Self Storage Demand Steady as Negative Rent Movement Continues
Although year-over-year changes remain negative, historic rates are still stable.
Despite year-over-year rent growth remaining negative at the end of the first quarter, street rates continue to be high by historic standards. After an outstanding 2022, annual changes for the 10×10 climate-controlled units showed a 3.4-percent drop, while national street rates for the similar-sized non-climate-controlled units registered a 2.3-percent fall. A more extended view reveals that the March national average for 10×10 climate-controlled units at $142, was up 2.9 percent compared to the March 2021 averages and 6.8 percent compared to the March 2019 figures. The national rate for the similar-sized non-climate-controlled options was $127, a 4.1-percent improvement and a 9.4-percent rise through the same time.
Charlotte, Raleigh-Durham, and Nashville were the only markets that saw annual rates for 10×10 non-climate-controlled units rise, while four markets showed no change in street rates. Nashville was also the only market to register some annual improvement for the 10×10 climate-controlled units. The other 30 top self storage markets experienced year-over-year declines for this unit type, with the Inland Empire rounding out the list with a 9.5-percent decline.
Looking at month-over-month changes, national average street rates for the combined 10×10 units remained flat. This trend was mirrored in 14 markets tracked by Yardi Matrix, where averages remained stable. These markets also saw a monthly increase, nine more than the previous month. Pittsburgh saw the largest monthly gains ($4) followed by Charleston ($2), while the rest of the markets only registered a $1 monthly increase.
Construction activity picks up slightly
As of March, there were 4,735 self storage properties in various phases of development. The share of projects underway amounted to 3.7 percent of total inventory, a 10-basis-point improvement compared to February.
While most markets stagnated, Las Vegas, Austin and Chicago registered a 10-basis-point drop in their pipelines. At the other end of the spectrum, three markets saw increases in development activity. San Antonio led the list, despite being slightly oversupplied, with 10.2 net square feet available per capita, above the 7.2 national figure. The metro had 357,645 square feet of space under construction with an additional 1.8 million square feet in the planning stages.
Head over to Yardi Matrix to read the full report.