Business

ANYONE ASKED to come up with their favourite literary home is spoiled for choice: Pemberley, Brideshead, Blandings, Jay Gatsby’s mansion, to name a few. The same holds true for workplaces on television: Los Pollos Hermanos, Dunder Mifflin and the swish Waystar Royco offices, for instance. Ask someone to come up with their favourite fictional storage unit, and expect a blank stare (the most ardent Neal Stephenson fans may recall the one where Hiro Protagonist lives in “Snow Crash”).Ubiquitous and unremarkable, self-storage solves a deeply American problem: what to do with too much stuff. A bunch of empty rooms near a highway is not the sexiest part of a property portfolio. Yet few property assets have matched their performance lately (see chart).One reason is more people moving house. (Ron Havner, former boss of Public Storage, the biggest self-storage firm, said that people seek his services for “the four Ds”: death, divorce, disaster and dislocation.) Amid covid-19, anyone living in a house or flat with no spare rooms had to convert an existing one to a home office or gym. That meant clearing out whatever was there. Many were reluctant to bin things, especially early on when nobody knew how long self-isolation would last. The alternative was to stash it in storage. Over the past three years self-storage occupancy rates have risen from around 90% to as much as 96%. Demand has been especially high in Florida, Texas and the sunbelt, where people flocked in search of larger homes and laxer lockdowns.High demand, in turn, has given landlords pricing power. Rent bumps went from around 8-9% every six months before the pandemic to as much as 35%, according to Spenser Allaway of Green Street, an advisory firm. Facilities managers can get away with this because customers tend to be “sticky”: they may shop around and choose a facility based on price and proximity, but once their stuff is in they seldom bother moving it. As Stephanie Wright of New York University explains, “Individuals tend to think, ‘I’ll park my stuff here for a month or two,’ but the average rental duration is in excess of a year.” Storage firms have also embraced dynamic-pricing software. Knowing up-to-the-minute market rates allows them to avoid undercharging customers. This is of a piece with the sector’s operational efficiency (a small staff keeps labour costs low; preparing a unit for a new customer requires little more than a quick sweep) and with its drive to modernise. Indoor, climate-controlled facilities are becoming the norm. “The days of the old drive-up with a rickety fence and a Doberman for a security system, that’s not going to cut it anymore,” says Tim Garey of Cushman Wakefield, a property consultancy.The last factor behind self-storage’s outperformance is constrained supply. Whereas the amount of available square footage rose by more than 15% from 2016 to 2019, labour shortages, high construction costs and supply-chain snags have limited new construction in the past few years. That may change as these bottlenecks ease. Even then, the self-storage business may slow but not collapse. As long as Americans keep buying things, they will continue to need places to put it. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

THE 2023 finals of America’s National Basketball Association (NBA) and Europe’s football Champions League were both history-making events, in rather different ways. On June 12th the basketball contest crowned a small-city team that had never before won a championship, the Denver Nuggets. They defeated an unlikely challenger in the Miami Heat, the last-seeded team in its conference of eight. Had Miami won, that would have been a first for such a lowly side. Meanwhile, the UEFA Champions League final, held on June 10th, featured a powerhouse from Britain, Manchester City, defeating a mainstay of European football, Italy’s Inter Milan. Listen to this story. Enjoy more audio and podcasts on More

An idea to run up the flagpole: jargon gets an overly bad press. Not the kind of jargon that involves using the words “flagpole” and “run up”, but the kind that binds teams together. The kind that is exemplified by the term “nub”. In the very unlikely event that you find yourself on board a submarine but are not a member of the crew, you will be a nub. Listen to this story. Enjoy more audio and podcasts on More

RARELY DO GERMANY’S top economists see eye to eye on a big economic-policy controversy. But when it comes to the government’s decision to spend billions on subsidies for Intel’s mega semiconductor factory in Magdeburg, Reint Gropp of the Halle Institute for Economic Research, Marcel Fratzscher of the German Institute for Economic Research and Clemens Fuest of the Ifo Institute all agree. They consider lavishing billions on the American firm a spectacular waste of taxpayers’ money. Listen to this story. Enjoy more audio and podcasts on More

Disney and Pixar’s “Elemental” arrives in theaters Friday.
The company, which operates both Pixar and Disney Animation, has struggled to drum up ticket sales for its animated fare in recent years.
Meanwhile Universal’s Illumination and DreamWorks animation arms have dominated the box office with hits like “The Super Mario Bros. Movie,” “Puss in Boots: The Last Wish” and “Minions: The Rise of Gru.”

