Third-party management is turning out to be an acquisition goldmine for Life Storage.
Joe Saffire, CEO of the Williamsville, NY-based self storage REIT, said roughly one-third of the 75 facilities purchased so far this year were part of Life Storage’s third-party management platform. Saffire called the company’s third-party platform a “robust acquisition pipeline.”
“The hard work of our acquisitions and third-party management teams over the past several years executing on our relationship-based strategy to be well positioned when opportunities become available is clearly paying off,” Saffire said in a Nov. 2 news release.
At the end of the third quarter, the third-party management platform comprised 357 facilities. Saffire expects the platform to continue to be fertile ground for acquisitions.
The third-party pipeline is helping Life Storage achieve its revised goal of making $1.7 billion to $1.9 billion in acquisitions this year. The REIT previously forecast $800 million to $1 billion in acquisitions for 2021. More than $1.7 billion worth of wholly owned acquisitions have either closed this year or are under contract.
“We’re more than ready to continue to expand through acquisitions,” Saffire told Wall Street analysts during a Nov. 3 call to discuss third-quarter financial results.
“We have repeat sellers who have come to us because we know we can get a deal done quickly and fairly,” he added, “and we would expect to be able to continue to do that going forward.”
Saffire said he expects healthy acquisition activity in the self-storage sector next year, but he’s unsure whether it will reach the level of activity in 2021. By one estimate, this year could end with $18 billion in self-storage acquisitions across the U.S.
Other highlights of Life Storage’s third-quarter results include:
- Crossing the 1,000 mark for the number of facilities in its portfolio.
- Boosting same-store revenue by 17.4% compared with the same time last year. For 2021, Life Storage predicts same-store revenue growth of 12.5% to 13.5%.
- Bumping up same-store NOI by 24.3% compared with the same time last year. Life Storage anticipates same-store NOI growth this year of 17% to 18%.
- Seeing growth in same-store operating expenses of 3.5% compared with the same time last year.