As a self-storage operator, it is useful insight to understand if rates are trending up or down in your area as that is something that is likely to impact your planning and yield as we go into 2018. While your current tenants will have the biggest impact on your yield, how much you can influence that yield and raise rates depends to a large extent on what the competitive market is offering. How much you can charge for new tenants is more directly tied to competitive rates.
StorTrack has rate analysis data down to the street level, but that would take up too much space here, so instead we moved our focus out to the state level to show some simple trend insights that 2017 rates may tell us about what will happen in 2018.
We took the monthly average rates for each state, and applied a basic trend calculation to show the implied rates in 2018, both as an average and at the end of 2018. We did this for both regular rates and for online rates – as you will see, there are often very different trends in these two rate types as operators ‘push’ online while maintaining a steadier regular rate across the year.
You can see the variations across states. To see if there are any regional consistencies, we can draw a heatmap for each rate type for the country;
Heatmap Showing Regular Rates
Heatmap Showing Online Rates
As you can see, the map of the USA looks predominantly green, demonstrating that overall average regular and online rates are trending up across the country. There are a few outliers – states where average rates are trending down, but these stand out against the green background.
Also interesting is that the delta between regular rates and online rates is changing, demonstrating by the ‘greener’ online heatmap. As an aggregate, across the country, the delta is now negligible – in some states online rates are slightly higher than regular rates, but in most states online rates are lower and so the country-wide average online rate is lower than the regular one. However, it seems this gap is closing and if the trend continues the gap will be closed in 2018, perhaps showing that stores are focusing more on promotions rather than longer-term online rates as a customer acquisition strategy.
Next month we will look at promotions and the use of them across the country, and see how they are changing… stay tuned!