While it remains to be seen how the coronavirus pandemic will affect the self-storage industry in the long run, in the short-term many markets across the country are seeing a surge in demand.
As colleges and universities shut down across the country in cities like Boston and Ithaca, they are forcing students to move out of dorms months earlier than normal. That has left students scrambling to find a place to keep their possessions safe until next semester.
SpareFoot, the world’s largest marketplace for self-storage rentals, has found that reservations for self-storage units made by customers with a .edu e-mail address jumped 1,123% year-over-year during first two weeks of March. Student reservations accounted for 6.3% of all reservations during that time period.
The surge in demand from students coincides with an overall jump in demand. Reservations from all sources across the SpareFoot network show reservations for self-storage space nationwide was up 42% during the first half of March year-over-year.
The visual below shows daily reservation activity on the SpareFoot network from 3/1/20-3/16/20. The larger and darker the circle, the more reservation activity there was on that day:
College evacuations are causing student rental volume that the industry usually sees in the month of May to shift to the present. But the data also indicates that the demand from student storage tenants is even greater than normal. So far in March, SpareFoot is seeing 18% to 27% more reservations from student e-mail addresses than it does during a typical day in May.
The following college towns saw the biggest surge in demand through the first half of March
|Search Demand Growth||Market||Area colleges|
|1436%||King of Prussia, PA||Villanova, Eastern University|
|887%||Stafford, TX||University of Houston, North American University|
|869%||Ithaca, NY||Cornell University|
|750%||Stamford, CT||University of Connecticut|
|668%||Claremont, CA||Claremont McKenna College, Pomona College, Scripps College, Harvey Mudd College|
|667%||Oxford, OH||Miami University|
|590%||Princeton, NJ||Princeton University|
|495%||San Jose, CA||San Jose State, Stanford University, Santa Clara University|
|432%||Amherst, MA||Amherst College|
|403%||Denton, TX||University of North Texas|
The surge in demand could provide a much needed boon to storage operators who are currently dealing with the uncertainty of how stay in place orders and other reactions to the coronavirus pandemic will have on their business.
Student storage renters are typically short-term, staying just the two to three months of summer break. With many colleges and universities likely to stay closed for the rest of the semester, the average length of stay for students is likely to double.
Marc Boorstein, principal of Chicago-based MJ Partners Real Estate Services, said he has heard anecdotal reports from operators he represents that demand from college students is surging at facilities located close to campuses.
“It has spiked up so much,” said Boorstein, referencing an operator with a facility near Ohio State University in Columbus, OH. SpareFoot saw a 78 percent increase in demand for the Columbus, OH market during the first half of March.
“The vast majority of the move-ins have been college students,” said Boorstein. “This time they are going to be in there a little longer than normal.”
Boorstein said that is good news for self-storage operators, even though some companies are less-than-enthusiastic about student tenants during normal conditions.
“They prefer not to get students in there during the summer months because you can’t have rent increases on them,” Boorstein said.
As a result the large public REITs have not actively marketed to students in recent years. The storage REITs have largely relied on customer rent increases to achieve record growth over the better part of the last decade.
Given the present uncertainty, however, Boorstein said operators are welcoming students with open arms, especially considering that many of them will likely stay longer than student tenants have in the past—along with most other storage tenants.
“People are not moving out,” Boorstein said. “The last recession people didn’t tend to move out quickly. We got to see what happens at the end of the month. That will be a big early tell.”