2013 was a banner year in self-storage expansion, but 2014 looks to be smaller.
Last year marked the largest expansion since 2007 as over 3 million square feet of storage space was added in the US. According to the US Census, that represents $530 million in construction spending. That was a 48% increase over 2012 for expanding, remodeling or building new facilities. For comparison, 2007 set a record with $1.2 billion spent in expansion before the market dropped. 20 marked the bottom for the industry, with only $241 million spent.
In spite of that expansion, the industry may not be able to keep up with demand. In late 2013 occupancy rates nationwide were 87.4% — up from 83.6% at mid-year. Projections indicate that over 500,000 new households will be built in 2013 but only 1.7 million square feet will be added to storage facilities. That represents around 21 new facilities that will not be able to meet the rising demand for storage by all those new households.
Looked at another way, approximately 9% of households currently utilize self-storage units. If 9% of those new households need storage, 112,500 new units will be required to meet the demand.