A Self Storage Success Story

Posted on Dec 31 2010 - 9:39am by Tony Gonzalez

While there is an upside to running your own business the downside exists as well. The responsibility for the success of the company falls upon you. Employees will be counting on their jobs to feed their families. As the business owner not only do you have your own time and energy invested in it, but chances are a lot of your own money.

The upside though is more than worth it for enough people to take the risk, invest in a business, and become their own boss—financial independence. To not have to compromise one’s beliefs or work at the behest of a boss you don’t care for makes the risk of failure enough to give it a shot.

However, if you can pick out a business with a strong likelihood of success it sure does not hurt to get into one that has a predisposition to doing well, right?

A quick search on the internet and the self storage industry would appear to be just such a business. When you read about companies like Virtus in Austin spending over $50 million to purchase and renovate 20 units it has to make you wonder. Then when you read on and find out that they have every intention of spending upwards of $150 million in the next year only the most pessimistic of business men would not take notice.

The likely question that does pop up when reading stories like this is whether they are buying up properties at rock bottom, foreclosure type prices or if the previous owners are making a profit off the transaction? While the details of those specific transactions are not available there is another self storage company that has advertised there success, U-Store-It.

In mid-December the company announced that it was paying out a dividend of seven cents per share for the fourth quarter (payable in late January). While this may not seem like a high amount, when you consider that in this day and age that there are plenty of businesses that are reporting losses and paying nothing seven cents a share is not bad.

A review of data from the last year shows that this number is not only good, but indicative of future success as well. The seven cents a share when viewed as an annualized rate of 28 cents for the year it represents a growth of180 percent of the 10 cents per share it paid out last year.

“The past two years have been transformational for our company as we navigated through a difficult recession and damaged capital markets. Our dividend policy during this period was predicated on preserving liquidity as our highest priority. As 2010 comes to an end, we look to continue our positive net operating income growth into 2011…” said Dean Jernigan, Chief Executive Officer.

Translation—business is good.


Sources Used:

“U-Store-It Raises Dividend 180%.” Yahoo! Finance; 14 December 2010.

Real Estate Firm Makes Big Self Storage Acquisition Demonstrating Strength of Market.” Self Storage Industry News; 30 December 2010.