t is impossible to ignore the change in strategy amongst the REITs and other large operators in which they are luring customers in with heavily discounted rates, only to implement large existing customer rate increases (ECRIs) a few months later.

Are you practicing this strategy at your facilities? It is an approach more operators are considering in order to compete for new customers. There are factors, however, to consider when executing this strategy. A bigger question remains though: Is this strategy sustainable for overall revenue growth?

Historically, the gap between street rates and in-place rates has been fairly low. According to Marcus & Millichap’s 2025 Self Storage Mid-Year National Investment Outlook, in 2017, street rates were six percent lower than in-place rates. By mid-2025 that gap had widened to 43 percent. Move-in rates are so low now that, in more cases than ever before, customers are coming from beyond the typical one- to three-mile trade area to rent.

With previous revenue management strategies, the advertised street rate was much more in line with in-place rents than with today’s approach. For example, your in-place rents might have been $100 and your advertised move-in rate was $94. You then increased customer rates once a year at a modest 5 percent–15 percent to bring them up to the street rate. Those days are over. In today’s environment, the ECRI cadence is much more frequent than once per year. With the current models, the first ECRI is typically three to five months after moving in, and a second and third increase anywhere from six to nine months later. Only after the third or fourth increase does the cadence change to annually. With this accelerated schedule, the rate of rent increases as a percentage of the existing rate is also significantly higher, anywhere between 20 percent to 75 percent, depending on a variety of factors, including what your move-in rate was, what the current street rate is, unit type occupancy, and whether or not this is your first rate increase, to name a few.

Does this newer strategy result in revenue growth? Is this strategy sustainable in the long run?

It may be too soon to tell. Data suggests some recent small improvements in street rates and in-place rents, but if the strategy of super low move-in rates continues and churn increases, revenue growth could prove difficult. For the third quarter of 2025, in-place rent rates amongst the REITs were down 3 percent year over year. On a positive front, compared to the second quarter of 2025, third quarter in-place rates were up 7.2 percent. The tide on continued decreases in street rates may be turning, and I suspect that this coming rental season will be telling as we will see what the REITs do with move-in rates as occupancy peaks during the busy season.

Are you practicing this strategy at your facilities? Have you considered the pros and cons of a low move-in rate/high ECRI strategy?

Here are some factors to think about as you formulate or revise your plan.

• How do you compete for new customers and maintain occupancy if you do not offer low move-in rates?
• Will you see an uptick in negative reviews resulting from more frequent and higher rate increases? If so, how does this affect your brand’s reputation? Do negative reviews impact potential customers from renting from you?
• Does your churn rate increase? One operator told me that before the high ECRI strategy, their churn rate averaged 4 percent, but over 12 months, as they increased the percentage of ECRIs, the churn rate increased to 6 percent.
• What does potential legislation surrounding high customer rate increases mean? Self-storage has typically not received much attention from legislators, but that may be changing. The number of consumers using storage is increasing, and the supply of storage is increasing. This could lead to more customers complaining about rate increases, which would put the industry on the radar for more legislators. Last year, for example, the state of California proposed a bill that would cap the rate of a customer increase at 5 percent annually, plus the percentage change in the cost of living, or 10 percent over any 12-month period. That bill did not pass; however, out of it came a strict disclosure requirement. As of Jan. 1, 2026, operators must now disclose in their rental agreement whether the move-in rate is promotional or discounted, whether the rate is subject to change, and the maximum rental rate an owner could charge during the first 12months. Will other states follow? Do we want self-storage to be on legislators’ radar where they could impose other restrictions on operations?

There is much to consider when determining what your street rates, move-in rates, and rate increases should be. What are you comfortable with? What is or is not working with your current strategy and where do you need to tweak it? Is there an effective balance between low move-in rates and high ECRIs? What does that look like to you?

I think time will tell as to whether this strategy is sustainable. I do believe it is here to stay, at least through the upcoming rental season and likely beyond. In the meantime, create your revenue management plan now so that you are ready for peak season. Watch the data—your own, the REITs, and what your competitors are doing with their rates. Be prepared to adapt and change to stay competitive while growing revenue.