Should I open or buy a Simply Self Storage franchise in 2027?

What it is and why it matters

Simply Self Storage is a major player in the self-storage industry, but it is not a franchise. The company was founded in 2004 and grew to operate more than 500 locations across roughly 30 states before being acquired by Extra Space Storage in 2023 for approximately $2.2 billion. That acquisition means the Simply brand is now part of the Extra Space Storage family, which operates over 3,500 facilities nationwide. The brand has never offered franchise opportunities to individual investors; all locations were company-owned and managed directly by corporate teams.

This distinction matters enormously for anyone asking whether to open or buy a Simply Self Storage franchise in 2027. A franchise model requires a franchisor to license its brand, operating systems, and support infrastructure to independent owners who pay royalties and follow strict guidelines. Simply Self Storage never built that infrastructure, and the post-acquisition integration into Extra Space Storage makes it even less likely that a franchise program will emerge. Extra Space Storage itself has not historically franchised its brand either, preferring to own and manage its properties directly.

If you are asking this question because you want to enter the self-storage business with the backing of a recognized brand, you have several alternatives that are actual franchises. Storage Rentals of America, for example, offers a franchise model with an initial investment range of roughly $2.5 million to $8 million depending on whether you build new or acquire existing facilities. U-Haul also offers dealership and franchise opportunities, though these are more limited in scope and often tied to moving equipment rental rather than full-scale storage operations. Another option is the CubeSmart franchise program, which has expanded in recent years and offers a more structured entry path.

The self-storage industry overall remains attractive for investors. Average occupancy rates in the United States hover around 90 to 93 percent, and the industry generates approximately $40 billion in annual revenue. The barriers to entry are relatively low compared to other commercial real estate sectors, and the operational model is straightforward: rent units, collect monthly payments, manage maintenance, and keep the property secure. However, the capital requirements are significant, and the market has become more competitive as institutional investors have poured money into the sector.

For 2027 specifically, several trends will shape the market. Interest rates are expected to stabilize but remain higher than the historically low levels seen between 2010 and 2021, which affects the cost of financing both acquisitions and new construction. Supply has been increasing, with roughly 3,000 new self-storage facilities opening annually in recent years. In some markets, particularly in the Sun Belt, new supply has outpaced demand growth, leading to lower occupancy and pressure on rental rates. Yet in other regions, especially densely populated urban areas with high land costs, supply remains constrained and demand continues to exceed availability.

The key takeaway is that the question of opening or buying a Simply Self Storage franchise in 2027 has a simple answer: it is not possible. But the underlying desire to enter self-storage is legitimate, and there are multiple pathways to achieve that goal without the Simply brand. Understanding the difference between a corporate chain and a franchise, and knowing which alternatives exist, is the first step in making an informed decision.

The step-by-step process

If you are determined to enter the self-storage business in 2027, the process involves several distinct phases, each with its own requirements and challenges. The following diagram outlines the high-level decision path you should follow, from initial research through acquisition or construction and into operations.

The first step is a realistic assessment of your capital position. Buying an existing self-storage facility typically requires a down payment of 25 to 35 percent of the purchase price, which for a 50,000-square-foot facility in a mid-sized market could mean $1.5 million to $3 million in cash. New construction is even more capital-intensive, with land acquisition, permitting, and building costs often exceeding $10 million for a ground-up project. If you are considering a franchise like Storage Rentals of America, the initial investment ranges from $2.5 million to $8 million, and you must have liquid assets of at least $1 million to qualify.

The second step is market research. You need to identify a geographic area with favorable demographics: population growth, household formation, and limited existing storage supply. Industry benchmarks suggest that a market needs roughly 5 to 7 square feet of self-storage per person to be adequately served. If the market you are targeting has less than that, there may be room for additional supply. Conversely, if the market already exceeds 8 square feet per person, you are likely entering an oversupplied environment where achieving high occupancy will be difficult.

The third step is choosing your entry mode. Buying an existing facility is generally less risky because you acquire a proven asset with existing tenants and cash flow. The downside is that you pay a premium, often 5 to 10 times the facility's net operating income, and you may inherit deferred maintenance or management problems. Building new construction gives you a modern, efficient facility but exposes you to construction delays, cost overruns, and the risk that the market changes while you are building. Joining a franchise provides brand recognition and operational support but adds ongoing royalty fees, typically 5 to 8 percent of gross revenue, and restricts your flexibility in pricing and marketing.

