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SELF STORAGE MARKET OVERVIEWThird Quarter 2013 SUMMARY
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 Results
Analysis of the Public Self Storage Companies
SELF STORAGE GROUPMarc A. Boorstein
[email protected] L. Jacobson
[email protected] E.Kohn
[email protected] Nyren
Steven [email protected]
Greg [email protected]
Benjamin [email protected]
150 South Wacker Drive • Suite 450 • Chicago, Illinois 60606 • (312) 726-5800 • www.mjpartners.com
2
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 SUMMARY
Overview
• Revenuegrowthinfirstquarterforeachoffourpubliccompaniesrangingfrom5.1%to8.3%.
• NewOperatingIncomegrowthrangingfrom5.6%to9.4%.
• Verycompetitiveacquisitionmarketforallqualityofexistingpropertiesfrombothprivateandpubliccompanies.Capratescontinuetotrendlower.
• Nominalnewsupply,lessdiscountingandcustomersstayinglonger.
Future Optimism
• “Thereisstillvirtuallynonewsupply….(and)becauseofthepowerandpotencyofourinternetplatform,we’retakingmarketsharefromthesmaller(operator).”
- Spencer Kirk, CEO, Extra Space Storage
• “Timesaregoodandweexpectthattocontinue” - David Rogers, CEO, Sovran Self Storage
New Development Subdued
• Difficultyobtainingconstructionfinancing
• Risinglandpricesinmajormetropolitanmarkets.
• Undercapitalizedprivatedevelopers.
• Emergingmarketforacquisitionsofnewlybuiltpropertiesatcertificate-of-occupancy.
3
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 SUMMARY
Implied Cap Ratesbasedoncommonshareprices:
Public Storage (PSA) 4.3% Extra Space Storage (EXR) 5.1% CubeSmart (CUBE) 5.4% Sovran Self Storage (SSS) 6.4% - BMO Capital Markets
Macroeconomic Trends Impacting Self Storage
• U.S.businessesfinallyaddedenoughjobstoreplacethe8.8millionpositionslostduringtherecession.
• Nonfarmemploymentgrewby288,000inAprilandunemploymentsankto6.3%from10.0%in2009–nowjustalittlehigherthanatthesametimeofLehmanBrother’scollapseinSeptember2008.
- U.S. Labor Department
• Jobgrowthoverthepastthreemonthshasaveraged238,000–farabovelastyear’space.
• Nation’spayrollemploymentnowtotals138.3million,justshyofarecordreachedinJanuary2008. - U.S. Labor Department
• SalesofpreviouslyownedhomesfellslightlyinMarchandweredown7.5%fromayearearlier. - National Association of Realtors
• Thelabor-forceparticipationratepeakedat67.2%in2000,hoveredat66%atstartofrecessioninDecember2007.Ithasfallensteadily,hitting62.8%inApril.Thebiggestfactoristheagingbaby-boomergeneration.
- Paul Ashworth, Chief U.S. Economist, Capital Economics
4
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014
EARNINGS RESULTSSame-Store Comparisons
Public Storage Extra Space CubeSmart Sovran
Number of Properties: 2,200 U.S. 188 Europe
1,052 539 487
Third-Party Management:Joint Venture Management:Total Managed: 35-40
252273525 161
245579
Revenue: +5.1% +7.9% +7.0% +8.3%
Net Operating Income: +5.6% +9.4% +9.0% +9.3%
Occupancy:vs.previousyear:
92.6%91.9%
(weightedaverage)
90.4%88.4%
(quarterend)
89.5%85.6%
(quarterend)
88.9%85.8%
(weightedaverage)
Rent Per Occupied Square Foot: $14.41 $14.09 $13.54 $11.16
5
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014
PORTFOLIO OCCUPANCYSame-Store Comparisons
Portfolio Occupancies
EXTRA SPACE STORAGE
CUBESMART SOVRAN
PUBLIC STORAGE
92.3% 92.2%
90.2% 90.8%92.4% 93.0%
91.8% 92.4%94.0% 94.4%
93.0% 92.6%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
87.7% 88.0%86.9%
85.7%
