Q1 2026 Self-Storage Industry Report

Macroeconomic Highlights

Self-Storage Market Trends 2026: The broader macroeconomic environment during Q1 2026 reflected continued stabilization across commercial real estate despite elevated interest rates and ongoing capital market uncertainty. Public real estate operators generally reported stable occupancy trends, continued rent growth, and resilient operating performance, while lenders including banks, life companies, and agency-backed financing sources remained active in the market for high-quality assets. Although borrowing costs remain elevated relative to prior years, transaction markets showed signs of gradual improvement as capital availability modestly increased and investors continued pursuing assets with stable cash flow characteristics. 

New supply growth across many property types also remains constrained due to elevated construction costs, tighter underwriting standards, labor shortages, and longer development timelines. As a result, many existing assets continue benefiting from limited competitive supply entering the market. At the same time, long-term demographic trends, ongoing housing affordability challenges, and continued migration toward lower-cost living options remain supportive of real estate demand fundamentals across multiple sectors. Combined with improving operational efficiencies and disciplined capital allocation, these conditions contributed to relatively stable property performance entering the remainder of 2026. 

Inflation and the 10-Year Treasury Since 2022

Inflation and the 10-Year Treasury Since 1962

Q1 2026 Self-Storage REIT Data Overview

Q1 2026 Self-Storage Operating Fundamentals

Self-Storage Rental Rates

Rental rate performance improved sequentially across much of the sector during Q1, though conditions remained highly market dependent. CubeSmart reported same-store revenue growth of 0.6% and stated that move-in rates improved throughout the quarter, finishing March and April up 2% year over year across all markets. The company highlighted particularly strong performance in New York, Washington D.C., Chicago, and the broader Acela corridor, while Miami swung back to positive same-store revenue growth and Phoenix and Atlanta began recovering from elevated supply pressure. Management also noted that 21 of its top 25 MSAs improved sequentially during the quarter. Extra Space Storage generated 1.7% same-store revenue growth, accelerating 130 basis points sequentially from Q4 2025, while average new customer rates increased roughly 2.5% on a per-square-foot basis during the quarter. January and February pricing trends were especially strong at 5%–6% growth before moderating to slightly above 1% growth in March. National Storage Affiliates Trust reported average annualized rental revenue per occupied square foot increased 0.6% to $15.88, with Portland, San Juan, and Colorado Springs outperforming portfolio averages. 

Pricing conditions remained weaker in several Sunbelt and value-oriented portfolios. Public Storage reported move-in rents declined 2.4% year over year during Q1, though management stated results were better than expectations entering the year. Occupancy gains and lower churn partially offset weaker asking rates, while management noted stronger pricing trends across coastal and Midwest markets relative to several Sunbelt regions. SmartStop Self Storage REIT reported achieved move-in rates per square foot declined 7% during Q1 and 6.5% in April, though move-in rates measured per unit increased 2% during the quarter and 1% in April. SmartStop also disclosed that April web reservations exceeded 10,000, up 25% year over year. Across multiple REITs, management teams stated that moderating new supply pipelines were helping stabilize pricing trends. 

Achieved Rates (Same Store)

Self-Storage Occupancy

Occupancy trends strengthened materially during the quarter as lower move-out activity and moderating supply improved leasing conditions. CubeSmart reported a 240% increase in net rentals during Q1, driven by steady demand and declining vacates, allowing the year-over-year occupancy gap to narrow to just 20 basis points by the end of April. The company stated vacates declined 3.9% during the quarter, while April move-ins increased approximately 1% year over year. Extra Space finished the quarter at 93% same-store occupancy, only 20 basis points below the prior year, while the occupancy gap improved 50 basis points since year-end. Management also noted that 64% of customers now stay longer than 12 months, up 167 basis points year over year, while 46% remain longer than 24 months, up 190 basis points. Public Storage reported occupancy growth of 0.4% year over year, outperforming internal guidance assumptions for flat occupancy during 2026, with management citing materially lower churn and healthier existing customer behavior. NSA increased same-store occupancy 70 basis points year over year to 84.5%, with April occupancy rising another 90 basis points year over year to 84.9%. 

