• The Dallas metropolitan area ranks first in the nation for the most activity in all sectors of real estate combined over the past decade.
  • Houston stands out as the most active single family market while the New York-Newark-Jersey City metro area saw the highest number of building permits issued for new apartments.
  • The industrial sector flourished, with 2.2 billion sq. ft. of space delivered.
  • The office sector saw the addition of 740M sq. ft. of space in the last 10 years.
  • Self storage added 300M sq. ft. over the last decade, with Dallas ranking first for new supply.
  • 2021 was the best year for residential construction in the last decade, with 557K building permits issued for single family homes and almost 437K for apartments last year alone.

America’s real estate landscape is constantly evolving, with every major city across the US having seen its fair share of real estate development in the last 10 years. But which sectors are booming, and which markets are the most active in terms of new construction?

To see which areas of the country experienced the most impressive real estate transformations over the past decade – from 2012 to 2021 – we looked at new construction in the single family, multifamily, self storage, office, retail and industrial sectors in the 50 largest metropolitan areas.

We’ve assessed quantities of new construction in terms of square footage delivered for the office, industrial, retail and self storage sectors, and in terms of building permits for residential real estate. While there’s significant activity across the board, it seems developers have been betting big on Texas’s largest urban hubs in the past decade.

The hottest sectors of real estate during a decade-long transformation

After experiencing limited growth in the first half of the past decade, as most markets were still navigating the effects of the Great Recession, the real estate market was firing on all cylinders in the second half. 2020 was indeed a pause point, as the pandemic required caution with regard to new development. But the trend was short-lived, as 2021 saw a pickup in construction activity in most of the country’s largest metros.

Residential construction emerged virtually unscathed by the pandemic, with 2021 being one of the most productive years for single family and multifamily construction in many of the metros analyzed – and the year with the highest overall average for all the 50 metros we analyzed. Roughly 557K building permits for single family homes and 437K permits for multifamily units were issued in 2021, the highest level in the last ten years. Across the 50 metros, over the past decade, permits were issued for more than 4M single family units and approx. 3.3M multi-housing units. Construction activity in the 50 largest metro areas accounts for 59% of national single family construction and 75% of multifamily construction.

Self storage, which generally mimics residential construction patterns, has seen considerable growth over the past decade. 2018 – when roughly 54M sq. ft. of storage space entered the market – stands out as the best year for new supply. Although maintaining healthy levels, construction activity slowed down in 2020 and 2021 as developers were trying to balance inventories in oversupplied markets.

The office and industrial sectors both experienced inventory increases, with 740M square feet of new office space and 2.2B square feet of industrial space added in the country’s 50 biggest metros over the past decade.

The one sector where new construction is lagging is retail, mostly due to the strong momentum of e-commerce. In fact, online retail increased from about 5% in 2012 to over 13% currently, causing a drop in both demand and investment in brick-and-mortar stores.

Throughout the past decade, Texan metros acted as powerhouses of real estate construction, with Dallas and Houston among the top 10 most active metros for new construction from 2012 to 2021 – and Austin is just shy of it, ranking 11th.

Dallas-Fort Worth-Arlington has seen the most impressive development activity over the past decade

One of the fastest-growing metros in the country, Dallas acted as a magnet for both new residents and businesses over the past decade, and the real estate market responded.

Building permits have been issued for roughly 323K single family homes and over 233K multifamily units in the last 10 years. During the same period, office space swelled by 55M square feet, industrial by almost 230M square feet, while retail and self storage added about 48M and 23M square feet of new space.

The Country's 50 Largest Metro Areas Ranked by New Real Estate Construction
2012 to 2021 Evolution

