From 2020 through mid-2025, the self-storage sector has experienced an evolution, one driven by pandemic-era dislocation and later tempered by economic recalibration. Initially propelled by urban flight, remote work, and heightened consumer mobility, the sector saw soaring transaction volumes, compressed cap rates, and rapid rental rate growth. But as interest rates climbed, housing activity stalled, and record amounts of new facilities were developed, fundamentals softened – and investor caution returned. Even so, regional bright spots, demographic tailwinds, and slowing supply pipelines suggest stabilization may be underway. This report explores the sector’s trajectory through this period, supported by transaction data, cap rate trends, and performance indicators that we have compiled over the years through our own deals that we’ve facilitated and from tracking the broader market.

 

Self-Storage Industry Timeline

2020-2021: The Pandemic Surge and Accelerated Demand

Demand spiked during the pandemic as migration patterns, lifestyle shifts, home remodels and temporary relocations boosted leasing. According to RCA, annual sales volume jumped from $8.4B in 2020 to nearly $24B in 2021, driven by both institutional interest and local owner-operators. Operators reported revenue strength, record fast lease-ups, and huge occupancy gains for historically stagnant locations. As revenue growth accelerated, pricing power increased, and new developments began to come online. Cap rates compressed significantly as competition for these investment opportunities intensified.

 

2022-3023: Peak Consolidation and Slowdown

While occupancies started to slowly decline, the pace of rent growth also slowed, and rising interest rates began to weigh on transactions. By 2023, deal volume dropped approximately 40% below 2021 levels as capital markets tightened, and cap rates entered an expansion period. M&A reshaped the landscape, too. Extra Space Storage acquired Life Storage in a $12.7B acquisition and Public Storage took over Simply Self Storage. These deals accelerated institutional consolidation and reshaped rental rate pricing models in the Top 50 metros. Operators began to cut advertised rental rates to stay competitive, and rental rates began their descent, resulting in 27 straight months of national rental rate decline.

 

2024-2025: Housing Gridlock and Oversupply Challenges

The industry begins grappling with the effects of housing market stagnation, as elevated mortgage rates and affordability constraints suppressed home sales and leasing velocity. Oversupply weighed heavily on key Sunbelt metros such as Atlanta, Orlando, Dallas, and Phoenix, where elevated deliveries of new facilities dampened both street rates and occupancy. Delinquency concerns are also emerging in more price-sensitive markets. Fast forward to today, while macro uncertainty still lingers, the sector seems to have hit a bottom point: street rates are beginning to stabilize and in some markets trend upwards, development is tapering off, and occupancy remains steady if not slowly improving again.

 

Southeast in Focus

From 2020 through 2022, the Southeast emerged as a bright spot, primarily driven by an influx of in-migration. Investor appetite remained strong, with Florida leading most states in transaction volume and rental rates. As national trends have moderated, the region has continued to attract both institutional and private investors, but pricing has had to shift in order to account for the risks that the region presents due to elevated supply levels suppressing rental rates and creating uncertainty in projections for the coming years.

 

Notable Trends:

• Florida remains the regional anchor: Florida consistently outperformed across all metrics. It recorded the lowest cap rates, highest price per square foot recorded this year, and the largest average closing prices ($26.4M in Q1 2025, including a $57.35M portfolio in Broward County, FL closed by Austin McLeod). It stands out as the most liquid and competitive market in the Southeast.
• 2021 – H1 2022 marked the valuation peak: Cap rates compressed across every state, price per rentable square foot surged exceeding $200/SF averages in FL, GA, and VA.
• 2025 shows signs of selective recovery: Early quarters of 2025 suggest a rebound is underway. Cap rates have remained steady, PPSF is rising modestly, and deal sizes are increasing in strong metros. Investors are re-engaging, but with a focus on high asset quality and favorable market fundamentals.

 

Cap Rate Review

Cap rate fluctuations have been the norm over the five-year period, reflecting broader market volatility, capital cost cycles, and investor risk sentiment. Cap rates peaked and compressed multiple times as macroeconomic conditions shifted from pandemic-induced disruptions to interest rate normalization and then into a more uncertain lending environment post-2022.

 

2020-2021

Cap rate highs occurred early in the cycle, reaching 6.43% in Q2 2020, coinciding with COVID-era uncertainty and slower transaction velocity. States like Georgia and North Carolina posted some of their highest figures in that quarter, suggesting widespread caution and valuation risk pricing. By late 2021, the region underwent a sharp cap rate compression, driven by investor demand and favorable financing conditions, hitting a low of 3.53% in Q4 2021. Florida reached its lowest point during this time at 2.97%, indicating strong competition for high-quality assets.

