Self-Storage REIT Update – 2nd Quarter 2024

September 9, 2024

Self-storage properties performed remarkably well through the first half of 2023 with properties showing rapid rent gains and maintaining stable occupancy. More recently, demand has slowed with vacancy increasing, rents flattening, and all four major REITs projecting negative revenue and NOI guidance. In the near term, rent growth is expected to stagnate, remaining in line with historical norms. High construction costs and interest rates have resulted in a reduced construction pipeline which should benefit existing operators in combatting continuously lowering street rates and occupancy levels in the second half of 2024 and into 2025. Nevertheless, long-term market fundamentals are expected to remain strong. Overall, the self-storage market has a positive outlook as a promising sector increasingly favored by investors for its resiliency and long run prospects.

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