Press Releases

Life Storage, Inc. Reports Fourth Quarter and Full Year 2021 Results

BUFFALO, N.Y.--(BUSINESS WIRE)-- Life Storage, Inc. (NYSE:LSI), a leading national owner and operator of self-storage properties, reported operating results for the quarter and year ended December 31, 2021. All share and per share information has been retrospectively adjusted to reflect the January 2021 three-for-two stock split made in the form of a 50% stock dividend.

Highlights for the Fourth Quarter Included:

  • Generated net income attributable to common shareholders of $74.1 million, or $0.90 per fully diluted common share.
  • Achieved adjusted funds from operations (“FFO”)(1) per fully diluted common share of $1.41, a 31.8% increase over the same period in 2020.
  • Increased same store revenue by 16.9% and same store net operating income (“NOI”)(2) by 23.9%, year-over-year.
  • Acquired 50 stores for $826.6 million, including eight stores from the Company’s third-party management platform.
  • With our joint venture partners, acquired 13 stores for a total cost of approximately $291 million, of which the Company invested $52 million.
  • Added 29 stores (gross) to the Company’s third-party management platform.

Highlights for the Full Year Included:

  • Generated net income attributable to common shareholders of $249.3 million, or $3.17 per fully diluted common share.
  • Achieved adjusted funds from operations (“FFO”)(1) per fully diluted common share of $5.07, a 27.7% increase over the same period in 2020.
  • Increased same store revenue by 14.1% and same store net operating income (“NOI”)(2) by 19.4%, year-over-year.
  • Acquired 112 wholly owned stores for $1,696.3 million, including 31 stores from the Company’s third-party management and joint venture platforms.
  • With our joint venture partners, acquired 30 stores for a total cost of approximately $611 million, of which the Company invested $81 million.
  • Added 103 stores (gross) to the Company’s third-party management platform; the Company grew its third-party management portfolio 11% in 2021 despite acquiring 31 previously managed stores.
  • Completed a $600 million offering of 2.4% Senior Unsecured Notes due 2031.

Joe Saffire, the Company’s Chief Executive Officer, stated, “We continued to successfully accelerate our growth in 2021. Each day our team executed to deliver exceptional results and I am very proud of what we accomplished together. We achieved record acquisition volume in 2021 as we closed $2.3 billion in wholly owned and joint venture acquisitions, adding 144 properties to our platform to be just under 1,100 properties. With a growing acquisition and a third-party management pipeline, we are well positioned to continue executing on our strategic initiatives to further grow shareholder value in 2022 and beyond.”

FINANCIAL RESULTS:

In the fourth quarter of 2021, the Company generated net income attributable to common shareholders of $74.1 million or $0.90 per fully diluted common share, compared to net income attributable to common shareholders of $41.6 million, or $0.57 per fully diluted common share, in the fourth quarter of 2020.

For the year ended December 31, 2021, the Company achieved $249.3 million of net income attributable to common shareholders, or $3.17 per fully diluted common share, as compared to $151.6 million, or $2.13 per fully diluted common share, for the year ended December 31, 2020.

Funds from operations for the quarter were $1.41 per fully diluted common share compared to $1.02 for the same period last year. Adjusted FFO per fully diluted common share for the quarter was $1.41 compared to $1.07 for the quarter ended December 31, 2020.

For the year ended December 31, 2021, FFO per fully diluted common share was $5.08 compared to $3.90 for the year ended December 31, 2020. Adjusted FFO per fully diluted common share for the year was $5.07 as compared to adjusted FFO for the year ended December 31, 2020 of $3.97.

OPERATIONS:

Revenues for the 531 stabilized stores wholly owned by the Company since December 31, 2019 increased 16.9% in the fourth quarter of 2021 compared to the same quarter of 2020. The increase largely resulted from the net impact of a 110 basis point increase in average occupancy and the net impact of a 15.2% increase in realized rental rates.

Same store operating expenses increased 1.9% for the fourth quarter of 2021 compared to the prior year period, the result of increased marketing costs, office and other operating expenses, and repairs and maintenance. The increases were partially offset by decreases in real estate taxes, and payroll and benefits. Same store NOI increased 23.9% in the fourth quarter of 2021 as compared to the fourth quarter of 2020.

