6 Reasons Why a Self-Storage Feasibility Study is the First Step to a Profitable Facility

Self Storage Feasibility Study & Self Storage Development

The self-storage industry continues to be one of the most recession-resistant asset classes, offering stable returns for investors and developers. The sector has experienced an annual growth rate of 7.5% over the past five years, with occupancy rates averaging around 90% in major markets. However, not every new facility turns into a success story.

A well-executed self-storage feasibility study is the foundation of any profitable project. Whether expanding a portfolio or entering the industry for the first time, understanding market demand, competition, and long-term financial viability is critical before breaking ground.

An image of a person at their self storage unit for a self-storage feasibility study.

Why a Feasibility Study Matters

Developing a self-storage facility without a feasibility study is like building a house without a blueprint. It may look good on paper, but unforeseen challenges can quickly turn a promising investment into a financial burden. A self-storage feasibility study from BMSGRP provides an in-depth market analysis, ensuring data-driven decision-making backed by industry expertise.

1. Key Insights a Self Storage Feasibility Study Provides

Market Demand & Demographics

Understanding the local self storage market is essential to predicting success. A self-storage feasibility study evaluates:

  • Population growth trends
  • Median household income
  • Local employment statistics
  • Renters vs. homeowners in the area

This data helps determine whether there is enough demand to support a new facility. According to the Self Storage Association, approximately 9.4% of U.S. households rent a self-storage unit, but demand varies significantly based on regional factors.

2. Competitive Landscape & Rental Rate Analysis

The number of existing storage facilities—and their pricing models—plays a critical role in determining market saturation. BMSGRP’s competitive analysis includes:

  • On-site visits to competing properties
  • A rental rate summary across unit sizes and features
  • Insights into future supply (i.e., planned and under-construction facilities)

This competitive intelligence ensures that pricing strategies align with market conditions, maximizing occupancy and revenue.

3. Absorption & Occupancy Projections

A self-storage feasibility study projects absorption rates, analyzing historical data and future supply to forecast occupancy levels over time. BMSGRP provides an 18-position absorption chart, outlining:

  • Current and future market conditions
  • The impact of new competition
  • Projected occupancy rates over five years

This data-driven approach prevents overbuilding and helps determine realistic timelines for reaching stabilization.

4. Financial Projections & NOI Forecasting

A self-storage facility’s long-term profitability depends on accurate financial forecasting. A BMSGRP feasibility study includes:

  • A 36-month, month-by-month fill-up projection
  • A detailed line-item expense summary
  • A 7-year operational NOI cash flow projection

These insights provide a clear financial roadmap, helping investors assess potential returns and secure financing.

An image of a self storage unit for a self storage feasibility study.

5. The Hidden Risks of Skipping a Feasibility Study

Some investors attempt to cut corners by skipping the feasibility phase, assuming a high-level market overview is enough. However, without a comprehensive feasibility report, key risks include:

  • Overestimating Demand – Investing in an oversaturated market can lead to lower-than-expected occupancy and long-term underperformance.
  • Incorrect Pricing Strategy – Without accurate rental rate benchmarking, developers may overprice or underprice units, impacting cash flow and profitability.
  • Unanticipated Competition – Failing to account for upcoming developments can drastically affect absorption rates and market positioning.
  • Missed Zoning or Regulatory Issues – Many municipalities have restrictions on self-storage development. A feasibility study ensures that zoning, permitting, and regulatory hurdles are addressed before significant investments are made.

6. What’s Included in a Self-Storage Feasibility Study?

A BMSGRP self storage feasibility study goes beyond basic market research. It delivers a data-backed investment strategy, helping developers secure funding and optimize site selection. Each report includes:

  • Comprehensive Market Analysis – A deep dive into demographics, population trends, and economic factors influencing self-storage demand.
  • Personalized Competitor Review – Site visits to local competitors with rental rate benchmarking.
  • Absorption Analysis – A data-driven forecast of how quickly units will lease-up.
  • Financial Modeling – A detailed proforma with projected revenue, expenses, and cash flow over seven years.
  • Expert Recommendations – An executive summary outlining whether to proceed, adjust plans, or reconsider development.

Explore a sample self-storage feasibility report to see what makes this data-driven approach industry-leading.

The Bottom Line: Feasibility = Profitability

Self-storage remains a lucrative investment, but success starts with strategy. A self-storage feasibility study eliminates guesswork, helping investors identify the right market, set competitive pricing, and project long-term returns with confidence.

Looking for self storage feasibility study consultants? Before breaking ground, make sure all necessary insights are in place to build a profitable facility. Learn more about BMSGRP’s Self Storage Feasibility Study and take the first step toward a data-driven investment strategy.