In this article, we are going to discuss the 11 best self-storage and apartment stocks to buy now. You can also check out the 14 Best Real Estate and Realty Stocks To Buy According to Analysts.
The American dream of sprawling living spaces is undergoing a transformation. Increasing housing costs in densely populated areas and the rising need for frequent relocations have led more people to use self-storage facilities. Furthermore, as families expand and accumulate more belongings, the demand for additional storage space continues to grow.
The self-storage sector experienced many changes from 2020 to 2023. The pandemic fueled a boom, with users increasing by 970,000 and sales volume nearly tripling between 2020 and 2021. This boom was driven by relocations, remote work, and increased online shopping. However, 2022 saw moderation with declining home sales and consumer spending leading to slightly lower rental rates and a sales volume drop. The first three quarters of 2023 continued this trend, with economic factors contributing to a further downturn.
Looking ahead to 2024, the self-storage industry is expected to maintain stable occupancy rates and rental income, driven by the ongoing housing shortage. Although a slight uptick in new facilities (4.4%) is predicted, the housing shortage is likely to continue driving demand. According to Mordor Intelligence, the US self-storage market is projected to reach nearly $50 billion by 2029, reflecting a steady growth rate of 2.44%. This indicates continued investor confidence and a healthy market outlook.
Meanwhile, in the apartment sector, rent growth in 2024 is forecasted to be moderate, ranging from 2.5% to 3.7%. The sector is expected to experience slightly stronger growth in 2025. However, with the potential weakening of the labor market and increased supply, some areas may require rent concessions and reductions.
Overall, the US residential real estate market is experiencing steady growth, valued at $2.5 trillion in 2023. This positive trend is expected to continue as the valuation of this market is projected to reach $2.8 trillion by 2028. This jump in the valuation of the residential real estate market translates to a compound annual growth rate (CAGR) of 2.04% during the forecast period.
Apartments hold a substantial share of the sector’s total demand. This dominance is likely due to the high number of apartment units being completed, with completions up by 26% as of 2023. Investors have also shown strong interest in popular real estate ETFs. One of the top performers is the Residential REIT ETF, which achieved a 13.15% annual return in 2023, outperforming the broader category’s return of 12.03%.
Aerial view of a thriving self-storage facility, showcasing the company’s expertise in acquisition and development.
Our Methodology
We have compiled a list of the best self-storage and apartment stocks to buy based on hedge fund sentiment toward each stock. Our assessment of hedge fund sentiment is derived from Insider Monkey’s database of 919 elite hedge funds as of the first quarter of 2024. The best self-storage and apartment stocks to buy have been ranked in ascending order of the number of hedge fund investors in each company.
“Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).”
11 Best Self Storage and Apartment Stocks to Buy Now
11. Apartment Income REIT Corp. (NYSE:AIRC)
Number of Hedge Fund Holders: 24
Apartment Income REIT Corp (NYSE:AIRC) is a publicly traded real estate investment trust that manages 76 communities with a 27,010-unit portfolio across 10 states and D.C. Their innovative business model, AIR Edge, prioritizes resident satisfaction through top-notch property management services. This platform not only drives organic growth but also unlocks additional value for properties joining AIR’s portfolio.
In April, Blackstone announced that it would acquire Apartment Income REIT (AIR Communities) in an all-cash transaction valued at $39.12 per share. This offer represented a 25% premium over the company’s April 5 closing price of $31.35 The announcement led to an over 20% rise in stock price in premarket trading. The deal is likely to be closed by Q3 2024.
Currently trading around $38.73, Apartment Income REIT Corp. (NYSE:AIRC) is attracting investors with its balanced approach to growth and value. The stock offers a forward dividend yield of 4.6%. Investing in AIRC provides the diversification benefits of a REIT alongside the potential for both steady dividend income and long-term capital appreciation.
Apartment Income REIT Corp. (NYSE:AIRC) has received a consensus rating of “Hold” from eight analysts, while one has issued a “Buy” rating. On April 9th, BMO Capital shared a price target of $39.12, reflecting a potential upside of around 1%.
According to Insider Monkey’s Q1 2024 database, 24 hedge funds held a stake in Apartment Income REIT Corp. (NYSE:AIRC). Long Pond Capital is the leading stakeholder in the company, with over 2 million shares worth more than $65 million.
