), a leading real estate investment trust (REIT) operating
self-storage facilities, reported core FFO (funds from
operations) of $1.65 per share, 3 cents ahead of the Zacks
Consensus Estimate of $1.62 per share and 14.6% ahead of the
prior-year quarter core FFO of $1.44 per share. The increase in
FFO per share was primarily due to improved property operations
resulting in a surge in net operating income.
DUKE REALTY CP (DRE): Free Stock Analysis
HOST HOTEL&RSRT (HST): Free Stock Analysis
PUBLIC STORAGE (PSA): Free Stock Analysis
PS BUSINESS PKS (PSB): Free Stock Analysis
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After taking into account the impact of a number of non-core
items, reported FFO came in at $1.57 per share, representing an
uptick of 16.3% from the year ago figure of $1.35 per share.
During the reported quarter, Public Storage recorded a 7.1%
year-over-year increase in total revenue to $439.7 million. Yet,
the revenue figure narrowly missed the Zacks Consensus Estimate
of $445 million.
Quarter in Detail
Same-store revenues increased 5.4% year over year to $409.6
million during the quarter, while net operating income (NOI)
climbed 9.5% to $278.2 million. The increase in same-store
revenues was primarily due to a 3.7% rise in realized annual rent
per occupied square foot to $13.79. Occupancy in the same-store
portfolio also increased 160 basis points (bps) to 92.4% at
quarter-end from 90.8% in the prior-year period.
During the reported quarter, same-store revenues in Shurgard
Europe decreased 2.0% year over year to $47.0 million. Same-store
NOI for Shurgard Europe fell 0.9% from the prior-year quarter to
$26.9 million. While the company experienced a 2.1% year-over-
year increase in realized annual rent per occupied square foot to
$26.57, it was offset by a 370 bps year-over-year decline in
occupancy level to 80.0% at the end of the first quarter of 2013.
During first quarter 2013, Public Storage acquired 2 self-storage
facilities for about $14 million in cash. The properties are
located in Arizona and Georgia and comprise 149,000 net rentable
square feet of self-storage space.
Furthermore, Public Storage is under a contract to purchase a
facility in Arizona for around $8 million in cash. This facility
has 80,000 net rentable square feet of self-storage space.
At the end of the first quarter of 2013, Public Storage had
$398.3 million of cash and cash equivalents, compared with $17.2
million at year-end 2012.
During the first quarter, the company generated gross proceeds of
$500 million through issuance of 5.20% Series W Preferred Shares.
Moreover, it reaped in $225 million as gross proceeds by issuing
5.20% Series X Preferred Shares.
Concurrent with its earnings release, Public Storage announced a
quarterly dividend of $1.25 per common share. The dividend will
be paid on Jun 27, 2013 to shareholders of record as of Jun 12,
2013. Notably, the company had hiked its quarterly dividend
rate by 14% in the prior quarter.
We are encouraged by the better-than-expected results at Public
Storage. We believe that the company is well poised to maintain
its growth curve backed by its robust presence in all the major
markets in the U.S.
It is the leading owner and operator of storage facilities in the
U.S. and has significantly increased the scale and scope of its
operations through the acquisition of Shurgard Storage Centers
that has a considerable presence in the European markets.
It also owns a 41% common equity interest in
PS Business Parks Inc.
), which owns and operates commercial space, primarily flex,
multi-tenant office and industrial space.
Public Storage currently has a Zacks Rank #2 (Buy). A number of
other REITs that are also performing well and deserve a look
Duke Realty Corporation
Host Hotels & Resorts Inc.
), both carrying a Zacks Rank #2.
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.