After the big Covid 19-inspired boom, self-storage asking rents have been on a downward slope, a trend giving little evidence of ending any time soon, says a new industry survey.
According to the latest Self Storage National Report, published by the Scottsdale, Arizona-based Yardi Matrix, the average rental price per square foot at $16.44 nationally is 4.5% lower than where things stood in May of 2023.
A year ago, the average price per square food stood at $17.36.
The decline is connected with several larger trends: continued high interest rates and the impact those rates have had on the U.S. housing market.
The rate drop has hit both climate-controlled and non-climate-controlled spaces nationally, with the decrease ranging anywhere from 1.2% in New York to a high of 9.1% in Atlanta.
Rent declines have showed up everywhere, with more than 5% drops in Philadelphia, Charleston, Tampa, Las Vegas, and Phoenix.
In looking at the big Texas market, Yardi Matrix noted rent growth increases in Austin and Houston, while Dallas and San Antonio have “underperformed on rent growth.”
The burden of high interest rates, meanwhile, will “continue to influence storage demand from home sales.”
The home sales trend, continues the report, will “impact self-storage transaction activities well into the next year, despite substantial pools of dry powder waiting on the sidelines.”
Whatever the latest rates, new self-storage construction remains strong, with a total of 76.1 million square feet nationally now being built. That construction rate growth ranges from less than 1% in San Jose, to 7.4% in Orlando.
Phoenix saw a construction increase of 4.5%, while Denver stood at 1.4%.
By Garry Boulard
Image Credit: Courtesy of Unsplash
