San Diego

The Southern California self-storage market is having a good year. The thriving apartment market has helped to drive self-storage demand and new construction, particularly in emerging submarkets, like the Inland Empire, which has recently seen a surge of apartment demand. While self-storage development is healthy, there isn't any concern that the new supply is outpacing demand.

"I wouldn't characterize self-storage as an easy asset class to overbuild.  While there are some parts of the country that are likely to see some potential over-supply, Southern California is experiencing fairly low levels of new supply compared to other parts of the country," Greg Wells, managing director of the self storage advisory group at Cushman & Wakefield, tells GlobeSt.com. "This is due to several factors; a very difficult entitlement and approval process, high land costs and very competitive development market with strength of the residential and development markets."

Bryan Grissinger, a principal of Frontera Real Estate and an active developer of self-storage product in Southern California, agrees that overbuilding isn't an issue. The firm is particularly bullish on the Inland Empire market, and is currently under construction on a property there. "There are certainly pockets that may be susceptible to overbuilding, but this has not been an issue yet in the Inland Empire as a whole," Grissinger tells GlobeSt.com. "As this market was slower to recover from the recession, rents have remained lower which makes it difficult for new development to pencil."