2026 Self Storage Cycle Check

Same Thesis. More Evidence.

At this time last year, we wrote that 2025 wouldn’t be the year of breakout growth, instead it would mark the beginning of a turn in the self storage cycle. That view has largely played out. The story wasn’t told in flashy headlines, but in fundamentals that quietly began to reset.
Occupancy held firm. Rent trends stabilized. Capital remained disciplined. And most importantly, the development pipeline continued to retreat. Public Storage reported permit activity down more than 50% from its peak. Extra Space project deliveries will remain well below average through 2027. The message is clear: supply is no longer a headwind, it’s becoming the tailwind.

We Expect Deliveries to Continue to Decline

And while demand hasn't surged, it’s important to distinguish between weak demand and 2026delayed demand. We’re living in a moment of record-low housing turnover, with existing home sales as a share of U.S. households at a 40-year low. But this isn’t 2009. There’s no flood of distressed sellers or collapsing consumer balance sheets. This is a housing market frozen in place—not broken.

Existing Home Sales As a Share of Total Households

That distinction matters because when mobility returns, it will encounter a self storage environment that has already rebalanced. New competition has stalled, promotional pressure is easing, and we’re now seeing more favorable construction pricing, which only strengthens the forward economics for those developing into this cycle, not out of it.

This environment favors groups with local expertise, strong lending relationships, and conviction. In many ways, it’s the perfect time to build. The deals you start in 2026 will deliver into a very different market by 2028 or 2029.

That’s the core of our thesis at DXD Capital. We aren’t trying to time the exact bottom. We’re building into the next leg of the cycle, one high conviction deal at a time.