Section 8 • Metro Areas
Q2 2015, we see a lineup with very few similarities. (See Table 8.3 on page 97.) Only Denver, Ft. Worth, and Orlando appear on both lists. While Denver held the top spot for both data seg- ments, Los Angeles took second place with a 7.7 increase in rental rates. Orlando appears in fourth place in this segment, it is actually tied with the Oakland, California, metro area, both of which saw a 7 percent increase in rates for a 10-by-10 unit. Ft. Worth, while showing the second highest increase during the first two quarters of 2015, fell to the middle of the pack on an annual basis with a 6.5 percent increase.
Surprisingly, since it did not appear on any of the
other lists, suburban Virginia anticipates a 6.9 percent increase in rental rates over the next year. According to the Marcus & Millichap Suburban Virginia Self-
Storage Research Report for the second half of 2015, self-storage demand in this area has accelerated ...
Strong rental rate growth was also seen in Atlanta (6.4 per-
cent) with San Diego and Orange County, California increasing rates by 6.1 percent. Northern New Jersey completes the list with a 6 percent increase for 10-by-10 units.
Looking at the one-year occupancy trend in Table 8.4 from
2Q 2014 to 2Q 2015, the largest jump was in Sacramento with a 3.8 percent increase. As indicated in Table 8.4, only five other metros in the country saw self-storage occupancies moved at or better than 3 percent: Orlando at 3.4 percent, Norfolk at 3.3 percent, Tampa-St. Petersburg at 3.3 percent, and Atlanta and San Bernardino/Riverside at 3 percent. Rounding out the Top 10 in one-year increases were Palm Beach at 2.9 percent, Las Vegas at 2.8 percent, Houston at 2.4 percent, and Orange County, California, at 2.3 percent.
It is interesting to note that if Houston was
dropped from Table 8.4, the remaining metro areas are all located in parts of the country that were hard hit during the Great Recession. Hence, their inclusion on this list could mean occupancies are getting back to normal in these particular Sunbelt cities. Houston is the outlier because it was one of the metros that did much better economically than rest of the coun- try from 2007 to 2011.
Table 8.5 looks at the top five metro areas in
terms of forecasted rental rate growth over the next year. Denver once again tops the list with a 9 per- cent increase over the next year. Los Angeles also holds on to the second position in terms of annual growth with a forecasted 8.1 increase in rental rates. Ft. Worth, which held the sixth position in Table 8.3, is predicting a 7.4 percent increase over the next
98 Self-Storage Almanac 2016
year, with Northern New Jersey showing a full percentage point increase over last year (7.1 percent).
Surprisingly, since it did not appear on any of the other lists,
suburban Virginia anticipates a 6.9 percent increase in rental rates over the next year as seen in Table 8.5. According to the Marcus & Millichap Suburban Virginia Self-Storage Research Re- port for the second half of 2015, self-storage demand in this area has accelerated due to an addition of more than 43,000 jobs in 2014 with an accelerated pace of hiring again in 2015. Likewise, self-storage demand is anticipated to see enhanced growth again over the next year. Furthermore, over the next three years, this metro area is forecasting a 5.6 percent increase in rental rates as seen in Table 8.6, with a 4.7 percent jump over the next five years as seen in Table 8.7.
Table 8.5 –
While the Austin metro area does not expect significant rental rate growth over the next year, it is forecasting a 5.4 percent increase over the next three years as seen in Table 8.6. Denver, on the other hand, expects a 6.4 percent increase over the next three years with an overall 4.5 percent increase spread out over the next five years.
Table 8.4 –
Top 10 Metro Areas by 1-Year Increase in Occupancy (2014 Q2 - 2015 Q2)
Metro Increase in
Rank Area Occupancy 1 Sacramento 2 Orlando 3 Norfolk
4 Tampa-St. Petersburg 5 Atlanta
6 San Bernardino/Riverside 7 Palm Beach 8 Las Vegas 9 Houston 10 Orange County
3.8% 3.4% 3.3% 3.3% 3.0% 3.0% 2.9% 2.8% 2.4% 2.3%
Source: © 2015 REIS, INC.
Metro Area 1-Year Forecast Rental Growth Metro
Rank Area 1 Denver 2 Los Angeles 3 Fort Worth
Rent Growth 9.0% 8.1% 7.4%
4 Northern New Jersey 7.1% 5 Suburban Virginia
6.9% Source: © 2015 REIS, INC. Table 8.6 –
Metro Area 3-Year Forecast Rental Growth Metro
Rank Area 1 Denver 2 Los Angeles 3 Suburban Virginia 4 Austin
5 Fort Lauderdale
Rent Growth 6.4% 5.7% 5.6% 5.4% 5.3%
Source: © 2015 REIS, INC. Table 8.7 –
Metro Area 5-Year Forecast Rental Growth Metro
Rank Area
1 Suburban Virginia 2 Denver 3 Austin 4 Oakland 5 Los Angeles
Rent Growth 4.7% 4.5% 4.3% 4.0% 4.0%
Source: © 2015 REIS, INC.
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