MSM’s Brad Hadfield recently conducted a roundtable discussion with six self-storage professionals who shared their insights on the Canadian storage market. Here is an excerpt of the discussion. To read it in full, visit here
Donald Trump has just reclaimed the White House in the U.S., with pundits speculating that the majority of Americans who voted for him were persuaded by his promises to fix the economy. Now, despite a recent shakeup, Canada is poised for its own election in October, and indications are that Canadians will be voting with their wallets too. According to new polling conducted for Global News, one in four respondents ranked inflation and the cost of living as their top priority today. So how do politics and the economy impact self-storage? Six industry experts gathered for this 2025 Canadian Self-Storage Outlook count the ways.
Note: Interviews took place Dec. 6 to 29, 2024.
Participants
DAVID ALLAN, CEO, Apple Self Storage
JAN BELIK, Acquisitions and Development, StorageVault
SCOTT HUMPHREYS, President, Canadian Self-Storage Valuation Services
JASON KOONIN, CEO, Bluebird Self Storage
ROBERT MADSEN, President, CSSA and U-Lock Mini Storage
JOE SHOEN, CEO, U-Haul
Former Bank of Canada Governor Stephen Poloz has stated the country is in a recession and that immigration had skewed economic data, making the economy appear stronger than it is. What are your thoughts, and how do you expect this to impact self-storage?
HUMPHREYS: To say the only reason Canada hasn’t had two consecutive periods of negative growth is because immigrants are doing all the spending is just stupid. I would be reluctant to listen to anything Poloz says; he’s just pissed that the Bank of Canada is dropping the interest rate sooner than he said it should be. The lower interest rates will promote spending among everyone, not just immigrants, and as such lessen the potential for recession.
ALLAN: I don’t know that “recession” means what it used to; I think it’s become too politicized, so I’ll just say that what we’ve experienced is that self-storage is really good when times are good and very resilient when times are bad. It’s the in-between times that we seem to struggle, which is what is happening now.
BELIK: I do believe the country is in a recession. Unemployment rates are up, the costs of everyday goods are up, and wages haven’t caught up. The good news is that the country is working through these issues, and I don’t expect Canada to be in a long recessionary cycle. The impact on self-storage growth will be a slower lease up for new operations and a lower/slower increase on ECRIs for existing operations.
MADSEN: Considering the high price of housing, taxes, food, gas, I agree with Poloz and that immigration numbers have blurred the numbers. If it wasn’t for their spending, we would’ve hit the technical definition of a recession. It’ll improve, but it’ll take time. The Canadian economy is slower than the U.S., for example. When there’s an issue down there, Americans react quickly and make moves. In Canada, we tend to overanalyze things, so it takes longer for momentum to build and changes to be made.
HUMPHREYS: We need to remember that it was only four years ago that we were in a global pandemic. Governments were spending like drunken sailors to avoid a depression and the general population was spending money they didn’t have just because the government gave them some. It will take time to recover from that.
A recession impacts discretionary spending, which could put self-storage on the chopping block for some people. Are you seeing this? How can operators retain tenants or bring in new ones?
KOONIN: Rising costs of housing and food have put extreme pressure on consumers. As a result, we experienced record-high vacates of storage units in 2024. However, inflation has moderated from very high levels in 2021 and 2022 to just two percent in recent periods. This should bode well for consumers in 2025.
HUMPHREYS: From a positive standpoint, a recession creates sustained economic uncertainty, which could pressure people to downsize or relocate to more affordable markets, increasing demand for self-storage. However, recession also brings weakened consumer spending, which is usually a major driver of self-storage demand. Operators might have to get creative with marketing or what they offer to attract consumers.
SHOEN: It’s important to keep innovating. Every time the industry ups its game, consumers respond favorably. That’s why we’re all in on U-Box. Trucks burn a lot of gas, and you get much more fuel efficiency transporting six to 10 U-Boxes than individuals driving six to 10 trucks. An 800-mile truck rental is not uncommon in Canada. For the maritime providences, that can be 6,000 miles. U-Box is so much more economical in these cases, I’m confident it’s going to do great here.
To read the full conversation on the Canadian market, visit here.
