16 Oct 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 industry. Bill Sitar of The Storage Acquisition Group and James McLean discuss the state of acquisitions in the self-storage industry. Sellers are starting to budge as they face pressure from interest rate hikes, and there's a noticeable drop in asking rates driven by REITs. This pressure may lead to more consolidation in the industry, particularly impacting smaller operators.
James: Hey everybody, I'm here with Bill Sitar from Storage Acquisition Group. Really just getting a chance to pick one of the experts' brains on what you're seeing in the field in terms of acquisitions volume. You know, it's not really an easy market, but we've been hearing whispers that sellers are starting to budge as they're realizing that last year's price is not this year’s price. So Bill, what are you seeing?
...
James: So one other thing that we're seeing on a macro is with, you know, Extra Space's acquisition of Life Storage, we're seeing that asking rates, you know, the average price per square foot to get a unit for the first month has been dropping a lot. You know, these REITs are really trying to push occupancy up. So average price per square foot has dropped dismally in terms of year-over-year changes...
...
James: So is that leading to more smaller operators feeling the need to sell? Do you think consolidation is going to continue to happen in the coming months, in the coming years with small operators having a hard time keeping up with these bigger franchises?
...
