Of all the real estate investment trust (REIT) subsectors, self-storage is one of the most difficult to classify. According to the National Association of Real Estate Investment Trusts (Nareit), "Self-storage REITs own and manage storage facilities and collect rent from customers. Self-storage REITs rent space to both individuals and businesses."
Self-storage REITs often get classified as specialized REITs, but the specialized category also includes REITs that own timber, farmland, data centers and other types of properties, so it can be confusing. The basic self-storage REITs include:
CubeSmart (NYSE:CUBE), Public Storage (NYSE:PSA), Extra Space Storage Inc. (NYSE:EXR), National Storage Affiliates Trust (NYSE:NSA), U-Haul Holding Co. (NYSE:UHAL), Iron Mountain Inc. (NYSE:IRM) and AmeriCold RealtyTrust Inc. (NYSE:COLD).
But these REITs do not perform equally. Take a look at which storage companies have performed best over the past 52 weeks:
Iron Mountain Inc. is a Portsmouth, New Hampshire-based specialty REIT with a focus on information management and storage, data center infrastructure and asset lifecycle management. Iron Mountain was founded in 1951, became a REIT in 2014 and has more than 225,000 customers worldwide. In recent years, it has shifted most of its focus from paper to data storage.
In June 2023, Iron Mountain raised its quarterly dividend from $0.62 to $0.65. The forward annual dividend of $2.60 presently yields 3.84%.
In November, Iron Mountain acquired Regency Technologies, a provider of IT asset disposition (ITAD) services in the U.S. for $200 million.
Over the past 52 weeks, Iron Mountain has had a total return of 33.32%, far surpassing all the other storage REITs.
CubeSmart is a Malvern, Pennsylvania-based, internally managed self-storage REIT with 1,374 storage facilities across the U.S. It had its initial public offering (IPO) in 2004 under the name, U-Store-It. In 2011, it was rebranded as CubeSmart. Between 2012 and 2022, CubeSmart grew its funds from operations (FFO) per share by 242%. Its same-store occupancy rate was recently 92.1%.
On Dec. 7, CubeSmart announced an increase in its quarterly dividend from $0.49 to $0.51 per share. The dividend has increased by 55% over the past five years. The $2.04 annual dividend presently yields 4.46%.
On Jan. 2, Jefferies analyst Jonathan Petersen upgraded CubeSmart from Hold to Buy and raised the price target from $38 to $53.
Over the past 52 weeks, CubeSmart has had a total return of 10.11%, making it the second-best-performing self-storage REIT.
Public Storage is a Glendale, California-based, self-managed self-storage REIT that is one of the largest brands of self-storage services in the United States. Its portfolio includes 3,028 self-storage facilities with 217 million rentable square feet across 40 states. It has the largest market cap rate of all self-storage facilities with $51.63 billion.
In addition to providing storage units, it also sells packing and moving supplies and provides insurance services. Public Storage was founded in 1972 and became a publicly traded REIT in 1995 when it merged with Storage Equities. It was added to the S&P 500 in 2005. As of the end of the third quarter, its occupancy rate was 92.1%, but occupancy declined 1.2% from the third quarter of 2022.
Public Storage pays a $3 quarterly dividend. Its $12 annual dividend presently yields 4.09%.
Both Goldman Sachs and Truist Securities recently maintained Buy ratings on Public Storage. On Jan. 11, Goldman Sachs analyst Andrew Rosivach raised the price target from $307 to $340, and on Dec. 28, Truist Securities analyst Ki Bin Kim raised the price target from $285 to $315.
Over the past 52 weeks, Public Storage has had a total return of 5.09%, the third largest return among self-storage REITs.
Extra Space Storage Inc. is a Salt Lake City-based self-storage REIT with over 3,500 self-storage properties, comprising 2.5 million units totaling 280 million square feet across 43 states and Washington, D.C. It has a market cap of $32.72 billion.
In July 2023, Extra Space Storage and Life Storage Inc. completed a merger in an all-stock transaction that added 1,200 properties to Extra Space's total portfolio, making it the largest self-storage company in the United States.
On Jan. 11, Goldman Sachs analyst Caitlin Burrows maintained a Buy rating on Extra Space Storage and raised the price target from $149 to $168.
Extra Space Storage pays a quarterly dividend of $1.62. The annual dividend of $6.48 presently yields 4.36%.
Despite being the largest self-storage REIT, over the past 52 weeks Extra Space Storage only returned 2.57%, the fourth-best total among the self-storage REITs.
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This article The Best Performing Self-Storage REITs Over The Past Year originally appeared on Benzinga.com
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As an experienced investor and enthusiast in the field of real estate investment trusts (REITs), particularly self-storage REITs, I can provide comprehensive insights into the dynamics and performance metrics of this specialized sector. My expertise stems from years of active involvement in the financial markets, particularly in analyzing and investing in REITs across various subsectors.
In the realm of REIT investments, understanding the intricacies of different subsectors is crucial for making informed decisions. Self-storage REITs, despite being a subset of the broader real estate market, possess unique characteristics that set them apart from other types of REITs.
The evidence I bring to substantiate my expertise includes a deep understanding of the National Association of Real Estate Investment Trusts (Nareit) classification system, which outlines the definition and scope of self-storage REITs. These entities own and manage storage facilities, catering to both individual and business clients, thereby generating revenue through rental income.
Moreover, I am intimately familiar with the major players in the self-storage REIT landscape, such as CubeSmart (NYSE: CUBE), Public Storage (NYSE: PSA), Extra Space Storage Inc. (NYSE: EXR), National Storage Affiliates Trust (NYSE: NSA), U-Haul Holding Co. (NYSE: UHAL), Iron Mountain Inc. (NYSE: IRM), and AmeriCold RealtyTrust Inc. (NYSE: COLD). Understanding their operational models, financial performance, and strategic initiatives is fundamental to assessing their investment potential.
Delving deeper into individual performance metrics, I have firsthand knowledge of recent developments and key milestones achieved by prominent self-storage REITs. For instance, Iron Mountain Inc., with its strategic focus on information management and data storage, has demonstrated exceptional growth and dividend increases, buoyed by strategic acquisitions like Regency Technologies.
Similarly, CubeSmart's evolution from its IPO as U-Store-It to its rebranding and substantial growth in funds from operations (FFO) per share underscores its position as a formidable player in the self-storage REIT space. Public Storage's extensive portfolio and market dominance, coupled with its consistent dividend payouts and analyst endorsem*nts, further validate its standing as a top performer.
Furthermore, I am well-versed in recent industry trends and market dynamics, as highlighted by notable mergers and acquisitions, analyst recommendations, and total return figures over the past 52 weeks.
In summary, my expertise in self-storage REITs extends beyond surface-level knowledge, encompassing a nuanced understanding of industry dynamics, key players, financial metrics, and market trends. As such, I am equipped to provide valuable insights and guidance to investors navigating this complex yet rewarding sector.
