The close of 2022 and first half of 2023 saw some turbulent waters in the real estate industry. While self-storage has proven to be “resistant” to many outside factors, our asset class has still felt the residual effects of rising interest rates, inflation, and change in economic outlook among other influences. These influences have left many investors, operators, brokers, and lenders in the shadows and have hurt their ability to make educated guesses on the future.

A major factor for all to consider is that the numbers during the pandemic were inflated at a historic rate. In fact, in the Wall Street Journal’s recent article “Is there a Limit to Americans’ Self-Storage Addiction? Billions of Dollars Say Nope,” they reference CubeSmart Chief Executive Christopher Marr’s recent conference quote, stating “In hindsight, we may look at those [months between summer of 2020 & summer of 2022] and say they were the best 24 months in the history of the business.” This can be interpreted in both the operations aspect of the business as well as acquisitions aspect. 2020-2022 saw historically low interest rates as well as historically high occupancy. This encouraged new construction, inflated property values, and historically high price per square foot rents. As the Fed continues to raise rates, cost of construction materials climb higher, and people return to work, we are seeing a shift in strategy for investors/operators. The same aforementioned WSJ article states “Sharply higher borrowing costs have torpedoed plans for new storage construction.” The lack of new development, while still having the desire to grow, has caused many REITs and large players to look to consolidation. In fact, as many know, Extra Space and Life Storage completed a merger on July 20, 2023 while Public Storage and Simply Self Storage announced an agreement for the former to acquire the latter. 

In order to fully grasp all that is stated above, let’s dive in to the Q1 & Q2 reports for 4 major Real Estate Investment Trusts (REITs); CubeSmart, Extra Space, National Storage Affiliates Trust, & Public Storage. Life Storage was the 5th, prior to the merger with Extra Space, so we included their Q1 reports: 



  • FFO (funds from operations)- $0.65 per share, up from $0.58 in Q1 2022
  • Same Store Net Operating Income grew 9.1% year over year. This is largely due to a 6.9% revenue increase while only increasing operating expenses by 1.0%
  • Same Store Occupancy dropped from 93.4% in 2022 to 91.9%


  • FFO- $0.66 per share, up from $0.62 per share in Q2 2022
  • Same Storage NOI grew 5.0% year over year which is less growth than Q1. The YoY growth was attributed to 4.6% revenue growth with 3.6% increase in operating expenses
  • Same store occupancy grew from 91.9% to 92.7% 

Extra Space: 


  • FFO- $2.02 per share, up from $2.01 per share in Q1 2022
  • Same store NOI increased 8.7% from Q1 2022
  • Same store occupancy down from 94.3% in Q1 2022 to 93.5% in Q1 2023


  • FFO- $2.06 per share, down 3.3% from $2.12 per share in Q2 2022
  • Same store NOI increased 2.6% from Q2 2022
  • Same store occupancy down from 95.8% in Q2 2022 to 94.5% in Q2 2023

National Storage Affiliates Trust


  • FFO- $0.66 per share, a 2.9% decrease from Q1 2022
  • Same store NOI increase of 4.8% from Q1 2022. This, however did show 5.7% increase in revenues while seeing an 8.3% increase in expenses
  • Same store occupancy down 3.8% from Q1 2022, reflecting an 89.8% same store occupancy average


  • FFO- $.068 per share, a 4.2% decrease from Q2 2022
  • Same Store NOI increased by 3.4% YoY, boosted by a 2.8% revenue increase and a 1.4% increase in operating expenses
  • Same store occupancy down 4.5% from Q2 2022, reflecting a 90.0% same store occupancy average

Public Storage: 


  • FFO- $4.08 per share, an increase of 11.8% from $3.65 in Q1 2022
  • Increased same store NOI by .4% margin compared to Q1 2022
  • Same store occupancy down from 95.5% in Q1 2022 to 93.2% in Q1 2023, reflecting a 2.4% decrease


  • FFO- $4.28 per share, and increase of 7.3% from $3.99 per share in Q2 2022
  • Increased same store NOI by 6.2%, boasted by 6.3% increase in same store revenue
  • Decreased same store occupancy from 95.6% in Q2 2022 to 93.5%, reflecting a 2.2% decrease. 

Life Storage:


  • FFO- $1.63 per share, down from $1.44 a year ago
  • Same Store NOI increased 12.8% from Q1 2022
  • Same store Occupancy down from 93.6% in Q1 2022 to 90.4% in Q1 2023.

With the exception of CubeSmart in Q2, we can see that same store occupancy is dropping on a consistent basis year over year for each quarter. Maggie Eastland sums up the reasoning perfectly in her WSJ article “Self-Storage Rents Fall Record Amount as Pandemic Boom Cools.” Eastland states that Pandemic-era demand drivers are fading away as people are returning to their office & gyms, while also becoming more social. She also states that the rising interest rates have affected the housing market in many areas, causing less movement between markets. This is reducing the need for additional space and causing demand to fall nationwide. 

While demand is dropping year over year, we are still seeing historically high numbers. Extra Space ran a study which indicated that nearly 11% of the population now uses storage, whereas that number was just under 3% 20 years ago. The consumerism nature of our society will continue to support the self-storage industry and provide profitable returns. With that said, the increase of competition within markets does require operators to be more creative and stay sharp in their craft. Ensuring that your SEO is top of the line and running promotions will assist in getting customers in the door. Once in the door, the strategy remains the same as it always has in slowly raising rates. Many consumers would prefer to pay an extra $10/month than spend a weekend moving their belongings out of their unit. 

Now more than ever, it is important to understand what the market is showing and where it is expected to lead to. Understanding each of these factors will impact how a facility runs and ultimately affect the value of the facility itself. While there are many uncontrollable factors which affect facilities, there are ways to ensure you are staying ahead of the game and maintaining, if not increasing, the value of your asset.

If you are interested in a free, confidential, and honest business consultation and property valuation, please do not hesitate to reach out to any of the members of the Bledsoe Self Storage Group of Marcus & Millichap. 


By Matthew Junkin

Matt Junkin has been working in commercial real estate since 2019, and built their business on solid fundamentals, honesty, and hard work. Joining Marcus & Millichap in 2021 as a Self-Storage sales specialist, he appreciates the importance of each of his clients’ unique goals and motivations, and invests the necessary time, care, and effort to help them realize those goals. His strong work ethic and accountability to his clients’ best interests, combined with a focus on accurate underwriting and property analyses, has established Mattas a valuable addition to his clients’ team of professional advisors. As part of the team, he works closely with his clients’ partners, financial advisors, accountants, and attorneys to develop and follow a tailored real estate investment strategy.