Secular demand trends and positive market fundamentals continue to attract investors, pointing to more favorable risk adjusted returns for the self storage sector.
- Transaction volume subsided in the first half of 2023 with the trailing 12-month volume down by 57% year-over-year (YoY). While this decline is significant, self storage remains a top performer, with volume remaining above the 12-month levels leading up to the pandemic.
- Despite the rising cost of debt, capitalization rates for self storage remain relatively stable, averaging 5.1% in the second quarter of 2023, up only 10 basis points (bps) from all-time lows.
- Self storage continues to show resiliency as valuations remain intact, averaging $165 per square foot (psf). Though down slightly from the 2022 peak, the average price psf marked a 2.5% increase YoY.