Self Storage Industry

Evolution of Self Storage

The self storage industry is believed to have started in England in the 1800s when British banking institutions were asked to safeguard valuables for clients embarking on extended voyages. It is believed that the self storage industry first hit the U.S. in Texas in the mid-1960s with first generation self storage facilities referred to as “do-it-yourself” self storage facilities. Shortly thereafter, self storage quickly spread to the West Coast and throughout the U.S.

The self storage industry has undergone an evolution since the beginning of the “do-it-yourself” storage trade. This evolution encompasses not only the physical attributes of the self storage facilities, but also the underlying methodology of how these facilities are operated as a business. The evolution of the self storage industry can be categorized into the following three distinct, yet overlapping, generations of self storage facilities:

1st Generation Characteristics

• 20,000- to 35,000-square-foot facilities — usually not exceeding 50,000 square feet
• Non-institutional-grade facilities located in industrial parks or other areas where the cost of real property was minimal
• Building construction of metal or frame buildings with stucco exteriors
• Small management offices attached to the on-site manager’s apartment
• Generally, these facilities suffered from inadequate size, poor locations and functional obsolescence

2nd Generation Characteristics

• Strategically located for higher visibility and built with a more retail character
• Exceeded the 50,000-square-foot size threshold set by the earlier generation
• Newer two-story urban warehouse designs were introduced
• Generally a more fortress style layout with perimeter buildings securing the site
• Larger management office

3rd Generation Characteristics

• State-of-the-art facilities
• High-visibility, prime real estate locations; multi-story, limited-access styles
• Exterior facades and architectural features in line with cities’ aesthetic requirements
• Increased service offerings such as storage-related merchandise and truck rental
• New showroom style management office

According to the Self Storage Association, the majority of the self storage facilities operating today may be classified as second generation self storage facilities. Developers are increasingly constructing third generation self storage facilities, which emphasize aesthetics in construction and design that blend in with the retail nature of the neighborhoods where they are built.