Self-Storage REITs Release 2011 Fourth-Quarter and Year-End Operating Results
|Copyright 2014 by Virgo Publishing.|
|Posted on: 03/02/2012|
The four publicly traded self-storage real estate investment trusts (REITs) released their fourth-quarter and overall operating results for 2011.
CubeSmart, Extra Space Storage Inc., Sovran Self Storage Inc. and Public Storage Inc. all showed strong revenue growth. Also, the REITs acquired in excess of $1 billion of properties in 2011 versus approximately $400 million the previous year, according to a report by MJ Partners Real Estate Services.
Glendale, Calif.-based Public Storage led the growth, reporting $164.2 million, or 0.96 per diluted common share. This was compared to $121.4 million in 2010. Revenue for same-store facilities increased by 5 percent compared to the same quarter in 2010, while net operating income increased 6.1 percent.
Public Storage acquired two properties in the fourth quarter, in California and Texas, for about $16 million. The purchases added 155,000 net rentable square feet to the company’s portfolio. Overall, the company acquired about $500 million worth of properties for the year.
Extra Space led the REITs in acquisitions in the fourth quarter, purchasing 28 properties for nearly $190 million. The REIT also increased its third-party management program to 185 properties.
The Salt Lake City-based company reported achieved funds from operations of $0.35 per diluted share, a 34.6 percent quarter-over-quarter growth compared to 2010. The company also increased same-store revenue by 5.8 percent and net operating income (NOI) by 9.3 percent compared to the same period in 2010.
“We are intensely focused on the fundamentals that drive our business,” said Spencer F. Kirk, Chairman and CEO of Extra Space Storage. “Strong execution on the basics and continued innovation will drive our success and allow us to capitalize on an environment marked by higher occupancy, stronger pricing and limited supply."
Sovran Self Storage, which operates under the brand name Uncle Bob’s Self Storage, reported net income available to common shareholders for the fourth quarter of 2011 was $10.3 million, or $0.37 per fully diluted share. The company’s total revenue increased 16 percent over the same period in 2010.
The company, based in Buffalo, N.Y., reported stores with the strongest revenue impact include facilities in New England, New York and Tennessee. Facilities in Georgia and Virginia experienced modern declines. Sovran purchased 20 facilities comprising 1.6 million square feet from Lackland Self Storage in a joint venture with an affiliate of Heitman LLC.
CubeSmart, which underwent a name and brand change in late 2011, also displayed favorable operating performance in the four quarter. "CubeSmart had an exceptional and productive 2011," noted CEO Dean Jernigan. "Not only did we produce healthy operational performance despite an uninspiring economic backdrop, but we also reached key strategic milestones as we executed on our investment and balance sheet objectives.”
The company reported funds from operations per share of $0.17, and an increase in same-store revenue of 3.4 percent and NOI of 5.7 percent, compared to the fourth quarter of 2010. CubeSmart purchased 22 class-A self-storage facilities from Storage Deluxe for $560 million, and acquired two more assets in the Washington, D.C., market for $31.3 million during the fourth quarter. The company also sold one property in Michigan for $1.7 million.
Overall, the self-storage REITs returned 35.4 percent in 2011, the strongest gain of any REIT sector for the second consecutive year, outpacing the 8 percent return of all REITs, MJ Partners reported.