Self storage rents began to lose momentum in recent months, however growth is still considerably high by historical standards. Street-rate rents increased 8.5 percent for 10×10 non-climate-controlled and 9.8 percent for climate-controlled units of similar size, year-over-year as of October. National rates remained flat on a month-over-month basis for 10×10 non-climate-controlled units at $128, while rates for the same-sized climate-controlled units fell $1 to $146.
Although pandemic-induced demand is starting to wane, need for storage is boosted by a strong economy, household formation, students returning to school and continued migration to the Southeast, Southwest and the West.
Despite high penetration rates, metros, such as Tampa, Miami, Atlanta, Phoenix, Austin, Charlotte and Charleston, S.C., experienced the most notable year-over-year rent performance as of October, with rates for 10×10 climate-controlled units increasing by at least 15 percent.
These markets also registered strong multifamily growth. In the seven high-growth self storage markets mentioned above, multifamily rent increases averaged 22 percent, year-over-year as of October. The average occupancy rate also saw a 1.6-percent uptick year-over-year through September. Additionally, the metros absorbed 6.1 percent of multifamily stock on average, in the 12 months ending in September. The growing housing sector will likely translate into continued demand for self storage in these markets.
Nationwide, projects under construction or in the planning stages accounted for 8.7 percent of existing inventory, up 20 basis points over September. The number of projects under construction increased by 20 to 695, while 23 projects were added to the planning stages, increasing the pipeline to 1,256.
New York and Philadelphia continued to lead the nation in development activity, with projects underway or in the planning phases accounting for 18.3 percent and 18.1 percent of total stock. Metros with high rent growth, including Miami, saw its pipeline increase by 30 basis points, to 10.9 percent of existing stock, while Tampa recorded a 50-basis-point uptick in development activity, reaching 8.1 percent.