Self-Storage Cap Rates Hit Record Lows

Public Storage is the only major REIT to have a significant number of new facilities, such as this one in Frisco, TX, under construction.

CHICAGO—The self-storage industry in general, and the big REITs active in the sector in particular, experienced a lot of growth in 2015, and so far 2016 has got off to a roaring start. That’s the conclusion of MJ Partners, a Chicago-based self-storage firm. The company just released its report on the first quarter results, which says the major REITs like Public Storage saw robust increases in occupancy rates, revenues and net operating incomes.

And implied cap rates based on common share prices have sunk to record lows, ranging from 3.7% for Public Storage and Extra Space Storage, the two biggest players in the sector, and between 4.0% and 5.4% for others like CubeSmart and National Storage Affiliates.