Yardi Matrix revised its 2026 self-storage supply forecast upward in its most recent update, projecting 51.1 million net rentable square feet of completions for the year. That's a 6% increase from its prior estimate, driven by a larger-than-anticipated under-construction pipeline at the close of Q4 2025 and a rebound in new development activity in the second half of last year. As of early 2026, Yardi's total tracked pipeline stands at 2,759 properties across all stages: 681 under construction, 1,766 planned, and 312 prospective.
The headline number matters less than where that supply is going. Certain markets, primarily in the Sunbelt, are absorbing the brunt of a multi-year development cycle while a different set of markets, particularly dense coastal cities and Midwestern metros, face almost no new supply and are holding pricing power as a result.
The divergence between those two groups is the defining supply story of 2026.
Which Markets Are Getting the Most New Supply?
Houston leads all U.S. markets in absolute construction volume, with approximately 888,000 square feet of new self-storage coming online in 2026, representing roughly 3% of its existing inventory. The Houston market currently offers approximately 7 square feet of storage per capita, in line with the national average of 7.8 square feet, which provides some absorption runway, but the volume of new deliveries coming consecutively is significant.
Las Vegas is the market most exposed on a relative basis: approximately 708,000 square feet of new supply is scheduled for 2026, accounting for 5% of the city's existing inventory. That is the highest share among major tracked markets. Las Vegas has been identified as one of the top emerging markets for 2026 based on rent growth trajectory and storage usage rates, but a 5% inventory expansion in a single year is a stress test for any market's absorption capacity.
San Antonio is delivering approximately 656,000 square feet, Los Angeles around 629,500 square feet, and Jacksonville, Florida approximately 586,000 square feet. New York City is adding roughly 457,900 square feet, but given the scale of the metro and the significant constraints on ground-up construction there, that figure represents modest new competition.
Where Is Oversupply Hitting Hardest?
The most stressed markets in the current cycle are Phoenix, Orlando, and Austin, all of which built aggressively between 2022 and 2024 and are now working through lease-up backlogs.
Phoenix has under-construction supply equivalent to 6.6% of its existing stock. Orlando is at 6.1%. Austin is at 3.2%, which sounds moderate until you consider that it's layered on top of the deliveries those markets absorbed in the preceding two years. The pipeline in these markets isn't just about what's opening in 2026; it's about whether occupancy can recover while new facilities are still burning through their lease-up periods.
That lease-up window is longer than it used to be. Industry observers tracking lender sentiment note that what used to take 18 months to stabilize now routinely takes 24 to 36 months. Absorption risk tops lender concerns heading into mid-2026, cited by 88.2% of surveyed lenders as their primary underwriting concern, ahead of oversupply at 58.8%. Those two concerns are related, but the distinction is meaningful: it's not just that there's too much supply, it's that even well-located new facilities are taking longer to fill.
Extra Space Storage called out Atlanta, Phoenix, and coastal Florida as the markets most likely to see reduced occupancy benefit through 2025, and that headwind has not fully cleared. REIT advertised rents fell 2.1% year-over-year in February 2026 across their combined portfolios, with Sunbelt oversupply markets dragging the blended figure down.
Which Markets Are Holding Up?
The flip side of the Sunbelt story is what's happening in supply-constrained markets, and it's the clearest proof that the fundamental demand for self-storage hasn't gone away.
New York and Nashville are the most-cited examples. Manhattan and Brooklyn face significant barriers to new construction: land costs, zoning complexity, and extended permitting timelines mean that even operators who want to build can't do it quickly. The result is that existing facilities face limited new competition, and pricing has stabilized. Nashville saw its ranking on the emerging markets list climb from eighth to fifth, with annualized average rents per square foot up 0.8% year-over-year, one of the stronger performances in any major market.
Chicago and Minneapolis tell a similar story. Both are Midwestern metros with limited new construction activity in the self-storage sector, and both have posted stable fundamentals while Sunbelt peers struggle. The Midwest's relative underperformance during the pandemic demand boom meant less speculative building followed, which now looks like a structural advantage heading into the back half of 2026.
Oversupply continues to weigh on rents in high-growth Sun Belt metros such as Atlanta and Orlando, while markets like New York and Nashville, where new construction has stalled, are seeing the benefits in the form of stabilized pricing.
- Multi-Housing News, Self-Storage National Report, 2026
What Does the 2027 Pipeline Look Like?
