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      <h1 class="headline">One Beneficiary From Hurricane Harvey: Self-Storage Landlords</h1>
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                By <a rel="author" data-omtag="web:article:by:author" href="https://www.realtor.com/author/esther-fung"><span itemprop="name">Esther Fung</span></a></span> | <span>Sep 13, 2017</span>
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              <p>Demand for self-storage space has surged in Houston with thousands of people displaced from their homes <a class="icon none" href="https://www.wsj.com/articles/evacuees-crowd-into-shelters-as-harvey-hits-louisiana-1504190720?mod=realtor" target="_blank" data-omtag="web:article:content:link">after Hurricane Harvey</a>.</p><p>Storage operators, which typically rent units ranging from 5 feet by 5 feet to as large as 10 feet by 25 feet, often report stronger demand following a natural disaster as residents look for a place to keep their belongings while they focus on rebuilding their property.</p><p><a href="http://quotes.wsj.com/LSI?mod=realtor" target="_blank" data-omtag="web:article:content:link">Life Storage</a> <span class="company-name-type">Inc.,</span> which owns and operates 69 storage locations in Houston and Beaumont, said it saw a pickup in demand after the storm. The Buffalo, N.Y.-based real-estate investment trust said it already had a strong occupancy rate of around 92% in Houston before the hurricane, and it is now nearly full.</p><div class="inline-related-articles">
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<p>Still, the REIT said it would be keeping its rates and leasing incentives—including a free first month—unchanged, and is doing the same in Florida after Hurricane Irma.</p><div id="div-gpt-ad-ARTCL1" class="ads inline-article-ad text-center margin-bottom hidden-md hidden-lg"></div><p>“We’re not taking advantage of people because of their misfortune,” said David Rogers, chief executive officer of Life Storage. Mr. Rogers said that in his experience with past hurricanes, the demand spike after the storm peters out after six to seven months.</p><p>Overall, Houston had a vacancy rate of 11.2% in the second quarter in the self-storage sector, up from 10.6% at the end of 2016. Before Harvey the rate was projected to rise to 12.2% by the end of 2017, according to data from property researcher <a href="http://quotes.wsj.com/REIS?mod=realtor" target="_blank" data-omtag="web:article:content:link">REIS</a> <span class="company-name-type">Inc.</span></p><p>That projection might change if developers pull back on construction plans following the storm, said Barbara Denham, an economist at REIS. Houston has a total of around 281,000 self-storage units valued at $8.4 billion.</p><p>Before Harvey, self-storage companies had been engaged in aggressive price competition, with incentives such as one-month free rent commonplace. These landlords will benefit from an uptick in demand in the short term, but given the pressure not to be seen as price gougers the potential upside is capped.</p><p>The largest storage REIT by assets, <a href="http://quotes.wsj.com/PSA?mod=realtor" target="_blank" data-omtag="web:article:content:link">Public Storage</a> <span class="company-name-type">,</span> is offering new customers in Houston $1 rent for the first month and up to 15% off in monthly rents for online reservations for selected units, according to its website.</p><p>The Glendale, Calif.-based REIT has reopened 115 properties covering 8.5 million square feet of rentable space and opened its 116th building in Houston last week, but anticipates having to demolish and rebuild seven properties severely impacted by Hurricane Harvey.</p><p>Public Storage on Sunday announced it has temporarily closed all 284 of its properties in Florida and nine in South Carolina and Georgia for the safety of its customers and staff. The REIT didn’t respond to requests for comment.</p><p>In Houston, investors hope that an oversupply of office, apartment and self-storage space could be mopped up by displaced residents and companies in the wake of Harvey.</p><p>Property brokers <a class="icon none" href="https://www.wsj.com/articles/harvey-likely-to-weigh-on-houstons-commercial-property-market-for-months-1504032205?mod=realtor" target="_blank" data-omtag="web:article:content:link">in the office sector</a>, which had suffered from vacancy rates as high as 18.8% amid problems in the energy industry in recent years, say they are fielding requests from companies looking for temporary office space. There were flooded office buildings in West Houston, Northwest Houston, along Cypress Creek and Kingwood.</p><p>“The increased demand right now is a ‘sugar high,’ as most of the need is for less than six months,” said Kevin Roberts, Southwest president at Houston-based Transwestern Commercial Services LLC. “The benefit [to landlords] is short term.”</p>
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