A boom in multifamily residential development over the past decade has spurred a coinciding flurry of activity in the self-storage industry.
More than 3.1 million new apartments in 50-plus unit buildings were added nationally from 2012 to 2021 when deliveries hit an all-time high with 427,000 new rentals added to the U.S. market last year, according to RentCafe’s self-storage division.
Nearly 350 million square feet of storage space was delivered across the U.S. from 2012 to 2021, representing 22% of the total existing inventory, according to RentCafe.
Texas is a hotspot for development with Dallas and Houston among the top metropolitan areas for apartment construction. The population of the Dallas-Fort Worth-Arlington area grew 17% over the past decade, leading to increased demand for housing and self-storage.
The metro area added nearly 200,000 apartments and 20 million square feet of new storage — the most for both asset classes of the 100 metro areas RentCafe analyzed.
Corporate relocations to Houston have been big for a while, with companies like Hewlett Packard, Maddox Defense and Sun Haven moving their headquarters to the city. That’s drawn young professionals to the metro area, which has boosted development.
The Houston metro area added 142,000 apartments and 15 million square feet of storage space from 2012 to 2021. Houston now has nearly 10 square feet of storage space per capita.
The Austin metro area also saw a correlation between apartment development and self-storage construction. The metro area, which saw the nation’s sixth-highest population growth rate at 28%, added more than 98,000 apartments and almost 7 million square feet of self-storage space.
Texas isn’t alone in seeing a boom in apartment and self-storage construction.
East Coast Self-Storage Market Undersupplied
Large metropolitan areas on the East Coast also have built a significant number of new apartments and self-storage facilities over the past decade.
The New York-Newark, New Jersey area added 162,000 apartments with an average size of 842 square feet — among the smallest in the country, increasing demand for storage and resulting in self-storage development.
The metro area added 17.6 million square feet of storage space — 26% of its existing inventory — during the past decade, with almost 3.4 million square feet of that space built in 2020. Even so, the per capita inventory of 3.4 square feet is among the lowest in the country’s 100 metro areas.
Like the New York metro area, Chicago still has an undersupplied self-storage market, with just 5 square feet of self-storage space per capita.
Developers are ramping up construction efforts in both New York and Chicago to keep up with demand.
Related offering: Self-Storage Development Investment Offering With 20.2% Target IRR
New Residents Boost Self-Storage Demand in South, Southwest
Cities in the South and Southwest continue to attract new residents, spurring the construction of new apartments and self-storage facilities.
The Phoenix-Mesa-Chandler area’s population grew by 14%, which coincided with more than 62,000 new apartments built between 2012 and 2021 and more than 10 million square feet of self-storage, representing nearly 20% of its total inventory developed during the same period.
Atlanta-Sandy Springs-Alpharetta’s population topped 6 million in the past decade. The area saw the delivery of 95,000 apartments and just under 10 million square feet of self-storage space.
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