Press Releases

Sovran Self Storage Reports Third Quarter 2010 Results

BUFFALO, N.Y.--(BUSINESS WIRE)-- Sovran Self Storage, Inc. (NYSE:SSS), a self storage real estate investment trust (REIT), reported operating results for the quarter ended September 30, 2010.

Net income available to common shareholders for the third quarter of 2010 was $8.9 million or $0.32 per diluted share. Net income available to common shareholders for the same period in 2009 was $7.5 million or $0.32 per diluted share. Funds from operations (FFO) for the quarter were $0.63 per fully diluted common share compared to $0.68 for the same period last year. The impact of the Company's 4 million share offering in October 2009 offset a significant decline in interest expense thereby contributing to the reduction in per share FFO results.

OPERATIONS:

Revenues for the 345 stores wholly owned by the Company for the entire quarter of each year were slightly positive over those of the third quarter of 2009, the result of a 60 basis point increase in average occupancy offset by a 1.1% decline in rental rates, and strong growth in other revenues.

"We saw solid increases in rents and occupancy this quarter," said Kenneth F. Myszka, the Company's President and COO. "Inquiries to our website are up dramatically, and we're encouraged by continued strong demand in many of our markets."

Same store operating expenses increased by a total of 80 basis points for the third quarter of 2010 compared to the prior year period, primarily the result of increased health care, workers compensation and property maintenance costs offset by a net property tax decrease of 2.6%. Property taxes were impacted by the reductions won at several properties as a result of successful challenges to assessed values.

Total consolidated property net operating income for the third quarter declined 27 basis points compared with the same quarter in 2009 to $30.5 million. Overall average occupancy for the quarter improved 20 basis points to 82.6% and average rent per square foot for the portfolio was $10.09.

General and administrative expenses grew by about $0.4 million over the same period in 2009, primarily due to increased income taxes associated with operations of the Company's taxable REIT subsidiary and marketing and internet advertising costs.

During the third quarter of 2010, revenue growth was seen at the Company's Georgia, Tennessee, and most of its New England stores, while stores in Florida, Arizona and Texas (primarily the Houston market area) showed revenue declines.

PROPERTIES:

The Company did not acquire or dispose of any properties during the quarter for its own portfolio or for that of its Joint Ventures.

"We're seeing an increased number of facilities coming to market, and we're well positioned to acquire the right properties at the right terms," commented David Rogers, the Company's Chief Financial Officer. "We have a strong balance sheet and plenty of liquidity to put to work."

The Company continues with its program of expanding and enhancing its properties. Up to 20 projects providing approximately 500,000 square feet of additional and/or improved space at existing stores is planned during 2010 at an estimated cost of $20 million. It is also evaluating up to $50 million of such improvements to undertake in 2011.

CAPITAL TRANSACTIONS:

At September 30, 2010, the Company had $400 million of unsecured term note debt and $79.5 million of mortgage debt outstanding. The Company has no significant debt maturities until mid-2012.

Illustrated below are key financial ratios at September 30, 2010:

    --  Debt to Enterprise Value (at $38.00/share) 31.1%
    --  Debt to Book Cost of Storage Facilities 34.8%
    --  Debt to EBITDA Ratio 4.7x
    --  Debt Service Coverage 3.2x

At September 30, 2010, the Company had approximately $32 million of cash on hand, and up to $175 million available on its line of credit.

YEAR 2010 EARNINGS GUIDANCE:

While consumer demand appears to be improving moderately in many of our markets, the Company expects conditions to remain competitive and anticipates the continuation of leasing incentives as well as increased advertising. Accordingly, a decline in same store revenue of 0% to 1% is projected from that of 2009. Property operating costs are projected to increase by 2% to 3%, including an expected 5% annual increase in property taxes. Accordingly, the Company is anticipating a decline of 2% to 3% in same store net operating income for 2010.

The Company has identified some 20 properties at which it plans to add or improve approximately 500,000 square feet of storage space during 2010 at an estimated cost of $20 million. The Company also has budgeted $12 million to provide for recurring capitalized expenditures including roofing, painting, paving, and office renovations.

The Company is selectively evaluating acquisition opportunities, but at present has no properties under contract and expects to remain prudent while the acquisition market remains unsettled.

