Self storage continues its transformation into a resilient, institutionally accepted asset class within CRE. After the unprecedented demand and transaction volume seen during the pandemic, the sector has entered a period of normalization. Performance in 2025 reflects a market settling into long‑term fundamentals: stable occupancy, moderated rent growth and more predictable valuations. Looking ahead to 2026, investor sentiment and survey data point to continued confidence, with expectations for steady cap rates, disciplined development activity and increased reliance on technology to meet changing customer demands.
Market Review
Self‑storage transaction volume — the total dollar value of properties sold — reached $2.85B in the first half of 2025, according to Cushman & Wakefield. That figure is less than 1% higher than the volume recorded during the same period in 2023, indicating activity is flat.[1]
From 2020 to 2022, self‑storage transaction volume rose to $50B — far surpassing the $35B volume of the previous seven years — as Americans relocated, downsized, worked from home and reconfigured living spaces. While other property types faced uncertainty, self-storage maintained or improved occupancy and cash flow during the disruption, according to CBRE. Much of this activity was driven by institutional investors significantly increasing allocations to the sector, viewing it as recession‑resistant and capable of delivering stable income during volatile conditions.
After peaking at $174 per square foot (psf) in 2023, valuations have tapered, declining for six consecutive quarters to an average of $159 psf in 2025, according to Cushman & Wakefield.
Rent growth also cooled. Average asking rents reached an all‑time high of $134 per unit in 2022, then settled at $128 per unit on average. Rents began declining in the second half of 2023 amid softening net demand, new supply and increased cost sensitivity among tenants. Even so, the typical duration of stay has remained stable.
Occupancy rates have remained flat, ranging from 89% to 92% since the beginning of 2024, with small declines noted in some regions due to declines in home sales and an influx of new supply.
On the development side, elevated construction costs, potential new tariffs on materials and reduced liquidity in construction debt have slowed activity. Construction starts are down 21% from the 2023 peak, with 2025 year‑to‑date activity trailing the 2024 pace, according to Yardi Matrix.
2026 Outlook
Cushman & Wakefield’s investor survey indicates broad confidence in the sector’s fundamentals. Investors remain active, particularly in value‑add opportunities across primary and secondary markets.
Fifty-six percent of the 40 experts interviewed expect little to no change in cap rates through June 2026. The slowing housing market was named as the top concern for self-storage investments and valuations, followed by interest rates.
Yardi Matrix pipeline data reflects a slowdown in development: new supply is projected to increase 4.3% in 2025, 4.6% in 2026 and then decline slightly — registering a ‑0.1% change — from 2027 to 2029. This suggests a continued deceleration in new construction.
Technology adoption is another defining theme for 2026. Storable’s survey of 454 U.S. self‑storage operators found that 31% consider new market entrants their top concern, pointing to technology as both lowering barriers to entry and raising customer expectations. With customer acquisition and retention as a top priority, 78% of operators plan to enhance customer experience through automation and smart systems next year, including automated billing, real‑time analytics, AI pricing, demand forecasting and smart‑lock integration.
Looking Ahead
The self‑storage sector appears positioned for continued stability as investors, operators and developers navigate a landscape defined by steady cap rates, moderating supply pipelines and evolving customer expectations. Technology adoption and operational efficiency will play an increasingly critical role as competition intensifies and housing‑market dynamics continue to shape demand. While interest rates and construction costs remain top concerns, the industry’s resilience suggests that the next phase of growth will come through disciplined execution, value‑add strategies and a maturing customer experience ecosystem.
[1] The report compares 2025 with 2023, rather than 2024, because 2024 remained part of the post‑pandemic adjustment period, when the market cooled from the record activity seen between 2020 and 2022. As a result, 2024 deal flow was considered too volatile to serve as a reliable benchmark.
