Storage Monitor: Rates and Occupancy Continue Pullback

Overall, the self-storage industry faces a lackluster operating environment as it heads into the spring months. Amid the housing market gridlock, recent growth in self-storage supply and persistent inflation, operators have had little room to grow rates.

The average rent for all unit types was $84.86 a month in March, more than 13.8% lower than the same month a year ago, according to Storable data. Many operators increase discounting during the spring to boost occupancy, which is further keeping average move-in rates down. 

At a glance:

• The average self-storage unit rented for $84.86 per month in March 2024.
• The average self-storage rental rate is down 13.8% from the same month a year ago.
• Average stabilized occupancy was 83.99% in February 2024
• Self-storage average occupancy was down 3.46% from the same month a year ago.

Occupancy remains down compared to last year, with the average stabilized rate in February standing at 83.99%, a change of nearly 3.5% from the previous year. That marks a return to occupancy levels not seen since the start of the COVID-19 pandemic in the spring of 2020 and lockdown orders were in full effect.

The continued pullback in rental rates and occupancy has prompted widespread cancellations and indefinite hiatuses for new self-storage developments as the industry seeks to absorb existing supply and lending becomes harder to access. 

The prospects of a slightly more busy home sales market compared to last year might provide hope for some operators, however it appears that much of the economy is in a holding pattern as election year effects take hold. Strong job creation numbers also provide a positive ray of light to operators as they look for signs that seasonal growth trends will reemerge in the coming months.