What effect will Portable On Demand Storage have on the traditional self-storage industry?
A. First, let’s classify each of these storage options. The Portable On Demand Storage (PODs) concept is essentially a business and not a real estate investment, which is how traditional self-storage facilities are categorized. While PODs offer convenience by delivering a unit to renters’ driveways, they do not allow the access of a traditional self-storage facility. The POD is stored in a warehouse and stacked atop many others, making it difficult to access the unit. Most importantly, lenders are not giving credit to PODs as a real estate investment and will not underwrite them the same way as traditional self-storage property. If you have PODs and a traditional storage facility both economically occupied at 85%, their values will differ dramatically. The PODs will be valued as a business and not as a piece of real estate, which will limit your abilities in the current debt and disposition market. At first glance, both of these storage methods seem similar, however they attract an ent
