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 Dec. 31, 2014. In general, all four entities showed gains in key areas, particularly funds from operations (FFO) and net operating income (NOI), while also achieving increases in occupancy levels. The quarter was also marked by several property acquisitions.
"It was another outstanding year of growth for Extra Space Storage. Our integrated operating platform continues to drive excellent results, with record-high occupancy and steady gains in revenue and NOI,” said Spencer F. Kirk, CEO. “Acquisitions exceeded $163 million in the fourth quarter and $531 million for the year. With a continuing forecast of moderate supply growth and stable demand, 2015 is positioned to be another strong year for Extra Space."
CubeSmart CEO Christopher P. Marr also forecast a healthy 2015. "The fourth quarter topped off another fantastic year of operational performance for CubeSmart," he said. "Looking forward to 2015, we expect demand and supply trends that have supported positive self-storage fundamentals to continue. We are focused on enhancing the company's portfolio quality and net-asset value through a disciplined investment strategy and are well positioned to leverage our operating platform to generate attractive risk-adjusted returns for shareholders."
CubeSmart reported FFO per share of $0.28 during the quarter, a 21.7 percent year-over-year increase. For 2014, FFO per share grew 18.7 percent to $1.08 compared to $0.91 in 2013. Same-store NOI at its 346 facilities during the quarter grew 8.6 percent year over year. The company attributed this to 6.6 percent growth in revenue and a 2.3 percent increase in property operating expenses.
The operation gained 140 basis points in physical occupancy compared with the same quarter the previous year. The same-store physical occupancy was 90.7 percent as of Dec. 31. The company’s total-owned portfolio, representing 421 facilities comprising 28.6 million square feet of rentable space, had a physical occupancy of 89.1 percent at the end of the fourth quarter.
CubeSmart acquired eight storage facilities for $65.1 million during the quarter, including five in Texas and three in Florida. For the full year, the company acquired 52 facilities for $530.2 million. It also acquired a development property during the quarter in New York for $38 million. In 2014, the company opened three new facilities, including two in New York and a mixed-use asset in Pennsylvania that contains CubeSmart’s corporate headquarters. Those development projects cost a combined $80.3 million.
On Dec. 16, the company declared a dividend of 16 cents per common share, a 23.1 percent increase from the previous quarter. The dividend was paid on Jan. 15 to common shareholders of record on Jan. 2. 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 Jan. 15 to holders of record on Jan. 2.
CubeSmart owns or manages 595 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 7.3 percent and NOI rose 9.5 percent compared to the same period in 2013. FFO was 62 cents per diluted share, resulting in 19.3 percent growth compared to the fourth quarter the previous year. For 2014, FFO per share was $2.52, a 28.6 percent increase from $1.96 in 2013.
Same-store occupancy grew by 190 basis points to 91.4 percent as of Dec. 31, compared to 89.5 percent at the same time in 2013.
The company purchased 19 properties during the quarter for approximately $163.5 million. Fifteen of the facilities had been under Extra Space management. The assets are in California, Colorado, Florida, Georgia, New Jersey, North Carolina, South Carolina, Texas and Virginia. Since the quarter ended, the company acquired three other properties in Texas for approximately $41.9 million.
The company paid a quarterly dividend of 47 cents per common share on Dec. 31 to common shareholders of record on Dec. 15.
Headquartered in Salt Lake City, Extra Space owns or operates 1,088 self-storage properties in 35 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 725,000 units and 80.4 million square feet of rentable space.
Public Storage Inc.
Revenue for same-store facilities increased 5.6 percent, or $24.9 million, in the quarter, as compared to the same period in 2013, primarily because of higher realized annual rent per occupied square foot. For the year, revenue for same-store facilities increased 5.4 percent, or $93.5 million. Cost of operations for the same-store facilities increased 1.6 percent, or $1.7 million, during the quarter as compared to the same period in 2013.
FFO was $2.17 per diluted common share, compared to $2.13 for the same period the previous year. NOI increased $41.3 million during the quarter compared to the same period in 2013, including $23.2 million for same-store facilities. For the year, FFO was $7.98 per diluted share, a 5.97 percent increase compared to $7.53 in 2013.
The company acquired 13 self-storage facilities comprising 1.2 million square feet during the quarter for approximately $154 million. Four of the assets are in Minnesota, two each in Virginia and Texas, and one each in Arizona, California, Florida, North Carolina and South Carolina. For the year, the REIT purchased 44 storage facilities comprising 3.4 million square feet for approximately $431 million.
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 March 31 to shareholders of record as of March 16.
Based in Glendale, Calif., Public Storage has interests in 2,250 self-storage facilities in 38 states, with approximately 146 million net rentable square feet. Operating under the Shurgard brand name, the company also has 193 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 17.9 percent over the previous year's fourth quarter, while operating costs increased 14.1 percent, resulting in an NOI increase of 19.6 percent. Same-store NOI increased 8.1 percent year over year. FFO for the quarter was $1.08 per fully diluted common share, compared to 98 cents for the same period the previous year, a 10.2 percent increase.
Net income available to common shareholders for the fourth quarter was $25.7 million, or 76 cents per fully dilated share. For the same period in 2013, net income available to common shareholders was $22.2 million, or 69 cents per fully diluted common share.
Revenue for the company’s 384 wholly owned facilities increased 6.3 percent year over year, helped by an increase in average occupancy of 60 basis points and 5.2 percent increase in rental rates. Average overall occupancy was 88.9 percent, with units renting for an average of $12.19 per square foot.
Sovran acquired five self-storage properties during the quarter for $55 million. The properties comprise nearly 470,000 square feet and are in Florida, Illinois, Louisiana and Texas. The REIT also sold a Houston asset during the quarter for $6.1 million. For 2014, the company acquired 33 properties for $291.9 million and added 14 assets through a joint venture for $187.2 million.
The company paid a quarterly dividend of 75 cents per common share, a 10 percent increase.
Sovran, which operates facilities under the brand Uncle Bob's Self Storage, operates more than 500 facilities in 25 states, with a large presence in Texas.
- CubeSmart: CubeSmart Reports Annual 2014 Results: FFO per Share Grows 18.7%; Same-Store NOI Increases 9.6%
- Extra Space Storage: Extra Space Storage Inc. Reports 2014 Fourth Quarter and Year End Results
- Public Storage: Public Storage Reports Results for the Fourth Quarter and Year Ended December 31, 2014
- Uncle Bobâ€™s Self Storage: Sovran Self Storage Reports Fourth Quarter Results, Adjusted FFO per Share Increases 8.7%, Issues Guidance for 2015