The self storage sector is thriving thanks to changing migration patterns and evolving consumer behaviors that owe largely to the COVID-19 pandemic, pushing the niche asset class "from a laggard to a leader," according to senior economist Thomas LaSalvia of Moody's Analytics REIS. 

The sector's pre-COVID woes are well-documented: too much development, which began in earnest at the end of the Great Financial Crisis, pushed rents and occupancy rates down with a vengeance.  And while net absorption averaged 196,000 units per year from 2019 through 2019, "this wasn't enough to balance the inventory gains that averaged 311,000 units per year during the same period," LaSalvia writes: during that time, vacancy rates pushed up to 14.5% from 10.4%.  And since the asset class has a low barrier of entry for investors, he says, it tends to have higher peaks and lower valleys than other sectors.

"At the end of 2019, the market was in one of these valleys," LaSalvia recently told Scotsman's Guide.  "The COVID-19 crisis turned out to be the shot in the arm needed to jolt the sector out of its malaise. During the early stages of the pandemic, the self-storage market gained stability that it maintained throughout the course of 2020."