All of us keeping up with the latest self-storage news know that Texas is one of the fastest growing states in terms of population and in self-storage development. Several Texan cities have made the lists for fastest growing cities across the U.S. in recent years. It comes as no surprise that many investors and self-storage developers have turned to the Lone Star state for their next big investment.
According to an annual migration report recently released by U-Haul, traffic for 50 percent of one-way U-Haul rental trucks was destined to Texas, making it the number one destination for moves across the U.S. Strong economic and housing development makes the state very attractive.
To study the impacts of this growth in Texas’ self-storage market, StorTrack looked at average monthly rates over the last 12 months for 6 of the most common unit types (5×5 standard, 5×5 climate controlled, 5×10 standard, 5×10 climate controlled, 10×10 standard and 10×10 climate controlled). The average monthly trend for the last year is based on the average monthly rates for these units. The overall monthly rate trend for each of the top 15 Texan cities is shown here:
Average Monthly Rate Trend
Overall, 11 of the 15 top cities saw a downward trend in their rates for the units listed above. What this means is that on average, each month in 2017 saw a decrease in rates for these units. However, only two cities saw an average rate decrease of more than 1 percent. There was an overall upward trend in rates for four of the 15 cities. The largest rate change was in Fort Worth, with an average monthly rate increase of 3 percent over the last year.
While we can’t ascertain the reasons behind these trends, as each market has its own nuances, we do know that one factor contributing to the changes, particularly in Fort Worth, is the growth it has been undergoing. The growth in population due to strong economies and better housing opportunities, has resulted in the migration highlighted by the recent U-Haul report. For the self-storage industry in these markets, it means an increase in demand and supply. With an uptick in competition and new players coming into their markets, savvy self-storage owners and operators have implemented sophisticated pricing strategies, investing more in pricing and revenue management systems to keep their rates optimized and competitive, according to the conditions in their local markets.
One thing for every owner and operator in the industry to always consider, is the importance of knowing what is happening in their market. While the costs for robust revenue management systems can be prohibitive for many, tools such as those offered by StorTrack can be cost-effective and very useful at providing local market pricing conditions. Want to learn how? Let us know!