This talk is usually dismissed by experts who point out that smaller entrepreneurs are building more new facilities than large operators can acquire. Thus, they say, the industry is expanding rather than contracting.
But some influential voices in the industry are making noises about an inevitable consolidation resulting from the confluence of a recession, credit crunch, and competitive forces. “We have not had over the years a powerful, motivat- ing reason for small entrepreneurs to sell their storage facili- ties,” says Dean Jernigan, CEO of Cleveland, Ohio-based U-Store-It Trust. “We’re in a perfect situation now. We have the economy falling apart around us and that could have a dramatic effect on smaller players.”
Jernigan estimates entrepreneurs have built approximately 5,000 storage facilities in the past 10 years, but large opera- tors have not acquired nearly that many over the decade. However, the economic downturn has changed the rules.