When new investors think about commercial real estate, they often picture apartment buildings, retail centers, or office space. But there’s another asset class that’s often overlooked—and it might surprise you.

I’m talking about self-storage.

It doesn’t always come to mind as a traditional CRE investment, but self-storage units have carved out a solid place in the market. In fact, over the last 20 years, this sector has grown rapidly. You’ve probably noticed them popping up in cities and towns all over the country. But the big question is—are they a good investment?

Let’s take a look at the pros and cons.

A Few Fast Facts About Self-Storage

Here’s something that might catch your eye: according to Bloomberg’s Riskless Return Rankings, self-storage REITs outperformed all other real estate investment trusts in terms of risk-adjusted returns during the ten-year stretch ending in 2012.

Now, buying stock in a REIT isn’t the same as owning a self-storage facility outright—but that dat...

Per the National Association of Realtors...

Commercial real estate is defined as “any multifamily residential, office, industrial, or retail property that can be bought or sold in a real estate market.” This might seem straightforward, but there are a few additional intricacies to the commercial real estate market that differentiate it from the homeowner’s market.

While it’s easy to identify a commercial real estate property that’s used as an office building, by definition, commercial real estate is any building or property that houses one or more retail businesses where the general public can go to purchase goods or services. There are also industrial commercial real estate properties that usually fall into the categories of distribution center, manufacturing facilities, or warehouses. And it includes specialty commercial real estate properties that may function as medical, office building, self-storage, five-plus unit apartments, hotels, motels, senior centers, golf courses, resort...

Dear Valued Reader,

In the dynamic world of investment, the quest for a resilient and robust portfolio is never-ending. Diversification is often heralded as the beacon of success in this journey. However, not all diversification strategies are equal in their effectiveness or appeal. Today, I'm excited to shed light on a segment of the commercial real estate market that is frequently overlooked yet brimming with potential: self-storage investments.

Why pivot towards self-storage, you might wonder? The allure of self-storage investments lies in their unique combination of stability and growth potential, offering a form of diversification that is rare and valuable. Here are a few compelling reasons why self-storage stands out:

1. Diverse Demand Drivers: Self-storage benefits from a wide array of demand drivers. Whether it's individuals downsizing, relocating, or simply seeking additional space for their possessions, the need for self-storage remains consistent across various economic c...