The Self-Storage Market Status for 2021

Let’s face it, 2020 was a tough year for everyone. With the pandemic spreading rapidly and businesses and industries everywhere struggling, what has been going on in the self-storage industry? In 2020, many industries came to a halt, such as airlines and tourism, but the global self-storage market has seen much less of an impact than other businesses. Let’s take a look at why this is the case. Maybe this is your year to invest in self-storage!

Self-Storage Market Statistics

The latest earnings reports from the self-storage REIT sector have been very strong in the fourth quarter of 2020. They continue to show record-high industry occupancy from the last quarter of 2020 to the end of the third quarter of 2021. This reinforces the self-storage industry as one of the most resilient asset classes in commercial real estate.

The non-weighted average for same-store (existing stores’) Net Operating Income (NOI) growth was 4.54%, while the non-weighted average for same-store revenue grew 3.24% year over the year. As you can see, compared to the fourth quarter of 2019, the self-storage REIT industry is posting profits while many other industries are posting losses.

Self-storage outperformed the broader REIT industry within commercial real estate. It showed the second-best shareholder returns of about 12.91%. The only REIT asset class that showed greater shareholder returns was data centers with 21%. 

Many self-storage REITs posted their best year on record. Almost every wholly-owned acquisition posted increased profits compared to the same time in 2018. Same-store profits are expected to peak within the first and second quarter of 2021 and balance out around the third quarter. So, even as the pandemic rages on, self-storage investment income has continued to increase

Factors Contributing to the Self-Storage Market in 2021


The self-storage industry thrives in the face of trauma, and 2020 was a traumatic year. One factor that has greatly contributed to the rise in self-storage in 2020 and 2021 is the number of families who have needed to downsize during this recession. Unfortunately, we have experienced an increase in unemployment. Many industries were forced to lay off many of their core employees. When this happens, families are forced to downsize to smaller homes, which means they need a place to store their stuff.

Family Discord and Consolidation

As unfortunate as this is, families have been tested immensely during this period of quarantine and isolation. More people than ever were stuck inside their homes with family members. It can also create financial strife since so many people were out of work for weeks at a time. The self-storage industry is likely to see high occupancy rates due to families separating during this trying time. This industry helps people who are going through difficult times.

While some families may separate, on the other side of that coin, some families may consolidate. Many college students and millennials might move back in with their parents to share the cost of living. Those people will need storage units to store their belongings. Other family members, such as grandparents, might move in with their children. This can contribute to high occupancy rates in 2021.

Man Writing on board

Cost Control Measures For Self-Storage Owners to Implement in 2021

To curtail any uncertainties 2021 might bring, many self-storage facility owners are using cost control measures to keep costs low and income high.

Solar Panels

One of the primary ways in which businesses can decrease their monthly costs is by installing solar panels on their facility. Solar panels can decrease the monthly utility bills while also providing huge tax breaks for commercial real estate owners.

The Solar Investment Tax Credit (ITC) is available to commercial properties that fall under Section 48 of the United States Tax Code. If you install solar panels on your building, you are eligible for a 26% tax credit for your business. One of the greatest expenses for every real estate investor is their taxes. By installing solar panels on your commercial self-storage facility, you can decrease your monthly operating costs and your tax bill.

Not to mention, solar panels are much better for the environment. You can reduce carbon emissions by using renewable energy as opposed to non-renewable energy sources, which contribute to most of the greenhouse gases emitted from electrical power plants.

Energy-Efficient Lighting

Another simple yet effective way to decrease your monthly costs is to install LED lighting throughout the building. By replacing the lighting in your commercial building, you can reduce the amount of electricity used and the heat emitted by lighting fixtures.

The Bottom Line

The global pandemic is here to stay for a while. This might be the perfect time for you to invest in a self-storage facility. It could be a great time to buy since some facility owners might panic in the face of a recession. If you have been considering the self-storage business, with the projected growth in the market, we recommend checking out your options now. Contact us for further information on how you can invest in a recession-proof business and secure your financial future.