The fourth step is due diligence. For an existing facility, this means reviewing financial statements, tax records, tenant leases, and occupancy trends. You should also commission a physical inspection to identify structural issues, roof condition, and the state of the security systems. For new construction, due diligence focuses on zoning approvals, environmental assessments, and construction contracts. For a franchise, you must review the Franchise Disclosure Document carefully, including the audited financial statements and the litigation history of the franchisor.

The fifth step is financing. Traditional banks are often hesitant to lend on self-storage because it is a specialized asset class, but Small Business Administration 504 loans are a common option for owner-operators. These loans require only 10 percent down payment, with the SBA providing 40 percent of the financing and a bank providing 50 percent. The maximum loan amount is $5 million, which may not be sufficient for larger projects. Private lenders and commercial mortgage-backed securities are alternatives for larger deals, but they come with higher interest rates and stricter underwriting requirements.

The sixth step is closing and transition. For an acquisition, this involves transferring the title, updating the insurance, and notifying tenants. For new construction, this is the point where you take occupancy and begin leasing. For a franchise, this is when you sign the franchise agreement and pay the initial franchise fee, which for Storage Rentals of America is $40,000. The final step is stabilization, which typically takes 18 to 36 months. During this period, you will need to ramp up marketing, establish a management team, and achieve the occupancy level that makes your investment profitable.

Costs, timelines, and typical ranges

The costs associated with entering the self-storage business in 2027 vary dramatically based on the path you choose. Buying an existing facility is the most common entry point for individual investors. The average price per square foot for an existing self-storage facility in the United States is approximately $100 to $150, which means a 50,000-square-foot facility will cost between $5 million and $7.5 million. The price is typically expressed as a multiple of net operating income, with average multiples ranging from 8 to 12 times NOI. In high-growth markets like Texas or Florida, multiples can exceed 15 times NOI, while in slower markets in the Midwest or Northeast, multiples may be as low as 6 times NOI.

The timeline for acquiring an existing facility is typically 3 to 6 months from initial search to closing. This includes time for identifying properties, conducting due diligence, securing financing, and negotiating the purchase agreement. If you are using an SBA loan, expect the process to take longer, often 6 to 9 months, because the SBA approval process adds time. You should also budget for closing costs, which typically run 2 to 5 percent of the purchase price, and for post-closing capital improvements, which can add another $100,000 to $500,000 depending on the condition of the property.

New construction costs are significantly higher. The cost to build a self-storage facility from the ground up ranges from $80 to $120 per square foot for a single-story building, and $120 to $180 per square foot for a multi-story climate-controlled facility. A typical 60,000-square-foot multi-story facility will cost between $7 million and $11 million to build. Land costs add another $1 million to $3 million depending on the market. The timeline for new construction is 18 to 30 months, including land acquisition, permitting, and construction. You will also need to carry development costs during this period, including interest on construction loans and property taxes, which can add 10 to 15 percent to your total project cost.

Franchise costs are a third option, though as noted, Simply Self Storage does not offer one. For franchises that do exist, the initial franchise fee ranges from $30,000 to $50,000. The total initial investment for a newly constructed franchise facility typically ranges from $3 million to $8 million. You will also pay an ongoing royalty of 5 to 8 percent of gross revenue and contribute 1 to 2 percent of gross revenue to the national advertising fund. Franchise agreements typically run for 10 to 20 years, with renewal options, and you must meet minimum performance standards to retain the franchise.

Operating costs for any self-storage facility include property taxes, insurance, utilities, maintenance, security, and payroll. Property taxes typically run 1 to 2 percent of the property value annually. Insurance costs have risen significantly in recent years, especially in states prone to natural disasters like Florida and Texas, and can range from $20,000 to $60,000 per year for a mid-sized facility. Utilities for a climate-controlled facility can be substantial, especially in hot climates, and can run $30,000 to $80,000 per year. Payroll for a single-site operation with a part-time manager is typically $40,000 to $80,000 per year.

Revenue expectations depend on occupancy and rental rates. The average rental rate for a 10x10 unit in the United States is approximately $120 to $150 per month, with climate-controlled units commanding a 20 to 30 percent premium. At 90 percent occupancy, a 50,000-square-foot facility with an average rate of $1.20 per square foot per month will generate approximately $54,000 per month in revenue, or $648,000 per year. The net operating income, after operating expenses of roughly 40 percent of revenue, would be approximately $389,000 per year. At a 10 times NOI multiple, that facility would be worth approximately $3.9 million.

