Selling space; Self-storage is a $32 billion industry that no one notices

Well into the mid 20th century, the thought of selling nothing but empty space to someone probably seemed ludicrous. (Probably as ridiculous as bottling and selling drinking water that you could get from the tap for free!) After all, how could one person – or even one family – have so much STUFF that they needed an extra space to store it all? 

But in 1958 in Fort Lauderdale, Florida, that’s exactly what happened as the first modern self-storage facility opened. A few years later in the 1960s, a copy cat about a storage facility in Odessa, Texas called “A-1 U-Store-It U-Lock-It U-Carry the Key,” which apparently attempted to give consumers the entire premise for the industry right in their name. What was interesting about these storage spaces was that they were located in an industrial near where fisherman needed to store their boats for the winter.

The convenience of off-site, secure and easily accessible personal storage for the average person took off in 1972, when the first Public Storage opened in El Cajon, California catering the idea to the general public and launching a massive new industry.

So 45 years later, just how prevalent are self-storage units in our society?

9% of all U.S. households – nearly 1 in 10 – currently are renting a self-storage unit, adding up to about 10.85 million people that have their things in storage!

That’s up from just 6% of households that used self-storage in 1995.

We have so much storage space that every household in America could rent 21 square feet of space and we wouldn’t run out, or an average of 7.3 square feet of storage for every man, woman, and child in the United States.

In total, we have about 2.3 billion square feet of personal self-storage space, adding up to 78 square miles of storage.

To put it in perspective, if you combined all of the storage space in the United States, you could fit three Manhattans inside of it with room to spare!

There are now about 52,500 self-storage facilities (not individual units) in the United States. 48,500 of those facilities are the primary source of income for their owners.

Compare that to the number of self-storage facilities in all of Canada (3,000) or Australia (1,000) and you can see that we have a serious overflow of stuff.

The average self-storage facility spans 46,500 sq ft, which is about as big as one football field (57,600 sq ft with the endzones or 48,000 sq ft without them).

In 2016 alone, the self-storage industry in the US generated an estimated $32.7 billion in profits, a 33% increase from $24 billion in revenue in 2013.

That’s more than every individual company in the Fortune 500 except for Apple ($53.4 billion profits).

The self-storage industry's $32.7 billion in profits is also more than the total GDP of Bahrain, Yemen, Latvia, Paraguay, Honduras, and Iceland, and 88 other countries.

People don't keep their things in storage forever, or even on a long-term basis. In fact, 13% of all self-storage renters keep their unit for less than three months, 18% rent for 3-6 months, 18% rent for seven months to a year, and less than 50% rent for a year or more.

Investing into the self-storage industry and building new facilities has proven to be a safe and fruitful move. In fact, growth rates in REITs (real estate investment trusts) that focus on self-storage units have increased 5.7 to 8.5% per year the last few years, with expected growth of at least 3.5% annually over the next five years. 

Despite the massive growth in self-storage facility construction, occupancy rates remain high, with about 90% of all self-storage units presently occupied – and a waiting list at many facilities. 

But the growth of the industry doesn't just point to our gluttony but also serves a vital purpose, as 6% of all self-storage units are rented to our military personnel and their families.

The biggest companies in the self-storage industry include:

1.         Public Storage: $2.56 billion in 2016

2.         Extra Space Storage: $991.87 million in 2016

3.         CubeSmart: $510 million in 2016

4.         Life Storage: $462.6 million in 2016

5.         U-Haul: $247.9 million in 2016 (self-storage revenue only)

The largest self-storage operators in the U.S. (listed by the number of facilities) include:

1          Public Storage: 2,348 facilities

2          Extra Space Storage: 1,427 facilities

3          U-Haul (AMERCO): 1,360 facilities

4          CubeSmart: 791 facilities

5          Life Storage: 659 facilities

While there are 4,500 mid- to –large sized firms that run multiple storage facilities,

About 27,650 facilities are owned and operated by small business entrepreneurs.

In fact, 90% of all self-storage facilities are run by entrepreneurs that own just one facility.   

Over the last 35 years, the self-storage industry has been the fastest-growing sector of the U.S. commercial real estate industry – more than malls, office space, medical facilities, etc.!

Primary self-storage facilities employee about 163,000 people across the country, or an average of 3.5 employees per facility other than the owner.

Who rents these storage spaces? About 27% of all people who rent storage spaces live in apartments or condos, while 68% live in single-family homes.

It's hard to make a case for shrinking living spaces for our increase in self-storage use, as 68% of all storage renters have a garage, 47% have an attic, and 33% have a basement at home!

Nor do we need more storage space because we live in small spaces in cities without extra room, as only 32% of storage facilities are urban, 52% suburban and 16% in rural areas (assuming people rent near where they live).

