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, as well as some leading self-storage REITs investors should consider.
Understanding self-storage REITs
Self-storage properties are small warehouses with multiple units of varying sizes. Owners lease storage units in these buildings to businesses and individuals who need space to store inventory or household items. Some self-storage operators also rent parking spaces for 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 among the lowest-cost real estate investments, as 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 REITs. They have significantly outperformed other real estate investments over the past decade, including leading REIT ETF Vanguard Real Estate ETF (VNQ +1.44%).
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, increasing competition for customers in a market and 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 2026. While all focus on owning, operating, and managing self-storage facilities, three of them stand out for their slightly differentiated business models.
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| Public Storage (NYSE:PSA) | $50.6 billion | 4.16% | Specialized REITs |
| Extra Space Storage (NYSE:EXR) | $30.1 billion | 4.57% | Specialized REITs |
| National Storage Affiliates Trust (NYSE:NSA) | $2.5 billion | 7.00% | Specialized REITs |
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 +3.21%) is the largest self-storage REIT by market cap. In early 2026, 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 by late 2025.
2. Extra Space Storage
NYSE: EXR
Key Data Points
Extra Space Storage (EXR +2.60%) is the largest player in the U.S. self-storage sector. In early 2026, it had almost 4,240 properties in 43 states, with more than 326.9 million square feet of rentable space. It controlled 14.4% of the U.S. self-storage market, the largest share in the sector (bigger than Public Storage's 11.2%).
Extra Space Storage's third-party management platform sets it apart from other self-storage REITs. While most REIT rivals also manage properties owned by third parties, Extra Space Storage was an early leader in this business model. It currently manages more properties than any of its competitors (1,811 in early 2026, compared to 814 for CubeSmart (CUBE +2.34%) and 339 for Public Storage).
This strategy has several benefits. It generates steady management fee income and requires little up-front investment. Meanwhile, it provides the company with a steady stream of acquisition opportunities. Extra Space Storage can purchase a property it knows very well when the owner sells, reducing risk.
3. National Storage Affiliates
NYSE: NSA
Key Data Points
National Storage Affiliates (NSA +1.34%) had about 1,070 self-storage properties across 37 states and Puerto Rico, with about 69.8 million rentable square feet as of early 2026. It focuses on owning properties across the country's top 100 metro areas.
What's unique about National Storage Affiliates is that it doesn't consolidate its properties under one national brand. Instead, it owns, operates, and manages strong regional brands.
The company was undergoing an internal consolidation strategy to transition from a dozen brands to seven market-focused brands. This strategy will strengthen its core brands and reduce costs, which should enhance its returns. It can then leverage those stronger brands to expand in their markets by acquiring smaller rivals and transitioning them to the more-focused regional brand.
Factors to consider when choosing self-storage REITs
Investors need to evaluate a few things before adding a self-storage REIT to their portfolio, including:
- Size: Whether to invest in a larger-scale REIT or a smaller one with more growth potential.
- Development strategy: Some REITs invest only in stabilized operating properties, while others engage in ground-up development, a higher-risk, higher-reward strategy.
- Portfolio mix: Some REITs focus more on owning self-storage properties, while others have a third-party management platform.
- Geography: Some REITs only own properties in certain U.S. markets, while others are more broadly diversified, including internationally.
Ways to invest in self-storage REITs
Investors have a few ways to add self-storage REITs to their portfolios:
- Direct stock purchases: You can buy one or more self-storage REITs through your brokerage account.
- ETFs: You can buy a REIT exchange-traded fund (ETF), which provides passive exposure to self-storage REITs as well as those that own other property types.
- Mutual funds: Another option is to buy a REIT mutual fund, which, similar to a REIT ETF, provides exposure to self-storage and other REITs.
- Real estate investment funds: You can also consider a private real estate investment fund, some of which focus specifically on owning self-storage properties. However, these funds are often open only to accredited investors and typically require high minimum investments.
Key Trends in the Storage Industry
Demand for self-storage space was muted heading into 2026. Rates rose by a modest 0.3% year-over-year in December 2025, according to Yardi Matrix. Meanwhile, the pipeline of new self-storage supply remained strong at 54.3 million net rentable quarter feet under construction, equivalent to 2.7% of the existing inventory in December. These factors could put pressure on occupancy levels and rental rates in 2026.
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 for real estate investors to consider.
FAQ
FAQ on self-storage REITs
About the Author
Matt DiLallo has positions in Public Storage. The Motley Fool has positions in and recommends Vanguard Real Estate ETF. The Motley Fool recommends Extra Space Storage. The Motley Fool has a disclosure policy.
