The Mile High City has been a high flyer for a while, offering great attractions plus employment prospects to anyone making it their home. And in response to a population increase of more than 21% between 2019-2020, the Denver self storage sector has grown. We asked a local operator about the state of the industry there, and they told us about stiff competition but also about the worth of compassion and a variety of services at this time.
Denver has a diversified economy, with manufacturing and service industries alongside the still lucrative energy and mining sectors. The city’s mid position between several large US cities has also made it an important distribution hub. According to the U.S. Bureau of Labor Statistics, the unemployment situation in Denver has recovered from a low point of more than 12% last year to around 7% currently, better than what was seen a decade ago and roughly on a par with the state average. As a tech-savvy town, the possibilities for teleworking are also considerable, enabling people to work from an office in their bedroom.
Some cities have done better than others recently at retaining and attracting new workers, and one observed trend is that many of them are inland. Western metros, including Denver, were among the places that saw their economies recover faster than the rest of the country. Austin, Kansas City and Indianapolis are also doing well.
The city’s vibrant economy means residents stay and new ones arrive. This is a boost for the self storage sector, especially as the greatly increased cohort of at-home workers can use it expand their space at a reasonable cost. They benefit from Denver’s higher-than-average provision of self storage, now at about 7.6 square feet per person. The market is fairly well penetrated at this point in time: the amount of storage space planned or under-construction is currently equivalent to about 6% of the current inventory, less than the national average of 8%. The current average Denver street rate of $118 for a 10’x10’ unit is an increase of 6% in 12 months, more than compensating for the declines early last year.
To find out more about the self storage industry in Denver, we spoke to Adams County Self Storage, who run facilities to the north of the city center. They offer regular storage units in sizes from 5’x4’ to 8’x40’ with prices starting from $45 a month, and climate-controlled units in sizes from 5’x8’ to 8’x20’. Unit locks and packing supplies are among the items they stock to help ensure the efficiency of their customers’ self storage experience.
In addition to facilities in Boulder and Loveland, Adams County Self Storage provide specialist storage for cars, RVs and other vehicles, very conveniently located near to the I-76 and I-70 interstates. The options there include indoor, outdoor and covered parking, so any vehicle used for holidays, at weekends, or perhaps in competitions can be kept safe and in good condition until needed. Boats and other watercraft can also be stored here. A wide variety of options.
1. What is the self storage picture in Denver these days and what are the challenges it is facing?
Well, competition would be our biggest challenge, for instance with residential areas going up everywhere, which bring their own self-storage facilities creating further competition.
2. How has COVID-19 changed the way in which self storage owners operate their facilities in Denver?
Like in every company, masks are required, offices need to be cleaned frequently, sneeze guards are erected, and hand sanitizer is provided at the desk for employees and customers.
3. What in your experience are the most important extra services to offer customers?
Compassion. You don’t know everyone’s story and why they are storing their stuff. People run into hard times, and as a company I find if you are understanding towards customers’ situations they are more willing to pay on the unit to save their stuff so it doesn’t get auctioned. In addition, it is beneficial to offer a variety of sizes to accommodate customers’ needs, and features like drive-up access and options for vehicle parking.
4. What special offers and discounts have you found to be most effective for attracting customers?
We offer 50% off on the first 1 to 4 months, depending on supply and demand, and if we have a lot of one specific size the better deal you will get. Also, not charging admin fees or deposits is very much appreciated.
5. Have Denverites changed their self storage habits as a result of COVID-19?
Yes. Many people have moved out to save money.
6. If you offer vehicle storage, can you tell us anything about what sort of cars people store?
We do more recreational storage and work trucks than passenger vehicles.
7. In your experience, what are the best ways to deal with cases where customers can no longer pay rent on a unit?
Offer a deal or payment plan so they don’t lose their stuff. We are not in the business of selling people’s belongings. We want them to have their stuff, and each situation is different, so we base what we do off the situation and the customer’s needs.
More residential property is being built in Denver, boosting the potential client base of the self storage industry. For example, Austin-based Endeavor Real Estate Group has plans for a 10-acre, mixed-use project called Gates District in Broadway Station. This will add approaching 900 residential units, 180,000 square feet of retail and restaurant space, and 380,000 square feet of offices to the mix in this centrally located district. And this is just part of an even larger redevelopment project in the area.
Denver’s self storage sector may be competitive but adapting to changing customer needs and showing understanding when problems arise helps companies maintain their client base. Pitching attractive discounts and offering variety are clearly also tactics that succeed. The economic challenges of last year meant that some people had to downsize, perhaps going to live with relatives for a while, but Denver provided plentiful and good value storage space for belongings that no longer could be accommodated at home. Holidaying with people you know well has been an advantage during the pandemic, boosting the RV market, and Denverites have clearly been enjoying their great outdoors in this way. The Mile High City retains its attractions and the local self storage sector is on hand to maximize life there.
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