The return on investment for self-storage is attractive but not spectacular. Internal rates of return for stabilized facilities typically range from 8 to 12 percent. For value-add acquisitions where you can improve occupancy and raise rents, returns can reach 15 to 20 percent. New construction projects, if successful, can generate returns of 12 to 18 percent, but the risk of cost overruns and lease-up delays is significant. You should also factor in the illiquidity of the investment; selling a self-storage facility takes 6 to 12 months, and you may be forced to accept a lower price if you need to sell quickly.

Where teams get it wrong

One of the most common mistakes investors make when considering self-storage is confusing a corporate chain with a franchise. Simply Self Storage is not and never has been a franchise, and the acquisition by Extra Space Storage in 2023 makes it even more certain that no franchise program will emerge. Investors who waste time pursuing a Simply Self Storage franchise are delaying their entry into the market and may miss favorable acquisition opportunities. The correct approach is to identify which brands actually offer franchises and evaluate those against the alternative of buying an independent facility.

Another frequent error is underestimating the capital requirements. Many first-time investors assume they can enter self-storage with $500,000 or less, only to discover that even a small 20,000-square-foot facility in a secondary market will cost $2 million or more. The down payment alone, at 25 to 35 percent, will be $500,000 to $700,000, and that does not include working capital for the first year of operations. Investors who are undercapitalized are forced to take on expensive mezzanine financing or bring in partners, which dilutes their returns and increases their risk.

A third mistake is failing to conduct proper market research. Self-storage is a local business, and the performance of a facility depends almost entirely on the immediate trade area. A facility in a growing suburb with limited competition can achieve 95 percent occupancy within 12 months, while a facility in an oversupplied market may struggle to reach 70 percent occupancy even after three years. Investors who rely on national averages rather than local market data are making decisions in the dark. You should analyze the population within a 3-mile radius, the number of competing facilities, the average household income, and the rate of new household formation.

A fourth error is ignoring the impact of interest rates on the deal economics. In 2027, if interest rates remain elevated at 6 to 7 percent for commercial real estate loans, the cost of debt will consume a larger share of the net operating income, reducing cash flow and lowering the effective return on equity. Investors who lock in variable-rate loans without considering the potential for further rate increases are exposing themselves to significant risk. You should stress-test your pro forma under multiple interest rate scenarios and ensure that you can still service the debt even if rates rise by 200 basis points.

A fifth mistake is underestimating the operational complexity of self-storage. While the business model is simple, the day-to-day operations require attention to detail. Collections, evictions, lien sales, maintenance, pest control, security, and customer service all demand consistent effort. Many investors assume they can hire a part-time manager and walk away, only to find that occupancy declines, expenses creep up, and the property deteriorates. You should either plan to be actively involved in operations or budget for a professional management company, which typically charges 5 to 8 percent of gross revenue.

A sixth error is failing to account for the tax implications of the investment. Self-storage facilities are depreciable assets, and the depreciation deduction can offset a significant portion of the income. However, if you sell the facility, you will face depreciation recapture and capital gains taxes, which can be substantial. Investors who do not structure their ownership correctly, such as holding the property in a limited liability company or considering a 1031 exchange for future sales, may face unnecessary tax burdens. You should consult with a tax professional who specializes in commercial real estate before making any purchase.

A seventh mistake is overpaying for the asset. In competitive markets, buyers often bid up prices to levels that cannot be justified by the underlying cash flow. A facility that sells for 15 times NOI may look attractive because it is in a growing market, but if the NOI does not grow as projected, the return on investment will be disappointing. You should establish a maximum price based on your required return and be willing to walk away from deals that do not meet that threshold. The best deals are often off-market, where you can negotiate directly with the seller and avoid the bidding war that comes with a public listing.

Decision framework: when to choose what

The decision between buying an existing facility, building new construction, or joining a franchise depends on your capital, experience, risk tolerance, and time commitment. The following diagram provides a structured framework for making that decision.

If you have less than $1 million in liquid capital, your options are limited. A franchise with a lower initial investment, such as Storage Rentals of America at $2.5 million total, may still be out of reach. Your most realistic path is to buy a small existing facility in a secondary market, perhaps 20,000 to 30,000 square feet, with a purchase price of $2 million to $3 million. Even this will require a down payment of $500,000 to $750,000, leaving you with limited working capital. You should also consider partnering with other investors to pool resources and share risk.

If you have $1 million to $3 million in capital, you have more flexibility. You can consider a franchise program, which provides brand recognition, training, and operational systems. The trade-off is ongoing royalty fees, which reduce your cash flow over the life of the investment. Alternatively, you can buy a mid-sized existing facility with a purchase price of $4 million to $6 million, using a combination of your equity and bank financing. This path gives you more control over operations and avoids the ongoing fees, but it requires more expertise and a longer learning curve.