General and administrative expenses are expected to increase due to income taxes on its taxable REIT subsidiaries and the Company's plans to expand its internet marketing presence.

At September 30, 2010, all of the Company's debt is either fixed rate or covered by rate swap contracts that essentially fix the rate. Subsequent borrowings that may occur will be pursuant to the Company's Line of Credit agreement at a floating rate of LIBOR plus 1.375%.

At September 30, 2010, the Company had 27.6 million shares of common stock outstanding and 0.34 million Operating Partnership Units outstanding.

As a result of somewhat improved projected operating results, offset by the dilutive impact of the sale of 10 stores, management reiterates its prior forecast of expected funds from operations for the full year 2010 to be approximately $2.44 to $2.48 per share, and between $0.62 and $0.64 for the fourth quarter of 2010.

FORWARD LOOKING STATEMENTS:

When used within this news release, 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. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by such forward looking statements. Such factors include, but are not limited to, the effect of competition from new self storage facilities, which could cause rents and occupancy rates to decline; the Company's ability to evaluate, finance and integrate acquired businesses into the Company's existing business and operations; 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 fluctuate, impacting costs associated with the Company's outstanding floating rate debt; the Company's ability to comply with debt covenants; the future ratings on the Company's debt instruments; the regional concentration of the Company's business may subject it to economic downturns in the states of Florida and Texas; the Company's ability to effectively compete in the industries in which it does business; the Company's reliance on its call center; the Company's cash flow may be insufficient to meet required payments of principal, interest and dividends; and tax law changes which may change the taxability of future income.

CONFERENCE CALL:

Sovran Self Storage will hold its Third Quarter Earnings Release Conference Call at 9:00 a.m. Eastern Time on Thursday, November 4, 2010. To access the conference call, dial 877.407.8033 (domestic), or 201.689.8033 (international), at least five minutes prior to the scheduled start of the call. Management will accept questions from registered financial analysts after prepared remarks; all others are encouraged to listen to the call via webcast at www.unclebobs.com/company/investment/events.

The webcast will be archived for a period of 90 days; a telephone replay will also be available for 72 hours by calling 877.660.6853 and entering pass codes 286/358443.

Sovran Self Storage, Inc. is a self-administered and self-managed equity REIT that is in the business of acquiring and managing self storage facilities. The Company operates 371 self storage facilities in 24 states under the name "Uncle Bob's Self Storage"(R). For more information, please contact David Rogers, CFO or Diane Piegza, VP Corporate Communications at 716.633.1850 or visit the Company's Web site.


SOVRAN SELF STORAGE, INC.

BALANCE SHEET DATA

(unaudited)

                                                  September 30,  December 31,

(dollars in thousands)                            2010           2009

Assets

Investment in storage facilities:

Land                                              $ 235,128      $ 234,522

Building, equipment and construction in progress    1,143,867      1,129,932

                                                    1,378,995      1,364,454

Less: accumulated depreciation                      (263,496  )    (238,971  )

Investment in storage facilities, net               1,115,499      1,125,483

Cash and cash equivalents                           31,927         10,710

Accounts receivable                                 2,324          2,346

Receivable from joint venture                       232            173

Investment in joint venture                         19,710         19,944

Prepaid expenses                                    5,338          4,203

Other assets                                        4,543          5,313

Net assets of discontinued operations               -              16,926

Total Assets                                      $ 1,179,573    $ 1,185,098

Liabilities

Line of credit                                    $ -            $ -

Term notes                                          400,000        400,000

Accounts payable and accrued liabilities            24,193         22,316

Deferred revenue                                    4,841          4,980

Fair value of interest rate swap agreements         12,213         11,524

Mortgages payable                                   79,539         81,219

Total Liabilities                                   520,786        520,039

Noncontrolling redeemable Operating Partnership     12,997         15,005
Units at redemption value

Equity

Common stock                                        288            287

Additional paid-in capital                          816,470        814,988

Accumulated deficit                                 (144,738  )    (139,863  )

Accumulated other comprehensive loss                (12,137   )    (11,265   )

Treasury stock at cost                              (27,175   )    (27,175   )

Total Shareholders' Equity                          632,708        636,972

Noncontrolling interest - consolidated joint        13,082         13,082
venture

Total Equity                                        645,790        650,054

Total Liabilities and Equity                      $ 1,179,573    $ 1,185,098




CONSOLIDATED STATEMENTS OF
OPERATIONS

(unaudited)

