U-Store-It Trust Announces Third Quarter 2007 Operating Results

U-Store-It Trust (NYSE: YSI) announced its operating results for the three months ended September 30, 2007.

Significant highlights of the quarter include:

--  Average same-store physical occupancy reached 83.6%, a sequential gain
    of 2.2 percentage points over the second quarter of 2007, and a 1.3
    percentage point increase over the third quarter of 2006
--  Same-store physical occupancy reached 83.7% on July 31, 2007, and
    ended the quarter at 83.4%
--  At September 30, 2007, the Company had 5.3% or approximately 9,200
    more occupied self-storage units in the comparable store portfolio as
    compared to January 1, 2007
--  Accounts receivable greater than 30 days past due at September 30,
    2007 represented approximately 2.4% of our projected rents, better than
    what we believe to be industry standard
--  The Company acquired 14 Class A self-storage facilities for
    approximately $121 million and closed on a $50.0 million term-loan facility
    used to fund a portion of the acquisition
    

President and Chief Executive Officer Dean Jernigan commented, "In a quarter during which published reports have national self-storage average occupancies declining 1.7 percentage points and rent per occupied square foot declining 1.4 percentage points over the third quarter of last year, we are pleased with our ability to gain both physical occupancy and realized rent per occupied square foot in our same-store pool as compared to the third quarter of 2006. We continued to be aggressive to gain physical occupancy. During the quarter, we made significant investments through the use of aggressive discounting, increased our marketing expenditures, and improved the physical appearance of our facilities through both capital investment and increased spending on repair and maintenance. In the near term, those investments produced strong, same-store occupancy gains and we expect to continue this strategy into 2008. In the long term, our higher occupancies should result in improved top-line and bottom-line growth."

The Company reported a net loss of $4.1 million or $0.07 per share, compared to a net loss, as restated of $2.0 million or $0.03 per share for the quarter ended September 30, 2006. Funds from Operations for the third quarter of 2007 were $12.4 million. Funds from Operations excluding the non-cash lease abandonment charge of $1.3 million or $0.02 per share were $13.7 million or $0.22 per share. The restated FFO for the third quarter of 2006 was $14.1 million or $0.23 per share.

Chief Financial Officer Christopher Marr said, "Our occupancy gains across the portfolio allowed us to exceed our guidance by 60 basis points. We waived the traditional administrative fee during the quarter as an additional promotion on our lower occupied unit types, resulting in a sequential decline in our FFO per share of approximately one-cent. The sharp spike in LIBOR during the quarter impacted the borrowing cost on our floating rate debt of approximately $324 million and was not anticipated in our guidance. Our operating expense increase is reflective of higher repair, maintenance, and landscaping costs as we invested in improving the physical appearance of our portfolio, and higher personnel costs as we enhanced our store-level staffing and incentives, while continuing to operate on Sunday to better position us to capture more than our share of rental activity."

Total revenues increased $2.3 million and total operating expenses increased $2.9 million in the third quarter of 2007, compared to the same period in 2006. Increases in total revenues and property operating expenses are attributable to: (i) the acquisition of 17 self-storage facilities for approximately $140.4 million since September 30, 2006; (ii) a full-period impact in the 2007 period of the 16 self-storage facilities purchased during the third quarter of 2006 for approximately $59.9 million, and (iii) increases in same-store revenues and expenses. General and administrative expenses declined by $2.1 million in the third quarter of 2007 as compared to the same period in 2006.

The Company vacated its office space in Middleburg Heights, Ohio during the quarter and subleased the space to a third party. The Company incurred a non-cash charge of approximately $800 thousand representing the present value of future net cash flows related to our office leases and the sublease. Additionally, the Company incurred a non-cash charge of approximately $500 thousand to write-off the net carrying value of furniture, fixtures and improvements related to the space. This transaction was part of our stated goal of eliminating related party transactions.

Interest expense increased approximately $1.7 million in the third quarter of 2007 compared to the third quarter of 2006 primarily as a result of the additional debt used to fund the acquisition of 17 facilities purchased since September 30, 2006 and the full-period impact of the borrowings used to acquire the 16 facilities during the third quarter of 2006.