Extra Space Storage Market Analysis

In: Business and Management

Submitted By Joe724c
Words 328
Pages 2
Market analysis
February 8,2013
| Extra Space StorageGaining a competitive advantage.

Market analysis
February 8,2013
| Extra Space StorageGaining a competitive advantage.

Background Information:
According to the National Association of REITs, “self-storage REITs have had the strongest returns out of all publicly traded REITs over the past two years. In 2011, self-storage REITs had a 35.4% return, whereas the overall REIT market realized 8% returns. Generally speaking, REITs are relatively low risk, as 90% of all profits must be returned to shareholders. Moreover, the 2013 fiscal climate looks promising for the real estate sector, as many financial analysts expect interest rates to remain exceptionally low. Interest rates are particularly relevant, because REITs use a lot of leverage and operate with considerable debt.”
There are four publicly traded self-storage investment trusts on the New York Stock Exchange:
* Public Storage (PSA) (A-rated by S&P), which opened its doors for business 40 years ago. Today Public Storage is the world's largest owner and operator of self-storage facilities. The company operates over 2,200 unique and diverse company-owned locations in the United States and Europe, totaling more than 141 million net rentable square feet of real estate. Seeking Alpha writer Michael Terry, CFA wrote an excellent article on Public Storage here.

* Extra Space Storage (EXR) (not rated), which is the second largest owner and operator of storage facilities in the US. The company's properties comprise approximately 585,000 units and totaling 64 million square feet of rentable storage space. I wrote an article on Extra Space here.

* Sovran Self Storage (SSS) (BBB- rated by S&P), which was founded 30 years ago and owns and/or operates more than 400 self storage facilities encompassing over 20 million square…...

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