Florida among hottest states for self-storage, Cushman exec says
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Jul 1, 2022

Mike Mele leads Cushman & Wakefield Inc.'s national self-storage advisory group from Tampa — one of the hottest markets for self-storage properties in the U.S.

"Tampa is an outstanding storage market," Mele, executive vice-chairman, told the Tampa Bay Business Journal. "There are no basements and people who move around quite a bit."

Self-storage properties have evolved significantly over the last decade. The market, once largely controlled by mom-and-pop owners, has seen an influx of institutional-level buyers. Florida, Mele says, is among the top self-storage markets in the U.S., alongside Arizona and Texas. The Miami, Tampa and Orlando metro areas are among the markets with the largest pipeline of self-storage projects in the nation.

"Covid really helped storage, with people working from home and cleaning out the house," Mele said. "There was a concern in late 2019, early 2020 that maybe we overbuilt, but Covid hit and filled that right up. We've been pushing rents ever since."

Mele spoke with the Business Journal about the state of the self-storage market and what's to come. Here are some highlights of the conversation, which have been edited for brevity and clarity.

Overall, the market is strong. "The market is still operationally running very well. Occupancies are very high and facilities are stabilized. Rent growth projections, even with potential recession fears, are still in the double digits."

It's no longer a niche market. "If you look at our own transactions in 2018, the average deal size was $8.5 million; now, that's over $17 million. Through most of the teen years, we did between 43 and 48 transactions a year, and that would total $450 million to $750 million. Last year, we did 84 transactions for $2.3 billion total volume.

"We've already closed $1.2 billion this year and have another $1 billion under contract. People want to be in this sector. It's no longer a unique area that nobody's aware of. It has become mainstream, and people like it because of its safety. These facilities do well in downturns."

Self-storage may be getting harder to develop — and high barriers to entry are good news for owners. "As everybody else has experienced, there have been issues with the supply chain and getting proper materials for construction. There have also been recent wrinkles in financing; it's harder to get construction financing on everything.

"It's not something municipalities want, so it's very hard to get them approved in the first place."

In the pipeline

Florida is among the top states in the U.S. for self-storage projects in the pipeline. Here's how many projects are planned in the state's major metro areas:

Tampa-St. Petersburg-Clearwater: 13

Miami-Fort Lauderdale-Miami Beach: 25

Orlando: 9