Exhibit 99.1

Life Storage, Inc. Reports First Quarter 2022 Results

BUFFALO, N.Y.--(BUSINESS WIRE)--May 4, 2022--Life Storage, Inc. (NYSE:LSI), a leading national owner and operator of self-storage properties, reported operating results for the quarter ended March 31, 2022.

Highlights for the First Quarter Included:

  • Generated net income attributable to common shareholders of $73.6 million, or $0.88 per fully diluted common share.
  • Achieved funds from operations (“FFO”)(1) per fully diluted common share of $1.44, a 33.3% increase over the same period in 2021.
  • Increased same store revenue by 15.6% and same store net operating income (“NOI”)(2) by 21.9%, year-over-year.
  • Acquired 18 stores for $351.5 million, including one store from the Company’s third-party management platform.
  • Added 25 stores (gross) to the Company’s third-party management platform.

Joe Saffire, the Company’s Chief Executive Officer, stated, “We are off to a very strong start for the year as we continue to demonstrate strong pricing power in our footprint and robust acquisition activity. We added more scale to our key existing markets with the addition of 18 wholly owned stores and 25 stores to our third-party management platform. With a strong pipeline ahead, healthy consumer demand trends, and our ability to continue to operationally execute on our strategic initiatives, we are well positioned to continue to grow shareholder value through 2022 and beyond.”

FINANCIAL RESULTS:

In the first quarter of 2022, the Company generated net income attributable to common shareholders of $73.6 million or $0.88 per fully diluted common share, compared to net income attributable to common shareholders of $47.4 million, or $0.63 per fully diluted common share, in the first quarter of 2021.

Funds from operations for the quarter were $1.44 per fully diluted common share compared to $1.08 for the same period last year.

OPERATIONS:

Revenues for the 580 stabilized stores wholly owned by the Company since December 31, 2020 increased 15.6% in the first quarter of 2022 compared to the same quarter of 2021. The increase largely resulted from the impact of a 14.9% increase in realized rental rates and a 20 basis point increase in average occupancy.


Same store operating expenses increased 2.9% for the first quarter of 2022 compared to the prior year period, the result of increased internet marketing costs, utilities, and office and other operating expenses. The increases were partially offset by decreases in payroll and benefits. Same store NOI increased 21.9% in the first quarter of 2022 as compared to the first quarter of 2021.

During the first quarter of 2022, the Company achieved double digit same store revenue growth in 32 of its 33 major markets. Overall, the markets with the strongest positive revenue impact were various Florida markets; Atlanta, GA; Las Vegas, NV; Buffalo, NY; and Austin, TX.

PORTFOLIO TRANSACTIONS:

Wholly Owned Portfolio

During the quarter, the Company acquired 18 stores in California (6), North Carolina (4), Texas (4), Illinois (1), Georgia (1), South Carolina (1), and Maryland (1) for a total purchase price of $351.5 million.

At March 31, 2022, the Company was under contract to acquire 15 self-storage facilities in California (3), Florida (6), New York (2), Massachusetts (1), Illinois (1), Georgia (1) and Texas (1) for an aggregate purchase price of $279.1 million. Subsequent to March 31, 2022, the Company completed the acquisition of five of these self-storage facilities in Florida (3), Georgia (1) and Massachusetts (1) for an aggregate purchase price of $88.5 million. In addition, the Company acquired the remaining ownership interest in a joint venture in which the Company had a 85.8% common and preferred investment. The net investment to acquire the remaining equity in this joint venture, which owns a property located in New York, was $5.2 million. Also subsequent to March 31, 2022, the Company entered into contracts to acquire three self-storage facilities in Florida, California and North Carolina for an aggregate purchase price of $54.8 million. The purchases of the remaining facilities are subject to customary conditions to closing, and there is no assurance that any of these facilities will be acquired.

