Industry Ownership • Section 2


Antonio, Texas, in 1954 to serve military members who needed to store their belongings.


T By the early 1970s, the concept of storage as a true business


began to emerge; albeit the facility was run in a tiny office with records kept on index cards and receipts issued as carbon cop- ies. Nevertheless, the “mini-storage” business, as it was known back then, became a direct competitor to the moving and stor- age companies that had cornered the market for so long.


In 1975, everything changed when the Self Service Storage


Association was formed by Buzz Victor, Tom Pepper, and Mike Russell—three of the industry’s earliest pioneers. Over the next decade, the industry started to become more professional, with new technology tools such as computers and laser printers. The first storage-specific software even emerged.


Since then the Self Service Storage


Association has evolved to become the national Self Storage Association (SSA) and the business of storage has become a lucra- tive, highly professional business. Gone are the 100-square-foot offices, retired manage- ment couples whose apartment is adjacent to the office, and simple gates with a bell to announce the arrival of a customer.


Today self-storage is a profitable asset


class of its own—one that is attracting ven- ture capital from other real estate sectors. Indeed, investors are eager to acquire or expand existing facilities. Moreover, given


Storage REITs (Total)** PSA


In terms of the view from Wall Street, self-storage REITs ex-


ceeded the already elevated expectations for Q3 2015, with same-store net operating income (NOI) continuing to outpace


9/30/14


Table 2.1 – Market Index 1/2/15


$309.75 $357.10 $410.30 165.84


SSS 74.36 CUBE 17.98 EXR 51.57 NSA* 13.00 DJIA


17,042.90 S&P 500


U.S. 10 YEAR 10 YEAR SWAP


¹ Excludes dividends


Sources: NGKF Capital Markets, Yahoo! Finance, U.S. Dept of the Treasury, U.S. EIA, Barchart (SWAADY10.RT), Bloomberg, World Gold Council *NSA (National Storage Affiliates Trust) Historical Pricing is based upon its April-2015 IPO price of $13/share **NSA will be excluded from the consolidated Storage REITs TTM Total until it has a year-over-year price history and from the YTD Total until 1/5/16


Chart 2.1 – Self-Storage REIT Historical Stock Prices


$0.00 $40.00 $80.00 $120.00 $160.00 $200.00 $240.00


NASDAQ 4,493.39 GOLD 1,216.50 OIL


91.17 2.52% 2.64%


187.23 88.56 22.37 58.94 13.00


17,832.99


211.63 94.30 27.21 77.16 13.55


1,972.29 2,058.20 1,920.03 4,726.81 1,189.80 52.62 2.12% 2.23%


16,284.70 4,620.16


1,114.00 45.06 2.06% 2.01%


9/30/15 YTD Change¹ TTM Change¹ 14.90%


13.03% 6.48%


21.64% 30.91% 4.23% -8.68% -6.71% -2.26% -6.37% -14.37% -2.83% -9.87%


here are varying accounts of when and where the con- cept of self-storage actually began. The first true storage facility—to the best of our knowledge—was built in San


the drop in demand over the past few years, they are once again eager to buy land and build new facilities in areas where demand is lacking.


Since July 2006 when Seattle-Wash.-based Shurgard Storage Centers was sold to Public Storage, the top five operators in the industry have been public companies—Public Storage, Extra Space Storage, U-Haul International, CubeSmart, and Sovran Self Storage dba Uncle Bob’s Self Storage. With the exception of U-Haul, these companies are all REITs (Real Estate Investment Trusts). In 2013, National Storage Affiliates was formed, which has since changed the lineup, making this new and unique REIT the sixth largest operator in the U.S.


32.46% 27.61% 26.82% 51.33% 49.62% 4.23% -4.45% -2.65% 2.82% -8.43% -50.58% -18.25% -23.86%


Jan-10 Jul-10 Jan-11 Public Storage


Extra Space


Jul-11 Sovran Self Storage


Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 CubeSmart


National Storage Affiliates 2016 Self-Storage Almanac 27


Source: NGKF Capital Markets, Yahoo! Finance


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