Self-Storage in 2026: Moving Beyond the Post-Pandemic Correction

The self-storage industry is finally settling down after a rocky two-year adjustment period following the pandemic era. The surge in 2021-2022 gave way to a pullback as home sales cooled and new self-storage supply flooded the market.¹ However, by 2026, the sector has found more solid ground: demand is holding steady, occupancy levels have stabilized within a healthy range, the pace of new construction is easing, and rents are starting to tick upward again in several markets.²

Overall, the industry is shifting out of its rapid post-pandemic growth phase and into a steadier, more predictable operating rhythm. Better pricing momentum, slower supply growth, and more diligent capital allocation are shaping how the sector will perform throughout 2026-2027. Meanwhile, transaction volume has picked back up as both buyers and sellers adapt to a higher interest rate environment.

Chart 1: Occupancy Rates 2022-2026^1,3,4

Occupancy

At the start of 2026, occupancy levels looked similar across the six major regions in the U.S., spanning a range of 84.0% to 95.3%.³ Fewer tenants moving out, combined with a slower pipeline of new facilities, have made leasing conditions more favorable while pushing occupancy higher. This more balanced demand across regions may also translate into a broader allocation of investment activity, with each region capturing at least 10% of total transaction volume for the year.

Major public operators are reporting solid occupancy figures.³

Chart 2: Occupancy Per Facility^4,5,6

Rental Rates

Rent growth remains subdued but is trending in the right direction. Data from Yardi Matrix showed the national average asking rate for self-storage space climbed 0.7% through June, bringing the average to $16.48 per square foot across a blended mix of unit types and sizes.²

Cap Rates 

Nationally, cap rates for self-storage assets are averaging around 5.8%.³ Breaking that down by asset class:

For investors, that spread reflects more than simply property quality. It represents the balance between risk, current income, and potential upside. Class A assets in strong markets typically command lower cap rates because investors are willing to pay a premium for stabilized occupancy, newer facilities, stronger locations, and more predictable cash flow. Class B assets, meanwhile, can offer higher going-in yields and potentially more room for value creation through operational improvements, renovations, or improved revenue management.

The Capital Markets Perspective 

As transaction volume picks back up, the financing side of the market is adjusting in step. Mortgage banking firms active in the self-storage space report more disciplined underwriting than during the 2021–2022 boom, with capital sources favoring stabilized, income-producing assets over speculative development⁷.

As a commercial real estate mortgage banking firm that arranges debt and equity financing for self-storage alongside multifamily, industrial, and retail assets, Peakhill views the sector’s underlying fundamentals as a key driver of investor appetite. As Will Flaa, Vice President of U.S. Capital Markets, explains:

Will Flaa

Vice President of U.S. Capital Markets

“Self-storage benefits from one of the most stable income streams in commercial real estate. Tenant turnover is comparatively low because customers are reluctant to incur the costs as well as the inconvenience of relocating stored possessions. This embedded customer retention creates a highly predictable and diversified revenue base. When paired with low expense ratios and limited ongoing capital expenditures, self-storage assets have demonstrated exceptional cash flow durability and downside protection.”

For Peakhill, self-storage checks several key boxes when evaluating deal fundamentals. It combines low tenant turnover with minimal capital expenditure requirements, which keeps net operating income more predictable in comparison to other property types with longer lease-up periods or heavier reinvestment needs. Supply growth has started to cool down. New construction is projected to fall to roughly 2.4% of existing inventory in 2026, well below the long-term average.³ This gives stabilized assets room to hold occupancy and pricing power. This combination of durable cash flow, lower operating risk, and a shrinking development pipeline makes self-storage a valuable asset class for investors.

Investor Demand 

The combination of predictable cash flow and low capex puts borrowers in a favorable position even as investors grow more selective. As rate pressure eases and deal activities normalize, we anticipate continued momentum from owners and operators looking to refinance or expand.

With demand becoming more balanced across regions, transaction activity follows suit, though the Southeast is still expected to lead in overall deal volume. The Rocky Mountain region is emerging as a bigger player, having captured a record 15% share of transactions in 2025.⁴ Strong population growth and healthy occupancy are also drawing investor interest in Phoenix and Las Vegas, even though both metros have a significant new supply in the pipeline.

The sector’s resilience is fueling continued transaction activity. In fact, 2025’s transaction volume was surpassed only by the exceptional run from 2021 to 2023.⁴ Private investors drove much of that momentum, capturing their largest share of total sales volume in six years, while REITs remained active on both the buying and selling sides. We are seeing this broadening play out as borrowers pursue deals outside the traditional Southeast stronghold. They are looking for the right capital solutions to align with increasingly diverse regional opportunities.

Most active buyers are not expected to overhaul their investment strategies dramatically in the short term, but the markets they target could broaden. With vacancy rates looking similar across major regions moving through 2026 and into 2027, deal activity may end up more evenly distributed nationally as the Southeast continues to set the pace.³

Outlook for Self-Storage Assets  

Key themes to watch include the pace of new supply coming online, whether rent growth can build on its recent modest gains, and how investor appetite shifts as regional occupancy and demand patterns continue to even out. At Peakhill Capital, our experienced team provides tailored capital solutions across all asset classes, helping investors navigate market conditions and capitalize on opportunities with the right financing strategy.

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Footnotes

1. SkyView Advisors. 2026. Q1 2026 Self-Storage Industry Report. ↩︎
2. CRE Daily. 2026. Self-Storage Rents Fall 1.6% as Supply Growth Moderates. ↩︎
3. SkyView Advisors. 2025. Q3 2025 Self-Storage Industry Report. ↩︎
4. SkyView Advisors. 2025. Q4 2025 Self-Storage Industry Report. ↩︎
5. Yardi Matrix. 2026. Self-Storage Property Type Overview. ↩︎
6. The Storage Brief. 2026. Self-Storage Industry Statistics 2026. ↩︎
7. SkyView Advisors. 2025. Q3 2025 Self-Storage Industry Report. ↩︎