Tertiary Markets Slow Down while Early Signs of Rate Stability Start to Show

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One of the most common topics at recent industry conferences was the difficulty owners are facing when trying to sell storage facilities in tertiary markets. Many groups who were active buyers a year or two ago have become more cautious. They are now prioritizing locations with steadier demand and clearer recovery trends. Because of that shift, sellers in tertiary areas are learning that the interest is still there, but often at pricing that no longer matches expectations formed eighteen to twenty four months ago.

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That doesn’t mean deals are impossible. Well operated facilities in smaller markets can still attract regional operators who know the area and can run them efficiently. The difference today is that buyers are moving slower and being far more selective. The days when tertiary deals moved quickly with a long line of interested groups seem to be on pause for now.

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Amid those challenges, there is a bit of encouraging news. Yardi’s September 2025 national report shows the storage industry may be stepping into the early stages of rate stabilization. National advertised rents ticked up by 0.9 percent year over year, landing at an average of $16.80 per square foot. It is not a big jump, but it breaks a nearly three year streak of compression.

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REITs are leading this improvement. Same store advertised rents rose 2.6 percent year over year, while non REIT competitors saw only a 0.1 percent increase. Several supply constrained markets like Detroit, Chicago, Minneapolis, and Indianapolis posted some of the strongest gains between 2.5 percent and 3.6 percent. On the other hand, high growth metros with heavy lease up pipelines, including Austin and Salt Lake City, are still seeing year over year declines ranging from -0.6 percent to -2.3 percent.

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Overall, the picture is uneven but moving in a better direction. Markets with stable demand and more disciplined pipelines are beginning to show momentum. For tertiary markets and supply heavy metros, the path to smoother conditions may take a bit longer. What seems clear is that buyer expectations, seller expectations, and the broader rate environment are gradually finding their new balance.

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