Dream Storage Newsletter - October 2023

Market Insights and Company Outlook

Author

Chris Chan
October 30, 2023

Monthly Newsletter

The self-storage industry and investment landscape continue to evolve as we end the first month of the final quarter of 2023. In this edition of our newsletter, we share these changes and highlight opportunities entering the home stretch of this year.

Market Insights

Public Storage, long a bellwether for the self-storage industry, released Q3 earnings which reported year over year revenue growth of 6.1% and net operating income growth of 6.5% year to date. While average facility occupancy fell to 92.1%, it remains well above the historical average of just below 90%. The ability to continually increase revenue in an environment of moderating street rates and occupancies is a strength of the self-storage business model that will continue to serve it well in both the near and long term. It is extremely clear that despite financing challenges, self-storage operating fundamentals stand on very solid ground.

These industry results have played out against a backdrop of mixed economic indicators. For every negative signal suggesting weakness in the economy such as rising auto and credit card loan delinquencies, there are cross currents which suggest relative economic strength. The unemployment rate remains near historic lows at 3.8% and September GDP exceeded expectations at 4.9%. This confluence of factors is driving uncertainty and dislocation in the market.

Dream Storage’s Outlook

Market dislocations create great opportunities. We continue to invest in our relationships with the investment sales and capital markets communities to ensure we are seeing every deal. While transaction volume remains muted, the market is certainly shifting as buyers and sellers allow the price discovery process to play out. We anticipate sharing our next opportunity with you very soon.

Warm regards,

The Dream Team

Public Storage Reports Results for the Three and Nine Months Ended September 30, 2023

Public Storage (NYSE:PSA) announced today operating results for the three and nine months ended September 30, 2023. “Public Storage’s industry-leading platform drove higher move-in volumes, improved occupancy, and better-than-expected NOI growth in our stabilized and lease-up portfolios during the third quarter. Collectively, this propelled a third consecutive increase to our outlook for 2023 within a competitive customer move-in environment across the self-storage industry,” said Joe Russell, P

GDP jumps 4.9% as the U.S. economy speeds up

The U.S. economy grew at a 4.9% annual pace in the third quarter --- fueled by a burst of consumer spending --- and defied expectations of slowdown

Self-Storage REITs Schedule Conference Calls to Discuss 3Q 2023 Financial Results

The four largest publicly traded, U.S.-based self-storage real estate investment trusts have announced when they’ll reveal their third-quarter 2023 earnings.