Chris Marr, president and CEO of publicly traded self-storage real estate investment trust (REIT) CubeSmart, announced last week that he expects pressure from new supply to lessen next year. Marr made the declaration during an Oct. 25 call to discuss the REIT’s third-quarter earnings.
The company predicts new development in the top 12 markets in which it operates will drop to about 110 to 150 new developments next year, compared to the 300 to 360 planned for 2019. These markets represent about 70 percent of CubeSmart’s revenue, Marr said.
CubeSmart predicts the biggest decline in deliveries will be in Chicago, Dallas, Houston and Miami. Despite the slowdown, the REIT still expects revenue growth to be hampered by new supply.
“We’re just starting to see [the] rental rate climb back from its lows, and [that] gives us some optimism as we go into 2020 that those markets will continue to show improvement,” Marr said.
An August report from Yardi Systems Inc. stated the storage industry could be facing a “rocky road for the foreseeable future,” due to continually high levels of facility development nationwide. 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.
CubeSmart owns or manages 1,165 self-storage facilities across the United States. Its operating portfolio comprises 78.8 million square feet.
SpareFoot, CubeSmart Expects Less New Supply Pressure in 2020