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Self-Storage REITs Strategic Storage Growth Trust, Strategic Storage Trust II Report 2Q 2017 Results

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Strategic Storage Growth Trust Inc. (SSGT) and Strategic Storage Trust II Inc. (SST II), both public, non-traded, self-storage real estate investment trusts (REITs) sponsored by SmartStop Asset Management LLC, have released their financial statements for the quarter that ended June 30. In general, the entities showed gains in revenue, net operating income (NOI) and occupancy.

SSGT increased same-store revenue by 15.6 percent, with NOI growing 44.1 percent, compared to the same period in 2016. Same-store occupancy was 94.8 percent as of June 30, up from 89.3 percent the previous year. The REIT also reported growth in same-store annualized rent per occupied square foot, showing an increase of 9.8 percent ($12.11) year over year. Modified funds from operations (FFO) grew $700,000, though the company reported a net loss of $1.1 million.

During the quarter, SSGT closed on two self-storage acquisitions in Asheville, N.C., and Sarasota, Fla., for approximately $17 million. Combined, the assets comprise 173,000 net rentable square feet in 1,345 units.

“Our second-quarter results represent our fifth consecutive quarter of double-digit growth in same-store revenues and NOI,” said H. Michael Schwartz, chairman and CEO of both REITs. “This trend is a testament to our investment strategy of buying growth-oriented assets and driving performance.”

SST II increased total revenue by about $9.3 million, a 95 percent bump compared to the second quarter last year. Same-store revenue grew 11.6 percent, while NOI showed a 23.2 percent increase year over year. Modified FFO grew $2.7 million, or 119 percent, though the company reported a net loss attributable to common shareholders of $3.5 million.

Same-store occupancy was 93.3 percent as of June 30, up from 89.9 percent the previous year. The REIT also reported growth in same-store annualized rent per occupied square foot, showing an increase of 6.2 percent ($13.62) year over year.

SST II didn’t close on any acquisitions during the quarter.

“Our second-quarter same-store results show the continued execution of our strategy: acquiring quality assets in strong markets and recognizing greater revenues as the properties mature,” Schwartz said.

SSGT focuses on the acquisition, development, redevelopment and lease-up of self-storage properties. Its portfolio currently consists of 20 storage facilities in nine states comprising approximately 1.5 million net rentable square feet in 12,900 storage units.

The SST II portfolio includes 83 self-storage facilities in Canada and the United States. It comprises approximately 51,300 self-storage units and about 6 million rentable square feet of storage space.

Both REITs are sponsored by SmartStop Asset Management, a diversified real estate company with a managed portfolio of 107 self-storage facilities in Canada and the United States. Its managed properties comprise approximately 7.8 million rentable square feet.

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