SANTA BARBARA, Calif., Sept. 08, 2022 – Consumer purchases of recreational vehicles and boats are spurring strong demand for storage facilities, creating investment opportunities within this niche asset class, according to a new research bulletin from Yardi® Matrix.

The bulletin outlines factors driving demand for RV and boat storage. Most notable among them are a record number of acquisitions. In 2021, 571,000 RV registrations and 313,000 boat sales were recorded, driven largely by consumers’ desire for outdoor vacation activities during the pandemic and a shortage of space in residential areas to store the vehicles.

RV/boat storage facility deliveries are expected to rise to the highest levels in nearly two decades in 2022, the bulletin reports. However, this growth, constrained by the limited number of developers and suitable facilities, zoning issues and other factors, is not fully meeting demand.

Sixty-six property sales valued at $284.5 million took place in 2021. With the average price per acre already 40% higher in 2022 over last year, this year “will likely be another record year for RV/boat storage transaction volume,” the bulletin says.

Although vehicle sales could be slowed by rising interest rates, supply chain snags and a slowing economy, “growth in the total number of RVs and boats to be delivered over the next five to 10 years is likely to be solid and increase demand for storage,” the bulletin says.

Read the research bulletin to learn more about the RV/boat market’s current state and prospects and why this subsector of the self storage vertical presents an opportunity for investors.

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, self storage, office and industrial property types. Email matrix@yardi.com, call (480) 663-1149 or visit yardimatrix.com to learn more.    

About Yardi

Yardi® develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. With 8,000 employees, Yardi is working with our clients globally to drive significant innovation in the real estate industry. For more information on how Yardi is Energized for Tomorrow, visit yardi.com.

The post RV/Boat Storage Market Poised for Further Growth, Yardi Matrix Reports appeared first on Yardi Matrix Blog.

On a market level, rate growth is tempering across major and tertiary markets. Street rate performance in markets appears to be largely driven by population growth rather than the level of storage penetration in a market. Especially as rates remain the strongest in high-growth markets in the South, Southeast and Southwest, despite high levels of available storage supply.

This solid rate growth and healthy demand has supported robust new construction starts for the self storage industry. As a result, the new-supply pipeline has been steadily increasing since the start of the second quarter of 2022, renewing some fears of oversupply in select markets. However, rising costs and extended construction timelines will likely moderate the pace of new supply over the coming years.

RV and boat storage facilities may only be a small niche equal to roughly 3-5% of the total U.S. self storage industry, but with business booming recently, this niche is starting to draw a lot of attention. Demand for this distinctive storage type is surging due to the increasing use of RVs and boats, as well as the growing efforts of local organizations to prohibit their storage in residential areas. As the sector grows, it continues to attract investor interest, seeing record-high transaction activity in 2021. However, due to due to unique considerations and constraints in developing RV and boat storage facilities, the amount of new supply being delivered hasn’t met recent demand. Overall, the RV and boat storage niche appears to be in the beginning stages of growth, so it will be interesting to see how it evolves in coming years.

Get the full Yardi Matrix webinar recording and presentation materials.

The post [Webinar Recap] Self Storage National Outlook – Fall 2022 appeared first on Yardi Matrix Blog.

SANTA BARBARA, Calif., July 21, 2022 – Self storage rates keep edging up month after month due to persistent demand, according to the latest National Self Storage Report from Yardi® Matrix.

Average U.S. street rates for 10X10 climate-controlled (CC) units rose $1 to $132 in June, while average rates for 10X10 non-climate-controlled (NON CC) units also rose $1 to $150, both all-time highs.

“Demand continues to come from all directions, including the growth in home offices as most companies employ some type of hybrid strategy for knowledge workers, consumer spending on items such as clothing and furniture, and to a lesser degree businesses using storage for distribution purposes,” say Matrix analysts.

Solid occupancy rates also enable property managers to push in-place rents, calculating that vacant units can be filled by new customers at higher rates.

Nationally, the overall average street rate for all unit types increased 3.5 percent year-over-year in June. Although rates are at record highs, the growth rate has declined steadily since peaking at 14.4 percent in June 2021. However, market performance remains comfortably above historical trends.

Concerns for the sector center around the slowing economy and rising interest rates that have produced a reduction in home sales, which drives storage demand.

