26 Sep 2023
During the recent SSA Fall Conference and Trade Show, we had the opportunity to engage with industry experts, gaining insights into the current self-storage landscape. Phil Warchol of Forge Building Company and James McLean discuss the current landscape of development activity in the self-storage industry. They also explore the diversity of players involved in these projects.
James: Phil, thank you so much for your time today at Forge Building. What have you guys been seeing in terms of development activity because the rumors, the whispers were that development was dead in the water for a while because it was so hard to raise investment at a favorable rate with the interest rates being so high, but what are you and your team seeing now that a couple months have passed?
Phil: We are still showing a pretty big increase in the projects that are coming off our tables. I think what's driving it is really a view towards long-term investment. If you were to look at interest rates and some of the costs involved, it may not always jive, but that's what we're seeing. We have seen no slowdown whatsoever and business has been very healthy, very healthy. There's no particular area of the country that I could stick a pin in and say it's happening for that reason. It's pretty dispersed.
James: That's interesting to see that across the board, storage facilities demand is still staying high and people are still bullish on the fact that a storage facility is a strong asset to have. Primarily, if you have this information, who are the people that are still building this project? Is it bigger institutions or are small players stepping in from the sidelines to get involved in development? What are you seeing from your end?
Phil: We see the typical suspects, the large rates, the local regionals, and then the two or three mom-and-pop storage facilities, but what's interesting is we're seeing a lot of townhome builders that are jumping out of residential and jumping over into self-storage, so as a different venue for them to build it, which is kind of a new thing.
James: Wow, that is really interesting and it's actually great to see people taking interest in our industry and giving it a shot and seeing that it is a very strong asset class to invest in. Phil, thank you so much for your time and thank you for your insights, sir.
