Self storage was a stable haven in 2020, as sector fundamentals continued to strengthen compared to other commercial property asset types. Street rate performance continued to improve significantly across the nation in December, according to the newly released Yardi Matrix National Self Storage Report.
1. Street rents are up
National street rates for 10×10 non-climate-controlled self storage units increased 3.5% in December on a year-over-year basis, and rates nationwide for 10×10 climate-controlled units grew by 2.3% year-over-year. While rates saw substantial growth on an annual basis, rates for both unit types remained flat month-over-month.
“In December, none of the top markets saw street rates for standard 10×10 non-climate-controlled units drop lower than -1.8% year-over-year — a notable feat, looking back at street rate performance over the last couple of years,” states the report.
2. Negative growth was kept to a minimum in 2020
While most of the top markets saw positive rate growth for 10×10 non-climate-controlled units year-over-year, only two top markets experienced negative rate growth on an annual basis. Compared to December 2019, Nashville saw street rates for 10×10 non-climate-controlled units fall 1%, while rates in Minneapolis for the same unit type dropped slightly further, down 1.8% year-over-year.
3. Storage facilities continue to be developed
Development activity remained relatively stable nationally despite an increase in abandoned projects in the new-supply pipeline.
“The consistent rise in project abandonments may be a sign of a slowdown in storage development moving forward,” states Yardi Matrix, which may prove positive for markets currently without a supply-and-demand balance. Further details about anticipated new supply can be found in the report.
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. Matrix also maintains operational profiles for 26,399 completed self storage facilities across the United States, bringing the total data set to 28,530.
More on Yardi Matrix
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, industrial, office and self storage property types. Email [email protected], call (480) 663-1149 or visit yardimatrix.com to learn more.
This article was originally published as a press release by Yardi.