Understanding Demand: Who Relies on Self Storage?

The self storage industry continues to experience strong demand across economic cycles. While traditional real estate sectors face headwinds from shifting consumer behaviors and workplace dynamics, self storage remains a vital asset class, driven by a diverse and evolving customer base.

Self storage has become an amenity as urban density continues to grow, and housing units have started to shrink. Understanding the demographics of self storage users is key for investors seeking to optimize facility locations, unit mix, and pricing strategies.

Millennials and Gen Z: The Next Generation of Renters

Millennials (born 1981–1996) and Gen Z (born 1997–2012) are driving a significant portion of self storage demand. These younger generations frequently experience life transitions, including relocations, career changes, and downsizing in response to rising housing costs.

Investment Implications:

• Mobility and Urbanization: Younger renters are more likely to move frequently due to job changes and housing constraints, creating consistent demand for self storage.
• Limited Space in Rental Housing: With housing affordability challenges, many younger consumers live in smaller apartments and need external storage for their belongings. These renters are seeing self storage as an amenity.
• E-Commerce Growth: Millennials and Gen Z entrepreneurs, particularly those engaged in e-commerce and reselling, use self storage for inventory management.

Gen X and Baby Boomers: Storage Needs in Life Transitions

Gen X (born 1965–1980) and Baby Boomers (born 1946–1964) represent a substantial portion of self storage demand, driven by downsizing, estate planning, and lifestyle changes.

Investment Implications:

• Downsizing Boom: Many Baby Boomers are transitioning from large family homes to smaller residences, increasing their reliance on storage for heirlooms and personal possessions.
• Longer Rental Durations: Unlike younger generations, older renters often lease storage units for extended periods, contributing to stable occupancy rates.
• Storage as a Home Extension: With increasing urbanization, Gen X and Boomers use self storage to accommodate seasonal items, recreational equipment, and business supplies. Most long-term users think of the storage cost as a living expense or an extension of the mortgage. 

Businesses: A Growing Tenant Segment

Self storage isn’t just for individuals—businesses account for a growing share of unit rentals. From independent contractors to corporate overflow storage, commercial users provide consistent demand.

Alternative Storage Users:

• Contractor and Service Industry Use: Landscapers, plumbers, and janitorial services leverage drive-up storage units as cost-effective business hubs.
• E-Commerce and Retail Storage: Small businesses rely on self storage for inventory management and logistics solutions, particularly in last-mile delivery zones.
• Document and Equipment Storage: Companies with compliance or archival needs use climate-controlled storage for records retention and specialized equipment.

Regional and Market-Specific Demographics

Investors evaluating self storage development opportunities must account for demographic trends at the local level. Factors such as migration patterns, population growth, and employment dynamics significantly impact demand.

• Urban Areas: High-density metros drive demand for climate-controlled, multistory storage.
• Suburban Markets: These areas see a mix of family-oriented and commercial demand, often requiring blended facility types.
• Retirement Hubs: Markets with aging populations may require long-term storage solutions catering to downsizing homeowners.

Positioning for Success

A data-driven approach to understanding self storage demographics potentially enables investors to position facilities strategically, optimize pricing, and ensure sustained demand. Investors can better assess which storage types and locations align with long-term growth opportunities by analyzing generational behaviors, commercial storage trends, and regional market data.

At DXD Capital, we leverage proprietary data and market intelligence to identify high-performing self storage investment opportunities.