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 March 31, 2013. In general, all four entities showed gains in key areas, particularly funds from operations (FFO) and increased occupancy.
"Strong operational and financial performance continues to be driven by occupancy gains across our same-store portfolio," said Christopher Marr, president of CubeSmart. "Notably, we posted sequential same-store occupancy gains of 90 basis points during what is typically a seasonally slow first quarter, contributing to an expanded year-over-year gain of 640 basis points. Meanwhile, our pipeline of external growth opportunities remains steady, and we continue to maintain a measured and disciplined investment approach."
"We experienced another strong quarter. Solid operational performance and record high occupancies have once again helped produce outstanding financial results,” said Spencer F. Kirk, Extra Space CEO. “Disciplined growth continues to enhance our results, as we have benefited from recent acquisitions and the growth of our third-party management platform. We are optimistic and have confidence in our people, our technology and our properties as we enter peak rental season."
CubeSmart reported FFO per share of $0.20, a 25 percent year-over-year increase. Same-store net operating income (NOI) at its 328 facilities grew 7.6 percent year over year. The company attributed this to 6.8 percent growth in overall revenue and a 5.4 percent increase in property operating expenses.
The operation gained 640 basis points in physical occupancy compared with the same quarter the previous year. The same-store physical occupancy was 85.7 percent as of March 31.
The company closed on one self-storage acquisition in Phoenix for $6.9 million during the quarter. CubeSmart also closed on dispositions totaling $11.4 million, including four assets in Houston and one in Indianapolis. The Indianapolis disposition completes the company’s exit from that market.
On Feb. 21, the company declared a dividend of 11 cents per common share. The dividend was paid on April 15 to common shareholders of record on April 1.
CubeSmart owns or manages 517 self-storage facilities across the United States and operates the CubeSmart Network, which consists of more than 800 additional self-storage facilities.
Extra Space Storage Inc.
Same-store revenue increased 7.5 percent and NOI rose 10.8 percent compared to the same period in 2012. FFO was 46 cents per diluted share, resulting in 39.4 percent growth compared to the first quarter the previous year.
Same-store occupancy grew by 290 basis points to 88.6 percent as of March 31, compared to 85.7 percent at the same time last year.
The company purchased two properties during the quarter for approximately $12.9 million. They are in Illinois and Maryland. Extra Space also has five additional properties under contract for $53.6 million. The acquisitions are expected to close by the end of the second quarter.
The company paid a quarterly dividend of 25 cents per common share. The dividend was paid on March 29 to common shareholders of record on March 15.
Headquartered in Salt Lake City, Extra Space owns or operates 965 self-storage properties in 35 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 640,000 units and 70 million square feet of rentable space.
Public Storage Inc.
Revenue for same-store facilities increased 5.4 percent, or $21.1 million, in the quarter, as compared to the same period in 2012, primarily because of higher realized annual rent per occupied square foot and higher average occupancy. Cost of operations for the same-store facilities decreased by 2.3 percent, or $3.1 million, in the quarter as compared to the same period in 2012.
FFO was $1.57 per diluted common share, compared to $1.35 for the same period the previous year. NOI increased $30.3 million during the quarter compared to the same period in 2012, including $24.2 million for same-store facilities.
During the quarter, the company acquired two self-storage properties (149,000 net rentable square feet) in Arizona and Georgia for approximately $14 million. Public Storage is under contract to acquire another Arizona facility for approximately $8 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 June 27 to shareholders of record as of June 12.
Based in Glendale, Calif., Public Storage has interests in 2,080 self-storage facilities in 38 states with approximately 133 million net rentable square feet. Operating under the Shurgard brand name, the company also has 188 facilities in seven European countries, with approximately 10 million net rentable square feet.
Sovran Self Storage Inc. (Uncle Bob's Self Storage)
Total revenue increased 17 percent over the previous year's first quarter, while property operating costs increased 14.9 percent, resulting in an NOI increase of 18.1 percent.
FFO for the quarter was 82 cents per fully diluted common share, compared to 75 cents for the same period the previous year.
Net income available to common shareholders for the first quarter was $14.3 million, or 47 cents per fully dilated share. For the same period in 2012, net income available to common shareholders was $11.1 million, or 39 cents per fully diluted common share.
Same-store revenue increased 8.1 percent year over year due to an increase in average occupancy of 530 basis points (87.4 percent), reduced move-in incentives and growth in insurance commissions. Average overall occupancy was 85.7 percent, with units renting for an average of $10.76 per square foot.
Sovran acquired three properties during the quarter in Boston; Long Island, N.Y.; and San Antonio. The properties were purchased through two separate transactions for $22 million and comprise approximately 131,000 square feet.
The company paid dividends of 48 cents per common share.
Sovran, which operates facilities under the brand Uncle Bob's Self Storage, operates 471 facilities in 25 states, with a large presence in Texas.
Strategic Storage Trust Inc.
Strategic Storage Trust, a publicly registered, non-traded REIT, also released its first quarter 2013 financial results. The company reported year-over-year same-store revenue and NOI increases of 9 percent and 19 percent, respectively. The increase in same-store revenue was attributed primarily to an increase in average occupancy of approximately 8 percent.
In all, same-store average occupancy was at 81 percent for the quarter, up from 73 percent year over year. Occupancy for the company’s Homeland Portfolio increased to 75 percent from 51 percent during the first quarter 2012. The Homeland Portfolio consists of 12 lease-up self-storage facilities acquired in December 2011 for $80 million.
The company also increased IPA (Investment Program Association) modified funds from operations by 315 percent to $4.6 million during the quarter, up from $1.1 million during the same period in 2012.
Cash flow from operation increased by 103 percent from $2 million during the first quarter the previous year to $4 million for the three months ended March 31, 2013.
The Strategic Storage Trust portfolio includes more than 100 self-storage facilities across the United States and Canada that are branded as SmartStop Self Storage. It includes approximately 70,000 self-storage units and 9.2 million square feet of rentable storage space.