U-Haul Pushes Self-Storage Case at KeyBanc Forum: Profitability, Risks & Valuation

U-Haul’s scheduled participation in the KeyBanc Self-Storage Investor Forum is significant because it reflects its elevated positioning within the self-storage sector—a space traditionally dominated by REITs. By presenting there, the company signals its intention to showcase its expanding scale in storage, differentiate from moving/rental peers on growth metrics, and engage directly with institutional owners sensitive to margin dilution and asset utilization.

Key facets of U-Haul’s self-storage operations:

• Portfolio size: 1,111,000 rentable units across 96.5 million square feet, ranking as the third-largest operator in North America. This gives it scale, but its occupancy and operational metrics are the next level for scrutiny.
• Revenue growth: self-storage revenues are growing in double-digits (≈ 8-10 %) year-over-year, outperforming some other segments—moving equipment rentals have more modest growth; but profitability lags due to cost pressures.
• Profitability pressures: Fleet depreciation and losses on disposing retired equipment are substantial headwinds. For example, these were cited as major contributors to a Year-over-Year decline in net earnings, even as revenues rose; occupancy for self-storage trails peer groups.

Strategic implications:

• Margin uplift potential: As storage units mature and occupancy increases, there is a pathway for improved margins. A rough estimate cited in analysis suggests that about 80 % of incremental storage revenue could drop to the bottom line once facilities overcome lease-up and promotional discounting pressure.
• Capital allocation balance: U-Haul faces trade-offs in allocating capital among fleet renewal, storage build-out/U-Box expansion, and other operations. Excess fleet investment creates depreciation burdens; underinvestment could limit growth. Transparent guidance here is increasingly demanded by investors.
• Valuation comparisons: Self-storage REITs trade at premium multiples relative to traditional moving rental; U-Haul’s storage business alone is viewed by some analysts as being worth much of the current market valuation of the company—if not more—if it can prove consistent performance and profitability.
• Governance & capital return: Low dividends, limited share buybacks, and family control are noted as constraints from investors. These may be areas where U-Haul could evolve to unlock value if financial metrics improve.

Open questions and risk areas:

• Occupancy trajectory: How quickly can U-Haul move from lower occupancy (sub-80 %) toward peer levels (> 90 %) in self-storage, especially in new developments?
• Fleet depreciation regime: Whether depreciation expense and losses on equipment disposals will moderate, and when, given significant recent fleet expansions.
• Competitive landscape: Pressure from REITs, industrial conversion of storage properties, local regulation on self-storage supply—these may affect pricing, occupancy, and land costs.
• Analyst coverage & disclosure: U-Haul currently receives relatively little independent research; clearer forward guidance or segment profitability disclosure could affect investor acceptance and valuation multiples.