Self-Storage REITs Slow Down Acquisitions

Life Storage reported occupancy of 92.7%, a slight increase from one year ago.

CHICAGO—The self-storage sector has become one of the most attractive investments in commercial real estate, outperforming most others in terms of revenue growth, but in the past few quarters it reached a plateau. Growth in occupancy and revenue has slowed for its major REITs, along with their stock prices. As a result, these companies have slowed down acquisitions. However, that has opened up opportunities for the many private investors that want to jump into the still-vibrant sector.

“Transaction volume is way down for the public companies,” Marc Boorstein, a principal with self-storage firm MJ Partners, tells GlobeSt.com. The Chicago-based company just published its latest analysis of the sector, and found that self-storage REITs such as Public Storage and Extra Space Storage generated same-store revenue growth in the second quarter ranging from 0.9% to 5.4%. Several years ago, the same figures ranged from around seven to nearly ten percent.