Self-Storage REITs Advertised Rates More Than 20% Below Independent Operators

For years, the largest self-storage REITs used web rate discounting as a way to capture market share and fill vacant units. That strategy created a two-tier pricing market in which institutional operators advertised rates more than 20% below where independent operators were pricing comparable units, according to Tom de Jong, Executive Vice President at Colliers. The rollback of that discounting, supported by California’s SB 709 disclosure law and developments in New York, is now bringing fresh clarity to which operators held the stronger position throughout the cycle.

A 20% Gap That Shaped Visible Pricing

The mechanics were straightforward: advertise low web rates to drive lease-up velocity, fill units quickly, then adjust rents on existing tenants through systematic existing customer rate increases. Independent and mom-and-pop operators, de Jong says, largely took a different path and held their pricing steady. The result was a visible pricing gap that gave consumers a very different picture of market rents depending on the operator.

“You could see one of the REIT operators advertising rents 20% plus below where the independents might be advertising rates,” de Jong says.

For buyers underwriting acquisitions during this period, the only publicly visible pricing data was the advertised web rate, which meant the market could appear softer than it actually was for operators who had never discounted. Independent facilities with stable, market-rate in-place rents looked expensive relative to REIT-advertised rates, even though the REIT rates were promotional and temporary.

The shift gained momentum following California’s SB 709, which was first introduced as a rent control bill and subsequently passed as a rental disclosure bill on October 6, 2025, taking effect in California on January 1, 2026. Under the new rules, operators clearly distinguish between promotional rates and long-term rates in rental agreements. De Jong says SB 709 encouraged a broader national move away from deep discounting, particularly in high-supply markets like Las Vegas, Miami, and across Texas and the southern states.

The U-Haul Counterexample

The operator that stands out most clearly in de Jong’s analysis is U-Haul, notable for its pricing discipline. Unlike the REITs, U-Haul maintained market-rate pricing throughout the cycle, accepting a more measured lease-up in exchange for higher in-place rents from the start.

“U-Haul is one example of one of the largest operators that doesn’t discount the rents,” de Jong says. “My guess is they take a little bit longer to lease up, but they do so at higher rents.”

De Jong notes he has not seen U-Haul’s individual facility financials. The company does not sell properties, so rent rolls are not available for review. But the strategic logic is clear: an operator that never discounts can move straight to market rents rather than working through the 18-to-24-month process of bringing in-place rents back toward market after physical stabilization. The REITs, by contrast, begin the rent recovery process from a lower starting point.

De Jong says whether U-Haul’s approach produces better long-term returns than the REIT discount-and-raise model remains an open question. The REITs may ultimately close the gap through rent increases once stabilized. But the comparison raises a useful point: if a major operator can achieve stabilization at market rents without deep discounting, it invites a fresh look at the role of the discount strategy.

Regulation and Short-Term Renters

The regulatory response to discounting has introduced its own dynamics. States beyond California are now implementing rules that cap annual rent increases, and de Jong observes that these measures can produce results that surprise consumers who expect regulation to work in their favor.

“I always hate when you regulate a free market, especially a competitive free market, because you fix one thing, you break another,” de Jong says.

The specific effect he identifies: operators in heavily regulated markets are less inclined to offer deep upfront discounts because they cannot rely on future increases to recover the revenue. Short-term renters, such as people who need storage for two or three months during a kitchen remodel or a move, can end up paying more than they would in an unregulated market.

“If you’re remodeling your kitchen and you only need storage for two months, that ends up hurting you versus helping you,” de Jong says.

Long-term tenants, by contrast, gain some protection from the same regulations. De Jong says regulation tends to redistribute costs between tenant types rather than reduce them overall, a nuance he believes deserves more attention in the public conversation around storage rate practices.

What the Pricing Shift Means for Acquisitions

As the REIT pullback continues and advertised rates move closer to in-place rents, the gap that made independent operators look overpriced relative to institutional competitors is beginning to correct.

For buyers, this creates a more legible market. When advertised rates across operator types converge toward actual market rents, underwriting becomes more straightforward and the difference between what a facility appears to generate and what it actually generates narrows. Independent operators who maintained pricing discipline throughout the discount cycle may find their assets are now more accurately valued relative to institutional properties, and potentially more attractive to buyers who want stable in-place income without the 18-to-24-month rent recovery timeline that accompanies a recently stabilized REIT-managed property.

De Jong’s view is that the regulatory environment is likely to hold, which means the era of 20%-plus discounting gaps between institutional and independent operators may be structurally limited going forward. For operators and buyers alike, the pricing discipline that once looked like a trade-off for independents is increasingly looking like the more durable strategy. For a closer look at his work across the self-storage sector, explore Tom de Jong’s profile at Colliers.

About Tom de Jong: Tom de Jong is Executive Vice President at Colliers and Founding Principal of the De Jong Self Storage Team. With 19 years at Colliers, a $2B+ transaction record across 32 states, and an SIOR designation, he is one of the most recognized specialists in self-storage brokerage and investment advisory in the United States. In 2026, the De Jong Self Storage Team launched a service dedicated to representing buyers.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.