89.0% 88.9% 88.6% 88.6%
90.8% 90.6%89.2%
90.4%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
80.0%81.2%
79.1% 79.3%
84.1%
88.9%
84.6%85.7%
90.0% 90.5%89.3% 89.5%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
79.9%81.5% 81.5%
82.9%
87.7% 88.4%87.4% 87.6%
91.0% 90.9%89.5% 88.9%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2011 2012 2013 2014 2011 2012 2013 2014
2011 2012 2013 20142011 2012 2013 2014
6
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014
REVENUE GROWTHSame-Store Comparisons
RevenuesChangesfromsamequarterayearearlier
EXTRA SPACE STORAGE
CUBESMART SOVRAN
PUBLIC STORAGE
4.0%
5.8%
5.0% 4.8%5.1%
4.8% 4.9%5.4%
5.1%5.5% 5.4%
5.1%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
4.7% 4.9%
5.8%6.3%
6.7% 6.8% 6.5%
7.5% 7.8% 7.8%
6.6%
7.9%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
3.5%4.0%
3.4%2.7% 3.0%
4.1%
5.2%
6.8%
9.0%
7.2%6.7% 7.0%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
5.2% 5.3%
3.4%3.9%
5.1%
8.0% 8.2% 8.1%8.9%
7.3%6.6%
8.3%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2011 2012 2013 2014 2011 2012 2013 2014
2011 2012 2013 20142011 2012 2013 2014
7
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014
NET OPERATING INCOME GROWTHSame-Store Comparisons
Net Operating IncomeChangesfromsamequarterayearearlier
EXTRA SPACE STORAGE
CUBESMART SOVRAN
PUBLIC STORAGE
6.2%
8.6%
6.1% 6.3%
8.3%7.9%
8.9%9.5%
8.4%
7.2%8.0%
5.6%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
7.8%7.3%
9.3%
10.8%10.2%
11.4%
8.5%
10.8% 10.4%9.7%
8.9%9.4%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
7.4% 7.9%
5.7%
7.4%
5.2%4.5%
7.4% 7.6%
13.1%
10.0%
7.3%
9.0%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
8.5%7.9%
4.1%
7.9%8.6%
13.1%
11.7%10.6%
12.2%
9.3%
7.2%
9.3%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2011 2012 2013 2014 2011 2012 2013 2014
2011 2012 2013 20142011 2012 2013 2014
8
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014
Public Storage Extra Space CubeSmart Sovran
Market Capitalization $29.61 billion $5.99 billion $2.54 billion $2.46 billion
Funds From Operations (AdjustedQuarter)
$1.80/share(+9.1%)
$0.57/share(+23.9%)
$0.25/share(+25%)
$0.98/share(+16.7%)
Dividend Per Common Share(Quarter)
$1.40/share $0.40/share $0.13/share $0.68/share
Dividend Yield 3.30% 3.10% 2.80% 3.60%
Common Stock PriceMay5,2014:52-WeekRange:
$171.93$145.04 to $176.72
$51.69$38.98 to $52.99
$18.10$15.06 to $19.69
$76.05$62.11 to $80.24
EARNINGS RESULTS
9
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 INVESTMENT ACTIVITY
PUBLIC STORAGE: • As ofMarch 31st, development and expansion projects in processwhichwill addapproximately1.9millionnetrentablesquarefeetofstoragespaceatatotalcostofapproximately$195million,tobeincurredprimarilyin2014.
• Completedtwonewdevelopmentfacilitiesandoneexpansionprojectinfirstquarter,adding335,000netrentablesquarefeetatacostofapproximately$40million.
• InApril,acquiredonefacilityinAustin,Texaswith86,000netrentablesquarefeetforapproximately$11million-$6millionincashand$5millioninassumeddebt.
• AsofMay1st,currentlyundercontracttoacquirefivefacilitiesinNorthCarolinawith342,000net rentablesquare feet for totalcostofapproximately$26million incash.Expecttocompleteacquisitioninsecondquarter.
• GerardpropertyinBronx,NewYorkleasedover3,000unitsinaboutoneyearandendofApril67%occupied.Ratesabout60%to70%offorecast,helpingleaseupsoquickly,canbemoreaggressiveonrateswhenstabilizedsoon.
