The self-storage industry has become one of real estate’s hotspots, mostly thanks to the growing job market and heightened demand that keeps investors busy. Whether people are buying more, or, on the contrary, are downsizing their home, they need storage facilities to keep things in order. According to the National Self-Storage Report conducted by Yardi Matrix in August 2019, the development activity intensified in about 40% of the top markets, compared to the previous month, with the number of self-storage projects under construction or in the planning stages being equivalent to 9.5% of the total current inventory. Drawn from Yardi Matrix’s national database of more than 27,000 stores, here are the top 5 hottest markets for new self-storage construction:
The largest city in the state of Oregon tops the list with an astonishing number of new or projected self-storage constructions, representing 23.3% of the existing inventory. Even though the percentage decreased slightly compared to the previous month, Portland remains the hottest city for self-storage construction at the moment.
According to Smart Asset, Portland is the third most-popular moving destination for millennials, who seem to be drawn to this prosperous West Coast settlement. Known for its local culture, Portland is one of the top hipster destinations in the Pacific Northwest, as well as a major hub for many industries and huge companies such as Google and Intel, which implies a quickly growing job market.
Nashville is next in line with a large number of new stores planned or under construction – 21.8% of the current self-storage inventory. The promise of good jobs and good pay, combined with an affordable cost of living, constantly attract the younger population, making it one of the fastest-growing cities in the US. Due to a consistently strong job market, Tennessee’s largest city has favorable financial prospects for its residents.
According to the Bureau of Labor Statistics, even though the average income is slightly lower than the national average, the population experiences a low rate of unemployment. Among major employers in the Nashville area is Nissan North America, but it is also home to a large number of small businesses, many of them owned by millennials.
The third city that paves the way for more building of self-storage facilities is Seattle, with new constructions and projects representing 20.6% of the inventory. Washington’s largest and most acclaimed city is a hub of both culture and technology, factors that are very likely to attract younger people to live there, and, boost the job market and the self-storage industry as a consequence. According to Census data, over the course of last year there were 33,989 new millennials moving into Seattle, and 25,982 who left. That results in a gain of 8,007 millennial residents for the Emerald City, which is booming with new constructions as well as new self-storage facilities.
Orlando occupies the 4th position in the top 5 cities with the biggest number of new self-storage facilities, with constructions and projects being equivalent to 18.1% of the city’s inventory in August. Even though it is not among the country’s most populated cities, its diversification into the finance, science, mathematics, engineering, and technology sectors encourage young people to move to central Florida, and Orlando is becoming one of the fastest-growing cities in the United States.
5. New York
Last, but not least, New York is #5 on our list, with the number of new self-storage facilities due to come online being 16.9% of the existing inventory. The unemployment rate in New York City has been on the decline, mostly due to economic growth. With a wide variety of industries represented here, the city’s average income is noticeably higher than the national average, as can be seen in the data sourced from the Bureau of Labor Statistics. Also, being a more and more space-challenged city with ever-shrinking apartments and more expensive living quarters, New York shows great demand for new self-storage constructions, as they are the best solution to living small.
A constantly increasing rate of urbanization and consumption combined with an improved economic outlook nationwide leads to a significant development in the self-storage industry.