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Self-Storage Experts Make Predictions Regarding Industry Performance and Investing Trends in 2025
ISS Staff
November 15, 2024
2 Min Read
“Multi-Housing News,” a publication for the multi-family real estate sector, has published an article containing insight from self-storage professionals who offer predictions about the industry’s performance in 2025. It reports that this year has been one of adjustment following the COVID-19 pandemic and the sector is seeing softening fundamentals across many key markers.
One influence on the industry has been rising interest rates, which have impacted self-storage rents. The advertised street rate per square foot declined 3.5% year-over-year as of September to $16.55, according to a recent report from Yardi Matrix, a self-storage data-services platform.
“Performance has been lackluster,” said Brian Cohen, CEO and president of Andover Properties, which operates the Storage King USA brand. “Roughly 15% to 20% of self-storage demand comes from housing mobility, and incredibly high interest rates have kept people from moving.”
Doug Ressler, manager of business intelligence for Yardi, agreed. “Home sales, which helped push occupancy and rent growth to all-time highs during the pandemic, have remained near a two-decade low,” he told the source. This translated into declining revenue and net operating income growth during the second quarter for the self-storage real estate investment trusts, he added.
The industry also faces overbuilding in some regions, the article stated. “Now markets are experiencing excess supply, pushing rents down and causing some stress on newly built projects,” said Tom de Jong, executive vice president of investing for the National Self Storage Team of Colliers International.
Even so, the experts interviewed are optimistic about how the self-storage industry will perform next year. They point to stabilization in occupancy levels, increases in rental rates and a boost in acquisitions as interest rates begin to drop and new investors enter the market. These factors, plus the resilient nature of the sector, point to a promising year.
“When people move, get divorced, downsize, relocate, start a business, grow their families, retire or experience any number of other personal changes, they turn to storage,” said Ryan Gibson, president of Spartan Investment Group, an investment firm that operates the FreeUp Storage brand.
“Multi-Housing News” reports on news, trends and issues in real estate markets across the United States as well as those that affect the industry nationally. The publication also offers marketing tips, case studies, executive interviews, data and guest columns from industry experts.
Source: Multi-Housing News, How Will Self Storage Perform in 2025?
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