Self-Storage’s Surging Profile
June 7, 2015 | by Hagan Dick | Commercial Property Executive
The self-storage market continues to show strength, consistency, and an improving reputation with both equity investors and the capital markets. Rents are on the rise and occupancy levels remain steady. Underscoring these trends, in 2015 the leading self-storage REITs (Public Storage, Extra Space, CubeSmart, Sovran, and National Storage Affiliates) recorded year-over-year portfolio occupancy increases ranging between 40 to 320 basis points. Meanwhile, same-store revenue increased more than 6.5 percent.
On balance, self-storage assets present attractive investment opportunities for a variety of reasons.
• Life happens. The industry benefits from a variety of major changes that increase demand for storage space, such as marriage, divorce, new jobs and relocation, and more generally transient lifestyles.
• Home trends. As the home ownership rate and average size of living spaces continue to decline, rental housing is a popular option, especially in the urban core. Less living space translates into a greater need for storage.
• The REIT factor. Stepped-up demand from REITs is creating widespread liquidity and encouraging more developers to enter the field.
Blue Vault is just what advisors need to size up the different offerings in the nontraded REIT market. Just as importantly, it’s what the industry needs to encourage best practices among REITs.