Yardi Matrix has raised its near-term self-storage supply forecast, signaling a modest rebound in new development even as longer-term indicators remain restrained, according to the firm's first-quarter update.
The update reflects slightly stronger construction activity in the second half of 2025, which pushed the under-construction pipeline higher in the fourth quarter. For markets covered by Yardi Matrix for at least 24 months, the under-construction pipeline increased 5.3% quarter-over-quarter to 52.96 million net rentable square feet, the firm reported. That represents 98.2% of the 53.92 million net rentable square feet currently underway across all markets tracked by Yardi Matrix. On an annual basis, however, the pipeline declined 9.7%, underscoring that activity remains below prior-cycle highs.
As a result of the pickup in starts, Yardi Matrix increased its 2026 completions forecast by 6% and its 2027 completions forecast by 4.8%. The firm also raised its 2028 projection by 13.7% from the prior quarter to 37.59 million net rentable square feet. For the later years of the forecast, Yardi Matrix now models supply at roughly 1.7% of existing stock, up from the previously anticipated 1.5%.
National advertised rental rates showed modest improvement in the second half of 2025 after a period of decline. Rates increased 0.3% year-over-year in December, suggesting stabilization in operating fundamentals, Yardi Matrix noted. The firm's near-term outlook assumes steady but unspectacular economic growth in 2026, supporting moderate demand gains.
However, it cautioned that continued fiscal deficits are expected to keep longer-term interest rates elevated, sustaining higher cap rates and mortgage rates. Higher cap rates suppress valuations and new development, while higher mortgage rates weigh on single-family home sales, a key driver of self-storage demand, the report said.
Construction timelines also expanded. Projects completed in Q4 averaged 431 days, or 14.4 months, marking a new series high, according to Yardi Matrix. The trailing four-quarter average climbed to 414 days or 13.8 months and has been trending upward since mid-2024.
The prospective pipeline declined 6.8% quarter-over-quarter and 21.7% year-over-year to 31.45 million NRSF, Yardi Matrix said. Since peaking at 52.69 million net rentable square feet in October 2023, the prospective pipeline has fallen 40.3% and is approaching pre-pandemic levels.
The planned pipeline now stands at approximately 2.15 times the size of the under-construction pipeline, down from a mid-2025 peak of roughly 2.4 times, according to Yardi Matrix. Projects starting construction in Q4 spent an average of 676 days in planned status, well above the trailing four-quarter average of 602 days.
Meanwhile, the deferred pipeline declined 8.1% in Q4 to 5.83 million net rentable square feet. but remains 20.1% higher year-over-year and roughly double its size at the peak of the last development cycle, Yardi noted.
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