Self Storage Maintains Positive Fundamentals

Elevated demand across the country continued to fuel solid rent performance in August, with all major markets again seeing growth.
August 2021 Year-Over-Year Rent Change for 10×10 Units

The self storage sector maintained its positive fundamentals in August, with notable growth in street rate performance across the U.S. On a year-over-year basis, street-rate rents increased 9.4 percent for the average 10×10 non-climate-controlled and 10.6 percent for the climate-controlled units of similar size.

While annual rent growth remained steady, rates remained flat for both 10×10 climate- and non-climate-controlled units on a month-over-month basis, indicating a slight slowdown compared to the accelerated growth seen throughout 2021.

Nonetheless, annual street rate performance was positive in all top markets tracked by Yardi Matrix. Miami kept its place as a top performer year-over-year, with 10×10 non-climate-controlled rates increasing by 20.1 percent and climate-controlled rates by 17.2 percent. At the other end of the spectrum, Minneapolis recorded a mere 1.8-percent and 2.4-percent uptick for the standard 10×10 non-climate-controlled and climate-controlled units.

Benefiting from positive demographic trends and a strong industrial sector, the Inland Empire’s self storage market continued to record substantial growth. Compared to August 2020, street-rate rents climbed 13.6 percent for the standard 10×10 non-climate-controlled and 16 percent for the same-sized climate-controlled units. Asking rates reached $174 for non-climate-controlled and $134 for climate-controlled units.

Owing to its diversifying economy and more affordable living, Atlanta has become a top destination for relocating residents, underscoring demand for self storage. Despite an inventory of 8.3 net rentable square feet per capita, above the 6.8 national figure, the Sun Belt market registered a notable rent growth. On a year-over-year basis, street-rate rents increased 14.6 percent for the average 10×10 non-climate-controlled units, while rates for 10×10 climate-controlled units fared even better, rising 15.2 percent.

Nationally, projects under construction or in the planning stages accounted for 8.6 percent of existing inventory, up 20 basis points over the previous month. While the new-supply pipeline continued to increase on a national level, development activity remained flat in around half of the top markets.

Columbus, Ohio, recorded the largest uptick in development, up 100 basis points month-over-month. The metro’s new-supply pipeline accounted for 5.8 percent of total stock. With an existing inventory of 6.4 net rentable square feet per person, the metro seems to have room to accommodate a growing storage supply.

Read the full Yardi Matrix report.