According to a report from Cushman & Wakefield, transaction volume of sales in the U.S. self-storage sector cooled in the first half of 2023, with the trailing 12-month volume down by 57% year-over-year, following the peak levels achieved in 2022.

The increased cost of debt and lack of overall liquidity will create headwinds, primarily for higher leveraged owners, while creating opportunities for well-capitalized investors. Occupancy leveled out near 90% in the fourth quarter of 2022 and has remained nearly flat through the first half of 2023.

Newer properties with state-of-the-art amenities that include climate-controlled and secured units are holding value. “Self-storage fundamentals remain healthy at the midyear point of 2023. Conditions have cooled from peak levels, representing a normalization after a period of accelerated growth,” said Managing Director Tim Garey. “As rate hikes pull the self-storage market back to historical levels, the overall market fundamentals for the sector point to a favorable outlook.”