The self-storage industry saw challenges in 2025 that impacted all segments of the business, from development and investing to every aspect of operation. Factors including high interest rates, a depressed housing market, rising costs, aggressive pricing practices, over supply and others made it difficult for new entrants and existing players alike to meet their goals. Now, many of us are wondering: What’s in the cards for the new year? Is the worst behind us with better times ahead, or will the sector continue to face obstacles?
In speaking with self-storage professionals to gather content in the past year, I’ve heard a range of perspectives. Some express clear optimism, while others proceed with caution and perhaps a bit of doubt. If only we had a way to see into the future!
While I don’t have a crystal ball or an aptitude for divination, I do have access to artificial intelligence. In fact, if you’ve been reading my blogs, you may remember that in June, I asked our company’s in-house AI assistant, Elysia, some commonly asked questions about the self-storage industry. That exercise yielded pretty enlightening answers. For this post, I thought I’d glean her predictions for the year ahead. Her responses below were edited only for grammar.
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What do you think … Are there glimmers of hope on the horizon for self-storage in 2026?
Will the process of acquiring self-storage assets be easier in 2026 than it was in 2025?
Acquiring self-storage facilities in 2026 is expected to become somewhat easier as market conditions stabilize, but challenges will persist. Lender confidence is gradually returning, with many still targeting acquisitions, particularly stabilized or light to medium value-add properties. However, tighter underwriting standards and a more conservative capital environment will require buyers to be more strategic.
Self-storage professionals are focusing on operational discipline, leveraging automation and digital tools to streamline acquisitions and integrate new facilities efficiently. While competition from new entrants remains a concern, the cooling of new facility development may reduce oversaturation in some markets, creating more favorable acquisition opportunities. Overall, while the process may not be as straightforward as in pre-2025 years, a disciplined and tech-savvy approach will help operators navigate the self-storage acquisition landscape successfully.
You mentioned the cooling of new facility development in some markets. Can you expand that thought and offer your prediction for next year in that area?
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New facility development in the self-storage industry is expected to remain subdued in 2026, continuing the cooling trend seen in recent years. Rising construction costs, higher interest rates, and stricter lending criteria have made it more difficult for self-storage developers to secure financing for new projects.
Additionally, oversaturation in certain markets has prompted a more cautious approach, with developers focusing on areas with strong demand and limited competition. Secondary and tertiary markets may see modest growth, as they often present untapped opportunities. However, urban markets with high saturation are likely to experience a slowdown in new builds.
Instead of aggressive expansion, many operators are expected to prioritize upgrading existing facilities, adding features like climate control and advanced security to attract self-storage tenants. This shift toward quality over quantity reflects a more strategic and sustainable approach to development in 2026.
What role do you foresee AI playing within the self-storage industry in next year? Do you see advancements? New uses?
Artificial intelligence will play an increasingly significant role in the self-storage industry in 2026, driving advancements in operational efficiency and customer experience. AI-powered tools are expected to become more sophisticated, enabling operators to optimize pricing strategies, predict occupancy trends and manage inventory with greater precision. Chatbots and virtual assistants will continue to enhance customer service, providing instant responses to inquiries and streamlining the self-storage rental process.
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Predictive analytics will help operators identify emerging market opportunities and mitigate risks, while AI-driven marketing tools will refine targeting and personalization to attract and retain tenants.
New uses may emerge, such as AI-powered facility-maintenance systems that monitor equipment and infrastructure for proactive repairs. As the technology evolves, operators who embrace AI will gain a competitive edge, leveraging its capabilities to reduce costs, improve decision-making and deliver a seamless experience for customers.
Rental rates were generally flat this year due to many factors. Do you see that changing next year? Can self-storage operators expect them to increase and, if so, at what rate do you predict?
Rent rates in the self-storage industry are likely to see modest increases in 2026, though the pace will vary by market. As oversaturation eases and demand stabilizes, operators may regain pricing power, particularly in markets with limited new development and strong population growth. Economic factors, such as cooling inflation and improved consumer confidence, could also support higher rates.
However, increases are expected to be conservative, likely in the range of 2% to 5%, as operators remain cautious about alienating price-sensitive tenants. Dynamic pricing models powered by AI will play a key role in helping operators adjust rates based on real-time market conditions and occupancy trends. While self-storage rent growth may not return to pre-2025 levels, the industry is poised for gradual recovery, with operators focusing on balancing competitive pricing with profitability.
What do you forecast for self-storage occupancy rates next year? If you see an increase or decrease, please specify the rate at which you see it doing so.
Occupancy rates in the self-storage industry are expected to stabilize or see a slight increase in 2026, likely rising by 1% to 3% in most markets. The slowdown in new facility development will help ease oversaturation, allowing demand to catch up with supply. Additionally, self-storage operators are becoming more adept at leveraging data-driven marketing and dynamic pricing strategies to attract and retain tenants. Markets with strong population growth, such as those in the Sun Belt, are likely to see the most significant improvements in occupancy. However, some urban areas with lingering oversupply may continue to face challenges.
Operators focusing on customer experience, such as offering flexible lease terms and enhanced amenities, will be better positioned to maintain higher occupancy levels. While the recovery may be gradual, the outlook for self-storage occupancy rates in 2026 is cautiously optimistic.
While we can’t know for certain how 2026 will unfold, these predictions offer a glimpse into the opportunities and challenges ahead for the self-storage industry. From stabilizing occupancy rates to modest rent increases and the growing influence of AI, the year holds promise for professionals who are willing to adapt and innovate.
As the industry continues to evolve, staying informed and strategic will be key. Only time will tell if these forecasts hold true, but with cautious optimism and a focus on operational excellence, the future looks brighter for self-storage professionals.
Ron Matejko
Associate Editor, Inside Self-Storage
Ron Matejko is associate editor at Inside Self-Storage. To reach him, email [email protected].
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