A positive economy for 2011?
The past year in the storage industry has been quite challenging. The U.S. recession has changed many markets and the way customers and operators act. A higher percentage of customers have been shopping around more for the best price with some willing to travel beyond the normal market limits to get a great price.
We’ve also noted an increase in customer willingness to relocate or threaten to a competitor for a better deal. Plus some customers are staying shorter periods than in previous years.
Storage operators have responded by offering more generous specials and often have reduced their rates across the board. The largest U.S. storage companies, the Real Estate Investment Trusts (REIT) have often led the way toward heavy discounting across the board in the markets they serve. We suspect that some operators may feel the REITs know more and are following suit with reductions that may not be needed, at least not as deep.
Our own experience confirms that managing each location in terms of that specific market produces the best results. In many cases we have really emphasized “value” and found that continues to work well. In other locations we have discounted very moderately and very selectively. Also of great importance has been the reduction of operating expenses. For SIMI these are all business as usual.
Looking forward, for 2011 we hope the economy turns positive and more jobs are created. If this occurs the U.S. economy will start to return to normal. All type of business including storage markets and operators will be able to resume their normal operating posture.