Self-storage after the surge

Self-storage had a spectacular pandemic. Occupancy hit record highs, rents climbed to all-time peaks, and capital poured into new development. Then the cycle turned. The interesting question for 2026 is not whether the surge ended — it did — but what the sector looks like on the other side of it.

The correction, in numbers

Sector values fell roughly 25% from their post-pandemic peak before pricing found a floor around mid-2025 and began to recover.¹ National advertised street rates were still modestly negative year over year in early 2026 — around $131 per month in March, down about 2.2% from a year earlier — though the pace of decline has been losing momentum.² Occupancy has been bifurcated: large public operators reported same-store occupancy in the mid-80s to low-90s, while many private and smaller-operator assets sat lower.¹

Demand cooled, but for a revealing reason

The demand softness traces largely to a frozen housing market. With mortgage rates elevated, existing-home sales have run well below their historical pace and interstate migration has reset sharply from its 2021–2022 highs, which cooled the moves that generate storage demand.³ Yet the same lock-in effect cuts the other way: customers are staying longer, with average length of stay rising to roughly 18–19 months.² Fewer move-ins, but also fewer move-outs, has kept occupancy more stable than the rate headlines suggest.

Supply is finally the tailwind

New supply is the single most important variable in storage underwriting, and for the first time in years it is working in owners' favor. Industry data put new supply growth at an eleven-year low in 2025, with construction starts down about 21% from their 2023 peak as elevated construction costs and tighter lending made new projects harder to justify.¹ When less competing supply is coming, existing well-located facilities are the beneficiaries.

Where the yield is

The opportunity we see is not a bet on a rate cut or a rent spike. It is basis. Buying stabilized cash flow below replacement cost, in submarkets where the forward pipeline is thin, lets an operator earn a current yield today and benefit from constrained supply tomorrow — without needing heroic assumptions. We are selective about geography: some Sun Belt markets that absorbed the most construction are still working through it, while supply-constrained locations have held pricing power.²

None of this is a forecast. Rents could stay soft longer than expected, local markets can be oversupplied, and storage is intensely local. But a sector that has already repriced, with new supply at a decade-plus low and demand that is need-based rather than discretionary, is exactly the kind of setup disciplined operators prefer. Targets and views here are illustrative, not guaranteed, and current as of publication.