How Self-Storage Quietly Became One of Real Estate's Most Consistent Performers

Written by:

Steve Marcinuk

Date:

13 Mar 2025

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While headlines focus on office conversions and housing shortages, the self-storage sector has quietly emerged as one of real estate’s most consistent performers. The global market, valued at approximately $58 billion in 2023, is projected to reach over $72 billion by 2028. This steady growth stands in stark contrast to the office sector, which continues to struggle with declining occupancy rates nationwide.

The industry’s evolution is perfectly captured by 10 Federal Storage’s recent performance. The company added 27 properties in 2024 while delivering “superior same-store NOI growth exceeding industry benchmarks,” according to Brad Minsley, Co-Founder of 10 Federal. “Our proprietary system identifies the best submarkets, optimizes pricing, and ensures maximum efficiency at every facility,” he explains, highlighting how technology is transforming what was once considered a simple real estate play.

This technological revolution is sweeping through the industry. Tenant Inc. recently launched two game-changing features—Mobile Manager and Auction Manager—designed to streamline operations. Meanwhile, SmartStop Self Storage REIT introduced a new mobile application to enhance customer experience, signaling the industry’s shift toward digital-first operations.

The adoption of Internet of Things (IoT) technology is also making a significant impact. Companies like Vantiva are leveraging IoT to create fully automated, remotely monitored storage facilities, reducing labor costs and improving security. Similarly, Cloudastructure’s AI-powered security solutions enable real-time threat detection and automated access control, enhancing both operational efficiency and tenant safety.

The sector’s appeal isn’t just about technology. Forum Partners recently closed its initial funding round for Pocket Storage, a platform targeting ultra-urban markets, demonstrating strong institutional interest in the space. Research from IBISWorld shows the domestic market grew at nearly 3% annually from 2018 to 2023, outperforming many traditional commercial real estate segments. Even international players are taking notice, with Sirius Real Estate bringing in a Shurgard executive to drive self-storage growth strategy across their European portfolio.

Market segmentation reveals the industry’s breadth. A 2023 market analysis identified multiple thriving storage types—indoor, outdoor, climate-controlled, and vehicle storage—serving diverse end-users across residential, commercial, and industrial sectors. This diversification helps explain the industry’s resilience and consistent growth, which has outpaced the broader commercial real estate market by approximately 2% over the past five years.

BGL Properties’ recent acquisition of a second facility in Kingman, Arizona, exemplifies the industry’s expansion patterns. The company cited the “fast-growing region with potential for RV, boat, and self-storage” as key to their investment thesis, highlighting how demographic trends continue driving sector growth.

Regional performance varies significantly across the country. Sun Belt states such as Texas, Florida, and Arizona lead the sector with robust demand driven by strong population growth and migration patterns. Meanwhile, densely populated urban centers like New York and Los Angeles see continued demand but face zoning and space constraints, leading to innovative solutions like multi-story storage facilities. In contrast, some Midwest and Rust Belt regions experience slower growth due to stagnant population trends but still offer opportunities in select submarkets with strong local economic drivers.

Looking ahead, the industry’s future remains bright. Industry experts forecast the global self-storage market to expand at more than 4% annually through 2028, fueled by urbanization, downsizing trends, and increasing e-commerce storage needs. By comparison, the multifamily sector reported about 5% annual growth over the past five years, placing self-storage firmly among real estate’s top-performing segments. The sector’s proven recession resilience further bolsters its attractiveness to investors seeking stable returns.

For an industry that literally stores other people’s forgotten items, self-storage has proven impossible to overlook as a serious real estate investment opportunity. With its steady growth, increasing institutional interest, and ongoing technological transformation, self-storage is no longer just a niche asset class—it’s a major player in the real estate landscape.