The supply of new self-storage spaces in the U.S. has grown in the last couple of years, reaching almost 60 million square feet in 2020 and the demand is still rising, with rates remaining steady. There are countless uses for a self-storage unit, whether it’s for your grandparent’s old coffee table because of relocating, a sentimental DVD collection after decluttering your home, or even parking an unused vehicle. A self-storage unit facilitates reducing clutter, organizing items, and eases hoarding, by ensuring safe and reliable storage facilities.
Looking at the self-storage fact sheet
The self-storage industry has been one of the fastest-growing sectors of the United States commercial real estate industry over the period of the last 38 years. U.S. self-storage facilities pay a total of more than $3.25 billion in property taxes to local government jurisdictions.
The self-storage industry’s annual revenue in 2019 was a staggering $39.5 billion USD, with a 3.6% 1-year increase and a nearly 50% increase since 2010, industry revenue continues to be one of the fastest growing sectors in the US economy. The leading self-storage company in the U.S. Public Storage boasts over 180 million square feet of rental space across the United States and generated over 2.4 billion USD in revenue in 2020, more than one billion USD more than Extra Space Storage, the second largest company. Experiencing terrific revenue growth in the last few years, Extra Space Storage comes in with almost $1.3 billion. Cube Storage and Life Storage have remained in third and fourth place, although they continue to be neck on neck with less than a $100 million difference in revenue in Q3 2019.
Public Storage has seen its market capitalization value fall between 2015 and 2018, even though its revenue has been growing constantly over the last couple of years. In addition, the company’s debt has skyrocketed from 391 million dollars in 2016 to over 2.5 billion dollars in 2020. Their debt to total assets ratio has risen from two percent in 2015 to about eight percent in 2020. In contrast to Public Storage, Extra Space Storage has experienced a stable market capitalization value in the last couple of years, although its debt had ballooned to nearly 6.5 billion dollars as of 2020. The uncertainties and aftermath of COVID-19 are still lingering, as we are continuing to track and evaluate the direct as well as the indirect influence of the pandemic on different end-use sectors. These insights are included in the report as a major market contributor.
A positive forecast for the market:
The rising rate of urbanization all over the globe along with the improved economic outlook is creating an optimistic prediction for the self-storage market. Urban populations widely adopt self-storage spaces because people move around more frequently given the more expensive living spaces in the cities. Facilitating the demand for additional storage as families expand with more material possessions, therefore favoring the market growth. In this case, COVID-19 also positively impacted the market with a shift toward a remote work model and cutting out rent on physical locations, driving up the demand for self-storage facilities.
Product adoption for business and commercial needs such as storing seasonal promotional material or equipment that is not used on a regular basis also creates a positive impact on the market growth. Other factors, including the rising expenditure capacities of consumers and the significant development of small businesses, are anticipated to drive the market forwards.
According to Scott Meyers a Forbes Councils Member, this is a great time to educate yourself and do your research. Take a look at self-storage growth and trends. Investigate those projects that you previously set aside and get clear on the pros and cons. You may find that they make sense at the current interest rates. Whether the market continues to enter deeper into a recession, or recovers quickly, there will always be opportunities in self-storage facilities and if you’re interested in learning more, visit us at The Tymac Group.