2021 U.S. Self-Storage Investment Outlook
Commercial Real Estate 2021: Adapting to the New Normal;
Trends, Insights and Outlook for Self-Storage Investors
Initial uncertainty briefly weighed on self-storage performance. When a wave of stay-at-home orders came into effect in March 2020 in response to the health threats of COVID-19, many commercial real estate demand factors were substantially disrupted. Self-storage properties were not immune to this trend. While storage was classified as essential business and permitted to stay open during lockdown, general uncertainty about the health situation kept many renters away from their units. Although more people sequestering at home means that fewer tenants were ending existing leases, fewer new rental agreements were also being signed. The precipitous drop in move-ins prompted operators at many facilities to cut marketed rates in anticipation of a prolonged slowdown in demand, decreasing the average asking rent nationally in the second quarter to its lowest level in at least four years. This dynamic, however, proved to be short lived.