Self Storage Rates Continue to Drop Year-Over-Year, but at a Slower Pace, With Signs of Steadying Month-Over-Month Changes

• Self storage rates dropped by 3.8% nationally year-over-year in May 2023
• However, prices registered a slight 0.8% increase month-over-month at a national level
• 73% of the country’s largest 150 cities saw street rate decreases in May 2023
• New Orleans, North Las Vegas and San Bernardino registered the steepest price drops
• Rates in Newark, Arlington and Bakersfield, on the other hand, saw significant year-over-year increases
• Houston, San Antonio, and Orlando, have the largest amounts of new construction planned for the rest of 2023
• Texas’s San Antonio and Fort Worth have registered the largest amounts of new self storage space already delivered this year

Self storage rates marginally increased across the nation in May 2023 compared to April 2023, by 0.8%, to $128 per month for a non-climate-controlled 10’x10’ unit. However, year-over-year, the national self storage street rate dropped by 3.8%. Year-over-year rates stayed on a downward trend in most of the country’s largest 150 cities: 109 cities saw price drops, while in 15 of them the self storage rates remained about the same and 26 cities experienced price increases.

Nationally, almost 15.2M square feet of new self storage space has already been completed in 2023, and another 38.6M square feet is expected to be added by the year’s end.

New Orleans, North Las Vegas Continue to Register the Biggest Year-Over-Year Price Drops – but Monthly Evolution Gives New Signals

The self storage sector across the country continues to adjust to post-pandemic levels of demand, and prices continued to drop year-over-year, with New Orleans, LA, and North Las Vegas, NV, seeing the most significant street rates declines. A non-climate-controlled 10’x10’ storage unit in New Orleans currently rents for $128, which represents a 17.4% decrease year-over-year, while North Las Vegas saw a 14% reduction in street rates this May compared to the same period last year.

However, both cities experienced a slight slowdown in year-over-year price drops. In fact, month-over-month, North Las Vegas registered a 3.8% street rate increase for a non-climate-controlled 10’x10’ self storage unit, from $106 in April 2023 to $110 in May 2023.

As we are moving more firmly into prime moving season, with many families favoring summertime for such a major endeavor, month-to-month price upticks can be expected even in cities where year-over-year self storage street rates are on a downward slope.

San Bernardino and Stockton, in California, entered the top 10 of cities ranked for self storage street rate declines this May. The self storage rent drops can be correlated with a slowdown of the housing market in both cities. Home prices dropped year-over-year by 1.5% in San Bernardino and 4.1% in Stockton, while the unemployment rate is above the national average in both cities.

Lincoln and Tallahassee Are Among the Cities That Experienced Steep Street Rate Increases

Increases in self storage street rates are usually associated with low inventories per capita, and this is certainly the case for both Newark, NJ, and Arlington, VA, which experienced substantial price hikes year-over-year, 13.2% and 9.5%, respectively. Newark has the second-lowest self storage inventory per capita among the country’s largest 150 cities, at 0.9 square feet. Arlington, VA, does not perform much better, with an inventory of 1.2 square feet of self storage space per capita. By comparison, the national benchmark is 7.2 square feet per person.

Bakersfield, CA, experienced the third-highest year-over-year price increase this May, despite a very generous inventory of almost 9 square feet of storage space per capita. However, in this case, self storage demand generated by economic and population growth, combined with a low starting point – a 10’x10’ self storage unit in Bakersfield rents for $88 at the moment – led to a year-over-year 7.3% increase in street rates.

Tallahassee, FL, and Lincoln, NE, are two new entries that didn’t appear in the previous month’s list of cities displaying the biggest rent increases. Although Tallahassee benefits from a healthy inventory of almost 10 square feet of self storage space per capita, its tourist-centric economy responds to an increased influx of people, from digital nomads eager to mix work with fun to retirees and young families looking for friendlier housing markets. Not only do newcomers need some extra storage space for things like sports or beach equipment, but the retail and service sectors are also firing on all cylinders, stimulating the demand for business storage.

Similarly, Lincoln, NE, is an increasingly popular relocation destination. With a thriving economy that boasts a low 1.9% unemployment rate, it may come as no surprise that Lincoln’s population is growing. Street rates for self storage grew by 3.1% year-over-year, reaching an average of $100 per month for a 10’x10’ self storage unit.

Southern Cities Continue to Expand Their Self Storage Inventory at a Fast Pace

Houston, TX, San Antonio, TX, and Orlando, FL, have big plans to expand their self storage inventories this year. The strong economic growth and the ongoing influx of people into the Southern US are creating demand for self storage there, and the local sectors are delivering. With 580K square feet of new self storage space planned to be built during the remainder of 2023, and over 163K square feet already delivered, Houston ranks first nationally for expected levels of new self storage construction. San Antonio moved rapidly and already delivered 44% of the 707K square feet of new storage planned for 2023. Orlando is forecast to add over 691K of new storage space during this year, but, so far, it has delivered only 9% of it.

Looking at cities that plan to increase their self storage provision the most this year, as a percentage of the total local inventory, NYC’s borough of Manhattan jumps ahead, with an expected increase of 86%. Manhattanites currently benefit from only 1 square foot of self storage space each, so the addition of over 261K square feet of new space is more than welcome. About 82K square feet of the 261K planned for this year were already delivered.

Los Angeles, CA, another major city with a very low self storage inventory per capita, only 1.7 square feet, has plans to increase its inventory by 80% by building almost 432K square feet of new space this year. Over 87K square feet of this has already been delivered.

Top 100 Cities for 2023 Expected Construction

Undersupplied Philadelphia Added 229K Square Feet of Storage Space in 2023

Philadelphia, PA, an undersupplied self storage market with an inventory of 2.8 square feet of space per capita, ranks fourth in terms of expansion of inventory so far this year. The local sector already added over 184K square feet of self storage space and is forecasted to deliver another 382K square feet by year’s end. Phoenix, AZ, another city with a per-capita inventory under the national benchmark, also managed to deliver 164K square feet of storage space so far in 2023.

However, the two cities that have delivered the highest amount of self storage space already this year are San Antonio, TX, and Fort Worth, TX, with respectively 308K and 248K square feet of new space built.

Despite the annual declines in storage street rates in numerous cities across the United States, an overall trend of steadying month-over-month prices is emerging. New construction continues both in traditionally strong self storage markets as well as in cities with historically low inventories, fueled by burgeoning economies and increasing populations.

Methodology

This analysis was done by RentCafe Self Storage, an online platform that provides apartment and storage unit listings across the nation.

The report sets out to investigate self storage prices and market trends in May 2023. For city-level data, we looked at 150 of the largest U.S. cities by population that have at least 10 self storage facilities.

Storage provision per capita was calculated by ascertaining both the population and the square footage of rentable storage units within a 3-mile radius from the center of any city.

All figures relating to storage square footage refer to rentable space.

Data on self storage street rates and construction estimates for 2023 came from our sister division Yardi Matrix, a business development and asset management tool for brokers, sponsors, banks and equity sources underwriting investments in the multifamily, office, industrial and self storage sectors.

Fair use and redistribution

We encourage you and freely grant you permission to reuse, host, or repost the research, graphics, and images presented in this article. When doing so, we ask that you credit our research by linking to RentCafe Self Storage or this page, so that your readers can learn more about this project, the research behind it and its methodology.