Web Rates Continue to Climb
Pricing strength continued through February as 10x10 Climate Controlled Web Rates were up 12% y/y nationally, and up 15% in the top 50 markets. Certain markets are seeing even more strength, with Riverside, CA, Chicago and Denver seeing 10x10 CC rents up 32%, 25% and 23% respectively. Rounding out the bottom of the top 25 markets are Tampa, Dallas and Boston, who saw rates up 8-10% y/y.
While each market is seeing varied improvement over the prior year, it’s become clear that the lifestyle changes brought about from COVID have resulted in increased demand for self storage. Using the chart below to understand the trajectory of performance during the pandemic, it was well documented that rates were slowly declining (nationally) since 2016 as a result of the largest development cycle the sector has ever seen. When the initial lockdowns occurred this time last year, REITs cut rates dramatically through June of 2020 (red line). Once lockdowns began to lift (green line), rates rose and largely haven’t stopped rising since.
With the vaccine rollout accelerating, we are likely to see mobility increase over the coming months. We will be paying acute attention to the trends in move-outs as they have been below their seasonal norms. This will be the biggest test thus far in understanding the composition of the increased demand and how much is here to stay.