Thinking of starting a self storage business but don’t know where? Let’s help you out!
The best self storage business markets are usually large population centres that lack residential or commercial space. The residents in these cities often need a place to store their personal property as well as their items from both work and home life.
While self storage marketing may prove difficult in these areas due to intense competition, they’re still your area of choice if you seek the best markets for self storage. To make your task easier, we’ve compiled a list of these areas in this brief guide.
The Five (5) Best Markets for Self Storage Today
As you may expect from the world’s largest economy, the United States boasts the most favourable self storage markets.
Below are the cities with the best markets for self storage in no particular order.
New York City, New York.
Recently, developers of self storage facilities have been busy in New York City, with over 12.3 million square feet of storage space either being built or planned. More than 66.7 million square feet of storage space is already in place in the metro area, making it the largest inventory in the US.
As of the end of August 2020, 18.5% of all inventory was either planned or under construction. An impressive sixty-four were already completed out of a total of one hundred planned.
Construction in New York City is becoming more difficult due to zoning regulations, recent revisions to the Industrial & Commercial Abatement Program, and a scarcity of available land. Yet, because of its massive size and consistently increasing population, the demand for storage space will remain constant.
As a result of its rapid population growth in recent years, Tampa is now considered one of Florida’s most dynamic urban centres and best markets for self storage. Notably, over 2.61 million square feet of warehouse space was completed in 2018.
Even though the healthcare crisis has boosted the allure of lower-cost metro areas, Tampa has maintained its ability to draw in new firms and residents over the past year. Roofstock predicts that by 2040 the metro area’s population will have risen to over 3.8 million.
While self storage construction in the city may have slowed in recent years, there’s still a sizable amount of new construction planned for the area. As of March 2020, the metro area had about 26.8 million square feet of inventory, of which 8.9% was occupied by projects now under development or in the planning stages.
Las Vegas, Nevada.
Las Vegas’s self storage market has been buoyed by a steady influx of retirees in recent years. At the same time, Sin City experienced a population growth of 1.6% in 2019, driven by international travellers to a figure greater than the national average of 0.3% (35,068 new residents in 2019).
Moreover, about 16.2% of the metro area’s 17.2 million square feet of storage space was in the planning or development stages in Las Vegas in August 2020.
In the last decade, self storage in the Portland area boomed because of the city’s robust employment market and the flood of people who had to leave more expensive West Coast cities. During this period, there’s been an increase in the number of self storage facilities in the metro area. In 2017, a record 1.6 million square feet of storage space was constructed, marking a new peak in the ten-year cycle.
Portland’s inventory per person is 6.9 net square feet, slightly over the 6.6-square-foot national rate, so a halt in development activity may be to the city’s advantage. A total of nine projects totalling 2.2 million square feet were actively being built in 2020, with another 18 projects in the planning stages.
San Diego, California.
Despite the initial job losses caused by the pandemic, the San Diego metropolitan area has since recovered. According to preliminary data from the US Bureau of Labor Statistics (BLS), the unemployment rate in San Diego dropped to 7.2% in February 2021, just above the national figure of 6.6%.
As of 2020, self storage construction activity in San Diego was stable despite the city’s uncertain economic climate. In the past year, the metro area has finished 774,216 square feet of storage space, marking a new cycle peak in deliveries.
Evidently, the self storage industry is blossoming in the United States, with New York City, Tampa, Las Vegas, Portland, and San Diego being the main hubs. Investors may consider establishing a self storage venture in these cities and employ efficient self storage marketing means, as well as self storage software, to grow the business and ensure maximum productivity. Other countries with impressive markets for self storage business include the UK and Australia.
Frequently Asked Questions
Is self storage a good investment?
Yes, it is.
Owning and running a self storage business is a lucrative endeavour due to the constant demand for storage space and the business’s relatively fast turnover rate. In a year, you can make an estimated $350,000–$800,000 from a self storage facility. However, this hinges on several factors like location, storage facility size, etc.
Is self storage a growing industry?
Yes, with a projected annual growth rate of 5.76% between 2021 and 2027.
Although self storage is already a trendy business venture, it has the potential to become more profitable in the future, especially in cities with high population growth rates and favourable economic statutes.
Photo by Adam Winger on Unsplash