CHICAGO—The self-storage industry has experienced a remarkable amount of growth over the past few years, with its largest companies reporting big increases in revenue and occupancy. But as occupancy rates have peaked at historic highs, growth expectations are now a bit more modest, even though the underlying demand for storage continues to be quite strong, according to a new mid-year report by Marcus & Millichap.

And the changes underway in storage will also open up investment opportunities for new groups. For several years, REITs such as Public Storage, Extra Space Storage, Sovran Self Storage, and CubeSmart have been the sector's big dogs, snapping up the best locations and gaining an advantage from high-tech tools and internet marketing that their many Mom-and-Pop competitors could not afford. But with the REITS deciding to pull back in new purchases, small to mid-size investors now have a better chance to close deals, according to Marcus & Millichap. And the sector has many advantages for these investors.

“Self-storage isn't nearly as capital intensive as an office property,” Joel Deis, national director of Marcus & Millichap's self-storage group, tells GlobeSt.com. Typically, in an office building, when a lease runs out the landlord may have to spend a great deal updating a space or reconstructing it to meet the needs of a new tenant. And individual leases can last about five years, providing limited opportunities to boost increase rental income. By contrast, self-storage properties require very little upkeep. Furthermore, leases are month-to-month, giving the owners a lot of flexibility when it comes to instituting rental increases.