In this article, we discuss 10 best public storage stocks to buy now. If you want to skip our detailed discussion on the storage industry, check out 5 Best Public Storage Stocks to Buy Now.
According to Mordor Intelligence, the self-storage market will potentially be worth around $58.26 billion in 2023 and is expected to reach approximately $72.15 billion by 2028, with a compound annual growth rate (CAGR) of 4.37% during the forecast period from 2023 to 2028. As a sub-sector of the commercial real estate industry, higher urbanization and a positive economic outlook will result in new business growth. Although self-storage facilities are a mainstream concept in markets like the United States and Europe, they remain a relatively unexplored phenomenon in Asian markets such as China and India. Self storage software, artificial intelligence, and IoT are also driving market growth as customers can keep checks on their storage units, thus increasing occupancy rates and enhancing efficiency.
Despite a slowdown in rental growth and occupancy during the last quarter of 2022, primary metrics for the self-storage industry remained positive throughout 2022. Market performance hovered near record levels achieved in the last two years, and transaction activity in the self-storage sector remained stable during the same period. According to Cushman & Wakefield, transaction volumes reached an all-time high of $13.5 billion in the fourth quarter of 2021 and remained consistently above $2.5 billion per quarter throughout 2022. Despite increases in interest rates, average capitalization rates decreased to a record low of 5% in the fourth quarter of 2022. In 2022, real estate investment trusts performed well, and the self-storage market sector rebounded at a quicker pace than the average self-storage cycle due to migration patterns during the pandemic.
Financial Times recently reported that the UK self-storage market is on its way to surpass a record £1 billion in turnover during 2023, driven by skyrocketing consumer demand for additional space. Demand for self storage in the UK exceeds many European countries due to staggering activity in the rental market. Cushman & Wakefield’s data showed that British self-storage firms like Big Yellow and Safestore grew their revenues by 6.5% to £990 million in 2022. This indicates that activity in the self-storage sector remained healthy and was not fazed by inflation. Philip Macauley, UK head of self storage at Cushman & Wakefield, noted that a “huge surge” in residential rental housing amplified the number of young individuals using self storage in the last year. According to Macauley, private equity investors are increasingly turning to self-storage as a preferred sector for diversifying their portfolio, partly due to the underperformance of office space. He commented:
“Self storage is now on their bucket lists whereas five years ago that wouldn’t have been the case.”
To benefit from the surge in the sector, some of the best public storage stocks to buy include WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), Prologis, Inc. (NYSE:PLD), and Public Storage (NYSE:PSA).
Our Methodology
We selected the following public storage stocks based on the hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the first quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm.
Photo by JOSHUA COLEMAN on Unsplash
Best Public Storage Stocks to Buy Now
10. Global Self Storage, Inc. (NASDAQ:SELF)
Number of Hedge Fund Holders: 3
Global Self Storage, Inc. (NASDAQ:SELF) is a real estate investment trust that owns, operates, and redevelops self-storage properties. Global Self Storage, Inc. (NASDAQ:SELF)’s portfolio of self-storage properties provides affordable and safe storage space for residential and commercial clients.
On May 9, Global Self Storage, Inc. (NASDAQ:SELF) reported a Q1 adjusted FFO of $0.10 and a revenue of $3 million, up 6.4% on a year-over-year basis. The company also paid a $0.0725 per share quarterly dividend to shareholders on June 30.
According to Insider Monkey’s first quarter database, Thomas Bailard’s Bailard Inc, Ken Griffin’s Citadel Investment Group, and Jim Simons’ Renaissance Technologies were bullish on Global Self Storage, Inc. (NASDAQ:SELF).
Like WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), Prologis, Inc. (NYSE:PLD), and Public Storage (NYSE:PSA), Global Self Storage, Inc. (NASDAQ:SELF) is one of the best public storage stocks to watch.
9. National Storage Affiliates Trust (NYSE:NSA)
Number of Hedge Fund Holders: 16
National Storage Affiliates Trust (NYSE:NSA) is a Colorado-based REIT that owns, operates, and acquires self storage properties. On May 25, National Storage Affiliates Trust (NYSE:NSA) declared a $0.56 per share quarterly dividend, a 1.8% increase from its prior dividend of $0.55. The dividend was distributed on June 30. It is one of the best public storage stocks to invest in.
According to Insider Monkey’s first quarter database, National Storage Affiliates Trust (NYSE:NSA) was part of 16 hedge fund portfolios, compared to 23 in the earlier quarter. Dmitry Balyasny’s Balyasny Asset Management is the largest stakeholder of the company, with 484,173 shares worth $20.2 million.
Heartland Value Fund made the following comment about National Storage Affiliates Trust (NYSE:NSA) in its Q1 2023 investor letter:
“Real Estate. In a market filled with uncertainty, stocks that offer investors an added margin of safety stand out. For National Storage Affiliates Trust (NYSE:NSA), which was a new addition in the quarter, that comes in the form of strong insider buying.
National Storage is a real estate investment trust that owns self-storage properties, with two thirds of its facilities located in the Sun Belt. The stock has pulled back significantly, which is not surprising given the deteriorating fundamentals in real estate amid rising interest rates and cap rates. We viewed this as an opportunity to purchase a high-quality REIT at a discounted valuation.
