KBRA releases research on self-storage and the effects that regional migration and demographic trends have had on this sector.
In recent years, key self-storage demand generators have included people migration and not having enough space at home. Together, they account for over two-thirds of self-storage renters according to Storage Cafe’s Self Storage Industry Trends December 2022 update.
Self-storage development as a percentage of existing inventory appears to be tracking the regional migration movement, which has seen the South and West continue to gain the most new residents. Based on Yardi Matrix data as of December 9, 2022, of the 19 metros where units are under construction or in the planning stages and form 10% or more of existing inventory, nine were in the South and seven were in the West. Together, these two regions accounted for close to 85% of this self-storage development stock.
Demographics are favoring continued demand. With the number of retiring baby boomers potentially downsizing over the next couple of decades, this population cohort is expected to continue to provide demand for self-storage. Additionally, millennials are the largest population group and 40% are self-storage users according to StorageCafe in their August 2022 survey. Their demand is not expected to wane as many live in urban settings and in small, expensive living spaces, which could contribute to a more transient lifestyle and continuing need for storage space.
The report is part of KBRA’s ongoing series on the secular trends that are transforming the “new normal” landscape in commercial real estate (CRE) across property types.
Click here to view the report.
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KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.
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