Self-Storage Construction Slows as Investment Activity Rises
The self-storage market shows signs of stabilization with a slowdown in new supply and increased investment activity, according to Marcus & Millichap's second-half report. In 2026, the sector is expected to see only 53 million square feet (SF) of completions—a 2.2% increase from total inventory—marking the smallest delivery since 2016. Despite this slowdown in construction, asking rents are still projected to fall by 0.8% year-over-year due to ongoing pressure from newer properties needing tenants. Vacancy rates are expected to decline slightly to around 10%, driven more by tenant retention than new demand growth. Construction activity has dropped significantly compared to previous years, with first-half completions at their lowest since 2014 and a notable reduction in openings across most major markets. Development remains focused on high-growth areas like Phoenix, Houston, and Dallas-Fort Worth. Investor interest is rebounding as well, with self-storage transactions up nearly 20% year-over-year through June and deal volume increasing by almost 50%. However, larger deals remain below pre-pandemic levels. The South remains the most active region for trades while smaller transactions have shown stronger resilience.
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Topics: commercial real estate market trends supply and demand