By Marc Goodin, CEO of Storage Authority Franchising.
The bad news is starting to change to good news! Are you ready?
Yardie just reported self storage rental rates increased (May 2024 -June 2024) for the first time in a long while. And that Nationally the NRSF delivered as a percentage of the starting inventory the last in the last 36 months was 8.5% vs 2.8% for the last 12 months. And they confirmed a considerable amount of new development projects ( especially in the early planning/design phases) have been abandoned.
A Franchise owner just started construction on his Storage Authority facility last month and it is clear that self storage construction prices have come down from their peaks and fewer projects are being bid than in the last couple of years. Partially because material prices are down (steel is down 40% year to date) and because fewer projects are being constructed.
Residential mortgage rates are off their peaks and heading down and will drop substantially as the feds start dropping the fed rate in Sept. More people are moving = more renters = rental rates increases.
At Storage Authority we have heard it first hand: " I am going to wait a year until rates are down" Huge mistake. Now is the time to get started. Once things get heated up development costs will go up and prices for existing facilities will go up. And many best locations will get grabbed up by those looking now.
Marc Goodin is the President of Storage Authority Franchising. www.StorageAuthorityFranchise.com The only self-storage franchise. He owns 3 self-storages he designed, built, and manages. He has been helping others in the self-storage industry for over 30 years. He can be reached at marc@StorageAuthority.com or directly at 860-830-6764 to answer your franchising, development, marketing, sales, and operations questions. His best-selling self-storage books are available on Amazon.
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