Self-storage is on our expansion list, and not because it's the easy asset class people assume it is. We like it because the underwriting rewards a discipline that's genuinely different from apartments — and right now the supply setup looks a lot like the one we keep pointing to in multifamily.

The Setup Right Now

The 2026 storage picture is soft fundamentals, strong liquidity. Per the Yardi Matrix outlook, advertised street rates are flat to slightly negative — up about 0.3% year over year in December, down roughly 0.2% in January — and physical occupancy has held in a tight 89% to 92% band since 2024. That's not a boom. But the pipeline is stepping down: new deliveries are projected near 51 million net rentable square feet in 2026, falling to about 44 million in 2027 and 38 million in 2028. Same shape as the apartment story — the pressure on today's rates is a supply wave that's already cresting.

What's Actually Different from Apartments

The reason storage needs its own underwriting is that almost none of the multifamily muscle memory transfers.

  • No leases. Storage is month-to-month, so the pricing engine isn't the annual renewal — it's the existing-customer rate increase (ECRI). A well-run facility raises in-place customers on a cadence, and the gap between the street rate and the in-place rate is where a lot of the value lives.
  • Trade area is everything. An apartment competes with its submarket; a storage facility competes with whatever sits inside about a three-mile ring. One new REIT facility down the road can reset street rates for a year. Supply-per-capita in that ring is the single most important number we underwrite.
  • Demand is event-driven. Move-ins are triggered by moves, home sales, downsizing, life events. With home sales soft, one of the biggest move-in drivers is muted — part of why street rates are flat. That's a headwind today and a coiled spring when transaction volume returns.
  • The margin profile is different. Low payroll, low ongoing capex, high operating margin — but that also means rate and occupancy do almost all the work, with little opex lever to pull if you get them wrong.

The Metrics We Underwrite First

Before a pro forma, the storage version of our short list is: three-mile supply per capita and the visible construction pipeline in that ring; the spread between in-place and street rates (the ECRI runway); physical versus economic occupancy; and, for a development or lease-up, an honest fill curve rather than a hopeful one.

In apartments you underwrite the submarket. In storage you underwrite the three-mile ring — and the cranes inside it.

Why the Mountain West

The same population growth that makes our multifamily markets work supports storage demand, and the region is still heavily owned by mom-and-pop operators running facilities below their rate and occupancy potential. That fragmentation — paired with a moderating supply pipeline — is the operational-upside setup we look for: buy a facility that's under-managed on rate, professionalize the ECRI and marketing, and let the supply air-pocket do the rest. Same patient thesis we run in apartments, applied to an asset class where the operating lever is sharper.