Businesspeople capitalize on self-storage industry

Commercial property manager and developer Gregg Stancer has spent around $6 million since 2003 on his sprawling 37-acre storage facility in Nixa. Last week, he opened an 8,000-square-foot climate-controlled storage building in the sixth phase of upgrades at Elite Storage Centers – a 760-unit business he estimates is valued at $11 million.

Stancer’s investments emphasize the big-business potential in self-storage for the Springfield area and beyond.

“We are pushing 250,000 square feet,” Stancer said of his Nixa property, where he also plans to add a boat-storage building and the center’s third RV canopy by mid-March.

According to the Self Storage Association, there are over 52,000 self-storage facilities nationwide comprising 2.5 billion square feet of leasable space. That equates to roughly 7.3 square feet of storage room for every man, woman and child in the United States.

In the Springfield area – including portions of Nixa, Ozark, Republic, Strafford and Willard – Springfield Business Journal research identified over 50 storage facilities. Operators say the marketplace is crowded, but there is room for subniches.

Gary Baumgartner, co-owner of Storage Climate Controlled LLC, said the company’s three owners have managed a multimillion-dollar renovation of two buildings on Trafficway Street east of National Avenue since 2012 to fill a niche.

“Surveying the facilities in Springfield led us to believe the occupancy rate was fairly high – 90 percent or so. And we just felt we could enter the market, put a quality facility together and attract the business. And we did,” Baumgartner said, noting the business partners identified about 10 climate-controlled facilities around Springfield.

Storage Climate Controlled has 276 units, comprising roughly 45,000 square feet. He said the 70 percent occupancy rate is meeting expectations, considering one of its two buildings has been available for about a year.

The local estimated occupancy rate is in line nationally, according to the Self Storage Association.

As a result of generally single-digit vacancies, financing has eased up in recent years.

Kenton DeVries, a senior vice president at Guaranty Bank, said demand for storage facilities has been increasing the last decade, leading the bank to fund plans for a few area facilities in recent years. Declining to disclose clients, he said most properties were aging.

“That’s what makes that particular type of loan more palatable or interesting to the bank,” he said.

Darin Haselhorst, co-owner of Sun-West Storage on Sunshine Street, got into the storage business about 10 years ago with family members spinning off from Haselhorst Properties’ specialty in college rentals near Missouri State University.  

The 600-unit facility west of West Bypass is the first, and largest, of the family’s storage holdings, which takes in the 150-unit Haseltine Mini Storage, near the James River Freeway and Sunshine Street interchange, and the 80-unit Golden Hills Mini Storage off of West Kearney Street.

The Sun-West property has an occupancy rate of roughly 75 percent, Haselhorst said, declining to disclose revenues.

“People from all walks of life use them,” he said, adding about one-third of business is from commercial clients such as FedEx, which has leased from Sun-West before. “From roofers to plumbers – we even had the Missouri Lottery here for a while storing lotto machines.”

Stancer said his sprawling Nixa complex is targeting boats, RVs and “fifth-wheel” vehicles.

According to the industry association, about 10,000 storage centers offer boat and RV parking and/or storage – 19 percent of all facilities.

“We recently added over 100 outdoor spaces,” Stancer said. “It’s supply and demand. With us being on the way to the lake and on a major highway, U.S. 160, it makes it convenient for people to drop in and hook up their rig.”

He also owns Eastway Storage Center on Division Street. Between indoor and outdoor spaces, covered and climate-controlled, Stancer said Elite Storage offers 36 sizes and types of rental spaces.

“We have everything from a 5-by-10 climate-controlled unit to a 45,000-square-foot warehouse that we rent to Bass Pro [Shops],” he said.

Prices range from $70 a month for a traditional 10-by-10-foot storage unit to $350 a month for a 14-by-60 covered RV space. Bass Pro rents the warehouse for undisclosed terms.

About 9.5 percent of all households rent from a self-storage facility, according to the association.

For Baumgartner, knowing the client demographics at Storage Climate Controlled is key.

“The items that are in climate-controlled environment are generally possessions of higher value. They are more along the lines of furniture, documents – things that are subject to environmental temperature and humidity changes,” he said. “You’re going to pay your rent. Because you value the possessions, you’re not going to walk off from it.”

Haselhorst wasn’t surprised to learn over 50 facilities operated in Springfield and its bedroom communities.

“If you’re driving to St. Louis some time, look for them on the side of the highway. They’re everywhere,” he said.

The Self Storage Association reports about one-third, 32 percent, of facilities are in urban areas; 52 percent are in suburban sites; and 16 percent are in rural areas.

And turnover is common. The association says about 13 percent of storage clients rent for less than three months; 36 percent rent for three months to a year; 22 percent for one to two years; and 30 percent over two years.

At Sun-West, which is open seven days a week, Haselhorst said it is not uncommon to assist 150 customers a day.

“It is a challenging market,” he said.