Cooldown Persists for Self Storage

The year-over-year street rate performance remained negative, but monthly rents showed growth.

Line Chart Showing National Average Street Rates for 10x10 Units from the Matrix Self Storage National Report-June 2023. Image courtesy Yardi Matrix

National Average Street Rates for 10×10 Units in the Matrix Self Storage National Report-June 2023. Image courtesy Yardi Matrix

As of May, the national street rates for the 10×10 non-climate-controlled units were down on a yearly basis, showing a 3.8 decrease. The same-sized climate-controlled units registered a 4.7 percent drop following the same pattern. Despite the continued negative annual rent growth, the national averages remained high compared to long-term figures. The rate for 10×10 non-climate-controlled units at $128 was 1.8 percent higher than its average over the previous 36 months. Meanwhile, the rate for 10×10 climate-controlled units at $143 was 0.5 percent higher than its average over the same period.

Drilling down to the metro level, only a single metro of the top 31 self storage metros tracked by Yardi Matrix saw an increase in street rates for the standard-sized units. In Charleston, the average rate for the 10×10 climate-controlled units increased by $1 to $138, amounting to a 0.7 percent annual growth. On the other end of the spectrum, Philadelphia had the largest annual losses. The average rate for the 10×10 climate-controlled units dropped by 9.3 percent and the average rate for the same-sized non-climate-controlled units fell by 9.5 percent.

Month-over-month, the national average street rate for the 10×10 units combined increased by $1 to $134. Most of the markets mirrored this trend, as the average street rates for 10×10 units increased by $1 in 13 markets. Eight markets had even larger gains, seeing $2 increases, while rates stagnated in nine top metros. Sacramento was the sole market that saw a decrease, as rates fell $1 to $144.

Self storage developers stay busy

Self storage rooms with metal closed doors.

Image by adventtr/iStockphoto.com

As of May, the national pipeline encompassed 4,799 self storage properties in various stages of development. Work was underway on 807 self storages, which accounted for 3.6 percent of existing inventory, 10 basis points higher than the previous month. The new-supply pipeline also included 1,959 storages in the planning stages, 646 prospective facilities as well as 1,341 abandoned projects.

Development pipelines stagnated in most of the top metros. In Orlando, developers continued to work on more than 2 million net rentable square feet. The under-construction pipeline accounted for 7.5 percent of existing stock, boosting the metro to the top. Orlando’s self storage footprint offered 8.8 net square feet available per capita, above the 7.3 national average. The new supply pipeline also included nearly 3 million square feet of planned projects.

Read the full Yardi Matrix report.

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