Street rate performance was weaker than normal in July
SANTA BARBARA, Calif., Aug. 16, 2023 – Self storage street rates slipped month-over-month in July as demand and supply trends soften, according to the latest National Self Storage Report from Yardi® Matrix.
Street rate performance was weaker than normal in July. Nationally, overall street rates (all unit sizes and types combined) dropped $1 to $141, down 0.7 percent month-over-month. Historically, rate growth is positive in July, averaging a sequential increase of 0.8 percent in the past seven years.
“Lower street rates are a result of weak move-in activity, with average REIT occupancy in Q2 2023 down 400 basis points from its all-time peak in Q2 2021. Demand is impacted by the weak home sales market and domestic migration coming down from pandemic highs,” state Matrix analysts.
Street rates continued to be negative year-over-year in July in nearly all of Yardi Matrix’s top 31 metros. Rates for 10×10 non-climate-controlled units dropped in 30 of the top 31 metros compared to July 2022, while rates for similar-size climate-controlled units also decreased in all but one of the top markets (Pittsburgh).
Despite the challenges, there are bright spots. The job market remains sound, and strong consumer balance sheets will support long-term demand. Self storage demand has historically been resilient, coming from a variety of sources, and growth rebounds quickly following a downturn due to month-to-month lease terms and flexible customer rate increase programs.
Learn more about the state of the self storage sector nationwide.
Yardi Matrix tracks a total of 4,916 self storage properties in various stages of development, including 830 under construction, 1,977 planned, 672 prospective, 1,375 abandoned and 62 deferred. Matrix also maintains operational profiles for 30,152 completed self storage facilities across the United States, bringing the total data set to 35,068.
Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, student housing, industrial, office, retail, vacant land and self storage property types. Email [email protected], call (480) 663-1149 or visit yardimatrix.com to learn more.
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