Independent Operators Outperform REITs in Self Storage Recovery
According to TractIQ's August market briefing, independent operators are leading the recovery in the U.S. self storage sector compared to publicly traded real estate investment trusts (REITs). Independent operators manage a majority of tracked facilities—65.7% by count—but control less space due to smaller property sizes. They also experienced stronger year-over-year street-rate growth at 6.5%, outpacing REITs' 4.7%. Occupancy gains were similarly concentrated in non-REIT properties, with independent operators improving occupancy levels more significantly than their publicly traded counterparts. The data highlights a significant disparity between major and smaller markets: while REITs dominate the top 25 metropolitan areas, they have minimal presence outside of them. Smaller markets contain nearly as much inventory (1B SF) as the largest metro regions but face higher local risks due to limited construction pipelines or none at all in many cases. TractIQ also notes that independent operators hold a large number of maturing loans with an average size of $2.6M, which could lead to increased M&A activity among private buyers.
Topics: commercial real estate independent operators market recovery REITs