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.
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.