BUFFALO—Illustrating the strength in the sector, locally based Sovran Self Storage Inc. said first-quarter funds from operations was up 16.7% over the year prior. The self-storage REIT, which operates nearly 500 facilities nationwide under the Uncle Bob's Self-Storage brand, had an 18.9% year-over-year increase in NOI for the quarter that ended March 31.
“We had a strongfirst quarter,” says CEO David Rogers. “Our marketing and pricing strategies continue to attract customers who tend to stay with us for the long haul, and as a result we experienced fewer move-outs than we have in recent winters. This enabled us to maintain high occupancies throughout the slow leasing season, and it set us up well for the busy months to come.”
During Q1, SSS experienced positive same-store revenue and NOI growth in virtually every state in which it operates. The stores with the strongest revenue impact included in Texas, Florida, New York, North Carolina and Georgia.
That same-store tally could be larger a year from now. At quarter's end, SSS was under contract to acquire 17 self-storage facilities for about $120.7 million in cash. It acquired seven properties during Q1 in two separate transactions, for a total of $95.4 million.
Analysts at Baird Equity Research said the strong showing by SSS, and by Extra Space Storage in its Q1 numbers reported earlier this week, bore out its thesis for the sector. “Stable demand and historically high occupancies out of the seasonal trough would drive pricing power, and deal flow would remain strong”—predictions which were reflected in the two REITs' latest earnings. It bodes well, Baird analysts predicted, for Cubesmart and Public Self Storage, both scheduled to report their Q1 results after the market closes on Thursday.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
