Self-Storage Rent Drops Slow Down in January

US self-storage rents fell just 1.2% YoY in January, easing from steeper drops in previous years.

Jordan B.
February 21, 2025

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Good morning. US self-storage rents fell just 1.2% YoY in January, easing from steeper drops in previous years, as new supply slows down and REITs focus on existing tenant pricing, per Yardi Matrix.

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RENT REPORT

Self-Storage Rent Drops Ease as Supply Pressure Fades

Around the country, self-storage rent drops are losing steam, with national rates showing signs of stabilization as new supply slows down.

Moderate declines: Advertised self-storage rates fell 1.2% YoY in January, improving from December’s 2.2% drop and November’s 2.4% decline, per Yardi Matrix. On a MoM basis, national self-storage rents ticked up 0.3% to $16.32 PSF.

Less new supply: The share of self-storage projects under construction dipped slightly in January, continuing a downward trend. Over the past year, the national three-year supply pipeline shrank from 9.1% to lower levels. Yardi Matrix predicts a 15% drop in self-storage supply in 2025, which could help stabilize rents further.

Regional winners: Washington, D.C., led the market, likely benefiting from limited new supply, though potential government layoffs pose a risk. Tampa remained strong despite a high number of properties in lease-up, aided by hurricane-driven demand.

Regional laggards: Meanwhile, Phoenix remains under pressure with the most new self-storage supply in the pipeline, keeping rents in check.

REITs stay disciplined: Self-storage REITs have held firm on pricing, focusing on rent hikes for existing customers rather than deep discounts for new tenants. Non-REIT operators, meanwhile, have been more aggressive with promos.

➥ THE TAKEAWAY

What’s next? After years of oversupply, self-storage operators may finally be regaining pricing power—especially in markets where new supply is slowing down. Self-storage sector performance in 2025 will hinge on how demand shakes out. Extreme weather events could continue driving regional rent surges.

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✍️ Editor’s Picks

Net lease surge: US net lease investment hit $13.7B in Q4, up 19% QoQ and 57% YoY, with industrial assets leading at 64% of deals, per CBRE.
Insurance soars: Property insurance expenses have surged 200% for some CRE assets since 2018, with multifamily and retail hit hardest, particularly in high-risk regions like TX and FL.
Manage your syndications: We’ve researched the best investment management platforms to help you track deals, engage investors, and optimize performance.
Jobless claims steady: US jobless claims rose to 219K, aligning with pre-COVID levels, as economists watch for impacts from federal workforce cuts and corporate layoffs.
All-cash sales drop: According to Redfin, all-cash home deals fell to 32.6% in 2024, a 3-year low, as institutional investors pulled back amid high housing costs.
Revenue jump: JLL posted $6.8B in Q4 revenue, up 16% YoY, driven by a 32% rise in capital markets activity and 14% leasing growth amid stronger office demand.

🏘️ MULTIFAMILY

$1B student beds: San Diego State University is planning a $1B student housing project, adding 5.22K beds, as San Diego rents remain high at $2.8K monthly.
Boom cools: US apartment completions are set to drop 50% in 2025, with Sun Belt markets like Austin, Dallas, and Atlanta seeing the sharpest slowdowns amid rising vacancies.
Seattle sale: Equity Residential (EQR) sold a 106-unit Lower Queen Anne apartment building for $42.6M, as Seattle's multifamily market adjusts to rising vacancies.
Eviction protections: LA County Supervisors approved limited eviction protections for renters impacted by recent wildfires, covering nonpayment from Feb. to July for eligible tenants.
Affordable housing: The Breakers Palm Beach aims to buy land in West Palm Beach for an affordable housing project to support its employees amid soaring local rents.
Low loan rate: Hines locked in a 5.4% fixed rate on a $25M loan for its $44M Daly City multifamily buy, reflecting strong market fundamentals and lender confidence.

🏭 Industrial

Data destiny: Arizona Land Consulting bought 160 acres in Buckeye for $22M, aiming to develop up to 3.5M SF of data centers amid surging AI-driven demand.
Manufacturing soars: Manufacturing’s share of industrial demand has shot up by 354% since 2018, fueled by federal incentives and reshoring efforts despite shifting trade policies.
Blackstone-backed: Blackstone Mortgage Trust (BXMT) provided a $189M loan to Alterra IOS, financing 49 industrial outdoor storage properties across 22 states through its $925M fund.

🏬 RETAIL

Shark in Noho: UK-based fitness brand Gymshark leased 15K SF at Aby Rosen’s 11 Bond Street, marking its first US brick-and-mortar location with a long-term deal.
SoCal mall sold: CBL Properties sold Imperial Valley Mall in El Centro, CA, for $38.1M in an all-cash deal, using proceeds to reduce debt on a non-recourse loan.
Project refinanced: Jerico Development and The Ratkovich Co. secured a $61.5M loan to complete West Harbor, a $500M waterfront retail and entertainment destination in San Pedro.

🏢 OFFICE

Vacant Chicago office: AEW Capital Management is seeking a buyer for 525 West Van Buren, a 516K SF West Loop office tower that is 36% leased amid downtown market struggles.
Google to sublease: Google (GOOGL) is subleasing 165K SF at 345 Hudson St. after opening its $2.1B St. John’s Terminal HQ, as it reassesses office space needs.

🏨 HOSPITALITY

Luxury demand: Host Hotels CEO Jim Risoleo says high-end consumers remain strong, driving luxury travel demand despite broader economic uncertainties.
Houston foreclosure: Jefferies LoanCore seized the 354-room Crowne Plaza Houston Med Ctr-Galleria after a $24.2M auction, following years of loan default and occupancy struggles.

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📈 CHART OF THE DAY

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