Self-Storage REIT Outlook Remains Positive, Green Street Analyst Says

Ryan Burke, an analyst at Green Street Advisors, joined Nareit for a video interview at REITworld 2017.

Burke discussed the performance of the self-storage sector and its long-term outlook.

“Despite near-term pressures, we continue to think the long-term outlook is pretty good,” Burke said. However, he added that he expects some softening of the “very easy and supportive operating environment” that self-storage REITs have experienced in the past several years.

Burke noted that “while we do think that self-storage has seen its best days from an operating perspective, there probably are some good days that lie ahead.”

Burke said he sees room for the overall self-storage utilization rate to increase further, even though mobility is at a cyclical low in the United States.

“People are feeling relatively well-settled this deep into the recovery and rents per square foot for self-storage are at an all-time high. You’re also starting to get the impact of new development in certain core markets,” Burke said.

Meanwhile, Burke highlighted the “systemic underpricing” that has occurred in the self-storage sector, which has allowed investors to achieve sizeable risk-adjusted returns.