The self-storage industry is in the midst of a development boom, and the deserts and mountains of Utah are no exception.
There are about a dozen new projects underway in the city, which has a metro population around 1.1 million, the 48th largest metro area in the country.
So what’s encouraging developers to build here?
Approaching the peak
There are currently over 350 self-storage facilities operating in the state of Utah. Salt Lake County has over 100 of those facilities and Utah County has over 80 which means Salt Lake and Utah counties have over 50% of the self-storage facilities in the state.
Those two counties are the core of the Salt Lake market. Using SpareFoot data, we can see that average asking rents in the Salt Lake market increased from 2013 to 2015 but have begun to trail off a bit since 2015 and current average asking rents in Salt Lake are the following:
|Avg 5×5 Price||Avg 5×10 Price||Avg 10×10 Price||Avg 10×15 Price||Avg 10×20 Price|
STOR-N-LOCK Self Storage’s 7 facilities and other facilities in the Salt Lake market have seen occupancies steadily grow year over year since 2013. See below for occupancy trends since 2013:
- June 2013: 74.8% occupancy
- June 2014: 83.8% occupancy
- June 2015: 87.7% occupancy
- June 2016: 91.8% occupancy
- June 2017: 92.2% occupancy
Follow the movers
Part of the reason for these occupancies increasing year over year is Utah continues to see phenomenal population growth. In fact, according to the U.S. Census Bureau, Utah is the nation’s fastest growing state.
Cities in Southern Salt Lake County (like South Jordan and Herriman) and Northern Utah County (like Saratoga Springs, Eagle Mountain, and Lehi) have seen some of the biggest growth in the state. South Jordan, UT went from a population of 29,437 in 2000 to 66,648 in 2015–a growth of 126.4%. Between 2000 and 2010, Herriman (1,330%), Saratoga Springs (1,673%), Eagle Mountain (893%), and Lehi (149%) all at least doubled in population.
Accordingly, many of the new facilities planned and being built in Utah are in the Southern end of Salt Lake County and the Northern end of Utah County. In all, there are approximately 12 self-storage facilities in the prospective, planned, or construction stage in the Salt Lake market.
Despite the population growth, especially in the aforementioned cities, overbuilding is still a huge threat. Like many real estate products thinking there’s no end to the growth and overestimating the demand could lead to an oversaturated Salt Lake market.
Operators looking to navigate the market in Salt Lake should follow what STOR-N-LOCK Self Storage has done with all our Utah sites–make sure to be very selective when picking sites and fit your facility sizes to the market.
If this growth continues there might be opportunities for more self-storage development, however, take care to be selective with your prospective sites and take an adequate look at the other planned facilities so we can avoid oversaturating the market.