Public StoragePSA recently unveiled more than 700 new storage units in California, in line with its plans of expanding in the thriving Silicon Valley.
Located at Public Storage 1080 Pecten Ct. Milpitas, CA 95035, these new storage units are all climate controlled and indoors. Specifically, the building, which lies between the existing Public Storage structures, has replaced a previous vehicle storage lot. With addition of the latest units, the total count at this site has now exceeded 1,200.
The expansion of this facility seems a strategic fit for the company as the population of Milpitas is growing at a rapid pace, locking 16% growth over the last six years. In fact, with San Francisco and San Jose becoming the least affordable housing markets in the nation, new movers relocating for job opportunities in the tech industry and other arenas are opting for comparatively less expensive and smaller neighboring towns like Milpitas.
Moreover, being positioned close to the I-680 in a well-traveled neighborhood, with several new apartments and condos, and the planned Milpitas BART station nearby, this facility is likely to grab attention from the new movers.
Notably, Public Storage is one of the largest owners and operators of storage facilities in the United States. The 'Public Storage' brand is the most recognized and established name in the self-storage industry, with presence in all major metropolitan markets of the nation.
The company has been capitalizing on growth opportunities. Since the beginning of 2013 through Mar 31, 2018, Public Storage has acquired 273 facilities, with 19.2 million net rentable square feet from third parties, shelling around $2.5 billion. Additionally, during this period, the company opened newly-developed and expanded self-storage space for a total cost of $947.4 million, thereby adding about 8.5 million net rentable square feet of space to its portfolio.
Nonetheless, supply has been rising in a number of markets. This is a concern as it limits the company's power to raise rents and turn on more discounting. Also, rate hike adds to its woes.
Shares of Public Storage have outperformed the industry it belongs to, in the past three months. This Zacks Rank #3 (Hold) company's shares have logged in a gain of 13.1%, while the industry has rallied 8.9% during the same time period. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Stocks to Consider
A few better-ranked stocks from the real estate space are Life Storage, Inc. LSI , Lamar Advertising Company LAMR and PS Business Parks, Inc. PSB . All three stocks carry a Zacks Rank of 2 (Buy).
Life Storage's Zacks Consensus Estimate for 2018 FFO per share inched up 0.4% to $5.37 in the last 60 days.
Lamar's current-year FFO per share estimates moved up 1.1% over the last 60 days to $5.40.
PS Business Parks' FFO per share estimates for 2018 moved 0.8% north to $6.37 in 60 days' time.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) - a widely used metric to gauge the performance of REITs.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportLamar Advertising Company (LAMR): Free Stock Analysis ReportLife Storage, Inc. (LSI): Free Stock Analysis ReportPublic Storage (PSA): Free Stock Analysis ReportPS Business Parks, Inc. (PSB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research