The self storage sector ended 2020 on a high note, with notable improvement in street rate performance across the country. On a year-over-year basis, street-rate rents increased 3.5 percent for the average 10×10 non-climate-controlled and 2.3 percent for the climate-controlled units of similar size. Annual street rate performance was positive in 94 percent of the top markets tracked by Yardi Matrix. Overall, only Nashville and Minneapolis saw street-rate rents drop, down 1 percent and 1.8 percent year-over-year.
The increased exodus from major California metros such as the Bay Area and Los Angeles is positively impacting the Inland Empire self storage market. Compared to December 2019, street-rate rents grew 6.2 percent for the standard 10×10 non-climate-controlled units and 6.9 percent for the same-sized climate-controlled units. Asking rates were $120 and $156 for non-climate and climate-controlled units, respectively.
On the East Coast, Philadelphia experienced notable rent growth, up 5.7 percent for non-climate-controlled and 2.8 percent for climate-controlled units. With a completed inventory of only 4.2 net square feet per person, below the 6.7 national figure, the metro will likely be able to keep this momentum heading into the new year.
Nationwide, projects under construction or in the planning stages accounted for 8.3 percent of existing inventory, up 10 basis points over the previous month. Although development activity maintained a steady pace across the country in December, a total of 23 projects were abandoned. The growing number of abandoned projects might be a sign of a slowdown in construction activity, although this might help oversupplied markets to restore the balance between supply and demand.