In-place rent growth is one bright spot for operators as demand falters
SANTA BARBARA, Calif., Nov. 16, 2023 – 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.
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