Self Storage Cap Rates and Business Valuation in 2026: NOI Math and the Climate-Control Premium
Self storage valuation in 2026: divide the NOI a buyer will underwrite, after a management fee and reassessed property tax, by a cap rate of 5.05% to 6.75% by class (Newmark, 3Q 2024).
Key takeaways
- Newmark’s 3Q 2024 investor survey averaged 5.05% cap rates for Class A, 5.95% for Class B and 6.75% for Class C self storage (Newmark 2025 Almanac, Table 14.3).
- Closed trades averaged a 6.59% cap rate in 2026, and $1 million to $10 million deals were nearly 80% of transactions (Marcus & Millichap, via CRE Daily, September 11, 2026).
- Public Storage’s existing customers paid $22.54 per occupied square foot in 2025 while new move-ins signed at $12.80 (Public Storage 10-K, fiscal 2025).
- Florida reassesses non-homestead property at just value after a change of ownership, ending its 10% annual cap (Fla. Stat. s. 193.1555).
- Public Storage closed its National Storage Affiliates deal on July 22, 2026, reaching over 4,500 properties (Public Storage).
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How do you calculate self storage valuation?
Self storage valuation uses the income approach: net operating income divided by a market cap rate, cross-checked against price per net rentable square foot. Newmark’s appraisal chapter writes it as Income divided by Rate equals Value, and notes that seller, buyer and broker can quote 5.50%, 6.0% and 5.75% on the same sale (Newmark 2025 Almanac, Section 14).
- Rebuild trailing 12 months of NOI. Use collected rent plus tenant insurance, fees and retail, less a full expense load that includes a market management fee and reassessed property tax.
- Pick a cap rate from class and trade evidence. Newmark’s class averages run from 5.05% to 6.75%; 2026 closed trades averaged 6.59%.
- Divide. A 6.5% cap rate equals 15.4 times NOI; 5.5% equals 18.2 times.
- Cross-check and adjust. Compare value per square foot with the $143 to $168 in Newmark’s six stabilized Class B comps, add entitled expansion land, subtract deferred roof or paving work.
A lender relies on an MAI appraisal that reconciles income, sales comparison and cost approaches. For owner salary and one-time costs, see which add-backs buyers accept.
Self storage cap rates and EBITDA multiples by market tier and asset class
Self storage cap rates in Newmark’s 3Q 2024 survey averaged 5.05% for Class A, 5.95% for Class B and 6.75% for Class C, with Class C quotes up to 8.00%; 2026 closed trades averaged 6.59%. The implied NOI multiple is 1 divided by the cap rate, the property-level version of an EBITDA multiple.
| Class or measure | Cap rate range | Average | NOI multiple | Typical facility (CT Acquisitions estimates, illustrative) | Source |
|---|---|---|---|---|---|
| Class A | 4.75% to 5.50% | 5.05% | 19.8x | Primary metro, multi-story, climate-controlled | Newmark, 3Q 2024 |
| Class B | 5.25% to 6.50% | 5.95% | 16.8x | Secondary metro or older primary-market facility | Newmark, 3Q 2024 |
| Class C | 6.25% to 8.00% | 6.75% | 14.8x | Tertiary or rural, single-story drive-up | Newmark, 3Q 2024 |
| Closed trades, 2026 | Not published | 6.59% | 15.2x | Mostly $1 million to $10 million deals | Marcus & Millichap via CRE Daily |
| Survey, six quarters to H1 2025 | Not published | 5.8% | 17.2x | Institutional-quality assets | Cushman & Wakefield |
Surveys and trade averages measure different things. Newmark and Cushman & Wakefield poll investors about stabilized institutional product; Cushman & Wakefield logged an all-time low of 5.0% in Q4 2022. The 6.59% Marcus & Millichap figure covers closed sales in the $1 million to $10 million range where most single-facility owners sell, so an independent Class B or C facility should test its price at both.
How have self storage cap rates moved since 2019?
