15 Feb 2022
When looking at all the Public REITS 10x10 CC web rates from the top 25 markets, three markets had tremendous growth in their price per square foot when comparing January 2021 to January 2022. Atlanta-Sandy Springs-Roswell- GA had its rates increase 41.8%, Tampa-St. Petersburg-Clearwater- FL, increased 34.9%, and Miami-Fort Lauderdale-West Palm Beach- FL increased 34.8%. The Radius team took a closer look at each of these markets to determine what factors could have contributed to this massive increase in pricing from last year.
Atlanta-Sandy Springs-Roswell- GA has been a burgeoning economic market for the past couple of years. According to a 2020 study from bestplaces.net this CBSA had an unemployment rate of 4.1%, which was lower than the National average at the time of 6.0%. Additionally, this market is predicted to have future job growth of 46.5% in the next 10 years, which is significantly higher than the US average of 33.5%. Job growth is a huge component to increasing demand for Self Storage, as people are drawn to a market for work they often need a storage unit to place some of their items, as they get situated in a new area. The high economic growth in Atlanta-Sandy Springs-Roswell- GA, has led to a surge in rates, despite there being a 2.7% increase in supply growth in 2021. This just emphasizes how much demand there is for Self Storage, that it is still outpacing the supply.
Tampa-St. Petersburg-Clearwater, FL also has one of the fastest growing populations in Florida. The Tampa Bay metro region has ballooned in population with them growing more than 14% in the last decade. This area is also heavily favored by retirees looking for stable climates and lower expenses. This demographic raises demand for Self Storage, which can help explain why the Tampa-St. Petersburg-Clearwater, FL CBSA had a 34.9% jump in rates from January 2021 till January 2022. This is all with a 3.7% increase in supply in 2021.
Miami-Fort Lauderdale-West Palm Beach, FL is a part of the greater Miami area, and one of the Nation's hottest storage markets. The Miami market has a growing population, and growing economy and while rates took a slight dip during the Coronavirus pandemic- the jump from January 2021’s price per square foot (1.62) till January 2022 (2.19) could be seen more as a correction of rates, and the market bouncing back from the initial shock of the pandemic. Alongside this increase in rates this CBSA is continuing to increase in supply as well with a 3.2% increase in supply in 2021. It seems safe to say that developers are still full steam ahead on Self Storage in the Miami market.
These 3 markets stood out as having the most drastic price increases from January 2021, till January 2022. Each one with its own unique set of circumstances driving demand for Self Storage. One thing they all had in common, was an increase in supply growth despite rates jumping drastically- enforcing confidence that 2022 will be another landmark year.
