Northeast Self-Storage Market Report

Delaware | New Jersey | New York | Connecticut | Rhode Island | Massachusetts | Vermont | New Hampshire | Maine 

In recent years, the self-storage industry has demonstrated exceptional performance, establishing itself as a prominent commercial real estate sector and emerging as one of the nation’s top investment categories. Occupancy rates remained steady at approximately 90% throughout the latter half of 2022, and this pattern has continued with minimal variation throughout 2023. The Northeast continues to experience upward trends in occupancy levels.

Highlights

Source: SelfStorage.com

• Delaware has experienced a surge in the growth of self-storage facilities attributed to a nationwide trend of unprecedented self-storage construction over the past few years. Delaware self-storage facilities cover 934,695 square feet of storage space.
• Self-storage development has been on the rise throughout the New Jersey market. New Jersey self-storage facilities cover 32,621,181 square feet of storage space.
• There has been a notable increase in self-storage expansion throughout New York, extending beyond the five boroughs in recent years. Both Long Island and Upstate New York have witnessed substantial growth in self-storage development.
• Connecticut has witnessed a revival in the development of self-storage facilities, especially in towns and cities that have attracted the highest influx of residents. Connecticut self-storage facilities cover 11,751,914 square feet of storage space.
• As of July 20th, 2023, the Providence, Rhode Island city council passed a zoning ordinance amendment banning the approval of new storage development projects in the future in the city. Moves like this from major Northeast metros in the future could prove to increase values tremendously for existing facilities.
• Massachusetts currently has one of the lowest rates of self-storage per capita compared to the national average, but developers across the state are actively working on new storage facilities, which is expected to increase availability and lower rates for residents who are relocating within or outside the state.
• While the self-storage industry in Vermont may not be the largest, it proves to be profitable for facility owners and operators due to the scarcity of competition.
• New Hampshire self-storage facilities cover 7,940,210 square feet of storage space.
• Maine has experienced consistent population growth lately, which has led to an increase in both self-storage development and investment activity in the state.

Market Performance

The need for storage is expected to persist as individuals choose to rent for more extended periods or opt not to sell their current homes, resulting in a shortage of space. On a nationwide scale, the average rental rates for 10×10 storage units decreased from June to July, dropping by $1 to reach $134. This decline was observed across a wide range of regions, affecting 23 out of the top 31 metropolitan areas.

Self-storage construction has notably increased over the past few years, especially in the Northeast. Regarding monthly street rate performance, New York stood out as one of the top performers, and the metro area also took the lead nationwide in construction activity, according to the most recent report released by Yardi Matrix. New York boasted the most extensive development pipeline, with over 4.6 million square feet of storage space currently under construction for rental purposes.

Sales

In H1 2023, the number of self-storage transactions decreased significantly nationwide, with a year-over-year decline of 57% in the trailing 12-month volume. Despite this notable decrease, it’s worth noting that the self-storage sector continues to outperform, as the transaction volume remains higher than the levels seen in the 12 months leading up to the pandemic.