Every self-storage development begins with a problem to solve. A developer has to find land, navigate zoning, manage construction costs, secure financing, determine how much rentable square footage the site can support, and ultimately create a project capable of generating an acceptable return.

Those pressures have only intensified in recent years. Land is more expensive, labor and construction costs remain elevated, financing is harder to secure, and rental-rate growth has become less predictable. In that environment, maximizing density can become one of the easiest ways to improve a project on paper.

More floors create more rentable square footage without requiring more land. Climate-controlled buildings can support higher projected rents. Larger facilities can spread certain costs across more units. From the developer’s perspective, those decisions can make a difficult site economically viable.

The problem is that the customer is not looking at the project through the same spreadsheet.

Customers are thinking about how quickly they can get to their unit, whether they can pull a vehicle close to it, how far they have to carry furniture, whether an elevator is available, how easy the property is to navigate, and whether the convenience justifies the price.

A facility can make perfect sense from a development perspective while creating a product that does not fully match how the surrounding customer actually wants to use storage.

The 2026 Radius+ Forecast identifies this issue within the growing divide between urban and suburban multi-story development. As more vertical facilities have moved into suburban markets, the data suggests that the product being built and the product customers prefer are not always the same.

How Vertical Storage Became the Default Answer

Multi-story storage is not inherently a problem. In many markets, it is exactly the right product.

Dense urban areas naturally support vertical development because land is scarce, parcels are expensive, and customers are already accustomed to navigating buildings, elevators, parking structures, and other forms of vertical real estate. Building upward allows developers to add inventory in locations where expanding outward is either impossible or prohibitively expensive.

Over time, however, the economics that made vertical development attractive in urban markets began influencing projects elsewhere.

As land and construction costs increased, developers in suburban markets faced similar pressure to generate more rentable square footage from each site. A multi-story facility could help spread land costs across more units and improve the economics of a project that might not pencil as a traditional single-story or drive-up development.

The Radius+ Forecast notes that suburban markets have taken on a growing share of multi-story development. The report also points to land economics as one of the major forces behind that shift, with developers increasingly using larger vertical projects to justify higher land and construction costs.

That may solve an important financial challenge, but it introduces another question that needs to be answered before the project moves forward: does the customer want the additional square footage being created?

The Customer Does Not Care About the Pro Forma

A development model might show strong demand for climate-controlled storage, attractive projected rents, population growth, and enough total households to support another facility. Those inputs are important, but they do not necessarily explain how customers will choose between individual units once the facility opens.

Two 10×10 climate-controlled units may look identical in an underwriting model. To a customer, they can be completely different products.

One might be located on the first floor near an entrance. The other might require unloading into a cart, entering a building, waiting for an elevator, traveling to another floor, and navigating several hallways before reaching the unit.

Both units contribute the same amount of nominal square footage to the facility, but customers may not value them equally.

The Radius+ Forecast found evidence of this difference when comparing pricing between first-floor and upper-floor climate-controlled units. In suburban markets, the pricing gap between those products is substantially wider than it is in urban markets.

That spread provides useful information about customer behavior. If upper-floor units consistently require larger discounts to attract renters, the issue may not simply be pricing. It may indicate that customers place a meaningful value on convenience and accessibility.

That matters because a development model based on average rents can hide important differences between individual types of inventory.

Urban and Suburban Customers Do Not Always Behave the Same Way

One of the risks in self-storage development is assuming that a successful format in one type of market will perform the same way somewhere else.

Urban consumers regularly make tradeoffs around convenience. Apartment living, limited parking, elevators, public transportation, smaller living spaces, and higher density are common parts of daily life. A multi-story storage facility can fit naturally into that environment because the experience is consistent with how customers already navigate the surrounding market.

Suburban customers often have a different frame of reference. They may have larger vehicles, more household belongings, greater access to parking, and more alternatives when choosing storage. For those customers, the ability to drive directly to a unit or minimize the distance between a vehicle and stored belongings can carry substantial value.

The 2026 Radius+ Forecast specifically notes this preference, with industry participants pointing to drive-up access, climate-controlled options, and a mix of storage products as characteristics that have historically performed well in suburban markets. The report also notes that multi-story, climate-controlled suburban facilities can face challenges because customers are often less willing to use elevators or upper-floor units.

This does not mean vertical development cannot succeed in the suburbs. It means the decision to build vertically should be supported by customer behavior, not simply by the number of units that can fit on the site.

More Rentable Square Footage Does Not Automatically Mean More Valuable Square Footage

The distinction between rentable square footage and valuable square footage is especially important in a slower demand environment.

During periods of strong demand, weaker inventory can sometimes be absorbed simply because customers have fewer choices. If nearby facilities are full and people need storage, they may accept a less convenient unit.

When demand softens, those preferences become more visible.

Customers have more options. Operators have to compete harder for move-ins. Units that are less desirable may require larger discounts, stronger promotions, or longer lease-up periods.

