At the end of September 2019, storage REITs had a combined total market capitalization of over $75 billion with a dividend yield of 3.32%. That followed an 8 percent rise in September. Extra Space has done a good job of treating dividend investors well, paying a current yield of 3.5% and having grown its quarterly payouts by more than eightfold since 2010. Funds from operations in the first quarter of 2018 were up more than 20% from year-ago levels, and the REIT spent about $145 million on acquisitions of roughly 25 self-storage properties. For income investors, Public Storage has been a reliable dividend-payer. This is the largest self-storage company and it acquires, develops, owns, and operates self-storage facilities. In all, self storage appears to … Acquisition activity among the national self storage REITs increased significantly during the third quarter of 2020, and third-party management … Even with that rise in the stock, National Storage still sports a yield approaching 4%, putting it in the middle of the pack. If a company doesn't pay out at least 90% of its taxable income as shareholder dividends each year, then it can't be a REIT. It's similar to net income for regular companies, but it excludes the extensive depreciation that real-estate investment trusts typically have because of their large portfolios of real-estate holdings. The debt-to-equity ratio gives an indication of how much leverage a REIT takes on by comparing outstanding debt to the shareholder equity measured on the company balance sheet. Access to timely real estate stock ideas and Top Ten recommendations. Public Storage, a member of the S&P 500 and FT Global 500, is a fully integrated, self-administered, and self-managed REIT that primarily acquires, develops, owns, … https://finance.yahoo.com/news/3-self-storage-reits-consider-162124344.html Life Storage is the highest-yielding self-storage REIT on this list, with a current yield of around 4.6%. There are more than 2,200 Public Storage self-storage locations in the US, Canada and Europe. Market data powered by FactSet and Web Financial Group. Interestingly, the REIT was originally opened as a financial planning firm, but it opened a Florida self-storage location shortly thereafter, in 1985, and then grew very quickly. Below is a list of the five best-performing publicly traded storage REITs in 2019. It also owns 42 percent of an office parks … Bring in new people. Later in this article, we'll reveal five of the top pure-play self-storage REITs available to investors. In addition, the fact that REITs don't have to pay corporate-level tax enables them to pay dividend yields that are often above what a typical corporation would pay. Self Storage REITs Weather Difficult Quarter, See Quick Rebound By Laura Williams-Tracy, SSA Magazine It was a quarter fraught with uncertainty, new cleaning and rental protocols, and far fewer new faces at the customer service counter. Learn more.Already a member? Public Storage is a California-based REIT and member of the S&P 500. They do have risks associated with them, and it's important to assess those risks carefully before investing. Net asset value measures the total current market value of real-estate holdings in the REIT's portfolio, reduced by any outstanding debt. With a long history of strong performance, CubeSmart is still well-positioned to keep growing. In just over three years, the REIT has almost doubled its quarterly payout, with seven increases in just a dozen quarterly periods. For self-storage facilities in particular, occupancy rates are extremely important. That gives investors a chance to tailor their exposure to match up with the risks they're willing to take and the opportunities they see in the self-storage space. But with the branding change, Life Storage has been able to add third-party management as a more significant part of its overall business. In addition, like any REIT, self-storage REITs are vulnerable to interest rate increases. Strong demand from renter households and businesses has kept rents and occupancy generally flat in the face of ample supply. Although demand has been climbing, only about 10% of U.S. households rent self-storage space, according to industry estimates. CubeSmart owns or manages more than 1,000 self-storage facilities throughout the United States. As rates rise, the interest expense on loans that self-storage REITs borrow to buy or build facilities goes up. Long-term price gains haven't been as impressive as what Extra Space has seen, but the stock is still up more than 30% in the past year even before you include the impact of dividends. Public Storage owes its success to its early vision. Instead, all of the tax attributes of the income and expenses the REIT receives and incurs get passed through to the individual shareholders of the REIT. This puts the company at No. We do receive compensation from some affiliate partners whose offers appear here. To learn more about CafeMedia’s data usage, visit: www.cafemedia.com/publisher-advertising-privacy-policy. I'm referring to the two best self-storage REITs to … It has more than 550 storage properties located in 29 different U.S. states, and it has about 34 million rentable square feet in its portfolio. However, investors in non-REIT real-estate businesses end up essentially having their profits taxed twice: once at the corporate level, and once when they pay any taxes due on the dividend income they receive. With lower expenses, greater income is available. Compensation may impact where offers appear on our site but our editorial opinions are in no way affected by compensation. The REIT's most recent boost came just last month, with a 10% increase bringing the payout to $0.86 per share on a quarterly basis. Real-estate investment trusts can be a great way for investors to get the combination of income and growth they want, and REITs that concentrate in the self-storage arena have largely escaped notice even among those who've paid attention to other types of real-estate investments. For dividend investors, that's been a good philosophy so far. In its most recent quarter, the REIT posted a nearly 5% rise in core funds from operations, with a better than 2% rise in same-store revenue among more than 2,000 facilities. They're typically measured as a percentage of square footage occupied divided by total square footage available. They then bear the brunt of paying any necessary tax. National Storage Affiliates owns and operates 729 storage facilities in 35 states and Puerto Rico. For those who prefer smaller players in an industry with plenty of room for growth, National Storage Affiliates has a lot of runway left to compete with its bigger rivals. Self storage real estate investment trusts (REITs) have been excellent investments over the long term. The rent these tenants pay then comes back to the REIT, which meets the expenses of operating its business and managing the properties. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world. Expansion took it first along the East and Gulf Coasts, and then into the Midwest before making it to the West Coast in 2016 with the acquisition that gave the self-storage REIT its current name. If too many players move into a given market, the result will be reduced occupancy rates that threaten profitability. Public Storage is a blue-chip with an A rated balance sheet, Extra Space Storage has been a top performer in the past. Occupancy was a bit low, at 87%, but that arguably reflects the pace at which the self-storage specialist has worked to build up its portfolio of properties. REIT status is also reserved for larger pools of investors. In 2008, it was the largest of four publicly traded storage REITs. It's this second requirement that divides REITs into two large categories: equity REITs, which hold real estate directly and collect rental income from tenants; and mortgage REITs, which invest in mortgage-backed securities related to financing for real-estate investments by others. And with a set of unfair advantages that are completely unheard of with other investments, it’s no surprise why. Nareit's members are REITs and other businesses throughout the world that own, operate, and finance income-producing real estate, as well as those firms and individuals who advise, study, and service those businesses. Buying a Home in These 7 States Gives You the Most Bang for Your Buck, www.cafemedia.com/publisher-advertising-privacy-policy, Extensively researched articles in the areas of Real Estate Taxes, REITs, CREs, Regulation A and Returns as of 01/25/2021. Will the Covid 19 Crisis Push Home Values Lower? Public Storage currently has a consensus rating of "hold," but if demand for self-storage REITs continues to climb, it may be well-suited for a buy-and-hold strategy for the long term. It's been expanding aggressively, spending billions of dollars to bring its total network to about 910,000 units and 103 million square feet of rentable space. Even when you ignore the impact of dividends, the REIT's share price has jumped more than 500% over the past decade. Please read our Privacy Statement and Terms & Conditions. Finally, REITs are required to pay out most of their income to their shareholders. Public Storage is an American international self storage company headquartered in Glendale, California, that is run as a real estate investment trust (REIT). Storage space is more of a commodity item, though, and that makes it vital for successful self-storage facilities to have occupancy rates that are as high as possible. Learn More. 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