The Rise and Success of the Storage Facility

The self-storage industry has becoming a booming segment, especially in major cities where space is limited. According to the Self Storage Association (SSA), in 2011, this business generated over $22 billion in annual revenue with over 49,000 self-storage facilities in the United States alone and 58,500 worldwide. There are around 1,000 units in Australia and over 3,000 in Canada. Per the latest statistics, the total rentable space in the United States is over 2.5 billion square feet and growing. This is three times the size of Manhattan. One in ten United States household rents one or more storage units. Meanwhile, the industry employs over 170,000 individuals.

The bottom line is that storage facilities are a considerable part of the fabric of society, especially in the United States and the idea is growing around the world. However, given the minimalist nature of other societies, it will never be as big of a market as in the United States. This sparks the question as to the origins of self-storage, the biggest players in the industry, and the bright future for this marketplace.

History

Evidence shows that the concept of self-storage dates back 2,000 years to Ancient China. However, the idea was refined by the British when they would place contents in crates which were situated inside of stable with watchmen securing the contents. The first real self-storage company dates to 1891 when brothers Martin and John Bekins established the Bekins Company in Omaha, Nebraska. The company had three horse-drawn carriages and 12 employees. The business was then expanded to Los Angeles in 1895 when they used moving vans. In 1906, the company built its first warehouse, known as the Bekins Warehouse, with reinforced steel and concrete.

Until around 1950, the Bekins Company established multiple fireproof warehouses in Southern California. After World War II, the company focuses on local moving and storage, long distance moving of households and valuable goods, international moving for military personnel and archive storage. It is because of the visionary Bekin brothers that we have the modern concept of containerized storage. During the 1960’s, the popularity of self-storage facilities really expanded in the United States. The first garage-style facility was constructed by Russ Williams in Odessa, Texas in 1964. The unit was aptly named A-1 U-Store-It U-Lock-It U-Carry-the-Key. The structure was actually built from the oil industry so that they had quick access to supplies. Shortly after, the entire country followed-suite and facilities appeared everywhere.

In the years following, facilities functions primarily as transitional solutions to divorcing, moving or a death in the family. However, once disposable income grew and the cost of buying decreased from 1970 to 2008, these facilities prospered and held overflow from homes. Storage facilities continue to be a major part of the cultural landscape with population shows like Auction Hunters and Storage Wars have strengthened the industry.

Top Self-Storage Companies

The following is the 2015 list of the top five self-storage companies in the United States by square footage as this is the best metric for judging such companies.

One: Public Storage

Founded in 1972, Public Storage is in every major city across the United States. The company currently owns over 2,400 facilities and 1.5 million units. The total square footage owned is 156 million.

Two: Extra Space Storage

With 990 facilities owned and 675,000 units owned, Extra Space Storage is located in most states and has a total of 74 million square feet owned.

Three: U-Haul International

A growing segment for U-Haul, outside of their truck rentals, is self-storage spaces. Many of their locations offer truck rentals and storage which is extremely convenient. U-Haul owns almost 1,300 facilities with 44 million square feet.

Four: CubeSmart

As the most recently founded company on this list (2004), CubeSmart already owns 433 facilities for a total of almost 30 million square feet.

Five: Sovran Self Storage Inc.

Founded in Buffalo, New York in 1982, Sovran owns 442 facilities around the United States with 265,000 units owned and almost 30 million total square feet of owned storage space.

Future of Self-Storage

As of 2016, Texas, Florida and California lead the nation with regards to total square footage of self-storage space. This is primarily due to the fact that they have some of the largest populations in the United States and that many of the post-World War II ranches did not come with a basement. This presented a major need for storage units in these states. The aforementioned numbers are continuing to grow. In 2014, 90-percent of all self-storage locations in the United States were occupied. This set an all-time high record in the industry.

The future outlook among self-storage experts (yes, there is such a thing), predicts major growth in the industry and new developments in construction. As suburbanites and Millennial’s continue to flock to cities at a rapid pace, they will need some place to store the items that cannot fit in their apartment. Also, residents are willing to put up with less space to save money and spend it on other products and services. As a result, the will seek out additional storage units as it is cheaper to store their items than to pay extra rent for a larger apartment.

This is especially evident in big cities like New York and Los Angeles where space is at a premium so you will paid a premium price. Therefore, many residents are seeking storage units in suburban locations to further save on costs as a result of limited land.

Based on an idea that is over a century old, the self-storage industry has a bright future of growth. This is especially evident given the migration patterns of humans back into cities where they are willing to compromise space for rent cost. As the housing market rebounds, people still cannot afford the rental and mortgage costs in many cities so they need to downgrade their space and store their belongings. Experts believe this will be a continuing trend for many years to come. As technology becomes more efficient, it will trickle down to the self-storage industry and make it more cost-effective. Perhaps in the future, many of these companies will utilize a combination of underground and above ground facilities to maximize space and efficiency.