Self Storage Reflections, Predictions for 2021

Self storage was a beneficiary of the disruption caused by the global pandemic. Drew Dolan of DXD Capital explains why and what's to come for the sector.
Drew Dolan

The pandemic of 2020 has been a “black swan event” and could not have been predicted by the vast majority of us and it changed the trajectory of commercial real estate investing. We saw hospitality stumble quickly, while office faced its largest challenge in many decades. We also witnessed big box retailers thrive while small shops and restaurants without drive-thrus die. Industrial with an e-commerce focus, data centers and cold storage, which had already seen a lot of attention became even more interesting as consumer demand shifted into a whole new gear. 

Self storage was a beneficiary of the disruption caused by the global pandemic—as its 30-year history has shown, storage has fared well in good times and in bad.  During 2020, we have seen many pandemic-related use cases:

  • Students came home from college and needed to clear out their dorms and apartments.
  • Bedrooms became home offices and families cleaned out storage spaces in their homes.
  • Many restaurants closed and stored expensive kitchen equipment. The ones that remained open had many limited seating requirements which led them to storing unused tables and chairs.
  • Office space has been reimagined. Some are clearing out guest bedrooms to create space at home.  Others realized that an expensive office could be replaced by an inexpensive and often, more secure, self storage unit.
  • With more time spent at home than maybe ever before, many people have decided to renovate kitchens and other areas at their homes creating additional need for storage.

What will we see in 2021?  How are we thinking about storage trends?

Most of the hardest-hit asset types will start recovering. Between vaccinations and herd immunity, asset classes like student housing, hospitality and senior living will begin to recover in later half of 2021. However, valuations could be impacted for many years after a normalization of occupancies.

The US population shifted into uber consumer mode; spending has increased by 9 percent in 2020, according to Deloitte. From March to November of 2020, the U.S. spent $575 billion less on services (fewer trips to Miami) compared to the same time period in 2019, but spending on durable goods was up $60 billion (think home gym equipment).

The personal and family dynamics arising from COVID-19-lifestyles introduced self storage to customers that had never considered it before. We will see this demographic have a first experience with the product. 

As we observe positive performance metrics in the storage industry, we will see increased interest in storage investment, particularly as a stabilized, cash-flowing asset. In a period of uncertainty, development activity decreases. 

We are all hopeful that 2021 will be normalizing, but after sustained changes in behavior, there will be accelerated trends that continue and “new normal” in some areas.


In his 20-year career in development and construction, Drew Dolan of DXD Capital has focused on structuring real estate investments, joint ventures, asset and capital management. Previously, he was President of Titan Development where he managed Titan’s self storage and multifamily divisions. Dolan is currently a member of YPO, active on his ULI Council, and was a member of NAIOP’s national board.