Disney and Pixar’s latest animated feature is “Elemental.”

The stakes are high as Pixar releases its 27th feature film in theaters this Friday.
“Elemental,” a romantic immigrant story told through anthropomorphic elements of nature, arrives as Disney is under pressure to prove it hasn’t lost its golden touch in animation.

The company, which operates both Pixar and Disney Animation, has struggled to drum up ticket sales for its animated fare in recent years. Meanwhile, Universal’s Illumination and DreamWorks animation arms have dominated the box office with hits like “The Super Mario Bros. Movie,” “Puss in Boots: The Last Wish” and “Minions: The Rise of Gru.”
Disney’s Pixar studio, in particular, is looking to rebound from the box-office letdown that was “Lightyear.” The Buzz Lightyear origin story snared just $226.7 million at the global box office in 2022, a fraction of what past Pixar films have generated from ticket sales, according to data from Comscore.
“Elemental” is expected to debut between $35 million and $45 million domestically, according to industry analysts, in the midrange for a typical Pixar release but well shy of the $120.5 million that Sony’s animated “Spider-Man: Across the Spider-Verse” picked up during its opening weekend earlier this month.
“Animation certainly seems to be going through some winds of change,” said Shawn Robbins, chief analyst at BoxOffice.com. “Universal and Illumination are leading that charge after a very successful decade that has seen their streak of successes extend into the 2020s, arguably becoming for today’s young Gen Z and older Gen Alpha kids what Pixar and DreamWorks were for Gen X and millennials.”

Robbins said the growing diversity in animation studios and increased competition are positives for the industry overall. However, it has also highlighted a dip in Disney’s box-office prowess.

Falling with style

The pandemic shuttered theaters one week after the release of Pixar’s “Onward,” minimizing the box-office potential of the film. With ongoing restrictions, worries about Covid-19 variants and a trend of parents skipping out on theatrical releases, Disney sent “Soul,” “Luca” and “Turning Red” directly to Disney+.
“Disney’s pandemic strategy of streaming-only distribution, among other creative disruptions, for several of their well-reviewed films did a disservice to the brand, one which new leadership is trying to mend now,” Robbins said.

When “Lightyear” went to theaters, consumers were used to Pixar films going straight to streaming. But that confusion was only part of the reason for the lackluster ticket sales.
“Lightyear” shifted away from a formula that had endeared so many generations to the “Toy Story” franchise — focusing on emotional stories with beloved childhood toys.
The feature was billed as an origin story about the film that made Buzz Lightyear the hottest-selling toy and a coveted prize for young Andy. The characters on screen aren’t toys that believe they are real — rather they are human. This meta-style story might have been enticing to audiences that grew up with “Toy Story” in the ’90s, but for younger generations the science fiction action adventure missed the mark.

Buzz Lightyear and his robot companion Sox embark on an intergalactic adventure in Pixar’s “Lightyear.”

Later that year, Disney Animation’s “Strange World” also failed to lure in moviegoers, tallying just $72.4 million globally during its run, according to Comscore.

Wish upon a star

Disney is hoping “Elemental” will be the start of a new era of animated success for its studios. With more family films in theaters after a drought in the slate, the company will have an easier time marketing its upcoming features to theatrical audiences.
The company is set to release Disney Animation film “Wish” in cinemas over Thanksgiving and has two more Pixar films slated for 2024 — “Elio” and a sequel to “Inside Out.” Disney also plans to eventually release a fifth film in the original “Toy Story” franchise, a third “Frozen” film and a second film based in the world of “Zootopia.”
“Having established itself over the decades as the preeminent producer of animated films, Disney has set the bar for how to perfectly produce, market and distribute animated films,” said Paul Dergarabedian, senior media analyst at Comscore.
Despite recent box-office issues, both Dergarabedian and Robbins foresee a return to form for Disney animation efforts in the future.
“Disney animation boasts unparalleled brand identity, a massive creative talent pool and strong marketing and distribution teams,” Dergarabedian said. “This is a perfect time for Disney to hit the reset on their animated film strategy and reestablish themselves as a revered and legendary creator of animated family films.”
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. More

Cava is expected to make its market debut on the New York Stock Exchange on Thursday.
If its IPO performs well, other restaurant chains could follow its lead, ending the IPO drought.
Brazilian steakhouse Fogo de Chão and Korean barbecue chain Gen Restaurant Group have both filed regulatory paperwork confidentially.

