A big jump in occupancy and a reduction in the incentives given to new customers helped Sovran Self Storage boost its first-quarter earnings by 17 percent, the Amherst-based self-storage facility operator said.
The earnings were slightly better than analysts were expecting, and the company said it now expects its earnings for the full year to be about 2 percent higher than it originally forecast and about 13 percent higher than last year.
“Occupancy levels grew even during our traditionally slowest season,” Sovran CEO David L. Rogers said in a statement. “We feel increasingly optimistic that 2013 should continue to be a prosperous one.”
Sovran’s funds from operations rose to $25.3 million, or 82 cents per share, from $21.6 million, or 75 cents per share, a year earlier. Excluding nearly $500,000 in acquisition costs, its adjusted funds from operations improved to $25.7 million, or 84 cents per share, which was a penny more than analysts expected.
Much of the improvement came from a big increase in occupancy at its Uncle Bob’s self-storage facilities. Occupancy rates jumped to 87.4 percent during the quarter at the 362 stores that have been open for at least a year, much better than the 82.1 percent level from a year ago.
With demand rising, Sovran was able to scale back the incentives it frequently offers new customers, which improved its profitability and helped drive up its average rents, which inched up by less than 1 percent, to $10.61 per square foot, from $10.57 a year ago. Sovran said it now expects its earnings this year to range between $3.54 and $3.58 per share, about 2 percent higher than its February forecast of $3.46 to $3.50 per share. Sovran earned $3.14 per share last year.
Sovran said it purchased three self-storage facilities during the quarter at a total cost of $22 million. The stores were located in Boston and San Antonio, and on Long Island. It also added seven stores to its program to manage self-storage sites owned by others.
Sorvan’s share price closed up by 92 cents, or 1.35 percent, to $68.89 Thursday. That is near the top of its 52-week range of $46.93 to $69.13.