This is a challenging market right now for developers. Softening demand for self storage has caused rates to be lower than it was in the past year, this combined with high interest rates has created a market that is not conducive to building new supply. However, three markets within the top 25 CBSAs stand out as having a large amount of supply in the development pipeline relative to their current supply.
The Phoenix-Mesa-Scottsdale, AZ CBSA is expected to add an additional 20.70% increase in total supply if all their development projects are completed. The Phoenix CBSA is a flourishing economic center from the healthcare, technology and tourism industry resulting in a growing population. This population influx has helped drive self storage demand and lead to new supply planned to be built.
The Tampa-St. Petersburg-Clearwater, FL CBSA anticipates a 21.20% increase in supply if all its current development projects were to complete. Tampa has seen an increase in population growth as people flocked to the area after being priced out of places like Miami. This increased population has led to higher self storage demand, which developers have since caught on to.
The Atlanta-Sandy Springs-Roswell, GA CBSA is expecting a 20.4% increase in total supply once all its development projects are completed. This market has noticed a heavy increase in population. With there being a 7.2% increase YoY in population in 2022 alone. This has driven self storage demand in the area, and the sizable development pipeline can prove it.