You may be wondering how much a self-storage unit will cost you. Of course, things are always more expensive in California, but the average cost by unit size nationally is:

5×10: $63 per month

10×10: $96.09 per month

5×5: $45.30 per month

10×20: $137.06 per month

10×15: $123.01 per month

The self-storage industry is so big that it has its own tax-exempt organization, The Self Storage Association (SSA), which lobbies Congress and other federal agencies on behalf of owners and businesses in the field.

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Study finds that the average family use only 40% of their home's floorpan regularly.

This floor plan hasn't been afflicted with red chickenpox – it's part of a fascinating study into how the modern family uses their home, and it’s contributing to a new field called “Residential Behavioral Architecture.”

What you’re seeing is a “heat map” of foot traffic in one of the subject’s homes in Los Angeles, with each red dot showing a person standing or walking when they took a survey photo every 10 minutes.

The study originated when a UCLA research group used advanced sensors and cameras to follow 32 middle-class families around the first floor of their home over two weekday afternoons and evenings – prime time hours. The UCLA team was trying to track the patterns and use of residential space for today's family and this heat map of the subject group "Family 11," a typical family living in an approximately 1,300 square foot single family home in the Los Angeles suburbs, tell us a lot. 

Even a cursory glance reveals something important about the location of each parent and child on the first floor of Family 11’s home: they don’t use a whole lot of it.

In fact, the study found that the family’s movements were concentrated mostly in three rooms: the dining room, family room, and kitchen. In the case of Family 11, the dining room, kitchen and family room comprised almost half of the total square footage on the first floor, yet the other rooms remained virtually untouched even during prime traffic hours.

While the “hottest” imprint occurred around the kitchen cooking space, kitchen table, and between the computer and TV area in the family room, the living room was untouched except for a piano lesson, the dining room only had one person walk in, and same goes for the pantry/laundry room.

Jeanne Arnold, who ran the UCLA study, said, "The propensity for the family to aggregate near the kitchen with table space is almost universal" among all of the subject families and homes they monitored.

Even the outdoor front porch went completely unused even tough the weather was perfect in temperate LA at the time they family was observed. It’s estimated that Americans use their outdoor living spaces only 10% of the year, even when the weather conditions are welcoming.

In all, it’s estimated that of the 1,344 square feet on Family 11’s first floor, only 528 square feet was used regularly – or just shy of 40%.

This ensuing heat map was featured in a Wall Street Journal article about the book "Life at Home in the 21st Century," which documents the findings of the UCLA researchers.

The map doesn't just document our typical daily lives in a unique aesthetic but speaks to the patterns of how we're living in the 21st century.

For instance, the average home size was about 2,662 square feet as of 2013, but the average home was only 938 square feet in the 1950s. We also had more people per household in 1950, with 3.37 people/house then compared to only 2.54 now.

Even in the 1970s, we had larger family sizes and more people in each home, with 40% of the US population comprised of married couples with kids in that decade. These days, that number has dropped in half to only 20% of our population that’s made up of married couples with children.

But our homes are still big and bigger – even though we aren’t using even half of them regularly according to this study. In fact, 20% of American houses have four or more bedrooms, 41% have three bedrooms, and 26% have two bedrooms, and only 12% are either one-bedroom homes or studios.

With expansively larger homes comes larger lots and. As residential behavioral architects point out, longer commute times, a bigger carbon footprint and environmental impact, and a propensity to purchase things that we really don't need or use. That overabundance includes a whole lot of unneeded square footage that we're not even using, according to this UCLA heat map study of Family 11.

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How much of your floor plan do you and your family actually use? Conduct your own study by putting a notepad in each room on the first floor. Every time someone goes into that room, they are to mark a check on the pad. At the end of the allotted period (one afternoon/evening or one weekend day when everyone is home) add up the check marks, put a red dot on your floorplan graph for each one, and you'll be able to see how much of your space is being used.

Understanding a real estate Comparable Market Analysis (CMA)

At its core, real estate is all about valuing properties. Sellers want to list their home for as high as possible, and buyers want to get a great deal on a property that will only go up in value.

So if it all comes down to value, how can we gauge property value without paying for an extensive appraisal?

I’d like to introduce you to the Comparable Market Analysis, or CMA as you’ll commonly hear it called. CMAs are professionally generated value estimates based on hard facts of home sale data – not speculation or subjective guessing. It follows a particular format and structure that is similar – but not identical to – a more intensive paid appraisal that banks or lenders conduct.

CMAs have a lot of utility for both buyers and sellers. For sellers, it's the first step to getting a realistic range of what price your house may sell for in today's current marketplace. It’s important to note that it’s not a definitive “answer” as to what your home is worth, but a possible range depending on certain tangible variables. With a CMA, homeowners can see a general range of what their home is worth and also gauge the competition if they decide to sell.

