Self Storage Rent Drops Pervasive Across Most Large Cities, While Construction Carries On in About Half of Them

• National self storage rates went down 3.5% year-over-year in May 2024, continuing on the same 20-month downward trend
• Fayetteville, NC, and Chandler, AZ, experienced rent drops in the double digits, joining other Sunbelt cities for highest rent decreases
• A handful of cities registered modest rent increases, with Detroit, MI, and Akron, OH, coming in first
• Over half of the 150 largest cities are expected to deliver new self storage construction in 2024, with Texas dominating the top 10 most active markets

In May 2024, self storage rates dropped 3.5% year-over-year, marking the 20th consecutive month of self storage rent decreases. It’s a substantial slowdown after the higher rates experienced at the height of the pandemic and its aftermath, when demand pushed rates higher than usual. On a monthly basis, rates have fluctuated very little, a trend that’s been going on over the past six-plus months, indicating that the market is returning to its prepandemic levels.

A sluggish housing market, which has slowed down moving activity, and an existing high supply of self storage are some of the culprits behind the lowering of rents. Construction activity is expected to add about 54M square feet of self storage space by the end of the year. Over half (54%) of the 150 most populous cities are projected to add new deliveries by the end of the year.

Sunbelt cities register most significant rent declines, with Fayetteville, NC, and Chandler, AZ, coming on top

When it comes to cities experiencing rent reductions, nine out the top 10 places are from the Sunbelt region. Fayetteville, NC, comes first for self storage rent decreases, standing at 12.3% y-o-y. This brought a Fayetteville storage unit to $114 in May 2024. The city already benefits from a healthy inventory of 11.7 square feet per capita, much below the national benchmark of 7 sq. ft./person, which helped to put downward pressure on rents. The city is slated to add 123K square feet of self storage in 2024, pointing to the continuing demand for the service locally.

Still in North Carolina, Greensboro also saw a reduction in the price of storage, an 8.5% annual drop. The city also has a high supply of storage related to population, with 10.7 square feet of self storage per resident, which contributed to the reduction in local rates. A Greensboro storage unit averaged $99/month, while a square foot of storage went for $0.8, based on May 2024 data. With population growing 4.3% in the last five years, based on U.S. Census data, self storage continues to see demand in the city. For this reason, about 226K square feet of self storage space is scheduled for delivery in 2024.

Out in Arizona, two cities also register decreasing rents, with Chandler coming second nationally for street rate plunges — a 10.1% annual drop. As a result, Chandler storage rents for $118/month and for $1 per square foot of storage. Similarly, rates also went down in neighboring Tempe, at an 8% annual rate. A storage unit in Tempe costs $119/month, while a square foot of storage averages $1, based on May 2024 rates.

Outside of the Sunbelt, Boston, MA, also witnessed a considerable self storage rent cut to the tune of 9.3% year-over-year. This translates to the cost of Boston storage units reaching $203, whereas it costs about $2 to rent a square foot of storage there. The city’s developers are not planning on adding new construction in 2024.

Self storage rates register modest increases mostly in undersupplied cities

Detroit, MI, registers the most notable rent increase, of 2.8% y-o-y. This brings a Detroit storage unit to $200/month, per May 2024 estimates. The city is heavily undersupplied, with only 1.2 square feet of storage per person, much below the national average of 7 square feet/capita. What’s more, Detroit has had no new self storage construction in the past two years, and 2024 is forecasted to go on the same trajectory.

Still in the Midwest, two Ohio cities are also getting in the spotlight for street rate increases. Akron comes in second nationwide for a storage rent jump of 2.5%, which translates to an Akron unit averaging $101/month. A square foot of self storage rents for $0.8/month. In Toledo, self storage rents went up a small 0.2% year-over-year, bringing a Toledo unit to $97/month in May 2024. Both cities have low inventories relative to population, standing at 4.5 square feet/capita in Toledo and 4.9 square feet/resident in Akron. This helped to give rates a little push, albeit small. To satisfy demand, Akron is scheduled to add about 75K square feet of self storage in 2024, while Toledo’s pipeline is not likely to see new projects added this year.

Over in California, Fresno (2.5%) and Oceanside (1.4%) both saw their rent rates go up year-over-year. As a result, a Fresno unit averaged $124/month while storage in Oceanside hovered at $172/month. Population went up 4.3% in Fresno, helping to bolster demand for self storage, which, in turn, nudged prices higher. In Oceanside, however, it’s the undersupply (3.1 sq. ft./capita) that contributed to the current rate increase. As for now, local inventory in both cities is predicted to stay put in 2024, with no new construction expected by the end of the year.
With only 3.2 square feet of self storage per capita, Honolulu, HI, was also bound to experience a push in self storage rents, although small, at 1.3% year-over-year. A Honolulu storage unit costs $315/month, while a square foot of storage rents for $3.2.

Texas cities dominate the list of most active self storage construction markets in 2024

Self storage construction marches on in 2024, with 54% of the 150 largest cities looking to expand their storage supply by the end of the year. Already enjoying a substantial inventory across its many cities, Texas steals the development spotlight with four places featured among the most active cities for forecasted construction in 2024.

Top Cities for 2024 Expected Construction

Philadelphia, PA, comes on top for the highest construction volume expected for delivery thanks to the 721,000 square feet of self storage estimated to be built by the end of 2024. This represents a 57% rise from 2023’s deliveries. So far, about 550K square feet of self storage have been delivered. This comes as a response to the supply crunch as evidenced by the 3.2 square feet of self storage per resident available in the city.

Over in Texas, Fort Worth’s developers are set on adding close to 623,000 square feet of storage space, 51% more than in 2023. In the past five years, population went up a whopping 11%, fueling a strong demand for the service. Meanwhile, Houston anticipates adding about 600,000 square feet to its pipeline by the end of 2024.

San Antonio and McKinney are both expected to see their inventories swell, to the tune of 456,000 square feet and 359,000 square feet respectively in 2024. In McKinney, population went up 19% in the last five years, helping to support further demand for self storage.

California’s Los Angeles is also expected to see amped up construction activity, with 492,000 square feet of new self storage projected to be added to the local pipeline in 2024, more than double the deliveries in 2023. This accelerated construction volume is meant to address the low per-person inventory crunch as LA is one of the most undersupplied markets in the country.

Methodology

This analysis was done by RentCafe Self Storage, an online platform that provides apartment and storage unit listings nationwide.

This report considers self storage rents and construction estimates for 2024 based on May 2024 data.

The report includes the largest 150 cities by population with an active self storage inventory of at least 10 units. The analysis only encompasses same-store properties that have had a market presence for the previous 12 months.

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).

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.