Self-storage is one of the strongest segments of the U.S. real estate market. The storage industry generates $35 billion a year, and one in five Americans uses storage units to store their belongings.
However, the industry has not yet reached its peak, and there is a trend that promises to increase its scope: the subdivision of buildings into independent units.
The condo-storage model: Innovation and new Opportunities
The business model proposed by condo-storage represents a breath of fresh air for the storage industry. It is a reformulation of an established product, which allows the market to expand to new types of public. Indeed, the subdivision of buildings into units makes it possible for small and medium-sized investors to join this business, with capital outlays starting at around USD 50,000.
This reconfiguration of storages marketing does not imply the replacement of one type of target investor by another, but constitutes a market innovation. In other words, a strategy whereby a business introduces a novelty that allows new segments to be incorporated. The possibility of acquiring storage units and scaling the investment progressively increases the segment's alternatives in terms of costs and, therefore, favors its expansion.
"Condo-storage has even demonstrated the ability to generate even greater returns than those offered by U.S. Treasury bonds."
Marcos Victorica
The condo-storage model: innovation and new opportunities
The business model proposed by condo-storage represents a breath of fresh air for the storage industry. It is a reformulation of an established product, allowing the market to expand to new types of audiences.
Indeed, the subdivision of buildings into units makes it possible for small and medium-sized investors to join this business, with capital outlays starting at around USD 50,000.
This reconfiguration of storages marketing does not imply the replacement of one type of target investor by another, but constitutes a market innovation. In other words, a strategy whereby a business introduces a novelty that allows new segments to be incorporated. The possibility of acquiring storage units and scaling the investment progressively increases the segment's alternatives in terms of costs and, therefore, favors its expansion.
Superior Yields
It is such a simple operation that, unlike what happens with other real estate properties, its commercialization depends on its objective utility and not on its subjective attractiveness. So much so that, on many occasions, those who acquire these properties do not consider it necessary to meet them in person before buying them.
The key: relying on production, not on population
One of the keys to the success of this industry lies in its dependence on production growth, not population growth. As long as the U.S. remains one of the most productive countries in the world, it will continue to generate a surplus to store, and the self-storage business will continue to grow. Storages are assets deeply rooted in American culture, as necessary to the country as airports and highways.
The condo-storage not only represents a reconfiguration within the sector, but also a new range of possibilities for the modern investor.
Marcos Victorica is Founder and CEO of BAS STORAGE.
Company that is revolutionizing the American real estate market by creating a product based on the American economic infrastructure.