Life Storage, Inc. Reports Fourth Quarter and Full Year 2020 Results

February 22, 2021 4:15 PM EST

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BUFFALO, N.Y.--(BUSINESS WIRE)-- Life Storage, Inc. (NYSE: LSI), a leading national owner and operator of self-storage properties, reported operating results for the quarter and year ended December 31, 2020. All share and per share information has been retrospectively adjusted to reflect the January 2021 three-for-two stock split made in the form of a 50% stock dividend.

Highlights for the Fourth Quarter Included:

  • Generated net income attributable to common shareholders of $41.6 million, or $0.57 per fully diluted common share.
  • Achieved adjusted funds from operations (“FFO”)(1) per fully diluted common share of $1.07, an 11.5% increase over the same period in 2019.
  • Increased same store revenue by 4.9% and same store net operating income (“NOI”)(2) by 6.8%, year-over-year.
  • Acquired nine stores for $113.0 million, including one store from one of our unconsolidated joint ventures for $11.5 million.
  • Added 21 stores to the Company’s third-party management platform.

Highlights for the Full Year Included:

  • Generated net income attributable to common shareholders of $151.6 million, or $2.13 per fully diluted common share.
  • Achieved adjusted funds from operations (“FFO”)(1) per fully diluted common share of $3.97, a 5.9% increase over the same period in 2019.
  • Increased same store revenue by 1.6% and same store net operating income (“NOI”)(2) by 2.3%, year-over-year.
  • Acquired 40 stores for $532.6 million, including 32 stores from three of our unconsolidated joint ventures for $431.1 million.
  • Added 77 stores to the Company’s third-party management platform; the Company grew its third-party management portfolio 11% in 2020 despite acquiring 32 previously managed stores from unconsolidated joint ventures.
  • Completed a $400 million offering of 2.2% Senior Unsecured Notes due 2030.
  • Bolstered Warehouse Anywhere’s ecommerce solution through a partnership with Deliverr, a leading technology-enabled fulfillment organization, with the build-out of a micro-fulfillment center in Las Vegas and a second launched in Chicago in the first quarter of 2021.
  • Launched “Rent Now 2.0,” the Company’s dynamic pricing, second generation, fully-digital rental platform that allows customers to self-serve and move into their storage unit with no human interaction; the new pricing alternatives allow customers to select a storage unit from one of three convenience and pricing-based tiers according to their individual needs and preferences.

Joe Saffire, the Company’s Chief Executive Officer, stated, “I am so proud of what our team accomplished in 2020 despite the challenges of the COVID-19 pandemic. We quickly adapted to operate in a manner designed to keep our teammates and customers safe. Rent Now contributed to differentiated performance as we grew same store occupancy significantly by year end, up more than 300 basis points, year-over-year. We invested more than $500 million in store acquisitions, while growing our total store count by 8.5%. Additionally, we positioned Warehouse Anywhere to capitalize on the significant consumer shift toward ecommerce. I believe we are very well positioned to continue executing on our strategic initiatives to further grow shareholder value in 2021 and beyond.”

FINANCIAL RESULTS:

In the fourth quarter of 2020, the Company generated net income attributable to common shareholders of $41.6 million or $0.57 per fully diluted common share, compared to net income attributable to common shareholders of $43.5 million, or $0.62 per fully diluted common share, in the fourth quarter of 2019. Net income in the same quarter last year benefited from a $4.8 million gain on sales of storage facilities and real estate.

For the year ended December 31, 2020, the Company achieved $151.6 million of net income attributable to common shareholders, or $2.13 per fully diluted common share, as compared to $258.7 million, or $3.70 per fully diluted common share, for the year ended December 31, 2019. The decrease in net income was largely attributable to the $104.4 million gain on sale of storage facilities in 2019.

Funds from operations for the quarter were $1.02 per fully diluted common share compared to $0.97 for the same period last year. After adjusting for the $4.0 million impact of a make-whole payment on a repaid note, adjusted FFO per fully diluted common share for the quarter was $1.07, compared to $0.96, after adjusting for $1.1 million for a gain on sale of land and acquisition fees, for the quarter ended December 31, 2019.

