A new report from Yardi Matrix illustrates how the self storage industry’s performance mirrors employment growth and population gains. Development activity for self storage space is highest in metros such as Portland, Ore., Nashville, Tenn., Seattle and Orlando, Fla., where corporate expansions and relocations, along with college student enrollment and multifamily development, are driving demand. Nationwide, units under construction and in the planning stages account for 9.4% of inventory. The report also documents strong development activity in Boston and New York City, which are historically undersupplied markets. Street rates for self storage units declined slightly nationwide in December a normal seasonal occurrence. In addition, the report notes, “New projects coming online over the past few months continued to weigh on rent growth at the national level, albeit at a much slower pace compared to the previous month.” Yardi Matrix tracks nearly 2,000 self storage development projects in the pipeline and maintains operational profiles on more than 24,600 completed properties. Read the full supply and rent recap for January 2019. Learn more about Yardi self storage...

The self storage industry has been strong over the last several years, with economic growth creating new households and driving demand. Can this pace continue or will the recent supply surge outpace demand? That question formed the basis of a recent web presentation by Jeff Adler and David Dent, vice president and senior real estate market analyst, respectively, for Yardi Matrix. Their discussion focused on four areas: Macroeconomic Outlook The U.S. economy is in very good shape, Adler and Dent reported, with gross domestic product growing, inflation under control, and a tight labor market “pulling people off the sidelines,” although trade and immigration policies could brake the growth. Their research reveals that millennials and Baby Boomers are leaving big cities such as New York, Los Angeles, Chicago and Miami in favor of smaller, lower-cost cities with concentrations of intellectual capital work, which in turn drives storage demand. Destination metros include Dallas-Fort Worth, Tampa, Fla., Atlanta and Charlotte, N.C., along with retirement favorites such as Las Vegas and smaller mountain metros in the Appalachians and the Rockies. However, rental market fundamentals are faltering, with only 12 of 133 markets studied by Yardi Matrix showing year-over-year rent increases in September 2018, versus as many as 41 in previous years. Profile of Current Supply and Demand Domestic migration patterns have made Las Vegas, Tampa, Phoenix, Orlando. Fla., and Columbus, Ohio, the most attractive metros for self storage providers, Adler and Dent reported. The national average of self storage projects under construction and planned as a percent of existing inventory is 9.5%. Portland, Ore., Nashville, Tenn., Orlando, Boston and Seattle have the highest percentages. Approximately half of storage customers are in the process of moving while the other half are long-term users. Adler and Dent noted that approximately...