Storage facilities under construction or planned rose to 10 percent of existing stock this month. Strong fundamentals serve to incentivize development of new supply, but there is some concern that fear of oversupply may arise in highly penetrated markets.

Yardi Matrix tracks a total of 4,115 self storage properties nationwide in various stages of development — including 1,524 planned, 755 under construction and 516 prospective properties. Matrix also maintains operational profiles for 28,455 completed self storage facilities across the United States, bringing the total data set to 32,570.

Learn more about the state of the self storage market nationwide.

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 matrix@yardi.com, call (480) 663-1149 or visit yardimatrix.com to learn more.

About Yardi

Yardi® develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. With 8,000 employees, Yardi is working with our clients globally to drive significant innovation in the real estate industry. For more information on how Yardi is Energized for Tomorrow, visit yardi.com.

The post Self Storage Street Rates Up Again in June, Yardi Matrix Reports appeared first on Yardi Matrix Blog.

Cold storage has long been a niche segment of industrial. CommercialEdge tracks 900 facilities nationwide, compared to 152,000 total industrial properties. Rapidly mushrooming need for space has produced some development, with the 8.1 million square feet of cold storage space currently under construction expected to add 1.6% to total stock, according to CommercialEdge. Nearly 20% of the new development is concentrated in the Inland Empire, where 1.5 million square feet are under construction. The largest project totals 1 million square feet at San Manuel Landing.

Evolving demographic and social trends are likely to keep demand for cold storage high for the foreseeable future. Demand is being driven by consumers, particularly the growth in convenience foods and take-out meals. Nearly half of Americans surveyed by OnePoll on behalf of Home Chef say they are too busy to cook or would prefer to spend time doing other things. COVID-19 is another factor driving demand for cold storage. The Pfizer and Moderna COVID-19 vaccinations must be kept in frozen storage units that are negative 158 degrees Fahrenheit (colder than the winters in Antarctica, according to NPR) for the vaccinations to be effective.

Refrigerated storage has become an integral part of the supply chain when it comes to transporting and storing temperature-sensitive products. Cold storage offers two options: chilled or frozen. The frozen market sector is more profitable than its chilled counterpart. Cold storage operators are looking to cut a few costs by investing in CO2/NH3 cascade refrigeration systems, which are easier to maintain than the current ammonia systems, according to JLL. Operators are also investing heavily in energy-efficiency solutions to reduce operating costs.

The increasing ubiquity of cold storage has spurred demand from investors, who expect strong rent growth. Cold storage properties accounted for $2 billion in sales volume in 2021, trading at an average price of $157 per foot, according to CommercialEdge.

The market capitalization of U.S. cold storage in 2021 was about $42 billion, which is 35% of the global market, according to Grand View Research. The research firm expects the segment to grow at a compound annual growth rate (CAGR) of 13.4% from 2022 to 2030.

The post Cold Storage Industry Heating Up appeared first on Yardi Matrix Blog.

Self storage fundamentals signal a strong spring rental season for the sector.

Report Highlights:

• National street rates increased 7.6% for 10×10 NON CC and 7.4% for 10×10 CC units year-over-year in February
• Month-over-month rent growth remained flat or negative on a national level
• The new-supply pipeline accounted for 9.2% of total inventory

Thanks to record gains over 2021, the self storage industry is starting the spring rental season in a more favorable position, despite slowing rent rates over the winter. National street rates for 10×10 non-climate-controlled units grew 7.6% on a year-over-year basis in February, while rates for 10×10 climate-controlled units increased 7.4%.

From January to February, national rates stayed flat for 10×10 non-climate-controlled units at $128, while rates for same-size climate-controlled units fell $1 to $145.

Nonetheless, some metros experienced substantial growth on a month-over-month basis. For instance, rates in Seattle increased a combined $2 for 10×10 climate-controlled and non-climate-controlled units, pushing up the year-over-year rate growth by 120 basis points. Pittsburgh saw storage rates grow 0.8 percent over January, while Los Angeles recorded a 0.5 percent uptick. Overall, 10 metros experienced combined street rates decrease by $1 month-over-month, and 18 metros out of the top 31 metros tracked by Yardi Matrix saw no shift in rates.

