The self-storage sector is shifting from decline toward stabilization, but a meaningful recovery hinges on demand returning and excess supply clearing, leaving investors cautious and highly market-specific in 2026.
Historically low home sales, subdued job growth and economic uncertainty continue to weigh on demand, according to Yardi Matrix's latest self storage supply and rent recap. In response, investors have adopted more conservative underwriting assumptions around rent growth, lease-up timelines and exit cap rates. Debt and equity remain available, though increasingly selective, particularly for experienced operators.
Asking rents appear to have bottomed nationally, though they remain well below in-place rates. Yardi Matrix expects the recovery to be gradual and uneven in 2026, favoring markets with limited supply and improving housing conditions.
National advertised rents rose 0.3% year-over-year in December, extending an annual growth trend but marking a slowdown from earlier in the fourth quarter, when rents increased 0.6% in both October and November. The national average rent reached $16.32 per square foot across all unit sizes and types. Roughly half of the top 30 metros posted lower annual rent growth in December than in November.
On a month-over-month basis, advertised rents declined 0.3% nationally from November to December, consistent with typical seasonal patterns. Rents fell in 25 of the top 30 metros, although New York City recorded month-over-month growth for the second year in a row, signaling a shift in momentum.
In addition to New York City, the New York suburbs, Boston and Washington, D.C., continue to show stronger demand. Markets with solid population growth and rising multifamily rents are posting positive or improving self storage performance, even amid elevated new supply. By contrast, metros such as Denver, Portland and San Diego are experiencing weaker advertised rents alongside slower population and multifamily rent growth.
Nationally, new supply delivered over the past three years equals 9.4% of starting inventory, while deliveries over the trailing 12 months account for 2.6%. The under-construction pipeline totaled approximately 54.3 million net rentable square feet at the end of December, representing 2.7% of existing inventory and remaining essentially flat year-over-year.
While national supply levels have stabilized, metro trends vary. Several markets, including Nashville, San Antonio, Philadelphia, New York City, Atlanta, Detroit and Seattle, saw declines in under-construction supply over the past year. Conversely, development activity remains elevated in parts of the Sun Belt, with markets such as Miami, Tampa, Phoenix, Sarasota–Cape Coral and Las Vegas maintaining or expanding construction pipelines despite higher costs and more challenging underwriting conditions.
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