For the year ended 2020, FFO per fully diluted common share was $3.90 compared to $3.80 for the same period last year. Absent the $5.0 million impact in 2020 due to the make-whole payment, uninsured damages and customer reinsurance claims (net) resulting from hurricane damage in September 2020, a gain on sale of land and acquisition fees, adjusted FFO per fully diluted common share for the year was $3.97. Adjusted FFO for the year ended 2019 was $3.75, after adjusting for the impact of $3.4 million of a lawsuit settlement, gain on sale of land, acquisition fee income and costs related to an officer’s retirement.

OPERATIONS:

Revenues for the 515 stabilized stores wholly owned by the Company since December 31, 2018 increased 4.9% in the fourth quarter of 2020 compared to the same quarter of 2019. The increase largely resulted from the net impact of a 310 basis point increase in average occupancy.

Same store operating expenses increased 1.0% for the fourth quarter of 2020 compared to the prior year period, the result of increased repair and maintenance, payroll and benefits, office and other operating expense and insurance costs. The increases were offset by decreases in real estate taxes, utilities and marketing expenses. Same store NOI increased 6.8% in the fourth quarter of 2020 as compared to the fourth quarter of 2019.

Same store payroll and benefits included a one-time bonus payment to select store team members totaling $0.3 million in aggregate in recognition of their successful efforts rapidly implementing revised store procedures in response to the COVID-19 pandemic. Had that payment not occurred, same store payroll and benefits would have increased only 0.7%, rather than 3.9%, in the fourth quarter of 2020, compared to the same period last year.

During the fourth quarter of 2020, the Company achieved same store revenue growth in 28 of its 30 major markets. Overall, the markets with the strongest positive revenue impact were New York-Newark-Jersey City, New England-Other, Buffalo-Upstate, Boston and Chicago.

PORTFOLIO TRANSACTIONS:

During the quarter, the Company acquired nine stores in Florida (3), California (2), New Jersey (1), Missouri (1), South Carolina (1) and New York (1) for a total purchase price of $113.0 million.

At December 31, 2020, the Company was under contract to acquire 10 self-storage facilities in California (1), Florida (8) and South Carolina (1) for an aggregate purchase price of $111.3 million. During January 2021, the Company completed the acquisition of the two self-storage facilities in California and South Carolina for an aggregate purchase price of $26.3 million. Subsequent to December 31, 2020, the Company entered into contracts to acquire three self-storage facilities in Washington (2) and New York (1) for an aggregate purchase price of $87.9 million. The purchases of the remaining facilities are subject to customary conditions to closing, and there is no assurance that any of these facilities will be acquired.

THIRD-PARTY MANAGEMENT:

The Company continues to aggressively and profitably grow its third-party management platform. During the quarter, the Company added 21 stores. As of quarter end, the Company managed 330 facilities in total, including those in which it owns a minority interest.

FINANCIAL POSITION:

At December 31, 2020, the Company had approximately $54.4 million of cash on hand, and approximately $499.9 million available on its line of credit.

During the three months ended December 31, 2020, the Company issued 1,877,742 shares of common stock under its continuous equity offering program at a weighted average issue price of $75.60 per share, generating net proceeds after expenses of $140.5 million. The Company filed a new $500 million continuous equity offering program on December 29, 2020, and in early January 2021 issued an additional 1,205,009 shares of common stock under this program at a weighted average issue price of $78.79, generating net proceeds after expenses of $94.0 million.

Below are key financial ratios at December 31, 2020:

• Debt to Enterprise Value (at $79.59/share)

   

27.2%

• Debt to Book Cost of Storage Facilities

   

41.5%

• Debt to Recurring Annualized EBITDA

   

5.4x

• Debt Service Coverage

   

4.7x

STOCK SPLIT AND COMMON STOCK DIVIDEND:

Subsequent to quarter end, the Company completed a three-for-two stock split, which was made in the form of a 50% stock dividend. The additional shares were distributed on January 27, 2021 and Life Storage’s common stock began trading on a split-adjusted basis on January 28, 2021.

