Many investors are asking the same question right now: “Is it too late to get into self-storage?”
It’s a fair concern. Interest rates have risen. Cap rates have shifted. And some markets that were red-hot two years ago have cooled down. But while the easy deals may be gone, we believe self-storage continues to offer some of the strongest risk-adjusted returns in commercial real estate, if you know where to look.
At Dahn Corporation, we’ve been developing, acquiring, and operating self-storage assets for more than 40 years. Through multiple real estate cycles, we’ve seen this asset class prove its durability again and again. In today’s more cautious environment, that resilience matters more than ever.
Self-Storage Still Outperforms, Even in a Shifting Market
Recent market data continues to show self-storage standing out among commercial real estate sectors. Although most commercial real estate asset types have faced headwinds, self-storage has been resilient, signaling its durability even in challenging economic times. That’s not just a rebound, it’s a signal.
Even with headwinds, the fundamentals of this asset class remain sound:
- Consumer behavior continues to drive demand: life transitions, downsizing, remote work, and small business growth all create consistent need for storage space.
- Operating costs stay low relative to other commercial assets. With limited staffing, no tenant improvement allowances, and simplified maintenance, margins remain healthy.
- Facilities are still recession-resilient: During downturns, many people need to store belongings while relocating or resizing their lives.
Self-storage isn’t immune to macroeconomic shifts, but it’s proven to be more flexible than most.
The Deals Look Different, But the Opportunities Are Still There
In a lower-rate environment, compressed cap rates often made up for operational inefficiencies. But today, deal quality matters more. That’s why experienced sponsors are adjusting in a few key ways:
- Focusing on strong fundamentals: Markets with population growth, minimal new supply, and healthy existing occupancy are at the top of our list.
- Underwriting conservatively: We model cash flow with today’s rates and tomorrow’s potential in mind, not yesterday’s assumptions.
- Finding value through repositioning: Turnaround assets with design flaws or management gaps often outperform shiny new builds over the long term.
The takeaway? This market rewards experience. Knowing how to operate efficiently, underwrite prudently, and reposition strategically is where we see the edge.
Long-Term Wealth, Not Short-Term Flips
While other sectors chase appreciation, self-storage continues to deliver through cash flow and stability. Over time, this leads to real, compounding returns.
Dahn’s track record includes over 100 storage investments and more than $300 million in self-storage assets developed or acquired. We’re not chasing trends, we’re focused on building value property by property, market by market.
That mindset is what’s allowed us to navigate changing conditions for decades. It’s also why our partners stay with us from deal to deal.
Looking Ahead
We don’t believe the window has closed. We believe it’s shifted. And that means investors need to shift with it, toward smarter underwriting, stronger operators, and assets that stand the test of time.
For those willing to dig deeper and invest with intention, self-storage remains a compelling place to build long-term wealth.
Thinking About Your First or Next Investment?
Schedule a call to learn how we’re identifying today’s opportunities and helping partners invest with confidence.
