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Attracting Younger Renters
What Do Millennials Want In A Facility?
By Anne Mari DeCoster

nowing who is renting and what they want is critical to your success as a self-storage operator. Today, millennials rent more self-storage units than any other generation. Born between 1981 and 1996, currently about 28 to 43 years old, millennials comprise 38 percent of renters, according to the SSA’s 2023 Self Storage Demand Study.

A short 10 years ago, self-storage professionals were wondering if millennials would ever rent storage. They seemed to be a generation of vagabonds, who were not getting married or buying homes the way their baby boomer parents did at similar ages.

It seems that millennials are finally becoming their parents. They have steady employment while also starting their own businesses, are making more money, amassing wealth, buying homes, and having babies, like previous generations, even if they took a little longer.

Of course, today’s higher interest rates and sharp appreciation of home prices put a damper on home purchases by millennials and all generations, which is creating pent-up homebuying demand. When interest rates ease, home purchases are likely to rebound, especially among first-time homebuyers in the millennial generation.

Jeff Adler, vice president at Yardi Matrix, started pointing out over five years ago that millennials are a “positive force” for self-storage demand.

What Data Tells Us
Millennials are a diverse group, and their preferences can’t be generalized as easily as older generations. On one hand, their No. 1 concern when renting space is price (as it is for all generations). On the other, millennials are willing to spend more for the convenience of state-of-the-art technology and goods and services they believe are more sustainable. But they don’t want to drive far to a storage unit. This combination makes millennial buying habits a bit confusing: They want the cheapest space, very close by, and they up-sell themselves on tech and green features.

Confusing or not, it does chart a course for your response. First and foremost, focus on that age-old adage: location, location, location! Buy or build facilities where the demographics are favorable. Offer the features today’s young consumers want: convenience, technology, and value. If your local market has a significant segment of millennials, be sure to lead with technology and sustainability in your marketing.

Using Self-Storage
Younger renters, like millennials and Gen Z (born 1997 to 2004 and currently 20 to 27 years old), tend to use self-storage as an extension of their homes, as opposed to older renters who tend to store memories. According to the SSA’s 2023 Self Storage Demand Study and StorageCafé’s 2023 Annual Report (https://www.storagecafe.com/blog/self-storage-demand-and-trends/), several factors fuel this trend:

  • Millennials are more likely to live in apartments than older generations.
  • They are more likely to live in urban areas.
  • Apartments are getting smaller, especially in urban areas.
  • Self-storage costs up to 30 percent less than apartments by square feet.

Millennials store their kayaks and snowboarding equipment, which they use often. This means they go to their units more often than baby boomers, who don’t tend to visit their stored memories.

Using storage units more like an extra closet, millennials visit more frequently to swap out clothing, furniture, holiday decorations, and other “season of life” items, such as baby furniture, car seats, and toys. All of this generates more traffic at self-storage facilities from millennials than older generations.

Generational Differences
Generally speaking, millennial self-storage renters are more likely to be female, and they are more ethnically and racially diverse than older renters.

Younger renters tend to rent less costly, smaller units (10-by-10 or smaller), and they expect to be there for shorter periods of time. While these tendencies may generate less rental revenue for the facility, younger renters generate more ancillary revenue through purchases of items they need for storage, like boxes, tape, and packing supplies. They are also more likely to rent trucks than older renters.

They also want more flexibility in contract terms, pricing, and means of payment, including a wide variety of payment options, from autopay via debit or credit card, to Apple Pay and Google Pay. They want to be able to get in and out of contracts easily, and they want to be able to lock in pricing.

Millennials also place greater value on temperature and humidity control, as well as in-unit fire sprinklers and security features.

Finally, especially in dense urban areas, younger renters are more likely to walk, bike, or take public transit to their storage units. Not many boomers do that!

Finding A Facility
You already know that younger renters spend more time on their phones. That’s where they do research and make their decisions, based on online reviews.

They want to be able to do every step of the rental process from their beds, on their phones, at any time. That means comparing facilities, reading reviews, selecting a facility, selecting their space, signing the lease, obtaining access to their space, buying merchandise, and renting a truck.

Even if they don’t do all those steps every time, they want to be able to do it all 24/7. Excellent digital presence and functionality, including online rentals, are critical for younger renters.

Where Younger Renters Move
Millennials and Gen Zers are on the move, as are many Americans. According to This Old House (https://www.thisoldhouse.com/studies/moving-by-generation), reporting on the U.S. Census Bureau’s 2022 American Community Survey 1-Year Estimates, about 8.2 million people moved to a different state in 2022, up 4 percent from 2021. This continues a decade-long trend of increasing state-to-state migration. While California experienced the biggest population decrease in 2022, the following sunny states grew in population: Florida, Texas, North Carolina, Arizona, and Georgia.

In terms of cities, regardless of generation, the biggest winners were Seattle, Wash.; Nashville, Tenn.; and San Antonio, Texas. Generally, the biggest losers were New York, N.Y.; Los Angeles, Calif.; and Portland, Ore. Of all U.S. cities, more people moved out of New York City than any other.

According to the data, cities people are moving to and from vary greatly by generation. For instance, Seattle returned to the top spot in 2022 for millennials, after falling to No. 115 in 2021, but not for Gen Z. Seattle wasn’t even in their top 10 cities.

Gen Z is the only generation that seems to be flocking to more well-known big cities, especially Washington, D.C. This leaves people wondering if DC is the new NYC for Gen Z. Also in Gen Z’s top 10: Chicago, Ill.; Boston, Mass.; New York, N.Y.; Philadelphia, Pa.; Los Angeles, Calif.; Tucson, Ariz.; Eugene, Ore.; and Columbia, S.C.

Tracking with older generations, millennials left major cities such as New York, Los Angeles, Philadelphia, and Las Vegas. In fact, while New York was the top spot for millennials to move to in 2012, it was the top spot for millennials to move out of a mere 10 years later in 2022, for the second year in a row.

Overall, in 2022 millennials tended to move to tech-hub cities with thriving arts communities. Seattle in the top spot, followed by Austin, Texas; Nashville, Tenn.; Charlotte, N.C.; and Denver, Colo.

Summarizing migration data, younger renters are moving into Seattle, Austin, Nashville, Charlotte, and Denver (millennials), as well as D.C., Chicago, Boston, New York, Philadelphia, Los Angeles, Tucson, Eugene, and Columbia (Gen Z). That covers a lot of territory!

Facilities in these locations will find it especially important to remember that younger renters are more likely to be:

  • Female
  • Racially diverse, particularly Hispanic
  • Living in rental properties
  • Living in urban areas

These younger renters tend to:

  • Use self-storage as an extension of their homes
  • Rent smaller units that cost less
  • Buy more merchandise and rent trucks more frequently
  • Pay a premium for tech and sustainability
  • Visit their units more frequently

Both millennials and Gen Z expect convenience, including short driving distances. They are willing to pay for technology and sustainability, and they are more demanding about the features and amenities they want.

In general, everything they want is likely to be in greater demand in the future, so making your facility attractive to younger renters positions you well for generations of the future. This way you can meet the market where it is going, as future renters will all increasingly rely on high-tech solutions for every aspect of daily life.

Anne Mari DeCoster is a self-storage professional with over two decades experience in all aspects of development and operations, from concept to exit. She excels in strategic planning and specializes in the design, development, and delivery of new products, services, programs, and companies.