Self Storage

Self Storage


The self-storage industry is primarily a United States-based industry: of the 58,000 storage facilities worldwide in 2009, 46,000 were located in the United States.[1]

Industry experts often refer to the 4Ds of life (death, divorce, downsizing and dislocation; the latter can refer to either the renter relocating to another area and needing space to store items until they can be moved to the new location, or a subsequent marriage resulting in the couple having duplicate items) when discussing why storage space is rented.[2]






Although there is historical evidence of publicly available storage in ancient China, modern self-storage facilities (in which the tenant has exclusive access to the storage space) did not begin to appear until 1958, when Lauderdale Storage in Fort Lauderdale, Florida (founded by the Collum family) opened for business. In the late 1960s, the first self-storage facility chains started to open in Texas.[4]


Self storage today

At year-end 2009, a total of some 46,000 self-storage facilities, owned by 30,235 companies, have been developed in the United States on industrial andcommercial land parcels. There is more than 2.35 billion square feet of self-storage in the U.S., or a land area equivalent to three times Manhattan Island under roof. The five large publicly traded storage operators (four REITs and U-Haul) own or operate approximately 9% of self-storage facilities. More recently, in manymetropolitan cities where competition among storage companies is fierce, better parcels of land near residential and commercial areas are being converted into self-storage once approved by zoning panels.[1] In an effort to build these facilities faster and gain more market share, some storage operators are turning to prefabricated units that allow for quick installation and location growth.[6] Companies are becoming more adept at manufacturing these modular storage units, allowing operators to get up and running quickly. To support the need, businesses like PODS are expected to enter the modular construction effort as well.


An emerging storage trend is the addition of Mailstorage or on-demand storage options, where customers’ items are kept together in a warehouse rather than providing each customer with a storage unit.


  • 5×10, about the size of a large walk-in closet,
  • 10×10, about the size of a child’s bedroom (as of 2015, 10×10’s are the most common storage unit size, making up 16% of the distribution in the U.S.),[7]
  • 10×20, about the size of a one-car garage,
  • 15×20, about the size of a large master bedroom, and
  • 20×20, about the size of a two-car garage.


Example of an older, urban self-storage facility.


One in ten U.S. households now rent a self-storage unit.[8] The growing demand for self-storage in the U.S. is created by people moving (some 40 million people move each year according to U.S. Census data), and by various lifestyle transitions, such as marriage, divorce, retirement, a death in the family, etc. Recent surveys of self-storage companies indicate a positive trend in market demand and occupancy rate.[9]

Over 54,000 self-storage facilities currently exist in the U.S.[10] ranging from companies with a nationwide presence to companies with regional footprints or even stand-alone independent “mom and pop” facilities.

Demand for storage space remains stable as of Q4 2015. The supply for self-storage is also relatively stable. Often, the process to build a new storage building is onerous and can take years. Additionally, this specific asset class often gets push back from communities, due to its nature.[2]

The self-storage sector is highly fragmented, which is in contrast to other asset classes in the industry. 80% of self-storage facilities are owned by individuals or small investors. In recent times, real estate investment trusts (REITs) have demonstrated a healthy appetite for this asset class. Notable publicly-traded REITs in this sector include CubeSmart (NYSE: CUBE), Extra Space Storage (NYSE: EXR), National Storage Affiliates Trust (NYSE: NSA), Public Storage(NYSE: PSA), and Sovran Self Storage (NYSE: SSS).

There is a belief amongst investors that the self-storage industry is recession-proof. This belief is supported by the 5.1% total return the sector delivered to investors in 2008.[11]


