DALLAS, Jan. 3, 2018 /PRNewswire/ -- New construction of self-storage facilities, bestowed the dubious reputation as the "ugly duckling" of the commercial real estate market, turned in a stunning performance in 2017 with one of its best years ever.
More than $2.27 billion was spent on new construction of self-storage facilities nationwide for the first eight months of 2017, the highest amount on record.This amount was more than the $1.9 billion spent in all of 2016, representing nearly a 90 percent increase year over year, according to Inside Self-Storage citing U.S. Census Bureau data.
Nationally, approximately 900 facilities were built last year, a 50 percent increase from the 600 projects a year earlier, according to industry sources.
Texas claimed top spots in construction of these facilities in 2017, with Dallas and Houston ranked first and third. Construction of self-storage units in Dallas increased nearly 50 percent from a year earlier to more than nine million square feet, while Houston posted a 16 percent gain, or 2.87 million square feet.
Miami (21 percent, 3.85 million square feet), New York (16 percent, 2.92 million square feet) and Atlanta (15 percent, 2.68 million square feet) rounded out the top five metros for self-storage construction.
The construction boom is attributed to a growing trend of storing household items in these facilities rather than cluttering up garages, basements and other rooms. Also, the devastation caused by hurricanes in Florida and Houston last year has helped spur self-storage construction, as more people felt their valuables would be less prone to weather-related damage in these facilities.
New designs and other features, such as climate-controlled units and locations near shopping areas and multi-family neighborhoods are making self-storage facilities more appealing to consumers, helping the industry rid its "ugly duckling" image of nondescript, cold and dark buildings in remote areas.
There is also an increasing trend of storage facilities for high-end items, such as luxury cars and expensive wines. Some of these facilities offer automated retrieval systems, in which robots locate renters' vaults and deliver their belongings to a private room at the facility.
BBG CEO Chris Roach commented: "The surge in construction of self-storage facilities across the country has been one of the biggest growth areas in the commercial real estate market in 2017. We anticipate that this sector will continue to show solid growth this year amid an increasing trend of more people storing items in these facilities and for longer durations."
BBG is a leading independent national commercial real-estate valuation, advisory and assessment firm headquartered in Dallas with 25 offices in key U.S. markets. BBG has achieved a reputation for personal attention, on-time delivery and deep expertise in multi-family, office, retail and industrial sectors. For more information about BBG, please visit www.bbgres.com.