Also subsequent to quarter end, Life Storage’s Board of Directors approved a quarterly dividend of $0.74 per share, or $2.96 annualized, on a post-split basis. The dividend was paid on January 27, 2021 to shareholders of record on January 15, 2021.

YEAR 2021 EARNINGS GUIDANCE:

The following assumptions covering operations have been utilized in formulating guidance for 2021:

Year 2021 Earnings Guidance

 

Current Guidance

 

 

 

Range

Same Store Revenue

 

3.75%

 

-

 

4.75%

 

Same Store Operating Costs (excluding property taxes)

 

2.25%

 

-

 

3.25%

 

Same Store Property Taxes

 

6.75%

 

-

 

7.75%

 

Total Same Store Operating Expenses

 

4.00%

 

-

 

5.00%

 

Same Store Net Operating Income

 

3.75%

 

-

 

4.75%

 

General & Administrative

 

$56M

 

-

 

$57M

 

Expansions & Enhancements

 

$40M

 

-

 

$50M

 

Capital Expenditures

 

$21M

 

-

 

$26M

 

Wholly Owned Acquisitions

 

$350M

 

-

 

$450M

 

Joint Venture Investments

 

$20M

 

-

 

$25M

 

Adjusted Funds from Operations per Share

 

$4.18

 

-

 

$4.28

 

 

 

1Q 2021

 

FY 2021

Reconciliation of Guidance

Range or Value

 

Range or Value

Earnings per share attributable to common shareholders - diluted

$0.55 - $0.59

 

$2.39 - $2.49

Plus: real estate depreciation and amortization

0.43 - 0.43

 

1.79 - 1.79

FFO per share

$0.98 - $1.02

 

$4.18 - $4.28

The Company’s 2021 same store pool consists of the 531 stabilized stores wholly owned since December 31, 2019. Twenty-two of the stores purchased through December 31, 2020 at certificate of occupancy or that were in the early stages of lease-up are not included, regardless of their current occupancies. The Company believes that occupancy levels achieved during the lease-up period, using discounted rates, are not truly indicative of a new store’s performance, and therefore do not result in a meaningful year-over-year comparison in future years. The Company will include such stores in its same store pool in the second year after the stores achieve 80% sustained occupancy using market rates and incentives.

FORWARD LOOKING STATEMENTS:

When used in this news release, the words “intends,” “believes,” “expects,” “anticipates,” and similar expressions are intended to identify “forward-looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933 and in Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the effect of competition from new self-storage facilities, which would cause rents and occupancy rates to decline; risks associated with the COVID-19 global health crisis or similar events, including but not limited to (i) the impact to the health of our employees and/or customers, (ii) the negative impacts to the economy and to self-storage customers which could reduce the demand for self-storage or reduce our ability to collect rent, (iii) reducing or eliminating our ability to increase rents charged to our current or future customers, (iv) limiting our ability to collect rent from or evict past due customers, (v) we could see an increase in move-outs of longer-term customers due to the economic uncertainty and significant rise in unemployment resulting from the COVID-19 global health crisis which could lead to lower occupancies and reduced average rental rates as longer-term customers are replaced with new customers at lower rates, and (vi) potential negative impacts on the cost and availability of debt and equity which could have a negative impact on our capital and growth plans; the Company’s ability to evaluate, finance and integrate acquired self-storage facilities into the Company’s existing business and operations; the Company’s ability to effectively compete in the industry in which it does business; the Company’s existing indebtedness may mature in an unfavorable credit environment, preventing refinancing or forcing refinancing of the indebtedness on terms that are not as favorable as the existing terms; interest rates may fluctuate, impacting costs associated with the Company’s outstanding floating rate debt; the Company’s ability to comply with debt covenants; any future ratings on the Company’s debt instruments; regional concentration of the Company’s business may subject it to economic downturns in the states of Florida and Texas; the Company’s reliance on its call center; the Company’s cash flow may be insufficient to meet required payments of operating expenses, principal, interest and dividends; and tax law changes that may change the taxability of future income.

