The first few weeks of 2021 have confirmed that investor sentiment towards self-storage is at an all-time high. Today, stabilized assets are commanding record high pricing while newly developed lease-up properties and C of O deals are regaining momentum and pricing power, reinforcing that once again, self-storage will emerge from a market disruption as the shining star of commercial real estate. This is largely being driven by the current debt markets and the investment community’s strong desire for yield and assets with low capital expenditures, such as self-storage.
Over the last few weeks, top executives from around the self-storage industry gathered virtually to discuss industry trends, investor sentiment and the overall market outlook for 2021. The consensus is that the industry is experiencing some new demand drivers due to the change in live/work/school environments, the slow down in new developments, longer tenancy and a stickier tenant base, all leading to all-time high occupancy, further fueling investor appetite for self-storage properties. However, despite the positive changes in market fundamentals, most remain cautiously optimistic about the industry’s long-term outlook heading into 2021.