Self-Storage has become one of the most desirable commercial real estate investments in America. Indeed, it has evolved into a core asset class for institutional investors, in large part due to its unmatched performance through all economic cycles. It is regarded as a safe harbor investment. For the past 30 years, self-storage has been the top performing property type in the NAREIT index, with average annual returns of 17.30% for the period from 1994-2023. Self-storage outperformed the Office, Industrial, Retail, Residential, Diversified, Health Care, Lodging/Resorts, Mortgage REIT, Timber, Infrastructure, Data Centers, and Specialty sectors.

Over the past 50 years, the self-storage industry has proven to be one of the sectors with the most rapid growth in the U.S. commercial real estate industry. The unprecedented growth of the industry has been attributed to self-storage consumers including renters, homeowners, students, businesses, and transitional populations who are constantly demanding rental storage. Increasingly small businesses are utilizing business self-storage units as a home-base for their operations. Doing so keeps their overhead low, gives them freedom not often found in leases, and eliminates the need to maintain a security system. Climate-controlled units ensure that inventory and records are well-maintained, and the location of the facility can give businesses a more desirable zip-code at a much lower price.

The American Heritage Dictionary provides the following definition of the adjective self-storage: “Of, relating to, or being a commercial facility in which customers can rent space to store possessions.” The Self-Storage Association defines self-storage more precisely as the term applied to facilities offering rental on a month-to-month basis where the tenant applies the lock and has sole access to the unit. A self-storage property is more than just a box for unused possessions; it is a specialized type of property with unique legal and economic characteristics. Indeed, the self-storage industry has been one of the fastest-growing sectors of the U.S. commercial real estate industry for more than four decades.

Over 70% of self-storage facilities are privately owned (not publicly traded companies). Regional and local owner-operators own most facilities. However, consolidation in the industry is a current ongoing trend, as operation costs tend to be lower for regional, multi-facility companies. Today, the self-storage industry has evolved to include architecturally dynamic facilities with state of-the-art management and security systems. They offer a wide range of sought-after specialty services and are managed by well-trained professionals who are highly skilled in terms of customer service, marketing, and sales. Just as facilities and managers have changed, so have the industry's operators. In terms of ownership, self-storage has also evolved.

Self-storage is a decidedly unglamorous property type yet is a well proven producer of above average market returns. The industry's boom over the last few decades mirrors larger demographic and real estate trends: Americans relocating from the Midwest and Northeast to Sunbelt cities store old gear in self-storage units. Millennials moving into increasingly crowded, high-demand downtowns require extra space. A wave of downsizing baby boomers needs a place to put a lifetime of accumulated memories. Small businesses want room to store excess inventory.

Self-storage has also become an international commercial real estate asset class. With significant development occurring in the United Kingdom, France, and the Netherlands. Mainland China has also significantly increased its facilities under development, and Brazil is developing 25 to 30 properties per year.