A person departs a Cava restaurant chain location in Pasadena, California, Feb. 6, 2023.
Mario Tama | Getty Images News | Getty Images

As Cava prepares to make its public market debut Thursday, other restaurant companies will be watching closely while they decide whether to follow in the Mediterranean restaurant chain’s footsteps.
The last 18 months have marked the slowest initial public offering market since the financial crisis. Few U.S. companies have pursued IPOs, wary of a volatile market rocked by the war in Ukraine, inflation, rising interest rates and recession fears.

Of the 44 IPOs that have priced shares this year, just 20 were for companies based in the U.S., according to data from Renaissance Capital, which tracks IPOs and the performance of newly public company stocks.
Cava’s IPO could help break that drought, as a handful of restaurants watch to see how the chain fares as they mull whether to jump into the public market themselves.
“A successful IPO from Cava should open the door to more restaurant IPOs,” said Matt Kennedy, senior strategist at Renaissance Capital. “It’ll show that investors are interested in the space, and companies can get a certain valuation in the public markets.”
On Wednesday evening, Cava priced its IPO at $22 per share, valuing the company at $2.5 billion. The company initially sought to price its common stock offering at $17 to $19 per share, which would have given it a valuation of $2.12 billion, before it raised the range to $19 to $20 per share.
The company will trade on the New York Stock Exchange under the ticker CAVA.

Cava’s decision to raise its initial price range is an early indication the IPO will perform well, Kennedy told CNBC.
That bodes well for the restaurant companies waiting in the wings to go public. Brazilian steakhouse Fogo de Chão and Korean barbecue chain Gen Restaurant Group have both filed regulatory paperwork confidentially, while both Panera Bread and Fat Brands’ Twin Peaks have shared intent to issue an IPO in the near future.
“Nobody wants to be the first one to go public, which is why I think we tend to see companies in the same sector go public in batches,” Kennedy said.
But the window to go public can close much faster than it opens, according to Kennedy. Sudden volatility in the market can spook investors and the private companies hoping to attract them.
Even if the window remains open for future restaurant IPOs, those companies might not see the same level of investor interest as Cava, which reported same-store sales growth of 28% in the first quarter. While the Mediterranean chain is still unprofitable, it’s narrowing its losses and appears closer to reporting more net income than rival Sweetgreen, which went public in November 2021.
“[Cava] rightly came earlier than most because it’s a high-quality name,” said Kevin McCarthy, managing director at Neuberger Berman. More

The Vegas Golden Knights won the Stanley Cup after just six seasons in existence.
Vegas’ success in the NHL also underlines the gambling mecca’s rapid development into a major sports city.
The NFL will hold the Super Bowl next year in Sin City, while the MLB’s Oakland Athletics are on track to relocate there.

Mark Stone celebrates with the Stanley Cup after the Vegas Golden Knights won the NHL Stanley Cup Final against the Florida Panthers at T-Mobile Arena in Las Vegas, June 13, 2023.
Jeff Speer | Icon Sportswire | Getty Images

The Stanley Cup belongs to Sin City.
The Vegas Golden Knights, in just their sixth season in the NHL, won the league’s championship Tuesday night, completing a 4-1 series victory over the Cinderella Florida Panthers.

Vegas’ meteoric rise to the top of hockey has surprised the sports world, but it’s exactly what owner Bill Foley intended when he plunked down the $500 million expansion fee in 2016.
It’s a remarkable accomplishment for an expansion team in any sport, but especially for an ice hockey team in a desert city that had, until recently, also been a desert for professional team sports.
Now, the who’s who of Las Vegas have become Golden Knights fans.
“I was at Game 5 of the Stanley Cup Final and T-Mobile Arena was absolutely electric,” MGM Resorce CEO Bill Hornbuckle told CNBC on Wednesday.
On Golden Knights game days, MGM properties surrounding the team’s home, T-Mobile Arena, are crowded with customers. That’s what former MGM CEO Jim Murren envisioned in 2017, when he described his efforts to turn Sin City into Sports City.