• Wouldbewillingtopay175%ofreplacementcostsincertainmarketssuchaslowerManhattan, where there are higher incomes, very little competition, and greatpopulationdensity.Mayonlypay50%to60%ofreplacementcostsinReno,Nevada.
• Notdoingnewcertificate-of-occupancybuyouts,althoughacquiredonenewprojectinBostonandacquiredoneunderdevelopment.
• Maybelessthan20largeinstitutionalportfoliosavailablenationwide.
• Twooflargesttransactionslastyearwereprivatewithoutbrokers.
10
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 INVESTMENT ACTIVITY
EXTRA SPACE STORAGE: • Year-to-date$350millionofpropertieseitherclosedorundercontract.
• Duringthefirstquarter,acquired21propertiesforapproximately$249.7million. 17ofthepropertiesacquiredintheMiniPriceStorageportfolioinVirginiafor $213.8million,consistingof1.5millionrentablesquarefeet,14,000units,withoverall
occupancyof90%.
RemainingfourpropertieslocatedinAlabama,California,Connecticut,andTexas.
• Fouradditionalpropertiesundercontractforapproximately$39.3million,expectedclosingbyendofsecondquarter.
• Capratesfrom6%to7%inYearOnelookingforward,withNOIgrowthexpectedof5%to8%infirstyear.
• Twopropertiesacquiredatcertificate-of-occupancyphasewithnooccupancy.
• Twodealsacquiredfromjointventurepartnerrelationship.
• Somecapratecompressioninsecondarymarkets.
• Thirdpartymanagedproperties: 252 Ownedandmanagedinjointventures: 273 Totalmanaged: 525 WhollyOwnedProperties: 496 TotalProperties: 1,052
Same-StorePool: 443
• Notaddingsignificanttotalsquarefeetviaexpansionprojects,butupgradingcertainpropertiestoremainrelevant.
11
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 INVESTMENT ACTIVITY
CUBESMART: • Closed on 16 property acquisitions year-to-date in 14 separate transactions for anaggregate purchase price of just over $187million.Acquired ten assets for $103.3millionduringfirstquarter.ThreepropertieslocatedinFlorida,twoinMarylandandoneeachinArizona,California,Connecticut,Pennsylvania,andTexas.
• Subsequenttoquarter’send,acquired$84millionofproperties.TwofacilitiesinNewYorkandoneeachinTexas,Florida,andMassachusetts.
• Openedtwonewpropertiesfortotalcostofapproximately$41.6million.OnepropertyinTheBronx,NewYork,andsecondamixed-usefacilityinMalvern(Philadelphia),PennsylvaniacontainingstoragespaceandofficespacefortheCompany’scorporateheadquarters.Projecting36monthslease-upforbothstores.(Bronxstore10%occupiedinabout40days.Malvernabout34%occupiedsinceJanuary.)
• Thefirst12to14monthsafternewacquisitiontypicallycapturemostofimpactfromnewsystems,branding,andmarketing.
• Addedthreenewmanagementcontractstothird-partymanagementprogram,nowoperatingthird-partymanagementof161facilitiestotaling9.8millionsquarefeet.
• For2014,increasingacquisitionstargetof$250millionto$300millionofacquisitions,upfromprevioustargetof$150millionto$200million.
• Investmentactivityacombinationofstabilizedacquisitionsandlease-upopportunities.Project$50millionto$75millionperyearoneachco-investmentinnewdevelopment,andseparatelyononlytakinglease-upriskofnewlybuiltpropertiesatcertificate-of-occupancy.Currently,about$200milliontotal,including:
-Threebuilt-to-suitpropertieswillclosein2015and2016.
-Fourdevelopmentprojectsopeninginlate2015.
12
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 INVESTMENT ACTIVITY
SOVRAN: • Totalpropertyacquisitionsinfirstquarterof$95.4million
• Early in 2014 acquired six properties for $86.7 million. Two located in SoutheastFlorida,twoinPortland,Maine,andoneeachinSanAntonioandAustin,Texas.Thepropertiestotal460,000squarefeetofrentablespaceandalllocatedinmarketswithexistingpresence.
• OnMarch31st,acquiredHometownStorage,an87,000squarefootfacilityinChicagosuburbSt.Charles,Illinois,for$8.7million.
