Self-Storage REITs Release Financial Results for Second-Quarter 2021

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 indicated gains in funds from operations (FFO), net operating income (NOI) and occupancy.

“Operating fundamentals continued to strengthen throughout the rental season resulting in an exceptional quarter,” said Christopher P. Marr, president and CEO of CubeSmart. “We believe the foundational elements of consumer demand will continue to have positive implications for growth throughout the balance of this year and into 2022.”

Joe Margolis, CEO of Extra Space, expressed similar sentiments. “We had an exceptionally strong second quarter, with record setting occupancy and very strong rental rates. Our stronger than expected year-to-date performance, together with an improved outlook for the remainder of 2021, has allowed us to increase the midpoint of our FFO guidance by 8.3% to $6.53 per share.”

CubeSmart

CubeSmart reported FFO per share of $0.50 during the second quarter of 2021, up from $0.41 a year ago. Same-store NOI at its 511 facilities grew 17.6% year over year. The company attributed this to a 14% increase in revenue and a 6.6% increase in operating expenses. Same-store locations contributed 90.6% of property NOI during the quarter.

Same-store physical occupancy was 96.1% as of June 30, up from 93.7% a year ago. The company’s total-owned portfolio, representing 547 facilities and comprising 39 million square feet of rentable space, had a physical occupancy of 94.5% at the end of the quarter.

CubeSmart acquired one wholly-owned property during the quarter, in Maryland, for $22.1 million. It also contributed $3.4 million to purchase a 50% stake in a consolidated joint venture that bought a Minnesota self-storage property for $12 million. At quarter-end, the company had three joint-venture projects under construction to which it’s expected to contribute $73.7 million.

On May 12, the company declared a dividend of 34 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 1,265 self-storage facilities across the United States. Its operating portfolio comprises 87.2 million square feet.

Extra Space Storage Inc.

Same-store revenue and NOI at Extra Space increased 13.6% and 20.2%, respectively, compared to the same period in 2020. Core FFO, excluding adjustments for non-cash interest, was $1.64 per diluted share, a 33.3% increase over the previous year. Same-store occupancy was 97% as of June 30 compared to 94.2% a year prior.

During the quarter, the company acquired 13 operating facilities and two properties at Certificate of Occupancy for approximately $184 million. It also purchased five facilities in conjunction with joint-venture partners for $68.7 million to which it contributed $6.9 million.

Extra Space paid a quarterly dividend of $1 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 1,973 self-storage properties in 40 states and Washington, D.C. The company’s properties comprise approximately 1.4 million units and 152.6 million square feet of rentable space.

Life Storage Inc.

Same-store revenue and NOI at Life Storage increased 14.7% and 20.2%, respectively, compared to 2020. FFO was $1.22, compared to $0.94 a year ago, while adjusted FFO for the quarter was also $1.20 per fully diluted common share, compared to $0.94.

Net income attributable to common shareholders for the second quarter was $57.5 million, or $0.74 per fully diluted share. For the same period in 2020, net income attributable to common shareholders was $36.5 million, or $0.52 per fully diluted common share.

Same-store revenue for the company’s 531 wholly owned, stabilized facilities increased 14.7% year over year, impacted by an increase in average occupancy of 420 basis points and an 8.3% bump in rental rates. Overall occupancy as of June 30 was 95%, up from 91% a year ago, with units renting for an average of $15.32 per square foot.

During the quarter, Life Storage acquired 17 facilities across five states for $267.5 million. The assets include five in New Jersey, four in Texas, three each in Florida and North Carolina, and two in New Hampshire. At quarter-end, the company was under contract to acquire four properties for $54.1 million.

Subsequent to quarter-end, the company approved a quarterly dividend of $0.74 per share on a post-split basis, which was equal to the previous quarter. It was paid on July 26 to shareholders of record on July 14.

Based in Buffalo, N.Y., Life Storage operates more than 950 self-storage facilities in 33. Its portfolio of owned and managed facilities comprises more than 71.4 million square feet.

National Storage Affiliates Trust (NSAT)

Core FFO per share was $0.55 during the second quarter, a 34.1% year-over-year increase. NSAT net income was $35.7 million, a 100.6% increase compared to the same period in 2020.

NSAT reported diluted earnings per share of $0.25 during the quarter. Same-store NOI was up 21.5%, driven primarily by an 16.3% increase in same-store revenue and partially offset by a 4.3% increase in same-store operating expenses.

As of June 30, same-store occupancy was 96.7%, an increase of 720 basis points from a year ago. Average annualized rental revenue per occupied square foot for same-store facilities was $12.78 during the quarter compared to $11.97 in 2020.

During the quarter, NSAT acquired 20 properties for about $269.4 million, adding approximately 1.7 million rentable square feet and 13,700 units to the company portfolio.

On May 27, the company declared a quarterly dividend of $0.38 per common share, which was up from $0.35 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. The company has ownership interest in 864 storage facilities in 36 states and Puerto Rico. Its portfolio comprises approximately 55.2 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 at Public Storage increased 10.8%, or $66.4 million, over the same quarter in 2020, primarily due to higher realized annual rent per available square foot and weighted average square foot occupancy. Operations costs for same-store facilities decreased 13.1%, or $25.2 million, compared to the previous year. This was attributed primarily to a 7.3% ($5.3 million) decrease in property-tax expense, a 33.7% ($13.1 million) decrease in onsite-manager payroll, and a 61.2% ($10.8 million) decrease in marketing expenses.

FFO was $2.99 per diluted common share, compared to $2.28 for the same period of 2020, marking a 31.1% increase. NOI increased $126.8 million, which was driven by a $91.6 million increase in same-store facilities and a $35.2 million increase from other non-stabilized stores.

During the quarter, Public Storage acquired 84 facilities across 18 states for $2.3 billion. The properties comprise 7 million net rentable square feet. The company also completed two development projects in Florida and Colorado, adding 300,000 net rentable square feet to its portfolio for $40.2 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 2,649 self-storage facilities in 39 states, with approximately 184 million net rentable square feet. It holds a 35% interest in Shurgard Self Storage SA, which has 243 facilities in seven European countries, with approximately 13 million net rentable square feet.

Sources:
CubeSmart, CubeSmart Reports Second Quarter 2021 Results
Extra Space, Extra Space Storage Inc. Reports 2021 Second Quarter Results
Life Storage, Life Storage Inc. Reports Second Quarter 2021 Results
National Storage Affiliates Trust, National Storage Affiliates Trust Reports Second Quarter 2021 Results
Public Storage, Public Storage Reports Results for the Three and Six Months Ended June 30, 2021

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