What Data Do I Need Before Building a Self-Storage Facility?

Why informed site selection is critical in today’s evolving self-storage market

The self-storage sector continues to attract interest from investors and developers globally, driven by its historically strong performance, relatively low operating costs, and resilience during economic cycles. However, the success of any new development is closely tied to early-stage due diligence, particularly the data used to assess feasibility and risk.

Before committing capital to a new facility, developers should conduct a multi-dimensional market study that includes demographic, economic, competitive, and regulatory data. This article outlines the key data points necessary to make an informed decision and mitigate the risks associated with overbuilding or misalignment with local demand.

Core Data Categories to Evaluate Before Development

1. Demand Indicators and Demographic Trends

Accurate demand forecasting begins with understanding the people who live, work, and move through a target trade area. Data to consider includes:

• Population density and projected growth
• Household composition and size
• Median income levels and economic stability
• Housing tenure (renter vs. homeowner) and mobility rates

These factors help determine whether a market has the demographic depth to support additional storage supply. For example, fast-growing suburban areas with high renter populations often correlate with higher storage demand.

2. Supply Levels and Market Saturation

One of the most common risks in self-storage development is entering a saturated market. Key supply-side data includes:

• Total existing storage square footage within a defined radius
• Number and type of competitors (e.g., REIT-owned vs. independent)
• Facility class, age, unit mix, and design quality
• Square feet of storage per capita (local and regional benchmarks)

While the U.S. national average hovers around 6–7 square feet per capita, localized figures are far more relevant. A market with 5.5 square feet per capita may still be oversupplied if nearby facilities have high vacancy or weak demand fundamentals.

3. Pricing and Rate Trends

Understanding the pricing environment is essential not only for pro forma modeling, but also for gauging a market’s overall competitiveness. Important pricing data includes:

• Current asking rates by unit size and type
• Rate differences between climate-controlled and non-climate units
• Occupancy-adjusted pricing strategies (e.g., seasonal or dynamic pricing)
• Historical rate volatility and discounting patterns

Monitoring how rates have shifted over time, particularly in relation to new supply or macroeconomic changes, provides important context for forecasting rent growth potential.

4. Zoning, Land Use, and Regulatory Frameworks

Even in markets with favorable demand metrics, regulatory constraints can impede development. Key areas of focus:

• Current zoning classification and allowable uses
• Local development restrictions, height limits, and design requirements
• Permitting processes and estimated timelines
• Traffic flow, site ingress/egress, and environmental considerations

Municipal attitudes toward self-storage vary widely. Some cities are tightening zoning due to concerns about land use efficiency or urban design, particularly in mixed-use corridors.

5. Sales Transactions and Asset Valuation Benchmarks

Sales data from comparable facilities can help developers understand long-term asset performance and exit potential. Useful metrics include:

• Recent sales comps in similar locations or markets
• Cap rates by facility class and market tier
• Price per square foot and per unit
• Buyer types (institutional vs. private equity vs. individual)

These data points help align development assumptions with real-world valuations and may also influence financing and underwriting strategies.

Frequently Asked Questions

How can I tell if a market is oversupplied?

Start by calculating square footage per capita and comparing it with regional norms. However, occupancy rates, rent growth, and new developments in the pipeline should also be looked at.

How important are competitor prices in the early planning phase?

Very. Pricing data gives insight into what customers are willing to pay, and whether a new facility can command sustainable rates, especially once stabilized.

Should I avoid markets where REITs operate?

Not necessarily, but REIT presence often signals higher competitive intensity. Their pricing models and marketing budgets can put pressure on smaller or new entrants.

Insights from the Field

Markets that looked promising based on population growth alone have underperformed when developers overlooked key variables like income levels, commuting patterns, or unit mix mismatch. Conversely, secondary markets with moderate growth but limited supply have outperformed expectations when supported by strong fundamentals.

Data transparency remains a challenge across U.S. and international markets. Aggregating multiple data types (e.g., pricing, occupancy, and sales comps) provides a clearer picture of market viability. A rigorous, data-driven approach becomes even more critical as global interest in self-storage expands, particularly in underpenetrated regions like parts of Europe and Australasia.

TL; DR: Essential Data Checklist for Self-Storage Development

• Population density and household demographics
• Supply metrics and square footage per capita
• Competitor count, pricing, and unit mix
• Local zoning and land use regulations
• Comparable sales and valuation benchmarks

Data is not a guarantee of success but is the foundation of every sound development strategy. A robust analysis across these categories enables more intelligent decisions and more resilient assets.