Self Storage National Report – August 2024

According to second quarter REIT results, self storage growth continued to decelerate due to lower street rates that are impacting realized rents and a drop in occupancy that started to show signs of bottoming.

Moving into the third quarter, advertised asking rates have remained negative on an annual basis as of July, as the overall advertised street rate per square foot fell to $16.40, a 4.1 percent decline year-over-year. Annually, advertised street rates for the 10×10 non-climate-controlled and climate-controlled units declined in all the top 30 metros tracked by Yardi Matrix.

On a monthly basis, average advertised street rates per square foot for the 10×10 non-climate and climate-controlled units combined were down 0.4 percent or six cents to $16.40. This comes after three consecutive months of increases, but also a result of seasonal patterns that mark an end to the busy summer leasing months. Of the top 30 metros tracked by Yardi Matrix, six registered improvement, 22 showed a decrease, while Las Vegas and Houston remained flat. Seattle led gains, with a 0.7 percent increase month-over-month for same-store combined advertised street rates.

Further slowing down in new supply

As of July, there were 3,404 self storage properties in all stages of development nationwide. The new-supply pipeline included 854 under construction, 2,033 planned projects and 517 prospective properties. The under-construction projects made up 3.5 percent of the total stock, 10 basis points lower than the previous month.

According to the Yardi Matrix forecast in the 2024 third quarter update, data indicates a slowdown in new development. Construction starts have started to decline beginning with the fourth quarter in 2023, which has led to a flat under-construction pipeline in the first half of this year. Planned and prospective pipelines have contracted as well due to the increase in abandoned projects.

Download the latest Yardi Matrix self storage report.