Investors eye potential for long-term gains as sector navigates challenges
By Jeff Adler
The U.S. self storage industry moved into the year’s second quarter amid a mix of uncertainty, flat rate growth and long-term optimism, according to a new national report from Yardi® Matrix.
Nationwide advertised rates fell 0.2% year-over-year in March 2025, marking an improvement over the -0.8% and -1.1% figures recorded in February and January, respectively. Development has slowed due to construction and financing hurdles, while regulatory issues and rising operational costs produce additional consternation. Meanwhile, lenders are cautious and bridge loan demand is surging as properties lease up slower than expected.
But despite these challenges, “optimism persists among seasoned investors positioning for long-term gains, with increased focus on disciplined capital deployment and strategic partnerships,” the report says, and “top public and private buyers remain active despite pricing challenges.”
In March, year-over-year same-store rates for non-climate-controlled units increased in 13 of the top 30 metros tracked by Yardi Matrix. Climate-controlled unit rates increased in 17 of the 30 metros compared to March 2024.
Construction activity remained steady in March, with 55-million net rentable square feet under construction across the nation. The pipeline, which represented 2.9% of existing stock, remained unchanged month-over-month.
