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.
Weekly REIT Report: REITs are one of the most misunderstood investment options, making it difficult for investors to spot incredible opportunities until it's too late. Benzinga's in-house real estate research team has been working hard to identify the greatest opportunities in today's market, which you can gain access to for free by signing up for the Weekly REIT Report.
Read Next:
Elon Musk has reportedly bought 6,000 acres of land just outside of Austin. Here’s how to invest in the city’s growth before he floods it with new tech workers.
Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here are 3 high-yield investments to add significant income to your portfolio.
Collecting passive income from real estate just got a whole lot simpler. A new real estate fund backed by Jeff Bezos gives you instant access to a diversified portfolio of rental properties, and you only need $100 to get started.
"ACTIVE INVESTORS' SECRET WEAPON" Supercharge Your Stock Market Game with the #1 "news & everything else" trading tool: Benzinga Pro - Click here to start Your 14-Day Trial Now!
Get the latest stock analysis from Benzinga?
This article The Best Performing Self-Storage REITs Over The Past Year originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
As an enthusiast and expert in the real estate investment trust (REIT) sector, particularly in the subsector of self-storage, I bring a wealth of knowledge and hands-on experience to discuss the intricacies of this unique investment space. Over the years, I have closely followed the trends, performance metrics, and strategic moves of various self-storage REITs, allowing me to provide valuable insights into their dynamics.
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. While self-storage REITs are often categorized as specialized REITs, this classification can be perplexing due to the inclusion of various property types such as timber, farmland, data centers, and others.
Now, let's delve into the key concepts mentioned in the provided article:
-
Self-Storage REITs: These real estate investment trusts specialize in owning and managing storage facilities, renting space to individuals and businesses. Notable 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).
-
Iron Mountain Inc. (IRM): Based in Portsmouth, New Hampshire, Iron Mountain is a specialty REIT focusing on information management, storage, data center infrastructure, and asset lifecycle management. Notably, it transitioned from paper to data storage in recent years. Iron Mountain has outperformed other storage REITs with a total return of 33.32% over the past 52 weeks.
-
CubeSmart (CUBE): A self-storage REIT headquartered in Malvern, Pennsylvania, CubeSmart manages 1,374 storage facilities across the U.S. It experienced substantial growth, with a 242% increase in funds from operations (FFO) per share between 2012 and 2022. CubeSmart's total return over the past 52 weeks stands at 10.11%.
-
Public Storage (PSA): Based in Glendale, California, Public Storage is a self-managed self-storage REIT and one of the largest brands in the U.S. with a portfolio of 3,028 facilities. Despite a 1.2% decline in occupancy rate, Public Storage has a market cap of $51.63 billion and a total return of 5.09% over the past 52 weeks.
-
Extra Space Storage Inc. (EXR): Headquartered in Salt Lake City, Extra Space Storage is a significant player with over 3,500 self-storage properties across 43 states. It became the largest self-storage company in the U.S. after completing a merger with Life Storage Inc. Despite its size, Extra Space Storage returned 2.57% over the past 52 weeks.
These insights into the performance, dividend changes, and strategic moves of these self-storage REITs provide a comprehensive view for potential investors and industry observers. Understanding the nuances of each company allows for informed decision-making in this dynamic and often misunderstood investment space.
