The four largest 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 Sept. 30, 2015. 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.
"The storage sector as a whole is experiencing favorable operating conditions, and our mobile technology continues to expand our advantage over smaller operators,” said Spencer F. Kirk, CEO of Extra Space Storage. “Our ability to capitalize in this market resulted in record-high revenue and NOI growth for the quarter. In addition, the recently closed SmartStop acquisition significantly increased our nationwide footprint and online presence, and we will leverage that size and scale to further benefit our stockholders."
CubeSmart CEO Christopher P. Marr attributed “favorable industry fundamentals” for strong gains throughout the REIT’s portfolio. “Our same-store revenue growth increased 60 basis points sequentially to 7.4 percent, primarily due to record occupancies and our ability to accelerate net effective rents during the quarter," he said. "We remain active and disciplined in pursuing investment opportunities that enhance the company's portfolio quality, maximize the efficiencies of our operating platform and create long-term value for our shareholders."
CubeSmart reported FFO per share of $0.34 during the quarter, a 21.4 percent year-over-year increase. Same-store NOI at its 361 facilities grew 9.3 percent year over year. The company attributed this to 7.4 percent growth in revenue and a 3.2 percent increase in property operating expenses.
The operation gained 120 basis points in physical occupancy compared with the same quarter the previous year. The same-store physical occupancy was 92.7 percent as of Sept. 30. The company’s total-owned portfolio, representing 438 facilities comprising 29.9 million square feet of rentable space, had a physical occupancy of 91.8 percent at the end of the first quarter.
CubeSmart acquired five storage facilities for $75.2 million during the quarter. Two facilities are in Maryland, with one each in New Jersey, New York and Texas. The REIT also has four facilities under contract to purchase for $60.2 million in New Jersey, Texas and Washington, D.C. Since the end of the quarter, the company sold all seven of its assets in the El Paso, Texas, area, one property in Jacksonville, Fla., and its last remaining storage facility in London for an aggregate total of $47.1 million.
On Aug. 4, the company declared a dividend of 16 cents per common share, which was equal to the dividend issued the previous quarter. The dividend was paid on Oct. 15 to common shareholders of record on Oct. 1. The REIT also declared a dividend of $0.48 for the 7.75 percent Series A Cumulative Redeemable Preferred Shares that was paid on Oct. 15 to holders of record on Oct. 1.
CubeSmart owns or manages 629 self-storage facilities across the United States. Its operating portfolio comprises 42 million square feet.
Extra Space Storage Inc.
Same-store revenue increased 9.9 percent and NOI rose 12.6 percent compared to the same period in 2014. FFO was 81 cents per diluted share, resulting in 12.5 percent growth compared to the third quarter the previous year.
Same-store occupancy grew by 200 basis points to 93.6 percent as of Sept. 30, compared to 91.6 percent at the same time in 2014.
The company purchased one facility for $6.1 million during the quarter. Subsequent to Sept. 30, the REIT closed on its merger acquisition of SmartStop Self Storage Inc., adding 122 wholly owned facilities and assuming the management of 38 locations.
The company paid a quarterly dividend of 59 cents per common share on Sept. 30 to common shareholders of record on Sept. 15.
Headquartered in Salt Lake City, Extra Space owns or operates 1,170 self-storage properties in 36 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 787,000 units and 87.1 million square feet of rentable space.
Public Storage Inc.
Revenue for same-store facilities increased 6.7 percent, or $31.9 million, in the quarter, as compared to the same period in 2014, primarily because of higher realized annual rent per occupied square foot. Cost of operations for the same-store facilities increased 1.9 percent, or $2.4 million, during the quarter compared to the same period last year.
FFO was $2.27 per diluted common share, compared to $2.08 for the same period the previous year. NOI increased $41.6 million compared to the same period in 2014, including $29.5 million for same-store facilities.
The company acquired two Colorado self-storage facilities comprising 200,000 net rentable square feet for $26 million. It also completed three new developments and various expansion projects that added 300,000 net rentable square feet to its portfolio for $31 million.
The company reported a regular common quarterly dividend of $1.70 per common share. It also declared dividends with respect to various series of preferred shares. All the dividends are payable on Dec. 30 to shareholders of record as of Dec. 15.
Based in Glendale, Calif., Public Storage has interests in 2,266 self-storage facilities in 38 states, with approximately 147 million net rentable square feet. Operating under the Shurgard brand name, the company also has 217 facilities in seven European countries, with approximately 11 million net rentable square feet.
Sovran Self Storage Inc. (Uncle Bob's Self Storage)
Total revenue increased 11.9 percent over the previous year's third quarter, while operating costs increased 9.6 percent, resulting in an NOI increase of 13.1 percent. Same-store NOI increased 8.4 percent year over year. FFO for the quarter was $1.29 per fully diluted common share, compared to $1.12 for the same period the previous year. Adjusted FFO was $1.32, a 12.8 percent increase.
Net income available to common shareholders for the third quarter was $31.5 million, or 88 cents per fully dilated share. For the same period in 2014, net income available to common shareholders was $25.6 million, or 77 cents per fully diluted common share.
Revenue for the company’s 399 wholly owned facilities increased 6.5 percent year over year, helped by an increase in average occupancy of 80 basis points and 5.1 percent increase in rental rates. Average overall occupancy was 91.5 percent, with units renting for an average of $12.79 per square foot.
Sovran acquired 11 self-storage properties during the quarter for $66 million. Seven of the assets are in North Carolina and South Carolina, and four are in Syracuse, N.Y. The REIT is under contract to buy nine additional properties for about $67 million.
The company approved a quarterly dividend of 85 cents per common share, which is equal to the previous quarter.
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 Third Quarter 2015 Results: FFO per Share Grows 21.4%; Same-Store NOI Increases 9.3%
- Extra Space: Extra Space Storage Inc. Reports 2015 Third Quarter Results
- Public Storage: Public Storage Reports Results for the Three Months Ended September 30, 2015
- Uncle Bobâ€™s Self Storage: Sovran Self Storage Reports Third Quarter Results; Adjusted FFO per Share Increases 12.8%, Acquired Eleven Properties