Self-storage transaction volume has been slower than buyers and sellers want. Capital is ready. Assets need to trade. The friction is price: sellers still anchor to 2021-2022 underwriting, and buyers price 2026 achieved income with flat rate assumptions going forward. Tom de Jong, Executive Vice President at Colliers and founding principal of the De Jong Self Storage Team, says that standoff is starting to break, and not always through negotiated sales.
De Jong, who has tracked dozens of active deals over 18 months and carries a $2 billion-plus transaction record across 32 states, reported in June 2026 that he heard of three to four situations in a single week where operators quietly returned assets to REIT bridge lenders. No auction listings. No press releases. Just private transfers of problem collateral when interest reserves ran out.
Where Does the Bid-Ask Gap Actually Come From?
Most assets struggling to trade were built or underwritten in 2021 and 2022. Sellers penciled exits at 4.5% to 5.0% cap rates on projected rents assuming 5% to 7% annual increases. Those projections were reasonable at the time. They are not today's reality.
Achieved rents on many newer builds sit well below original pro formas. Occupancies are often solid, frequently in the mid-to-high 80% range, but the income those properties generate does not match initial underwriting. Higher interest rates pushed buyer cap rates to the 5.5% to 7.0% range depending on market. Asset values fell below where sellers expected to exit.
Buyers underwrite today's achieved rents with flat rate assumptions. Sellers want credit for the spread between achieved rates and market rates. Both math sets are internally consistent. They produce different valuations for the same building.
The math on both sides is internally consistent. The problem is that the two sets of numbers produce very different valuations for the same asset.
- Tom de Jong, Executive Vice President, Colliers
How Do Sophisticated Buyers Price the Achieved-to-Market Spread?
De Jong describes a structured approach centered on the gap between achieved rents and current market rents. If a facility's achieved rate is $1.25 per square foot but the market supports $1.50, a buyer gives partial credit for that upside, not full credit, and not at the seller's preferred cap rate.
The discount reflects time and risk in closing the gap through existing customer rate increases. The seller wants to be paid at market value. The buyer wants to purchase at achieved income with a risk-adjusted discount for execution. When a deal happens, it lands between those positions.
That framework explains why List Self Storage's June 2-10, 2026 roundup showed Oklahoma City and Las Vegas assets spending more than 130 days on market before closing. Price discovery is working. It is just slower than sellers accustomed to 2021 liquidity expect.
What Happens When Bridge Loan Reserves Run Out?
The acute pressure sits in a specific corner of the market. Major REITs operated bridge loan programs extending financing at up to 90% of projected value. Many of those projections never materialized.
De Jong reports bridge loans now sitting at 110% to 120% of current asset value. When interest reserves expire, operators face a binary choice: inject more capital to keep the loan current, or hand keys back to the lender.
The pipeline of these situations is real. Lenders who take back assets must mark to market and find buyers. For acquirers positioned with capital and operational systems, the opportunity is specific: asset quality may be sound, location solid, capital stack broken. When the transfer resolves the debt, a buyer can enter at current market pricing rather than 2021 projections.
List Self Storage documented 14 property trades across 11 states in the June 2-10 window. That steady mid-market flow coexists with the quieter distress channel De Jong describes. The sector is clearing inventory through two pipes at once.
What Is Moving Transaction Volume in the Second Half of 2026?
The bid-ask spread will not close on its own. It closes when sellers run out of road. Private equity funds carry defined timelines, typically five to seven years. Recapitalization at current rates is expensive. Waiting compounds cost.
De Jong is seeing transaction volume pick up heading into 2026. Opinion-of-value requests are increasing, which typically precedes deal flow. Portfolio transactions are closing, including enterprise-level acquisitions by institutional buyers with committed capital and deployment pressure.
TractIQ's Q1 2026 REIT data supports a stabilizing operating backdrop beneath the transaction friction. Sector-wide same-store occupancy finished Q1 at 90.9%, down just 20 basis points year over year. Every major REIT posted positive or flat same-store revenue growth, the first universal quarter since TractIQ began tracking the metric in 2024.
Better operating fundamentals do not automatically reset 2021 seller expectations. They do give buyers confidence that assets acquired at repriced levels can perform if underwriting is disciplined.
The Numbers Worth Writing Down
- 2021-2022 seller underwriting: 4.5% to 5.0% cap rates on 5% to 7% projected annual rent growth
- 2026 buyer cap rates: 5.5% to 7.0% depending on market, on achieved rents with flat forward assumptions
- Bridge loan overhang: loans at 110% to 120% of current asset value on underperforming 2021-2022 vintage builds
- Quiet handbacks: 3 to 4 asset returns to REIT bridge lenders in a single week (De Jong, June 2026)
- REIT bridge programs: financing historically up to 90% of projected value
- De Jong track record: $2 billion-plus in self-storage transactions across 32 states, 19 years at Colliers
- Q1 2026 REIT occupancy: 90.9% sector-wide, down 0.2 percentage points YoY (TractIQ via CRE Daily)
- June deal tape: 14 properties traded across 11 states June 2-10, 2026 (List Self Storage)
Sellers Who Price Reality Are Finding Buyers
The self-storage transaction market in June 2026 is not frozen. It is bifurcated. Operators who accept that 2021 valuations are gone are closing deals at rates that reflect 2026 income. Operators waiting for cap rate compression back to 4.5% are watching interest reserves expire on bridge debt.
De Jong's quiet handback story matters because it is the pressure valve the public market does not see until assets reappear at marked-down prices. Buyers with capital and patience will absorb that inventory. Sellers who negotiate before the lender takes keys retain more control. Sellers who do not are learning that the market clears without them.
The gap is closing. It closes through price adjustment, lender transfers, and fund timelines, not through a return to pandemic-era tailwinds.
Sources
- The Gap Between What Self Storage Sellers Want and What Buyers Will Pay is Finally Starting to Close, List Self Storage
- Weekly Self Storage Transaction Roundup: 6/2/26 – 6/10/26, List Self Storage
- Self-Storage REITs Show First Broad Growth Rebound, CRE Daily
- Self-Storage 2026 Buyer Window: Maturity Wall and Motivated Sellers, YourCAIO