20
Sep

Self Storage in California as seen from Missouri

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By Tron Jordheim of PhoneSmart
 
I often am asked where the PhoneSmart call center has its clients. There are some people who still think that a service provider like us might be a regional player in our own geographic space. Usually my first response to the question is, “California”. We have clients in 43 states and 6 Canadian provinces, but California is in a world all its own. I just looked at September’s call volume reports and once again California self storage properties accounted for some 21% of our total call count. On the one hand, you would think that a state with so many facilities like California would naturally make up a big part of out business. One also might think that since California was an early adopted of self storage that one would expect us to answer sales inquiries for so many stores here. But there is more to it than that.
 
From where we see it, there are several factors that make California a unique self storage market. In many parts of the country people simply built self storage where they had a piece of land. California has looked at self storage as a real estate pursuit from very early on. Because of this, a higher percentage of self storage companies are more real estate developers than self storage operators. This means facilities were better located and built as real estate assets much earlier than in other parts of the country. This also means that the operation of these properties has come from a different point of view as well. Californians understood the concept of maximizing an asset’s return while operators in other parts were still thinking it was neat to just have some respectable cash flow.
 
California also saw some competitive pressure early in the business cycle of self storage. The competitive pressures most people around the country are feeling now for the first time, is not new to people who have been in business in California for 10 or 20 years.
The population pressure is also in a different cycle in California now than it is in many parts of the country. The population is growing faster than the supply of self storage as people continue to move frequently. Barriers to entry and slower construction starts in the last year or two mean that California as a whole should have a positive supply to demand balance for the foreseeable future.
 
I realize California is many sub markets which all have their own unique characteristics, but in general California is a different business climate than you find for self storage in other places.
 
Some would say the climate for self storage is as pleasant in California as the climate for driving with the top down. All of these factors make California a great place for us to do business. The value we bring matches very nicely with the business goals self storage operators are pursuing.
 
We are excited to contribute to the success of the California Self Storage Association and look to its members to help us craft the service offerings that they will need to carry their businesses to new heights.
This will be published in the Califonrnia self storage association newsletter.
 

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