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Good morning. Yardi Matrix’s August 2024 report highlights that the U.S. self-storage market is experiencing a growing slowdown due to various factors, like rising supply and falling rents.
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Today’s issue is brought to you by Agora—your all-in-one real estate investment management platform.
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Market Snapshot
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*Data as of 8/28/2024 market close.
Supply and Rent Recap
Self-Storage Sector Faces Continued Slowdown in Q2 2024
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Yardi Matrix’s August 2024 report shows self-storage growth slowed in Q2, with falling street rates and occupancy driving the decline.
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Hitting the brakes: As of July 2024, the national average advertised street rate dropped to $16.40 per square foot, a 4.1% decrease from last year. Rates fell across all top 30 metros, with 10×10 non-climate-controlled and climate-controlled units seeing a combined 0.4% month-over-month decline, signaling the end of the summer leasing season. However, there was a silver lining.
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Zoom in: YoY declines in advertised rates eased in July after worsening earlier in the year. Same-store rates for non-climate-controlled (NCC) units dropped 3.7%, better than June’s 4.4% and May’s 4.1% declines. Climate-controlled (CC) units fell 4.7%, an improvement from the second quarter’s 5.1% average drop.
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Key metros: Washington, D.C., experienced a 4% increase in multifamily rents, which helped cushion storage rates, leading to only a 1.3% year-over-year dip for 10×10 units. In contrast, Atlanta faced challenges, with storage rates plummeting by 9.2% and multifamily rents down by 3.3%, both hit by a high influx of new supply despite ongoing population growth.

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Lease-up supply is moderating: New deliveries over the past three years accounted for 8.6% of starting inventory, down from 9.2% in 2023. Las Vegas and Phoenix face high supply levels, but Las Vegas is faring better with a 3.5% rate drop versus Phoenix’s 4.8%, helped by stronger home sales.
➥ THE TAKEAWAY
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Forecasting a slowdown: Storage development is decelerating, with the national pipeline shrinking to 3.5% of existing stock by July 2024. Yardi Matrix anticipates moderating new supply to 3.2% this year and 2.6% in 2025, with further declines expected in upcoming years as developers scale back.
TOGETHER WITH AGORA
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Imagine the success your business could achieve if you could reduce back-office tasks by 10X. That’s exactly what Metonic accomplished with Agora’s comprehensive real estate investment management platform.
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By streamlining operations, reporting, and investor management, Metonic was able to focus on high-impact initiatives that drive business growth.
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Agora’s modern, intuitive Investor Portal not only improved investor engagement by 70% but also strengthened investor relationships, paving the way for scalable growth.
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With Agora, you can streamline operations, build strong investor relationships, and effortlessly scale your business.
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*Please see the advertising disclosure at the bottom of this newsletter.
✍️ Editor’s Picks
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Graduate migration: Two-thirds of 2024 U.S. college graduates are flocking to 21 major cities, heavily influencing future office market trends.
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Iconic revamp: Developers are revealing plans to finish a 60-unit condo project at the Flatiron Building by 2026, with minor exterior changes.
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Rate cut rethink: Investors are cozying up to T-bills, with yields over 5% despite looming Fed rate cuts, fueling a record $6.24T in money-market funds.
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Developer downfall: Brooklyn developer Yoel Goldman allegedly inflated cash holdings and took on an undisclosed $36M in debt, leading All Year Holdings into bankruptcy.
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The bigger picture: US mortgage rates hit their lowest level since April 2023, at 6.44%, in July, fueled by an uptick in home-buying applications.
🏘️ MULTIFAMILY
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Oversupply woes: Raleigh-Durham, Austin, and Jacksonville lead the U.S. in multifamily excess supply, driven by rapid construction outpacing demand.
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Renters revealed: Nearly one-third of U.S. apartment renter households are composed of “Starting Out Singles,” typically aged 26 with tight budgets, predominantly renting in the Midwest and Sun Belt markets.
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Workforce wave: Coastland Residential is planning a 371-unit multifamily project near Miami’s Tropical Park, with 55 units designated as workforce housing
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Real estate riches: Cardone Capital recently acquired two Broward apartment complexes with 850 units, spending over $200M in total on the buildings.
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Multifamily momentum: Raith Capital secured $62.4M in financing from JPMREIT for Satori West Ashley, a 297-unit multifamily property near Charleston.
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Real issues: RealPage (RP), under scrutiny for rent collusion and facing a DOJ lawsuit over alleged antitrust violations with its YieldStar tool, finally vows to cooperate.
🏭 Industrial
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Data gold rush: Denver-based startup Tract has purchased a 2.1K-acre site in Buckeye, AZ, for $136M to develop one of the largest U.S. data center complexes.
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Tech transformation: The Santa Ana City Council approved C.J. Segerstrom & Sons’ 313 KSF industrial complex on 16 acres at South Coast Technology Center.
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Beauty boom: Voyant Beauty (VOYT) is expanding in Southern California, signing three long-term leases for 180 KSF in Chatsworth.
🏬 RETAIL
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The dream lives on: The infamous American Dream mall in New Jersey will start repaying $287M in bonds after missed payments, with $46.4M past-due interest.
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Front and center: Alex Mill is set to open a 2 KSF Rockefeller Center store near the Big Apple’s iconic giant Christmas tree, targeting holiday shoppers.
🏢 OFFICE
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Opportunists thrive: San Francisco’s struggling office prices are still heading downhill, but they’re drawing in wealthy investors betting on a long-term, post-pandemic recovery.
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Influencer oasis: Fashion Nova’s founder bought a Beverly Hills office building that offers 175 KSF near the city’s luxury district for $118M.
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Massive renewal: Amazon (AMZN) renewed a lease at a North Dallas tower for 240 KSF, boosting the area’s office market with 600 new jobs.
🏨 HOSPITALITY
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Urban oasis: Sunbelt Holdings and its partners are ready to construct a $140M, 17-story, 236-room hotel called The Edith in Downtown Phoenix.
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Debt deal unveiled: Stratus Development Partners and Choice Hotels secured a $48.8M refinancing deal for the 212-key Cambria Hotel Austin Downtown.
📈 CHART OF THE DAY
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According to DLA Piper’s midyear real estate investment trends report, data centers have emerged as a ballooning CRE asset class that’s attracted exponentially more investor attention in 1H24 compared to previous years, representing 14% of acquisitions and disposition deals during the period.
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Notably, the report identified an upsurge in the percentage of data center and industrial property deals (60%) where the project’s construction fee was 5% or more. Meanwhile, 40% of deals fell within the 3–4% range.

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