Cooldown Tapers for Self Storage
Despite a year-over-year decline, average street rates remained unchanged month-over-month.
National Average Street Rates for 10×10 Units. Image courtesy of Yardi Matrix
As of February, the overall national street rate showed yet again a negative movement, recording a 280-basis-point fall year-over-year. Following the same pattern, rates for the 10×10 units were also down on a yearly basis, showing a 3.1 decrease for the non-climate-controlled options, while the same-sized climate-controlled units registered a 4.1 percent drop.
Drilling down to the metro level, only three of the top 31 self storage metros tracked by Yardi Matrix saw an increase in street rates for the 10×10 non-climate-controlled units on an annual basis. Charlotte and Raleigh-Durham saw the largest yearly gains of 1 percent, each. Charleston rounded out the top three showing a 0.9 percent rise. Meanwhile, 25 of the top metros saw a decrease in rates. Las Vegas registered the largest decline for the 10×10 non-climate-controlled units displaying a 9.8 percent fall year-over-year.
Looking at the yearly performance for the 10×10 climate-controlled units, only one of the top 31 metros experienced a year-over-year increase. Nashville bucked the declining trend with slight growth, while Orlando rates remained flat and the other 29 markets all experienced negative growth.
On a monthly basis, average street rates for the combined 10×10 units remained unchanged at $132 in February. This was mirrored in 19 of the top 31 metro areas as well. Rent growth was led by Houston, which registered a 1-percent increase, followed by four West Coast markets. Meanwhile, the remaining seven markets saw a $1 drop month-over-month.
The new-supply pipeline holds steady
Image by chandlerphoto/iStockphoto.com
As of February, the national pipeline encompassed 4,730 self storage facilities in various stages of development. Work was underway on 823 properties, which amounted to 3.6 percent of total inventory, unchanged from the previous month. The pipeline also included 1,885 projects in the planning stages as well as 662 prospective properties.
While only 11 of the top 31 markets tracked by Yardi Matrix had an under-construction pipeline above the national level, no market saw decreases when looking at month-over-month changes. Construction activity across Orlando increased to 1.9 million net rentable square feet under construction or 7.2 percent of existing stock. Although the metro’s self storage footprint amounted to 8.6 net square feet available per person, above the 7.1 national average, the new supply pipeline also included more than 3 million square feet of planned projects.
Head over to Yardi Matrix to read the full report.
