May 13, 2020

9 Min Read
Self-Storage REITs Release Financial Results for First-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 March 31. In general, the companies showed gains in key areas, particularly funds from operations (FFO) and net operating income (NOI), while occupancy figures generally reflected some of the early business impact from the coronavirus (COVID-19) pandemic.

“We had another excellent quarter, the results of which continue to validate our strategic initiatives to drive revenue growth, improve operating margins and increase shareholder value,” said Joe Saffire, CEO of Life Storage. “The emergence of COVID-19 later in the quarter has shifted our focus and attention to the health and safety of our teammates and customers, and ensuring the company’s liquidity remains strong.”

Joe Margolis, CEO of Extra Space, expressed similar sentiments. "Despite the impact from COVID-19, we had a solid first quarter,” he said. “We are pleased with the durability of our need-based sector, and we have made significant efforts to continue to operate safely during these challenging times. We are confident that our balance sheet, portfolio and operating platform are all prepared to navigate this uncertain landscape.”

“I’ve lived through three previous recessions in the self-storage business, and our properties have weathered those storms very well. Overall, the self-storage sector has historically proven to be very resilient and less affected than many other real estate sectors during economic downturns, and we think this will be no exception,” added Arlen Nordhagen, chair of National Storage Affiliates Trust (NSAT). “The benefits of our PRO (participating regional operator) structure and our limited exposure to the largest metropolitan cities should serve us particularly well through the economic crisis created by the COVID-19 pandemic.

“On the other hand, the speed and magnitude of the economic stress affecting our customers and communities is unlike anything we have ever seen, and the current environment has required an unprecedented change in consumer behavior,” he continued. “Throughout this turbulent time, we remain committed to our core values of integrity, accountability, compassion and humility, as we do our very best for [our] customers, employees and investors.”

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


CubeSmart reported FFO per share of $0.41 during the quarter, which was a 2.5 percent increase from the same period a year ago. Same-store NOI at its 477 facilities grew .8 percent year over year. The company attributed this to a 1.7 percent growth in revenue and a 3.8 percent increase in operating expenses. Same-store locations contributed 92 percent of the REIT’s property NOI during the quarter.

Same-store physical occupancy was 91.8 percent as of March 31, down from 92 percent a year ago. The company’s total-owned portfolio, representing 524 facilities and comprising 36.7 million square feet of rentable space, had a physical occupancy of 90.2 percent at the end of the first quarter.

CubeSmart acquired a Texas self-storage facility during the quarter for $9 million. It also invested a 10 percent ownership in an unconsolidated joint venture, HVPSE, which acquired 14 properties for an aggregate $135.3 million. Together, the facilities comprise 1.1 million rentable square feet. Eight of the assets are in Georgia, four in South Carolina and two in Florida. CubeSmart’s contribution to the HVPSE portfolio acquisition was $5.6 million.

On Feb. 19, the company declared a dividend of 33 cents per common share, which was equal to the previous quarter. The dividend was paid on April 15 to common shareholders of record on April 1.

CubeSmart owns or manages 1,231 self-storage facilities across the United States. Its operating portfolio comprises 83.7 million square feet.

Extra Space Storage Inc.

Same-store revenue and NOI increased 1.9 percent and 1.2 percent, respectively, compared to the same period in 2019. Core FFO, excluding adjustments for non-cash interest, was $1.24 per diluted share, resulting in 6.9 percent growth compared to the first quarter last year. Same-store occupancy was 91.3 percent as of March 31 compared to 91.4 percent a year ago.

During the quarter, the company purchased one facility and made one Certificate-of-Occupancy (C of O) acquisition for a combined $19.4 million. In conjunction with joint-venture partners, the REIT acquired one operating facility and two C of O properties for approximately $40.6 million, of which the company contributed $9.7 million.

The company paid a quarterly dividend of 90 cents per common share, which was equal to the previous quarter. It was paid on March 31 to common shareholders of record on March 16.

Headquartered in Salt Lake City, Extra Space owns or operates 1,852 self-storage properties in 40 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 1.3 million units and 143 million square feet of rentable space.

Life Storage Inc.