THIRD-PARTY MANAGEMENT:

The Company continues to aggressively and profitably grow its third-party management platform. During the quarter, the Company added 25 stores (gross). As of quarter end, the Company managed 378 facilities in total, including those in which it owns a noncontrolling interest.

FINANCIAL POSITION:

At March 31, 2022, the Company had approximately $50.2 million of cash on hand, and approximately $365 million available on its line of credit.

During the quarter, the Company issued 686,712 shares of common stock under its continuous equity offering program at a weighted average issue price of $136.48 per share, generating net proceeds after expenses of $92.8 million.


Below are key financial ratios at March 31, 2022:

  • Debt to Enterprise Value (at $140.43/share) 19.6%
  • Debt to Book Cost of Storage Facilities 39.5%
  • Debt to Recurring Annualized EBITDA 4.9x
  • Debt Service Coverage 5.8x

COMMON STOCK DIVIDEND:

Subsequent to quarter end, the Company’s Board of Directors approved a quarterly dividend of $1.00 per share, or $4.00 annualized. The dividend was paid on April 26, 2022 to shareholders of record on April 14, 2022.

YEAR 2022 EARNINGS GUIDANCE:

The following assumptions covering operations have been utilized in formulating guidance for 2022:

 

 

Current Guidance
Range

Prior Guidance
Range
(February 24, 2022)

Same Store Revenue

 

10.50%

 

-

 

11.50%

 

9.50%

 

-

 

10.50%

Same Store Operating Costs (excluding property
taxes)

 


4.50%

 


-

 


5.50%

 


4.50%

 


-

 


5.50%

Same Store Property Taxes

 

6.25%

 

-

 

7.25%

 

6.25%

 

-

 

7.25%

Total Same Store Operating Expenses

 

5.00%

 

-

 

6.00%

 

5.00%

 

-

 

6.00%

Same Store Net Operating Income

 

13.0%

 

-

 

14.0%

 

11.5%

 

-

 

12.5%

General & Administrative

 

$69M

 

-

 

$71M

 

$69M

 

-

 

$71M

 

 

 

 

 

 

 

 

 

 

 

 

 

Expansions & Enhancements

 

$65M

 

-

 

$75M

 

$65M

 

-

 

$75M

Capital Expenditures

 

$30M

 

-

 

$35M

 

$30M

 

-

 

$35M

Wholly Owned Acquisitions

 

$700M

 

-

 

$900M

 

$550M

 

-

 

$650M

Joint Venture Investments

 

$50M

 

-

 

$100M

 

$50M

 

-

 

$100M

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Funds from Operations per Share

 

$6.04

 

-

 

$6.14

 

$5.93

 

-

 

$6.03

 

Reconciliation of Guidance

2Q 2022

Range or Value

FY 2022

Range or Value

Earnings per share attributable to
common shareholders - diluted


$0.94 - $0.98


$3.82 - $3.92

Plus: real estate depreciation and
amortization


0.56 - 0.56


2.22 - 2.22

FFO per share

$1.50 - $1.54

$6.04 - $6.14

The Company’s 2022 same store pool consists of the 580 stabilized stores wholly owned since December 31, 2020. Forty-two of the stores purchased through March 31, 2022, at certificate of occupancy or that were in the early stages of lease-up are not included, regardless of their current occupancies. The Company believes that occupancy levels achieved during the lease-up period, using discounted rates, are not truly indicative of a new store’s performance, and therefore do not result in a meaningful year-over-year comparison in future years. The Company will include such stores in its same store pool in the second year after the stores achieve 80% sustained occupancy using market rates and incentives.


FORWARD LOOKING STATEMENTS:

When used herein, the words “intends,” “believes,” “expects,” “anticipates,” and similar expressions are intended to identify “forward-looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933 and in Section 21E of the Securities Exchange Act of 1934.

All forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements. We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements. All forward-looking statements apply only as of the date made. We undertake no obligation to publicly update or revise forward-looking statements which may be made to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained herein. Any forward-looking statements should be considered in light of the risks referenced in the “Risk Factors” section included in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Such factors include, but are not limited to:

  • adverse changes in general economic conditions, the real estate industry and in the markets in which we operate;
  • the effect of competition from new self-storage facilities or other storage alternatives, which would cause rents and occupancy rates to decline;
  • impacts from the COVID-19 pandemic or the future outbreak of other highly infectious or contagious diseases on the U.S., regional and global economies and our financial condition and results of operations;
  • potential liability for uninsured losses and environmental contamination;
  • the impact of the regulatory environment as well as national, state, and local laws and regulations including, without limitation, those governing real estate investment trusts (“REITs”), tenant reinsurance and other aspects of our business, which could adversely affect our results;
  • loss of key personnel;
  • the Company’s ability to evaluate, finance and integrate acquired self-storage facilities on expected terms into the Company’s existing business and operations;
  • the Company’s ability to effectively compete in the industry in which it does business;
  • disruptions in credit and financial markets and resulting difficulties in raising capital or obtaining credit at reasonable rates or at all, which could impede our ability to grow;
  • the Company’s existing indebtedness may mature in an unfavorable credit environment, preventing refinancing or forcing refinancing of the indebtedness on terms that are not as favorable as the existing terms;
  • interest rates may increase, impacting costs associated with the Company’s outstanding floating rate debt, if any, and impacting the Company’s ability to comply with debt covenants;
  • exposure to litigation or other claims;
  • risks associated with breaches of our data security;
  • the regional concentration of the Company's business may subject the Company to economic downturns in the states of Florida and Texas;
  • the Company’s cash flow may be insufficient to meet required payments of operating expenses, principal, interest and dividends; and
  • failure to maintain our REIT status for U.S. federal income purposes, including tax law changes that may change the taxability of future income.

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our securities.

CONFERENCE CALL:

Life Storage will hold its First Quarter Earnings Release Conference Call at 9:00 a.m. Eastern Time on Thursday, May 5, 2022. To help avoid connection delays, participants are encouraged to pre-register using this link. Anyone unable to pre-register may access the conference call at 888.506.0062 (domestic) or 973.528.0011 (international); passcode 829431 or request to be joined into the Life Storage call. Management will accept questions from registered financial analysts after prepared remarks; all others are encouraged to listen to the call via webcast by accessing the investor relations tab at lifestorage.com. The webcast will be archived for a period of 90 days; a telephone replay will also be available for 14 days by calling 877.481.4010 and entering passcode 45168.

ABOUT LIFE STORAGE, INC:

Life Storage, Inc. is a self-administered and self-managed equity REIT that is in the business of acquiring and managing self-storage facilities. Located in Buffalo, New York, the Company operates over 1,100 storage facilities in 36 states. The Company serves both residential and commercial storage customers with storage units rented by month. Life Storage consistently provides responsive service to approximately 625,000 customers, making it a leader in the industry. For more information visit http://invest.lifestorage.com.


Life Storage, Inc.



Balance Sheet Data



(unaudited)







 


March 31,


December 31,

(dollars in thousands)

2022


2021

Assets



Investment in storage facilities:



Land

$

1,224,576

 


$

1,185,976

 

Building, equipment and construction in progress

 

6,229,832

 


 

5,904,481

 



 

7,454,408

 


 

7,090,457

 

Less: accumulated depreciation

 

(1,048,299

)


 

(1,007,650

)

Investment in storage facilities, net

 

6,406,109

 


 

6,082,807

 

Cash and cash equivalents

 

50,206

 


 

171,865

 

Accounts receivable

 

18,209

 


 

17,784

 

Receivable from joint ventures

 

804

 


 

333

 

Investment in joint ventures

 

214,641

 


 

213,003

 

Prepaid expenses

 

12,462

 


 

9,918

 

Intangible asset - in-place customer leases

 

11,854

 


 

13,966

 

Trade name

 

16,500

 


 

16,500

 

Other assets

 

28,706

 


