Self-storage supply in Northwest Arkansas has grown 19 percent during the last four years, growing by more than 1 million square feet, according to a report from news website “Talk Business & Politics.” The growth has been concentrated in Benton and Washington Counties, where there’s about 260,000 square feet of self-storage under construction and another 630,000 square feet in various stages of planning. The combined total represents 14 percent of current space, with more than 70 percent concentrated in Benton County, the source reported.
Despite the growth in added space, occupancy remains strong at existing facilities. Managers from more than 20 storage locations contacted by the source indicated vacancy ranged from below 1 percent up to around 10 percent.
Real estate activity has also been high, with more than 25 self-storage facilities purchased within the two counties during the past two years. Those sales represent a total transaction value of more than $57 million. Many of the new property owners have re-branded and upgraded their acquisitions, the report stated.
“The Northwest Arkansas [real estate] market has experienced a surge in self-storage construction over the past few years, and this is likely a result of low vacancy levels and rising rental rates, together with a strong local economy and larger national trends,” wrote author Jordan Karnes of Arkansas-based Reed & Associates Inc., a real estate research and valuation firm. “Our research suggests vacancy rates in both counties are at healthy levels. Stakeholders, however, will need to monitor the amount of new product being delivered to the market over the next six to 18 months.”
Supply is expected to continue to meet local demand as long as current population and employment growth in the area continues, Karnes said.
Source:
Talk Business & Politics, Self-Storage Investors Find Strong Prospects in NWA
