Every real estate niche has a simple truth that separates modest outcomes from exceptional ones. In self-storage, that truth has not changed over time: meaningful growth usually requires stepping into bigger environments, even when they feel less comfortable at first.
Conrad Hilton learned this early in his career. His first hotel was a small operation in Cisco, Texas. It kept him busy, but it also kept him constrained. His mother’s advice was straightforward: “if you want to build large ships, you need deep water”. That idea still applies directly to self-storage investing today.
Big Markets Still Matter
Self-storage demand is driven by population density, mobility, and economic activity. Larger markets consistently deliver all three.
In major metros, population turnover is higher, household sizes fluctuate more often, and business activity creates steady need for storage space. These forces support stronger occupancy and allow rent growth over time. Smaller towns can work, but they leave little margin for error. One new competitor or one local employer leaving town can materially change demand.
Larger markets are also where buyer interest concentrates. Institutional capital, regional operators, and private equity groups all focus on markets with depth. That liquidity matters when it comes time to refinance or sell.
The trade-off is obvious: pricing is higher and competition is stronger. But higher barriers often exist precisely because the long-term fundamentals are better.
Bigger Facilities Multiply Time Value
A small facility can consume just as much owner attention as a large one. Leasing, maintenance, marketing, and management do not scale down cleanly with size.
Hilton spent nearly all his time operating a tiny hotel. The effort was real, but the payoff was capped. The same hours invested into a much larger operation would have produced a very different outcome.
In self-storage, scale improves economics in several ways:
- Operating costs per unit decline as unit counts rise
- On-site staffing and management systems become more efficient
- Marketing spend reaches more rentable square footage
- Exit options expand as buyer pools widen
This is not about chasing size for its own sake. It is about recognizing that time is a fixed resource. Larger facilities simply reward it better.
Growth Requires Leaving Familiar Ground
The deeper message behind Hilton’s mother’s advice is not about buildings or cities. It is about willingness to move beyond what feels safe.
Many investors remain stuck at a level they understand well but no longer benefits them. They know how to operate smaller deals, so they keep repeating them. Progress often requires stepping into complexity that initially feels uncomfortable.
History offers plenty of parallels. Sam Walton began with a small local store, but his success came from expanding into larger markets and building systems that worked at scale. The pattern is consistent across industries.
Closing Thought
Self-storage fundamentals remain challenged heading in 2026. Property and market selection is key, as it being a strong negotiator who demands a lower price.
The question for investors is simple: are you operating where growth is possible, or where it merely feels familiar?
Deep water is rarely calm, but it is where the largest ships are built.