Q SELF-STORAGE REIT REPORT

Transcription

1 THE MELE GROUP OF MARCUS & MILLICHAP SELF-STORAGE REIT REPORT MICHAEL A. MELE Senior Vice President Investments Senior Director National Self-Storage Group Marcus & Millichap Real Estate Investment Services The Mele Group Self-Storage Advisory Services

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3 THE MELE GROUP Michael A. Mele-National Senior Vice President Investments Sean Delaney - Midwest Vice President Investments Luke Elliott - Florida Senior Associate Robert Bloch - D.C. Investment Associate Associates Brian Baldwin Southeast Kevin Menendez Tri-State Trey Hammond Midwest Mick Hurley Indiana Steven Dolinsky Florida - Industrial Analysts Operations Brian Fulton Senior Analyst Kelly Russano, Financial Analyst Tara Paronto Operations Director Rachel Roy Marketing Director Nicholas Creech Agent In Training Not Pictured: Pibuau Lakh, Financial Analyst Holly Powers, Marketing Coordinator Kimberly Brothers, Executive Assistant

4 SELF-STORAGE OVERVIEW While the consensus among the CEOs remains positive, one only has to listen to the inflection in their voices to sense their uncertainty about the future. Throughout the arising uncertainty, it is fair to say that the self-storage industry is currently robust and well positioned for Demand for self storage remains strong while new supply remains muted. The net effect of this is an increase in occupancies and street rates, and a reduction in concessions. The market average same-store occupancy of 92.9% and net operating income (NOI) growth of 9.0% echoes the markets current resolve. Public Storage (NYSE: PSA) leads the way in same-store occupancy at 93.9% and realized rent per occupied square foot at $ The remaining REITs achieved results that are also closely comparable to those achieved by Public Storage; Extra Space (NYSE: EXR) recorded its same-store occupancy at 92.9% and rent per occupied square foot at $15.81; CubeSmart (NYSE: CUBE) achieved 91.7% and $15.16; Sovran Self Storage (NYSE: SSS) achieved 90.1% and $12.64; and National Storage Affiliates (NYSE: NSA) achieved 88.9% and $10.07, respectively. These solid results can be attributed to current market conditions. Extra Space posted same-store revenue growth of 9.6%, leading the self-storage sector this quarter. Extra Space attributed this growth primarily to higher occupancy rates and a solid rent growth coupled with a reduction in customer discounts. CubeSmart followed, posting same-store revenue growth of 8%, which was largely driven by an increase in net effective rents and occupancy levels. Self-storage REITs continue to display strong activity on the investment front. Collectively, the REITs acquired 168 new facilities this quarter for an approximate $1.67 billion dollars. Extra Space lead the quarter in acquisitions due to its purchase of the SmartStop portfolio. In total, Extra Space acquired 131 properties this quarter for $1,395 million. CubeSmart acquired thirteen properties for $124.2 million, Public Storage acquired seven properties for $71 million, National Storage Affiliates acquired sixteen properties for $70.4 million, and Sovran Self Storage acquired one property for $6.6 million. The economy demonstrates resilience despite uncertainty regarding the Federal Reserve s monetary policies and the health of the overall securities market. And while this uncertainty has affected tightening of lending standards and increased spreads in the CMBS markets, we believe that the overall outlook of 2016 will remain optimistic.

5 SELF-STORAGE OVERVIEW OVERALL RESULTS Same-Store Facilities Same-Store SF Occupancy Revenue Growth Same-Store NOI Growth Realized Rent / Occupied SF CUBE ,808, % 8.0% 11.10% $15.16 EXR ,936, % 9.6% 11.5% $15.81 PSA 1, ,347, % 6.6% 8.0% $16.18 SSS ,824, % 6.7% 7.80% $12.64 NSA 135 6,522, % 6.5% 10.70% $ % OCCUPANCY 11.0% REVENUE GROWTH 95.0% 90.0% 91.7% 92.9% 93.9% 90.1% 88.9% 10.0% 9.0% 8.0% 8.0% 9.6% 85.0% 7.0% 6.6% 6.7% 6.5% 80.0% 6.0% 75.0% CUBE EXR PSA SSS NSA 5.0% CUBE EXR PSA SSS NSA 14.00% 13.00% 12.00% 11.00% 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% SAME-STORE NOI GROWTH 11.1% 11.5% 10.7% 8.0% 7.8% CUBE EXR PSA SSS NSA

6 SELF-STORAGE ACQUISITIONS Acquisitions Throughout Q4 of 2015, a total of 168 acquisitions took place. NY CubeSmart (1), Extra Space (1) IL Extra Space (4) MA CubeSmart (3) OR Extra Space (1) NV Extra Space (8) CA Extra Space (10), Public Storage (2), National Storage Affiliates TX CubeSmart (2), Extra Space (16) Public Storage (2), National Storage Affiliates (1) PA Extra Space (4), Sovran (1) KY Extra Space (5) TN CubeSmart (1), Extra Space (4) NJ CubeSmart (1), Extra Space (7) VA Extra Space (6) NC CubeSmart (2), Extra Space (4), National Storage Affiliates (2) SC Extra Space (13) GA CubeSmart (2), Extra Space (22) AZ CubeSmart (1), Extra Space (6) MS Extra Space (3) AL Extra Space (3) FL Extra Space (13), Public Storage (3) CUBE EXR PSA SSS NSA Acquisitions Quarterly Quarterly Aggregate Amount $124,200,000 $1,395,358,000 $71,000,000 $6,600,000 $70,400,000 COMMENTS 1) National Storage Affiliates (NYSE: NSA) acquired 16 stores. 15 were mapped due to data constraints. 2) Extra Space (NYSE: EXR) acquired 131 stores. 130 were mapped due to data constraints.

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8 The Mele Group Self-Storage Advisory Services 4030 W BOY SCOUT BLVD #850 TAMPA, FL TAMPA CHICAGO MANHATTAN D.C. TULSA INDIANAPOLIS CHARLOTTE