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How warehouses for personal junk became a $38B industry

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Re: How warehouses for personal junk became a $38B industry

#71

Post by dddrh »

mathattack wrote: post #13

A lot of storage is a real estate play. Buy land in the direction of where cities are growing. Pay your mortgage with storage facilities sitting on top until the land appreciates.

It's actually the opposite, it's more akin to a SaaS company. I've worked with Owner-Operators of facilities and the ones who do it right are printing money.

The smart ones optimize towards revenue per square foot and can pull in upwards of $30,000+ of profit per month. And that can be on a single facility. Typically the smart ones own 2-3 facilities. They buy an underperforming facility and optimize its functions and reap the rewards.

How do they do it? One method (of a few) is by constantly pushing the rates up and churning customers that have lower rates. Once their occupancy hits a certain threshold (typically above 85%) they start really trying to push customers out with higher rates. If the occupancy starts to dip below their target, they start to offer deals. That way they can keep the monthly recurring revenue flowing while still optimizing towards revenue per square foot.

Edit: This is why there are specific REITs that focus on self-storage.

Re: How warehouses for personal junk became a $38B industry

#72

Post by yters »

People get a weird sentimental attachment to stuff. I used to have a lot of books, and looking through them would give me a good feeling, though I rarely read them. Got rid of most of them and haven't noticed their absence. But it feel bad getting rid of them. I can see why people accumulate a lot of things they never use, and why it looks weird from the outside. But, I don't want to end up on that 'Hoarders' show.

Re: How warehouses for personal junk became a $38B industry

#73

Post by enobrev »

heartbreak wrote: post #51
chasingthewind wrote: post #2

I try to be pretty slow to criticize people for taking advantage of a service that they find valuable. Calling things in these storage units "junk" is a moral judgement that's repeated a bit early on and then cast off to make room for the more mundane rundown of the market analysis. In the end, there's no way to know the ratio of people getting good value out of this storage to the number of people throwing good mone…

My (non-tech) small business uses "warehouses" (mini storage) for temporary and long-term storage. In one unit you can find crates of inventory, in another you can find equipment we produced for a one-off event job. We don't have enough to warrant an actual warehouse, and the units are significantly cheaper than renting extra office space to store this stuff. I keep it there to keep it out of my garage.

My mother has an online business that has grown far beyond the capacity of her house / garage (which now includes 5 sheds in the yard for storage). She does the same, as storage facilities are still cheaper than a warehouse. She keeps an eye on commercial real estate as her business continues to grow, but in the interim, the storage facilities are as essential as they are affordable.

Re: How warehouses for personal junk became a $38B industry

#74

Post by Antimachides »

xefer wrote: post #21

One thing I've noticed over the years reading old wills and probate records (16th -18th century) is just how few physical possessions even fairly well-off people owned. Estate inventories often list individual coats, shirts, bedding, bowls, tools, etc. I think the material wealth we have today is so incredible we don't even realize how much we've accumulated and could probably do without.

Any examples? I'd like to see one.

Re: How warehouses for personal junk became a $38B industry

#75

Post by Tiktaalik »

conductr wrote: post #55
djrogers wrote: post #35

Earlier quoted context omitted.

Interesting theory, but I've never seen a storage facility close down and be turned in to other real-estate...

Land is usually a very long play (trust funds, REITs, endowments, etc), I'd say this is a relatively new strategy in the past 10-20 years in most places. They likely won't be looking to do that until the storage building reaches its useful life and needs major repair. Then, the question is, do we have a thriving storage business or is there a better use for this land?

Yep.

Buy industrial land relatively close to residential/commercial areas. Build self storage, wait 20-40 years. Eventually people are going to feel the need to upzone that under utilized industrial land that is so close to a thriving, gentrified neighbourhood.

The City of Vancouver recently upzoned its Flats industrial area, and went to the extra step of banning self storage to ensure people actually build buildings that are capable of employing people.

Re: How warehouses for personal junk became a $38B industry

#76

Post by lallysingh »

UncleEntity wrote: post #69
gadders wrote: post #43

Earlier quoted context omitted.

A neighbour of mine has a spare piece of waste land in an industrial area on the edge of a nearby town. He has opened a storage facility using shipping containers. They come over to the UK from China and are not worth shipping back empty, so you can buy them cheaply and then just supply a padlock to clients.

They put up some shipping container apartments a few blocks from me: http://www.theoscarphx.com/ A/C bill has to be insane...

I think they put insulation behind the drywall.

Re: How warehouses for personal junk became a $38B industry

#77

Post by kbutler »

thaumaturgy wrote: post #46
patentatt wrote: post #8

Earlier quoted context omitted.

Sure, what if the rent/mortgage you pay per square foot in your home is greater than the rent for a storage locker down the road? And there are reasonable use cases for medium-long term storage, such as seasonal items. I don't know how many people use them this way, but I can see reasonable uses too.

One is that I sort of accidentally ended up becoming the keeper of a whole pile of family history -- documents, photographs, memorabilia, handmade things -- and I trust the fire suppression and security systems in my storage unit much more than whatever small apartment I'm renting at the time.

For the documents and photos, could I suggest https://www.familysearch.org/ ? Pictures of the rest could go a long way to making the memory of them more accessible as well.

Re: How warehouses for personal junk became a $38B industry

#78

Post by bluGill »

heartbreak wrote: post #51
chasingthewind wrote: post #2

I try to be pretty slow to criticize people for taking advantage of a service that they find valuable. Calling things in these storage units "junk" is a moral judgement that's repeated a bit early on and then cast off to make room for the more mundane rundown of the market analysis. In the end, there's no way to know the ratio of people getting good value out of this storage to the number of people throwing good mone…

My (non-tech) small business uses "warehouses" (mini storage) for temporary and long-term storage. In one unit you can find crates of inventory, in another you can find equipment we produced for a one-off event job. We don't have enough to warrant an actual warehouse, and the units are significantly cheaper than renting extra office space to store this stuff. I keep it there to keep it out of my garage.

While your point stands as a whole, why are you storing the equipment for the one-off event. Storage is for things you will need again.

Re: How warehouses for personal junk became a $38B industry

#79

Post by mathattack »

dddrh wrote: post #71
mathattack wrote: post #13

A lot of storage is a real estate play. Buy land in the direction of where cities are growing. Pay your mortgage with storage facilities sitting on top until the land appreciates.

It's actually the opposite, it's more akin to a SaaS company. I've worked with Owner-Operators of facilities and the ones who do it right are printing money. The smart ones optimize towards revenue per square foot and can pull in upwards of $30,000+ of profit per month. And that can be on a single facility. Typically the smart ones own 2-3 facilities. They buy an underperforming facility and optimize its functions an…

I though REITs focused for the opposite. I wonder if it’s driven by the city? Are the storage units you’re looking at in low cost or high cost areas?

Re: How warehouses for personal junk became a $38B industry

#80

Post by bluGill »

thaumaturgy wrote: post #46
patentatt wrote: post #8

Earlier quoted context omitted.

Sure, what if the rent/mortgage you pay per square foot in your home is greater than the rent for a storage locker down the road? And there are reasonable use cases for medium-long term storage, such as seasonal items. I don't know how many people use them this way, but I can see reasonable uses too.

One is that I sort of accidentally ended up becoming the keeper of a whole pile of family history -- documents, photographs, memorabilia, handmade things -- and I trust the fire suppression and security systems in my storage unit much more than whatever small apartment I'm renting at the time.

For documents have you considered donating to the local historical society? Depending on what they are they might be of general interest and the historical society is probably better equipped to save them.
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