Sunbelt Storage Demand & Backlog Trends for 2026: Insights from Extra Space Storage

Sunbelt storage-unit demand trends and backlog signals for 2026 (from Extra Space Storage’s 2026 Q1 commentary)

1) Demand trend in the Sunbelt: “steady,” with improving direction in many markets

Management characterized demand as steady, noting they have not seen material improvement or degradation in demand overall. ¹²

Within the Sunbelt specifically, the company emphasized that the Sunbelt is not one uniform market and outcomes vary by metro:

• Markets with significantly improved performance include Atlanta, Austin, Dallas, Miami, and Phoenix. ¹
• Markets still facing headwinds include Southwest, Florida, Tampa, and Houston (explicitly called out as still difficult). ¹

So, the demand backdrop entering/continuing through 2026 appears stable at the top line, while the “demand quality” (i.e., unit/market-level outcomes) is improving in a subset of Sunbelt metros but not all. ¹²

2) “Backlog” signals—what to look for in storage demand (and what the company actually disclosed)

Unlike manufacturing or construction, storage operators don’t report “backlog” in the same way; instead, backlog-like signals show up as:

• pipeline of inquiries/development interest (management deals) (a proxy for future market formation/supply activity), and
• new supply intensity / competitor deliveries, which affects pricing and move-in conditions.

In the excerpt, management provided two supply-related “signals” that function as demand/backlog pressure indicators (i.e., whether markets will tighten or loosen):

1. Inquiries for development management: management said they get an “extraordinary number of inquiries” from developers and that the volume of these inquiries is decreasing. ³
2. National starts forecast reduction (starts as % of total stock): they cited Yardi data that national starts are expected to reduce from 2.8% to 2.3% of total stock between 2025 and 2026. ³

They also used a competitor-supply proxy based on same-store trade areas:

• The share of markets where a new competitor is delivered was in the 20%+ range in 2021–2023, then fell to 13% in 2024 and 8% in 2025, and they expect it to be 6% in 2026. ³

Interpretation as “backlog” for demand/supply pressure: these statements indicate less incremental supply building into 2026, which typically releases demand pressure on pricing/churn and can make “move-in catch-up” easier for existing assets. ³⁴⁵

3) How supply dynamics feed into the 2026 Sunbelt demand outlook (the clearest “signal”)

Management explicitly linked improving Sunbelt conditions to supply improving:

• They stated supply is coming down and that this is “good,” while demanding remains steady. ⁵
• They said correlated to that (steady demand), they are seeing improvement in the supply situation, and in “many” Sunbelt markets impacted by supply pressure, they are starting to see improvement. ⁴
• They also noted they continue to need to “work through supply” in some markets, while “directionally, it’s certainly improving.” ⁶

Additionally, they described that in Sunbelt markets where there were major headwinds in 2024 or 2025 (notably from new-customer rate pressure), they are starting to get a little more traction as fundamentals improve. ⁷

4) New-customer absorption and early 2026 leasing-season indicators: occupancy improving; move-in rates modestly positive

While the question is about demand trends/backlog signals for 2026, management provided early leasing-season and absorption data points that support the demand-through-supply narrative:

• Management said occupancy is improving “from both a sequential standpoint and a year-over-year standpoint,” and new customer base is “modestly positive.” ⁸
• On new customer rates, they reported that new customer rate growth moderated across the quarter: from 5%–6% in January and February to a little over 1% in March, averaging ~2.5% for the quarter (and also noting a reporting-metric change from per unit to per square foot). ⁹
• They also stated they did see occupancy picked up even as March new customer rates moderated. ⁹

How this relates to “backlog”/demand strength: occupancy tightening plus modestly positive new-customer metrics, combined with lower expected supply into 2026, is consistent with a market moving toward less demand dilution rather than a sudden demand collapse. ⁸⁹³

Bottom line (2026 Sunbelt demand + backlog-like signals)

• Demand trend: described as steady overall with improving fundamentals in many (but not all) Sunbelt markets, including Atlanta/Austin/Dallas/Miami/Phoenix, while Southwest/Florida/Tampa/Houston remain more challenged. ¹²
• Backlog-style signals (pressure indicators): management’s strongest forward-looking “signal” is less incoming supply into 2026, including a forecast drop in national starts (2.8% to 2.3% of total stock from 2025 to 2026) and a decline in competitor-delivery exposure (to ~6% in 2026). ³
• Early 2026 leasing/absorption: occupancy improving and new customer base modestly positive, supporting the idea that markets are tightening as supply pressure eases. ⁸⁹

If you want the demand trend specifically by product type (unit types that “move better” vs others), the excerpts indicate management sees that effect as granular by property type and unit type, but they did not quantify those differences in the provided text. ⁶