Section 8 • Rental Rates
option for numerous self-storage facilities. In fact, most op- erators waived late fees and/or forgave delinquent tenants’ debts or negotiated reduced repayment amounts simply to free up units.
In addition to those issues, the nation faced a staggering upturn in its unemployment rate. According to U.S. Depart- ment of Labor statistics, unemployment skyrocketed to 14.7 percent in April 2020, which was more than triple the March 2020 rate of 4.4 percent. The savings rate in the United States also experienced an upswing, climbing from 8.3 percent in February to 33.7 percent in April; this was likely a result of the stimulus checks issued by the federal government.
The pandemic also upset the predictable seasonality of self-storage rental rates, which typically tend to mimic the
temperatures, dropping in the winter and climbing in the spring and summer. This is usually an annual occurrence that can be seen with stronger rates in the second and third quar- ters and slightly weaker rates in the first and fourth quarters. When looking at the tables and charts in this section, you will notice how COVID-19 altered this pattern.
By the summer of 2020, the U.S. confronted additional
challenges, including racial and political protests and ri- ots. Black Lives Matter and other groups fueled unrest and wreaked havoc on large cities. The burning, looting, and de- struction of property in top MSAs was prevalent.
As a result of stay-at-home orders from the pandemic,
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 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2
Source: Radius+ 68 Self-Storage Almanac 2021
$63.81 $64.62 $65.14 $64.96 $65.21 $66.21 $66.39 $65.37 $65.99 $67.95 $68.18 $67.40 $68.36 $71.14 $70.76 $69.85 $71.17 $73.52 $59.60 $54.30 $56.40 $58.90 $58.30 $55.10 $53.90 $55.90 $56.20 $54.10 $53.69 $56.10 $55.67 $52.88 $52.75 $51.95
$89.08 $89.73 $91.09 $91.83 $91.73 $92.01 $93.35 $93.99 $92.81 $93.99 $96.89 $97.00 $95.74 $97.53 $101.52 $100.95 $99.72 $101.45 $104.87 $89.60 $84.10 $84.10 $87.40 $88.00 $83.10 $80.60 $83.30 $84.56 $81.83 $81.03 $84.46 $82.93 $79.35 $78.96 $77.38
$139.57 $140.14 $141.80 $143.06 $143.11 $143.80 $145.70 $147.20 $145.62 $147.89 $152.42 $153.04 $151.17 $153.98 $159.95 $158.59 $156.06 $158.25 $162.83 $138.20 $131.60 $130.50 $135.60 $136.40 $129.60 $127.00 $131.40 $132.01 $127.79 $127.25 $132.66 $130.36 $125.14 $123.91 $120.23
$182.92 $183.17 $185.30 $186.89 $187.32 $188.81 $190.81 $191.75 $190.01 $193.15 $198.69 $199.28 $197.38 $201.05 $208.45 $206.64 $204.28 $207.25 $213.39 $179.60 $171.50 $170.80 $176.80 $180.50 $170.70 $166.50 $169.70 $172.40 $166.57 $166.11 $173.32 $170.69 $164.95 $163.57 $157.83
$225.43 $226.42 $228.66 $230.51 $230.78 $232.86 $234.23 $235.51 $233.61 $237.38 $244.00 $244.50 $242.50 $246.78 $255.00 $253.34 $250.71 $254.26 $260.28 $225.20 $220.90 $218.40 $223.70 $230.30 $219.10 $213.90 $215.30 $218.18 $212.54 $215.71 $222.49 $216.65 $211.39 $208.64 $205.17
which forced many employees to work remotely, as well as the escalating hostility in large MSAs, some urban residents began seeking homes outside of city limits. Now, secondary markets and suburban areas are becom- ing a desirable alternative to the cramped and chaotic city life.
$63.48
To summarize, 2020 was a year
riddled with uncertainty. And the upheaval of the norm may contin- ue into 2021 with a new president on the horizon. It will be interest- ing to see how all the disruptive issues of 2020 impact self-storage rental rates going forward.
National Averages A surge of new supply across the country in 2016, 2017, and 2018 had begun to soften self-storage demand. As a result, rental rates at existing facilities started to gradu- ally slip from the record highs in the second quarter of 2016. De- spite the declining rates, Table 8.1 shows that rental rates continued to follow the typical seasonal pat- tern experienced in the industry, with slightly lower fourth quarter and first quarter rates preceding stronger second quarter and third quarter rates. However, that sea- sonal repetition was disrupted in 2020 thanks to the pandemic.
With the exception of 5-by-5
non-climate-controlled units, all unit sizes and types posted their lowest rates in nearly a decade in the second quarter of 2020, which
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