 

30,421

 

Total Assets

$

6,759,491

 


$

6,556,597

 





 
Liabilities



Line of credit

$

135,000

 


$

-

 

Term notes, net

 

2,748,787

 


 

2,747,838

 

Accounts payable and accrued liabilities

 

112,136

 


 

131,778

 

Deferred revenue

 

29,495

 


 

27,277

 

Mortgages payable

 

36,837

 


 

37,030

 

Total Liabilities

 

3,062,255

 


 

2,943,923

 





 
Noncontrolling redeemable Preferred Operating Partnership Units at redemption value

 

90,761

 


 

90,783

 





 
Noncontrolling redeemable Common Operating Partnership Units at redemption value

 

131,780

 


 

142,892

 





 
Equity



Common stock

 

843

 


 

836

 

Additional paid-in capital

 

3,791,598

 


 

3,697,000

 

Accumulated deficit

 

(313,851

)


 

(314,713

)

Accumulated other comprehensive loss

 

(3,895

)


 

(4,124

)

Total Shareholders' Equity

 

3,474,695

 


 

3,378,999

 

Total Liabilities and Shareholders' Equity

$

6,759,491

 


$

6,556,597

 


Life Storage, Inc.



Consolidated Statements of Operations



(unaudited)





January 1, 2022
January 1, 2021


to
to
(dollars in thousands, except share data)
March 31, 2022
March 31, 2021




 
Revenues



Rental income

$

205,509

 


$

150,283

 

Tenant reinsurance

 

17,267

 


 

12,619

 

Other operating income

 

4,858

 


 

4,395

 

Management and acquisition fee income

 

5,856

 


 

4,590

 

Total operating revenues

 

233,490

 


 

171,887

 





 
Expenses



Property operations and maintenance

 

42,368

 


 

33,740

 

Tenant reinsurance

 

6,847

 


 

4,780

 

Real estate taxes

 

24,523

 


 

19,887

 

General and administrative

 

15,826

 


 

14,183

 

Depreciation and amortization

 

40,795

 


 

31,288

 

Amortization of in-place customer leases

 

5,606

 


 

2,071

 

Total operating expenses

 

135,965

 


 

105,949

 





 
Income from operations

 

97,525

 


 

65,938

 





 
Other income (expense)



Interest expense (A)

 

(24,240

)


 

(20,346

)

Interest and dividend income

 

15

 


 

779

 

Equity in income of joint ventures

 

2,118

 


 

1,221

 





 
Net income

 

75,418

 


 

47,592

 

Net income attributable to noncontrolling preferred interests in the Operating Partnership

 

(996

)


 

-

 

Net income attributable to noncontrolling common interests in the Operating Partnership

 

(847

)


 

(209

)

Net income attributable to common shareholders

$

73,575

 


$

47,383

 





 
Earnings per common share attributable to common shareholders - basic

$

0.88

 


$

0.63

 





 
Earnings per common share attributable to common shareholders - diluted

$

0.88

 


$

0.63

 





 
Common shares used in basic earnings per share calculation

 

83,644,426

 


 

75,387,332

 





 
Common shares used in diluted earnings per share calculation

 

83,837,773

 


 

75,510,201

 





 
Dividends declared per common share

$

1.0000

 


$

0.7400

 





 




 
(A) Interest expense for the period ending March 31 consists of the following

Interest expense

$

23,510

 


$

19,743

 

Amortization of debt issuance costs

 

730

 


 

603

 

Total interest expense

$

24,240

 


$

20,346

 


Life Storage, Inc.



