Investment Sales Debt & Equity Advisory Services SKYVIEW ADVISORS SELF STORAGE REIT REPORT Q SKYVIEWADVISORS.COM

Transcription

1 Debt & Equity Advisory Services SKYVIEW ADVISORS SELF STORAGE REIT REPORT

2 SKYVIEW ADVISORS JAY J. CROTTY President Skyview Advisors NOEL P. CAIN Managing Partner Debt & Equity Group RYAN N. CLARK Senior Vice President CHRIS M. WEISMILLER Vice President STEVEN K. HUNG Chief Operating Officer CARRIE L. AUBREY Transaction Manager MORGHAN J. COPE Events & Communication Coordinator ANNE-MARIE B. KWAN Marketing Coordinator TRENT B. KLOTER Analyst PARKER A. SWEET Associate CAMERON M. VALE Associate

3 OVERVIEW REIT HIGHLIGHTS & OVERALL RESULTS Self Storage REIT 4th quarter performance turned out to be slightly better than expected, with four of the five REITs beating revenue estimates. While there was a bit of a decline from Q3, performance is still strong in the self storage sector. The quarterly conference calls demonstrated some concerns over the impact that new supply will have on future rent growth expectations and occupancy levels. The widening gap between buyer and seller expectations was another topic discussed. The gap between buyer and seller expectations began to widen rather abruptly in, and we ve seen that trend continue in the first part of 2017, states Jay Crotty, President of SkyView Advisors. Broadly speaking, self storage appears well positioned to continue to perform better than REITs in other sectors. This quarter, the REITs have all shown a growth in revenue with NOI growing as high at 9.2% (NSA). While Public Storage reported the highest NOI this quarter at $420,336,000, they have shown the lowest growth percentage (5.1%) from the fourth quarter last year. NSA reported the largest growth (9.2%) from last year but reported the lowest NOI at $22,162,000. Same-Store Facilities Same-Store SF We also saw a growth in rental income across all REITS mainly due to rents being raised for both new and existing customers. NSA lead the way with a 6.3% growth from Q in rental revenue to $32,299,000. CubeSmart followed close with a 5.8% growth in rental revenue to $101,949,000. Extra Space saw a 5.2% growth in rental revenue to $179,003,000 and Life Storage saw a 4% growth to $119,465,000. Public Storage reported the highest amount of rental revenue of $506,335,000 which was a 4.8% growth from last year. This quarter many of the REITs focused on acquisition while some also worked to develop new facilities in top markets. NSA invested $228 million for the acquisition of 31 facilities throughout eight different states. These acquisitions include approximately 2.1 million rentable square feet configured in over 16,600 storage units. In addition to these acquisitions NSA s JV investor completed an acquisition of a 66 property istorage portfolio for approximately $630 million. CubeSmart acquired four stores throughout Nevada, Arizona, and North Carolina for $52.8 million. In mid-december, the company invested 10% in a newly formed joint venture that acquired 13 stores in Massachusetts, Connecticut, Rhode Island, and Vermont, totaling 0.7 million rentable square feet for $87.5 million. The company will also be entering Period End Occupancy Same-Store Revenue Growth high-barrier-to-entry locations with $133.4 million in new Class A developments in New York and Texas. Extra Space Acquired 24 wholly-owned operating stores and three stores at completion of construction for approximately $316 million. The company also acquired two stores at completion of construction with joint venture partners for approximately $19 million. Life Storage acquired two properties, a total of 71,000 square feet, that they previously managed in Orlando, FL for $9.8 million. The company also acquired a 68,000-square foot property in Chicago upon issuance of a certificate of occupancy for $8.75 million. Public Storage acquired 23 self-storage facilities throughout Oklahoma, Ohio, Tennessee, California and Texas for $159 million. The properties totaled 8.1 million net rentable square feet. The company also completed six newly developed facilities and various expansion projects totaling 0.8 million net rentable square feet or $107 million. At the end of this quarter, Public Storage had 4.2 million net rentable square feet in development estimated to cost $520 million. The company also had 1.1 million net rentable square feet in expansion projects estimated to cost $140 million. Stock Price ( ) Same-Store NOI Market Cap ( ) CUBE ,828, % 5.8% $26.45 $81,526, B EXR ,162, % 5.2% $77.24 $132,834, B LSI ,431, % 4.0% $85.26 $61,033, B NSA ,100, % 9.2% $22.07 $22,162, B PSA 2, ,200, % 4.6% $ $420,366, B Sources: CubeSmart, Extra Space Storage, Life Storage, Inc., Marketwatch, National Storage, Affiliates Public Storage

4 OVERVIEW RENTAL REVENUE REITS IN NUMBERS 2016 $500,000,000 $450,000,000 $400,000,000 $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $ Q4 QUARTERLY OCCUPANCY 96.0% DIVIDEND PER SHARE $ % 86.0% $2.50 $2.00 $2.00 $ % 76.0% 1Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 2016 $1.00 $0.50 $0.00 $0.27 $0.78 $0.95 $0.24 Cubesmart (CUBE) Public Storage (PSA) National Storage Affiliates (NSA) Life Storage, Inc. (LSI) Extra Space Storage (EXR) Sources: CubeSmart, Extra Space Storage, Life Storage, Inc., National Storage Affiliates, Public Storage

5 DEVELOPMENTS SKYVIEW SUPPLY MONITOR 400km 300mi Source: Sparefoot/Alexander Harris, Esri, CoStar, HERE, ESRI Garm Under Construction Proposed

6 REIT REPORT 2016 YEAR IN REVIEW & LOOKING AHEAD TO 2017 CHRISTOPHER P. MARR CUBESMART PRESIDENT & CHIEF EXECUTIVE OFFICER Our strong 2016 performance marks the fourth consecutive year of FFO growth exceeding 15% and same-store NOI growth exceeding 9.0%... Looking forward to 2017, we remain focused on executing our internal and external growth strategies and generating attractive risk-adjusted returns for shareholders by maintaining a disciplined approach to capital allocation. JOSEPH D. MARGOLIS EXTRA SPACE STORAGE CHIEF EXECUTIVE OFFICER "Same-store revenue and NOI growth for the year (2016) were among the highest in our history, and earnings and FFO per share increases were among the best of all public real estate companies. We continued to grow our national portfolio with over $1 billion in acquisitions and the addition of over 60 third party managed stores. Industry fundamentals continue to be sound, and while growth rates have moderated from all-time highs, we anticipate solid revenue, NOI and FFO growth in 2017." DAVID ROGERS LIFE STORAGE CHIEF EXECUTIVE OFFICER 2016 was a remarkable year for us. We acquired 122 stores making our portfolio bigger, better and stronger. We entered the California and Las Vegas markets in scale with high-quality properties, and the name change to our Company and our stores was exciting and well received. The integration of the new stores is complete, and the rebranding is on time and on budget. ARLEN NORDHAGEN NATIONAL STORAGE AFFILIATES CHIEF EXECUTIVE OFFICER & CHAIRMAN 2016 was an exceptional year on all fronts for NSA...We achieved a 10.2% increase in same store NOI and a 21.7% per share increase in Core FFO. Operationally, we drove same store revenue and NOI growth of 7.7% and 10.2%, respectively, while on the external growth front we continue to identify and close high-quality selfstorage acquisitions in our core growth markets."

7 JAY J. CROTTY President SkyView Advisors NOEL P. CAIN Managing Partner Debt & Equity Group RYAN N. CLARK Senior Vice President CHRIS M. WEISMILLER Vice President