The good news embedded in the current oversupply picture is that starts have been slowing. New supply as a percentage of total existing stock is forecast at 2.4% for 2026, down from 3.0% in 2025 and meaningfully below the long-run average of approximately 4.2%. Projected completions are expected to trough around 400 to 650 facilities in 2025-2026 before recovering toward more than 1,000 annually by 2027 and 2028, based on what's currently in the planned and prospective pipeline.
The 6% upward revision Yardi made to its 2026 forecast was driven partly by a rebound in construction starts in the second half of 2025. That rebound was concentrated in specific markets and project types, primarily adaptive reuse and conversion projects, which are faster to permit and cheaper to execute than ground-up builds. It does not suggest a broad recovery in speculative ground-up development in oversupplied markets.
The steel tariffs announced in 2025, adding 25% to imported steel costs, are a real constraint on ground-up economics for any project that hasn't already locked in materials pricing. Developers who bought land in Phoenix or Austin in 2023 expecting to break ground in 2025 are running financial models that look materially worse today than when those parcels were acquired.
What Does This Mean for Investors and Operators?
The market divergence creates two very different investment environments depending on where you're looking.
In oversupplied Sunbelt markets, the acquisition opportunity is real but requires patience. Deals in markets like Phoenix and parts of Austin are trading at or below replacement cost. For operators with the balance sheet to acquire distressed or underperforming assets and run them through a lease-up cycle over two to three years, this is historically when the best deals get made. But the market is not pricing a quick recovery, and the investors who did ground-up development in these markets at 2022 construction costs are under pressure.
In supply-constrained markets (coastal California, New York, upper Midwest), the current environment looks more stable but entry prices reflect that stability. Cap rates are lower. Deals are fewer. The operators winning in these markets are the ones who got in before the competition tightened, and who are now running lean operations in facilities that face limited new supply for the foreseeable future.
The five-year supply story, per institutional forecasters, is one of pronounced divergence: oversupplied Sunbelt metros working through excess while supply-constrained coastal markets maintain pricing power. The current moment is early in that process, not the resolution of it.
The Numbers That Define 2026 Supply
- Yardi Matrix 2026 forecast: 51.1 million NRSF of completions, 6% higher than prior estimate
- Total pipeline: 2,759 properties; 681 under construction, 1,766 planned, 312 prospective
- New supply as percentage of existing stock: 2.4% in 2026, down from 3.0% in 2025
- Phoenix: under-construction supply at 6.6% of existing stock
- Orlando: 6.1%; Austin: 3.2%
- Las Vegas: 5% of existing inventory scheduled for delivery in 2026 alone
- Jacksonville: 10.2 sq ft per capita already, adding another 6% of inventory this year
- Lease-up timelines: 24 to 36 months to stabilize, up from the historical 18-month baseline
- Absorption risk cited by 88.2% of lenders as primary underwriting concern
Location Is the Whole Game in 2026
The 51 million square feet coming to market in 2026 is not equally distributed, and it's not landing in markets with equal ability to absorb it. Operators in Phoenix, Orlando, and Las Vegas are fighting for tenants in markets that haven't yet worked through what was built in 2022, 2023, and 2024. Operators in New York, Chicago, and Nashville are running existing facilities with limited new competition and stable or improving pricing. Both groups are in the self-storage business. Their 2026 looks nothing alike. The operators who will look smart in 2028 are either the ones who stayed disciplined about market selection from the start, or the ones who had the capital to buy distressed assets in Sunbelt markets now and hold through the absorption cycle. There is no middle path that avoids the supply question.
Sources
- Self Storage Market Outlook, February 2026, Yardi Matrix
- Pipeline Prompts Increase in Yardi Matrix Self Storage Supply Estimate, Yardi
- U.S. Self-Storage Market Steps Cautiously Into 2026, Yardi Matrix Reports, Yardi
- Self Storage National Report: March 2026, Multi-Housing News
- Top 10 Emerging Self-Storage Markets of 2026, Multi-Housing News
- What's Next for Self Storage in 2026, Multi-Housing News
- Self-Storage Rents Continue Slide in Early 2026 Amid Sluggish Demand and Local Oversupply, Scotsman Guide
- Self-Storage REITs See Signs of Stabilizing Fundamentals, Supply Expected to Moderate, Nareit
- 2026 U.S. Self-Storage National Investment Outlook, Marcus & Millichap
- Self Storage Rent Trends Face Volatility in 2026, CRE Daily