Self Storage Rents Stay Level Month-over-Month

Self Storage Major Metro Summary Although self storage rents have moderated over the winter, the…

Self Storage Major Metro Summary

Although self storage rents have moderated over the winter, the sector is heading into the spring season with healthy fundamentals. Street-rate rents rose 7.6 percent for the average 10×10 non-climate-controlled and 7.4 percent for the climate-controlled units of similar size, year-over-year as of February.

Overall, nine of the top 31 metros tracked by Yardi Matrix registered at least a 10 percent rent growth for non-climate-controlled units, and 25 markets recorded increases at or above 5 percent. Climate-controlled units saw a similar performance, with nine markets registering double-digit rent growth and 21 markets experiencing at least a 5 percent improvement. San Jose was the only top market with a negative growth rate, dropping 0.6 percent for climate-controlled units.

Thanks to continued migration, rent growth remained strong across major metros in the Southeast and Southwest. However, as demand topped out in the second half of 2021, seasonality has returned more quickly to markets in the Northeast, resulting in slower rent growth in recent months. Nonetheless, fundamentals are expected to stay steady in this region as well.

On a month-over-month basis, street-rate rents remained level in recent months on a national level, however, some metros registered considerable increases. Rents grew a combined $2 for 10×10 non-climate- and climate-controlled units in Seattle, driving up the year-over-year growth rate by 120 basis points. Pittsburgh experienced a 0.8 percent month-over-month growth, while Los Angeles registered a 0.5 percent uptick. A total of ten metros saw combined street rates decrease by $1, whereas rents in the remaining 18 metros out of the top 31 markets stayed unchanged.

As the correlation between the new-supply pipeline, completed net square feet available per capita, and growth in street rates continues to be weak, developers are eager to grow the self storage inventory across the U.S. Nationally, projects under construction or in the planning stages accounted for 9.2 percent of existing stock, up 20 basis points over the previous month. The number of projects under construction decreased by one to 730, while 72 projects were added to the planning stages, increasing the pipeline to 1,359.

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Head over to Yardi Matrix to read the full report.