Read the latest Yardi Matrix Self Storage Market Outlook.
On a monthly basis, all the top metros recorded negative rate growth, while in August only 23 metros had monthly decreases.
Key Takeaways:
- As of September, the annual street continued to be negative with the average annualized same-store asking rent per square foot down 4.2 percent for the combined mix of unit sizes and types.
- On an annual basis, the same-store national street rates for the combined non-climate-controlled units fell 4.1 percent, while the same store asking rates for climate-controlled units declined 4.2 percent.
- Month-over-month, all of the top 31 metros tracked by Yardi Matrix showed negative growth influenced by seasonality as well.
- The national under-construction pipeline equaled 3.7 percent of existing inventory, unchanged from the previous month.
Street rates down year-over-year reflecting softening demand
In September, the national average annualized same-store asking rent per square foot was $17.07 for the combined mix of unit sizes and types. Compared to the $17.83 average of September 2022, this figure marked a 4.2 percent decrease. September’s same-store national street rates for combined non-climate-controlled units saw a significant decline from their average of -2.9 percent over the previous 12 months, falling 4.1 percent year-on-year. Similarly, the 4.2 percent decline of the same-store asking rates for the climate-controlled units in the same main sizes, was below the -3.4 percent average of the previous 12 months.
In September, the majority of the top 31 metro areas had negative street rate growth year-over-year. New York proved to be the exception to the rule, as the combined same-store rates for non-climate-controlled units increased 0.8 percent year-over-year. While the street rates for the same-store climate-controlled units across the metro increased 0.1 percent annually.
The average national combined street rates per square foot fell 24 cents to $17.07 in September, marking a 1.4 percent decline month-over-month. Seasonality influenced the monthly asking rates, as all the top metros recorded negative rate growth, while in the previous month only 23 metros had decreases. Columbus proved to be the most affordable metro, as the September average combined street rates per square foot fell 1.9 percent to $12.85.
The performance of street rates can vary in metro areas with strong lease-up supply
On a national level, new supply over the previous three years has accounted for 8.5 percent of the stock at the beginning of the period, while deliveries during the previous 12 months have accounted for 2.5 percent of that amount. Philadelphia, among the metros with the most recent completions as a percentage of existing stock and also saw a large year-over-year drop in street rates in September. Meanwhile, New York also had a sizeable amount of new supply in lease up, while it was the sole metro that had street rate growth.
Yardi Matrix keept track of a total of 4,909 self storage properties in various stages of development, across the country. The development pipeline includes 836 properties under construction, 1,942 planned projects, 650 prospective facilities, 1,415 abandoned projects and 66 deferred properties. As of September, the under-construction portion of the pipeline amounted to 3.7 percent of existing stock, unchanged from the previous month.
Orlando and Charleston recorded the biggest increases in construction activity in September, with both metros seeing a 60 basis point month-over-month gain. Orlando’s continued have a significant under-construction supply with 2.2 million net rentable square feet of storage space underway and an additional 2.5 million square feet in the planning stages.
Read the full Matrix Self Storage National Report-October 2023.
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