August 23, 2019
A new report from Yardi Matrix shows that high supply levels are slowing rent growth in the U.S. self-storage industry. Street rates for standard 10×10 non-climate controlled units tumbled 2.5% year-over-year in July, with the average rate for climate controlled units falling 4.3%. Street rate performance declined in 89% of the top metros tracked by Yardi Matrix.
“Compared to July 2018, street rates have deteriorated even in markets with strong demand and limited new supply, such as large metros on the West Coast,” the report says.
On a national level, Yardi Matrix tracks a total of 2,118 self-storage properties in various stages of development—comprising 647 under construction, 1,106 planned and 365 prospective projects. In August, the national new-supply pipeline as a percent of existing inventory increased by a slight 0.1% compared to the previous month, as several projects advanced from planned to under construction.
Nationwide, self-storage projects under construction or in the planning stages account for 9.5% of total inventory, up 10 basis points from July. Boston construction levels accelerated the most, rising 1.8% month-over-month. In Austin, another established tech market, construction activity expanded by 1.7% since July.
Despite existing stock equal to 6.2 NRSF per capita, Portland is showing significant signs of oversupply. Planned and under construction properties account for nearly a quarter of existing inventory, and street rates for both climate and non-climate units are suffering as a result. With many projects yet to complete, Portland appears poised for a long slog ahead, writes Yardi Matrix.
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