The commercial real estate market has certainly faced its share of challenges over the last few years. Subsequently, many advisors and investors have steered clear, waiting for an appropriate time to reallocate to the asset class. While the market still faces several uncertainties, green shoots are emerging in a few sectors. One showing notable signs of life again is self storage.
Self storage experienced its first real cooldown in years in 2023 and early 2024. Occupancy rates declined from post-pandemic highs, and monthly street rates decreased year-over-year as supply caught up with demand. However, more recent data suggest that the correction phase is tapering off.
As of February 2025, national street rates declined just 0.8% year-over-year, the most modest decrease in over 12 months and a sign that pricing may be bottoming out1. Importantly, some major metros, including Tampa, San Jose, and Chicago, have already flipped to positive rent growth on a month-over-month basis2. While still below peak pricing, the trajectory has flattened, signaling the possibility of greater price stability heading into the second half of the year.
Occupancy trends are also encouraging. Despite seasonal softness, average occupancies are holding near 90% in stabilized portfolios for top-tier operators3. In the self storage world, that's a signal of underlying strength.
Behind the sector’s durability is a simple truth: people almost always need space. Whether driven by a job relocation, downsizing, divorce, business inventory overflow, or college move-in season, demand for storage is fundamentally tied to life transitions, not GDP.
That reality continues to hold. According to StorageCafe, one in three Americans currently uses self storage, and another 18% say they plan to in the near future4. The use case is no longer niche. It's mainstream.
In addition, two long-term trends remain supportive:
These shifts don’t appear to be temporary responses to pandemic-era disruption. They seem to represent more permanent behavioral realignments that are likely to underpin consistent user demand in the years ahead.
Investor confidence in the sector looks to be on the rise. REITs, private equity firms, and institutional platforms are once again making strategic moves. In one notable deal, CubeSmart acquired its partner’s 80% interest in a 14-property Dallas-Fort Worth portfolio for $452.8 million, demonstrating conviction in both the market and the asset class5.
Meanwhile, developers are slowing new supply pipelines. According to Yardi Matrix, as of Q1 2025, there were 56.1 million square feet of storage space under construction, down from previous highs and representing just 2.9% of total inventory6. For context, when self storage supply growth slows while demand remains steady, rent growth typically follows.
We’re also seeing increased bridge lending activity in the sector. Over 24% of storage-related bridge originations in Q4 2024 converted to permanent financing, suggesting operators see value in stabilizing and holding assets rather than flipping them quickly7. That long-term orientation bodes well for institutional participation in the future.
For RIAs, family offices, and investors seeking real asset diversification, self storage may represent an early-cycle opportunity. Its historically low correlation to traditional asset classes, combined with predictable cash flow potential, can make it a useful counterbalance in a portfolio.
But access and execution matter. Self storage performance is highly location-sensitive. Oversupply in one submarket can lead to years of underperformance, while another just a few miles away might benefit from strong absorption and constrained supply. That’s why local expertise, site selection rigor, and operational discipline are paramount.
While the overall self storage market is showing encouraging signs for investor entry points, performance can vary by location and market conditions. For that reason, it’s essential to work with only the most experienced and reputable fund sponsors who bring transparency, execution depth, and proven expertise to every investment.
Self storage may not grab headlines like AI or venture capital. However, for advisors and investors building resilient portfolios, it may be one of the smartest sectors to watch this year.