                                         July 1, 2010        July 1, 2009

                                         to                  to

(dollars in thousands,                   September 30, 2010  September 30, 2009
except share data)

Revenues

Rental income                            $ 46,196            $ 46,440

Other operating income                     2,109               1,761

Management and acquisition                 318                 313
fee income

Total operating revenues                   48,623              48,514

Expenses

Property operations and                    13,197              12,888
maintenance

Real estate taxes                          4,940               5,058

General and administrative                 4,983               4,568

Depreciation and                           8,215               8,111
amortization

Amortization of in-place                   -                   27
customer leases

Total operating expenses                   31,335              30,652

Income from operations                     17,288              17,862

Other income (expense)

Interest expense (including
amortization of financing
fees

of $258 in 2010 and $315 in                (7,954     )        (10,873    )
2009)

Interest income                            24                  22

Gain on the sale of land                   -                   1,127

Equity in income of joint                  16                  60
ventures

Income from continuing                     9,374               8,198
operations

Loss from discontinued operations
(including loss on disposal of $1,009 in   -                   (228       )
2009)

Net income                                 9,374               7,970

Net income attributable to                 (451       )        (474       )
noncontrolling interests

Net income attributable to               $ 8,923             $ 7,496
common shareholders

Earnings per common share attributable to common
shareholders - basic

Continuing operations                    $ 0.32              $ 0.33

Discontinued operations                    -                   (0.01      )

Earnings per common share -              $ 0.32              $ 0.32
basic

Earnings per common share attributable to common
shareholders - diluted

Continuing operations                    $ 0.32              $ 0.33

Discontinued operations                    -                   (0.01      )

Earnings per common share -              $ 0.32              $ 0.32
diluted

Common shares used in basic

earnings per share                         27,485,416          23,335,957
calculation

Common shares used in
diluted

earnings per share                         27,525,279          23,349,479
calculation

Dividends declared per                   $ 0.4500            $ 0.4500
common share




CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

                                          January 1, 2010     January 1, 2009

                                          to                  to

(dollars in thousands, except share       September 30, 2010  September 30, 2009
data)

Revenues

Rental income                             $ 136,606           $ 137,580

Other operating income                      5,669               5,013

Management and acquisition fee income       941                 929

Total operating revenues                    143,216             143,522

Expenses

Property operations and maintenance         38,673              37,754

Real estate taxes                           15,290              15,068

General and administrative                  15,090              13,292

Depreciation and amortization               24,617              24,331

Amortization of in-place customer leases    -                   262

Total operating expenses                    93,670              90,707

Income from operations                      49,546              52,815

Other income (expense)

Interest expense (including amortization
of financing fees

of $773 in 2010 and $946 in 2009 as well    (23,762    )        (32,552    )
as $923 of waiver fees in 2009)

Interest income                             65                  75

Gain on the sale of land                    -                   1,127

Equity in income of joint ventures          154                 154

Income from continuing operations           26,003              21,619

Income from discontinued operations
(including a gain on disposal of $6,944
in 2010

and loss on disposal of $1,009 in 2009)     7,562               1,215

Net income                                  33,565              22,834

Net income attributable to                  (1,454     )        (1,416     )
noncontrolling interests

Net income attributable to common         $ 32,111            $ 21,418
shareholders

Earnings per common share attributable
to common shareholders - basic

Continuing operations                     $ 0.89              $ 0.90

Discontinued operations                     0.28                0.05

Earnings per common share - basic         $ 1.17              $ 0.95

Earnings per common share attributable
to common shareholders - diluted

Continuing operations                     $ 0.89              $ 0.90

Discontinued operations                     0.28                0.05

Earnings per common share - diluted       $ 1.17              $ 0.95

Common shares used in basic

earnings per share calculation              27,464,672          22,639,513

Common shares used in diluted

earnings per share calculation              27,504,175          22,646,131

Dividends declared per common share       $ 1.3500            $ 1.0900




COMPUTATION OF FUNDS FROM OPERATIONS
(FFO) (1) - (unaudited)

                                         July 1, 2010        July 1, 2009

                                         to                  to

(dollars in thousands, except share      September 30, 2010  September 30, 2009
data)

Net income attributable to common        $ 8,923             $ 7,496
shareholders