This can leave a facility with a strange problem. It technically has plenty of inventory, but a disproportionate share of that inventory may be concentrated in the units customers want least.

Looking only at total occupancy can obscure that issue. A facility might appear to be experiencing a broad demand problem when the real challenge is concentrated in a particular floor, unit size, or product type.

This is why unit-level analysis matters. Operators and developers should be looking at where vacancy actually sits, how pricing varies by product, which units require the greatest promotional support, and how quickly different types of inventory are absorbed.

A facility that is 80 percent occupied does not necessarily have one 20 percent vacancy problem. It may have several very different inventory problems hiding inside the same number.

Product Mix Should Begin With Customer Behavior

Choosing a unit mix has traditionally involved demographics, competitor inventory, market rents, square footage per capita, and development feasibility. Those remain important, but customer behavior should have a larger role in the process.

The question is not simply whether the market needs additional storage. The question is what kind of storage the market needs.

A suburban area dominated by single-family housing may behave differently from a dense renter-heavy neighborhood. A market with significant boat and RV ownership may support inventory that would make little sense in an urban environment. A high-income market may support premium climate-controlled space, but convenience may still determine which units command the strongest rates.

Even within climate-controlled inventory, location inside the building matters. First floor, upper floor, distance from the elevator, unit dimensions, entry points, loading areas, and overall ease of access can influence how customers perceive value.

Those preferences should be considered before a facility is designed, not discovered after the building enters lease-up.

The Lowest Rent Is Not Always a Pricing Problem

When certain units consistently underperform, lowering the price is an obvious response. Sometimes that is exactly what the market requires.

However, pricing can also become a temporary solution to a deeper product issue.

If upper-floor units consistently require significant discounts relative to first-floor inventory, an operator can reduce the price until customers accept the inconvenience. That may improve occupancy, but it also reduces the revenue generated by the additional square footage that helped justify the vertical project in the first place.

The Radius+ Forecast shows this dynamic clearly in suburban markets, where the average spread between first-floor and non-first-floor units has widened significantly. The pricing difference is considerably larger than what is seen in urban markets.

That should encourage developers to think differently about projected rents. Rather than applying one average rate to a broad category of climate-controlled inventory, underwriting may need to account for where the unit is located and how customers are likely to value it.

If a project depends on upper-floor units achieving nearly the same rents as the most convenient inventory in the building, the assumptions may deserve another look.

Development Feasibility and Market Fit Need to Be Evaluated Together

The financial realities of development cannot be ignored. Projects still have to work economically. Land costs, construction expenses, financing, zoning, density, and expected returns will always influence what gets built.

The opportunity is to evaluate those factors alongside market fit rather than treating them as separate conversations.

A larger building may reduce the cost per rentable square foot, but what happens if the additional units take significantly longer to lease? Vertical construction may allow a developer to justify an expensive parcel, but what happens if the upper floors require persistent discounts? A climate-controlled facility may achieve higher advertised rents, but what happens if customers in that submarket strongly prefer drive-up access?

These are not arguments against development. They are questions that make development assumptions stronger.

A successful project needs both financial feasibility and customer acceptance. If one is missing, the other eventually suffers.

The Best Facility Is Not Necessarily the Biggest One

For much of the last development cycle, adding more rentable square footage could look like a straightforward advantage. More units created more revenue potential, and strong demand could support increasingly large projects.

The current market is encouraging a more careful approach.

With weaker mobility, slower demand, elevated construction costs, and more conservative lending standards, every piece of inventory needs a clearer reason to exist. Developers have less room for assumptions that depend on customers eventually accepting a product simply because it is available.

The better question is not how much storage can be built on the site. It is how much of the right storage should be built on the site.

In some markets, that may still mean a large multi-story facility. In others, it may mean fewer units, greater drive-up access, a more balanced mix of climate-controlled and non-climate-controlled inventory, or a completely different site.

The answer should come from the market rather than from a predetermined development model.

Build for the Customer Who Will Actually Use It

The self-storage industry has become much more sophisticated about finding sites, analyzing markets, structuring projects, and maximizing development efficiency. The next step is making sure that sophistication extends all the way to the customer experience.

A development can solve the cost of land, achieve an attractive square-footage target, and create a compelling financial model while still missing something fundamental about how local renters want to use storage.

The widening pricing gap between first-floor and upper-floor units in suburban markets offers a useful reminder that customers ultimately determine the value of the product. They do not evaluate facilities based on development costs or project density. They evaluate convenience, access, price, location, and whether the unit solves the problem that brought them to storage in the first place.

That makes product-market fit just as important in self-storage as it is in any other business.

Radius+ helps developers, investors, operators, and lenders evaluate those decisions with greater context by connecting local supply, unit-level pricing, demographics, development activity, and market conditions. Understanding how much storage a market can support is important, but understanding what kind of storage customers will actually choose can be even more valuable.