Self Storage Market Trends 2026: What’s Happening and What It Means for Sellers
Key Takeaways
- Institutional capital is still flowing into self storage, with Public Storage deploying nearly $1 billion in acquisitions in 2025 alone
- New supply is peaking in 2026 at ~51.1M NRSF, then the construction pipeline drops significantly — bullish for existing owners
- Street rates are stabilizing after two years of negative rent growth, with Yardi reporting approximately +0.3% YoY growth
- Technology is widening the gap between institutional and independent operators, making modernized facilities more attractive to buyers
- The consolidation wave is accelerating — private equity and REITs are acquiring faster, and mom-and-pop owners are aging out
- The next 12–24 months represent a strategic window for sellers who want to capitalize on strong buyer demand before market dynamics shift
Introduction: The State of Self Storage in 2026
Every year, we take stock of where the self storage industry stands — not as detached observers, but as brokers who are in the market every day, talking to buyers, sellers, operators, and lenders.
2026 is shaping up to be one of the most consequential years for self storage owners in the last decade. Not because of any single dramatic event, but because several powerful trends are converging simultaneously: institutional capital is returning to full force, new supply is peaking, street rates are finally stabilizing, and the consolidation wave that’s been building for years is accelerating.
For owners who are thinking about selling — or even just thinking about thinking about it — understanding these trends isn’t optional. The difference between selling at the right time and the wrong time can be hundreds of thousands of dollars on a single facility, and millions on a portfolio.
Here are the ten trends we’re watching most closely, what the data says, and what it means for you.
Trend 1: Institutional Capital Is Still Flowing — and Getting More Aggressive
What’s happening: Despite interest rate uncertainty and a more cautious lending environment, institutional capital continues to pour into self storage acquisitions. Public Storage deployed approximately $946 million in acquisitions in 2025, and other major players are on similar trajectories. Perhaps more notably, sovereign wealth funds and foreign institutional investors have begun entering the U.S. self storage market for the first time in meaningful size.
The data:
- Public Storage (PSA): ~$946M in 2025 acquisitions
- Extra Space Storage (EXR): Continued portfolio integration post-Life Storage merger; selectively acquiring
- Private equity dry powder allocated to self storage: estimated $5B–$8B across dedicated funds
- New entrants: sovereign wealth funds from Middle East and Asia-Pacific exploring U.S. self storage for the first time
- Brookfield, KKR, and Blackstone all have active self storage investment strategies
What it means for sellers: There are more buyers with more capital competing for a finite number of quality facilities than at any point in the industry’s history. This buyer competition supports valuations and creates leverage for sellers — particularly those working with brokers who know how to create competitive bidding environments.
Trend 2: Supply Moderation — The Construction Pipeline Is Declining
What’s happening: After years of aggressive new construction, the self storage development pipeline is contracting. An estimated 51.1 million NRSF is expected to deliver in 2026 — still a significant number — but the pipeline beyond 2026 is declining sharply. Higher construction costs (up 25%–35% since 2020), tighter construction lending, and increasingly restrictive zoning are all working to slow new development.
The data:
- 2026 projected deliveries: ~51.1M NRSF
- 2027 projected deliveries: ~35M–40M NRSF (a 25%–30% decline)
- Construction cost increases: steel +30%, concrete +20%, labor +25% since 2020
- Construction loan availability: significantly tighter since 2023; many regional banks have pulled back
- Average time from entitlement to delivery: 18–24 months (up from 12–18 months pre-COVID)
What it means for sellers: Less new supply coming online means less competition for existing facilities, which supports occupancy and rental rates. If you’ve been competing with a shiny new facility down the road, the development pipeline slowdown means fewer new competitors in the years ahead. This trend is particularly bullish for facilities in markets that have already absorbed recent construction.
Trend 3: Rate Stabilization — The Bottom Is In
What’s happening: After approximately two years of negative street rate growth following the COVID-era spike, self storage rental rates appear to be stabilizing. Yardi Matrix data shows national street rate growth turning slightly positive at approximately +0.3% year-over-year — not explosive growth, but a meaningful inflection point after a painful correction.
The data:
- Street rate growth (YoY): ~+0.3% nationally (Yardi Matrix)
- Existing customer rent increases (ECRI): Still averaging 8%–12% annually for long-tenured customers
- Move-in concessions: Still elevated but beginning to moderate
- RevPAF trends: Flattening after 6–8 quarters of decline
What it means for sellers: Rate stabilization is critical for valuations because buyers underwrite future performance. During the period of negative rent growth, buyers were applying larger discounts to current NOI. As rates stabilize and the story shifts from “declining revenue” to “bottoming and recovering,” buyer confidence improves — and so do offers. If you’ve been waiting for the rate environment to improve before selling, this inflection point may be the signal you’ve been looking for.
