US Self Storage Industry Continues to Boom in 2021
There’s never been a better time to invest in the self-storage real estate industry! According to recent market analyses, the industry is continuing to grow and is proving to be a very fruitful asset for investors even as other real estate property sectors have faced challenges due to the COVID-19 pandemic. In fact, the recent pandemic has actually led to an increase in demand for self-storage facilities; as of March, the market had seen five months in a row of positive national street rate performance on an annual basis, according to Yardi Matrix.
So, what does the future of the self storage industry look like, and what does that mean for potential investors?
What’s to come for self storage?
Good news for current and future investors: Self-storage remains a bright and hopeful horizon in the real estate market. According to a report by Market Reports World, the market was valued at 37.33 billion in 2018. Today, the estimated global market worth for self-storage and moving services is estimated to be 80.8 billion. Even better for investors to hear, potential returns on individual assets are on track to grow by 6.6% each year for the next 7 years, according to a Global Industry Analysts Report. Several factors play into this rapidly growing demand, from increased urbanization to new business growth to higher amounts of people renting later into life. We’ll cover a few of the main reasons in the next section.
Besides continual rapid growth, there are a few more changes to the industry investors may want to keep an eye on. One major development lies in online channels; this includes conducting virtual tours, handling payments online, and self-service kiosks. The social distancing procedures the past year threw us into has only spurred the developments of these virtual aspects of self storage.
A biometric security boom is also on the horizon. This will mean even more secure storage facilities, with security features such as retina scans, fingerprints, and voice and face recognition. Remote monitoring is also on the rise; this allows renters to keep an eye on their belongings. All of this is likely to make renters feel even better about using self storage units to store their belongings.
Why self storage is booming today and continuing to grow
You may be wondering why and how, exactly, the self-storage real estate market is continuing to grow even through difficult economic times driven by a recent pandemic. While other real estate sectors have faltered, self-storage facilities have only increased in demand–so what’s the reason? It turns out that there are many reasons.
Urbanization and downsizing
We live in a country that is rapidly urbanizing. As people are pushed into cities with smaller, more expensive housing units, the demand for self storage grows; the less place there is to store belongings in homes, the more people are in need of self storage units for their belongings. Urbanization also leads to more renters, as opportunities for affordable homeownership are less common in larger cities with high population density. And as more people rent, they are more likely to move more frequently. This drives the demand for self storage units as a place to hold belongings between homes.
Economic growth
Even though the recent pandemic has put a strain on the economy, the United States is still facing an overall positive economic outlook. Innovation and capital investment push our economy forward and spur the growth of new businesses. This is a huge reason for the success of the self storage industry; between 2015 and 2017, the overall size of self storage space in the U.S. skyrocketed from 18.5 million square feet to over 36 million, and that was still four years ago!
Self storage is consistently recession resistant
Overall, self-storage is a real estate asset that’s fit to withstand just about any market. In fact, it saw the lowest foreclosure rate of any asset class during the great recession. The demand for self-storage units is consistently high, making the asset class virtually recession-resistant. When the market is doing well, people buy more assets, which they need space to store. When the market is doing poorly, many families and businesses choose to downsize and therefore have less space to store their belongings, pumping the demand for self-storage yet again. So, even if the fear of another recession looms, investors can feel peace of mind knowing that their money is in a secure industry.
Trust TyMac
As you can see, there’s never been a better time to invest in self-storage. If you want the best possible help on your investment journey, partner with the most trusted developer in the region: TyMac Group LLC. At TyMac, our main focus is creating incredible investment opportunities for our partners–and we have the experience and the knowledge to ensure we make this happen. So if you want to start creating consistent cash flow, diversifying your investment portfolio, and growing your retirement nest egg with self-storage real estate today, don’t hesitate to reach out via our website!
