We recently published a list of 12 Best Warehouse and Self-Storage Stocks to Buy Now. In this article, we are going to take a look at where First Industrial Realty Trust, Inc. (NYSE:FR) stands against other best warehouse and self-storage stocks to buy now.
A Quick Look at the Warehousing and Storage Market
The warehouse and self-storage sector plays a vital role in the global economy. This sector is expected to see significant growth and transformation in the coming years. According to a report by The Business Research Company, the warehousing and storage market was estimated to have reached a value of $798.45 billion in 2024. The market is expected to grow at a compound annual growth rate (CAGR) of 7.5% during 2025-2029 to reach a value of $1.159 trillion by the end of the forecast period. In 2024, Asia-Pacific was the largest region in the global warehousing and storage industry while North America came in as the second largest region.
This growth is driven by a number of factors including urbanization, growing population, and the rise of e-commerce. There is a rising demand for secure storage solutions as both individuals and businesses downsize their spaces and require additional space for inventory. Warehouses and self-storage facilities are becoming the most feasible solutions for those looking to declutter their homes or store goods for their online businesses.
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However, according to the 2024 Self-Storage Market Report by Storeganise, public awareness of self-storage services still remains low. Only 43% of the population knows about these services and only 8.7% of the population is actively considering using self-storage solutions. Those who do use self-storage solutions are highly satisfied with the services. Nevertheless, 39% of customers think that the costs are high. These trends highlight an opportunity for self-storage providers to improve their outreach and marketing efforts while also addressing concerns about pricing to attract a wider audience.
Another key trend in the world of warehousing and self-storage is the integration of advanced technologies. As the demand for storage services rises with the growing logistics needs of retailers and manufacturers, companies offering warehousing and self-storage solutions are adopting new and innovative technologies to improve customer experience and operational efficiency. Technological innovations like smart security solutions and automation are helping facilities modernize and improve their services.
With rising urbanization, technological advancements, and a booming e-commerce sector, the warehouse and self-storage market is expected to continue growing in the foreseeable future.
Methodology
To compile our list of the 12 best warehouse and self-storage stocks to buy now, we looked for the largest warehouse and self-storage companies. We reviewed our own rankings, financial media reports, and various online resources including ETFs to compile a list of the best warehouse and self-storage stocks. Next, we focused on the top 12 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 12 best warehouse and self-storage stocks to buy now are ranked in ascending order based on the number of hedge funds holding stakes in them as of Q3 2024.
Why do we care about what hedge funds do? 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).
A construction site of a new industrial facility, emphasizing the company’s developer capabilities.
First Industrial Realty Trust, Inc. (NYSE:FR)
Number of Hedge Fund Holders: 37
First Industrial Realty Trust, Inc. (NYSE:FR) is a real estate investment trust (REIT) that owns, operates, develops, and acquires industrial real estate and logistics properties. With a focus on supply-constrained, coastally oriented markets across the United States, the company has a strong portfolio of light industrial properties and bulk warehouse properties. Providing high-quality facilities to multinational corporations and local organizations to meet their supply chain needs, FR ranks among the best warehouse stocks to invest in.
As of September 30, 2024, the company owned or had under development around 69 million square feet of industrial space. First Industrial Realty Trust, Inc. (NYSE:FR) is strategically focused on expanding and optimizing its portfolio through investments and dispositions. In Q3 2024, the company commenced the development of First Rockdale VII in Nashville. This is a new project that will cover 542,000 square feet with an estimated investment of $54 million. Additionally, First Industrial Realty Trust, Inc. (NYSE:FR) acquired a four-building fully leased portfolio in Houston covering 445,000 square feet for a total of $29 million. On the other hand, during the quarter, the company sold a seven-building portfolio in New Jersey covering 445,000 square feet for $82 million.
It appears there is a strong demand for the company’s properties. First Industrial Realty Trust, Inc. (NYSE:FR) reported that in-service occupancy was 95% at the end of Q3 2024. Additionally, the company has achieved strong cash rental rate increases, with a reported increase of approximately 51% on leases signed for 2024 to-date by the end of the third quarter. With regards to development leasing, First Industrial Realty Trust, Inc. (NYSE:FR) leased 100% of the 461,000 square-foot First Pioneer Logistics Center in the Inland Empire shortly after starting the project in Q3 2024.
Overall, FR ranks 3rd on our list of best warehouse and self-storage stocks to buy now. While we acknowledge the potential of warehouse and self-storage companies, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.