Stowaways: The Growth of Self-storage In and Around Asheville

At some point in one's adult life, it's likely that the need for self-storage will arise. Even Americans who aren't hoarders seem to accumulate more "stuff" than they have space for, and any number of situations can occur that require temporary -- or even long-term -- storage of possessions in an off-site, purpose-built facility.

Remarkably, a mere two generations ago, the concept of self-storage hadn't even been devised. Today, according to industry blog SpareFoot, there are nearly 50,000 storage facilities in the United States, representing total rentable storage space of 1.7 billion square feet.

Self-storage in WNC
George Morosani was there at the beginning. Self-storage facilities were virtually unknown when he moved to Asheville in January 1968. Initially he worked for a local company as controller, but by late 1969 he had launched a business of his own, providing off-site storage for businesses. "Much like a bank stores money," Morosani says, Western Carolina Warehousing Company "stored goods."

As that business established itself, Morosani learned of a similar concept aimed at the consumer market. He recalls that a friend "was quite insistent that I would think about this new thing that was coming around, particularly in Texas: self-storage or mini-storage, as it was known at the time." Believing that the concept was a solid business idea, in 1975 Morosani purchased 1.68 acres of property on Sweeten Creek Road, a few miles south of downtown Asheville.

"By 1976, I had built a 2000 square foot mini storage [facility] there," he says, noting that his was the first of its kind in the area. He hired a man who moved his trailer onto the property, living onsite and serving as the facility's manager.

There was no template for what Morosani was doing; he effectively made things up as he went along. But his instincts were good, and the business was successful. Other business owners across the country independently opened similar facilities, and by 1975 a fledgling trade organization, the Self Storage Association came into being.

Today the SSA describes itself as "the official trade organization and voice of the U.S. and international self-storage industry" and "the registered lobbying entity representing the industry's 49,000 facilities before the U.S. Congress and federal departments and agencies." The SSA maintains formal affiliations with 40 state-level organizations. Morosani was a charter member. "My membership number was 16," he deadpans.

For Morosani and others venturing into this new kind of business, things got off to a slow start. Much of that was due to the fact that consumers didn't know what was on offer. "You had to sell the concept," Morosani explains. "What is it? Why would I purchase it?" He says that it took nearly ten years for his businesses to reach peak profitability. Once the self-storage concept become widely known, Morosani says that new start-ups typically took a mere six months to become profitable.

That first Sweeten Creek Road location remains in operation today, though it has changed greatly from its original design. "Over the next 30 years [after opening], I had put about nine or ten expansions on that particular site," Morosani says. He would eventually open and operate more than a dozen self-storage facilities in the Asheville area.

In the early days of the new business model, self-storage was "a very mom and pop type thing," Morosani emphasizes. "People would go in their backyard, build a little building and call it 'mini storage.' And then, over the years, people would start buying a second one or a third one." And to some extent, that's how things developed for Morosani.

This was all happening in the days before nationally franchised and/or large corporate-owned self-storage facilities dotted the North American landscape. And locally, Morosani launched his companies under different names: Stowaway, George's Stor-Mor and so on. "Much like Ingles has several grocery stores under different names," he explains. "On Sweeten Creek Road itself, I had five storage companies between Biltmore and Airport Road."

Morosani's cornering of the small yet growing local market for self-storage caused some unintentional misconceptions among local consumers. "More than once," Morosani recalls with a wry smile, "someone would be dissatisfied with one of the storage units. They would move out and go to another one, not knowing it was the same company. That happened a lot over the 37 years I was in the business."

When Morosani cashed out of the self-storage business, he sold ownership of 10 facilities in Asheville plus two in Henderson County. Explaining that "someone wanted it more than I did," Morosani says that about five years ago he sold all of his storage facilities to an out-of-state company. "I kept pretty local here, and it was time to go ahead to sell them out," he says. "We had the majority of the business in this market area, and it was inviting for someone to realize that and capitalize on that."