Seasonality Hits Northeastern Markets

Growth was yet again led by markets in the Southeast and the Southwest as demand remained strong, allowing rents to stabilize at a new higher rate. At the same time, the effects of seasonality have had more impact in the Northeast, as demand in the region topped out in the second half of 2021. Despite this, industry experts expect market fundamentals to remain healthy in this region as well.

Although some of the pandemic-driven demand started to weaken in the past couple of quarters, fundamental lifestyle changes continue to fuel the heightened need for storage space. This also includes the growing need for RV and boat storage across the nation.

Appetite for New Product Remains High

Considering that there’s little to no correlation between the new-supply pipeline, completed net square feet available per person and growth in street rates, developers continue to add new projects to the inventory. Nationwide, projects under construction or in the planning stages accounted for 9.2% of existing stock, up 20 basis points over the previous month.

There were 3,864 self storage properties in various stages of development as of February. This included 730 projects under construction, 1,359 planned and 532 prospective properties. Despite developers’ appetite for new projects, increasing construction and material costs will likely cause delays in the development process, helping markets to maintain equilibrium in the near term.

Read the full Matrix National Self Storage Monthly-March 2022

The post Self Storage Outlook – March 2022 appeared first on Yardi Matrix Blog.

Although occupancy rates have slightly dropped over the winter, rates continue to hold steady.

Report Highlights:

• National street rates increased 7.6% for 10×10 NON CC and 7.4% for 10×10 CC units
• Rates for 10×10 NON CC units stayed flat, at $128, and for CC units fell $1 to $145
• Development activity remained strong, with the new supply-pipeline accounting for 8.9% of total inventory

National street rates remained healthy and changed little sequentially in January. On a year-over-year basis, street-rate rents increased 7.6% for the average 10×10 non-climate-controlled and 7.4% for the climate-controlled units of similar size. From December to January, national rates stayed flat for 10×10 non-climate-controlled units, at $128, while rates for same-size climate-controlled units fell $1 to $145.

Overall, no metros in the top 31 markets tracked by Yardi Matrix recorded negative rate performance on an annual basis. A total of 11 markets saw 10% percent or higher rent growth in the non-climate-controlled category and 25 markets registered at least 5% growth. Climate-controlled units recorded similar performance, with 11 markets registering double-digit rent growth and 22 markets experiencing at least 5% improvement.

Optimism Prevails Among Operators

Occupancy rates have slightly contracted due to increased move-outs in recent months; however, this won’t cause concerns considering that properties recorded high occupancy going into the seasonal lull. Operators are leaning toward maintaining street rates at the risk of losing some customers, instead of cutting rent rates.

Strong demographic growth continues to drive the sector’s positive performance across the South and Southwest. For 10×10 non-climate-controlled units, growth was highest in Atlanta (17.5%), Miami (16.8%), Charlotte (12.8%), Phoenix (12.6%) and Charleston, S.C. (11.8%).

This also demonstrates that currently there’s little to no correlation between supply penetration and rent increases. Charleston, S.C., has 11.6 net square feet of storage space available per capita, above the 7 net square feet national average, and the highest completed per-person inventory among the top markets. Atlanta, Charlotte and Phoenix are also in the 7 to 9 net square feet range, while Miami’s inventory is at 6.8 net square feet per capita.

Construction Headwinds on the Horizon

Thanks to positive fundamentals, such as high demand and rent rates, developers are eager to continue to add new supply across the country. However, rising construction costs and lingering supply shortages will likely slow down development in the coming quarters.

As of January, projects under construction or in the planning stages accounted for 8.9% of existing inventory, up 10 basis points over December. There were 3,831 properties in various stages of development. This included 731 facilities under construction, 1,287 planned and 520 prospective projects.

Read the full Matrix National Self Storage Monthly-February 2022

The post Self Storage Industry Report (February 2022) appeared first on Yardi Matrix Blog.

Some $10.9 billion of self storage properties traded during the year, a 161% increase over the $4.2 billion sold in 2020, and well above the previous high of $4.3 billion in 2016, according to Yardi Matrix. The growth was led by New York City, which posted $3.6 billion of sales. Some $3 billion of New York’s volume came from a single M&A deal, StorageMart’s purchase of 18 Manhattan storage facilities from parking operator Edison Properties.

Other metros with high volume included Phoenix ($468 million), Denver ($302 million) and Atlanta ($299 million). Institutional and private equity capital are focused on portfolio purchases to deploy large amounts of capital quickly.