Net income attributable to                 451                 474
noncontrolling interests

Depreciation of real estate and
amortization of intangible

assets exclusive of deferred financing     8,215               8,138
fees

Depreciation of real estate included in    -                   270
discontinued operations

Depreciation and amortization from         197                 205
unconsolidated joint ventures

Gain on sale of real estate                -                   (118       )

Funds from operations allocable to
noncontrolling

interest in Operating Partnership          (214       )        (284       )

Funds from operations allocable to
noncontrolling

interest in consolidated joint ventures    (340       )        (340       )

Funds from operations available to
common

shareholders                               17,232              15,841

FFO per share - diluted                  $ 0.63              $ 0.68

Common shares - diluted                    27,525,279          23,349,479

                                         January 1, 2010     January 1, 2009

                                         to                  to

(dollars in thousands, except share      September 30, 2010  September 30, 2009
data)

Net income attributable to common        $ 32,111            $ 21,418
shareholders

Net income attributable to                 1,454               1,416
noncontrolling interests

Depreciation of real estate and
amortization of intangible

assets exclusive of deferred financing     24,617              24,593
fees

Depreciation of real estate included in    217                 878
discontinued operations

Depreciation and amortization from         588                 620
unconsolidated joint ventures

Gain on sale of real estate                (6,944     )        (118       )

Funds from operations allocable to
noncontrolling

interest in Operating Partnership          (677       )        (868       )

Funds from operations allocable to
noncontrolling

interest in consolidated joint ventures    (1,020     )        (1,020     )

Funds from operations available to
common

shareholders                               50,346              46,919

FFO per share - diluted                  $ 1.83              $ 2.07

Common shares - diluted                    27,504,175          22,646,131




(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 computed in accordance with
generally accepted accounting principles ("GAAP"), excluding gains or losses on
sales of properties, 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.




QUARTERLY SAME STORE DATA   July 1, 2010        July 1, 2009
(2) *

                            to                  to                  Percentage

(dollars in thousands)      September 30, 2010  September 30, 2009  Change

Revenues:

Rental income               $ 46,134            $ 46,440            -0.7 %

Other operating income        1,988               1,670             19.0 %

Total operating revenues      48,122              48,110            0.0  %

Expenses:

Property operations and       13,123              12,848            2.1  %
maintenance

Real estate taxes             4,925               5,057             -2.6 %

Total operating expenses      18,048              17,905            0.8  %

Operating income            $ 30,074            $ 30,205            -0.4 %

(2) Includes the 345 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 venture stores
managed by the Company.

* See exhibit A for supplemental same store data.




YEAR TO DATE SAME STORE DATA  January 1, 2010     January 1, 2009
(2)

                              to                  to                  Percentage

(dollars in thousands)        September 30, 2010  September 30, 2009  Change

Revenues:

Rental income                 $ 136,473           $ 137,580           -0.8 %

Other operating income          5,351               4,771             12.2 %

Total operating revenues        141,824             142,351           -0.4 %

Expenses:

Property operations and         38,452              37,665            2.1  %
maintenance

Real estate taxes               15,248              15,069            1.2  %

Total operating expenses        53,700              52,734            1.8  %

Operating income              $ 88,124            $ 89,617            -1.7 %




OTHER DATA                Same Store (2)                          All Stores (3)

                          2010                2009                2010    2009

Weighted average          82.8%               82.2%               82.6%   82.4%
quarterly occupancy

Occupancy at September    82.5%               81.4%               82.3%   81.6%
30

Rent per occupied square  $10.10              $10.21              $10.09  $10.15
foot

(3) Does not include 25 unconsolidated joint venture stores
managed by the Company

Investment in Storage
Facilities:

The following summarizes activity in storage facilities during the nine months
ended September 30, 2010:

Beginning balance         $ 1,364,454

Property acquisitions       -

Improvements and
equipment additions:

Expansions                  4,809

Roofing, paving,
painting, and equipment:

Stabilized stores           8,712

Recently acquired and
consolidated joint          783
venture stores

Change in construction
in progress (Total CIP      403
$10.2 million)

Dispositions                (166)

Storage facilities at     $ 1,378,995
cost at period end

                          September 30, 2010  September 30, 2009

Common shares               27,648,329         23,478,580
outstanding

Operating Partnership       342,936            419,952
Units outstanding





Exhibit A

Sovran Self Storage, Inc.

