CHICAGO—The self-storage sector has been riding high for several years, outperforming most others in terms of revenue growth, but a big change has occurred. Growth in occupancy and revenue has slowed for its major REITs, along with their stock prices. As a result, these companies have slowed down acquisitions, thereby opening up opportunities for private investors in the still-vibrant sector.
“Growth has slowed from a breakneck pace to something more normal,” Marc Boorstein, a principal with self-storage firm MJ Partners, tells GlobeSt.com. The Chicago-based company just published an analysis of the sector, and found that self-storage REITs such as Public Storage and Extra Space Storage generated same-store revenue growth in the second quarter ranging from 1.4% to 5.8%. Two years ago, the same figures ranged from around seven to nearly ten percent.
That new, more moderate pace has brought total returns back down to earth. The big five REITs, which also includes CubeSmart, Life Storage, and National Storage Affiliates, saw returns down 3.7% this year, according to Wells Fargo, after an 81% increase in the previous five years, Boorstein says.
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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.
