Statistics in this article are provided by Ibisworld.com
To say the least, projections for the Self Storage industry are optimistic with tons of growth expected. Since self-storage started in the 1960′s, the industry has been one of the fastest growing sectors of commercial real-estate and has remained stable throughout recent economic downturns. After briefly flatlining in 2012, revenue has continued to increase and revenue is expected to grow %4.0 annually in the coming years. Increases in demand are theorized to be the product of consumers trends like declining home ownership, foreclosures, and an overall bad economy. Economist also forecast the home market to take another hit as the baby boomer generation enters retirement. Bottom-line, the real-estate market and storage industry are highly correlated.
While the storage business is continuing to grow, it is now considered a “mature market”. For those not familiar with this term, it is a period characterized by less innovation, stagnant consumer demands, and market equilibrium. This doesn’t mean that the market is not profitable, but there won’t be double-digit growth. Furthermore, consumer acceptance has been long established so consumers are less likely jump head-over-heels for a unit and view it more as a necessity. Overall, businesses should focus more on efficiency and innovation and not rapid expansion.
As many storage businesses owners know, competition can be fierce. This is expected to increase as late-movers enter the market and larger companies expand. The largest company, Public Storage, currently holds 7.2% and this may increase with the recent acquisition of Shurgard. As globalism continues, larger companies now search to buy small storage facilities. While a threat, economies of scale prevent the bigger fish from really cornering the market and allow businesses with a good reputation to thrive.
The storage industry still continues to chug along with no signs of stopping. This means major revenues for those that can keep the phones lines busy. But the business landscape is changing at an exponential rate. Some say that small businesses can’t compete in the current market. Those same people don’t realize the adaptability of a smaller enterprise and how essential these traits will be in the coming era.