Sovran Self Storage is a self-administered and self-managed real estate investment trust (REIT) with an acquisition portfolio of more than 400 company-owned and/or operated self-storage facilities spanning 30+ million square feet. Operating under the trade name Uncle Bob’s Self Storage®, Sovran serves a client base of more than 200,000 customers in 25 states. In tandem, the company offers value-added products and services like its Dri-guard dehumidification system, a fleet of Uncle Bob’s rental trucks, and a national Customer Care Center. Founded in 1982, the Buffalo, New York-based company now employs more than 1,100 people.
Sovran kicked off 2014 with an impressive first-quarter performance, which the company attributes to specific marketing and pricing strategies designed to attract long-term customers. Despite a 9.2% increase in rental rates (to $11.75 per square foot), the strategy was a success, and the company reported fewer move-outs in the quarter than in recent winter months and overall occupancy averaged nearly 89%.
Total first-quarter revenues increased 18.1% compared to the year-ago quarter, while net income grew to $16.7 million, or $0.51 per fully diluted common share, compared to net income of $14.3 million, or $0.47 per fully diluted common share, in the first quarter of 2013. The company set a quarterly dividend of $0.68 per share, or $2.72 on an annualized basis. Sovran finished the first quarter with approximately $6.3 million of cash on hand and $60 million available on its line of credit (excluding an additional $75 million available under the expansion feature). The company intends to spend up to $30 million on its expansion and enhancement program, and has also budgeted $16 million for recurring capitalized expenditures such as roofing, paving and office renovations.
In early 2014, Sovran increased its already established foothold in Southeast Florida, Portland, Maine, and San Antonio and Austin, Texas, spending $86.7 million on the acquisition of six properties spread across these key markets. Sovran also acquired an 86,000-square-foot facility in the Chicago market for $8.7 million. By the end of March, 2014, the company was under contract to acquire another 17 self-storage facilities for cash consideration of approximately $120.7 million.
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