Public Storage
(
PSA
), a leading real estate investment trust (REIT) operating
self-storage facilities, reported first quarter 2012 FFO (funds
from operations) of $1.35 per share, compared with $1.48 in the
year-earlier quarter. Fund from operations, 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.
Excluding several non-recurring items, FFO for first quarter
2012 was $1.44 per share compared with $1.28 in the year-ago
quarter. Recurring FFO for first quarter 2012 beat the Zacks
Consensus Estimate by 2 cents.
During the reported quarter, Public Storage recorded an increase
in total revenues to $442.6 million from $419.7 million in the
year-earlier quarter. Total revenues for the reported quarter were
well ahead of the Zacks Consensus Estimate of $424 million.
Same-store revenues increased 4.8% year-over-year to $383.9
million during the quarter, while net operating income climbed 6.3%
to $253.2 million. The increase in same-store revenues was
primarily due to a 0.6% increase in average occupancy and a 4.1%
rise in realized annual rent per occupied square foot.
Occupancy in the same-store portfolio was 90.3% at quarter-end
versus 89.8% in the prior-year period. Realized annual rent per
occupied square foot increased from $12.65 in the year-earlier
quarter to $13.17 in the reported quarter.
Public Storage currently has a 49% stake in Shurgard Europe,
which has interests in 189 facilities (10 million net rentable
square feet) located in 7 Western European countries. Public
Storage is also the managing member of the JV that owns Shurgard
Europe.
During the reported quarter, Public Storage acquired 6
self-storage facilities spanning 532,000 square feet of net
rentable space for $42 million. The properties were located in
California, Florida, Massachusetts, New Jersey and Pennsylvania. In
addition, Public Storage acquired the remaining ownership interests
in 3 consolidated partnerships for approximately $19.9 million in
cash and assumed an existing debt of $4.8 million. The company is
also currently under negotiations to acquire 4 facilities (316,000
net rentable square feet, 2 in California and 1 each in New York
and Florida) for approximately $46 million in cash.
During first quarter 2012, the company replaced its erstwhile
credit facility with a new credit facility with a borrowing
capacity of $300 million and scheduled to mature in March 2017. At
quarter-end, Public Storage had $620.1 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 $49.3 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.
(
SSS
), one of the competitors of Public Storage.
PUBLIC STORAGE (PSA): Free Stock Analysis
Report
SOVRAN SLF STOR (SSS): Free Stock Analysis
Report
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