Population growth, new supply and oil prices are all having an impact on the self-storage industry and lending an air of unpredictability at the same time, say STR and Argus.

“The new supply in Houston is satisfying demand that was created by population growth, as well as lack of development over the past several years before the oil and gas market downturn,” said Bill Brownfield, a real-estate expert with self storage brokerage firm Argus. “It is possible that certain submarkets will be overbuilt and see some occupancy declines by mid-2017, but we do not believe that we have witnessed this to date. But stay tuned for 2017.”

An example of the appeal of self-storage properties throughout the state can be found in the recent sale of a four-storage facility portfolio. The Store Here-branded self storage portfolio totaled 2,162 units in Austin, Denton, Fort Worth and Harker Heights, TX (in the Killeen area).

Westport Properties Inc. purchased the portfolio. Holliday Fenoglio Fowler LP marketed the property on behalf of the seller, a joint venture partnership between Woodbridge Capital Partners LLC and RHW Capital Management Group LLC.

The portfolio comprises facilities at 201 West Stassney Ln. in Austin, 1815 Shady Oaks Dr. in Denton, 4772 Golden Triangle Blvd. in Fort Worth and 700 Indian Trail in Harker Heights. The portfolio features 420 climate-controlled units, which is 19.4% of the total units, three warehouse/commercial spaces and 77 RV/surface parking spaces.

All of the properties are in highly visible and accessible locations along the Interstate 35 corridor, a major north-south arterial highway that stretches approximately 500 miles within Texas and connects four of the state's major cities: Austin, Dallas, Fort Worth and San Antonio.

The HFF self storage team representing the development manager was led by director Barbara Guffey, managing director Richard Schontz and associate director Matthew Weckesser.

Nationally, GlobeSt.com learns that the US labor market continues to make strides with the unemployment rate teetering near a post-recession low and wage growth outpacing the rate of inflation. The resounding strength of the job market is driving improvements in retail spending and household formation. Elevated consumption is outweighing available residential space, bolstering underlying self-storage demand. Additionally, the strength of the multifamily sector is having a positive impact on self-storage as apartments and other renter housing typically don't have the room to accommodate all of a resident's belongings. These factors contributed to a decline in self-storage vacancy with the mid-year rate sitting at a post-recession low, according to Marcus & Millichap's recent self-storage report.

HOUSTON—The appeal of self storage is heating up in Houston, along with other areas of Texas. There are 58 self-storage projects under development in Houston, representing the potential for a roughly 6% increase in supply, according to STR.

“Houston was a hot topic during quarterly earnings calls because of performance deceleration in the market and an overlying interest in development in Texas,” said Anne Hawkins, STR's executive vice president. “The self-storage industry has been trying to gauge the impact of new supply on performance for quite some time and this interest level has heightened in Houston.”

STR expects 41 self-storage facilities to be completed and begin operating in the Houston market during the next year. Harris County has the most development activity with 21 projects and Fort Bend County ranks second with 11 new projects.

“The potential 6% increase in new facilities is actually lower than the other markets that we are tracking nationwide,” Hawkins said. “But when considering all development projects, Houston faces a potential supply increase of 3.8 million net rentable square feet, or a little more than half a net rentable square foot per person. That growth would outpace historic population growth rates (approximately 2.5%), thus raising concern over how much new supply the Houston market can absorb. Right now, several factors are likely in play when it comes to Houston's relative underperformance—mainly the decrease in oil prices and the resulting dislocation from that phenomenon. It is unclear what role new supply entering this MSA plays in performance.”

Population growth, new supply and oil prices are all having an impact on the self-storage industry and lending an air of unpredictability at the same time, say STR and Argus.

“The new supply in Houston is satisfying demand that was created by population growth, as well as lack of development over the past several years before the oil and gas market downturn,” said Bill Brownfield, a real-estate expert with self storage brokerage firm Argus. “It is possible that certain submarkets will be overbuilt and see some occupancy declines by mid-2017, but we do not believe that we have witnessed this to date. But stay tuned for 2017.”

An example of the appeal of self-storage properties throughout the state can be found in the recent sale of a four-storage facility portfolio. The Store Here-branded self storage portfolio totaled 2,162 units in Austin, Denton, Fort Worth and Harker Heights, TX (in the Killeen area).

Westport Properties Inc. purchased the portfolio. Holliday Fenoglio Fowler LP marketed the property on behalf of the seller, a joint venture partnership between Woodbridge Capital Partners LLC and RHW Capital Management Group LLC.

The portfolio comprises facilities at 201 West Stassney Ln. in Austin, 1815 Shady Oaks Dr. in Denton, 4772 Golden Triangle Blvd. in Fort Worth and 700 Indian Trail in Harker Heights. The portfolio features 420 climate-controlled units, which is 19.4% of the total units, three warehouse/commercial spaces and 77 RV/surface parking spaces.

All of the properties are in highly visible and accessible locations along the Interstate 35 corridor, a major north-south arterial highway that stretches approximately 500 miles within Texas and connects four of the state's major cities: Austin, Dallas, Fort Worth and San Antonio.

The HFF self storage team representing the development manager was led by director Barbara Guffey, managing director Richard Schontz and associate director Matthew Weckesser.

Nationally, GlobeSt.com learns that the US labor market continues to make strides with the unemployment rate teetering near a post-recession low and wage growth outpacing the rate of inflation. The resounding strength of the job market is driving improvements in retail spending and household formation. Elevated consumption is outweighing available residential space, bolstering underlying self-storage demand. Additionally, the strength of the multifamily sector is having a positive impact on self-storage as apartments and other renter housing typically don't have the room to accommodate all of a resident's belongings. These factors contributed to a decline in self-storage vacancy with the mid-year rate sitting at a post-recession low, according to Marcus & Millichap's recent self-storage report.