The self-storage and multifamily markets are interconnected. They are both driven by demand for multifamily and shrinking home sizes in cities, and investors in both asset classes follow a similar set of metrics, from employment to income growth, to determine a profitable submarket.
“I think that the metrics that drive demand for multifamily are very similar to the metrics that drive the profitability of the self-storage market,” Hunter Thompson, CEO of Cash Flow Connections, tells GlobeSt.com. “For example, we are looking for population growth; we are looking for income growth; we are looking for a diversified amount of employers; and we are looking for stability in the economy from a big picture.”
While the metrics are similar, Thompson doesn't pay much attention to the specific market activity, however. He says that trends in multifamily do not necessarily carry over to the self-storage industry. “Going down to the nitty-gritty, when you look at the differential between B-class apartments and nearby single-family houses, that is not something that we pay close attention to,” says Thompson. “That would be industry-specific, in my opinion.”
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.