National Storage Affiliates Trust
National Storage Affiliates Trust is the fifth-largest publicly traded self-storage REIT and one of the newest REITs on the market. It went public in 2015.
NSA focuses on building and acquiring high-end storage facilities in high-growth sectors of the United States. This REIT is growing quickly and achieving some notable numbers, including a 5.5% net operating income (NOI) growth for the second quarter of 2019 compared to the same quarter in 2018.
As of June 30, 2019, NSA owns over 700 storage facilities in 35 states and Puerto Rico. Their reported core funds from operations (core FFO) is $34.3 million, or $0.38 per share. The REIT's stable balance sheet, moderate leverage ratio at less than 41%, and plans for expansion put them high on the list for top self-storage REITs to invest in.
Life Storage Inc.
Life Storage Inc. (NYSE: LSI) is one of the largest self-storage companies in the world, owning over 800 self-storage facilities with 55 million rentable square feet across 28 states.
In Q2 2019, LSI acquired four new properties at a total cost of $43.2 million while adding 11 new stores to its third-party management platform. Management and acquisition fees increased 28% year over year. Occupancy is slightly above the industry average at 90.8% and its financial position remains strong in comparison to other REITs in this sector with a debt service coverage ratio of 4.6x. That's well above the industry average ratio of 3x.
Public Storage (NYSE: PSA) is the largest developer, owner, and operator of self-storage facilities in the country with an interest in nearly 2,500 facilities across 38 states. As of Q2 2019, the company's same-store revenue increased 1.9% year over year in addition to an increase in NOI of $7.9 million. PSA has a healthy payout ratio that fluctuates between 78% and 88%, which is normal for a REIT.
Public Storage added 10 facilities to its portfolio during Q2 2019. On Sept. 11, 2019, Public Storage announced a call for the redemption of all outstanding depositary shares representing interests in its 5.625% Cumulative Preferred Shares. Reliable profits, earnings, and new developments support its expansion and dividend growth, making this an appealing REIT for investors.
When considering these top three self-storage REITs, review each company and determine if its investment portfolio and risk potential make sense for you.
Most commercial assets, including self-storage facilities, are intended to be buy-and-hold investments and provide better returns over a longer period. With that said, shifts in economic circumstances or increases in interest rates can affect any of these companies at any moment.
Always conduct your own due diligence and make sure your investments align with your risk tolerance.