U-Store-It Posts 3Q

Self-storage real estate investment trust U-Store-It's YSI third-quarter performance metrics were about in line with our assumptions, and we don't anticipate changing our fair value estimate. Like industry peer Public Storage PSA, U-Store-It is benefiting from a pickup in consumer sentiment and business fundamentals. Top-line revenue grew by 4.4% due to increases in tenant insurance commissions and property management fee income. On a same-store, year-over-year basis, the company saw property net operating income grow 0.5% due to a 1.4% increase in revenue, which offset a 2.9% increase in operating expenses. That said, we note that the same-store revenue gain in the quarter was built upon increased occupancy, as the firm's realized annual rent trended down 1.1% from the third quarter of 2009. With an economic recovery underway, we think U-Store-It will be able to garner rate growth in late 2010 or early 2011.