The total square footage of self-storage facilities sold rose 22% year-over-year, reaching over 12 million square feet.

Overall, despite tighter capital markets, StorageCafe writes that the CRE asset class remains resilient.

It differs from the 2020-2021 explosive growth boom, with today’s momentum more strategic and selective.

Investors are targeting markets constrained by supply and buoyed by ongoing population growth and strong move-in rates.

“The expectation is that well-located self-storage operators in the densely populated San Diego, Los Angeles, and San Francisco metro areas will maintain and increase consumer pricing power, and grow revenue into the future as inventory remains constrained,” Glenn Brill, managing director in the Real Estate Solutions practice at FTI Consulting, told GlobeSt.com.

“Demand for the service is expected to remain steady as baby boomers downsize and many younger households opt for a more mobile renters’ lifestyle, as newly constructed multifamily units become increasingly smaller.”

He added that investors are willing to pay a premium for the assets because they believe there is income growth to be had from what is a relatively easy-to-operate, low-risk asset class.

Transaction Volume ‘Limited’ in First Half

Tom Errath, head of research at Harrison Street, told GlobeSt.com that investor appetite for self storage remains strong, supported by institutional capital flows, solid sector fundamentals, and consistent performance among the public REITs.

However, despite continued interest, transaction volume has been limited in the first half of 2025 overall, he said.

“Elevated interest rates and a slow housing market have temporarily softened demand and rent growth in storage, putting downward pressure on asset valuations,” according to Errath.

“These conditions have created a gap between buyer and seller expectations, as many owners remain hesitant to sell in the current pricing environment.”

Harrison Street finds that transaction volume has increased in stabilized assets in core urban areas, such as New York, Los Angeles, San Francisco, and Dallas, where pricing expectations have come into closer alignment.

“However, some owners, facing pressure from rising debt costs, slower lease-ups, and weaker rental rates, have chosen to sell, resulting in select portfolio-level activity,” Errath said.

There is also cautious optimism around the sector’s outlook, he added, with Green Street projecting that same-store NOI growth will return in 2026.

Capital formation has also continued, he said. This spring saw at least one large California-based pension fund increase its allocation supporting the acquisition and development of self storage properties. In April, SmartStop completed its IPO, raising approximately $810 million to support ongoing expansion.

According to Real Capital Analytics, self storage volume year-to-date was $550 million across 34 deals. Coastal California markets such as Los Angeles, San Francisco, San Jose, Oakland and the Inland Empire are seeing stronger performance compared to Sun Belt markets like Austin, Dallas, Atlanta, and Memphis.

“This is due in part to more stable demand in coastal areas, where smaller living spaces and higher housing costs create more consistent need for storage, and where reliance on housing turnover is lower,” Errath explained.

Converting Space Into Self Storage

Katharine Lau, CEO and co-founder of Stuf, told GlobeSt.com her firm is moving to take advantage of the coastal California trend.

Stuf converts underused urban spaces into storage, and markets like Los Angeles — where residential rents and home prices remain high — are seeing growing demand for a solution to the most stubborn, universal challenge of urban living: where to put all your stuff, she said.

“At the same time, landlords are eager to monetize retail or office spaces that have long been sitting vacant, Lau said.

Her firm is set to open its largest of five Los Angeles locations soon.