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Does the self-storage industry have strong investment potential?

Many people in New Jersey choose to invest in commercial real estate to increase earning potential, diversify their portfolios or tax advantage of tax benefits, among other common reasons. The commercial real estate market has many different types of commercial properties, some of which include office buildings, warehouses, retail buildings and multifamily properties. Some types of commercial real estate have historically had better investment potential than others, and self-storage buildings are among them.

Per REJournals, many economists have long called the self-storage industry “recession-resistant,” meaning that, unlike many other industries, it does not typically take a hit when the economy tanks.

What returns on investment self-storage facilities offer

Research shows that self-storage facilities offer returns on investment that exceed those associated with investing in office, industrial, retail or residential properties. Between 2009 and 2018, the typical U.S. self-storage facility generated an ROI of 16.9%.

Why self-storage has strong investment potential

A big reason self-storage facilities have strong investment potential is that people need them regardless of how the economy is currently performing. When the economy is strong, people tend to buy more assets. When they buy more assets, they often need places to store them (especially if they are buying, say, RVs or boats), driving up a need for self-storage. Yet, when the economy weakens, people often need to downsize their homes or business, and this also drives up a need for self-storage space.

Many people believe that the self-storage industry is going to continue to grow as more people start moving to cities, where storage space is often scarce, and working from home, rather than in traditional brick-and-mortar work settings.