Demand for self storage has been significantly impacted by diminished moving activity, which has fallen to its lowest level in more than 30 years. However, economic trends and favorable dynamics within the housing market should have a positive long-term impact on demand, according to an analysis of the asset class market by DXD Capital principal Cory Sylvester.

The demand for self storage is driven by several factors. About half of demand is linked to moving, while about one-third is due to space constraints. The remainder of self-storage demand is driven by various commercial and residential needs.

Moving activity has been impacted by rising interest rates that have led to decreased home affordability and a mortgage lock-in effect as more than half of mortgages were financed at below 4% while the prevailing rate has been closer to 7%. The recent slowdown in moving activity dragged total self-storage demand by 10%, Sylvester said.