Occupancy • Section 4
slightly better occupied than do individually or small-business owned facilities. At the end of the current quarter, average large operator occupancy rates rose 2.5 percent to reach an occupan- cy level of 89.9 percent in 2014. However, smaller, non-corporate owned self-storage businesses achieved an occupancy gain of 2.4 percent for the quarter and ended the period with a very respectable average occupancy rate of 88.1 percent. Over the past year, occupancy levels have continued to in-
crease. Looking forward, owners and operators will need to be careful that individual store occupancy levels do not reach the point where they lack availability and can no longer meet new customers’ self-storage needs. To best manage occupancy, own- ers and operators may want to reevaluate their rental rates to
and demand for space slowly begin to find an equilibrium, many foresee a leveling out of occupancy rates with the expectation that overall occupancy will remain strong for the long term. Looking at national, regional and metropolitan area oc-
cupancy numbers, it is clear that individual operators are suc- cessfully signing new customers and filling self-storage units. The occupancy trend is also projected to continue in a positive, upward direction over time. Record-high occupancy rates cou- pled with strong occupancy growth signals a robust demand for self-storage space nationwide. As the barometer for the sector, current occupancy rates point to ongoing growth and strength for individual operators as well as for the future of the self- storage industry as a whole.
Table 4.14 – Occupancy Rate Comparisons - Multi- and Single-Story Occupancy Rate Change in Occupancy Rate
Occupancy Rate
Metro Year Quarter (Multi-Story Facilities) National 2013
National 2013 National 2013 National 2013 National 2014 National 2014
1 2 3 4 1 2
85.8% 88.2% 87.8% 86.7% 87.0% 89.5%
(Multi-Story Facilities) *
2.4% -0.4% -1.1% 0.3% 2.5%
ensure they are optimally pricing each unit to profit from the current high level of demand for self-storage space that is cur- rently enjoyed by the industry.
New Development On The Horizon At this time, occupancy rates are hovering at or near historically high levels. After several years of stifled new construction de- velopment, the supply of available self-storage units appears to have reached a point where it has not kept pace with the growth in both the population of customers and demand for the prod- uct. As a result, occupancy rates are projected to continue to rise until additional self-storage facilities are fully constructed and are ready to open their doors for business. Many new projects linger on the horizon and are in various
phases of development nationwide. Once these new facilities come online, most experts expect the market to quickly absorb the additional supply of units without much negative impact on overall occupancy levels. As the supply of self-storage units
(Single-Story Facilities) 84.9%
87.5% 87.1% 86.4% 86.2% 88.8%
Note: Multi-story facilities may include buildings which are single-story, but single-story facilities will not feature any units in multi-story buildings. * Data Not Available
Change in Occupancy Rate (Single-Story Facilities)
*
2.6% -0.4% -0.7% -0.2% 2.6%
Source: © 2014 REIS, INC.
Table 4.15 – Chicago Submarket Occupancy Submarket
Metro Name Chicago METRO
Chicago Central Chicago Chicago
South Cook County
Chicago Glendale Heights/Schaumburg/Palatine Chicago Downers Grove/Woodridge/Lisle Chicago Aurora/Naperville/Wheaton Chicago Oak Park/O'Hare/Wheeling Chicago Glenview/Evanston Chicago
Far West Suburbs
Chicago Lake County Chicago Joliet/Far Southwest Chicago South Shore
Source: © 2014 REIS, INC.
Table 4.16 – Occupancy Rates Comparisons - Large and Small Operators (Large Operators:
Metro Year Quarter National 2013
National 2013 National 2013 National 2013 National 2014 National 2014
* Data Not Available
1 2 3 4 1 2
Occupancy Rate Change in Occupancy Rate (Large Operators: REITs + LOCs)
85.9% 88.5% 88.1% 87.2% 87.4% 89.9%
REITs + LOCs) *
2.6% -0.4% -0.9% 0.2% 2.5%
Occupancy Rate
(Smaller Operators) 84.5%
86.9% 86.5% 85.7% 85.7% 88.1%
2Q 2014
Occupancy Rate 90.3%
88.2% 88.9% 90.8% 91.7% 93.9% 89.4% 92.5% 90.1% 93.5% 91.0% 88.1%
Change in Occupancy Rate (Smaller Operators)
*
2.4% -0.4% -0.8% 0.0% 2.4%
Source: © 2014 REIS, INC. 2015 Self-Storage Almanac 65
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