How a Specialty Real Estate Market Can Boost Your Business
Insurance | Mike Schofield, President and CEO, MiniCo Insurance Agency | Jul 14 2020
Sponsored Content from MiniCo Insurance Agency
There is a segment of the commercial real estate market that has proven itself to be resilient to the vagaries of consumer trends, economic recession and even pandemic, all while offering a wealth of opportunities for agents and brokers to grow a book of business.
8 Reasons Self-Storage May Be a Fit for Your Agency or Brokerage
1. Strong Industry Metrics
The self-storage industry in the United States generates an estimated $39 billion in revenue and includes 45,000 to 60,000 facilities and 1.7 billion square feet of rentable space. While 27% of these businesses are owned by large, public companies and the top 100 operators, the remaining 73% are owned by small operators, making them prime opportunities for independent agencies and brokerages. (Source: SpareFoot)
2. Virtually Recession-proof
The demand for self-storage space increases year after year, with the recent exception of the early days of the recession in 2007 and 2008. The initial shock of economic turbulence caused a decrease in residential and commercial customers, only to reverse course as consumers downsized their living arrangements and businesses downsized or vacated commercial space and required a storage solution for equipment and inventory.
3. Leaders in Automated and Touch-free Service
When it came to responding to the requirements of the coronavirus pandemic, the self-storage industry was a few steps ahead of many businesses. The industry has long embraced automation and touch-free customer service through self-service kiosks, online reservations and leasing, and online payment systems. In addition, the average self-storage facility typically is staffed by only one or two employees at any given time.
4. Essential Business
When the pandemic required many businesses to cease or limit operations, the vast majority of states designated self-storage as an essential business, meaning that facilities were permitted to continue operations in compliance with required safety guidelines.
5. Growing Consumer Demand
In the over four decades of the industry's history, self-storage has proven to be a service trusted by consumers at a wide range of personal milestones and economic changes such as downsizing, upsizing, moving and college breaks. Currently, over 9% of U.S. households rent storage space. Business customers rely on self-storage facilities to house inventory, equipment, files and more. (Source: SpareFoot)
6. New Construction Growth
As demand for storage grows, new construction follows suit. In recent years, self-storage construction has grown from $2.1 billion in 2016 to $4.8 billion in 2019. (Source: SpareFoot, U.S. Census Bureau)
7. Strength of Industry Associations
Industry associations on the national and state levels (in the U.S.) are a driving force in providing educational and professional resources for business owners. They also play an active part in monitoring, writing and advocating for legislation that impacts the self-storage industry nationwide. Many associations offer an annual conference along with local events and other meetings that encourage networking. An agency or brokerage seeking to write self-storage risks typically will have multiple opportunities throughout the year to attend and sponsor these types of events and interact with a wide range of self-storage professionals.
8. Specialty Insurance for Unique Risks
Self-storage operations are commercial businesses, but a standard BOP will need to be endorsed to include specialty coverages to address the unique exposures facing these operations such as lien sales (auctioning the contents of delinquent tenants' rented storage units) and damage to or loss of tenants' stored items as a result of negligence on the part of the self-storage operator. The most universal self-storage model is based on the fact that the tenant is renting a space and the business owners do not maintain care, custody and control of the property stored by the tenant in the rented unit.
Agents and brokers have a wealth of opportunities to partner with self-storage business to help ensure they have adequate insurance coverage as they continue to grow. For agencies seeking niche programs for young agents or experienced agents looking for additional programs, this market may provide an opportunity to build a book of business and gain specialized knowledge.
Mike Schofield is president and CEO of MiniCo Insurance Agency, a full-service managing general agency that offers multiple specialty property and casualty insurance products for a variety of unique industries and exposures. He has more than 35 years of experience in the insurance industry with the last 19 years serving as the top executive of MiniCo’s property and casualty programs. Mike holds a bachelor of business administration degree in management from Lamar University.
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