Will Mixed-Use Development in the Self-Storage Industry Be Its Golden Hoard?

March 2, 2022 by
Jan Brebaum

Self-storage facilities are no longer only found in commercial areas but are also becoming increasingly popular in vacant retail spaces and residential developments. But are mixed-use self-storage facilities a safe step forward for the industry?

 

Self-storage - an old concept in a new edition 

The self-storage industry is one of the fastest-growing industries in recent years, and the question often arises: How did this self-storage industry come into being?   

The origin of self-storage is based on a few theories. Some claim that its roots lie in ancient China, where a man named Xiang Lau collected stones and bones and other things that could have been found in the city in ancient China. One day his wife got fed up with the whole mess and told Xiang Lau to do something about it. So he built huge pots and stored them underground. Others claim that the first self-storages were invented in the Roman Empire, as the Romans are responsible for many other inventions such as sewerage, heating and cooling. Still, others assume that travellers and merchants in the British Empire stored their valuables in the bank while they were at sea. As soon as the banks were overcrowded, the valuables were moved to some kind of storage room. Thus the valuables were safe for the travellers. Although all these theories are very intriguing, they can be hardly substantiated by sources. The first self-storage as we know it today was based on the American story.

In 1906, the brothers built the Bekins Warehouse in Los Angeles as a temporary storage facility for movers. However, storage facilities did not become successful in America until the 1960s. The first facility to use garage doors was built in Texas in 1964. The concept quickly spread to the west coast of the country and evolved throughout the US and Canada. The original Bekins company still exists today as a moving company.   ​  


According to Mordor Intelligence Research, the valuation of the self-storage market reached $87.65 billion USD in 2019. By 2025, that valuation is expected to grow to $115.62 billion. This puts the compound annual growth rate (CAGR) at 134.79% over the forecast period of 2020-2025. 

- Forbes Magazine 


Shared Economy: The Interplay of Self Storage and Coworking 

Like everything else in life, the self-storage industry is changing. Recent years have seen an increasing combination of self-storage and co-working spaces. Offices, in particular, have suffered from the pandemic. One result of this phenomenon is the growth of home offices and co-working spaces. However, co-working spaces often do not have personalized workspaces. This leads to a problem that all co-working spaces have in common: there is usually no extra space for archives. Some providers provide extra storage for materials, but that space is limited. Therefore, people who cannot work without paper and files, such as artists, fashion designers, architects, etc. use all kinds of materials and files in their work. - use all kinds of materials and equipment in their work, they often lack an essential resource in a co-working space: storage space. ​ 

  

Multi-use development in the storage sector 

The self-storage industry is not exclusively merging with co-working spaces, but tending towards multi-use development. This development towards mixed-use of storage spaces is also called fifth generation self-storage. This includes mergers of self-storage with: 

 

  • Fast food chains: Operator MyPlace has merged with a neighbouring KFC. In the UK, Starbucks Drive-Thru and operator StorageGiant are similarly positioned in Cardiff and Bristol.   
  • Light Industry: Examples include businesses that sell, manufacture and store tile and stone flooring, furniture, etc. These use-cases tend to be less retail-focused and require more space for their operations. This subcategory is often referred to as "flex tech" because it allows for a variety of uses. Another subcategory is self-service car washes, which are becoming more popular to work together with self-storage providers.  
  • Residential: This use-case is less common today, but is becoming more popular as land becomes scarcer in densely developed areas. Flats and even condominiums are being designed and built as part of mixed-use self-storage projects.   
  • Parking garages: Although they cannot be assigned to a specific category, parking garages can be used together with self-storage projects in dense urban areas where any kind of space is scarce.  

 

The storage facility is reaching a peak today with its fifth generation. The self-storage industry could thus establish itself as bullet-proof.      


“Apartment managers are overwhelmed with deliveries (Amazon boxes and Instacart groceries). Storage facilities provide a secure delivery outlet and are open 24 hours, equipped with dozens of video surveillance cameras, and key-fob access.”- Bill Leitner is CEO of Leitbox Storage Partners.  

 

The benefits of digitalisation for the shared economy  

Heutzutage bieten viele Self-Storage Standorte, nicht nur einfache Lagerräume, sondern außerdem eine Fusion aus Self-Storage und Co-Working Spaces mit hochmodernen Dienstleistungen, wie computergesteuerte Eingangstore und klimatisierte Einheiten. Sensorbergs Technologie deckt dabei beide Use Cases- sowohl Technologie für Co-Working als auch für Self-Storage-ab. Somit müssen nicht viele Anbieter gesucht werden, um jeden Use-Case abzudecken. Der Einsatz intelligenter Technik trägt dazu bei, Zeit-, Energie- und Kosteneffizienz zu gewährleisten, sorgt aber auch für Sicherheit, denn Sensorberg Zutrittskontrollsysteme zeichnen sich durch maximale Zuverlässigkeit dank eines dreistufigen Sicherheitssystems aus - das heißt, sie arbeiten offline und sind somit gegen Ausfälle geschützt.

Besonders die Fusion von Self Storage und Co Working als gemischtes Geschäft Modelle ist mit uns möglich, da wir offen für verschieden Assets sind. Mit Sensorberg kann man schon heute digitalisieren und in die Zukunft investieren. Ein Beispiel ist ​