During the fourth quarter of 2021, the Company achieved double digit same store revenue growth in each of its 31 major markets. Overall, the markets with the strongest positive revenue impact were Austin, TX; Las Vegas, NV; Buffalo-Upstate, NY and various Florida Markets.

PORTFOLIO TRANSACTIONS:

Wholly Owned Portfolio

During the quarter, the Company acquired 50 stores in Florida (17), Georgia (9), Connecticut (6), Texas (4), Illinois (4), North Carolina (3), South Carolina (2), Colorado (2), Tennessee (1), Virginia (1) and Maine (1) for a total purchase price of $826.6 million.

At December 31, 2021, the Company was under contract to acquire ten self-storage facilities in California (9) and Maryland (1) for an aggregate purchase price of $246.3 million. During January 2022, the Company completed the acquisition of six self-storage facilities in California for an aggregate purchase price of $165.0 million. Subsequent to December 31, 2021, the Company entered into contracts to acquire 15 self-storage facilities in Texas (4), North Carolina (4), Florida (3), South Carolina (1), Illinois (1), Massachusetts (1) and Georgia (1) for an aggregate purchase price of $236.2 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 29 stores (gross). As of quarter end, the Company managed 367 facilities in total, including those in which it owns a minority interest.

FINANCIAL POSITION:

At December 31, 2021, the Company had approximately $171.9 million of cash on hand, and approximately $500 million available on its line of credit.

To support acquisition activity, the Company issued equity securities and priced a bond offering during the fourth quarter. During the quarter, the Company issued 1,527,771 shares of common stock under its continuous equity offering program at a weighted average issue price of $140.44 per share, generating net proceeds after expenses of $212 million. Additionally, the Company completed a previously announced $600 million Senior Unsecured Notes offering at 2.4% due 2031 that closed on October 7, 2021.

Below are key financial ratios at December 31, 2021:

• Debt to Enterprise Value (at $153.18/share)

17.7%

• Debt to Book Cost of Storage Facilities

39.7%

• Debt to Recurring Annualized EBITDA

4.5x

• Debt Service Coverage

5.5x

COMMON STOCK DIVIDEND:

Subsequent to quarter end, the Company’s Board of Directors approved a 16% increase to its quarterly dividend to $1.00 per share, or $4.00 annualized. The dividend was paid on January 26, 2022 to shareholders of record on January 14, 2022.

YEAR 2022 EARNINGS GUIDANCE:

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

Year 2022 Earnings Guidance

 

Current Guidance Range

Same Store Revenue

 

9.50%

 

-

 

10.50%

Same Store Operating Costs (excluding property taxes)

 

4.50%

 

-

 

5.50%

Same Store Property Taxes

 

6.25%

 

-

 

7.25%

Total Same Store Operating Expenses

 

5.00%

 

-

 

6.00%

Same Store Net Operating Income

 

11.50%

 

-

 

12.50%

General & Administrative

 

$69M

 

-

 

$71M

 

 

 

 

 

 

 

Expansions & Enhancements

 

$65M

 

-

 

$75M

Capital Expenditures

 

$30M

 

-

 

$35M

Wholly Owned Acquisitions

 

$550M

 

-

 

$650M

Joint Venture Investments

 

$50M

 

-

 

$100M

 

 

 

 

 

 

 

Adjusted Funds from Operations per Share

 

$5.93

 

-

 

$6.03

 

 

Reconciliation of Guidance

1Q 2022
Range or Value

 

 

FY 2022
Range or Value

Earnings per share attributable to common shareholders - diluted

$0.82 - $0.86

 

 

$3.76 - $3.86

Plus: real estate depreciation and amortization

0.54 - 0.54

 

 

2.17 - 2.17

FFO per share

$1.36 - $1.40

 

 

$5.93 - $6.03

The Company’s 2022 same store pool consists of the 581 stabilized stores wholly owned since December 31, 2020. 38 of the stores purchased through December 31, 2021 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 Fourth Quarter Earnings Release Conference Call at 9:00 a.m. Eastern Time on Friday, February 25, 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 877.234.0062 (domestic) or 973.413.6112 (international); passcode 105369 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 44506.

