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 also achieving increases in occupancy.

"We're pleased with the first quarter in that we achieved better than expected results in most of our markets, and with record-high occupancies and solid demand, are well-positioned as we enter the upcoming busy season," said David Rogers, CEO of Life Storage. "We're also encouraged with the continued ramp up of Life Storage Solutions, our third-party management division, as we grow our client base and expand our brand."

Joseph Margolis, CEO of Extra Space, expressed similar sentiments. "We are off to a solid start in 2018, with year-to-date performance progressing as planned,” he said. “We continue to have pricing power and maintained very high occupancy through the winter, which positions us well heading into our leasing season.”

CubeSmart

CubeSmart reported FFO per share of $0.39 during the quarter, an 8.3 percent year-over-year increase. Same-store NOI at its 458 facilities grew 4 percent year over year. The company attributed this to a 3.8 percent growth in revenue and a 3.4 percent increase in property operating expenses. Same-store locations contributed 95.5 percent of the REIT’s property NOI during the quarter.

Same-store physical occupancy averaged 91.9 percent during the quarter, (92.5 percent as of March 31), an increase of 20 basis points. The company’s total-owned portfolio, representing 485 facilities and comprising 33.8 million square feet of rentable space, had a physical occupancy of 90.3 percent at the end of the first quarter.

CubeSmart acquired a storage property in Texas during the quarter for $12.2 million. The REIT’s joint venture, HVP IV, purchased 4 properties for $51 million. Two are in Arizona, with one each in Maryland and Texas. CubeSmart contributed $10.3 million toward the acquisition.

On Feb. 13, the company declared a dividend of 30 cents per common share, which was equal to the previous quarter. The dividend was paid on April 16 to common shareholders of record on April 2.

CubeSmart owns or manages 981 self-storage facilities across the United States. Its operating portfolio comprises 66.3 million square feet.

Extra Space Storage Inc.

Same-store revenue increased 5.2 percent and NOI rose 4.5 percent compared to the same period in 2017. FFO was $1.08 per diluted share, resulting in 5.8 percent growth compared to the first quarter the previous year.

Same-store occupancy was 92.1 percent as of March 31, which was essentially equal year over year.

During the quarter, the company acquired three operating facilities at Certificate of Occupancy and assumed full control of another property from a joint-venture partner for $69.9 million. It also made one Certificate-of-Occupancy purchase and completed a development project with joint-venture partners for $22.8 million, of which the REIT’s contribution was $14.9 million.

The company paid a quarterly dividend of 78 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 1,523 self-storage properties in 39 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 1.05 million units and 115 million square feet of rentable space.

Life Storage Inc. (Formerly Sovran Self Storage Inc.)

Total revenue increased 3.7 percent over the previous year, while operating costs also grew 3.7 percent, resulting in an NOI increase of 3.7 percent. Same-store NOI increased 2.5 percent year over year, which was attributed primarily to a 2.6 percent bump in operating expenses. FFO for the quarter was $1.27 per fully diluted common share, compared to $1.26 for the same period in 2017. Adjusted FFO was $1.30, a 3.2 percent increase.

Net income attributable to common shareholders for the first quarter was $33.9 million, or $0.73 per fully diluted share. For the same period in 2017, net income attributable to common shareholders was $20.4 million, or $0.44 per fully diluted common share.

Revenue for the company’s 535 wholly owned stabilized facilities increased 2.5 percent year over year, helped by an increase in average occupancy of 150 basis points and 6 percent growth in income related to tenant insurance. Average overall occupancy for the quarter was 90.6 percent, with units renting for an average of $13.51 per square foot.

During the quarter, the REIT didn’t acquire any properties but added 10 facilities to its third-party management platform. The company expects to contribute up to $50 million toward joint-venture acquisitions this year.

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 700 self-storage facilities in 28 states under the Life Storage and Uncle Bob’s brands. Its portfolio of owned and managed facilities comprises more than 50 million square feet.

National Storage Affiliates Trust (NSAT)

Core FFO per share was $25.9 million during the first quarter, a 10.3 percent year-over-year increase. Its net income was $12 million during the quarter, a 66.7 percent gain compared to the $7.2 million it reported for the same period in 2017. Same-store NOI was $40.9 million, up 4.4 percent.

