21 Oct 2024
Phil Warchol from Forge Building Company shares his thoughts on the evolving demand for premium boat and RV storage in unexpected regions, like Idaho and Arizona. While traditional coastal areas might come to mind, it's all about location convenience and shifting homeowner restrictions like HOAs. Despite challenges like high interest rates and oversupply, Forge Building Company remains busy, with forward-thinking developers betting on future demand. As interest rates are forecasted to drop, Phil sees more opportunities for growth in these specialized storage sectors. Tune in to learn more about where the market is headed!
James: Hey everybody, this is James with Radius+. I'm getting connected with Phil again from Forge Builders. Always such a wealth of information. But Phil, today's a little bit different. I wanna ask you, besides traditional self-storage, what kind of activity you've been seeing around boat and RV storage or flex warehousing? What's on the mind?
Phil: James, good to see you. You know, we've got large enclosed RV going up in Idaho, out in Arizona, mid Dallas area. A lot of places that aren't necessarily near the coast, you know, destination areas.
James: Wow, see, that's almost a misconception on my part. So what creates that demand for an enclosed, almost premier space in areas that are not close to the coast where the salt air might, you know, affect your asset that you're storing there? What creates that demand for an enclosed, premium boat and RV space?
Phil: You know, like I always say, my two favorite things they never say to an RV dealer is, hey, back this thing up and where you gonna park it, right? So, you know, HOAs, preventing a lot of people from parking it at home anyway. A lot of times it's about mileage, you know, like where are we gonna put this thing on the way to where we're going? So Lake of the Ozarks, you know, things that don't necessarily come to mind. If it's over a mountain range from a major city, maybe it's better keeping it there than hauling it up and over the range. So just things that don't normally come to mind.
James: Got you. Phil, that makes perfect sense. Following the migratory patterns, where are people going and where would they need the storage to be? So what are you seeing in terms of activity for development? Obviously, you know, with interest rates and oversupply in general, the general consensus is there should be a slowdown supply coming online. Is Forge keeping very busy? What are you seeing?
Phil: We’re busy. We, you know, I know you can get locked up with the finance rates and the OG, what's going to happen. But the reality is, is that there's still people out there that are thinking ahead and, you know, they may not be able to make the dollars work in the first year or two, but they're going for it. And I guess we're fortunate enough to be going for it with them.
James: Well, as interest rates are forecasted to come down, the housing market will unfreeze and self-storage demand should pick up. So I'm betting on it. I'm bullish on it. And I wish your clients the best.
Phil: Right on, James. It was good to see you, man.
James: Good to see you too.
