Self Storage Market Overview: Operations and Investments

My Background  Licensed Real Estate Agent since 1994  Sold Residential Real Estate, 1994 to 2000  Extra Space Storage, 2000 to 2006 District Manager of a15-Property Portfol io  Marcus & Millichap Real Estate Investment Services Self-Storage Investment Broker, 2006 to present  Self Storage Profits, Scott Meyers, 2011 to Present Coach / Mentor

 One of the fastest-growing sectors of the commercial real estate industry over the period of the last 25 years  1 in 10 households currently rent a self storage unit (10%). This is up from 6% in 1995 Source: Self Storage Association

Demand Drivers Life Changing Events  Death  Divorce/Break-Ups  Weddings/Consolidating Households  Household Moves  Small Business 5.09 million existing homes sold (2013); +9% from 2012 & highest level in 7 yrs

 “Self Storage is a great property type as it just continues to ‘puke’ cash”! Ron Havner, CEO, Public Storage

REIT Performance: 2013 vs 2012 CompanyREVNOI# Stores Occupancy Extra Space Storage 7.4%10.0%102988% to 89% Public Storage5.3%8.2%220092% to 93% Uncle Bob’s7.7%9.9%47587% to 90% CubeSmart7.4%9.3%52685% to 89% Source: Q Earnings Call

Year End 2013 Results  Revenue growth ranges from 5.3% to 7.7%  NOI growth ranges from 8.2% to 10.0%  Leading private operators displaying similar strong performance, although REITs on average have about 3% occupancy advantage over non-REITS

REIT vs Non-REIT Performance: 2013 versus 2012 REIT’sNon-REITs / Mom & Pops Income 6.95%4.45% Asking Rental Rates 1.0%0.70% Physical Occupancy 88% to 90%85% to 87% REIT Analyst Calls; Private Sources of over 46 facilities

Major Markets with Above Average Revenue Growth Source: REIT Earnings Calls ChicagoDenver Los AngelesSan Diego TexasFlorida New YorkNorth Carolina

Income Drivers  Locks, Boxes & Moving Supplies  Admin Fees  Tenant Insurance  Truck Rentals  30-day Leases  Reduce Discounts  Revenue Mgmt  Lower Cost of Operations  Increase Occupancy Diversified cash flow, low volatility and low capital expenditures and no tenant improvement expenses = attractive income stream

Investment Market Overview

Self-storage companies were found to be the best real estate investment over the past 10 years. - Bloomberg

Cap Rate Trends

Cap Rate vs. 10-Year Treasury

Self-Storage vs. Other Investments  On Average: Stocks Return 10.98% per year Bonds Return 11.03% per year Storage REITs Return 17.85% per year  Source: Ibbotson Associates SBBI bonds index, NAREIT Report

Investment Market What does this all mean to me??  Raising private equity for your investment or trying to get a loan??

In Summary… Positive Revenue Growth Increased Occupancy Returning (consumer) Demand HIGH Investor Demand Low Interest Rates Available Capital Lack of Alternative Investments Go Get ‘Em

Questions?