The self-storage sector faces two possible outcomes that cast doubt on the certainty of long-term predictions, according to a new forecast of future supply from Yardi Matrix.
On the one hand, the company’s analysis predicts that the currently high under-construction pipeline will slow through 2027 and beyond. On the other side, nationally advertised self-storage unit rates rose in September for the first time in three years – a trend that would improve prospects for new development.
Under the first scenario, a decline in new self-storage supply would be expected. But that picture is complicated by the fact that at the end of 3Q 2025, there was a larger-than-predicted self-storage inventory in the pipeline. As a result, the forecast supply of completions did not fall but rose by 4.3% for 2025 and by 4.6% for 2026, though projections for 2027 remain unchanged, suggesting a decline in supply.
Under the second scenario, the impact of the higher advertised rates on rental rate growth would be limited by the relatively large amounts of new supply delivered in 2023 and 2024. That prediction could change under some combination of rental rate growth and easing monetary policy, Yardi Matrix noted.
In 4Q 2025, the under-construction pipeline across all Matrix self-storage markets totaled 51.76 million net rentable square feet (NRSF). The pipeline declined 17.3% year over year, with construction expected to be completed by the end of 2026.
In markets Matrix covered for at least 24 months, construction starts rose by 2.6% quarter over quarter to 12.12 million NRSF, a pattern for three consecutive quarters. Nevertheless, the total was well below the peak of 17.05 million NRSF recorded in 3Q 2023. Completion times hovered around 410 days.
The excess supply of self-storage inventory delivered in 2023 and 2024 has impacted absorption and depressed rate growth.
“Publicly traded self-storage REITs have also reported negative net-operating income growth from 4Q 2023 through 2Q 2025,” the report noted. Weak operating results have translated into a noticeable decline in longer-term development interest.
The planned pipeline peaked in September 2024 at 131.65 million NRSF. It is currently about 2.4 times as large as the under-construction pipeline because projects are spending increasing amounts of time in planned status, a trend that has persisted for 18 months. The trailing four-quarter average time in the planning stage has now reached 571 days – a figure likely driven by a weaker operating environment that forced projects to delay breaking ground, the report said.
The prospective pipeline has shrunk over the past 24 months, while 6.12 million NRSF were in deferred status, another indication that long-term self-storage development interest remains weak. In addition, 46 properties were characterized as abandoned in September, slightly below the trailing three-month average of 52 properties.
“On a year-over-year basis, the planned pipeline has declined by 10% while the prospective pipeline has declined by 18.8% and the deferred pipeline has grown by 33.3%," Yardi Matrix said.
"The monthly number of abandoned projects is currently averaging 52. In mid-2022, the average was seven projects per month. Matrix development pipeline data continues to show an overall deceleration in both near-term and long-term development interest."
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