U-Store-It TrustYSI

Morningstar Rating

Stock Research and Analysis

by David Rodziewicz

U-Store-It Trust is a promising self-storage landlord undergoing major changes. Although we've had high expectations for CEO Dean Jernigan and his management team, they're off to a rocky start, given a dividend cut in late 2008 and difficulties boosting Read more

Bulls Say

U-Store-It owns self-storage facilities located near retail centers, providing high-traffic corridors and easy tenant access. Its facilities often have onsite managers and wide aisles for trucks.

More businesses are increasingly using self-storage, which is good news for operators since corporations have an average lease term nearly twice that of residential users.

The average age of a U-Store-It facility is about 12 years, which is slightly younger than that of its publicly traded competitors. Read more

Bears Say

The company has about $458 million in debt coming due in 2010. If credit markets remain unstable, this maturing debt could pose serious risks to U-Store-It's business.

The company's decentralized pricing model may not be the best structure to have in place, given CEO Dean Jernigan's concerns about a dearth of talented employees.

Consumer weakness could lead to decreased demand for storage space as customers sell items they don't need in order to reduce the monthly storage expense.

If long-term interest rates rise, in addition to already increased credit spreads, this firm's cost of capital would increase, pressuring asset values and reducing cash flow. Read more

Strategy

U-Store-It plans to drive revenue growth primarily through rent increases and occupancy gains, but with about $470 million in net acquisitions during 2006-08, the company has also shown a history of Read more

Management

The management team at U-Store-It may be new, but for shareholders, that's good news. Founder Robert Amsdell resigned the CEO post in April 2006, and in February 2007, he resigned as chairman at the request of the board of directors. His resignation Read more

Profile

U-Store-It Trust is one of the largest providers of self-storage space in the nation. The company owns and operates more than 380 self-storage facilities constituting nearly Read more

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