Self-storage best real estate investment over decade

May 02, 2012 11:30AM

Far from golf resorts and office property, self-storage companies were found to be the best real estate investment over the past 10 years, Bloomberg reported, citing their Riskless Return Ranking. These companies, such as Public Storage, which is based in California and has locations in New York City, had the highest total return and the third-lowest volatility, according to Bloomberg.

Over the past 10 years, Public Storage, as well as other storage companies, gained investors with low debt ratios and a steady growth in cash flow. Public Storage itself has a 22.5 percent debt-to-assets ratio, which is half the average 45 percent for REITs.

Storage occupancy and rents are slated to increase this year, due to rising demand and the lack of new construction. Occupancy will increase by 1 to 3 percent and rents will climb 3 to 3.5 percent, according to Bloomberg. Occupancy has already risen to 81.1 percent in the first quarter of 2012 from 80 percent last year. Median asking rents also increased to $90 per month in first-quarter 2012, up $2 from the year prior. [Bloomberg]