10. CubeSmart (NYSE:CUBE)
Number of Hedge Fund Holders: 25
CubeSmart (NYSE:CUBE) is a prominent player in the US self-storage industry. The company manages a sizeable portfolio of self-storage facilities, with over 1,479 locations across the country. This vast network makes them one of the top three owners and operators of self-storage properties in the country.
CubeSmart (NYSE:CUBE) reported its financial results for Q1 2024 recently. The company achieved diluted earnings per share (EPS) of $0.42, while the funds from operations stood at $0.64 per share. Furthermore, the company’s same-store net operating income for 598 stores saw a YoY decline of 1.9%, primarily due to a 5% rise in operating expenses.
Meanwhile, the average same-store occupancy rate during the quarter was 90.2%, ending slightly higher at 90.4%. CubeSmart (NYSE:CUBE) completed the acquisition of two stores during the quarter, totaling $20.2 million. Furthermore, the company successfully expanded its third-party management platform by adding 68 stores in the first quarter of 2024.
With its strong financial performance and market position, 16 out of 30 analysts are recommending CubeSmart (NYSE: CUBE) as a “Buy.”
Here is what Diamond Hill Capital, an investment management company, wrote about CubeSmart (NYSE:CUBE) in its investor letter for Q4, 2023:
“Other top contributors in Q4 included CubeSmart (NYSE:CUBE), Webster Financial and Parker-Hannifin. Shares of self-storage real estate investment trust CubeSmart rose as storage rents showed signs of bottoming in Q3, which could boost fundamentals looking forward. Further, REITs more broadly rallied during the quarter as long-term interest rates rapidly declined.”
CubeSmart (NYSE:CUBE) ranks tenth on our list of the best self-storage and apartment stocks to buy.
9. UDR Inc. (NYSE:UDR)
Number of Hedge Fund Holders: 25
UDR, Inc., (NYSE:UDR), a well-established real estate investment trust, specializes in acquiring, developing, managing, and selling multifamily properties across strategic US markets. As of December 31, 2023, the company’s substantial portfolio included ownership or interest in over 60,336 apartment units, with even more under development.
UDR Inc. (NYSE:UDR) reported strong financial performance for the first quarter of 2024. The company’s funds from operation of $0.61 per share met expectations. Meanwhile, the revenue for the quarter was $411.67 million, exceeding analyst forecasts of $408.61 million by 0.75%. This represents a YoY revenue increase of 3.4%.
Overall, there is a positive sentiment surrounding UDR Inc. (NYSE:UDR) in the market. On April 25th, UBS analyst Michael Goldsmith upgraded UDR Inc.’s (NYSE:UDR) stock rating from “Neutral” to “Buy” and raised the price target to $44, citing strong job growth and healthy apartment demand as key factors.
Meanwhile, Wedbush Securities analyst Richard Anderson maintained his “Outperform” rating on April 29th and kept the price target at $40. More recently, on May 29th, Wells Fargo analyst James Feldman reiterated his positive outlook on UDR Inc. (NYSE:UDR) by maintaining a Buy rating and issuing a price target of $41.
As of Q1 2024, UDR Inc. (NYSE:UDR) was held by 25 hedge funds.
8. U-Haul Holding Company (NYSE:UHAL)
Number of Hedge Fund Holders: 25
U-Haul Holding Company (NYSE:UHAL) is one of the largest self-storage operators in the country.
In the fourth quarter of fiscal 2024, the company’s self-storage revenues rose by $17.5 million, or 9%, compared to the same quarter in fiscal year 2023. Meanwhile, for the entire fiscal year, revenues increased by $86.6 million, or 12% YoY. Furthermore, the average number of occupied units, during Q4 FY2024 increased by 6% YoY, or 31,000 units.
Overall, analysts have a Neutral sentiment towards the stock, giving it an average 12-month price of $70.30. This price target reflects an upside potential of over 8% from the current price levels.
Here’s what Old West Investment Management, Llc said about U-Haul Holding Company (NYSE:UHAL) in its Q4 2023 investor letter:
“A real sweet spot for our investment style is discovering companies run by owner/managers, CEOs with huge ownership stakes in their company. It’s hard to find a better example of this then Joe Shoen, CEO and Chairman of U-Haul Holding Company (NYSE:UHAL). Shoen owns 55% of the company, with his stake valued at nearly $6 Billion, and his total annual compensation is $1 million. He clearly has more to gain from a higher stock price than his paycheck.
