Marcus and Millichap Report Shows Self Storage Growth

| By:
Marcus and Millichap Report Shows Self Storage Growth

The self storage industry has been experiencing rapid growth lately and shows no signs of slowing down. The recent influx of valet self storage facilities that have popped up both in the U.S. and abroad indicate that not only are investors taking self storage seriously, customers also show no indication of cutting back on their self storage needs. A recent report issued by Marcus and Millichap that takes a look at the national self storage industry in the first half of 2015 shows that the self storage industry is set to “attain lower vacancy and higher rents in 2015.”

The report indicates that the self storage industry will experience a 50-basis point decrease in vacancy, which will in turn influence rent prices causing increases as high as 4.2 percent for climate controlled units. Non climate controlled storage will lag behind slightly with a 3.8 percent increase. Marcus and Millichap attribute this growth to steadily growing U.S. salaries, which indicate that there is more disposable income.

Construction, vacancy and rent trends and sales trends in the self storage industy were all examined in the report. While developers completed around 5.2 million square feet of space in 2014, an additional 4.4. million square feet of self storage space is predicted to be completed in 2015, which shows a decline. With the decline in space development, vacancy rates are likely to remain.

Sales are also expected to increase in 2015. With the flow of equity and debt along with expectations of a rise in interest rates, recent property valuations will cause an valuations to go up.

The trends predicted by the Marcus and Millichap report are also being seen with the growth of publicly traded self storage REITs. One self storage facility in Greenwood Village is going public with an initial public offering of #320 million. It plans to offer 20 million shares valued between $15 and $17 a share. If shares sell for $16 each, that would but the company at a market value of $880 million.

With companies that have the potential to be valued at nearly a billion dollars, 2015 seems to be the shining year for the self storage industry and it shows no indication of slowing down in growth.

Jodi Reid

About Jodi Ann Reid

Jodi is a writer for the Self Storage Blog, and specializes in content writing and SEO rich articles. She enjoys working out, eating healthy and having fun.