Obviously the San Francisco housing market is a hot topic and won’t stop being talked about for some time. Some of the common things that people talk about in regards to this topic are the new tech companies in the area, the high income of new residents, disparity in housing opportunities, and more. Despite this, there is one interesting industry that has more of an impact on the market than you think. This mystery industry is self-storage.
Because of the current state of the housing market in this area, self-storage facilities have been doing very well. With so many renters living in small apartments, there are tons of people who need a place to put their things. This along with the fact that renters are moving every three years means there are many opportunities for these businesses and they see no reason to change.
What this means for the rest of the market however, is that the comfort the self-storage industry is enjoying right now leads to a very low likelihood they will be selling anytime soon. For new residential developers who are looking to make something happen in a specific area, you now have large pieces of high-quality real estate that they have a very small chance of getting their hands on. Some are getting extremely high offers in regards to what their properties are worth, yet are still not selling.
With so many of these in popular development zones like SoMa and the Mission, you can see how this can be frustrating for developers. Unfortunately for them their hands are pretty much tied in regards to this. Some self-storage facilities are entertaining hybrid property opportunities where they sell part of their property, or the top floor of their building, to be converted for residential use. Most however, are sticking to their guns on this. It will be interesting as time does on to see what their stance is as developers get even hungrier.