Self Storage Forecast Rises Amid Construction Slowdown

Yardi Matrix raised its new supply forecast by 4.3% for 2025 and 4.6% for 2026 due to a larger-than-anticipated under-construction pipeline.
Despite the short-term uplift, construction starts continue to decline from the 2023 peak, and the pipeline for future projects is contracting across planned and prospective phases.
A rise in abandoned and deferred projects suggests developers remain hesitant amid weak rental growth and NOI performance by self storage REITs.

Key Takeaways

Forecast Adjustments For 2025 And 2026

Yardi Matrix revised its self storage new supply forecast upward in Q4. The projection now stands at 59.4M NRSF for 2025 and 48.2M NRSF for 2026. These figures represent increases of 4.3% and 4.6%, respectively, compared to Q3 projections. This change stems from a larger-than-expected under-construction pipeline that should largely complete by the end of 2026.

Bar and line chart showing U.S. self storage under-construction NRSF and properties from Jan 2018 to Jul 2025. Construction peaked in late 2023 and declined into 2025.

Construction Trends Signal Softening Momentum

Although Q3 saw a modest 2.6% quarter-over-quarter increase in construction starts, the overall trend remains negative. Construction activity is down 21% from its peak. Additionally, 2025 year-to-date starts are lagging behind the pace set in 2024. Days in construction now average 410 days, up slightly from the previous quarter.

Line chart displaying quarterly U.S. self storage construction starts from Q1 2018 to Q2 2025. Data shows a sharp decline after peaking in late 2023.

Line graph showing average construction duration for U.S. self storage properties from 2017 to Q3 2025. Trend shows increasing build times past 2021.

Weakening Future Pipeline

Planned pipeline: Down 10.3% YoY to 118.4M NRSF, with a slower decline rate than under-construction inventory.
Prospective pipeline: Down 18.8% YoY and 35.6% from its 2023 peak, indicating reduced appetite for longer-term development.
Deferred projects: Up 33.3% YoY, suggesting more developers are putting projects on hold due to market uncertainty.
Abandoned projects: Average of 52 per month, up sharply from just 7 per month in mid-2022.

Bar and line chart tracking U.S. self storage planned pipeline (NRSF and property count) from Jan 2018 to Jul 2025. Trend shows a decline after 2024 peak.

Bar and line chart showing U.S. self storage prospective pipeline (NRSF and property count) from Jan 2018 to Jul 2025. Activity declines after 2023 peak.

What’s Driving The Caution?

Rental rate growth turned positive in September for the first time in three years. Still, overbuilding in 2023 and 2024 has kept pressure on occupancy and rates. Public self storage REITs have posted negative net operating income growth from late 2023 through mid-2025, dampening developer confidence.

Bar and line chart showing number of abandoned U.S. self storage projects from 2018 to mid-2025. Sharp rise begins in late 2022.

What’s Next?

Yardi expects new supply to taper off to 1.5% of stock annually in the coming years unless rate growth accelerates and monetary policy loosens. If rental rates recover meaningfully, future forecasts could shift upward.

Bottom Line

While the near-term forecast has been revised higher, the self storage development cycle is shifting. It appears to be entering a more cautious, demand-driven phase. Developers are reacting to economic uncertainty, elevated supply, and soft operating fundamentals.