Amidst the Covid lockdown, online shopping skyrocketed because of the inability of customers to shop in stores. Thus, the accumulation of “stuff” in the average American home has continued to pile up. The LA Times places the number of items the average American owns at 300,000. The build-up of household items and the trend of downsizing during the pandemic has created a much larger demand for both business and residential storage. Many storage companies have emerged since then, upping the number of storage facilities across the country.
Online shopping has taken over the retail industry and continues to soar. The decrease in the need for big box department stores has left large buildings vacant for self-storage facilities to take over. Department store name brands like Sears, Macy’s, and countless others have experienced mass closings of brick-and-mortar locations over the past few years. Challenges for department stores accelerated during the beginning of the pandemic, but the number of department store closures is not expected to drop in 2023. This will provide even more space for new self-storage facilities to expand into and dominate. Although some facilities will move into these department store vacancies, we’ll also see new facilities built from the ground up.
Self-Storage Will Continue to Expand in 2023
To start off 2023, there are more than 55,000 operating self-storage facilities in the United States. Over the last few years, self-storage facilities have become the fastest-growing segment of commercial real estate. The number of facilities is expected to exponentially grow throughout the year, with thousands of construction projects already underway, far exceeding the numbers from last year of 1,555 completed projects. As the number of units continues to increase, the occupancy rates and rent per square foot will tend to decrease.
As newer facilities pop up, older facilities may have a harder time keeping up with fresher designs and larger capacities. In 2023, we’ll expect to see some remodeling and redesigning of older facilities to maintain their reputation as new facilities emerge. The substantial number of available facilities will create more options for customers to choose from, so now’s the time to make sure your company stands out. Getting in front of potential renters before other competitors is more important now than ever. Most storage companies offer the same amenities and services, which places high importance on their marketing strategy to attract new customers from competitors.
Understanding How Overbuilding Could Influence Your Marketing Blueprint
Though overbuilding doesn’t seem too great for the storage industry—especially for companies who have been around for a while—it proves that the self-storage market is healthy. It’s a sign there is high demand, and with more available units, the number of occupancies has room to grow. With more players in the industry, we anticipate new advancements will be seen in self-storage and technology will be implemented more to improve user experience and appeal to younger renters.
But the real question is how long it’ll take to fill these new storage facilities as they continue to emerge and if the American appetite for self-storage will continue to keep up. The record-high occupancy rates we’ve been seeing in the past few years may decrease slightly now as society recovers post-pandemic. Whatever changes come toward the industry, bulletproof your marketing strategy before it’s too late.
