The Self-Storage Industry s Largest Owners and Management Firms Fatten Their Portfolios

Transcription

1 The Self-Storage Industry s Largest Owners and Management Firms Fatten Their Portfolios

2 The 2017 Top-Operators Lists The Top-Operators List is an annual compilation of the self-storage industry's leading players. This year, ISS presents two rankings: the top 100 facility owners and the top 50 management companies. Within both, real estate investment trusts (REITs), multi-facility operators and management firms are ranked by total square footage. Additional information includes company leadership, contact information, number of facilities, number of units, operating names, operating locations and expansion plans. This slideshow provides analytical insight to the 2017 lists, which were recently released on the ISS website and published in the October 2017 edition of ISS magazine. To view the list, select it from the Directories drop-down menu in the top navigation bar at

3 Tale of Two Lists Historically, the Inside Self-Storage Top-Operators List has contained a single, top-100 ranking based on total portfolio size. While this can be a useful number, it can also be problematic due to the potential for squarefootage redundancy. For example, as a third-party manager, CubeSmart might report in its total the 25,000 square feet it manages on behalf of XYZ Storage. At the same time, as the facility owner, XYZ might report the same 25,000 square feet in its own total, creating undisclosed repetition in the numbers. To reduce the amount of overlap and present a better apples-to-apples comparison, this year s rankings are broken out as the top 100 facility owners and the top 50 facility-management companies.

4 The Big Picture The change to two lists affects very little in the upper echelon of the rankings, though it does help to clarify where the largest operators are making gains. It also allows us to track more companies and include additional square footage, units and other data that would otherwise be left out in a single, top-100 ranking Top-Operators Lists At-a-Glance Total Square Footage 795.3M Square Feet Owned 616.3M Square Feet Managed 179M Overall, several operators in the top 40 in owned square footage posted big gains, with almost no notable declines. Similarly, the largest gains in managed square footage were posted by companies in the top half of the list. Facilities Owned 9,535 Facilities Managed 2,774

5 The Big 5 Is Now The Big 6 The five largest publicly traded U.S. self-storage REITs continue to dominate the Top-Operators Lists, with National Storage Affiliates Trust (NSAT) officially muscling its way into the Big 6. CubeSmart, Extra Space Storage, Life Storage, NSAT and Public Storage are joined by U-Haul International to account for 60.2 percent of the total square footage represented on the 2017 lists and 49.4 percent of the total number of facilities. In terms of facility owners, the Big 6 account for 60.7 percent of the net rentable square feet represented in the top 100.

6 Big 6 Spotlight: Public Storage At No. 1, Public Storage continues to cast an imposing shadow. Its owned portfolio of 167 million net rentable square feet is 90 million more than its nearest competitor and represents 27 percent of all owned square footage in the top 100. The REIT also owns 100 percent of its operating portfolio. By itself, the industry s largest operator accounts for 21 percent of the total square footage and 21 percent of all owned and managed facilities represented in both rankings. Its square footage grew 2.7 percent year over year, while its facility count of 2,574 reflects a 2.7 percent increase.

7 Big 6 Spotlight: Extra Space Extra Space continues to hold a firm grip on the industry s No. 2 spot, rebounding from an 11.8 percent reduction in total-portfolio square footage last year with a 28.8 percent increase in total footprint for Though the REIT saw a 4.1 percent increase in total number of facilities, its percentage of owned properties fell from 73 percent to 69.6 percent year over year.

8 Jostling Among the Big 6 Spots 3 through 6 continue to be tight, though CubeSmart and NSAT have leapfrogged U-Haul in owned square footage. After a virtual tie in total square footage last year, CubeSmart surged past U-Haul this year thanks to a 60.8 percent increase in managed square feet, while U-Haul s managed portfolio was flat year over year. CubeSmart is now third in total square footage, posting 60.5 million square feet. In contrast, U-Haul s total footprint grew just 7.1 percent year over year. Its full portfolio of 52.6 million square feet is about 3.6 million square feet ahead of Life Storage.

9 NSAT Makes Its Move With a 51.5 percent year-over-year increase in total square footage, NSAT continues to grow at an impressive pace. While its total portfolio of 39.7 million square feet still trails Life Storage by 9.3 million square feet, the operator has closed the gap between the two companies by 5.3 million square feet in the last two years. For 2017, the REIT posted a 55.1 percent increase in owned square footage and a 42.7 percent gain in managed square feet. Its owned and managed portfolios now rank fifth and fourth, respectively, thanks to a busy year in which it added its eighth participating regional operator, purchased a 26- property portfolio, and acquired istorage through a joint venture with Heitman Capital Management LLC.

