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17 Jul, 2019
Analysis | Development | News
What Louisville Can Teach Us About Classic Self Storage Oversupply
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Written by Amanda S.Helfrich

Amanda Helfrich is the principal owner of Starr Commercial Real Estate, based out of Louisville, Kentucky. She is a General Certified Real Estate Appraiser, licensed in Kentucky and hold the MAI designation from the Appraisal Institute. The knowledge and experience that she has gained as an appraiser over the years has propelled her interest in the self-storage industry and aids in her increased capabilities to provide structured and thorough research for clients. With complete focus and peaked interest in this industry, she has learned how to gauge a market for demand, canvas an area for supply, research to locate proposed developments, analyze historical development trends, track absorption and provide realistic financial feasibility for a property. She enjoys helping people reach success in this industry. One of the first major components in reaching success is understating a market and determining demand and feasibility.

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Louisville, at a Glance

The overall state of the Louisville, Kentucky self storage market has changed significantly over the past 12 to 18 months. Many of the submarkets researched have shifted to a highly saturated market status and some are revealing oversupply by 100,000 square feet or more.

What Does Oversupply Look Like?

Let’s dig into the Louisville, KY market further with the following case study of oversupply. A saturation ratio of approximately 16.0 to 16.4 square feet per person (based upon primary market area of two-miles and secondary market area of three-mile radius).

Developers currently seeking sites in the Louisville, KY market should pump the brakes and really do thorough preliminary research before committing to a site. To prevent market turmoil and keep the current self storage market thriving, owners/developers are advised to seek guidance from industry professionals in terms of market demand/supply and overall project feasibility.

Know Your Market, Simple Right?

With the uptick in self storage projects, developers will have to become more diligent in site selection, and completing thorough preliminary demand analysis for each specific location considered.

In terms of further self storage development in Louisville, Kentucky, there are still some specific submarkets that reflect market undersupply, but overall, the city as whole is likely at or nearing equilibrium.

When analyzing a site during the site selection process, some favorable factors should be given consideration such as having a primary commercial corridor location, good traffic counts, good/increasing demographics, high rents, affordable land prices, noted apartment growth trends and more.

So, first things first, check for POSITIVE demand!