Shurgard Storage reported little growth in funds from operations(FFO) for the second three months of the year, in part due to the cost of increased marketing. The marketing did, however, assist in moderate same store sales growth, which the company hopes will increase further and continue through to the bottom line in the final two quarters.

FFO for the quarter ended June 30 was $20.2 million compared with FFO of $19.7 million for the second quarter of 1999. On a per share basis, FFO was 69 cents a share, a one cent increase from a year ago.

Same store revenue for the second quarter increased 6.8% percent over the same period a year ago. Same store net operating income increased 7.2% in the second quarter 2000 versus second quarter 1999. Same Store average rental rates increased to $10.78/sf from $10.29/sf. Same store occupancy for the second quarter 2000 also increased to 88%, 2% greater than second quarter 1999.

Steve Tyler, Shurgard’s senior vice president of operations gave two reasons for the growth: the ability to increase rates “significantly with minimal customer turnover,” the company’s ability to convert more customer inquiries into sales. Added Shurgard’s Chief Financial Officer, Harrell Beck, “We are pleased with the revenue trend, but we are not satisfied with the pace of revenue growth. Our focus will be on improving the rate of growth.”

At the close of the quarter, Shurgard operated a network of 397 properties. During the quarter, the company opened 4 newly constructed stores: two in Texas, one in Tennessee, and another in California. In addition, the company had 16 storage centers under construction in the United States and 11 in Europe.

The company’s board of directors declared a second quarter dividend of 51 cents a share – a 2% increase from the second quarter of 1999 – payable on August 25, 2000 to shareholders of record as of August 11, 2000.

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