Real estate investment trust Sovran Self Storage Inc. reported operating results for the quarter and year ended Dec. 31, 2010.
Net income available to common shareholders for the quarter was $8.5 million, or $0.31 per fully diluted share. For the same period in 2009, there was a net loss to common shareholders of $1.5 million, or $0.06 per fully diluted common share. Funds from operations (FFO) for the quarter were $0.62 per fully diluted common share compared to $0.28 for the same period last year. Had the company not recorded charges of $0.8 million related to a late-December acquisition, FFO would have been $0.65 per fully diluted common share for the fourth quarter of 2010.
During the quarter, the Sovran also acquired seven new stores: four in Charlotte and three in Raleigh, N.C. The combined purchase price was $34.7 million.
“We’re seeing positive trends on many fronts. Revenues are strengthening, costs are contained, investment opportunities are available, and we’re well positioned to grow from here,” said Robert J. Attea, chairman and CEO.
Revenue for the 344 stores wholly owned by the company for the entire quarter of each year increased 2.6 percent from those of the fourth quarter of 2009, the result of a 90 basis point increase in rental rates and strong growth in other revenue. “We achieved solid gains in rental rates this quarter, and we saw revenues increase in 23 of 24 states,” said Kenneth F. Myszka, president and chief operating officer. “We’re encouraged by improving demand in our markets.”
Same-store operating expenses decreased 1.9 percent for the fourth quarter of 2010 compared to the prior year period, the result of a net property tax decrease of 12.1 percent offset by increases in healthcare, workers’ compensation and property-maintenance costs. The property-tax expense was achieved by reductions won at several locations as a result of successful challenges to assessed values, and also due to conservatively estimated accruals during the first three quarters at the company’s
Florida, Texas and Gulf Coast properties.
Consequently, same-store net operating income increased 5.2 percent this period over the fourth quarter of 2009 as a result of increased revenues, controlled costs, and a significant decrease in property taxes.
General and administrative expenses grew by about $1.4 million over the same period in 2009. More than half of this increase was attributable to $0.8 million of acquisition costs expensed in conjunction with the purchase of the Carolina stores. The balance was primarily due to increased income taxes associated with operations of the company’s taxable REIT subsidiary, incentive compensation, and marketing and Internet advertising costs.
During the fourth quarter of 2010, all states save one achieved same store sales equal to or greater than the same period in 2009. For the first time since the hurricanes of 2005 and 2006, the Florida stores reported revenues greater than the prior year’s quarter, a sign that recovery may be on the horizon. The stores with the strongest revenue growth include most in New England, Louisiana, New York and Tennessee.
To read the complete financial report, visit www.unclebobs.com/downloads/11-02-23.pdf#zoom=100.