The report ranks market conditions overlaid with a scoring model based on occupancy, income, and cap rate data in top Metro markets based on REIS data, along with cap rate data from the CBRE 2Q Investor Survey. The result is a ranking of top Metro Markets for self-storage, segmented among top performers and market conditions (under-supply, over-supply, or equilibrium).
Among the markets identified in the report as having too much self-storage supply are: Oklahoma City, Memphis, Columbus, Kansas City, Salt Lake City, Houston, Dallas and Seattle. For the full list of under and oversupplied markets please refer to the chart below.
Market conditions are determined by CBRE’s proprietary econometric model that compares existing supply per person to four demographic variables: population, percent of renters, average household size and average household income.
“Analysis by major Metro Markets can be useful for comparison from a national perspective but these metrics should not be relied upon for local area analysis. Factors that affect local self-storage product type include zoning regulations, local demographics, household income and density, among others,” said Christian Sonne, CRE, Executive Vice President of CBRE’s Self Storage Valuation Group. “The best analytics for this sector are by local trade area. From our Investor Surveys and zip code studies of existing facilities, it is clear the trade area for self-storage is relatively small, generally within a three-mile radius for a typical suburban property.”
San Jose ranks second in the top undersupplied markets with under 4.5 square feet of storage space per person. “San Jose continues to see a tremendous amount of demographic growth,” said Charlie Doll, Senior Appraiser of CBRE’s Walnut Creek office. “While the majority of new development in San Jose is primarily residential, the increase in population will ultimately drive demand for self-storage space to support this growth.”
The CBRE Self-Storage Valuation group consists of 40 valuation professionals focused exclusively on the self storage sector, with access to in-depth levels of market research and real time data from the firm’s other lines of service. This market intelligence allows for the appraisers to employ the most current and detailed analysis of the market in their reports to owners and lenders. The combination of sector expertise and local market knowledge, provide for superior analytics with current data (such as the Investor Survey or other publications). The group appraises over 500 single asset facilities annually in the U.S. and completes over $2 billion in quarterly analytics for institutional investors. The team members have been extensively published, are speakers at numerous industry conferences globally, and authored the Appraisal Institute book “Self Storage Economics and Appraisal.” For more information, visit www.cbre.com/selfstoragevaluation.
CBRE’s Valuation & Advisory Services provides appraisal, property condition, market studies, feasibilities, underwriting due-diligence, environmental, zoning and telecommunication consulting services to a broad base of local, regional and global clients. It has a professional staff of more than 1,700 appraisers, engineers, architects and environmental scientists in more than 300 major metro areas globally. CBRE was named the leading global valuation services provider in the 2015 Euromoney real estate awards for the fourth year in a row. In addition to the global awards, CBRE was named as the leading real estate advisory firm in Western Europe, North America, Latin America and Africa, as well as the U.S. and in 20 individual countries.
About CBRE Group, Inc. CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.