New York City's CRE sector has seen a surge in office-to-residential conversions to meet housing demand — but reuse projects for self-storage might be overlooked in the area.
About 179 million square feet of adaptive reuse self-storage has been delivered nationally, representing 10 percent of total inventory in the sector, according to data from StorageCafe.
Of the space that's already been converted to self-storage, New York City is home to three of the top five spots on the list. This includes second-ranked Brooklyn (3.19 million square feet), Manhattan in fourth place (2.17 million square feet) and Queens in fifth (2.11 million square feet). The already converted space represents 46 percent, 48 percent and 42 percent of the total self-storage inventory in the respective NYC boroughs.
Chicago took the top spot overall on the list, with 4.39 million square feet of reuse self-storage completed transformations. Philadelphia ranked third, with 2.34 million square feet of space.
Yet, even though these cities rank at the top, self-storage remains supply-constrained in those areas.
"In fact, 9 of the top 10 markets with the most converted storage space are also undersupplied — from just 2.1 square feet per person in Los Angeles and New York City to 3.3 in St. Paul and 3.5 in Chicago — driving their heavy reliance on adaptive reuse to expand capacity in densely built environments," StorageCafe said in the report.
Meanwhile, when it comes to the underway repurposing to self-storage, not a single NYC borough makes the cut in the top 10. Instead, Albany and Buffalo are the only ones within the Empire State on the list, ranking seventh and eighth, respectively.
"In that environment, adaptive reuse becomes less a matter of preference than necessity," Victor Maghear, a market analyst at StorageCafe, said in a statement.
"What's notable is how underperforming segments of the office market are increasingly intersecting with that dynamic, particularly in Manhattan, where shrinking apartment sizes and residents' growing need for additional space are creating conditions for older office buildings to be repositioned as storage."
Irving, Texas, leads all areas with almost 233,000 square feet under construction. That's followed by Los Angeles (more than 226,000 square feet), Cranston, Rhode Island (214,000 square feet), Fairfield, Alabama (nearly 200,000 square feet) and Little Rock, Arkansas (roughly 175,000 square feet).
So NYC will likely stay supply-constrained, at least in the short term.
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