With the COVID-19 situation continuing to evolve across our nation and the world, I want share some thoughts and observations with storage owners across Kansas. Hopefully, we are keeping a positive attitude and looking to come out of this crisis stronger than ever.
As the highest priority is the health and safety of our employees and our customers, storage owners are being extra meticulous in social distancing and the hygiene of our facilities. Most owners are staying open with either with regular hours or somewhat reduced operations. It is our understanding that the Department of Homeland Security has deemed self-storage as an essential service and is not mandated to close as part of the Shelter in Place orders. How individual owners handle their own particular situation in regard to late fees, lien sales, hours of operation, etc. is up to them, and we hope that owners and tenants work together to get through this difficult situation.
What we have seen in the market, so far, is:
- Some postponement of auctions.
- Some existing customer rate increases are being deferred
- Leniency on late fees and increased manager’s authority to wave the late fees if the tenant has been adversely affected by COVID 19.
- Calling programs to get as many customers on credit card, ACH and auto payments.
- Stores being provided with additional hand sanitizer and disinfectant supplies.
- We are seeing many lenders offer relief to their borrowers, especially if the borrower can document hardship due to COVID 19.
- Concern about the negative impact of record unemployment on collections and new leasing activity. There is some discussion that the crises may actually drive some demand for self-storage, as prospective tenants will need additional space in the homes, as a result of the Shelter in Place orders and several other motivating factors.
- As alternative investments seem to be as volatile as ever, self-storage investment is perceived to be a safe harbor during turbulent times, especially considering the drop-in interest rates. So far, investor demand SEEMS to be increasing from an already high level.
- The speed that banks can process new loans is a concern, as lenders are busy offering support to existing customers.
I am confident that when we get on the other side of these crises, we will benefit from efficiencies and best practices that we now being driven to implement.
Stay safe, everyone.
Larry Goldman, CCIM
President, Kansas Self Storage Owners Association