In good times and in bad times, whether it’s moving in together, taking on a new city, or that long-awaited renovation project Americans need a place to store their stuff.
New data shows the pandemic has been no different, and self-storage companies have proven one of the most lucrative investments in America since Covid began circulating.
In 2018 and 2019, US developers flooded the market with new storage units, adding 5% of space nationally each year according to property research firm Green Street. That created fears they were opening space faster than Americans — 1 in 10 of which uses storage units — were amassing excess stuff.
The pandemic wiped those fears away. Under lockdown, record numbers of people began decluttering at home to make room for offices and work-out spaces, and seven million households moved to a different county in 2020 alone in a shift to suburban living. In both cases, they needed a place to put that dresser that never gets used.
By the third quarter of this year, the country’s four largest storage companies each reported record low vacancies of less than 5% in the third quarter. Extra Space and Public Storage, which together own about 345 million square feet of storage space, were 97% at capacity. The average monthly storage bill rose to $155.65 in November, the highest in five years according to KeyBanc Capital Markets, helping storage companies lock away gold:
- Since February 2020 — or right before the pandemic rocked stock markets — self-storage company shares on the FTSE Nareit All Equity REITs Index have returned over 85%, compared to just 18% return on the broader real-estate investment trust index.
- Extra Space Storage shares have doubled in value and Public Storage stock has returned 73% since the pandemic began, beating out the S&P 500’s 41% return in the same period.
Stow Away the Future: JPMorgan, Raymond James and Truist Securities all recently raised their target prices targets for self-storage stocks, expecting more gains. Here’s hoping it’s thanks to all the forthcoming delayed marriages.