22
RENTAL REPORT
ACCESS, LIFT & HANDLERS
NOVEMBER-DECEMBER 2013
From mid-sized to giant,
the overall rental market
in the U.S. has picked
up considerably.
Lindsey
Anderson
interviewed
Sunstate
Equipment
and
United Rentals
for a taste of what was and
what’s to come.
I
n August, the American Rental Association
(ARA) made a slight decrease in its growth
forecast for the U.S. rental market – it
dropped its figure from 7.3 percent to 7 percent.
While the change reflected what was then a
modest slowdown in the U.S. economy, it still
represented an extremely high growth rate.
Europe, after all, is expected to grow only 1
percent.
Across the U.S., rental companies large
and small are benefitting from the increased
economic optimism and activity. One such
company is Phoenix-based Sunstate Equipment.
In both the
AERIALS
20
and
ACCESS
50
toplists (published by this magazine and sister
publication
Access International
, respectively)
Sunstate saw huge gains year-on-year. On
ALH’
s
AERIALS
20
list, the company jumped 36
percent, and on
AI
’s
A
50
, it went up 32 percent.
It clearly was a strong year for the company,
but one can’t help and wonder if the increase
has any relation to Sumitomo Corporation’s 80
percent stake hold in Sunstate, which occurred
in early 2013.
Sumitomo made its original investment in
Sunstate in 2009 during the severe downturn.
The company believed the market was poised
for long-term growth, and, four years later, with
the majority share on its books, Sumitomo has
gained a deeper understanding of the rental
industry and now believes it is the perfect time
to further grow Sunstate’s business. So is the
parent company the one to pat on the back for
Sunstate’s progressive growth?
“It would be easy to assume [our growth] has
something to do with the Sumitomo relationship,
but that’s not really the case,” says Chris Watts,
president and chief operating officer of Sunstate
Equipment. “It’s simply the demand and growth
of the markets we’re in and it doesn’t have
anything to do with capitalization, change in
strategy or focus; it really is the same Sunstate
leadership that’s making the decisions and
doing things the way we’ve done them.”
From a historical perspective, Sunstate’s roots
were more in line with dirt and ground types of
rental equipment, which was driven by market
demand. As those demands shifted over time,
customers started to use more telehandlers and
aerial equipment. “We simply responded to that
demand,” Watts says.
In the last year, Sunstate has opened a handful
of new locations, bumping its current footprint to
54 depots across the Southwest. The company
aims to maintain its broad-based revenue
stream, which Watts says is what kept it afloat
over the last five years.
“One of the key strategic things Sunstate
has done is really going after more non-
construction-like revenue streams,” Watts says.
“Manufacturing, warehousing, refineries and a
number of other industries that aren’t actually
constructing something but do have needs for
rental equipment, are great revenue streams
because they’re less price-sensitive, they’re
more consistent and it certainly helps take some
of the major ups and downs out of the cycle if
you have a larger percentage of your revenue
base coming from non-construction sources.”
While being less-dependent on the next mega
Rental momentum
A selection of equipment from
Sunstate’s fleet.
Chris Watts, president and chief operating
officer of Sunstate Equipment.
