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THE RUNDOWN

Self-storage returns are decreasing. Is it time to panic?

November 11, 2017

Self-storage has been a super commercial real estate performer in recent years. In 2010, self-storage REITs delivered returns of about 29.29 percent; in 2011, 35.22 percent and soured to 40.65 percent in 2015.  In 2016, however, total returns were down 8.14 percent.

A major reason is the increasing supply of new-build, chasing the ‘pot of gold’. Also, the sector is facing is resistance by local authorities because of a negative stigma attached to the property type. New builds are addressing these concerns by producing more attractive self-storage, and adding other uses, especially retail spaces, to the build.

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