Every now and then it’s good to pull our heads up and just look at our self-storage industry.
There is no doubt that the industry has grown during this recovery. Some may say too much, but this is the inevitable cycle that affects all real estate and businesses.
As an industry, self-storage is becoming known, accepted, and used.
This is good for us because the more people who understand and accept self-storage as a useful product, the larger our customer base becomes.
What percentage of people in our country do you think eat fast food every day?
33%.
What percentage of American’s use self-storage?
9.4% of households do.
What if 30% did? There is a day where that may be the case.
In the US, 65% of people using self-storage have garages. They just would rather park their cars there than use it to store their stuff.
33% of self-storage users have basements.
As our society becomes more of a consumer society, the self-storage product will be more in demand.
Let’s take a look at where we are right now as an industry.
The Industry
- The typical self-storage facility is on 2.5 to 5 acres with 46,000 net rentable square feet (Source: SSA).
- There is currently 2.3 billion square feet of self-storage in the US. (Source: Statistic Brain).
- There are more self-storage facilities than McDonalds and Starbucks’s locations combined (Source: Huffington Post).
And this is only currently serving 9.4% of US households. What will this look like in the next decade as we move towards 12% or 15% OF US households?
This is one reason why I see a bright future for this industry and relate to any overbuilt markets or submarkets as a temporary phenomenon.
Demand for self-storage is only going to grow.
Market Stats
- 172,000 people are employed in the self-storage industry (Source: Statistic Brain).
- Annual self-storage revenue is $36 billion (Source: SSA).
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- Twice as much as global music industry $15.7 billion (Source: IFPI).
- 67% of renters of self-storage live in single-family homes. 27% live in apartments (Source: SSA).
- The majority of self-storage renters lease long term. 52% of those surveyed say they have rented their unit longer than a year (Source: SSA).
- Only 13% of self-storage customers rent for less than three months (Source: SSA).
Most Expensive Markets
Here are the most expensive markets in the U.S. in which to rent a 10 x 10 unit (Source: Self-Storage Performance Quarterly).
- San Francisco-Oakland-Freemont: $160 per month
- Los Angeles-Long Beach-Santa Ana: $153 per month
- San Jose-Santa Clara: $153 per month
- New York-Newark: $137 per month
- San Diego-Carlsbad: $136 per month
Conclusion
I know we are all dealing with whatever we are dealing with at the moment with our business, or trying to figure out how to grow or get in the business. Just take a moment and look at the current snapshot of the industry itself.
No matter what you are dealing with, know this is temporary. This is a relatively new industry, and one of the few that does not have a majority of it owned by large, multinational corporations (REITs account for only about 20% of the space in the US).
Now is the time for the small investor to get a foothold in the industry, or increase your footprint in the industry.
Think what these numbers will be in January 2029.
That date will come. The question is will you have been part of those numbers from 2019 to 2029 in this fantastic business of self-storage or not?
There is a lot of room for all of us as you can see.
