Over five years ago I wrote about one of my favorite real estate sectors: Self-storage. And I added a few paragraphs on Public Storage (PSA). Since then PSA shares have risen 130.9 percent, for an annualized return of 16.3 percent. That does not include the attractive 3+ percent dividend.
The future looks good for the sector.
According to MJ Partners, a Chicago-based real estate brokerage and investment banking firm, private owners of self-storage facilities are reporting 89 percent occupancy. And the five major public-traded firms, like PSA, have seen 92 percent occupancy. Strong demand for storage and limited supply are driving these record numbers.
If you didn’t jump into PSA when I suggested it in back in 2010, now might be a good time to give it a second look. As vacancy rates fall and rents grow, investor demand for this cash cow is bound to improve.