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 avid real estate investment enthusiast with a deep understanding of REITs, particularly within the self-storage subsector, I'd like to shed light on the concepts discussed in the provided article. My expertise in real estate investment and REITs is demonstrated by my comprehensive knowledge of the market, key players, and recent developments.
The article delves into the realm of real estate investment trusts (REITs) with a specific focus on the self-storage subsector. The National Association of Real Estate Investment Trusts (Nareit) defines self-storage REITs as entities that own and manage storage facilities, collecting rent from both individuals and businesses. This subsector often falls under the category of specialized REITs, which also includes properties like timber, farmland, and data centers, leading to potential confusion.
The key self-storage REITs mentioned in the article include:
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CubeSmart (NYSE: CUBE): A self-storage REIT based in Malvern, Pennsylvania, with a significant nationwide presence.
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Public Storage (NYSE: PSA): A Glendale, California-based, self-managed self-storage REIT, considered one of the largest brands in the United States.
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Extra Space Storage Inc. (NYSE: EXR): Headquartered in Salt Lake City, this self-storage REIT recently became the largest in the U.S. after completing a merger with Life Storage Inc.
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National Storage Affiliates Trust (NYSE: NSA): Mentioned as one of the basic self-storage REITs.
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U-Haul Holding Co. (NYSE: UHAL): Another player in the self-storage REIT space.
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Iron Mountain Inc. (NYSE: IRM): Known for its focus on information management, data center infrastructure, and asset lifecycle management.
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AmeriCold RealtyTrust Inc. (NYSE: COLD): Included in the list of basic self-storage REITs.
The article then goes on to highlight the performance of these REITs over the past 52 weeks, with Iron Mountain Inc. standing out with a total return of 33.32%, making it the best-performing among the mentioned storage REITs.
Additionally, the article provides detailed insights into individual REITs, such as CubeSmart's recent dividend increase, growth in funds from operations (FFO), and positive analyst ratings. Public Storage, despite being one of the largest self-storage REITs, has a total return of 5.09% over the past 52 weeks, and Extra Space Storage, despite its size, returned 2.57%, ranking fourth among the discussed REITs.
This information provides a comprehensive overview of the self-storage REIT landscape, allowing investors to make informed decisions based on the performance and key indicators of these prominent players in the market.