Same-store revenue was $60.8 million during the quarter, a 4.2 percent increase from a year ago. This was driven by a 4.4 percent increase in average annualized rental revenue per occupied square foot. Average occupancy was 87.2 percent as of March 31, down from 88.3 percent last year. Same-store average occupancy was 88.1 percent, down from 88.5 percent during the same period last year.

The company acquired 25 wholly owned self-storage facilities and one joint-venture property during the quarter for $145.3 million. The wholly owned facilities are in six states and comprise more than 1.4 million rentable square feet in about 12,000 units. The joint-venture purchase was in New Jersey. It comprises about 100,000 square feet in 500 units.

On Feb. 22, the company declared a quarterly dividend of $0.28 per common share, a 7.7 percent increase 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 541 storage facilities in 29 states. Its portfolio comprises approximately 34 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 2.1 percent, or $11.5 million, in the quarter, as compared to the same period in 2017, primarily because of higher realized annual rent per occupied square foot. Cost of operations for the same-store facilities increased 3.3 percent, or $5 million, during the period compared to the previous year.

FFO was $2.37 per diluted common share, compared to $2.34 for the same period the previous year, marking a 1.3 percent increase. NOI increased $13.6 million compared to the same period in 2017, including $6.5 million for same-store facilities.

The company acquired two self-storage facilities in Nebraska and Tennessee during the quarter for $18 million. Together they comprise 200,000 net rentable square feet. It also completed four new development and various expansion projects that added 500,000 net rentable square feet to its portfolio for $60 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 28 to shareholders of record as of June 13.

Based in Glendale, Calif., Public Storage has interests in 2,392 self-storage facilities in 38 states, with approximately 159 million net rentable square feet. Operating under the Shurgard brand name, the company also has 223 facilities in seven European countries, with approximately 12 million net rentable square feet.

Sources:
CubeSmart, CubeSmart Reports First Quarter 2018 Results
Extra Space, Extra Space Storage Inc. Reports 2018 First Quarter Results
Life Storage, Life Storage, Inc. Reports First Quarter 2018 Results; Raises Same Store Outlook for 2018
National Storage Affiliates Trust, National Storage Affiliates Trust Reports First Quarter 2018 Results
Public Storage, Public Storage Reports Results for the First Quarter Ended March 31, 2018

Self-storage facilities have various operating hours depending on ownership, location, staff and needs of the consumer base. Some provide around-the-clock admission, while others restrict access to standard business hours. In some cases, operation may be limited on weekends, or shortened on certain week days.

For sites with a closing time, ensuring the property is empty of tenants can be a challenge. A customer may show up just minutes before close, insisting on visiting his unit, or refuse to leave the site if he’s already there. On occasion, a user will “hide out,” hoping to escape the attention of staff.   

In a recent thread on Self-Storage Talk, the industry’s largest online community, members discuss how they deal with visitors who don’t adhere to the facility’s closing policies. What advice can you offer on this hot topic? See what others have to say and join the conversation.

Guardian Storage, which operates 22 self-storage facilities in Colorado and Pennsylvania, has expanded its presence with a multi-story building conversion in the Forest Hills suburb of Pittsburgh. The company invested $12.8 million in transforming the existing structure at 915 Brinton Road into 90,000 square feet of rentable space in more than 700 units. Guardian’s 17th location in the Pittsburgh market will officially open later this month, according to a press release.

The project included renovating a basement, two sublevel parking lots and nine floors. Security features include keypad access, individual unit alarms and property-wide video cameras.

“It’s a rewarding experience to take an existing building that was neglected for many years and turn it into something the community can once again embrace,” said Steven Cohen, president. “With every property, it’s our goal to make a positive impact in the community, and we feel like we not only accomplished this by offering a much-needed service to individuals, families and business professionals, but by also helping to revitalize a high-traffic area for the community.”

Pittsburgh-based Desmone Architects helped redesign the existing structure. Local firm Bridges Co. handled the construction.

Established in Pittsburgh in 1987, Guardian operates five self-storage facilities in Colorado and 17 in Pennsylvania. It also has a location in Bethel Park, Pa., scheduled to open this year, and a project scheduled for completion in Aurora, Colo., in 2019.

