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U.S. Self Storage Performance Quarterly (SSPQ) report, measuring the health of more than 19,000 self storage facilities in the country’s 50 largest Metropolitan Statistical Areas (MSAs).

Despite physical occupancy of non-climate-controlled self storage units declining by -1.0% year-over- year (YOY) nationwide, the self storage sector saw a 7.4% uptick in asking rental rates and 5.7% increase in rental income in 2022.

New projects increased by 7% quarter-over-quarter in Q4 2022 and went up by over 20% YOY; however, the number proposed in the pipeline fell by 6% in Q4 2022 because 31 projects were on hold, leading to a 31% decrease in relation to Q4 2021.

REITs also performed well YOY, with asking rental rates, rental income, and physical occupancy climbing by 3.4%, 6.9%, and 1.0% consecutively.

The five markets with the greatest number of projects in the pipeline include: New York-Newark- Edison with 80 projects, Atlanta-Sandy Springs-Marietta with 50, Philadelphia-Camden-Wilmington with 32, Los Angeles-Long Beach-Santa Ana with 31, and Houston-Baytown-Sugar Land with 25.

“The self storage sector has shown impressive resiliency over the past few years having outpaced all other leading asset classes,” “From an investment standpoint, self storage remains an attractive opportunity particularly within emerging markets with considerable population driving a significant number of new development opportunities.”

The top five markets with the largest number of projects in the pipeline include: New York-Newark- Edison with 80 projects, Atlanta-Sandy Springs-Marietta with 50, Philadelphia-Camden-Wilmington with 32, Los Angeles-Long Beach-Santa Ana with 31, and Houston-Baytown-Sugar Land with 25.

The report’s key findings include:

• The Self Storage Performance Index (SSPI) decreased 2.1% compared to Q3 2022 and increased 7.4% compared to Q4 2021. The SSPI now stands at 176.3.
• Asking rental rates decreased 3.0% compared to Q3 2022 and increased 7.4% compared to Q4 2021. REITs decreased 4.5% compared to the previous quarter and increased 3.4% YOY.
• Median physical occupancy remained unchanged compared to Q3 2022 and decreased 1.0% over Q4 2021. REITs increased 1.0% compared to Q3 2022 and increased 1.0% from Q4 2021.
• The Concession Cost Index indicates absolute change increased by 2.2% compared to Q3 2022 and increased 18.1% over Q4 2021. The facilities offering concessions saw an increase of 3.1% in absolute change from Q3 2022 and an 8.5% increase YOY. The Concession Cost Index increased to 163.9 in the Q4 2022.
• Rent per Available Square Foot (RPASF) for the benchmark 100 square feet of non climate-controlled units fell 3.4% from Q3 2022 but are up 5.7% compared to the Q4 2021. REITs decreased 3.1% compared to the previous quarter but increased 6.9% YOY.