The cities that make up America’s Rust Belt region have been underperforming for a long time. However, efforts to diversify and revitalize the region’s employment base in recent years, have helped to improve economic fundamentals. Millennials looking for more affordable living are also flocking to the region, driving demand for rental housing, as well as self storage.
As of September, there were more than 7.4 million square feet of self storage space under construction or in the planning stages across the Rust Belt markets. Meanwhile, developers completed a total of 4.1 million square feet of storage space year-to-date through September, according to Yardi Matrix data.
The table below highlights the top 5 Rust Belt markets for underway and planned storage projects as a percentage of total inventory, using Yardi Matrix data.
|Rank||Metro||Under Construction + Planned SF||Percentage of Stock|
Source: Yardi Matrix
5. Cincinnati, Ohio
With moderate construction activity over the previous decade, Cincinnati had some 805,000 square feet of storage space under construction or in the planning stages as of September, representing 7.1 percent of total inventory. With a completed stock of 11.3 million square feet, the metro has 6 net square feet of storage space available per person, below the 6.9 national average.
A cluster of projects is located near interstates 71 and 75 in North Cincinnati. While the largest facility underway is Public Storage’s 117,324-square-foot development around 7 miles from Northern Kentucky University at 3350 Madison Pike in Fort Wright, Ky.
4. Detroit, Mich.
Detroit has been steadily recovering from the effects of the health crisis, with solid employment growth, recovering 101,800 jobs in the 12 months ending in July. Multifamily development picked up pace this year, around 6,050 units were under construction as of June and more than 3,600 units are slated for completion by the end of this year—exceeding completions registered in previous years.
Self storage development has also gradually accelerated over the past five years in Detroit. So far this year, a total of 13 projects or 973,561 square feet of storage space came online in the metro, outpacing the 793,043 square feet space delivered throughout 2020. As of September, there were 15 projects under construction and 26 in the planning stages, encompassing more than 2.4 million square feet. The metro’s new-supply pipeline accounted for 8.6 percent of existing inventory.
3. Madison, Wisc.
After a decade of limited deliveries, Madison had more than 307,000 square feet of storage space under construction or in the planning stages as of September, accounting for 8.9 percent of existing inventory. Year-to-date through September, developers also completed three projects, encompassing 190,513 square feet. The city has a self storage stock of 3.4 million square feet, and a per-person inventory of 6.2 net square feet, below the national figure.
The largest project underway is SAFStor’s 104,200-square-foot facility located in an Opportunity Zone at 2700 Ski Lane. The four-story building is slated for completion by the first quarter of 2022. Real Estate Management Solutions is also developing a five-building facility encompassing 57,400 square feet in the Cottage Grove suburb of Madison. The project is expected to come online by the end of October.
2. Buffalo, N.Y.
Buffalo’s storage inventory has been steadily growing over the past few years. Last year, the metro reached a new cycle peak in completions—a total of five projects, comprising 221,292 square feet of storage space, were delivered. As of September, Buffalo had 506,938 square feet of storage space under construction or in the planning phases, accounting for 12.9 percent of existing stock.
Most of the development in the pipeline are conversion projects, including an Extra Space Storage branded property. Granger Development is converting a former retail building into a 102,200-square-foot storage facility at 2590 Military Road in Niagara Falls.
1. Syracuse, N.Y.
Syracuse tops our list, with around 410,000 square feet of new storage space underway or in the planning stages, representing 15.5 percent of existing stock. The city had 9 projects in the pipeline, six in the planning stages, and three under construction slated for completion by the end of this year.
With a completed inventory of more than 2.6 million square feet, Syracuse has only 4.5 net square feet available per person. Kohan Retail Investment is converting a 102,226-square-foot space into an Extra Space branded self storage facility at the Great Northern Mall. Kohan bought the distressed mall in 2017, for $8.5 million, local newspapers reported.