Self storage remains resilient, ending the year strong
Despite initially experiencing challenges due to the pandemic’s disruptions earlier in the year, self storage fundamentals continue to strengthen and stabilize, especially compared to other commercial property asset types. The self storage industry ended the year strong by continuing to prove its ability to fare well, even when faced with difficult economic conditions, as street rate performance improved substantially across the nation on an annual basis. Despite the fact that the number of abandoned storage projects in the new supply pipeline continued to rise in December, development activity remained relatively stable in most markets and at the national level. However, with the strain of the health crisis continuing to be felt across much of the economy, the resiliency of self storage may be put to the test as we move into the new year.
Strength in street rate performance continues
Street rate performance continued to improve significantly across the nation in December. National street rates for 10×10 non-climate-controlled (NON CC) units increased 3.5% in December on a year-over-year basis, and rates nationwide for 10×10 climate-controlled (CC) units grew by 2.3% year-over-year. While rates saw substantial growth on an annual basis, rates for both 10×10 NON CC and CC units remained flat month-over-month.
Annual street rate performance was positive in roughly 94% of the top markets tracked by Yardi Matrix for 10×10 NON CC units in December. Year-over-year, only two top
markets saw negative rate performance for this unit type. By comparison, rates fell in 24 of the top markets on a year-over-year basis in December 2019.
On a national level, Yardi Matrix tracks a total of 2,131 self storage properties in various stages of development—comprising 592 under construction, 1,135 planned and 404 prospective properties. The national new-supply pipeline as a percent of existing inventory increased by a minor 0.1% month-over-month in December, and the share of existing projects in planning and construction stages accounts for 8.3% of existing inventory.
Yardi Matrix also maintains operational profiles for 26,399 completed self storage facilities across the United States, bringing the total data set to 28,530.
Read the full Matrix National Self Storage Monthly-January 2021
Watch the video below for a quick review of highlights from the Yardi Matrix January 2021 Self Storage National Report.