Self-Storage Report

KANSAS

2025

SELF-STORAGE REPORT

naimartens.com | (316) 262-0000 1330 E Douglas, Wichita KS 67214

NEW DEVELOPMENT Development Pipeline and New Supply Self-storage construction boomed in the late 2010s, cooled briefly in 2020, then ramped up again. The last three years have seen substantial new supply nationally. Over 58.5 million square feet of new self-storage space was delivered across the U.S. in 2024 alone – roughly 3.1% of existing inventory added in a single year. For 2025, another ~56 million sq. ft. is expected nationwide. Rising construction costs and tighter financing have tempered the breakneck development pace. Still, the U.S. overall continues to expand selfstorage inventory by roughly 3% per year, concentrated in high-growth metros and undersupplied markets.

New development in Kansas outside the Kansas City metro has been more modest in scale. Kansas had a building boom of its own in past decades (which led to high supply per capita), so recent projects have been more measured. In Wichita, for example, only about 37,000 sq. ft. of new storage space came online in 2024 – just ~1.2% of the local inventory. By comparison, many Sunbelt cities saw 3–5% inventory growth in 2024. Wichita’s 2024 additions were actually less than the prior year’s, resulting in only a ~1.3% net inventory increase year-over-year. However, 2025 is set to see a bump in Wichita construction: one new facility of 84,000 sq. ft. is slated for completion in West Wichita, and a 64,000 sq. ft. climate-controlled facility is planned for Derby, KS. Other Kansas cities have similarly small-scale development. For instance, college towns like Manhattan and Lawrence have seen a few projects to meet student demand. New supply in 2022–2025 has expanded Kansas inventories by 1–3% annually, compared to ~3%+ nationally. This slower growth has actually been a blessing for existing operators – it prevented the severe oversupply concerns seen in some Sunbelt cities. Occupancies in Kansas have thus remained fairly strong, supporting the rent stability discussed earlier.

Overall, Kansas’s new construction pipeline is active but disciplined, expanding just enough to meet demand without significantly outpacing it.

A rendering of a new 64,000 square foot climate-controlled storage facility in Derby, KS

OCCUPANCY

Occupancy Rate Trends (2022–2025) The self-storage industry experienced record-high occupancy during the pandemic, reaching about 96.5% occupancy by Q3 2021. As the market normalized, occupancy leveled off around 90% by late 2022 – still above prepandemic norms. Throughout 2023, national occupancy held roughly steady in the high-80s to 90% range, essentially “stabilized” near 90% according to industry reports.

Kansas self-storage markets followed a similar trajectory with a few key differences. Occupancies in Kansas were historically a bit lower than coastal/Sunbelt markets due to abundant supply – for example, in Wichita, local operators considered 85–90% occupancy “healthy” even pre-pandemic (SpareFoot Names Wichita, KS, as Self-Storage Capital of the United States).

During 2021–2022, Kansas facilities also saw a pandemic bump (some operators briefly hitting the upper-80s to 90% range), but by 2023 occupancy eased slightly. Industry observers noted that the Midwest, including Kansas, saw mild softening in occupancy in 2023 (whereas some Northeast markets actually kept climbing. By early 2025, Kansas facilities are generally running in the high-80% occupied range, just a few points below the ~90% U.S. average.

Nonetheless, Kansas self-storage occupancy today remains robust and roughly in line with normalized national levels.

Space Station Storage – Augusta, KS

RENTAL RATES Rental Rate Trends and Comparisons

The pandemic period also drove surging rents: operators achieved double-digit rent growth in 2021 as move-in demand spiked and facilities filled up. Street rates for a standard 10’×10’ storage unit hit all-time highs by mid-2022. Since then, however, the trend has reversed slightly. By late 2023, national self-storage rents had cooled about 3% year-over-year. For example, the average 10×10 non-climatecontrolled unit cost ~$122/month in Dec 2023, down 3.2% from a year prior. As of early 2025, the national average 10×10 rate is around $121 (down ~1.6% YoY) – a modest decline reflecting the post-pandemic normalization. Many large cities saw slight rate drops last year, and a few over-supplied markets (e.g. parts of Florida and Arizona) even saw double-digit price declines. Operators responded by increasing discounts to attract customers as occupancy softened. Heading into 2025, however, the decline in rents has slowed and appears to be bottoming out.

