CHICAGO—The nation's largest self-storage REITs saw impressive revenue growth in the third quarter, although the rate of that growth has slowed down from levels seen over the past year, according to a new report from MJ Partners, a Chicago-based self-storage firm.
The five companies generated same-store revenue growth ranging from 4.5% to 7.2%. This is down from last quarter's growth of 5.7% to 8.5% year-over-year. Net operating Income also increased at a good clip, and ranged from 4.7% to 9.5%. But last quarter, NOI growth ranged from 6.6% to 11%.
The sector has seen a tremendous amount of consolidation in the past few years, and that trend shows no sign of abating. Sovran Self Storage completed its acquisition of LifeStorage LP for about $1.3 billion in the third quarter and changed its brand name to LifeStorage. The transaction included 83 wholly-owned properties and four third-party managed locations.
Sovran's move was the sector's largest transaction since Extra Space Storage closed on its $1.4-billion acquisition of SmartStop Self Storage in late 2015. But other big REITs have also been busy. In the third quarter National Storage Affiliates acquired the 66 property iStorage portfolio for about $630 million in a joint venture with a state pension fund advised by Heitman Capital Management. National Storage Affiliates will retain 25% ownership in the joint venture. Separately, the company acquired the iStorage property management platform for $20 million.
Public Storage, the largest REIT, has 2,319 US locations and 218 in Europe, and saw its third quarter revenue jump 5.1% since last year, with a 4.7% increase in net operating income. And after several years of constantly boosting its occupancy rate, that third quarter number held steady at 95.3 %, the highest in the industry. The other big players put up similar numbers. The third quarter revenue for Extra Space Storage, the next largest storage REIT with 1,421 US locations, grew by 6.1%, its net operating income 7.8%, but in the last year its occupancy rate declined from 93.4% to 93.0%.
CHICAGO—The nation's largest self-storage REITs saw impressive revenue growth in the third quarter, although the rate of that growth has slowed down from levels seen over the past year, according to a new report from MJ Partners, a Chicago-based self-storage firm.
The five companies generated same-store revenue growth ranging from 4.5% to 7.2%. This is down from last quarter's growth of 5.7% to 8.5% year-over-year. Net operating Income also increased at a good clip, and ranged from 4.7% to 9.5%. But last quarter, NOI growth ranged from 6.6% to 11%.
The sector has seen a tremendous amount of consolidation in the past few years, and that trend shows no sign of abating. Sovran Self Storage completed its acquisition of LifeStorage LP for about $1.3 billion in the third quarter and changed its brand name to LifeStorage. The transaction included 83 wholly-owned properties and four third-party managed locations.
Sovran's move was the sector's largest transaction since Extra Space Storage closed on its $1.4-billion acquisition of SmartStop Self Storage in late 2015. But other big REITs have also been busy. In the third quarter National Storage Affiliates acquired the 66 property iStorage portfolio for about $630 million in a joint venture with a state pension fund advised by Heitman Capital Management. National Storage Affiliates will retain 25% ownership in the joint venture. Separately, the company acquired the iStorage property management platform for $20 million.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