• Undercontracttoacquire17facilitiesfromLacklandSelfStorageforapproximately$120.7million.MayassignthepurchaseoffourofthepropertieslocatedinNewJersey,withacombinedpriceof$47.1million,toaSovranHFFjointventurewithHeitman,LLCinwhichthecompanyhasa20%interestforcashcontributionof$9.4million.Expectfirstyearcapratetobeabout6.5%to6.75%.
• Anticipatedtoacquireanadditional$100millionofpropertiesin2014.
• WorkingwithselectdevelopersinlargerMSA’sondifferentmodelstovalueacquiringproperties at certificate-of-occupancy, based on the cap rate at stabilization andimplementingadiscountedcashflow.Fewtoprobablyclosethisyearat$5millionto$10million,andhope$10millionto$15millionmorenextyear.
• WithSovran’soperatingplatformmoreconfidencetogrowoccupancyquickerthanpreviouslyprojectedfouryears,incertainmarkets.
• The28properties acquired in2012 that recently entered the company’s same-storepoolfeaturedoccupancygainfromabout70%toabout85%.
13
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 ADDITIONAL NOTES
PUBLIC STORAGE: • EndofApriloccupancy93.9%versus92.9%lastyearwithinsame-storepool.
• Expectedpeakoccupancyat95%to95.5%.
• Costsofoperatingforsame-storefacilitiesincreased4.0%comparedtosameperiodlastyear,dueprimarilytoweatherrelatedincreasesinsnowremovalandincreasedpropertytaxexpense,partiallyoffsetbyloweradvertisingandsellingcosts–duetohighoccupancylevels.
• 58%ofcustomermove-inscamethroughaninternetchannel,upfrom51%lastyear’sfirstquarter.
• Move-inratewasupabout3%whereasinAprilupover6%.
• StreetratesinAprilupabout6%to7%.
• 56%ofcustomerbasecurrentlystayingoveroneyear.
• About80%ofnewmove-insreceivesometypeofpromotionaldiscount–either$1forfirstmonthor50%off.
• Last summer, sentoutabout55%of customersa rent increase, andexpect slightlymorethissummer.Rateincreasesaverageabout8%to9%.
Rent Roll-Downs
- Averagemove-inrateinfirstquartersame-storesabout$114permove-in.Averagemove-outsameperiodabout$123-representingabout$9negative.
- Lastyear,move-inrateabout$111versusamove-outrateof$119.
14
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 ADDITIONAL NOTES
PUBLIC STORAGE: Shurgard Europe
• Same-Storepoolof174facilitiesconsistingof9.2millionnetrentablesquarefeet.
• Squarefootoccupancy(weightedaverage)upto86.1%versus79.5%lastyear,butrentperoccupiedsquarefootdownto$26.77versus$27.58lastyear.
• Same-storerevenuegrowthof1.3%,andNOIgrowthof1.3%.
15
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 ADDITIONAL NOTES
EXTRA SPACE STORAGE: • 14consecutivequartersofdouble-digitFFOgrowth,withanotherstrongyearexpected.
• Same-store revenues increaseddue to gains in occupancy, lowerdiscounts to newcustomersandhigherrentsforbothnewandexistingcustomers.
• Expenseshigherforsameperiodduetoincreasesinsnowremovalandutilityexpenses,relatedprimarilytosevereweatherintheMidwesternandEasternU.S.
• MaximumoccupancyforExtraSpacelowtomid90’s.
• MajorMarketsWithRevenueGrowthAboveCompany’sPortfolioAverage:
-Chicago -Houston -Denver -Miami
• MajorMarketsBelowCompany’sPortfolioAverage:
-Detroit -LasVegas -Indianapolis -Seattle
• Rentincreasesofexistingcustomersaverage8%to10%,butdependsonlengthofstayandunitoccupancy.
