Site selection has become one of the clearest drivers of self-storage performance. According to Tom de Jong, Executive Vice President at Colliers, well-sited facilities are outperforming their peers by 15 to 18 percent in operating metrics and reaching stabilization noticeably faster.
De Jong notes that the self-storage industry’s site selection framework has grown considerably more sophisticated since 2021 – and that today’s most successful facilities are approved on criteria that reflect that higher standard.
Location has always mattered, and now it works best alongside two other factors – internet and mobile search presence, and strong management. Strength across all three creates a compounding advantage in lease-up performance. “You really need all avenues of clients or tenants to find you in a lease-up situation,” de Jong says. “You need location, you need the internet, you need strong management, you need internet presence, mobile search presence, and you need street visibility.”
The greatest results come when a strong physical location is paired with capable management and effective digital marketing. De Jong describes the upside directly: a well-located property can lease up as much as a full year faster than a comparable asset in a less favorable location, and can reach and sustain a higher performance level over time.
For a development with a projected 24-month lease-up timeline, that faster pace protects a significant portion of projected returns by reducing carrying costs – debt service, operating reserves, and management fees – while reinforcing the long-term performance advantage that a strong location provides.
De Jong points to a specific institutional portfolio in the Boston market as evidence of how measurable the location advantage has become. The portfolio included two REIT-managed facilities: one with strong visibility and easy access, and one situated in an industrial area with some freeway visibility.
The performance gap between the two ran to approximately 15 to 18 percent in operating metrics in favor of the highly visible, easily accessible asset. “The biggest difference is for newly built properties getting through lease-up,” de Jong says. A facility in lease-up benefits when every discovery channel works simultaneously – street visibility, digital search, and management execution. When all three align, the asset moves through lease-up quickly and confidently. De Jong adds that AI visibility and strategic, dynamic pricing models have also become critical drivers of facility performance.
The strongly located facility combined institutional management, REIT branding, and digital presence with excellent access, allowing it to convert drive-by awareness into actual tenants. De Jong suggests that this kind of visibility and accessibility is a durable, structural advantage that compounds over time.
For buyers evaluating self-storage acquisitions, a 15 to 18 percent operating performance advantage translates into a meaningful NOI difference, which at current cap rates produces a valuation premium large enough to strengthen both underwriting and exit pricing. Well-located properties are operationally stronger – and structurally easier to sell.
De Jong observes that the criteria developers use to evaluate sites have become more layered than the traffic-count-focused analysis of earlier cycles. Population growth has emerged as a primary filter. “Building into a market that’s growing gives you a real advantage,” he says, emphasizing that strong demographic momentum is one of the clearest green flags a developer can look for.
Beyond population trends, de Jong emphasizes that submarket-level rent and occupancy data has become the most valuable input in any feasibility analysis. Rather than relying on broad square-feet-per-capita figures that dominated pre-2021 underwriting, developers now benefit from examining where every competitor in a submarket is actually performing on rents and occupancies – real results rather than projections.
The old saturation threshold of 8+ square feet per capita, once treated as a headline oversupply signal, is now one input among many. “The saturation level is still a factor, but it’s not as important as a lot of these other layers that you want to look at,” de Jong says. Income levels, population trajectory, and achieved rents in the immediate competitive set now anchor the analytical framework.
He also highlights competitive pipeline awareness as a valuable planning input. “If you’re in a market that’s doing okay, it’s starting to perform a little better, I think you can add a facility,” de Jong says. “But if you see two others coming, I think that’s where you need to really park the bus and take a hard look.”
De Jong is now working with developers re-entering the market with renewed confidence, including multifamily developers looking to diversify into self-storage. With capital ready to deploy, disciplined site selection is the key to translating that momentum into strong results. “People are definitely being a little bit more aggressive, particularly more than they were two years ago,” he says. “That was kind of the market bottom.”
De Jong’s view is that the industry is applying the lessons of the last cycle and focusing on the fundamentals that produce durable performance. Existing incumbents are performing better as supply has moderated, which signals to developers that there may be room to add one more facility in a given market. The distinction de Jong draws is between adding one facility to an improving market and entering a market where two or three others are already in the planning stages. The facilities now demonstrating the strongest recovery are the ones that were well-sited to begin with – a pattern that, according to de Jong, makes the clearest case for disciplined site selection as the next development cycle begins. Developers looking to apply that discipline can learn more through Colliers.
About Tom de Jong: Tom de Jong is Executive Vice President at Colliers and Founding Principal of the De Jong Self Storage Team. With 19 years at Colliers, a $2B+ transaction record across 32 states, and an SIOR designation, he is one of the most recognized specialists in self-storage brokerage and investment advisory in the United States.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
Disclosure: Individuals or companies mentioned may have a commercial relationship with KeyCrew.
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