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 9,600 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
Recent Developments
Mar 21, 2023 - Big Self-Storage REITs’ Incomes Up in Q4, Occupancies Soften
- Several top US-based self-storage real estate investment trusts (REITs) notched strong income growth in the fourth quarter of 2022. CubeSmart’s same-store net operating income (NOI) grew 12.1% year over year in Q4 2021, and Extra Space Storage saw its same-store NOI rise by 13.4%. Life Storage’s same-store NOI increased by 13.3% in Q4, and Public Storage turned in same-store NOI growth of 13%. Christopher P. Marr, president and CEO of CubeSmart said, “We are reaping the benefits of our efficiency initiatives, as we’ve managed our expense growth in the face of inflationary pressures. We continue to see good demand for the product and our platform is well-positioned to drive growth throughout 2023.” While income growth was steady in Q4, most of the largest self-storage REITs saw occupancy soften in Q4 2022 compared to the same quarter in 2021.
- The rising frequency of natural disasters due to climate change is pushing up insurance costs for commercial property owners, according to Yardi Matrix. While the issue is most pronounced in states that are experiencing extreme weather events – such as wildfires, hurricanes, and severe winter storms – insurance rates are rising nationwide. In states with high climate-related risks, including Florida and Texas, insurance rates are rising by 50% or more and threaten to stifle property sales and new development. Property insurers that use reinsurance policies to assuage some of their risk are finding reinsurance rates rising by 45-100%, and some reinsurance firms are ceasing to offer services in high-risk states.
- After posting annual double-digit revenue growth during the pandemic, some industry insiders expect the self-storage industry will return to more normalized growth in 2023, according to Multi-Housing News. As schools and workplaces closed early in the pandemic, consumers sought to store more goods to create extra space in their homes. Those conditions have eased, and so has self-storage demand. Some industry watchers project that self-storage rent growth, occupancy, and project development will likely slow but remain in healthy territory.
- As consumers sought more outdoor activities during the pandemic, recreational vehicle sales soared. Some self-storage industry insiders suggest the uptick in the RV fleet creates demand for RV and boat storage and parking services. Many homeowner associations (HOAs) prohibit RV and boat parking in driveways, streets, and yards, creating the need for off-site storage. Industry experts note that vehicle parking facilities with premium amenities such as extended-access hours, paved parking areas with canopies, and robust security can be strong market differentiators. Some facilities also offer vehicle washing, wastewater/sewage disposal, electrical hookups, and RV-related retail items.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.