Did you know that more than 12% of American households now stash their extra “stuff” in storage facilities?
That’s more than ever before thanks to higher rates of downsizing, decluttering, divorce, and death. (Sorry If that’s morbid, but those four Ds really are the primary motives for renting self-storage space.)
Yet thanks to elevated rates and overbuilding during the pandemic years, there’s not much new supply being built these days. So, despite there being over 52,000 self-storage locations across the U.S…
They’re still doing quite well for themselves.
Source: Extra Space IR
Now, U.S. self-storage is intensely fragmented. Big publicly traded real estate investment trusts (REITs) own about a fifth of them. And about a hundred large operators combined hold another decent chunk.
But the majority belong to small businesses and individual owners. So there’s a whole lot of room for consolidation in this field.
And consolidating they are.
Some have even made acquisitions a core part of their playbooks. Public Storage (PSA), for one, recently announced its intention to take over fellow REIT National Storage Affiliates (NSA).
That $10.5 billion all-stock deal will give Public Storage over 1,000 more properties consisting of 69 million rentable square feet. It will also push its pro-forma enterprise value into the high-$70 billion range.
Extra Space (EXR), meanwhile, has been buying up smaller competitors across the country since its 2023 purchase of Life Storage (another REIT competitor). And CubeSmart (CUBE), the third-largest REIT owner and operator in the sector, is making similar moves.
Then there’s SmartStop Self Storage REIT (SMA). It’s significantly smaller… but still busy expanding in its own way.
In short, there are plenty of self-storage opportunities to capitalize on right now – both for the companies themselves and their shareholders. It really just depends on what kind of growth you’re looking for.
U-Haul and the two biggest self-storage REITs
Any discussion of publicly traded self-storage profits needs to include U-Haul (UHAL). Despite not being structured as a REIT – and despite the moving truck rental business it’s best known for – U-Haul is the third-largest self-storage operator on the continent.
It has around 2,100 self-storage facilities in its portfolio, 1,612 of which are corporately owned. That collection brought in $17.9 million more in revenue in Q4-25 than in Q3-25, a 7.9% increase.
When you add U-Haul to the self-storage REIT picture along with Public Storage, Extra Space, CubeSmart, and Smartstop… the resulting square footage amounts to over a third of U.S. inventory. That should tell you how significant U-Haul is to the industry.
When it comes to pure-play REITs, however, we have to look first and foremost at Public Storage. With its $54.47 billion market cap and 3,500+ locations across the country, it’s easily the blue-chip behemoth of the group.
Thanks to its size and history of wise management choices, Public Storage gets preferential treatment to low-cost, unsecured debt. And that in turn helps it maintain a fortress, best-in-class balance sheet.
This includes low leverage with debt-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) of 2.9x. Plus, its liquidity profile is strong, with around $134 million in cash and full availability on its $1.5 billion revolver.
Public Storage’s financial status even remains attractive with its pending $10.5 billion acquisition of National Storage. Wide Moat Research expects this purchase to integrate very well into the REIT’s current portfolio after it closes (probably after June).
Core funds from operations (FFO) rose 2.4% year over year to $4.22. That was supported by better-than-expected same-store performance, non-same-store net operating income (NOI), and ancillary income.
The second-largest self-storage REIT is Extra Space, with over 4,000 locations in its portfolio. Because it owns some and manages so many others, its market cap is “just” $30.45 billion – placing it squarely in second place against Public Storage.
There are many reasons to like Extra Space in and of itself, however. Its particular mix of joint ventures and third-party operations allows it to offer impressive customer relationships throughout its diversified portfolio.
This setup also lets Extra Space be fairly flexible in how and when it chooses to grow… all while turning smaller competitors into customers who plug into its technology, call centers, and revenue-management systems.
This is the quintessential business example of catching more flies with honey than vinegar.
In A1-26, core FFO rose 2% year over year to $2.04 per share, above the consensus of $2.01. And leverage was solid with net debt/EBITDA at 5.4x and 17.5% of debt floating.
Smaller but still attractive
CubeSmart, for its part, is the disciplined middleweight of the self-storage 5. With 1,500 facilities, it’s obviously smaller than Public Storage, Extra Space, and U-Haul.
But what it lacks in size, it makes up for in wisdom.
CubeSmart has a noteworthy focus on higher-density markets, where it can stand out better and therefore make a bigger impact. And management has a history of keeping its balance sheet very orderly while it grows, buying up portfolios that are too small to tempt its bigger competitors… but just right for CubeSmart.
That way, when it goes in to make an offer, it doesn’t have to worry about being outbid.
Rounding out our list is SmartStop, the undisputed new kid on the block. SMA began trading on the NYSE on April 2, 2025; and its current portfolio contains 460 properties located in 38 states and Canadian provinces.
Despite its size and much shorter history, SmartStop still has a solid balance sheet that includes:
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A BBB investment-grade rating from Morningstar
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The lowest debt to equity (0.93) in the peer group.
I have to admit that I’m warming up to SmartStop. It features 10% adjusted FFO (AFFO) per-share growth and trades at a lower multiple of 14.4x than its two biggest competitors.
It’s hard to overlook that kind of data, to say the least.
Source: ChatGPT
If I was fixating on wide moats, however, I’d have to choose Extra Space. It has a long-term earnings record of 12% compound annual growth rate (CAGR).
Public Storage and CubeSmart, in contrast, have only averaged about 7% growth since 2007. In addition, Extra Space is cheaper than Public Storage and sports a higher yield of 4.8%.
Really though, when it comes down to it, each one of these big self-storage companies has its own distinct appeal. Public Storage remains the fortress-balance-sheet blue chip…
Extra Space has that wide moat I mentioned…
CubeSmart offers disciplined middleweight exposure…
U-Haul is diversified…
And SmartStop gives investors a newer, faster growth option.
I’m impressed with where these companies are and how they’re navigating the competitive field. And I have a feeling we’ll see them get stronger and smarter as the year continues to play out.
Regards,
Brad Thomas
Editor, The Wide Moat Daily
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