While industrial is taking all of the attention, the self-storage market is quietly becoming one of the top performing CRE asset classes. According to the Spring 2022 Nunez Self-Storage Report, self-storage was among the most actively traded asset classes last year. Demand for self-storage fueled strong occupancy rates north of 90% and rent growth.

Last year, the rents on a 10 x 10 non-climate controlled units increased 8.5%, and strong rent growth is predicted again this year, albeit at a slower rate. Much of the market growth was concentrated throughout the Sunbelt region, which experienced substantial inward migration during the pandemic, and the formation of new households, particularly among millennials, in 2021 helped to drive demand.

In the Phoenix and Tucson markets, where Denise Nunez, executive managing director at NAI Horizon and the author of the report is based, there are currently 29 new storage facilities under construction and 54 new projects proposed. Nunez notes that Phoenix has had the fastest-growing home price appreciation in the nation for 31 consecutive months, at 32.5%. This has underscored the activity in the market.