Street rates appear to be recovering, and construction of new units has been mostly unaffected
SANTA BARBARA, Calif., Aug. 19, 2020 – After experiencing accelerated declines in street rates at the start of the COVID-19 crisis, the storage sector saw June and July rates trending upwards on a month-over-month basis, states the latest National Self Storage report from Yardi® Matrix. Tempering the fast recovery somewhat, street rates contracted for both 10×10 non-climate-controlled (2.6%) and climate-controlled units (5.2%) on a year-over-year basis.
“Despite COVID-19’s unprecedented economic impact in recent months, street rate performance in July illustrated the recession-resistant nature of the self storage sector,” the report summarizes.
The best example of this resiliency is California’s Inland Empire, one of the nation’s tightest industrial markets, which had a 2.7% month-over-month increase for 10×10 non-climate-controlled units and was the only market to see year-over-year rate growth for this unit type (up 0.9%).
COVID-19 has yet to significantly impact new self storage development, but this month did see an uptick in abandoned projects in the new-supply pipeline. Matrix data shows at least 31 storage properties in the new-supply pipeline were abandoned in July, representing a 182% increase over the 11 storage properties abandoned in July 2019.
Nationwide, Yardi Matrix tracks a total of 2,196 self storage properties in various stages of development—comprising 592 under construction, 1,172 planned and 432 prospective properties. Even though the development pipeline saw an increase in abandoned projects, most of the abandonments were in the prospective phase. Thus, July’s increase in projects under construction or in the planning stages still resulted in growth of the new-supply pipeline. Matrix also maintains operational profiles for 26,105 completed self storage facilities across the United States, bringing the total data set to 28,301.
Gain detailed insights into this resilient real estate market in the new self storage national 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, industrial, office and self storage property types. Email [email protected], call (480) 663-1149 or visit yardimatrix.com to learn more.
About Yardi
Yardi® develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. Established in 1984, Yardi is based in Santa Barbara, Calif., and serves clients worldwide. For more information on how Yardi is Energized for Tomorrow, visit yardi.com.