Q4 2025 Self-Storage Properties Industry Report

Macroeconomic Highlights

The broader macroeconomic environment reflected a gradual normalization following the volatility of recent years, providing a steadier backdrop for real estate performance across multiple sectors. Capital markets conditions showed modest improvement as lenders became more active and transaction activity slowly began to reemerge, even as borrowing costs remain elevated relative to earlier cycles. At the same time, development pipelines across many property types remain constrained due to high construction costs and tighter financing conditions, limiting new competitive supply and supporting occupancy and rent growth within existing portfolios. 

Structural demand drivers also continued to support sector fundamentals. Persistent housing affordability challenges have sustained demand for cost-effective living options such as manufactured housing, while demographic trends—particularly the rapid growth of the aging population—are increasing demand for healthcare services and related real estate. Combined with improving capital markets conditions and limited new supply, these trends have contributed to resilient property performance and stable operating fundamentals as the industry moves further into 2026. 

Inflation and the 10-Year Treasury Since 2022

Inflation and the 10-Year Treasury Since 1962

Q4 2025 Self-Storage REIT Data Overview

Q4 2025 Self-Storage Properties Operating Fundamentals

Self-Storage Rental Rates

Rental rate trends across self-storage REITs improved during 2025 as leasing demand strengthened in the second half of the year. CubeSmart reported that year-over-year move-in rate trends improved from -10% in Q4 2024 to -8.3% in Q1 2025, -4% in Q2, +2.5% in Q3, and +2.8% in Q4 2025, reflecting a steady recovery in new-customer pricing momentum. Extra Space Storage reported that 16 of its top 20 markets posted positive year-over-year move-in rates in the fourth quarter, compared with only two markets earlier in the year, while new customer rental rates increased slightly above 6%. 

Pricing remained competitive across parts of the sector. SmartStop reported that web rates were down about 8% year-over-year in the fourth quarter, while achieved move-in rates were down 11% on average as concessions and discounting increased. Public Storage reported that move-in rents are expected to remain negative in the mid-single digits in 2026, but improve through the year, while ECRI contribution is expected to continue supporting total revenue. National Storage Affiliates reported that lower average occupancy was partially offset by 100 basis points of growth in average revenue per square foot. 

Achieved Rates (Same Store)

Self-Storage Occupancy

Occupancy across self-storage REIT portfolios remained stable in the low-90% range, though modestly below prior-year levels in several portfolios. SmartStop reported 92.3% average occupancy in the fourth quarter and 92.1% occupancy at year-end, then improved to 92.7% in January and about 92.8% in early February. Extra Space Storage reported 92.5% occupancy in mid-February, approximately 40 basis points below the prior year. 

Occupancy trends also improved across other portfolios entering 2026. CubeSmart reported that its year-end occupancy gap narrowed to down 70 basis points year-over-year, improving from down140 basis points at the end of the third quarter. The company ended January at 88.7% occupancy, only 40 basis points below January 2025. National Storage Affiliates reported that year-end occupancy was down 40 basis points year-over-year, then improved to up 20 basis points year-over-year at the end of January. Public Storage reported that occupancy was down 20 basis points in the fourth quarter and expects occupancy to remain roughly stable through 2026. 

Period Ending Occupancy (Same Store)

Self-Storage Income & Expenses

Operating performance across self-storage REITs reflected modest revenue growth and disciplined cost control as rental rate pressure persisted across parts of the sector. CubeSmart reported same-store revenue declining 0.1% during the fourth quarter, while same-store operating expenses increased 2.9%, resulting in same-store NOI declining 1.1%. 

Extra Space Storage reported same-store revenue growth of 0.4%, same-store operating expense growth of 1.1%, and same-store NOI growth of 0.1% during the quarter. Property-level expenses declined in several categories, including property taxes falling 3.4% and property operating expenses declining more than 5%, partially offset by increases in healthcare and marketing costs. 

SmartStop reported same-store revenue growth of roughly 40 basis points during the fourth quarter, while same-store operating expenses increased approximately 2%, resulting in NOI declining roughly 30 basis points. National Storage Affiliates reported same-store revenue declining 70 basis points during the fourth quarter, an improvement from a 260-basis-point decline in the prior quarter, while same-store expenses declined 80 basis points in the quarter and increased 3.1% for the full year. 

