People have a lot of stuff. They often have more stuff than space in which to stow it.
Don’t believe us? Check out the recent series of semiannual self-storage reports released by Marcus & Millichap. The first-half 2014 reports show that in cities across the United States, self-storage facilities are on the rise.
Consider St. Louis. Marcus & Millichap reports that steady employment growth and population gains mean that the demand for self-storage units in the St. Louis market will jump this year. Because of this, the company predicts that self-storage vacancies will decline 50 basis points this year to 13.3 percent.
Operators here will also be able to lift asking rents at climate-controlled and non-climate-controlled facilities 2.9 percent and 2.3 percent respectively. This means that the average asking rent for a climate-controlled St. Louis self-storage facility will jump to $126 a unit, while this figure will increase to $85 a unit for non-climate-controlled facilities.
And St. Louis is just one market in which rents will rise and vacancies will fall when it comes to self-storage units.
Marcus & Millichap predicts that self-storage unit vacancies will drop 70 basis points to 12.3 percent by the end of 2014 in the Minneapolis market. Asking rents for climate-controlled units here climbed 1.9 percent to $141 a unit on climate-controlled facilities in 2013 and 4.1 percent to $115 a unit on facilities that lack climate control.
Marcus & Millichap predicts another 70-basis-point drop in vacancies for Detroit-area self-storage facilities. Vacancy rates in this sector should fall to 14.5 percent by the end of 2014. Rents for climate-controlled facilities in the Detroit market should rise 3.2 percent to $130 a unit, while those at non-climate-controlled facilities should rise 0.7 percent to $93 a unit.
The news was good in the Chicago market, too, with vacancies at self-storage units expected to fall 130 basis points to 11.2 percent by the end of 2014. In 2013, rental rates for climate-controlled space jumped 2.4 percent to $150 a unit and 4.9 percent to $112 a unit for non-climate-controlled spaces.
In Columbus, self-storage vacancies should drop to 12.3 percent by the end of the year. Rents on climate-controlled facilities in 2013 slipped 0.9 percent to $109 a unit, though they jumped 2.5 percent to $83 a unit for non-climate-controlled facilities.