CMBS Current Market Views

Research evidence excerpt

CMBS Current Market Views

Not for Distribution to Retail Investors

Self-Storage – Oversupply Stabilizing/Senior Housing: Favorable

Demographics

• After a period of weakness, largely attributed to elevated new supply, REITs expressed a more positive outlook as new

deliveries lessen. One firm has seen 4-5 months of improving operating trends, noting pricing power is returning, leading to

an upswing in move-in rates.

• Still, customers remain somewhat price sensitive. Another storage REIT's year-to-date move-in rates are down 4.7%. While

their initial guidance for 2026 does expect mid-single digit declines, it anticipates improvement throughout the year,

supported by growth in overall storage utilization.

• Even with pricing restrictions in Los Angeles, storage operators can still increase rents on new customers. Given

approximately 60% annual turnover, REITs expect some level of rent growth to persist in LA. The new 2026 self-storage

laws, led by California, focus on consumer protections. The California legislation, including SB 709 and AB 380, introduced

measures related to price gouging and disclosure.

• Management teams note the increase in the 80+ year-old 75+ Demographic Grew 6.4%

population is driving demand, particularly for senior living While Inventory Grew 1.2% in 2025

8% options, and project continued growth.

75+ Population Growth (%) Senior Housing Inventory Growth (%)

• Limited new supply contributes to the sector's strength. REITs

expect light development to persist due to high construction 6%

costs and lender conservatism. New supply remains muted

across skilled nursing, senior housing, and outpatient medical. 4%

(%)

2% • The tight supply-demand balance is translating into strong Change

operating fundamentals, including improving NOI, occupancy YoY