Los AngelesThe 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.”

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