Self-Storage Construction Reaches An All-Time High
The self-storage industry is on track to have its biggest year yet.
Self-storage construction spending increased 89% year-over-year and surpassed $2.27B between January and August. This is the highest amount of spending on record, SpareFoot reports.
A CBRE report attributes the pent-up demand to a lack of adequate supply these past few years. This has led to an estimated 600 buildings being constructed in 2016 with another 900 new facilities expected to come online in 2017.
Given the supply coming on the market, some are wary that oversupply may emerge as an issue in the coming months.
Though overbuilding is of some concern, vacancies are expected to remain at or near 10.2% until the end of 2017. If oversupply should occur, research suggests it will be confined to the top five most active markets by volume, which account for approximately 40% of the 51.2M SF coming online this year. These markets are Dallas, Miami, New York, Houston and Atlanta.