Dream Storage Newsletter - February 2025

Monthly Newsletter

The public self-storage companies reported earnings this week and released their full 2024 year end operating results as well as their forecasts for 2025. In our February newsletter, we discuss the above as well as the state of the transaction market.

Market Insights

Public Storage reported full year revenue of -0.7%, net operating income of -1.7%, and occupancy of 92.4% for 2024. It issued 2025 revenue guidance ranging from -1.3% to 0.8%. Extra Space ended with revenue of 0.2%, net operating income of -1.5%, and occupancy of 93.7%. Revenue guidance ranged from -0.75% to 1.25% for the current year.

Asking rates have bottomed in many markets and have returned to a growth trajectory in others. This normalization of operating fundamentals is critical for the transaction market as it facilities asset valuations for investors, brokers, and lenders alike.

With this backdrop, investment sales brokers have shared positive sentiment on more properties coming to market for sale this year. While any rebound in transaction activity remains to be seen, the early signs lead by moderating street rates are strong positive indicators.

Dream Storage’s Outlook

With the spring and summer leasing seasons around the corner, the trajectory of the industry will be tested. If asking rates improve more than compared to the last two years, sellers will gain confidence in testing the market and buyers will be able to underwrite with more conviction. Debt, while selective, is still ample. These conditions should lead to more opportunities in the months to come.

We look forward to presenting you with the next opportunity.

The Dream Team