In-Migration and Retail Sales Boosting Self-Storage
Marcus and Millichap’s Self-Storage Investment Forecast report details how demand for self-storage will be bolstered by elevated net in-migration and above-average retail sales growth in 2020. In-migration to Denver has remained high since a cycle-high 40,500 residents moved in during 2015. An additional 22,260 people will move in during 2020. The prominent outdoors culture in the region will also assist self-storage prospects; large items like kayaks, bikes, and other equipment may be put into storage.
Self-storage construction in the metro will bring nearly double the amount of square feet in 2020 as was delivered last year. Development hit a cycle high of 3.1 million square feet in 2018, a sizable difference from the average 926,000 square feet delivered yearly from 2013 to 2017. Two major projects in progress are to the north of Denver, near Brighton.
Amid near-record supply increases, availability decreased 130 basis points from 2016 through 2019, and that trend will be continued with a 20-basis-point vacancy decline in 2020. The average asking rent in Denver has also trended down. Over the past four years, rent has declined 15 percent to $1.17 per square foot in 2019.