10 Oct 2024
The development landscape is tightening with rising rates and banking challenges, but Chris Berg from Abernathy Holdings sees a silver lining. With supply shrinking through 2025-2027, the future of self-storage growth looks promising!
James: All right, this is James with Radius+, and today we're joined by Chris Berg from Abernathy Holdings. Chris, you do such a great job keeping a finger on the pulse of the economy and self-storage. I want to hear from you. What are you seeing in development for Class A facilities in the state of California?
Chris: I think we see a lot of it just tightening up right now. The development aspect is tightening up just because of obviously what's going on with rates. The banking has tightened up a little bit, although I hear it's starting to loosen up a little bit more as of late. What do you think is great news for us? You know, heading into 2025, 2026, and 2027, as the supply starts to shrink a little bit, we're going to continue to build. So we think it's going to be very, very positive for us long term.
James: You hit the nail on the head. We're seeing such a slowdown in supply because of the obstacles to development. So when you find that diamond in the rough and you are able to develop a facility, you're so set up for success for the next couple of years forecasted. But Chris, self-storage has seen so many new capital market groups enter the space and take notice of this asset class. What are your thoughts on that? And where do you see the industry heading with so much more money being poured into it?
Chris: There’s a lot of competition, is what I'll say. You know, it's interesting being here today and at the Great Economic Summit yesterday. Right. And I sort of walked away with everyone's got a smile on their face. But this is war, man. We're fighting for land. Right. I mean, it's like the epitome of fighting for territory. But it's not the old. It's just it's with money. And you're trying to beat each other out and find the right pieces that work for your particular returns. I think that's the interesting piece is, you know, you look at some of the REITs, obviously, they buy and hold forever. We don't have those same kind of returns or metrics. So it's a little bit different dynamic for us with other different capital guys that are coming into the space.
James: Well, Chris, thank you so much for your time and your insights. And congratulations on your most recent deal I saw happening.
Chris: Good things are happening. We're still out there being active and making some deals to get them done. We got some LOIs out there. So some prayers up that we'll get some of those under contract as well.
James: Keep fighting the good fight. Thank you, Chris. Thank you.
