Sustained Self-Storage Demand Bolstered by Strong Economy, But Construction Wave Creates Pockets of Risk
Marcus & Millichap’s National Self-Storage Group just released the National Self-Storage Report for the 2nd half of 2018. Population growth, job gains, wage growth and lifestyle trends strengthen the need for storage units in metros across the country. Developers have aggressively expanded pipelines to meet demand, slowing rent growth as the new supply is absorbed. A short-term supply and demand imbalance is emerging in concentrated pockets of select metros, though on the national level the long-term outlook remains positive.
Key Findings:
- Accelerating household formation and steady apartment demand by millennials and baby boomers alike supports self-storage demand.
- Operators are combating heightened development by offering increased concessions, sacrificing topline rent growth to bolster occupancy.
- Many investors are investigating secondary and tertiary markets for their stronger yields and more manageable development pipelines.
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