Rising rents, spurred on by Phoenix’s great popularity right now, can cause Arizonans to rethink their living arrangements. As they factor accommodation costs into their budgets, many may be feeling the pinch regarding the amount of living space they have. Enter self storage.
An already expanding self storage sector gained further traction during the pandemic, keeping its doors open while others closed, and more and more Arizonans found out about its advantages. It helped them get accustomed to smaller spaces if they had to downsize or move back in with family, and there was always extra space in a storage unit for their seasonal items and sports gear.
The self storage sector is closely linked with the rental sector — it is regularly used by people moving home — and while the limits of Arizona’s residential inventory were being felt, more storage space was being built in the Grand Canyon State. During 2021, Phoenix was in fifth place nationwide for the total amount of new self storage that was completed, more than half a million square feet distributed across units of all shapes and sizes.
This added to an already strong storage inventory. Phoenix has an above average provision of storage space at close to eight square feet per person, and the average rent of $125 for a standard non-climate-controlled 10’x10’ unit is a few dollars below the national average, as per Yardi Matrix data. In addition, the square footage of storage that is planned or under construction represents about 13% of the current inventory, one of the highest figures of any large city in the nation.
The market for self storage facilities in Arizona was also very active in 2021. Phoenix was in second place nationwide in terms of both the total sales volume and the total square footage transacted, about $180M and more than a million square feet, respectively. Tucson self storage was not so far behind in tenth place, with around $68M in sales accounting for almost half a million square feet.
The sales volumes in Arizona’s two largest cities were both big increases on the previous year’s figures. In 2020, Phoenix had the fifth-highest sales volume, with $63M spent for more than half a million square feet, while Tucson was in 15th place with slightly more than 200,000 square feet traded for $28M. Both cities in 2021, therefore, more than doubled the dollar volumes they saw transacted during the previous year.
Developers and investors have considered self storage a good option during the pandemic — the sector also emerged better than many from the financial challenges that began in 2007. There are ongoing challenges such as rising construction costs, but a new enthusiasm for redeveloping sites such as vacant retail lots minimizes these and can be a win-win for investors, residents and city halls in Arizona.
As populations grow in Arizonan cities, self storage naturally expands to fill residents’ needs. And it can go some way to compensating for rising rents, giving residents the space they need at home to maximize their lifestyles.