Demand in the self-storage sector is stabilizing following a COVID-induced surge, and analysts at one brokerage say oversupply concerns are now safely in the rearview.

A recent Marcus & Millichap investment forecast for the self-storage asset class predicts the pace of rent growth, which increased by 13% on average nationally for a standard-sized unit since March 2020, will moderate as some – but not all – of the pandemic-related demand drivers decrease.

Office and campus closures in particular drove many Americans to house their belongings in storage units as spare rooms became used for other purposes like remote learning, work-from-home and exercise. Between March 2020 and September 2021, according to Marcus & Millichap data, self-storage vacancy fell by 460 basis points to a record low of 5.5%. And "the rapid drop in availability has restored rent growth after the surge of development in 2018 and 2019 added 142 million square feet to the sector, weighing on asking rates," the report notes.