The two sectors that have attracted the most buyers during this real estate cycle are apartments and self-storage facilities. The pair often go hand-in-hand and enjoy a symbiotic relationship. Apartments have become coveted as a result of demographic trends and a willingness to forego home ownership, especially among Millennials aged 25 to 37 and empty-nester baby boomers born between 1946 and 1964. Self-storage facilities have grown in popularity among developers and investors alike in large part because Americans often accumulate more possessions than they can store – especially in apartments. Competing buyers for these product types are driving up prices and shortening due diligence periods. While Harshman & Co. echoes economists in believing the long-term outlook for both sectors is strong, we also believe that the key to their success stems from efficient management and quality locations. The difference between these products and single-tenant investments – such as a stand-alone Starbucks coffee shop or a CVS Pharmacy – is that management plays a more important role. Both multifamily complexes and self-storage projects are businesses with tremendous upsides but they are also vulnerable to the negative impacts of market downturns as well. For instance, while macro-economic forces may push some people into apartments because they are unable to save the necessary money for a down payment or qualify for a mortgage, those same forces could lower occupancy rates for self-storage product, as consumers search for ways to trim costs in times of economic distress.