Chicago Self Storage Market Statistics:

What are the factors driving the local boom in self storage development?

Urban density and limited space will be important factors in the development of the self storage industry. As residential units become smaller, particularly in downtown and high-density neighborhoods, residents increasingly rely on self storage for additional space.

Population mobility is also set to make an impact. Chicago has a high rate of relocation and migration, including young professionals, students, and downsizing retirees, all of whom frequently need storage solutions.

Self storage development might also be driven by e-commerce growth. The rise of small businesses and online retailers has driven demand for commercial self storage, with businesses using storage units as inventory hubs.

Multifamily housing trends will also have a significant impact. As the city continues to develop high-rise apartments and mixed-use developments, storage space in residential buildings is often limited, pushing tenants toward external storage options.

All in all, the self storage market is mostly influenced by real estate market shifts. As housing prices fluctuated and people moved between urban and suburban areas, demand for short-term storage spiked.

What are the sources of local self storage demand?

Renters and condo owners are big demand drivers of self storage. Many residents in urban areas, particularly in downtown Chicago and transit-oriented developments (TODs), have limited in-unit storage.

College students are also noticed to drive up demand. With several major universities in Chicago (e.g., UIC, DePaul, Northwestern), students often need seasonal storage for dorm and apartment belongings.

Other demand drivers come from businesses and entrepreneurs. Small businesses, especially e-commerce retailers and service providers, use self storage for inventory, records, and equipment.

Finally, the group most likely to use self storge may be homeowners in transition. Oftentimes, people relocating, downsizing or undergoing renovations turn to self storage as a temporary solution.

What economic events are impacting the self storage industry in Chicago?

Right now, the Chicago self storage market is meeting the needs of residents dealing with economic uncertainty and inflation. Rising inflation and economic instability have influenced how people use self storage, with some downsizing and using storage as a cost-effective alternative to larger living spaces.

How do you envision the future of the local self storage industry, in the medium- and long-term?

In the short term (meaning the next 3 to 5 years), self storage development will continue in high-density areas and near transit hubs, catering to urban renters, remote workers, and small businesses. The situation is much more open-ended in the long term.

Which factors underpin the local boom of self storage development in the past few years?

Due to its ability to generate consistent growing dividends, self storage has outperformed many other real estate categories during and since the COVID-19 pandemic.

Where does local demand for self storage come from?

In my opinion, local demand follows where people moved since Covid. In other words, many people sought suburban or rural life during COVID-19. The targets of the investor transactions since 1/1/23 are not in the City of Chicago but in places like Crystal Lake, Lake in the Hills, Volo, Plainfield and West Chicago to name a few Collar County locations. Even Minooka and Beach Park and into the border towns of WI and IN! In the rest of the country, this tracks as well — SelfStorage.com reports that states with increased self storage demand include North Dakota and Maine!

What major economic events affected the self storage industry in Chicago?

Based on the statistics I’ve seen, the peak was 2022 for self storage. Since then, owners have been decreasing move-in costs, increasing the demand with these incentives. This is especially true for climate-controlled and increased security where consumers traditionally are willing to pay more — getting a move-in incentive has helped the increase in that demand.

How do you envision the future of the local self storage industry, in the medium- and long-term?

It is still a good performing asset — I see possible consolidation, especially given the Red Dot storage transaction.

Where does local demand for self storage come from, and what major economic events affected the self storage industry in Chicago?

Storage demand, as we all know, usually comes from life events. However, one of these life events has been recently declining, with home sales struggling due to higher interest rates. This has renters and homeowners staying in their residences for longer periods of time, causing self storage owners to lower their advertised rates in search of the next tenant. How long will this last is the question.