StorageVault Canada Inc: An interesting way to play the Coming Housing Downturn

StorageVault Canada Inc  is the only publicly traded company in Canada that manages public self storage facilities.  They have been aggressively expanding in a growing market and we believe they are positioned uniquely to take advantage of the coming Canadian housing market crash.

Storage vault operates over 3500 self storage units in Canada.  They’re a fairly small company with a market cap under 1 billion CAD.  But they’ve been aggressively growing for the past number of years.

So, how is self-storage an play against the crashing housing market.  In the USA, during the subprime crisis, there was a boom in self storage usage.  The theory behind it is: a person loses their house to a mortgage default, this person is stuck with all of their treasured belongings and they need a place to store it, so they rent a self storage locker.

Other Things we like

The Canadian self storage market is under-served and dwarfed by the US market on a per capita basis.


Things we don’t like

Their large, but manageable debt might become a problem in the Canadian credit crisis.  Even relatively healthy companies with large debt loads struggled or even went bankrupt in the US subprime crisis because it became nearly impossible to refinance or renew loans when the credit market froze.

Canadians don’t need storage as much as Americans do because our country is much less densely populated.  Finding spaces to store your excess belongings is simply easier for many Canadians.  Maybe not in downtown Toronto, but for the many rural residents of this country, self storage might never be a consideration as they have plenty of space on their own property to store things.

Disclosure:  We plan to initiate a position in this stock in the near future, but we currently do not have a position.

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