The relentless growth in the region keeps demand high. Buncombe County's population has grown from about 239,000 in 2010 to 257,000 in 2017, the most recent year for which figures are available from the U.S. Census Bureau. That represents an approximate 7.5% jump in just seven years. For that same period, population within the Asheville city limits grew even more, from about 83,500 to just short of 92,000, a 10% increase.

The changing nature of self-storage
Thanks both to demand and to the relative simplicity of running a self-storage facility, self-storage units grew like wildfire in the later years of the 20th century. "In the old days, it was something that could be run out of your home or your backyard," Morosani says. Business hours were typically only until five or six at night. "You knocked on a door, and the person who lived on premises would show the space to you," he recalls.

Round-the clock access was rarely offered, and by today's standards, security was minimal. The on-premises manager would keep the facility under lock and key, and the entire complex was often (but not always) fenced. Today, it's common practice for a self-storage facility to offer 24-hour video monitoring and/or secure gated entry to the complex. Additionally, an alarm system connected to local law enforcement is a selling point for many facilities. "We have 24/7 camera surveillance here," says Andy Nelson of AAA Storage World in West Asheville. "The Asheville Police Department has a code so they can come and go; periodically, they drive through at night. We're very secure."

When Morosani started, there was no such thing as a climate-controlled storage space for consumer use. A typical rental space was "like having a garage, unheated and unpowered," he says. Heated and/or air-conditioned units didn't come about widely until around 1990, he says. That type of storage facility quickly grew in popularity, and like his colleagues across the country, Morosani followed the demand. "Of the 675,000 square feet of self-storage we had in the Asheville area, about one-third of it was [eventually] climate controlled," he says. About half of the rental units at Morningstar Storage in Arden are climate controlled, says facility manager Wendy Messer.

From Morosani's point of view, the self-storage business represented a good return on investment, one that successfully weathered the inevitable ups and downs of the economy. "A lot of people would say that they're cash cows," he allows. Morosani concedes that profitability levels track with the national, regional and local economy overall. "We got boom periods when Asheville was doing well," he says. Occupancy rates dipped around the time of the Great Recession (2007-2009). "But then when 2012, '13 and '14 came along, we got to almost 100% capacity," Morosani says.

That post-recession boom signaled to Morosani that it was time to move on, though. "It was a nice little wave at the time," he says. The cap rates (ratio of net operating income to property asset value) for real estate investment at the time were low -- too low, Morosani believed -- "So it was an ideal time for me to sell."

Not in my back yard? Well, maybe ...
Relevant zoning and other municipal regulation figure into any commercial venture. And Morosani notes that by definition, cities are generally more restrictive than counties. Specific to Asheville, he notes that the city "has become very restrictive on a lot of the rules. And politically, a lot of people don't want things to happen in their backyard. So it's easier to get permitted and to construct in the county than it is in the city.

"But ultimately," he says, "you do build in the city. Because that's where the people are." And perhaps surprisingly, few owners or managers of self-storage facilities report significant community opposition to building new units. According to an April 2017 news item in Mountain Xpress, Pulliam Properties, a developer active in the Asheville market, sought to build a self-storage facility with a retail component on Gerber Road in South Asheville between Hendersonville Road and Sweeten Creek Road. The developer reached out to the local community, scheduling a town hall, inviting the South Asheville Resident & Business Community Organization and the wider community.

Apparently, any concerns were addressed in advance of the city taking the issue under consideration. At a Planning and Zoning Commission meeting that June, several community members -- including residents and staff of nearby Givens Gerber Park -- voiced their support for the project, described in Asheville city government minutes as "a three-story, 85,000 square foot self-storage facility." The minutes also noted that "No communication has been received from the public as of the writing of this report."

"The commission voted unanimously to recommend that City Council approve the conditional rezoning request," Kari Barrows reported for Mountain Xpress.

