While local development activity of all kinds has soared over the last five years, you might have noticed one thing in particular: There’s a heck of a lot more self-storage facilities around town than ever before.

Some of this growth is from big, national players like U-Haul and CubeSmart, which have both built prominent facilities here in recent years. The rest is from scores of smaller facilities, many locally or regionally owned, that were built in the wake of the COVID-19 pandemic.

Surely all of these were built to meet demand and are at or near capacity, right? Wrong, industry insiders say. A headlong rush to build during and after COVID resulted in far too many facilities coming online, and now a lot of operators are paying the price.

“It's a very difficult time to be a self-storage owner or operator. Yes, there's demand and yes, people are utilizing storage more than they ever have in the past, but the real story is there was too much built,” said Brian Mullally, whose MBPG Capital owns, manages and consults in the self-storage industry. “There's just way too much supply.”

How much oversupply, exactly?

“Generally speaking, a stabilized square fee per capita metric in the industry is going to be around seven to nine square feet per capita, and in the Traverse City area now, we're closer to 14 to 15 square feet per capita,” Mullally said. “That’s nearly twice as much self-storage per person than what is considered a stabilized market.”

This, in turn, drives pricing down for everyone, Mullally adds.

“The cost of a storage unit has decreased more than 50% from where the peak was in 2022,” he said. “Rates have really taken a hit, and occupancy has really taken a hit.”

For the rest of this story (and much more), check the August edition of The Ticker's sister publication the Traverse City Business News. 

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