Newmark’s all-class average fell from 5.60% in 3Q 2019 to 4.93% in 3Q 2021, then rose to 5.70% by 3Q 2024 as interest rates climbed. A neighbor’s 2021 sale sits at the low point of the series, so it overstates what the same facility would fetch at today’s rates.
| Newmark survey | Range | All-class average |
|---|---|---|
| 3Q 2019 | 4.50% to 8.50% | 5.60% |
| 3Q 2020 | 4.50% to 8.50% | 5.50% |
| 3Q 2021 | 4.00% to 6.50% | 4.93% |
| 4Q 2022 | 4.00% to 6.50% | 5.21% |
| 3Q 2023 | 4.75% to 8.00% | 5.68% |
| 3Q 2024 | 4.75% to 7.75% | 5.70% |
What guides say vs what the dated sources say
Several ranking guides quote cap rates with no survey name or date. The table sets each claim against Newmark’s 3Q 2024 survey and the 2026 Marcus & Millichap trade average, including the figures this page carried until its June 2026 version.
| Claim | Where | Dated source |
|---|---|---|
| Class A 5.5% to 6.5%, Class B and C 7.5% to 8.5% | This page, June 2026, no named report | Newmark 3Q 2024: Class A 5.05%, Class C 6.75% averages; top Class C quote 8.00% |
| Typically 5% to 8% | Oakside, July 30, 2026, no source | Newmark ranges 4.75% to 8.00%; 2026 trades 6.59% |
| 9% cap rate example | Inside Self Storage, December 15, 2010 | Newmark 3Q 2024 all-class average 5.70% |
What is an exit cap rate?
An exit cap rate, or terminal cap rate, is the rate a buyer assumes for its own resale at the end of the hold, usually at or above the going-in rate. In the illustrative example below, year-11 NOI of $561,026 is worth $8,631,163 at a 6.5% exit cap and $8,014,651 at 7.0%, a $616,512 swing that feeds straight into the offer.
How will a buyer rebuild your NOI?
A buyer rebuilds NOI from the rent roll and bank deposits, then books two costs most independent owners never carry: a management fee and property tax reassessed at the sale price. In the illustrative example on this page, those two lines cut NOI from $546,960 to $460,236, a 16% drop before any cap rate is applied.
Physical and economic occupancy
Physical occupancy is leased square feet over net rentable square feet; economic occupancy is collected rent over street rent on the whole building. Public Storage averaged 92.0% same-store occupancy in 2025 and CubeSmart ended 2025 at 88.6% (CubeSmart, February 26, 2026). Extra Space calls a store stabilized after three years open or a calendar year at 80.0% average occupancy.
Street rent vs in-place rent and ECRI headroom
Street rent is what a new customer pays; in-place rent is what current customers pay. REITs raise long-term customers’ rents, typically every six to twelve months, through existing customer rate increases (ECRIs), so in-place rent sits far above street. Public Storage’s 2025 same-store customers paid 76% more per square foot than its new move-ins.
| Public Storage same-store | 2025, per sq ft | 2024 | Source |
|---|---|---|---|
| New move-ins, contract rent | $12.80 | $13.69 | Public Storage 10-K |
| Move-outs, contract rent | $20.30 | $20.59 | |
| All occupied space, realized | $22.54 | $22.43 |
Many independent owners run the opposite book, with in-place rent at or below street. A buyer counts that as ECRI headroom: if comparable units nearby advertise $14.40 per square foot a year and your occupied space averages $13.20, the $1.20 gap on 52,800 square feet is $63,360 of revenue, or $974,769 at a 6.5% cap rate (illustrative). Buyers rarely pay for all of it because move-outs follow increases, so run ECRIs for 12 months before marketing. Street rents are also falling: Yardi Matrix put September 2026 rates at $16.21 per square foot, down 1.8% year over year (CRE Daily, October 22, 2026).
