Self storage


Self storage is an industry in which storage space, also known as "storage units" is rented to tenants, usually on a short-term basis. Self-storage tenants include businesses and individuals.
Industry experts often refer to "4Ds of life" when discussing why storage space is rented.

Description

Self-storage facilities rent space on a short-term basis to individuals or to businesses. Some facilities offer boxes, locks, and packaging supplies for sale to assist tenants in packing and safekeeping their goods, and may also offer truck rentals.
Most storage facilities offer insurance for purchase; also, the lessor may be covered by his/her own insurance policy or may purchase insurance to cover the items.
The rented spaces are secured by the tenant's own lock and key. Unlike in a warehouse, self-storage facility employees do not have casual access to the contents of the space. A self-storage facility does not take possession or control of the contents of the space unless a lien is imposed for non-payment of rent, or if the unit is not locked the facility may lock the unit until the tenant provides his/her own lock.

History

Although there is historical evidence of publicly available storage in ancient China, modern self-storage facilities did not begin to appear until the late 1960s. The first self-storage facility chains opened in Texas. This was often helped by the fact that most homes in Texas do not have basements, which often is used for storage.
The first self-storage facility in Europe was started in the United Kingdom by Doug Hampson, and opened in central London in 1979. Called Abbey Self Storage, it would become the first self-storage chain in Europe. "... it was Doug Hampson who gave Britain the modern self-storage industry, with its bright, clean corridors and endless rows of brightly-coloured doors. In the industry he is widely credited with the enviable title of the "father of UK self-storage".
Modern storage facilities grew slowly through the 90s, at which time demand outpaced supply and caused a rush of new self-storage developments. From 2000 to 2005, over 3,000 new facilities were built every year in America.

Self storage today

At year-end 2019, there were 47,539 self-storage facilities in the United States on industrial and commercial land parcels. There is more than 1.9 billion square feet of available self-storage in space in U.S. The six largest publicly traded storage operators include:
The storage units are typically window-less, walled with concrete cinder blocks or corrugated metal, and lockable by the renter. Each unit is usually accessed by opening a roll-up metal door, which is usually about the same size as a one-car garage door. A controlled access facility may employ security guards, security cameras, individual unit door alarms and some means of electronic gate access such as a keypad or proximity card. A few facilities even use biometric thumbprint or hand scanners to ensure that access is granted only to those that rent. Self-storage facility operators frequently provide 24-hour access, climate controlled storage, outdoor storage for RVs and boats, and lights or power outlets inside the storage unit as amenities to set themselves apart from competitors. Some storage facilities have open roofs i.e. a wire mesh roof which are not that secure, compared to ones that have full covered tin roofs that provide added security and privacy.
In rural and suburban areas most facilities contain multiple single-story buildings with mostly drive-up units which have natural ventilation but are not climate-controlled. These buildings are referred to as "traditional" storage facilities. Climate-controlled interior units are becoming more popular in suburban areas. In urban areas many facilities have multi-story buildings using elevators or freight lifts to move the goods to the upper floors. These facilities are often climate-controlled since they are comprised mostly, if not totally, of interior units. Warehouses or grocery stores are sometimes converted into self-storage facilities. Loading docks are sometimes provided on the ground floor. Also, complimentary rolling carts or moving dollies are sometimes provided to help the customers carry items to their units. Urban self-storage facilities might contain only a few floors in a much larger building; there are successful self-storage businesses co-located with manufacturing plants, office tenants and even public schools.
One in ten U.S. households now rent a self-storage unit. The growing demand for self-storage in the U.S. is created by people moving, and by various lifestyle transitions, such as marriage, divorce, retirement, a death in the family, etc. Recent surveys of self-storage companies indicate a positive trend in market demand and occupancy rate.
Over 54,000 self-storage facilities currently exist in the U.S. ranging from companies with a nationwide presence to companies with regional footprints or even stand-alone independent "mom and pop" facilities.
Demand for storage space remains stable as of Q4 2015. The supply for self-storage is also relatively stable. Often, the process to build a new storage building is onerous and can take years. Additionally, this specific asset class often gets push back from communities, due to its nature.
The self-storage sector is highly fragmented, which is in contrast to other asset classes in the industry. 80% of self-storage facilities are owned by individuals or small investors.
There is a belief amongst investors that the self-storage industry is recession-proof. This belief is supported by the 5.1% total return the sector delivered to investors in 2008 during The Great Recession. The self-storage industry reported strong results during the COVID-19 pandemic. This is due to the fact that self-storage is considered to be an "essential business" in many jurisdictions so during a lockdown many facilities never closed and many people were reportedly panic buying storage units to keep valuables safe from contamination.

Self storage worldwide

Self-storage or variations on the business model are now found in many parts of the world. In 2014, FEDESSA, the Federation of European Self Storage Associations, published a report about the state of the self-storage industry in Europe. In this report, it was estimated that 975 facilities exist in the United Kingdom, 430 in France, 264 in The Netherlands, 210 in Spain, 131 in Germany, and 112 in Sweden. No other country in Europe has more than 100 facilities. Overall, the report estimates 2,391 total facilities in Europe, or about 75 million square feet of rentable storage space. This compares with over 52,000 facilities in the US, and 1,100 facilities in Australia. In the UK, charges are related to capacity in ft², transportation, hour/loading, with low-cost alternatives to traditional self-storage.

Storage auctions

In the United States, self-storage facilities may hold storage auctions or lien sales to vacate non-paying tenants according to their enforcement rights that are outlined within the lien law of each jurisdiction.
Facilities owners are generally required to first notify the tenant of the outstanding debt, commonly by certified or registered mail to the address on file with the facility. If the debt remains unpaid, the facility must then give public notice of the sale or auction, generally in a newspaper of general circulation in most states, though some states may allow public notice of sales to be done in the internet. The tenant has the right to pay their outstanding bill at any time until the moment the auction begins and thus reclaim rights to the unit and his/her items; those units would be removed from the auction.
The auctions/sales are open to the general public, with most bidders buying for the purpose of reselling for profit. Once the auction for a unit starts, the door to the unit is opened and potential bidders are allowed to view the contents only by looking in from the doorway; they may not step inside, touch, or move any of the contents prior to the auction. Generally, the spaces and their contents are sold "as is, where is" with no warranties or guarantees implied or provided, and the terms of sale are cash-only upon conclusion of the auction. The purchaser of a unit takes possession of its entire contents and is responsible for removing them within a set period of time. In some cases, the facility may allow the purchaser to rent the unit and/or charge a refundable deposit for cleaning of the unit once it has been emptied.
Certain jurisdictions require facility owners to immediately confiscate controlled items such as firearms if they are in plain sight within a delinquent unit. Also, a jurisdiction may require the purchaser to turn over some items to the facility owner.
In the fall of 2010, two new television programs featuring storage auctions, Storage Wars and Auction Hunters, were released. The popularity led to additional shows such as Storage Hunters, ', and ' which helped increase the visibility and interest of storage auctions. also debuted on the Outdoor Living Network in 2013.

Self Storage Associations

Self Storage Associations have been created around the world in order to support the growth of the industry. These associations offer support in the way of information, education, networking, referrals, events, standardized agreements, data collection, marketing, advocacy, and publications for current and potential facility owners, managers, suppliers, and investors.