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Boston Doesn’t Have Enough Room to Store its Stuff

CoStar Market Insights: Strong Demand for Self-Storage Leading to Record Levels of Development
September 6, 2018
An Extra Space Storage facility located at 490 Eastern Ave. in Malden, Massachusetts.

Boston has a self-storage shortage. And not enough self-storage, of course, is only important when it’s you that can’t find a place to store the stuff. But there are a lot of "yous" out there that are experiencing this problem.

The greater Boston region, with its population of 4.6 million residents, has only 3.1 square feet of self-storage per resident. This figure pales in comparison to many Sunbelt cities including Atlanta, with 4.7 square feet and Dallas with an incredible 7.9 square feet per resident.

The problem is particularly acute when you factor in that Boston is a city famous for its large number of students -- nearly 152,000 -- many of whom are currently lugging furniture from storage units into their dorms. Add in a large number of baby boomers and wealthy renters with needs to store ample amounts of their collected goods mean the self-storage market is tight to say the least.

Furthermore, much of Boston’s self-storage inventory is in distant parts of metro Boston. New Hampshire’s Rockingham County, part of the Boston CBSA, has 70 percent more inventory than the next largest submarket, with more than 1.5 million square feet.

CoStar does not track occupancy figures for self-storage, but all anecdotal evidence suggests the shortage is real. Cube Smart, owner of more than 600,000 square feet of inventory in greater Boston, recently listed its average occupancies at slightly more than 90 percent, higher than its U.S. portfolio average.

How have developers responded to demands for self-storage in greater Boston? First, by ramping up deliveries.

More than 700,000 square feet of pure self-storage is projected to come on line by the end 2018, the largest amount to hit the market since 2002.

Much of the new inventory is high-end, indoor climate-controlled facilities by giants like ExtraSpace and CubeSmart. Close-in suburban areas have also been a focus, catering to expanding urban populations. ExtraSpace Storage recently wrapped up work on its 120,000-square-footfacility in Malden, which has witnessed a spike in population growth with a wave of new multifamily construction.

In the urban core, building new self-storage is a much more expensive task and little pure self-storage has delivered this cycle or in the previous one. A handful of developers, however, have latched on to converting old warehouses into new self-storage facilities. Boston has close to 900,000 square feet of self-storage space in old industrial buildings, retrofitted for a higher and better use. Lynn Storage LLC, for example, converted more than 100,000 square feet of old warehouse space in Lynn in 2014.

As more big-box retailers begin to close, it wouldn’t be surprising to see more self-storage incorporating into shopping centers. Regency Centers has made sure to incorporate self-storage into their Twin City Plaza in Somerville. ExtraSpace is located in a space towards the back of their center, a less-than-desirable location for most retailers. Dark, big-box anchors can be a difficult space to fill and self-storage tenants may be the perfect tenant type willing to help fill that void.

CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

Learn how CoStar Market Analytics can add to your market knowledge, helping to minimize risk and maximize returns.

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