Global Self Storage(US:SELF)2025-03-26 20:00Part I Business Global Self Storage, Inc. is a self-administered REIT owning and operating 13 self-storage properties across eight states, focusing on performance maximization and disciplined acquisitions Company Portfolio Overview (as of Dec 31, 2024) | Metric | Value | | :--- | :--- | | Total Stores | 13 (Owned and Managed) | | States of Operation | 8 | | Net Leasable Square Feet | 967,187 | | Total Storage Units | 7,049 | - The company's core business strategies include implementing proprietary revenue rate management for both new and existing tenants, refining digital and referral marketing programs, and pursuing acquisitions of single stores or small portfolios26 - The acquisition strategy targets secondary and tertiary cities in the Mid-West, Northeast, and Mid-Atlantic with high barriers to entry for new competition. The company did not complete any property acquisitions in 20243437 - The company's financing includes a $20 million term loan at 4.192% due in 2036 and a second amended revolving credit facility of up to $15 million, which matures in 2027. As of December 31, 2024, no proceeds were withdrawn from the credit facility394647 - The company operates a third-party management platform, managing one 137,318-leasable square foot property in Edmond, Oklahoma as of year-end 202449 - An ESG committee has been established to oversee sustainability priorities, including initiatives like solar panel installations, LED lighting retrofits, and energy management systems to reduce the company's environmental impact6061 Risk Factors The company faces significant business, debt, REIT qualification, and common stock risks, including economic sensitivity, financing dependence, and market volatility Risks Related to our Self Storage Properties and our Business - Operating results are highly dependent on occupancy levels and rental rates, which can be negatively affected by adverse economic conditions, competition from other self storage properties, and a general decrease in demand for storage space677577 - The company relies on information technology for its operations. A material failure, interruption, or security breach could disrupt business, compromise sensitive data, and lead to financial losses and reputational harm101 - Climate change presents both transition risks (e.g., new regulations, investor sentiment) and physical risks (e.g., extreme weather events) that could increase operating costs and adversely impact properties9194 - The company's growth may be impacted by the inability to successfully identify, consummate, and integrate suitable property acquisitions, facing competition and potentially paying higher prices79 Risks Related to Our Debt Financings - The company depends on external financing for acquisitions, debt servicing, and REIT-required distributions. Access to this capital is not guaranteed and may not be available on favorable terms119 - Existing debt agreements contain financial covenants, such as minimum net worth and liquidity standards. A failure to comply with these covenants could result in default and require immediate repayment120 Risks Related to Our Qualification as a REIT - Failure to maintain REIT qualification would subject the company to U.S. federal income tax at corporate rates, significantly reducing cash available for distribution to stockholders121124 - To maintain REIT status, the company must distribute at least 90% of its taxable income annually. This may require borrowing funds during unfavorable market conditions to meet distribution requirements126127 - Compliance with REIT asset and income tests may force the company to forgo or liquidate otherwise attractive investments, potentially hindering investment performance129130 Risks Related to Our Common Stock - Future sales of a substantial number of common stock shares, or the perception of such sales, could cause the market price of the stock to decline and dilute existing stockholders' ownership142 - The market price and trading volume of the company's common stock (NASDAQ: SELF) may be volatile due to factors such as operating results, market interest rate changes, and general economic conditions144146 Unresolved Staff Comments The company reports no unresolved staff comments - None147 Cybersecurity The company maintains a cybersecurity risk management program with third-party support and Board oversight, reporting no material threats to date - The cybersecurity program involves third-party consultants, threat protection software, multi-factor authentication for cloud services, and periodic employee training150 - The Board of Directors oversees the company's cybersecurity risk management activities and receives periodic updates149 - As of the report date, the company has not identified any risks from cybersecurity threats that have had or are reasonably likely to have a material effect on its operations or financial condition150 Properties As of December 31, 2024, the company's 13-store portfolio totaled 967,187 net leasable square feet, with overall occupancy increasing to 93.4% Property Portfolio Summary (as of Dec 31, 2024) | Category | Number of Units | Net Leasable Sq. Ft. | Occupancy % (2024) | Occupancy % (2023) | | :--- | :--- | :--- | :--- | :--- | | Owned Stores (Same-Store) | 6,430 | 829,869 | 92.9% | 89.3% | | Managed Stores | 619 | 137,318 | 96.1% | 96.9% | | Total Owned/Managed | 7,049 | 967,187 | 93.4% | 90.4% | - The portfolio includes a mix of storage types: approximately 33% climate-controlled, 59% traditional drive-up, and 8% outdoor parking for boats, cars, and RVs154 Legal Proceedings The company is not currently a party to any material pending legal proceedings - The Company currently does not have any material pending legal proceedings155 Mine Safety Disclosures This item is not applicable to the company - Not applicable157 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on NASDAQ under "SELF", with approximately 7,400 holders as of March 14, 2025 - The Company's common stock is traded on NASDAQ under the symbol "SELF"159 - As of March 14, 2025, there were approximately 7,400 holders of the Company's common stock160 Management's Discussion and