The recent reports from Yardi Matrix reveal encouraging information for the Self Storage industry. The report touched on Monthly rents and supply, rate growth, and new supply for the month of August.
Overall Self Storage continues to remain resilient in nature as noted in the August report;
“Faced with the economic implications of the coronavirus pandemic, the self storage industry continues to prove its recession-resistant nature. After experiencing accelerated declines in street rates at the start of the COVID-19 crisis, the storage sector saw flattening rates in June. July showed even more positive signs for the asset class, with national street rates trending upwards on a month-over-month basis. However, the sector will still have to weather the continuing COVID-19 pandemic and its resulting economic consequences— as is evident in this month’s uptick in abandoned projects in the new-supply pipeline.”
Additionally, Negative rates are also showing signs of improvement. Per the August report.
“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. While national street rates decreased compared to July 2019, rate performance month-over-month trended upwards for both 10×10 NON CC and 10×10 CC units. Street rates for 10×10 CC units experienced their largest month-over-month increase in the last four years, rising 1.6% from June to July. Rates for 10×10 NON CC units saw a 1.0% uptick compared to the previous month.”
There are other positive signs in rate growth in previously oversupplied areas like Austin. Yardi reports that “Austin metro saw street rates for
10×10 NON CC units rise 2.1% in July compared to June. This is the largest rate growth in the metro for 10×10 NON CC units since May 2017…”
It appears that Covid 19 has not significantly impacted new self storage development as self storage properties under construction or in the planning stages accounted for 8.9% of existing inventory across the nation in July.
Yardi Matrix’s monthly report shows Self Storage to be a solid and resilient investment class, even during difficult and/or changing economic times. For additional information regarding opportunities in the market, call us directly. Thomas Gustafson 216.409.3189 and Matt Davis 440.570.9003, Colliers Self Storage.