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Self-Storage REITs Release Financial Results for Third-Quarter 2024
ISS Staff
November 4, 2024
5 Min Read
The four largest publicly traded, U.S.-based self-storage real estate investment trusts (REITs)—CubeSmart, Extra Space Storage Inc., National Storage Affiliates Trust (NSAT) and Public Storage Inc.—have released financial statements for the quarter that ended Sept. 30. In general, the companies indicated declines in net operating income (NOI) and funds from operations (FFO), but stabilization in occupancy.
“The third quarter saw a continuation of trends as we remain in a competitive environment for new-customer rental rates while the existing customer remains very resilient,” said Christopher P. Marr, CEO and president of CubeSmart.
“Performance is stabilizing across our portfolio,” said Joe Russell, CEO and president of Public Storage. “With formidable competitive advantages and our distinctive operating model transformation ahead of schedule, we are very well-positioned for growth in an environment of improving fundamentals and increasing transaction market activity.”
CubeSmart
CubeSmart reported FFO per share of $0.67 for the third quarter of 2024, down from $0.68 during the same period last year. Same-store NOI at its 598 facilities decreased 3.1% year over year, resulting from a 0.8% decrease in revenue and a 5.3% increase in operating expenses.
Same-store physical occupancy averaged 90.8% as of Sept. 30, down from 91.3% in 2023. CubeSmart added 24 sites to its third-party management platform during the quarter.
The company plans to acquire two facilities in Oregon and Pennsylvania for an aggregate purchase price of $22 million. The deals are expected to close during the fourth quarter. CubeSmart is also constructing two projects in New York under a joint venture. It anticipates investing $36.9 million. Both are expected to open during the third quarter of 2025.
On July 23, the company declared a quarterly dividend of $0.51 per common share. The dividend was paid on Oct. 15 to common shareholders of record on Oct. 1.
CubeSmart owns or manages 1,507 self-storage facilities across the United States. Its operating portfolio comprises more than 94 million square feet.
Extra Space Storage Inc.
Same-store revenue and NOI at Extra Space decreased by 0.3% and 1% respectively in Q3, compared to the same period in 2023. Core FFO, excluding adjustments, was $2.07 per diluted share, a 2.5% increase year over year. Same-store occupancy was 94.3% as of Sept. 30 compared to 93.7% a year prior.
During the quarter, Extra Space acquired 10 operating self-storage facilities and one at Certificate of Occupancy for approximately $163.9 million. In conjunction with joint-venture partners, the company acquired five properties and completed two developments for a total cost of approximately $114.6 million, of which the company invested $30.7 million.
Extra Space added 63 stores facilities to its management platform. As of Sept. 30, it managed 1,461 properties for third parties and 460 in unconsolidated joint ventures for a total of 1,921.
The company paid a dividend of $1.62 per share on dividend of $1.62 per share to stockholders of record on Sept. 16.
Headquartered in Salt Lake City, Extra Space owns or operates more than 3,862 self-storage facilities nationwide under the Extra Space, Life Storage and Storage Express brand names. The company’s properties comprise approximately 2.7 million units and 296 million square feet of rentable space.
National Storage Affiliates Trust (NSAT)
NSAT reported core FFO of $83.9 million, or $0.62 per share for the third quarter, a decrease of 7.5% per share compared to the same period last year. Net income was $29.8 million, a decrease of 30.9% compared to the third quarter of 2023.
NSAT reported a decrease in same-store NOI of 5.3% compared to the same period in 2023. It was driven by a 3.5% decrease in same-store total revenue and an increase of 1.2% in same-store operating expenses. Same-store occupancy was 85.6% at the end of the quarter, a decrease of 270 basis points compared to the same period last year.
The company completed the internalization of its participating regional operator (PRO) structure in July. As a result, it purchased the PROs' management contracts and, in some cases, their brand names, related intellectual property and certain rights for tenant-insurance programs. It’ll no longer pay supervisory and administrative fees or reimbursements under the previous agreements with the PROs.
One of NSAT’s unconsolidated real estate ventures acquired 18 self-storage properties for approximately $147.9 million in two separate transactions. The venture financed the acquisitions with capital contributions from its members, of which the company contributed $37 million.
On Aug. 15, the company declared a quarterly cash dividend of $0.56 per common share. It was paid on Sept. 30 to shareholders of record as of Sept. 13.
Headquartered in Greenwood, Colorado, NSAT is a self-administered and -managed REIT focused on the acquisition, operation and ownership of self-storage properties within the top 100 U.S. Metropolitan Statistical Areas. The company operates 1,070 storage facilities in 42 states and Puerto Rico. Its portfolio comprises approximately 70 million net rentable square feet.
Public Storage Inc.
Revenue for Public Storage’s same-store facilities decreased 1.3% or $12.3 million in the three months compared to the same period in 2023, due primarily to lower realized annual rent per occupied square foot and a decline in occupancy. Operations costs for same-store facilities went up 2.6%, or $5.8 million, compared to the previous year. This was mainly attributed to direct property costs, repairs, maintenance and marketing expenses.
The company reported FFO of $3.80 per diluted common share compared to $4.58 for the same period in 2023, representing a decrease of 17%. It achieved 78.4% same-store direct NOI margin.
Public Storage acquired three facilities in Florida, North Carolina and South Carolina comprising a total of .2 million net rentable square feet for $24.3 million. It also opened one site and completed various expansion projects, adding 0.5 million net rentable square feet at a cost of $142.6 million.
On Oct. 30, the company declared a regular common quarterly dividend of $3 per common share. It’ll be paid on Dec. 30 to shareholders of record as of Dec. 13.
Based in Glendale, California, Public Storage has interests in 3,33 self-storage facilities in 40 states, with approximately 241 million net rentable square feet. It holds a 35% interest in Shurgard Self Storage Ltd., which has 315 facilities in seven European countries, with approximately 1.4 million net rentable square feet.
Sources:
CubeSmart, CubeSmart Reports Third Quarter 2024 Results
Extra Space Storage, Extra Space Storage Inc. Reports 2024 Third Quarter Results
National Storage Affiliates Trust, National Storage Affiliates Trust Reports Third Quarter 2024 Results
Public Storage, Public Storage Reports Results for the Three and Nine Months Ended September 30, 2024
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