Self-Storage Could Be Entering a New Growth Cycle — Baron Capital Re-Initiated Public Storage (PSA)

Self-Storage Could Be Entering a New Growth Cycle — Baron Capital Re-Initiated Public Storage (PSA)

Tue, September 22, 2026 at 4:11 PM GMT+3 3 min read

• PSA +0.06%
• MORN +0.73%

Baron Capital, an investment management company, released its Q2 2026 letter for the "Baron Real Estate Income Fund." The Fund gained 12.18% (Institutional Shares) during the quarter, modestly outperforming the MSCI US REIT Index, which increased 11.84%. The letter can be downloaded here. Its long-term performance also remains strong, with Morningstar ranking it the #2 real estate fund since its December 2017 inception. The letter discusses management's current views, portfolio composition, key contributors and detractors, recent activity, and the outlook for real estate and the Fund. Management believes a multi-year recovery in real estate is beginning to emerge, despite elevated interest rates, housing affordability pressures, and AI-related disruption. Its constructive outlook is supported by attractive valuations, accelerating M&A, favorable supply-demand dynamics, healthy balance sheets, improving debt conditions, and increasing recognition of real estate as an AI beneficiary. The Fund remains positioned to benefit from improving growth, rising dividends, and potential valuation normalization. Please review the Fund's top five holdings to gain insights into their key selections for 2026.

In its second-quarter 2026 investor letter, Baron Real Estate Income Fund highlighted Public Storage (NYSE:PSA). Public Storage (NYSE:PSA) is a leading real estate investment trust that owns and operates self-storage facilities. On September 21, 2026, Public Storage (NYSE:PSA) closed at $296.67 per share. Over the past month, Public Storage (NYSE:PSA) declined 8.06% and its shares gained 5.09% over the past 52 weeks. Public Storage (NYSE:PSA) has a market capitalization of $55.43 billion with a 52-week trading range between $256.54 and $335.55.

Baron Real Estate Income Fund stated the following regarding Public Storage (NYSE:PSA) in its Q2 2026 investor letter:

"In the last few years, we have been cautious about self storage REITs due to several years of flat to negative growth. In 2025, our outlook became moderately more positive, as our research suggested a potential inflection point, with growth possibly reaccelerating in 2026-2027. Over the long term, we continue to view self-storage as an attractive business that has a long history of generating solid growth with strong inflation protection characteristics and comparatively low capital intensity. In 2026, we re-initiated positions in Public Storage (NYSE:PSA)."

Public Storage (NYSE:PSA) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held Public Storage (NYSE:PSA) at the end of the second quarter which was 39 in the previous quarter. While we acknowledge the potential of Public Storage (NYSE:PSA) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.

This article is originally published at Insider Monkey.