Storage spent most of the last two years on defense. New supply outpaced demand, advertised rents drifted lower, and the spread between new street rates and renewals compressed faster than most operators had modeled. The headlines tracked the pain. Underneath, the math has been quietly resetting — and the math is what matters when you underwrite for a long hold.

We don't own storage yet. It's the next vertical after our multifamily portfolio reaches scale, and we've said as much publicly. But the moment we step in matters, and the variables that decide that moment are moving. Here's what we're watching, market by market and dial by dial, going into the back half of 2026.

The Supply Pipeline Is the Punchline

This is the variable that resets everything else. New self-storage supply has been the dominant constraint on rent growth for three years; that constraint is fading faster than the consensus narrative has caught up to.

Cushman & Wakefield's U.S. Self Storage Market Trends & Sector Outlook shows new supply forecast at 2.4% of total stock in 2026, down from 3.0% in 2025 and well below the long-term average of 4.2%. That isn't a one-quarter blip. The pipeline that fed the 2022–2024 oversupply has emptied.

Extra Space's own portfolio data, surfaced in the SkyView Advisors Q1 2026 industry report, tells the same story from inside the largest operator in the country: the share of same-store properties facing new competitive supply has fallen from the high-20% range during 2021–2023 to 8% in 2025, with management guiding to 6% in 2026. When the operator with the broadest national footprint says competitive supply pressure is back to mid-single digits, that's a structural turn, not a sentiment read.

Yardi Matrix's May 2026 National Report shows approximately 46.2 million net rentable square feet still under construction nationally — down month-over-month and year-over-year. The pipeline that does exist is concentrated in the same coastal and Sunbelt corridors that drove the overbuild. Outside those corridors, the supply correction is largely behind us.

Rents Are at — or Through — the Bottom

The April 2026 Yardi Matrix data is the clearest signal we've seen in a year: month-over-month advertised street rates rose 1.0% to $16.22 per square foot for blended 10×10 non-climate and climate-controlled units. Twenty-nine of the top thirty metros tracked posted positive monthly rent growth. Year-over-year is still negative — 1.9% nationally — but the direction has turned.

StorageCafe's March 2026 national tracker noted national street rates at $131 per month, down 2.2% year-over-year, with 76% of large U.S. cities still recording annual declines. Read in isolation, that looks bad. Read alongside the April Yardi Matrix data and the supply trajectory, it reads like a market printing its low.

What we know from operating multifamily — and what applies cleanly to storage — is that the rent trough always shows up as a year-over-year negative for several quarters after monthly direction has already turned. The Q1 in-place rent growth Yardi cites at 0.6% is the leading indicator. The trailing twelve-month figure will follow.

The supply correction is largely behind us. The rent correction is printing its low. Cap rates are the variable that has not yet moved.

Where Cap Rates Have Settled

Industry-wide, self-storage cap rates currently range from 5.0% to 7.5% depending on asset quality, climate control, and market tier. Class A climate-controlled facilities in primary markets trade at 5.0–6.0%. Class B facilities in secondary markets sit at 6.0–7.0%. Class C and non-climate facilities in tertiary markets clear at 7.0–7.5% and higher. Over the past six quarters, the blended average has run near 5.8%.

For our acquisition lens, the relevant numbers are the secondary and tertiary tranches — that's where the Mountain West sits and that's where the going-in math has the most working capital efficiency for a long-hold buyer who can actually wait for the rent recovery.

Inside Self Storage's western-states coverage puts Utah and Nevada asking rates in the 6.5% range, with closed deals printing closer to 8%. Colorado is more bifurcated — class A is scarce and trading tighter, while B and B-plus inventory commands stronger relative pricing than recent comps would suggest, because buyers are reaching down the quality curve where they have to.

That spread between “asking” and “closing” is the most useful signal in the dataset. It means sellers are still anchored to a pre-correction perception of value while buyers are pricing the actual cash flow. When that gap narrows, the window we're watching closes.

