Section 5 • Occupancy
occupancy rates for self-storage stores in the U.S. should hover in the 90 to 95 percent range. When a store has too many unoccu- pied units, it is unable to generate money to its full potential. On the other hand, self-storage facilities with too few vacant stor- age spaces will have to turn customers away—some of whom would have been willing to pay more for a unit than the current tenants are paying. In addition, most unserved potential cus- tomers will end up as tenants at competing self-storage stores.
Table 5.2 –
Change in National Occupancy 2011 to 2015 (By Quarter)
Year Quarter Occupancy
2011 Q4 82.1% 2012 Q1 82.4% 2012 Q2 85.0% 2012 Q3 85.8% 2012 Q4 85.0% 2013 Q1 85.3% 2013 Q2 87.8% 2013 Q3 87.4% 2013 Q4 86.5% 2014 Q1 86.6% 2014 Q2 89.1% 2014 Q3 88.7% 2014 Q4 88.0% 2015 Q1 88.2% 2015 Q2 90.2%
* Data not available
% Change *
0.3% 2.6% 0.8% -0.8% 0.3% 2.5% -0.4% -0.9% 0.1% 2.5% -0.4% -0.7% 0.2% 2.0%
Source: © 2015 REIS, INC.
Not only does a lack of availability leave money on the table, it can also help the competition when managers who are unable to serve new tenants are forced to refer their potential custom- ers to neighboring self-storage facilities.
Over most of the past two decades, national occupancy rates have been in
the 80 percent-range. However, rates started to fall off just before the Great Recession. In 2010, occupancy rates reached a low point or trough, measuring an average of slightly over 75 percent.
National Occupancy Averages As discussed in Section 4, the tight supply and lack of new com- petition in the self-storage industry has been advantageous for existing operators, many of which have benefited from a result- ing increase in both occupancy and rental rates. Currently, as indicated in Table 5.1 on the previous page, the average occu- pancy rate for self-storage facilities in the U.S. hovers near 90 percent. Over most of the past two decades, national occupancy rates have been in the 80 percent-range. However, rates started to fall off just before the Great Recession. In 2010, occupancy rates reached a low point or trough, measuring an average of slightly over 75 percent.
Chart 5.1 – National Occupancy Rates 2011 - 2015 (By Quarter) 92.0% 90.0% 88.0% 86.0% 84.0% 82.0% 80.0% 78.0% National Occupancy Rate 60 Self-Storage Almanac 2016 Since that time, occupancy
has been on the rise. At 90.2 percent, the current national average occupancy rate falls within the ideal target of 90 to 95 percent. This figure indi- cates that there is strong de- mand for self-storage spaces in the U.S. With so little vacancy, it is also likely that many stores are currently considering an in- crease in monthly rents.
Looking at the data on a Source: © 2015 REIS, INC.
quarterly basis, as seen in Table 5.2, shows relatively stable av- erage occupancy levels at self- storage stores. Historically, the busiest season for self-storage facilities falls within the sum- mer months. In keeping with that trend, the highest occu- pancy rates were posted in the second and third quarters of the year for all years analyzed
2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2
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