The remaining 96 companies on the Top Operator’s list are the larger, regional operators that may own facilities across several states. This segment holds 12.9 percent of the market share. Surprisingly, despite the many sales and acquisitions throughout the year, this segment has not changed from last year’s reported 12.9 percent.

The remaining ownership segment is the small operators, often referred to as the mom-and-pop owners in the industry. Chart 2.1 indicates that this segment of the industry holds a 64.6 percent market share, down 0.7 percent from last year’s reported 65.3 percent.

Industry market share by rentable square footage can be seen in Chart 2.2. Looking at this scenario, as opposed to the number of facilities, we can see that the public companies now hold a 37.6 percent market share, up from the 36.6 percent reported in last year’s Almanac. Accordingly, 40.2 percent of the market share is held by the smaller, mom-and-pop owners in the industry. Looking at it from a different perspective, while the public companies hold 37.6 percent of the market, the remaining non-public top operators in the industry hold a 22.2 percent market share. We are sure to see these numbers change as the public companies continue to expand through future acquisitions.

As seen in Tables 2.2 A and 2.2 B, Extra Space is now the largest operator in the industry with 281,122,977 net rentable square feet in their portfolio. Public Storage trails slightly behind with 249,700,000 million rentable square feet of storage space. As previously mentioned, a few days after becoming the second-largest operator, Public Storage announced its own stellar acquisition: the $2.2 billion purchase of Blackstone Real Estate Income Trust, Inc.’s 127-property Simply Self Storage portfolio. That deal added 9 million NRSF to Public Storage’s portfolio near the end of July. These consolidations, and others within the industry, have shaken up the rankings and enabled some operators to reach new heights. Though CubeSmart and National Storage Associates (NSA) have kept their 2022 positions (third and fifth, respectively), U-Haul has rocketed up two slots, from No. 6 to No. 4, by adding 136 facilities to its portfolio.

Rounding out the top 10 is Storage Asset Management (No. 6), StorageMart (No. 7), Merit Hill Capital (No. 8), and Prime Group Holdings, which was ranked 11th in 2022 but pushed ahead of StorQuest (No. 10) to come in nineth this year. As for the rest of the 2023 list, there are 26 operators in this edition that were not listed in 2022. Some of those operators have been ranked on previous Top Operators lists, including Rosewood Property Company (No. 26) and East Penn Self Storage (No. 78); in 2021 they were ranked 30th and 80th, respectively.

Two high-ranking newcomers on the list are KO Storage (No. 23) and NexPoint Storage Partners (No. 28). There are also a couple new remote management companies this year, such as StoreEase Virtual Management (No. 63) and Remote Management Solutions (No. 67). Copper Storage Management, which has climbed 10 spots, from 42nd to 32nd, offers remote management services as well. Rising payroll costs, unexpected employment issues (truancy, turnover, and hiring difficulties), and the need to provide customers with contactless rentals are a handful of the reasons operators may be seeking alternatives to traditional on-site management. Finally, for the fifth consecutive year, the 2023 list has a total of 101 operators. This is due to a tie between Nova Storage and Polo Properties for 90th place. Both operators reported a total of 900,000 net rentable square feet of storage space.

When looking at the top operators list, there are three different types of ownership entities:

• Operators who own facilities but do not manage any third-party facilities
• Operators who manage facilities but do not own any facilities
• Operators who both own and manage facilities

Table 2.3 and Chart 2.3 on the opposite page list the top 10 operators who own facilities only, ranked by net rentable square footage. Moving up from second position to the No. 1 spot this year is Merit Hill Capital with 22,300,852 rentable square feet of storage space. In second position this year, up from third last year, is Prime Group Holdings with 22,128,062 net rentable square feet of storage space.

Impressively moving up from seventh position last year to third this year is SmartStop Self-Storage REIT with 15,494,000 rentable square feet of storage space. It is important to note that SmartStop is also one of only two operators on this list with facilities located outside of the U.S. Also moving up four spots from ninth to fourth is Morningstar Properties with 10,812,715 net rentable square feet in the marketplace. With 7,725,211 rentable square feet of storage space, Mini Mall Storage ranked fifth on the list of owners who do not have any third-party managed facilities.

Last year, Compass Self Storage ranked 10th on this list. This year they have also impressively moved up four slots to the sixth position with 7,690,617 rentable square feet of storage space. Following right behind them in the seventh position, and new to this list, is KO Storage with 7,076,297 rentable square feet of storage space.

Back on the list this year after not reporting in 2022 is Brookwood Properties with 6,800,000 rentable square feet of storage space. Rounding out the ninth and tenth positions is Rosewood Property Company with 6,300,000 rentable square feet of storage space and NexPoint Storage Partners with 5,537,659 net rentable square feet.

Table 2.4 and Chart 2.4 on page 23 represent the same 10 operators ranked by number of facilities owned. As we can see, the ranking on this list did not change from the list ranked by rentable square footage. The number of facilities owned range from 350 for Merritt Hill Capital to 69 for NexPoint Storage Partners.

Tables 2.5, 2.6 and Charts 2.5, 2.6 look at the top 10 management companies; in other words, the top 10 operators that manage facilities without owning any. When looking at this segment by rentable square footage, Storage Asset Management (SAM) is the largest company with 36,100,802 rentable square feet of storage space in the market. SAM also ranked in the top position last year with approximately 4 million less rentable square feet than reported for this year. Coming in right behind them in second position is Argus Professional Storage Management with 17,987,900 rentable square feet of storage space. This represents approximately 1 million more rentable square feet than reported last year.

Storage Pro Management, Inc., which ranked fourth last year, has gained approximately 1.5 million rentable square feet of storage space over the last year, making it the third largest management company in the industry. Moving up from seventh position last year to fourth position this year is TNT Self Storage Management with a little more than 5.2 million rentable square feet of storage space. And while Self Storage Plus ranked third last year with 7.24 million rentable square feet, this year they dropped to fifth with 5.2 million rentable square feet of storage.

Copper Storage Management dropped from fourth to sixth place in this year’s ranking; the company now operates 5,189,227 rentable square feet of storage space. Dropping only one spot from sixth to seventh is Urban Self Storage with 4,348,725 rentable square feet of storage space. They are followed by Trusted Self Storage Professionals with 3,804,313 rentable square feet of storage space in the market. The eighth largest management company is Right Move Storage with 3,621,326 rentable square feet of storage space, followed by Cox’s Armored Mini Storage Management with just a little over 2.5 million rentable square feet.

It is safe to say that we will continue to see industry consolidation expand over the next few years. Why? Quite simply, operators are bolstering their market presence through acquisitions. Market dominance, however, is only one factor that is contributing to this consolidation. Many operators are looking for portfolio diversification with properties in other municipalities and regions in order to protect themselves against losses in a single market.

Consolidating portfolios also leads to operating efficiencies for operators. As an example, having multiple locations within close proximity to one another can reduce the expense of marketing and operations. It can also lead to enhanced technology integration as larger operators may have the capital to invest in modern technological solutions that smaller operators may not be able to afford on their own. Moreover, when a larger operator takes over a smaller facility, they may have the capability of increasing services such as adding conference centers, workspaces, better security protocols, and things like smart lock technology that may have been cost prohibitive to a smaller operator.

Needless to say, we can expect to see consolidation continue in the near future. That means that now more than ever, developers and operators alike must do their due diligence in order to stay competitive in the
market.