Dampened by high interest rates, the housing market has remained sluggish in 2024. That has influenced storage demand from home sales, causing a continued year-over-year decrease in street rates. Yardi Matrix has released its most recent self-storage national report, which reveals the following information.
Economic conditions shape current self storage performance
A team from Yardi attended the Texas SSA Executive Retreat in Galveston, Texas, from June 11–13, and presented data on self storage supply in the state. Supply in Texas markets has followed national trends in recent years. Smaller secondary and tertiary markets are experiencing a wave of new supply, which is impacting performance at existing stores, while primary markets in Texas have seen a decline in new deliveries. A waning supply pipeline has helped rent growth in recent months, particularly in Austin and Houston, while Dallas and San Antonio have underperformed on rent growth. There was ample discussion on interest rates, which are expected to remain high. This will continue to influence storage demand from home sales. It will also impact self storage transaction activity well into next year, despite substantial pools of dry powder waiting on the sidelines.
Year-over-year street rates fall across all top metros
- Street rates continued to decline on an annual basis in May. The national average annualized same-store asking rent per square foot was $16.44 for the combined mix of unit sizes and types. This is a 4.5% same-store decrease from $17.36 last May and a further deceleration from last year’s 3.8% year-over-year decline.
- Street rate growth remained negative year-over-year in all of Yardi Matrix’s top metros. Same-store rates for non-climate-controlled (NON CC) and climate-controlled (CC) units combined decreased in all 30 of the top metros in May compared to a year ago, ranging from -1.2% in New York to -9.1% in Atlanta.
- Nationally, Yardi Matrix tracks a total of 3,408 self storage properties in various stages of development, including 856 under construction, 2,015 planned and 537 prospective properties. The share of projects (net rentable square feet) under construction nationwide was equivalent to 3.6% of existing stock as of May, unchanged from the previous month.
- Yardi Matrix also maintains operational profiles for 31,154 completed self storage facilities in the U.S., bringing the total data set to 34,562. We are happy to announce the expansion of 10 of our storage markets, including Orlando, Tampa, Port St. Lucie, Charlotte, West Houston, Cleveland-Akron, Knoxville, Jackson, Reno and Portland, all of which are now available to Yardi Matrix customers on the subscriber portal.
