Storage wars: Inside York County's booming self-storage industry
There are nearly 60 self-storage units in York County, and more are expected to open in the next two years.
But why so many?
John Gilliland, CEO of Investment Real Estate, LLC and founder of Moove In Self Storage, said the answer is simple: people need storage.
Gilliland said that self-storage has become increasingly popular because of people decluttering and downsizing, moving, remodeling their homes or needing space for seasonal storage or business needs.
"Modern self-storage facilities often offer advanced security features like surveillance cameras, gated access, and individual unit locks. This provides peace of mind for consumers, knowing their belongings are secure," Gilliland said. "Additionally, many self-storage facilities offer 24/7 access, making it convenient for customers to retrieve their items when needed."
Gilliland added that self-storage also offers flexibility so that customers "can rent units in various sizes to meet their specific needs, and they can usually adjust the rental period to match their requirements, whether short-term or long-term."
According to SelfStorage.com, developers stopped building as many storage facilities in the wake of the 2008 recession, and that led to the existing supply of storage units to become mostly occupied. Since the demand outpaced supply, the price for those units rose.
However, the recent building boom has led to more storage space available and occupancy and rental rates have started to come down.
Gilliland said that there are roughly 56 self-storage facilities currently open in York County, and four of those have opened in the last two years. In the next two years, another eight are expected to open, but that number could go up if new investment opportunities arise.
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New facilities coming to York County
A Moove In Self Storage is opening a 24,000 square-foot facility at 4844 W. Market St., York in February 2024, and a 97,876 square-foot facility in Dover at 3025 Carlisle Road in a former grocery store in March 2024.
Gilliland said that Moove In Self Storage is the main developer for the storage facilities in York County. He said they perform a nationwide demand study every two to three years to determine how high the demand for self-storage is.
"Americans are accumulators and hang onto things, and lots of things in our lives have emotional value," he said. "COVID was our best two-year period for the self-storage industry because so many people were home and they were decluttering and then creating home offices. Most facilities went to 100% occupancy."
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Gen X likes storage
A Cushman and Wakefield report recently looked at the generational breakdown of storage unit users. There are roughly 65 million "Gen Xers," and they currently make up the largest share of self-storage users, at 54 percent. There are around 72 million Millennials, and they make up 40 percent of self-storage users. The report said that as Millennials age, though, there will be a higher demand for self-storage.
Gilliland added that it is much cheaper to rent a storage unit than it is to rent a larger living space, which is why in recent recessions self-storage was the best performing commercial real estate.
"It's small dollars," he said. "When things get tight, people want to cut living expenses and people move in together and need space, but they don't want to get rid of stuff, so they rent the space."
He said that the average self-storage facility is worth $5 million, and the return-on-investment for one is 20%- 25%.
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A good investment
"The bottom line is it's a very good investment, and it meets a demand," he said. "I don't see anything that would derail this momentum."
New reports are showing that the self-storage sector has slowed down some from its 2021 and 2022 performance levels, but the numbers are still higher than pre-COVID levels. Self storage rent rates decreased by 4.5% year-over-year in August 2023, while staying the same month-over-month, according to a report on RentCafe.
Per Cushman and Wakefield, occupancy levels remain high, though, averaging around 90%, with the Northeast markets continuing to see steady occupancy growth.
"There are less self-storage facilities per person in the Northeast, so occupancies have remained a little higher here," Gilliland said.
Per SelfStorage.com, the commonwealth is home to an estimated 1,583 self-storage facilities, and those cover 44,495,071 square feet of storage space. Pennsylvania storage facilities offer 3.49 square feet of storage per person, which is lower than the national average of 5.4 square feet per person.
According to RentCafe, the rates for a 10’x10’ non-climate-controlled storage unit averaged $127 in August, marking a 4.5% decrease compared to the previous year. The average unit cost in York County is about $150 per month, per Gilliland.
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This article originally appeared on York Daily Record: How many self-storage facilities does York County, Pa. have?