CONFERENCE CALL:

Life Storage will hold its Fourth Quarter Earnings Release Conference Call at 9:00 a.m. Eastern Time on Tuesday, February 23, 2021. To help avoid connection delays, participants are encouraged to pre-register using this link. Anyone unable to pre-register may access the conference call at 844-707-6940 (domestic) or 412-317-5702 (international). Management will accept questions from registered financial analysts after prepared remarks; all others are encouraged to listen to the call via webcast by accessing the investor relations tab at lifestorage.com. The webcast will be archived for a period of six months.

ABOUT LIFE STORAGE, INC:

Life Storage, Inc. is a self-administered and self-managed equity REIT that is in the business of acquiring and managing self-storage facilities. Located in Buffalo, New York, the Company operates more than 900 storage facilities in 31 states and in the province of Ontario, Canada. The Company serves both residential and commercial storage customers with storage units rented by month. Life Storage consistently provides responsive service to approximately 500,000 customers, making it a leader in the industry. For more information visit http://invest.lifestorage.com.

Life Storage, Inc.
Balance Sheet Data
(unaudited)
 

December 31,

 

December 31,

(dollars in thousands)

2020

 

2019

Assets
Investment in storage facilities:
Land

$

951,813

 

$

884,235

 

Building, equipment and construction in progress

 

4,378,510

 

 

3,865,238

 

 

5,330,323

 

 

4,749,473

 

Less: accumulated depreciation

 

(873,178

)

 

(756,333

)

Investment in storage facilities, net

 

4,457,145

 

 

3,993,140

 

Cash and cash equivalents

 

54,400

 

 

17,458

 

Accounts receivable

 

15,464

 

 

12,218

 

Receivable from joint ventures

 

1,064

 

 

1,302

 

Investment in joint ventures

 

143,042

 

 

154,984

 

Prepaid expenses

 

8,326

 

 

7,771

 

Intangible asset - in-place customer leases

 

5,409

 

 

2,910

 

Trade name

 

16,500

 

 

16,500

 

Other assets

 

26,498

 

 

26,681

 

Total Assets

$

4,727,848

 

$

4,232,964

 

 
Liabilities
Line of credit

$

-

 

$

65,000

 

Term notes, net

 

2,155,457

 

 

1,858,271

 

Accounts payable and accrued liabilities

 

112,654

 

 

103,942

 

Deferred revenue

 

17,416

 

 

11,699

 

Mortgages payable

 

37,777

 

 

34,851

 

Total Liabilities

 

2,323,304

 

 

2,073,763

 

 
Noncontrolling redeemable Operating Partnership Units at redemption value

 

26,446

 

 

26,307

 

 
Equity
Common stock

 

495

 

 

467

 

Additional paid-in capital

 

2,671,311

 

 

2,376,723

 

Accumulated deficit

 

(288,667

)

 

(238,338

)

Accumulated other comprehensive loss

 

(5,041

)

 

(5,958

)

Total Shareholders' Equity

 

2,378,098

 

 

2,132,894

 

Total Liabilities and Shareholders' Equity

$

4,727,848

 

$

4,232,964

 

 
Life Storage, Inc.
Consolidated Statements of Operations
(unaudited)

October 1, 2020

 

October 1, 2019

 

January 1, 2020

 

January 1, 2019

to

 

to

 

to

 

to

(dollars in thousands, except share data)

December 31, 2020

 

December 31, 2019

 

December 31, 2020

 

December 31, 2019

 
Revenues
Rental income

$

145,852

 

$

129,150

 

$

539,554

 

$

510,774

 

Other operating income

 

16,353

 

 

14,286

 

 

59,811

 

 

49,691

 

Management and acquisition fee income

 

4,300

 

 

4,118

 

 

17,406

 

 

14,274

 

Total operating revenues

 

