The Self Storage Sector Grapples with Over Two Years of Street Rate Declines

• Self storage street rates continue to drop at a national level, with the decrease rate slowing down under 3% for the second month in a row.
• Over three quarters of the country’s largest 150 cities by population experienced self storage street rates declines.
• Port St. Lucie, Florida, sees the highest price decrease nationally, followed by Fayetteville, NC, and Chattanooga, TN.
• Oceanside and Huntington Beach, CA, and Jersey City, NJ are topping the list of cities with rental rates increases.
• About half of the country’s major 150 cities have planned deliveries of new self storage space for 2024.

The self storage sector has now experienced over two consecutive years of declining street rates, with the national average for a self storage unit standing at $132 in October 2024—a 2.9% year-over-year decrease. On a monthly basis, rates also saw a notable 1.5% drop, continuing the downward trend, albeit at a slower pace than in previous months.

Several key factors are driving this sustained decline. Migration trends have slowed across the U.S., reducing the short-term demand for storage services, while the housing market remains challenging, with high interest rates and affordability constraints keeping many potential movers in place. Additionally, the sector has absorbed a significant influx of new inventory over the past few years, following the heightened demand observed during the pandemic-driven boom. As a result, street rates remain on a downward trajectory across most markets.

While new construction activity has moderated slightly compared to previous years, the sector continues to expand its footprint. In 2024, approximately 60 million square feet of new self storage space is expected to be delivered nationwide, with 12 million square feet concentrated in the country’s 150 largest cities.

Port St. Lucie, FL, sees double-digit street rate drop

Port St. Lucie, FL, recorded the steepest street rate decline among major U.S. cities, with a 16.5% year-over-year drop. The average rental rate for a self storage unit now stands at $122 per month, down from $146 a year ago. On a monthly basis, prices fell by an additional 1.2%, reinforcing the city’s ongoing downward trend.

Another Florida market experiencing significant price adjustments is Cape Coral, where the average street rate in October hovered around $165 per month, reflecting a nearly 7% year-over-year decrease.

In Fayetteville, NC, street rates declined by 9.3% year-over-year, bringing the average rental price to $111 per month. Several factors contribute to this downward adjustment, including the city's relatively large apartment sizes, which average 990 square feet, reducing the demand for external storage solutions. Additionally, Fayetteville has seen a slight population decline, further softening demand. Despite these trends, the city continues to expand its storage inventory, with over 149,000 square feet of new space projected for delivery in 2024. This will add to an already above-average supply of 12 square feet per capita, further influencing pricing trends.

Two Tennessee cities, Chattanooga and Memphis, rank third and fourth nationally for self storage price declines among the country's 150 largest cities.

• Chattanooga: The average self storage rental rate now stands at $96 per month, following a 7.4% year-over-year decrease.
• Memphis: Prices dropped by 7.1% year-over-year, with the average unit now renting for $88 per month.

Both markets maintain a healthy inventory of over 8 square feet per capita, but there are no additional new construction projects in the pipeline.

Self storage prices increasing in coastal hubs

Oceanside and Huntington Beach in California, along with Jersey City, NJ, are experiencing the most significant increases in self storage prices, primarily due to low local inventory and, in some cases, the absence of new developments planned for 2024.

The average self storage unit in Oceanside now rents for $179 per month, reflecting a 6.9% increase from the previous year. The city's per capita inventory stands at just 3.1 square feet, less than half the national benchmark, which continues to put upward pressure on rates. However, over 100,000 square feet of new self storage space is projected to be delivered in 2024, which should help alleviate some of the supply constraints.

Huntington Beach also faces significant supply limitations, with an even lower per capita inventory of 2.5 square feet. The average rental rate for a self storage unit in Huntington Beach has climbed to $213 per month, representing a 5.7% year-over-year increase. With no new self storage developments forecasted for 2024, pricing pressures are expected to persist. Other California markets, including San Francisco and St. Petersburg, are also experiencing rising self storage rental rates due to similar supply constraints.

On the East Coast, Jersey City, NJ, continues to see strong price growth. The average rental rate for a self storage unit in Jersey City has increased to $197 per month, marking a 4.7% year-over-year rise. The city's rapidly growing population, coupled with relatively small apartments averaging under 800 square feet, contributes to sustained demand. With only 1.3 square feet of self storage space per capita, among the lowest in the country, and no new supply scheduled for delivery in 2024, street rates in Jersey City are unlikely to ease in the near future.

Construction activity thriving in Texas, California

Texan cities continue to lead the nation in self storage construction, even as many of them are already well-supplied. San Antonio, TX, ranks first nationally in forecasted new supply for 2024, with 748,000 square feet of storage space set to be delivered—nearly double the volume added in 2023. However, this significant expansion represents only 4% of the city’s total inventory, making it unlikely to cause a major shift in the local market.

Top Cities for 2024 Expected Construction

Houston, TX, ranks third nationally in self storage development, with 638,000 square feet of new space projected for delivery this year, a figure nearly identical to 2023. Unlike many other major markets across the country, street rates in Houston are trending slightly upward year-over-year, with the average self storage unit renting for $124 per month. The additional inventory is expected to help balance supply and demand in this steadily growing market.

Garland, TX, is also among the top 10 U.S. cities for self storage construction, with 294,000 square feet of new space slated to come online in 2024. With a relatively low inventory of just 4 square feet per capita and a growing population, Garland remains a prime location for new development.

Outside of Texas, Los Angeles, CA, ranks second nationally in new self storage construction, with over 680,000 square feet scheduled for delivery this year. This additional space is much needed, as Los Angeles remains one of the most undersupplied major markets, with only 1.8 square feet of storage per capita. As a result, street rates in Los Angeles exceed $240 per month, underscoring the persistent demand for storage solutions.

Elk Grove, CA, is also seeing significant expansion, with 310,000 square feet of self storage space planned for 2024. This addition represents an impressive 24% increase in the city’s total inventory, signaling a strategic effort to meet local demand.

Another seriously undersupplied market, Philadelphia, PA, is taking steps to bridge the gap, with over 400,000 square feet of new storage space set to be delivered in 2024. With limited inventory and sustained demand, this expansion is expected to help ease pricing pressures in the city.

Below, you can check how the country's largest 150 cities do in terms of street rates and existing supply:

Methodology

This analysis was conducted by RentCafe Self Storage, an online platform offering nationwide apartment and storage unit listings.

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.

This report considers self storage rents and construction estimates for 2024 based on October 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).

Please note that data and coverage areas may evolve, and actual figures are subject to change.

Fair use and distribution

This study is intended as a resource for the general public on topics of common interest and should not be considered investment advice. The data presented is accurate to the best of our knowledge, based on thorough and good-faith research, but it may change due to external factors.

We permit the distribution of this content, provided that proper attribution is given to "RentCafe Self Storage" with a link back to the research study.