Self-storage pulled ahead of other property types in the reopening trade as the real-estate business rebounded this year during the easing of pandemic restrictions.
The storage facilities around the country have brought the biggest returns to investors in public real-estate stocks this year. Many people moved, and for those who stayed put, a desire to have more space in their homes because of remote learning and working also spurred demand for self-storage.
As of June 30, total returns from self-storage real-estate investment trusts reached 36%, outpacing other REIT sectors except shopping center and mall landlords. Over the same period, the FTSE Nareit Equity REITs Index gained 22% and the S&P 500 climbed 15%.
People generally haven’t been able to tame their consumerism, increasing the need for storage space. The self-storage industry sees demand when people’s lives are disrupted, such as relocating for a new job, marriage, divorce and education.
“Self-storage thrives when people experience change, and Covid disrupted norms across all generations, “ said Drew Dolan, principal at DXD Capital, a self-storage developer and investor. He added that many customers who needed self-storage in 2020 were first-time customers.