Jay Lynne Fleming, president and CEO of CVL Investments Ltd., is up for election as a director of StorageVault Canada Inc., which operates self-storage facilities throughout Canada. The vote will occur during the company’s annual shareholder meeting on May 30. Longtime director Rob Duguid isn’t seeking re-election, according to a press release. Following the vote, Fleming will be added to the five-person board.

After helping the Great Canadian Casino Co. Ltd. grow into a public company in 1997, Fleming entered the self-storage industry in 1999. She served as president and CEO of Storage for Your Life Solutions Inc., where she led a series of land and business acquisitions, development and financing. StorageVault acquired the company’s four-property portfolio in September 2015 for $52.5 million. The facilities comprised approximately 300,000 rentable square feet in more than 3,000 units.

Fleming currently serves on the acquisition committee for StorageVault and is an active member of the buildings and grounds committee for Mulgrave School in West Vancouver, Canada.

“We are excited to add Jay’s extensive industry experience, public-markets knowledge and operational expertise to our team,” said Steven Scott, who serves as CEO and a director. “On behalf of the board, shareholders and all stakeholders of StorageVault, we would like to thank Rob for his dedication, commitment, time and effort as a director of StorageVault. Rob has been with StorageVault as a director since 2009 and has been a valuable member of our team as we have grown throughout that period. We wish Rob all the best in the future.”

StorageVault shareholders will also have the opportunity to reaffirm board members. Up for re-election are Scott, Iqbal Khan, Al Simpson and Blair Tamblyn.

StorageVault operates several self-storage facilities in Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Quebec and Saskatchewan.

Source:
GlobeNewswire, StorageVault Announces Jay Lynne Fleming as Nominee for Director

Bluebird Self Storage, which operates four facilities in New Hampshire, will host a “Business After Hours” event for the Greater Rochester Chamber of Commerce on May 24, 5:30-7 p.m. The event will take place at the storage location, 201 Highland St., in Rochester, N.H.

Chamber members are invited to network, meet the Bluebird staff and learn about the facility. Door prizes will be awarded and refreshments will be served. Those interested in attending can register on the chamber website.

In addition to its Rochester location, Bluebird operates additional facilities in Bedford, Hooksett and Manchester, N.H. The sites are owned by Bluebird Storage LLC, which also owns the Greenland Self Storage brand.

Source:
Fosters.com, Bluebird Self Storage to Host Business After Hours

StorageMart, which operates 200 self-storage properties across Canada, the United Kingdom and the United States, has purchased two facilities in Clive and Des Moines, Iowa. The acquisition adds 100,000 square feet of storage space and 785 units to the company’s portfolio. It now operates 19 locations in the region, according to a press release.

The newly acquired properties are Preferred Storage at 2155 N.W. 94th St. in Clive and Fleur Mini Storage at 1900 Hackley Ave. in Des Moines. Both contain single-level buildings with drive-up units, keypad entry and video cameras, the release stated.

StorageMart acquired two other facilities in the Des Moines metropolitan market in February. Together, the locations in Grimes and Waukee comprise more than 50,000 square feet of storage space in 450 units.

“We're growing again and are well on our way to hitting 300 stores by 2021,” said Cris Burnam, president. “We're excited to open two more locations, and look forward to bringing easy, clean storage service to more people.”

Founded in 1999 and based in Columbia, Mo., StorageMart is privately owned and operated by the Burnam Family, which has been in the storage industry for three generations. Its portfolio consists of more than 12 million square feet of storage. It serves more than 75,000 self-storage customers, and operates in Chinese, English, Punjabi, Quebecois French and Spanish.

Source:
PR News, StorageMart Expands with Self Storage Facilities in Clive and Des Moines, IA

 

When designing a self-storage project, it’s critically important to understand the necessary steps and team members involved before getting to final construction or permitted drawings. A typical development can involve more than a dozen advisors, consultants and contractors. Without a clear understanding of each person’s role in the process or the appropriate time to engage each party, an owner or developer can find himself over budget, behind schedule or at risk of losing the deal all together.

A little time spent on the front end of a plan can save a lot of time, energy and money, not only on the design process but, more important, on your construction budget. Here are some guidelines to ensure everyone is working seamlessly toward the same goal.

