Competitive Analysis • Section 7
self-storage REITs were at the top of the chart. In fact, the self- storage sector has surpassed all other REIT categories.
S As discussed previously, it is essential to know what is
happening in your market area. Is there a new facility in the market? What are they charging? Are REITs or large operators of- fering concessions that will impact your rates? Has the demand for storage in the market area shifted, thereby requiring a price adjustment?
For many operators, this information is reliant on the efforts of the managers to call, visit, or shop competitors. For other operators, companies such as Stortrack (365 Media) offer self- storage pricing solutions. Tracking unit rental rates for more than 38,000 facilities, they are able to provide market data and analytics for self-storage markets as well as demographic data for acquisitions, site analysis, and investment research. For the purpose of the 2016 Almanac, we have chosen to look at 19 states and metro areas not covered by the Reis data in Section 8.
Data in Table 7.1 reflects the average annual rental rate differ-
ence for 19 states for the past year (Q4 2014 to Q3 2015). Of the states listed, the obvious outlier is Nebraska, a state that shows an overall increase of 22 percent, followed by North Dakota with an increase of 13 percent.
One factor for these two states may very well be summed up in one word: oil. Nebraska and South Dakota—both locat- ed within the U.S. Energy Belt—have seen a rapid increase in population and job growth as the result of the ongoing oil
Month Oct-14 Nov-14 Nation
28.83
Alabama 18.64 Arkansas 3.72 Idaho 9.29 Iowa 12.25 Kentucky 28.39 Louisiana 14.52 Maine 10.00 Mississippi 15.57 Montana 1.08 Nebraska 4.86 New Hampshire New Mexico North Dakota Rhode Island South Carolina
16.23 18.58 10.34 14.98 26.94
Vermont 17.89 West Virginia
0.89
Wisconsin 20.97 Wyoming 10.40
27.19 18.7 5.44
11.03 16.22 30.22 13.73 12.21 11.28 2.68 6.34
17.89 17.78 9.84
14.46 27.95 21.39 3.48
20.02 7.64
Dec-14 27.61
18.97 2.63 9.61
15.88 23.52 13.99 14.45 14.20 0.83 4.13
15.14 17.29 10.24
Jan-15 27.87
19.26 2.31 8.22
11.62 26.53 14.88 14.41 9.17 0.90 4.41
14.55 17.41 8.70
14.15 11.48 28.89 14.10 2.38
27.57 12.13 2.83
22.34 12.10
22.42 10.46
Mar-15 27.30
12.26 8.89
33.45 17.77 15.36 11.75 0.97
10.15 16.32 22.32 8.55
13.62 29.44 16.35 2.94
27.20 13.39
17.04 2.41 9.34 8.8
20.98 15.58 14.46 11.29 0.79 8.23
15.74 21.72 3.28
16.62 27.45 13.92 3.81
24.15 13.99
Apr-15 28.91
18.14 2.99
10.19 11.05 26.81 17.47 17.96 11.04 3.32 8.46
17.14 25.71 3.10
17.62 27.94 12.50 4.23
22.99 9.42
elf-storage continues to be an excellent investment—so much so that when Bloomberg published its annual list of best alternative investments this year, the nation’s largest
boom. While both states have been rather quiet in terms of self- storage, work in the oil fields has had a definite impact on the sector.
On the downside, Kentucky, Arkansas, Maine, and Wisconsin
saw single-digit decreases, the highest of which is Kentucky with an average decrease of 6 percent over the same period.
Another data point tracked is price volatility. While we
will discuss state-specific data on the following pages, Table 7.2 reflects the price volatility for all of the states covered in this section.
Price volatility reflects
the frequency at which a store or a market gener- ates activity around pric- ing for a unit type within a time range. This can be either an increase or de- crease, or the removal or addition of a price. In gen- eral, a higher the volatil- ity percentage represents more active or aggressive pricing for a store or a mar- ket. Conversely, a market or store with a lower vola- tility percentage indicates a more stagnant or passive market. In the U.S., the cur- rent average monthly vola- tility sits at 29 percent.
Table 7.2 – Average Monthly Volatility by State Feb-15 30.61
May-15 30.09
20.89 2.33
17.79 2.23 8.98
10.84 25.11 14.25 18.69 11.53 3.06 6.14 17.8
25.78 5.23
16.84 29.99 17.03 3.92
23.42 9.07
Jun-15 29.10
18.29 3.82
16.02 7.53
22.55 16.26 18.42 16.16 3.99 7.55
18.15 24.44 10.55 17.03 28.39 12.58 3.99
20.76 10.16
Jul-15 30.50
17.64 2.78
16.98 11.89 22.69 15.89 22.46 15.26 3.54 7.47
15.78 22.4 2.43 15.6
30.13 12.09 4.82
21.18 10.83
Table 7.1 – Average Annual Rental Rate Difference by State
State Rate Difference ALABAMA
3%
ARKANSAS -2% IDAHO 4% IOWA
4%
KENTUCKY LOUISIANA
-6% 2%
MAINE -2% MISSISSIPPI 3% MONTANA NEBRASKA
4%
NEW HAMPSHIRE NEW MEXICO
NORTH DAKOTA RHODE ISLAND
SOUTH CAROLINA VERMONT
WEST VIRGINIA Source: StorTrack (365 Media)
22% 7% 5%
13% 6% 3% 7% 1%
WISCONSIN -1% WYOMING 5%
Aug-15 29.50
18.94 1.82
12.30 14.46 22.88 14.88 22.49 16.78 2.97 8.47
21.96 19.34 1.51
17.35 31.75 12.54 6.08
23.13 10.44
Sep-15 29.36
19.15 1.63 9.89
10.16 24.99 14.34 23.14 14.15 2.68 6.89
18.09 20.27 2.32
18.32 32.52 10.13 4.95
19.86 11.99
Oct-15 32.53
24.13 12.44 11.65 10.21 21.61 17.27 25.8
17.06 10.18 8.38
21.44 24.35 5.28
25.80 32.54 18.14 8.06
26.06 17.91
Average (%) 29.18
19.04 3.58
11.21 11.52 25.36 15.45 17.68 13.48 2.85 7.04
17.40 21.34 6.26
16.45 29.35 14.68 4.03
22.65 11.37
Source: StorTrack (365 Media) 2016 Self-Storage Almanac 75
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