If you’re a real estate investment (“REIT”) guy like me, you probably heard about last week’s Iron Mountain (IRM) drama.

If fact, even if you don’t care about REITs, you may still have noticed. It made national news when Elon Musk’s Department of Government Efficiency (“DOGE”) posted the following on the social platform X:

Source: X

Since that’s an IRM property being called out by a department intent on eliminating billions of dollars in government spending… it only makes sense that investors got concerned.

For those who don’t know, Iron Mountain is a storage REIT that houses assets and information for a whopping 95% of Fortune 1,000 customers. And, as the post above shows, it also serves the U.S. government.

In all, IRM has over 240,000 customers in 60 countries. It owns or controls around 97 million square feet of real estate, and it employs 26,000 professionals.

In short, this company is a global bohemoth.

Of course, size alone doesn’t gaurantee future achievement. Neither does more than 70 years experience doing business.

As I often say, past performance is no gaurantee of future success. And Iron Mountain is no exception to that rule.

If anything, the days of DOGE make these times even more unpredictable.

Thousands of federal employees, who have always operated under cushy expectations of lifelong job security, are being fired. Tens of thousands more are on notice, and government contracts are being slashed left and right.

Yet I remain bullish on Iron Mountain nonetheless. This REIT might not be able to give me any guarantees, but what it does offer is one very compelling case to consider.

Iron Mountain Is Always Moving With the Times
To understand what I mean about Iron Mountain, I have to take you back in time to 1936.

The Great Depression was still going on. Hitler was on the rise in Germany, and the Spanish War was breaking out. So it was a time of intense uncertainty.

That’s when Herman Knaust decided to purchase a depleted iron ore mine in Hudson Valley, New York named Iron Mountain. He soon turned the property into a mushroom farm – and a successful one at that.

Knaust made a small fortune off that business for the next decade. Yet he wasn’t so caught up in his burgenoning business to ignore the perilous times he was living through. To quote IronMountain.com itself:

Knaust’s decision in 1945 to sponsor the relocation of many Jewish immigrants – who lost identities via missing personal records during WWII – into the United States is what spurred the idea to start protecting vital information from wars or other disasters in his mines.

By 1951, “during the midst of the ‘Cold War Era,’ Iron Mountain as we know it today was formally founded, offering bomb-resistant storage.”

The company – not yet a REIT – just kept growing from there, both in size and scope. In 1961, it was fitted to store priceless art. In 1975, it bought up another New York mine. And just a decade later, it “became the first records management company to use UPC bar codes to allow real-time access to shipped boxes and documents.”

If that sounds inconsequential all these years later, it isn’t. Those kinds of shifts are important to note in Iron Mountain’s history; they show how its managers not only know how to adjust with the times…

They know how to lead them.

Today’s Iron Mountain Is Better Than Ever
Iron Mountain made a 20th-century name for itself storing business and government data in the form of paper copies. These backup documents were extremely important, ensuring that even if something happened to corporate or agency buildings, their work would not be lost.

With slow-moving, stuck-in-their-ways customers like the U.S. government, the REIT really didn’t have to change a thing. Yet, beginning in 2013, it did anyway, opening or buying up one data center after another.

Today, it owns more than two dozen across three continents, with plans to expand further still.

I began covering Iron Mountain in 2012, just as it announced it was converting from a C corporation to a REIT. Since then, I’ve researched it through and through, up and down, repeatedly interviewing its management and digging into its financials.

I continue to be impressed.

Make no mistake: Iron Mountain’s traditional storage does still account for most of its revenue. Out of $6.1 billion in 2024, data centers accounted for just $620 million.

Yet that “little” sum was still a 25% increase over 2023. Moreover, IRM’s data-center business is set to grow even more, leasing out 125 megawatts (“MW”) this year versus 115 last year.

That’s based on the $810 million worth of annualized contracts it held going into 2025. Plus, around 94% of the 165 MW worth of digital storage it has under construction and over 699 MW held for future development. In which case, Iron Mountain could soon triple its data-center business to over 1,280 MW of potential data-center capacity.

In short, this is not a company that’s content to let things happen. It makes things happen.

As such, I can’t see it suffering much from the loss of one client at one facility. In fact, I’m certain the U.S. Government will continue to utilize Iron Mountain’s “non paper” mission critical products and services that include shredding, digitization, and data storage management.

Even if DOGE ends up cutting multiple Iron Mountain contracts for the former iron mine in Hudson Valley, the revenue generated from the government is de minimis.

As I stressed earlier, I’m not betting the whole mushroom farm on IRM, however the pullback is welcome, giving value investors the opportunity to capitalize on this global storage juggernaut. If readers are interested, I’d recommend waiting on $80 to $85 before buying shares.

Anything could happen from here – giant meteors, global conflict, or the Trump administration eliminating paper copies altogether. You just never know.

But barring those possibilities, I expect IRM’s business model to keep adapting and innovating, capturing long-term and growing profits along the way.

Regards,

Brad Thomas

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Source: Wide Moat Research