The self-storage sector experienced strong demand during the COVID-19 pandemic, supported by the shift to remote work, government stimulus and low interest rates, which contributed to increased housing transactions and rental activity. These factors drove elevated demand for storage space. More recently, the sector has faced a slowdown as some of that demand was pulled forward during the pandemic period, according to Inland Real Estate Group in a recent report. Higher interest rates and moderating demand have contributed to declining rents, cap rate expansion, softening property values and vacancy levels rising from the historic lows seen during the pandemic.
Market conditions now appear to be stabilizing, with the sector returning toward more typical operating levels. Some investors view the adjustment as positioning the self-storage market for more sustainable performance over the longer term.
To read the full report,
