The State of the Self-Storage Market, Fall 2020
November 6, 2020 | Luke Elliott, Michael Mele, Steven Paul | Inside Self Storage
Despite the disruption the coronavirus pandemic has created for numerous industries, certain business types still provide opportunities for investors during the recession and are likely to do so well into recovery. Self-storage is one of the most resilient asset classes in the market, in part because the number of people using storage continues to climb, and the unique fundamentals of operating the business make it attractive.
We’re beginning to gain clarity on how much the self-storage industry has been impacted by the health crisis and subsequent recession. Below is what we’re seeing across the sector today.
Operating Performance
While self-storage isn’t immune to pandemic impact, it is adjusting. Before COVID-19 and the economic downturn, the industry was trending upward. The glut of new construction in the U.S. had hit a peak, and the development cycle reached a plateau midway through 2019. At the end of the first quarter of this year, absorption of new supply increased demand, leading to upward trends in rental rates and occupancies.
