Extra Innings For Extra Space

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  • EXR has grown at a tremendous pace – the company has acquired more than any public self-storage REIT and almost more than all public self-storage REITs.
  • I certainly don’t consider Extra Space a technology play, but I can certainly attest to the driving forces behind EXR’s success, of which technology is correlated.
  • However, these days, we consider EXR an attractive REIT deserving shelf space (we added to the Mega Millions portfolio as discussed in my newsletter).

I’ll admit, I rent a storage facility although I have plenty of room in my basement or office to keep the “stuff.” According to Hoya Capital Real Estate, “roughly one in ten Americans currently rent space in a self-storage facility. These 30 million Americans park their possessions in one of 50,000 self-storage facilities throughout the country.”

Renting self-storage space is like insurance; it’s just a pain to move the business and deal with the red tape. In addition, I don’t have a pick-up truck, and I never can find the time to rent a truck and move the “stuff.”

I wonder if I’m in a minority, admitting that I’m too lazy to save $65.00 monthly, or maybe a majority of consumers just refuse to deal with the hassle of moving their precious junk.

Yet, part of the psychology, at least for me, is that I get my storage space for free, kind of. As my disclaimer recognizes, I own shares in Extra Space (EXR) and CubeSmart (CUBE), so when I collect these dividend checks I feel as though I am getting paid to store my “stuff.”

I know that’s silly, because for $100 I can rent a truck and haul my stuff to my basement, and then instead of getting free storage, I can reinvest the dividends back into the REIT.

That’s precisely what I plan to do this weekend. My buddy is going to let me use his truck and I’m going stop paying storage rent, so I need to spend a few hours examining Extra Space and the other storage REITs. Let’s get started…

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Extra Space: My First Choice

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