Self-Storage REITs: Storage Wars
Comeback Kids: Self-Storage REITs have delivered as impressive of a turnaround as any property sector in recent memory, catalyzed by the ongoing housing boom and the acceleration in housing market turnover.
An ensemble of impressive earnings results indicated that the pandemic-driven rebound was no fluke. Storage REITs now project to have one of the strongest growth rates of any sector this year.
The 'suburban revival' has been a boon for self-storage REITs, which had entered the pandemic as perennial underperformers with challenged fundamentals and a strained outlook amid oversupply headwinds.
Occupancy rates climbed to record-highs in Q1 driving a nearly double-digit surge in NOI. Recent indicators suggest that booming demand has continued while supply growth continues to moderate.
Storage demand is driven by "change", and there has been no shortage of that recently as post-pandemic mobility rates normalize. The demographic-driven housing boom bodes well for a sustained recovery into the mid-2020s.
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