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 just under 1,100 storage facilities in 35 states. The Company serves both residential and commercial storage customers with storage units rented by month. Life Storage consistently provides responsive service to approximately 600,000 customers, making it a leader in the industry. For more information visit http://invest.lifestorage.com.

 
Life Storage, Inc.
Balance Sheet Data
(unaudited)
 

December 31,

December 31,

(dollars in thousands)

2021

2020

Assets
Investment in storage facilities:
Land

$

1,185,976

 

$

951,813

 

Building, equipment and construction in progress

 

5,904,481

 

 

4,378,510

 

 

7,090,457

 

 

5,330,323

 

Less: accumulated depreciation

 

(1,007,650

)

 

(873,178

)

Investment in storage facilities, net

 

6,082,807

 

 

4,457,145

 

Cash and cash equivalents

 

171,865

 

 

54,400

 

Accounts receivable

 

17,784

 

 

15,464

 

Receivable from joint ventures

 

333

 

 

1,064

 

Investment in joint ventures

 

213,003

 

 

143,042

 

Prepaid expenses

 

9,918

 

 

8,326

 

Intangible asset - in-place customer leases

 

13,966

 

 

5,409

 

Trade name

 

16,500

 

 

16,500

 

Other assets

 

30,421

 

 

26,498

 

Total Assets

$

6,556,597

 

$

4,727,848

 

 
Liabilities
Line of credit

$

-

 

$

-

 

Term notes, net

 

2,747,838

 

 

2,155,457

 

Accounts payable and accrued liabilities

 

131,778

 

 

112,654

 

Deferred revenue

 

27,277

 

 

17,416

 

Mortgages payable

 

37,030

 

 

37,777

 

Total Liabilities

 

2,943,923

 

 

2,323,304

 

 
Noncontrolling redeemable Preferred Operating Partnership Units at redemption value

 

90,783

 

 

-

 

 
Noncontrolling redeemable Common Operating Partnership Units at redemption value

 

142,892

 

 

26,446

 

 
Equity
Common stock

 

836

 

 

495

 

Additional paid-in capital

 

3,697,000

 

 

2,671,311

 

Accumulated deficit

 

(314,713

)

 

(288,667

)

Accumulated other comprehensive loss

 

(4,124

)

 

(5,041

)

Total Shareholders' Equity

 

3,378,999

 

 

2,378,098

 

Total Liabilities and Shareholders' Equity

$

6,556,597

 

$

4,727,848

 

 
Life Storage, Inc.
Consolidated Statements of Operations
(unaudited)
 
October 1, 2021 October 1, 2020 January 1, 2021 January 1, 2020
to to to to
(dollars in thousands, except share data) December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020
 
Revenues
Rental income

$

194,441

 

$

145,852

 

$

690,758

 

$

539,554

 

Tenant reinsurance

 

16,294

 

 

12,234

 

 

58,103

 

 

44,742

 

Other operating income

 

4,387

 

 

4,119

 

 

17,577

 

 

15,069

 

Management and acquisition fee income

 

6,037

 

 

4,300

 

 

22,127

 

 

17,406

 

Total operating revenues

 

221,159

 

 

166,505

 

 

788,565

 

 

616,771

 

 
Expenses
Property operations and maintenance

 

40,129

 

 

32,503

 

 

143,648

 

 

122,544

 

Tenant reinsurance

 

6,448

 

 

4,474

 

 

22,882

 

 

15,729

 

Real estate taxes

 

18,067

 

 

17,550

 

 

79,861

 

 

70,302

 

General and administrative

 

17,210

 

 

13,557

 

 

62,617

 

 

52,055

 

Depreciation and amortization

 

36,817

 

 

30,777

 

 

134,754

 

 

117,302

 

Amortization of in-place customer leases

 

4,014

 

 

1,812

 

 

12,365

 

 

5,623

 

Total operating expenses

 

122,685

 

 

100,673

 

 

456,127

 

 

383,555

 

 
Gain on sale of real estate

 

-

 

 

-

 

 

-

 

 

302

 

Income from operations

 

98,474

 

