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Does the self-storage industry have strong investment potential?

On Behalf of | Mar 29, 2023 | Commercial Real Estate |

When you invest in commercial real estate in Massachusetts, you may do so in an effort to make as much money as possible while risking as little as possible. Some types of commercial real estate investment opportunities involve less risk than others, and one low-risk industry you may want to consider investing in is the self-storage industry.

According to REJournals, many economists have long lauded the self-storage industry as a recession-resistant one. This means that the industry typically remains strong and profitable even when the economy weakens or even plunges.

How big the self-storage industry is

Economists predict that the self-storage industry is going to see an overall growth rate of 5.45% between 2021 and 2026. More than 10% of American homeowners currently rent self-storage space, and the number of business owners seeking storage space is also rising alongside the number of Americans now working from home.

Why self-storage is a low-risk investment

Research shows that self-storage has strong investment potential. Between 2009 and 2018, private equity firms that invested in self-storage saw an average annual return of 16.9%. This is higher than the average return seen among investors who put their money into office, industrial or retail buildings. Another reason the self-storage industry has strong investment potential is that demand for storage space remains high in both strong and weak economies. In strong economies, people buy more goods, leading to a need for more room to store those goods. In weak economies, people often have to downsize, which also drives up the need for storage units.

No commercial real estate investment is completely risk-free. However, if you are looking for one that has historically performed well for investors, the self-storage sector may prove well worth considering.