Alternatives to Self-Storage in a Shifting Market
Self-storage has been a hot topic in commercial real estate for years, especially since 2020. The sector’s popularity surged during the pandemic as people relocated, downsized, and needed extra space for remote work. Investors loved the story: low maintenance assets, recession-resistant demand, strong rent growth, and reliable cash flow. Occupancy hit record highs, street rents climbed double digits, and transaction volume soared as institutional capital flooded in.
Fast-forward to 2025, and the market is starting to look a little different. Nationwide, self-storage rents are softening, occupancies have eased from peak levels, and valuations are off their highs. Additionally, construction pipelines are shrinking and deliveries are scheduled for a significant slowdown in 2025 compared to 2024.
These are early signs that the self-storage boom is cooling. For CRE investors, it might be a cue to reassess strategies and consider some alternatives in the industrial real estate space.
Recognize the Warning Signs in Self-Storage
Softening rents and slower pipelines aren’t just blips, they signal structural shifts such as:
- Reduced consumer mobility (fewer relocations)
- Tighter discretionary spending
- Housing development slowdown limiting new demand
- Market saturation (overbuilding) and aging inventory
Now is a good time for investors to audit their existing storage assets for exposure to weaker submarkets, monitor occupancy and churn (especially in the older or non-climate controlled facilities), and perhaps pause on aggressive acquisition plans until fundamentals stabilize.
Industrial Alternatives to Consider
Last-Mile Logistics Warehouses
E-commerce is still growing, and retailers need urban infill space to keep up with delivery expectations. In Colorado’s dense metros, last-mile logistics remains undersupplied.
- Target small-bay warehouses (<50,000 SF) near population centers.
- Prioritize clear heights >20 ft and flexible loading options.
Cold Storage & Temperature-Controlled Facilities
Food, pharma, and grocery distribution depend on cold storage. It’s hard to build, highly specialized, and demand is resilient even in downturns.
- Look near major corridors like I-25 and I-70 or near food hubs.
- Seek out long-term tenants such as grocery or medical distributors.
Flex Industrial
Flex assets have become a hot spot in CRE because they provide exceptional adaptability to accommodate a diverse range of tenants such as light manufacturers, R&D labs, small scale distributors, and a wide range of retail and office users.
- Ensure zoning allows a wide range of light industrial, retail, and office uses.
- Favor properties with highly functional layouts with full HVAC when possible, abundant parking is a huge bonus.
Don’t Overlook Truck Terminals & Industrial Outdoor Storage
Truck yards and IOS support logistics networks and are scarce due to zoning and land constraints. These assets are gaining favor as supply chains tighten.
- For truck terminals: prioritize highway-accessible sites with heavy yard ratios.
- For outdoor storage: target 3–10 acre flat parcels near logistics corridors with secure fencing.
Conclusion
Self-storage has enjoyed its moment in the spotlight and can still be excellent investments if positioned correctly, but early signs of softening are showing up in both national and Colorado markets. Investors would be wise to watch the red flags and shift focus to industrial assets tied to essential goods, logistics, and supply chain resilience. These categories offer stronger fundamentals today and more staying power tomorrow.
Jordan Burgess
Jordan joined NavPoint in early 2021 after spending 7 years in the golf industry working as a professional at some of the top golf clubs in the country, most recently at top 100 facility Castle Pines Golf Club. During his time in the golf business, Jordan built an outstanding network of professionals in the commercial real estate space which encouraged him to get into brokerage.
