Storage REITs take a tumble despite strong results

John Egan
May 12, 2022

The COVID-19 pandemic may be waning, but the pandemic-fueled lift in business for the five publicly traded self-storage REITs is not.

During their first-quarter earnings calls, executives at the five REITs reported continued strength in occupancy rates, rental rates and revenue growth.

Despite the sunny results, however, financial analysts mostly downgraded the sector. Shares of the Big 5 storage REITs tumbled in tandem, each stock falling more than 20% from April 22 through May 9.

While the slump in the sales price might lead you to believe the REITs had fallen on tough times—at the moment it is quite the opposite. In fact, four of the REITs just boosted their same-store revenue outlooks for 2022. Only Glendale, CA-based Public Storage, the biggest of the REITs, didn’t adjust its revenue forecast for this year.

“We are off to a great start in 2022,” Scott Stubbs, chief financial officer at Extra Space Storage, said in a remark that could sum up the situation at all five REITs.

Here’s how four of the REITs tweaked their 2022 projections for growth in same-store revenue:

  • Malvern, PA-based CubeSmart. Previous guidance: 8% to 10%. New guidance: 8.75% to 10.25%.
  • Salt Lake City, UT-based Extra Space Storage. Previous guidance: 10.5% to 12.5%. New guidance: 13% to 15%.
  • Williamsville, NY-based Life Storage. Previous guidance: 9.5% to 10.5%. New guidance: 10.5% to 11.5%.
  • Greenwood Village, CO-based National Storage Affiliates Trust. Previous guidance: 8% to 9.5% increase. New guidance: 11% to 13%.

Marc Boorstein, principal of Chicago-based real estate brokerage and investment firm MJ Partners Real Estate Services, said the four REITs’ “very bold” forecast revisions came as a “real surprise.”

“The REITs are extremely optimistic,” Boorstein said. “But when they start the second quarter with occupancies in the mid-90s and they are seeing a lot of good trends in April, they think they can push rates on existing customers because there is still demand from new customers.”

Occupancy stays strong

“Overall, business is excellent and self-storage fundamentals remain at all-time record levels,” said Tamara Fischer, president and CEO of National Storage Affiliates, during the company’s earnings call.

“The sector is well positioned in an inflationary environment as a needs-based service with monthly leases that allow operators to adjust rates dynamically at a rent payment that represents a relatively small portion of our customers’ disposable income,” she said.

Much of the REITs’ optimism about robust revenue growth stems from occupancy rates that remain healthy. For instance, Life Storage reported a same-store occupancy rate of 93.7% as of March 31, down slightly from 94%…

Continue reading on Storable.com

Sign up for the Storage Beat newsletter

Never miss a story! Sign up for our weekly newsletter featuring the latest storage industry news and interviews with movers and shakers:



About the SpareFoot Storage Beat

The SpareFoot Storage Beat is your go-to source for news, features and analysis about the self-storage industry. Self-storage categories covered by The SpareFoot Storage Beat include public companies, private companies, industry trends, real estate development, facility acquisitions, hirings and promotions.

Send us a tip






Recent posts

Sold! Newly minted facility in Maine trades for $2.1 million

Sold! Newly minted facility in Maine trades for $2.1 million

Malone Commercial Brokers led the sale of a newly built 26,000-square-foot self-storage facility at 17 Town House Road in West Gardiner, ME. The 7.5-acre property has five buildings and was sold to Town House Road LLC for $2.134 million. West Gardiner Self Storage is...

read more
Etude Storage Partners makes offer to buy Global Self Storage

Etude Storage Partners makes offer to buy Global Self Storage

Global Self Storage, Inc. a publicly-traded real estate investment trust with a portfolio of 13 self-storage properties, finds itself in the crosshairs of a third unsolicited acquisition proposal from Austin-based Etude Storage Partners LLC. The proposal, amounting to...

read more