U-Store-It Posts 2Q

U-Store-It's YSI second-quarter performance metrics were in line with our valuation assumptions, and our fair value estimate is unchanged. In the second quarter of 2010, compared with the second quarter of 2009, net rental income dropped by 0.8%, while a 4.4% decline in operating expenses sent organic profitability, or same-store net operating income (NOI) higher by 2.1%. In contrast, in the first quarter of 2010, year over year same-store NOI fell 3.6%. We think profitability should prove steady for the balance of the year. Its largest competitor, Public Storage PSA, doesn't appear to be engaging in as much price competition now that its occupancy rate is hovering above 92%. Indeed, U-Store-It's end of period occupancy rate of 77.6% was higher than its period average by 110 basis points, a good sign.