{"id":1004459191,"date":"2020-07-01T07:29:37","date_gmt":"2020-07-01T15:29:37","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004459191"},"modified":"2025-02-27T01:02:36","modified_gmt":"2025-02-27T09:02:36","slug":"the-pandemics-mixed-effects-on-self-storage","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/the-pandemics-mixed-effects-on-self-storage\/","title":{"rendered":"The Pandemic\u2019s Mixed Effects on Self Storage"},"content":{"rendered":"
\"\"<\/a>

Nathan McElmurry, Senior Vice President, SecureSpace Self Storage. Image courtesy of InSite Property Group<\/em><\/p><\/div>\n

The global health crisis is both a threat and an opportunity for the self storage business. While the impact of the pandemic has been tough on self storage rents<\/a> across the country, the sector might benefit from an eventual slowdown in new deliveries and accelerating automatization.<\/p>\n

In the interview below, Nathan McElmurry, senior vice president & head of self storage acquisitions at InSite Property Group subsidiary SecureSpace Self Storage, talks about the mixed effects of the novel coronavirus outbreak and how the company is tackling the issue.<\/p>\n

The self storage business is deemed less vulnerable to economic disruptions. However, it is not completely immune to the effects of the pandemic. What has <\/strong>been <\/strong>your <\/strong>experience so far?<\/strong><\/p>\n

McElmurry:<\/strong> It\u2019s too early to tell what will come of these unprecedented changes we\u2019re seeing in the economy, the health sector and in society. But storage thrives during economic disruptions. You can already see that in the May numbers for many companies, including ours. But no tree grows to the sky, and storage was already overbuilt before COVID-19. Strong, stabilized stores, in good, low-supply markets will do fine. Early-stage deals, especially in areas with lots of competition, will likely struggle to find rent stability and hit occupancy targets.<\/p>\n

Hopefully, many of the questionable investments that were in the planning stages won\u2019t be built at all. In other words, I\u2019d say that the pandemic may have just hastened the inevitable. What I\u2019m curious to see, is what specific effect the virus has on tenant retention and bad debt. That will take some time to unfold and would be further clouded if we have a second wave of infections.<\/p>\n

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READ ALSO:<\/strong> A Conversation on Self Storage Amid the COVID-19 Crisis<\/a><\/p>\n

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How has the coronavirus outbreak impacted the operations of InSite Property Group? <\/strong><\/p>\n

McElmurry:<\/strong> We have adapted to remote work, limited traveling and started navigating the new realities of time management\u2014all the things that everyone is dealing with right now. However, we’re also seeing opportunities to widen our operating platform lead.<\/p>\n

For instance, we launched our contactless move-in process for customers a few weeks before the shutdown. During the peak of quarantine, more than 50 percent of our customers selected that option and we grabbed market share, while local competitors and even several of the REITs scrambled to launch solutions. Self storage has always been a product type that did well during volatility, and, despite some small bumps around collections, our stores remain on track.<\/p>\n

What can you tell us about investor sentiment during these challenging times? What types of assets are buyers looking for? <\/strong><\/p>\n

McElmurry:<\/strong> Good question. Truth be told, I don\u2019t know. But I\u2019ve observed that a company\u2019s capital source tends to be the primary driver in how they deploy resources. I don\u2019t spend too much time trying to discern what our peers might do because their motivations are particular to their investment goals. Broadly speaking, I think we all see that the most vulnerable properties are the ones in transition, and at this particular stage, I would expect many folks to be looking for these particular properties.<\/p>\n

\n

READ ALSO: <\/strong>What\u2019s Causing Distress in Self Storage?<\/a><\/p>\n

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What strategy do you use when choosing a market to invest in? <\/strong><\/p>\n

McElmurry:<\/strong> Storage is still a very local business and likely will remain so. People store in dense, urban locations and smaller markets as well. But they do so differently, depending on their needs. We\u2019re able to use technology in a unique way to predict demand in any area. We always strive to allocate our resources judiciously. We set minimums for metrics like population, rent per square foot, total revenues etc. Also, where we can cluster properties, we will.<\/p>\n

How has the pandemic influenced your approach to investing in self storage? <\/strong><\/p>\n

McElmurry:<\/strong> If anything, it has made us more disciplined. We thought we\u2019d see a faster trend toward price stabilization and attrition of competition. That has not yet materialized in any sort of comprehensive manner. So, for the time being, we remain selective and patient. We are seeing deals come back around\u2014some for a second or third time\u2014and moving forward this time. Still, we feel that a larger opportunity has yet to unfold.<\/p>\n

What permanent changes do you expect to see in the self storage sector in a post-pandemic world?<\/strong><\/p>\n

McElmurry:<\/strong> Every time there is major disruption there are dire predictions about a \u201cnew normal.\u201d We saw it after 9\/11, during the global financial crisis, when the debt markets were disrupted a few years back, and now with the coronavirus. By and large, though, I expect behaviors to revert to the norm, as they\u2019ve done historically, with some minor adjustments, which result from any change in the landscape.<\/p>\n

I would expect to see a hastening of the trend of automating some facilities. There may also be an uptick in opportunity for smaller markets that have strong growth trajectories and offer a high quality of life. Lastly, I think the industry will take notice of how various regions of the country respond from a policy and regulation perspective\u2014in the near and long term\u2014and adjust accordingly.<\/p>\n","protected":false},"excerpt":{"rendered":"

InSite Property Group\u2019s Nathan McElmurry discusses the effects of the coronavirus outbreak on self storage and talks about the company\u2019s approach to overcoming challenges.<\/p>\n","protected":false},"author":871,"featured_media":1004459224,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[23891,21742,21744],"tags":[40476,48950,49642],"class_list":["post-1004459191","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-national","category-latest","category-people","tag-cpetalks","tag-coronavirus","tag-insite-property-group"],"acf":[],"yoast_head":"\nThe Pandemic\u2019s Mixed Effects on Self Storage - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/the-pandemics-mixed-effects-on-self-storage\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Pandemic\u2019s Mixed Effects on Self Storage\" \/>\n<meta property=\"og:description\" content=\"InSite Property Group\u2019s Nathan McElmurry discusses the effects of the coronavirus outbreak on self storage and talks about the company\u2019s approach to overcoming challenges.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/the-pandemics-mixed-effects-on-self-storage\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2020-07-01T15:29:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-27T09:02:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/06\/Nathan-McElmurry.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Evelyn Jozsa\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-pandemics-mixed-effects-on-self-storage\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/the-pandemics-mixed-effects-on-self-storage\/\",\"name\":\"The Pandemic\u2019s Mixed Effects on Self Storage - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-pandemics-mixed-effects-on-self-storage\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-pandemics-mixed-effects-on-self-storage\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/06\/Nathan-McElmurry.jpg\",\"datePublished\":\"2020-07-01T15:29:37+00:00\",\"dateModified\":\"2025-02-27T09:02:36+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/7a1fad8f1e02fa4d8f81f7e9ad21736a\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-pandemics-mixed-effects-on-self-storage\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/the-pandemics-mixed-effects-on-self-storage\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-pandemics-mixed-effects-on-self-storage\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/06\/Nathan-McElmurry.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/06\/Nathan-McElmurry.jpg\",\"width\":800,\"height\":620,\"caption\":\"Nathan McElmurry, Senior Vice President, Self Storage Acquisitions, SecureSpace Self Storage. 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