Trends and Revelations in the ISS 2013 Top-Operators List

Trends and Revelations in the ISS 2013 Top-Operators List

The ISS Top-Operators List The Top-Operators List is an annual compilation including 100 of the industry's leading players. In the list, real estate investment trusts, multifacility operators and management companies 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 2013 list, which was recently released on the ISS website and published in the October 2013 edition of ISS magazine. To view the list, select it from the Directories drop-down menu in the top navigation bar at insideselfstorage.com.

The Big Picture Industry consolidation has dominated analyst reports regarding the selfstorage sector during the last few years, and for good reason. Through the recession, ground-up development of new facilities gave way to consumption, with the real estate investment trusts (REITs) and larger, private operators taking advantage of attractive buys in major markets to accelerate their growth.

The Big Picture Although indicators suggest new self-storage development is on the rise, fluctuation within the 2013 Top-Operators List shows that many operators continue to grow annually by acquiring multiple new locations each year, either by purchasing competitors, redeveloping existing buildings, or through third-party management contracts. Similarly, contraction among some of the top operators also has come by way of selling off sizable portions of portfolios or terminating management agreements.

REIT Dominance While self-storage has been a top-performing sector among all U.S. REITs, the four publicly traded self-storage REITs continue to lead consistent growth among the industry s top operators. The list s top five operators have remained unchanged over the last two years, with U-Haul International Inc. being the only non-reit, at No. 3.

REIT Dominance Public Storage is again the undisputed leader, with 143 million square feet and 2,268 facilities. The company rebounded from a 5.8 percent decline in square footage in 2012 to post a 9.2 percent increase in 2013. All of the operators in the top five posted at least a 6 percent increase in net rentable square feet compared to last year. Sovran Self Storage, which operates the Uncle Bob s Self Storage brand, posted a 6.3 percent increase this year after a whopping 21.5 percent in 2012, in which it grew from 24.7 million to 30 million square feet. The company is now at 31.9 million square feet.

A Closer Look at the Big 5 Tracking the Big 5 by Net Rentable Square Feet (in Millions) 2011 2012 % Change 2013 % Change Public Storage Inc. 139M 131M -5.8 143M 9.2 Extra Space Storage Inc. 59M 64.5M 9.3 70M 8.5 U-Haul International Inc. 36.2M 38.2M 5.5 41M 7.3 CubeSmart 29.1M 31.5M 8.2 33.8M 7.3 Sovran Self Storage Inc. 24.7M 30M 21.5 31.9M 6.3 Tracking the Big 5 by Number of Facilities 2011 2012 % Change 2013 % Change Public Storage Inc. 2,233 2,064-7.6 2,268 9.9 Extra Space Storage Inc. 1,110 1,144 3.1 1,206 5.4 U-Haul International Inc. 821 882 7.4 965 9.4 CubeSmart 470 477 1.5 519 8.8 Sovran Self Storage Inc. 377 451 19.6 471 4.4

Moving on Up After the Big 5, net rentable square feet per operator drops off dramatically, but that doesn t mean operators haven t posted big gains in the last 12 months. No one gobbled up storage properties faster than W. P. Carey Inc. in 2012. The Dallas-based company moved into the top 10 this year (from No. 13) by increasing its net rentable square feet from 4.9 million to 8.97 million, an astounding 83 percent jump. It increased its portfolio from 70 facilities to 167, a 138.6 percent increase.

Moving on Up Other notable growth increases: No. 43 - The Amsdell Cos./Compass Self Storage (41 percent) No. 73 - Lyons Cos. (36.6 percent) No. 15 - The William Warren Group (28.9 percent) No. 30 - Universal Storage Group (23 percent) No. 19 - Absolute Storage Management Inc. (22 percent) No. 13 - Westport Properties Inc. (19 percent) As one might expect, numerous ranking changes have occurred in the bottom half of the list this year, as the addition of one or two facilities can significantly add to footprint size and boost a company s ranking one or several spots.

Million-Marker Milestones Several operators reached square-footage milestones in 2013, either reaching 1 million net rentable square feet for the first time or growing their footprint into higher million-marker plateaus. Square Footage Club 2013 Million Marker Milestones in Net Rentable Square Feet Company 2012 Rank Square Feet Facilities 2013 Rank Square Feet Facilities Square Feet % Change 9M Simply Self Storage 9 8.6M 116 9 9M 118 4.7 8M W. P. Carey Inc. 13 4.9M 70 10 8.97M 167 83 6M SecurCare Self Storage Inc. 12 5.7M 149 12 6.2M 139 8.8 5M Westport Properties 15 4.2M 61 13 5M 71 19 4M The William Warren Group 17 3.8M 60 15 4.9M 80 28.9 4M Optivest Properties 21 3.45M 43 18 4M 54 15.9 3M Universal Storage Group 38 2.6M 34 30 3.2M 50 23 2M Amsdell Cos./ Compass Self Storage 50 1.7M 26 43 2.4M 38 41 1M Lyons Cos. 81 805K 10 73 1.1M 13 36.6 1M StorPlace Self Storage 75 932K 14 75 1.04M 16 11.6 Note: This table excludes companies making their debut in the Top-Operators List for which ISS has no 2012 data.

Shrinking Footprints Operators that have sold sizable portions of their self-storage portfolios or terminated management agreements in the last two years have fallen significantly in the Top-Operator rankings. A few are noted below: Company Previous Rank* 2013 Notable Downsizing Square Feet Facilities 2013 Rank Square Feet Facilities Square Feet % Change Tellus Self Storage 33 2.9M 58 70 1.16M 31-60 Platinum Storage Group 10 7.4M 106 24 3.5M 45-52.7 SKS Management LLC 45 2.05M 24 62 1.4M 19-31.7 Dahn Corp. 10 6.4M 98 14 4.9M 75-23.4 *All previous rankings, square footage and facility numbers are from 2012, except Dahn Corp. (2011), which did not submit data for the Top-Operators List last year.

In Summary The Top-Operator List, published annually, is open to all multi-facility self-storage operators and third-party management firms. To be considered for inclusion in the 2014 list, simply complete an online form. 1. Visit insideselfstorage.com. 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.

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 2013 Top-Operators List is 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, please visit the Inside Self-Storage Store.