Sovran Self Storage, Inc. Company Presentation February 28, 2016

Transcription

1 Sovran Self Storage, Inc. Company Presentation February 28, 2016

2 Safe Harbor Statement This presentation may contain forward looking statements as defined in Section 27A of the Securities Act of 1933, and in Section 21E of the Securities Exchange Act of Forward looking statements address matters that are subject to a number of risks and uncertainties. Such factors include, but are not limited to, the effect of competition from new self storage facilities; the Company s ability to evaluate, finance and integrate acquired businesses into the Company s existing operations; the Company s ability to enter new markets where it has little or no operational experience; and other such factors as set forth in the Company s 10-K for the year ended December 31, 2015 as filed with the Securities and Exchange Commission. We are under no obligation to update any such forward looking statements.

3 Company Presentation I. Sovran Self Storage, Inc. II. Industry Overview III. Operations The Uncle Bob s Advantage IV. Acquisitions / Growth Drivers V. Results VI. Financial Overview VII. Summary VIII. Recent News

4 Sovran Self Storage, Inc. OUR COMPANY

5 Introduction NYSE:SSS 30 years in the storage industry 5 th largest operator in the world Over 500 locations in 26 states Operates under the trade name Uncle Bob s Self Storage

6 Portfolio SSS operates over 500 facilities in 26 states under the name Uncle Bob s Self Storage Acquired 2016 SSS Managed 2016 Sovran Self Storage 472 Sovran HHF JV 69 UB Management February 28, 2016

7 Investment Considerations Strong Financial Condition Investment Grade Ratings: Moody s Baa2 / Stable S&P BBB / Stable Fitch BBB / Stable Experienced Management Team Disciplined Growth Strategy Consistently Strong Operating Performance Quarterly Cash Dividends paid since 1995

8 Sovran Self Storage, Inc. INDUSTRY OVERVIEW

9 Operators With Scale Dominate Public REITS and large operators have the scale and resources to leverage: Internet visibility Centralized call centers Revenue management systems Brand recognition This provides a clear advantage over the remaining players Large OPS* The majority of self storage owners operate three or fewer properties. *2015 Self Storage Almanac

10 Limited New Supply New construction of self storage facilities has been muted since 2010 as a result of capital constraints and increased barriers to entry as more communities enforce stricter building codes and aesthetic requirements. Industry experts expect supply/demand dynamics to remain favorable through the year Built Built 2010 or later Built Before 1980 Built Built Source: Self Storage Almanac

11 Customer Characteristics Inelastic demand largely independent of economic cycles Demand is driven by change good & bad (marriage, moving, death, divorce, etc.) Diverse customer demographics Customer Profile - Industry Military 6.2% Student 6.3% Business 17.5% Residential 70% Source: 2015 Self Storage Almanac

12 Market Area of Renters Micro-market specific Most customers live or work within five miles of a facility Suburban, residential renters comprise 44% of all storage customers Market Area Of Renters Suburban 44% Rural 21% Urban 35% Source: 2013 SSA Self Storage Demand Study

13 Sovran Self Storage, Inc. THE UNCLE BOB S ADVANTAGE

14 Our People Our Values Teamwork We will leverage the experience and talent of every team member to achieve extraordinary results. Respect We will treat our fellow team members, our customers, our shareowners, and our community with the highest degree of dignity, trust, and honesty. Accountability We will take responsibility for our actions and accomplish the appropriate results. Integrity We will exercise the highest ethical standards in all our actions. Innovation We will anticipate and embrace change while creatively meeting all challenges.

15 Platforms Cross Feed Information Custom internal development allows for system integration between departments Full integration with sales channels Superior programming flexibility Stores Unclebobs.com Revenue Management Customer Care Center Company Intranet Project Management Accounting & Audit

16 Proprietary Technology Web & Mobile Marketing Proprietary LMS Training Program Customer Care Center Robust Revenue Management System

17 Search Engine Marketing Most of the industry s marketing investments are made in Search Engine Marketing, since consumers choose search engines over other online directories to find storage facilities. Competition is fierce for the various ways to be placed in search results.

