I have never rented a self-storage unit. I have stored things at my parents' places during certain periods of my life, such as when I moved to the US for grad school, but as a general rule, I never seem to conclude that I have too much stuff and that I should maybe rent some storage. However, I do on occasion fantasize about having a garage or large "man cave" where I could store an assortment of exotic snowboards, bicycles, and other life essentials. I mean, who doesn't, right?
In any event, I seem to be in the minority, because self-storage is a growing real estate asset class:
Investors have dramatically increased their allocation to self-storage over the last several years [in the US]. A rush into the asset class occurred from 2020 to 2022, when transaction volume hit $50 billion, far exceeding the $35 billion spent during the entire seven‑year period from 2013 to 2020, according to Cushman & Wakefield. Transaction volumes are now normalized but remain well above their pre‑pandemic baseline.
It proved to be the best-performing sector in the NCREIF Property Index from 2005 to 2022, with returns since 2010 nearly double that of the overall index.
So what's driving this? Some of the explanations include a frozen housing market, millennials who haven't yet bought a garage and are starved for room, and small-scale entrepreneurs who use it as cheap warehouse space. According to some reports, this latter use case accounts for nearly a third of total demand. And this makes sense to me. But generally, I have tended to apply an egocentric bias to this asset class. My mind discounts it because I don't personally use it.
One way to look at self-storage is that it represents the "unbundling of residential real estate." Housing has gotten so expensive that we continue to search for ways to make it smaller and more efficient. One second-order consequence of this is that storage now needs to be disaggregated and moved to an off-site location where land is cheaper and the build costs are lower. From this perspective, there are strong structural reasons for the sector's growth.
There are also noteworthy differences between Canada and the US. Americans use self-storage at roughly 2 to 3x the rate of Canadians when measured by square footage per capita. Is this because Americans are bigger consumers and have more stuff? Or is it because the industry is more mature and built out at this point? It's likely both of these factors.
According to Avison Young, the supply of new self-storage in Canada is projected to nearly double year-over-year from under 1 million square feet in 2025 to over 1.8 million square feet in 2026. Another specific demographic factor contributing to this growth is Canada's aging population. People are downsizing and then needing to put their stuff somewhere. How long this stuff stays in storage, I don't know, but it's there.
I think the personal tension I have with self-storage is that there's a big part of me that aspires to have less stuff. When I travel, I take great pride in often packing only a carry-on. There's something liberating about having everything I need in one roller. Less is more. But then again, I could really use a new commuter bicycle and I have been meaning to get into splitboarding. How much do those storage units cost again?
Cover photo by Aga Adamek on Unsplash
I have long told myself that if I ever needed to rent self-storage space, it would mean that I own too much stuff and that I need to get rid of some of my shit. But I recognize that there are many reasons why someone might need extra storage and I recognize that the storage market in the United States alone is something to the tune of $30 billion a year.
Here is an interesting case study about the storage company MakeSpace, which to-date has raised almost $60 million in equity funding. Their model is likely one that you’ve heard of or used before. Instead of you yourself going to the “self-storage” facility, they do the pickup and delivery. So they call themselves a logistics business, like Amazon, except that it works in reverse. Instead of you receiving deliveries, they take your stuff from your home back out to their warehouses.
Because of the route management software that they’ve been building over the last 4.5 years and because there’s enough density in the areas that they service, their pick-up and drop-off routes are apparently profitable. You no doubt need a certain amount of scale for that to happen, but they seem to have it. By the end of this year, they expect their reoccurring revenues to be in the $10′s of millions. That’s coming from the volumes of green boxes you see at the top of this post.
What’s particularly relevant for this audience are the built form and real estate implications. Because their customers aren’t physically visiting their facilities, they’ve been able to locate all of their distribution centers on the outskirts of the cities in which they operate. And because of this, their physical real estate costs are said to be less than 50% of traditional self-storage firms and they believe this number will trend to around 20% as volumes continue to grow.
All of this has me thinking about some of the other implications of the on-demand economy on cities and on real estate.
Image via Both Sides of the Table
I’ve always been fascinated by Japanese culture.
A lot of that has to do with how design and technology seem to permeate the culture. But it also has to do with how dichotomous the culture feels to me. On the one hand they’re at the forefront of design and technology, and on the other hand they are very much steeped in tradition. It has always felt like a unique and special place to me.
So today on ATC I thought I would share a piece of Japanese architecture that I found on Dezeen. It’s a 47.55 square meter (512 square foot) apartment in Tokyo that was recently renovated by Yuichi Yoshida & Associates.
Here are three views of the main living area:
Here’s the view from the main entrance:
Here’s the walk-in-closet/storage area (notice how the exposed concrete walls have been dabbed with plaster):
And here’s the floor plan (I’m guessing sub entrance means secondary entrance):
The first thing that struck me was the lack of a traditional bedroom. It’s basically a nook with a bed and sliding doors. But that was obviously done to give more space to the remainder of the apartment and the main living area, which they label as the “reception area.” The idea was that this space could be used for both living and working, and so they wanted a large open space.
The other thing that stood out for me was the amount of storage and shelving throughout the apartment. There’s a bookshelf as you walk in. There are drawers under the bed. There’s a walk-in-closet with floor to ceiling shelving. And if you look closely at the upper track for the sliding bedroom doors, you’ll see a small ledge that was purposefully created for storage and display.
It all seems very Japanese to me.
It’s a small space and yet there’s no absolutely zero clutter. I love how organized everything seems. For many of you, this space may be a bit too sparse (even with that hammock!). But there’s something really nice about the simplicity of it all. It’s peaceful.