166,505

 

 

147,554

 

 

616,771

 

 

574,739

 

 
Expenses
Property operations and maintenance

 

36,977

 

 

33,294

 

 

138,273

 

 

130,103

 

Real estate taxes

 

17,550

 

 

16,634

 

 

70,302

 

 

65,061

 

General and administrative

 

13,557

 

 

12,221

 

 

52,055

 

 

46,622

 

Payments for rent

 

-

 

 

-

 

 

-

 

 

358

 

Depreciation and amortization

 

30,777

 

 

26,638

 

 

117,302

 

 

104,199

 

Amortization of in-place customer leases

 

1,812

 

 

1,253

 

 

5,623

 

 

2,931

 

Total operating expenses

 

100,673

 

 

90,040

 

 

383,555

 

 

349,274

 

 
Gain on sale of storage facilities

 

-

 

 

4,131

 

 

-

 

 

104,353

 

Gain on sale of real estate

 

-

 

 

705

 

 

302

 

 

1,781

 

Income from operations

 

65,832

 

 

62,350

 

 

233,518

 

 

331,599

 

 
Other income (expense)
Interest expense (A)

 

(24,959

)

 

(20,091

)

 

(86,015

)

 

(76,430

)

Interest income

 

4

 

 

2

 

 

19

 

 

342

 

Equity in income of joint ventures

 

923

 

 

1,470

 

 

4,838

 

 

4,566

 

 
Net income

 

41,800

 

 

43,731

 

 

152,360

 

 

260,077

 

Net income attributable to noncontrolling interests in the Operating Partnership

 

(213

)

 

(230

)

 

(789

)

 

(1,378

)

Net income attributable to common shareholders

$

41,587

 

$

43,501

 

$

151,571

 

$

258,699

 

 
Earnings per common share attributable to common shareholders - basic

$

0.57

 

$

0.62

 

$

2.13

 

$

3.70

 

 
Earnings per common share attributable to common shareholders - diluted

$

0.57

 

$

0.62

 

$

2.13

 

$

3.70

 

 
Common shares used in basic earnings per share calculation

 

73,100,672

 

 

69,902,115

 

 

71,054,907

 

 

69,875,445

 

 
Common shares used in diluted earnings per share calculation

 

73,275,641

 

 

70,030,851

 

 

71,177,763

 

 

69,979,595

 

 
Dividends declared per common share

$

0.7133

 

$

0.6667

 

$

2.8533

 

$

2.6667

 

 
 
(A) Interest expense for the period ending December 31 consists of the following
Interest expense

$

20,325

 

$

19,477

 

$

79,584

 

$

74,101

 

Make-whole payment on repaid note

 

4,030

 

 

-

 

 

4,030

 

 

-

 

Amortization of debt issuance costs

 

604

 

 

614

 

 

2,401

 

 

2,329

 

Total interest expense

$

24,959

 

$

20,091

 

$

86,015

 

$

76,430

 

Life Storage, Inc.
Computation of Funds From Operations (FFO) (1)
(unaudited)

October 1, 2020

 

October 1, 2019

 

January 1, 2020

 

January 1, 2019

to

 

to

 

to

 

to

(dollars in thousands, except share data)

December 31, 2020

 

December 31, 2019

 

December 31, 2020

 

December 31, 2019

 
Net income attributable to common shareholders

$

41,587

 

$

43,501

 

$

151,571

 

$

258,699

 

Noncontrolling interests in the Operating Partnership

 

213

 

 

230

 

 

789

 

 

1,378

 

Depreciation of real estate and amortization of intangible assets exclusive of debt issuance costs

 

31,955

 

 

27,310

 

 

120,512

 

 

105,107

 

Depreciation and amortization from unconsolidated joint ventures

 

1,311

 

 

1,727

 

 

5,814

 

 

6,195

 

Gain on sale of storage facilities

 

-

 

 

(4,131

)

 

-

 

 

(104,353

)

Funds from operations allocable to noncontrolling interest in Operating Partnership

 

