How do you think that Covid 19 will affect Occupancy Rates in Self Storage Facilities?
I think that occupancy rates will go up. Real estate is driven by events in peoples lives. Typically, those events are negative like divorce, job loss, relocation, downsizing, or death. Covid 19 is causing a recession that has already cost 26 million jobs. Students have had to relocate because their schools have closed. Many students needed a place to put their stuff right away. Eventually, I think that we will see families having to consolidate living spaces in order to survive. This also means more prized possessions being put into storage. In addition to that, small businesses have been shut down due to social distancing and they may not be able to open for some time. Many of them will temporarily need somewhere to store their entire business.
All these events are going to increase occupancy rates for Self-Storage Facilities. This is a great time to be in self-storage. These people need help and you are there to give them somewhere to store their belongings so that they do not lose everything.
What can Self-Storage Facility Owners do to stay relevant during the Pandemic?
This is a very important time to make sure that you are online. If you do not have systems in place to be able to rent to tenants online, you are not going to be relevant anymore. This is going to be the new way of doing things. People are going to expect to be able to click a few buttons and then walk in and use their unit.
You are going to have to adjust your marketing to be able to sell your additional services online. For example, you may have a move in special that includes boxes, packaging tape and bubble wrap that you will leave in the unit for the tenant. You will have to offer your additional services in new and creative ways if you want to continue to have that additional stream of income.
You will also need to adjust your marketing to make sure that you are on the first page of Google. You have good SEO if you are going to stay in business in an online world.
Is it a good time to buy Self-Storage Facilities?
I always think that it is a good time to buy Self-Storage Facilities. The key is to do a lot of due diligence before you buy to make sure that you are buying a great opportunity.
How will Covid 19 affect new Self-Storage construction and Self-Storage conversions?
We are going to see a slowdown in new development whether that is new construction or conversions because of government shutdowns. Properties that are in the first phases are going to be slowed down by the fact that they can’t get approvals because city planners are not meeting. Conversions will have the same problem. Projects that are in process, may run into construction delays because the construction companies may have sick workers or supply chain interruptions. Either way, if you are planning on building, you need to plan on delays. That doesn’t mean that you shouldn’t try to get into undersupplied markets, it just means that you need to plan on additional time before you will be up and running.