The Impact of New & Lease-up Supply
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.
The Impact of New & Lease-up Supply
Heavy lease-up supply is impacting street rates in some metros. Nationally, the amount of new supply delivered over the past 3 years is 8.6% of existing NRSF. Developers are optimistic about the future of self-storage and their optimism is reflected in the large inventory of new supply under construction accounting for 3.7% of existing NRSF. Some of the earlier staged planned and prospective projects have been put on hold until operating fundamentals.
