Self-storage is a fantastic business to be in. One out of 10 U.S. households rents a self-storage unit, roughly half of renters continue to do so for longer than two years and about a quarter rent for a decade!
Life Storage does not build new facilities — it only buys existing properties. Over the past six years, it has increased its location count by 90%.
One of Life Storage’s great advantages is its technological expertise: It was the first major storage company to offer online self-service rentals. A customer fills out an online application, pays the first month’s rent with a credit card and within seconds has automated access to their storage space with no human contact.
That touchless sales system has been extremely popular during the COVID-19 pandemic, but the beauty is how it helps reduce staffing expenses and boost profit margins.
Funds from operations (FFO) is the real estate investment trust (REIT) equivalent of earnings per share (EPS) … and FFO is booming at Life Storage. In 2021, FFO jumped by a whopping 36.5%, largely thanks to its tech-driven decrease in operating expenses.
Occupancy rates are rising and approaching 100%. In 2021, the occupancy rate increased to 94.6%, up from 92.4% in 2020. The storage business is an extension of the U.S. housing market, driven by a rising U.S. population and supply shortages. Life Storage’s future is very, very bright.