Bank of America has downgraded several storage REITs, citing concerns about limited demand catalysts. Public Storage was cut to Neutral, and Extra Space Storage and Americold Realty Trust were downgraded to Underperform. The firm cited subdued rental revenue growth expectations and broader macroeconomic pressures impacting the sector, including weak housing turnover.

BofA's outlook reflects a cautious view on the sector's ability to sustain recent gains. Stalling housing market activity, coupled with elevated borrowing costs, is weighing on demand for self-storage units. The downgrades come despite a recent rally in storage REIT shares, and analysts are concerned about sustained outperformance.

The bank lowered price targets for the affected companies. For Public Storage, the target was reduced to $310 from $336. Extra Space's target went to $143 from $163, and Americold's to $13 from $14. The analysts see a lack of near-term catalysts to fuel significant growth in the sector.

Investors should watch for signals of a housing market recovery, which could potentially boost demand. Furthermore, keep an eye on new-customer pricing trends to assess their impact on overall revenue gains. Any earnings guidance disappointments could further pressure these stocks in the coming months.