Images: Katsumi Hirabayashi via Dezeen
I have never rented a self-storage unit. I have stored things at my parents' places during certain periods of my life, such as when I moved to the US for grad school, but as a general rule, I never seem to conclude that I have too much stuff and that I should maybe rent some storage. However, I do on occasion fantasize about having a garage or large "man cave" where I could store an assortment of exotic snowboards, bicycles, and other life essentials. I mean, who doesn't, right?
In any event, I seem to be in the minority, because self-storage is a growing real estate asset class:
Investors have dramatically increased their allocation to self-storage over the last several years [in the US]. A rush into the asset class occurred from 2020 to 2022, when transaction volume hit $50 billion, far exceeding the $35 billion spent during the entire seven‑year period from 2013 to 2020, according to Cushman & Wakefield. Transaction volumes are now normalized but remain well above their pre‑pandemic baseline.
It proved to be the best-performing sector in the NCREIF Property Index from 2005 to 2022, with returns since 2010 nearly double that of the overall index.
So what's driving this? Some of the explanations include a frozen housing market, millennials who haven't yet bought a garage and are starved for room, and small-scale entrepreneurs who use it as cheap warehouse space. According to some reports, this latter use case accounts for nearly a third of total demand. And this makes sense to me. But generally, I have tended to apply an egocentric bias to this asset class. My mind discounts it because I don't personally use it.
One way to look at self-storage is that it represents the "unbundling of residential real estate." Housing has gotten so expensive that we continue to search for ways to make it smaller and more efficient. One second-order consequence of this is that storage now needs to be disaggregated and moved to an off-site location where land is cheaper and the build costs are lower. From this perspective, there are strong structural reasons for the sector's growth.
There are also noteworthy differences between Canada and the US. Americans use self-storage at roughly 2 to 3x the rate of Canadians when measured by square footage per capita. Is this because Americans are bigger consumers and have more stuff? Or is it because the industry is more mature and built out at this point? It's likely both of these factors.
According to Avison Young, the supply of new self-storage in Canada is projected to nearly double year-over-year from under 1 million square feet in 2025 to over 1.8 million square feet in 2026. Another specific demographic factor contributing to this growth is Canada's aging population. People are downsizing and then needing to put their stuff somewhere. How long this stuff stays in storage, I don't know, but it's there.
I think the personal tension I have with self-storage is that there's a big part of me that aspires to have less stuff. When I travel, I take great pride in often packing only a carry-on. There's something liberating about having everything I need in one roller. Less is more. But then again, I could really use a new commuter bicycle and I have been meaning to get into splitboarding. How much do those storage units cost again?
Cover photo by Aga Adamek on Unsplash
I have long told myself that if I ever needed to rent self-storage space, it would mean that I own too much stuff and that I need to get rid of some of my shit. But I recognize that there are many reasons why someone might need extra storage and I recognize that the storage market in the United States alone is something to the tune of $30 billion a year.
Here is an interesting case study about the storage company MakeSpace, which to-date has raised almost $60 million in equity funding. Their model is likely one that you’ve heard of or used before. Instead of you yourself going to the “self-storage” facility, they do the pickup and delivery. So they call themselves a logistics business, like Amazon, except that it works in reverse. Instead of you receiving deliveries, they take your stuff from your home back out to their warehouses.
Because of the route management software that they’ve been building over the last 4.5 years and because there’s enough density in the areas that they service, their pick-up and drop-off routes are apparently profitable. You no doubt need a certain amount of scale for that to happen, but they seem to have it. By the end of this year, they expect their reoccurring revenues to be in the $10′s of millions. That’s coming from the volumes of green boxes you see at the top of this post.
What’s particularly relevant for this audience are the built form and real estate implications. Because their customers aren’t physically visiting their facilities, they’ve been able to locate all of their distribution centers on the outskirts of the cities in which they operate. And because of this, their physical real estate costs are said to be less than 50% of traditional self-storage firms and they believe this number will trend to around 20% as volumes continue to grow.
All of this has me thinking about some of the other implications of the on-demand economy on cities and on real estate.
Image via Both Sides of the Table
I’ve always been fascinated by Japanese culture.
A lot of that has to do with how design and technology seem to permeate the culture. But it also has to do with how dichotomous the culture feels to me. On the one hand they’re at the forefront of design and technology, and on the other hand they are very much steeped in tradition. It has always felt like a unique and special place to me.
So today on ATC I thought I would share a piece of Japanese architecture that I found on Dezeen. It’s a 47.55 square meter (512 square foot) apartment in Tokyo that was recently renovated by Yuichi Yoshida & Associates.
Here are three views of the main living area:
Here’s the view from the main entrance:
Here’s the walk-in-closet/storage area (notice how the exposed concrete walls have been dabbed with plaster):
And here’s the floor plan (I’m guessing sub entrance means secondary entrance):
The first thing that struck me was the lack of a traditional bedroom. It’s basically a nook with a bed and sliding doors. But that was obviously done to give more space to the remainder of the apartment and the main living area, which they label as the “reception area.” The idea was that this space could be used for both living and working, and so they wanted a large open space.
The other thing that stood out for me was the amount of storage and shelving throughout the apartment. There’s a bookshelf as you walk in. There are drawers under the bed. There’s a walk-in-closet with floor to ceiling shelving. And if you look closely at the upper track for the sliding bedroom doors, you’ll see a small ledge that was purposefully created for storage and display.
It all seems very Japanese to me.
It’s a small space and yet there’s no absolutely zero clutter. I love how organized everything seems. For many of you, this space may be a bit too sparse (even with that hammock!). But there’s something really nice about the simplicity of it all. It’s peaceful.
Images: Katsumi Hirabayashi via Dezeen
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