Green Street Managing Director Spenser Glimcher joined the REIT Report podcast to review developments in the self-storage sector, where a key demand driver is coming from consumers facing home affordability challenges and using storage as an extension of their current living space.
"We are seeing fewer top-of-the-funnel customers for self-storage come from home buying consumers than in the past. Today, more consumers are seeking self-storage due to other life events such as a lack of space,” Glimcher said.
On the supply front, Glimcher says current conditions could benefit existing operators. "The quiet supply environment is the silver lining in this sector right now... New supply that came online in the last three to four years has finally been mostly absorbed."
Moderated construction activity and rising costs have kept new developments at bay, which is a positive sign for current operators aiming to improve their fundamentals, she noted.
Meanwhile, Glimcher discussed the potential for increased consolidation in the sector, with REITs only controlling about 15% of all self-storage assets in the United States. One of the benefits of scale is having more data points to feed sophisticated revenue management systems. “That's another reason why I think we'll continue to see a push on the consolidation front, particularly from REITs,” she said.