Trend 4: Technology Adoption Is Widening the Gap
What’s happening: The technology gap between institutional and independent operators continues to grow. Institutional operators are investing heavily in dynamic pricing algorithms, AI-powered revenue management, smart access systems, unmanned facility operations, and digital marketing platforms. These tools are driving measurable improvements in NOI — and making the operational gap between institutional and independent facilities more visible to buyers.
The data:
- Dynamic pricing adoption: ~90%+ of institutional facilities vs. ~15%–20% of independents
- Unmanned/remote-managed facilities: Growing from ~5% to an estimated 15%–20% of new institutional properties
- Smart lock/access systems: Reducing on-site labor costs by 30%–50%
- AI-powered revenue management: Generating 5%–10% incremental revenue vs. static pricing
- Digital marketing spend: Institutional operators spending 3x–5x more per facility on SEO, PPC, and reputation management
What it means for sellers: Buyers — especially institutional ones — look at technology-gap facilities and see immediate NOI upside. If your facility uses manual pricing, paper leases, and phone-only reservations, a sophisticated buyer knows they can implement modern systems and generate meaningful revenue increases. This is actually good news for sellers: it means your facility may be worth more to a buyer than its current financials suggest, because the buyer is underwriting their operational improvements into the price.
Trend 5: The Consolidation Wave Is Accelerating
What’s happening: Self storage consolidation has been discussed for decades, but the pace is genuinely accelerating. Private equity firms and REITs are acquiring facilities faster than ever, and the independent owner pool is shrinking — not just through sales, but through attrition. Many original owners are in their 60s, 70s, and 80s, and their children often don’t want to operate the business. The result is an accelerating transfer of ownership from independent operators to institutional ones.
The data:
- Independent ownership share: Down from ~80% a decade ago to ~70% today
- Rate of consolidation: ~1%–2% of facilities transfer from independent to institutional ownership annually
- PE-backed platforms: Over 30 active self storage–focused PE platforms acquiring in 2025–2026
- Average acquisition pace (top 10 institutional buyers): ~50–100 facilities per year combined
What it means for sellers: Consolidation creates urgency on both sides. Institutional buyers are competing with each other for a shrinking pool of quality independent facilities, which supports pricing. But the window doesn’t stay open forever — as independent market share declines, the remaining facilities may face increased competitive pressure from better-operated institutional neighbors.
Trend 6: Third-Party Management Is Growing
What’s happening: Third-party management (3PM) has emerged as one of the fastest-growing segments of the self storage industry. Major operators like CubeSmart, Extra Space Storage, and Public Storage are aggressively expanding their management platforms, offering independent owners institutional-quality management, technology, and brand recognition — in exchange for management fees typically ranging from 6%–8% of gross revenue.
The data:
- CubeSmart managed store count: ~900+ (up significantly from 5 years ago)
- Extra Space managed store count: ~1,200+ (including former Life Storage platform)
- Total industry third-party managed facilities: estimated 5,000–7,000
- Average management fee: 6%–8% of gross revenue
- Typical NOI improvement under 3PM: 10%–25% in the first 12–24 months
What it means for sellers: Third-party management offers an alternative to selling — you retain ownership while outsourcing operations. However, many owners who start with 3PM eventually sell, because the experience of professional management shows them what their facility could be worth under institutional ownership. Additionally, facilities under 3PM agreements are often more attractive to buyers because the operational transition is smoother.
Trend 7: Climate-Controlled Premium Is Growing
What’s happening: Customer willingness to pay premium rents for climate-controlled storage continues to increase. Climate-controlled units — which maintain consistent temperature and humidity — now command 25%–40% premiums over standard drive-up units, and the gap is widening. Consumer awareness of climate-controlled benefits is growing, and newer facilities are being built with a higher proportion of climate-controlled space.
The data:
- Climate-controlled premium: 25%–40% over standard units
- New construction mix: ~50%–60% climate-controlled (up from ~30% a decade ago)
- Customer preference: ~40% of new customers actively seek climate-controlled options
- Revenue per SF: Climate-controlled units generate $18–$28/SF vs. $10–$16/SF for standard
What it means for sellers: If your facility has significant climate-controlled space, this trend supports your valuation. If your facility is primarily standard drive-up, you may face increasing competitive pressure as customers migrate to climate-controlled options. For some owners, this is actually a reason to sell now — before the competitive dynamic shifts further.
Trend 8: Adaptive Reuse Is Reshaping Supply
What’s happening: A growing number of new self storage facilities are conversions of existing retail, office, and industrial buildings rather than ground-up construction. Vacant big-box retail stores, office buildings, and warehouses are being repurposed as self storage facilities — often in prime locations that would otherwise be impossible to develop due to zoning restrictions.
