U-Store-It Trust, a self-storage real estate investment trust based in Wayne, Pa., announced its operating results for the three months ended Sept. 30, 2009. It also announced the closing of transactions related to its capital-raising initiatives including property dispositions, secured loans, a joint-venture transaction and a follow-on equity offering.
Funds from operations for the third quarter of 2009 were $14.4 million, compared with $16.3 million for the third quarter of 2008. FFO per share was $0.18 in the quarter compared with $0.26 in the prior-year quarter.
U-Store-It reported net income of $7.5 million, or $0.09 per share, in the third quarter of 2009, compared with net income of $4.4 million, or $0.07 per share, in the prior-year quarter. Total revenue decreased 3.5 percent to $54.9 million from $57.3 million, primarily due to lower occupancy levels and lower average scheduled rent per square foot. Total property operating expenses decreased to $23.2 million from $24.7 million, primarily due to lower advertising and utilities costs this year as compared to the prior-year period. General and administrative expenses decreased to $5.6 million from $5.8 million.
Interest expense decreased approximately $0.8 million in the third quarter of 2009, primarily as a result of reduced levels of debt outstanding and lower interest rates during the third quarter of 2009, compared with the same period in 2008.
As of Sept. 30, the company's 368 owned facilities, containing 23.8 million rentable square feet, had a physical occupancy of 75.7 percent and an average physical occupancy of 76.6 percent.
U-Store-It’s same-store pool at Sept. 30 represented 361 facilities containing approximately 23.3 million rentable square feet, and included approximately 97.9 percent of the aggregate rentable square feet of the company's 368 facilities. The same-store facilities represented approximately 97.8 percent of property net operating income for the quarter.
Same-store total revenue decreased 4.9 percent, and same-store operating expenses decreased 6.4 percent compared with the third quarter of 2008. Same-store net operating income decreased 3.9 percent in the third quarter of 2009, compared with the prior-year quarter.
Same-store average physical occupancy for the third quarter of 2009 was 76.4 percent, compared with 81.8 percent in the third quarter of 2008. Realized annual rent per occupied square foot (rental income divided by average occupied square feet) increased 1.3 percent over the prior year quarter.
On Aug. 5, the Board of Trustees declared a dividend of $0.025 per share. The dividend was paid on Oct. 22 to shareholders of record as of Oct. 7.
For 2009, U-Store-It expects fully-diluted FFO per share will be between $0.72 and $0.73, and fully diluted net loss per share will be between $(0.05) and $(0.04).
In the third quarter, U-Store-It announced the closing of several capital-raising transactions. The company also accessed the public equity market, raising $161 million in proceeds from its follow-on equity offering. It expects to close on its previously announced $450 million secured credit facility in the fourth quarter.
On Aug. 13, U-Store-It closed on its joint venture with an affiliate of Heitman LLC, receiving approximately $51 million in cash for a 50 percent interest in the unleveraged joint venture. The company contributed 22 of its wholly-owned properties in eight states. U-Store-It receives a management fee and continues day-to-day operation of the properties.
During the third quarter, U-Store-It sold 13 facilities for an aggregate sale price of $67.3 million and closed on seven secured term loans totaling $21.4 million. At the end of the quarter, the company closed on the sale of three additional facilities for $9.9 million and closed additional term loans for $40.6 million. To date in 2009, U-Store-It has raised $88.9 million through the disposition of 19 facilities and a total of $113.4 million through 16 secured loans.
On August 19, 2009, the U-Store-It closed its public offering of 32.2 million common shares at a public offering price of $5.25 per share, including 4.2 million common shares purchased by the underwriters pursuant to an overallotment option. The company received approximately $161.2 million in net proceeds.
Company management will host a conference call at 11 a.m. ET on Nov. 6 to discuss financial results for the quarter. A live webcast of the call will be available online from the “Investor Relations” page at Ustoreit.com. The dial-in numbers are 800.860.2442 for domestic callers and 412.858.4600 for international callers.
After the live webcast, the call will remain available on U-Store-It's website for 30 days. In addition, a telephonic replay of the call will be available until Dec. 6. The replay dial-in number is 877.344.7529 for domestic callers and 412.317.0088 for international callers. The reservation number for both is 431540.
U-Store-It owns and manages 367 self-storage facilities and operates the U-Store-It Network, which consists of approximately 547 additional facilities.
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