NOI increased 4.8 percent, year over year, while adjusted FFO for the quarter was $1.40 per fully diluted common share, a 6.9 percent increase from the same period in 2019. FFO was $1.41, compared to $1.32 a year ago.

Net income attributable to common shareholders for the first quarter was $36.4 million, or $.78 per fully diluted share. For the same period in 2019, net income attributable to common shareholders was $34.5 million, or $.74 per fully diluted common share. The increase was primarily attributed to growth in same-store NOI and income from management fees.

Same-store revenue for the company’s 517 wholly owned stabilized facilities increased 2.6 percent year over year, helped by a 2.7 percent growth in rental rates and partially offset by a decrease in average occupancy of 50 basis points. Overall occupancy as of March 31 was 89.5 percent, down from 90 percent a year ago, with units renting for an average of $14.59 per square foot.

Life Storage acquired six California properties during the quarter from a joint-venture partner for $134 million. The REIT previously managed the facilities and owned a 20 percent minority interest. The net investment to acquire the properties was $115.9 million. Through a joint venture, the company also acquired a 20 percent minority investment in a C of O purchase in Seattle. The total purchase price was $21.7 million, of which the REIT contributed $1.7 million.

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 April 27 to shareholders of record on April 14.

Based in Buffalo, N.Y., Life Storage operates more than 850 self-storage facilities in 29 states and Ontario, Canada. Its portfolio of owned and managed facilities comprises more than 62.9 million square feet.

National Storage Affiliates Trust (NSAT)

Core FFO per share was $0.40 during the first quarter, an 8.1 percent year-over-year increase. Its net income was $15.8 million, a 21.8 percent increase compared to the same period in 2019. It reported diluted earnings per share of $0.06 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 up 3.5 percent, driven primarily by a 3 percent increase in same-store total revenue and partially offset by a 2.1 percent increase in same-store property operating expenses.

Same-store average occupancy was 87.2 percent, down from 87.5 percent a year ago. Average annualized rental revenue per occupied square foot for same-store facilities was $12.34 during the quarter compared to $11.98 in 2019.

During the quarter, NSAT acquired 36 wholly owned self-storage properties across seven states for $222.8 million. The facilities comprise about 1.8 million rentable square feet in approximately 13,600 units. The company’s 2016 joint venture also invested in two properties for $12.1 million. Together, those facilities comprise around 100,000 rentable square feet in about 500 storage units.

On Feb. 20, the company declared a quarterly dividend of $0.33 per common share, which was equal to the previous quarter. It was paid on March 31 to holders of record on March 13.

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 780 storage facilities in 35 states and Puerto Rico. Its portfolio comprises approximately 48.9 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 increased 1.2 percent, or $7.2 million, over the same quarter in 2019, primarily because of higher realized annual rent per occupied square foot. Operations costs for same-store facilities increased 4 percent, or $7 million, compared to the previous year.

FFO was $2.61 per diluted common share, compared to $2.52 for the same period of 2019, marking a 3.6 percent decrease. NOI increased $9.5 million compared to last year, which was driven by a $300,000 increase in same-store facilities and a $9.2 million increase from the remainder of the company’s portfolio.

During the quarter, the company acquired nine facilities for $186.2 million. The properties include two each in California, New York and Tennessee, and one each in Indiana, Massachusetts and Nebraska. Together they comprise 700,000 net rentable square feet. It also completed a 100,000-square-foot expansion project in Minnesota for $25.3 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 June 30 to shareholders of record as of June 15.

Based in Glendale, Calif., Public Storage has interests in 2,492 self-storage facilities in 38 states, with approximately 170 million net rentable square feet. It holds a 35 percent interest in Shurgard Self Storage SA, which has 234 facilities in seven European countries, with approximately 13 million net rentable square feet.

CubeSmart, CubeSmart Reports First Quarter 2020 Results
Extra Space, Extra Space Storage Inc. Reports 2020 First Quarter Results
Life Storage, Life Storage Inc. Reports First Quarter Results
National Storage Affiliates Trust, National Storage Affiliates Trust Reports First Quarter 2020 Results
Public Storage, Public Storage Reports Results for the First Quarter Ended March 31, 2020

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