Self Storage Demand Has Turned
Q1 results point to a turnaround, notes DXD Capital's Cory Sylvester.
Across the self-storage universe, something pivotal shifted in Q1 2025. After 18 months of sliding occupancies and move-in rates, REIT titans Public Storage, Extra Space and CubeSmart all dropped a common refrain this quarter: Demand has turned.
With move-in declines narrowing, street rates stabilizing and digital traffic climbing, the long-anticipated inflection point has arrived. For multifamily operators watching ancillary income streams—or simply tracking broader renter behavior—this isn’t just another feet-on-the-ground metric. It’s a leading indicator of where renters are going next, how they’re spending and what to expect from the 2025 rental cycle ahead. Let’s dive into the data that underpins this turning point—and why it matters for the broader housing ecosystem.
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The data speaks volumes
- CubeSmart saw move-in declines narrow dramatically, from—10 percent in Q4 to just 2 percent in April. Flat year-over-year rentals in Q1? In today’s climate, that’s a win.
- Extra Space took it further. By the end of April, their street rates were flat year over year and occupancy jumped to 93.7 percent—100 basis points higher than Q1 2024.
- Public Storage reported rising rental volumes and shrinking occupancy shortfalls.
We’re not back to 2021 pricing power, but this quarter marked the first time in over a year where all three operators saw month-over-month rate increases and positive demand indicators—particularly in digital traffic and customer inquiries.
As the chart below shows, rental rates have experienced short periods of softness over the last 20 years, followed by much longer periods of sustained growth.
Why it matters
We may be entering a unique period in the storage cycle with pricing stabilizing, customer demand returning to baseline and new supply slowing down. What’s unique here is high mortgage rates continue to constrain the transaction volume in the housing market as home sales remain near historical lows.
The implication is that, if home sales were to accelerate, that would be an additional tailwind for self storage demand.
We believe that Q1 2025 looks set to go down as the turning point for self-storage momentum. With developers largely on pause, the outlook for new site builds is bullish. And for multifamily operators keeping an eye on ancillary income streams—or simply tracking broader renter demand—this is a trend worth watching.
Cory Sylvester is principal, DXD Capital.
