As the year winds down and you look at the overall commercial real estate market, there were definitely challenges – retailers were closing doors, the future of office space is still uncertain, supply chain issues have persisted, and inflation is near 40-year highs prompting the Fed to steadily increase interest rates1. However, there are still bright spots in the commercial real estate market forecast. The one asset class that has outperformed all the others in 2021 was self storage. With an average occupancy of 92%, self storage is a viable option for those looking for alternative investment opportunities as it provides income and inflation resistance (since rates can change daily2.
Also see our blog, "Why Self Storage in a Recession?"
In today’s self storage industry, almost 40% of Americans rent a self storage unit with Gen X leading the other age groups. This segment of the commercial real estate industry is growing tremendously in popularity because it assists people during many key life events – growing your family, downsizing, moving, death, and divorce. Typically, homeowners with smaller homes tend to use self storage more, but the percentage of owners of larger homes is also on the rise3.
The primary reason investors are now looking at this asset class is because it can be an inflation hedge. Most units are on a month-to-month rent, which can increase each month to keep up with inflation. According to the 2023 Self-Storage Almanac, consumers typically rent a 10x10 storage unit. The rent for these units increased by 13% in 2022. In 2001-2023 the average return on self-storage was 20.87%, and in 2006-2021 it was 18.76%. Numbers like this are gaining the attention of investors.
Furthermore, the average sale price of storage properties has appreciated by more than 30% over the past five years4.
See "2022 Outlook for Self Storage."
Also, see what the Forge President and CEO have to say about "Self storage as an investment."
In today’s market, you do not necessarily need to buy and build your own self storage facility. Some companies create self storage turnaround investments that are for accredited investors. These funds tend to buy self-storage units from “mom and pop” operators and add economies of scale, invest in the properties, and increase the return on investment (ROI) for investors.
So, whether an investor wants to buy and own a self storage facility outright or just benefit from the long-term economic benefits, self storage facilities stand to serve both types of investors well5.
1. Brooks, A. (2022, December 2). J.P. Morgan. Retrieved from jpmorgan.com: https://www.jpmorgan.com/insights/outlook/economic-outlook/2023-commercial-real-estate-trends
2. Hubler, F. (2023, September 5). Forbes. Retrieved from Forbes.com: https://www.forbes.com/sites/fredhubler/2023/09/05/self-storage-isnt-just-for-hoarders-a-primer-for-investors/?sh=2e5e810d77be
3. Mohan, M. (2022, August 15). Storage Cafe. Retrieved from storagecafe.com: https://www.storagecafe.com/blog/self-storage-use-and-main-demand-drivers/
4. Weinstock, S. D. (2022, January 15). Inside Self Storage. Retrieved from insideselfstorage.com: https://www.insideselfstorage.com/market-conditions/how-will-self-storage-perform-year-ahead-real-estate-market-outlook-2022
5. Cone, J. (2018, January 11). U.S. News and World Report. Retrieved from money.usnews.com: https://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/articles/2018-01-11/self-storage-is-an-investment-alternative
In an era where space is a premium commodity and people constantly seek efficient storage solutions, the self storage industry has emerged as a beacon of innovation and convenience. The hottest industry right now is Self-storage! It has experienced exponential growth in recent years, fueled by urbanization and changing consumer habits. Because the demand for self storage facilities is skyrocketing nationwide, companies like Forge Building Company have risen to the occasion, solidifying their position as premier general contractor in the industry.
As the demand for self-storage facilities continues to surge! The importance of reliable and efficient construction companies cannot be overstated. In this landscape, Forge Building Company has distinguished itself as The Steel Building Experts. We set the standard for excellence in self storage construction.
What sets Forge Building Company apart from the competition? It combines experience, expertise, and a relentless commitment to quality. Moreover, with a track record of successful projects spanning the nation, Forge Building Company has earned a reputation for delivering superior results on time and within budget.
