Why Texas, Florida, and the Carolinas? Inside AAA Storage’s Geographic Investment Thesis

Most real estate investors assume self-storage demand follows population. The bigger the city, the more storage it needs. It’s a logical assumption: and it’s wrong.

The single most important indicator of self-storage demand is not how many people live in a market. It’s how many people are moving there. And when you follow that data, three states keep rising to the top: Texas, Florida, and the Carolinas.

This is the geographic thesis behind AAA Storage Investments: and it’s been refined across 33 years and dozens of development projects. Here’s how it works.

Key Market Data at a Glance

States ranked 1 and 2 for net inward migration in 2025: North Carolina and Texas (both targets for Growth Fund Two)

Share of U.S. business formations from three states: 25% of the US total from Texas, Florida, and the Carolinas combined, representing less than 10% of U.S. geography

Texas business formation growth: 8.4% year-over-year

Share of movers who use self-storage: 68%

Florida population over 65: 22%, highest of any large state in the country

Lago Vista, Texas occupancy result: 50% above initial projection, 20 net units leased in March 2026 alone

What Actually Drives Self-Storage Demand?

Self-storage demand is driven by activity: specifically, the life events that force people to deal with their stuff. The industry calls them the Six Ds:

Dislocation: job changes, economic disruption, forced moves

Death: estates being cleared and consolidated

Decluttering: clearing space without letting go

Downsizing: empty nesters moving from large homes

Divorce: one household splitting into two

Population Density: limited living space driving offsite storage

Overlaid on the Six Ds is one overarching signal: domestic migration. Sixty-eight percent of people who move in the United States use self-storage. That single statistic is the foundation of AAA’s entire site selection process.

Business formation matters too. When entrepreneurs start companies, they need space. Equipment, inventory, supplies : it all has to go somewhere. Markets with strong small business growth consistently outperform markets where business formation is flat.

“A city with a large population but net outward migration is far less attractive than a smaller market showing really strong inward migration.” : Paul Bennett, AAA Storage Investments

Why Texas Remains the Core Market After 33 Years

Texas ranks number two in the United States for net inward migration. It posted 8.4% year-over-year growth in new business formation last year. And it has grown more consistently over a longer period than any other state in the country.

Those numbers explain why AAA has developed in Texas for three decades. But the state-level data is only the starting point. The actual opportunity lives in the suburbs.

When people relocate to Texas, they are not moving into downtown Austin or central Houston. They are moving into Georgetown, north of Austin: which held the title of America’s fastest-growing town for five consecutive years. They are moving into New Braunfels, between Austin and San Antonio on the I-35 corridor. They are moving into the suburban rings of every major Texas metro.

AAA calls this the city-skirt thesis: focus on suburban markets along interstate corridors, where migration is landing. Interstate moves are the moves most likely to result in storage use: another little-known data point that reinforces the I-35 focus.

One important clarification on Houston: the metro does not appear in the top quartile of percentage growth because it is already one of the two largest metros in the country. Getting 6% growth at 20 million people is an enormous number of actual people : and percentage points don’t rent storage units. People do. AAA has active projects in suburban Houston across Fund 1 and Fund 2, including one currently 60% complete in Northwest Houston.

“You can’t deposit percentage points in the bank. It’s dollars you deposit. And it’s people who rent storage units.” : Paul Bennett

What Makes the Carolinas the Number One Migration Market in 2025?

As of 2025, North Carolina ranked number one in the United States for net inward migration. That is not a projection: it is a measured result. Growth Fund Two’s two target states, Texas and North Carolina, are the top two domestic migration destinations in the country.

The Charlotte metro is the primary focus in the Carolinas. Mecklenburg County has the highest business formation rate in the state. And the migration pattern into Charlotte mirrors what AAA has seen in Texas for decades: people moving from expensive coastal markets, particularly the Northeast and California, find that what seems expensive to a native North Carolinian looks like a bargain to them. That dynamic is pushing housing prices outward and driving suburban growth in communities like Gastonia: 18 miles west of Charlotte’s city center.

Mount Pleasant, South Carolina tells a similar story. The town sits directly adjacent to Charleston but has grown 15 to 18 miles north up the coast. From the outside, Charleston looks saturated. From the inside, Mount Pleasant is building as fast as it can.

What Is the Current State of Self-Storage Supply in These Markets?

The supply side of the equation has shifted meaningfully in the past two years. During COVID, self-storage occupancy hit 98% nationally and rates surged. Developers responded by overbuilding: particularly in certain markets : which triggered a corrective phase. Rates compressed to protect occupancy, and the data from that correction is still working its way through the market.

But two things are happening simultaneously. First, the rate of new development has fallen sharply. The annual delivery rate, which peaked above 4% of current inventory, is projected to land at approximately 1.5% by 2029–2030. Higher interest rates, tighter lending standards, and compressed development margins have made new projects hard to pencil.

Second, across all seven Texas self-storage sites in Growth Fund Two, there are only five new competitors in the pipeline across those markets: and three of those are small expansions of existing facilities, not new ground-up developments.

The supply correction is creating the setup for the next cycle.

Why Does Hyperlocal Analysis Matter More Than State-Level Data?

