Life Storage, Inc. Reports Third Quarter Results

Life Storage, Inc. (NYSE:LSI) (formerly Sovran Self Storage, Inc.), a self storage real estate investment trust (REIT), reported operating results for the quarter ended September 30, 2016.

The Company incurred a loss for the third quarter of 2016 of $4.7 million or $0.10 per fully diluted common share. This compares to net income of $31.5 million in the third quarter of 2015, or $0.88 per fully diluted common share. The loss in the third quarter of 2016 was attributable to one time transaction expenses associated with the Company's acquisition of LifeStorage, L.P. and the related financing costs.

Highlights for the 3 rd Quarter Included:
  • Increased same store revenue by 4.5% and net operating income ("NOI") (1) by 5.8% as compared to the third quarter of 2015.
  • Grew same store average occupancy for the quarter by 30 basis points to 92.3% compared to the same period in 2015 and quarter-end occupancy by 50 basis points to 91.9% at September 30, 2016.
  • Achieved adjusted funds from operations ("FFO") (2) per fully diluted common share of $1.34.
  • Paid a quarterly dividend of $0.95 per share of common stock.
  • Issued $200 million of 12 year unsecured term notes at a fixed rate of 3.67% on July 21, 2016.

LifeStorage Acquisition and Integration Update:
  • Completed the previously announced acquisition of 83 LifeStorage properties for $1.3 billion on July 15, 2016.
  • Integration of onsite personnel and Company platforms were completed with minimal disruption.
  • Operations are on track to meeting original 2017 underwriting.
  • Lack of aggressive property management between the announcement and close of the acquisition resulted in less active rent roll management and property maintenance that the Company expects to have corrected by the end of the fourth quarter 2016.
  • Changed the Company name from Sovran Self Storage, Inc. to Life Storage, Inc. and announced its intention to rebrand all Uncle Bob's Self Storage locations to Life StorageĀ®. The rebranding of the portfolio is expected to be complete by April 2017.

Funds from operations for the quarter were $0.79 per fully diluted common share compared to $1.29 for the same period last year. Absent $25.2 million of acquisition related costs (including $15.5 million of loan defeasance and pre-payment penalties, and $9.7 million of advisory and other transaction costs) incurred in the third quarter of 2016, and $1.0 million of acquisition costs in the third quarter of 2015, adjusted FFO per fully diluted common share was $1.34 and $1.32 for the quarters ended September 30, 2016 and 2015, respectively. The quarter ended September 30, 2016 earnings and adjusted FFO include approximately $0.05 per share of dilution resulting from the early issuance of 6.9 million shares of common stock and $600 million of long term debt to fund the LifeStorage, L.P. acquisition.

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