If something characterizes the North American market, it is its vast mobility that occurs in multiple sectors but that begins with the almost nomadic life of its inhabitants. A culture that the pandemic helped strengthen. And these moves also generated an interesting niche that grew as the employment generating centers strengthened and the differences in the cost of living between cities increased.
Magnets. Traditionally, the North American labor system was very open to the incorporation of immigrant labor (also from our country and other emerging economies at the time) but then the mobility of employees by area was reinforced, seeking better opportunities according to the rises and falls of the industry or simply also looking for a better quality of life. The differences between the cost of housing (for sale and rent) are very wide.
Since 2020, the cost of housing and services has been rising in the United States above average, but it does not reflect the great dispersion in areas, with places (for example, the Miami area) with general increase in price and others more postponed depending on the fate of the industries established after the pandemic. In the last two years, while the cost of urban living rose between 3.5% and 3.7% annually, the cost of housing almost doubled: 6.5% and 6.7% according to data from the Statistics Office.
Another distinctive element is the tradition of university students of seeking the best “profitability” of very expensive university degrees outside their own city. All this generated a regular flow of moves and social disintegration that generated its own business ecosystem. For example, it is estimated that in that country there are 30 million users of the “storage” system, almost 15% of American households in total. It is estimated that currently this market represents a total value of US$58,230 million and will expand at a speed of 7.5% annually to bill almost US$90,000 million by the year 2030.
From exportation. Marcos Victorica He is an economist who left his consulting firm in Buenos Aires seven years ago and tried to enter the US market. Already settled in the state of Florida and speaking with corporate tax advisors, he began to analyze the business of deposits located near urban centers. An easy niche to manage, with low risk and constant demand. For example, almost 1.5 million members of the Armed Forces and security forces are regular clients due to their constant rotation of tasks. Also the university world and the growing labor mobility after the pandemic helped destroy the requirement for in-person work. Also the strong acceleration of processes of closures, mergers and acquisitions of companies that forced flows of workers going from one place to another. Also the growing purchasing power of salaries increased consumption and therefore expanded the demand for places to accumulate goods that are not burdens on mobility. And finally, it is a business that is resilient to recession: even in a crisis, there will always be things to save when downsizing or waiting for another opportunity.
“For multiple reasons, the storage business is experiencing growing demand, but it is undervalued by the Wall Street bosses. The usual buyer is someone who has another business and what they want is an investment vehicle that does not bring complications to manage,” explains Victorica. This is what is called the investor’s “triple net” (free of taxes, expenses and services).
However, the return he found there was to import the model of the Buenos Aires garage system and adapt it to the investor client who wants to buy a real estate asset, but with a lower income floor: from US$25,000, with an annual rate of return of around 6% net annually and rents ranging between US$70 and US$200 per month. His own calculations (as an economist he worked for the IDB to measure informality in the Latin American economy) estimate that in Argentina alone there are almost US$40 billion in the cushion and the same in the rest of the region, waiting for a simple and safe investment. “The buyers of the first building we built in Miami were able to sell it with a capital gain of 20%, so if we add it to the rent it gave them a rate of return of 10% annually, he concludes.
Local landing. Meanwhile, the success of this market soon led to the creation of its mirror business in Argentina. Juan Luis Basombrío, an all-round entrepreneur, adapted the North American system to the local idiosyncrasy with the help of trends that took strong root in our country and created U-Store as part of his real estate services company Framat Rental. “I started the business of renting configured modular structures to the oil and mining industry in Comodoro Rivadavia. There I began to look and see containers and the number of uses they had,” he says. From a piece of land with little use that a friend gave him and six containers that he had in his company, he began to walk his path. “Today I have a company with a partner, three warehouses in operation and a fourth on the coast with the people of Pinamar Sociedad Anónima where we are minority shareholders“, he details. Escobar, Don Torcuato, Azopardo Street (storage areas by metro) and Pinamar are the places of activity. “Unlike the American model, this is a cash flow business, not real estate due to the number of regulations that make it more expensive,” he explains. Renting a container costs $50,000 per month in December in an open contract and storage spaces, $2,700 per square meter per month.
A business that is based on a rare paradox: accumulating belongings in a world that speeds up its liquid ties that require a more permanent anchor. This also generates demand measured in meters and percentage of profitability.
