Storage Wars may have put the self-storage industry in the spotlight, but the self-storage industry has been a rising star long before that. In the past 15 years, the self-storage industry has exploded in growth and continues to be a niche industry with solid returns for investors.
The numbers say it all:
- The US share of the global self-storage market is 86%, 50,100 of 58,000 storage units worldwide.
- The REIT return from self-storage units in 2011 was 35.22%, the highest of all REIT’s.
- The quantity of US storage space doubled in the last decade from 1 billion to 2.2 billion square feet. That’s an area 3 times the size of Manhattan.
- 1 in 10 Americans owned a storage unit in 2011, a 65% increase in 15 years.
- Total revenues from the self-storage industry were approximately $22 billion in 2010.
What is the driving force behind this growth? It is likely a combination of several cultural factors. Unlike previous generations that typically stayed put, Americans are increasingly mobile, moving an average of 11 times during their lives. Also, as an increasing amount of people are becoming EBay and Amazon entrepreneurs, they need extra space to store their inventory. Another factor may be the phasing out of the attic. Fewer homes than ever are being built with an attic, creating a need for external self-storage.
Despite the economic downturn, the self-storage business continues to thrive. The real reason behind the industry’s endurance may be deceptively simple. According to Clemente Teng, Vice-President of investor relations for Public Storage, “People always think, ‘I’ll just house it for a couple of months and then get it all out, but the problem is once you get all your stuff in, the last thing you want to do is spend a Saturday cleaning it out.’”