Where are the hottest markets for self-storage development?
Three U.S. markets stood out when Union Realtime LLC of New York, NY released its study about who’s generating the most heat in self-storage these days:
- Dallas-Fort Worth-Arlington, Texas CBSA, with 7,698,747 square feet of self-storage development
- New York-Newark-Jersey City, NY-NJ-PA CBSA with 14,777,229 square feet
- Phoenix-Mesa-Scottsdale, AZ CBSA with 7,516,436 square feet.
Big Storage in the Big D
Dallas-Fort-Worth-Arlington expects to have a 10.7% increase in total supply once it completes all its development projects and now has 71,945,083 square feet of existing supply, the most of any CBSA in the nation. Texas is experiencing rapid population growth, raising the need for more self-storage.
“It looks like despite the large amount of supply already in the area, developers are still bullish on this market as almost 7.7 million square footage of supply is going to be added,” wrote James McLean, market analyst with Union Realtime.
He also advises: “Don’t expect rates to rise in that market. When you add this much space, rates don’t really spike.”
Among the giant REITs in the Dallas area are Public Storage, which in late April 2021 spent $1.8 billion to purchase the ezStorage portfolio with 48 properties totaling 14.2 million NRSF. Public Storage also bought a portfolio of 56 facilities for $1.5 billion in early November 2021, focused in the Dallas market.
The Storage Beat checked in with a few Texas-based experts to learn more what’s making storage boom in Dallas.