There are a number of self storage REITs (Real Estate Investment Trusts) today, and they are buying up a significant number of self storage facilities. That's having an impact on the REITs themselves, but also on the self storage industry and the communities where these storage facilities are located. It's important to understand not only why REITs are buying up storage facilities, but how they are changing the self storage landscape and how that might affect the future of the self storage industry for facilities and consumers.
Why REITs are Buying Storage Facilities
The majority of REITs are buying storage facilities because investing in real estate is how they make their money. The more they invest, the more they stand to gain. In the case of storage facilities, there is a lot of money to be made. These facilities are located all over the United States and many other countries, and their numbers continue to grow. As more people find that they have items they don't use every day but aren't willing to part with, there will continue to be further opportunities for storage facilities - and the REITs that purchase them. In a culture of consumerism, self storage units are a great way to bring in income, and a popular option for many people who need extra space.
Another reason REITs are buying storage facilities is because people move around more today than they ever used to. As people become more mobile and move more often, they need storage units more frequently. They may have to move for a job, or because they are in the military. They may just wake up one day and be in the mood to live somewhere else, or they may decide to travel around a bit to see where they want to settle. No matter their reason for needing a storage unit, they will need one. The company that owns the facility where customers rent their storage units is the company that will make money, so it makes more sense for that company to own as many storage units as possible.
How do REITs Affect the Self Storage Industry?
REITs affect the self storage industry in a largely positive way. By purchasing self storage facilities that may be mom-and-pop operations or owned by smaller companies, they put more power and value behind those facilities. They may also come through and make repairs on the units, all while changing the facility over to their brand. As they make repairs and changes, the units might become cleaner, sometimes better, and more desirable. These REITs often also add security measures and other options to the self storage facilities they purchase, so more customers can feel safe renting a unit there. The better quality the storage facility is and the more security that is offered there, the more likely it is that customers will want to rent from that facility.
The Impact of REIT Purchases on Communities
When REITs purchase self storage facilities, that can help the communities in which those storage facilities are located. As self storage facilities are purchased, cleaned up, secured, and rebranded, they give more value to the communities they are in, and provide more options to the people who live there. If there were problems at the facility in the past, having a REIT come in and take over may change that, adding to the safety and security of the community and making it a more comfortable place to live. When communities come together they can do great things and help keep all of their residents safe. A REIT purchasing a self storage facility in a particular community can do much more than just provide residents with a clean place to store temporarily unneeded items.
The Future of Self Storage
Self storage has developed from a small time operation into a huge opportunity for both REITs and consumers. That doesn't show any signs of slowing down, so the future appears to be bright in a number of ways. Customers who need self storage are going to get more options, higher quality facilities, and better security for their belongings, while REITs are going to get a better income stream and the opportunity to add more properties to their rosters. It's a winning situation for everyone, including the current owners of storage facilities who are selling their businesses to REITs and either retiring or moving onto bigger and better things.
From the investments that have been made and the changes to self storage units that have taken place, it's easy to see that REITs really are the future of self storage. They continue to buy up large numbers of these facilities and rebrand them as their own, often improving them in the process. While not everyone may be happy that this is taking place, there is a lot of value to the facilities and the communities when this happens, along with very little downside. Overall, it's a winning proposition for everyone involved.