(Over)Supply and Demand?: Rental storage business sags while condo unit sales remain strong
August 2026
While local development activity of all kinds has soared over the last five years, you might have noticed one thing in particular: There’s a heck of a lot more self-storage facilities around town than ever before.
Some of this growth is from big, national players like U-Haul and CubeSmart, which have both built prominent facilities here in recent years. The rest is from scores of smaller facilities, many locally or regionally owned, that were built in the wake of the COVID-19 pandemic.
Surely all of these were built to meet demand and are at or near capacity, right? Wrong, industry insiders say. A headlong rush to build during and after COVID resulted in far too many facilities coming online, and now a lot of operators are paying the price.
“It's a very difficult time to be a self-storage owner or operator. Yes, there's demand and yes, people are utilizing storage more than they ever have in the past, but the real story is there was too much built,” said Brian Mullally, whose MBPG Capital owns, manages and consults in the self-storage industry. “There's just way too much supply.”
How much oversupply, exactly?
“Generally speaking, a stabilized square fee per capita metric in the industry is going to be around seven to nine square feet per capita, and in the Traverse City area now, we're closer to 14 to 15 square feet per capita,” Mullally said. “That’s nearly twice as much self-storage per person than what is considered a stabilized market.”
This, in turn, drives pricing down for everyone, Mullally adds.
“The cost of a storage unit has decreased more than 50% from where the peak was in 2022,” he said. “Rates have really taken a hit, and occupancy has really taken a hit.”
This problem does not appear to extend to owned storage spaces (as opposed to traditional rentals). Condo-based self-storage units, many of them high-end, continue to come online and sell well.
“We only have two left, and there’s 41 units in there,” said Jennifer Kreta, a real estate agent representing the newly opened M-37 Round About Barns on Blair Townhall Road.
Rental market woes
COVID changed everything, Mullally says. A lot of people were creating home offices, leading to a big demand for space to put all the stuff that had to be moved out of the way. Add to that people moving or relocating, and there was a record-high demand for self-storage.
“COVID really accelerated the need, which then in turn drove a lot of development during a time when interest rates were already at all-time lows,” he said.
Not only did national players enter the local market to meet this demand, Mullally says (think U-Haul’s big facility south of Chums Corner and CubeSmart at Garfield and Hammond roads), but many local developers also rushed to get in on the action.
“Because storage became so popular, there were a lot of developers that didn't have backgrounds in self-storage that looked at a self-storage facility and said, 'Wow, that's a cash cow. Metal buildings with roll up doors, that's so easy. I can do that,’” he said.
The U-Haul facility on M-37.The problem is that it generally takes a few years for a development to be planned, fully approved and built, Mullally says. By the time they were all open, there were just too many. And, to make matters worse, the home office trend eventually softened.
“A lot of these new facilities that were planned and approved and started construction during that COVID boom have really struggled,” Mullally said.
Other operators reported similar sentiments. After noticing a strong demand, Mary Rollert and her husband John broke ground on a rental storage unit complex in 2018 on U.S. 31 west of Interlochen. They ended up building several phases on 10 acres, and the development (4 Seasons Storage) was a big success. They filled up 300 units and even had a waiting list.
“As soon as we were breaking ground, people were asking when they were going to be done,” Mary Rollert said. “We just couldn’t build them fast enough.”
In 2021, they sold to a downstate company that quickly doubled the number of units. But now, she says, they are probably a third empty.
“Since then they have not been full, and it does seem like the market is saturated,” she said. “It’s been successful, but they never reached full capacity like we had.”
The over-saturation hurt more than just new facilities, though established facilities with existing clientele likely fared better. Regardless, it’s a problem for everyone.
“I know several facilities that are really hurting and that they're not cash flowing. They're not making money. Their occupancies are below 50%. So they're really struggling,” Mullally said. “And then add to that that taxes, insurance, utilities, all of your expenses continue to increase, and it’s a really tough time to be in the storage business.”
The national players rolling into town with unlimited marketing budgets also puts a squeeze on the little guy.
“The bigger players in the business have much more money to spend on marketing, which can help them, and it really hurts some of the local mom and pop operators that aren't thinking about the business the same way,” Mullally said. “CubeSmart is one of the largest operators in the country. I get mailers from them. You go online, and you get bombarded by ads on Facebook and TikTok.”
CubeSmart did not respond to repeated phone or email requests for comment on its local operations; a U-Haul spokesman said its facility was built specifically to meet
Jim Drake at Hammond Road Storage Barndemand and that demand remains strong, though he wouldn’t provide any hard numbers.
Jim Drake manages Hammond Road Storage Vault (about 400 units, built in 2018, 80% full) and Long Lake Storage Vault (about 120 units, built in 2024, 50% full). He agrees that the area is considerably oversupplied, but he’s not worried about it in the long term.
“I’m sure the population will eventually catch up with the number of storage units,” he said. “We know it’s a growing area … my goodness, just look around and see all the apartment complexes and developments being built in various areas.”
Condos doing better
Meanwhile, demand, sales and continued construction would suggest the oversupply problem does not extend to storage units that are designed to be sold and owned instead of merely rented. This is especially true for large, barn-sized buildings.
Many of the M-37 Round About Barns sold before they were even finished, and only two of the 41 remain, Kreta says. The large units range from $122,000 to $229,000.
While Kreta says a lot of things are in their favor – a killer location, dedicated website and very high-quality buildings – there are simply plenty of people who would rather own than rent, particularly for something as long-term as storage. They also have much more ability to control and customize the unit, she says.
“There’s just a lot of advantages,” she said.
Rollert, who with her husband owned the rental unit west of Interlochen, now is the exclusive real estate agent for Silver Lake Storage Barns, a relatively new development of larger units on Silver Lake Road near M-37. Having seen both sides (rental and condo) she says the condo storage market is much stronger.
About half of the 50 units at Silver Lake have been sold since it opened a few years ago, and Rollert expects them all to be gone in less than two more. Like Kreta, she says a lot of her customers are attracted to the quality and customizable nature of her barns, and that a lot of them are simply thinking long-term. Why throw all that money at a rental when you could own?
“We even had somebody who said, ‘My kids are probably going to have to deal with this stuff (after I die),’” Rollert said.
A portable twist
There’s also plenty of strong demand for portable, on-site storage units. So says Matt Buza, operations manager for Northland Self-Storage in Petoskey. Northland is opening up a Traverse City hub to better serve its growing mobile storage unit business, in which it delivers units all over northern Michigan.
A Northland portable storage unit.“Having on-site storage has really changed the way people are thinking about the storage industry,” Buza said. “We’ve been doing it for about three and a half years now, and it’s been really great for us.”
There are many reasons why on site makes a ton of sense, Buza says, but the primary reason is not having to pack stuff up and haul it across town. If you’re doing a flooring project, for instance, it’s much easier to put it in a unit outside than it is to load it up and transport it a few miles away.
“One of our units can really save them a bunch of time and energy,” Buza said.
Demand fluctuates depending on what’s going on around town, Buza says, but the units are mostly rented. People keep them for a few weeks or as long as a year or more. There’s a transportation fee, then the units start at about $200 a month to rent.
“We get consistent feedback that our pricing is very affordable,” Buza said.