RankMetroSingle Family PermitsMultifamily PermitsOffice (sq. ft.)Industrial (sq. ft.)Retail (sq. ft.)Self Storage (sq. ft.)Population Growth (2012-2020)
1Dallas-Fort Worth-Arlington, TX323,250233,24654,977,882228,119,59747,823,11722,939,82115.80%
2Houston-The Woodlands-Sugar Land, TX392,136170,81744,286,647153,325,35451,849,61517,590,04215.70%
3New York-Newark-Jersey City, NY-NJ-PA107,812410,86878,600,77380,245,03830,511,88422,544,844-0.10%
4Phoenix-Mesa-Chandler, AZ207,37095,33021,570,83997,061,54115,812,35611,895,20216.80%
5Atlanta-Sandy Springs-Alpharetta, GA222,20887,60220,216,76898,534,83415,728,79312,157,19111.80%
6Los Angeles-Long Beach-Anaheim, CA89,186195,46330,584,33153,599,41714,597,7567,719,0080.80%
7Washington-Arlington-Alexandria, DC-VA-MD-WV130,858121,14439,129,52529,516,49316,261,7319,936,4897.50%
8Chicago-Naperville-Elgin, IL-IN-WI79,09084,74023,772,253162,280,94712,433,27714,069,870-1.30%
9Miami-Fort Lauderdale-Pompano Beach, FL68,160129,54515,710,00158,910,99624,111,05011,861,3987.40%
10Denver-Aurora-Lakewood, CO98,282100,50118,919,80956,292,89010,948,0558,739,86912.80%
11Austin-Round Rock-Georgetown, TX152,779133,95124,318,01724,027,20715,188,7418,317,45625.10%
12Seattle-Tacoma-Bellevue, WA89,156156,60229,635,77749,189,6507,820,7827,394,82112.90%
13Charlotte-Concord-Gastonia, NC-SC139,88973,59316,483,77846,105,9009,024,2096,479,54815.70%
14Orlando-Kissimmee-Sanford, FL131,54483,3179,127,18730,835,72016,787,4686,867,29918.60%
15Philadelphia-Camden-Wilmington, PA-NJ-DE-MD69,41185,22613,517,03145,069,5168,494,4717,222,7771.50%
16Tampa-St. Petersburg-Clearwater, FL117,90654,6326,515,43646,855,57811,719,2417,145,60914.10%
17Nashville-Davidson--Murfreesboro--Franklin, TN119,12973,63915,096,87337,882,8267,332,8024,824,36515.10%
18Boston-Cambridge-Newton, MA-NH47,71288,19230,875,50915,575,19511,452,4127,184,9374.70%
19Minneapolis-St. Paul-Bloomington, MN-WI83,51781,06611,131,44233,086,3193,902,5747,771,2637.40%
20San Antonio-New Braunfels, TX79,05744,1709,332,55430,437,72713,879,8786,828,60415.80%
21Raleigh-Cary, NC100,25343,30913,558,48713,870,7686,660,7624,268,70819.60%
22Columbus, OH42,90946,2569,297,02954,828,1698,006,7752,880,1679.80%
23Indianapolis-Carmel-Anderson, IN64,35825,0774,478,36672,125,8097,251,2963,967,7608.30%
24Riverside-San Bernardino-Ontario, CA93,01627,9001,999,743185,963,5709,488,5872,035,0577.90%
25Salt Lake City, UT43,15636,39520,501,13346,225,6186,266,9592,373,81410.30%
26Portland-Vancouver-Hillsboro, OR-WA66,41469,5349,887,45622,916,6252,795,8536,114,3869.70%
27San Jose-Sunnyvale-Santa Clara, CA21,13048,37937,959,53630,440,5078,214,5542,213,6154.10%
28Las Vegas-Henderson-Paradise, NV88,36332,2302,873,05636,446,5647,634,7463,380,71216.40%
29Baltimore-Columbia-Towson, MD47,45629,1999,925,82230,804,8935,186,4265,047,0511.60%
30Kansas City, MO-KS51,12440,3678,238,58053,964,872871,6343,745,7366.60%
31St. Louis, MO-IL51,08820,7535,903,08631,495,8067,487,5974,007,5760.30%
32Jacksonville, FL94,91131,9002,570,23917,128,5825,598,6683,651,84515.20%
33San Francisco-Oakland-Berkeley, CA40,79289,40127,222,1467,331,3523,384,9092,200,6225.40%
34Detroit-Warren-Dearborn, MI54,31918,6616,875,51333,204,2721,562,8953,744,9040.10%
35Oklahoma City, OK59,4838,6785,829,27516,878,1219,097,8833,130,0239.80%
36San Diego-Chula Vista-Carlsbad, CA29,51859,2829,538,49212,515,0283,548,4583,178,5655.00%
37Cincinnati, OH-KY-IN40,55017,4114,814,81438,756,7432,618,8832,794,8063.70%
38Sacramento-Roseville-Folsom, CA58,27016,9503,767,18414,474,1955,205,9883,064,8498.40%
39Richmond, VA42,05620,6414,342,57623,268,6014,353,5522,923,7517.60%
40Louisville, KY-IN30,68517,3272,801,58731,460,9091,367,2263,170,8624.00%
41Cleveland-Elyria, OH25,3994,5167,897,54324,653,3345,807,9852,167,461-1.00%
42Milwaukee-Waukesha, WI14,68113,8685,230,49316,657,6001,014,2524,636,1510.70%
43Virginia Beach-Norfolk-Newport News, VA-NC42,31621,038538,6123,721,5926,474,8632,773,5982.60%
44Pittsburgh, PA29,19711,9807,768,7498,863,417324,2293,469,119-2.20%
45Memphis, TN-MS-AR30,6779,9743,064,74511,548,8084,661,0991,688,6051.30%
46Buffalo-Cheektowaga, NY9,6676,8363,946,6546,201,6234,432,1501,062,912-0.80%
47Grand Rapids-Kentwood, MI22,34210,9592,553,20410,204,836327,5351,805,2576.70%
48Providence-Warwick, RI-MA15,4874,4151,975,7951,735,9872,154,9792,005,7531.10%
49Birmingham-Hoover, AL26,7116,5231,016,8795,572,376313,4111,751,6142.30%
50Hartford-East Hartford-Middletown, CT8,4616,647378,769778,7951,436,0441,129,275-1.20%
StorageCafe analysis of U.S. Census Bureau, Yardi Matrix and Commercial Edge data (January 2012 - December 2021)

