All Top Self Storage Metros Post Negative Growth in October

Self storage is feeling the impact of a sputtering home market, which has seen sales slow due to higher mortgage rates, reducing population mobility, and lesser self-storage demand, according to Yardi Matrix’s October self storage report.

The report’s upside for operators is that unemployment remains low (although it is rising) and inflation growth is slowing.

Nonetheless, all top metros recorded negative monthly rate growth in October with the national average combined street rates per square foot falling 1.6%, or 27 cents, to $16.77 compared to September.

The decline in monthly asking rates was broad-based, with same-store street rates per square foot falling month-over-month in all the top 31 metros Yardi tracks.

As a result, storage operators continue to lower asking rates to drive new rental demand. Street rates fell month-over-month in October, and year-over-year growth remained negative at the start of the fourth quarter.

Current operators are also facing headwinds due to slowing but steady self storage construction activity.

“However, in-place rents continue to trend upwards, supported by existing customer demand, helping bolster rental income for operators,” according to the report.

Combined same-store rates for non-climate-controlled (NCC) units fell in all but one of the top metros (New York) on an annual basis, while asking rates for same-store climate-controlled (CC) units decreased in all of the top metros.

Rates for 10×10 NCC units increased 0.4% year-over-year. This also reflected how the multifamily housing industry’s performance is mirroring that of self storage’s as New York also showed the strongest apartment market performance with multifamily rents increasing 5.0% compared to October 2022.

As for monthly performance, Portland was the best-performing top metro as it declined by just 0.4 in same-store combined street rates in October.