For buyers who are interested in a property, a CMA gives them access to hard data for which they can base their price if they decide to write a purchase offer. It also confirms or double checks if the listing price the seller chose is accurate, realistic, and fair in today’s rapidly evolving buying and selling environment.

But if you’ve ever received a CMA – possibly in an email from your Realtor – it might just look like a lot of data and numbers at first glance. So let’s dissect the parts of a CMA one by one and explain how to read it properly.

Here’s what you’ll see in a CMA:

-On the cover of the CMA, you’ll see the subject property address listed along with an overhead photo of the dwelling and its surrounding neighborhood from GoogleEarth.

Where do these properties come from and why were they chosen for this CMA? The real estate agent that produces this CMA for you hand selects properties that they think are similar to the house we’re trying to value. That means we’re comparing single family residence to the same, condo to a condo, etc. and not comparing a halfplex to a duplex, etc.

Ideally, the properties in the CMA that we’re comparing to have sold recently – usually with 6 months or less as a rough parameter. The more recent the home that sold (or is pending or listed, etc.), the more relevant that price will be for comparison purposes.

Likewise, we want to compare the subject property to homes that are in the same neighborhood, as the price for the same 2-bedroom, 1-bath, 1,000 sq ft. structure could either be dirt cheap or sky high depending on the quality of the neighborhood. So to be as accurate as possible, we want to compare to homes that are in the same area, usually within half a mile or so, with most credence given to the homes that are on the same street or closest.

It's important to note that this isn't a perfect science. Sometimes, there are dozens of comparable properties to choose from that are right on the same street and have sold within a couple of months. Other times, you may have to go a mile or two out and further back in time to find enough similar listings for an accurate CMA.

But what we don’t do is “cherry pick” certain properties just to justify a higher or lower price – that doesn’t do the buyer or seller any good and just wastes everyone’s time because the results will be skewed.

-You’ll see a Map Of All Listings which displays pins on all of the listings the CMA is based on (properties as similar as possible to the subject property.) These will be color coded as active, pending, or sold listings.

-The Summary of Comparable Properties then breaks down those properties, grouped by active, pending and sold listings. Of course, sold listings hold more weight when factoring a CMA because their sold price is a matter of fact, where pending listings might sell for less. Since anyone can list their home for any price, active listings bare the least influence on the CMA.

In this Summary of Comparable Properties, data like the number of bedrooms, bathrooms, year built, square footage, list/sold price and sold date are all documented for each property.

-In the next section, a full CMA will go into further detail in an expanded view of each property with more information like year it was built, the lot size, photos, and agent remarks that are useful for understanding repairs that need to be made, upgrades that could boost the value, whether it’s a rental property, and many other comments.

-Comparable Property Statistics

Now we’re getting into the portion of the CMA that gauges the hard data of the subject property lined up with our chosen comparable properties. 

For each of Sold, Pending, and Active listings, the lowest, highest, and average price will be documented, as well as the average Days On Market. This information will be displayed as a bar graph and then also charts.

So now you have a thorough statistical analysis of your subject property compared to sold, pending, and active listings that are in the same neighborhood and approximately the same size, type, bedroom and bath composition, etc.

You know which listed homes sat on market for a long time before selling, and which were snatched up by eager buyers and sold quickly.

With all of this data displayed in several different forms side-by-side, you can easily judge you’re the subject home’s potential value based on a tight range, no matter if you’re selling your home or looking to buy one and want to make sure the price is fair.

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Do you still have more questions about CMA's or your home's value? Contact us! 

30 Facts about In-N-Out Burger (including the secret menu!)

If you've lived in California, then you've probably tasted an In-N-Out Burger. In fact, the high-quality fast food burger joint is a Cali institution, with rabid fans instead of just customers.

Here are 30 facts about our favorite, In-N-Out Burger (including the secret menu!):

1.    There are presently 313 locations of In-N-Out Burger in existence, most of which sit in California, the food chain’s home state. But there are also locations in Arizona, Nevada, Utah, Texas and Oregon.

2.    There are four In-N-Out Burger locations in Sacramento and 18 in total among Sacramento, Placer, Yuba, and El Dorado counties.

3.    In-N-Out Burger was founded in 1948 when newlyweds Harry and Esther Snyder opened the first location.

4.    Harry Snyder was a huge fan of drag racing and once bought 50% of the Irwindale Raceway just so that he could serve In-N-Out at their concession stand.

5.    The Snyders always had their sons, Guy and Rich, do entry-level work prepping, doing dishes, and taking out the trash when they worked at the family chain. 

