The Self-Storage industry, which continues to be one of the nation’s top performing asset classes, has seen strong growth in rental rates. Lifestyle changes influenced by the pandemic have resulted in increased demand for self-storage. Nationally we are seeing a 12% year-over-year growth in web rates (through February 2021) and in certain markets even more growth. The top 50 markets nationally have seen growth closer to 15%. Since the Summer of 2020, self storage demand and pricing have skyrocketed.
This chart, complements of Radius+ shows the significant uptick in rates since March of 2020.
With respect to development, deliveries of new self storage facilities were down significantly in 2020 with the ongoing pandemic being a major reason for the decline. (Chart complements of Radius+)
However, significant new development is still being planned across the country. Below is a chart showing markets where the largest percentage growth in supply is expected (noting facilities currently planned, permitted or under construction).
Even with recent increases in the 10-year Treasury Rate, cap rates remain compressed as demand for self storage appears to be at an all time high. The ever-growing self storage buyer pool, coupled with significant amounts of capital and equity in the marketplace, make this the best seller’s market we have seen.
If you own a self storage property or a portfolio of self storage properties and would like to further discuss today’s self storage market, please reach out to Tom Gustafson or Matt Davis with Colliers Self Storage. We would be happy to help with a FREE VALUATION of your property and/or portfolio if you are thinking about selling. Let our expertise help you get the maximum price the market will pay!