People in the self-storage industry often talk about the “four Ds” that drive demand for their business: death, divorce, dislocation, and downsizing (or disaster or density, depending on Who are you asking).
The past year has tragically delivered on some of them, but in the process has made self-storage one of the most resilient sectors amid widespread economic uncertainty.
From a broader perspective, last year culminated another decade of growth in the self-storage sector, with 295 million square feet of space added between 2011 and 2020, according to a recent RentCafé report.
Even as apartment construction slowed in the second half of the decade, “self storage continued to grow at a rapid rate as people prioritized location over space in their apartment options.” The report indicated.
Across all markets, the rental platform analysis found a substantial match between new apartments and increased self-storage offerings.
Dallas, which added 1.2 million residents in the past 10 years, saw 173,000 new apartments and 16.2 million more square feet of storage space during the same period, ranking at the top nationally by both measures.
New York City ranked second in both categories, adding 15.7 million square feet of storage space and 140,000 new apartments since 2011, according to the report. Data in the report comes from parent company Yardi Matrix and the US Census Bureau Houston, Chicago, Phoenix, Atlanta and Miami also added at least 8 million square feet each in storage space.
On a percentage basis, Milwaukee experienced the most dramatic growth in personal storage space over the past decade, with 4 million square feet in new supplies representing a 69 percent increase.
Austin, Texas, the nation’s fastest-growing major metro in the past 10 years, also saw an increase of more than 50 percent, as did Midwest population centers such as Madison, Wisconsin and Des Moines, Iowa. Markets like Phoenix and Atlanta have also seen growth, said Yardi Matrix’s Doug Ressler.
While the supply of self-storage has expanded across the country, so has the demand, leading to rent increases in many markets. Las Vegas saw the largest rent increase of all. Using the market benchmark “street rate,” the monthly rate for a 10-foot by 10-foot non-climate controlled storage unit, rents in Sin City increased 27 percent between 2017 and 2021, from $ 88 to $ 112 per month, according to RentCafé. analysis.
Storage rents in Honolulu have long been the highest in the country, with a current rate of $ 260 a month. On the mainland, San Francisco, Los Angeles, New York and San Jose, California, have the highest self-storage rents of all, at more than $ 177 a month.
This year, RentCafé estimates that the industry will see 765 new facilities delivered, totaling more than 56 million square feet of additional space.