SANTA BARBARA, Calif., Oct. 2, 2023 – Self storage street rates have now been been negative year-over-year for almost a full year, reflecting slower demand caused by declining home sales and fewer relocations, reports the new Self Storage National Report from Yardi® Matrix.
Street rate growth remained negative in August, with annualized same-store asking rents per square foot down an average of 4.1 percent nationwide for all unit sizes and types. This is a slight improvement from the negative national annual growth of -4.5 percent recorded in July.
But it’s not all gloom and doom.
“Operators have been able to grow revenue by increasing existing customer rents (ECRIs), and the average length of stay has been extended during the past few years, which counteracts the effect of lower move-in rates. In addition, the amount of new supply under construction is moderating and new deliveries are expected to fall below the long-term average over the next few years, helping to reduce competition among operators,” say Matrix analysts.
Last month, supply caused a drag on street rate growth in many metros. Markets with the most supply in lease up are also recording some of the worst rate performance. Combined same-store rates for non-climate-controlled (NCC) units decreased in all of the top 29 metros year-over-year.
Street rates for same-store climate-controlled (CC) units dropped in all but one of the top metros annually. New York City was the only metro to see street rates increase compared to August 2022.
Yardi Matrix tracks a total of 4,789 self storage properties in various stages of development, including 816 under construction, 1,890 planned, 625 prospective, 1,393 abandoned and 65 deferred. Matrix also maintains operational profiles for 28,939 completed self storage facilities across the United States, bringing the total data set to 33,728.
Matrix has recently made updates to how it reports on the self storage sector nationwide. Get all the details in the new report.
Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, student housing, vacant land, industrial, office, retail and self storage property types. Email [email protected], call 480-663-1149 or visit yardimatrix.com to learn more.
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