- October 29, 2019
It may not be the most glamorous sector in commercial real estate (CRE), but in recent years, self-storage has proven to be one of the most resilient. In fact, the industry generated an estimated $38 billion in annual revenue in 2018.
Although there is some concern over saturation in specific markets, the self-storage industry is by no means failing. The key factors that fueled its rapid expansion over the last decade remain in place.
Generational Buying Habits
Americans like stuff, and they need a place to keep all of it. As baby boomers retire and downsize their homes, they may not be ready to completely get rid of everything they’ve accumulated over the years. Those moving from the Midwest and Northeast to sunnier southern cities don’t need to bring their cold-weather gear with them. Millennials choosing to live in urban areas may not have ample storage space to hold all of their belongings.
Decluttering and Minimalism Trends
On the surface, it looks counterintuitive, but the decluttering and minimalist movements have helped spur the development of self-storage facilities. In some cases, people want a decluttered home now but don’t have the time to completely purge everything quickly. They can store the clutter in a storage unit and do the purging and sorting from the remote spot.
Similarly, some individuals have items that they don’t use regularly but want to keep, just in case they need or want them again in the future. This can be anything from kitchen appliances to furniture and collectibles. With a self-storage unit, they can still live a minimalist lifestyle without the worry of having to rebuy something they decided to give away in a decluttering frenzy.
Sorting through a lifetime of possessions takes time. When children inherit their parents’ (or other family member’s) possessions or assist their parents with a move to a senior care facility, they have to find the time to decide what to keep and what to toss. Sometimes they don’t feel emotionally ready to start rifling through keepsakes and collectibles.
A storage unit gives them physical and emotional space to do this necessary work. If they’re sharing this task with siblings or other family members, the storage unit becomes a neutral place to sort through items that often have sentimental attachments. It also gives them the ability to control who has access to the space.
Evolving Office Spaces
Self-storage facilities also appeal to businesses. It gives them room to store inventory, materials, equipment, and files so they don’t have to give up valuable space at home or in their office. This is increasingly important for individuals running their businesses from their kitchen tables, a spare room, or a co-working environment.
Some storage facilities specifically cater to business clients. Extra Space Storage accepts deliveries for customers so they can have inventory and materials sent directly to the facility. Beyond Self-Storage has a business center in each of its locations that clients can use to meet with their customers, sort through their stored files, or catch up on work in a quiet place.
Although no investment is guaranteed, the self-storage industry offers promising opportunities for investors. The factors driving this sector’s impressive growth reflect the current needs and lifestyle trends of Americans and don’t appear to be changing in the immediate future.