Self Storage Investors Wait for Housing Recovery, Lower Rates

MARCH 2024

This is supposed to be the "busier" spring leasing season for self-storage but the mood in the industry is mostly "somber" but optimistic for the future, according to a new report from Yardi Matrix.

"Performance slipped in 2023 and there are few signs that market conditions are picking up," according to its "Self Storage National Report."

The industry is hoping for a recovery in the housing market later this year or in early 2025 that would bolster the sector.

Sellers are waiting for more certainty on interest rates and a bottom for street rates and occupancy, which has slowed deal flow. Meanwhile, street rates continue to decline year-over-year across top metros, remaining negative in February.

The average annualized same-store asking rent per square foot was $16.37 nationwide for the combined mix of unit sizes and types, according to the report, marking a 3.6% decrease compared to the national average of $17.16 recorded 12 months prior.

Some Reducing Space, Need Storage

Tricia Peterson, Managing Partner at Accord Group Holdings, tells GlobeSt.com that uncertain and inflationary economic times such as these can often lead consumers to substantially reduce the square footage of the spaces where they live and work, which establishes a subsequent expanding demand for self-storage opportunities where belongings can be safely stored on a month-to-month rental basis.

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Accord, through its affiliates, is a global capital advisor, principal investor and investment manager. With its headquarters in San Francisco and personnel in Chicago, London, Hong Kong and Seoul, Accord engages with a wide variety of participants in the real estate private equity industry. Accord Capital Partners, its broker/dealer affiliate, provides advisory and capital raising services in the United States. Accord Europe Limited, its broker/dealer affiliate, provides advisory and capital raising services in the United Kingdom and Europe. For further information on Accord, visit: www.accord-group.net.