Self Storage Part 9 – Supply and Demand

This is Part 9 of a multi-part series on investing in Self Storage assets.

This post will focus factors relating to supply and demand to consider.

During the 80s, 90s, and into the 21st century, investors heard more and more about “saturation” of a market. That’s the possibility that supply in certain areas may be surpassing the demand from customers for storage. Higher monthly turnover, shorter term tenants, increased vacancy rates, longer initial rent up periods, and move-in discounts are all danger signals that there may be over building in a given area.

Such saturation may be temporary in an area where construction of new housing units and business buildings will eventually “catch up” to the demand for storage. On the other hand, overbuilding in an area plagued by vacant buildings and declining neighborhoods may be a permanent problem – or at least one that will endure for a very long time.

Other factors which are changing the financial community’s view of self storage include: higher land cost, increased construction cost and higher interest rates. All of these factors tend to lower loan values. Many storage owners may know very little about the management techniques needed to produce a profitable self storage business in the current market environment. Financiers see the inexperienced operator as a major area of concern. For these reasons, the individual wishing to develop self storage must do his homework before building a storage property.

If you’d like to know how you can invest in self storage alongside me, send an email to and let me know. Or, if you want to have a discussion with me about self storage, use this calendar link to set up a call with me –