The four publicly traded, 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. In general, all four entities showed gains in key areas, particularly funds from operations (FFO) and net operating income (NOI), while also continuing to invest in property acquisitions and development.
"We had a strong first quarter, and 2014 is shaping up to be another great year for us,” said Spencer F. Kirk, CEO of Extra Space. “We are seeing solid rental activity in most markets, and we're entering peak rental season with pricing momentum. Our acquisitions, year to date, have placed us on track for another robust year of acquisition activity despite a competitive market."
Christopher P. Marr, president and CEO of CubeSmart, expressed similar optimism. "Our strong performance to start the year was driven by our property portfolio and operating platform maximizing the continued positive trends in self-storage fundamentals and lack of new supply in our markets,” he said. “We are pleased with our position entering the busy rental season and confident in continuing to deliver on our internal and external growth expectations."
CubeSmart reported FFO per share of $0.25, a 25 percent year-over-year increase. Same-store NOI at its 346 facilities grew 9 percent year over year. The company attributed this to 7 percent growth in revenue and a 3.2 percent increase in property operating expenses.
The operation gained 400 basis points in physical occupancy compared with the same quarter the previous year. The same-store physical occupancy was 89.5 percent as of March 31. The company’s total-owned portfolio, representing 378 facilities comprising 25.5 million square feet of rentable space, had a physical occupancy of 88.6 percent at the end of the first quarter.
CubeSmart acquired 10 self-storage properties during the quarter for $103.3 million including three in Florida, two in Maryland and single assets in Arizona, California, Connecticut, Pennsylvania and Texas. The company also opened a new facility in the Bronx, N.Y., and a mixed-use property in Malvern, Pa., at a cost of $41.6 million.
On Feb. 25, the company declared a dividend of 13 cents per common share. The dividend was paid on April 15 to common shareholders of record on April 1. The board of trustees also declared a dividend of $0.48 for the 7.75 percent Series A Cumulative Redeemable Preferred Shares that was paid on April 15 to holders of record on April 1.
CubeSmart owns or manages 539 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 7.9 percent and NOI rose 9.4 percent compared to the same period in 2013. FFO was 55 cents per diluted share, resulting in 23.9 percent growth compared to the first quarter the previous year.
Same-store occupancy grew by 200 basis points to 90.4 percent as of March 31, compared to 88.4 percent at the same time in 2013.
The company purchased 21 properties during the quarter for approximately $249.7 million. Seventeen of the assets were acquired as part of a single portfolio in Virginia. The other four properties are in Alabama, California, Connecticut and Texas. Extra Space has four additional properties under contract for a total purchase price of approximately $39.3 million. The acquisition of these properties is expected to occur by the end of June.
The company paid a quarterly dividend of 40 cents per common share on March 28 to common shareholders of record on March 14.
Headquartered in Salt Lake City, Extra Space owns or operates 1,052 self-storage properties in 35 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 700,000 units and 78 million square feet of rentable space.
Public Storage Inc.
Revenue for same-store facilities increased 5.1 percent, or $21.3 million, in the quarter, as compared to the same period in 2013, primarily because of higher realized annual rent per occupied square foot and higher average occupancy. Cost of operations for the same-store facilities increased by 4 percent, or $5.3 million, in the quarter as compared to the same period in 2013.
FFO was $1.74 per diluted common share, compared to $1.57 for the same period the previous year. NOI increased $30.8 million during the quarter compared to the same period in 2013, including $16 million for same-store facilities.
During the quarter, the company completed two new developments and an expansion project, adding 335,000 net rentable square feet to its portfolio for $40 million. An additional $195 million in development and expansion projects currently underway will add another 1.9 million net rentable square feet, company officials said.
The company reported a regular common quarterly dividend of $1.40 per common share. It also declared dividends with respect to various series of preferred shares. All the dividends are payable on June 30 to shareholders of record as of June 13.
Based in Glendale, Calif., Public Storage has interests in 2,202 self-storage facilities in 38 states, with approximately 141 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 18.1 percent over the previous year's first quarter, while operating costs increased 16.6 percent, resulting in an NOI increase of 18.9 percent. Same-store NOI increased 9.3 percent year over year. FFO for the quarter was 88 cents per fully diluted common share, compared to 82 cents for the same period the previous year, a 7.3 percent increase.
Net income available to common shareholders for the first quarter was $26.7 million, or 51 cents per fully dilated share. For the same period in 2013, net income available to common shareholders was $14.3 million, or 47 cents per fully diluted common share.
Same-store revenue increased 8.3 percent year over year, helped by an increase in average occupancy of 310 basis points and 3.4 percent increase in rental rates. Average overall occupancy was 88.7 percent, with units renting for an average of $11.75 per square foot, an increase of 9.2 percent. Facilities showing the strongest revenue gain were in Florida, Georgia, New York, North Carolina and Texas, officials said.
Sovran has acquired seven self-storage properties this year for $95.4 million. Two of the facilities are in Florida, one in Illinois, two in Maine and two in Texas. The assets add approximately 546,000 square feet of rentable space to the company’s portfolio. The company is also under contract to purchase 17 additional self-storage facilities for $120.7 million.
The company paid a quarterly dividend of 68 cents per common share.
Sovran, which operates facilities under the brand Uncle Bob's Self Storage, operates 487 facilities in 25 states, with a large presence in Texas.
- CubeSmart: CubeSmart Reports First Quarter 2014 Results: FFO per Share Grows 25%; Same-Store NOI Increases 9.0%
- Extra Space Storage: Extra Space Storage Inc. Reports 2014 First Quarter Results
- Public Storage: Public Storage Reports Results for the Quarter Ended March 31, 2014
- Uncle Bobâ€™s Self Storage: Sovran Self Storage Reports First Quarter Results, Adjusted FFO Per Share Increases 16.7%, Guidance Raised