What to Expect From the Self Storage Industry in 2022
Despite the uncertainty of the past two years, self storage continues to experience extraordinary growth. Industry numbers took a downturn during the first half of 2020, but have shown record-setting increases since that time. Occupancy and rental rates are both at all-time highs.
Given this stellar growth, the question is whether or not self storage professionals and investors can continue to look forward to these same trends in 2022 and beyond.
According to Unwired Logic, “Despite the tumultuous 2020 and early 2021, the growth outlook is positive: A Global Industry Analysts report estimates a Compound Annual Growth Rate (CAGR) of 6.6% over the next seven years. Nevertheless, self-storage owners need to be aware of the direction the industry is headed and the technological novelties set to become market standards.”
The Self Storage Industry – 2022 and Beyond
There are multiple reasons for the surge in occupancy and rentals rates over the past two years. From reorganizing and carving out space for home offices, to having to face downsizing of homes and businesses, the pandemic has obviously played a role. Despite most temporary renters having moved on by now, the growth trend has continued.
With the worst of Covid behind us, short-term storage tenants have been better able to get a sense of their needs. Furthermore, urbanization, population growth, aging populations, and the popularity of e-commerce are also stimulating the demand for self storage. Many factors have contributed to skyrocketing growth, and, in any case, the 4Ds of self storage demand hold true today as they always have: divorce, downsizing, death, and displacement.
Successful owners and operators have recognized that technology is a value-add factor that can boost convenience, service, and, ultimately, the bottom line in 2022 and beyond. They have embraced a broad range of solutions to meet consumer preferences. Everything from self-service kiosks, online reservations, digital access, and biometric security offer proven solutions that attract customers. Don’t overlook cloud-based software that can dispatch maintenance requests, provide insight on customer and financial trends, and merge data from a variety of sources to simplify accounting. If you haven’t already added technology to your toolkit, it’s time to explore options that will save you time and money.
Every day more owners are recognizing the value of third-party management. The right third-party management company can increase your profitability because they have the resources and expertise to build your business and your brand through proven operational and marketing techniques. You’ll be regularly updated with data that will help you make informed decisions and capitalize on growth opportunities. Manager training, revenue management, and reliable vendor connections will propel your business forward in the coming year.
Confidence and Optimism
Self storage has once again proven to be recession-resistant, taking less of a hit than multifamily, retail, hotel, and student housing in the last two years. As self storage continues to thrive, the industry has piqued considerable investment interest from both private and public markets. This heightened interest has led to more aggregation as a few big names acquire smaller independent owners.
Moving into 2022, available capital, along with increases in rates and occupancy, continues to fuel the growth of this commercial real estate sector. If you’re looking for self storage investment opportunities, Pinnacle Storage Properties can help.
There are no guarantees of success in business, but you can guarantee defeat by failing to keep up with market developments and ignoring the trends that your competition welcomes. The key point here is that technological advancements are becoming industry standards and should not be ignored. The industry will continue to grow. Keep your business growing along with it.