Storage rents continue slow decline
While performance is still positive on a year-over-year basis, a slow month-to-month decline is now visible for the storage sector.
- National street rates increased 6.7% for 10×10 NON CC and 7.4% for 10×10 CC units year-over-year in December
- Month-over-month rents declined $1 for both 10×10 NON CC and CC units to $127 and $145
- The new-supply pipeline accounted for 8.9% of existing stock
National street rates for 10×10 non-climate-controlled units grew 6.7% on a year-over-year basis in December, while rates for 10×10 climate-controlled units increased 7.4%, down 80 basis points from the gains recorded in the previous month. Despite cooling rents, the growth rates are well above of where they were in December 2020, when national increases were 2.3% for 10×10 non-climate-controlled and 3.5% for climate-controlled units.
Overall, no metros in the top 30 markets tracked by Yardi Matrix recorded negative rate performance on a year-over-year basis. A total of 22 markets saw 5 percent or higher rent growth in the non-climate-controlled category and 19 markets registered the same growth in the climate-controlled category.
Nonetheless, on a month-over-month basis, national rates for 10×10 non-climate-controlled units declined by $1 to $127, and rates for the same-size climate-controlled units also fell $1 for the third consecutive month to $145.
Operators Remain Optimistic
Although self storage rents are coming off record-high gains seen in 2021, industry experts expect robust growth in 2022. Most operators will start the spring leasing season on a high note, with strong occupancy rates, giving them the possibility to maintain and ultimately increase street rates.
Optimism in the industry is also driven by the expansion of the traditional demand drivers. Besides the four Ds: divorce, death, disaster and dislocation, demand for storage is also underscored by decluttering and distribution/business needs.
Supply Maintains Growth
Nationally, projects under construction or in the planning stages accounted for 8.9% of total stock, up 10 basis points over the previous month. The number of storage facilities under construction increased by 24 to 719, while the number of planned projects dropped by four to 1,252. Overall, there were 3,022 self storage properties in various stages of development as of December.
New York continues to have the most robust pipeline, with projects under construction or in the planning stages equal to 19% of total inventory, up 40 basis points over November. Las Vegas was second on the list—the metro’s new-supply pipeline increased from 15% in November to 15.6% in December.
Read the full Matrix National Self Storage Monthly-January 2022