It’s more than just hockey, too. Vegas’ success in the NHL also underlines the city’s rapid development into a major player in sports.
Murren championed the WNBA’s Las Vegas Aces, which MGM owned at the time and later sold to Las Vegas Raiders owner Mark Davis in 2021.
Clearly, Davis has bought into the concept as Las Vegas as a sports destination. He moved his storied football franchise, long a staple of California, to the city in 2020. The team’s Allegiant Stadium will welcome the Super Bowl to Vegas for the first time next year.

Golden glamor

The Golden Knights have been contenders since their first season. They quickly garnered a fierce fanbase while making it all the way to the Stanley Cup finals in 2018, losing to the Washington Capitals. Between then and its championship this year, the Golden Knights made the conference finals twice and missed the playoffs only once.
The team often sells out its home games, drawing locals and tourists alike. The city dons black and gold during hockey season. MGM Resorts drapes a Golden Knights jersey on its replica Statue of Liberty outside New York New York.
The community spirit surrounding the NHL team is felt throughout the city’s sports scene.
Horbuckle said, ” This is an exciting time for our city as we cement our status as one of the top sports and entertainment destinations in the world. ”
Las Vegas native Sandra Douglass Morgan is now president of the Raiders. She told CNBC in a recent interview that her hometown is poised to capture the imagination of sports fans everywhere, with its entertainment, dining, shopping and, of course, gambling options.
“We’re going to make sure that we continue to provid Las Vegas and the 40 million visitors from across the world these life-changing experiences,” she said.
Vegas’ casinos are also capitalizing on Formula 1’s inaugural race in the city, set for November. Wynn, for example, is offering a five-star weekend package with a price tag of one million dollars.
While Las Vegas lost out this year on a Major League Soccer expansion team, a Major League Baseball team looks like it’s on the way.
The Oakland A’s have signed multiple agreements to relocate the team to a Vegas location. The Nevada Senate this week approved a bill to raise $380 million in public funds toward a professional baseball stadium. The bill now goes to the state Assembly.
Rumors and hopes have persisted for years about the potential for an expansion team from the National Basketball Association, though nothing solid has emerged.
For now, though, Las Vegas is firmly enamored with the Golden Knights, a pride that compels locals to brave the dreaded Strip tourists and traffic to support their team.
And now the Knights are the kings of hockey. More

Lawmakers on the House Committee on Transportation and Infrastructure narrowly voted in favor of a measure to raise the mandatory retirement age for pilots from 65 to 67.
The vote comes as the aviation industry grapples with a shortage of pilots.
The last time Congress raised the pilot retirement age was in 2007 when it was raised from 60 to 65.

A pilot holds the thrust controls of a United Airlines Boeing 787 aircraft at Newark Liberty International Airport in Newark, New Jersey, March 9, 2023.
Ed Jones | AFP | Getty Images

A House panel voted Wednesday to raise the mandatory retirement age for commercial airline pilots to 67 from 65 as the industry faces a persistent shortage of aviators.
Members of the House Committee on Transportation and Infrastructure voted 32-31 to include the measure in proposed legislation to reauthorize Federal Aviation Administration programs for five years.

“It’s a modest increase but that gives us some time for long-term solutions to take shape,” said Faye Malarkey Black, president of the Regional Airline Association, which represents smaller carriers that feed major airlines.
The association had pushed for the bill to stem the loss of pilots as airlines ramp up schedules and pilot hiring after shrinking during the Covid-19 pandemic by urging aviators to take buyouts. Airlines have blamed a shortage of pilots on service reductions, particularly to small cities.
The last time Congress raised the pilot retirement age was in 2007 when it was raised from 60 to 65.
The committee voted 63-0 on the proposed FAA reauthorization bill Wednesday, but it now faces a vote in the full House. It isn’t clear whether the new retirement age provision would be in a final version of the bill or make it through a vote in either chamber.
The Air Line Pilots Association, the country’s biggest pilot labor union, which represents aviators at major carriers such as Delta and United, has opposed the measure.
“The rash decision to move an amendment on changing the statutory pilot retirement age, without consulting agencies responsible for safety, or studying potential impacts of such a change as has been done elsewhere, is a politically driven choice that betrays a fundamental understanding of airline industry operations, the pilot profession, and safety,” the ALPA said in a statement. More