"It's true of any commercial-type activity that a lot of people do not want any change in their backyard," Morosani admits. "And that does happen." But he says that by and large, he and other developers typically sidestep such issues by building in less controversial areas. "Usually," Morosani says, "self-storage normally goes in places that are commercially viable. We go to places with lesser value, like industrial parks." He says that the facilities he owned were generally on -- or within sight of -- four- or five-lane highways. "So we didn't necessarily have a conflict with neighbors."

Occasionally, a site chosen for a storage facility turns out to have problems of its own. One of Morosani's properties near the Asheville Municipal Golf Course flooded during a pair of so-called "once in a lifetime" floods a week apart in 2004. That self-storage facility was one of many businesses to sustain water damage; once the flood subsided, the property was upgraded to protect against future flooding. "We put up a five foot berm, and reinforced the concrete walls on the outside of the berm" Morosani says, and even though there has been even more flooding in that area along the Swannanoa River, he says that he hasn't "heard of any problems since then."

Small business, big boys' toys
Also important in choosing a location is its practicality for customers. Morosani says that new self-storage units are often built in proximity to apartment complexes. Those apartments are often 1000 to 1500 square feet, he says, often lacking large closets or extra on-site storage space. It follows, then, that a significant segment of the self-storage customer base includes apartment dwellers.

A few apartment complexes might offer limited self-storage on their property, but Morosani says that to his knowledge that's uncommon. More likely, he suggests, is an arrangement between apartment management and a nearby self-storage facility whereby renters are offered a discount.

The housing squeeze and rising costs overall have made self-storage the go-top option for many consumers with more physical possessions than their homes can accommodate.

But people whose apartments can't contain all of their belongings aren't the only ones turning to self-storage units. "You also find [self-storage facilities] in more rural areas," Morosani says. Sometimes a storage unit can serve as a means to bridge the gap between someone working in their home and having to move to an office elsewhere; small business inventory is a common and growing segment of the self-storage customer base. "A little mom-and-pop [business] can do distribution" out of one, Morosani says.

Other times, storage units are a place to store recreational items that simply don't have a place in the home. "Some people -- men, particularly -- use them as 'man caves,'" Morosani says. A storage space can be "a place where they can do their hobby, whatever it may be."

Morosani mentions that at one of the facilities he formerly owned, one designed to accommodate especially large items like RVs, a group of students rented a unit. "As a high school project, two or three of them assembled an experimental airplane in there," he says. "I don't think there are any real rules [governing self-storage units] that say that you can't perform your hobby."

Parking a recreational vehicle in a covered or enclosed structure makes economic sense for its owner, Morosani points out. "Some of those RVs cost a quarter million to $1 million," he says, making the point that it's cheaper to protect that investment by putting it into a storage facility than it is to repaint a faded vehicle every three years.

Who rents, for how long and how much?
The demographic of consumers renting self-storage space varies widely. Families moving to town sometimes store their belongings until it's time to move into their new home. "Our business is about 70% relocation folks," says Andy Nelson, manager of AAA Storage World on Sardis Road in West Asheville.

George Morosani recalls that in his day, rental activity didn't seem to fluctuate during the year; it was fairly consistent year-round. But that's not the case everywhere: the Riverside Drive Go Store It is located mere blocks from the campus of UNC Asheville, and the facility gets a lot of student customers. "They go on summer break and store their stuff here," says facility manager Elizabeth Belshaw.

Musicians represent a chunk of the self-storage market; bands store their instruments and sound reinforcement gear between shows or while not on tour. And some self-storage facilities -- primarily ones located out of earshot of residential areas -- permit bands to use their rental spaces for rehearsals, too. "We have a mariachi band here," says Morningstar Storage's Messer. "They play here on a particular night, and other customers will come in and listen to them. We've had other bands through the years, too."

Go Store It self-storage spaces don't offer electrical power, so they don't have musicians practicing in their units. "We do have people call and ask about it, though," says Belshaw. And because AAA's facility is located near residential areas "it's not allowed because of noise ordinances," says Nelson.

Like other managers, Belshaw says that her business sees all different types of customers, from businesses that store overage or documents to people who have lost their parents and don't have time to go through inherited property. Some of the latter customers "store [for] upwards of five, ten years," she says.