Forge Building Company is one of the premier national self-storage steel building contractors in the U.S. Founded in 2007 and headquartered in Boise, Idaho, Forge Building Company was created after its founders, Hamish Bell and Hayden Farrell, spent decades working in the steel-structure industry. Focusing their expertise on storage and the three pillars of building, designing, and erecting. This led the company to a more diverse portfolio and stronger relations across America. The Forge team has built over 50+ million square feet, has over 200+ employees, and remains privately owned. Learn more about the Forge story.
Perhaps the most distinguishing aspect of Forge Building Company is its unwavering commitment to customer satisfaction. From the initial consultation to the final walkthrough, clients can expect open communication, transparency, and a dedication to exceeding expectations at every stage of the construction process.
As the self-storage industry continues to evolve and expand, Forge Building Company remains poised to lead the way. The company is especially well-positioned to meet the growing demand. Furthermore, we have a proven track record of success and a steadfast commitment to excellence. Forge Building Company provides high-quality, state-of-the-art storage facilities nationwide. View our featured projects here: FEATURED PROJECTS
In conclusion, the self-storage industry represents a dynamic and rapidly growing sector of the economy, driven by changing consumer behavior and the need for innovative storage solutions. In this landscape, Forge Building Company stands out as a beacon of reliability, professionalism, and unparalleled expertise, setting the standard for excellence in self storage construction. As the industry evolves and expands, Forge Building Company remains committed to unlocking success for its clients, one storage facility at a time.
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Despite recessions and demographic shifts, few building types have boomed like self storage warehouses. In fact, they’ve proven to be one of the surest bets in real estate over the last half century, while malls, starter homes, and even luxury commercial space in big cities, once safe and steady investments, have struggled. Behind the combination locks and roll-up doors lies a $38 billion industry.
Living spaces are often limited and lifestyles are constantly changing with the need for extra storage. Storage units offer a practical solution for individuals seeking to declutter their homes, safeguard their valuables, or manage life transitions. Here are the top reasons people turn to storage units to store their valuables and junk:
One of the most common reasons people use storage units is to declutter their homes. Over time, households accumulate an assortment of items that may not be needed on a daily basis but still hold sentimental or practical value. By moving these items into a storage unit, homeowners can free up space, making their living areas more organized and less stressful. This is particularly useful for those living in smaller apartments or homes where space is at a premium.
Many items are only used during certain times of the year. Holiday decorations, winter sports gear, summer camping equipment, and seasonal clothing can take up significant space when not in use. Storage units provide a convenient way to keep these items out of the way until they are needed again. This not only helps in maintaining a tidy home but also ensures that seasonal items are kept in good condition. Climate controlled storage is becoming increasingly popular with renters allowing self storage operators to increase their revenue for premium space.
During the he moving process, timing can be a major issue. Sometimes, there is a gap between moving out of the old place and moving into the new one. Storage units serve as a temporary solution to keep belongings safe and secure during this transition period. Additionally, storage units can be incredibly useful for individuals who are downsizing and need time to sort through their belongings to determine what will fit in their new space.
Home renovations can be exciting but also chaotic. To prevent damage to furniture, electronics, and other valuables during construction work, many people opt to store their belongings in a storage unit temporarily. This not only protects their items from dust and debris but also provides more space for contractors to work efficiently. Once the renovations are complete, items can be moved back into the refreshed living space.
Storage units are not just for personal use; businesses also find them incredibly useful. Small businesses, in particular, may not have the space to store excess inventory, equipment, or important documents. Storage units offer a cost-effective solution to this problem. They provide a secure environment for business owners to store their goods without the need for larger, more expensive self storage warehouses. This can be particularly beneficial for online retailers or seasonal businesses that experience fluctuations in inventory levels.
Whether it's for decluttering a home, managing a move, storing seasonal items, protecting belongings during renovations, or meeting business needs, storage units offer a versatile and practical solution. They provide the extra space that many people need to keep their lives organized and their valuables safe. As our lives and circumstances change, the flexibility and convenience of storage units make them an increasingly popular choice for a wide range of storage nee
