Why do construction starts matter more than headlines?

A market can look healthy today and still become risky if too much new space is already in motion.

In markets tracked by Matrix for at least 24 months, the under-construction pipeline declined 6.2 percent quarter over quarter to 49.79 million net rentable square feet and 17.3 percent year over year. That decline is encouraging, but it does not eliminate risk. Most of that inventory still needs to be delivered and absorbed. Construction starts also remain a leading indicator. If starts fall, future competitive pressure may ease. If starts rebound because rates grow and capital or construction gets cheaper, supply risk can return. For investors, the underwriting lesson is clear: do not evaluate occupancy and rent today without also evaluating what is scheduled to open tomorrow. Unless a municipality has barriers in place- such as a moratorium- an errant developer can throw a wrench into an entire market. We try to leave “meat on the bone” when looking at a market. If the equilibrium supply index for a market is 7- meaning 7 net rentable square feet per capita results in an average occupancy of 85%- we try to have the supply index come in at less than the equilibrium AFTER our development is accounted for. We’d like to see room for another 1 or 2 self storage facilities before the equilibrium supply index is hit so that we have a protective buffer to our lease up or stabilized occupancy. If we reach stabilized occupancy and there are no new developments to erode the buffer, then expansion can be considered.

Is the self storage supply pipeline slowing?

One of the biggest questions in self storage right now is simple: are we overbuilt? 

The supply data shows a mixed answer. Yardi Matrix increased its Q4 2025 forecast by 4.3 percent for 2025 and 4.6 percent for 2026, bringing expected 2025 completions to 59.44 million NRSF and 2026 completions to 48.23 million NRSF. But the more important trend is deceleration. The forecast still shows new self-storage supply declining through 2027 and beyond. That matters because new supply pressures rents, occupancy, and lease-up timelines. For buyers, the right question is not, 'Is storage still viable?’ The right question is, 'How much new storage is hitting this exact trade area?’. Storage is a hyper local business with 70% of renters coming from a 10 minute drive area from the facility. There used to be a “if you build it, they will come” mentality with self storage development. That’s not the case anymore. Many developers have been burned by fast and loose underwriting resulting in slow lease up. Even seasoned developers that did their homework pre-development have felt the impact as additional developments sprout up agnostic of supply and demand, tanking the entire trade area. Construction costs have risen significantly bringing pause to many builders who relied upon cheap materials and quick build times, especially in the southern regions of the US. Most of the already zoned, flat land in high population areas has been gobbled up. Municipalities are placing moratoriums on new storage after a glut of development in the late twenty-teens and early 2020’s. These realities have cause the self storage supply pipeline to slow but certainly not stop.

How do I invest with SSSE?

At SSSE, we provide both accredited and non-accredited investors access to tax-advantaged self storage investments with an emphasis on downside mitigation and social stewardship. Our syndications range from acquiring existing value-add self storage facilities to expanding existing facilities, from converting vacant big box stores into self storage to building from the ground up. The first step to investing with SSSE is to fill out our investor onboarding webform. It is quick and easy and can be found on our website SSSE.com by clicking the “Investors” menu link in the upper left corner. Once you have submitted your investor webform, you will have the opportunity to schedule an introductory phone call with one of our investor relations team members. A scheduling program will automatically appear. After that, stay tuned for the next investment opportunity! If we have any active raises occurring that are a good fit for your investor profile, our investor relations team member will let you know on the call and will walk you through getting access to the investor portal. Otherwise, we typically will send out an email whenever there is a new investment opportunity. It will have the high level details including whether it is a 506(b) syndication (for both accredited and non-accredited investors that we have pre-existing relationships with) or a 506(c) syndication (for accredited investors only). There will also be a link to the investment opportunity’s web page! On the webpage will be more details including a short description at the top, followed by buttons to schedule a call, access the investor portal to review the documents, and a video summary. The investment process concludes with accessing the investor portal and signing the subscription documents and wiring funds through the investment portal. Our investor relations team will be there to help every step of the way.

What is the typical size of a self-storage unit?

Self-storage units come in a range of sizes to accommodate different storage needs. The most common sizes for self-storage units are 5’x5’, 5’x10’, 10’x10’, 10’x15’, and 10’x20’, but larger units (such as 10’x30’ or larger) are also available. The size of the unit needed will depend on the amount and type of items being stored. Most self-storage facilities offer a variety of unit sizes to accommodate different storage needs, and many offer flexible month-to-month rental options to allow customers to adjust the size of their unit as their storage needs change.

According to the Self Storage Association 2020 Self Storage Demand Study, these are the percentages of various unit sizes rented:

• 15.6% 5’x5’

• 20% 5’x10’

• 24.4% 10’x10’

• 14.8% 10’x15’

• 12.5% 10’x20’

• 12.7% 10’x30’ or larger

What is the typical maintenance and upkeep for self-storage facilities?

The typical maintenance and upkeep for self-storage facilities can vary depending on the size and age of the facility, as well as the specific needs of the tenants. Some common maintenance and upkeep tasks for self-storage facilities include:

Building Maintenance: This may include regular cleaning, painting, and repairs to the buildings and structures on the property. The roof is the most important item to maintain at a self storage facility. Renters are interested in storing their items safely and securely. While the renter is responsible for securing their unit with a lock, the integrity of the roof (i.e. no leaks) is crucial for the safety of the renter’s items.

Unit Maintenance: This may include regular cleaning, repairs, and upgrades to the individual storage units.

Landscaping: This may include regular lawn care, tree trimming, and other landscaping tasks to keep the property looking well-maintained and attractive.

Electrical and Plumbing: This may include regular inspections, repairs, and upgrades to the electrical and plumbing systems within the buildings and units.

Fencing and Gates: This may include regular inspections, repairs, and upgrades to the fencing and gates that surround the property and provide security.

Pest Control: This may include regular pest control treatments to prevent infestations of insects, rodents, or other pests that can cause damage to stored items.

It is important for self-storage facilities to have a comprehensive maintenance plan in place, and to regularly review and update this plan as necessary. In addition, facilities should educate their tenants about the importance of maintaining their units, and should provide information about recommended cleaning and maintenance practices. By investing in regular maintenance and upkeep, self-storage facilities can help to maintain the safety and security of their tenants' stored items, and can also improve the overall value and appeal of the property.