Self-storage development is no longer limited to major metros. As an asset class, self storage stands out for its resilience and profitability compared to other real estate investments, attracting both seasoned and new investors. In 2026, more investors are looking at secondary markets for new opportunities. Lower land costs, growing populations, and less competition can make these areas attractive. But they also come with unique risks that require a more disciplined approach. This trend reflects a shift in developer interest from primary to secondary and tertiary markets, with the national pipeline of self storage projects expanding across the country.
If you are evaluating self storage development in a secondary market, the question is not just whether you can build. It is whether you should. Understanding the local customer base—demographics, needs, and behaviors—is critical, and leading companies in the industry rigorously analyze these factors to assess true market potential.
At BMSGRP, self storage feasibility and market analysis experts, we help clients answer that question with data, not assumptions. Here is what you need to consider.
What Defines a Secondary Market?
Secondary markets are typically smaller cities or suburban areas outside of primary metropolitan hubs. These markets often have:
- Lower population density
- Fewer existing storage facilities and lower existing inventory, often measured in square feet per person. Markets with less than 7 net square feet of storage per person are typically considered undersupplied.
- Emerging economic or residential growth
- Less institutional competition
A benchmark of 30,000 people is often cited as a target for a viable self-storage market.
On paper, that can look like opportunity. In practice, it requires deeper analysis.
The Opportunity in Secondary Markets: There are real advantages to developing in these areas.
Lower Barriers to Entry: Land acquisition and construction costs are often lower than in primary markets. This can improve margins and reduce upfront capital requirements. The choice of construction materials also plays a significant role in overall project costs.
Less Saturation: In many cases, secondary markets have fewer competitors. That creates room for new supply if demand supports it. However, the number of many projects in the pipeline, the presence of existing facilities, and completion rates can all affect competition and impact rental rates, underscoring the need for thorough self storage competition analysis.
Growing Demand Drivers: Population growth, new housing developments, and small business activity can all contribute to increased storage demand. Secondary markets tied to regional growth corridors are especially attractive. Higher demand often comes from areas with high renter ratios (over 30%), median household incomes above $75,000, and positive job growth.
The Risk Side of the Equation: Not every secondary market is a good bet. The same factors that create opportunity can also introduce risk.
Limited Demand Depth: Smaller populations mean less margin for error. If demand is overestimated, lease-up timelines can stretch significantly.
Economic Sensitivity: Secondary markets are often tied to a smaller number of industries. Economic shifts can impact occupancy and pricing more quickly.
Visibility and Access Challenges: Site selection matters even more in these markets. If your facility is not easily accessible or visible, it can struggle to gain traction. High daily traffic (10,000+ vehicles) is an important factor, and nearly half of all tenants find their self-storage facility by driving past it.
Financing Considerations: Lenders may be more cautious with projects in smaller markets. A strong feasibility study and business plan become even more critical. Overdevelopment in certain markets has softened street rates, increasing competition and impacting rent and rental rates. When evaluating market conditions, it’s important to compare average street rates or rental rates as a benchmark.
What Makes a Secondary Market Work
Successful projects in secondary markets are built on strategy. Key factors include:
- Verified demand supported by population and occupancy data
- Limited competitive pipeline
- Strong traffic patterns and site visibility
- Right-sized unit mix based on local needs
- Clear lease-up and marketing strategy
- Focus on zoning, visibility, and accessibility to ensure optimal site selection and market appeal
- Robust customer base within a 3–5 mile radius to drive facility success
At BMSGRP, we evaluate these variables through detailed self storage market analysis. Our goal is to determine not just if a project is viable, but how it will perform over time. Industry events and keynote presentations further highlight emerging trends developers should track. Many developers are now creating storage solutions by converting existing retail or industrial spaces to manage construction costs, especially as urbanization and e-commerce growth increase demand for external storage options. Retirement communities also drive demand, as families often need storage when elderly residents move into assisted living. Las Vegas stands out as a top market for self-storage demand due to its transient population. Additionally, modern self storage development increasingly integrates technology, with unmanned and automated facilities managed through remote kiosks and AI-driven systems.
Understanding Self Storage Demand
As populations boom and cities grow, you’re seeing more people and businesses turn to flexible storage solutions to navigate life’s big changes. A major factor influencing self storage demand is the broader economic environment—household income and low unemployment rates significantly impact tenants’ ability to afford storage rates and drive overall demand.
What’s exciting is how customer preferences are evolving right before our eyes. Today’s storage seekers want climate-controlled units in prime locations because they value security, convenience, and real protection for what matters most to them. Demand for climate-controlled units is rising as consumers increasingly store high-value items like electronics and collectibles, making these offerings more essential than ever. If you’re a developer or investor who gets these demand drivers, you’re already ahead of the curve — positioning your storage development strategies to meet what today’s market actually wants. In those promising secondary markets where population growth and fresh housing developments are reshaping communities, nailing your self storage demand forecast isn’t just smart, it’s essential for long-term success. When you align your facility offerings with what locals actually need, you’ll capture more of that growing self storage market and drive the kind of sustained revenue growth that makes all the difference.
Choosing the Right Location
Choosing the right site is a make-or-break decision that’ll define your storage facility’s success story. You want locations that work as hard as you do. Think strong population density, growing communities, and competition you can actually handle. High visibility and easy access from major roads or residential areas aren’t just nice-to-haves; they’re your ticket to driving demand and keeping those units filled.
You have to navigate zoning regulations, crunch those land costs, and factor in environmental challenges that could throw a wrench in your timeline. Self-storage is usually permitted in industrial or light-industrial zones. When you dive deep into site selection analysis and really understand what makes each market tick, you’re not just maximizing your investment. You’re building storage facilities that stand out and deliver results in this competitive industry.
Self Storage Prices and Revenue Management
Your pricing strategy can make or break your self storage facility’s success. Your rates need to balance location perks, unit sizes, climate control features, and security measures in a way that attracts customers while keeping you profitable. Want to stay ahead of the competition? You’ll need to keep your finger on the pulse of market trends and adjust your pricing models accordingly. Smart revenue management isn’t just about setting the right per-square-foot rates.
When you truly understand the ins and outs of self storage pricing and revenue management, you can optimize your occupancy, maximize your revenue, and secure your spot as a leader in the storage industry.
The Role of Feasibility in Secondary Markets
In primary markets, there is often enough data to make informed assumptions. In secondary markets, that margin disappears. A feasibility study becomes essential.
A BMSGRP feasibility report provides:
- Local demand and supply analysis
- Competitive landscape review
- Absorption and lease-up projections
- Financial modeling based on real market conditions
This level of insight reduces risk and gives investors the clarity needed to move forward or walk away.
The Bottom Line
Self-storage development in secondary markets can be a strong opportunity, but only when approached with the right data and strategy. Lower costs and less competition do not guarantee success. Execution matters.
If you are considering a project in a secondary market, start with the numbers. BMSGRP helps you evaluate opportunity, minimize risk, and make confident decisions.
Have a market in mind? Let’s take a closer look.
