Niche Expansion of Self-Storage Emerges
Demand for self-storage continues to rise, with the share of U.S. households renting space showing its largest increase in recent years.
Renters are gravitating toward longer leases and larger units, reflecting greater lifestyle integration and space needs.
A new asset type is emerging in response—the storage–industrial–flex condo—offering expanded capacity and ownership opportunities.
The use of self-storage space is on the rise. The share of households in the United States that rent at least one storage unit rose from 11.1 percent in 2022 to 13.4 percent in 2024—the largest jump between any two survey periods in the Self-Storage Association’s recurring study. In that same span, there was also an estimated net absorption of more than 150 million square feet of storage space. While vacancies are rising—up 20 basis points year over year to 9.1 percent in June 2025—much of that pressure has come from new supply. More than 71 million square feet of self-storage space was completed over the 12-month period ended in the second quarter, which is only about 13 million square feet under the record delivery tallies from 2018 and 2019. Development pressure is easing, however. The most recent April to June period marked the least amount of new space in a quarter since early 2022.
Amid these favorable demand trends, renters are also showing a stronger orientation toward longer stays and larger units. Last year, roughly 60 percent of surveyed users expected to stay in their units for more than one year—a new high. These trends may be a partial reflection of the current housing market.
Elevated home prices and mortgage rates are keeping many households—notably homeowners with built up equity—from changing their living situation. This dynamic is weighing on relocations, which are the second most commonly cited reason for renting self-storage units. The share of households that moved within the past year fell to 20 percent in 2023—down 7 percentage points from 2017. The inability to obtain a larger home with a basement, garage, barn, or other free space may be creating demand for off-site storage. Yet interior units larger than 300 square feet are uncommon at most self-storage properties.
To address demand for larger spaces, a new storage solution is developing: the storage–industrial–flex condo. Storage condos straddle the gray area between a self-storage facility and a small industrial warehouse. Properties house multiple condo units, each spanning between 1,000 and 2,000 square feet. Units are also often equipped with electrical and water hookups, allowing for the installation of home comforts such as bathrooms, kitchenettes, or entertainment areas. This optional utility immediately separates storage condos from traditional self-storage units, along with the form of ownership. As the name implies, individual storage condo units are typically sold by the developer or operator to private parties, not rented.
Affluent individuals and households are the most common type of owner, with motor vehicles the most common item stored. A storage condo facility operator who has found early success with ground-up projects in Colorado reiterates the interest of private households. In their experience, as much as 80 percent of a facility’s units are owned by such individuals for personal use. Their developments, however, have also garnered interest from those who acquire a unit intentionally to rent to a commercial tenant, using these condos to fill another gap in the commercial real estate spectrum.
Some storage condo owners have found success renting the units to businesses looking for a modest industrial space. Common tenants include heating and ventilation companies, landscaping businesses, and event-related firms such as caterers, who use the space to store equipment or as a preparation area for off-site work. In this capacity, these condos fulfill a need underserved by traditional industrial space. Less than 10 percent of the nation’s industrial inventory comprises buildings 10,000 square feet or less. This scarcity is reflected in less available space. Vacancy among buildings at or under 10,000 square feet was around 2.8 percent in mid-2025, whereas the overall industrial vacancy rate has climbed 400 basis points over the past three years, reaching 7.6 percent in June, amid a supply-demand mismatch in larger spaces. For small investors, these units can provide a lower entry cost option than other, more traditional asset types, and they have less competition.
Limited competition has also drawn developers and operators of storage condo facilities and they are finding opportunities in local communities where no comparable property exists. Although data is incomplete, the inventory of storage condos may be less than 5 percent of the size of the traditional self-storage sector. Yet roughly one in ten American households has a net wealth of $1.6 million or higher and the discretionary resources to consider this property type. It is this dynamic—slim competition against a small but underserved user profile—that underlines the strong appeal of the property type.
—Marcus & Millichap
