Self storage rents continued to decline in May due to oversupply. Over the past 12 months, street-rate rents dropped by 0.9 percent for 10×10 non-climate-controlled and 2.2 percent for climate-controlled units of similar size. However, the downward trend has moderated throughout the first half of 2019, showing hope for positive movement in the coming months.
Street rates dropped in around 42 percent of the top markets tracked by Yardi Matrix. Charleston continued to see heavy decline year-over-year, as rent rates decreased 6.6 percent for non-climate- and 8.2 percent for climate-controlled units. Street rate-rents also kept falling in Portland, for both climate- and non-climate-controlled storage spaces, by 6.6 and 4.7 percent.
Limited opportunity for new development pushed rent rates up in the Inland Empire by 2.7 percent for the standard non-climate-controlled units. Other supply-constrained markets such as Las Vegas (5 percent) and Los Angeles (2.2 percent) also experienced increased asking rates. For climate-controlled units, the strongest gains were recorded in San Diego (4.3 percent) and in Columbus (3.7 percent).
Nationwide, projects under construction or in the planning stages accounted for 9.5 percent of existing stock, indicating a 10-basis-point decrease compared to the previous month. The decline is a result of several projects reaching completion in the first part of the year. Positive demographic trends and stable economic trends continue to drive demand for storage spaces in a number of metros.
Portland, Nashville and Seattle are still leading the nation in development, as projects under construction or in the planning stages account for 25.7, 22.7 and 21 percent of total inventory. Additionally, growing wages and residents relocating from the Bay Area have led to heightened development in Sacramento, where projects under construction or in the planning stages represent 11.9 percent of existing stock, a 180-basis-point increase over May.