SmartStop maintained average occupancy of 92.5% during the quarter and increased occupancy to 92.6% in April, representing a 30 basis point sequential increase from March. The company’s Asheville portfolio, which had been negatively impacted by weather events, improved substantially as its occupancy gap narrowed from 260 basis points year over year in Q1 to 130 basis points by April, reaching 92.2% occupancy. Public Storage also highlighted that move-out activity was “meaningfully lower” during the quarter, helping offset softer move-in activity caused by weather and uneven demand. Across major REITs, customer retention remained elevated relative to pre-pandemic norms, supporting occupancy despite continued pricing volatility in supply-impacted markets. 

Period Ending Occupancy (Same Store)

Self-Storage Income & Expenses

Expense management became a major differentiator during Q1 as weather-related costs created volatility across the sector. CubeSmart reported same-store operating expense growth of 5.8%, with snow removal expenses alone contributing roughly 120 basis points of growth. Same-store NOI declined 1.5% as expense growth outpaced the company’s 0.6% revenue growth. Extra Space faced similar pressure from weather-related utilities and repair costs, though management stated expense growth would have been 1.5% excluding those items. Despite elevated costs, Extra Space still delivered 1.2% same-store NOI growth, improving 110 basis points sequentially from the prior quarter. NSA reduced same-store operating expenses by 3.9%, driven primarily by lower personnel, utilities, and repair costs, allowing same-store NOI to increase 2.0% despite only 0.2% revenue growth. 

Public Storage reported same-store expense growth declined 1.6% year over year. Management attributed the improvement to lower payroll, repairs and maintenance, utilities, marketing costs, and a $3 million property tax appeal benefit recognized earlier than expected. Same-store NOI increased 0.5%, while non-same-store NOI increased 27% and ancillary income increased 12%. SmartStop also limited same-store operating expense growth to 60 basis points and expanded same-store operating margins by 30 basis points. Beyond core property operations, REITs increasingly referenced ancillary businesses as contributors to growth. Extra Space reported management fee and other income growth above 9% year over year alongside 5% tenant insurance growth, while CubeSmart expanded its third-party management platform to 854 stores and Extra Space increased managed stores to 1,916. SmartStop’s managed REIT platform surpassed $16 million of annualized revenue during the quarter. 

YoY Rental Income Growth (Same Store)

YoY Expense Growth (Same Store)

YoY NOI Growth (Same Store)

Self-Storage Investment & Transaction Activity

Acquisition activity remained disciplined during Q1 as REITs continued discussing disconnects between public and private market valuations. CubeSmart stated that wholly owned acquisitions remain challenging due to valuation gaps, pushing the company toward joint venture structures instead. During the quarter, CubeSmart closed the first store within its new $250 million joint venture with CBRE IM focused on high-growth markets. Extra Space projected approximately $200 million of acquisitions during 2026 but indicated materially more transaction volume would likely occur through joint venture structures rather than wholly owned acquisitions. Management also stated that recent institutional transactions were still trading at sub-5% initial cap rates. Public Storage reported $186 million of acquisitions or assets under contract year-to-date, largely sourced through off-market channels aligned with its PSNext platform strategy. NSA acquired one wholly owned property totaling roughly 47,000 rentable square feet and approximately 500 units for $10.4 million during Q1, while simultaneously disposing of three properties totaling roughly 199,000 rentable square feet and 1,500 units for $20.6 million. 

Public Storage’s announced acquisition of NSA represented the largest transaction discussed during the quarter. Public Storage stated the transaction values NSA at approximately $10.5 billion enterprise value and will include ownership interests in more than 1,000 assets. Management projected $110 million to $130 million of synergies tied to operational integration and portfolio optimization.  Meanwhile, SmartStop expanded into bridge lending through a strategic joint venture with Axxess Capital and disclosedmore than $100 million of active lending opportunities with targeted yields ranging from 10% to 14%. 

