Street Growth Update

Zachary Urow February 2, 2024

Overview

Self-storage owners and operators are cautiously optimistic for 2024, with occupancy and asking rates stabilizing after a period of rapidly decelerating growth. The transaction market is anticipated to pick up in the second half of the year. However, storage development faces challenges such as declining street rates, a slower lease-up pace, and a challenging lending environment, which may impact activity throughout 2024.

Street Growth Update

Despite continuing negative annual street rate growth, there is improvement: same-size CC units experienced a 2.9% annual decline in 2023, indicating progress from the -4.2% in the preceding 12 months. As of December 2023, street rates were over 9% below their previous peak. Additionally, in December 2023, 19 top metros displayed positive monthly rate growth, likely signaling a trend of stabilized occupancy. The positive trend may continue if the housing market rebounds. Urban markets like Chicago, New York, and Southern California are steady and outperforming expectations. Sun Belt markets such as Las Vegas, Phoenix, and Florida are underperforming expectations.

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