Self-Storage REIT Update – January 2025

January 6, 2025

Self-storage demand has slowed, with increasing vacancy rates and rents flattening. All major REITs are forecasting negative revenue and NOI guidance. At the same time, high construction costs and interest rates have constrained the development pipeline, giving existing operators an edge in managing rates and occupancy through 2024 and into 2025. The slowdown in construction could benefit the sector in late-2025 and into 2026.

As capital markets normalize and housing pressures ease, the sector is likely to see rent increases once current supply is absorbed. Despite challenges, the sector remains attractive to investors, supported by its proven resilience and strong long-term prospects. Overall, the self-storage market maintains a positive outlook, driven by its sustainable growth potential.

For more information on the self-storage sector, please reach out to: