What’s in (Self) Store for 2025?
By Matt DePrato, Vice President, Preconstruction and Development, Storage Construction
No matter where you are along the self-storage industry production chain — owner, manager, architect, or builder — 2025 is likely to provide both challenges and opportunities.
You may discover opportunities in your region or market, but the challenges may also provide a clearer perspective to see where you can be of the most value to yourself and your customer.
At Storage Construction, a company focused solely on the design and construction of self-storage facilities in the U.S., we’ve been preparing for the opportunities and challenges of the coming year. In this article, we’re sharing a few insights into what we see as the most critical elements for our — and perhaps your — success:
Changes in HVAC refrigerant policy Beginning January 1, all manufacturers of HVAC equipment were required to cease designing for and use of the refrigerant R-410A, and to begin manufacturing equipment that uses more eco-friendly refrigerants like R-454B and R-32.
This change may cause an increase in price for HVAC equipment across the board for two major reasons: first, R-410A refrigerant will likely still be available before inventories are depleted, but its availability will be limited, and waning availability of existing R-410A-compatible equipment has the potential to increase prices on existing inventory.
Next, newly manufactured R-454B or R-32 equipment is expected to have a higher cost due to the higher cost of the refrigerant and the specialized tools required to handle it.
Steel and concrete prices are likely to remain stable Steel prices have been relatively stable over the last 8-9 months. While we are experiencing some volatility as a result of proposed tariffs, we don’t anticipate the spike to be prolonged, and many metal building suppliers may be able to ride out any price fluctuations and hold pricing steady. Because the costs for concrete work typically follow the same changes in costs as that of steel, we project parallel stabilities for concrete.
Interest rates may continue to fall During 2024, the Federal Reserve cut interest rates by 100 basis points. While loaning institutions have already factored these cuts into commercial mortgage rates and the Fed has paused rate cuts for at least Q1, some experts believe the Fed may cut rates again in late 2025, depending on the level of inflation. If additional cuts occur, interest rates may fall slightly towards the end of 2025.
Changes in zoning regulations will affect costs Municipalities continue to change their zoning ordinances to preserve the aesthetics of their respective communities. An increasing number of those municipalities will require stricter architectural requirements for commercial construction. As a result, self-storage facilities will continue to have to incorporate more enhanced facades including the use of masonry, EIFS, glazing, and more.
IBC 2021 and 2024 may encourage increased building heights The 2021 and 2024 versions of the International Builders Code (IBC) changed a long-standing requirement that all self-storage buildings over three stories had to have fire-proofing spray applied to all structural steel members.
This requirement is the reason why most four-story-or-taller self-storage buildings use a podium system where the first floor is made of a structural steel ‘podium’ with higher floors constructed of traditional light gauge framing.
The new IBC codes allow builders of self-storage facilities with four stories or fewer to use industry standard light gauge framing for all four floors without the requirement of fire spray.
Got questions about these or other industry trends? Let us know. We look forward to getting to know more about you and your projects as 2025 progresses.