Current Cap Rates For Self Storage Facilities

The highest pricing in the nation is the northeast region where pricing averages 15 per square foot.

Current cap rates for self storage facilities.

Full year 2019 below is the average national cost by storage unit size. 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 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. 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.

Because of differences between properties cap rates vary. Cap rate snapshot. Percent as compared with a 10 year treasury long term average yield of 3. 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.

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. Full year 2019 the national average cost per square foot is 0 92 per month. 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. All property types across nearly all classes and segments changed by less than 10 basis points either up or down.

Some portfolio sales in this region have sold for less than 5 cap rates. 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. Today typical cap rates fall within the range of 6 5 8.

Commercial real estate assets were broadly unchanged in h1 2019. Using our data we ve identified the 10 most in demand cities for self storage units. Multifamily and industrial cap rates tightened the most. We expect industrial and office cap rates to increase by 10 bps in 2020 and retail to increase by 20 bps.

He recommended using a market cap rate of 7 75 percent unless a property needed a lot of deferred maintenance. In the third quarter of 2018. Capitalization rates for u s.