The Covid Pandemic and the Self Storage Sector

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The self-storage industry was fairly stable before the Coronavirus pandemic, and it experienced major growth in the US from 2014. This can be shown in;

  1. More units available for rent across the country.
  2. Better knowledge and understanding of the product among consumers
  3. Increased demand for the service throughout the US
  4. Large property development companies, including Real Estate Equity Investment, creating and maintaining self-storage departments and facilities.

Like other real estate options, there was a steady increase in investor interest due to its high-profit margins, which led to fierce competition.

Covid-19's immediate effect on the industry was overly positive. The market forces have balanced themselves out during the period, with an increased demand for units countering the oversupply before the pandemic hit.

How Was Demand Impacted?

Demand for self-storage units increased immensely in March and April 2020. The pandemic forced many businesses to downsize, moving to smaller offices. Equipment and furniture that could not fit in the reduced size location had to be stored, hence a rise in the demand for the units.

Colleges also closed, and students had to move out of their dorm rooms. Most of the learners booked self-storage units to temporarily store their items.

As the pandemic period stretched on, the demand for new units reduced. People who had already rented self-storage, however, continued paying for the secured space, maintaining the revenue levels in the industry. Businesses are also holding on to their items even after downsizing as they cannot find buyers at the right prices.

Increased urbanization, technology adoption, and other lifestyle changes have also played a big role in the sector's growth.

How Was Supply Impacted?

The supply of self-storage units has also affected the industry's growth immensely. More units have been built, even with restrictions on construction works in some states. While this might have been disastrous for the saturated industry pre-pandemic, the increased demand is covering the market gaps.

Existing businesses, however, have a clear advantage over new self-storage companies. It is difficult for companies to source new clients as most customers are sticking to their initial suppliers. This means that for new businesses to penetrate the market, they have to offer very low fees and take care of moving costs to make the customers change their storage partners.

Location: New York, NY, USA

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