Self-storage is starting to become a victim of its own success. Operators are reeling from a double punch—rising tax rates across many jurisdictions along with higher assessed property values.
The specter of rising assessments is coming just as large and small operators alike are expected to face greater competition from new development and decelerating revenue over the months ahead.
“Taxes have always been a very large expense line item and they are becoming the largest very quickly on almost every property as all of these jurisdictions hustle for more money,” said Kenneth Nitzberg, chairman & CEO of Devon Self Storage Holdings in Emeryville, CA.
Devon operates 46 facilities in 15 states and has seen property taxes rise at its facilities all across the country.