The data:
- Adaptive reuse as % of new supply: estimated 15%–20% (up from ~5% a decade ago)
- Average conversion cost: $40–$80/SF (vs. $80–$120/SF for ground-up construction)
- Common conversion targets: Kmart, Sears, Office Depot, former grocery stores, warehouse buildings
- Location advantage: Many conversions are in retail corridors with high visibility and traffic counts
What it means for sellers: Adaptive reuse projects can introduce new competition in markets where ground-up development isn’t feasible. If a vacant big-box store near your facility is being eyed for conversion, that’s worth paying attention to. Conversely, adaptive reuse is creating acquisition opportunities for operators looking to expand through conversion rather than ground-up development.
Trend 9: Interest Rate Impact — The Fed Factor
What’s happening: The Federal Reserve’s interest rate trajectory remains one of the most significant variables affecting self storage transaction volume and valuations. After the aggressive rate hikes of 2022–2023, the market has largely adjusted to higher rates. The question now is whether and when rates will decline — and how that will affect cap rates, lending, and buyer demand.
The data:
- Federal Funds Rate (current): 4.25%–4.50% range
- Market expectations: 1–2 rate cuts anticipated in 2026
- Self storage cap rate spread over 10-year Treasury: ~200–300 bps (historically stable)
- Lending environment: Debt available but at higher rates and lower LTVs than 2021
- DSCR requirements: Most lenders requiring 1.25x–1.35x (up from 1.15x–1.20x in 2021)
What it means for sellers: Lower interest rates would likely compress cap rates and push valuations higher. If the Fed delivers rate cuts in 2026, we could see a meaningful uptick in transaction volume and pricing. For sellers, this creates an interesting dynamic: selling now captures current strong institutional demand, while waiting for rate cuts could yield higher valuations — but with no guarantee on timing or magnitude.
Trend 10: Regulatory Headwinds — Zoning Is Getting Tighter
What’s happening: Municipalities across the country are tightening zoning restrictions on new self storage development. Cities including Atlanta, Chicago, New York City, Denver, and numerous suburban jurisdictions have implemented moratoriums, special permitting requirements, or outright bans on new self storage construction in certain zones. This is largely a reaction to the building boom of 2018–2023.
The data:
- Cities with active storage zoning restrictions: 50+ (up from ~20 five years ago)
- Atlanta: Temporary moratorium on new storage facilities in multiple corridors
- Chicago: Special use permit requirements significantly slowing approvals
- NYC: Extremely limited zoning for new storage; conversion-only in most areas
- Impact on supply: Estimated 10%–15% reduction in potential new supply nationally
What it means for sellers: Zoning restrictions are a double-edged sword. If you’re in a market with tight zoning, your facility is more valuable because new competitors can’t easily enter. The barrier to entry is one of the most important factors in self storage valuations, and regulatory barriers are increasingly supplementing the traditional barriers of land cost and construction expense.
The Big Picture: What All 10 Trends Mean Together
When we step back and look at these ten trends collectively, the picture for self storage owners — particularly those considering a sale — is nuanced but generally positive:
The bullish case:
- Institutional buyer demand is strong and growing
- New supply is moderating after 2026
- Street rates are stabilizing and turning positive
- Consolidation creates competitive tension among buyers
- Potential rate cuts could push valuations higher
The cautionary notes:
- Technology is widening the performance gap — facilities that don’t modernize will fall further behind
- Some markets remain oversupplied and will take time to absorb new inventory
- Interest rate uncertainty creates valuation volatility
- The window of peak institutional demand won’t stay open indefinitely
Our view: The next 12–24 months represent a strategic window for self storage owners who are considering a sale. Buyer demand is strong, rates are stabilizing, and the supply pipeline is contracting. This combination of factors supports healthy valuations — but the landscape is always shifting, and the owners who time their exits well will be rewarded.
Let’s Talk About Your Situation
Understanding where the market is heading is crucial for timing your exit. But every facility is unique — market trends are the backdrop, not the whole picture.
If you’re thinking about selling in the next 1–3 years, we’d welcome the opportunity to discuss your specific situation. We’ll share our perspective on your market, your timing options, and what your facility might be worth in today’s environment.
No commitment required. Just an honest conversation between people who know this industry.
[Schedule a Confidential Conversation →]
Sources: Yardi Matrix, Public Storage 2025 10-K, Extra Space Storage Investor Presentations, JLL Self Storage Outlook, CBRE Cap Rate Survey, Federal Reserve Economic Data (FRED), Green Street Advisors, Marcus & Millichap Self Storage National Report, Inside Self-Storage, municipal zoning records.