Self-storage cap rates: what the surveys say, and which cap to use

Published self-storage cap rates, with dates

Most “2026 cap rate” pages quote a range with no source. The table below lists what each publisher actually reported, what the number measures, and when. Where the full report sits behind a registration form, the figure comes from a trade publication's summary and is labeled as such.

Two readings matter for a buyer. First, the institutional figures (Newmark, Cushman & Wakefield, the REIT deals SkyView describes) sit in the 5% to 6% band. SkyView notes that brokered pricing stayed “relatively aggressive,” and that Extra Space Storage made nearly all of its $91 million of Q2 2026 acquisitions off market. Second, the Marcus & Millichap average of 6.59% is about 90 basis points above Newmark's 3Q 2024 average. The summary does not say what mix of deals sits behind it, so treat it as a signal that the average trade is not a class A trade, not as proof that cap rates rose by that much.

Self-storage cap rates by class

Newmark's survey is the only source here that publishes a range and an average for all three classes:

Cushman & Wakefield's class A (5% to 5.5%) and class B (5.5% to 6.5%) ranges line up closely. The 170 basis point gap between Newmark's class A and class C averages is the premium buyers demand for older buildings, smaller markets, thinner demand data and more operating risk. Most facilities a first-time buyer can afford are class B or C, so the headline “5.7%” is usually the wrong benchmark.

How the survey average has moved

The average fell to 4.93% in 2021, then climbed back to roughly its 2019 level by 2023 and held there in 2024. Newmark read the flat 2023 to 2024 result as a sign that values had stabilized. If you bought in 2021 at a sub-5% cap and plan to sell into a market near 5.7%, the same NOI is worth about 13.5% less, which is the risk an exit cap assumption is meant to capture.

Why published surveys lag the market

• Publication delay. The Newmark survey above was taken in 3Q 2024 and published in the 2025 Almanac. By the time most buyers read it, the data is a year old or more.
• Averaging. Cushman & Wakefield's 5.8% is an average across six quarters, which smooths out any recent move.
• Sales reflect old negotiations. A closed sale records a price agreed months earlier. Newmark notes that comparable-sale cap rates reflect expectations at the time of sale, and that investor perceptions from two years ago may not match current conditions.
• Different NOI bases. Newmark points out that a cap rate can be calculated on trailing NOI or on a forecast, and that it matters whether expenses, particularly real estate taxes, were adjusted to market. It gives the example of a seller who believes the cap rate was 5.50%, a buyer who believes 6.0%, and a broker who reports 5.75% on the same deal.

Newmark itself says surveys are support, not a primary source. Use them to bracket your assumption, then check it against recent sales in your market and against brokers who trade facilities like yours.

Going-in cap, exit cap and valuation cap

• Going-in cap: your first-year (or current) NOI divided by the purchase price. It tells you what you are paying for today's income.
• Valuation cap: the market cap rate an appraiser or lender applies to stabilized NOI to estimate value. Survey figures are closest to this number, because they describe stabilized or forecast Year 1 cap rates.
• Exit (terminal) cap: the rate you assume the next buyer will pay on the forward NOI at the end of your hold. It sets the sale price in your return model.

On a value-add deal the going-in cap can be well below market because current NOI is depressed by low occupancy or below-market rents. That is fine if the price reflects it. What you compare to the market is the cap on stabilized NOI, which is what the cap rate calculator and the Deal Analyzer both show.

Why an exit cap above the going-in cap is conservative

When you sell, the building is older, roofs and doors are closer to replacement, new supply may have opened nearby, and interest rates may be higher. The next buyer will also reset your tax bill and discount your NOI the way you are discounting the seller's. Assuming a higher exit cap prices those risks in. Assuming a lower one means part of your return depends on the market paying more for the same income, which you do not control.

A 50 basis point change in the exit cap moves the sale price by 7.7% here. On a levered deal that swing lands entirely on your equity, which is why the exit cap is often the input that decides whether a deal clears your IRR target. Compare the exit cap to the stabilized market cap, not to a going-in cap computed on depressed current NOI.

How the cap rate relates to the loan constant

The loan constant is annual debt service divided by the loan amount. It includes principal, so it is higher than the interest rate. The band of investment method builds a cap rate from the lender's constant and the equity investor's required cash yield, weighted by their shares of the price:

Newmark's Almanac example uses 65% LTV, a 6.50% rate and 30-year amortization (a 7.59% constant) with a 2.00% equity dividend, which produces a 5.63% cap rate, close to its survey average. Read that the other way: at survey-level cap rates and those loan terms, the buyer earns about 2% cash-on-cash in year one.

Here is a hypothetical with different terms: 65% LTV, a 6.75% rate and 25-year amortization, which gives a loan constant of 8.29%.

If the cap rate is below the loan constant, each borrowed dollar costs more than the property earns on it, so cash-on-cash falls below the cap rate. The same arithmetic sets your debt coverage at purchase:

Buy at a 6.0% cap with those loan terms and DSCR is 6.0% ÷ (65% × 8.29%) = 1.11x, and year-one cash-on-cash is about 1.7%. If your lender sizes to 1.25x, the same 6.0% cap supports only about 58% LTV, or you need a 6.74% cap to borrow 65%. Lender requirements vary, so confirm them before you rely on a loan size. The DSCR and loan sizing calculator runs this with your terms.

The seller's NOI vs your NOI: the “real” cap rate

An asking price “at a 6.5% cap” is only 6.5% on the seller's NOI. Two adjustments change it most often: the property tax bill after the sale is reassessed, and a management fee the owner-operator never charged. Suppose a facility is offered at $5,000,000 on a seller NOI of $325,000.

The advertised 6.50% cap is a 5.24% cap on the NOI you would own. If 6.50% is the right cap for this facility, it is worth about $4,027,700 to you, not $5,000,000. The property tax reassessment guide shows how to estimate the new bill, and the NOI calculator rebuilds the rest of the expense side.

This guide is general education about self-storage underwriting, not investment, lending, tax or legal advice. Figures from third-party reports are cited with their dates and change over time.