Self-storage properties are finally beginning to feel some pain from overbuilding. Rents that rose quickly of over the past few years are likely to rise slowly this winter—if they rise at all.
“We are experiencing a development boom,” says Brandon Carr, director of the national self-storage group for Marcus & Millichap, based in Fort Worth, Texas.
Experts have worried for years that developers would build too many self-storage properties. But rents continued to rise quickly, as strong demand filled new properties. Rents are likely to rise much more slowly over the next year as another wave of newly-built properties opens. Even in sub-markets that aren’t overbuilt, the owners of older properties now often compete with new properties in stronger location with professional managements—changing the expectations of their customers for service and convenience.