Mainly supported by a strong job sector and a healthy economy, the residential sector in Dallas has seen amazing growth. Not only did the pandemic not slow the market, but 2020 and 2021 saw the highest numbers of permits issued for new single family homes in the entire decade – 44,000 and almost 50,000, respectively.

The best year for multifamily construction in Dallas was 2015, with over 28,000 building permits issued for new apartments. The first pandemic year saw a rather steep drop, of almost 40%, from approximately 28,000 new apartments planned in 2019 to under 17,000 in 2020. However, the development market bounced back in 2021, when almost 27,000 new apartments got the go ahead in DFW.

After the peak year of 2018, when the Dallas office market added 10M square feet of space, office construction started cooling down in 2019, but it remains significantly higher than at the beginning of the decade. In 2021, almost 4.1M square feet of office space was built, 170% more than in 2012.

The industrial construction sector here is one of the strongest in the country, as Dallas had the most new industrial space delivered – approx. 228M – during the last 10 years.

Much in line with national trends, the retail market experienced a decrease in new construction over the past decade. In 2021, Dallas had 718K square feet of new retail space added to its inventory.

Self storage construction, on the other hand, has experienced tremendous growth in Dallas. In fact, the Dallas-Fort Worth metro area ranks first for self storage construction in the US, with no less than 23M square feet of space delivered over the past decade. New deliveries peaked in 2018, when the local inventory grew by over 4.1M square feet. The last three years saw a slowdown in new construction as developers were trying to fend off the effects of oversupply. Currently, rent for a 10’x10’ storage unit in Dallas is $116/month, up 7.4% year-over-year.

Houston permitted the highest number of single family homes over the past decade

Houston-The Woodlands-Sugar Land ranks second nationally for the overall volume of new construction during the past decade, cementing Texas’s status as one of the nation’s economic hotspots.

Houston has been the primary destination for newcomers moving to Texas, especially Californians who find respite in Harris County’s lower home prices and tax rates, cheaper land and sound economy. A typical home in Harris County, for example, is 57% cheaper than in Los Angeles County (approx. $848,000 vs. $365,990) whereas the average annual pay is about the same (approx. $75,000 in Harris County and $73,000 in Los Angeles County).

It may come as no surprise, then, that the Houston metro area had the largest numeric growth in building permits for single family homes in the last decade, over 392K. The best year for single family homes was 2021, with over 52K units planned to be delivered, followed by 2020, with over 52K units. The metro area also permitted about 170K multifamily units over the past ten years, with 2014 peaking at around 25K units.

Houston saw over 44M square feet of office space being built over the past decade, and new industrial construction surpassed 153M square feet, with signs pointing to even more strong growth. The historically oil-driven hotspot is slowly evolving into a hub for digital technology as well as manufacturing and life sciences. Among the big players that announced new offices in the area in the past year are Hewlett Packard Enterprise, Avetta, Maddox Defense, Dominion Aesthetics Technologies Inc. and Roboze.

