The outlook for the self-storage sector is improving as new household formation accelerates, and migration to new cities encourages residents to make use of self-storage units until they have settled in.

And while these migrants often head to the popular Sun Belt or Rocky Mountain regions, many are now seeking out smaller tertiary cities there to avoid the rising cost of living in big metros – especially retired households and professionals who can work remotely.

A midyear report on the sector by Marcus & Millichap said this creates self-storage opportunities for private investors, who are more active in small markets and rural areas, while large investors favor major metros. More than half of the new supply has gone to just 25 of the nation's total markets. "Since 2020, less than half of all institutional sales activity has taken place outside of major markets," the report noted.