• Self-Storage REITs stumbled into the pandemic with challenged fundamentals and an outlook for near-zero growth amid oversupply challenges, but catalyzed by housing market strength, self-storage demand has suddenly become insatiable.
• While no longer trading at the compelling valuations that we discussed before the 80% total returns in full-year 2021, we see value in targeted opportunities within the storage REIT sector.
• Like a phoenix rising from the ashes, storage REITs have delivered an incredible turnaround over the last eighteen months. Forward-looking indicators and industry commentary suggest that the positive momentum should continue into 2022.
• Residential REITs have historically been one of the most effective inflation hedges across all asset classes, and self-storage REITs are no exception, resulting from short lease terms and "sticky" demand.
• More broadly, we believe that the sector's strong balance sheets, low cap-ex profile, inflation-hedging lease structure, and above-average external growth potential warrant a premium multiple and overweight positioning within a balanced REIT portfolio.

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