Self storage construction, which is also driven by moving, has itself witnessed an increase in demand that in turn has translated into heightened construction activity. More than 17M square feet of new self storage space entered the Houston market over the last decade.

Austin-Round Rock-Georgetown missed the top ten by a whisker, landing eleventh among the biggest metros for overall real estate development. This is the third Texan metro area that saw impressive volumes of new construction over the past decade. Austin manages to outperform many of the decidedly bigger metros in the top 10 for both single family and multifamily construction.

The metro area saw nearly 153K building permits for single family homes and almost 134K permits for multifamily units issued over the last decade, placing Austin in the top 10 nationally for residential development.

Office space seems to be vying with industrial space for supremacy in terms of new deliveries – 24.3M square feet vs. 24M square feet – as the area is trying to accommodate an increasing number of tech companies as well as manufacturing and distribution centers.

In one of the most commented on moves of the decade, Tesla has now officially relocated its headquarters from Palo Alto, California, to Austin, with development moving ahead as planned on the electric automaker’s new Austin $1.1B plant. The Gigafactory Texas will most likely produce the Cybertruck, Semi, Model 3 compact sedan, model Y and batteries on the site, and could eventually employ up to 10,000 people.

The New York metro area takes the cake for new multifamily development

The New York metropolitan area has been busy in its efforts to respond to the need for more housing. More than 410K permits for new multifamily units were issued in the last ten years, with 2015 being the most active year (approx. 75K new multifamily units). After a pandemic-induced slowdown, the construction market resumed its pace, with both 2020 and 2021 experiencing renewed developer interest.

Among the latest, most notable developments revamping the New York cityscapes is Astoria West, a 544-unit premier apartment community that found its home on one of the few remaining land plots along the water in NYC. Other recently delivered multifamily projects include The Artisan, a 263-unit addition to Essex Crossing in Lower East Side, and The Smile, a 233-unit building in Harlem. They are betting on innovative architecture, plus perks and amenities including rooftop terraces, pools, fitness centers and communal lounge spaces.

The single family market in the New York metro area has also grown over the past 10 years, albeit at a slower pace than multifamily development. The construction rhythm kept steady at around 10K single family homes annually during the last decade.

Alongside multifamily, another area where New York truly shines is office space. Nearly 79M square feet of office space that is often both architecturally and artistically impressive has been built in the last 10 years, making New York rank first nationally among the 50 biggest metro areas. Office construction lagged during 2020 and 2021 compared to the previous years, undoubtedly influenced by the WFH trend – however, the sector is seeing a major comeback, with the likes of Google and Facebook leasing office space here.

Industrial space increased by 80M square feet in the New York metro area, with retail and self storage sectors each seeing the addition of 30M and 22M square feet of new space, respectively, in the last 10 years.

Intense construction activity puts Phoenix, Atlanta among best development markets in the nation

Ranking 4th and 5th respectively in terms of overall new construction during the past decade, both the Phoenix and Atlanta metros seem to be punching above their weight. With populations of around 5M and 6M, respectively, the two metros come ahead of Los Angeles and Chicago, showing remarkable real estate growth over the past decade.

Phoenix is one of the country’s fastest growing metros, with new residents attracted by a low cost of living and a strong employment sector. In fact, Phoenix is experiencing a surge in technology jobs — in the semiconductor and electric vehicle manufacturing industries, for example. Moreover, while Phoenix has traditionally been seen as a desirable destination for retirees, it has now become a hotspot for young people: the median age in the metro area is now 34, compared to the national average of 38, according to the US Census.

From 2012 to 2021, the Phoenix-Mesa-Chandler metro had building permits issued for approx. 207K new single family homes, with the activity in the sector picking up steam in each of those years. While 12K new single family homes were planned in 2012, by 2021 that number almost tripled, to 35K new homes. The multifamily sector has also expanded in Phoenix, with over 95K building permits issued for new multifamily units in the last ten years.

Roughly 21M square feet of new office space and 97M square feet of industrial space have been built in Phoenix over the last decade.