 

65,832

 

 

332,438

 

 

233,518

 

 
Other income (expense)
Interest expense (A)

 

(24,316

)

 

(24,959

)

 

(86,786

)

 

(86,015

)

Interest and dividend income

 

39

 

 

4

 

 

827

 

 

19

 

Equity in income of joint ventures

 

1,570

 

 

923

 

 

5,696

 

 

4,838

 

 
Net income

 

75,767

 

 

41,800

 

 

252,175

 

 

152,360

 

Net income attributable to noncontrolling preferred interests in the Operating Partnership

 

(1,018

)

 

-

 

 

(1,494

)

 

-

 

Net income attributable to noncontrolling common interests in the Operating Partnership

 

(604

)

 

(213

)

 

(1,364

)

 

(789

)

Net income attributable to common shareholders

$

74,145

 

$

41,587

 

$

249,317

 

$

151,571

 

 
Earnings per common share attributable to common shareholders - basic

$

0.90

 

$

0.57

 

$

3.18

 

$

2.13

 

 
Earnings per common share attributable to common shareholders - diluted

$

0.90

 

$

0.57

 

$

3.17

 

$

2.13

 

 
Common shares used in basic earnings per share calculation

 

82,293,536

 

 

73,100,672

 

 

78,424,956

 

 

71,054,907

 

 
Common shares used in diluted earnings per share calculation

 

82,522,589

 

 

73,275,641

 

 

78,608,151

 

 

71,177,763

 

 
Dividends declared per common share

$

0.8600

 

$

0.7133

 

$

3.0800

 

$

2.8533

 

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

$

23,586

 

$

20,325

 

$

84,248

 

$

79,584

 

Make-whole payment on repaid note

$

-

 

$

4,030

 

$

-

 

$

4,030

 

Amortization of debt issuance costs

 

730

 

 

604

 

 

2,538

 

 

2,401

 

Total interest expense

$

24,316

 

$

24,959

 

$

86,786

 

$

86,015

 

 
Life Storage, Inc.
Computation of Funds From Operations (FFO) (1)
(unaudited)
 
October 1, 2021 October 1, 2020 January 1, 2021 January 1, 2020
to to to to
(dollars in thousands, except share data) December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020
 
Net income attributable to common shareholders

$

74,145

 

$

41,587

 

$

249,317

 

$

151,571

 

Noncontrolling common interests in the Operating Partnership

 

604

 

 

213

 

 

1,364

 

 

789

 

Depreciation of real estate and amortization of intangible
assets exclusive of debt issuance costs

 

40,287

 

 

31,955

 

 

144,978

 

 

120,512

 

Depreciation and amortization from unconsolidated joint ventures

 

1,988

 

 

1,311

 

 

6,227

 

 

5,814

 

Funds from operations allocable to noncontrolling
interest in Operating Partnership

 

(945

)

 

(382

)

 

(2,177

)

 

(1,443

)

Funds from operations available to common shareholders

 

116,079

 

 

74,684

 

 

399,709

 

 

277,243

 

FFO per share - diluted

$

1.41

 

$

1.02

 

$

5.08

 

$

3.90

 

 
Adjustments to FFO
Costs related to officer's retirement

 

465

 

 

-

 

 

620

 

 

-

 

Acquisition fee

 

(472

)

 

-

 

 

(1,752

)

 

(217

)

Gain on sale of land

 

-

 

 

-

 

 

-

 

 

(302

)

Uninsured damages and customer reinsurance claims, net

 

-

 

 

-

 

 

-

 

 

1,546

 

Make-whole payment on repaid note

 

4,030

 

 

4,030

 

Funds from operations resulting from non-recurring items
allocable to noncontrolling interest in Operating Partnership

 

-

 

 

(21

)

 

5

 

 

(26

)

Adjusted funds from operations available to common shareholders

 

116,072

 

 

78,693

 

 

398,582

 

 

282,274

 

Adjusted FFO per share - diluted

$

1.41

 

$

1.07

 

$

5.07

 

$

3.97

 

 
Common shares - diluted

 

82,522,589

 

 

73,275,641

 

 

78,608,151

 

 

71,177,763

 

