What began as a trailer park in the 1970s has since become the world’s largest retirement community. And it’s getting bigger, which could mean opportunity for self-storage operators.
With a population spike of 5.2 percent, The Villages, FL, was the fastest-growing metro area in the U.S. from 2012 to 2013, according to the U.S. Census Bureau. The metro area encompasses all of Sumter County, FL; about half of the area’s residents live in the age-restricted retirement community known as The Villages. The Villages metro area added 5,308 residents from July 2012 to July 2013, reaching a population of 107,056.
Population growth typically spurs demand for self-storage, especially when there’s limited supply. Including facilities in nearby Lady Lake, FL, there’s about 2.5 square feet of storage space per person in The Villages area, according to research by The SpareFoot Storage Beat. That’s far below the national average of 7.35 square feet per person in 2013.
One storage operator benefiting from the area’s booming population is Ron Bischoff, co-owner and general manager of Allstor Self Storage in Lady Lake. He and his business partner, Randy Bronson, bought a building and converted it to self-storage back in 2001; they bought land for their second facility in 2003.
Bischoff said business dropped off during the recession but has bounced back at both facilities as more people flock to this area of Central Florida. “We’re quite full. We’ve got a waiting a list, so I guess that’s good,” Bischoff said.
The majority of Bischoff’s tenants actually are not retirees. In fact, Bischoff said, about three-fourths of his units are leased by small businesses catering to residents of The Villages. Allstor has about 50,000 square feet of rentable space. Of that, about 30,000 square feet is taken up by office/warehouse units equipped with electricity, water and restrooms.
Tenants include a chiropractor, an accountant and a golf cart dealer. Golf carts are a popular mode of transportation in The Villages, where golf-cart tunnels, bridges and parking spaces are common.
“Service businesses and retailers need someplace to hang their hats and have some inventory,” Bischoff said.
As to why he’s not developing any more storage space, Bischoff said finding the right site at the right price is challenging.
“It has to be the right spot to do it,” Bischoff said. “If you tried to build new units, you have to rent them a lot higher. The cost of construction is quite high to do it right.”
One advantage for any aspiring self-storage developer is owning suitable property.
In December, Tree Tops Golf driving range owner Michael Girard started developing a 110,000-square-foot storage facility on his nearly 13-acre property in Lady Lake. The facility will be built where the driving range was located; the driving range will be moved. Tree Tops Golf also features batting cages and a miniature golf course.
Another way operators are breaking into the fast-growing community is to buy an existing facility. Palm Beach Gardens, FL-based Southern Self Storage recently bought a 64,000-square-foot facility in The Villages for $7.1 million.
Robert McIntosh, co-owner of Southern Self Storage, said he’d had his eyes on the facility for a long time and dealt exclusively with the previous owner. The purchase represented the company’s re-entry into the Florida storage market after it sold a 21-property portfolio to Public Storage for $240 million in August 2013.
“We saw a good growing market that is perhaps a little undeserved on the supply side,” McIntosh said of The Villages.