Investors Embrace Adaptive Reuse for Urban Self-Storage Projects

Investors in self-storage are increasingly pivoting away from new ground-up developments to adaptive reuse of existing facilities in core urban areas. According to a recent report from StorageCafe, soaring development costs and strict zoning regulations have prompted a surge in repurposing retail and industrial sites for self-storage projects in recent years.

The report found that adaptive reuse accounts for 191 million square feet of self-storage space in the U.S.—approximately 9% of the total inventory—spread across 2,300 facilities. Over half of these conversions have taken place in the past decade, StorageCafe found, which underscores the market’s desire to meet consumer needs in bustling urban locales.

Maria Gatea, the author of the report, said that about 96% of the converted space originated from former retail (16%) and industrial (78%) properties. From 2014 to 2023, the total square footage repurposed for self-storage reached 106 million square feet, surpassing the 85 million square feet converted from 1964 to 2013.

“What’s truly driving this growth in self-storage is a shift in consumer mindset: people now view self-storage as an extension of their homes, which is why we’re seeing a rise in what we call ‘lifestyle storage,’” said Doug Ressler, business intelligence manager at Yardi Matrix. “Former department store sites are poised to become key players in this trend. Their convenience and accessibility are particularly appealing to downsizing baby boomers and remote workers looking to carve out space for home offices.”

StorageCafe found that investors have been particularly active in urban hubs like Chicago, New York, and Philadelphia, transforming old factories and warehouses into modern self-storage facilities to meet evolving consumer demands.

Chicago has the highest amount of converted space, totaling 7.3 million square feet, followed by Brooklyn and Manhattan, with 4.6 million and 4.9 million square feet, respectively. Philadelphia ranks third with 2.8 million square feet of converted facilities and in the Mid-Atlantic region, Baltimore has added 1.5 million square feet. Two markets in the Midwest, St. Louis and Milwaukee, have added over two million and 1.65 million square feet of self-storage, respectively.

In the West, Portland and Seattle have seen 1.5 million and 1.1 million square feet converted, while Houston boasts the highest concentration of adaptive reuse in the South, with 1.7 million square feet repurposed. StorageCafe notes that converted units are generally more affordable than new constructions, averaging $141 per month compared to $144, and often boast more convenient locations. The firm said that adaptive reuse is proving to be a cost-effective solution for addressing demand in a landscape constrained by zoning and a limited supply of land for development.