Management fee and property tax normalization
A buyer charges a management fee even if you self-manage; this page uses 6% of effective gross income (CT Acquisitions estimates, illustrative). Property tax is the bigger cut where a sale triggers reassessment, and the statute decides how big.
Florida caps non-homestead increases at 10% a year until a change of ownership, then reassesses at just value (s. 193.1555(3) and (5)). California reassesses to market value when ownership changes (State Board of Equalization), at a base rate capped at 1% (Cal. Const. art. XIII A, s. 1).
| Line (60,000 sq ft, 88% occupied, illustrative) | Seller’s P&L | Buyer’s underwriting | Why |
|---|---|---|---|
| Rental income (52,800 sq ft at $13.20) | $696,960 | $696,960 | Verified against deposits |
| Tenant insurance, fees, retail | $35,000 | $35,000 | Kept if the program transfers |
| Effective gross income | $731,960 | $731,960 | |
| Expenses before tax and management | $157,000 | $157,000 | Payroll, insurance, utilities, repairs |
| Property tax | $28,000 | $70,806 | Assumed 1.0% of purchase price |
| Management fee | None booked | $43,918 | 6% of effective gross income |
| NOI | $546,960 | $460,236 | 16% lower |
| Value at a 6.5% cap rate | $8,414,769 | $7,080,560 | Gap of $1,334,209 |
| Per net rentable sq ft | $140 | $118 |
What is your self storage facility worth at different cap rates?
Holding buyer NOI at $460,236, each 50 basis points of cap rate moves value by roughly $440,000 to $700,000. Proving Class B (Newmark average 5.95%) rather than Class C (6.75%) matters as much as the NOI, and the per square foot column gives the cross-check a buyer will run.
| Cap rate | Value of $460,236 NOI | Per sq ft |
|---|---|---|
| 5.5% | $8,367,935 | $139 |
| 6.0% | $7,670,607 | $128 |
| 6.5% | $7,080,560 | $118 |
| 7.0% | $6,574,806 | $110 |
| 7.5% | $6,136,485 | $102 |
Price per square foot as a cross-check
Cushman & Wakefield, citing Real Capital Analytics, put the national average at $159 per square foot in Q2 2025, down from $174 in Q1 2023. Public Storage’s roughly $10.5 billion enterprise value for National Storage Affiliates, announced March 16, 2026, works out to about $151 across 69.4 million square feet (Public Storage; CT Acquisitions arithmetic). An older single-story facility at $118 fits below both; drive-up space above $159 needs rents that prove it.
How do REITs and regional operators underwrite a self storage acquisition?
REITs underwrite your NOI with their own pricing system, call center and tenant insurance; regional operators spread management overhead across nearby sites. Both test new supply, which Yardi Matrix put at 2.1% of existing stock under construction in September 2026.
| Buyer | Verifiable activity | What it underwrites |
|---|---|---|
| Public Storage (NYSE: PSA) | Closed NSA July 22, 2026; 273 facilities for $3.9 billion since January 1, 2023; 362 facilities managed for others (10-K) | Its move-in rents plus ECRIs on your rent roll |
| Extra Space Storage (NYSE: EXR) | 41 stores for $483.6 million in 2025; one C of O store; $200 million 2026 acquisition guidance; 1,856 stores managed for others (February 19, 2026) | Three years open or 80.0% occupancy; mostly joint venture buying in 2026 |
| CubeSmart (NYSE: CUBE) | Two stores for $49.0 million in Q4 2025; 862 stores under third-party management | Metro infill; management contracts |
| Westport Properties (US Storage Centers) | Three Utah facilities, over 200,000 sq ft, December 17, 2025 (PR Newswire) | Clusters that open a new metro |
| Regional operators, local investors | Most of the $1 million to $10 million trades | Bank or SBA debt; 7(a) loans cap at $5 million (SBA) |
Selling is not the only route: Extra Space added 379 stores to third-party management in 2025, so an owner can keep the real estate under a REIT brand and sell later on REIT-run numbers. Our guide to selling a storage facility covers how a confidential process reaches these buyers.
