CEO: U-Store-It can profit from housing turmoil

U-Store-It Trust (NYSE: YSI) CEO Dean Jernigan said the real estate investment trust, which owns self-storage facilities, might benefit from the housing market turmoil. Jernigan made the statements during a morning conference call.

“Along with marriage and divorce, I’m ready to add home foreclosures as an additional life-changing event that brings us business,” Jernigan said.

The chief executive said he noticed growth in rental rates in markets with high foreclosure rates, such as Detroit and Las Vegas.

I’m not ready to say there’s a positive correlation yet, because I don’t think we have enough time under observation and I think we will do a study at the appropriate time to look back and see if we can make a positive correlation,” Jernigan said. “I think it’s quite possible.”

For 2008, the firm expects a loss in the range of $0.12 to $0.10 per share. The company expects funds from operations, the most common measure of real estate investment trust operating performance, of $0.31 per share.

“We are affirming the full-year 2008 guidance and the underlying assumptions we introduced in the December release,” CFO Christopher Marr said.

U-Store-It’s January and February rental activity has met expectations, Marr said.

After Thursday’s closing, U-Store-It reported a fourth-quarter loss of $5.9 million, or $0.10 per share, compared with a loss of $5.7 million, or $0.10 per share, a year earlier. Analysts expected a loss of $0.10 per share.

Quarterly revenue rose 13% to $56.2 million, from $49.9 million during the year-ago period. Wall Street analysts predicted $56.97 million in revenue.

“Without a doubt, Q4 was a wonderfully positive quarter for us on all fronts. Yet, I can’t help but to say, don’t doubt that we recognize that we remain actively engaged in the turnaround process,” Marr said. “We have work to do in 2008 to grow occupancy, control expenses and shore up our balance sheet.”

The firm expects to open 60 new locations during 2008, to bring the total location count to 389, Marr said.

In midday trading, YSI shares are up 4.64%, or $0.45, at $10.15. Over the last 52 weeks, shares have ranged from $7.56 to $21.69.