Strategic Storage Trust, a private REIT that operates the SmartStop Self Storage brand, has posted the first profitable quarter in its five-year history.
“Our top-line growth in same-store revenues and NOI has continued to increase and contributed to our first quarter with positive net income,” said H. Michael Schwartz, chairman, president and CEO of Strategic Storage Trust.
Since launching in 2008, the REIT has grown to 126 self-storage facilities in 17 states and Canada.
The company earned profit of $1.45 million on revenue of $24.3 million during the second quarter of the year. During the same quarter last year, the company posted a loss of $1.95 million on $19.9 million in revenue.
As Schwartz noted, strong same-store numbers helped pave the way to profitability. Same-store revenue rose 8.8 percent, while same-store net operating income (NOI) grew by 15.7 percent. The same-store growth is tied to occupancy and rental rate gains.
The storage operator notched an average same-store occupancy rate of 86.5 percent during the second quarter, up 3.6 percentage points over the same period last year. During the same timeframe, average rent climbed to $10 per square foot from $9.61.
Strategic Storage Trust has continued to add facilities through acquisitions and also has some ground-up developments in the works.
During the second quarter, the company boosted its stake in a 76,000-square-foot facility in San Francisco from 12 percent to nearly 99 percent. The cost: $5.8 million.
Since the end of the second quarter, the company picked up a facility in Florida and another in Nevada for a combined $13.3 million.
The company is working on at least two development projects. One is planned on a parcel in Toronto that it bought in April for $5.8 million. The 78,000-square-foot facility will contain 870 units. The REIT also is developing a facility next to its headquarters in Ladera Ranch, CA, that will include basketball and volleyball courts. The $32.6 million project will feature 255 storage units.
Strategic Storage Trust pocketed some extra cash in July when it and Westport Properties sold an industrial facility they owned in Newport Beach, CA, for $47 million. The facility is fully leased by private space exploration startup SpaceX. Strategic’s share of the deal is estimated at $10.3 million.
Strategic Storage Trust II
The company is raising money to launch a second REIT, Strategic Storage Trust II. As of Aug. 14, the initiative had raised $4.8 million from the sale of about 500,000 shares. The company hopes to sell another $1.09 billion worth of shares.
The planned REIT has a contract to buy a seven-state portfolio of 26 self-storage facilities for $128.2 million. The facilities cover about 1.5 million square feet and contain nearly 14,500 units. Dahn Corp. owns the facilities, operating under the name Mini U Storage.
According to documents filed with the U.S. Securities and Exchange Commission, the 26-facility deal depends on the ability of the new REIT to raise sufficient capital. The planned REIT also has a deal to buy five facilities in North Carolina and South Carolina for $22.1 million.