Computation of Funds From Operations (FFO) (1)



(unaudited)





January 1, 2022
January 1, 2021


to
to
(dollars in thousands, except share data)
March 31, 2022
March 31, 2021




 
Net income attributable to common shareholders

$

73,575

 


$

47,383

 

Noncontrolling common interests in the Operating Partnership

 

847

 


 

209

 

Depreciation of real estate and amortization of intangible



assets exclusive of debt issuance costs

 

45,866

 


 

32,819

 

Depreciation and amortization from unconsolidated joint ventures

 

1,802

 


 

1,202

 

Funds from operations allocable to noncontrolling



interest in Operating Partnership

 

(1,389

)


 

(359

)

Funds from operations available to common shareholders

 

120,701

 


 

81,254

 

FFO per share - diluted

$

1.44

 


$

1.08

 





 
Common shares - diluted

 

83,837,773

 


 

75,510,201

 


Life Storage, Inc.



Computation of Net Operating Income (2)



(unaudited)





January 1, 2022
January 1, 2021


to
to
(dollars in thousands)
March 31, 2022
March 31, 2021




 
Net Income

$

75,418

 


$

47,592

 

General and administrative

 

15,826

 


 

14,183

 

Depreciation and amortization

 

46,401

 


 

33,359

 

Interest expense

 

24,240

 


 

20,346

 

Interest and dividend income

 

(15

)


 

(779

)

Equity in income of joint ventures

 

(2,118

)


 

(1,221

)

Net operating income

$

159,752

 


$

113,480

 





 
Same store (4)

$

120,547

 


$

98,868

 

Net operating income related to tenant reinsurance

 

10,420

 


 

7,839

 

Other stores and management fee income

 

28,785

 


 

6,773

 

Total net operating income

$

159,752

 


$

113,480

 


Life Storage, Inc.
Quarterly Same Store Data (3) (4) 580 mature stores owned since 12/31/20
(unaudited)









January 1, 2022
January 1, 2021





to
to


Percentage
(dollars in thousands)
March 31, 2022
March 31, 2021
Change
Change








 
Revenues:







Rental income

$

169,446


$

146,430


$

23,016

 


15.7

%

Other operating income

 

1,924


 

1,845


 

79

 


4.3

%

Total operating revenues

 

171,370


 

148,275


 

23,095

 


15.6

%









 
Expenses:







Payroll and benefits

 

10,823


 

11,068


 

(245

)


-2.2

%

Real estate taxes

 

19,744


 

19,327


 

417

 


2.2

%

Utilities

 

4,506


 

4,136


 

370

 


8.9

%

Repairs and maintenance

 

5,331


 

5,126


 

205

 


4.0

%

Office and other operating expense

 

4,704


 

4,422


 

282

 


6.4

%

Insurance

 

1,763


 

1,722


 

41

 


2.4

%

Advertising

 

52


 

52


 

-

 


0.0

%

Internet marketing

 

3,900


 

3,554


 

346

 


9.7

%

Total operating expenses

 

50,823


 

49,407


 

1,416

 


2.9

%









 
Net operating income (2)

$

120,547


$

98,868


$

21,679

 


21.9

%









 








 
QTD Same store move ins

 

50,203


 

51,745


 

(1,542

)











 
QTD Same store move outs

 

49,951


 

46,560


 

3,391

 




Other Comparable Quarterly Same Store Data (4)







(unaudited)









January 1, 2022
January 1, 2021





to
to


Percentage


March 31, 2022
March 31, 2021
Change
Change
2021 Same store pool (530 stores)







Revenues

$

155,574


$

134,500


$

21,074


15.7

%

Expenses

 

46,157


 

44,726


 

1,431


3.2

%

Net operating income

$

109,417


$

89,774


$

19,643


21.9

%









 








 
2020 Same store pool (514 stores)







Revenues

$

150,732


$

130,185


$

20,547


15.8

%

Expenses

 

44,698


 

43,347


 

1,351


3.1

%

Net operating income

$

106,034


$

86,838


$

19,196


22.1

%


Life Storage, Inc.







Other Data - unaudited

Same Store (3)


All Stores (5)



2022


2021


2022


2021









 
Weighted average quarterly occupancy

93.6%


93.4%


93.0%


92.7%









 
Occupancy at March 31

93.7%


94.0%


92.9%


93.1%









 
Rent per occupied square foot

$17.11


$14.89


$16.98


$14.82


Life Storage, Inc.



