Demand Still Sluggish

Slowed demand for self storage continues to drive street rates lower, reports the new Self Storage National Report from Yardi Matrix. Annual street rate growth stayed negative in October.

Slowed demand for self storage continues to drive street rates lower, reports the new Self Storage National Report from Yardi Matrix.

Annual street rate growth stayed negative in October. The average annualized same-store asking rate per square foot for the main unit types and sizes averaged $16.77 nationally last month, marking a 4.2 percent drop from the average recorded in October 2022.

Street rates also remained negative on an annual basis in October in nearly all of the top metros. Combined same-store rates for non-climate-controlled units fell in all but one of the markets tracked by Matrix year over year, while asking rates for same-store climate-controlled units decreased in all of the top metros.

“Elevated residential mortgage rates have slowed home sales, reducing population mobility, a major driver of storage demand. As a result, storage operators continue to lower asking rates to drive new rental demand,” states the report.

In-place storage rents continue to trend upwards, supported by existing customer demand, helping bolster rental income for operators. In addition, the labor market remains relatively strong and inflation is slowing, which will benefit the sector as it helps boost the financial confidence of new and existing customers.

Nationally, Yardi Matrix tracks a total of 5,006 self storage properties in various stages of development, including 864 under construction, 1,940 planned, 673 prospective, 1,457 abandoned and 72 deferred properties. Yardi Matrix also maintains operational profiles for 29,234 completed self storage facilities in the U.S., bringing the total data set to 34,240.

Gain more insight on self storage performance.

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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AUTHOR

Leah Etling is the founding editor of the Balance Sheet and a 12-year Yardi employee who also oversees press releases and social media. An award winning journalist, she holds a master's degree from UC Berkeley and is a native of Santa Barbara County, Yardi's home.

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