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Vacancies Up, Rents Down as Storage Supply Ramps Up
In many ways, Chicago’s self-storage market mirrors the national picture as detailed by Marcus & Millichap. The firm notes that developers nationally have become more active recently, and that applies to the Chicago metro area as well.
Marcus & Millichap’s report for the second half of 2018 forecasts 2.145 million square feet of new development across the region. “Self-storage deliveries ramp up significantly this year, with more than 1 million square feet of space finalized in both urban and suburban Chicago,” according to the report.
That uptick in completions, the firm says, puts “temporary upward pressure” on vacancy. By year’s end, it’s expected to be 10%, a 100-basis-point annual increase.
Nationally and in Chicago, Marcus & Millichap sees downward pressure on rents this year, although supply-side pressures are expected to abate in 2019. Average asking rents in the Chicago metro area are expected to decline by nearly 2% in 2018.
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