Gabfocus Spotlight: How is the outlook for people just starting in storage?

May 16, 2023

self storage quote banner: keep your eyes on the horizon
3 min

With how the industry boomed over the last few years, it's no surprise that new faces are starting to get involved in storage.

Now that we're coming down from the highs of the pandemic era, though, what is the outlook like for new investors?

John Chang of Marcus & Millichap spoke with us about his advice for new self storage investors in this Gabfocus Spotlight. Check it out—you may even find some useful information if you're an industry veteran!

Question: "How is the outlook for people just starting to invest in self storage?"

Check out the video clip below to hear their answers:


In this Gabfocus Session: State of the Industry 2023, John Chang of Marcus & Millichap joined us to discuss the state of the economy and of the self storage industry. He took us on a walk through everything from potential recession to rental trends among millennials.

Check out the full Session to dive deeper! 

Don't want to watch the clip? Here's what John had to say:

For anybody who catches my videos—every week I post a video on LinkedIn and on our company website—I always end it with the same thing: keep your eyes on the horizon.

And what happens is far too often investors get caught in today's news, right?

Just the last two months, I mean, I just kind of went through all those things that changed in just like the last 60 days. But if you look forward and you change your barometer from where are we going to be in 30 days, 60 days, six months, or even a year, and you shift it to, okay, I'm going to buy this property, I'm going to own this asset for five to seven years.

That's kind of the normal hold time these days.

Think about where is it going to be in five to seven years? So you look at the macro drivers, things like population growth, you look at migration trends, you look at overall economic momentum over our long term, and then you can start to see some of the possibilities, right?

Because every day people are moving from whatever, Chicago to Tennessee or to Charlotte or North or South Carolina, and they move in ones and twos and families and so on. But if you think about how many people move over a five year span, then it starts to become really meaningful and you can see shifts over the longer term.

So it's those big patterns that make a difference.

So just looking and anything can go wrong, right? There's all sorts of black swans. No one knew that the pandemic was coming until literally months before it hit. So there's always something that can go wrong. There's geopolitical risks, there's all sorts of things going on in the world. But setting aside all of those abnormalities, generally speaking, the economy continues to grow.

We see one to 3% economic growth every year. Our population continues to grow. Demand drivers are going, people are generally moving south, and they're generally looking at strong employment markets. Our unemployment rates at a record low, and the economic momentum is there. The use of storage has been growing and changing over time.

It's a generational shift.

I mentioned demographics earlier. I think if you look at demographics, that is the biggest driver, the millennial generation, 72 million of them between 30 and 40 years old. Over the next five years, they move into kind of that 35 to 45 year old range, which are prime earning years. That's where people make most of their money. That's where their incomes really rise. And as their incomes rise, that is going to drive the US Economy.

That's why I'm really bullish about where we are for the economy, but more importantly, for real estate demand over the next ten years as that group, that population cohort rolls through their biggest earning years of their lives and grows their wealth. While you still have the baby boomers out there who've secured their wealth and are kind of transitioning to another stage of their life.

But that wealth creation is going to drive commercial real estate demand and fuel the economy over the next five to ten years."

—John Chang

Make the Right Choices in 2023

See our list of customer trends and expectations.

Customer Trends 2023 - Cover