), a leading real estate investment trust (REIT) operating
self-storage facilities, reported third quarter 2012 FFO (funds
from operations) of $1.73 per share compared with $1.29 in the
year-earlier quarter, representing a year-over-year increase of
34.1%. The surge in reported FFO was primarily due to improved
property operations and impact of foreign currency translations.
PUBLIC STORAGE (PSA): Free Stock Analysis
SOVRAN SLF STOR (SSS): Free Stock Analysis
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Excluding several non-recurring items, FFO for third quarter 2012
was $1.76 per share compared with $1.56 in the year-ago quarter.
Recurring FFO for the third quarter of 2012 beat the Zacks
Consensus Estimate by 8 cents.
During the reported quarter, Public Storage recorded a 5.8%
increase in total revenues to $472.9 million from $445.6 million
in the year-earlier quarter. Total revenues for the reported
quarter were well ahead of the Zacks Consensus Estimate of $450
Same-store revenues increased 4.8% year over year to $412.6
million during the quarter, while net operating income (NOI)
climbed 7.9% to $294.1 million. The increase in same-store
revenues was primarily due to a 4.5% rise in realized annual rent
per occupied square foot to $13.79. Occupancy in the same-store
portfolio was 92.5% at quarter-end versus 91.7% in the prior-year
Public Storage currently has a 49% stake in Shurgard Europe,
which has interests in 189 facilities (10 million net rentable
square feet) located in seven Western European countries. Public
Storage is also the managing member of the JV that owns Shurgard
During the reported quarter, same-store revenue in Shurgard
Europe decreased 2.0% to $47.0 million due to the continued
sovereign debt crisis and concerns over euro. Same-store NOI for
Shurgard Europe increased 2.1% year over year to $27.7 million,
driven by a 1.3% rise in realized annual rent per occupied square
foot to $25.65.
During third quarter 2012, the company acquired four self-storage
properties for $56 million cash. Spanning 300,000 net rentable
square feet, two of the acquired properties are located in
Hawaii, and one each in California and New Jersey. Subsequent to
the quarter-end, Public Storage acquired four additional
self-storage facilities (409,000 net rentable square feet) in
Texas, New York, Georgia, and Arizona for $43 million in cash.
The company is currently under contract to acquire two additional
properties in Georgia and California for $21 million.
At quarter-end, Public Storage had $535.8 million of cash and
cash equivalents. The company maintained its quarterly dividend
at $1.10 per share. Funds from operations available for
distribution (FAD) among common shareholders exceeded the regular
common distributions by about $101.7 million during the quarter.
We maintain our Neutral rating on the stock, which presently has
a Zacks #3 Rank, translating into a short-term Hold rating. We
also have a Neutral recommendation and a Zacks #3 Rank for
Sovran Self Storage Inc.
), one of the competitors of Public Storage.
Note: FFO, a widely used metric to gauge the performance of
REITs, is obtained after adding depreciation and amortization and
other non-cash expenses to net income.