The self storage industry ended 2020 on an upward trend, showing more resilience than other real estate sectors in the face of pandemic-induced challenges. The national average street rate for a 10×10, non-climate-controlled unit stood at $118 this January, as Yardi Matrix data shows, representing a 4% growth year-over-year.
Most of the country’s largest metro areas have seen increases in 2020, with the Philadelphia and Boston markets in the lead, both seeing local street rates grow a healthy 6% year-over-year. Rent growth was negative in only a couple of cities, including Nashville where rates went down 1%, and Minneapolis at-2%.
In Florida’s case, self storage street rates are either on an upward path or stagnant y-o-y, with one exception — Tallahassee.
Tallahassee residents enjoy lowering self storage street rates — unlike the rest of Floridians
The average street rate for a 10×10 storage unit in Tallahassee was $97 this January, representing a 3% decrease year over year. Not only does the 385k-resident-strong metro enjoy lowering rates, but it also has one of the most affordable self storage markets in Florida.
The only area in the state where self storage rents are slightly lower than in Tallahassee is North Central Florida, with average rents at $96 this January. In this case, however, the rents are actually climbing — up nearly 8% year over year. Pensacola and Jacksonville are also registering self storage monthly rates close to but under the $100 mark, with the January year-over-year growth rate at 5% and 4%, respectively.
The most expensive local self storage market in Florida is Fort Lauderdale, mostly due to limited inventory levels. There is about 15 million square feet of rentable storage space, which translates into 2.6 square feet per capita — less than half the national benchmark of 7 square feet per capita. The average monthly street rate for self storage space in Fort Lauderdale was $147 in January, representing a robust 4% increase year-over-year.
Tallahassee, on the other hand, is well supplied, and this is reflected in the area’s self storage costs. There are currently 77 self storage facilities in Tallahassee, totaling about 2.6 million square feet of total rentable square feet of storage space. The inventory translates to almost 7 square feet per capita, which is in line with the national benchmark. An additional 55,000 square feet of space is planned to be delivered by the end of 2021.
Development activity in Tallahassee was consistent over the past few years, bringing supply and demand into relative balance. Total completions from 2016 to 2020 represented 250,000 square feet of storage space added to the metro’s total inventory. The most active year for new completions was 2018, with more than 140,000 square feet of storage space delivered.
The least active year was 2019, when only a little over 8,000 square feet of new storage space was constructed. Despite pandemic-related difficulties, 2020 has seen the addition of over 60,000 square feet of storage space to the Tallahassee market.
Long-term trends signal positive outlook for the self storage sector in Tallahassee
Although showing a mild decrease y-o-y, self storage street rates in Tallahassee increased by 27% over the past five years, from around $77 per month back in 2016 to the current rate of $97 per month. This slow and steady evolution spells good news for storage property owners, as far as market potential goes. With the metro area’s population projected to grow to almost 430,000 residents by 2025 and the employment market on the rebound, the self storage sector’s perspectives appear positive in Tallahassee.