Current Cap Rates For Self Storage Facilities

Cap rate snapshot.

Current cap rates for self storage facilities. Because of differences between properties cap rates vary. This statistic shows the capitalization rate of self storage investment properties in the united states from the first quarter of 2014 to the third quarter of 2018. Percent as compared with a 10 year treasury long term average yield of 3. As you can see the market has seen a constant decline in cap rates for self storage properties over the last 10 years from an average of 10 percent in 2000 to 6 25 percent in 2013.

He recommended using a market cap rate of 7 75 percent unless a property needed a lot of deferred maintenance. Multifamily and industrial cap rates tightened the most. All property types across nearly all classes and segments changed by less than 10 basis points either up or down. This is largely due to the increased industry data now available that indicates the overall risk associated with owning self storage is much less than once thought.

The highest pricing in the nation is the northeast region where pricing averages 15 per square foot. Commercial real estate assets were broadly unchanged in h1 2019. The national average cost for all unit sizes is 87 89 per month according to sparefoot data. Using our data we ve identified the 10 most in demand cities for self storage units.

As of mid year 01 the long term average self storage cap rate was. Negative news such as flat or falling rental rates or even defaults regarding one or more high profile operators could affect investor sentiment toward the entire sector. In the third quarter of 2018. Capitalization rates for u s.

The minimal increase in the 10 year treasury yield anticipated for 2020 will help limit cap rate increases and keep the spread about 200 to 300 bps above the risk free rate next year. Full year 2019 below is the average national cost by storage unit size. We expect industrial and office cap rates to increase by 10 bps in 2020 and retail to increase by 20 bps. That being said my experience for self storage cap rates in the mid atlantic states range from a low of 5 for the best properties to 9 0 for properties that are considered higher risk investments.

Full year 2019 the national average cost per square foot is 0 92 per month. At the time this article was written i consulted an appraiser who said the average cap rate for mom and pop type storage facilities had been around 7 25 percent but was moving toward 8 percent. Today typical cap rates fall within the range of 6 5 8.