Why Self-Storage Funds Are Becoming a Staple for Family Offices

Authors: Matt Blackwell & Michael Rieger, CFA | Reliant Real Estate Management

As wealth managers and institutional allocators reevaluate portfolio resilience in a post-REIT, post-60/40 world, one asset class has quietly surged to the top of strategic allocation models: self-storage funds. Long overlooked as a niche play, self-storage is now a core holding among family offices, drawn by its ability to deliver predictable cash flow, low correlation, and operational scalability—even during economic headwinds. 

For sophisticated investors with a mandate for capital preservation, tax efficiency, and risk-adjusted growth, self-storage has shifted from “interesting idea” to “strategic necessity.” Here’s why. 

The self-storage sector has undergone a quiet transformation—from a fragmented, mom-and-pop dominated niche into one of the most actively pursued categories in private real estate investment. As alternative assets move from “nice-to-have” to “need-to-own” in family office portfolios, self-storage is becoming an allocation staple—not because of narrative hype, but because of data-backed performance. 

In its early decades, the self-storage industry was characterized by local operators managing one or two facilities, often with limited technological sophistication or institutional capital. Today, that landscape is changing rapidly. Firms like Reliant Real Estate Management, now ranked as the 17th largest self-storage operator in the U.S., represent the new face of the industry: vertically integrated, data-centric, and designed for institutional-grade performance. 

Through a combination of proprietary deal sourcing, revenue management systems, and value-add repositioning strategies, firms like Reliant are driving net operating income (NOI) growth far beyond legacy operators—unlocking durable returns for passive investors. 

Self-storage demand is driven less by economic cycles and more by life transitions—divorce, death, downsizing, relocation, business inventory needs, and regional migration. These triggers remain consistent regardless of market volatility, making self-storage one of the most counter-cyclical forms of real estate. 

During the 2008 financial crisis and the COVID-19 pandemic, self-storage occupancy and revenue held steady—or even improved—as Americans sought flexibility and temporary solutions amid uncertainty. It’s one of the few real estate sectors that benefits from chaos. 

Unlike multi-family or commercial leases locked in for 12–36 months, self-storage contracts are typically month-to-month, allowing operators to: 

• React immediately to market shifts 

• Implement yield management pricing (à la airline or hotel models) 

• Capture seasonal and local demand fluctuations 

This agility creates pricing power during high demand periods while protecting downside during economic slowdowns—translating into more predictable cash flow for investors. 

Self-storage facilities are low-touch assets by design: 

• No plumbing or HVAC inside storage units 

• No tenant turnover costs or long vacancy periods 

• Centralized management and automation through virtual manager platforms 

This creates high operating margins—often exceeding 70%—with far fewer surprises than traditional residential or office assets. Capital expenditure requirements are minimal, meaning more revenue flows directly to the bottom line and investor distributions. 

The fundamentals aren’t just strong—they’re accelerating. 

According to data from Extra Space Storage, the percentage of U.S. households utilizing self-storage has more than quadrupled, growing from 2.7% in 1987 to over 11% in 2023. This growth has been fueled by: 

• Urbanization and downsizing: Smaller living spaces mean more need for off-site storage. 

• E-commerce expansion: Small businesses increasingly store inventory offsite in self-storage facilities. 

• Consumer habits: Americans simply own more “stuff” than prior generations. 

And yet, over 64% of facilities remain in the hands of non-institutional operators, creating a ripe landscape for roll-up strategies by seasoned sponsors. 

This confluence of macro demand, operational leverage, and acquisition runway is why self-storage has evolved into an institutional darling—and why family offices are no longer asking if they should allocate to the asset class, but how much. 

When evaluating private real estate investment opportunities, most accredited investors default to what they know—multi-family. But in today’s yield-starved, cap rate-compressed environment, self-storage is outpacing apartments on nearly every operational and return-driven metric. The comparison isn’t close—especially when viewed through the lens of scalability, predictability, and net operating income (NOI) efficiency. 

While multi-family assets face rising repair costs, regulation-heavy environments, and longer vacancy turnover cycles, self-storage offers something far more elegant: operational simplicity with economic durability. 

