12/17/2013 | By Mitch Irzinski
Chris Marr, president, COO and CIO of self-storage REIT CubeSmart (NYSE: CUBE), joined REIT.com for a video interview at REITWorld 2013: NAREIT’s Annual Convention for All Things REIT at the San Francisco Marriott Marquis.
Marr discussed the leading drivers of self-storage performance.
“One of the great things about our business over the past few years is the complete lack of new supply,” he said. “Typically, self-storage new supply is provided by the local real estate entrepreneur. They can manage through the entitlement process, and they have generally produced most of the new product over the last two decades. When you look at where we are in the climate today, they just can’t get financing, and so we’ve seen very little to no new supply – and that’s been great for all of the existing owners and operators of our product.”
Marr also talked about the acquisition environment.
“We’re at a stage in the cycle here where cap rates are very attractive to the owner,” he said. “The fundamentals of the business have been quite strong. So, when you have an attractive cap rate and strong fundamentals, folks look at it as an opportune time to sell, and particularly the larger operators in storage have been able to take advantage of that and grow their platform.”
CubeSmart has embraced value-added amenities and additional services beyond the perceived standard options of self-storage operators. Marr described the impact that these changes have had on his company.
“What we’ve been doing, and many of the other larger operators, is changing the face of self-storage, and really taking the word ‘self’ out of it,” he said. “We are able to take what is most often a stressful time in peoples’ lives and make it simple by providing the types of customer service that people have come to expect in other products. I think it’s really made a big difference at CubeSmart. In terms of length of stay, our customers are staying longer because they really have found us to be helpful beyond just the core need for storage.”