Dream Storage Newsletter - March 2025

Monthly Newsletter

In our March newsletter, we dive into some of the trends emerging in 2025 and how they compare to previous years. Further, we share industry insights from brokers and owners following a well-attended national storage conference, and how these insights are influencing our plans for 2025.

Market Insights

While the REITs have not yet delivered their Q1 reports, Yardi Matrix (a self-storage data source) issued its March 2025 National Storage Report which examines trends through February 28, 2025. The report is linked below and sources data from 30,003 self-storage facilities operating in the United States. Per the report, advertised rates (which include both online and street rates) continue to decline year-over-year on a national level, but are doing so at a slower rate than in the previous 27 months. Further, a significant portion of top metros saw advertised rates increase in February 2025 compared to February of 2024. For those of us in the self-storage industry, we welcome the easing of rent declines (or in some cases, actual advertised rates increasing) as it may indicate that the worst is behind us and we are slowly starting to see the light at the end of the tunnel.

A storage conference was held in Orlando earlier this month. Many of the brokers and operators in attendance have described the general public sentiment as “cautious optimism”. Some panelists even suggested that the market has reached its bottom and that a stronger cycle may be on the horizon.

Lastly, SmartStop (a storage REIT with 208 owned and managed properties) announced on March 24th the launch of its proposed underwritten public offering.

Dream Storage’s Outlook

While we too feel “cautiously optimistic” about current trends (not only as reported but in markets we are actively exploring), it is hard to deny the strength of rental rates in top MSAs, especially here in Southern California. As customers face rising costs, whether it be at the grocery store or the car dealership, they are hitting a tipping point on discretionary spending (and for some, that may include their storage unit). Customer pushback is often more obvious in the secondary and tertiary markets, where a customer may move over a $20 increase in rent. But, a customer renting the same unit size in a top metro where the cost of living is very high may have more sticking power and continue to rent with a $40 increase. Whether it’s because incomes are higher or homes simply cost more, those markets continue to show relative strength. That is not to say that great investment opportunities do not exist in secondary and tertiary markets, but it forces us to focus on advertised rates rather than relying on rent increases for existing customers.

We are constantly refining our strategy based on market data when underwriting potential acquisitions and hope to present you with an exciting opportunity in the near future.

The Dream Team