Most U.S. Businesses including Self Storage owners continue to market to the powerful Baby Boomer generation, but generations X and Y should not be ignored. As the Baby Boomers near retirement, Generation X workers are establishing themselves in careers and starting families. In the meantime, Generation Y is graduating from college and entering the job market.
However, the first group of Baby Boomers are edging closer to retirement with the first wave due in the next few years. Numbering almost 80 million, Baby Boomers make up about on-third of the country’s population. And although they have indicated that they will likely remain employed in either a full time or part time capacity after reaching retirement age, they continue to buy second homes and many other “toys” in anticipation of reducing the # of hours devoted to work. This generation has also accumulated a vast amount of wealth through equity in their homes, inheritances, and wise long-term investments. And as a result, they continue to spend more and more money on luxuries.
Baby Boomer “toys” include Recreational Vehicles (RVs) and wine, both of which are candidates for specialized Storage. According to the Recreational Vehicle Industry Association (RVIA), 2008 is expected to be one of the best years for RV sales in nearly three decades, following several double digit sales increases the past 2 years. RV ownership is at a record high, totaling over seven million, a figure expected to increase by one million in the next 3 years. In addition to empty-nesters, RVs are also appealing to young families seeking an affordable means of vacationing. As demand for RVs increases, so will demand for places to store them, especially as Homeowners’ Associations become less tolerant of the storage of RVs in residential neighborhoods.
Wine buying has also become increasingly more prevalent among Baby Boomers, many of whom are amassing large collections of wine as a hobby. While some store their bottles at home, an increasing number are also turning to self-storage facilities with areas designated to hold wine at the proper temperature. In addition, it is believed that Baby Boomers are passing their affection for wine on to their younger children, creating another source of demand for wine storage, both now and in the future.
An aging population is generally predicted for the U.S. overall for the next few decades. From 2000 to 2050, the U.S. Census Bureau reports that the percentage of population within the 20 to 44 age bracket will decline from 37 percent to 31 percent as the share of 65 to 84 group rises from almost 11 percent to nearly 16 percent. The 45 to 64 group will remain steady near 22 percent, but the proportion of the population over the age of 84 is expected to rise from under two percent to about fie percent. The graying of the nation’s populace will call for new demands in storage, likely ease of use in accessing units and enhanced services, such as free pick-up and/or delivery of goods.
In addition, regrettably, we will be losing a portion of our country’s boomers as they reach the end of their lives, which will trigger another need for storage. Many owners of Self Storage facilities are already seeing an increase in occupancy caused by the settling of estates when a loved one passes on. Once the house is sold, many of the goods and heirlooms are either kept by the family, or staged in a self storage facility until they can be sold or auctioned at another date. Some remain there for years because the heirs just can’t stand the thought of parting with their family’s belongings.
So to sum it all up, I’ll quote Ben Stein, one of America’s foremost economists, from his keynote speech at the Self Storage Association Annual Conference and Trade Show Last year where he said “I can’t think of 1 single long term trend in our country and our economy that doesn’t benefit Self Storage – It’s the perfect storm – a Hurricane of Profits”. “This is the sweetest spot in the whole American economy; a Receptacle for an enormous cascade of money!”
“The Opportunity in Self Storage Right Now resembles the Opportunity in the oil industry in the 1950’s or Silicon Valley in the 1990’s – Ben Stein