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). Occupancy figures tended to stay about equal.
“First quarter results represent a solid start to the year,” said Christopher P. Marr, president and CEO of CubeSmart. “We continue to experience broad-based customer demand across our portfolio. With a solid U.S. economy, high employment and low interest rates, consumer confidence remains elevated and creates a positive environment for our product as we enter the prime rental season.”
“We are pleased to report solid results in the first quarter. Despite the absorption of new supply, we continue to drive revenue growth while controlling operating costs,” added Joseph Saffire, who assumed the Life Storage CEO role from David Rogers on March 1. “Our international expansion is gaining traction, and our asset rotation strategy is repositioning our company for future growth. While the program comes with minor short-term dilution, we believe the long-term strategy of selective asset recycling will ultimately benefit our shareholders.”
CubeSmart
CubeSmart reported FFO per share of $0.40 during the quarter, a 2.6 percent year-over-year increase. Same-store NOI at its 468 facilities grew 2.8 percent year over year. The company attributed this to a 2.6 percent growth in revenue and a 2.2 percent increase in operating expenses. Same-store locations contributed 95.3 percent of the REIT’s property NOI during the quarter.
Same-store physical occupancy was 92.1 percent as of March 31, which was equal to last year. The company’s total-owned portfolio, representing 494 facilities and comprising 34.7 million square feet of rentable space, had a physical occupancy of 90.2 percent at the end of the first quarter.
CubeSmart acquired one storage property in Maryland during the quarter for $22 million. Through joint ventures, the company has seven development properties under construction in which it’ll invest about $183 million.
On Feb. 19, the company declared a dividend of 32 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 1,086 self-storage facilities across the United States. Its operating portfolio comprises 75 million square feet.
Extra Space Storage Inc.
Same-store revenue increased 4.2 percent and NOI rose 4.8 percent compared to the same period in 2018. Core FFO, excluding adjustments for non-cash interest, was $1.16 per diluted share, resulting in 6.4 percent growth compared to the first quarter the previous year.
Same-store occupancy was 91.6 percent as of March 31, which was essentially equal year over year.
During the quarter, the company acquired two facilities at Certificate of Occupancy (C of O) and bought out a joint-venture partner’s interest in 12 properties for $222.3 million. In conjunction with joint-venture partners, the REIT also acquired one operating facility and made six C of O purchases for a total cost of approximately $210.6 million, of which the company contributed $47.7 million.
The company paid a quarterly dividend of 86 cents per common share, which was equal to the previous quarter. It was paid on March 29 to common shareholders of record on March 15.
Headquartered in Salt Lake City, Extra Space owns or operates 1,696 self-storage properties in 40 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 1.2 million units and 130 million square feet of rentable space.
Life Storage Inc.
Total revenue increased 2.6 percent over the previous year, while operating costs increased 3 percent, resulting in an NOI increase of 2.3 percent. Same-store revenue grew 2.4 percent, while same-store NOI increased 2.5 percent, year over year. FFO for the quarter was $1.32 per fully diluted common share, compared to $1.27 for the same period in 2018. Adjusted FFO was $1.31, a .8 percent increase.
Net income attributable to common shareholders for the fourth quarter was $34.5 million, or $0.74 per fully diluted share. For the same period in 2018, net income attributable to common shareholders was $33.9 million, or $0.73 per fully diluted common share.
Revenue for the company’s 538 wholly owned stabilized facilities increased 2.4 percent year over year, helped by a 3.5 percent growth in rental rates and partially offset by a decrease in average occupancy of 110 basis points. Same-store financial results for the first quarter don’t include tenant-insurance revenue, due to the REIT’s decision to transition from a third-party product to an inhouse offering, officials said.
Average overall occupancy for the quarter was 89.4 percent, with units renting for an average of $14.01 per square foot.
During the quarter, the REIT acquired a facility in Tampa, Fla., and one in Queens, N.Y., for $66.5 million. In the New York deal, Life Storage purchased the remaining 60 percent interest owned by a joint-venture partner. The company also entered into separate joint-venture agreements on two properties in Ontario, Canada. It will manage both facilities.
Subsequent to the end of the quarter, the company approved a quarterly dividend of $1 per common share, which is equal to the previous quarter.
Based in Buffalo, N.Y., Life Storage operates more than 750 self-storage facilities in 28 states and Ontario, Canada. Its portfolio of owned and managed facilities comprises more than 55.8 million square feet.
National Storage Affiliates Trust (NSAT)
Core FFO per share was 0.37 during the third quarter, a 15.6 percent year-over-year increase. Its net income was $12.9 million during the quarter, an 8.1 percent increase compared to the same period in 2018. The increase was primarily attributed to $10.1 million in NOI generated from 64 wholly owned properties acquired during the previous 12 months. Same-store NOI was $50 million, up 6.7 percent.
Same-store revenue was $72.3 million during the quarter, a 4.8 percent increase from a year ago. This was driven primarily by a 4 percent increase in average annualized rental revenue per occupied square foot and growth in average occupancy of 40 basis points. Same-store average occupancy was 87.7 percent, up from 87.3 percent during the same period in 2018.
During the quarter, the company acquired 32 wholly owned facilities across 10 states for $194.6 million. facilities in four states for $51.4 million. The properties comprise about 1.7 million net rentable square feet in approximately 15,000 units. The REIT also added Moove In Self Storage and Southern Self Storage as its ninth and 10th participating regional operators.
On Feb. 21, the company declared a quarterly dividend of $0.30 per common share, which was up 3.4 percent from the previous quarter. It was paid on March 29 to holders of record on March 15.
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 709 storage facilities in 35 states and Puerto Rico. Its portfolio comprises approximately 44.9 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 1.5 percent, or $8.7 million, in the quarter, as compared to the same period in 2018, primarily because of higher realized annual rent per occupied square foot. Operations costs for same-store facilities increased 3.9 percent, or $6.3 million, during the period compared to the previous year.
FFO was $2.52 per diluted common share, compared to $2.37 for the same period the previous year, marking a 6.3 percent increase. NOI increased $7.4 million compared to the same period in 2018, including $5.1 million for same-store facilities.
The company acquired 12 self-storage facilities comprising 800,000 rentable square feet during the quarter for $81.3 million. Nine of the properties are in Virginia, with one each in Florida, Georgia and Kentucky. It also completed four new development and various expansion projects that added 1.6 million net rentable square feet to its portfolio for $133.5 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 27 to shareholders of record as of June 12.
Based in Glendale, Calif., Public Storage has interests in 2,444 self-storage facilities in 38 states, with approximately 164 million net rentable square feet. Operating under the Shurgard brand name, the company also has 231 facilities in seven European countries, with approximately 13 million net rentable square feet.
Sources:
CubeSmart, CubeSmart Reports First Quarter 2019 Results
Extra Space, Extra Space Storage Inc. Reports 2019 First Quarter Results
Life Storage, Life Storage Inc. Reports First Quarter 2019 Results
National Storage Affiliates, National Storage Affiliates Trust Reports First Quarter 2019 Results
Public Storage, Public Storage Reports Results for the First Quarter Ended March 31, 2019
