Self-Storage REITs Release Financial Results for Second-Quarter 2020

The five largest publicly traded, U.S.-based self-storage real estate investment trusts (REITs)—CubeSmart, Extra Space Storage Inc., Life Storage Inc., National Storage Affiliates Trust and Public Storage Inc.—have released financial statements for the quarter that ended June 30. In general, the companies showed the effects the coronavirus pandemic has had in key areas, particularly funds from operations (FFO), net operating income (NOI), and occupancy.

“Like all businesses, we were tested in our ability to operate safely and effectively in the face of the unprecedented COVID-19 global health crisis. Though our second-quarter financial results were not as originally planned, our team and technology platforms proved once again why I think they are the best in the business,” said Joe Saffire, CEO of Life Storage. “We have seen several positive trends emerge as we continue to attract and retain customers. Our efficiency initiatives remain well on track; our balance sheet is strong; and our industry is proving once again to be resilient in the face of challenging economic times.”

Christopher P. Marr, president and CEO of CubeSmart, expressed similar sentiments. “Over the last few months, we have faced unprecedented challenges and uncertainty. Once again, self-storage showed its resilience, and our team continued to adapt, finding innovative new ways to meet the varied needs of our customers in this changing landscape. Recently we have seen demand return to normal levels following the steep declines experienced in late March and April, driven by government shutdowns, and we have now resumed our normal operational processes.”

“Despite the impact from COVID-19, we delivered positive year-over-year FFO [funds from operations] growth in the quarter,” added Joe Margolis, CEO of Extra Space. “We are pleased with the returning demand we have seen in our need-based sector and our customer-acquisition platform’s ability to convert that demand into rentals. While we are encouraged by improving leasing activity and occupancy, we recognize the remaining headwinds and uncertainty in 2020 due to new supply, negative rental rates to new customers, restrictions on auctions and existing customer rent increases, the course of the COVID-19 virus and general macro-economic conditions.”

Due to the uncertainty of continued operational and financial impacts from the public-health crisis, CubeSmart, Extra Space, Life Storage and NSAT postponed issuing revised 2020 guidance.


CubeSmart reported FFO per share of $0.41 during the quarter, which was a 2.4 percent decrease from the same period a year ago and equal to the previous quarter. Same-store NOI at its 477 facilities fell 4.1 percent year over year. The company attributed this to a 2.2 percent decline in revenue and a 2.4 percent increase in operating expenses. Same-store locations contributed 90 percent of the REIT’s property NOI during the quarter.

Same-store physical occupancy was 94 percent as of June 30, up from 93.5 percent a year ago. The company’s total-owned portfolio, representing 527 facilities and comprising 37 million square feet of rentable space, had a physical occupancy of 92.5 percent at the end of the first quarter.

CubeSmart acquired two facilities in Maryland and New Jersey during the quarter for $65.7 million. It also opened a new facility in New York for a total investment of $45.9 million. At quarter-end, it had four joint-venture projects under construction of which CubeSmart’s contribution is expected to be $88.9 million.

On May 12, the company declared a dividend of 33 cents per common share, which was equal to the previous quarter. The dividend was paid on July 15 to common shareholders of record on July 1.

CubeSmart owns or manages 1,246 self-storage facilities across the United States. Its operating portfolio comprises 85 million square feet.

Extra Space Storage Inc.

Same-store revenue and NOI decreased 3.1 percent and 4.6 percent, respectively, compared to the same period in 2019. Core FFO, excluding acceleration of share-based compensation expense due to retirement of an executive officer and adjustments for non-cash interest, was $1.23 per diluted share, representing a .8 percent increase over last year. Same-store occupancy was 94.5 percent as of June 30 compared to 93.5 percent a year ago.

During the quarter, the company completed one development and made one Certificate-of-Occupancy (C of O) acquisition for a combined $25.4 million, of which the company contributed $14.4 million.

The company paid a quarterly dividend of 90 cents per common share, which was equal to the previous quarter. It was paid on June 30 to common shareholders of record on June 15.

Headquartered in Salt Lake City, Extra Space owns or operates 1,878 self-storage properties in 40 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 1.4 million units and 145.4 million square feet of rentable space.

Life Storage Inc.

NOI increased 1.9 percent, year over year, though same-store NOI declined 2.5 percent. FFO was $1.42, compared to $1.45 a year ago, while adjusted FFO for the quarter was $1.42 per fully diluted common share, which was equal to the same period in 2019.

