The Miami self storage industry has received plenty of attention recently with increasing supply and potential overbuild issues in the market. This prompted the city’s Planning, Zoning and Appeals (PZA) board to request regulations that will restrict future projects through changing the city’s zoning ordinance. During a meeting held December 7, the PZA board recommended approval for a regulation that will set more stringent distance requirements between storage facilities and single-family homes in the market.
As this situation develops, STR takes a look at our development database to analyze the potential impact of new supply entering the market.
Currently, STR is tracking a total of 85 self storage projects in various phases of development in Miami. This total includes unconfirmed projects that have not yet been zoned/approved. Of these 85 projects, STR expects 43 to be completed, which would represent a 10% growth in the market’s self storage supply.
The average size of a facility under development in Miami (based on a sample of 70 projects) is approximately 71,647 net rentable square feet (NRSF). The largest project in Miami tracked by STR is a facility developed by a chain with a total square footage of approximately 145,910.
If all 85 development projects in Miami were completed, it would represent a 19% supply increase for the market. According to local sources, demand growth for storage space in the market is strong, and there is a widely-held belief that Miami has lower than average square feet of storage per capita. However, it remains to be seen whether this level of supply growth can be supported without an effect on performance.
“In my opinion, the square footage of the storage space in Miami is only about three square feet per capita, while the national average is at about seven square feet,” said Richard Beavers, a developer in the market. “Even presuming these new facilities actually open, Miami would still be at about five square feet per capita. Storage developers instead need to be concerned about their absorption of lease up. Although Miami can support these new facilities, the real key is you better have a really prime location.”
STR expects some development attrition, as many of the current projects are still in their early stages, but market occupancy levels could slip if a high percentage of these projects do come to fruition.
If you are interested in purchasing a listing of the facilities under development or of existing facilities in markets across the U.S., please contact STR at SSInfo@STR.com.
About the Author
Anne Hawkins leads new business initiatives in STR’s Sector Analysis division. She is responsible for managing and implementing all aspects of sales and operations across this division. Previously, Anne worked in private equity and investment banking. If you’d like to get in touch with Anne, she can be reached at AHawkins@STR.com or 615.824.8664 (x3341).