Self-Storage REITs Release 2Q 2012 Financial Results

The four 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 June 30. In general, all four entities showed gains in key areas and are displaying aggressive acquisition strategies.

CubeSmart

CubeSmart reported a funds from operations (FFO) per share of $0.18 and a 5.2 percent increase over last years second quarter in same-store net operating income (NOI) at its 330 facilities. The company attributed this to a 3 percent growth in overall revenue and a 0.7 percent decrease in property operating expenses.

The operation gained 360 basis points in physical occupancy compared with the same period last year. The same-store physical occupancy was 83.6 percent as of June 30.

The company also closed on $64.3 million in self-storage acquisitions during the quarter. This includes one facility in the Dallas-Fort Worth area for $5 million, as well as two former Storage Deluxe facilities for $59.3 million. CubeSmart's $560 million acquisition of Storage Deluxe is now complete. (Original story: "CubeSmart Announces $560M Acquisition of Storage Deluxe.")

On May 30, the company declared a dividend of 8 cents per common share. The dividend was paid on July 16 to common shareholders of record on July 2.

Extra Space Storage Inc.

Same-store revenue increased 6.7 percent and NOI rose 10.2 percent compared to the same period in 2011. FFO was 38 cents per diluted share, including lease-up dilution of 1 cent per share, resulting in 40.7 percent growth compared to the same period last year.

Same-store occupancy grew by 270 basis points to 90.4 percent, compared to 87.7 percent at the same time last year.

The company acquired four properties for approximately $21.3 million. As part of a public offering of 8.05 million shares of common stock, the company generated net proceeds of approximately $226.7 million.

Extra Space paid a quarterly dividend of $0.20 per share.

Public Storage Inc.

Revenue for same-store facilities increased 5.1 percent, or $19.2 million, in the quarter, as compared to the same period in 2011, primarily because of higher realized annual rent per occupied square foot. Cost of operations for the same-store facilities declined by 1.4 percent, or $2.4 million, in the quarter as compared to the same period in 2011.

FFO was $1.38 per diluted common share, compared to $1.39 for the same period last year. NOI for same-store facilities increased 8.3 percent, or $20.9 million, in the quarter compared to the same period in 2011.

During the quarter, the company acquired four self-storage properties (316,000 net rentable square feet), in California (two), Florida and New York, for approximately $46 million. Public Storage has entered into contracts to purchase two more facilities for a combined $31 million.

The company reported a regular common quarterly dividend of $1.10 per common share. It also declared dividends with respect to various series of preferred shares. All the dividends are payable on Sept. 27 to shareholders of record as of Sept. 12.

Sovran Self Storage Inc. (Uncle Bob's Self Storage)

Total revenue increased 17 percent over last year's second quarter, while property operating costs increased 9.6 percent, resulting in an NOI increase of 21.3 percent.

FFO for the quarter were 77 cents per fully diluted common share, compared to 67 cents for the same period last year.

Net income available to common shareholders for the second quarter was $11.7 million, or 40 cents per fully dilated share. For the same period in 2011, net income available to common shareholders was $9.7 million, or 35 cents per fully diluted common share.

Average overall occupancy was 85.6 percent, with units renting for an average of $10.31 per square foot.

Sovran acquired five properties during the quarter, one each in Miami and Norfolk, Va., (existing markets) and two in Chicago, which is a new market for the company. The properties cost a combined $43 million and comprise 311,000 square feet of rentable space.

The company paid dividends of 45 cents per common share.