With tiny, expensive apartments and a lot of stuff, decluttering may be what New Yorkers talk about, but what they really do is rent more space. And self-storage companies and real-estate investors are ready and waiting to fill the demand.
New York City is packed with customers who see storage lockers as extensions of their closets. And the room for growth is evident: The self-storage space per capita in the five boroughs is 1.5-3.0 square feet, compared with 7.0-8.0 square feet nationwide, according to brokers, analysts and real estate executives.
“It’s the best storage market in the world because it has this incredible density of population,” said Tim Martin, chief financial officer of CubeSmart, a real estate investment trust that has about 30 self-storage buildings in New York City with three more scheduled to open over the next two years. “And you have a lot of people living in small spaces who move around a lot.”
Companies across the country are joining CubeSmart in making a bid to expand or break into the New York City market, despite what analysts and industry executives describe as serious drawbacks: high land prices, stiff competition from developers of more expensive residential and office space, and zoning regulations that are expected to get even tougher.
Extra Space Storage Inc. has 14 self-storage locations citywide and plans to open 4 more in Brooklyn and 1 in Queens in the next 12-18 months. Post Management Self-Storage will open four self-storage buildings in the Bronx, Brooklyn and Westchester County. New entrants, such as Orlando, Florida-based Simply Self Storage and its partner Brookfield Asset Management are trying to establish facilities in Manhattan and the surrounding five boroughs. The Canadian real estate giant has only a few self-storage sites in the metropolitan area, but it hopes to buy more, according to Brian Kingston, chief executive of Brookfield Property Partners LP, a subsidiary of Brookfield Asset Management.
“We would like to own more assets than we do currently in the New York City area,” Mr. Kingston said. “We think it’s a great market in general for real estate, and for self-storage there is an acute need.”