Self Storage Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 9,500 self storage service providers in the US rent or lease secure space, such as rooms, compartments, lockers, containers, or outdoor space, for clients to store and retrieve goods. Storage properties include one story buildings, multi-story buildings, climate controlled units, and parking areas for boats and motor vehicles. Sources of revenue include rent, sales of storage items (boxes, packing materials), insurance, late fees, administrative charges, and truck rentals. Large companies may offer management services.
Demand Dependent On Local Demographics
Because the majority of demand for self storage comes from customers within a one to three mile radius, a company’s business health is related to local population demographics and density.
Oversaturation Drives Down Occupancy
Some markets suffer from excess supply due to oversaturation.
Industry size & Structure
The average self storage company operates a single location, employs 6-7 workers, and generates about $2 million annually.
- The self storage service industry consists of about 9,500 companies that employ 59,500 workers and generate $19.5 billion annually.
- The industry is fragmented; the top 50 firms account for about 60% of total revenue.
- Just over half of self storage facilities are located in suburban areas; about 36% in urban; and 12% in rural.
- About 10% of US households and 12% of US businesses rent self storage units.
- Large companies include Public Storage, Extra Space Storage, CubeSmart, and National Storage Affiliates.
Industry Forecast
Self Storage Services Industry Growth
Recent Developments
Dec 23, 2024 - Existing Home Sales Rise
- Sales of existing US homes increased by 4.8% in November from October and were up 6.1% year-over-year, according to the National Association of Realtors (NAR). NAR chief economist Lawrence Yun said, "Home sales momentum is building. More buyers have entered the market as the economy continues to add jobs, housing inventory grows compared to a year ago, and consumers get used to a new normal of mortgage rates between 6% and 7%. Existing homeowners are capitalizing on the collective $15 trillion rise in housing equity over the past four years to look for homes better suited to their changing life circumstances.” Existing home sales help drive demand for self-storage services.
- The average metro rate for medium (10x10 & 10x15) climate-controlled self-storage units decreased by 2.4% year-over-year in November 2024, according to Yardi Matrix. Average metro rates for medium (10x10 & 10x15) non-climate-controlled units dropped 1.9% year-over-year. Average annualized same-store street rates – storage rent rates quoted to new customers – for non-climate-controlled units fell 2.1% in September compared to a year earlier, while street rates for climate-controlled units declined by 2.7%. While November marked the 26th consecutive month for year-over-year declines in street rates, some self-storage operators are hopeful that street rates have hit bottom and interest rate cuts will lead to better self-storage deal flow.
- Several top US-based self-storage real estate investment trusts (REITs) saw net operating income and occupancy soften in the third quarter of 2024. CubeSmart’s same-store net operating income (NOI) fell 3.1% year over year in Q3 2024, and occupancy dropped to 90.2% from Q3 2023’s 91.3%. Extra Space Storage’s same-store NOI was down 1% from the third quarter of 2023 but occupancy rose to 94.3% from 93.7% over the same period. Public Storage’s same-store NOI declined 2.6%, and occupancy fell from 93.2% in Q3 2023 to 92.7%. National Storage Affiliates Trust’s NOI dropped 5.3% in Q3 2024, and occupancy fell to 86.3% from 89.2% in Q3 2023.
- After two years of high interest rates and home prices hindering home sales, the US housing market is expected to improve in 2025 and 2026, according to a November forecast by National Association of Realtors chief economist Lawrence Yun. New home sales are forecast to increase by 11% in 2025 and 8% in 2026. Existing home sales are expected to rise 9% year-over-year in 2025 and then climb 13% in 2026. Key demand drivers include a healthy labor market and population growth. The average 30-year fixed-rate mortgage over the past 52 weeks has ranged between 6.08% and 7.44%, according to Freddie Mac. Yun says he believes mortgage rates will be near the bottom end of that range in 2025 and 2026.
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