Net income attributable to common shareholders for the second quarter was $36.5 million, or $.78 per fully diluted share. For the same period in 2019, net income attributable to common shareholders was $40.7 million, or $.87 per fully diluted common share. The decrease was primarily attributed to effects from the health crisis and related economic disruptions, including lower realized rental rates and increased reserves to accounts receivable for curtailed auctions.

Same-store revenue for the company’s 517 wholly owned stabilized facilities fell 2 percent year over year, impacted by a 2.7 percent decline in rental rates and an increase in average occupancy of 20 basis points. Overall occupancy as of June 30 was 91 percent, up from 90.8 percent a year ago, with units renting for an average of $14.12 per square foot.

During the quarter, Life Storage entered three joint ventures, each of which is developing self-storage in Greater New York City. The company’s expected equity commitment is $6.8 million, which represents various minority interest ownership ranging from 17 percent to 25 percent. The REIT contributed $1.5 million to the joint ventures during the quarter.

Subsequent to the end of the quarter, the company approved a quarterly dividend of $1.07 per common share, which was equal to the previous quarter. It was paid on July 27 to shareholders of record on July 14.

Based in Buffalo, N.Y., Life Storage operates more than 875 self-storage facilities in 29 states and Ontario, Canada. Its portfolio of owned and managed facilities comprises more than 64 million square feet.

National Storage Affiliates Trust (NSAT)

Core FFO per share was $0.41 during the second quarter, a 7.9 percent year-over-year increase. Its net income was $17.8 million, a .3 percent increase compared to the same period in 2019. It reported diluted earnings per share of $.10 during the quarter, which was primarily attributed to the Hypothetical Liquidation at Book Value method used for allocating net income among various classes of equity. Same-store NOI was down 1.2 percent, driven primarily by a 1.1 percent decrease in same-store total revenue and partially offset by a 1.1 percent decrease in same-store property operating expenses.

Same-store average occupancy was 88.1 percent, down from 89.5 percent a year ago. Average annualized rental revenue per occupied square foot for same-store facilities was $11.99 during the quarter compared to $11.94 in 2019.

During the quarter, NSAT acquired four wholly owned self-storage properties for $36.2 million. The facilities comprise about 300,000 rentable square feet in approximately 2,500 units.

On May 21, the company declared a quarterly dividend of $0.33 per common share, which was equal to the previous quarter. It was paid on June 30 to holders of record on June 15.

Headquartered in Greenwood, Colo., 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 throughout the United States. The company has ownership interest in 784 storage facilities in 35 states and Puerto Rico. Its portfolio comprises approximately 49.2 million net rentable square feet. It's owned by its affiliate operators, who are contributing their interests in their self-storage assets over the next few years as their current mortgage debt matures.

Public Storage Inc.

Revenue for same-store facilities decreased 3 percent, or $18.7 million, over the same quarter in 2019, primarily because of lower realized annual rent per occupied square foot and reduced late and administrative fees. Operations costs for same-store facilities increased 6.7 percent, or $11.5 million, compared to the previous year.

FFO was $2.28 per diluted common share, compared to $2.57 for the same period of 2019, marking an 11.3 percent decrease. NOI decreased $22.5 million, which was driven by a $30.2 million decrease in same-store facilities and partially offset by a $7.6 million increase from the remainder of the company’s portfolio.

During the quarter, the company acquired six facilities for $67.1 million. The properties include four in Ohio and one each in California and Florida. Together they comprise 400,000 net rentable square feet. It also completed development on two new facilities and various expansion projects, adding 400,000 net rentable square feet to its portfolio for $44.7 million.

The company reported a regular common quarterly dividend of $2 per common share, which was equal to the previous quarter. It also declared dividends with respect to various series of preferred shares. All the dividends are payable on Sept. 30 to shareholders of record as of Sept. 15.

Based in Glendale, Calif., Public Storage has interests in 2,500 self-storage facilities in 38 states, with approximately 171 million net rentable square feet. It holds a 35 percent interest in Shurgard Self Storage SA, which has 238 facilities in seven European countries, with approximately 13 million net rentable square feet.

CubeSmart, CubeSmart Reports Second Quarter 2020 Results
Extra Space, Extra Space Storage Inc. Reports 2020 Second Quarter Results
Life Storage, Life Storage Inc. Reports Second Quarter Results
National Storage Affiliates Trust, National Storage Affiliates Trust Reports Second Quarter 2020 Results
Public Storage, Public Storage Reports Results for the Three and Six Months Ended June 30, 2020

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