Apr
17

Good Times for Self Storage Market

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self_storageThese are good times for self-storage, Marcus & Millichap says in its new report on the sector. For starters, says MMI, the sector will see a 50-basis point decline in vacancy nationwide this year, driven by “a more robust pace of economic growth” that will also fuel rent increase as high as 4.2% for climate controlled product. Already in several markets, notably California’s major cities as well as Atlanta, bp declines in vacancy last year were in the triple digits.

MMI’s report, prepared in collaboration with Richard A. Bird, who heads the firm’s national self-storage group, notes that payrolls are growing steadily. Meanwhile, real disposable income, “a broader measure of spending power than wages that takes inflation into account,” is rising. Accordingly, says MMI, “purchases of consumer goods suitable for stowing continue to climb, creating potential new requirements for space in existing self-storage properties nationwide.”

Even as growing space demand appears to justify building new facilities, “construction remains anemic,” according to MMI. There’s fierce competition for development sites, “with multifamily builders in the midst of a building boom that is pushing up land prices and shutting out self-storage developers.”

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