This story appears in the Septemper 4, 2017 issue of Forbes. Subscribe
Self-storage has been a growth business for decades, and the success of startups like Clutter isn't likely to dent the prospects of established players for some time.
If you consider the urbanization going on here and in emerging economies, the sector's long-term prospects are excellent. The internet and technology have also played a large role; search-engine optimization and call centers are reeling in customers more efficiently than ever.
For big real estate investment trusts (REITs) like Public Storage (PSA), Extra Space (EXR) and CubeSmart (CUBE), there are even more tech advantages. Sophisticated revenue-management algorithms can help them optimize rents at each property, not unlike airline pricing.
Extra Space is my top pick, as shares have traded down from around $92 last summer to $80. Double-digit earnings growth is unlikely, but if you factor in its steadily growing dividend, now yielding 4%, then annual return expectations of 15% are a good bet.
See related article: This L.A. Startup Is Digitally Transforming The Self-Storage Industry
Brad Thomas is editor of Forbes Real Estate Investor.
