Self-Storage Expected To Face Slowdown In 2018

Growth in the self-storage sector has grown sluggish as markets increasingly gain new supply, but experts remain unconcerned about the slowdown, saying the current figures are simply a sign that the self-storage market is leveling out after experiencing a boom over the past several years, the Wall Street Journal reports.

Stock valuations have similarly begun to fall with self-storage companies now trading at a 2% discount. This is down from a 16% premium on average over the last five years. Even so, the performance is better than most property types with malls REITs trading at discounts of 13% while office REITs are trading at discounts of 9%.

In the fall, the sector saw massive growth following hurricanes Harvey and Irma, but experts had warned that this type of reaction was not uncommon after a natural disaster as people tend to rent space to store their belongings while attempting to rebuild.

Concerns regarding the future of the industry are being exacerbated by aging baby boomers' moving into smaller housing and getting rid of material items, the WSJ reports. In addition, millennials have also accumulated fewer material items and are less likely to require self-storage, though that could soon change as the generation continues to age and a larger number of millennials begin to form households.

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