(382

)

 

(361

)

 

(1,443

)

 

(1,417

)

Funds from operations available to common shareholders

 

74,684

 

 

68,276

 

 

277,243

 

 

265,609

 

FFO per share - diluted

$

1.02

 

$

0.97

 

$

3.90

 

$

3.80

 

 
Adjustments to FFO
Make-whole payment on repaid note

$

4,030

 

$

-

 

$

4,030

 

$

-

 

Uninsured damages and customer reinsurance claims, net

 

-

 

 

-

 

 

1,546

 

 

-

 

Lawsuit settlement

 

-

 

 

-

 

 

-

 

 

(1,651

)

Gain on sale of land

 

-

 

 

(705

)

 

(302

)

 

(1,781

)

Acquisition fee

 

-

 

 

(442

)

 

(217

)

 

(442

)

Costs related to officer's retirement

 

-

 

 

-

 

 

-

 

 

443

 

Funds from operations resulting from non-recurring items allocable to noncontrolling interest in Operating Partnership

 

(21

)

 

6

 

 

(26

)

 

18

 

Adjusted funds from operations available to common shareholders

 

78,693

 

 

67,135

 

 

282,274

 

 

262,196

 

Adjusted FFO per share - diluted

$

1.07

 

$

0.96

 

$

3.97

 

$

3.75

 

 
Common shares - diluted

 

73,275,641

 

 

70,030,851

 

 

71,177,763

 

 

69,979,595

 

 
Life Storage, Inc.
Computation of Net Operating Income (2)
(unaudited)

October 1, 2020

 

October 1, 2019

 

January 1, 2020

 

January 1, 2019

to

 

to

 

to

 

to

(dollars in thousands)

December 31, 2020

 

December 31, 2019

 

December 31, 2020

 

December 31, 2019

 
Net Income

$

41,800

 

$

43,731

 

$

152,360

 

$

260,077

 

General and administrative

 

13,557

 

 

12,221

 

 

52,055

 

 

46,622

 

Payments for rent

 

-

 

 

-

 

 

-

 

 

358

 

Depreciation and amortization

 

32,589

 

 

27,891

 

 

122,925

 

 

107,130

 

Gain on sale of storage facilities

 

-

 

 

(4,131

)

 

-

 

 

(104,353

)

Gain on sale of real estate

 

-

 

 

(705

)

 

(302

)

 

(1,781

)

Interest expense

 

24,959

 

 

20,091

 

 

86,015

 

 

76,430

 

Interest income

 

(4

)

 

(2

)

 

(19

)

 

(342

)

Equity in income of joint ventures

 

(923

)

 

(1,470

)

 

(4,838

)

 

(4,566

)

Net operating income

$

111,978

 

$

97,626

 

$

408,196

 

$

379,575

 

 
Same store (4)

$

88,008

 

$

82,426

 

$

331,556

 

$

324,020

 

Net operating income related to tenant reinsurance

 

7,760

 

 

7,012

 

 

29,013

 

 

26,298

 

Other stores and management fee income

 

16,210

 

 

8,188

 

 

47,627

 

 

29,257

 

Total net operating income

$

111,978

 

$

97,626

 

$

408,196

 

$

379,575

 

 
Life Storage, Inc.
Quarterly Same Store Data (3) (4) 515 mature stores owned since 12/31/18
(unaudited)

October 1, 2020

 

October 1, 2019

 

 

 

 

to

 

to

 

 

 

Percentage

(dollars in thousands)

December 31, 2020

 

December 31, 2019

 

Change

 

Change

 
Revenues:
Rental income

$

127,133

$

121,345

$

5,788

 

4.8

%

Other operating income

 

1,658

 

1,462

 

196

 

13.4

%

Total operating revenues

 

128,791

 

122,807

 

5,984

 

4.9

%

 
Expenses:
Payroll and benefits

 

9,881

 

9,511

 

370

 

3.9

%

Real estate taxes

 

14,522

 

15,357

 

(835

)

-5.4

%

Utilities

 

