It’s been less than six months since Move It Self Storage entered the Louisiana market with five self-storage facilities, including four in flood-damaged Baton Rouge.
Within days of the flooding, all five facilities were 100 percent leased as flood weary residents secured units to store household goods as they wait for insurance adjusters to do their work. The company’s fifth Louisiana facility is in Slidell.
The demand for self-storage is “extreme” said Tom Maxfield, national director of operations at Dallas-based Move It Self Storage, which leased 225 units within five days of the flooding.
Although Move It had roof leaks at two properties, it escaped major damage from the Aug. 11-14 torrential rains, Maxfield said. Prior to the storm, the facilities were about 85% percent occupied.
Lonnie Bickford, a board member of the Louisiana Self Storage Association and an owner/operator of a Baton Rouge area self storage facility, estimates that 75 to 80 percent of self storage assets in Livingston Parish — one of the worst hit parishes — were damaged in the flood.
Most damage occurred from flash flooding that damaged tenant’s goods but left self-storage buildings intact, Bickford said.
Bickford said his facility sits on a one of the highest spots in the parish but about 8 inches of water still rushed into tenants’ units. Other facilities, he says, had several feet of water. If a mattress was on the floor, it likely was damaged, but other items such as grills, bicycles and items stored plastic bins at his facility were generally OK.
Doing house gutting in Baton Rouge after flood. pic.twitter.com/4l9G9GFrl3
— Michael AngeloCaruso (@MichaelACaruso) August 20, 2016
Sustained self-storage demand
Self-storage operators say they expect self-storage occupancy in the region to remain at or near full capacity for six months, possibly longer.
“The demand for self storage is tremendous,” said Shaun Ferguson, with Southern Storage Centers. Ferguson is treasurer of the LSSA.
“People are scrambling for any facility that wasn’t flooded that has space available,” Ferguson said.
Ferguson said the local industry experienced four to five months of elevated demand after northwest Louisiana was affected by floods last March.
“There were roughly six times as many homes and businesses affected in Baton Rouge than there were in north Louisiana, so the rebuilding is going to take considerably longer,” Ferguson said.
Long recovery ahead
One concern is that state and federal assistance that often comes after large hurricanes may arrive and many will come to learn in the coming weeks and months through the insurance adjustment process that their homeowner’s insurance, renter’s insurance and self-storage tenant insurance won’t cover flood damage.
Maxfield says he’s concerned the long-term economic impact could be significant.
“It will take several years for these homeowners and businesses to recover,” Maxfield said.
As of Aug. 23, more than 100,000 people had applied for federal assistance and more than $127 million in federal aid was earmarked for temporary housing assistance, home repairs and flood insurance payments, according to the White House.
— Eliott C. McLaughlin (@EliottCNN) August 18, 2016
Filing insurance claims
Tim Parnell, executive vice president and chief operating officer of Bader Co., said the Indianapolis-based insurer is starting to receive claims. It has about 2,000 self-storage tenant policies in place in the affected area, he says. Although it also insures self-storage facilities, it doesn’t have any commercial policies in the flood zone.
“As the waters recede, you start to hear from tenants,” Parnell said. “They are starting to file claims. We have been in contact with some of the owners and operators in that area.”
The insurer requires a manager’s statement and an adjuster to view the damage to process a claim. Once authorities determine a facility is safe to enter, tenants should assess the damage to their property, Parnell said.
Just as a typical homeowner’s or renter’s insurance policy doesn’t cover flooding, standard tenant self-storage insurance policies also don’t cover flooding damage, Parnell said. Still, Parnell said each claim will be assessed individually to ascertain if there is a covered loss as wind damage, for example, is a covered loss.
It’s been a tough two weeks, but there have been a few rays of sunshine.
“The Louisiana Self Storage Association was contacted by the Georgia Self Storage Association requesting information on how they could help, and LSU football’s biggest rival, Nick Saban and the Alabama Crimson Tide, sent trucks with much needed supplies,” LSSA’s Ferguson said.
“We were overwhelmed by the flooding, but just as much so by the generosity of strangers.”