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Article By Agota Felhazi

via Multi-Housing News

Using Yardi Matrix data, we pinpointed these geographically varied markets poised for improvement.

Once again, we’re looking at the top emerging self storage markets in the U.S., based on previous performance in the sector. The average annualized street rate per square foot was $16.6 nationwide for the combined mix of unit sizes and types, as of December. The street-rate performance continued to be negative, dropping 2.7 percent year-over-year. The nationwide under-construction pipeline included 64.4 million rentable square feet of space under construction and an additional 146.9 million square feet in the planning stages. Based on Yardi Matrix’s forecast, by 2028 developers are expected to add another 189.7 million square feet of storage space.

In the table below, we highlighted the top emerging self storage markets across the U.S. There are a number of Florida metros as the Sunshine State continues to be a major draw. To determine the ranking of these smaller but notable markets we looked at rent growth, development activity and demographic trends.

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Rank	Metro	Total Inventory (Rentable Sq. Ft.)	Under Construction (Rentable Sq. Ft.)	YoY Pop Change – 3 Mile Radius	Annualized Rate PSF – Main Unit Types (NCC+CC)	Overall Score
1	Jacksonville	14,557,299	788,129	3	$15.84	635
2	Providence	7,135,030	932,330	3	$18.53	603
3	Sarasota-Cape Coral	20,150,971	1,936,990	−1	$16.66	603
4	North Central Florida	11,067,081	658,643	1	$15.71	597
5	Tacoma	12,150,820	410,282	2	$17.89	591
6	Reno	8,367,406	284,861	3	$15.62	588
7	Nashville	17,529,198	173,016	3	$15.82	572
8	Worcester – Springfield	6,905,938	1,085,716	2	$17.34	571
9	Boise	11,769,335	1,092,140	3	$12.63	567
10	Pensacola	10,961,212	487,160	1	$14.98	551

1.      Jacksonville, Fla.

The Sunshine State has remained among the top three growth states on the recent 2023 U-Haul Growth Index, which assessed one-way U-Haul truck traffic during the previous year. Florida placed second only to Texas, while North Carolina, South Carolina and Tennessee rounded out the top five.

Among several Florida metros on our list, Jacksonville came in first. In December 2023, the metro’s unemployment rate was 2.9 percent, up 70 basis points from the December 2022 rate of 2.2 percent according to FloridaCommerce. Based on the same source, Jacksonville added 32,512 new jobs during the same period, marking a 3.8 percent year-over-year increase. Education and health services created the most jobs over the year, adding 9,200 positions.

As of December, Jacksonville’s development pipeline included 22 projects totaling 1.8 million rentable square feet in the planning stages as well as 11 properties underway, encompassing 788,129 square feet. The pipeline amounted to 18 percent of existing inventory. Over the next five years the self storage stock is projected to increase by an additional 2.2 million square feet to undercut any demand for the metro’s growing population.

With a 14.6 million rentable square foot inventory Jacksonville offered residents 10.4 net square feet of available storage space per capita, above the national 7.2 average. Regarding rents, the average annualized rent per square foot for the metro was $15.8 for the combined mix of unit sizes and types. This remained below the national average of $16.6 and marked a 2.9 percent annual decrease.

I’m going to skip most of the location details and if you want to explore that information, you can click here for the complete article via MHN.

3.      Sarasota-Cape Coral, Fla.

Sarasota-Cape Coral had the largest self-storage footprint among the metros on our list amounting to 20.2 million rentable square feet. As of December, the area had 1.9 million square feet of space under construction with an additional 5.9 million square feet in the planning stage. The development pipeline accounted for 39 percent of Sarasota-Cape Coral’s existing inventory.

Despite the robust existing storage inventory of 10.5 net square feet per capita forecasts suggest further robust increases. By 2028 the metro’s inventory is expected to gain 6.8 million rentable square feet of space. Across Sarasota-Cape Coral the average annualized rent per square foot was $16.7 for the combined mix of unit sizes and types. Annual street rate growth marked the sharpest yearly decline among the metros on the list, down 8.2 percent.

4.      North Central Florida

During the five-year period between 2019-2023 2.4 million square feet of storage space came online in North Central Florida. While the metro’s total self storage stock added up to 9.2 net square feet available per person developers showed no signs of slowing down. As of December, the development pipeline included 658,643 rentable square feet of space under construction and 2.5 million square feet in the planning stages. The pipeline represented 28.5 percent of existing inventory. Expansion plans over the 2024-2028 period are expected to add another 3.6 million rentable square feet of storage space to North Central Florida’s footprint.

As of December, the metro’s average combined street rates per square foot fell to $15.7, marking a 5.2 percent annual decline. The national average annualized same-store asking rent per square foot was $16.6 for the combined mix of units and types.