Local Storage Markets: How to Read One

If you're considering buying or building a self-storage facility in a small town or exurb, the local market analysis is the single most important part of your decision. The same facility can be a great investment in one town and a disaster in another, and the difference is almost entirely about local supply and demand.

This article walks through how to actually evaluate a small local storage market. We'll use Van Alstyne, Texas as a worked example because it's the kind of small-town exurb that small storage operators routinely consider, and the analysis we walk through here applies to any similar town in any state. It's part of the Storage Unit Business guide.

What "local" means for storage

Self-storage is a hyperlocal business. The vast majority of storage customers come from within a 3-mile radius of the facility. A facility on one side of a town can be fully occupied while a facility 4 miles away on the other side struggles. This is different from many other businesses where regional or metro-level demand matters more than micro-location.

For a small-town or exurb facility, "local" usually means:

• A 1-3 mile primary draw radius
• A 5-mile secondary radius for larger or specialized units
• The road network that connects the facility to its draw area

If a small town only has one main road, the facility either sits on that road or has a meaningful disadvantage to one that does.

The six metrics that matter

For any specific local market, there are six numbers you need to find and understand.

1. Population within 3 miles

This is the size of the primary draw area. For a small-town storage facility, you typically want at least 5,000-10,000 people within 3 miles for the facility to support itself. Below that, the demand base is too thin.

Where to find it: US Census Bureau American Community Survey,¹ free demographic mapping tools (esri, GIS data), or by buying a market study from a self-storage analyst.

2. Population growth rate

Storage demand correlates with population growth. A market growing 3-5% per year produces meaningful new demand each year as people move in. A market shrinking 1-2% per year produces declining demand. The Texas exurbs (including Van Alstyne) are notable because many are in the 5-15% annual population growth range, which is unusual nationally.

Where to find it: US Census Bureau population estimates by city.¹

3. Median household income

Storage customers are typically middle-class. Below about $35,000 median household income, storage demand is more limited because people make do without paying for off-site storage. Above about $120,000 median household income, the market is wealthier but there are also more competing demands for space (bigger houses with garages, less need for off-site storage).

The sweet spot for storage demand is roughly $50,000-$100,000 median household income.

Where to find it: US Census Bureau ACS income data.¹

4. Existing storage supply

How much storage is already in the market? This is the single most important number after population.

The national average is roughly 7-8 square feet of self-storage per capita. Markets with significantly less than that (under 5 sq ft per capita) usually have room for additional storage. Markets with significantly more (over 12 sq ft per capita) are saturated and adding more supply will hurt everyone's occupancy.

Where to find it: Drive the area and physically count the facilities, then estimate their square footage. Or buy a supply study from a self-storage analyst (Inside Self-Storage, RealPage Self-Storage, and similar publish market data; some of it is free, some paid).

5. Existing facility occupancy and rates

What are the existing facilities renting at, and how full are they?

• Call existing facilities and ask for rates on a 10x10 unit
• Note whether they offer move-in specials (a sign of competitive pressure)
• Check online listings (sparefoot, storage.com) for posted availability and prices
• Drive past at different times of day to see vehicle traffic

If existing facilities are running 90%+ occupancy and rates are climbing, the market is undersupplied. If they're 75% or below and offering significant concessions, the market is saturated.

6. Future supply pipeline

Are there any new storage facilities under construction or in the entitlement process? A market that looks undersupplied today can be overbuilt 18 months from now if a major operator is building.

Where to find it: Local planning department records (building permits, site plan applications, zoning variance applications). Driving the area and looking for "coming soon" signs on vacant lots. Asking other operators in the market.

Worked example: Van Alstyne, Texas

Let's apply this analysis to Van Alstyne, a small town in Grayson County, Texas, about an hour north of Dallas-Fort Worth. (The information below is illustrative based on general patterns for similar exurbs; verify specific numbers for any actual deal.)

Population within 3 miles: Van Alstyne has experienced significant population growth as the Dallas metro has expanded northward. The 3-mile radius around the town typically captures 5,000-10,000 people, depending on how much of the surrounding rural area is included.

Population growth rate: Strong. Many of the small towns in this corridor have been growing 5-15% per year as Dallas metro residents move outward seeking lower housing costs. Population growth at this rate produces meaningful new storage demand each year.

Median household income: Typically $60,000-$85,000 in Van Alstyne and similar Grayson County towns. This is in the sweet spot for storage demand: middle-class enough to pay for off-site storage, not wealthy enough to have built-in alternatives like 3-car garages.

Existing storage supply: Drive State Highway 5 and US 75 through Van Alstyne and adjacent areas. Count the storage facilities. Note the format (drive-up, climate-controlled, mixed). Look up each one online for size and rates. The supply per capita ratio tells you whether the market is undersupplied.

Existing facility occupancy and rates: Call 3-5 existing facilities, ask for current rates on a 10x10 unit. Ask whether they have any specials. Check sparefoot.com and storage.com for the same units. If rates are around $90-$130/month for a basic 10x10 in this market and facilities are reporting limited availability, the market is healthy.

Future supply pipeline: Check Grayson County and Van Alstyne city planning department records for any pending storage facility applications. The Texas exurbs have seen significant new storage construction recently as developers chased the population growth, so confirm whether the market is ahead of, at, or behind the supply curve.

Bottom line for Van Alstyne or similar exurb markets: The combination of strong population growth, middle-class income, and sometimes limited existing supply makes these markets potentially attractive for new storage facilities. The risk is overbuilding: if multiple operators have reached the same conclusion, the market can shift from undersupplied to oversupplied in 18-24 months. Always check the supply pipeline.

How to do this analysis for any market

For any small town or exurb you're considering:

1. Get the population data from Census ACS for the city and the surrounding area within a 3-mile radius.
2. Get the population growth rate from Census population estimates over the last 5 years.
3. Get the median household income from Census ACS.
4. Drive the market and count storage facilities. Note their approximate size, format, and visible signs of business condition.
5. Call the existing facilities and ask about availability and rates.
6. Check listing sites for posted prices and concessions.
7. Visit the planning department or check online records for pending storage applications.
8. Calculate supply per capita (total storage square footage divided by population) and compare to national average.
9. Compare your prospective facility to the existing supply. Would yours have a meaningful location advantage, format advantage (climate control where there is none), or pricing advantage?

If your analysis shows the market has supply per capita well below national average, healthy occupancy at existing facilities, no large pipeline of new construction, and growing population, you've found a market worth pursuing. If it shows the opposite, you've avoided a costly mistake.

Don't skip the market study to save $5,000-$15,000. A professional self-storage market study from a recognized analyst is the cheapest insurance you can buy on a $500,000-$5 million investment. The analysts have access to data sources you don't, including proprietary supply data, demographic projections, and recent transaction comps. If you can't afford the market study, you can't afford the deal.

Next steps

• How to Start a Storage Unit Business - the sequence after market analysis
• Storage Unit Business Plan - the document the market analysis feeds into
• Cost to Start a Storage Unit Business - the cost side

Or back to the Storage Unit Business guide for the rest.