Phoenix, AZ: Despite the massive interruption COVID-19 has brought to most industries in the US, the self storage sector has felt it to a lesser degree as new development continued, encouraged by steady demand.
New Sources of Demand Keep Self Storage Afloat
Self storage has been able to respond to people’s needs both in prosperous and challenging times, and new sources of demand have justified the steady stream of new self storage developments. For one thing, new demand has come from the many businesses, including retail and office, that turned to self storage to keep extra furniture or inventory that no longer could be accommodated at their premises as they complied with social distancing regulations.
Similarly, college students have also been benefiting from using self storage. Many Arizona State University students found themselves needing a place to store their belongings when the lockdown began and through the summer and winter breaks. Both Phoenix and Tempe are well equipped to respond to this steady demand as new supply keeps flowing in.
In fact, Phoenix-Mesa-Scottsdale Metro is the second-most active self storage development market in the country, with an astounding 2.3 million square feet of new self storage space having been delivered in 2019. That’s almost twice the size of Chase Field! According to a report issued by STORAGECafé, a nationwide self storage marketplace, the only market that surpassed PHX in this respect is the New York metropolitan area, which boasted 3 million square feet of new self storage supply.
In recent years, the Phoenix-Mesa-Scottsdale metropolitan area saw very significant Y-o-Y growth. In 2017, 1.2 million square feet of self storage was added to the new supply line — double compared to 2015 and 2016, which had recorded 0.5 million square feet of new construction per year. 2019 was another strong year for self storage construction, with new deliveries doubling from the previous year.
In 2020, the market here is expected to see 23 new facility completions that will add about 1.7 million square feet of storage space to the local inventory.
High Inventory and COVID-19 Send Phoenix Street Rates Down
The large existing inventory and continued development kept Phoenix’ rent growth in check, with self storage street rates experiencing mild increases over the last five years. With the COVID-19 hit, street rates took on a downward trend. Now sitting at $103/mo., average street rates in the Phoenix-Mesa-Scottsdale metropolitan area saw a 1.9% drop compared to the previous year.
In difficult times such as these, when sudden relocation might be in order or when downsizing might sound like a good idea, it’s good to know that there are options for dealing with the changes. Phoenix is well equipped to respond to storage needs associated with a wide range of life events.
Sort it. Pack it. Store it… at… STORAGECafé
Article by Mirela Mohan at STORAGECafe
Featured image Photo by JOSHUA COLEMAN on Unsplash
24/7 Agent (simplifying residential & commercial AZ®e) 