The self storage market is sending mixed signals this fall. Occupancy has held up, the big REITs beat expectations in the second quarter, and new construction is dropping fast. At the same time, the rents operators advertise to new customers are still lower than they were a year ago in almost every major metro.
Both things are true, and the space between them is where most of the risk and most of the opportunity sits right now. Here’s what the latest Yardi Matrix national reports and second-quarter REIT results actually say, and what we think they mean if you’re planning to build or buy.
Street rates are still falling
Yardi Matrix reported that national advertised self storage rates fell 1.9% year over year in August 2026, following declines of 1.6% in July and 1.5% in June. The national average asking rate came in at $16.39 per square foot across the combined mix of unit types.
The decline is broad. Compared with August 2025, non-climate-controlled rates fell in 26 of the top 30 metros, and climate-controlled rates fell in 28 of them. Climate-controlled space took the bigger hit, down 2.3% versus 1.5% for non-climate units.
Only a few markets moved the other way in August:
• Non-climate-controlled rates rose year over year in Minneapolis, Salt Lake City, Indianapolis and New York City.
• Climate-controlled rates rose in Austin and San Francisco.
• Indianapolis, Detroit and San Diego were the only top 30 metros with month-over-month rate growth.
July was the seventh straight month of annual declines in advertised rates, and August extended the streak.
Occupancy is holding, but not for the reason you’d hope
The better news came from the public operators. Yardi Matrix found that weighted-average same-store revenue growth for the self storage REITs reached 0.7% in Q2 2026, up 10 basis points from the first quarter. That was driven by a 10-basis-point occupancy gain and 0.5% growth in in-place rents. Extra Space ended the quarter at 94.2% occupancy, and Public Storage and CubeSmart reported new-customer move-in rates up 1.6% and 1.7% year over year.
But Yardi’s explanation of why matters more than the headline. According to the report, the year-to-date improvement has come entirely from fewer move-outs, not stronger demand. Home sales and migration are still slumping, so people who would normally move and clear out their units are staying put.
That keeps occupancy looking healthy. It doesn’t mean more new renters are showing up. When housing activity picks back up, move-outs will rise, and operators will have to replace long-term customers paying higher in-place rents with new customers paying today’s lower street rates. Yardi’s September report describes the gap between in-place and street rates as historically wide.
If you’re looking at an existing facility, that gap is the first number you should understand. We break down how to test it in our guide to self storage due diligence.
New supply is finally slowing
Supply is where the outlook genuinely improves.
• Yardi’s Q3 forecast projects 52.93 million net rentable square feet of completions in 2026, down almost 19% from 2025, followed by 45.25 million in 2027.
• As of August, 594 projects were under construction nationally, equal to 2.1% of existing stock and 43.8 million net rentable square feet.
• Another 1,499 projects were in planning and 299 were prospective.
• Marcus & Millichap expects 2026 deliveries to be the smallest since 2016.
Less new product means fewer facilities in lease-up competing for tenants on price, and that competition has been one of the main forces holding street rates down. It’s the main reason most operators say the sector is recovering even while advertised rates are negative.
Supply is still a local story
National construction is slowing. That doesn’t mean your trade area is safe. Yardi’s September report warns that record oversupply in many markets could stretch the recovery out for years.
As of August, the metros with the largest under-construction pipelines relative to existing inventory were:
• Phoenix: 6.2% of existing stock (down from 6.6% in July)
• Orlando: 4.6% (down from 5.1%)
• New York suburbs: third on the list
Texas and Florida markets continue to dominate the top of the supply rankings. Salt Lake City, Portland and Minneapolis sit near the bottom.
The rate data lines up with the supply data. Minneapolis, with one of the thinnest pipelines in the country, is one of the few markets still posting rate growth. On their Q2 calls, Extra Space named Houston, Tampa and Phoenix as difficult markets for new-customer pricing, while Austin, Dallas and Miami turned positive.
Local rules can move the numbers too. In Los Angeles, wildfire-related emergency pricing restrictions held rents down for months, and Public Storage estimated they’d cost about 50 basis points of full-year revenue. When the restrictions expired, LA posted the strongest month-over-month rate gain of any top 30 metro in July. No national report is going to tell you a county emergency order is capping your rents. That’s why we don’t rely on national data to make local site decisions.
What this means if you’re building
This part is our read on the data, not a forecast.
The supply slowdown opens a window. A facility that breaks ground in 2027 will likely deliver into a market with far less new competition than the projects that opened between 2023 and 2025. That’s real upside for developers with the right site.
The catch is that you can’t count on rent growth to save a thin deal. Build your numbers around today’s street rates in your trade area, not the 2022 peak, and test what happens if lease-up runs longer than you planned. If the project only works with fast rent growth, that’s a warning sign.
Pay close attention to:
• Every project under construction, approved or proposed within your trade area, not just the ones already open.
• Your unit mix. Climate-controlled rates fell harder than non-climate rates in August, so the right split matters more than it did two years ago.
• Construction costs, which have been cooling and may change the math on a site you passed on last year.
What this means if you’re buying
Large investors still like this asset class. Yardi notes that the sector remains favored by institutional capital and that transaction activity and pricing have continued a gradual recovery in 2026. Consolidation is accelerating too. Public Storage closed its $10.5 billion acquisition of National Storage Affiliates this summer.
For private buyers, the biggest risk is paying a price that assumes a facility’s current rent roll will hold. If tenants are paying well above what a new customer would pay today, some of that income will walk out the door as turnover returns to normal. Compare the rent roll against street rates at the closest competitors, unit size by unit size, before you settle on a number.
The bottom line
Fall 2026 looks like an early recovery with a long tail. Supply is slowing, occupancy is steady and move-in rents at the largest REITs have turned positive. But street rates are still negative in most metros, new-rental demand hasn’t picked up and oversupplied markets could take years to absorb what’s already been built.
That’s a market that rewards site-level homework. National numbers tell you which way the industry is heading. They can’t tell you whether a specific parcel has room for another facility, what unit mix it can absorb or how long lease-up will actually take.
If you’re weighing a site right now, a BMSGRP Snap Report is a fast, low-cost first look at whether it’s worth pursuing. When you’re ready to go to a lender, our full feasibility study gives you the market analysis they expect to see. BMSGRP has been in self storage consulting for more than 30 years, and we don’t build, broker or manage anything. Our only job is to tell you whether the numbers work.
Frequently asked questions
Is the self storage market recovering in 2026?
Partly. REIT occupancy and in-place rents improved in Q2 2026, and move-in rents at Public Storage and CubeSmart turned positive year over year. But national advertised rates were still down 1.9% year over year in August, and Yardi Matrix attributes most of the improvement to fewer move-outs rather than stronger demand.
Why are self storage rents still falling?
Two main reasons. Demand from home sales and migration remains weak, and many markets are still absorbing facilities delivered during the 2021 to 2025 building cycle. Newer facilities in lease-up often compete on price, which pulls down street rates for everyone nearby.
Which markets have the most self storage under construction?
As of August 2026, Phoenix had the largest pipeline among the top 30 metros at 6.2% of existing stock, followed by Orlando at 4.6% and the New York suburbs. Texas and Florida markets generally rank highest for new supply, while Salt Lake City, Portland and Minneapolis rank lowest.
Is now a good time to build self storage?
It depends on the site. Slowing national construction should mean less competition for projects delivering in 2027 and beyond, but some metros remain heavily oversupplied. A project should work at today’s local street rates with a conservative lease-up schedule. A feasibility study is the best way to find out whether a specific site meets that bar.
