Self-storage has historically been one of the best-performing commercial mortgage-backed securities (CMBS) property types by both cumulative loan defaults and losses.1 However, over the last two years, the sector’s fundamentals have faced some headwinds from moderating demand, driven by stagnant home sales and elevated supply. This came on the heels of a very robust, pandemic-era spike in demand during 2020-22, stemming from remote work, relocations, and increased housing activity.
In 2025, there are indications the tide may be turning, or at least stabilizing, for rents and occupancies as supply is absorbed following the decline in new construction due to higher borrowing and construction costs. While the sector may be in a transition phase correcting some of its earlier strong gains, it remains a favored commercial real estate debt asset class given its strong demand attributes.
Key Takeaways
- Despite the softness in self-storage fundamentals…