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WSJ Reports 2007 Decline in Self-Storage REIT Performance


The Wall Street Journal recently reported a decline of performance in the self-storage REIT sector, though no final conclusions were made as to the cause. Last year, the self-storage REITS outperformed the REIT industry as a whole. But during the first quarter of 2007, same-store growth in net operating income for the four publicly traded companies—Extra Space Storage Inc., Public Storage Inc., Sovran Self Storage and U-Store-It Trust—declined to 3.7 percent from 6.6 percent the previous year, according to BMO Capital Markets.

Analysts are considering several reasons for the downturn, including a lack of discretionary income on behalf of consumers. A few specific causes were cited by WSJ; for example, Public Storage said its first quarter net income fell 48 percent as a result of charges related to last year’s deal with Shurgard. U-Store-It is in the middle of a major management restructuring. Sovran attributes some of its lack of performance to slowness in the housing market.

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