Giving us added confidence: Storage REITs are among the best performers in the real estate sector, with net operating income margins north of 70% and the lowest recurring capital requirements. We also like the fact that NSA’s insiders share in our optimism. Late last year, National Storage’s executive chairman/founder and three directors were significant buyers of the stock.”
8. CubeSmart (NYSE:CUBE)
Number of Hedge Fund Holders: 20
CubeSmart (NYSE:CUBE) is a self-managed real estate investment trust that provides affordable climate-controlled storage space for residential and commercial customers. It is one of the best public storage stocks to invest in. On May 16, CubeSmart (NYSE:CUBE) declared a quarterly dividend of $0.49 per share, in line with previous. The dividend is payable on July 17, to shareholders of record on July 3.
According to Insider Monkey’s first quarter database, 20 hedge funds were bullish on CubeSmart (NYSE:CUBE), compared to 21 funds in the prior quarter. Ric Dillon’s Diamond Hill Capital is the largest stakeholder of the company, with 2.5 million shares worth $119.40 million.
Baron Real Estate Income Fund made the following comment about CubeSmart (NYSE:CUBE) in its Q4 2022 investor letter:
“Following a sharp correction in the share price of CubeSmart (NYSE:CUBE) in 2022, we initiated a position. The company is the third largest self-storage REIT. CubeSmart owns and operates a high-quality portfolio of approximately 1,274 self-storage properties. With its well-located real estate portfolio and conservative balance sheet, we believe the company is well positioned to generate solid cash-flow growth and strong performance returns in the next few years.”
7. Extra Space Storage Inc. (NYSE:EXR)
Number of Hedge Fund Holders: 23
Extra Space Storage Inc. (NYSE:EXR) is a self-administered and self-managed REIT that owns secure storage units across the United States, including boat storage, RV storage and business storage. It is one of the best public storage stocks to invest in. Extra Space Storage Inc. (NYSE:EXR), on June 30, paid a quarterly per share dividend of $1.62 to shareholders.
On June 13, Extra Space Storage Inc. (NYSE:EXR) set the price for a public offering of $450 million worth of 5.500% senior notes due in 2030. These notes were priced at 98.878% of their principal amount and are set to mature on July 1, 2030. The offering was completed on June 16, 2023. The funds generated from the offering will be utilized to settle any outstanding obligations under the company’s lines of credit and for general corporate and working capital expenses. This includes the possibility of using the funds to finance potential acquisitions.
According to Insider Monkey’s first quarter database, 23 hedge funds were bullish on Extra Space Storage Inc. (NYSE:EXR), compared to 27 funds in the earlier quarter. Eduardo Abush’s Waterfront Capital Partners is the largest stakeholder of the company, with 432,851 shares worth $70.5 million.
Baron Funds made the following comment about Extra Space Storage Inc. (NYSE:EXR) in its Q4 2022 investor letter:
“Following a sharp correction in its share price over the course of 2022, we acquired shares in Extra Space Storage Inc. (NYSE:EXR). This REIT has assembled the second-largest self-storage portfolio in the country and has the largest portfolio of third-party managed self-storage facilities.
In our opinion, Extra Space’s management team is excellent. Over the last decade, management has delivered strong occupancy gains, rent growth, and expense control that has led to a cost of capital advantage relative to its peers. Management has capitalized on its cost of capital advantage by tripling its owned self-storage count since 2010. We believe the long-term growth opportunity for the company remains strong.”
6. Americold Realty Trust, Inc. (NYSE:COLD)
Number of Hedge Fund Holders: 24
Americold Realty Trust, Inc. (NYSE:COLD) owns, operates, acquires, and develops temperature-controlled warehouses. The company provides refrigerated storage to food producers, processors, distributors, and retailers in North America, Europe, Asia-Pacific, and South America. On May 16, Americold Realty Trust, Inc. (NYSE:COLD) declared a $0.22 per share quarterly dividend, in line with previous. The dividend is distributable on July 14, to shareholders of record on June 30.
According to Insider Monkey’s first quarter database, 24 hedge funds were long Americold Realty Trust, Inc. (NYSE:COLD), compared to 17 funds in the prior quarter. Scott W. Clark’s Darlington Partners Capital is the biggest stakeholder of the company, with 4.3 million shares worth $122.7 million.
In addition to WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), Prologis, Inc. (NYSE:PLD), and Public Storage (NYSE:PSA), smart investors are piling into Americold Realty Trust, Inc. (NYSE:COLD) for exposure to the public storage industry.
Here is what Baron Small Cap Fund has to say about Americold Realty Trust, Inc. (NYSE:COLD) in its Q2 2022 investor letter:
“Americold Realty Trust contributed to our performance this quarter. Americold is a large owner/operator of cold storage facilities. The stock had lagged because of two issues: first, frozen food manufacturers and their customers had labor issues that restricted production and thus the need for storage; and second, the company had execution issues. It seems like industry trends are improving. Plus, the company is making progress increasing its productivity and improving margins, somewhat from the effect of hiring some new senior executives.
The stability of the business and the fact that it pays a nice dividend as a REIT is a positive in this market. Even after its recent pickup, we think the stock still trades at a modest cap rate and well below its private market value, so the stock can work via growth and multiple expansion.”
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Disclosure: None. 10 Best Public Storage Stocks to Buy Now is originally published on Insider Monkey.