Rental Rates • Section 3
ey for better marketing campaigns, and buying power to utilize state-of-the-art tools, smaller operators remain competitive. A national comparison of large versus small operators within the 50 metropolitan areas of the U.S. shows that occupancy rates and rental rates are similar between the two types of operators. Small operators reported occupancy rates that were within
2 percent of those reported by large operators. The small op- erators also reported slightly less change in occupancy from the third quarter of 2013 to the fourth quarter of 2013, with only a 0.8 percent decreased compared to the 0.9 percent decrease at the large operators’ facilities. In that time period, small operators had less change in the asking rates for non-climate controlled 10-by-10 units and climate controlled 10-by-10 units as well. While large operators experienced a 1.3 percent decline in
rental rates for non-climate controlled 10-by-10s, the small op- erators had only a 0.2 percent decline. Large operators reported a 1.4 percent drop in rental rates for climate controlled 10-by- 10 units from the third quarter of 2013 to the fourth quarter of 2013, yet small operators reported less than half that percent- age with only a 0.6 percent drop. However, it’s important to note that large operators did report greater increases in rental rates for both climate-controlled and non-climate controlled 10- by-10 units from the fourth quarter of 2013 to the first quarter of 2014 and from first quarter 2014 to second quarter 2014. In addition to large operators’ versus small opera-
tors’ data, data was also collected from multi-story facil- ities and single-story facilities within the top 50 metro areas in order to conduct occupancy rate and rental rate comparisons. Most importantly, the data shows that despite having higher rental rates than single- story facilities for both climate controlled and non- climate controlled 10-by-10 units, multi-story facilities managed to post higher occupancy rates. Throughout 2013 and the first half of 2014, multi-
story facilities reported slightly higher occupancy rates than did single-story facilities. However, both multi- story and single-story
facilities experienced de-
creased occupancy rates in the second half of 2013; from the second quarter of 2013 to the third quarter of 2013, both facility types had a 0.4 percent decline in
Table 3.22 – Metro Area 1-Year Forecast Rental Growth
1-Year Metro
Rank Area 1 Denver
2 Fort Lauderdale 3
4 Chicago 5 Miami
Source: © 2014 REIS, INC.
Forecasted Rent Growth
9.7% 8.5%
Northern New Jersey 8.1% 7.4% 7.2%
Metro
Rank Area 1 Denver
2 Fort Lauderdale 3 Austin 4 Chicago 5
Source: © 2014 REIS, INC.
occupancy. The following quarter brought a greater decrease in occupancy rates for both multi-story and single-story facili- ties as well. Occupancy rates at multi-story properties dropped 1.1 percent from third quarter 2013 to fourth quarter 2013, while single-story properties had a 0.7 percent decline in occupancy rates during that time period. Occupancy rates rebounded for multi-story facilities from the fourth quarter of 2013 to the sec- ond quarter of 2014 with a combined increase of 2.8 percent during that time frame. Concerning rental rates, multistory facilities posted higher
rates than did single-story facilities for both non-climate con- trolled and climate controlled 10-by-10 units. In fact, non-climate controlled 10-by-10 units at multi-story facilities are reported to cost approximately $40 more than non-climate controlled 10- by-10 units at single-story facilities. The greatest difference in rental rates for non-climate controlled 10-by-10s at both facility types was reported for the second quarter of 2014, with multi- story facilities charging $144.94 and single-story facilities charg- ing $102.94—a difference of $42. However, that price difference shrinks somewhat when look-
ing at the data for climate controlled 10-by-10 units. During the second quarter of 2014, the average rental rate for climate
Table 3.20 –
Metro Area Rental Growth* (2014 Q1 - Q2)
Metro
Rank Area 1 Denver 2 Austin 3 Chicago
10 x 10
Rent Growth 4.9% 4.5% 4.4%
4 Northern New Jersey 4.4% 5 Suburban Maryland 6 Indianapolis
7 Central New Jersey 4.0% 8 Atlanta 9 Boston
4.4% 4.1%
3.9% 3.8%
10 Columbus 3.8% *Non-Climate Controlled
Table 3.23 – Metro Area 3-Year Forecast Rental Growth
3-Year
Forecasted Rent Growth
7.1% 6.1% 5.8% 5.5%
Northern New Jersey 5.5% Metro
Rank Area 1 Denver
2 Austin
3 Fort Lauderdale 4 Suburban Virginia 5 New York
Source: © 2014 REIS, INC. 2015 Self-Storage Almanac 57 Source: © 2014 REIS, INC.
Table 3.21 – Metro Area 1-Year Rental Growth* (2013 Q3 - 2014 Q2)
Metro
Rank Area 1 Denver
2 Fort Lauderdale 3 Minneapolis
10 x 10
Rent Growth 12.0%
9.5% 7.6%
4 Northern New Jersey 7.0% 5 Chicago 6 Houston 7 Boston 8 Kansas City 9 Long Island 10 Nashville
*Non-Climate Controlled
Table 3.24 – Metro Area 5-Year Forecast Rental Growth
5-Year
Forecasted Rent Growth
5.2% 5.0% 4.8% 4.7% 4.6%
6.9% 6.8% 6.7% 6.7% 6.5% 6.5%
Source: © 2014 REIS, INC.
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