The U.S.motion picture industry last year may have done $7.7 billion at the box-office, but it's dwarfed by the prosaic self-storage business, which doubled that figure.
Self-storage did $15 billion in gross annual revenue.
It's not glamorous, insiders admit.
But it's healthy, it's growing, and it's everywhere.
Insiders are enthusiastic fans.
The self-storage sector has caught the attention of real estate investment trusts, and made a year-end Forbes Magazine list of eight picks in REITs.
"Self storage is one of the secrets of the commercial world," says Daniel P.Wager, owner of Reno Self-Storage."And it's one of its best investments."
Wager, a dot-com success story, came to Reno with loose change in his pocket from the sale of his Quick Quote Web site.After the glamour of international travel and intensity of high profile success, he sought a hands-off investment.
With cash flow.
And this business has an even cash-flow year round, he says.
Michael T.
Scanlon Jr., president and chief executive officer of the Self-Storage Association, adds, too, that nationally the industry has been on an upward trend since the early 1990s growing about 3 to 5 percent per year, standing at about 3 percent currently.
And, though there is a move now toward larger firms gobbling up smaller ones, self-storage facilities typically are small operations.
The Self-Storage Association counts about 44,104 facilities in the United States, owned by 31,000 companies.
The math gets interesting, too, because the top 100 companies own 7,000 of those facilities, leaving 37,000 owned by 30,900 companies.
"We're a small operation industry," Scanlon says.
Wager owns three facilities under the Reno Self-Storage umbrella.
The northern Nevada region, with its transient population, is a natural for self-storage.
People on the move getting married, divorced, changing jobs, selling a house, relocating are people who need storage space.
"What goes into a storage unit is peoples' lives," says Shelli Schilt, coordinator of Stor- All, a family-run, five-facility business founded in 1971 and still owned and operated by the Gardnerville-based Whear family.
But one of the beauties of the industry is its money-for-nothing aspect, she adds, explaining: Once the units are built, the rent's paid and the cash flows.
An owner's presence is not a 24/7 requirement.
The industry has very low staff requirements,Wager agrees.He estimates that he runs his centers with one fulltime and one part-time employee per site.And with onsite housing thrown in, a manager can be found for about $24,000 plus benefits.
There must be a downside, though, to almost any business."Not really," says Wager.
Employee pilferage is hard to track, he says.
Some customers those contemplating divorce and stashing their treasures, for example like to pay cash.
But with computerized tracking systems, it's getting tougher to pilfer.
Occupancy rates are not a problem either.
Nationally, the industry runs at about 85 percent occupancy, according to the Self-Storage Association.Wager figures his units average a 99 percent rate.Whear's Stor- Alls average in the high 90 percentages, she says, seeing fluctuations in mining regions dependent on mine openings and closures.
Another local self-storage owner,William Manke, head of the family-owned Emigrant Storage,worries when his occupancy rates go too high.
"You never want to be plumb full," he says.
That means your rates are too low.He likes to run his facilities at 10 to 12 percent vacancy, keeping rates up.
But it's location that determines the health of a self-storage business, he says.
People will drive up to about two miles to stash their stuff, not much more.
The talk is that the industry is recessionproof and insulated against temporary market downturns, too, says Wager.At least, it has been for him.
Even during the downturn of 2001-2002, he says, occupancy rates remained at 98 percent.
But with the word out on the great investment that storage units make, are we headed for market saturation? In some markets, yes, says Scanlon in some urban and suburban markets.And Reno? Not yet, says Wager.
But close, says Manke.
The secret is to follow the population to the housing developments proliferating on the outskirts of northern Nevada towns and cities,Wager says.
Be there not before the people, but with them.
As land prices go up, though, buy-in to self-storage goes up, too.Manke,who bought his 2500 Longley Lane location for 35 cents per square foot years ago, is now sitting on land worth $7 per square foot.He's not ready to sell anytime soon.
But, still, that's another reason to buy selfstorage, says Wager.
It creates cash flow on land while the population grows up around it making money while building equity.
"In the old days," says Scanlon,"you could put a self-storage anywhere."Not anymore.
Today, he says,"You have to be very careful where you decide to build."
With most areas nearing saturation levels, competition is fierce, and affordable prime locations are scarce.
And the next trend in this dull but lucrative business? It may be diversification and upscale units, says Scanlon.
Already, many self-storage facilities offer moving truck rentals and packing materials.
Owners are diversifying the product, too, he says, by going into boat, RV and big-toy storage.
Some are also creating climate-controlled units for wine storage.
Wager is planning an expansion on his Mill Street facility to include a large, indoor unit for 45-foot motor homes.
And meanwhile, too, he's considering bringing another take on the business to Reno: self-storage condos.
Condos are a trend in Los Angeles, he says.
And just like housing condos, people buy the building and pay association fees.
Rick Johnson and Jerry Edlefson are also believers in the future of condo self-storage.
They announced plans to build upwards of 250 of them, dubbed The Toy Shed, in Mound House this year.