10 A Closer Look at the Big 6 Tracking the Big 6 by Net Rentable Square Feet (Total Portfolio) Change 2017 Increase % Owned Public Storage Inc. 156M 161M 3.2% 167M 3.7% 100% Extra Space Storage Inc. 97.5M 86M -11.8% 110.8M 28.8% 69% CubeSmart 41M 49.1M 19.8% 60.5M 23.2% 55% U-Haul International Inc. 44.9M 49.1M 9.4% 52.6M 7.1% 54% Life Storage Inc. 36.4M 45.5M 25% 49M 7.69% 81% National Storage Affiliates Trust 21.8M 26.2M 20% 39.7M 51.5% 73% Tracking the Big 6 by Number of Facilities (Total Portfolio) Change 2017 Increase % Owned Public Storage Inc. 2,450 2, % 2, % 100% Extra Space Storage Inc. 1,313 1, % 1, % 70% U-Haul International Inc. 1,297 1, % 1, % 67% CubeSmart % % 53% Life Storage Inc % % 81% National Storage Affiliates Trust % % 74%

11 The Rich Get Richer Though there are square footage gains evident throughout the ownedproperty ranking, notable large increases among the top 40 include: No. 35 Rosewood Property Co. (59 percent) No. 18 Urban Self Storage Inc. (58 percent) No. 14 StorQuest Self Storage (45 percent) No. 39 Storage Rentals of America (42 percent) No. 28 Reliant Real Estate Management LLC (41 percent) Note: Rosewood and Urban own 100 percent of their operating portfolios.

12 Square-Footage Milestones Company 2017 Notable Increases in Facility OWNERS 2016 Rank Square Feet Facilities 2017 Rank Square Feet Facilities Square Feet Increase Universal Storage Group K K 7 62% Rosewood Property Co M M 39 59% Urban Self Storage Inc M M 67 58% National Storage Affiliates Trust M M % Sentry Self Storage Management K K 6 48% StorQuest Self Storage (The William Warren Group) Storage Rentals of America (Elite Stor Capital Partners) M M 84 45% M M 58 42% Reliant Real Estate Management LLC M M 48 41% Extra Space Storage Inc. 2 59M 1, M 1,023 31% West Coast Self Storage K K 10 28% Note: This table excludes companies making their debut in the Top-Operators List for which ISS has no 2016 data.

13 Shrinking Footprints Though several operators in the 2017 owned-property ranking showed year-over-year declines in square footage, few showed significant decreases. A few that exceeded the 20 percent threshold are noted below Notable Downsizing in Facility OWNERS Company The Jenkins Organization Inc. Storage Pros Management LLC 2016 Rank Square Feet Facilities 2017 Rank Square Feet Facilities Square Feet Decrease M M 32 39% M K 18 31% Bargain Storage M M 28 23% Self Storage Management Co. Inc M M 30 21%

14 The Management Effect Due to separate lists this year, several third-party management companies that own self-storage facilities but whose portfolios consist primarily of managed property appear much lower in the top 100 than they would have under a total-portfolio ranking. Among the top 11 management companies, six posted square-footage gains of more than 42 percent. Among the top 50 management companies, 13 operate strictly as property managers, while another 11 manage more square footage than they own. At No. 6, Storage Asset Management Inc. is the first in the rank whose portfolio is comprised entirely of managed property. In all, three companies in the top 10 have portfolios comprised entirely of managed property, with Self-Storage Consulting Group at No. 11.

15 Top-Heavy Management The top 10 management companies are again dominated by the largest operators, with Extra Space leading the way at 33.8 million managed square feet. CubeSmart now ranks No. 2 ahead of U-Haul, followed by NSAT and Life Storage. StoragePro Management makes its debut in the top 10 this year at No. 9. Company Top 10 Third-Party Management Companies Square Feet Managed % of Total Portfolio Square Feet Change YOY Extra Space Storage Inc. 33.8M 31% 25% CubeSmart 27.5M 46% 61% U-Haul International Inc. 24.1M 46% 1% National Storage Affiliates Trust 10.7M 27% 43% Life Storage Inc. 9.4M 19% 46% Storage Asset Management Inc. 5.4M 100% 49% Absolute Storage Management Inc. Argus Professional Storage Management 4.9M 80% 27% 4.2M 100% 21% StoragePro Management Co. 3.8M 100% 88% StorQuest Self Storage (The William Warren Group) 3.5M 36% 0%

16 International Flavor While previous Top-Operators Lists have included international square footage in the total-portfolio numbers, primarly from properties owned by Public Storage in Europe under the Shurgard brand and SmartStop Asset Management LLC in Canada, the 2017 facility-owners list includes National Storage REIT at No. 15 and Mega Storage at No. 96, which operate their portfolios in Australia and Panama, respectively.

17 An Industry Snapshot The two rankings represent million net rentable square feet, with million of that being property owned by companies in the top 100 list. The top 50 third-party management firms operate 2,774 facilities comprising 179 million square feet. Separating the rankings between owned and managed property understandably resulted in a sizable increase in the number of owned facilities. The 9,535 owned facilities in the top 100 represents an 8.3 percent year-over-year increase. It also helped smaller operators enter both lists. In 2016, the smallest owned portfolio in the top 100 was 646,000 square feet. This year, 14 companies that own less than 600,000 square feet of self-storage made the ranking.

18 Who s Eligible? The Top-Operators Lists, published annually, are open to all multi-facility self-storage operators and third-party management firms. To be considered for inclusion in the 2018 list, simply complete an online form. 1. Visit 2. Hover over Directories in the top navigation bar. 3. Choose Top-Operators List. 4. Click the ADD/EDIT LISTING link in the upper right corner.

19 Thank you! Thank you for viewing our slideshow. Please be sure to download the PDF copy for future reference. The PDF also provides clickable links. The complete 2017 Top-Operators Lists are viewable on the ISS website. Simply click on the company name to access the individual listing info. To get all of the operator information contained in a convenient Excel spreadsheet plus an analytic report, please visit the ISS Store at