Is the ‘Tidy-Up’ KonMari Craze Dampening the Self-Storage Sector?
March 5, 2019
Marie Kondo, the Japanese organizational guru whose tidying-up trend is sweeping the country, may be prompting one commercial real estate sector to lose its joy, suggests Stephen Gandel, an opinion writer for Bloomberg. Shares of self-storage investment trusts—one of the hottest REITS last year—are seeing a significant slowdown this year.
Self-storage units popped up across the country as consumers showed high demand for storing all of their extra belongings. Storage prices rose and profits soared for investors. But supply may be catching up, along with the “KonMari-method mania and its minimalist appeal,” writes Gandel.
Gandel notes that donation stores nationwide have reported significant increases in donated goods since late last year, which coincides with Netflix’s airing of “Tidying Up with Marie Kondo.” Kondo’s main organization principle is to keep only what brings you joy, and not to accumulate items at home or stash belongings away in storage facilities.
As Marie Kondo has been teaching the public to downsize their belongings, developers have been rapidly expanding storage spaces across the country. Developers spent about $4 billion when they added around 100 million square feet of storage facilities last year—double what they spent in 2016, according to Green Street Advisors, a real estate consulting firm. Green Street estimates that this year will likely continue to be near peak levels too.
On a conference call with analysts last week, Public Storage CEO Joe Russell cautioned that the storage facility market is likely to be headed for a cooling down. “I think there is an element of both disappointment and potentially and ultimately some level of distress that could come,” Russell said.
“Where Does Tidiness Craze Leave Self-Storage?: Stephen Gandel,” Bloomberg Opinion (March 4, 2019)
Updated: August 16, 2019