SAN DIEGO, CALIFORNIA (August 30, 2021) – Wyatt Campbell, vice president in NorthMarq’s San Diego office, shared his insights on self storage in a recent story about self storage’s emergence as a “comfort zone” for lenders.
Self storage rental rates experienced their biggest fourth quarter increase on record at the end of 2020: 3 percent for climate-controlled units and 2.4 percent for non-climate controlled units, according to Moody’s Analytics. What’s more, rental rates grew 1.8 percent for climate-controlled units for the full year in 2020 and 1.7 percent for non-climate controlled units. Those were the biggest increases since 2014 and 2016, respectively.
At the moment, an eagerness among lenders to put money to work, the continuation of historically low interest rates and healthy fundamentals are benefitting self storage borrowers. Debt funds, CMBS lenders, banks, life insurance companies, REITs and the Small Business Administration are active in the sector, and more debt providers continue to allocate capital to it.
“Self storage has always had a stable lender pool, but it has been a little bit limited,” said Wyatt Campbell, a vice president with NorthMarq. “But lenders that are staying away from other asset classes are now looking to dip their toe into self storage.”
Check out the full coverage on Multi-Housing News.