Under the right set of circumstances, self-storage operators can be ideal. That is according to Richard Latella, an executive managing director and Americas Practice Leader of Retail, Valuation & Advisory at Cushman & Wakefield, along with Kate Spencer, a managing director and Self-Storage Practice Group Leader, Valuation & Advisory at Cushman & Wakefield. The team chatted with GlobeSt.com about retail’s evolution, what the average self-storage developer is looking for an more.
GlobeSt.com: What’s driving the trend of self-storage jumping into the big box fray?
C&W team: Retail is undergoing a real evolution, as we’re all well aware – and with the glut of underutilized or vacant big boxes hitting the market, landlords are keen to find suitable, solid tenants to fill those empty spaces and keep customers coming to their centers. Under the right set of circumstances, self-storage operators can be ideal, and we’re seeing an increasing amount of interest from self-storage developers to repurpose retail sites. The average self-storage developer is looking for at least 50,000 square feet of space, about the size of a several mid-size box tenants such as the smaller WalMart and Target concepts as well as chains like Dick’s and certain heath club users. More and more, we’re seeing operators that are willing to go vertical with their buildouts, so they don’t need acres and acres of low, one-story buildings; your typical vacant Bon-Ton box works quite well instead. And they don’t need lots of parking, so that’s a big win for landlords and co-tenants.
GlobeSt.com: Is there anything unique about these types of deals that landlords should keep in mind?
C&W team: This isn’t your typical lease. Self-storage operators typically buy entire buildings or parts of them, which is a great deal if you’re a shopping center owner and need to backfill large swaths of space. Most shopping centers have large parking fields and offer ease of access for the potential storage patrons. Adding the required security component is relatively easy as the space can be secured at minimal cost.
GlobeSt.com: Are there any areas where this trend is working particularly well?
C&W team: Without a doubt, self-storage operators are enjoying better success in boxes that are within a few miles of a suburban area, where the average household size tends to be a little bigger. Obviously, if your family is larger, you have more stuff (especially if you have kids!) – and that often translates to a need for storage.