Like transaction volume, sales price per foot took a big leap in 2021. Nationally, self storage properties sold for an average of $167 per square foot in 2021, up a whopping 50% over the $112 average in 2020 and more than double the prices paid before 2018, according to Yardi Matrix.

The growth in price reflects in part the weight of the StorageMart New York City acquisition, which accounted for 27% of the annual volume. The average price per square foot of Manhattan storage in 2021 was $612 per square foot, more than triple the national average. Manhattan real estate is expensive, even for storage facilities.

Even discounting the Manhattan deal, storage prices rose about 10% in 2021 as institutional investors entered the segment looking for stable cash flow and higher yield than multifamily and industrial properties, where competition to buy assets has driven yields to historic lows. Some institutional buyers are willing to pay higher prices for self storage portfolios because they see an upside to future cash flows, as street rates are projected to keep growing in coming years.

Other metros with high price-per-foot sales included the San Francisco Peninsula ($935), Los Angeles ($390) and San Diego ($315).

The post Storage Sales, Prices Soar in 2021 appeared first on Yardi Matrix Blog.

While performance is still positive on a year-over-year basis, a slow month-to-month decline is now visible for the storage sector.

Report highlights:

• National street rates increased 6.7% for 10×10 NON CC and 7.4% for 10×10 CC units year-over-year in December
• Month-over-month rents declined $1 for both 10×10 NON CC and CC units to $127 and $145
• The new-supply pipeline accounted for 8.9% of existing stock

National street rates for 10×10 non-climate-controlled units grew 6.7% on a year-over-year basis in December, while rates for 10×10 climate-controlled units increased 7.4%, down 80 basis points from the gains recorded in the previous month. Despite cooling rents, the growth rates are well above of where they were in December 2020, when national increases were 2.3% for 10×10 non-climate-controlled and 3.5% for climate-controlled units.

Overall, no metros in the top 30 markets tracked by Yardi Matrix recorded negative rate performance on a year-over-year basis. A total of 22 markets saw 5 percent or higher rent growth in the non-climate-controlled category and 19 markets registered the same growth in the climate-controlled category.

Nonetheless, on a month-over-month basis, national rates for 10×10 non-climate-controlled units declined by $1 to $127, and rates for the same-size climate-controlled units also fell $1 for the third consecutive month to $145.

Operators Remain Optimistic

Although self storage rents are coming off record-high gains seen in 2021, industry experts expect robust growth in 2022. Most operators will start the spring leasing season on a high note, with strong occupancy rates, giving them the possibility to maintain and ultimately increase street rates.

Optimism in the industry is also driven by the expansion of the traditional demand drivers. Besides the four Ds: divorce, death, disaster and dislocation, demand for storage is also underscored by decluttering and distribution/business needs.

Supply Maintains Growth

Nationally, projects under construction or in the planning stages accounted for 8.9% of total stock, up 10 basis points over the previous month. The number of storage facilities under construction increased by 24 to 719, while the number of planned projects dropped by four to 1,252. Overall, there were 3,022 self storage properties in various stages of development as of December.

New York continues to have the most robust pipeline, with projects under construction or in the planning stages equal to 19% of total inventory, up 40 basis points over November. Las Vegas was second on the list—the metro’s new-supply pipeline increased from 15% in November to 15.6% in December.

Read the full Matrix National Self Storage Monthly-January 2022

The post Self Storage Industry Report (January 2022) appeared first on Yardi Matrix Blog.

Report Highlights:

• National street rates rose 8.5% for 10×10 NON CC and 9.8% for 10×10 CC units year-over-year
• Rates for 10×10 NON CC and CC units stayed flat or negative month-over-month in October
• The construction pipeline accounted for 8.7% of total stock

Self Storage Rents Continued Slow Decline

Year-over-year rate growth in October dropped from the cycle peaks recorded during this summer, however gains are still high by historical standards. National street-rate rents increased 8.5% for 10×10 non-climate-controlled and 9.8% for climate-controlled units of similar size, on an annual basis. Nonetheless, on a month-over-month basis national rates stayed flat for 10×10 non-climate-controlled units, at $128, while rates for the same-sized climate-controlled units fell $1 to $146.

