Storage: Demand Low But Steady; Risk/Reward Unappetizing Post Rally

Research evidence excerpt

Storage: Demand Low But Steady; Risk/Reward Unappetizing Post Rally

June 15, 2026 | 02:00 ET~

Self Storage REITs

Storage: Demand Low But Steady; Risk/Reward US Real Estate

Unappetizing Post Rally Juan C. Sanabria Analyst

juan.sanabria@bmo.com (312) 845-4074

John P. Kim AnalystBottom Line:

JohnP.Kim@bmo.com (212) 885-4115

1Q26 results were solid, generally beating expectations, likely setting up guidance

Robin Haneland Senior Associatebumps with 2Q26 results with steady peak leasing results through May. However,

robin.haneland@bmo.com (646) 901-2282

June scraping data suggests potential weakness with the consumer clearly pressured.

Legal Entity: BMO Capital Markets Corp.

Storage has performed well YTD (shares +15.4%, excl. NSA), outperforming the IYR

(+11.2%) with a 5.5% avg. implied cap rate. With a higher multiple but a similar growth

Real Estate Investment Trusts

profiles vs multifamily, we don't see storage as particularly compelling. CUBE remains 320

our top sub-sector pick with lower risk coastal/infill markets, strong cost controls, an 300

attractive valuation and M&A potential. 280

260 300

Key Points 240 200

220 100

Bumping Higher. Fundamentals continue to gradually improve. We've bumped our '26 200 0

SSRev/NOI forecasts vs. pre-earnings +30/+60bps to +0.9/+0.3% y/y, which is modestly LHS: Price / RHS:DecVolume (k) Jun Dec Source: FactSetJun

above the Street and guidance. We expect REITs to upgrade SSRev with 2Q26 given May

updates. Our updated '26 FFO estimates are +50bps above the Street (+60bps above

guidance). For '27 FFO we're -60bps below the Street with the pace of re-acceleration

still tepid as per move-in rate trends.

Valuation: Expensive vs Apartments. Storage trades at a -0.5x NTM FFO multiple

discount vs. overall REITs vs.