Self-Storage REITs Release Financial Results for Second-Quarter 2022

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) and net operating income (NOI), with some minor declines in occupancy.

“The rental season got off to a solid start, generating strong performance through the second quarter as all aspects of the operating platform worked effectively to maximize cash flows,” said Christopher P. Marr, president and CEO of CubeSmart. “We believe that the demand characteristics created by the attractive demographics of our portfolio position us to perform well through all macroeconomic backdrops.”

Tamara Fischer, president and CEO of National Storage Affiliates Trust, expressed similar sentiments. “We’re exceptionally pleased to deliver another quarter of double-digit growth in same store NOI and core FFO per share, both of which remain well above industry historical averages,” she said. “As the economy enters more challenging times, [our] differentiated structure and exposure to secondary, suburban and sunbelt markets should continue to benefit all of our stakeholders.”

CubeSmart

CubeSmart reported FFO per share of $0.62 during the second quarter of 2022, up from $0.50 a year ago. Same-store NOI at its 523 facilities grew 19% year over year. The company attributed this to a 14% increase in revenue and a 2.5% increase in operating expenses.

Same-store physical occupancy was 95.3% as of June 30, down from 96% a year ago. The company’s total-owned portfolio, representing 609 facilities and 43.9 million square feet of rentable space, had a physical occupancy of 93.6% at the end of the quarter.

CubeSmart acquired one wholly owned property in Texas for $23 million. It also opened a $21.8 million facility in Virginia At quarter-end, the company had two joint-venture projects under construction in New York to which it’s expected to contribute $78 million.

On May 17, the company declared a dividend of 43 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 1,289 self-storage facilities across the United States. Its operating portfolio comprises 89.8 million square feet.

Extra Space Storage Inc.

Same-store revenue and NOI at Extra Space increased 21.7% and 26%, respectively, compared to the same period in 2021. Core FFO, excluding adjustments for non-cash interest, was $2.13 per diluted share, a 29.9% increase over the previous year. Same-store occupancy was 95.9% as of June 30 compared to 96.9% a year prior.

During the quarter, the company acquired 12 operating facilities, three properties at Certificate of Occupancy and one development project for a total cost of approximately $231.4 million. It also purchased 16 facilities in conjunction with joint-venture partners for $332.1 million to which it contributed $57.6 million.

Extra Space paid a quarterly dividend of $1.50 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 2,177 self-storage properties in 41 states and Washington, D.C. The company’s properties comprise approximately 1.6 million units and 168 million square feet of rentable space.

Life Storage Inc.

Same-store NOI at Life Storage increased 25.4% compared to 2021, while adjusted FFO was $1.65, compared to $1.20 a year ago. Net income attributable to common shareholders for the second quarter was $92.3 million, or $1.09 per fully diluted share. For the same period in 2021, those numbers were $57.5 million and $0.74, respectively.

Same-store revenue for the company’s 580 wholly owned, stabilized facilities increased 18.9% year over year, impacted by a 20% bump in rental rates. Overall occupancy as of June 30 was 93.7%, down from 95% a year ago, with units renting for an average of $18.21 per square foot.

During the quarter, Life Storage acquired 13 facilities, including five from its third-party management platform, for $262.6 million. The assets include six in Florida, three in New York and one each in California, Georgia, Massachusetts and Texas.

The company approved a quarterly dividend of $1.08 per share, an 8% increase from the previous quarter. It was paid on July 26 to shareholders of record on July 15.

Based in Buffalo, New York, Life Storage operates more than 1,100 self-storage facilities in 36 states. Its portfolio of owned and managed facilities comprises more than 82.5 million square feet.

National Storage Affiliates Trust (NSAT)

Core FFO per share at NSAT was $0.71 during the second quarter, a 29.1% year-over-year increase. Net income was $48.4 million, a 35.7% increase compared to the same period in 2021.

NSAT reported diluted earnings per share of $0.24 compared to $0.25 a year ago. Same-store NOI was up 17.3%, driven primarily by an 14.6% increase in same-store revenue and partially offset by a 7.6% increase in same-store operating expenses.

As of June 30, same-store occupancy was 95.2%, a decrease of 140 basis points from the year prior. Average annualized rental revenue per occupied square foot for same-store facilities was $14.55 during the quarter compared to $12.66 in 2021.

NSAT acquired eight properties for $114.5 million, adding approximately 685,000 rentable square feet and 5,400 units to the company portfolio.

On May 25, the company declared a quarterly dividend of $0.55 per common share, which was up from $0.50 the previous quarter. It was paid on June 30 to holders of record on June 15.

Headquartered in Greenwood, Colorado, 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 operates 1,076 storage facilities in 42 states and Puerto Rico. Its portfolio comprises approximately 69.9 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 at Public Storage increased 15.9%, or $108.4 million, over the same quarter in 2021, primarily due to higher realized annual rent per available square foot. Operations costs for same-store facilities increased 7.6%, or $12.7 million, compared to the previous year. This was primarily attributed to increases in centralized management costs, marketing expenses, payroll, property taxes and other property costs.

FFO was $4.58 per diluted common share compared to $2.99 for the same period of 2021, marking a 53.2% increase. NOI increased $160.9 million, which was driven by a $95.7 million increase in same-store facilities and a $65.2 million increase from other non-stabilized stores.

During the quarter, Public Storage acquired 10 facilities across eight states for $123.6 million. Comprising 700,000 net rentable square feet, the properties include two each in North Carolina and Texas, and one each in Colorado, Florida, Georgia, Maryland, Oregon and Tennessee. The company also completed various expansion projects, adding 300,000 net rentable square feet to its portfolio for $36.9 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. 29 to shareholders of record as of Sept. 14.

Based in Glendale, California, Public Storage has interests in 2,807 self-storage facilities in 39 states, with approximately 200 million net rentable square feet.

Sources:
CubeSmart, CubeSmart Reports Second Quarter 2022 Results
Extra Space Storage, Extra Space Storage Inc. Reports 2022 Second Quarter Results
Life Storage, Life Storage Inc. Reports Second Quarter 2022 Results
National Storage Affiliates Trust, National Storage Affiliates Trust Reports Second Quarter 2022 Results
Public Storage, Public Storage Reports Results for the Three and Six Months Ended June 30, 2022