Storage USA Inc.'s operational income and revenues more than doubled in the third quarter, resulting from a barrage of property acquisitions by the mini-warehouse owner.
For the period that ended Sept. 30, the Columbia-based firm yesterday reported funds from operations of $10.7 million, compared with $3.9 million in the corresponding quarter in 1994.
That 174 percent gain marked the third consecutive reporting period in which the real estate investment trust's funds from operations -- a key measure of a REIT's performance -- more than doubled as compared to the year before.
The company's revenues also soared to $18.6 million, a 143 percent rise from a year ago.
Both Storage USA and industry analysts pointed to its swelling property portfolio as the primary factor behind the increases. In the third quarter, the company spent $56.1 million to acquire 14 new facilities, raising the number of self-storage properties under its control by 10 percent.
"Their growth came from a combination of results from new dTC acquisitions and good internal growth," said Samuel T. Hillers, an Alex. Brown & Sons Inc. REIT analyst. "Their rents are up 6 percent for properties they've owned at least a year, and that seems to be sustainable, so we're very optimistic about them."
On a per-share basis, Storage USA's earnings in the third quarter were tempered by only a 17 percent gain, to 62 cents, because of a 4 million share secondary stock offering that generated $107.8 million, said Carol Shipley, a Storage USA senior vice president.
For the nine-month period, the trust generated funds from operations of $26.3 million, or $1.76 per share, as compared $7.8 million, or $1.07 per share, for the same period last year. Again, the 239 percent gain in funds from operations was attributed to increased properties. The stock offering held the earnings per share gain to 64 percent.
Revenues for the period grew by 225 percent, to $47.4 million.
More acquisitions are planned. Before the end of the year, Storage USA plans to purchase six properties now under contract for $16 million.
Storage USA's stock closed yesterday at $29.25 per share, down 25 cents.