The 2000 US Census reported that the United States population was approximately 281.5 million. At the same time, the total amount of US self-storage was estimated to be approximately 1.3 million square feet, indicating that there were approximately 4.62 sq. ft. of self-storage space for every person in the United States. Compare this to the United States population in 1960. There were 180.6 million people and an estimated storage supply of only 180 million square feet, or approximately 1 rentable square foot of self-storage per person. According to these statistics, the amount of self storage space in the United States has quadrupled in the last 40 years. However, as a result of the recent economic recession, we are now experiencing an oversupply of self-storage space throughout the country.
In order to effectively appraise a proposed or existing self-storage facility, a market analysis is necessary to analyze how the market interacts with a specific property. Performances in the past, present, and future impact the value of a specific property, and these market trends are always changing. The analysis starts by defining the market area and identifying who the competitors are. The existence of competitive properties helps to demonstrate demand trends. Potential demands can be quantified using demographic statistics meshed with industrial ratios such as total rentable square feet per person. Self-storage appraisals tend to be rich in value analysis and weak in market analysis. This is not the case in our appraisal reports.
After determining the subjects’ highest and best use as a self-storage facility, the three traditional approaches of value including the Cost Approach, Income Approach, and Sales Comparison Approach are utilized before arriving at a reconciliation of value.