uccessful self-storage businesses are lean. They have to control costs in order to keep street rates attractive while maximizing net operating income (NOI), an approach that doesn’t exactly encourage new technology adoption. There’s little appetite and no budget for experimentation; if a technology tool can’t offer concrete, near-term ROI, most operators aren’t interested.

This dynamic has led to an industry with strong uptake for point solutions like surveillance, access control, and tenant management, but deep skepticism about more complex or cutting-edge IoT applications. The self-storage industry now lags far behind other commercial real estate verticals in the adoption of smart space technologies. While integrated building automation systems encompassing HVAC, leak detection, occupancy sensors, access control, security, energy management, and more have become commonplace in office, hospitality, and industrial properties, self-storage operators have preferred to keep their businesses relatively low-tech.

In 2024, the cracks in the traditional approach are starting to show. Shifting market forces are eroding the revenue potential of stripped-down storage sites. To remain relevant, operators are going to have to change their definition of “lean” from “simple and low-tech” to “automated and optimized.”

Let’s be honest: The market has enough simple, low-tech storage sites. Analysis from Yardi finds that the storage project pipeline has expanded 63.2 percent since the pandemic; the glut of inventory is driving street rates down, with no end in sight for some of the most oversaturated regions. Most of these new sites are led by less experienced developers who are perhaps drawn to the market by the very simplicity of traditional site operations. In 2023, over 70 percent of self-storage site loans went to developers who had delivered three or fewer projects since 2017; over half went to first-timers.

In response to this oversupply, more experienced developers have slowed down acquisitions and expansions. Instead, they’re looking inward, seeking opportunities to reduce costs and maximize NOI by implementing new technology solutions, in many cases working toward “touchless,” unmanned sites. If they must compete with a flood of cheap, new sites, they’ll do so by providing a modern experience at the best possible price.

If inventory hadn’t forced the issue, demographics would have. Over half of today’s renters are digital natives, and according to SSA’s 2023 Self Storage Demand Study, they shop around for storage units more than past generations. Tenants are looking for price and convenience, but that’s not all; millennial and Gen-Z renters are willing to pay extra for smart features like in-unit alarms and monitoring, humidity and climate controls, and 24/7 access.

Smart features are the differentiators self-storage operators need to attract tenants in an increasingly competitive market. Smart storage early movers will have a significant advantage over their peers. While other facilities engage in a race to the bottom on street rates, smart facilities will secure the next generation of renters and boost ECRIs with attractive new optional services.

Here’s the dream: IoT technologies will give operators better visibility into portfolio performance, allowing them to identify opportunities to streamline operations. At the same time, they’ll be able to minimize labor costs by managing multiple sites mostly or entirely remotely. Smart sensors will be their eyes and ears at unmanned sites, increasing safety and security. And, perhaps most importantly, they’ll be able to offer highly valued features like after-hours access, unit status alerts, or AC as services with added RMR. They can also reduce operations costs and increase safety and security through smart sensors that give them comprehensive visibility into unmanned sites.

Vantiva’s own market research has found that 40 percent of renters would pay more for instant alerts of hazards like leaks or fire. In-unit monitoring and HVAC also rank highly as features for which renters are willing to pay extra. Rolling out these features site-wide and baking them into the street rate may hamper operators’ ability to compete in a crowded market, however.

A smart space solution allows operators to turn highly valued features on and off for specific tenants/units. To turn on zoned climate control and temperature monitoring or gain access to the site after hours, tenants upgrade to a higher monthly rate. There are no free riders. Instead of, for instance, offering site-wide air conditioning and raising rates incrementally, operators can charge the tenants who actually value climate control what it’s worth. A zoned system is also exponentially more efficient and cost-effective. This approach keeps street rates enticing to new renters while growing revenues over time.

IoT technologies have a lot of benefits to offer the self-storage industry, but they won’t be easy to grasp. Those who have already overcome the industry’s traditionally skeptical attitude towards new technology quickly find themselves faced with the difficult reality of implementing IoT solutions in spaces and businesses that were built without any consideration toward tech infrastructure.

Parks Associates, a market research and consulting company, has found that an estimated 60 percent of the self-storage facilities in the U.S. are over 30 years old. That means they predate the widespread availability of Wi-Fi, and it shows. Aging storage sites are riddled with network blind spots where you can’t receive a call, let alone monitor a camera. Traditional self-storage building materials exacerbate the issue; steel and concrete blocks reflect and absorb Wi-Fi frequencies, making the typical self-storage wireless coverage map look like Swiss cheese. Many sites have strong wireless network access in the front office but nowhere else.

In order to adopt the IoT solutions they need to navigate the current market, self-storage sites need to fortify their wireless infrastructure. They need a reliable blanket of connectivity that works in every corner of their site and accommodates both new and legacy devices.

What many self-storage operators have not yet learned is that Wi-Fi is not the only option. There are mature technological solutions to the connectivity challenges the industry faces. Operators who are serious about developing smarter storage sites should know they need more than internet service and a Wi-Fi router.

To be sure, a lot of consumer IoT devices, like smart speakers and doorbells, just use Wi-Fi. Wi-Fi doesn’t always make sense for connecting devices on a commercial scale, though. In a smart self-storage site, there may be hundreds of sensors, thermostats, and other devices. If all these devices try connecting to Wi-Fi, the channel gets too crowded; important real-time notifications may be delayed or not delivered at all.

Instead, many IoT devices rely on much lower frequency, “sub-Gigahertz” networks designed for large numbers of devices and big coverage areas. These signals are better at passing through materials like concrete and steel, and they take less power to transmit. Using this connectivity technology, devices like sensors or locks can often run on a single coin cell battery for a decade. Sometimes, the wireless devices themselves even act as a network repeater, strengthening your wireless network coverage as you install more devices.

There are several capable and widely adopted connectivity standards out there. It’s not really important to weigh the pros and cons and pick a winner, because each is well-suited to a different application. The only way to truly futureproof a site is to build the capacity to support multiple protocols. Operators should never have to say no to a promising IoT application because of the radio frequencies it uses.

Just like you need a Wi-Fi router to create a Wi-Fi network, you typically need a dedicated hub to establish communications among devices using a sub-Gighertz protocol. Most sites will need a mix of sub-Gigahertz, Wi-Fi, and Bluetooth to monitor and control their IoT subsystems. That means they will also need a multi-protocol network infrastructure—a common practice in other commercial real estate verticals. The technology and network design best practices are mature; operators just need an experienced partner to implement them.

If you’re ready to start modernizing your self-storage operations with IoT technology, the first step is to audit current wireless capabilities. Any site that wasn’t built from the ground up to be a smart storage site likely needs a few upgrades.

By installing a multi-protocol network infrastructure, you can blanket your site in wireless connectivity for all the main IoT protocols. This preparation will allow you to rapidly deploy and scale IoT solutions and services to meet the rising demand from digital native tenants. You won’t just be saving time on future network upgrades either. With sub-Gigahertz networking capability, you’ll be ready to support sensors, cameras, and other IoT devices with no external wiring or power supply. With no additional infrastructure required, the upfront cost of rolling out new IoT point solutions drops dramatically.

Right now, those at the top of the self-storage industry are looking to IoT solutions to differentiate and optimize their businesses for the coming economic squeeze. In order to seize that opportunity, however, operators must first shore up their wireless networks to support these applications. With a site-wide, multi-protocol approach, operators can begin expanding their IoT ecosystems, creating a modern, data-driven enterprise.