Self-storage facilities have Americans’ wallets on lock

The storage business boomed during covid, and even as it returns to Earth, it’s still putting up impressive numbers.

search interest for storage space

Olivia Heller

Open closet. Try to keep a rat’s nest of old cords and boxes of Lord knows what from falling on me. Close closet. Sigh.

Managing the ratio of accumulated stuff to available space is a nightmare — unless you’re making gobs of money running a storage facility.

Business has been brisk

Few industries had a better pandemic than the self-storage sector; in 2021, The Wall Street Journal called it the “best bet in real estate.”

While storage company profits and stocks have cooled from historic covid-fueled peaks, they are still wildly outperforming the rest of the S&P 500.

A housing crisis is a storage opportunity; everyone’s got so much stuff but can only dream of having enough house for it all, per WSJ.

  • More than 10% of Americans lease storage space today.
  • In June, they paid an average of ~$166/month to do so.

Cashing in on panic

Google searches for “Storage near me” are continually rising — so long as there’s death, divorce, disaster, moving, marriages, and mangers, there’ll be people scrambling to pack things away.

Even when the value of goods in storage doesn’t match the price of storing them, customers weirdly don’t seem to mind.

  • Industry leader Extra Space Storage now issues ~130k rent-increase notices each month, and most customers don’t bat an eyelash. Talking pricing in June, CEO Joe Margolis noted that existing renters “didn’t care if it was $75 or $100.”

Wondering why Extra Space just dropped $11.5B to buy up rival Life Storage and create the largest storage operator in the US? Look no further than this captive consumer base.

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