Charlotte’s more lenient approach to self-storage projects is allowing lots of new investment for the business of storing one’s treasures. Childress Klein is leading the way with a new facility opening this month.
Stuff — people have a lot of it and it needs to go somewhere. People’s love affair with stuff has inspired an entire industry dedicated to housing it, and that industry is booming — predicted to reap revenues of more than $32 billion this year according to IBISWorld. Even large investment firms are cashing in on the business and developing storage units.
Drivers for demand include what is known in the industry as the four Ds: divorce, downsizing, dislocation and death. With people relocating, getting married or moving back home, there seems to always be a need for people to store items that they aren’t using at the moment but don’t want to toss.
Charlotte is a hotbed for these projects. Six self-storage projects have been announced during past year, all within a few miles of the central business district. The proliferation was made possible in part when the city of Charlotte last year changed its zoning rules to allow self-storage facilities in mixed-use developments. Developers of the center-city properties include Charlotte-based Morningstar Properties, LLC, which manages 27 storage properties, mostly in the South. The company ranked as the nation’s 46th largest self-storage operator, according to a 2015 study by Inside Self Storage magazine. Other investors in Charlotte’s new self-storage projects are based in Columbia, S.C., Colorado and Florida.
Childress Klein is leading the way in the local race to develop self-storage units with its $7 million self-storage facility, SpaceMax Storage, set to open on Monroe Road this month. Perhaps best known for its office and mixed-use properties, Childress Klein has been developing and managing the SpaceMax Storage business out of its Atlanta office for 11 years. These aren’t your storage units from years past located outside with no heating or air. These units are located in multi-story facilities with guards and other layers of security, controlled temperatures and elevators.
DevelopCLT talked with Chris Poholek, a 27-year Childress Klein veteran and division partner in charge of the self-storage division.
DevelopCLT: Why did Childress Klein get involved in storage units?
Chris Poholek: I had always been interested in self storage. In 2005, we were looking at other developments. I felt like self storage had progressed to the point where our company might be interested in it. I brought the concept to our principals in Atlanta, Don Childress, and they were willing to look at an Atlanta site. We ended up building three facilities over three years in Atlanta. They all were successful.
DevelopCLT: When did you move into Charlotte?
CP: Basically, we took a break during the recession and started back in 2015, when we opened a fourth location in Atlanta. At that point in time, we felt we could look in Charlotte as well for opportunities. We were looking around and found this property we are building on. This was 2013 when we were looking at this. We bought the property in 2014. It’s been in the works for a long time, and we’re excited about it coming.
DevelopCLT: What was it about this property type that attracted you?
CP: I thought it was very similar to our other business (office, class A office building). And this new product, climate controlled multi-story is very similar, in that you build it, lease it up to customers, then manage it. I also felt we could manage it because we had experience in managing multiple types of property. It’s a very stable product when you get it leased up.
DevelopCLT: Why is self-storage so popular?
CP: I think what’s really has driven the recent need for storage is that people are aware of storage, and storage is now a very comfortable idea. It’s not the old garage-style drive up, where you are a little bit nervous and weather and bugs can get in. Now it’s almost like your own home. You go in, it’s completely climate controlled, you go through two or three levels of security. I think people are more comfortable using it, more aware of it. And population growth.
DevelopCLT: How is Childress Klein putting its stamp on the industry?
CP: The product we’re building is a little bit different. We took that Childress Klein mentality of ‘Let’s do everything in a class A manner.’ We’re trying to manage it that way. We put in landscaping, security, cleanliness. We’re trying to do all those things the best we can be to not only gain those customers, many are short term, but you want them to come back or recommend us to neighbors.
Revenue in the U.S. self-storage industry according to IBISWorld and the SpareFoot Storage Beat blog
2014 (estimate): $29.8 billion
2015 (estimate): $31.6 billion
2016 (forecast): $32.7 billion
Number of self-storage facilities in the U.S. forecast for 2015: 54,009
Number of self-storage facilities in North Carolina: 1,595
Source: Self-Storage Almanac and SpareFoot Storage Beat