Self Storage Has Momentum Post-Pandemic: Florida Cities Seeing Largest Rent Hikes, Nevada Cities Increase Inventory Most — Lubbock, TX, Does Both

Self storage became an even more essential service during recent challenging times. Facilities stayed open and welcomed new clients, creating bonanza years for storage providers. Street rates often cooled after health concerns had eased but then recovered, and new development has stayed strong as customers continued renting storage, setting the sector up well going forward.

During the pandemic, many people needed extra storage space when moving, to declutter crowded homes or when business premises they owned had to close. And space challenges are still accumulating, as many employees now prefer to work from home — and apartments have been getting smaller — further widening the storage sector’s customer base. The storage industry has therefore been consolidating its position. It has even made operations more efficient, as pandemic concerns about hygiene fast-tracked the adoption of contact-free procedures and unmanned stores.

The heightened demand for self storage that began in 2020 followed a period of some market saturation. Many markets had been growing their inventories enthusiastically, and the nationwide average street rate had actually decreased over the previous three years. But the pandemic-triggered high occupancy levels at storage facilities meant operators could raise rents — by almost 17% for standard 10’x10’ non-climate-controlled units between June 2020 and June 2022, reaching $133 per month. Street rates then declined slightly when restrictions and Americans’ lifestyles eased, but at $128 they remain significantly higher than they were pre-pandemic.

With the boom years having made self storage more widely appreciated, and having generated a momentum that has bolstered street rates, investors are not deterred from the sector. In fact, they never really went away, having retained confidence even as the construction industry was experiencing obstacles. And this year’s forecasted square-footage additions approach pre-pandemic levels, indicating a sharp uptick in investors’ commitment to storage going forward.

Regionally, some local storage sectors, such as in Texas, major Floridan cities and California’s Central Valley, have been more than able to raise rents to above pre-2020 levels. Other areas used the pandemic-generated momentum to forge ahead with a lot more new storage space, the Las Vegas Valley being the most notable followed by Arizona’s Metro Phoenix area. Most impressive of all, some select markets such as Lubbock, Texas, both profit from confidently raising rents and develop a lot more square footage. To discover the whole story, we analyzed recent street rate trajectories and new storage development across the US’s largest cities, pre-pandemic (2017-2019) vs. post-pandemic (2021-2023).

Post-pandemic street rate evolution strongest in Florida and other hot states

Among the nation’s 100 largest cities, Jacksonville had the strongest street rate growth. Together with Miami's top-10 showing, this demonstrates that Florida’s long-term residents and incomers alike need self storage to manage the limited living space resulting from continually growing housing costs. Cities in Arizona and Texas — other states experiencing both very positive in-migration and weather extremes — found they could raise their rather low-cost average rates after the pandemic, often by as much as a quarter.

Top 10 Major Cities for Storage Rent Increases Pre- vs. Post-Pandemic (10'x10' Non-Climate-Controlled Units)

Storage operators in California’s major cities managed to increase their street rates between 2019 and 2023, by around 13% in Los Angeles and San Diego, to $265 and $189 respectively, and by around 7% in San Francisco to $275. However, the state’s inland cities flew way higher, with Bakersfield and Fresno upping their pre-pandemic rates by around 25%. These cities buck the out-migration trend seen in other places in California, and there was also more scope to raise prices from comparatively low levels.

At the other end of the spectrum, Minnesota’s Minneapolis and St. Paul saw the greatest drops between 2019 and 2023, the latter by as much as 26%. But these were exceptional, and the only other cities experiencing rent decreases for non-climate-controlled units during this period were Pittsburgh, PA, Detroit, MI, Durham, NC, Portland, OR, Washington, DC, and Honolulu, HI.

Climate-controlled storage units are increasingly appreciated in warmer states post pandemic — motivated by weather conditions that can have adverse effects on delicate items, but perhaps also as a result of increased climate change concerns. Price hikes on Jacksonville, FL, climate-controlled units over the last four years are even higher than for its standard units, while Bakersfield, CA, Lubbock, TX, and Greensboro, NC, also saw top-10 price increases for this type of unit.

Downtown Greensboro North Carolina Skyline

Nevada cities grew their per-capita storage provision most recently

In terms of storage inventory additions per capita post-pandemic vs. pre-pandemic, cities toward the Southwest corner of country account for most of the top 10. While Memphis, Tennessee, heads the list, Nevada excels as the state most enthusiastically increasing its storage provision for residents and the Las Vegas Valley shines as the US metropolitan area most enthusiastically increasing its storage provision per capita. Some Central California cities, in particular, also upped their storage provision after having been rather inactive pre-pandemic.

