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5 Largest Self-Storage REITs in the US

Kelly Kennedy

Author

SUMMARY

With steady demand driven by demographic transitions, economic trends, and changing lifestyles, this sector has long-term growth potential. The five REITs discussed in this article are an ideal starting point for anyone wishing to diversify their portfolios. Whether we look at market leaders like Public Storage or niche businesses like Global Self Storage, these options highlight the sector's ability to adapt and prosper in a competitive environment.
Self-storage REITs, Self storage REITs

Self-storage Real Estate Investment Trusts (REITs) own, manage, and finance self-storage facilities. They generate income primarily through rental fees charged to customers, and self-storage REITs are proving to be a promising investment opportunity for many new or aspiring real estate investors. 

These REITs expose investors to the self-storage sector without needing to directly own or manage individual storage properties. Self-storage REITs are publicly traded, which makes it relatively easy for individuals to invest in this niche real estate market.

Below, we take a detailed look at the five largest self-storage REITs in the US, diving into their operations, portfolios, and contributions to the self-storage sector.

Introduction to Self-Storage REITs

As of late December 2024, there are five publicly listed self-storage REITs:

  1. CubeSmart
  2. Extra Space Storage, Inc.
  3. Global Self Storage, Inc.
  4. National Storage Affiliates
  5. Public Storage

Investors can invest in them directly or through REIT mutual funds or exchange-traded funds (ETFs).

What each of these REITs have in common is their focus on generating consistent revenue through strategically located storage facilities and professional management practices. 

These REITs cater to a growing demand for storage solutions driven by lifestyle changes, population shifts, and economic trends.

Between 2005 and 2022, self-storage was the best-performing real estate sector, consistently delivering some of the highest annual returns. Much of this was driven by demographic shifts such as aging populations, downsizing, and lifestyle trends like decluttering.

During the pandemic, the self-storage sector experienced a whole new surge in demand as people transitioned to remote work, relocated, or required more space to accommodate lifestyle adjustments. 

Although some of this heightened demand has normalized post-2023 due to higher interest rates and reduced housing activity, vacancy rates have stabilized at around 8%, and move-in rents remain above 2019 averages.

The self-storage REIT sector also benefits from societal shifts, such as increased household penetration rates.

In 2024, approximately 10.2% of U.S. households utilized self-storage, up from 9.3% in 2019, according to estimates from CBRE Investment Management. Analysts predict this figure could rise to 16% by 2034, spotlighting the long-term growth potential for this sector.

Although not a new trend, people moving to the 18 Sun Belt states is an ongoing factor to consider in the demand for self-storage. Currently, about 50% of the entire American population lives in one of these states, with many people moving there as they retire. 

The population growth in this region has been particularly advantageous for commercial real estate investors, with self-storage REIT investors being no exception.

The Top 5 Self-Storage REITs

Having covered the basics, let’s move on to the five biggest self-storage REITs. We have listed them in order of highest to lowest market cap and included several other statistics for each, taken from Nareit.

  • Public Storage (PSA)

  • Property Type: Self-storage
  • Exchange: New York Stock Exchange, Inc. (NYSE)
  • Ticker: PSA
  • Market Cap: $52.4 B
  • Dividend Yield: 4.03%
  • 1-Year Return: 1.51%
  • Ex-Dividend Date: 2024-09-13. 

Public Storage is the largest self-storage REIT in the United States, with over 2,000 facilities across the country. Public Storage is known for its careful financial management and has an “A-rated” balance sheet.

As the primary market leader, the organization consistently delivers strong returns. Its diverse portfolio and emphasis on operational efficiency solidify its position as a self-storage industry leader.

The REIT’s long-term performance stresses its resilience, with a 5-year return of 11.69% and a 10-year return of 8.82%. 

As a fully integrated and self-managed company, Public Storage continues to lead the sector with its expansive portfolio and focus on financial prudence.

2. Extra Space Storage, Inc. (EXR)

  • Property Type: Self-storage
  • Exchange: New York Stock Exchange, Inc. (NYSE)
  • Ticker: EXR
  • Market Cap: $31.3 B
  • Dividend Yield: 4.38%
  • 1-Year Return: -4.22%
  • Ex-Dividend Date: 2024-09-16

Extra Space Storage takes second place in market cap in the self-storage REIT sector, with a strong acquisition strategy that has driven its expansion. The purchase of Life Storage in 2023 greatly expanded its scope, establishing it as one of the largest operators in the United States.

The company focuses on increasing shareholder value through efficient operations and inventive solutions for customers.

With more than 3,500 locations, the company prioritizes operational efficiency, data-driven solutions, and shareholder value. Extra Space is known for its progressive technology and customer service, helping the company meet a range of storage needs.