• No tenants, no toilets, no midnight calls: Self-storage eliminates the most time-consuming parts of property management. 

• Flexible lease structures: With month-to-month agreements, operators can respond to market conditions and adjust rates frequently—unlike 12-month locked leases in apartments. 

• Less regulatory drag: Self-storage is rarely subject to rent control or eviction moratoriums, reducing legal exposure and friction costs. 

• Scalable operations: Modern platforms utilize virtual managers, automated kiosks, and centralized leasing—driving down labor costs and increasing margin per asset. 

Self-storage facilities run lean, meaning more revenue flows directly to NOI—and ultimately, investor distributions. With a typical margin advantage of 15–20% over multi-family, self-storage isn’t just more efficient—it’s more predictable. And in a climate of interest rate uncertainty and market dislocation, predictability is the new premium. 

Family offices and institutional investors are increasingly shifting allocations not because self-storage is trendy—but because it delivers better risk-adjusted returns, with less operational friction and higher margin reliability than traditional housing plays. 

Unlike multi family, self-storage avoids high-turnover costs, maintenance headaches, and regulatory burdens. The lean operations create consistent margins and allow operators to scale without dilution of returns. 

Data centers have gained traction with investors seeking to ride the wave of digitization, cloud computing, and AI infrastructure. As enterprise workloads move online and the demand for hyperscale computing grows, these assets offer clear upside potential. But for family offices, the comparison often comes down to a single question: predictable yield or speculative growth? 

While the growth story of data centers is compelling, the investment profile is far from straightforward. Consider the operational complexity: 

• High CapEx: Data centers require massive upfront investment in land, fiber connectivity, redundancy systems, and security infrastructure. Initial capital outlays can exceed $1,000 per square foot. 

• Specialized Maintenance: Maintaining uptime (often 99.999%) requires constant oversight of power supply, cooling systems, and backup generators. Failure is not an option—literally. 

• Technology Obsolescence Risk: Hardware, networking protocols, and software environments evolve rapidly. What’s “state-of-the-art” today can be functionally outdated in five years. 

• Operator Concentration: In many markets, hyperscalers like Amazon, Microsoft, and Google dominate tenancy and pricing power—leaving landlords little leverage.

Self-storage is, in many ways, the antithesis of data centers. Its very strength lies in its simplicity and timeless utility. People will always need a place to store physical belongings—regardless of technological trends. And that demand is growing steadily, not cyclically. 

• Low CapEx: Steel, concrete, and a gate—self-storage facilities are among the most capital-efficient commercial real estate assets to build and maintain. 

• No Obsolescence Curve: Unlike tech-driven infrastructure, a well-located storage facility remains relevant for decades with minimal updates. 

• Low Friction Operations: No high-skill technicians, no server maintenance, no uptime SLAs—just clean, accessible units and responsive management. 

• Mass Market Demand: Driven by transitions like downsizing, relocation, or small business needs, self-storage serves broad, resilient use cases. 

For family offices prioritizing capital preservation, operational transparency, and durable cash flow, self-storage offers what data centers can’t: 

• Fewer moving parts 

• Lower downside risk 

• More consistent distributions 

Where data centers require active oversight and carry a higher technology beta, self-storage represents a pure real asset play—with 70–80% NOI margins and month-to-month leasing optionality. In a world increasingly obsessed with digital infrastructure, sometimes the most analog investments are the ones that hold up best. 

Historically fragmented, the self-storage market is now rapidly consolidating. Institutional capital now accounts for over 35% of rentable square footage, according to the 2023 Top Operators Survey. 

Reliant Real Estate Management, now the 17th largest U.S. operator, is among the few vertically integrated firms scaling in secondary and tertiary markets with surgical underwriting and operational edge. 

This asset class is evolving—and family offices are taking notice. 

Family offices, by nature, are built for long-term capital stewardship. Their mandate blends preservation of principal, multi-generational wealth planning, and opportunistic growth—all within a framework of disciplined risk management. In the current macro environment of inflation volatility, public market correlation, and rising interest rate sensitivity, family offices are increasingly turning to self-storage funds as a stable, tax-efficient, and operationally scaled allocation. 