3,156

 

3,499

 

(343

)

-9.8

%

Repairs and maintenance

 

4,778

 

3,890

 

888

 

22.8

%

Office and other operating expense

 

4,160

 

3,833

 

327

 

8.5

%

Insurance

 

1,610

 

1,478

 

132

 

8.9

%

Advertising

 

48

 

168

 

(120

)

-71.4

%

Internet marketing

 

2,628

 

2,645

 

(17

)

-0.6

%

Total operating expenses

 

40,783

 

40,381

 

402

 

1.0

%

 
Net operating income (2)

$

88,008

$

82,426

$

5,582

 

6.8

%

 
 
QTD Same store move ins

 

46,701

 

44,112

 

2,589

 

 
QTD Same store move outs

 

46,610

 

45,749

 

861

 

Other Comparable Quarterly Same Store Data (4)
(unaudited)

October 1, 2020

 

October 1, 2019

 

 

 

 

to

 

to

 

 

 

Percentage

December 31, 2020

 

December 31, 2019

 

Change

 

Change

2019 Same store pool (502 stores)
Revenues

$

126,133

$

120,337

$

5,796

4.8

%

Expenses

 

39,675

 

39,376

 

299

0.8

%

Net operating income

$

86,458

$

80,961

$

5,497

6.8

%

 
 
2018 Same store pool (486 stores)
Revenues

$

121,739

$

116,064

$

5,675

4.9

%

Expenses

 

38,169

 

37,559

 

610

1.6

%

Net operating income

$

83,570

$

78,505

$

5,065

6.5

%

 
Life Storage, Inc.
Year to Date Same Store Data (3) (4) 515 mature stores owned since 12/31/18
(unaudited)

January 1, 2020

 

January 1, 2019

 

 

 

 

to

 

to

 

 

 

Percentage

(dollars in thousands)

December 31, 2020

 

December 31, 2019

 

Change

 

Change

 
Revenues:
Rental income

$

490,343

$

482,006

$

8,337

 

1.7

%

Other operating income

 

6,298

 

6,617

 

(319

)

-4.8

%

Total operating revenues

 

496,641

 

488,623

 

8,018

 

1.6

%

 
Expenses:
Payroll and benefits

 

37,761

 

38,864

 

(1,103

)

-2.8

%

Real estate taxes

 

62,958

 

61,054

 

1,904

 

3.1

%

Utilities

 

13,894

 

15,199

 

(1,305

)

-8.6

%

Repairs and maintenance

 

15,579

 

16,582

 

(1,003

)

-6.0

%

Office and other operating expense

 

14,998

 

15,529

 

(531

)

-3.4

%

Insurance

 

6,017

 

5,909

 

108

 

1.8

%

Advertising

 

233

 

877

 

(644

)

-73.4

%

Internet marketing

 

13,645

 

10,589

 

3,056

 

28.9

%

Total operating expenses

 

165,085

 

164,603

 

482

 

0.3

%

 
Net operating income (2)

$

331,556

$

324,020

$

7,536

 

2.3

%

 
 
YTD Same store move ins

 

199,200

 

193,099

 

6,101

 

 
YTD Same store move outs

 

182,563

 

192,758

 

(10,195

)

Life Storage, Inc.
Other Data - unaudited

Same Store (3)

 

All Stores (5)

2020

2019

2020

2019

 
Weighted average quarterly occupancy

 

93.1

%

 

90.0

%

 

92.4

%

 

88.7

%

 
Occupancy at December 31

 

92.9

%

 

89.6

%

 

92.2

%

 

88.2

%

 
Rent per occupied square foot

$

14.67

 

$

14.66

 

$

14.69

 

$

14.63

 

 
Life Storage, Inc.
Other Data - unaudited (continued)
 
Investment in Storage Facilities: (unaudited)
The following summarizes activity in storage facilities during the twelve months ended December 31, 2020:
 
Beginning balance

$

4,749,473

 

Property acquisitions

 

523,922

 

Improvements and equipment additions:
Expansions

 

