Stability. That is the word that brokers at Cushman& Wakefield are using to describe the self-storagemarket performance in San Diego through the pandemic. In the lastthree months, a decline in move-outs has offset new leases, keepingboth rental rates and asset values stable. However, the market isnot immune to economic changes.

"Most self-storage owners are reporting solid operating resultsso far," Greg Wells, managing director of theself-storage advisory group at Cushman & Wakefield, tellsGlobeSt.com. "While leasing activity has slowed in some areas, sohas move-out activity, keeping occupancies steady. California hasenacted some fairly strict policies regarding evictions during thiscrisis and delinquencies have risen some in most areas. In SanDiego, and Southern California in general, the new supply pipelinehas been manageable so most stabilized projects are not seeing amajor impact from the new supply and those new projects are leasingat or near the original projections."

Equally, cap rates and asset pricing has remained stable sincethe onset of the pandemic. "Cap rates for stabilized assets haveremained relatively stable since the pandemic," adds Wells."Investors are certainly more cautious right now so underwriting onprojects still in lease-up has become more conservative. Investorsmay not have changed their yield requirements much, if any,however, they are looking at longer stabilization time frames andslower rate growth, which is impacting current valuations."