Below are the five core reasons behind this capital reallocation trend: 

For family offices, predictable income isn’t just a preference—it’s often a requirement. Self-storage delivers on this need through monthly or quarterly distributions driven by consistently high net operating income (NOI) margins. 

Reliant’s past funds have not only met their conservative pro forma expectations—they’ve exceeded them: 

• 31.3% average project IRR (levered) 

• 2.73x average equity multiple across full-cycle assets 

• $0 in investor principle lost 

This is not speculative growth—it’s institutional-grade, operations-driven performance. And with many properties stabilized or operating under value-add execution plans, cash flow begins upon stabilization of the portfolio. 

For family offices managing cash flow demands for foundations, philanthropic arms, or intergenerational trusts, this level of reliability is critical. 

Self-storage is largely non-correlated to traditional asset classes. Unlike equities, bonds, or even core multi-family, self-storage usage is fueled not by economic growth—but by life events: 

• Relocation 

• Divorce 

• Death 

• Downsizing 

• Business transitions 

• E-commerce inventory needs 

These drivers persist through recessions, interest rate shifts, and global volatility. In fact, self-storage has historically performed well during downturns as consumers and small businesses seek temporary, flexible space solutions. 

For family offices seeking downside protection in their alternative investment allocations, self-storage serves as a powerful hedge against systemic volatility—particularly when public markets underperform or correlation spikes across other real estate holdings. 

Self-storage doesn’t just deliver on cash—it excels in after-tax return optimization, especially for high-net-worth structures like family offices. 

K-1s will contain in-depth information highlighting the results of our work regarding cost segregation strategies, with details on accelerated depreciation and associated pass-through elements. 

This creates the rare—and highly prized—“unicorn pairing”: real cash in, no tax out. For many accredited investors, this structure offsets other passive income or capital gains, enhancing portfolio-level tax efficiency in a way that REITs or public alternatives can’t match. 

CPA firms regularly cite private self-storage funds as one of the most tax-efficient real estate investment vehicles for long-term LPs. 

Despite institutional growth, 64.6% of self-storage facilities remain non-institutionally owned, leaving substantial room for roll-up strategies. 

Firms like Reliant leverage technology, vertical integration, and value-add execution to drive NOI and unlock equity growth. Whether it’s dynamic pricing algorithms or value-accretive expansions, this is not your 1990s storage lot—it’s institutional infrastructure. 

As traditional LPs move away from retail REITs, private real estate sponsors offering fund-level access to value-add strategies are drawing capital. 

Self-storage offers: 

• Smaller check sizes with direct access 

• Transparent operator LP communications 

• Institutional underwriting discipline without the fee drag of mega-funds 

Reliant’s Self-Storage Fund V, for instance, offers three investor classes starting at $100k, with 13–16% target IRRs, 1.8–2.0x equity multiples, and quarterly distributions. 

For family offices, alternative investments are no longer about alpha-chasing—they’re about balance, protection, and control. 

Self-storage, with its lean operations, fragmented acquisition targets, and rising institutional demand, checks the boxes for: 

• Diversification away from public markets 

• Consistent income with downside protection 

• Real asset ownership without operational burden 

As public market correlations increase and multi family cap rates compress, self-storage offers rare white space in an increasingly crowded alt landscape. 

According to Reliant, we’re at a critical “Early Adopter” inflection point in the Rogers Adoption Curve. Investing today allows LPs to capture alpha before broader capital inflows compress yields. 

Waiting until self-storage becomes mainstream means: 

• Higher competition 

• Tighter cap rates 

• Diminished risk-adjusted returns 

In a landscape where real estate fundamentals are being tested by rising rates, market volatility, and shifting tenant behavior, institutional allocators are reassessing which asset classes best balance income, scalability, and downside protection. While multi-family and office have long dominated traditional portfolios, their performance is increasingly being challenged by alternative real estate segments like self-storage and data centers. For family offices, the decision comes down to comparative efficiency: Where does capital produce the most predictable, tax-efficient yield with the least operational drag? The chart below offers a high-level comparison—and the results are telling. 

• Multi Family offers consistent yield in the 3–5% range, but rent control, rising costs, and longer lease cycles can soften income stability. 

