One thing that distinguishes Iron Mountain's (NYSE:IRM) business from other REITs is the relative insensitivity to higher interest rates. Iron Mountain customers' storage needs are largely unaffected by interest rate movements, and the company's core storage NOI doesn't change with the value of the underlying real estate.
In a rising rate environment, this structure reduces Iron Mountain's exposure to real estate value fluctuations compared with REITs that own their entire portfolios. Additionally, it should be noted that the company enjoys higher levels of real price increases during periods of more inflation.
Since it owns less real estate (owns 27 million sq. ft. and leases 59 million sq. ft.), the operations drive the value for the company. Because Iron Mountain has hundreds of customers, it can pass through increases, and this means the REIT is less impacted by rising rates.