In contrast to the national cooling, many Kansas markets have shown remarkable rate resilience – even growth – in recent years. Self-storage rents in Kansas are lower in absolute dollar terms than the U.S. average (reflecting the state’s lower construction costs and historically high supply), but lately they have been rising instead of falling. For example, as of February 2025 the average 10×10 unit in Wichita rents for about $93/month, roughly 25% cheaper than the U.S. average (~$121). Despite the lower price point, Wichita’s rates have been trending up.

Wichita actually saw about a +5.7% increase in average storage rents. Smaller Kansas cities have seen similar or even larger gains – Lawrence, KS rents jumped ~10% year-over-year (one of the highest increases in the country). By contrast, the majority of major U.S. cities had negative rent growth in that period. Operators have commented that tenants have become stickier – allowing for the implementation of ECRI’s (Existing Customer Rate Increases), helping increase property incomes.

Looking ahead, Kansas rental rates are expected to remain below national averages but relatively stable. Recent data (early 2025) actually put Kansas City, KS and Lawrence among the top 20 U.S. markets for fastest rent growth. This outperformance may not last indefinitely – if new supply ramps up, it could temper further rent increases. But so far, Kansas’s self-storage rents have shown resilience, with mom-and-pop operators benefiting from the sector’s postpandemic stability more than their big-city counterparts.

TRANSACTIONS Cap Rates and Investment Trends After a frenzied 2021–2022, self-storage investment activity cooled significantly in 2023. Nationwide, rising interest rates and economic uncertainty led to a -57% YoY drop in transaction volume in H1 2023. Many buyers went to the sidelines as debt became more expensive. Despite this pullback, self-storage remained a favored asset class relative to other real estate (investment volume was still above pre-pandemic levels). Kansas, as a secondary market, saw proportionally fewer mega-deals, but the broader trends still apply. Most self-storage properties in Kansas are still owned by local mom-and-pop operators, and those that changed hands in the last 2–3 years often were acquired by regional operators or national companies expanding into the area. For example, Wichita-based facilities have historically been family-owned or run by regional firms, but in recent years major REITs like Extra Space have also established a presence in the market. Overall, transaction activity in Kansas slowed in 2023 and 2024, in line with national trends. Deals that did occur often involved higher cap rates (lower prices). Despite the sharp increase in interest rates over the past two years, cap rates have only expanded by 100 – 150 basis points, further proving the self-storage sectors resilience. In today’s environment, well-maintained, stabilized facilities in primary locations are trading in the low to upper 6% cap rate range, versus the sub-5.5% caps seen at the 2021 peak premium assets.

Class B facilities have traded in the 7.5%-8.5% cap rate range with Class C facilities trading in the range of 8.5-9.5% U.S. 10 Year Treasury depending on the population statistics, condition/age of the facility, and value-add potential. Buyers have

increasingly in-place financials over future potential and prefer deals that offer value-add opportunities with below-market rents, no online presence or website with the ability to streamline operations, and priced below replacement costs. In 2021 and 2022, a deal could be listed and would receive multiple offers within the first few days. It is now taking buyers longer to underwrite deals and fully understand the asset before making an offer. An increase in inventory has also allowed buyers to underwrite with more conservative assumptions.

Expectations between buyers and sellers are finally becoming closer. We expect this trend to continue and lead to an increase in activity for 2025. Institutions and private capital remain interested in strong self-storage assets due to the sector’s proven recession resilience.

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Brogan Klein

Drew Gannon, CCIM

@ Copyright 2024 NAI Martens. Reproduction in whole or part is permitted only with the written consent of NAI Martens. The information contained herein was obtained from sources believed reliable; however, NAI Martens makes no guarantees, warranties or represents as to the completeness or accuracy thereof.

(316) 352-7315 bklein@naimartens.com

(316) 680-1108

dgannon@naimartens.com

Commercial Advisor

t r o p e R e g a r o t S-fl e S 5 2 0 2

Commercial Advisor

t r o p e R e g a r o t S-fl e S 5 2 0 2 1330 E. Douglas Wichita, Kansas 67214