LOS ANGELES—The millennial demographic ishelping to fuel growth in the self-storage industry, according toFred Cordova, EVP at KennedyWilson. Cordova recently represented the buyer in theacquisition of a three-property self-storage portfolio in LosAngeles and Riverside, which GlobeSt.com reported in a previous story, and is an expert in theself-storage sector.

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“The global forces affecting the self-storage market are thedownscaling of households and how people live,” Cordova tellsGlobeSt.com. “The millennials aren't buying houses, and ownershiphas dropped down from 65% to 66% to 61%, so you have a huge demandfor apartment units. These new apartments are quite small, butpeople still have their stuff and they need to put it somewhere.Self-storage space is half the cost of living space, so it makessense to put the items you don't use that often in storage.”

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Cordova explains that self-storage is becoming so popular thatlarger self-storage investors, like a Public storage, will out bidan office building or retailproperty for the space. “I have seen it happen,” he says.“The push is for multi-level, multi-story new product.” Location isthe most important selling point of the self-storage property.These units need to be no more than one to two miles from apartmentbuildings, because users won't drive further than that to accesstheir things.

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In Los Angeles, Hollywood and downtown seem to be the mostpopular submarkets, but Cordova notes that everywhere from Downtownto the 405 freeways is extremely popular. “They are looking forexisting warehouse space that they can double-deckor tear down, as long as it is on a main boulevard with goodvisibility,” he says. “You have to have that.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.