Same Store Performance Summary

Three Months Ended September 30, 2010

(unaudited)

                                Avg        Avg Quarterly
                                Qtrly      Occupancy        Revenue                       Expenses                       NOI
                                Rent       for the Three    for the Three Months          for the Three Months           for the Three Months
                        Square  per        Months Ended     Ended September 30,           Ended September 30,            Ended September 30,
                        Feet    Occupied   September 30,
                                Square
State          Stores           Foot       2010     2009    2010      2009      %         2010      2009      % Change   2010      2009      %
                                                                                Change                                                       Change

Alabama        22       1,587   $ 8.07     76.9%    76.0%   $ 2,694   $ 2,649   1.70%     $ 1,023   $ 1,017   0.59%      $ 1,671   $ 1,632   2.39%

Arizona        9        530       9.63     86.7%    86.9%     1,171     1,212   -3.38%      436       418     4.31%        735       794     -7.43%

Connecticut    5        301       17.38    77.4%    74.3%     1,039     1,026   1.27%       243       350     -30.57%      796       676     17.75%

Florida        54       3,452     10.00    80.0%    79.9%     7,182     7,342   -2.18%      3,015     3,022   -0.23%       4,167     4,320   -3.54%

Georgia        22       1,423     9.28     80.9%    79.4%     2,801     2,677   4.63%       1,029     1,020   0.88%        1,772     1,657   6.94%

Louisiana      14       836       10.81    85.2%    80.2%     1,979     1,952   1.38%       628       693     -9.38%       1,351     1,259   7.31%

Maine          2        113       10.97    84.0%    80.7%     271       278     -2.52%      102       85      20.00%       169       193     -12.44%

Maryland       4        172       13.75    89.2%    91.5%     543       533     1.88%       212       199     6.53%        331       334     -0.90%

Massachusetts  12       664       12.40    82.5%    79.3%     1,781     1,710   4.15%       651       624     4.33%        1,130     1,086   4.05%

Michigan       4        229       9.22     92.5%    90.2%     510       491     3.87%       200       182     9.89%        310       309     0.32%

Mississippi    12       924       8.71     85.3%    85.4%     1,815     1,803   0.67%       619       586     5.63%        1,196     1,217   -1.73%

Missouri       7        432       10.84    88.2%    88.6%     1,059     1,070   -1.03%      401       424     -5.42%       658       646     1.86%

New Hampshire  4        260       10.47    82.9%    79.7%     564       543     3.87%       206       187     10.16%       358       356     0.56%

New York       28       1,595     12.90    86.3%    88.0%     4,606     4,555   1.12%       1,525     1,462   4.31%        3,081     3,093   -0.39%

North          11       540       9.11     83.9%    84.1%     1,045     1,097   -4.74%      391       390     0.26%        654       707     -7.50%
Carolina

Ohio           17       1,132     8.41     87.4%    86.0%     2,159     2,144   0.70%       756       763     -0.92%       1,403     1,381   1.59%

Pennsylvania   4        208       9.94     80.9%    84.1%     429       430     -0.23%      149       143     4.20%        280       287     -2.44%

Rhode Island   4        168       12.04    80.7%    80.6%     449       451     -0.44%      180       171     5.26%        269       280     -3.93%

South          8        443       9.42     82.7%    80.8%     904       903     0.11%       386       366     5.46%        518       537     -3.54%
Carolina

Tennessee      4        291       8.12     90.6%    79.1%     554       500     10.80%      259       227     14.10%       295       273     8.06%

Texas          81       5,886     9.95     82.4%    83.5%     12,325    12,549  -1.79%      4,909     4,881   0.57%        7,416     7,668   -3.29%

Virginia       17       1,003     10.35    83.4%    79.2%     2,242     2,195   2.14%       728       695     4.75%        1,514     1,500   0.93%

Portfolio      345      22,189  $ 10.10    82.8%    82.2%   $ 48,122  $ 48,110  0.02%     $ 18,048  $ 17,905  0.80%      $ 30,074  $ 30,205  -0.43%
Total

Dollars in thousands except for average quarterly rent per occupied square foot. Square feet in thousands.

345 wholly owned same stores.




    Source: Sovran Self Storage, Inc.