The Atlanta-Sandy Springs-Alpharetta metro has also been getting a lot of attention from both new residents and new businesses. Building permits for more than 222K single family homes were issued during the last ten years, plus almost 88K for multifamily units. The trend of single family home construction activity shooting up during the pandemic, as seen in both Dallas and Houston, applies to Atlanta as well: 2020 and 2021 were the best years during the past decade for single family home construction. In terms of multifamily activity, new construction underperformed in 2020, with only 3,700 new units planned for delivery – however, multifamily permits doubled year-over-year in 2021.

The metro area also added almost 99M square feet of new industrial space to its inventory from 2012 to 2021, sustained by a strong demand for warehouse space from corporations such as Amazon, Lowe’s and Kellogg’s. The office market in Atlanta saw the addition of 20M square feet, whereas retail and self storage space in Atlanta grew by 16M and 12M square feet, respectively, over the last decade.

The Los Angeles metro area performs well in the multifamily sector

Residential construction activity in the Los Angeles-Long Beach-Anaheim metro area was at a much higher level for multifamily than for single family during the past decade – a trend that also holds true for other busy urban hubs with expensive housing markets like the New York, San Francisco and Seattle metros.

While the number of LA building permits ranged around 89K for single family homes in the last ten years, the LA metro area had over 195K building permits for multifamily units, the third highest nationally, after the New York and Dallas metros.

Office construction during the past decade totaled over 30M square feet of new space, while the industrial sector added almost 54M square feet of new space.

The Washington DC metro area ranks high for office construction

The Washington-Arlington-Alexandria metro area saw over 130K new single family homes planned to be delivered over the past decade, and more than 121K new multifamily units. The metro area performed very well for new office construction, with over 39M square feet added to the inventory from 2012 to 2021, making it rank 4th nationally for activity in this sector.

New industrial construction, on the other hand, lagged, with only about 29M square feet of new space added during the past decade, placing the DMV 30th among the country’s top 50 metros.

The Chicago metro area ranks eighth nationally for new construction, powered by the industrial sector

The industrial and self storage sectors have been propelling the Chicago-Naperville-Elgin metro into the top 10 nationally for new construction during the past decade. Over 162M square feet of industrial space and over 14M square feet of self storage space was added to the Chicago metro area’s inventory. Last year was the best of the past 10 for industrial construction in the Chicago metro area, with companies like Amazon and Facebook developing new data and distribution centers.

On the other hand, Chicago is behind other large metros in terms of residential construction, with roughly 79K single family homes and almost 85K multifamily units permitted over the past decade.

Miami-Fort Lauderdale-Pompano Beach ranks 9th among the top 10 most active development markets in the US. Almost 130K apartments were permitted between 2012 and 2021, compared to 68K houses. With its tourism-oriented local economy, and a steady influx of retirees relocating here to enjoy their golden years in a nice climate, the Miami metro area indeed has all the givens of a housing market that favors multifamily construction. New developments, such as Downtown 5th,  a 2021-delivered luxury rental property with over 1,000 units, are answering an increasing demand for premier living in one of the country’s most appealing urban hotspots.

Other sectors where the metro area performed well are retail construction – over 24M square feet during the decade – and Miami self storage, with almost 12M square feet of new storage space.

Ever-growing interest in Denver makes it one of the best performing residential markets in the US

The Denver-Aurora-Lakewood metro area rounds out the top 10 of the best performing real estate markets over the past decade. In fact, Denver is arguably one of the finest success stories in terms of population during that period. Currently home to about 3M people, Denver has seen constant population growth over the past 10 years and is expected to boast 3.6M residents by 2030.

A combination of talent, particularly in tech, a highly educated population, a desirable lifestyle, plus access to a large, international airport are attracting people and businesses alike to the Denver metro area. New construction naturally follows, and the metro area saw over 98K of single family homes and over 100K of multifamily units permitted over the past 10 years.

New office construction totaled 19M square feet of space, with 2021, one of the best years of the past decade for office construction, adding over 3M square feet to the inventory. The sector is very likely to maintain the upward trend in the following years, with various companies, including Palo Alto native Palantir, deciding to relocate or open new facilities in the Denver metro area.

The industrial sector saw the addition of over 56M square feet of new space, with 2021 again being the best year of the decade. The self storage sector in Denver added about 8.7M of new space from 2012 to 2021.

