Peer-Leading Same-Store Revenue, Occupancy and NOI Growth Driven by Operational Excellence

MILLBROOK, NY / ACCESSWIRE / November 8, 2024 / Global Self Storage, Inc. (NASDAQ:SELF), a real estate investment trust that owns, operates, manages, acquires, and redevelops self-storage properties,reported results for the third quarter ended September 30, 2024. All comparisons are to the same year-ago period unless otherwise noted.

Q3 2024 Highlights

• Total revenues increased 3.6% to a record $3.2 million.

• Net income increased 336% to a record $1.2 million or $0.10 per diluted share from $271,000 or $0.02 per diluted share.

• Same-store revenues increased 3.6% to a record $3.2 million.

• Same-store net operating income (NOI),a non-GAAP term, increased 6.3% to $2.0 million.

• Same-store occupancy at September 30, 2024 was 91.5% compared to 89.8% at September 30, 2023 as the company optimized rental revenue.

• Same-store average tenant duration of stay at September 30, 2024 was approximately 3.4 years, increasing from approximately 3.3 years as of September 30, 2023.

• Funds from operations (FFO) was about the same at $1.1 million or $0.10 per diluted share (see definition of this and other non-GAAP measures and their reconciliation to GAAP, below).

• Adjusted FFO (AFFO), a non-GAAP term, increased 2.2% to $1.2 million or $0.10 per diluted share.

• Maintained and covered quarterly dividend of $0.0725 per common share.

• Capital resources total approximately $25.1 million, comprised of $6.9 million in cash, cash equivalents and restricted cash and $3.2 million in marketable securities as of September 30, 2024. $15 million remains available under the company's revolving credit facility.

• Extended $15 million revolving credit facility with Huntington National Bank for another three years with fourth-year extension option. Supports the pursuit of growth through potential acquisitions, joint ventures, and property expansions.

First Nine Months 2024 Highlights

• Total revenues increased 1.4% to $9.3 million.

• Net income increased 10.8% to $2.0 million or $0.18 per diluted share.

• Same-store revenues increased 1.5% to $9.3 million.

• Same-store NOI decreased 0.7% to $5.7 million.

• FFO decreased 11.5% to $2.9 million or $0.26 per diluted share.

• AFFO decreased 8.5% to $3.1 million or $0.28 per diluted share.

• Maintained and covered three quarterly dividends totaling $0.2175 per common share.

Dividend

On September 3, 2024, the company declared a quarterly dividend of $0.0725 per share, consistent with the quarterly dividend for the year-ago period and previous quarter. The quarterly distribution represents an annualized dividend rate of $0.29 per share.

Company Objective

The objective of Global Self Storage is to increase value over time for the benefit of its stockholders. Toward this end, the company will continue to execute its strategic business plan, which includes funding acquisitions, either directly or through joint ventures, and expansion projects at its existing properties. The company's board of directors regularly reviews the strategic business plan, with emphasis on capital formation, debt versus equity ratios, dividend policy, use of capital and debt, FFO and AFFO performance, and optimal cash levels.

The management of Global Self Storage believes that the company's continued operational performance and capital resources position it well to continue executing its strategic business plan.

Management Commentary

"In Q3, our same-store revenue growth led our peer group of publicly traded self-storage REITs," stated Global Self Storage president and CEO, Mark C. Winmill. "We also led our peer group in same-store occupancy growth and NOI growth despite a continuing competitive move-in rate environment.

"We attribute these peer leading results to our targeted digital and local marketing activities that are combined with our operational excellence and professional competitive pricing strategies. These initiatives resulted in overall same-store occupancy at the end of the third quarter increasing by a peer-leading 170 basis points to a 91.5% occupancy rate at the end of the third quarter.

"This occupancy growth is even more impressive when considering that our marketing expenses decreased by 5.4% in the third quarter versus the same year-ago period. It truly underscores the efficiency and effectiveness of our well-tuned marketing strategies.

