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September 13, 2019 REAL ESTATE ROUNDUP

CT self-storage construction surge drives up vacancies

PHOTO | New Haven Biz

The construction boom in self-storage spaces continues apace statewide. The predictable consequence is a surge in inventory, as populations of Connecticut’s major metro centers remain essentially flat and employment forecasts chart only modest growth over the coming 12 months.

Since July 2018, developers have delivered nearly 730,000 square feet of self-storage space, according to the most recent Marcus & Millichap market report. The bulk of that new construction is concentrated in the suburbs surrounding Hartford.

For calendar 2019, the report forecasts a statewide total of 623,800 square feet of new construction of self-storage space. For 2018, more than 1 million square feet of space came online.

According to Marcus & Millichap, a second consecutive year of aggressive self-storage development weighs on vacancy, lifting availability in the New Haven-Fairfield County region to a six-year high of 9.8 percent.

That increase stalled rent growth, as the region’s average rate rose just 0.8 percent for the year. At $1.23 per square foot, the year-end average rate will nearly match the mid-2017 high-water mark of $1.24 per square foot, according to the M&M report.

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