Self Storage Sector Continues to Enjoy Rapid Growth in 2022
May 19, 2022 | Michael Gerrity | Commercial Real Estate News
Yardi Matrix is reporting this week the U.S. self-storage industry is continuing its march forward as both rent performance and demand keep building up in 2022.
Yardi Matrix states the need for self storage is expanding beyond the traditional pillars known as the 4D’s – dislocation, death, divorce and disaster – from storing excess stuff around the house to optimizing living space for downsizing and co-habiting to keeping office furniture and documents. Mainly supported by this increase in demand, rents have been on a steady rise over the past 12 months, with the national average street rate at $128, up 6% year-over-year.
Development is following suit, with over 131 million square feet of new storage space planned and under construction around the U.S. That would increase the existing stock – now accounting for over 1.6 billion rentable square feet of storage space – by 9%, according to data from Yardi Matrix. Roughly 50 million square feet are scheduled for delivery in 2022 alone.
Naturally, there are significant differences between the various areas of the country. More than half of the new self-storage development – approx. 68 million square feet – is located in the nation’s most active metros. Of those, the ones that see the most activity generally fall into two categories: undersupplied metros with a low per-capita inventory, or fast-growing urban hotspots where demand is fueled by significant inbound migration.
Among the top 20 U.S. metros for self-storage development, Florida’s North Port-Sarasota area registers the highest amount of new suburban self-storage. About two thirds of the 1.7M square feet of the new storage space in the process of being built in the North Port-Sarasota metro area are located in suburban settings – which suits the needs of newcomers to the area, many of them retirees in search of more peaceful surroundings.
In a similar vein, the Phoenix metro area, one of the fastest-growing regions in the nation, is also adding substantial self-storage square footage in the suburbs. About 51% of the facilities that are planned and under construction in the Phoenix metro area are suburban – a trend that has been in the making for several years. In fact, in 2021, self-storage construction volumes doubled from a year before in suburban Phoenix.
In other busy metros, including Chicago and New York, new self-storage construction remains mostly inside the urban core, where cramped living spaces continue to drive up demand.
