"I have far too much storage space."
- No One, Ever
Self-Storage
We Have the Power Today
to Change Tomorrow!
Currently, storage is one of the best asset classes in which you can invest. The demand is significant, and the returns are asymmetrical, meaning you receive more for less.
Self storage has been around for a very long time. This asset class has proven itself as one of the most solid and stable investments, not only surviving, but thriving throughout the last two recessions. The reason is, self-storage facilities tend to be more resilient during economic downturns. When people downsize homes or businesses cut back on space during recessions, they often need storage units to store their belongings.
This asset class out performs almost all other asset classes for many reasons and it provides steady Cash Flow. Many self-storage facilities offer a consistent and predictable income stream due to monthly rental payments from customers. There is low overhead. Once established, self-storage facilities generally have lower maintenance costs and operational expenses compared to other real estate investments, like multifamily or office buildings. There is high demand. The demand for storage has been increasing due to societal trends such as urbanization, downsizing by baby boomers, and the growth of small businesses that need storage space.
There is ease of scalability. Investors can start with a single facility and expand their portfolio over time. The modular nature of self-storage buildings allows for easy expansion on existing properties.
It has low tenant turnover costs. Unlike residential or commercial properties, turnover costs are minimal because there's no need for paint, carpet cleaning, or major repairs after a tenant vacates. Self-storage has a diverse customer base. Storage facilities cater to a wide range of customers, from individuals to businesses, ensuring a varied and potentially more stable clientele.
There is flexibility in pricing. Due to the month-to-month nature of most self-storage rentals, facility owners have the flexibility to adjust rental rates based on current market demand. There are currently no laws or regulations dictating maximum price for rents. Lastly, this asset class was not subject to rent moratoriums that hurt so many owners in residential and multifamily during covid.
There are fewer eviction concerns. The eviction process for non-paying storage customers is typically faster and less complicated than with residential tenants. If customers don't pay, their items can be auctioned off, following local laws and regulations.
There have been many technological advancements. The self-storage industry has embraced technological innovations, such as automated kiosks, online payment systems, and security enhancements, which make managing and scaling operations more efficient while significantly reducing overhead costs. When we look at the numbers. There is no doubt that self-storage is and will continue to be a solid growth asset for years to come. Industry growth has been amazing. From the 1960s to the early 2020s, the self-storage industry in the U.S. witnessed exponential growth, with facilities increasing from a mere handful to tens of thousands. According to the Squrefoot.com, as of 2023, the U.S. self-storage sector was a significant part of the commercial real estate market, with over 51,206 primary facilities nationwide.
Average occupancy rates hovered around the high-80% to low-90% range in the years leading up to 2021, and the current revenue for the self-storage industry in the U.S. is over 29 Billion annually, according to Squrefoot.com. The average occupancy of storage facilities is 96.5 percent as of 2023 (Chris Hudgins. Christie Moffat). According to the Self Storage Association, roughly 10% of U.S. households rented a self-storage unit as of 2022, and currently 11.1% of households rent a self-storage facility. That is an estimated 14.6 million households. (MJ Partners Self-Storage Update, January 2023)
The overall investment potential is undeniable. Between 2015 to 2020, investment in self-storage facilities totaled more than $25 billion (Source: CBRE, a global commercial real estate services firm). According to Storeganise.com, owners of storage facility businesses typically earn a yearly profit of $184,500. This is based on the facility’s size, local rental market, and operational efficiency. The $184,500 mentioned is based on an average annual rental rate of $9 per square foot, an average storage unit facility size of 50,000 square feet, and a profit margin of around 41%.
With statistics like these, and knowing that the population is set to grow 48% between 2005 and 2050 (according to the Pew Research Center). Even though we are facing a lowered naturalized population over the next 15-20 years due to the Baby Boom generation moving on, the growth projections include projected immigration. That means we are expected to go from a current population of 339 million to about 438 million by 2050. That is significant growth and will continue to buttress the growth of the self-storage industry for decades to come.
RPL Capital Ventures does not provide investment advisory services. Any information communicated through this website or other means should not be taken as investment guidance. The investment options we offer are exclusively private security offerings. These are not available in the public market and come with certain holding periods, suitable for those who do not require immediate access to their funds. It's important to note that these private placements are not covered by FDIC insurance or any other government protection, nor are they assured by RPL Capital Ventures. They inherently involve the risk of a decrease in value. Neither the SEC nor any state or federal securities regulatory bodies have endorsed these investment opportunities. The financial projections and expected returns presented on this site are hypothetical and not based on actual investment performance, hence, they do not assure future results. Such estimates should not be the sole factor in making investment decisions. While we endeavor to source our information from what we deem reliable avenues, we do not vouch for its accuracy or completeness and do not take responsibility for any errors. Only the official offering documents, detailing the risks, fees, and expenses, are reliable for making or soliciting investments. We strongly recommend that investors engage in comprehensive due diligence, including consulting with financial, legal, and tax advisors, to gain a full understanding of the risks involved in these investment opportunities. Investments in private placements are highly risky, potentially leading to a complete loss of investment, and are generally characterized by limited liquidity. Therefore, it is crucial for investors to seek advice from their respective professional advisors prior to committing to any private placement investments.