Identify Your Team

Identify your consultants before you need them, not when you need to hire them. Ask construction and development professionals in your local or target market for recommendations. Interview at least three of the following before beginning any design work:

• Civil engineer: The company may offer in-house surveying.
• Geotechnical engineer: The company might provide environmental services.
• Architect: Ideally, he should handle structural and mechanical, electrical and plumbing.
• Zoning/land-use attorney
• General counsel
• General contractor: The level of engagement depends on how you decide to contract, but their input is critical.
• Property manager/feasibility consultant: While likely less involved in the continuous design process, his input can be invaluable along the way.

Interview these people as if you were hiring an employee. Consider asking these questions:

• Have you ever worked on a self-storage project? If so, which ones?
• Are you familiar with the jurisdiction in which I’m planning to develop? (This may include the local city as well as the county and department of transportation.) If so, what was your experience—good/bad/other?
• Do you have the capacity to handle my project?
• Who will be my “point person” in your office?
• How long from the time we execute an agreement before various steps in the design process will be complete?
• How are your fees structured? Are they billed upon delivery of various phases and broken out by scope? What will you charge if we must deviate from the defined scope?

Also, ask if they know about or have opinions on any of the other professionals you’re considering. I don’t mean their direct competition, but the other disciplines with which they’ll be required to work during the project.

Communicate Your Goals

Define and clearly communicate the team’s goals along the way. This may sound simple, but failure to clearly define your specific goals—in your own mind and with members—makes it likely someone will miss the mark at some point during the process. While the objectives may change along the way, it’s your job ensure everyone is focused on accomplishing the same tasks.

For example, let’s say you’re in the zoning-entitlement phase, with the goal to get approval from the local jurisdiction. Unfortunately, your architect was late getting you the elevations for submittal because he was working on optimizing the unit mix, which has no impact on zoning approval. If you’re the owner, you lead the design team to ensure everyone is marching toward the same target at any given time.

Engage in the Correct Order

Engage your team from the ground up, not the roof down. The design process can be costly and time-consuming. You can avoid wasting resources by thinking from the ground up, starting with the soil and site. For example, it makes no sense to involve an architect first if he doesn’t know how the building will sit on the site—information that comes from your civil engineer.

Everyone is going to want to make sure your soils can sustain your proposed improvements, so have a geotechnical engineer run soil tests based on the layout. A civil engineer can’t layout the building without a reliable survey.

Design for Approval

Unless you’re in a jurisdiction with by-right zoning and no site-plan or design-elevation approvals, you’ll need to obtain some level of approval from your local jurisdiction before submitting your construction drawings. Have a clear understanding of the design documents you need to present to obtain zoning/land use, utility, access or site approval. This is a good time to engage your zoning/land-use attorney to make sure your civil engineer and architect are drafting design documents in accordance with submittal requirements, arranging meetings with any public officials or staff to discuss preliminary plans and concepts, and ensuring that any rolling submittal deadlines are met.

Review Progress

When should the design team review its progress? Early and often! As a project advances, opportunities for value engineering (construction cost savings) diminish, so have the various members review and comment on each other’s work along the way. While one may always have done something a particular way, another might see an opportunity to accomplish the same task in a more cost-effective or timely manner.

This cross-checking should generate healthy dialogue among the group but, ultimately, you are the decision-maker. It’s impossible to be an expert in all subject matter, but in most cases, you can determine the correct answer by asking:

1. Will it cost more money?
2. Will it take more time?
3. Will it have a significant positive or negative impact on my project’s performance?

Obviously, this is a simplistic approach, but it can come in handy when you don’t have a clear handle on the technical merits or downsides to a solution being discussed.

Understand the Stages

A typical project’s design lifecycle includes the following stages. Starting on the right foot is critical. It’s also highly recommended that you take the time to review the drawings as a team after each stage. This small extra step and time can save you significantly down the road.

