From the gravel drives and metal sheds in the back of industrial parks, storage had extremely humble beginnings. More recently, self storage is a full-blown multi-billion dollar industry with waves of real estate investors entering and recognizing the true potential of self storages’ ability to bring favorable returns.
With the turmoil of the past year’s pandemic, even more focus is being placed on the industry as more people look to store their items temporarily while transitioning to a new job, a new home, from college to school, or from office work to working remotely. And as with all industries on the rise, the talk is moving to how technology can help self storage continue to blossom. How do you leverage technology to help you make smart investments in the self storage industry and manage your investments properly? What is the future of self storage and what types of technology should you invest in to prepare for that future?
The team at AppFolio Investment Management recently sat down with John C. Lindsey, co-owner of Lindsey Self Storage Group to talk about his new book, The Sexy Side of Self Storage, and his views on the future of technology in self storage. Here are some excerpts from the interview:
AppFolio: The name Lindsey has been synonymous with self storage for a while now. What inspired you to write a book on self storage, and why now?
John Lindsey: My family’s been in this business since 1969–this is all we’ve ever done. My dad was a developer, and then my brother and I stepped more into the brokerage side of things and took ownership of our family portfolio over the years.
The book was really timely because I think storage has seen this real accelerated phase over the past decade. It is not the industry of yesteryear.
In this fragmented industry, there’s still a lot of single-owner operators or smaller operators that are getting left behind and it’s no fault of their own. The industry has all of a sudden picked up so much pace and speed. For some, it’s been very difficult to digest and process what’s actually going on in the storage industry today.
So I wanted to discuss the changes that we’ve seen in self storage over the past decade. I really wanted to talk through our experiences, trials, and tribulations, and paint an overall picture of what’s happening today in self storage. The clearest way I saw getting that done was to write about these experiences in a book.
AppFolio: And the book is incredibly insightful for anyone trying to learn more about the industry.
John Lindsey: Self storage has proven to be a necessary commodity, and it is resilient even in times of uncertainty–and this uncertainty can be both good or bad. We typically say that self storage is driven by 3 D’s: death, divorce, and downsize.
This sounds negative, but it doesn’t have to be. Let’s take a look at last year: people were spending more time at home, and many decided to remodel part of their house while living in it, and that required storage. We saw a lot of people be able to move when work from home became more flexible, and they needed to place their things in storage depending on the move.
With the current housing market, we’re going to continue to see a lot of people take advantage of this opportunity and sell, and we’ll most likely see increased demand for storage as they transition. The same can be said for the trend we’re seeing with large companies moving or expanding their headquarters.
At any time of uncertainty in someone’s life–whether it’s good or bad–there’s most likely a demand for self storage.
AppFolio: You mentioned self storage experiencing growth over the past few years. How has this impacted the Lindsey Self Storage Group?
John Lindsey: Thankfully, our growth has gone hand in hand with the storage industry. We’ve been on a very strong upward trend for the past decade.
Aside from the great longevity play of our company, I think part of this growth is attributed to how much we’ve given back to the storage industry as a whole. We’ve been running state associations to get bills passed, sitting on the National Board, being on code committees, working with banks, helping developers, whatever it may be. By being very, very involved in the industry at large, we’ve been able to help ensure we make good connections within the industry and ensure the industry is going to be strong in the long run. We’re building a future we want to be a part of.
AppFolio: When you think about innovation in the self storage space: how have you been able to innovate to stay successful in this rapidly changing industry?
John Lindsey: Innovation has impacted this industry in two ways: first, technology has made a great impact on the business operations through innovations like remote management and keypad upgrades. Beyond that, there has been innovations in software for this industry that has allowed us to manage people and partnerships effectively and this has had an important impact on the way we do deals.
We’re seeing a wave of attention coming toward self storage recently, and people are growing their portfolios into self storage. These investors that are interested in the space also want their investment performance data to be on-demand and available whenever they want it. This has been a huge driving force in the industry, and we’ve had to innovate and use the right tools to make sure we stay ahead.
AppFolio: So how do you keep these investors engaged, and how do you make sure you’re giving them the right information at the right time?
John Lindsey: In this day and age, I think we can all relate, whether you’re trading dogecoin or you’re investing in storage facilities, everyone wants immediate access through their phone. They want to see what’s happening every waking second.
And it’s funny because back in the ‘70s, my dad said investors would get an annual report mailed to them, and that was it–that’s all they’d hear. Nowadays, the expectation is to provide reports daily, weekly, monthly, generated specifically for certain investors–times have changed.
We use AppFolio Investment Management because you’ve been able to shape a platform that speaks to the investor of today. It allows us to provide information to any type of investor, even really sophisticated ones, and to keep them informed and engaged in self storage, which is important.
Feedback from our investors on the experience we provide has been just tremendous. We’re able to keep all of their information up to date, and they can access it instantaneously. They love seeing a chart of their investments over the years. They’re confident in the work we’re doing and are able to see the progress the investments have made at any time.
AppFolio: That’s great to hear. Is there a specific feature of AppFolio Investment Management that has helped the most?
John Lindsey: Honestly, I just love the seamless automation of all our processes. It allows me and my team to stay focused on what matters to us.
The self-storage space is poised for more progress, and those successful in the space understand the importance of leveraging technology to help them perform and exceed investor expectations.