The sustained construction activity in the country’s top 50 biggest metros over the past decade is reshaping the way we live and work, with urbanization on an onward path. In fact, urbanization increased by over 1.5% during the last 10 years, reaching 82.6% currently, and there are strong signals of a similar trajectory in the years to come.

What the experts say

Jacob Sagi, Professor of Finance and Wood Center in Real Estate Distinguished Scholar, Kenan Flagler Business School, The University of North Carolina at Chapel Hill

The US has seen tremendous real estate development over the last decade, with some regional variations. What makes some places attract more development than others?

Anticipation of demand, of course! This is highly correlated with job growth and demographic shifts. In the last few years, we’ve seen both favoring the Sunbelt. This is thought to be largely driven by a lower cost of living, lower taxes, lower regulatory constraints on development, and the increasing high-skill labor pool in certain Sunbelt MSAs (a case in point is where I live, the NC Triangle Area, home to three research tier universities). Weather advantages help too, in comparison to the NE.

Read more....

Do you think the COVID-19 pandemic had an impact on real estate construction, and how would you describe this impact?

Absolutely. Supply chain issues have slowed down construction and increased costs. Pre-COVID labor shortages in the construction industry have been greatly exacerbated by the pandemic.

Which sectors of real estate do you think will see most growth in the near future?

The general consensus appears to be that residential real estate (single- and multifamily) and industrial real estate will enjoy the greatest growth, unhampered by the issues that office properties face from WFH and retail properties face from e-commerce. Certain non-traditional sectors could also enjoy some high growth (e.g., infrastructure, renewable energy “farms”).

David Eyzenberg, Adjunct Assistant Professor, Leonard N. Stern School of Business, New York University

The US has seen tremendous real estate development over the last decade, with some regional variations. What makes some places attract more development than others?

Development is usually fueled by population growth which recently has been more about migration patterns vs immigration or birth rate. States with pro business regimes and less draconian lock down rules will benefit from an influx of mobile workers and development will follow.

Read more....

Which sectors of real estate do you think will see most growth in the near future?

The Build To Rent (“BTR”) industry has truly come into its own with over $50B of institutional capital allocated for the sector. As more of the economy shifts or maintains a WFH element the additional space offered by a house vs apt will prove very attractive to the growing renters by choice segments.

R. Kelley Pace, Director, Real Estate Research Institute, E. J. Ourso College of Business, Louisiana State University

The US has seen tremendous real estate development over the last decade, with some regional variations. What makes some places attract more development than others?

Development occurs in areas with anticipated growth (increase in demand), provided the present costs to add more space are not too high.

Read more....

Do you think the COVID-19 pandemic had an impact on real estate construction, and how would you describe this impact?

COVID-19 has affected perceptions about growth in the residential, office, and retail markets. Industrial is not as sensitive to these issues. Building more residential in growing markets seems relatively certain.

Randall Sakamoto, President and Director of Research, Rosen Consulting Group

The US has seen tremendous real estate development over the last decade, with some regional variations. What makes some places attract more development than others?

Costs and local regulatory hurdles are a large factor, but much of it boils down to demographics driving demand. Not only did the Sunbelt and Mountain states gain large numbers of residents, many are highly educated and skilled workers that lived previously in dense coastal markets. The high quality of life and relative housing affordability of many secondary and tertiary cities attracted new residents for much of the last decade. The pandemic accelerated this trend drastically during the last two years, and many of these relocations will be permanent even if remote work options change over time.

Read more....

Do you think the COVID-19 pandemic had an impact on real estate construction, and how would you describe this impact?

The pandemic impact varies widely by sector, but for all building types the shortage of skilled labor and high cost of materials will continue to strain development opportunities. While supply chain issues will eventually be resolved, the labor shortage is likely a longer term issue. During the Great Recession, the construction industry lost more than two million jobs, and many of those workers changed industries permanently, and the pandemic drove even more workers out of the industry. Barring an introduction of more vocational training programs and less restrictive immigration policies, it is hard to envision a quick end to the construction labor shortage. Aside from residential and industrial, where demand is booming, the high costs and sluggish space demand will constrain ground-up development for some time.

Which sectors of real estate do you think will see most growth in the near future?

The easy answer is warehouse and fulfillment centers in industrial and both rental and for-sale housing. The surge in demand for both segments show no signs of slowing in the near term. With mobility limited by the growing costs of housing and limited supply, the self storage sector should remain strong as more households turn to storage facilities because they cannot trade-up into larger homes or require storage during remodeling projects. Niche investment sectors, such as cold storage and data centers, also boast positive demand fundamentals and substantial hurdles to new development which provide some protection against oversupply.