• Office is tenant-driven and unpredictable, with 2–4% yields that fluctuate based on leasing velocity and macro cycles. 

• Data Centers can produce 6–8% yields, but are often structured through long-term contracts that limit near-term flexibility. 

• Self Storage delivers very strong cash flow—typically 5–7%—due to lean operating costs, month-to-month leases, and high NOI margins. It’s one of the most income-efficient asset classes in the market today. 

• Multi Family requires ongoing CapEx for unit turns, HVAC, plumbing, and deferred maintenance—often consuming 10–15% of NOI. 

• Office is even more CapEx-heavy, with frequent tenant improvements (TIs) and leasing commissions (LCs) cutting deep into returns—up to 20% of NOI. 

• Data Centers carry extreme CapEx needs due to constant technology upgrades and power/cooling infrastructure. 

• Self Storage is capital-light, averaging just 5–7% of NOI in CapEx. With no kitchens, plumbing, or HVAC inside units, maintenance is minimal, and revenue is more insulated.

• Multi Family is moderately volatile—generally recession-resilient, but exposed to supply spikes and interest rate sensitivity. 

• Office is highly volatile, tied closely to employment cycles and urban migration trends. It has yet to fully recover from pandemic-era vacancies. 

• Data Centers exhibit low volatility due to consistent digital demand—but rely heavily on a small set of hyperscale tenants. 

• Self Storage is among the most recession-resistant asset classes. Demand is driven by life events (divorce, downsizing, business moves) that persist in all market cycles. 

• Multi Family provides good tax benefits through depreciation and mortgage interest deductions. 

• Office offers fewer tax advantages, with less room for accelerated depreciation. 

• Data Centers are highly specialized assets and often come with limited, complex depreciation schedules. 

• Self Storage excels in tax efficiency, offering significant bonus depreciation through cost segregation. Many investors receive strong cash distributions while reporting negative taxable income—an ideal scenario for high-net-worth individuals and family offices. 

• Multi Family scales through portfolio aggregation, but often hits geographic and regulatory limits. 

• Office is difficult to scale predictably due to market specificity and slow leasing cycles. 

• Data Centers scale modularly but require massive upfront investment and technical expertise. 

• Self Storage is highly scalable, particularly due to the fragmented ownership structure—with over 60% of U.S. facilities still held by non-institutional owners. This creates a deep acquisition pipeline and opportunities for value-add consolidation. 

This comparative framework highlights what many family offices are already realizing: self-storage doesn’t just perform well—it outperforms on multiple strategic dimensions. It’s lean, resilient, tax-advantaged, and scalable in ways that few other asset classes can match. 

With a $1.6B+ portfolio, zero principal lost, and realized IRRs north of 30% on full-cycle deals, Reliant is not just riding the self-storage trend—it’s shaping it. 

Highlights: 

• 66,000+ units across 100+ properties 

• Institutional underwriting and operator-led management 

• Value-add and ground-up development in underserved markets 

• Full-cycle proven returns, including a 2.73x average equity multiple across 67 assets 

The Fund V opportunity is positioned for: 

• Strategic acquisition in secondary and tertiary markets 

• Technology-enhanced leasing and revenue management 

• Expansion and lease-up strategies with proven upside 

For Achiever-type investors, making the right call before the crowd matters. Self-storage is no longer the quiet contrarian play—it’s the cornerstone of modern real estate diversification. 

Family offices aren’t just testing the waters—they’re reallocating. The performance, tax profile, and risk-adjusted resilience of self-storage make it one of the few real estate strategies that truly belongs in the strategic allocation tier. 

Discover why accredited investors, family offices, and institutional allocators are increasingly turning to Reliant’s Self Storage Fund V. With predictable distributions, CPA-approved tax benefits, and a track record that outperforms, this may be the most strategic capital you deploy in 2025. 

Disclosures: 

The content published on the 1776ing Blog is for informational and educational purposes only and should not be considered financial, legal, tax, or investment advice. The insights shared are intended to promote discussions within the alternative investment community and do not constitute an offer, solicitation, or recommendation to buy or sell any securities or investment products.