Section 3 • Development Pipeline
growth. Based on these underlying factors, NAR es- timated a Work from Home Score for 3,142 counties. The top five counties that scored highest in the
NAR estimate are Forsyth County, Ga., part of the Atlanta-Sandy Springs metropolitan area; Douglas County, Colo., part of the Denver-Aurora metropolitan area; Los Alamos County, N.M., part of the Albuquer- que-Santa Fe combined statistical area; Collin County, Texas, part of the Dallas-Fort Worth-Arlington met- ropolitan area; and Loudoun County, Va., part of the Washington-Arlington metropolitan area.
Surge In The Carolinas Two states that are not concerned about a population exodus are North Carolina and South Carolina. In fact, the Carolinas have enjoyed an influx of new popula- tion and businesses in recent years.
In U-Haul’s 2019 Growth States report, based on the net gain of one-way company rental trucks, North Carolina was ranked third nationally and South Carolina fourth. According to the results of United Van Lines’ 43rd Annual National Movers Study, which tracks customers’ state-to-state migration patterns over the past year, the Carolinas were ranked in the survey’s top 10 results for 2019.
This popularity has brought with it challenges for
self-storage operators in the Carolinas. The Storage Acquisition Group (TSAG) reported in August that, because of an “extremely high” influx of new self- storage supply in recent years, the North Carolina and South Carolina storage markets can expect prices to remain low into the foreseeable future until the two- states balance their supply-and-demand ratios.
1 Florida 2 Texas
2 1
3 North Carolina 4 South Carolina 5 Washington 6 Alabama 7 Ohio 8 Utah 9 Indiana 10
Vermont Source: U-Haul International 38 Self-Storage Almanac 2021
24 3
29 42 15 4
26 7
North Carolina is already starting to see prices stabilize after un-
precedented supply growth over the past three years, including a 17.5 percent supply surge in the Charlotte area and a whopping 25.6 percent spike in the Raleigh-Durham area. Both rates are well above the national 10.8 percent growth rate during the same time period, according to Radius+.
The firm’s data shows North Carolina’s prices have fallen any-
where from 25 percent to 35 percent for 10-by-10 climate-controlled units since 2016. But considering the population continues to in- crease, and with Raleigh-Durham’s “Research Triangle” serving as a major economic generator, the state should soon reach a stabiliza- tion point in prices.
The prospects for Charlotte and other North Carolina markets re- main strong, and the fundamentals are still present.
But South Carolina is a different story. Its recent building boom, which included a 25 percent increase in storage supply in the Charleston area over the past three years, came later than the con- struction frenzy in North Carolina, according to Radius+ data.
As a result, it may take a few years for absorption of new supplies and for prices to stabilize in metro markets, including Charleston and Greenville.
Charleston prices for 10-by-10 climate-controlled units fell by
27 percent from 2016 to 2019. Prices for non-climate-controlled units fell by 38 percent during the same period, according to Radius+ data.
The ongoing pandemic and related economic downturn have
exacerbated rent rates in Charleston, where prices for both climate- controlled and non-climate-controlled units were down in June by about $20 compared to the same period in 2019.
Part of that pandemic-era plunge is directly attributable to the
REITs slashing their street rates in order to gain market share, a phe- nomenon that’s happened in other markets around the country.
Much of the South Carolina development has been the result of
an inflow of investors into a market that had been underserved for years in self-storage facilities.
The Carolinas serve as a microcosm for the industry that has wit-
nessed heightened building activity resulting in oversupply in many hot markets.
COVID-19 undoubtedly has changed lifestyles, attitudes, and
economic fortune for a generation. Americans may be increasingly ready to move to less populated areas to minimize the risk of coro- navirus or even a future pandemic.
Self-storage may need to recalibrate development objectives in the future to reflect these emerging trends.
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