 
Life Storage, Inc.
Computation of Net Operating Income (2)
(unaudited)
 
October 1, 2021 October 1, 2020 January 1, 2021 January 1, 2020
to to to to
(dollars in thousands) December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020
 
Net Income

$

75,767

 

$

41,800

 

$

252,175

 

$

152,360

 

General and administrative

 

17,210

 

 

13,557

 

 

62,617

 

 

52,055

 

Depreciation and amortization

 

40,831

 

 

32,589

 

 

147,119

 

 

122,925

 

Gain on sale of real estate

 

-

 

 

-

 

 

-

 

 

(302

)

Interest expense

 

24,316

 

 

24,959

 

 

86,786

 

 

86,015

 

Interest and dividend income

 

(39

)

 

(4

)

 

(827

)

 

(19

)

Equity in income of joint ventures

 

(1,570

)

 

(923

)

 

(5,696

)

 

(4,838

)

Net operating income

$

156,515

 

$

111,978

 

$

542,174

 

$

408,196

 

 
Same store (4)

$

112,553

 

$

90,876

 

$

409,459

 

$

342,846

 

Net operating income related to tenant reinsurance

 

9,846

 

 

7,760

 

 

35,221

 

 

29,013

 

Other stores and management fee income

 

34,116

 

 

13,342

 

 

97,494

 

 

36,337

 

Total net operating income

$

156,515

 

$

111,978

 

$

542,174

 

$

408,196

 

 
Life Storage, Inc.
Quarterly Same Store Data (3) (4) 531 mature stores owned since 12/31/19
(unaudited)
 
October 1, 2021 October 1, 2020
to to Percentage
(dollars in thousands) December 31, 2021 December 31, 2020 Change Change
 
Revenues:
Rental income

$

153,787

 

$

131,282

 

$

22,505

 

17.1

%

Other operating income

 

1,700

 

 

1,714

 

 

(14

)

-0.8

%

Total operating revenues

 

155,487

 

 

132,996

 

 

22,491

 

16.9

%

 
Expenses:
Payroll and benefits

 

9,999

 

 

10,222

 

 

(223

)

-2.2

%

Real estate taxes

 

14,564

 

 

15,046

 

 

(482

)

-3.2

%

Utilities

 

3,453

 

 

3,250

 

 

203

 

6.2

%

Repairs and maintenance

 

5,193

 

 

4,925

 

 

268

 

5.4

%

Office and other operating expense

 

4,703

 

 

4,273

 

 

430

 

10.1

%

Insurance

 

1,719

 

 

1,644

 

 

75

 

4.6

%

Advertising

 

69

 

50

 

19

 

38.0

%

Internet marketing

 

3,234

 

 

2,710

 

 

524

 

19.3

%

Total operating expenses

 

42,934

 

 

42,120

 

 

814

 

1.9

%

 
Net operating income (2)

$

112,553

 

$

90,876

 

$

21,677

 

23.9

%

 
 
QTD Same store move ins

 

47,479

 

 

48,102

 

 

(623

)

 
QTD Same store move outs

 

48,948

 

 

47,967

 

 

981

 

 
 
Other Comparable Quarterly Same Store Data (4)
(unaudited)
 
October 1, 2021 October 1, 2020
to to Percentage
December 31, 2021 December 31, 2020 Change Change
2020 Same store pool (515 stores)
Revenues

$

150,649

 

$

128,791

 

$

21,858

 

17.0

%

Expenses

 

41,404

 

 

40,785

 

 

619

 

1.5

%

Net operating income

$

109,245

 

$

88,006

 

$

21,239

 

24.1

%

 
 
2019 Same store pool (502 stores)
Revenues

$

147,361

 

$

126,133

 

$

21,228

 

16.8

%

Expenses

 

40,350

 

 

39,677

 

 

673

 

1.7

%

Net operating income

$

107,011

 

$

86,456

 

$

20,555

 

23.8

%

 
Life Storage, Inc.
Year to Date Same Store Data (3) (4) 531 mature stores owned since 12/31/19
(unaudited)
 
 
January 1, 2021 January 1, 2020
to to Percentage
(dollars in thousands) December 31, 2021 December 31, 2020 Change Change
 