YoY Rental Income Growth (Same Store)

YoY Expense Growth (Same Store)

YoY NOI Growth (Same Store)

Self-Storage Investment & Transaction Activity

Capital deployment across the self-storage sector remained active, though several REITs emphasized selectivity and alternative investment structures. Extra Space Storage acquired 27 operating properties for $305 million during the quarter, bringing full-year acquisitions to 69 properties totaling $826 million. The company also acquired seven properties through joint ventures totaling $107 million and originated $80 million of bridge loans, bringing its bridge loan portfolio to approximately $1.5 billion. 

Third-party management platforms also continued expanding across the sector. Extra Space Storage added 78 managed stores during the quarter and 281 net new stores during the year, bringing its managed portfolio to 1,856 stores. Public Storage deployed $953 million of acquisitions during 2025, while delivering $409 million of development projects during the year and maintaining $610 million of projects under development. 

Additional portfolio repositioning occurred across other REITs. SmartStop completed approximately $369 million of acquisitions during the year, including the Argus portfolio transaction. National Storage Affiliates completed 15 property dispositions totaling $97 million and 10 acquisitions totaling $75 million during the year, with $24 million of additional property sales during the quarterand $21 million of additional sales plus $10 million of acquisitions after quarter-end. CubeSmart completed two acquisitions totaling $49 million during the quarter.

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 – September 2025

* Source: Yardi Matrix

NRSF Delivered as a % of Starting Inventory – Last 36 & 12 Months – September 2025

* Source: Yardi Matrix

Self-Storage Cap Rates & Bid-Ask Spread

Capital markets for self-storage assets remained selective as REITs balanced acquisitions with development and alternative capital deployment strategies. Public Storage reported deploying $953 million of acquisitions during 2025, while development projects within its pipeline are targeting stabilized yields of approximately 8%, reflecting higher return thresholds for new construction relativeto stabilized assets. 

Capital allocation across the sector increasingly incorporated structured investment vehicles. CubeSmart launched a $250 million joint venture with CBRE Investment Management to pursue new investment opportunities. Extra Space Storage also continued expanding capital deployment through joint-venture acquisitions totaling $107 million and bridge loan originations of $80 million, bringing its bridge loan portfolio to approximately $1.5 billion. These strategies demonstrate how REITs continue deploying capital even as pricing differences between public market valuations and private asset pricing limit traditional acquisition activity. 

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

New supply delivered over the past several years continues to affect pricing conditions in certain markets. CubeSmart reported that approximately 19% of its same-store portfolio is projected to face competitive supply in 2026, down from 24% the prior year and 50% at the peak in 2019, though still contributing to pricing pressure in several markets. National Storage Affiliates cited continued supply pressure in Phoenix and Atlanta, where development activity has slowed revenue recovery.

Regulatory and operating cost pressures also remain factors. Extra Space Storage reported an approximately 40-basis-point occupancy headwind associated with pricing restrictions in Los Angeles County, while Public Storage indicated that the Los Angeles state of emergency could create an approximately 80-basis-point headwind to same-store revenue in 2026 if it remains in place for the entire year. National Storage Affiliates also reported marketing expenses increasing 37% during the quarter and 31% for the full year, reflecting increased investment in customer acquisition. 

Tailwinds in the Self-Storage Market

Demand trends improved across several portfolios during the second half of 2025. CubeSmart reported that more than 75% of its top 25 markets experienced accelerating revenue growth from the third quarter to the fourth quarter, reflecting improving demand conditions across much of the portfolio. Extra Space Storage reported that 16 of its top 20 markets posted positive year-over-year move-in rates in the fourth quarter, compared with two markets earlier in the year. 

Leasing activity also strengthened entering 2026. National Storage Affiliates reported move-in rental volume approximately 11% higher year-over-year during the fourth quarter, while early-year leasing trends continued to improve. Public Storage reported that more than 85% of customer interactions now occur through self-service digital platforms, supported by machine learning, AI-driven pricing tools, and digital marketing systems designed to improve customer acquisition and pricing optimization. 

Q4 2025 Self-Storage REIT Data by MSA

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