Keepin' It Real  

Economics, Housing, & Commercial Real Estate Analysis

apartment REITs
homebuilders ETFs
single family rental REITs
manufactured housing REITs
student housing REITs
data center REITs
Cell tower REITs
net lease REITs
industrial REITs
storage REITs
office REITs
mall REITs
REIT Preferreds and Bonds
hotel REITs
Timber REITs
healthcare REITs
REIT ETFs
Billboard REITs
shopping center REIT
High-Yield Real Estate ETFs
Real Estate CEFs
Casino REITs
cannabis REITs
prison REITs
mortgage REITs
real estate crowdfunding
REIT Portfolio Strategy
REITs Taxes
1/1
Housing100logo.png
ETF express.png
  • Alex Pettee, CFA

Storage REITs: When Business Is Too Good It Becomes A Problem

  • For full article, click here to visit Seeking Alpha!

  • The operating efficiency and relative simplicity of the self-storage business is second to none in the real estate sector, where properties can breakeven at sub-50% occupancy rates with sub-par management.

  • For self-storage REITs, the business is almost too good. Developers and new operators have flocked to the sector in recent years, adding new supply at a furious rate, weakening fundamentals.

  • 2018 appears to have been the bottom for self-storage fundamentals, but 2019 will be another challenging year. We remain neutral, noting ample supply but solid demand tailwinds from household formations.

  • With capital so plentiful, self-storage REITs have not been able to put their competitive advantages to work, but acquisition and consolidation opportunities will be plentiful over the next decade.

  • It turns out that millennials buy and store stuff too. Strong demand from renter households and businesses has kept rents and occupancy generally flat in the face of ample supply.



REIT Forum HOYA AD.png