"Our third quarter results also reflect the benefits our newly designed website that we relaunched in Q4 of last year. The redesigned site features an enhanced user interface designed for better visitor engagement and greater attention to our now more than 3,200 tenant reviews that highlight the superior tenant value we deliver.

"To further strengthen this positive message, during the third quarter we launched a new video reviews section on the customer reviews page of our website. We believe our reviews are a valuable asset that demonstrates the strength of our highly effective customer-focused management approach. Our reviews consistently reflect a high level of satisfaction, with an average rating of more than 4.8 out of 5 stars.

"While our commitment to exceptional customer service and innovative marketing strategies help garner positive reviews, we believe more importantly these efforts also help us attract high-quality tenants who tend to store with us longer than the industry average. In fact, at the close of the third quarter, our peer-leading same-store average tenant duration of stay was approximately 3.4 years, an increase from approximately 3.3 years a year ago.

"We remain confident that our professional management techniques will continue to maximize revenue and NOI growth in our self storage portfolio. We also believe our pleasant, clean, safe and hassle-free rental process delivers the best customer experience in the industry, and that our proven marketing strategies will continue to draw high-quality tenants that drive favorable stockholder returns.

"Our strong balance sheet-which includes capital resources totaling approximately $25.1 million-enables us to pursue growth through self-storage property acquisitions, joint ventures, and expansion of existing properties. We continue to explore opportunities in secondary and tertiary markets in select regions of the U.S. and non-U.S. markets. These markets continue to experience limited supply growth as well as less competition from other professionally managed self-storage operators.

"Looking ahead, we expect to continue to integrate new technologies that enable us to maximize revenue. We also plan to take further steps to control expenses. We currently believe these efforts will have a positive effect in the current quarter and make an even more meaningful impact in 2025 and beyond.

"We will remain focused especially on opportunities where we can apply our professional management techniques to optimize occupancy, revenue generation and NOI. Our strong track record of operational performance-even under challenging economic conditions-positions us well to execute our strategic business plan and continue to build value for our stockholders over the long term."

Q3 2024 Financial Summary

Total revenues increased 3.6% to $3.2 million in the third quarter of 2024, with the increase due primarily to increases in occupancy and existing tenant rates under the company's proprietary revenue rate management program. The increase was partially offset by lower move-in rental rates which were in line with lower rates across U.S. markets.

Total operating expenses increased 2.9% to $2.33 million compared to $2.26 million in the same year-ago period. The increase was attributable to an increase in general and administrative expenses which resulted from an increase in professional fees and employment costs. The increase in total operating expenses was partially offset by a decrease in store-level operating expenses.

Operating income increased 5.4% to $873,000, as compared to $829,000 in the same period last year, which was primarily due to increased total revenues combined with decreased store operating expenses.

Net income increased to $1.2 million or $0.10 per diluted share from $271,000 or $0.02 per diluted share in the same year-ago period. Contributing to the increase was an unrealized gain in marketable equity securities compared to an unrealized loss in the same year-ago period.

Capital resources totaled approximately $25.1 million, comprised of $6.9 million in cash, cash equivalents and restricted cash and $3.2 million in marketable securities as of September 30, 2024, and $15 million remains available under the company's revolving credit facility.

Q3 2024 Same-Store Results

As of September 30, 2024, the company owned 12 same-store properties and managed one third party owned property, and there were no non-same-store properties.

For the third quarter of 2024, same-store revenues increased 3.6% to $3.2 million compared to the same period last year.

Same-store cost of operations decreased 0.8% to $1.15 million compared to $1.16 million in the same period last year. This decrease in same-store cost of operations was due primarily to decreased expenses for real estate property taxes, and to a lesser extent decreased expenses for repairs and maintenance, administrative, marketing and utilities.

Same-store NOI increased 6.3% to $2.0 million compared to $1.9 million in the same period last year. The increase was primarily due to an increase in revenues and a decrease in cost of operations.

Same-store occupancy at September 30, 2024 increased to 91.5% from 89.8% at September 30, 2023.

Same-store average duration of tenant stay at September 30, 2024 was approximately 3.4 years compared to approximately 3.3 years at September 30, 2023.

