Real Estate in Recession | Gabfocus | Self Storage Virtual Workshop

Gabfocus Episode 9: Real Estate in Recession

In this Session, John and Stacey break down the economic shift in the 2008/2009 financial crisis versus the current global health crisis. They discuss the current bidding landscape for self storage investors and why it’s still a great time to buy, as well as looking into self storage trends across the map.

Moderators: Tommy Nguyen and Melissa Huff
Featured Speakers: John Chang and Stacey Gorman

Category: Real Estate
Focus: Owners and Managers
Aired: June 18, 2020
Duration: 1:03:15

Gabfocus Sessions

Gabfocus Sessions are virtual workshops for self storage owners, managers, and operators. Brought to you by the team behind Gabfest: StoragePug and MR Management.

Each session features hand-picked industry pros who will dive deep into relevant topics surrounding our industry, share best practices, and explore trends in the market. It's our hope that these sessions help you navigate your self storage business better during these uncertain times.

Want more tools for your managers? Join us on Gabfocus weekly on Thursdays.

Top Questions Answered in this session

What did the 2008 Recession teach us that we can remember in the wake of COVID-19? How is this time different?
What is the status of rent collections in April/May/June?
Is the sector still facing oversupply risk or will COVID stall the pipeline and bring supply/demand balance?
Is self storage recession-resistant? How deep of a downturn until self storage starts to feel the pain?
What are the most important characteristics for a property to operate successfully in today’s climate?
Are there still investment opportunities in the self storage landscape?
Are you seeing increased interest in self storage from investors of other property types?
How are lenders responding to forbearance requests?

These are just a few of the questions answered during this session! Get your pen and paper ready!

John Chang

SVP of Research Services at Marcus & Millichap

Website: http://marcusmillichap.com/
Email: jchang@marcusmillichap.com

stacey-gorman-2

Stacey Gorman

SVP of Investments at Marcus & Millichap

Website: http://marcusmillichap.com/
Email: sgorman@marcusmillichap.com

Resources from this session

Awesome Quotes

“It is recession-resistant because some of the behaviors that are driven by recessions actually bolster demand for self storage. This recession has been relatively good for self storage.” - John Chang

“Private investors who have access to the market have an intrinsic advantage right now because so many of the REITS and institutions really don’t have the ability to come in and play in the bidding process.” - John Chang

“Having those auto payments, the properties I’m hearing are suffering more are ones that don’t have auto payments and rely on tenants paying cash and coming in the door.” - Stacey Gorman

“Online fulfillment, that’s critical, square one necessity. If you can’t order, reserve, and pay for a unit online you are missing out on 60% of the market, especially with the millennial generation.” - John Chang

“Over the last couple of years, we have had this huge wave of construction in the self storage sector- in terms of supply and demand the huge wave of construction has been met with really good demand.” - John Chang

“If you are investing for the long haul, storage has been so strong through ups and downs in the economy that (for me) it’s an easy decision to make.” - Stacey Gorman

Resources Mentioned

2020 Self-Storage Investment Forecast

Question of the Week

We asked our panelists: What are the key factors to look at when investing in self storage real estate?

“Understand the long term supply and demand drivers from the big picture level, the national level, the regional/local level, and that one street corner that you are going to be on - is the key ingredient for your success.” - John Chang

“Look at real estate rental rates are and looking at your rent per square ft, that is key to making sure you are getting into a profitable endeavor.” - Stacey Gorman

Gabfocus Takeaway

Compared to the 2008 recession, the self storage industry is in a great place. Vacancy rates are low and new facility construction has been on-par with market demand. If you are a self storage investor that’s looking to wait out the storm, you may need to re-think your strategy as there are key factors at play keeping the REITS and bigger institutions from bidding against you. And, with the rise in market demand among the millennial generation, it is critical to have online fulfillment for your facility - without it you are missing out on 60% of the market.