The self storage industry is poised for more changes in 2018 and beyond. Back in 2015, industry revenue was projected to exceed $30 billion. According to these same forecasts, growth would continue at a rate of roughly 3 percent through 2020. This year has seen moderate revenue growth. Current forecasts call for growth of 3 to 5 percent in revenue increase by year’s end.
As our industry outlook remains positive. A series of significant developments in the first quarter of this year will contribute to my industry’s growth. Briefly, here are some trends in self storage:
Artificial intelligence, machine learning, and the like are redefining the landscape for many industries. Self storage is gradually becoming less of a stranger to its benefits. There are growing numbers of self storage operators who have committed to the partial automation of their properties — and a handful who have gone all-in on remote automation, as my company has. Creating collective emphasis on this strategy’s benefits — including potential increases in net operating income, which can be achieved through the elimination of onsite property manager salaries.
Centralization and automation will increasingly become a focal point for self storage operators (and in turn, the investment community) this year and beyond.
The younger generation
Millennial influence has been undeniable in the self-storage sector. As Millennials continue to gain spending power, their progressive consumer tendencies are reshaping markets, including mine. For example, the advent of storage apps — which allow users to access and transport stored items through a mobile on-demand platform — have challenged self-storage operators to revisit pricing to remain competitive.
Regardless of growth — current and projected — some suggest that self storage is entering uncharted waters in a turbulent market. Savvy operators continue to find innovative ways to leverage opportunities in secondary and tertiary markets. The self storage industry is expected to weather this process, as it continues to outperform other asset classes and attract the attention of investors.