Too Much Stuff! America's New Love Affair With Self-Storage

A strange new shadow land has grown up in America. It's a world of cinderblock villas and plywood hallways, garish under halogen security bulbs. It clings to the underside of Western towns like Roman catacombs, pushes up funereal fault blocks in urban centers, and festoons suburban freeways with palaces styled after castles and forts. If you could peer inside those locked rooms, you'd see, well, practically any object you could imagine: a pair of skis, five toadstool-style cookie jars, twelve years' back issues of Martha Stewart Living, a single broken bed frame, all waiting like Egyptian tomb dressing to serve in some afterlife. But you'd rarely see a person, because all these new, gray places are for stuff.

The "self storage" business started small three or four decades ago, as a few "mini-warehouses" around military bases in the Southwest, according to industry legend. Now it's a $22 billion-per-year industry, and maybe a whole way of life. Like VCRs and cell phones, self-storage is a product Americans didn't need until they discovered it, and now they can't live without.

The numbers are astounding. According to the Self Storage Association, an industry advocacy group, square footage of rentable storage has increased 740 percent in the past two decades; a billion square feet of storage space was created between 1998 and 2005; and there are now 6.8 square feet of storage for every man, woman and child in America. Chris Sonne, a storage expert at Cushman & Wakefield Inc., estimates there are 45,000 storage facilities today compared to zero 50 years ago.

"That's a pace of two or more self-storage facilities opening every day for 50 years," he says. "That beats McDonald's."

It's been a great ride for savvy investors, who watched the business produce impressive rents from inexpensive buildings. Industry giant Public Storage Inc. had total returns of 41 percent, 33 percent, 25 percent and 47 percent for the years 2003-2006, according to Morningstar. Though growth has slowed recently, due to high supply and tight credit, it hasn't stopped, with new development continuing in little-served areas like urban centers. What the hell is going on? Why do Americans crave all this space when they apparently lived fine without it 30 years ago?

There aren't many answers in the press. Storage tends to make the news only when something criminal or titillating happens -- like when a murderer stores body parts in his unit, or Paris Hilton forgets to pay her rent, and her purported party photos and Amsterdam drug notes are auctioned off to the highest bidder.

I walk into the office of a Public Storage facility and talk to "Jack," the manager on duty. (He tells me he could get fired if I used his real name.) With his beard neatly trimmed and his shirt tucked in, he seems grounded and efficient. I ask why demand for his service is so big.

"I guess there are just a lot of pack rats out there," he says without skipping a beat.

That's the same initial reaction I got from the majority of the 20 people I talked to for this story, from Wall Street analysts to everyday customers. But draw those conversations out a bit, and those pack rats "out there" start looking like everyone you know. The problem isn't just with the crass and slavish mob; more thoughtful types use self-storage too.

Building on Inertia

Part of the storage boom comes from use by business: Self Storage Association President Michael Scanlon says that perhaps 30 percent of customers are businesses storing records, equipment, inventory and the like. Still, the lion's share of the expansion has come from plain old folks storing their possessions. And every one of them has a story when they show up at Jack's desk.

"When people come in here, they are stressed out," he says. "Maybe their grandma died and left some furniture. Maybe they're moving. Maybe they got a new job."