We were all nervous, weren’t we?
No one had experienced a global pandemic before, and no one knew what would happen. What would transpire with our families? Our jobs and businesses? Our investments?
Wall Street was nervous. The market dropped about 30% before it later rocketed back to dizzying heights.
I was nervous. As a commercial real estate fund manager, I wondered what would happen to our investments. We invest heavily in self-storage and mobile home parks, which are known to be recession-resistant. But would they be pandemic-proof?
Self-storage during adverse conditions
Self-storage thrives under adverse conditions. People in challenging situations often undergo transition, and some of these transitions lead to more self-storage rentals.
Storage companies often refer to the four D’s: Downsizing, Death, Dislocation, and Divorce. Of course, these are terrible situations, and none of us are happy about them. But they are a reality.
(Note that self-storage typically thrives in a strong economy as well. People filling up their Amazon and Walmart carts need excess storage – often indefinitely.)
The whole economy was awash in fear in the Spring of 2020. It was a major heartbreak for college students when they were sent home in March. But this event led to surprising good news for self-storage operators. College students flooded self-storage facilities to store their stuff until the uncertain date of their return.
A second bonus followed over the past year. With employees effectively working from home, thousands of companies realized they could maintain productivity and potentially reduce office expenses. Many Americans, facing their own mortality, recognized their freedom moment and pulled their future relocation dreams into the present.
We have witnessed a massive relocation boom across the U.S. Many are leaving places like New York and Chicago for the lakefront or mountain retreats they dreamed they would retire to someday. Areas like Smith Mountain…