2025 State of the Industry | Self Storage Virtual Workshop

Gabfocus Episode 69 | 2025 State of the Industry

After a year of declining occupancy and increasing competition, what can we expect in 2025? The new year is the perfect time to audit your business and make plans for the rest of the year, so we've invited a storage trends expert to share the forecast for the coming year!

Featured Speaker: John Chang
Moderators: Tommy Nguyen & Melissa Huff

Category: Trends
Focus: Owners & Operators
Aired: February 20, 2025
Duration: 1:07:35

Overview

If you don't have time to watch the whole session, here are some of our favorite parts:

At 4:11, our expert discussed trends from 2024, including the ones that surprised him.
6:40, John talked about the current economic trends that are affecting the industry the most.
Starting at 14:40, he discussed trends with street rates, including whether or not the rate wars may continue.
At 18:00, our guest highlighted occupancy trends, including whether or not they will trend up or down.
21:48, our expert shared his views on market saturation and the current state of competition.
Around 24:00, the guest answered a question about region and market specific trends, including the most prevalent.
At 28:00, John covered what the average length of stay is and how demographics are changing it.
32:30, the expert touched on competitor analysis including whether or not competition will increase this year and how to stay competitive.
At 38:15, our expert discussed if the storage industry should expect backlash from a lawsuit in the multi-family sector.
42:00, John talked about whether or not it's a good time to invest, sell, or buy.
Starting at 48:01, he discussed the trends that operators should pay the most attention to in 2025.
At 51:40, our guest highlighted current migrations trends that could affect the industry.
53:50, John answered the question of the week!

Resources

Gabfocus Takeaway

2024 was more difficult than previous years, but overall many operators still faired well and continued to beat revenue goals by making smart business decisions even as demand slowed and occupancy dropped. This year is about adjusting to uncertainty and focusing on ways to keep your business competitive, especially if you're in a market that is congested with other facilities. Dig into your marketing strategies and figure out creative ways to differentiate yourself form the competition down the road and obsess over your customer.

What are Gabfocus Sessions?

Gabfocus Sessions are virtual workshops for self storage owners, managers, and operators. Brought to you by the team behind Gabfest: StoragePug and Lighthouse Storage Solutions.

Each session features hand-picked industry pros who will dive deep into relevant topics surrounding our industry, share best practices, and explore trends in the market. It's our hope that these sessions help you navigate your self storage business better during these uncertain times.

Want to learn more about self storage? Join us on select Thursdays for Gabfocus.

Questions Answered in this Session

What significant economic storage trends did you see emerge in 2024?
Which current economic trends are affecting our industry the most?
Going into 2025, how would you rate the health of the industry?
Where are we now with...
1. Street rates?
2. Occupancy?
3. Market growth/saturation?
Have you noticed any region or market-specific trends?
How should operators be approaching the following in 2025...
1. Pricing and discounts?
2. Competitor analysis?
3. Expanding, buying, and building?
4. Investing?
Which trends should owners and operators be most concerned about over the next year?
What trends do you expect to emerge in the next 2 years? What about 5?
Which one trend do you think will affect the industry most in 2025?

Resources from this session

Awesome Quotes

“Once your operation is in place, you can become more dynamic with your pricing, but that requires data. You need some method of being able to record the data that you need to know whether your price is in the right place - whether you need to move it up or start giving some concessions.” - Warren Lieberman

“I never want to downplay to what someone else is doing. I'm better than they are, then I'm going to be worth a higher price. That's what value is. If you go out to a restaurant and get really good service, would you go back? Yes! What if it was pricier? You'd still go back because you got better service and a better product.” - Jim Mooney

"It's good to be informed on your competition. I don't want to ignore them, but I don't want to respond too strongly to them either." - Warren Lieberman

"We did a survey of 10,000 facilities on their pricing. We found out that two-thirds of those operators didn't change the price of a single unit of the course of a month." - Warren Lieberman

“Rate increases and value pricing are the number one ways to grow your revenue.” - Jim Mooney

"Tenants in more convenient units tend to be less price sensitive." - Warren Lieberman

"The size of the unit is only one aspect of what people are willing to pay for." - Warren Lieberman

Highlights

Foundational marketing strategies to have in place - whether leasing up or stabilized:

Website
Set up listings (Yelp, Google My Business, Apple Maps)
Social Media
Establish Local Partnerships

Lease up marketing strategies:

Lead Generating Strategies (like digital ads)
Aggregators (Sparefoot, Storagefront, etc.)
Awareness Campaigns (like billboards, flyers, and sponsorships)

Your average customer value
Find the average stay length of all tenants. Next take your economic occupancy and divide by how many units you have. That will tell you what the average customer pays.

Multiply the average length of stay by what the average customer pays, and that's the average value of a customer.

For example, if a customer stays for 12 months and pays $100 per month, then their value is $1,200.

Your average lead value

Figure out your closing rate (or conversion rate) i.e. how many leads do you turn into tenants? Multiply that by your average customer lifetime value to figure out what your leads are worth.

Pro Tip: see which lead sources are converting the best. It may be that certain sources have a higher conversion rate, so those leads are worth more to you than a source that barely converts.

Typical Lease-up timeline

According to our panelists, it's typical to see a 3-4% increase each month, putting your facility at 36% after the first year, and 72% after the second.

Alternately, you can look at your lease up goals through the lens of your units, aiming for 20 units rented per month.

For Nick and StorageMax, they pro forma their economic occupancy at 85% with their sweet spot at 92%.