2025 Q1 REIT REPORT
The first quarter of 2025 showed signs of stabilization for the self-storage industry despite overall market volatility. Some storage REITs reported positive year-over-year revenue growth, something that has not happened for any storage REIT since the second quarter of 2024. In addition, year-over-year street rate growth continues to trend towards positive territory, suggesting rates have bottomed.
In this report, we leverage TractIQ’s data since 2018 combined with public filings to identify interesting trends that you can incorporate in your underwriting and operational efforts. The data includes:
- The delta between web, street, and achieved rents since 2018
- REIT discounting and move in/move out trends
- REIT street rate trends broken out by MSA
- REIT comparisons to understand how each company’s operational strategy differs
KEY FACTS:
- REIT advertised rates were $17.92 in 1Q25 (down 5.9% YOY) compared to $17.86 in 4Q24 (down 18.4% YOY). With REITs holding street rates steady, this suggests rates may have bottomed.
- REIT achieved rates were $20.74 in 1Q25 (down 3.1% YOY) compared to $21.46 in 4Q24 (down 2.8% YOY). This may illustrate further churn of the pandemic-era tenants who were commanding higher in-place rents as well as the last 24 months of depressed move-in rates.
- REIT street rates were below REIT achieved rates by 13.5% in 1Q25 (a 23.6% increase YOY from 11.00%) compared to 16.7% in 4Q24 (an 18x increase YOY from 0.87%). Although the delta has narrowed slightly since last quarter, street rates are still significantly below achieved rates, suggesting continued soft consumer demand.
- The REIT discount rate (% difference between street and web rates) was 25.7% in 1Q25 (up 18.7% YOY) compared to 27.2% in 4Q24 (down 5.5% YOY). Discounting has crept back up to nearly post-pandemic levels, further supporting that demand remains muted in the market.
