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V O L . X X V I I N O. I I I F E B R UA R Y 8 , 2 0 2 1 22 C O M M E R C I A L D E V E L O P M E N T W hen Falmouth native Mike Pride retired from the mer- chant marine after 21 years, he began his "chapter two" by invest- ing in commercial real estate. Several years ago, F.O. Bailey Real Estate broker omas Gadbois intro- duced him to the self-storage sector, showing him a facility at 226 Gorham Road in Scarborough and another at 14 Tory Hill Drive in Buxton. "I thought, "It's a business but not a lot of employees, so I can run it myself,'" Pride recalls. Pride bought the properties with a bit of skepticism. "I'm thinking, 'Who puts their stuff in storage?'" he says. After fixing them up and doing some marketing, he soon had the answer — plenty of folks. Now Pride is building a third facility — 550 units across 10 buildings — at the Innovation District at the Downs in Scarborough. Since he got into the business, he found the clientele is diverse and, apparently, never-ending. Customers include small business owners who rent units to store their wares and older folks downsizing to smaller homes. Furniture, cars, sports gear "You have people who don't have enough room for all the cars in their garage," he says. "Sports gear. People who come through town, get a small apartment, are here for a year, and need storage space." He enjoys meeting customers. And there's not a lot of turnover, making the business easy to manage. "So I became a believer in the business," he says. Self-storage facilities are one of those things you drive by and don't think much about. It turns out they can be an attractive sector with low-maintenance returns and value-add opportunities. Like Pride, owner-operators and inves- tors, both Maine and out-of-state, are believers in the business, viewing its as a solid investment, often suitable for upgrades or expansion and providing consistent income from customers who often stay for years. Direct costs are low, with minimal labor required, aside from managers to handle rentals and snow shoveling. New technology even makes operation possible without an on- site manager, further decreasing labor requirements and boosting upside. e sector is driven by customer demand. As a broker and a former co-owner of self-storage facilities himself, Donald Plourde from Coldwell Banker Plourde Real Estate says users at his facilities included baby boomers who inherited family belongings and didn't want to get rid of anything, people moving between homes, and businesses that needed extra storage space. One man, he says, rented half a dozen units from him every winter to store his car collection. "We started with one location and the demand was there so we kept expanding," Plourde says. Often, he says, buyers are looking for value-add opportunities. "If they're not in good shape, they'll turn them around and increase the rents," he says. "A lot of buyers are looking for locations that can be expanded so they can increase the value of the property." Fragmented buying pool e ownership pool breaks down into several buckets, says Connie Neville, co- chair of SVN|C.M. Neville & Associates Inc.'s Self Storage Product Council and member of the national and the Maine Self Storage Associations. Nationwide, real estate investment trusts, or REITs, own numerous facilities and comprise about 15% of the market. "Large operators" own a few facilities and comprise about 35% of the market. One is Prime Storage, which has facili- ties nationwide, including 11 in Maine, according to its website. e next group is the "mom and pop" small operators who own one or two facilities; nationally, they com- prise about 50% of the market. "It's still the small operators who prevail in Maine," says Neville. "I just talked with a guy this afternoon who bought a property in Biddeford. He went direct to the owner and got him to P H O T O / T I M G R E E N WAY F O C U S Mike Pride of Scarborough Storage Solutions, middle, with Nate Libby, president of Diversacorp Construction, left, and Andy Green, project superintendent of the site with Diversacorp Construction, at the construction site of Scarborough Storage Solutions at the Innovation District at the Downs in Scarborough. HISTORY OF SELF-STORAGE 1850s: First warehouse built for household and personal items. 1950s: Palletized warehousing developed. 1960s: Texas saw first-generation facilities as known today, driven by transient populations, retirement condos and slab construction. Today: Most are second-generation row buildings, multi- stories and conversions of older buildings. Newer third-generation facilities emphasize aesthetics. Estimated number of facilities nationwide: Over 50,000. S O U R C E : National Self Storage Association SELF-STORAGE The story Little glamour, but high demand, low overhead and steady returns drive the market B y L a u r i e S c h r e i B e r

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