Self Storage Rents Continue Strong Performance
- Jun 21, 2021
Self storage fundamentals remained strong in May, with substantial rent growth registered across the U.S. On a year-over-year basis, street-rate rents increased 10.7 percent for the average 10×10 non-climate-controlled units and 12.8 percent for the climate-controlled units of similar size. The sector also saw considerable rent growth on a month-over-month basis—up 1.6 percent and 2.2 percent for the standard 10×10 non-climate- and climate-controlled units.
Overall, street rate performance was positive in all of the top markets tracked by Yardi Matrix, both on an annual and monthly basis. National average rates not only rebounded from the shock at the onset of the health crisis but also surpassed pre-pandemic levels. Compared to May 2019, national rates grew 6 percent for the average 10×10 non-climate-controlled and 4.4 percent for climate-controlled units of similar size.
Robust population growth and corporate relocations from California metros and other gateway markets continue to have a positive impact on the Phoenix self storage market. Asking rates reached record-high growth in May, averaging $114 for the 10×10 non-climate-controlled units and $139 for the same-sized climate-controlled units. Phoenix also registered an uptick in development activity, with projects under construction or in the planning stages accounting for 11.8 percent of total stock, up 80 basis points since April.
Nationwide, projects under construction or in the planning stages accounted for 8.3 percent of existing inventory, up 20 basis points month-over-month. Although industry experts predicted a slowdown in development activity due to rising construction costs and other pandemic-induced concerns, the new-supply pipeline has not slowed down in the first five months of the year. Compared to the same five-month interval in 2020, when 199 new storage facilities were added to the market, the pace of new deliveries has accelerated significantly, with 239 new storage assets completed year-to-date through May.