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What $430 Million and a Rose Bowl Parade Float Says about Self Storage

Jan 03, 2014
by Ginny Sutton, TSSA Executive Director

A couple of things which happened at the end of 2013 and beginning of 2014 really captured my attention and made me start pondering what the new year will bring next for the self-storage industry.

First, in early December 2013, Public Storage acquired 44 Stor-All properties for a whopping $430 million.  The deal was the second largest self-storage acquisition ever, with the first being Big Orange's takeover of the Shurgard Storage Centers in a multi-billion dollar stock buyout in 2006.

The REITs are certainly in full swing with acquisition activity or expansion of existing portfolios. In fact, Public Storage took out a one-year loan with Wells Fargo in December for $700 million to take advantage of what the company termed "a preferred equity market." 

in November 2013, non-REIT operator U-Haul announced that the company had surpassed the incredible mark of 40 million square feet of storage in its portfolio.
 
In mid-December, CubeSmart acquired Private Mini Storage, with all but one of the 28 facilities purchased in Texas.  That hit especially close to home, as Private Mini Storage, a privately held portfolio, had been a long-time member of TSSA for more than 20 years.

When I was hired in 1997, the word "consolidation" was on the lips of many, as the REITs were actively buying privately-owned facilities throughout Texas at record prices.  I believe we are still in a state where the independent operator reigns supreme, but it would be difficult to argue that the winds of consolidation aren't once again blowing hard as these large transactions take place. Times they are a-changing...again.

Another event occurred on January 1 symbolizes, at least to me, something important for the industry.  Public Storage entered its first-ever float in the Rose Bowl parade, watched byPublic Storage Rose Bowl float millions across the nation.  Not only did the float capture the imaginations of spectators with its imaginative depiction of "Adventures in Space" and its green-faced, space ship-driving aliens descending from the mother ship, it captured the grand prize for best overall float.  Public relations and positive exposure are important for any industry to be thought of as mainstream and a part of the collective consciousness.  

I think it's important that the words "self storage" could have such a positive association for the public when connected to something as captivating and innocent as a flower-covered float.  Many may have previously associated "self storage" with somewhat negative images such as the "head in the jar" moment from the movie Silence of the Lambs and the 2013 horror movie simply titled Self Storage.  And then there were the not-really-negative but not-exactly-warm-and-fuzzy reality shows Storage Wars and Storage Wars: Texas which focus just on the foreclosure side of things.

In one fell swoop, the geniuses behind the Rose Bowl float managed a public relations coup that, at its core, says to the whole country that self storage is not only perfectly acceptable but creative, fun loving and even a little bit wacky.  To my mind, these are all good associations for the industry as a whole. 

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