Brauer: As long as people have discretionary dollars with this improving economy then storage will benefit with increased consumer spending. Additionally, people are preferring to rent as opposed to home ownership, which generally affords people less storage space. These factors underlie the strong demand for self-storage units and do not appear to be slowing down. This should help sustain momentum in the self-storage market.

GlobeSt.com: What is continuing to drive the market today?

Brauer: Increased population, economic growth and increased inventory in both multifamily and single-family properties are the most important self-storage market drivers.

GlobeSt.com: How has activity in the L.A. self-storage market affected pricing and rents?

Brauer: As vacancies have fallen, rents have been improving. That said, although vacancy is expected to see a 70-basis increase as a result of supply additions, rents will continue to grow. In the city of Los Angeles, self-storage supply is still very limited, which keeps demand high. This is due to the fact that municipalities in L.A. County are generally reluctant to approve new self-storage projects and zoning ordinances are not usually favorable to self-storage developers. Given the relatively limited supply, strong demand, and rising rental rates for self-storage units, prices have remained firm.

GlobeSt.com: What is your outlook for self-storage in the next year?

Brauer: I think transaction activity will be about the same but with fewer portfolio sales occurring. There will be a similar amount of individual sales within a very competitive, limited listing environment.

LOS ANGELES—Los Angeles is among the top investment markets for self-storage, according to a new report from Marcus & Millichap. With job and wage growth stimulating a healthy economy and the move toward densification, the asset class is booming in the L.A. market. Vacancy rates are down to 7.3% and rental rates are up 3.6% to $1.90 per square foot. To find out more about the Los Angeles market, how it stacks up against the national and a forecast for the remainder of the year, we sat down with Walter Brauer, VP of investments at Marcus & Millichap, for an exclusive interview.

GlobeSt.com: How does the self-storage market in Los Angeles compare to national trends?

Walter Brauer: In terms of desirability to self-storage investors, Los Angeles is among the top self-storage markets nationwide. Performance-wise, L.A. compares very favorably with all gateway cities, such as New York, Chicago and San Francisco. The average self-storage vacancy rate in L.A. County is below the national average and average rental rates for both non-climate-controlled and climate-controlled units are above the national average.

GlobeSt.com: The self-storage market has been incredibly active in recent years. Do you expect that to change anytime soon?

Brauer: As long as people have discretionary dollars with this improving economy then storage will benefit with increased consumer spending. Additionally, people are preferring to rent as opposed to home ownership, which generally affords people less storage space. These factors underlie the strong demand for self-storage units and do not appear to be slowing down. This should help sustain momentum in the self-storage market.

GlobeSt.com: What is continuing to drive the market today?

Brauer: Increased population, economic growth and increased inventory in both multifamily and single-family properties are the most important self-storage market drivers.

GlobeSt.com: How has activity in the L.A. self-storage market affected pricing and rents?

Brauer: As vacancies have fallen, rents have been improving. That said, although vacancy is expected to see a 70-basis increase as a result of supply additions, rents will continue to grow. In the city of Los Angeles, self-storage supply is still very limited, which keeps demand high. This is due to the fact that municipalities in L.A. County are generally reluctant to approve new self-storage projects and zoning ordinances are not usually favorable to self-storage developers. Given the relatively limited supply, strong demand, and rising rental rates for self-storage units, prices have remained firm.

GlobeSt.com: What is your outlook for self-storage in the next year?

Brauer: I think transaction activity will be about the same but with fewer portfolio sales occurring. There will be a similar amount of individual sales within a very competitive, limited listing environment.