People have a lot of stuff. And when they run out of room in their apartments and houses? They turn to self-storage.
The latest Midwest self-storage report from Marcus & Millichap offers more proof of this. According to the report, the vacancy rate for self-storage units across the Midwest is expected to fall to 11.2 percent by the time this year ends.
And the Indianapolis region is seeing an especially big jolt in this sector, as vacancies fall here and rents rise.
The only downside for the owners of self-storage facilities? Rising vacancy rates won’t translate into huge increases in rents. Marcus & Millichap reported that rents at self-storage facilities in the Midwest are only expected to jump 2.3 percent this year. That’s an increase, but it’s not a big one.
There is an exception: Indianapolis. Marcus & Millichap predicts big rent gains for self-storage facilities in this market. The company predicts that self-storage rents will increase 5.1 percent in 2017 to 90 cents a square foot. Asking rents for climate-controlled facilities are expected to increase 5 percent to $1.24 a square foot this year, according to Marcus & Millichap.
This isn’t the first year in which Indianapolis-area facilities have seen high rent increases. In 2016, rents at non-climate-controlled facilities jumped 7.3 percent, while they increased by 6.3 percent at climate-controlled facilities.
Even outside of Indianapolis, though, the Midwest saw several big self-storage sales recently. This includes thhe Lombard Self Storage facility in Lombard, Illinois, which sold for $9.8 million and the Mini Storage Depot in Walled Lake, Michigan, which nabbed a sales price of $11.3 million. The Space Splace Self Storage facility in Broadview Heights sold for $4.125 million, while the Prospect Heights Self Storage facility earned a sales price of $9 million.