Development remains robust, especially in markets with strong job and population growth
SANTA BARBARA, Calif., Nov. 26, 2019 – U.S. self storage markets are still dealing with the impact of high completion levels from the past few years.
The incoming supply continues to hinder rent growth, pressuring store operators to use cutbacks and concessions to maintain competitiveness. Compared to October 2018, asking rates decreased in October 2019 in all but two—Las Vegas and California’s Inland Empire—of the top 31 markets tracked by Yardi® Matrix. But “development activity is robust” despite rising construction, land and labor costs, according to a new Yardi Matrix report based on a data set comprising more than 27,600 self storage properties.
Street rates for standard 10×10 non-climate-controlled units fell 3.4% year-over-year in October 2019, while similar-size climate-controlled units saw a 3.7% rate decline.
Self storage properties under construction or in the planning stages accounted for 9.4% of total national inventory in October, a 20-basis-point increase over September. Phoenix’s 70-basis-point increase in new development reflected the metro’s attractiveness to entrepreneurs and corporations pursuing relocations and expansions. Steady population and job growth is also feeding Las Vegas’ new-supply pipeline, which grew by 40 basis points.
More information about deliveries, the supply pipeline, rate growth and more in 31 U.S. metros is available in the Yardi Matrix national self storage report for November 2019.
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