Let me share what I’ve gathered about the state of the self-storage industry halfway through 2025. This is based on the latest Yardi Matrix data, Radius insights, REIT shareholder reports, and—just as importantly—my own observations and experience in the trenches.
Before we dive in, a word of caution: take everything you read about the industry (including this blog) with a grain of salt. Why? Because how data is gathered matters—and that’s rarely discussed.
For example, Yardi does a solid job providing an industry-wide snapshot with average rental rates, occupancy trends, new supply data, and more. But their numbers reflect 34,069 facilities—out of roughly 53,000–55,000 nationwide. So, the data reveals trends, not absolutes.
And let’s not forget—self-storage is as local as it gets. National or regional averages may push rates up or down slightly, but what truly matters is the local trade area. Supply, demand, revenue strategies, and marketing from competitors are what move the needle.
I have owned facilities in a “declining” self-storage rental rate environment and had 3% to 6% rental rate increases, and vice versa.
Nothing replaces drilling down into a trade area and, if bringing more space on in a project, getting a good feasibility report.
Another blind spot in industry data? Omitted properties in lease-up. For example, one major brokerage firm reports market vacancy rates but excludes lease-up facilities—skewing the reality significantly.
With that context, here’s my take on where we are mid-year 2025:
Regional Breakdown
Southeast: This region saw a big migration wave over the last decade, especially during the pandemic. That triggered a lot of development—myself included. As a result, it may now have the highest supply per capita in the U.S.
Average rental rates have dipped slightly—about 0.5% since the start of 2025—but it varies by market. Some areas saw a slight uptick from April to May, while others (like Atlanta) dropped 0.7% monthly and are down 1.9% year-over-year.
Also, perhaps no region of the country is being hit with insurance cost increases as much as this part, so operational costs are going up. I recently looked at a conversion deal where I was putting in the Performa a $50,000 per year insurance number based on quotes.
There is still strong interest from Buyers here (again, myself included), but there’s a disconnect: sellers are still thinking in 2019–2020 valuations, while buyers are underwriting with 2025 realities.
Southwest: This region is heating up. Many players who focused on the Southeast are now eyeing the Southwest, including those relocating from California.
Inventory has risen, but rental rates are holding up better than in the Southeast. For example, Austin saw a 1.5% increase from April. Most major markets are up, with Las Vegas being a notable exception—down 0.8%.
CAP rates are stable. Median incomes and average rents are higher than in the Southeast (e.g., Phoenix averages $15.69 vs. Atlanta’s $13.96). But higher construction costs and stricter regulations—like Phoenix’s opaque wall requirement in some areas are slowing new development.
Midwest: What I’m seeing is stability. Demand and valuations are steady. There’s moderate buyer interest, especially in major markets. But in secondary markets, lower rental rates make development harder to pencil out—especially if construction is required.
Northwest: I don’t actively invest here, but from what I can tell, population growth is strong and pushing demand upward. Rents are rising, and fundamentals look solid. This may be a good region to acquire existing facilities with room to expand or upgrade.
Northeast & Mid-Atlantic: From what I can see, these areas have perhaps the highest demand for self-storage of any region. It also appears to have the highest barrier entry due to land cost and approval hurdles and time frames.
Rents are higher due to low per capita supply; values and CAP rates are steady. Rents are especially high in major markets. Also, education levels are higher in this region of the country, so the population adapts to downturns in the economy faster and better. Economic demographics are stronger, too.
For new entrants, it’s a tougher region to break into. But if you’ve got patience, capital, and the appetite for a longer runway, it could be worth the effort.
Acquisition Tips for 2025
- Don’t chase regions—chase strong rents that support current construction costs.
- Use online tools to identify trade areas with unmet demand—it’s never been easier.
- Secondary markets are active, but don’t be fooled by high CAP rates in oversupplied areas.
- The best news? New supply is slowing down.
Over the past three years, new supply averaged 9.4% of existing inventory. But in the trailing 12 months (as of May), it’s down to just 2.9%.
San Antonio saw the biggest 12-month supply bump, pushing rents down 2.3%. Minneapolis, on the other hand, saw a sharp drop in lease-up supply—down 400 basis points—which led to a 1.3% asking rent increase year-over-year.
Due to a slowdown in new supply, there appears to be a window for savvy Buyers in the space over the next 12 months. Focus on storage fundamentals, don’t over-leverage, and focus on markets where rents are strong enough to justify construction.
These are my personal takeaways from all the data and trends out there in the self-storage world halfway through 2025. If you’re new to the space, underwrite carefully. But remember—when others are sitting on the sidelines, opportunities open up.
