CBRE Group Inc., a commercial real estate services and investment firm, has released its third-quarter 2016 “Self Storage Investor Survey,” a report produced through its Valuation & Advisory Services Division. The three-page report includes metrics on key indicators in the self-storage market, including capitalization (cap) rates, discount rates, market-rent change and residual cap rates. It also provides observations on market segmentation by property class and yield rates.
The report concludes that self-storage cap rates have declined to an average of 5.64 percent, a reduction of 10 basis points compared to the fourth quarter of 2015. “The decline is due to continued investor interest in the sector and an increasing spread between the average cap rate and 10-year Treasuries,” the report states. Cap rates are likely to continue to compress, and “self-storage may be less impacted by an increase in interest rates than other core real estate.”
Additional information includes absorption time, marketing time, optimism index, profit on costs, trade-area size and other metrics. The data is presented in a table with comparison information from the last 12 years.
The survey is based on interviews with more than 50 buyers, brokers, investors, lenders, owners and real estate investment trust analysts. Interviews were conducted during the second quarter. 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.