The self-storage industry could be facing a “rocky road for the foreseeable future,” thanks to continually high levels of facility development nationwide, according to a recent report by Yardi Systems Inc., which provides management software for self-storage and other types of real estate. The company issued the caution through its Yardi Matrix self-storage data-services platform as part of its July “National Self Storage Report,” which examines the impact of self-storage supply across the United States.
Nationally, self-storage rental rates remain strong in most metropolitan areas, though street rates dropped 1.7 percent year over year in June for 10-by-10 traditional units. In all, about 60 percent of the “top metros” tracked by Yardi experienced rate declines. New development has hit Houston and Pittsburgh, Pa., particularly hard and is beginning to affect rate growth in Boston and New York City, according to a press release.
“Rents are likely to face increased pressure over the summer, especially in pockets of elevated [new-development] deliveries,” analysts said.
Listed rates were highest in West Coast markets with low development activity, including Los Angeles, San Francisco and San Jose, Calif. Favorable business and cost-of-living conditions continue to drive self-storage demand and rent growth in Las Vegas, while an expanding economy, coupled with population growth, in Colorado have made it an attractive market for development, the release stated.
The July report is available in PDF format as a free download from the Yardi Matrix website. The six-page publication compiles data from more than 2,000 properties in the supply pipeline, the release stated. It includes information on development projects and rental rates for 31 markets.
Yardi Matrix tracks self-storage development activity and rental-rate data in more than 130 markets nationwide.
Yardi Systems develops and supports software for the management of property and real estate investments. Its suite of programs includes accounting, ancillary processes, operations and services with portfolio-wide business intelligence and platform-wide mobility. Based in Santa Barbara, Calif., and founded in 1984, the company serves clients worldwide from offices in Asia, Australia, Europe, the Middle East and North America.
PR Newswire, Yardi Matrix: New Projects Braking U.S. Self Storage Rent Growth