Bigger is becoming better for a self-storage business founded by two brothers in Londonderry Township.
After opening their first building three years ago, Josh and Nick Matincheck are on pace to have four buildings along River Road by 2017.
“We have been looking to expand since the day we started,” Josh Matincheck said.
The business, PA Large Storage, caters to owners of RVs, boats and antique cars and has attracted renters from neighboring counties. The company’s storage units range from 16-by-25 feet to 16-by-50 feet, with the ability to customize spaces.
Most regional self-storage businesses feature smaller units. However, some companies offer large drive-through units and outside storage for larger items such as vehicles.
Local ordinances often restrict property owners and tenants from parking boats and RVs on their properties, which is driving the demand, Matincheck said. “Everyone is trying to clean the neighborhood up.”
Society of collectors
The industry has continued to grow nationally, as well, as many people continue to have a hard time throwing stuff away, storage veterans say.
About 10 percent of U.S. households now rent self-storage units, said John Gilliland, president and CEO of Manchester Township-based Investment Real Estate LLC, which does business as Moove In Self Storage, the largest known self-storage company in the midstate. His company currently has about 6,800 storage units in three states, including at several midstate facilities.
Many households have more than one unit, he said.
Strong demand has turned self-storage units into good investments for private equity firms and publicly traded real estate investment trusts, or REITs. Investors are frequently looking to buy existing storage facilities from private developers, Gilliland said. However, investors mostly focus on the big cities where occupancy and rental rates are stronger.
But there is interest in smaller markets, Gilliland said.
“I’m on the list, so I get weekly calls (from investors),” he said.
PA Large Storage is among the smallest local players in the self-storage industry.
But the brothers see room for growth in the region, especially around their hometown. Much of that momentum has been driven by the growth of Penn State Harrisburg’s student population, with many students coming from overseas. That has sparked new housing projects and created opportunity for more commercial development.
It’s also helped the Matinchecks diversify their business.
For more than 20 years, the brothers have run Peiffer Plumbing and Heating Inc., a small business started by their grandfather in 1950.
The brothers have also taken advantage of their proximity to Penn State Harrisburg. In 1999, they started a real estate holding company called Matincheck Associates Inc., which has focused on buying and selling single-family homes and smaller rental properties in the Middletown area.
They currently own about 25 units and hope to add more.
That foray into real estate is what led to the storage business. About five years ago, several people in the community approached the family about a lack of larger storage spaces.
The young entrepreneurs researched the industry and took a chance.
They now see their real estate holdings as the start of a new family legacy and part of their future retirement plan. The brothers are 43 and 41.
Their father, Ed Matincheck, oversees the administration of the storage business, while the brothers handle the heating and plumbing calls. Eventually they will need to hire additional staff.
“They continue to improve the infrastructure of Middletown and Londonderry Township. We will see growth in the residential area,” Matincheck said, noting that more people and businesses will need to store their stuff.
The brothers also need to stay on top of industry trends.
Climate-controlled units have become more common in the storage industry, which will factor into future facilities, Matincheck said.
The Matinchecks understand they are a small fish in a big pond. But they intend to compete with personalized service and competitive pricing as they look to build on their latest venture.
Self-storage industry evolves
While it may not be readily apparent from the outside, the self-storage business is changing.
Here are a few trends, according to John Gilliland, president and CEO of Manchester Township-based Investment Real Estate LLC, which does business as Moove In Self Storage.
• Size: Urban areas tend to see greater demand for smaller storage units, between 25 square feet and 50 square feet. Moove In averages about 120 to 125 square feet per unit across its nearly 7,000 units in three states. In Baltimore, Md., the company’s average unit is about 100 square feet, Gilliland said.
• Climate: A growing number of self-storage properties today feature more temperature-controlled units. A good rule of thumb is for 20 percent to 25 percent of units to have controls, Gilliland said. Any more than that, and it becomes harder to rent enough at the higher prices needed to cover increased utilities.
• Indoor access: Drive-through storage units are growing in popularity as renters look for spaces to store antique cars and furniture. Moove In recently added an ultra-premium option at its Centerville Road location: a climate-controlled indoor unit with carpeting and automatic doors, where renters can access live hallway security cameras through their mobile devices.
• 24/7 rentals: Mobile technology has helped expedite the rental process for the late-night crowd. If someone needs a rental unit, but drives up when the facility is closed between 10 p.m. and 6 a.m., Moove In offers an option for online-only check-in.