16
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 ADDITIONAL NOTES
EXTRA SPACE STORAGE: • StabilizedPropertyPerformanceAverageOccupancy
FirstQuarter 2013LosAngeles-Riverside-OrangeCounty(132) 85.7% 82.6%NewYork-NorthernNewJersey-LongIsland(90) 91.5% 90.0%Washington-Baltimore(64) 89.8% 87.6%Boston-Worcester-Laurence(50) 91.3% 90.3%Tampa-St.Petersburg-Clearwater(24) 85.2% 83.4%Chicago-Gary-Kenosha(18) 90.9% 91.0%
• SelectStateOccupancyLevelsofAllPropertiesOperatingAsOfMarch31,2014:
-Arizona(22) 88.0% -Michigan(11) 91.1% -California(248) 87.6% -NewJersey(68) 92.1% -Colorado(28) 91.2% -NewYork(33) 90.4% -Florida(105) 87.9% -Ohio(34) 89.5% -Illinois(29) 89.6% -Pennsylvania(34) 88.5% -Maryland(49) 87.9% -Texas(69) 86.1% -Massachusetts(50) 90.8% -Virginia(46) 86.2%
17
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 ADDITIONAL NOTES
EXTRA SPACE STORAGE: • Nettenantreinsuranceincomeprojectedat$44millionto$45millionfor2014,upover$3millionprojectedearlier.
• Overalltenantreinsurancepenetrationrateabout70%.Majorityofrevenueincreaseintenantreinsurancefromincrease indollarsperpolicy(highercoverageofgoodsinsured).
• Streetratesup3%atendofMarch,anddiscounts–downover10%sincelastJune,makingfordifficultupcomingcomparisons.
• 20%ofcustomerscommercialaccounts–aboutthesamepast16years.
• Added99storestosame-storepool,now443same-storesforcomparisons.
18
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 ADDITIONAL NOTES
CUBESMART: • AsofMarch31st,companyhas378wholly-ownedfacilitiescontaining25.5millionsquarefeetwithoccupancyof88.6%.
• Same-storestreetrentsaveraged2.4%growthinfirstquarter.
• StrongestMarketsForStreetRateGrowth:
-NewYorkwithveryfew5’X5’and10’X10’unitsavailablecanincreasestreetrates10%to13%
-Colorado +10%to13% -Dallas,FortWorth +8%andabove-Chicago +5.5%-AllFlorida,ledbyMiami-MostchallengingmarketElPaso,Texas
• Discountsonsame-storepoolasapercentageofrentsdeclinedto5%from5.3%lastyear.
• Added48stabilizedpropertiestosame-storepoolin2014,increasingthesame-storepooltotalto346.2013same-storepoolwas298assets,and2012was274.Same-storepoolnowrepresenting91%ofcompany’stotalNOIinfirstquarter.
• Peakoccupancyforsame-storesanticipatedtobe92%to93%.
• Rate increasesonabout5%to6%of totalbaseeachmonth.Rate increasesaverageabout9%onexistingcustomers.Providenoticeof increaseinthesixthmonth,andthenevery12monthsthereafter.
• Effectiverentsforcustomersmovinginupabout3%.
• Newcustomermovinginabout1.5%higherthancustomervacating,only0.3%higherlastyear.
19
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 ADDITIONAL NOTES
CUBESMART: • About81.6%ofcustomersreceivedpromotionaldiscountsversus82.2%lastyearinsame-storepool.
• Businesscustomersrepresentabout30%ofcustomerbase,projectedtostayaboutthesame.
• Averagelengthofstayabout14months,upaboutsixdaysversusayearago.
• About10%ofthird-partymanagedstoreshaveadoptedCubeSmartbrand.
• Almostnoimpactonanystoresnationwidewithlittlenewsupplyadded,notexpectedtochangeforatleast12months.
• OperatingPerformancebyRegion:Same-StoresMarch31,2014
EndingOccupancyMarch31,2013
EndingOccupancyNewYork/NorthernNewJersey(41) 89.0% 85.4%Non-MiamiFloridaMarkets(39) 90.7% 85.3%TexasMajorMarkets(36) 90.8% 87.6%Chicago(27) 90.3% 88.8%Miami/Ft.Lauderdale(16) 93.6% 86.5%SouthernCalifornia(12) 90.4% 85.5%
20
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 ADDITIONAL NOTES
SOVRAN: • Intends to spendup to $30millionon expansionandenhancementprogram.Alsobudgeted$16millionforrecurringcapitalizedexpendituresincludingroofing,paving,andofficerenovations.
• Revenuegrowthdueto310basispointincreaseinaverageoccupancy,a3.4%increaseinrentalrates,andstronggrowthininsurancecommissions.