 

2022-2023

The year 2022 was a transitional period. Though cap rates remained compressed through mid-year, slight upward movement resumed by Q4 in unison with the Fed’s four straight 75-basis point interest rate hikes.

 

2024-2025

In 2024, cap rates remained elevated compared to pre-2022 levels, though signs of stabilization began to emerge. Q2 2024 saw a regional uptick to 6.12%, inching up to where stabilized cap rates are considered to be in today’s market. Now, in 2025, while the majority of sales have been deals in some form of lease-up, stabilized cap rates are still landing in the low-6% range.

 

Averages in Q1 2025 posted a five-year low for the Southeast though at 2.98%, with Florida (2.95%), Georgia (3.66%), and North Carolina (1.11%) in terms of in-place cap rates, all showing investor confidence to take on riskier opportunities. However, these deals have been trading at lower price per foot levels, indicating buyers requiring more of a reward upon stabilization.

 

Price Per Square Foot Review

Price per square foot trends in the Southeast self-storage sector paint a picture of surging investor demand from 2020 to 2022, followed by a controlled retreat and rebalancing phase through 2024. As of mid-2025, Florida remains the regional pricing leader, while markets like North Carolina and South Carolina exhibit greater cyclicality tied to local supply dynamics and deal quality.

 

2020-2021

Prices jumped sharply by Q2 2020, with total Southeast averages reaching $85.65/SF. The rally gained momentum in 2021, with pricing in Q4 2021 reaching $170.35/SF across the Southeast. Florida averaged over $216/SF, Georgia climbed to $149.30/ SF, and North Carolina and South Carolina crossed $140/SF, supported by aggressive rental rate growth and capital flowing from other real estate sectors into self-storage. Virginia also stood out with a regional high of $243.67/SF.

 

2022-2023

In Q1 2022, Southeast pricing hit a new average high of $207.17/SF, coinciding with the sector’s peak following pandemic-fueled migration trends and asset performance. Florida and Georgia continued to outperform, at $246.64/SF and $197.91/SF, respectively. Even Virginia remained elevated at $237.09/SF. However, cracks began forming by Q2 2022, as pricing cooled to $150.28/SF across the region. This deceleration aligned with the onset of aggressive Fed rate hikes, dampened buyer demand, and growing caution among lenders and REITs. South Carolina and North Carolina dipped below $130/SF, with South Carolina in particular showing signs of supply-side pricing pressure.

The pricing environment in 2023 reflected wider instability. Southeast averages ranged from $177.18/SF in Q1 down to $120.10/SF in Q3, a drop consistent with slowing transactions, higher financing costs, and normalization of street rates. North Carolina was especially volatile, hitting $216.25/SF in Q1, before falling to $121.11/SF by Q3. South Carolina followed a similar arc, peaking at $188.18/SF in Q4 2022, then correcting sharply in 2023. Florida remained a pricing anchor throughout the year, never falling below $142.95/SF, and reaching $227.97/SF in Q1 2023, showcasing investor preference for core, resilient markets.

 

2024-2025

By 2024, prices began to stabilize regionally, albeit at a lower range than the 2021–2022 highs. Southeast-wide averages hovered between $117–$133/SF, while Florida remained buoyant at or above $141/ SF. Georgia and North Carolina stayed range-bound between $86–$148/SF, and South Carolina saw moderate recovery after prior-year softness. In Q1 2025, PPSF dipped again to $124.73/SF, driven by non-stabilized assets making up the bulk of the transaction pool.

 

Conclusion: A Market in Motion

The Southeast self-storage market has evolved through distinct cycles over the past five years, shaped by pandemic-era migration, monetary policy shifts, and changing investor appetites. From aggressive cap rate compression in 2021 to volatility-driven spikes in 2023, the market has demonstrated both strength and sensitivity. Despite cyclical adjustments, investor demand has remained focused on population growth corridors, where cap rates have consistently remained below national averages even amid rising interest rates.

 

 

The Southeast will always be a hotspot for investment due to the underlying fundamentals, and leading nationwide pricing metrics. Metros that have taken on overwhelming amounts of new supply, however, will need several quarters to absorb all the new supply in lease up before pricing can meaningfully recover. Once the majority of new square footage is occupied, expect the Southeast as a whole to once again outperform most other regions across the country as the rising populations and incomes attract more and more institutional capital.