Storage Monitor: Top Markets for Rental Rate Growth

By: Alexander Harris  
On Oct 8, 2023  
Blogs   focused on  Development (23)

With the first three quarters of the year behind us, we now have a pretty good view of how self-storage rental rates fared in 2023.

The average self-storage rate in September 2023 across the entire SpareFoot was $91.80 per month, down 16.7% compared to last year. Looking at SpareFoot’s 200 most popular markets, average self-storage rates through the first nine months of the year totaled $96.53 a month, down 11.8% from the same period last year.

The decline in rates is due to a fall in storage demand following the pandemic, but that is just the national story. So far this year, several markets across the country have actually managed to take rental rate growth into positive territory. Based on reservation data from the SpareFoot network, there were 22 markets (out of 200 markets with the most reservations) that posted positive street rate growth for the first nine months of 2023, compared to the same period last year.

Let’s take a closer look at these high-performing markets:

Hialeah, FL

Population: 220,292
Self-storage operators in Hialeah commanded an average rental rate of $176.04 so far in 2023, up more than 16.6% compared to last year.
Located in Miami-Dade County between Miami and Fort Lauderdale, the city has emerged lately as a relatively affordable place for millennials to live in the Miami area with a median home price of $455,000 as of August 2023. Homes spend a median of 42 days on the market before being sold.
The overall cost of living is 13% above the national average. Unemployment stood at 1.9% in August.

Del Rey Oaks, CA

Population: 1,616
Self-storage operators in Del Rey Oaks enjoyed an average rental rate of $197.53 in 2023, up 14.72% compared to last year.
Del Rey Oaks is a small, prosperous community located outside of Monterrey, CA in the northern part of the state. Attracting young professionals and retirees, the community had a median home price of $950,000 in July and a cost of living more than 50% higher than the national average.

Carson, CA

Population: 95,104
Heading to the southern part of the state, Carson is a city in Los Angeles County where storage operators achieved rates averaging $157.56 a month, an increase of 12.25% compared to the same period last year.
The population in Carson has grown 6% since 2020. The city provides a smaller town feel, while still providing proximity to the best that L.A. has to offer. The city is unique in that a plurality of residents, about 25%, are of Asian ethnicity, with 20% identifying as Filipino.
In August, the median home price was $733,250, and homes spent an average of 19 days on the market before being sold. The cost of living here is about 49% higher than the national average, but about average for the state.

Top Performing Markets for Self-Storage Rental Rate Growth January – September 2023

The table below displays all 22 of the self-storage markets achieving positive rate growth so far this year. Note that six of the markets are in California, and three are in Florida.
Average Self-Storage
Rental Rate Jan.-Sep. 2023
Average Self-Storage
Rental Rate Jan.-Sep. 2022
Change
HIALEAH FL
$176.04
$150.86
16.69%
DEL REY OAKS CA
$197.53
$172.18
14.72%
CARSON CA
$157.56
$140.37
12.25%
GAINESVILLE FL
$116.91
$104.16
12.24%
BOSTON MA
$155.42
$143.88
8.02%
TOLEDO OH
$83.13
$77.18
7.71%
ALEXANDRIA VA
$112.38
$105.86
6.16%
ESCONDIDO CA
$133.96
$126.45
5.93%
LUBBOCK TX
$66.88
$63.37
5.53%
SOUTH SAN FRANCISCO CA
$214.25
$203.63
5.22%
JACKSON MS
$82.12
$78.42
4.72%
TACOMA WA
$117.18
$112.84
3.85%
SAVANNAH GA
$127.37
$122.93
3.61%
WICHITA KS
$69.80
$67.57
3.30%
LONG ISLAND CITY NY
$113.54
$109.93
3.28%
NEW YORK NY
$118.86
$115.22
3.16%
CLARKSVILLE TN
$87.53
$84.98
2.99%
SAN JOSE CA
$115.88
$113.12
2.44%
SANTA ANA CA
$136.77
$134.48
1.70%
EVERETT WA
$117.55
$115.70
1.60%
MORGAN HILL CA
$140.97
$139.60
0.98%
POMPANO BEACH FL
$135.13
$134.33
0.60%

Gearing up for the home stretch

As the year winds down, the question remains—how much lower will rates fall? As we see above, some markets will fare better than others. Other markets may need to brace for further declines. Overall the economy appears to be entering a more stable and optimistic phase, which bodes well for the industry’s prospects as it returns to a normal seasonal pattern of ebbs and flows.

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