Self-storage development activity has continued to slow and is expected to drop to 2% of inventory by 2027 and 1.5% of inventory through 2030. This is according to Yardi Matrix’s latest self-storage report and forecast.
Full-year construction starts are on pace to contract by 20% compared to 2023, and the deceleration in starts has begun to show up in the under-construction pipeline, which contracted by 1.8% during the fourth quarter, according to Yardi Matrix. On an annual basis, the under-construction pipeline has declined by 6.7% after peaking in December 2023, and Yardi Matrix said most of the current under-construction pipeline will be completed this year or by early 2026.
Days in construction peaked in mid-year 2023 and decelerated through mid-year 2024, the firm said. During the second half of 2024, average completion times began to trend back up. Projects completed during the fourth quarter spent an average of 413 days under construction. As such, the under-construction inventory most likely to be completed this year started between the fourth quarter of 2023 and the third quarter of 2024. Year-over-year advertised rental rate growth remains negative in most markets.
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