Self Storage Still Riding Tailwinds

Thanks to continuous demand for storage space across the country, street-rate rents maintained momentum.
March 2021 Year-over-Year Rent Change for 10×10 Units

The self storage sector has maintained its positive fundamentals throughout the first quarter of 2021, with continued positive street rate performance across the country. Street-rate rents rose 2.6 percent for the average 10×10 non-climate-controlled and 3.1 percent for the climate-controlled units of similar size, year-over-year as of March. On a month-over-month basis, however, street rates remained flat for the 10×10 non-climate-controlled units, while rates for the same-sized climate-controlled units increased by a modest 0.8 percent.

Considering all U.S. storage markets, San Francisco saw the second-highest average street rate for 10×10 non-climate-controlled units, lagging only Honolulu. The San Francisco Peninsula and the East Bay recorded a 5.2-percent rent growth year-over-year, with asking rates reaching $203.

After experiencing major setbacks due to heavy storage deliveries in recent years, Houston registered the largest rent growth in March since June 2017. On a year-over-year basis, street rates increased 3.6 percent for the average 10×10 non-climate-controlled and 5 percent for the climate-controlled units of similar size.

Demand is also catching up with supply in Charleston, where the existing inventory available per person is 11.5 net rentable square feet, almost double the 6.7 national average. Street rates rose for both 10×10 climate- and non-climate-controlled units, up 3.5 and 3.4 percent year-over-year in March—registering as the best-performing month for rents in the past three years.

Despite the rising cost of construction materials, self storage development activity continues to be steady in most markets. Nationally, projects under construction or in the planning stages account for 8.4 percent, up 20 basis points month-over-month. New York is leading the nation in construction—the metro’s new-supply pipeline increased from 17.1 percent in February to 17.7 percent in March.

Read the full Yardi Matrix report.