Self-Storage: How the Pandemic Fueled an Already Booming Business

With more than 50,000 facilities and upwards of 2.3 billion square feet of self-storage in the United States, this segment of commercial real estate has steadily evolved over the last 60 years into big business.  As the Covid pandemic enters its third year there has been an accelerated need for families to create space for both employees working from home, and/or a workplace for students while remote schooling.  Storing household items to create space has furthered the upward trend in self-storage, and this will continue as the residential housing and apartment markets stay strong in 2022.  The 30-year average return on self-storage properties is 17 percent, outpacing apartment complex ownership (14%) and the S&P (10%) during this same 30-year period; self-storage ownership has stood the test of time.

Self-storage in its modern form has evolved quite a bit from the earliest iterations, which traces back almost 2,000 years to when Chinese villagers stored items in clay pots that were kept underground and closely guarded.

A more relatable version of self-storage arose a few hundred years ago in Britain, as banks began offering storage to safeguard valuables for those traveling overseas.  As their vaults filled, the need arose for a more dedicated solution; in the early 1850s, the first warehouse dedicated solely to storing household goods was built.

It would take another 50 years for this concept to reach the United States. John and Martin Bekins – the famed founders of Bekins Van Lines, built the first steel and concrete facility in Los Angeles in 1906.  The Bekins are considered the pioneers of the self-storage concept in the United States, as they tied the concept to their expanding trucking business.

It would be another 60 years before the self-storage concept truly took off in the United States, with explosive growth from the early 60s through the late 70s.  The mid-60s rental rates of 15 cents per SF have grown to upwards of $4 per SF in some high-demand areas.

If you need help buying or selling a self-storage facility or are seeking land to build one, please contact The Blau & Berg Company at 973-379-6644.