Unlocking Alternatives: Investing Beyond the Major CRE Asset Type

SELF STORAGE: PERFORMANCE

• Transaction volume subsided in the first half of 2023 with the trailing 12-month volume down by 57% year-over-year (YOY). While this decline is significant, self storage remains a top performer, with volume remaining above the 12-month levels leading up to the pandemic. • Despite the rising cost of debt, capitalization rates for self storage remain relatively stable, averaging 5.1% in the second quarter of 2023, up only 10 bps from all-time lows. • Self storage continues to show resiliency as valuations remain intact, averaging $165 per square foot (psf). Though down slightly from the 2022 peak, the average price psf marked a 2.5% increase YOY. • As the self storage sector continues to mature as an asset class, while maintaining low operational costs — interest from institutional investors will increase. Established players and new entrants will likely look to acquire at scale. DIVE DEEPER: • Self Storage: Market Trends & Sector Outlook

Self Storage Pricing and Volume Trends

$80 $100 $120 $140 $160 $180

$10B $12B $14B $16B

$B $2B $4B $6B $8B

Avg Price Per Unit

Transaction Volume

15Q1

15Q2

15Q3

15Q4

16Q1

16Q2

16Q3

16Q4

17Q1

17Q2

17Q3

17Q4

18Q1

18Q2

18Q3

18Q4

19Q1

19Q2

19Q3

19Q4

20Q1

20Q2

20Q3

20Q4

21Q1

21Q2

21Q3

21Q4

22Q1

22Q2

22Q3

22Q4

23Q1

23Q2

23Q3

Transaction Volume (LHS)

Avg Price psf (RHS)

$ Price per Unit

Average Self Storage Cap Rates

$100 $120 $140 $160

76% 78% 80% 82% 84% 86% 88% 90% 92%

0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00

3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00%

$0 $20 $40 $60 $80

Cap Rate

17Q1

17Q3

18Q1

18Q3

19Q1

19Q3

20Q1

20Q3

21Q1

21Q3

22Q1

22Q3

23Q1

Spread Over 10 yr Treasury

Spread - Multifamily (RHS) Self Storage Cap Rate (LHS)

Spread - Self Storage (RHS)

15Q1

15Q3

16Q1

16Q3

17Q1

17Q3

18Q1

18Q3

19Q1

19Q3

20Q1

20Q3

21Q1

21Q3

22Q1

22Q3

23Q1

Asking Rent Per Unit (LHS)

Occupancy (RHS)

Source: MSCI / Real Capital Analytics, Cushman & Wakefield Research

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