Although self storage rents continued to lose momentum, considering that growth has been unsustainably high and that demand for space is still strong in most of the top markets, the slowdown in rent growth will likely not cause concerns.

Strong Housing Markets Lead Storage Performance

Demand for storage is sustained by a strong economy, household formation, students returning to campus, increased consumer spending and continued migration to Sun Belt markets.

Despite a considerable storage supply, Tampa, Miami, Atlanta, Phoenix, Austin, Charlotte and Charleston, S.C., recorded the most notable rent growth year-over-year as of October, with rates for 10×10 climate-controlled units increasing by at least 15%.

These markets also registered strong growth in the housing sector, with rent growth averaging 22%, year-over-year as of October. The growing multifamily sector in these Sun Belt markets will likely continue to fuel the need for storage space as well.

Development Activity Still Robust

Across the U.S., projects under construction or in the planning stages accounted for 8.7% of existing stock, up 20 basis points over September. Month-over-month, developers broke ground on 20 storage facilities, while 23 projects moved forward into the planning stages. Overall, there were 2,399 self storage properties in various stages of development as of October.

New York and Philadelphia had the highest development pipeline as of October, with projects under construction or in the planning stages accounting for 18.3% and 18.1% of the metros’ existing inventory. Metros with high rent growth, such as Miami saw its pipeline increase by 30 basis points, to 10.9 percent of existing stock, while Tampa registered a 50-basis-point increase, reaching 8.1 percent.

Read the full Matrix National Self Storage Monthly-November 2021

The post National Self Storage Market Report – November 2021 appeared first on Yardi Matrix Blog.

Although rent performance remained strong on an annual basis, month-over-month rates are showing signs of slowing down.

Report Highlights:

• National street rates increased 9.4% for 10×10 NON CC and 10.6% for 10×10 CC units year-over-year in September
• Month-over-month rent growth remained flat or negative on a national level
• The new-supply pipeline accounted for 8.5% of existing stock

Self Storage Rents Continue to Decelerate

The self storage sector maintained its positive fundamentals over the third quarter of 2021, with robust rent increases across the country. Year-over-year in September, street-rate rents have increased 9.4% for 10×10 non-climate-controlled and 10.6% for climate-controlled units of similar size.

Despite the strong year-over-year performance, self storage rents continue to show signs of slowing down. On a month-over-month basis, rates for 10×10 non-climate-controlled units stayed level in September at a national average of $128. Meanwhile, rates for the same-sized climate-controlled units decreased 70 basis points, from $147 to $146.

From August to September, merely six, or 20% of the top markets registered positive rate performance for the 10×10 non-climate-controlled units and only four, or around 13%, saw an uptick in rates for the same-sized climate-controlled units.

This is a notable decline compared to the first half of the year when most of the top markets recorded steady growth month-over-month. The slowdown in rate growth might indicate that the heightened demand experienced at the peak of the pandemic is beginning to soften.

Sun Belt Markets Maintain Momentum

The self storage sector continued to benefit from the popularity of the Sun Belt markets among relocating residents and businesses. Miami, yet again, led the nation in rent growth, registering double-digit increases across all unit types, with rates for the standard 10×10 non-climate-controlled units increasing 20% year-over-year in September.

Other Sun Belt metros, such as Atlanta, Austin, Houston or Tampa also showcased strong performance. On a year-over-year basis, Tampa experienced the highest rates for all unit sizes and types in more than 24 months. For the average 10×10 non-climate-controlled and climate-controlled units, rates grew 11% and 14%.

Development Activity Remains Steady

Nationally, projects under construction or in the planning stages accounted for 8.5% of total stock, up 10 basis points over the previous month. Month-over-month, developers broke ground on 26 storage facilities, while 18 projects moved forward into the planning stages. Overall, there were 2,399 self storage properties in various stages of development as of September.

Developers were busiest in Philadelphia. The metro had more than 4.7 million square feet of storage space under construction or in the planning stages, accounting for 19.2% of Philadelphia’s existing inventory as of September.

Despite having 8.8 net rentable square feet available per capita, Raleigh-Durham registered a substantial increase in development activity. From August to September, the metro’s new-supply pipeline grew by 100 basis points, to 7.9%.

Read the full Matrix National Self Storage Monthly-October 2021

The post National Self Storage Market Report – October 2021 appeared first on Yardi Matrix Blog.