If you have more than $3 million in capital, you can consider larger acquisitions or new construction. A new construction project gives you the ability to design a modern facility with climate-controlled units, drive-up access, and advanced security features, which can command premium rental rates. However, new construction carries significant execution risk, including permitting delays, construction cost overruns, and the uncertainty of the lease-up period. You should only pursue this path if you have experience in commercial real estate development or are willing to hire a development consultant.

Your experience level also matters. If you have no experience in self-storage or commercial real estate, a franchise is often the safest entry point because the franchisor provides training, site selection assistance, and ongoing support. The downside is that you sacrifice control and pay ongoing fees. If you have some experience, such as owning other types of commercial property, buying an existing facility with a professional management company is a reasonable middle ground. You own the asset and benefit from appreciation, but you delegate the day-to-day operations. If you have significant experience, you can take on the risk of new construction or a value-add acquisition, where you buy an underperforming facility and improve it through better management, renovation, and more aggressive marketing.

The decision also depends on your time horizon. Self-storage is a long-term investment, and you should plan to hold the asset for at least 5 to 10 years. The value of a self-storage facility is driven primarily by the net operating income, which grows as you increase occupancy and raise rents. Over a 10-year holding period, a well-managed facility can double in value. However, if you need liquidity in the short term, self-storage is not the right investment. You should only commit capital that you can afford to tie up for the long term.

Finally, consider the tax structure of your investment. Holding the property in a limited liability company provides liability protection and allows you to take advantage of depreciation deductions. If you plan to sell the property in the future, a 1031 exchange allows you to defer capital gains taxes by reinvesting the proceeds into another investment property. You should work with a tax advisor to structure your ownership in the most tax-efficient manner.

Related questions

Is Simply Self Storage a franchise?

No. Simply Self Storage is a corporate-owned operator with more than 500 locations, and it was acquired by Extra Space Storage in 2023. It has never offered franchise opportunities to independent investors.

What is the best self-storage franchise to open in 2027?

Storage Rentals of America and CubeSmart are two recognized franchise programs. Initial investments range from $2.5 million to $8 million, and you should carefully review each franchise disclosure document before committing.

Can I buy an existing Simply Self Storage location?

No. Simply Self Storage locations are corporate-owned and are not available for individual purchase. You would need to buy an independent facility or a location from a different operator.

How much capital do I need to start a self-storage business?

A realistic minimum is $1 million in liquid capital for a small acquisition, but $2 million to $3 million provides more flexibility. New construction projects typically require $3 million or more in equity.

What is the average return on investment for self-storage?

Stabilized facilities typically generate internal rates of return of 8 to 12 percent. Value-add acquisitions can achieve 15 to 20 percent, while new construction projects range from 12 to 18 percent but carry higher risk.

FAQ

Is opening a Simply Self Storage franchise possible in 2027? No. Simply Self Storage does not offer franchises, and the 2023 acquisition by Extra Space Storage makes a future franchise program highly unlikely. You should focus on alternative entry paths into self-storage.

What happened to Simply Self Storage? Simply Self Storage was founded in 2004 and grew to over 500 locations. In 2023, Extra Space Storage acquired the company for approximately $2.2 billion, and the brand has been integrated into the Extra Space Storage portfolio.

What are the alternatives to a Simply Self Storage franchise? You can buy an existing independent facility, build new construction, or join a franchise from Storage Rentals of America, CubeSmart, or U-Haul. Each path has different capital requirements, risk profiles, and operational demands.

How much does it cost to open a self-storage facility in 2027? Buying an existing facility costs $100 to $150 per square foot, so a 50,000-square-foot facility will cost $5 million to $7.5 million. New construction costs $80 to $180 per square foot plus land, with total project costs often exceeding $10 million.

What is the typical timeline for entering self-storage? Buying an existing facility takes 3 to 6 months. New construction takes 18 to 30 months. Franchise development typically takes 12 to 24 months from application to opening.

What are the biggest risks in self-storage investment? Oversupply in local markets, rising interest rates, construction cost overruns, and operational mismanagement are the primary risks. You should conduct thorough market research and stress-test your financial projections before committing capital.

Sources

https://www.extraspace.com/about-us/ https://www.simplyselfstorage.com/ https://www.storagerentals.com/franchise/ https://www.cubesmart.com/franchise/ https://www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs/504-loans https://www.sparefoot.com/self-storage/news/ https://www.insideselfstorage.com/ https://www.nareit.com/ https://www.statista.com/topics/1268/self-storage-industry/ https://www.ibisworld.com/united-states/market-research-reports/self-storage-industry/

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