June 24, 2021
For this week’s blog post, I wanted to discuss one of the most common metrics used by storage investors when evaluating the saturation level for an area they are considering buying or building in. This metric is known as Square Foot Per Capita.
Square foot per capita shows the gross square feet of storage per person within a given area, usually 3 miles for self-storage. It is calculated by taking the total gross square footage for all the facilities in that area and dividing by the total population.
The average square foot per capita for Texas is about 7. Thus, anything over 7 is considered saturated or over supplied while anything under 7 is considered a low supply area. This is a general rule and does not apply to all scenarios. There are many factors that need to be considered when assessing supply and demand in a particular area.
For example, you are looking to build in a city with high temperatures and high humidity (Houston). The area you are looking at has square foot per capita of 15, however the existing supply is older and all non-climate. In addition, the existing supply is located on the other side of a major highway from where you are looking to build a new facility. As, a result of this further analysis, you find there may be high demand for a brand-new climate facility located on the other side of the highway from the competition.
Another factor to consider is people per household, the average for Texas is 2.84. If your area has 3.14, you can assume more people live in a home than usual, thus the demand for storage space maybe higher.
So, where can you find this information? There are many sources that can be used to gather all of this information. For example, the Census Bureau, Appraisal District, Local Development Council, Chamber of Commerce or https://www.city-data.com/. You can also find a local commercial real estate broker that specializes in self-storage such as CRD Realty. We are equipped with specific industry tools that enable us to quickly gather this information for our clients.
If you are looking to purchase or build a new storage facility in the Houston or greater Houston area. Please do not hesitate to reach out to CRD. We are looking forward to hearing from you.
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