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Thursday, November 15, 2018
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08

Consolidation in the Self Storage Industry

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Consolidation in the Self Storage Industry

The recent SSA Fall Conference and Trade Show was another event well done as evidenced by the record-setting attendance. My team and I enjoy attending these events not only because of the engaging educational sessions but because they allow an opportunity to network with our peers and friends from all over the country. Additionally, because our industry is so fragmented and spread, these events allow the chance for operators of all sizes and locations to discuss best practices in an encouraging and inviting forum. Our team, as well as others, openly engage in conversation about what works for their self storage businesses and what does not. 


Some of the greatest improvements made to the operations of SPMI came from ideas generated by conversations with other operators and vendors - even those we use and some we do not. Since getting into the self storage business over 25 years ago, I can attest to its continued evolution. One thing that stays constant is that the industry is full of innovators and great people. We look to each other for ideas on how to better our businesses together as this is a sector that doesn't mind sharing. 

 

Even among all of the familiar faces at this year’s SSA Fall Conference, it was difficult not to notice the increased attention private equity was paying to our industry. Please note that I am not referring to private equity participating in the ownership of self storage facilities. I am speaking to the private equity firms consolidating ownership of the operational tools and technology we have come to rely on. The question I left with was, “How does this impact us as an operator?” My gut and trust in markets makes me hopeful that this injection of capital will lead to efficiencies that benefit operators. By dramatically increasing the usability of our product for our customers our business should grow.

 

My worry is that consolidation could lead to a scenario where our choice of vendors becomes limited. The effect then could be an increase in operational costs for our self storage facilities, including those for which we were not previously charged. We have already seen some increases in costs during the last few years and I believe it is likely we will see this trend upwards in the near future.


We need only to look at other customer-centric industries to see how this could potentially relate to self storage. Hospitality, transportation and airlines have seen their industries forever changed by the role private equity plays in terms of owning and changing the operational tools needed to reach today’s customer. Airline tickets are purchased through websites such as Travelocity or Trivago and car rides are booked through apps. Consumers can have groceries delivered to their door with just the click of a button. As an industry, we have already faced the growing trend of "aggregation"  and continue to see different ways of reaching and servicing our potential and/or current customers. Please keep in mind that while some change is good, it most likely comes with a cost to us as operators.


The timing may never be more important for owners, operators and vendors to stay involved in the growth of the industry. An easy way to do this is to make sure you are reading the SSA Globe magazine, SSA blog articles and attending SSA events. Looking forward to seeing you at future conferences!

| Categories: Operations | Tags: Trade Show, Consolidation, Private Equity, Conferences, Networking | View Count: (1183) | Return
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