Storage REITs: Inflation Hedge With Dividend Growth

Summary

  • Self-Storage REITs stumbled into the pandemic with challenged fundamentals and an outlook for near-zero growth amid oversupply challenges, but catalyzed by housing market strength, self-storage demand has suddenly become insatiable.
  • While no longer trading at the compelling valuations that we discussed before the 80% total returns in full-year 2021, we see value in targeted opportunities within the storage REIT sector.
  • Like a phoenix rising from the ashes, storage REITs have delivered an incredible turnaround over the last eighteen months. Forward-looking indicators and industry commentary suggest that the positive momentum should continue into 2022.
  • Residential REITs have historically been one of the most effective inflation hedges across all asset classes, and self-storage REITs are no exception, resulting from short lease terms and "sticky" demand.
  • More broadly, we believe that the sector's strong balance sheets, low cap-ex profile, inflation-hedging lease structure, and above-average external growth potential warrant a premium multiple and overweight positioning within a balanced REIT portfolio.
  • This idea was discussed in more depth with members of my private investing community, Hoya Capital Income Builder. Learn More »

Couple Packing Boxes in Storage Unit

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REIT Rankings: Self-Storage

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Self-Storage REITs stumbled into the coronavirus pandemic with challenged fundamentals and an outlook for near-zero growth amid oversupply challenges, but catalyzed by housing market strength, self-storage demand has suddenly become insatiable. In the

storage REITs

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urban exodus intensified in 2020

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Self-storage REIT core FFO Growth

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self storage rent growth

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self storage reit performance 2022

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self-storage REITs hotel california

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rent growth by market

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self storage REIT geographical breakdown

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Real estate sector performance

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returns 2022

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self-storage reit performance

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self-storage NOI

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self-storage construction spending

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self-storage REITs balance sheets

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self-storage REIT acquisitions

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storage REIT dividends 2021

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self-storage REIT dividend yields

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self-storage REIT same-store NOI growth

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high dividend yield index

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Additional disclosure: This is an abridged version of the full report published on Hoya Capital Income Builder on January 10th.

Hoya Capital Real Estate ("Hoya Capital") is a research-focused Registered Investment Advisor headquartered in Rowayton, Connecticut. Founded with a mission to make real estate more accessible to all investors, Hoya Capital specializes in managing institutional and individual portfolios of publicly traded real estate securities, focused on delivering sustainable income, diversification, and attractive total returns. A complete discussion of important disclosures is available on our website (www.HoyaCapital.com) and on Hoya Capital's Seeking Alpha Profile Page.

Nothing on this site nor any published commentary by Hoya Capital is intended to be investment, tax, or legal advice or an offer to buy or sell securities. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and should not be considered a complete discussion of all factors and risks. Data quoted represents past performance, which is no guarantee of future results. It is not possible to invest directly in an index. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate.

Investing involves risk. Loss of principal is possible. Investments in companies involved in the real estate and housing industries involve unique risks, as do investments in ETFs, mutual funds, and other securities. Please consult with your investment, tax, or legal adviser regarding your individual circumstances before investing. Hoya Capital, its affiliate, and/or its clients and/or its employees may hold positions in securities or funds discussed on this website and our published commentary. A complete list of holdings is available and updated at www.HoyaCapital.com.

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