Share this article

print logo

Growing storage needs boost Sovran’s profits

Sovran Self Storage’s rental space keeps filling up, and that’s pushing up the Amherst company’s profits.

Sovran’s profits rose by 22 percent, topping analyst forecasts, as occupancy rates strengthened at its Uncle Bob’s self-storage facilities. That allowed Sovran to raise its rental rates by an average of 5 percent.

Sovran also said it has signed contracts to buy nine additional stores, including two in Buffalo for a combined price of about $88 million. A company spokeswoman declined to say where the Buffalo stores are located.

One of the stores that Sovran is buying is in its new Los Angeles market, while another is in Miami and one is in Dallas. Two others are in Chicago and Sovran is buying single stores in Charleston, S.C., and Charlotte, N.C.

The company also raised its earnings forecast for the entire year by less than 1 percent, predicting that its funds from operations to range between $5.49 and $5.55 per share this year, up 4 cents from its February guidance and about 10 cents more than analyst forecasts. Sovran’s profits have risen by more than 10 percent for each of the past five years.

Sovran said its funds from operations improved to $44.9 million, or $1.16 per share, from $36.9 million, or $1.07 per share, a year ago. Excluding $3.1 million in acquisition-related costs and other expenses, Sovran’s earnings were $1.22 per share, which was stronger than the $1.17 per share that analysts were expecting.

The improvement was driven by a continued rise in occupancy rates at the 428 Uncle Bob’s stores that have been open for at least a year, improving to 90.5 percent, from 89.6 percent a year ago.

That rising demand helped Sovran charge more for its space, raising rent by an average of 5 percent to $12.77 per square foot.

Earnings during the second quarter are expected to range between $1.37 and $1.39 per share, slightly more than the $1.36 per share that analysts are predicting.