Most people find their storage needs to be shorter-term -- "three to six months on average," says Nelson -- but they often underestimate. "Almost 50% of the people come in and say, 'We're just going to need it for a month,' and then they're here for six months," Belshaw says. But some do rent for just a month, right? "That pretty much doesn't ever happen," she says with a chuckle.

Some of those short-term rentals come about because of the current hot housing market. "They put their house on the market, and two days later, it's sold," Belshaw says. "So they have to move all their stuff out right away. I've run into a couple of those just this week."

An informal survey of self-storage facilities in and around Asheville finds that there's no real cost advantage to the consumer in committing to a long-term rental; most facilities charge a month-to-month rate. Several facilities do lock in that rate for the life of the rental, so if the base price goes up, existing customers don't have to shoulder the increase.

When the self-storage industry began, there was rarely a retail component to the facilities. Today many offer boxes, secure locks, bubble wrap, tape and related packing supplies for sale. Some provide dollies, hand trucks and mattress carts for use during load-in and -out at no cost. Morningstar provides new customers with a 16-foot box truck with a lift gate as part of every rental. A few, including Bee Safe Storage on Hendersonville Road in South Asheville, have labor available for hire, according to manager Olivia Elliott.

While competition keeps prices for getting too expensive, high demand means that rental rates for self-storage units in and around the Asheville vary. Many of the local companies offer seasonal and/or special sale rates.

Bee Safe's standard charges are anywhere from $84 a month (for a climate-controlled 5x5 unit) to $296 a month for a ground floor access, 10x30 space with climate control. AAA Storage World provides a 5x5 unit with climate control for $50 per month; a 5x10 without heating and cooling starts at $75. The largest units at AAA are 10x30; with temperature control, those units rent for $275 monthly.

Morningstar rents a climate-controlled 5x5 unit for $72 a month and up; a drive-up 20x20 space starts at $389 monthly, and a limited number of parking spaces are available for $69 per month and up, depending on vehicle size. Go Store It's units start at about $75 a month for the smallest size (5x5), with large, inside units measuring 10x20 and featuring climate control renting for about $245 a month.

Storage no-no's
According to most state and municipal codes, self-storage units are not to be used as retail offices. "You can't bring customers to the units," Morosani says.

Owners and management are subject to regulations as well. "Legislators have made a very concerted effort to make [self storage] an industry in which there is a definite path of how you collect money, what you can and cannot do," Morosani says. Much of that legislation came about through associations such as the SSA working with legislative bodies to craft rules that are "fair for everyone," Morosani says. "If you operate according to those rules and don't trip over them, it's pretty smooth. It's a pretty mature business model at this point."

An unfortunate truth of the self-storage business is that customer nonpayment and abandonment of storage contents is a common occurrence. In those cases, the facility owners are guided by state regulations as to how they can proceed. Elizabeth Belshaw, property manager at Go Store It's Riverside Drive location, explains the process.

"You have to wait a certain amount of days" after nonpayment, she says. "We reach out to [the customer] every day; we'd rather them have their stuff and us have our money, obviously." When those efforts are exhausted, "we cut the lock open up the unit, and take pictures." The photos are posted on the online auction site Storage Treasures, a solution many self-storage companies use. An auction runs for five or seven days, during which time interested parties can place bids starting at $10. At the conclusion, the winner has 48 hours to show up in person with $100 cash for a cleaning deposit. Once the unit is empty and clean, the deposit is returned.

There's no bidding on specific items, though. As Belshaw explains, "when we cut the lock, until it sells, it's not ours. I can't put my hands past the threshold of a unit." The photos show only what can be seen from standing outside the unit looking in. After the photos are taken, "we lock it back up and tag it," she says.

Looking back on his decades in the business, Morosani says that "we had almost monthly auctions." In business for 21 years, Morningstar is an outlier here. Messer says that the company "almost never" has to change the locks on a unit. "We would rather just work it out with them rather than auction anybody's stuff," she says. Olivia Elliott, manager at Bee Safe Storage on Hendersonville Road, says that at the new facility she runs, property seizure and auction is "not very common."