41,317

 

Roofing, paving, and equipment:
Stabilized stores

 

24,206

 

Recently acquired stores

 

1,546

 

Change in construction in progress (Total CIP $18.6 million)

 

(9,632

)

Dispositions and Impairments

 

(509

)

Storage facilities at cost at period end

$

5,330,323

 

 
 
Comparison of Selected G&A Costs (unaudited)

Quarter Ended

 

Year Ended

December 31, 2020

 

December 31, 2019

 

December 31, 2020

 

December 31, 2019

 
Management and administrative salaries and benefits

$

9,784

 

$

6,583

$

31,800

$

26,667

 

Training

 

320

 

 

409

 

887

 

1,197

 

Call center

 

865

 

 

702

 

3,160

 

2,960

 

Life Storage Solutions costs

 

467

 

 

405

 

1,029

 

1,300

 

Income taxes

 

(1,001

)

 

544

 

1,628

 

2,249

 

Legal, accounting and professional

 

430

 

 

1,293

 

3,360

 

4,100

 

Lawsuit settlement

 

-

 

 

-

 

-

 

(1,651

)

Other administrative expenses (6)

 

2,692

 

 

2,285

 

10,191

 

9,800

 

$

13,557

 

$

12,221

$

52,055

$

46,622

 

 
Net rentable square feet

December 31, 2020

Wholly owned properties

 

43,272,425

 

Joint venture properties

 

6,753,232

 

Third party managed properties

 

17,689,773

 

 

67,715,430

 

 

December 31, 2020

December 31, 2019

 
Common shares outstanding

 

74,211,920

 

 

70,013,900

Operating Partnership Units outstanding

 

334,149

 

 

369,699

 
(1) We believe that Funds from Operations (“FFO”) provides relevant and meaningful information about our operating performance that is necessary, along with net earnings and cash flows, for an understanding of our operating results. FFO adds back historical cost depreciation, which assumes the value of real estate assets diminishes predictably in the future. In fact, real estate asset values increase or decrease with market conditions. Consequently, we believe FFO is a useful supplemental measure in evaluating our operating performance by disregarding (or adding back) historical cost depreciation.
 
Funds from operations is defined by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) as net income available to common shareholders computed in accordance with generally accepted accounting principles (“GAAP”), excluding gains or losses on sales of properties, plus impairment of real estate assets, plus depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. We believe that to further understand our performance, FFO should be compared with our reported net income and cash flows in accordance with GAAP, as presented in our consolidated financial statements.
 
Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, or as an indicator of our ability to make cash distributions.
 
(2) Net operating income or "NOI" is a non-GAAP (generally accepted accounting principles) financial measure that we define as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income: interest expense, impairment and casualty losses, operating lease expenses, depreciation and amortization expense, any losses on sale of real estate, acquisition related costs, general and administrative expense, and deducting from net income: income from discontinued operations, interest income, any gains on sale of real estate, and equity in income of joint ventures. We believe that NOI is a meaningful measure to investors in evaluating our operating performance, because we utilize NOI in making decisions with respect to capital allocations, in determining current property values, and in comparing period-to-period and market-to-market property operating results. Additionally, NOI is widely used in the real estate industry and the self-storage industry to measure the performance and value of real estate assets without regard to various items included in net income that do not relate to or are not indicative of operating performance, such as depreciation and amortization, which can vary depending on accounting methods and book value of assets. NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues, operating income and net income.
 
(3) Includes the stores owned and/or managed by the Company for the entire periods presented that are consolidated in our financial statements. Does not include unconsolidated joint ventures or other stores managed by the Company.
 
(4) Revenues and expenses do not include items related to tenant reinsurance.
 
(5) Does not include unconsolidated joint venture stores or other stores managed by the Company.
 
(6) Other administrative expenses include office rent, travel expense, investor relations and miscellaneous other expenses.
 

 

Life Storage, Inc.
David Dodman
(716) 229-8284
ddodman@lifestorage.com

Source: Life Storage, Inc.



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