Core acquisition focus

Self-storage where local supply supports the cash flow

Self-storage remains attractive, but 2026 performance is highly local. XitSource prefers existing facilities in markets with constrained recent development, durable occupancy, reasonable acquisition basis, and revenue-management or operational upside.

Last reviewed: September 2026

Why this fits the XitSource thesis

Recurring rental revenue with limited staffing requirements.
Many attractive transactions remain in the small and mid-sized facility segment.
Operational gains can come from revenue management, digital leasing, expense control, security, and unit mix.
New supply is slowing nationally, improving the outlook for well-located existing facilities.

What we look for

  • • Existing stabilized or near-stabilized occupancy.
  • • Smaller facilities below major institutional transaction sizes.
  • • Mom-and-pop or locally managed properties with process improvement potential.
  • • Facilities with under-managed rates, collections, marketing, or ancillary revenue.
  • • Real estate and storage operations acquired together when possible.
  • • Expansion potential only when local supply and demand clearly support it.

Market screen

  • • Employment and household stability or growth.
  • • Limited recent and planned storage deliveries within the trade area.
  • • Existing occupancy supported by real local demand rather than deep concessions.
  • • Reasonable rent-to-income and housing mobility fundamentals.
  • • Fragmented competition rather than immediate REIT saturation.
  • • Going-in yield that works without assuming a rapid return to 2022 street rents.

What makes us cautious

  • • Construction-heavy submarkets with prolonged lease-up competition.
  • • Facilities priced on aggressive future rent growth.
  • • Low occupancy caused by structural local demand weakness.
  • • Markets where new supply is materially outpacing household formation.
  • • Large deferred capital needs without a sufficient basis discount.

September 2026 market context

Marcus & Millichap projects 2026 self-storage inventory growth of about 2.2%, the lowest annual delivery pace since 2016, with national vacancy expected to improve toward 10%. Asking rents remain below the 2022 peak, however, and development is still concentrated in several Sun Belt markets. That reinforces our preference for supply-disciplined secondary markets and smaller existing facilities rather than broad metro-growth stories.

Market sources reviewed

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