After five-plus years of momentum building in the self-storage investment market, buyers, sellers and lenders are proceeding cautiously as the volatility in the overall financial markets has yet to trickle down to our small corner of the real estate industry. In light of the recent market uncertainty, we have asked some of our most active and successful Argus Broker Affiliates to opine on the state of the investment market in their respective markets. You will find real time insight on how the self-storage market is performing in each area of the country.
Ryan Layton, Spokane, WA: In the Pacific Northwest, we are
seeing continued upward occupancy across the board at all
facilities. There are three new facilities that I’m aware of that
have averaged over 10% rent velocity monthly. In general,
stabilized occupancies remain over 90% in most markets.
Layton: The Pacific Northwest storage market is still robust as
many areas like Spokane, WA and Northern Idaho are popular
with outside money from other states. We are expecting that
this may cool as we approach the end of 2022. There is still a
lot of 1031 Exchange money looking to be placed and willing
to pay sub-5.5% cap rates, but we are seeing that properties
listed at sub-4.5% cap rates are not moving, especially in rural
areas. There is a lot of room for rental rate growth in our area
which is appealing to buyers looking for instant upside.
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