Self Storage Summary: Q3 2017
Growth Mixed, New Supply Impacting Select Markets
- The self storage REITs generated same-store revenue growth in the third quarter of 2017 ranging from 0.9% to 5.4%.
- Net Operating Income of same-store pools in the third quarter 2017 range from -0.5% to +6.7%.
- While hurricane-related uplift in demand provided a boost, operating metrics continue to decelerate as rising supply in select markets places pressure on revenue growth and pricing power.
Hurricanes Harvey and Irma Impact
- During the third quarter, Hurricanes Harvey and Irma devastated parts of Houston and Florida. The impact of the storms on each public company’s operations is highlighted in this report. In general, the Houston market, already challenged with deteriorating supply/demand fundamentals, experienced hurricane-related demand uplift. Operators resisted price gouging from the increased demand and held rent increases in check. Operators anticipate the increased demand to continue and restore pricing power in the fourth quarter and for several quarters thereafter.
- The impact of Hurricane Irma on the Florida self storage market was not as great as Hurricane Harvey’s impact on Houston. Water and property damage was significant, but not as prevalent as in Houston. Operators with exposure to Florida report that the initial demand uplift was short lived, as hurricanerelated customers moved-out before the full effects of additional revenue kicked in.
Read the Full Report