Supply seen gradually moderating into 2029
SANTA BARBARA, Calif., March 5, 2025 – The Yardi® Matrix Q1 2025 Self Storage Supply Forecast reports a slowdown in self storage development, with a deceleration in construction starts translating into a contacting under-construction pipeline.
The forecast projects a 2% decline in self storage supply by 2027, with a further reduction of 1.5% anticipated by 2029.
“The Federal Reserve has responded to the combination of persistent inflation pressures, a still healthy job market, and solid economic growth with a hawkish repositioning. This higher for longer policy stance combined with weak advertised rental rate growth suggests the 20% decline in new construction starts experienced in 2024 will persist into 2025, negatively affecting new supply in 2026 and into 2027,” according to Yardi Matrix analysts.
The planned pipeline remained mostly flat in 2024 and turned negative in Q4 2024, shrinking by 1.8%, while the prospective stage declined by 10.2% quarter-over-quarter and registered a 25.3% contraction year-over-year. Despite a 7.6% decrease year-over-year in deferred projects, the pipeline is still 30% above the levels recorded in late 2022 and early 2023. Similarly, the number of abandoned projects has decreased by 50% from mid-year 2024, but the current level is still four times the 2022 level.
Review the Q1 2025 Self Storage Supply Forecast from Yardi Matrix.
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