The four U.S.-based self-storage real estate investment trusts (REITs)—CubeSmart, Extra Space Storage Inc., Public Storage Inc. and Sovran Self Storage Inc.—have released financial statements for the quarter that ended Dec. 31, 2012. In general, all four entities showed gains in key areas and continue to display aggressive acquisition strategies. They also were encouraged by strong annual totals they believe will continue through 2013.
"Our keen focus on operational execution continues to drive accelerating occupancy and revenue performance," said Chris Marr, president of CubeSmart. "We also had a very productive 2012 from an external growth perspective, as we exceeded our targets for acquisitions, dispositions, and third-party management contracts in a disciplined manner that meaningfully enhanced our portfolio."
“Our operating fundamentals were strong this year thanks to continued technological innovation, stable demand, and virtually no new supply. The same-store numbers for the quarter were amongst the best in our company’s history,” said Spencer F. Kirk, Extra Space CEO. “For 2013, market conditions remain favorable and our outlook reflects our confidence in our proven operating platform and our ability to continue to maximize every opportunity to increase stockholder value.”
CubeSmart reported a funds from operations (FFO) per share of $0.21 and a 23.5 percent year-over-year increase. Same-store net operating income (NOI) at its 313 facilities grew 7.4 percent year over year. The company attributed this to a 5.2 percent growth in overall revenue and a 1.2 percent increase in property operating expenses.
The operation gained 550 basis points in physical occupancy compared with the same quarter the previous year. The same-store physical occupancy was 84.6 percent as of Dec. 31.
The company closed on five self-storage acquisitions totaling $25.6 million during the quarter, bringing its 2012 acquisition volume to $442.7 million.
CubeSmart also closed on dispositions totaling $24.3 million, including eight assets in Ohio, two in Florida and one asset in Tennessee. Full-year disposition volume totaled $60 million.
On Dec. 10, the company declared a dividend of 11 cents per common share. The dividend was paid on Jan. 15 to common shareholders of record on Jan. 2.
Extra Space Storage Inc.
Same-store revenue increased 6.5 percent and NOI rose 8.5 percent compared to the same period in 2011. NOI increased 10.2 percent for the year. FFO was 43 cents per diluted share, resulting in 23 percent growth compared to the fourth quarter the previous year. FFO grew 33 percent for the year.
Same-store occupancy grew by 170 basis points to 88.6 percent, compared to 86.9 percent at the same time last year.
The company purchased 32 properties during the quarter for approximately $215.1 million. Of those properties, 21 came from the acquisition of a joint-venture partner’s interest in an existing deal. The joint venture owned 21 properties in 11 states. The other 11 assets were in Arizona, Florida, Maryland, Massachusetts and New Jersey.
Extra Space paid a quarterly dividend of 25 cents per common share. The dividend was paid on Dec. 31 to common shareholders of record on Dec. 10.
Public Storage Inc.
Revenue for same-store facilities increased 4.9 percent, or $18.9 million, in the quarter, as compared to the same period in 2011, primarily because of higher realized annual rent per occupied square foot. Cost of operations for the same-store facilities declined by 5.9 percent, or $6.2 million, in the quarter as compared to the same period in 2011.
FFO was $1.86 per diluted common share, compared to $1.50 for the same period the previous year. NOI for same-store facilities increased 8.9 percent, or $25 million, in the quarter compared to the same period in 2011.
During the quarter, the company acquired 10 self-storage properties (761,000 net rentable square feet and 220,000 in conversion space), in Arizona (1), California (2), Florida (3), Georgia (2), New York (1) and Texas (1), for approximately $82 million.
The company reported a regular common quarterly dividend of $1.25 per common share. It also declared dividends with respect to various series of preferred shares. All the dividends are payable on March 28 to shareholders of record as of March 13.
Sovran Self Storage Inc. (Uncle Bob's Self Storage)
Total revenue increased 13.9 percent over the previous year's fourth quarter, while property operating costs increased 8.4 percent, resulting in an NOI increase of 16.8 percent.
FFO for the quarter was 77 cents per fully diluted common share, compared to 73 cents for the same period the previous year.
Net income available to common shareholders for the fourth quarter was $13.5 million, or 44 cents per fully dilated share. For the same period in 2011, net income available to common shareholders was $10.3 million, or 37 cents per fully diluted common share.
Same-store revenue increased 8.2 percent year over year due to an increase in average occupancy of 590 basis points and strong growth in insurance commissions. Average overall occupancy was 86.2 percent, with units renting for an average of $10.73 per square foot.
Sovran acquired 14 properties during the quarter, all in existing markets. Six of the facilities are in Illinois, four in Florida, three in Texas and one in Arizona. The properties cost a combined $83 million and comprise approximately 1 million square feet of net rentable space. For the year, the company acquired 28 facilities for $189 million.
The company paid dividends of 45 cents per common share.