2024 Montana Self Storage Trends: Navigating Occupancy Fluctuations

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Claire Matten | CCIM/SIOR

2024 Montana Self Storage Trends: Navigating Occupancy Fluctuations

The Montana self storage market has experienced notable shifts over the past few years. Influenced by various economic and social factors, these changes present both challenges and opportunities. Here are some key trends and issues you should consider to navigate this evolving asset class.

Resurgence of Occupancy Fluctuations

One of the most significant trends in 2024 is the return of occupancy fluctuations. During the height of the COVID-19 pandemic, Montana’s self storage facilities were critically full. The influx of new residents led to extensive waitlists and minimal downtime between unit turnovers, creating a sense of stability and predictability for operators.

Now, however, we’re witnessing a reversion to the traditional seasonal occupancy fluctuations. This shift has understandably caused some concern among operators who had grown used to constant high demand. The return of these typical seasonal fluctuations has likely created a bit of panic among operators.

Impact of Rate Adjustments

It’s important to recognize that these fluctuations are not uniform across all operators. Those who have refrained from aggressively pushing their rates continue to experience steady occupancy levels, while others are seeing more pronounced variations. This differentiation underscores the importance of strategic pricing and market positioning in maintaining consistent occupancy rates.

Development Challenges and Market Saturation

The development of new self-storage facilities in Montana has significantly slowed compared to three years ago. Several factors contribute to this trend, including the increased cost of capital and the high price of land. Land prices have not decreased sufficiently to make new projects financially viable, leading to a standstill in development activity.

Interest rates, which many hoped would decrease by the summer, have remained elevated, further complicating the feasibility of new developments. Some markets within Montana experienced a surge in new facility deliveries over the past two years, preceding the spike in interest rates. These areas now face potential saturation risks, necessitating cautious consideration for new projects.

Strategic Guidance for Investors and Developers

If you’re looking to develop or acquire self-storage facilities in Montana, thorough market analysis is crucial. Make sure you reach out to SterlingCRE Advisors so we can help you understand what has been delivered in each market, what’s in the pipeline, and how to avoid saturation issues.

Certain markets in Montana are susceptible to saturation due to low barriers to entry. Conversely, there are submarkets still ripe for new facilities, offering lucrative opportunities for savvy investors. Partnering with knowledgeable professionals who can provide comprehensive insights into market dynamics is essential. By leveraging expert guidance, you can make informed decisions, ensuring the long-term success and profitability of your self-storage ventures.

The Montana self-storage market presents both challenges and opportunities. As an operator or investor, you must navigate the complexities of occupancy fluctuations, development feasibility, and market saturation with strategic foresight. We’re here to help.
Matt Mellott
Matt Mellott, CCIM/SIOR

2024 Montana Self Storage Trends: Navigating Occupancy Fluctuations

The Montana self storage market has experienced notable shifts over the past few years. Influenced by various economic and social factors, these changes present both challenges and opportunities. Here are some key trends and issues you should consider to navigate this evolving asset class.

Resurgence of Occupancy Fluctuations

One of the most significant trends in 2024 is the return of occupancy fluctuations. During the height of the COVID-19 pandemic, Montana’s self storage facilities were critically full. The influx of new residents led to extensive waitlists and minimal downtime between unit turnovers, creating a sense of stability and predictability for operators.

Now, however, we’re witnessing a reversion to the traditional seasonal occupancy fluctuations. This shift has understandably caused some concern among operators who had grown used to constant high demand. The return of these typical seasonal fluctuations has likely created a bit of panic among operators.

Impact of Rate Adjustments

It’s important to recognize that these fluctuations are not uniform across all operators. Those who have refrained from aggressively pushing their rates continue to experience steady occupancy levels, while others are seeing more pronounced variations. This differentiation underscores the importance of strategic pricing and market positioning in maintaining consistent occupancy rates.

Development Challenges and Market Saturation

The development of new self-storage facilities in Montana has significantly slowed compared to three years ago. Several factors contribute to this trend, including the increased cost of capital and the high price of land. Land prices have not decreased sufficiently to make new projects financially viable, leading to a standstill in development activity.

Interest rates, which many hoped would decrease by the summer, have remained elevated, further complicating the feasibility of new developments. Some markets within Montana experienced a surge in new facility deliveries over the past two years, preceding the spike in interest rates. These areas now face potential saturation risks, necessitating cautious consideration for new projects.

Strategic Guidance for Investors and Developers

If you’re looking to develop or acquire self-storage facilities in Montana, thorough market analysis is crucial. Make sure you reach out to SterlingCRE Advisors so we can help you understand what has been delivered in each market, what’s in the pipeline, and how to avoid saturation issues.

Certain markets in Montana are susceptible to saturation due to low barriers to entry. Conversely, there are submarkets still ripe for new facilities, offering lucrative opportunities for savvy investors. Partnering with knowledgeable professionals who can provide comprehensive insights into market dynamics is essential. By leveraging expert guidance, you can make informed decisions, ensuring the long-term success and profitability of your self-storage ventures.

The Montana self-storage market presents both challenges and opportunities. As an operator or investor, you must navigate the complexities of occupancy fluctuations, development feasibility, and market saturation with strategic foresight. We’re here to help.