State-level migration data tells you where to look. Hyperlocal analysis tells you whether to build. These are two different questions and conflating them is one of the most common mistakes in self-storage investing.

San Antonio is a useful example. The metro-level data shows signs of oversupply. But AAA currently has a project in a San Antonio suburb: in Schertz, outside the city : that is leasing up on pace or ahead of pace. Why? Because the five-mile radius around that specific site is not overbuilt. There are abundant new rooftops, limited competing inventory, and demand that exceeds what the macro data would suggest.

The same principle applies to finding “holes” in a market: locations where no new development has occurred, where existing competitors are old and locally operated, and where demographics are moving in the right direction. Those opportunities exist even in markets that appear saturated at the regional level.

A Real-World Example: How the Gastonia, NC Site Came Together

The Gastonia site: one of AAA’s Growth Fund Two projects : illustrates how the thesis plays out at the ground level.

The property sits on West Franklin Boulevard, 18 miles west of Charlotte’s city center, one mile from Interstate 85. Traffic counts in the mid-20,000s per day clear the 15,000-vehicle threshold AAA looks for. Mecklenburg County’s business formation data, Charlotte’s inward migration patterns, and the proximity to I-85 all checked the macro boxes.

Then came the boots-on-the-ground confirmation. Directly across the street from the site: a 285-acre mixed-use development with 800 single-family homes and 100,000 square feet of commercial and retail space. That development is not just a customer base : it is the tipping point that will pull additional residential construction up and down the West Franklin corridor for years to come.

The land was purchased inexpensively. The previous use: a junkyard. The North Carolina DOT, responding to the traffic the adjacent development will generate, required road improvements: and the developers of the 285-acre project had to purchase a corner of AAA’s lot to widen the intersection. That kind of infrastructure commitment from a third party is an independent confirmation that the area is on the move.

Construction on the Gastonia site begins midsummer 2026. It will include both a self-storage facility and approximately 150,000 square feet of small-bay industrial space on the same land tract.

Why These Three States Together Represent a Distinct Opportunity

The case for Texas, Florida, and the Carolinas is not just that each state performs well individually. It is that the combination is unmatched:

• These three states combined capture more net inward migration than any other three-state combination in the country.

• Twenty-five percent of all new business formations in the United States occurred in these three states last year: despite representing less than 10% of the country’s geography.

• All three rank in the top 10 for three or more of the Six Ds of self-storage demand.

Florida’s migration numbers have cooled slightly since their 2023–2024 peak: property tax increases and hurricane activity have tempered enthusiasm in some markets : which is part of why Growth Fund Two does not include a Florida project. But AAA’s Fund One Florida project in Palmetto, near Sarasota, is on track to deliver to market within the next few months, and the fundamentals there remain strong.

The thesis is not “build anywhere in these states.” It is “use these states as the filter, then find the specific submarkets where demand is real, supply is limited, and the land is still attainable.” Growth cures a lot of ills. It does not cure bad site selection.

Frequently Asked Questions

What are the Six Ds of self-storage demand?

The Six Ds are the life events that most commonly drive self-storage use: Dislocation, Death, Decluttering, Downsizing, Divorce, and Population Density. Markets that score highly across multiple Ds: due to demographics, migration patterns, or economic activity : tend to produce more durable self-storage demand than markets driven by a single factor.

Why does domestic migration matter more than total population for self-storage?

Because 68% of people who move in the United States use self-storage. A city of 5 million with stagnant or declining migration generates far less storage demand than a smaller market seeing rapid inward movement. Migration creates the life transitions : new homes, new jobs, temporary living situations: that drive storage use.

Is self-storage oversupplied in Texas and the Carolinas?

Some metro areas saw overbuilding between 2020 and 2023. But new development has slowed significantly: annual supply delivery is projected to fall from over 4% of current inventory to approximately 1.5% by 2029–2030. The oversupply narrative is also a metro-level generalization. Hyperlocal analysis frequently reveals submarkets with strong demand and limited new supply, even inside metros that appear saturated at the regional level.

What is a city-skirt market?

A city-skirt market is a suburban community on the outer edge of a major metro : typically along an interstate corridor: where migration is landing rather than in the urban core. Examples include Georgetown north of Austin, New Braunfels between Austin and San Antonio, Gastonia west of Charlotte, and Mount Pleasant north of Charleston. These markets often offer lower land costs, less competition, and faster growth than the city centers they surround.

How does AAA Storage select specific sites within its target markets?

Site selection combines quantitative screening: traffic counts above 15,000 vehicles per day, five-mile radius supply and demand analysis, migration and business formation data : with on-the-ground qualitative assessment. The team evaluates visibility from the road, the competitive landscape within a specific radius, proximity to residential development, and leading indicators of neighborhood transition. Data sets the filter. Ground-level observation confirms or disqualifies what the data suggests.

Learn More About Investing with AAA Storage

AAA Storage Investments develops ground-up self-storage and small-bay industrial in Texas and the Carolinas. Growth Fund Two is currently open to accredited investors.

If you are an accredited investor evaluating private real estate alternatives and want to understand how we underwrite markets and select sites, we would like to start a conversation. Reach out through our contact form or listen to the full episode of The AAA Storage Podcast on Apple Podcasts, Spotify, or YouTube.