Self-Storage Suffers the Least Loss Among REIT Sectors

Though the real estate investment trust (REIT) market is poised for big losses in 2008, the self-storage sector has performed the best, having dropped only 14.59 percent over last year. In comparison, the industrial sector is down 81.11 percent, lodging and resorts 66.57 percent, and regional shipping malls 66.34 percent.

As of last Thursday, the index of equity REITs, which own commercial property and constitute the bulk of the market, was down 49.16 percent in 2008, according to the National Association of Real Estate Investment Trusts. (Losses for mortgage REITs, which originate loans and invest in mortgage-backed securities, averaged 42.16 percent.) This has been a second consecutive year of losses for REITs—in 2007, they fell nearly 16 percent.

Some analysts say the reason for self-storage’s comparatively better performance is Public Storage Inc., which operates self-storage facilities nationwide has no debt.  

Source:The New York Times, A Year of Tumult for REITs