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The U.S. Self-Storage Market is a Booming Industry Valued at $22 Billion

November 29, 2021

Today in 2021, the U.S. self-storage market is a booming industry valued at $22 billion. For investors who know how to acquire, manage, and maximize these facilities, this makes self-storage one of the most compelling real estate investment classes today. There are many reasons for the rise of self-storage, but consumer and demographic shifts are the major drivers.

According to a recent survey by the online marketplace Mercari, “Americans collectively have more than 5 billion items sitting at home that they no longer use.” That figure is astounding. Recently, CNBC released a video describing how the self-storage market became a $22 billion per year business.

Key findings from this video are highlighted below:

  • The U.S. self-storage industry produces $21.9 billion in annual revenue.
  • 39% of storage demand comes from millennials.
  • 50% of self-storage revenue comes from single family homeowners with garages and attics.
  • 10% (1-in-10) households now pay monthly fees for storage (at an average of about $80/month).
  • The average US home contains 300,000 items, meaning "America has a clutter problem."
  • According to research, too much clutter has the negative psychological effect on oneself and their relationships.
  • The demand drivers for self-storage are the 4Ds: death, divorce, disaster, and displacement.
  • There are approximately 60,000 self-storage facilities in US, which is more than Starbucks, Subway, and McDonald's combined.
  • Stock of Public Storage (NYSE:PSA), the largest brand of self-storage services in the U.S., was worth $22 in 2000. Today, it is worth $332 per share and the company has an incredible $58.2 billion dollar market cap.

Patriot’s Self-Storage Market Strategy 

Given the compelling state of the self-storage market, Patriot is strategically acquiring a portfolio of self-storage, industrial, and warehouse assets. Each self-storage asset that we acquire is immediately rebranded under the Patriot brand, All Purpose Storage. The reason for this is that we eventually intend to sell this portfolio of self-storage assets to a REIT or public company, such as Public Storage (NYSE:PSA), mentioned above.

Other large self-storage brands, such as Extra Space Storage, CubeSmart, Life Storage, and Simply Self Storage are other potential buyers of Patriot’s expanding self-storage portfolio. Understandably, these assets will command a substantially higher value as a large portfolio than the assets could sell for individually, which is why are taking this approach toward the rapidly expanding self-storage market.

Because of Patriot’s experience operating within the Midwest, Mid-Atlantic, and the Northeast, these are our favored markets for self-storage investment. The typical deal size we pursue is $3 to $10 million, because this asset size falls under the radar of institutional investors but over the radar of small or local retail investors. This makes it a “sweet spot” for securing value-add deals.

Our vision is to grow Patriot’s self-storage and manufactured housing portfolio to over one billion dollars of assets within the next 5-10 years. Investors who align with this vision can own equity stakes in recession-resistant assets, while benefiting from monthly cash flow, tax advantages, leverage, price appreciation, and surging institutional demand for these asset classes. 

If you are an accredited investor, click here to invest in Patriot Fund II or here to connect with our Founder, Jeremiah Boucher, on LinkedIn.