CBRE Group Inc., a commercial real estate services and investment firm, has released a report examining the results of its “Self Storage Investor Survey” through its Valuation & Advisory Services Division. The five-page report concludes investors continue to have high confidence in the self-storage sector due to “continued strong returns in cash flow, combined with restrained new construction trends,” according to a press release.
The survey results come from collaboration with 42 valuation and advisory professionals and interviews with more than 50 brokers, investors, lenders, facility owners and “industry leaders,” according to the report. It includes observations on national trends, key indicators from the second half of 2015, market segmentation by property class, and annual returns by property sector.
“Supply and demand market fundamentals remain strong in self-storage, resulting in continued, robust growth in operating results,” the release stated. Although a five-year trend of capitalization-rate compression continues, the rate dropped only 16 basis points between the fourth quarter of 2014 and the fourth quarter last year, which was the smallest margin in recent years and about half the pace of the previous year.
“Based on acquisition activity and comparative spreads in cap rates to 10-year Treasuries, investor confidence in the sector remains high,” said R. Christian Sonne, executive vice president and National Self Storage Valuation Group leader at CBRE.
In terms of development, approximately 300 new self-storage facilities were constructed in 2015, and CBRE forecasts 600 will be built this year.
A PDF version of the investor survey report is available as a free download from the CBRE website.
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.