Current Cap Rates For Self Storage Facilities

Commercial real estate assets were broadly unchanged in h1 2019.

Current cap rates for self storage facilities.

The national average cost for all unit sizes is 87 89 per month according to sparefoot data. 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. Because of differences between properties cap rates vary.

Full year 2019 the national average cost per square foot is 0 92 per month. He recommended using a market cap rate of 7 75 percent unless a property needed a lot of deferred maintenance. 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. In the third quarter of 2018.

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. Percent as compared with a 10 year treasury long term average yield of 3. While capitalization rates for the entire self storage sector averaged 8 5 percent to 9 0 percent last year institutional quality assets currently trade in the 6 75 percent to 7 5 percent range. 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.

All property types across nearly all classes and segments changed by less than 10 basis points either up or down. Multifamily and industrial cap rates tightened the most. 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. Using our data we ve identified the 10 most in demand cities for self storage units.

The highest pricing in the nation is the northeast region where pricing averages 15 per square foot. The rate generally reflects the quality of the income property and the level of investment risk for a buyer. 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. 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.

Full year 2019 below is the average national cost by storage unit size. Cap rate snapshot. Capitalization rates for u s.