We are seeing a lot of obstacles keeping development projects from happening. The REITs most recent earning call revealed that the majority of their development projects were being put on pause. The Radius+ team took at the top 3 markets within the Top 25 Markets that saw the biggest increase in supply growth YoY when comparing 2022 to 2023, which in turn would lead to new competition coming online in these markets.
The Las Vegas-Henderson-Paradise, NV CBSA saw 3.5% supply growth in 2022, which increased to a 5.2% supply growth in 2023.
The Orlando-Kissimmee-Sanford, FL CBSA saw a 3.1% supply growth in 2022, which increased to a 5.5% supply growth in 2023.
The Philadelphia-Camden-Wilmington, PA-NJ-DE-MD CBSA saw a 3.2% supply growth in 2022 which increased to a 5.7% supply growth in 2023.
While these projects coming online could have been a result of all the interest in self storage shown in 2021 and 2020 due to the increase demand due to COVID-19 drivers, we can expect to see rates in these areas soften a bit as the demand is met with this increase in new supply.