Baron Funds, an investment management company, released its “Baron Real Estate Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the first half of 2023, the fund rose 15.00% (Institutional Shares) compared to a 4.78% return for the MSCI US REIT Index (the “REIT Index”) and a 12.11% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). The fund rose 7.41%, modestly outperforming the indexes in the second quarter, which returned 2.34% and 7.04%, respectively, in the same period. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Real Estate Fund highlighted stocks like Extra Space Storage Inc. (NYSE:EXR) in the second quarter 2023 investor letter. Headquartered in Salt Lake City, Utah, Extra Space Storage Inc. (NYSE:EXR) is a self-administered and self-managed REIT that provides convenient and secure storage units. On July 25, 2023, Extra Space Storage Inc. (NYSE:EXR) stock closed at $145.17 per share. One-month return of Extra Space Storage Inc. (NYSE:EXR) was -1.33%, and its shares lost 18.95% of their value over the last 52 weeks. Extra Space Storage Inc. (NYSE:EXR) has a market capitalization of $31.708 billion.
Baron Real Estate Fund made the following comment about Extra Space Storage Inc. (NYSE:EXR) in its second quarter 2023 investor letter:
“Following its pending merger with Life Storage, Inc. which is expected to close late in 2023, Extra Space Storage Inc. (NYSE:EXR), a best-in-class self-storage REIT, will be the largest self-storage operator with a $46 billion self-storage operating portfolio. In the most recent quarter, the shares declined because rent growth is moderating from its strong pace of the last few years.
Though 2023 may be a transition year for Extra Space as growth retraces to a more sustainable run-rate and the management team prepares to incorporate Life Storage, we remain optimistic about the long-term prospects for the company and believe the current price of its shares reflects a good portion of this anticipated transition.
We believe Extra Space’s management team is excellent. Over the last decade, management has delivered strong occupancy gains, rent growth, and expense control that has led to a cost-of-capital advantage relative to its peers. Management has capitalized on its cost-of-capital advantage relative to its peers by tripling its owned self-storage count since 2010. We believe the management team will continue to create tremendous value for shareholders and believe the long-term growth opportunity for the company remains strong.”
Photo by Adam Winger on Unsplash
Extra Space Storage Inc. (NYSE:EXR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Extra Space Storage Inc. (NYSE:EXR) at the end of first quarter which was 27 in the previous quarter.
We discussed Extra Space Storage Inc. (NYSE:EXR) in another article and shared the list of best public storage stocks to buy. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