Revenues:
Rental income

$

578,658

 

$

506,469

 

$

72,189

 

 

14.3

%

Other operating income

 

6,893

 

 

6,519

 

 

374

 

 

5.7

%

Total operating revenues

 

585,551

 

 

512,988

 

 

72,563

 

 

14.1

%

 
Expenses:
Payroll and benefits

 

38,900

 

 

38,995

 

 

(95

)

 

-0.2

%

Real estate taxes

 

67,142

 

 

64,918

 

 

2,224

 

 

3.4

%

Utilities

 

14,654

 

 

14,273

 

 

381

 

 

2.7

%

Repairs and maintenance

 

18,259

 

 

16,098

 

 

2,161

 

 

13.4

%

Office and other operating expense

 

16,680

 

 

15,397

 

 

1,283

 

 

8.3

%

Insurance

 

6,374

 

 

6,151

 

 

223

 

 

3.6

%

Advertising

 

212

 

241

 

(29

)

 

-12.0

%

Internet marketing

 

13,871

 

 

14,069

 

 

(198

)

 

-1.4

%

Total operating expenses

 

176,092

 

 

170,142

 

 

5,950

 

 

3.5

%

 
Net operating income (2)

$

409,459

 

$

342,846

 

$

66,613

 

 

19.4

%

 
 
YTD Same store move ins

 

194,816

 

 

204,976

 

 

(10,160

)

 
YTD Same store move outs

 

188,925

 

 

187,935

 

 

990

 

 
 
Life Storage, Inc.
Other Data - unaudited

Same Store (3)

 

All Stores (5)

2021

 

2020

 

2021

 

2020

 
Weighted average quarterly occupancy

 

94.2

%

 

93.1

%

 

93.7

%

 

92.4

%

 
Occupancy at December 31

 

93.9

%

 

92.9

%

 

93.0

%

 

92.2

%

 
Rent per occupied square foot

$

16.97

 

$

14.73

 

$

16.84

 

$

14.69

 

 
Life Storage, Inc.
Other Data - unaudited (continued)
 
 
Investment in Storage Facilities: (unaudited)
The following summarizes activity in storage facilities during the twelve months ended December 31, 2021:
 
Beginning balance

$

5,330,323

 

Property acquisitions

 

1,675,366

 

Improvements and equipment additions:
Expansions

 

24,319

 

Roofing, paving, and equipment:
Stabilized stores

 

26,326

 

Recently acquired stores

 

8,924

 

Change in construction in progress (Total CIP $44.6 million)

 

25,946

 

Dispositions and Impairments

 

(747

)

Storage facilities at cost at period end

$

7,090,457

 

 
 
Comparison of Selected G&A Costs (unaudited) Quarter Ended Year Ended
December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020
Management and administrative salaries and benefits

$

10,238

 

$

9,784

 

$

39,218

 

$

31,800

 

Training

 

337

 

 

320

 

 

680

 

 

887

 

Call center

 

854

 

 

865

 

 

3,151

 

 

3,160

 

Life Storage Solutions costs

 

463

 

 

467

 

 

1,272

 

 

1,029

 

Income taxes

 

(193

)

 

(1,001

)

 

1,679

 

1,628

Legal, accounting and professional

 

1,180

 

 

430

 

 

4,048

 

 

3,360

 

Costs related to officer's retirement

 

465

 

 

-

 

 

620

 

 

-

 

Other administrative expenses (6)

 

3,866

 

 

2,692

 

 

11,949

 

 

10,191

 

$

17,210

 

$

13,557

 

$

62,617

 

$

52,055

 

 
Net rentable square feet December 31, 2021
Wholly owned properties

 

51,325,614

 

Joint venture properties

 

8,772,111

 

Third party managed properties

 

18,532,262

 

 

78,629,987

 

 
December 31, 2021 December 31, 2020
 
Common shares outstanding

 

83,565,710

 

 

74,211,920

 

Operating Partnership Units outstanding

 

960,708

 

 

334,149

 

 
(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.

 

Life Storage, Inc.
Alex Gress
(716) 295-6833
[email protected]

Source: Life Storage, Inc.