The Self Storage Sector Continues to See Significant Price Cuts

• The national self storage street rate registers the 22^nd month of consecutive price drops by 3.5% year-over-year, to $136 in July 2024
• Prices have decreased in 126 of the county’s largest 150 cities
• Port St. Lucie, FL, Aurora, IL, and Huntsville AL top the charts for street rate declines
• At the other end of the spectrum, low inventories are fueling price increases in Oceanside, CA, Arlington, VA and San Francisco, CA
• Three Texan cities – San Antonio, Houston and Fort Worth – are registering the highest levels of forecasted construction this year

Self-storage street rates continued their downward trend in July 2024, signaling further adjustment to the slower demand that followed the pandemic peaks. The national average street rate for self-storage currently stands at approximately $136, reflecting a 3.5% year-over-year decline. Prices have decreased in 126 of the nation’s 150 largest cities, with only 24 cities experiencing moderate to small price increases.

Despite the drop in street rates, national self-storage construction activity remains strong, with nearly 60 million square feet of new space projected for 2024, a 7% increase compared to last year. However, investor interest in building in major markets appears to be waning. The forecasted supply in the 150 largest cities is expected to reach 14 million square feet this year, down from 15 million square feet of new space delivered in 2023. Currently, only about 54% of the country’s urban hotspots are adding new self-storage space, a noticeable decrease from the 65% that delivered new space last year.

Port St. Lucie, Florida, sees a 17% year-over-year decrease in self storage street rates

Port St. Lucie, Florida, has experienced the steepest decline in self-storage rates this July, with a 17% year-over-year drop, bringing the average cost of a unit in the area to $132 per month. Despite the city’s growing population and a relatively low inventory of 4.4 square feet of storage space per capita, the local market is undergoing a correction following the pandemic-related surge in demand between 2020 and 2022, which has since subsided.

Aurora, Illinois, ranks second nationally for declining self-storage prices, with the average rate in July 2024 at $102—about 13.5% less than one year ago. The Midwestern city is facing a population decline of nearly 10% over the past five years, a factor that is directly impacting the local self-storage market, as this service is closely tied to moving activity.

In Huntsville, Alabama, where self-storage inventory stands at an above-average 11 square feet per capita, prices have also dropped significantly. The average cost to rent a unit in July 2024 is $98 per month, marking a 10% year-over-year decrease. Although Huntsville’s population has increased by almost 13% over the past five years, the already abundant inventory and ongoing construction activity have kept street rates in check. This year, Huntsville is expected to see the delivery of approximately 364,000 square feet of new self-storage space, representing a staggering 185% increase compared to 2023.

Other cities experiencing notable price drops in July 2024 include Santa Clarita, CA, Greensboro, NC and Yonkers, NY. Memphis, TN, has recently entered the top 10 cities for declining street rates, with the average rent in July 2024 at $91, or 7.6% less than in July 2023. The combination of a robust local inventory amounting to 8.2 square feet per capita, several years of continued new space deliveries, and an almost 4% population loss over a five-year period are the primary factors contributing to Memphis's very affordable self-storage rates.

Low inventories are fueling further price increases in already expensive Oceanside, CA, and Arlington, VA

Low existing inventories and a lack of new self storage developments in the pipeline are driving price increases in some of the nation’s largest 150 cities. Oceanside, CA, saw the most significant rise in street rates this July, with a 5.2% year-over-year increase. The average cost to rent a self-storage unit in Oceanside now stands at $186 per month, which is a substantial 37% above the national average. With a modest inventory of just 3.1 square feet of storage space per capita and average rental home and apartment sizes of only 850 and 812 square feet, respectively, the demand for self-storage continues to push prices upward.

Arlington, VA, recorded a street rate this July that is double the national average—$261 per month—reflecting a 5.1% year-over-year increase. The elevated street rates in Arlington can be largely attributed to a severe lack of inventory, with the city offering a mere 1.2 square feet of self-storage space per capita, compared to the national benchmark of 7 square feet per capita. Additionally, Arlington’s popularity among young professionals and its significant student population further strain the local self-storage market.

San Francisco, CA, ranks third for self-storage price increases, with street rates rising by 5% year-over-year this July, bringing the average rate for a unit to $245 per month. Like Arlington, San Francisco faces similar challenges with low self-storage availability, offering approximately 2 square feet of space per capita. In a city where living space is at a premium—average apartment sizes are just 739 square feet—and housing costs are among the highest in the nation, demand for self-storage remains strong. This pressure is exacerbated by the fact that no new inventory deliveries are planned for 2024, further contributing to the rising prices.

Texan cities continue to drive new self storage development

The Lone Star State remains a stronghold for self-storage development, with San Antonio, Houston, and Fort Worth leading the way in new space slated for delivery this year. San Antonio is set to add an impressive 828,000 square feet of new self-storage in 2024, more than doubling last year’s total deliveries. However, with prices on the decline and an already robust inventory of 9 square feet per capita, there is potential for a slowdown in new construction in the near future.

Top Cities for 2024 Expected Construction

In contrast, Houston and Fort Worth have slightly lower inventories than the national average and are experiencing population growth—particularly Fort Worth, which has seen its population expand by nearly 11% over the past five years. As a result, construction activity in these cities remains strong, with 732,000 square feet in Houston and 560,000 square feet in Fort Worth expected to come online this year.

Beyond Texas, Orlando, Florida, and the Arizona cities of Tucson and Phoenix are also among the top 10 nationwide for significant self-storage construction activity.

Methodology

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

This report considers self storage rents and construction estimates for 2024 based on June 2024 data.

The report includes the largest 150 cities by population with an active self storage inventory of at least 10 facilities.

The self storage street rate is calculated as the weighted averages of the street rates for all storage unit sizes, non-climate-controlled and climate-controlled units included.

Data on population changes came from the U.S. Census (2017-2022 dataset).

Data on self storage street rates, deliveries and 2024 forecasted construction activity 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.