Where Does Tidiness Craze Leave Self-Storage?: Stephen Gandel

Developers may have added too much space to the self-storage sector to keep supply levels in check.

(Bloomberg Opinion)—One of the hottest sectors in real estate investment trusts last year may no longer spark joy with investors. Marie Kondo, the tidying-up sensation, may be partly responsible.

Shares of self-storage REITs were up 3 percent last year, including dividends, in what was a tough market for real estate. Hotel REITs fell 12 percent, including dividends, in 2018. REITs focused on shopping centers dropped nearly 15 percent. Overall, REITs lost 5 percent last year, worse than the overall stock market. The basic reason for the success of self-storage is pretty evident to anyone who has lived in America, or just knows Americans: We buy a lot of stuff, and we don’t like to throw it away. That’s created a steady stream of demand for self-storage units for a while.

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