No room for the Picasso in the new digs

Self-storage industry benefits from business closings, downsizing
By Vanessa Weiman | January 29, 2009 10:15PM

What becomes of art collections and wine cellars that can no longer fit in newly downsized living quarters? In Manhattan, they most likely end up in high-end self-storage facilities, one of the few types of real estate seeing an increase in business.

In December, two luxury self-storage facilities — Cirker and Hayes — merged to form Cirker Hayes, which now operates a combined total of 200,000 square feet of storage space in Manhattan. The company, which specializes in fine art storage, has two storage buildings, one at 305 East 61st Street and the other at 430 West 55th Street, and recently added a wine storage unit to its 61st Street building.

According to Peter Lewis, the president of Cirker Hayes, the company has seen a burst of activity in the high-end self-storage industry recently because of the economy.

“Half our business in the last four months has been a direct result of the changing environment,” said Lewis. “We see the Park Avenue folks downsizing.”

He added that art stored in the buildings used to be moved in and out more frequently, but now more clients are opting for longer-term leases on their storage space.

It’s not only individual apartment owners using storage facilities. Lewis noted that he’s also seeing more business from art collectors who have pulled consignment pieces out of galleries that they fear will go bankrupt; galleries that are closing and need to store art; and law firms with expensive furniture that they don’t need because they are moving to smaller offices.

Even some retailers are turning to storage space. Tim Dietz, vice president of communications and government relations for the non-profit Self-Storage Association, said self-storage is being used “more and more for commerce.”

“They are used by entrepreneurs who keep low overhead; they have an eBay account and relationship with a couple of wholesalers,” Dietz said.

Lewis said two Upper East Side retailers — one that sold rugs and another that sold silver — recently closed their stores and came to Cirker Hayes’ facility.

“They were paying $200 to $500 a square foot for their storefronts,” said Lewis. “Here they can take a 400-square-foot room and run the business out of there. They’ll pay around $80 to $100 a square foot with us.”