Yardi Matrix's Q2 2026 self-storage supply forecast update reads like a market hitting the brakes hard. Fifty-three development projects were categorized as abandoned in March 2026 alone. The trailing three-month average climbed to 42 abandoned properties per month, versus roughly six per month at the peak of the last development cycle. The deferred pipeline expanded to 7.18 million net rentable square feet at Q1 close, up 49% year over year and more than double the July 2023 low of 2.72 million NRSF.
At the same time, Q1 2026 construction starts tracked approximately 29% below the pace recorded one year earlier, with just 5.12 million NRSF identified by early April. The industry is simultaneously delivering the tail end of the 2022-2023 boom and killing the projects that would have extended oversupply into 2028.
Why Are Abandoned Projects Surging Now?
Yardi Matrix has tracked self-storage development through multiple cycles. The current abandoned-project count is not seasonal noise. Since 2024, the monthly number of projects categorized as abandoned has consistently exceeded 20. At the last cycle's peak, the average was six per month.
March 2026's 53 abandoned properties represent developers walking away from entitled land, partially built structures, or planned projects that no longer clear underwriting. Weak net operating income growth, Sun Belt oversupply, and elevated long-term interest rates are the drivers Yardi Matrix cites in the Q2 bulletin.
The planned pipeline tells the same story from a different angle. For markets covered at least 24 months, planned inventory stood at 107.62 million NRSF at Q1 close, down 5.9% quarter over quarter and 14.1% year over year. The planned pipeline peaked in September 2024 at 133.24 million NRSF and has since declined 19%.
Projects are stalling longer before they start. Self-storage developments beginning construction in Q1 spent an average of 583 days (19.3 months) in planned status, down from 676 days in Q4 but still elevated. Historically, about 20% of projects spent more than two years in planned status. Since late 2024, that share has reached 40% in Q1 2026. Developers are not rushing to break ground. Many are not breaking ground at all.
What Does the Deferred Pipeline Signal?
The deferred category is where projects go when financing, entitlement, or market conditions pause construction without formally abandoning the site. After contracting in Q3 and Q4 2025, the deferred pipeline expanded 22.7% quarter over quarter in Q1 2026 to 7.18 million NRSF.
That inventory is stuck capital. It is not delivering rent. It is not formally dead. It can restart if cap rates compress and street rates stabilize, or it can slide into abandoned status if conditions worsen.
The prospective pipeline continues declining in parallel. At Q1 close, prospective inventory held 30.20 million NRSF in long-tracked markets, down 9.2% quarter over quarter and 14.1% year over year. The prospective pipeline peaked in October 2023 at 52.39 million NRSF and has since fallen 42.4%.
Yardi Matrix senior research analyst Ben Bruckner summarized the bottom line in the bulletin: both near- and long-term pipeline data suggest development interest has substantially declined, while abandoned and deferred projects sit well above last-cycle lows.
How Much Supply Still Has to Deliver Before Relief Arrives?
The forecast update is not all contraction. Year-end 2025 under-construction inventory reached 54.46 million NRSF, and completion timelines suggest roughly 52.88 million NRSF will finish in 2026. The Q2 forecast raised completion estimates 2.3% to 3.5% across all years to account for 30 new markets added to Yardi Matrix coverage since July 2025. The overall shape is unchanged: supply falls to approximately 1.75% of existing stock by 2028.
Near-term pain persists. Under-construction pipeline at Q1 2026 stood at 50.26 million NRSF nationally, down 14.5% year over year. For markets tracked at least 24 months, the figure was 49.48 million NRSF, down 5.9% from Q4 2025. Most of that inventory completes in 2026 or by mid-2027.
Q1 2026 construction starts at 5.12 million NRSF (with lag-adjusted upside) compare to 7.20 million NRSF in the same period one year ago. That 29% gap is what determines 2027 and 2028 supply. Starts today are tomorrow's completions. Abandoned projects today are supply that will never arrive.
Advertised rental rates remain under pressure, especially in Sun Belt markets struggling to absorb excess inventory. Long-term interest and mortgage rates stay elevated, suppressing single-family home sales, a primary demand driver, and keeping cap rates high enough to choke new development underwriting.
Which Markets Still Face the Most Delivery Risk?
Yardi Matrix's April 2026 market outlook, published alongside the supply data, showed the national under-construction pipeline at 46.2 million square feet, or 2.2% of total stock. Phoenix and Sarasota-Cape Coral ranked highest at 6.5% of existing inventory under construction despite month-over-month declines. Portland, Oregon ranked lowest at 0.5%.
The divergence is the story. Sun Belt metros that overbuilt in 2022-2024 are absorbing abandoned projects and deferred inventory while still completing what was already under construction. Supply-constrained coastal and gateway markets are seeing pipelines thin faster, with development barriers accelerating the contraction.
Capright's June 2026 REIT update reinforced the geographic split: Sunbelt markets continue experiencing oversupply pressures and rent compression, while supply-constrained gateway markets stabilize faster due to development barriers and zoning limitations. New York reported among the highest rental rates nationally at $33.62 per square foot. Atlanta faced elevated concessions and some of the sector's lowest advertised rents.
Operators in Phoenix, Tampa, Orlando, and Atlanta should plan for 2026 completions regardless of what starts data says today. Operators in Portland, Boston, and supply-constrained Northeast corridors are closer to the demand side of the inflection.
The Numbers Worth Writing Down
- Abandoned projects, March 2026: 53 properties; trailing three-month average 42 per month
- Last-cycle comparison: ~6 abandoned projects per month at prior peak
- Deferred pipeline, Q1 2026: 7.18 million NRSF; up 49% year over year; more than double July 2023 low
- Q1 2026 construction starts: ~5.12 million NRSF identified by early April; ~29% below prior-year pace
- Under-construction inventory, Q1 2026: 50.26 million NRSF nationally; down 14.5% year over year
- 2026 forecast completions: ~52.88 million NRSF from year-end 2025 pipeline
- Planned pipeline: 107.62 million NRSF in long-tracked markets; down 19% from September 2024 peak
- Prospective pipeline: 30.20 million NRSF; down 42.4% from October 2023 peak
- 2028 supply forecast: New supply declines to ~1.72% of existing stock (38.62 million NRSF)
Abandoned Dirt Is the Leading Indicator
Occupancy stabilization and modest street-rate improvement dominated REIT earnings commentary in Q1 2026. Yardi Matrix's development data explains the mechanism behind the next phase: the supply that pressured 2024 and 2025 is still arriving, but the supply that would have extended the downturn into 2028 is dying in planning committees and on capital desks.
Fifty-three abandoned projects in a single month is not a soft landing. It is a hard stop. The operators who survive the next 12 months of completions will face a thinner competitive set in 2027. The deferred pipeline is the wild card: 7.18 million NRSF that could restart or could join the abandoned count.
Watch abandoned and deferred metrics as closely as occupancy. They tell you what your competitors will not build, and that is worth more than another quarter of street-rate data in oversupplied Sun Belt submarkets.
Sources
- Self Storage Supply Forecast Update, Q2 2026, Yardi Matrix
- Self Storage Market Outlook, Yardi Matrix
- Self-Storage REIT Update – June 2026, Capright
- What's Next for Self Storage in 2026, Multi-Housing News
- Self storage in 2026: Stability and optimism, The Crittenden Report