“This was very much a retail IPO,” Boorstein adds. “It wasn't the big institutional buyers of stock” that drove the offering, but everyday investors, another sign that self-storage has appeared on investors' radar screens.

And on March 27, Jernigan Capital, Inc. completed an initial public offering of 5 million shares of its common stock at $20 per share, eventually resulting in total gross proceeds of $115 million. Jernigan Capital, a Miami-based REIT, offers financing for ground-up construction of self storage facilities or major redevelopment opportunities, as well as for acquisitions.

The constant revenue growth and occupancy gains in the industry have investors scrambling to acquire operating properties. The intense competition has even led to cap rate compression in secondary markets. “We just have bidding wars for any property that we bring to market,” Boorstein says.

National Storage Affiliates Trust just closed on its first post-IPO acquisition. The five facilities in Shreveport, LA, have about 340,000 square feet and are about 90% occupied, Boorstein says. Instead of cash, in the first phase of the transaction the sellers will receive $16.5 million worth of securities called operating partnership units.

In the first quarter, Public Storage acquired four facilities totaling 300,000 square feet for $32.3 million. Year to date, Extra Space Storage has closed on $277 million in acquisitions. CubeSmart, another of the big four, which last August acquired 26 properties from investment funds managed by Harrison Street Real Estate Services for $223 million, acquired another three facilities in the first quarter for $21.8 million.

An important factor bringing investors into the sector is that new development remains anemic. Whatever the occupancy levels in existing product, bankers still consider each new development, all of which open with zero occupancy, a speculative project, Boorstein says. Therefore, instead of establishing funds that could finance giant blocks of development in multiple markets, bankers approach self-storage on a deal-by-deal basis.

Public Storage is the only one of the major players that has a significant amount of projects underway. At quarter's end, it had a total of 31 facilities in development. These and other expansions will cost about $387 million and add about 3.2 million rentable square feet.

According to Ron Havner, chief executive officer of Public Storage, “400 to 500 new properties keep things static and we haven't had much development since 2009. We are four, five years behind in terms of the curve of new supply relative to organic population growth of 1% a year.”

“One day development may catch up with demand, but we don't believe it will happen in 2015 or 2016,” Boorstein says. “We're talking at least 2017.”