Doug Ressler, Business Intelligence Manager - Yardi Matrix

What are the most notable trends in self storage in the wake of the pandemic?

Demand for both multifamily and self storage has remained strong in the wake of the pandemic. Although rent growth appears to be slowing down, all metros tracked by Yardi Matrix have seen steady increases, with no negative street rate growth for either residential or self storage units.

Read more....

Moreover, 2022 is shaping up to be a banner year for self storage due to high occupancy rates and positive overall performance. Similarly, residential vacancy has not been this low (5.6% in Q4 2021) since Q2 1984 (5.5%), as per FRED data.

Yardi Matrix, which tracks more than 3,000 self storage properties nationally, has found that optimism is increasing among self storage owners and operators. The market is getting a big boost as demand comes not only from traditional sources – generally referred to as the 4 D’s, death, divorce, disaster, and dislocation – but from additional drivers as well – including decluttering and distribution/business needs. In fact, operators are looking for new uses of self storage properties, including industrial distribution and logistics facilities.

Do you think the COVID-19 pandemic had an impact on self storage, and how would you describe this impact?

The pandemic has obviously had an impact on the housing and employment sectors and the self storage market by extension. But it also served as an engine that reinforced some trends that were already in the making. The WFH storm had already been brewing for some time and the last two years created the right context for it to develop into the new normal. The work-from-home and co-working trends created new self storage demand from both consumers and businesses.

These new demand drivers added to the traditional reasons for using self storage that involved moving and home space optimization.

Whereas cities see consistent population growth, the suburbs are stepping more into the limelight as increasing numbers of people take the route to lower-density living. The top priority for parents is still a "good place" to raise children, according to a new survey by the Pew Research Center, with only one-in-five U.S. adults surveyed in late 2021 saying they prefer living in a city. That’s a drop from about one quarter who reported on that in 2018. In addition, the share of Americans who said they would want to live in the suburbs increased slightly — from 42% to 46% — during the past three years.

The flight to the suburbs applies to office development as well. A recent report from Yardi CommercialEdge shows that over the last 20 years office construction was overwhelmingly suburban, as campus-style design and cheaper land pulled developers and companies further out of the city.

Self storage generally follows growth in demand, which is what draws developers to a location. The new supply pipeline nationally is now at 8.9% of existing stock. Growth has been concentrated in secondary markets across the South, Southwest and West, especially in Las Vegas, Phoenix and Dallas, as well as the “Acela Corridor” in the Northeast.

Which sectors of real estate do you think will see most growth in the near future?

We predict significant additional growth in the next ten years for the Build-To-Rent (BTR), Manufactured Housing and Industrial asset classes.

BTR developers and lenders are excited about the opportunity of this asset class, which can provide fast economical additional housing solutions to address the robust demand growth of renters.

Another sector that’s poised for further growth is the manufactured housing industry. This sector has closed another 12 months of consistent growth, fueled by strong demand. Investor interest in the asset class stayed high last year, despite declining cap rates. But the biggest issue the sector experienced in 2021 continued to be the scarcity of new supply, both in terms of new communities and new homes within existing developments.


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

We analyzed new construction data for the country’s 50 largest metropolitan areas in terms of population. San Juan and New Orleans metropolitan areas were eliminated from the analysis due to the lack of available data.

The period for which we analyzed the data is January 2012 to December 2021.

Construction activity was quantified and evaluated based on square footage in the case of commercial assets (industrial, office, retail, self storage) and on unit count in the case of residential buildings. We analyzed unit count data from U.S. Census building permit records and we deemed it a relevant indicator of the housing market activity that allowed us to visualize the market's evolution in relation to household formation.

Unit count data was obtained from building permits. At a national level, 94% of the single family permits and 72% of multifamily permits translate into completions.

The overall ranking of the metropolitan areas in terms of real estate market activity was calculated as an average of the individual rankings for each of the following metrics:

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.


Maria Gatea is a real estate and lifestyle editor for Yardi with a background in Journalism and Communication. After covering business and finance-related topics as a freelance writer for 15 years, she is now focusing on researching and writing about the real estate industry. You may contact Maria via email.

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