The country's self-storage development boom appears to be nearing its peak, with new projections from Yardi Matrix showing the number of completions trending down after 2025.

Yardi Matrix forecast new supply of 54.4M SF this year, while next year's new supply is expected to total 46.8M SF. In 2026 and 2027, the self-storage market is poised to grow by about 38M SF each year. Less than 30M SF will come online during the last two years of the decade.

The company cites sagging rents and high interest rates as factors in developers' loss of appetite for the property type. Demand is also down from pandemic-era peaks, though not depressed.

The report says self-storage matured into “an institutional-quality asset” in the years after the Global Financial Crisis, with demand driving net operating income growth and development.

Each year since 2015, new self-storage exceeded 2.5% of existing stock, Yardi Matrix reported, but considering the number of abandoned and deferred projects in the second half of 2023, the company said growth will slow, forecasting 2% growth in 2026 and 2027, and 1.5% in 2028 and 2029.

The slowdown comes amid increased consolidation in the industry. Last year, Blackstone Real Estate Income Trust sold Simply Self Storage to Public Storage for $2.2B. The deal enlarged Public Storage, which made more than $10B in acquisitions in the four years before snapping up Simply.

Demand for self-storage grew significantly during the pandemic but moderated as the emergency did, returning to more normal levels by the beginning of last year.