This is Part 5 of a multi-part series on investing in Self Storage assets.
In previous posts, I have written about what self storage is, the competitive environment, the characteristics of the building improvements as an asset and the rental rates, including how well they have held up during the pandemic recession.
Below, I talk briefly about the growth pattern this asset class has experienced over the last 50 years.
When self storage got started in the U.S., the western and southern states were prime targets for this type of real estate. The residents were more transient, moving for new jobs and warmer weather. In the 1980s, self storage construction and development started occurring in the eastern and northern states.
It’s hard to estimate exactly how many self storage facilities are operating in the U.S. It really depends on what you want to include in the count. There are some that specialize in boat storage, records storage, outdoor and resort storage, security vaults and very small rural facilities. Generally estimated counts in the industry exceed 50,000 different properties that are in operation today.
As self storage has become more well-known, the demand for storage continues to grow. The customer base no longer is exclusive to individuals storing their own personal belongings. Now a significant percentage of the customer base includes businesses using this asset for storage of inventory, equipment, medical records, files, etc. Often times, businesses can make up 30% of the rent roll. Self storage has great benefits for small businesses such as short-term rental agreements and flexibility to scale up or down as their business activity changes as well as easy access to the units and convenient office hours.
Many businesses that use self storage include home-based businesses, small manufacturers, pharmaceutical reps and some types of retail businesses.
Come back for more information on self storage, or set up a call with me to discuss how you can invest alongside me. Set up your call here.