- In the U.S., there are approximately 53,000 self storage
facilities, totaling 2.2 billion square feet, with an approximate
value per s.f. of $90, resulting in a total market value
of approximately $200 billion.
- Long-term demand driven by six key factors: Population
growth; percentage of renter-occupied housing; average household
size; household income; supply constraints; and economic
- This niche sector is similar to apartment demand drivers,
lease terms, and operating leverage, while cap rates for
self storage exceed that for apartments.
- Awareness and acceptance of self storage as a consumer
service has been increasing.
- Supply growth, as measured by both units and square feet,
has been significant over the last few years, but most markets
are in balance with demand.
- Industry occupancy approximates 85 percent, which is
at approximately the same level for the last 15 years, demonstrating
that demand growth has kept up with supply growth.
- Using 10’ x 10’ units as a proxy for the
industry, rental rates have increased 7.8% from 1991 ($51.13
per month) through 2000 ($55.10 per month), while from 1991
through 2004, rental rates increased 3.7%. Growth from 2000
($55.10 per month) to 2004 ($79.87 per month) was 45%. Moderate
rental increases are expected in the short term.
- Tenants fall into four main categories with the industry
Residential – 75%; commercial- 20%; student-3%; and
- Average lease term for residential and commercial segments
approximates 12 months and 24 months, respectively.
- Attributes for location are similar to the retail sector.
Drive-by visibility, traffic count, and convenience are
important to individual properties.