An Investment That Stays True

in Good Times and Bad?

You may be in love with stocks which are at all-time highs now, but inevitably at some point in your relationship they will stop being faithful. Even if you don't believe the bearish prognosticators, most would agree that it's wise to play the field and diversify your investments.

Overall, experts regard real estate as a great vehicle for passive investment because it's a hard asset that is tangible and provides cash flow. One particular asset class, self-storage, has seen solid demand in strong economies as well as during tough times. In today's robust economy, most commercial real estate sectors are showing sustained growth, with the major self-storage players reporting occupancy rates of around 90%. In contrast during the Great Recession, stocks and all commercial real estate segments experienced a net annual loss of anywhere between 25 to 67% except self-storage, which actually posted a gain of 5% in 2008.

Is Self-Storage Overbuilt?

Even though developers have flooded large cities with supply in the last few years, many believe that the delivery of new self-storage facilities will peak in 2019, relieving fears of excess capacity. The MG Self Storage Fund is taking a different approach and is sticking to secondary and tertiary markets, avoiding areas where other institutional buyers have overbuilt and are seeing rental rates drop as a result. The Fund's sponsor also carefully analyzes the micro-markets that they're going into, checking key parameters such as square footage of storage space per capita to make sure that an area is not saturated before acquiring a facility there. They're also raising the bar by pioneering innovative technology in an industry where it's been sorely lacking.

If you're worried that your stocks may be on the rocks in the next couple of years, or if you're just looking to diversify your portfolio, consider getting hitched to self-storage, an investment well-suited to any kind of economy.