Top 10 Major Cities for Self Storage Additions per Capita Pre- vs. Post-Pandemic

The storage sector in Memphis, Tennessee, tops the list after being rather inactive pre-pandemic —  somewhat its stagnating population — but the sudden increase in storage development may be because the city has recently starting pulling in millennials.

Reno made Nevada’s largest recent storage addition for its residents. Henderson also built around half a million square feet after the pandemic, having made fewer additions before it. Las Vegas itself, just outside the list in 11^th place, increased inventory by 1.4M square feet post pandemic — second only to traditionally undersupplied New York City, which added 2.5M square feet for its much larger population — which is two and a half times more than it added between 2017 and 2019.

Arizona’s Tucson adds to the impression that Southwestern storage sectors are punching above their weight right now while Scottsdale, in 18^th place, is the Metro Phoenix area city increasing storage most per capita. A little further out west in California’s Bay Area, Oakland’s storage sector came alive after the pandemic after having added nothing just before, and nearby Sacramento also managed to give residents almost an extra half a square meter of storage over that time.

Representing the north of the country, Boise, Idaho, has been adding to its storage inventory — especially this year — as befits a city whose population is expected to really take off in the next few years. Lexington, Kentucky, is similarly a city of about a third of a million which is upping its inventory hugely this year, while the South is represented in the top 10 by New Orleans, Louisiana, which built new storage very confidently in 2021.

Boise Idaho Skyline

Lubbock, TX, & Jacksonville, FL, lead the cities both building space and increasing rates

Some cities’ storage sectors achieved a double, post pandemic, by both raising street rates and boosting inventory considerably. Lubbock, Texas, matches very strong street rate evolution, for units both with and without climate control, with top-10 new construction figures. This city has in fact been keen on storage for a while, having also grown its inventory in the three years prior to 2020 more than any other city in the top 10 for inventory additions.

Reinforcing how well Texas’s storage sector is thriving, El Paso not only saw top-10 street rate increases across the last few years but also built up its storage stock. The 352K square feet developed during the period 2021-2023 was double what was added over the years from 2017 to 2019. Boise also combined the confidence of its post-pandemic inventory additions with a street rate rise since 2019 of almost 20%, but it remains at a reasonable $116 per month.

The large US city with the most vibrant self storage sector, in terms of both increasing rates and development of new square footage, is Jacksonville, Florida. The inventory here increased by over a million square feet post pandemic, a top-10 figure in that respect, and this was in addition to the 681K built just before it and the 183K developed in 2020. Jax combines this with its high-flying street rates and one of the highest storage provisions per capita in the nation.

Downtown Lubbock Texas Skyline

The increased demand and resulting soaring street rates seen during the pandemic indicates what an essential service self storage can be. This, and the ongoing momentum it generated then, simply confirms what investors already knew from the 2007–2008 financial crisis, that self storage rides out challenging times particularly well. Expressing even greater confidence in the industry this year, they will reap the usual benefits of a relatively straightforward business sector plus an increased appreciation among the public and a wider client base. This confidence may well continue to bolster street rate evolution, even for operators in areas where they have needed to reduce rents. With rising housing prices, self storage’s much lower cost per square foot would also add to the sector’s positive outlook going forward.

The following table shows how the self storage sector fared in all the US's 100 largest cities, in terms of both street rates and inventory growth:

Top 100 Major US Cities for Storage Unit Rent & Inventory Increases Pre- vs. Post-Pandemic

What the experts say about self storage post pandemic

We asked experts about the self storage sector currently and also about the newest technology that will be benefitting the industry.

Doug Ressler, Business Intelligence Manager - Yardi Matrix

Doug Ressler, Business Intelligence Manager at Yardi Matrix

Entering the last quarter of 2023, the self storage industry looks to be in a good position. The lifestyle challenges caused by the pandemic created bonanza years for the storage sector, and although a following reduction in growth was then inevitable, industry fundamentals remain that keep business buoyant. These factors include growing populations, increasing housing costs — especially when coupled with hikes in interest rates — and many employees’ enduring preference to work from home rather than commute to an office. All such trends can make living space more restricted and benefit the storage sector going forward, stimulating transaction activity and further attracting institutional investors.

Methodology

This analysis was done by StorageCafe, an online platform that provides storage unit listings across the nation.

Self storage data came from our sister division Yardi Matrix. Yardi Matrix is 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.

Fair use and distribution

This study serves as a resource for the general public on issues of common interest and should not be regarded as investment advice. The data is true to the best of our knowledge but may change if amendments to it are made. We agree to the distribution of this content but we do require a mention in return for attribution purposes.