10 Year Texas Self Storage Update

texas self storage

June 18, 2021

We recently attended the first luncheon held by Texas Self Storage Association (TSSA) since the beginning of the pandemic. The luncheon was held in Dallas, TX and the speaker panel was made up of several brokers from the industry. We wanted to share some important information put together by Marcus & Millichap.

According to the Marcus and Millichap report, over the last 10 years the historical average price per square (PPSF) for self storage deals closed in Texas is $54.12. In 2012 the average PPSF was $29.80. So far in 2021, the average PPSF for sold properties is $65.79.

Over the last 10 years historical cap rates for self storage deals closed in Texas averaged 7.09%. The highest average cap rate was seen in 2012 hitting 10.52%! In 2021 the average cap rate for sold properties is 5.79%. Demand for storage has driven down cap rates and return expectations.

Over the last 10 years historical total sales volume for self storage deals closed in Texas averaged $92,028,350. In 2012, the total sales volume was $38,860,000. In 2021 the total sales volume thus far is $101,845,019!

The self storage industry is continuing to increase in popularity among investors. Demand has caused cap rates to lower across all classes and in all markets. Large institutional buyers, bringing tremendous financial backing, coupled with historically low interest rates has accelerated this race to the bottom for cap rates in storage. Self storage is a wonderful hedge in a bad economy as well as a tremendous asset in a growing economy. The future remains bright for this asset type.

Reach out to us today if you are interested in buying or selling!

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