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Saturday, Jul 20, 2024
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Is It Time to Put Your Money in Storage?

The brokerage firm Marcus & Millichap anticipates that San Diego County’s rising housing unit completions, especially on the apartment side, will translate into increasing demand for self-storage units this year.

In other words, new household formations mean that buyers and renters will need space outside the home to store things that might not fit in the new digs.

Intended as a guide for potential investors in this specialty sector, a recent Marcus report notes that still-healthy job creation in the region will encourage that household formation, including by young workers moving away from their parents’ homes for the first time. (Or maybe moving back out after temporarily seeking shelter during tougher times.)

By year’s end, researchers said multifamily completions are expected to add 5,800 new housing units to the local market, with 3,000 single-family homes on track for delivery. Both of those categories remain below numbers posted during the peak 2002-2005 period, but above anything seen during the past 10 years.

According to Marcus & Millichap, that should translate this year into a local self-storage vacancy rate of 8 percent, below the U.S. rate of 10 percent. Local asking rents this year are expected to rise 4.2 percent from 2016 for non-climate-controlled units (to $1.65 per square foot) and 1.8 percent for climate-controlled space (to $1.83 per square foot).

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