New York, Miami show strong demand for self-storage properties
Migrating retirees and low supply are fueling activity, according to a new report
A stream of self-storage properties coming online across the U.S. has been answering demand from smaller markets, along with some big cities like New York.
Overall development activity for the properties increased in December compared to November, according to a new report by Yardi Matrix. The large amount of new construction slightly pushed down asking rents on individual units.
Demand for the properties was highest in secondary markets including Orlando, Florida; Portland, Oregon; Nashville, Tennessee and Seattle, Washington.
Developers in Miami were also eager to build new properties. The percentage of inventory considered under construction — along with planned projects — rose to 16.4 percent in December, from 15.3 percent in November. Though recent report there found that demand has not yet kept pace with construction.
Rents for non-climate-controlled units dropped 4.1 percent year and dipped 2.2 percent for climate-controlled units, in November compared to the same time in 2017. The November figures were the latest for rent prices.
Demand for self-storage also remains strong in large cities like New York, where rents increased slightly over the year. Development activity in the city was up slightly from November to December.
Rents dropped or remained stagnant for various classes of units in Los Angeles, but remained among the highest in the country. Chicago saw year-over-year rents drop across the board.
Yardi said both L.A. and Chicago still have development opportunities. New York and Miami, meanwhile, have short-term absorption risks.