- Self-storage advertised rates fell 1.2% YoY in January, a slowdown from previous months.
- National average rent per SF rose 0.3% MoM to $16.32, a turnaround from past years.
- Yardi Matrix forecasts a 15% drop in new self-storage supply in 2025.
- Major markets like Washington, DC, Seattle, and Chicago saw YoY rent increases.
- Phoenix remains under supply pressure, while Tampa benefits from hurricane-driven demand.
The US self-storage sector is showing signs of stabilization, as supply constraints have slowed down the pace of rent declines nationwide, per GlobeSt.
By The Numbers
Advertised rental rates dropped 1.2% YoY in January, an improvement from December’s 2.2% decline and November’s 2.4% dip, according to Yardi Matrix’s February self-storage report.
The national average rent per SF across all unit sizes and types climbed 0.3% MoM to $16.32—outpacing January 2024’s -0.6% and January 2023’s -0.1% MoM performance.
The supply pipeline continues to shrink, with projects under construction nationwide down 10 bps from December. Meanwhile, 3-year supply projections have steadily decreased from 9.1% in January 2024, with Yardi Matrix forecasting a 15% drop in 2025 supply compared to 2024.
The slowdown in deliveries is expected to provide a tailwind for the sector.
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Region by Region
Despite overall declines, several major markets posted YoY rent growth in January. Washington, DC, led REIT performance last quarter, likely due to limited new supply—just 1.3% of starting stock. However, Yardi Matrix warns potential government layoffs could curb future rate gains in the capital.
Tampa’s self-storage market remains strong, with advertised rates rising 1.7% YoY. The city benefits from heightened demand due to hurricane-related displacement. Similarly, Los Angeles, affected by recent wildfires, may see an impact, though fire-related demand tends to be weaker than hurricane-driven storage needs.
Chicago has also emerged as one of the strongest turnaround markets, with advertised rents up 1% YoY after falling 1.6% in December. The city has seen limited new supply over the past year, contributing to improved pricing power.
On the other end of the spectrum, Phoenix faces ongoing challenges with the highest level of new supply under construction nationwide, keeping pressure on rental rates.
Pricing Discipline
While self-storage operators continue to attract new tenants with low introductory rates while raising rents for existing customers, self-storage REITs have been less aggressive in discounting rates than their non-REIT competitors. This strategy has helped maintain stability in a market that has faced headwinds from oversupply in recent years.
Looking ahead, the self-storage sector’s performance will largely hinge on supply trends and macroeconomic conditions. With new deliveries declining and demand drivers like severe weather events playing a role, market conditions could continue to improve in 2025.