Acquisition Dollar Amount History

*Excludes PSA Acquisition of ezStorage in Q2 2021 for $1.8 Billion

*Excludes PSA Acquisition of All Storage in Q4 2021 for $1.5 Billion

*Excludes PSA Acquisition of Simply Storage in Q3 2023 for $2.2 Billion

*Excludes EXR Acquisition of Life Storage in Q3 2023 for $11.6 Billion

Under Construction NRSF as a % of Existing Inventory – March 2026

* Source: Yardi Matrix

NRSF Delivered as a % of Starting Inventory – Last 36 & 12 Months – March 2026

* Source: Yardi Matrix

Self-Storage Cap Rates & Bid-Ask Spread

Management commentary across the sector consistently pointed to elevated private market pricing and stubborn bid-ask spreads despite improving operating fundamentals. CubeSmart stated that buying back shares represented a more attractive use of capital than acquiring stabilized assets at prevailing private market valuations. Extra Space similarly noted that recent transactions continued clearing at sub-5% initial cap rates, while management stated that buyers appeared to be underwriting future recovery into transaction pricing. Public Storage also characterized acquisition opportunities as selective and emphasized continued discipline despite growing transaction activity. The acquisition of NSA was purchased at a loaded mid-5% going-in cap rate on the ~$10.5 billion enterprise value (including debt) with a price of around $180 per square foot. Post-value creation, the implied cap rate is really in the low- to mid-6% range.” 

Joint ventures increasingly became the preferred structure for completing transactions in the current environment. CubeSmart’s CBRE IM partnership, Extra Space’s anticipated asset-light acquisitions, Public Storage’s NSA joint venture structure, and SmartStop’s expansion into bridge lending all reflected efforts to preserve balance sheet flexibility while still pursuing growth opportunities. REITs broadly stated that capital costs remain elevated relative to acquisition pricing. 

Implied Cap Rate History

*The implied cap rate data indicates the market value of each REIT.   

 

The implied capitalization rate is a culmination of the company value and total debt of each company divided by its NOI. 

  

Enterprise Value History

Headwinds in the Self-Storage Market

Supply pressure across major Sunbelt markets remained the most frequently cited operational headwind during Q1. CubeSmart described continued weakness across transient and supply-impacted Sunbelt and West Coast markets, though management acknowledged improving trends in Phoenix, Atlanta, and Miami. Extra Space similarly stated that Atlanta, Austin, Dallas, Miami, and Phoenix continued experiencing elevated competitive supply pressure, even as new deliveries moderated materially from prior years. Public Storage reported uneven operating conditions across Sunbelt markets and continued softness in customer move-in activity during the quarter, while SmartStop cited geopolitical uncertainty during March as a temporary drag on leasing demand. NSA also identified Atlanta and Phoenix among its weakest same-store revenue markets during the quarter. 

Regulatory constraints and elevated operating costs also weighed on sector performance. Public Storage estimated Los Angeles emergency regulations would reduce same-store revenue growth by roughly 80 basis points during 2026, while Extra Space projected a 40 basis point headwind from similar restrictions in Los Angeles County. Weather-related costs created additional pressure, particularly snow removal expenses at CubeSmart and Extra Space. REITs also continued citing macroeconomic uncertainty, elevated financing costs, and aggressive private market pricing as ongoing constraints on transaction activity and external growth. 

Tailwinds in the Self-Storage Market

Supply moderation remained the clearest positive trend discussed across the industry during Q1. CubeSmart stated that the development wave from recent years continues leasing up while the forward supply pipeline remains lighter, particularly in high-barrier urban markets such as New York. Extra Space disclosed that the percentage of same-store properties facing new competitive supply has fallen from the high-20% range during 2021–2023 to 8% in 2025, with expectations for 6% in 2026. Public Storage stated that new development is becoming harder and more expensive nationally. Across multiple REITs, management teams reported improving occupancy trends, narrowing occupancy gaps, moderating supply pipelines, and stabilizing move-in rate trends entering the 2026 leasing season. 

REITs also highlighted lower churn, longer customer stays, increased digital engagement, and expanded pricing analytics capabilities during the quarter. Public Storage discussed increasing customer interaction through digital channels and expanded use of PSNext analytics and pricing systems, while SmartStop reported record online reservation activity entering rental season. Extra Space stated that its pricing algorithms continue optimizing occupancy, rates, and marketing spend simultaneously to maximize revenue. Public Storage also stated that self-storage adoption has increased over the last decade and participation has broadened across younger customer cohorts. 

Q1 2026 Self-Storage REIT Data by MSA

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