Southern Nevada’s self-storage market stayed robust during the first half of 2008, reports Marcus & Millichap, thanks partly to a softened residential market creating more transitional housing needs. Financing woes, increased foreclosures and a steady influx of new residents all translate into more self-storage activity, the Encino, Calif.-based real estate investment services company said.
“People moving between cities often store their belongings in self-storage,” said Alan Schlottmann, executive director of the Theodore Roosevelt Institute, an economic think tank with offices in Las Vegas. “Also, the new trend in housing is smaller and with less clutter.”
Roughly 3 million square feet of new self-storage space was completed throughout the West last year, with about half of all new projects occurring in California, Marcus & Millichap reported. The Golden State was responsible for nearly one-third of Southern Nevada’s 79,482 new residents in 2007. Many transplants rent and store their belongings in facilities while searching for permanent residences.
But with lenders still reeling from mortgage-related write-downs, it’s taking longer for new residents to attain home financing, which means extended storage rentals and higher occupancy rates. Storage rents consequently increased 6.1 percent last year across the West, averaging 94 cents per square foot, Marcus & Millichap reports.
Self-storage facilities raked in $20.1 billion in gross revenues last year, reports the Self Storage Association, an industry trade group holding its annual convention in Las Vegas from Thursday through Saturday. Nearly one in 10 households rents a self storage unit, occupying 17.2 square feet on average, which is a 65 percent increase from 12 years ago. There are 51,500 self-storage facilities in the United States, with a combined capitalization value of $220 billion.
“A lot of small, startup businesses use self-storage for their inventory,” Schlottmann said. “People operating home-based businesses through the Internet can also get inventory space through self storage.”
PROJECTS
Road and Highway Builders, LLC is performing a $46 million, 17.8-mile widening of U.S. Highway 95, from 2.5 miles south of Searchlight to the Laughlin Highway. It marks the fourth and final phase of expansion creating a four-lane divided highway. The project will finish in the summer of 2009.
AvroKO, the New York City-based design firm, recently completed the $20 million Lavo restaurant, lounge and nightclub inside the Palazzo, 3255 Las Vegas Blvd. South. The 20,000-square-foot facility has a 1,405-person capacity. Ludo Lefebvre, a James Beard Award winner, is the executive chef.
Burke & Associates completed the $6.5 million, 22,185-square-foot Nevada Partners Culinary Training Academy at 710 W. Lake Mead Blvd. in North Las Vegas. The facility, designed by SH Architecture, consists of a 5,880-square-foot banquet hall, a 1,232-square-foot restaurant, nine training suites and student locker rooms.
Burke & Associates is also performing a $3.4 million, 81,616-square-foot office tenant improvement for the Clark County Department of Aviation inside Marnell Airport Center, 1845 E. Russell Road in Las Vegas. Marnell Properties is the developer; KKE of Nevada is the architect.
Crisci Builders is performing a $3.2 million, 20,000-square-foot retail tenant improvement for ElevenSpa inside Town Square at 6611 Las Vegas Blvd. South. The project, designed by George Brewer Architecture of Delray Beach, Fla., will finish in mid-November
LM Construction Co. finished a $2.5 million, 14,000-square-foot showroom for American Stone at 3741 Civic Center Drive in North Las Vegas. Lynn Centner & Associates designed the two-story building.
Nigro Development is building a new $1.48 million, 5,550-square-foot Bank of George regional branch at St. Rose Parkway and Seven Hills Drive in Henderson. The project is scheduled to finish in April.
Trinity Retail Construction completed a 4,320-square-foot tenant improvement for Mattress Firm inside McCarran Marketplace at 5775 S. Eastern Ave. in Las Vegas. The new store will create seven jobs. Castle’s Design Group was the architect.
MILLION DOLLAR DEALS
Ryder Truck Rentals bought 5.07 acres of vacant land at 8010 W. Post Road in Las Vegas for $6.3 million or $1.2 million per acre, from Southwest Acquisitions, LLC. Colliers International’s Daniel Doherty, Patti Dillon and Laura Hart represented the seller.
Kravitz, Schnitzer, Sloane & Johnson signed a seven-year, $3.042 million lease for 15,731 square feet of office space inside Beltway Corporate Center at 8985 S. Eastern Ave. in Las Vegas. CB Richard Ellis’ Randy Broadhead represented the lessor, Beltway Corporate Center LLC. The reported average rent equals $2.30 per square foot.
Community Bank of Nevada signed a 10-year, $1.8 million lease for 3,500 square feet of retail space at St. Rose Parkway and Coronado Drive in Henderson. Colliers International’s Rhonda Panciro, Grant Traub, and Keith Cubba represented the tenant. The reported average rent equals $4.28 per square foot.
Whiting Turner Contracting Co. signed a six-year, $1.249 million lease for 5,912 square feet of office space inside Marnell Corporate Center at 6720 Via Austi Parkway in Las Vegas. CB Richard Ellis’ Jayne Cayton and Bret Davis represented the lessor, Marnell Properties LLC. The reported average rent equals $2.93 per square foot.
Rhodes Design & Development Corp. signed a three-year, $1 million lease for 12,629 square feet of office space inside Colonial Bank Plaza at 4730 S. Fort Apache Road in Las Vegas. Lee & Associates’ Charles Witters, David Flynn and Kris Watier represented the lessor, REEF Colonial, LLC. The reported average rent equals $2.29 per square foot.
Credits: Las Vegas Business Press
One Response to “Housing Downturn Brings Self-Storage Boom”
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September 4th, 2008 at 4:50 pm
This article hits the issue dead-on. Myself, as well as many of my friends and acquaintances have turned to self storage in an attempt to save a little money now that times are a little tighter.