We recently compiled a list of the 12 Best Self Storage and Apartment Stocks to Invest In. In this article, we are going to take a look at where National Storage Affiliates Trust (NYSE:NSA) stands against the other self-storage and apartment stocks.
In the US, the apartment and self-storage markets are adapting to changing economic conditions and consumer needs. Both markets play a crucial role in the economy and are expected to maintain growth trajectories driven by the demand for housing and storage solutions.
The demand for safe storage solutions is supported by lifestyle changes such as the increasing prevalence of remote work and downsizing among retirees. Additionally, the rise of e-commerce is further supporting this trend. As businesses downsize their space and individuals declutter their homes, there is a rising demand for self-storage solutions.
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According to Nuveen Real Estate, the US apartment market saw record supply growth in 2024. This made it challenging for apartment operators to grow rents and keep occupancy levels above the sector’s long-term average. Despite these challenges, the demand for apartments remains robust due to a housing shortage and a growing preference for renting, particularly among younger generations who prefer flexibility over owning a home.
The apartment market saw an increase in resident retention in 2024 compared to the previous year. Middle-income households are expected to continue driving the ongoing demand for rental properties in the foreseeable future.
Methodology
To compile our list of the 12 best self-storage and apartment stocks to invest in, we looked for the largest apartment 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 self-storage and apartment 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 self-storage and apartment stocks to invest in were then 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).
An exterior view of a large self-storage facility in the US.
National Storage Affiliates Trust (NYSE:NSA)
Number of Hedge Fund Holders: 20
National Storage Affiliates Trust (NYSE:NSA) is a real estate investment trust (REIT) that ranks among the best self-storage stocks to invest in. The company is strategically focused on the ownership, operation, and acquisition of self-storage properties primarily located within the top 100 metropolitan statistical areas in the US. As of September 30, 2024, National Storage Affiliates Trust (NYSE:NSA) owned and operated 1,070 self-storage properties with a total of approximately 70 million rentable square feet. The company’s self-storage properties are located in 42 US states and Puerto Rico.
The company is making targeted acquisitions and taking steps to improve operational efficiencies. National Storage Affiliates Trust (NYSE:NSA) completed the internalization of its participating regional operator (PRO) structure, effective July 1, 2024. With this move, the company can acquire the PROs’ management agreements and no longer be required to pay any supervisory and administrative fees. National Storage Affiliates Trust (NYSE:NSA) expects that this will result in annual savings of about $7.5 to $9 million. Additionally, in Q3 2024, the company acquired 18 properties in markets where it already has an established presence. These acquisitions for nearly $150 million will improve National Storage Affiliates Trust’s (NYSE:NSA) overall portfolio quality and future earnings.
Overall, NSA ranks 12th on our list of the best self-storage and apartment stocks to invest in. While we acknowledge the potential of NSA as an investment, 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 NSA 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.
