Self Storage Keeps it Simmering
The sector continued its solid rent performance in June, with all 30 major markets again seeing improvement.
The self storage industry continued to prove its resilience, Yardi Matrix’s July National Self Storage report shows. National street rates for 10×10 non-climate-controlled units increased 10.6 percent year-over-year, to $125, while 10×10 climate-controlled units rose 12.7 percent, to $142. This is close to the best annual performance in the history of the data set, falling just below the increases seen earlier this year in May. On a month-over-month basis, 10×10 non-climate-controlled units street rates increased 80 basis points, while climate-controlled units of the same size increased by 70 basis points.
Annual street rate performance was positive in all top 30 Yardi Matrix markets. Miami led the top markets in annual street rate performance with 10×10 non-climate-controlled rates increasing by 21.4 percent year-over-year. Miami also led all markets on a monthly basis, with rates increasing 3.4 percent for units of the same type.
Las Vegas saw the largest monthly increase in development activity in June at 80 basis points. Average street rates for 10×10 climate-controlled and non-climate-controlled units were $119 and $117. These were the highest average prices ever recorded in Las Vegas, for both unit types.
Orlando also showed strong performance with a 60 basis point monthly increase in development activity. Street rates for 10×10 non-climate-controlled units improved by 11.3 percent annually to $108, and climate-controlled units of the same size improved by 12.0 percent to $131. Both unit types were at historic highs.
In 28 of the top 30 markets tracked by Yardi Matrix, street rates for 10×10 non-climate-controlled units increased by more than 5 percent year-over-year. The only exceptions were Minneapolis, at 4.4 percent, and Pittsburgh, at 3.2 percent.
There were 2,303 self storage assets in various stages of development as of June. This included 564 properties under construction, 1,261 planned properties, and 478 prospective projects. The pipeline accounted for 8.3 percent of existing inventory, a 20 basis point increase over May numbers.
According to Yardi Matrix’s latest supply forecast, new supply as a percentage of existing stock is expected to moderate slightly through 2026. Last year saw completions accounting for 3.9 percent of existing stock, with 3.3 percent forecasted for 2021. This is expected to drop to 2.5 percent by 2026.