Most industry watchers say the nascent self-storage development cycle will ramp up slowly and steadily. For self-storage builder Mako Steel, however, the ramp-up has been more like an explosion.
Caesar Wright, president of Mako Steel, said the Carlsbad, CA-based company has never been busier. In fact, Mako is on track to notch the best year ever in its 22-year history. Since its founding, Mako has built 1,500 self-storage facilities across the U.S.
As self-storage construction continues to burgeon, The SpareFoot Storage Beat caught up with Wright to learn more about the current development cycle.
How did you end up specializing in self-storage?
In the early 1990s, I was in the commercial/industrial rigid-frame industry, which is big-box buildings. Mike Brannon founded Mako in 1993, and I joined six months later. (Brannon sold his stake to Wright and other partners in 2010.)
We started working with a developer building a lot of boat and RV storage in Lake Havasu City, AZ. That is what niched us into this market. We started working out of his house at his dining room table. Within the first 18 months, we saw the industry start to get a little busier.
What was it like for you during the self-storage building boom of the mid-2000s?
2004 and 2005 were by far our busiest years ever. It was great, and it was challenging. We averaged 80 to 100 projects on our board at any time. At one point, we had offices in Vancouver, WA, and Jacksonville, FL, but we closed those in 2011.
Those times were unlike anything we had ever seen. Until now, that is, which is crazy for me to say.
How does business now compare with what it was then?
We are on pace to shatter our 2004 and 2005 numbers this year, which is shocking to me. I don’t know if it is because of pent-up demand or because money is looser now.
This year, we are on pace for us to have a record sales year. We have 111 jobs on our board right now all over the country. Oregon, Washington and Colorado have been the most active states for us.
To get to where you are now, you had to survive some pretty stagnant years on the building front. How did you do it?
So many people we built for during the boom years, they usually started out small. They would rent up and expand as demand grows. They had built their first phase, and with no new supply coming, they were able to maintain and expand. Our repeat business is what got us through those hard times.
So what is driving the current development cycle?
Our industry will always follow residential. I can see that residential growth here in California is back on the rise. Our city, Carlsbad, has three new big [residential] developments.
Are you seeing a lot of newcomers in self-storage?
I would say 20 to 25 percent of our projects are for people who are new to storage. We like those guys. We like taking a new client that hasn’t done storage, and show them our expertise and the things that our competition can or won’t do.
Has much changed in terms of the product you are building since the last cycle?
Storage used to be all metal buildings. It was a piece of cake. As we see them coming closer to downtown and more residential neighborhoods, [municipal] building departments are a little more demanding about how they look.
Half of what we are doing now is multistory and half is drive-up. Land is a bit pricier now, and parcels are getting smaller. Sometimes going vertical is the only thing that makes sense.
Have you had to expand to keep up with the new demand?
Right now, we have our hands so full. We are staffing up more. There are 16 of us here now, and we need to bring in one more project coordinator.
How competitive is the bidding process for projects?
It seems like there are three to five bids on a project — usually more like three. There are a lot less of us builders out there now since the recession. There are a lot that are coming back now, though.
Photo of Caesar Wright courtesy of Inside Self-Storage