• Infirstquarter, experiencedpositive same-store revenueandNOIgrowth ineverystateinwhichcompanyoperates.
Strongestrevenueimpact:
-Texas -NewYork-Florida -NorthCarolina-Georgia
• Concessionreductionsaddedabout50basispointstorevenuegrowth.
• Occupancymaytopoutat93%to94%duringpeakquarters.
• Customersstayingmorethanoneyearincreasedto57.4%comparedtolastMarch’s55.3%withinsame-storegroup.
• Customersstayingmorethantwoyearsincreasedto39.45%from37.6%lastyear.
• Rateincreasesgiventoabout2.7%ofcustomerswithnetaveragerateincreaseof11%.
• Reviewseverymonthoncecustomerstayspastthe10thmonthtodecideifcustomermeetscriteriafrominternalalgorithmsforpotentialrateincrease.
21
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 CAPITAL ACTIVITIES
PUBLIC STORAGE: • OnJanuary28th,jointventurepartnerinEurope,NewYorkStateCommonRetirementFund,purchasedtheir51%intheloanPublicStorageextendedtoShurgardEuropeatfacevalueof€158.6million($216.2million)incash.
• OnMarch17th,issued6.375%SeriesYPreferredSharesresultingingrossproceedsof$235million.OnApril10thissuedadditionalSeriesYPreferredSharesatparfor$50millioningrossproceeds.
• At end of the quarter, roughly $100million cash on hand and about $300millionrevolvinglineofcredit.
• Repaid$328millionofrecentbanktermloan,leavingabalanceof$322million.
22
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 CAPITAL ACTIVITIES
EXTRA SPACE STORAGE: • Fixed-ratedebttototaldebt74.2%.
• WeightedAverageInterestRates:
FixedRate: 4.1% VariableRate: 2.0% CombinedWeightedAverage: 3.6%
WeightedAveragematurityabout5.2years
• Endedquarterwithapproximately$67millioncashonhand,morethan$200millionofavailabilityonfourrevolvinglinesofcredit,andatotalcapacityof$290million.
23
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 CAPITAL ACTIVITIES
CUBESMART: • Sold2.7millioncommonsharesthrough“at-the-market”equityprogramataveragepriceof$17.34pershare,resultinginnetproceedsof$46.2million.Another3.7millionsharesavailableforissuance.
• OnMay 1st, HFF joint venture with Heitman, LLC, obtained a $100million loansecuredby35facilitiesownedbytheventure.Aseven-yearnon-recourseloanwithfixedinterestrateof3.59%.CubeSmartowns50%shareofjointventure,andrecieved50% of loan proceeds to reduce borrowings and create additional capacity underrevolvingcreditfacility.
• Atendofthequarter,approximately$7millioncashonhand,andapproximately $229millionofavailabilityunder$300millionrevolvinglineofcredit.
RateWeighted
AverageMaturityFloatingRateDebt 1.76% 3.2yearsFixedRateDebt 4.37% 6.3yearsTotalDebt 4.21% 6.1years
24
SELF STORAGE MARKET OVERVIEWFirst Quarter 2014 CAPITAL ACTIVITIES
SOVRAN: • Issued359,102sharesofcommonstockviaATM(at-the-market)programatanaveragepriceof$74.32pershare,resultinginnetproceedsof$26.3millionafterissuancecosts.Usedproceeds to fundacquisitions. In January, issued47,583 shares at anaveragepriceof$62.69throughDividendReinvestmentPlan.
• OnApril8th,issued$175millionoften-yearunsecurednotesatfixedrateof4.533%.$115millionoftheproceedsusedtopaydownlineofcredit,andremaindertofundacquisitionsandexpansions.
• Asresultoffinancing,approximately$60millioncashonhandforpurchasesexpectedlater in theyear,and$60millionavailableon lineofcreditwithan interest rateofLIBORplus1.5%,withadditional$75millionexpansionfeature.
• KeyFinancialRatios:
-DebttoEBITDA: 4.8x -DebttoEnterpriseValue(@$73.45/share): 22.1% -DebttoBookCostofFacilities: 35.3% -DebtServiceCoverage(DSC): 5.0x