06 Aug 2020
Due to the “extremely high” influx of new self storage supply in recent years, the North Carolina and South Carolina storage markets can expect prices to remain low into the foreseeable future until the two-state region’s supply-and-demand imbalance stabilizes, according to industry experts.
North Carolina is already starting to see prices settle down after unprecedented supply growth over the past three years, including a 17.5 percent supply surge in the Charlotte area and a whopping 25.6 percent spike in the Raleigh-Durham area. Both rates are well above the national 10.8 percent growth rate during the same time period, according to Radius+, the data analytics and research firm that closely tracks self-storage across the nation.
With North Carolina’s population continuing to increase – and with Raleigh-Durham’s “Research Triangle” acting as a major generator of economic activity – the Tar Heel state should soon reach a stabilization point in prices, which have fallen anywhere from 25 to 35 percent for 10-by-10-foot climate-controlled units since 2016, according to Radius+ data.
“The prospects for Charlotte and other markets (in North Carolina) remain very strong,” says Cory Sylvester, a principal at Radius+. “The fundamentals are still there.”
Robert Kapp, president of American Self Storage in Raleigh, agrees that the new-construction frenzy has recently eased in North Carolina and prices are starting to stabilize.
[...]
Monty Spencer, CEO of Storage Acquisition Group in Yorktown, Virginia, says the best investment opportunities always come down to the “neighborhood market,” not the broad-brush state markets.
[...]
Radius+’s Sylvester says both North Carolina and South Carolina should rebound from past overbuilding, as their populations and economies grow and create move demand for self storage.
“They’ve both seen massive increases” in supply, he said. “But ultimately their population growth over time can keep up with the supply growth. It will just take some time.”
[...]
