National street rate performance continued to improve in October, but will be tested by latest COVID-19 surge
SANTA BARBARA, Calif., Nov. 24, 2020 – It was another strong month for the self storage sector in October, according to the latest National Self Storage Report from Yardi® Matrix.
Street rates continued to rebound remarkably in October, buoying the already positive outlook for storage operators. National street rates for standard 10×10 non-climate-controlled (NON CC) units increased by 2.7% compared to October 2019. Year-over-year rates for 10×10 climate-controlled (CC) units recorded an increase of 0.8%, marking the first positive growth in annual rates for this unit type since the end of 2017.
Annual street rate performance was negative in only about 23% of the top markets tracked by Yardi Matrix for 10×10 NON CC units. Year-over-year, 22 markets saw positive rate growth for the unit type, while rates remained flat in two markets. In addition, several storage REITs reported healthy demand and strong occupancy across their facilities in their third quarter earnings calls.
However, next month’s report will indicate whether the nationwide surge in COVID-19 virus cases will hamper the strong storage performance. “With a third surge of the COVID-19 pandemic hitting the country and likely to strain the U.S. economy again, the strength and resiliency of the self storage industry will be put to further tests in the coming months,” states the report.
Nationwide, Yardi Matrix tracks a total of 2,153 self storage properties in various stages of development—comprising 585 under construction, 1,148 planned and 420 prospective properties. The national new-supply pipeline as a percent of existing inventory increased by 0.3% month-over-month in October, and the share of existing projects in planning and construction stages accounts for 8.5% of existing inventory.
Gain detailed insights into this resilient real estate sector in the November self storage national report.
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 and self storage property types. Email [email protected], call (480) 663-1149 or visit yardimatrix.com to learn more.
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