3. CubeSmart (CUBE)

  • Property Type: Self-storage
  • Exchange: New York Stock Exchange, Inc. (NYSE)
  • Ticker: CUBE
  • Market Cap: $9.6 B
  • Dividend Yield: 4.79%
  • 1-Year Return: -5.33%
  • Ex-Dividend Date: 2024-10-01

CubeSmart stands out in the sector for a few reasons. Among them is its focus on strategic positioning in urban and suburban areas to capitalize on heavily populated zones. It leverages technology (such as online reservations and dynamic pricing models) to facilitate better customer experiences.

CubeSmart’s emphasis on customer service and innovation has propelled the company to prominence in the self-storage industry. It now has approximately 1,500 facilities around the United States. 

4. National Storage Affiliates (NSA)

    • Property Type: Self-storage
  • Exchange: New York Stock Exchange, Inc. (NYSE)
  • Ticker: NSA
  • Market Cap: $2.9 B
  • Dividend Yield: 6.05%
  • 1-Year Return: -4.80%
  • Ex-Dividend Date: 2024-09-13

With more than 1,000 properties, NSA connects investors to high-growth markets while retaining strong community connections. Its dividend yield of 6.05% demonstrates its dedication to shareholder returns, notwithstanding recent market swings.

NSA operates in 42 states and Puerto Rico, accounting for 68.6 million rentable square feet in approximately 5,42,000 storage units

5. Global Self Storage, Inc. (SELF)

  • Property Type: Self-storage
  • Exchange: NASDAQ
  • Ticker: SELF
  • Market Cap: $59 M
  • Dividend Yield: 5.53%
  • 1-Year Return: 20.61%
  • Ex-Dividend Date: 2024-09-17

As a micro-cap REIT, Global Self Storage focuses on secondary and tertiary markets, filling unique opportunities that larger competitors sometimes overlook. 

With 13 properties across eight states, the company emphasizes cost efficiency and environmentally sustainable practices. Its facilities are designed to offer affordable, secure, and accessible storage options.

This approach has contributed to its impressive 1-year return of 20.61%.

Advantages of Self-Storage REITs

We’ll now explore five potential advantages of investing in self-storage REITs.

Diversification

Self-storage REITs offer investors diversification opportunities because they often operate in different states and regions. This geographical distribution lessens the danger of regional economic downturns and natural disasters.

For example, Public Storage has over 2,000 locations in practically every major urban region.

However, diversification extends beyond geographical purposes. Self-storage REITs provide a diverse spectrum of consumers, including individuals, small enterprises, and corporations, thereby diffusing risk.

Resilience in Economic Downturns

Self-storage REITs have shown tremendous resilience during economic downturns. When financial uncertainty arises, individuals and businesses might downsize their living or working spaces, creating increased demand for storage units. 

Regardless of economic conditions, the consistent demand for storage services lends itself to the sector’s strong performance over the years.

Scalability

Scalability is another undeniably appealing quality of self-storage REITs. For example, companies can extend their operations by purchasing existing buildings or building new ones in high-demand locations. 

Technological Integration

The use of technology has changed the self-storage industry as it has most others. Automated kiosks, digital leasing platforms, and dynamic pricing models have streamlined operations and improved the client experience. 

Sustainable Practices

Many self-storage REITs have included sustainability in their business models. Solar panel installations, energy-efficient lighting, and environmentally friendly construction techniques are just a few examples of emerging industry norms.

These efforts achieve a number of significant objectives, including lower operational costs, appealing to environmentally conscious customers, and adding to long-term profitability.

Potential Challenges to Consider

As promising an opportunity as investing in self-storage REITs can be, there are also challenges to consider. Among them are competition, supply-based difficulties, and increasing financing demands.

Industry Competition

The self-storage sector is highly competitive, with numerous players ranging from large publicly traded REITs to small, privately owned operators. The relatively low barriers to entry have allowed smaller operators to thrive, leading to a fragmented market. 

While creating acquisition opportunities for larger REITs, this fragmentation also intensifies “storage wars,” where facilities compete aggressively for tenants by offering incentives or reducing rates.

Supply Challenges

A significant challenge for self-storage REITs is the oversupply of facilities in certain regions. 

During periods of high demand, developers rush to build new facilities, often leading to saturation in specific markets. This oversupply can suppress rental rates and occupancy levels, particularly in areas where demand growth fails to match the influx of new units. 

As discussed earlier in this article, some regions (like the Sun Belt) have seen strong demand due to population growth. Still, others face prolonged recovery periods due to excess supply.

Financing Costs

The rising cost of capital can also prove challenging for investors. With higher interest rates come increased loan costs, and this makes acquisitions and new ventures more expensive. 

For smaller operators who tend to be already more leveraged, this could prove to be insurmountable. With those “smaller fish” out of the way, larger, well-capitalized REITs could take advantage of consolidation opportunities.

Conclusion

Self-storage REITs offer a distinctive combination of stability, growth potential, and innovation. Together, these qualities make them an appealing investment option for individuals who seek out portfolio diversification opportunities. 

If you’re interested in exploring this sector, the five self-storage REITs listed in this article are where to begin. 

 

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