The self-storage market is stabilizing along with asking rents as supply growth slows and capital markets begin to recover, according to Yardi Matrix’s national self-storage report. Household usage has climbed to 12.6% despite weak home sales and migration, with space needs and long-term tenants sustaining occupancy, the report noted.
Most markets posted strong rent gains in August compared with July, signaling broad improvement across the sector. Yardi Matrix said this is particularly notable, as the growth came during what is typically a period of seasonal slowdown.
Advertised rents were up 0.3% year-over-year in August—the highest growth rate since September 2022—driven by climate-controlled units and REITs, according to Yardi Matrix. Twenty-two of the firm’s top 30 metros posted stronger annual increases in August than in July.
In markets where they operate 10 or more stores, REITs are pushing rates most aggressively. In Los Angeles, advertised rents rose 6.1% year-over-year in August, while non-REITs saw a 1.6% decline. This suggests REITs may be proactively raising rates ahead of potential rent growth restrictions.
Same-store advertised rates declined month-over-month in 20 of the top 30 metros in August, while nine saw increases and one remained flat. Notably, several improving markets—including Austin, San Diego, Orlando, Charlotte and Atlanta—had shown the steepest year-over-year declines, signaling early signs of recovery, Yardi Matrix noted.
Charleston had the largest decline in rent among the top 30 metros, at -1.1%. While the market previously showed resilience, recent data suggests waning demand and increasing challenges in sustaining advertised rate growth.
Following a surge of new supply from 2023 to 2024, new construction is now easing, although some markets remain overbuilt. About 3,000 properties are in development, with 716 under construction, 1,906 planned and 382 prospective. The share of projects underway equals 2.7% of the existing stock—down from 3.4% in August 2024.
Minneapolis, Tampa, Washington, D.C. and New York each posted increased construction activity. Meanwhile, markets like Austin, San Diego and Denver show low levels of new supply, but advertised rates continue to underperform due to weak demand trends.
Atlanta, Charlotte and Philadelphia are benefiting from stronger demand, even in the face of moderate supply pressures, the report stated. Atlanta has seen a significant turnaround in rate performance, with advertised rates up 0.8% year-over-year in August compared to −9% in August 2024.
Transaction activity and pricing have both rebounded as cap rates and rents have stabilized. Competition for acquisitions is intensifying, driven by increased investor interest and stronger capital availability.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.