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Self-storage vacancies drop, rents climb

Self-storage Vacancy Trends

Vacancies in self-storage properties in the Denver metro area and nationally will continue to decrease and rents will climb, according to Marcus & Millichap’s recently released 2016 Self-Storage Investment Forecast.

The report says after three years of near-level vacancy in the Denver market, a drop of 110 basis points to 9.2 percent is expected by the end of 2016. Employment advances will support household demand for storage facilities. Tightening conditions will place the metro’s self-storage vacancy more than 160 basis points below the national vacancy rate.

Asking rent climbed for climate-controlled and nonclimate-controlled facilities by 3.8 percent to $1.65 per square foot and 4.8 percent to $1.40 per sf, respectively, in 2015. Average rents will increase 4.7 percent for climate-controlled space and 5.6 percent for nonclimate-controlled facilities in the Denver metro area this year.

On a national level, Marcus & Millichap said, the self-storage expansion cycle remains sound as steady job growth supports unit demand.

Highlights of the report are:

  • The positive economic environment and demographics sustaining multifamily demand are helping to boost the self-storage sector.
  • While positive demand dynamics will remain in place, national occupancy rates will begin to face challenges as the development pipeline falls.
  • Property operators are aggressively growing rental rates with the average asking rent pushing to a five-year high in 2016.

To view the full report, visit http://www.marcusmillichap.com/research/researchreports/reports/2016/03/14/national-self-storage-research-report

Edited by the Colorado Real Estate Journal staff.