Self-storage real estate investment trusts (REITs) are companies that own, operate, and manage mini-warehouse storage facilities. These properties enable businesses and individuals to securely store items in individual storage units.
Here's a closer look at the self-storage REIT business. We will explore its advantages and risks, and some leading self-storage REITs that investors should consider.
Understanding self-storage REITs
Self-storage properties are small warehouses with multiple units that range in size. Owners lease storage units in these buildings to businesses and individuals who need space to store inventory or household items. Some self-storage operators will also rent parking spaces to store boats, RVs, and other vehicles.
Most self-storage units rent on a month-to-month basis. That differs from the lease structure of many other REITs, which typically own properties that lease space for a year or more. On the one hand, the shorter-term lease structure enables self-storage REITs to raise rents more frequently to market rates. On the other hand, they might have to reduce rents during a down market.
In addition to generating rental income, self-storage REITs have several other potential revenue sources, depending on their business model. These can include tenant reinsurance income, late fees, management fees, and the sale of moving materials (boxes, packaging, tape, etc.).
Advantages of investing in self-storage REITs
Self-storage REITs have several attractive investment qualities, including:
- Steadily rising demand: Storage space demand drivers include relocation, decluttering, disasters, changing life circumstances, and business purposes. These factors tend to keep occupancy levels high while steadily pushing rental rates higher.
- Low break-even levels: Self-storage properties are one of the lowest-cost real estate investments since they're typically inexpensive to build and operate. As a result, they tend to have relatively low occupancy break-even rates. These factors enable self-storage investments to generate high margins and investment returns.
- Strong historical returns: Self-storage REITs have historically been among the best-performing investments in the REIT sector. They have significantly outperformed other real estate investments over the past decade, including leading REIT ETF Vanguard Real Estate ETF (VNQ -0.83%).
Risks of investing in self-storage REITs
While self-storage REITs have been excellent long-term investments, they're not without risk. There are two notable sector-specific risks:
- Oversupply risk: Because self-storage facilities are cheap to build and operate, there are low barriers to entry. Developers can quickly build new capacity, which can increase competition for customers in a market, weighing on occupancy levels and rental rates at existing facilities.
- Economic risk: Due to the short-term nature of self-storage leases, the sector has more exposure to an economic downturn. If the economy takes a hit, fewer people will move. Businesses might also cut back expenses, impacting occupancy and rental rates.
In addition to those sector-specific risks, self-storage REITs face two intertwined potential headwinds common to the entire REIT sector:
- Financing risk: As interest rates rise, borrowing money becomes more expensive. If a REIT has lots of floating-rate debt or near-term maturities, rising rates can increase its interest expenses. Higher interest rates can also affect a REIT's ability to finance acquisitions and development projects.
- Interest rate risk: Rising interest rates tend to weigh on REIT stock prices. That's because it makes lower-risk alternatives such as bonds more attractive investments since their income yields rise. As a result, REIT stock prices tend to fall, pushing up their dividend yields to compensate investors for their higher risk profiles.
The best self-storage REITs to buy right now
There were a handful of publicly traded self-storage REITs in 2025. While all focus on owning, operating, and managing self-storage facilities, three of them stand out for their slightly differentiated business models.
Here's a closer look at what makes these self-storage REITs different from their competitors.
1. Public Storage
NYSE: PSA
Key Data Points
Public Storage (PSA -1.46%) is the largest self-storage REIT by market cap. In late 2025, it had almost 3,500 owned or operated properties and more than 254 million square feet of net rentable space across 40 states. In addition, it also owns a 35% interest in European self-storage REIT Shurgard Self Storage, which owns 323 self-storage properties in seven Western European countries with 18 million net rentable square feet.
Its property development platform differentiates Public Storage from its self-storage REIT peers. It's the only REIT that develops new properties; the rest primarily expand by acquisition. The company's development strategy has enabled Public Storage to earn higher investment returns compared to acquisitions over the years.
Public Storage will also invest in redevelopment projects and make acquisitions. It had bought over 85 properties for more than $900 million through late 2025.
2. Extra Space Storage
NYSE: EXR
Key Data Points
3. National Storage Affiliates
Related investing topics
Self-storage REITs have historically been great investments
Self-storage REITs benefit from a combination of lower costs, high demand, and short-term lease structures, which have enabled the sector to steadily increase income. That has helped the industry generate above-average total returns over the years. The ability to earn high returns makes self-storage REITs attractive options that real estate investors should closely consider.
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