The state of self-storage in early 2024

In December 2023, Yardi Matrix released its National Self Storage Report detailing the state of the market at the end of the year. As the housing market cools down, storage facilities suffer from lower occupancy and falling rates. However, with new home sales expected to stabilize and storage development slowing, some are optimistic that occupancy and street rates could see an uptick.

Self-Storage from December 2023 Report

Street Rates

Annual street rate growth remains negative (but stable) across all top metros, with Miami, Fla., seeing the weakest performance in November (-9.1% year-over-year). The metro has seen street rate performance "slip substantially" throughout 2023, according to the report
Monthly street rates also declined in November, with Chicago, Ill., experiencing the largest drop (-2.0% month-over-month) and Portland, Ore., the lowest (-0.6% MOM)
The national average combined street rate sits at $16.57 per sf in November 2023, a 1% drop from the previous month

November 2023 YOY Rent Change for Main Unit Sizes — November 2023 Year-Over-Year Rent Change for Main Unit Sizes. Courtesy Yardi Matrix

New Supply

The national new-supply pipeline remained unchanged in November, but the number of abandoned projects is increasing
Several Sun Belt metros like Orlando, Tampa, and Atlanta have seen weak street rate performance due to consistent new-supply activity
New York City, despite having a substantial amount of new supply, has maintained strong demand due to its low relative storage supply per capita
Over the past three years, Philadelphia, Pa., has delivered the largest amount of new supply (+17.1% of starting stock), while Seattle, Wash., has seen the least new supply additions (+3%)

Lease-Up Supply

Lease-up supply impacts street rates differently in different metros, with New York City's strong demand absorbing new supply well, while Philadelphia's weak demand struggles with its large amount of new supply
Over the past three years, the national self-storage market added 8.6% of its existing inventory in new supply, with the past year alone contributing 2.7% of that total
Construction activity increased the most in Charleston, S.C., but due to strong demand, the new supply is expected to be absorbed without significantly impacting rates

NRSF Delivered Over the Last 36 and 12 Trailing Months. Courtesy Yardi Matrix

Overall, the self-storage market is facing some headwinds due to the slowing housing market, but it remains stable and new supply is starting to slow down. Some Sun Belt metros are struggling with weak demand and heavy new supply, while other markets like New York City are able to absorb new supply thanks to strong demand.

Click here to read the full Yardi Matrix report.