The Three Markets We're Watching

Our Mountain West focus is the same on storage as it is on multifamily. The same three markets we anchor multifamily acquisitions around are the three markets we track on storage, with different cap-rate ranges that reflect each market's competitive depth.

  • Boise / Meridian, ID — 6 to 7%. Our home market. We know the population growth, the in-migration vectors from California and the Pacific Northwest, and the household-formation rates as well as anyone underwriting deals here. Storage in the Treasure Valley benefits from the same demand engine that drives our multifamily thesis at The Enclave — long-tenured residents who form households, expand them, and accumulate the kind of material life that storage exists to house.
  • Salt Lake City, UT — 6 to 7.5%. Population growth continues to outpace national averages. The metro's supply correction came on slightly earlier than the Mountain West average, which means SLC may print a recovery quarter ahead of the rest of the region. We're watching the Lehi/American Fork/Saratoga Springs corridor specifically, where multifamily formation is concentrated and storage demand follows household geography.
  • Portland / Salem, OR — 8.5 to 9%+. This is the highest cap-rate band in the tier, and it's there for a real reason: Oregon's regulatory and tax environment compresses operating margins relative to Idaho or Utah, and the perceived risk premium is wider. The compensation, when the underwriting works, is materially stronger going-in yield. Supply is decelerating across the Willamette corridor. We watch this market for the price-discovery moment — when sellers who held through the correction decide the recovery isn't coming fast enough to wait for.

How We'd Underwrite When the Time Comes

Storage doesn't underwrite like multifamily. The expense ratio is structurally different, the tenant turnover is faster, the rent-resistance curve looks different, and the value of operational sophistication compounds harder. But the discipline we apply to multifamily — what we've written about in our retention philosophy — translates cleanly.

When we step in, we'll be looking at:

  • In-place occupancy versus stabilized occupancy — and the gap between them. A facility at 78% occupied in a market trending toward 89% stabilized is a different deal than one already at 92%.
  • Street rate gap — what new move-ins are paying versus what existing tenants are paying. This is the equivalent of multifamily's loss-to-lease, and it's the single biggest source of organic NOI growth in the first two years of a hold.
  • Distance from the new-supply corridors — the same submarket discipline we apply to multifamily. A facility three or more miles from the nearest new ground-up build operates on different competitive dynamics than one inside the corridor.
  • Climate control share — what percentage of net rentable square footage is climate-controlled. The premium has compressed, but climate-controlled units still hold rent better through soft markets, which matters when the cycle turns again.
  • Existing debt structure and refi timing — owners stretched on debt or facing 2026–2027 maturities are the motivated sellers in this window, exactly like the multifamily picture we sketched in our Q2 Treasure Valley outlook.

What We're Watching Through Q3 and Q4

A few specific data points we're tracking weekly:

  • Yardi Matrix monthly advertised rate growth. Two consecutive quarters of positive monthly readings would be our threshold to start sourcing actively rather than passively.
  • Public REIT lease-rate guidance — Extra Space, Public Storage, CubeSmart, and Life Storage — for signals about move-in pricing direction.
  • Cap rate prints from completed transactions in our three markets, not just listing spreads. Real comps tell us whether the bid-ask is closing or widening.
  • Refi pressure tracking — county-level mortgage maturity data in our target markets, where assessor access permits.

Standing Posture

We don't own storage yet. We're not buying storage yet. We're tracking the variables that will decide when we step in, and we're getting comfortable with the underwriting framework before we have to apply it under deal pressure.

If you operate storage in the Mountain West and you're approaching a decision point — refi, sale, partnership — we'd be open to a conversation now. Not because we're ready to commit, but because the relationships built in the year before the cycle turns are the ones that produce the deals worth doing when it does.

The supply correction is behind us. The rent correction is printing its low. The cap rate window hasn't moved yet. That's the setup. We're watching it carefully.