Three years ago, ISS published an article about flex space as a creative profit center. At the time it was considered a fringe service, not widespread like retail sales or vehicle storage. ISS took another look at this blossoming ancillary just a year ago. Today, even more people are talking about it!
For self-storage operators, the rise of flex space signals an opportunity to broaden tenant reach, enhance lease durability and diversify revenue streams within a single site or project. When thoughtfully integrated alongside self-storage or light industrial components, flex space can strengthen overall asset performance while responding to evolving tenant behavior, according to a recent news brief from MakoRabco, which announced its strategic partnership with Flex Space Nation, a business-building platform accelerating growth of the flex space asset class. Let’s explore what it is and why you should consider it for your existing site (if you have space) or new build.
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According to MakoRabco, all this chatter stems from the rise of small businesses, contractors, ecommerce firms and service providers. It can be less expensive than renting an office or warehouse, and can accommodate smaller companies who just need something flexible.
As the name implies, flex space can be used for a variety of purposes. For example, a small business might set up shop for remote office work or to store inventory. Other tenants might use it as workshop or as a creative studio.
Unlike traditional storage units, flex spaces are designed to accommodate activities beyond storing items in a unit. While people still can’t live in them, they might spend hours each day there as the space typically includes electricity, Wi-Fi, climate control and sometimes even plumbing. Some sites have added community areas with bathrooms and kitchens
“Flex space represents a natural evolution in how commercial properties serve today’s tenants,” says Sarah Swingler, director of business development at MakoRabco. “This isn’t about replacing self-storage or traditional industrial; it’s about expanding how developments can perform by meeting changing business needs.”
The addition of flex space to a self-storage facility can be a strategic move for operators looking to diversify their offerings and attract a broader customer base, which is imperative in today’s competitive landscape. Self-storage customers generally see storage units all the same—four walls and a door. While superior security, great customer service and even curb appeal do make a difference, operators who provide an abundance of products and services beyond units will rise to the top. People want convenience. When you deliver it—in whatever form that is—you gain a loyal tenant.
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Here are some compelling reasons to consider this product.
Meeting evolving customer needs. Self-storage is now more than just a place to store grandma’s antique dresser or clothing the children have outgrown. It’s becoming a part of people’s lives. Yes, the four Ds—downsizing, death, divorce, displacement—still matter, but more people are seeing self-storage as an extension of their lives. And they’re willing to pay for it!
The rise of remote work, entrepreneurship and small businesses has created a demand for affordable, flexible spaces. Many individuals and businesses are seeking alternatives to expensive office leases, and flex space provides a cost-effective solution. By offering this service, self-storage operators can tap into this growing market segment.
Maximizing revenue potential. Flex spaces typically command higher rental rates than traditional storage units due to their added functionality. This can significantly boost your facility’s revenue per square foot. Additionally, these tenants tend to stay longer than traditional storage customers, providing a more stable income stream.
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Enhancing property value. Adding flex space can increase the overall value of your property. Facilities that offer diverse services are often more attractive to investors and buyers as they demonstrate adaptability and a forward-thinking approach.
Just like any self-storage profit center, you need to do your homework. Here are some steps:
Assess demand. Just like you need to determine if there’s demand for boat/RV parking in your region, you should conduct market research to see if flex space could work in your community. Look at local demographics, business trends and competitor offerings. Is anyone else offering this service? If not, you might have an edge.
Design thoughtfully. Flex spaces aren’t enhanced self-storage units. Rather, they should be designed with functionality in mind. Consider features like ample lighting, electrical outlets, high-speed internet and climate control. If possible, offer customizable layouts to accommodate different types of users. A company using the space as an office has different needs than an e-commerce entrepreneur. Think modular shelving, partitioned areas or multi-purpose spaces to cater to diverse requirements. This approach not only enhances user satisfaction but also broadens the appeal of the facility to a wider audience.
Market strategically. When it comes to flex space, your audience is different than that of traditional storage. Your target is entrepreneurs, freelancers, artists and small-business owners. As such, find marketing avenues to reach these people such as leveraging social media, partnering with local business organizations and networking groups like the local chamber of commerce. Consider hosting an open house or community event to spread awareness. Of course, tell your existing tenants about this exciting offer!
Start small. If you’re unsure if flex space is right for your self-storage business, you can build a limited number of them and then expand as needed. This allows you to test the waters without overcommitting resources.
If you’re intrigued and would like to know more, consider attending “Storage Redefined Masterclass” presented by Toy Storage Nation at the ISS World Expo. This full-day workshop is designed for developers, investors and facility owners seeking specialized real estate assets beyond traditional self-storage, including flex space.
This new service is definitely worth exploring if you’re looking to diversify your offerings and maximize your self-storage facility’s potential. With careful planning and execution, flex space can be a valuable addition that benefits your business and customers.
As the self-storage industry continues to evolve, staying ahead of the curve is essential. Flex space represents an exciting opportunity to do just that—offering a service that meets modern needs while driving growth and profitability. Whether you’re expanding an existing facility or planning a new one, consider how it might fit into your strategy. It could be the key to unlocking your self-storage facility’s full potential.
“Flex space is the next evolution of income-producing property,” says James Reid, founder of FlexSpace Nation. “It combines the simplicity of self-storage with the cash flow potential of light industrial real estate—and institutional capital is circling.”
Amy Campbell
Senior Editor, Inside Self-Storage
Amy Campbell is senior editor of Inside Self-Storage. To reach her, email [email protected].
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