• Programming/scope meeting: This is a chance to confirm there aren’t any “scope gaps” in the team, wherein one person thinks another is in charge of something he himself should be doing. This is also an ideal opportunity to define the expected timelines for the work and various deliverables for each team member, and to establish a clear and consistent method of communication for the project. This can come in the form of a simple weekly or bi-weekly conference call or meeting, or regular updates to a “living” document all members can access.
• Conceptual design: This typically includes the preliminary site plan, floor plans, and possibly building elevations or sections as required. (Stop: Have the team review and comment on the plans.)
• Schematic design: This involves diagrammatic plans that document dimensions and relationships of various elements. It should include proposed locations of utilities and systems, but may not include final dimensioning and sizing. (Stop: Have the team review and comment on the plans.)
• Design development: This involves further developed plans and elevations; most dimensions, specifications and details have been included, but not all. (Stop: Have the team review and comment on the plans.)
• Construction drawings: Comprehensive drawings and specifications are ready to submit for permit or to obtain final bidding for construction.
• Permitting: It’s likely permitting review will require some revisions to your as-submitted plans, so make sure your team communicates any required revisions to you and you understand their implications.
• Construction: A good general contractor will have ongoing communication with your team to ensure the work in the field meets or exceeds the designer’s intent. They also might identify cost savings you can approve or deny. This is usually handled through a “request for information.”
• Project close-out: Have members of your team walk through the project at close-out and help you create your punch list.

An effective design team is critical and, although they’re third-party groups, you should treat them like company assets. Good consultants and advisors can be challenging to find, especially during hot development cycles like the one we’re currently experiencing. The stronger of a relationship you can establish with them, the more they’ll want to perform good work for you, and the more you can identify their strengths and weaknesses. This will allow you to plan accordingly on the next project.

Jim Berry is a managing member of RRB Development LLC, which develops self-storage facilities in the Southeast. His experience includes mixed-use master-planned communities, “new urbanist” projects, and a variety of commercial and residential properties. He applies his experience to the development of urban-infill self-storage assets. For more information, call 404.643.8245; visit www.rrbdevelopment.com. 

Tim Stinson, owner of Goderich Self Storage in Goderich, Ontario, Canada, has donated $25,000 to a fundraising campaign for Goderich Recreation Park, a multi-sport community park slated to open in spring 2019. The new venue will include baseball and soccer fields, a skate park, playground, and a pavilion.

The $3.6 million project is being financed by the town via reserved funds allocated for recreation, grants and budget allocations of $200,000 per year over a 12-year amortization, according to the town’s website. In addition, the Goderich Recreation Park Revitalization Committee was tasked by the town council to raise $1.1 million. To date, it has raised $1 million, according to its Facebook page.

Goderich Self Storage annually sponsors local youth who play baseball and hockey. In addition, Stinson volunteers as a coach for youth sports teams.

“Goderich Self Storage continues to be a great supporter of youth sports and recreation in our community,” said Trevor Bazinet, a town councilor and member of the revitalization committee. “With the support of businesses like Goderich Self Storage, a sports park of this magnitude will be one of the best things to happen in Goderich in a long time. These are exciting times for the town of Goderich.”

Donating to the cause was a “natural fit” for the storage business, Stinson said. “We believe youth sports are incredibly important to the vibrancy and sustainability of our community. We want to see our kids and our teams succeed.”

Locally owned and operated, Goderich Self Storage serves the communities in Huron County. The facility recently added a new building featuring climate-controlled storage to its property, according to its website.

Sources:
Goderich Signal Star, Goderich Self Storage Supports Rec Park
Goderich Town, The New Goderich Recreation Park!

The Jenkins Organization Inc., a Houston-based developer and operator of 45 self-storage facilities in five states, has hired Courtney Jenkins as director of marketing. Jenkins has a background in media, and was previously employed as an account executive at Cox Media Group Inc., where she was responsible for selling and executing radio and digital-advertising campaigns in various markets for nearly five years. While with the company, she was named a “Rising Star” by the Media Alliance of Houston, a chapter of the Alliance for Women in Media.

Jenkins earned a degree in advertising from The University of Texas at Austin. “I am thrilled to be on board with The Jenkins Organization, and I am excited to be able to give back to this business,” she said. “At the rate this company is growing, it’s important to have someone who oversees and implements a strong marketing plan for all of the properties.”

Jenkins has opened several sites in Texas in recent weeks, including Murphy Self Storage in Murphy, and ATX Storage and Lakeline Storage in Austin. It also has three acquisitions, seven new developments and five expansions underway, all in Texas and slated to be complete within the next year. The projects total more than 1.2 million square feet of storage space and represent a $125 million investment, according to company officials.

Formed in 1989, Jenkins has an ownership and management portfolio comprising more than 3.5 million square feet of storage space in Louisiana, Minnesota, Missouri, Oklahoma and Texas.