Is expansion land or a certificate of occupancy worth extra?
Expansion land adds value only to the extent a buyer can build without new approvals. Extra Space bought a Certificate of Occupancy (C of O) store at completion of construction in 2025: buyers pay for space the building department has signed off and discount anything still needing zoning or permits.
| If your extra land is | Buyers typically price it as (CT Acquisitions estimates, illustrative) |
|---|---|
| Zoned, site plan approved, utilities at the lot line | Part of the development profit on new space |
| Zoned for storage, no site plan | Close to raw land value |
| Needs rezoning, a variance or a special use permit | Little or nothing |
| Existing buildings missing a certificate of occupancy | A price cut or a closing condition |
How is the price split between the real estate and the business?
A storage sale is mostly real estate plus a small business: customer list, website, phone number and tenant insurance program. Buyer and seller each report the split on IRS Form 8594, where land, buildings and equipment are Class V, customer-based intangibles Class VI and goodwill Class VII (Form 8594 instructions).
| Asset (illustrative split of $7,080,560) | Amount | Class | Seller tax character | 1031 eligible |
|---|---|---|---|---|
| Land, 20% | $1,416,112 | V | Capital gain | Yes |
| Buildings, paving, fencing, 70% | $4,956,392 | V | Prior depreciation up to 25%, rest capital gain | Yes |
| Gates, kiosks, cameras, 2% | $141,611 | V | Ordinary income up to prior depreciation | No |
| Customer list, website, goodwill, 8% | $566,445 | VI and VII | Capital gain if self-created | No |
Section 1031 covers real property only (IRS, May 1, 2026), so $6,372,504 of this example could roll over. Replacement property must be identified within 45 days and received within 180 (26 U.S.C. 1031(a)(3)), and unrecaptured Section 1250 gain is taxed at up to 25% (IRS Topic 409). Ask your CPA to model the allocation before the letter of intent; see our purchase price allocation guide.
Selling a self storage facility? Talk to an advisor who knows the buyers.
We work for owners on the sell side. Our fee is success only: nothing upfront, and you pay nothing unless the business sells. A 15-minute call gets you three things: a view of what your facility is worth in today’s market, which buyer types fit your asset, and the option to meet one of them.
Which sale path fits your self storage facility?
The right path follows from three facts you can prove: stabilization, the gap between in-place and street rent, and the price band. Extra Space’s stabilization test, the SBA’s $5 million 7(a) cap and Newmark’s class averages set the thresholds below.
| If your situation is | Then do this | Threshold source |
|---|---|---|
| Open under three years, or under 80% average occupancy last year | Expect lease-up pricing; wait or approach developer-operators | Extra Space |
| In-place rent 10% or more below street | Run ECRIs for 12 months before marketing | CT Acquisitions estimates, illustrative |
| In Florida or California, owned 10+ years | Price off NOI with tax reassessed at the asking price | Fla. Stat. s. 193.1555; Cal. Const. art. XIII A |
| Price under $5 million, local buyer | Prepare lender-ready rent rolls and deposit records | SBA 7(a) cap |
| Class A, or price above $10 million | Approach REITs and institutional platforms | Newmark 3Q 2024 |
| Out of operations, not out of the asset | Ask REIT platforms about third-party management | REIT 2025 results |
Our guide to selling a self storage business and the data room checklist cover the documents buyers request, and the self storage franchise economics report shows how royalties change NOI.
Want to know what your self-storage business is worth?
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How we compiled this
We compiled this page in November 2026 from 18 documents: Newmark’s 2025 Almanac cap rate chapter, a Cushman & Wakefield report, Public Storage, Extra Space and CubeSmart filings and releases, a Westport release, Florida and California tax law, three IRS pages, 26 U.S.C. 1031, the SBA 7(a) page and two CRE Daily reports. Marcus & Millichap and Yardi Matrix figures come through CRE Daily because the originals could not be opened. We excluded forums, and worked examples use CT Acquisitions assumptions labeled illustrative.
