'Uncool' News for Climate-Controlled Units
Yardi Systems' chilling report reveals that every one of the 31 self-storage markets saw negative growth this October, impacting both traditional and climate-controlled units. Discover the details and how it might affect your self-storage business.
The Self Storage 'Chilling' Report, 31 Reasons Why Your Self Storage Business Might Be Of ‘Negative Growth’
The dynamic real estate software wizards at [Yardi Systems Inc.]have recently published a somewhat chilly "Self Storage National Report" - a 10-page punch of reality tackling the impacts of rental rates and new supply in the self-storage industry of Uncle Sam's great land.
So, why should you invest your precious TikTok scrolling time into dissecting this report? It's a Crash Course in Self-Storage 101. With meticulous data assembled from 31 markets, we're looking at more numbers than a pesky high-school calculus equation. But don't worry. We've braved the calculations and are here to divulge the findings with some humor to keep the tears at bay.
Every single one of the 31 markets assessed saw negative growth this October. Yes, you heard right - the self-storage industry is taking a deep dive—cue collective sighs from storage owners worldwide. The national average for the annualized same-store asking rate per square foot took a 1.6% tumble from $16.77 the previous month. Ouch!
That's not all, folks. Traditional units' same-store pricing had fallen year-over-year across all but one lucky market (wherever that may be). To add to the pain, asking rates for same-store, climate-controlled units followed suit, slipping across the board like an ill-timed banana peel gag.
The report insightfully chips in: "The self-storage industry is still feeling the impact of broader economic forces on demand." AKA, high residential mortgage rates are slowing home sales, reducing the often nomadic population at the heart of the self-storage demand. Storage operators are rather desperately lowering asking rates, hoping to drive new rental market.
There is a silver lining, thankfully, *for existing self-storage tenants*. Unit rates for them seem to be holding their own, trending upward. Go them! It means existing customer demand is faring well, bolstering rental incomes for operators. Another wave of relief comes from the stable labor market and slowing inflation that could boost the industry by lifting the financial confidence of new and, God-willing existing customers.
Moving swiftly along, Yardi's report informs us the construction pipeline for new self-storage supply contracted ten basis points month over month. Surprisingly, half the markets reported an unchanged construction pipeline, while ten others saw a decrease.
In the spirit of ‘Show, Don’t Tell’, if you’re anything like me and prefer seeing doomsday prophecies in full color (and graphs), you can snatch up your free download of the report [here]. Yardi, known for wearing multiple hats, has its eyes on over 29,234 existing self-storage facilities and a whopping 5,006 storage projects in various stages of development across borders from Asia, Australia, Europe, the Middle East, and North America. Star gazing, anyone?
Now, take a breath, and ask yourself - are you prepared to delve into this The Matrix series' lesser-known cousin, the Yardi Matrix? Maybe grab an extra-large coffee (or two) and get ready to uncover the cold, hard truth of the self-storage industry:
With hindsight and a slightly less rose-tinted view of the self-storage industry, is this article truly worth your time?* You bet it is, but I'd still keep my day job if I were in the self-storage business!
🔒📚 Hi! I'm Eric Manning, a self-storage operations wizard and lifelong learner. 🗝️ My articles blend industry know-how with a dash of humor and wisdom. Whether you're a storage newbie or a pro, join me as we explore the world of storage, one witty insight at a time! 📦😊🔑