For a reconciliation of net income to same-store NOI see, "Reconciliation of GAAP Net Income to Same-Store Net Operating Income," below.

Q3 2024 Operating Results

Net income in the third quarter of 2024 increased to $1.2 million or $0.10 per diluted share from $271,000 or $0.02 per diluted share in the third quarter of 2023.

Property operations expense decreased to $1.15 million from $1.16 million in the same period last year.

General and administrative expenses increased to $762,000 from $684,000 in the same period last year.

Business development costs decreased to $2,012 for the quarter from $5,903 in the same period last year.

Interest expense increased to $259,000 from $213,000 in the year-ago period. This increase was attributable to the change in fair value of the interest rate cap and the decrease in cash settlements under the interest rate cap.

FFO was consistent at $1.1 million or $0.10 per diluted share for the quarter and in the same period last year.

AFFO increased 2.2% to $1.2 million or $0.10 per diluted share compared to AFFO of $1.1 million or $0.10 per diluted share in the same period last year.

First Nine Months 2024 Financial Summary

For the first nine months of 2024, total revenues increased 1.4% to $9.3 million, as compared to $9.2 million in the same period last year. This increase was due primarily to increased occupancies and increases in existing tenant rates under the company's revenue rate management program.

Total operating expenses in the first nine months of 2024 increased 6.8% to $7.2 million, as compared to $6.8 million in the same period last year. The increase was primarily attributable to an increase in store level expenses and general and administrative expenses. The increase in store level operating expenses was due primarily to increased expenses for employment costs and property insurance.

Operating income decreased 13.6% to $2.1 million in the first nine months of 2024, as compared to $2.4 million in the same period last year.

Net income was $2.0 million or $0.18 per diluted share in the first nine months of 2024, as compared to $1.8 million or $0.16 per diluted share in the same period last year.

First Nine Months 2024 Same-Store Results

For the first nine months of 2024, same-store revenues increased 1.5% to $9.3 million compared to $9.2 million in the same period last year. This increase was due primarily to increased occupancies and increases in existing tenant rates under the company's revenue rate management program.

Same-store cost of operations in the first nine months increased 5.4% to $3.6 million compared to $3.4 million in the same period last year. This increase in same-store cost of operations was due primarily to increased expenses for direct store costs, and to a lesser extent expenses for employment, landscaping, administrative, real estate property tax and lien administration. The increase in same-store cost of operations was partially offset by decreased repairs and maintenance, utilities and marketing expenses.

Same-store NOI decreased 0.7% to $5.74 million in the first nine months of 2024, compared to $5.78 million in the same period last year. The decrease was primarily due to more muted revenue growth and increased cost of operations.

For a reconciliation of net income to same-store NOI see, "Reconciliation of GAAP Net Income to Same-Store Net Operating Income," below.

First Nine Months 2024 Operating Results

Net income in the first nine months of 2024 increased to $2.0 million or $0.18 per diluted share from$1.8 million or $0.16 per diluted share in the first nine months of 2023.

Property operations expense increased to $3.6 million in the first nine months of 2024 from $3.4 million in the same period last year.

General and administrative expenses increased to $2.5 million in the first nine months of 2024 from $2.2 million in the same period last year.

Business development costs decreased to $4,287 in the first nine months of 2024 compared to $11,152 in the same period last year.

Interest expense for the first nine months of 2024 increased to $676,000 from $620,000 in the year-ago period. This increase was attributable to the change in fair value of the interest rate cap. The increase in interest expense was partially offset by cash settlements under the interest rate cap as well as lower interest payments under the company's term loan agreement.

FFO in the first nine months of 2024 decreased 11.5% to $2.9 million or $0.26 per diluted share, compared to FFO of $3.2 million or $0.29 per diluted share in the same period last year.

AFFO in the first nine months of 2024 decreased 8.5% to $3.1 million or $0.28 per diluted share, compared to AFFO of $3.4 million or $0.30 per diluted share in the same period last year.

Q3 2024 and First Nine Months FFO and AFFO (Unaudited)