Record-high job growth coupled with a strong population increase and a booming housing market have contributed to robust growth in Seattle’s self storage development pipeline.
Using December data, Seattle’s self storage facility count is projected to grow 21.6% during the next two years—a growth rate that ranks fifth nationally. Further, STR data shows that areas of high population growth in the Seattle Metropolitan Statistical Area have a self storage development growth rate that is two to three times higher than the region’s low growth zip codes.
The Seattle MSA (Seattle-Tacoma-Bellevue, WA) is the 14th largest in the U.S. with an estimated population of 3.8 million in 2016, according to the U.S. Census Bureau. That figure represented a 10.2% jump from 2010 population estimates. This growth, along with significant gains in employment rates, has led to a thriving housing market—from 2016 through 2017, home prices increased nearly 13%, which was the highest rate of any metropolitan area in the U.S.
With an average of 1,100 residents moving to Seattle per week, according to the U.S. Census Bureau, skyrocketing housing prices have left many unable to find residential space with adequate square footage. As a result, more families and individuals are moving into the area and settling on homes with less square footage, subsequently increasing the need for self storage space.
The thriving economic conditions in the MSA prompted STR to analyze its database to determine the current landscape of Seattle’s self storage industry.
STR is currently tracking 398 existing self storage facilities in the Seattle MSA with 59.3% independently-owned and 40.7% chain-affiliated. The largest chains in terms of presence in the market are Public Storage, U-Haul Moving & Storage and Storage Court. The average size of the existing facilities campus is approximately 54,723 net rentable square feet (NRSF) with an average of 6.1 buildings per property. Currently, the market has a total of 22 million NRSF. The largest facility is slightly more than 300,000 NRSF.
In terms of pipeline development activity, STR is tracking 92 projects with 58 in the Planning phase, three in the Final Planning stage, eight in the In Construction phase and 17 under expansion. Six projects have been deferred. STR expects roughly one-third (28 projects) of pipeline projects to be completed in the upcoming year. Assuming all 86 active self storage projects were to be completed within the next two years, STR estimates a total of 6.8 million NRSF of self storage space entering the Seattle MSA.
The average NRSF for projects under development is just under 80,000 NRSF with the largest facility under construction being just over 200,000 NRSF.
STR believes that given the MSA’s prime economic conditions, along with the self storage industry’s rational growth patterns, the industry is well-situated to absorb the new growth coming online in the next 12 to 24 months.
About the Authors
Anne Hawkins leads new business initiatives in the Sector Analysis division of STR. 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. Anne can be reached at AHawkins@STR.com or 615.824.8664 x.3341. Will Sanford Will Sanford is a Research Analyst at STR. He can be reached at WSanford@STR.com or 615.824.8664 x.3462