UHAL is based in Reno, Nevada, and is North America’s largest “do-it-yourself” moving and storage operator. UHAL is synonymous with self-moving and is four times larger than its biggest competitor, Penske Truck Leasing. UHAL was founded in 1945 by Shoen’s father as a trailer rental company and began renting trucks in 1959. In 1973 they began their network of U-HAUL managed retail stores where they rent trucks and trailers, self-storage units and moving supplies like boxes and tape. UHAL has 23,000 locations in North America of which 2,200 are company-owned and over 21,000 are independent franchised dealers. UHAL’s rental fleet consists of 192,000 trucks, 138,000 trailers and 44,000 towing devices…” (Click here to read the full text)
Yacktman Asset Management is the leading hedge fund investor in the stock, with over 7 million shares worth more than $474.5 million.
7. Americold Realty Trust Inc. (NYSE:COLD)
Number of Hedge Fund Holders: 33
Americold Realty Trust Inc (NYSE:COLD) based in Atlanta, Georgia, is the world’s second-largest owner and operator of temperature-controlled warehouses. The company manages a network of 245 facilities across the US, Europe, Canada, Australia, and New Zealand, totaling 1.5 billion cubic feet of storage. In addition to core warehousing, the company offers value-added services like supply management and transportation to its customers.
Americold Realty Trust Inc (NYSE:COLD) reported strong financial performance during Q1 2024 with adjusted funds from operations (AFFO) of $104.9 million ($0.37 per share), reflecting a year-over-year increase of over 28%. This success was driven by a record-breaking first quarter for same-store services margins (10.7%), a significant improvement of 6.71% compared to the same period last year. This margin increase translated to an additional $22 million in net operating income.
These impressive earnings drew positive attention from analysts. Barclays analyst Anthony Powell reiterated an Equal-Weight rating for the stock but increased the price target from $25 to $26 on May 24th. Similarly, Scotiabank analyst Greg McGinniss upgraded its rating from Sector Perform to Sector Outperform and raised the price target to $30 from $27.
At the end of the first quarter of 2024, 33 hedge funds reported owning a stake in Americold Realty Trust Inc (NYSE:COLD), making it one of the best self-storage and apartment stocks to buy now.
6. Janus International Group Inc. (NYSE:JBI)
Number of Hedge Fund Holders: 36
Janus International Group, Inc. (NYSE:JBI), a global leader in the industry, manufactures and supplies comprehensive solutions for various building types, including self-storage, commercial, and industrial structures. Their product range includes roll-up and swing doors, hallway systems, and relocatable storage units. Janus International Group, Inc. (NYSE:JBI) operates both in North America and internationally.
Janus International Group Inc (NYSE:JBI) delivered strong financial results in Q1 2024, with revenue and net income rising 4.6% and 26% year-over-year, respectively. The company’s profit margin also expanded by 11 percentage points to 13%, driven by higher revenue.
Analysts are bullish on Janus International Group, Inc.’s (NYSE:JBI) prospects. The stock has received a consensus rating of “Strong Buy,” with an average price target of $20.50 per share, implying a potential upside of over 50% from the current price levels.
Overall, 36 hedge funds reported owning a stake in Janus International Group, Inc. (NYSE:JBI) at the end of Q1 2024. Rima Senvest Management is the leading hedge fund investor in the company, with over 4.8 million shares.
5. Camden Property Trust (NYSE:CPT)
Number of Hedge Fund Holders: 36
Camden Property Trust (NYSE:CPT) is a US real estate investment trust specializing in apartment ownership and management. The company’s portfolio includes interests in 171 apartment communities, totaling 58,588 apartment homes across the country. Camden Property Trust (NYSE:CPT) is among the top 5 best self-storage and apartment stocks to buy in 2024.
Camden Property Trust (NYSE:CPT) reported a strong Q1 financial performance, with core FFO exceeding expectations. Occupancy rates also remained high at 95%, on average, and rose to 95.2% in April. Despite a strong balance sheet, cautious optimism is reflected in the company’s revenue guidance, acknowledging both market limitations and continued demand.
Analysts are bullish on Camden Property Trust (NYSE:CPT) with a “Strong Buy” recommendation for investors with a 90-day horizon and above-average risk tolerance. The average analyst price target of $144 suggests a potential upside of 2.05% from the current price levels, indicating continued optimism despite some headwinds the company faces.
Camden Property Trust (NYSE:CPT) was held by 36 hedge funds at the end of the first quarter of 2024.
