U-Store-It Trust Posts Q1 Income Loss

CLEVELAND-With its economic occupancy at 69% and physical occupancy at 80%, self-storage REIT U-Store-It president and CEO Dean Jernigan says the company will begin its focus on reducing discounts, increasing physical occupancy and rental rates and controlling expenses. He says the company will strengthen its senior management team and reduce general and administrative expenses in hopes of increasing shareholder value.

The company incurred a net loss of $1.6 million, or 3 cents per diluted share, for the three months ended March 31, 2006, compared to net income of $1.6 million, or 4 cents per diluted share, for the same period in 2005. U-Store-It officials say the loss was led by a $1.3-million write-off of unamortized fees and expenses on a loan, which was repaid withproceeds from the company's 2005 follow-on equity offering proceeds.

With the inclusion of the write-off, adjusted FFO for the quarter was $11.9 million, or 21 cents per diluted share, compared to $9.4 million, or 25 cents per diluted share, for the same year-ago period. Total revenues increased 62% to $48.1 million, compared to 2005's $29.7 million. Executives attribute the revenue increase to the acquisition of 167 facilities during the past 12 months, giving the company a total of 374 self-storage units at the end of the quarter. Year-over-year same-store property operating expenses increased 6.8% to $10.5 million from $9.9 million, which were attributable to increased property taxes and utility expenses.

Through April 28, the company increased the number of facilities owned to 378 by completing the acquisition of four facilities, located in Memphis for approximately $13.6 million in cash. These facilities contain approximately 388,000 rentable sf.