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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 9,600 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 5-6 workers, and generates about $1.4 million annually.

    • The self storage service industry consists of about 9,600 companies that employ 55,900 workers and generate $14 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, Life Storage (formerly Sovran Storage), and Cube Smart.
                                  Industry Forecast
                                  Self Storage Services Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Apr 7, 2022 - New Security Issues Emerge
                                  • Most self-storage facilities went years without a single break-in, but experts say that the industry is seeing a rise in crime almost everywhere due at least in part to the coronavirus pandemic. Historically, when a break-in occurred, it was often a tenant trying to get to their stuff after being locked out for non-payment. Other times it was a disgruntled former partner or family member trying to retrieve their belongings from the person “holding it hostage” inside their unit. The crime at facilities today, though, isn’t always tenant related. Instead, criminals pry into doors with wrecking bars, break into offices, force open electrical boxes, steal backflow devices, break into stored vehicles, steal catalytic converters, tag walls with graffiti, sabotage lighting, damage surveillance cameras and cause real property damage. New security approaces are required to deal with these issues.
                                  • Rates for 10×10 climate-controlled units increased 7.4% year over year in February 2021, according to Yardi Matrix. Rates for non-climate-controlled units increased 7.6% year over year.
                                  • Some self-storage facility owners are adding boat and RV storage services due to surging sales of those items during the pandemic. Changes needed to accommodate boats and RVs include creating a special lease agreement for vehicle storage or adding a vehicle addendum to the existing contract, collecting proof of vehicle registration or title and insurance, adding rules about the condition of stored vehicles, and determining if customers may perform vehicle repairs on site. Upgraded security tools, such as video surveillance, lighting improvements, and electronic gate access may be needed.
                                  • Any increase in self-storage delinquencies as a direct result of the pandemic has been slight, according to Inside Self Storage. Many operators who did see defaults elected to defer payments, accept late payments or waive late fees.
                                  • The pandemic-driven increase in expenditures on products for the home is likely to boost demand for self-storage space. People are buying everything from outdoor heaters to gym equipment, air fryers, and home office furniture, said Drew Dolan, principal and fund manager at DXD Capital. “This stuff will create incremental immediate and future need for storage. New stuff displaces the old but not all Americans are good at giving away their old stuff.” Self-storage has outperformed other commercial asset classes for the past three downturns, Dolan said.
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