As the retail market continues to flounder, investors are eyeing vacant brick and mortar stores as possible future storage centers.
There are more than 50,000 storage facilities in the United States, and construction spending on mini-warehouses hit an all-time high in April, Bloomberg reported. The largest storage operator, Public Storage, took in $538 million in revenue during the first three months of this year, logging only $149 million in operating costs.
“These guys are making money hand over fist,” Chuck Gordon, chief executive at SpareFoot, a Texas-based storage startup, told Bloomberg.
Ari Rastegar, of Dallas-based Rastegar Equity Partners, said he’s looking for storage space on the outskirts of big metro areas and looking at buying space retail landlords haven’t been able to fill. “Converting big-box retail into storage — now that’s sexy,” he told Bloomberg.
The city, however, has moved to kick the self-storage industry to the curb. Mayor Bill de Blasio’s administration introduced a land use application last month that would require new self-storage facilities to acquire special permits in certain parts of manufacturing districts in the outer boroughs, a move that some view as basically a ban on the industry. [Bloomberg] — Kathryn Brenzel