Self-Storage REITs Scale Back Aggressive Web Rate Pricing Under Regulatory Pressure

Written by:

Rudi Davis

Date:

18 Mar 2026

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Major self-storage operators are scaling back years of aggressive online rental-rate tactics in response to mounting regulatory scrutiny and legal challenges, according to Tom de Jong, Executive Vice President at Colliers International. This change signals a significant shift in industry pricing strategy, with direct implications for property valuations and investor returns.

“For the past few years, the REITs have had super aggressive web rate marketing,” de Jong says. Operators have advertised rental rates online that are far lower than both market averages and the rents paid by existing tenants. This approach was designed to attract new customers. It has since drawn the attention of state regulators and become the subject of litigation, forcing companies to reconsider their pricing models.

California’s SB 709 Disclosure Law Forces Self-Storage Operators to Rethink Pricing

A key driver of this shift is California’s SB 709, a law that took effect as a disclosure requirement after being proposed as a rent control measure. The law mandates greater transparency in how self-storage companies advertise and implement rental rates, requiring operators to clearly disclose how rates are set and when increases may occur.

“California passed SB 709. Originally, it was meant to be a rent control measure, but as it moved through the legislature, it became a disclosure law,” de Jong explains.

This regulatory change in California, combined with recent litigation against Extra Space Storage in New York City over rental rate practices, has prompted a broader industry response. Operators are now raising their discounted web rates, closing the gap between advertised rates for new tenants and the higher rents paid by existing tenants. That gap had widened significantly during the post-COVID boom.

This change comes as the self-storage industry faces additional challenges, including oversupply in several markets and cooling demand. During the COVID-era boom from early 2020 through mid-2022, aggressive pricing strategies enabled operators to capitalize on a surge in demand driven by remote work and increased home organization. As that demand has normalized and new supply has entered the market, the disparity between online advertised rates and actual collected rents has become more apparent and problematic.

Pricing Shift Creates Mixed Outcomes for Self-Storage Property Performance and Valuations

The move away from aggressive web rate marketing is likely to have mixed consequences for property performance. Raising advertised rates may slow new tenant acquisition in markets where occupancy is already under pressure. However, reducing the gap between web rates and in-place rents can lower tenant turnover and create more stable rental income.

“It seems like the industry has come out of this super aggressive rental rate environment, and it started raising those lower web rates,” de Jong observes.

For investors assessing self-storage acquisitions, this new pricing environment adds complexity to underwriting. Properties that once showed strong in-place rents but weak street rates may see their market position shift as operators align their pricing. Buyers now must consider whether higher advertised rates will support occupancy and revenue growth or dampen lease-up momentum.

This shift also affects how operators manage rent increases for existing customers, which is a major revenue lever in the self-storage business. With regulators closely watching pricing practices, operators may find it harder to implement large rent hikes, especially where the difference between current and advertised rates is already significant.

Self-Storage Sector Adapts Pricing Strategy as Regulatory Oversight and Market Saturation Increase

The retreat from aggressive web-rate strategies signals a maturing self-storage sector adapting to increased regulatory oversight and market saturation. Operators who once relied on maximizing the spread between acquisition rates and in-place rents are adjusting to a landscape where transparency and consistent pricing are becoming central to competition.

De Jong notes that this trend is most evident among the largest REITs, which face the greatest exposure to regulatory action and litigation risk. Smaller operators and private owners may follow as new industry standards for pricing disclosure and rent increase practices take hold.

Looking ahead to 2026, the evolution of rental rate strategies will remain a key focus for investors, lenders, and regulators. The industry’s ability to sustain revenue growth while adapting to stricter pricing transparency will help shape property valuations and acquisition activity in the coming years. Operators that successfully balance occupancy, rent growth, and compliance are likely to be best positioned as the market continues to adjust to its new regulatory reality.