Self-Storage Industry Trends (Storage & Warehouse Leasing In 2023)

What is the current state of storage and warehouse leasing in the US?

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IBISWorld’s 2023 industry report into storage and warehouse leasing in the US sheds some light on the general trends of the industry. In this article, we will explore some key self-storage industry trends and consider the current major markets for self-storage facilities. Without wasting any time, let’s take a look at some of the variables influencing demand.

Self-Storage Industry Trends: What Influences Demand?

Economic Fluctuations Fuel Demand

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Fluctuations in economic health impact the self-storage industry. Indicators such as inflation and per capita disposable income drive demand for storage services. When disposable income rises, people can afford more possessions. As a result, they require more storage. The industry benefits from both high and low levels of economic health - which is perhaps surprising to those outside of the industry.

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While some may seek temporary storage solutions during economic downturns, others may look to upgrade their lifestyles during prosperous times. No matter whether the economy is in good or bad shape, both contribute to industry growth.

Seasonal Trends Also Affect The Demand

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Seasonal trends can influence demand in the self-storage industry. The main reason Americans rent temporary storage facilities is to accommodate moving, which typically occurs between May and September. However, colder months attract different consumers, such as bikers and boat owners, who require storage for their vehicles during unfavorable conditions.

Self-Storage Industry Trends: Major Markets

Residential Customers (The Largest Market)

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As you would expect, residential customers constitute the majority of the demand for self-storage solutions. The market can be divided into short-term (21.0% of revenue) and long-term residential customers (48.9% of revenue), with short-term customers renting storage units for less than six months, and long-term customers renting for more than six months.

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Major life events, such as marriage, divorce, new home ownership, new jobs, and retirement, often result in the need for self-storage solutions.

Commercial Operators (For Managing Stock Demand)

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Retail and wholesale companies that need storage for seasonal displays, stock, inventories, and equipment make up the commercial market segment. With support from platforms like Etsy and Shopify, storage leasing is rising in popularity among small business owners that require storage solutions when demand for products is either expanding or contracting in size.

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Another major trend specific to the continued growth of e-commerce brands has been the rise of Flex or Co-warehousing spaces. 

Military Personnel (A Reliable Source Of Revenue)

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Military personnel, who are required to relocate often, account for 5.9% of industry revenue in 2023. With over 700,000 self-storage units rented to military personnel in the United States, this segment is a dependable source of income for self-storage facility operators. However, demand may decrease in the coming years due to an overall reduction in deployed troops.

Students (Short-Term Leases Abound)

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Demand from students follows the seasonal nature of school semesters. Demand is typically higher in the summer months when the academic year ends. In 2023, this segment accounts for 5.8% of industry revenue. Self-storage facility operators can potentially explore ways to craft compelling offers for students in need of custom storage solutions with short-term leases.

Self-Storage Demand Reports: Understanding The Market

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If you are a self-storage operator, reading through industry reports can enable you to identify opportunities for growth. For instance, you may have overlooked one of the major markets fueling growth in the self-storage industry. Many self-storage facilities can often experience success by leaning into specific markets and developing tailored solutions for their needs.

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We highly recommend taking a full read through IBISWorld’s 2023 industry report on storage and warehouse leasing in the US. If you are looking for a “lightbulb moment” and want to find new opportunities for your business, a scroll through the report will set you on the right path. 

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Also, you should read our Operator’s BluePrint to “Building an Unmanned Facility” — the all-in-one resource of all the tools accessible to an operator to run their self-storage business more effectively.