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CBRE Valuation & Advisory Services Releases Self-Storage Market Conditions Report

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CBRE Group Inc., a commercial real estate services and investment firm, has released a “Self-Storage Valuation Metro Market Report” for the second-quarter 2016 through the Self Storage Valuation Group (SSVG) within its Valuation & Advisory Services Division. The three-page report ranks real estate and development market conditions in 38 self-storage markets using an index score based on capitalization (cap) rates, income and occupancy. Based on their scores, markets are identified as undersupplied, oversupplied or at equilibrium.

Metrics for the report comes from REIS Inc., a provider of commercial real estate market information and analytical tools, and cap-rate data from the CBRE second-quarter Investor Survey, according to a press release.

Of the markets examined, 16 are characterized as undersupplied, 11 oversupplied and 11 at equilibrium. The top five undersupplied self-storage markets are New York City; San Jose, Calif.; Los Angeles; San Diego and Baltimore. The top five oversupplied markets are Seattle; Tampa Bay/St. Petersburg, Fla.; Dallas; Austin, Texas; and Nashville, Tenn.

Market conditions are determined by CBRE’s proprietary model, which compares existing supply per person to four variables: average household income, average household size, percent of renters and population.

“Analysis by major metro markets can be useful for comparison from a national perspective, but these metrics should not be relied upon for local area analysis. Factors that affect local self-storage product type include zoning regulations, local demographics, household income and density, among others,” said Christian Sonne, executive vice president of the SSVG. “The best analytics for this sector are by local trade area. From our investor surveys and ZIP-code studies of existing facilities, it is clear the trade area for self-storage is relatively small, generally within a three-mile radius for a typical suburban property.”

PDF version of the report is available as a free download from the CBRE website.

SSVG is comprised of 40 valuation professionals who specialize in the self-storage sector. The CBRE Valuation & Advisory Services Group provides appraisals, feasibility and market studies, underwriting due diligence, and other consulting services. It has a staff of more than 1,700 appraisers, architects, engineers and environmental scientists in more than 300 metropolitan areas around the world.

CBRE Group, a Fortune 500 and S&P 500 company headquartered in Los Angeles, employs approximately 70,000 employees, excluding affiliates, and serves real estate investors, occupiers and owners through more than 400 offices worldwide. CBRE offers strategic advice and execution for appraisal and valuation; corporate services; development services; investment management; mortgage banking; property, facilities and project management; property sales and leasing; and research and consulting.

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