Frequently asked questions
How do you value a self storage facility?
Divide the NOI a buyer will underwrite, after a management fee and reassessed property tax, by a market cap rate. Newmark’s 3Q 2024 averages were 5.05% for Class A, 5.95% for Class B and 6.75% for Class C. In this page’s illustrative example, $460,236 of NOI at 6.5% supports $7,080,560, or $118 per square foot.
What is a good cap rate for a self storage facility?
For a seller, a lower cap rate means a higher price. Newmark’s 3Q 2024 class averages ran from 5.05% (Class A) to 6.75% (Class C), and 2026 closed trades averaged 6.59% per Marcus & Millichap. A 7% cap rate fits an older, rural or drive-up facility; on a newer metro facility it signals a weak bid.
What are the typical cap rates for self storage in 2026?
Closed self storage sales averaged a 6.59% cap rate in 2026, per Marcus & Millichap’s 2H 2026 report as covered by CRE Daily. Investor surveys run lower because they track institutional product: Cushman & Wakefield’s survey averaged 5.8% over the six quarters to H1 2025, and Newmark’s 3Q 2024 all-class average was 5.70%.
What is an exit cap rate?
An exit cap rate, or terminal cap rate, is the rate a buyer assumes for reselling the facility at the end of its hold, usually at or above the going-in rate. On $561,026 of year-11 NOI (illustrative), a 6.5% exit cap gives $8,631,163 and 7.0% gives $8,014,651, so a higher exit rate lowers today’s offer.
How profitable is self storage?
Occupancy is high but 2025 profit growth was flat to negative at the largest operators. Public Storage averaged 92.0% same-store occupancy in 2025, Extra Space same-store NOI fell 1.7% for the year, and CubeSmart same-store NOI fell 1.1% in Q4 2025 as operating expenses rose 2.9%. A buyer’s return comes from the price paid against verified NOI.
What is the outlook for self storage in 2026?
Supply is slowing while rents soften. Marcus & Millichap forecast 53 million square feet of 2026 completions, the lowest since 2016, and 10% vacancy by year-end, per CRE Daily. Yardi Matrix put September 2026 street rates at $16.21 per square foot, down 1.8% year over year, while sales volume through June rose nearly 50%.
Sources
Accessed November 2026 unless a date is shown.
- Newmark, 2025 Self-Storage Almanac, Section 14 (capitalization rate)
- Cushman & Wakefield, U.S. Self Storage Market Trends (H1 2025)
- CRE Daily on Marcus & Millichap 2H 2026 Self-Storage Report, September 11, 2026
- CRE Daily on Yardi Matrix October 2026 report, October 22, 2026
- Public Storage, Form 10-K, fiscal 2025
- Public Storage, NSA announcement, March 16, 2026
- Public Storage, NSA closing, July 22, 2026
- Extra Space Storage, 2025 results, February 19, 2026
- CubeSmart, 2025 results, February 26, 2026
- Westport Properties, Utah acquisition, December 17, 2025
- Florida Statutes s. 193.1555
- California State Board of Equalization, change in ownership
- California Constitution, art. XIII A, s. 1
- IRS, Like-kind exchanges, May 1, 2026
- 26 U.S.C. 1031, Cornell LII
- IRS, Instructions for Form 8594, April 30, 2026
- IRS Topic No. 409
- SBA, 7(a) loans
About the Author
Christoph Totter is the founder of CT Acquisitions, an M&A advisory firm that helps owners make the most of their exit, headquartered in Sheridan, Wyoming. We work directly with 500+ buyers, search funders, family offices, lower middle-market PE, and strategic consolidators, including direct mandates with the largest consolidators that other intermediaries cannot access. We work for owners on the sell side. Our fee is success only: nothing upfront, and you pay nothing unless the business sells. Connect on LinkedIn · Get in touch
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