Self-Storage Is Doing Just Fine: Investor Survey

Posted by R. Christian Sonne on Sep 30, 2026, 9:04:59 PM

Stability and resiliency in the self-storage asset class, particularly in a current environment of unstable investment market conditions, indicate minor increases in investment rates in the Q2 2026 Cushman & Wakefield Self Storage Investor Survey. In the past 16 quarters, self-storage average cap rates have varied less than 100 bps, while 10-year Treasuries have increased over 200 basis points.

 

The current survey shows an increase in investment rates with an average overall capitalization rate of 5.75 percent, an increase of 9 bps over Q1, following a 14 bp increase last quarter. This indicates a total increase of 23 basis points to the average, overall capitalization rate in the first half of 2026. Terminal cap rates increased 11 bps to an average of 6.18 percent in Q2. Discount rates (IRR) increased an average of 16 bps to 7.90 percent this quarter. Cap rates for Class A have not changed significantly, while Class-B and -C rates show a wide trend above Class A, suggesting a flight to quality in the sector.

 

The self-storage valuation team at Cushman & Wakefield Advisory surveyed over 50 market participants about a wide variety of data points, including the usual cap rate, terminal cap rate, and yield rates. Key performance indicators are shown in the following table:

 

 
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The Q3 2019 Investor Survey indicated an average cap rate of 5.6 percent, compared to a current average cap rate of 5.66 percent with a range from 4.93 percent to 5.76 percent during the past seven years. During the same time period, the 10-year Treasury increased from 2.01 percent (Q3 2019) to 4.45 percent, an increase and range of 244 basis points.
 
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So, why haven’t self-storage cap rates increased if the cost of capital is increasing?

 

It underscores market confidence in the sector, and a fundamental underwriting shift from an emphasis on cash flow to appreciation, from equity dividend to equity yield. In inflationary markets this is typical. But in low to moderate inflationary environments, it has not occurred before in this asset class. Self-storage has always been about cash flow, and that has now changed.

 

Self-storage is just fine. Slow growth in dynamic market conditions demonstrates confidence in self-storage over the long run.

 

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R. Christian Sonne is the executive director of valuation and advisory at Cushman & Wakefield.