Other Data - unaudited (continued)







 
Investment in Storage Facilities: (unaudited)



The following summarizes activity in storage facilities during the three months ended March 31, 2022:




 
Beginning balance

$

7,090,457

 



Property acquisitions

 

348,017

 



Improvements and equipment additions:



Expansions

 

5,060

 



Roofing, paving, and equipment:



Stabilized stores

 

3,980

 



Recently acquired stores

 

1,653

 



Change in construction in progress (Total CIP $55.0 million)

 

5,430

 



Dispositions and Impairments

 

(189

)



Storage facilities at cost at period end

$

7,454,408

 







 




 
Comparison of Selected G&A Costs (unaudited)
Quarter Ended


March 31, 2022
March 31, 2021
Management and administrative salaries and benefits

$

9,911

 


$

8,612

Training

 

136

 


 

102

Call center

 

840

 


 

700

Life Storage Solutions costs

 

345

 


 

299

Income taxes

 

358

 


 

573

Legal, accounting and professional

 

1,101

 


 

1,063

Other administrative expenses (6)

 

3,135

 


 

2,834



$

15,826

 


$

14,183





 
Net rentable square feet
March 31, 2022

Wholly owned properties

 

52,569,873

 



Joint venture properties

 

8,857,421

 



Third party managed properties

 

19,593,021

 





 

81,020,315

 







 


March 31, 2022
March 31, 2021




 
Common shares outstanding

 

84,307,259

 


 

76,477,796

Operating Partnership Units outstanding

 

960,208

 


 

333,398





 

(1) We believe that Funds from Operations (“FFO”) provides relevant and meaningful information about our operating performance that is necessary, along with net earnings and cash flows, for an understanding of our operating results. FFO adds back historical cost depreciation, which assumes the value of real estate assets diminishes predictably in the future. In fact, real estate asset values increase or decrease with market conditions. Consequently, we believe FFO is a useful supplemental measure in evaluating our operating performance by disregarding (or adding back) historical cost depreciation.






 
Funds from operations is defined by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) as net income available to common shareholders computed in accordance with generally accepted accounting principles (“GAAP”), excluding gains or losses on sales of properties, plus impairment of real estate assets, plus depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. We believe that to further understand our performance, FFO should be compared with our reported net income and cash flows in accordance with GAAP, as presented in our consolidated financial statements.






 
Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, or as an indicator of our ability to make cash distributions.






 
(2) Net operating income or "NOI" is a non-GAAP (generally accepted accounting principles) financial measure that we define as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income: interest expense, impairment and casualty losses, operating lease expenses, depreciation and amortization expense, any losses on sale of real estate, acquisition related costs, general and administrative expense, and deducting from net income: income from discontinued operations, interest income, any gains on sale of real estate, and equity in income of joint ventures. We believe that NOI is a meaningful measure to investors in evaluating our operating performance, because we utilize NOI in making decisions with respect to capital allocations, in determining current property values, and in comparing period-to-period and market-to-market property operating results. Additionally, NOI is widely used in the real estate industry and the self-storage industry to measure the performance and value of real estate assets without regard to various items included in net income that do not relate to or are not indicative of operating performance, such as depreciation and amortization, which can vary depending on accounting methods and book value of assets. NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues, operating income and net income.






 
(3) Includes the stores owned and/or managed by the Company for the entire periods presented that are consolidated in our financial statements. Does not include unconsolidated joint ventures or other stores managed by the Company.






 
(4) Revenues and expenses do not include items related to tenant reinsurance.






 
(5) Does not include unconsolidated joint venture stores or other stores managed by the Company.






 
(6) Other administrative expenses include office rent, travel expense, investor relations and miscellaneous other expenses.

 

Contacts

Life Storage, Inc.
Alex Gress
(716) 295-6833
agress@lifestorage.com