6.    After founder Harry Snyder passed away in the 1980s, his son, Rich Snyder, a devout born-again Christian, started printing Bible verses on the bottom of In-N-Out cups and wrappers, although the company has never released a formal statement on the matter.

7.    That humility and work ethic was passed down to Lynsi Torres, heiress to the In-N-Out franchise fortune when she turns 35, which will instantly launch her into the $500 million-plus income bracket.

8.    Back in 1948, the first In-N-Out location featured a groundbreaking (at the time) drive up lane for cars, the precursor to our modern drive-up window.

9.    In fact, In-N-Out was the first chain to install two-way speaker systems in their car drive up lanes, as before that, “carhops” came out to take orders and deliver food.

10. The intercom and drive-up lanes revolutionized the burger business, allowing customers to "get in and out" quickly, hence the name.

11. However, it wasn't the first, as Red's Giant Hamburg in Missouri had implanted a drive up window the year before. But when Red's closed in 1984, In-N-Out became the oldest drive-through burger joint in the country.

12. The chain didn’t expand outside of California until the 1990s, when it put their first non-California location in Las Vegas, Nevada.

13. Most In-N-Out locations have a pair of crossing palm trees planted out front. That signature landscaping was an inspiration from the movie "It's a Mad, Mad World," in which treasure is buried beneath palm trees in the shape of a W. Owner Harry Snyder wanted to mark each of his restaurants as its own treasure, so he opted for two crossed palms in front.

14. Known for it’s creative and sometimes secretive menu options, the first “animal style” hamburger was introduced in 1961.

15. But after that, few changes were made to the menu even as the decades rolled on. In fact, the only two changes since 1996 include sweet tea in a few Texas locations recently, and the addition of Dr. Pepper in 1996.

16. Since their inception, In-N-Out’s philosophy has been to “serve only the highest quality product, prepare it in a clean and sparkling environment, and serve it in a warm and friendly manner.”

17. In fact, In-N-Out's food is never frozen or pre-packaged, making it a far cry from typical fast food and endearing the pallets of loyal patrons.

18. They make every hamburger patty at their own facilities and ship them fresh to stores daily. According to In-N-Out Burger policy, no food product can ever travel more than 500 miles from a production facility to a restaurant location.

19. For that reason, there are no In-N-Out Burger chains in the East Coast, much to the chagrin of hungry would-be customers. But that didn’t stop a magazine from pranking New Yorkers in 2010 on April Fool's Day when it announced that the hamburger chain was opening in Manhattan.

20. In-N-Out makes a significant investment in hiring, training, and keeping the best employees in the business. In fact, there’s an In-N-Out University where new managers are trained diligently.

21. With each manager making at least $100,000 a year and even starting employees earn a competitive living wage, it’s no wonder why In-N-Out has the lowest turnover rate of any burger or fast food chain, with managers serving an average tenure of 14 years.

22. Other than buying a tasty lunch, you can buy In-N-Out swag like hats, t-shirts, pajamas, tracksuits, and even custom Uggs on their website, in-n-out.com

23. Enough with the chit-chat, let's get down to the facts about the secret In-N-Out menu! Not listed on the regular menu and the stuff of Cali lore, you can order options like a side of pre-packaged yellow chilies, root beer floats, bun doughnuts, pepperoncinis on your burger, and a "Monkey Style" burger that has animal style fries on top of a burger patty.

24. Although the company denies it’s a secret, there are a host of expanded menu options that many people don’t realize. For instance, burgers come cooked medium-well as the standard, but you can order your burger cooked the way you like it, including medium rare – a testament to the quality of their meat.

25. On the alleged “top secret” menu, there are also seven different ways you can order French fries: fries light, fries well done, fries light well, fries no salt, fries with special sauce, fries with cheese and fries with grilled onions.

26. For vegetarians, the grilled cheese or veggie burger are big hits, and one of the most popular off-menu treats is the Neopolitan Shake, blending strawberry, vanilla, and chocolate ice cream into one shake.

27. Not long ago, there was one remarkable option on the secret menu where you could order any combination of meat plus cheese, detailed in a numeric format like 4x4, (four patties and four slices of cheese).

28. That all changed when some rowdy customers in Las Vegas ordered a 100x100 option (100 burger patties and 100 slices of cheese!). Needless to say, they were politely refused, and In-N-Out instituted a max 4 x 4 policy after that.

29. In-N-Out offers a variety of creative wallpaper images as well as custom ringtones available for free download at http://www.in-n-out.com/downloads.aspx

30. Hollywood celeb Paris Hilton once was arrested for drunk driving on her way to In-N-Out Burger for a late night after-party snack. She tried to justify her DUI to Ryan Seacrest by explaining, “I was just really hungry and I wanted to have an In-N-Out burger!"