Summer 2024 RV and Boat Storage Market Report: Navigating the Flow of Supply and Demand

Executive Summary

In Summer 2024, the RV and boat storage market is navigating a period of adjustment following a surge in new supply in 2023. While demand has softened, advertised rental prices have increased modestly since February, with the sector performing better than traditional self-storage, where rates declined by 4.9% in June.

Regional variations are significant. Markets like Jacksonville and Austin experienced rent increases above 2% in June, driven by migratory trends and limited supply. In contrast, cities such as Seattle and Las Vegas saw rent declines due to reduced demand and competition from newly developed self-storage facilities offering parking.

Despite a slowdown in RV and boat registrations from their 2021 highs, new storage facilities are still being constructed, particularly in the Midwest and Southeast. However, development activity has decelerated, with fewer new deliveries expected in the near future. As of June 2024, 52 storage sites are under development, accounting for 3.8% of existing stock.

Sales in the sector have also dropped, with only 14 properties sold in the first half of 2024 compared to 46 in the same period last year. Despite these challenges, the market remains attractive, with average prices per acre nearing $800,000.

Introduction

The RV and boat storage market experienced a dip in demand in June 2024, following a surge in new supply that reached an 18-year high the previous year. Despite this, advertised rental prices for parking units have seen a gradual increase since February, even though they were down 0.4% year over year during that month. Interestingly, the RV and boat storage sector has outperformed traditional self-storage, where rate decreases have been more pronounced, with rentals dropping by 4.9% in June.

Market Performance and Rent Growth

Certain markets continue to enjoy respectable rent increases, largely driven by strong demand and limited new supply. Cities like Jacksonville and Austin witnessed a more than 2% rise in rents in June, spurred by recent migratory trends and supply levels below the national average. Conversely, markets experiencing the largest rent declines are those facing lower demand and increased competition from newly constructed self-storage facilities offering parking options.

While RV and boat registrations have decreased from their 2021 peak, new storage facilities specifically designed for these vehicles are being constructed, particularly in smaller markets across the Midwest and Southeast. The pandemic-driven surge in RV and boat purchases and the shortage of Class A storage facilities have resulted in a persistent supply-demand imbalance. However, despite the ongoing interest in this sector, development activity has slowed, with fewer deliveries expected in 2024 and beyond.

Updates on Advertised Rates

In June 2024, the annual advertised rental rate for parking units averaged $6.02 per square foot, reflecting a 0.4% decrease from June 2023. While nine markets saw year-over-year rate increases, five experienced declines compared to the March report. Notably, Austin led with a 2.3% rate increase, up from 0% in February, while Seattle’s rent growth plummeted from 0.8% in February to -2.6% in June.

The national average rent has decreased by 1.7% since its peak of $6.12 in April 2022. Although supply has grown and demand has softened, parking rentals have been less volatile compared to traditional self-storage, where rates have remained stable at 9.2% since their pandemic peak.

Development Updates

In June 2024, the 36-month delivery rate for RV and boat storage increased to 13.7% of stock, up from 12.4% in June 2023, driven by the delivery of 57 properties totaling 661 acres over the past year. New supply has been concentrated in a few markets, particularly in Texas, the Midwest, Southwest Florida, and California’s Central Valley.?

Minneapolis and San Antonio are likely to feel the impact of new supply most acutely, given their high delivery rates as a percentage of stock. In contrast, markets like Atlanta, Charleston, Seattle, and Las Vegas have seen no new RV and boat storage facilities constructed in the last three years. However, these cities have witnessed the development of parking-inclusive self-storage facilities, which may contribute to their slower rental performance.

As of June 2024, 52 RV and boat storage sites, totaling 552 acres or 3.8% of stock, were under development. This is a decrease from the peak of 4.5% in October 2023, due to the opening of new properties. Notably, construction has commenced on two sites in the Chicago suburbs, which will add 35 acres of storage space—a 44% increase over the current inventory. Despite the market's significant undersupply, these developments are unlikely to have a major impact.

Conclusion

The RV and boat storage market has seen a sharp decline in sales, with only 14 properties sold in the first half of 2024 compared to 46 in the same period the previous year. The entry of major firms into the sector and the development of national portfolios have driven up the average price per acre to nearly $800,000 in 2024. Despite the challenges, the market continues to attract interest, particularly in areas with strong demand and limited new supply.

How Gallagher & Mohan Can Help You Navigate the RV and Boat Storage Market

As the RV and boat storage market undergoes significant shifts, having expert guidance is crucial to making informed decisions. Gallagher & Mohan, a leading real estate outsourcing firm, specializes in providing comprehensive market analysis and strategic insights tailored to your needs. With our team of seasoned professionals, we offer unparalleled expertise in real estate market dynamics, including niche segments like RV and boat storage.

Whether you're looking to invest, expand, or optimize your current holdings, Gallagher & Mohan can help you understand market trends, evaluate opportunities, and mitigate risks. Our deep industry knowledge and data-driven approach ensure that you stay ahead of market changes and make decisions that align with your long-term goals.

Partner with Gallagher & Mohan to gain a competitive edge in the evolving RV and boat storage market. Let us help you turn market insights into strategic actions that drive success. Reach out today to learn how we can support your real estate endeavors.

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