Self-storage has been gaining a growing amount of attention from investors over the past several years. As cap rates have continued to shrink on multifamily investments, the returns on self-storage have become attractive.
One of the largest owners of self-storage properties is CubeSmart (NYSE: CUBE), the third-largest storage real estate investment trust (REIT) in the United States. This REIT has done a great job getting through the pandemic and was able to recover quickly. But where will CubeSmart be in five years? We’ll take a close look at its current operation and what direction it’s heading in to get a better idea.
CubeSmart currently owns 527 self-storage properties and manages an additional 719 under the CubeSmart brand. While it owns and operates storage properties throughout the United States, its highest concentration of properties is in New York City, which has a high demand for self-storage units due to the high percentage of the population living in apartments.
Having 26% of its properties in the New York City area has offered an additional bonus. Recent legislation has significantly increased regulations on developing new self-storage properties. This provided a huge benefit to CubeSmart because it will be extremely difficult for any new competition to move into the area.