The self storage industry has displayed tremendous resiliency amid the COVID-19 pandemic. The third quarter was very positive considering the current state of the market and what results we saw in the second quarter. Rental rates in the market were trending upwards as demand for the product was increasing. Move-in rates were starting to turn positive year-over-year (YoY) and occupancies were at an all-time high across all the REITs with move-outs at a low point.
Operating fundamentals in Q3 turned around from Q2. Rental income and net operating income (NOI)’s were beginning to turn positive YoY numbers for some of the REIT’s while the others were nearly there. Operators cut expenses such as personnel costs and utilities when possible. On the acquisition front the trend was incredibly encouraging. We saw more institutional players enter the storage market and cap rates compressed. Demand for the product increased and stable facilities with value-add opportunity were at the top of the list for investors. There is no predicted slowdown in the pace of self storage acquisitions in the near future.
