Read the latest Yardi Matrix Self Storage Market Outlook.
On a monthly basis, six out of the 30 metros saw advertised asking rent growth, 22 saw contractions, while two remained flat, according to the latest Yardi Matrix self storage market outlook.
Key Takeaways
- As of July, advertised asking rent movement continued to be negative, with the average annualized same-store asking rent per square foot down 4.1 percent for the combined mix of unit sizes and types.
- Same-store advertised asking rates for the combined non-climate-controlled units were down 3.7 percent year-over-year, while rates for climate-controlled units fell by 4.7 percent.
- Six out of the top 30 metros tracked by Yardi Matrix showed growth month-over-month, 22 saw contractions, while two remained flat, as per square foot rates were down 0.4 percent to $16.40.
- The national-under construction pipeline equaled 3.5 percent of existing inventory, shrinking 10 basis points month-over-month.
Advertised asking rents decrease M-o-M
In July, the national average annualized same-store advertised asking rent per square foot was $16.40 for the combined mix of unit and sizes. This figure marked a 4.1 percent decrease compared to July 2023. Rates for combined non-climate-controlled units fell by 3.7 percent on a year-over-year basis as of July, while same-store advertised asking rates for climate-controlled units decreased by 4.7 percent. This comes after three consecutive months of increases, with a drop in line with normal seasonal patterns.
In July, all the top 30 metro areas had negative advertised street rate growth year-over-year. The decrease in combined same-store advertised rates for non-climate-controlled units and same-store climate-controlled units ranged between -1.1 percent in Seattle and -9.5 percent in Atlanta.
Slowdown in new development
On a national level, new supply in the last three years has accounted for 8.6 percent of stock at the beginning of the period. Meanwhile, delivers equaled 2.8 percent of that amount during the previous 12 months.
Due to a large increase in home sales as a percent of households in the second quarter of 2024, stronger demand in Las Vegas has lessened the downward pressure of lease-up supply on advertised rates. The metro’s deliveries over the last three years equaled to 15.1 percent of starting inventory.
Yardi Matrix keeps track of a total of 3,404 self storage properties in various stages of development across the U.S. The development pipeline included 854 under construction, 2,033 planned and 517 prospective properties. As of July, the under-construction portion of the pipeline accounted for 3.5 percent of stock, down 10 basis points month-over-month.
Sacramento became the top metro with the largest under construction pipeline at 7.0 percent after a 20-basis-point increase in construction activity month-over-month. Nevertheless, Raleigh-Durham registered the largest uptick, up 60 basis points, followed by Austin, Philadelphia and Charlotte. The largest monthly decrease was in Orlando, with construction activity shrinking 80 basis points to 6.7 percent.
In the third quarter 2024 update, Yardi Matrix forecast a slowdown in new development, as construction continues to decline and the number of planned and prospective pipelines contract as well due to an increase in the number of abandoned projects.
Read the full Yardi Matrix National Self Storage Market Outlook: August 2024
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