Analysis of Financial Condition and Results of Operations Total revenues increased 2.8% to $12.5 million in 2024, but rising expenses led to a 27.7% net income decrease, while same-store NOI grew 2.1% Results of Operations (FY 2024 vs. FY 2023) Consolidated Results of Operations | Metric | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $12,530,280 | $12,190,715 | 2.8% | | Total Expenses | $9,635,952 | $9,079,462 | 6.1% | | Operating Income | $2,894,328 | $3,111,253 | (7.0%) | | Net Income | $2,123,743 | $2,938,769 | (27.7%) | | Diluted EPS | $0.19 | $0.26 | (26.9%) | - The increase in total revenues was primarily driven by a 2.6% increase in rental income, resulting from higher occupancy rates and the company's existing tenant rate management program185 - The 6.1% increase in total expenses was mainly due to higher store operating expenses (up 4.2%) and a significant rise in general and administrative expenses187 Liquidity and Capital Resources - The company has total capital resources of approximately $24.8 million, consisting of $7.2 million in cash, $2.6 million in marketable securities, and $15 million available under its credit facility183 - Management expects to have sufficient cash from current sources to meet liquidity needs for the next twelve months182 Same-Store Self Storage Operations Same-Store Operating Results (Twelve Months Ended Dec 31) | Metric | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $12,459,719 | $12,111,742 | 2.9% | | Cost of operations | $4,739,995 | $4,549,038 | 4.2% | | Net operating income (NOI) | $7,719,724 | $7,562,704 | 2.1% | | Overall square foot occupancy | 92.9% | 89.3% | 3.6 bps | - The increase in same-store cost of operations for the year was primarily due to higher expenses for employment, repairs and maintenance, and insurance218 - The average tenant duration of stay was approximately 3.4 years as of December 31, 2024, consistent with the prior year217 Non-GAAP Financial Measures FFO and AFFO Reconciliation (Twelve Months Ended Dec 31) | Metric | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Income | $2,123,743 | $2,938,769 | (27.7%) | | FFO | $3,923,932 | $4,163,937 | (5.8%) | | AFFO | $4,259,327 | $4,383,769 | (2.8%) | | FFO per diluted share | $0.35 | $0.38 | (7.9%) | | AFFO per diluted share | $0.38 | $0.40 | (5.0%) | Quantitative and Qualitative Disclosures About Market Risk This item is not applicable to the company - Not applicable239 Financial Statements and Supplementary Data This section references the full consolidated financial statements and supplementary data, beginning on page F-3 - The full financial statements are included in the report starting on page F-3240 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no disagreements with its accountants on accounting and financial disclosures - There were no disagreements with accountants on accounting and financial disclosures241 Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material changes - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period244 - Management assessed the effectiveness of internal control over financial reporting using the COSO framework and concluded it was effective as of December 31, 2024247248 - No changes occurred during the fourth fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting249 Other Information The company reports no other information - None250 Disclosure Regarding Foreign Jurisdictions That Prevent Inspections This item is not applicable to the company - Not applicable251 Part III Items 10-14 Information for Items 10-14, covering governance, compensation, and ownership, is incorporated by reference from the forthcoming proxy statement - Information for Part III (Items 10, 11, 12, 13, and 14) is incorporated by reference from the company's forthcoming 2025 proxy statement254257260 Part IV Exhibits, Financial Statement Schedules This section lists all financial statements, schedules, and exhibits, including governance documents and material contracts, filed with the annual report - This section lists all documents filed as part of the report, including financial statements and exhibits such as articles of incorporation, bylaws, and material loan agreements263264 Form 10-K Summary This item is not applicable to the company - Not applicable267 Financial Statements Report of Independent Registered Public Accounting Firm RSM US LLP issued an unqualified opinion on the consolidated financial statements for 2024 and 2023, identifying no critical audit matters - Auditor RSM US LLP provided an unqualified opinion on the consolidated financial statements278 - The auditor determined there were no critical audit matters arising from the audit282 Consolidated Financial Statements Total assets decreased to $65.5 million in 2024, with net income declining to $2.1 million from $2.9 million in 2023 Consolidated Balance Sheet Summary (as of Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Real estate assets, net | $53,925,409 | $55,481,220 | | Total Assets | $65,515,024 | $66,879,204 | | Note payable, net | $16,356,582 | $16,901,219 | | Total Liabilities | $18,077,347 | $18,633,177 | | Total Stockholders' Equity | $47,437,677 | $48,246,027 | Consolidated Statement of Operations Summary (Year Ended Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenues | $12,530,280 | $12,190,715 | | Total Expenses | $9,635,952 | $9,079,462 | | Net Income | $2,123,743 | $2,938,769 | Notes to Financial Statements Notes detail accounting policies, real estate, debt, related party transactions, and subsequent events, including a $16.7 million term loan and dividend declaration - The company's debt includes a term loan with a principal balance of $16,664,125 as of Dec 31, 2024, bearing interest at 4.192% and maturing in 2036340344 - In July 2024, the company entered into a second amended revolving credit facility for up to $15 million, maturing in July 2027. No balance was outstanding as of year-end347351 - The company has transactions with affiliated entities, paying $3,039,878 for compensation/benefits and $36,723 for administrative services in 2024361 - Subsequent to year-end, on March 3, 2025, the company declared a quarterly cash dividend of $0.0725 per common share378