Morosani says that instances of taking the renter to court are fairly rare; none of the facility managers interviewed for this story mentioned court proceedings at all. Instead, most owners focus on keeping up with collections so the situation doesn't get serious enough to warrant legal action.

The authorities are called when it's discovered that someone is living in their self-storage unit. "That's a big no-no," says Messer, noting that it has never happened at Morningstar. "That's against state law," Nelson emphasizes. Belshaw says the same is true for her facility, but that at some of Go Store It's other locations in the Asheville market, "we've had to call the cops to get people to leave."

Storage horror stories
Elizabeth Belshaw recalls a somewhat shocking tale she heard from a colleague ("Not a Go Store It," she hastens to add.) A customer rented a space and then quit making the required monthly payments. Eventually, after repeated attempts to reach the customer failed, management cut the locks and opened the unit. "It was filled with Bose stereo equipment boxes," she says. Photos were taken and the contents were auctioned online. When the winning bidder -- who had paid $5000 -- opened the boxes, they were all empty.

Belshaw explains what happened. In the case of an auction, the storage facility takes only what is owed them; the rest is returned to the customer who abandoned the contents. "That person who defaulted, he knew what he was doing," she says. It's likely that defaulting, losing the "property" and getting a tidy sum was the scammer's plan from the very beginning.

Fortunately, such stories aren't commonplace. But managers of self-storage facilities do get the odd request now and then. "Somebody did call and ask me if they could store a casket," says Morningstar's Messer. "Sure," she told the man. "As long as there's nobody in it."

What's in store for the future?
Even though George Morosani isn't in the self-storage business himself any longer, as a developer he makes a point of following the marketplace. He notes that since he sold his facilities, he's seen "four or five different companies putting in units" in and around Asheville. "Some might say that they've overbuilt," he says. But he emphasizes that in 2019, self-storage facilities "are still a hot item."

The days of mom-and-pop self-storage are largely over, though. "I'm sure there are still some small ones around that operate in their rural or niche areas," Morosani says. "But most of them are larger concerns that have been consolidated into several large companies." Since Morosani sold his properties, that's definitely the case in the Asheville market.

Whereas most of the earliest self-storage facilities were simply a cluster of garages built onto a flat piece of property, that model has been essentially abandoned in favor of a vertical configuration. "The tendency is to stack them up," Morosani says, "because you don't involve as much land." That approach is especially applicable when one gets closer to urban areas.

A new and growing trend is for self-storage facilities to go one better on the climate control angle, offering wine storage. Wine collectors and enthusiasts are a growing segment of the self-storage business for companies like Bee Safe, a brand of the CubeSmart self-storage company. Select locations -- including the Hendersonville Road facility -- offer wine storage in temperature-controlled units ranging in size from five square feet to 10x30.

Self-storage facilities do seem to be experiencing a boom in the region. According to figures cited in a 2017 Asheville Planning and Zoning Commission meeting, there were 19 facilities locally, with eight new applications in the 24 months prior to the meeting. Several have broken ground and/or opened since that time. A facility near I-240 on Asheville's east side is typical of the facilities being constructed; its original owners paid $750,000 for the land alone, according to a June 1, 2016 story by John Boyle in the Asheville Citizen-Times. That same story cited total estimated cost for construction at $6.5 million. Three years later, the SpareFoot blog noted the facility's sale to the Prime Storage chain in March 2019, noting that the Bleachery Boulevard facility "features 734 units in 77,510 rentable square feet."

Considered along with the other self-storage facilities locally, that may seem like an awful lot of storage space. But clearly, the demand does exist. Industry news and information website SpareFoot -- a site whose editors pride themselves on keeping up with trends in the self-storage business -- notes that as of March 2019, there exists 5.4 square feet of storage space for every man, woman and child in the United States. As long as Americans keep accumulating stuff, the self-storage industry will be there providing somewhere to put it all.

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