18 Search Engine Marketing Sovran Databases We leverage our conversion and revenue management data to understand customers and improve efficiency: Paid Search Campaigns optimized for the right search at the right time Budgets automatically adjust within markets based on occupancy Content marketing introduces our brand well before the search begins

19 Mobile Web Storage customers are particularly transient, often in the middle of a move. The storage industry was one of the first to see as much search on mobile devices as desktop computers. Uncle Bob s is a leader in mobile - the first storage company to offer mobile websites, a mobile app, and uses sophisticated, GPS-based mobile marketing that drive potential customers to our doors.

20 Customer Care Center Technology Proprietary software Call quality / virtual observer every call recorded with corresponding video Exacting Performance Recently expanded operating hours 24/7 98%+ service level 8 second speed of answer

21 Revenue Management Our advanced Revenue Management Model is aimed at analyzing, anticipating, and understanding customer behavior in order to maximize revenues. It directs offered rate, in-place rates, and concession controls the three critical components of managing revenues in our industry. Our proprietary revenue management software is unparalleled in the industry, including our REIT Peers. Web Intelligence Store Operating System Customer Care Center Revenue Management Team External Data

22 Sovran Self Storage, Inc. ACQUISITIONS & GROWTH DRIVERS

23 Growth Drivers Acquisitions C of O Deals Expansions & Enhancements Truck Rentals Sustainability Initiatives

24 Quality Acquisitions The Company has added a net of 179 quality properties since December 2010

25 Quality Acquisitions for a total cost of approximately $1.7 Billion

26 Certificate of Occupancy Deals Completed Market Acquired Cost Sq. Ft. Occupancy At Dec. 31, 2015 Revenue For the three months ended Dec. 31, 2015 Expenses For the three months ended Dec. 31, 2015 NOI For the three months ended Dec. 31, 2015 Estimated Annualized NOI at stabilization Chicago, IL May-2014 $5.50 Million 52, % $164,000 $77,000 $87,000 $534,000 Chattanooga, TN Sep Million 57, % 164,000 82,000 82, ,000 Chicago, IL Nov Million 97, % 144, ,000 17, ,000 Chicago, IL Mar Million 64, % 78, ,000 (43,000) 735,000 Phoenix, AZ June Million 64, % 107,000 67,000 40, ,000 Boston, MA June Million 63, % 29,000 48,000 (19,000) 800,000 $44.68 Million 399,695 $686,000 $522,000 $164,000 $3,827,000 Contracted Market No. Stores Anticipated Opening Expected Cost Phoenix, AZ 1 Q $9.28 Million Miami, FL 1 Q Million Durante, CA 1 Q Million Charleston, SC 1 Q Million Chicago, IL 2 Q Million $66.16 Million

27 Expansions & Enhancements Convert existing units to premium space including climate/humidity controlled Construct new buildings with added amenities Significantly upgrade property appearance and visibility

28 Sovran Self Storage, Inc. FINANCE

29 Conservative Capital Structure 2016 Note 2018 Note 82.3% Common Stock 2019 Note 2019 Line 2020 Note 2021 Note 2024 Note OP Units As of December 31, million shares & units Price = $ per share Equity Market Cap = $4.0 Billion Enterprise Value = $4.8 Billion Debt to Enterprise Value = 17.4% Cash on Hand = $7.0 million Credit Available = $221 million* ATM Capacity = $59.3 million * Prior to increase of line of credit capacity from $300 Million to $500 Million

30 * Hedged through date indicated, do not mature until 2020 ** Line of credit balance as of December 31, 2015 Debt Maturity Schedules - SSS Staggered maturities allow for maximum flexibility to provide for future capital requirements. $200 $180 $160 $140 $ in millions $120 $100 $80 $60 $40 $20 $0 * * Bank Term Notes Line** Institutions Mortgage

31 Debt Maturity Schedules - JVs Includes Sovran HHF Storage Holdings, Sovran HHF Storage Holdings II, and Iskalo Office Holdings*. $70 $60 $50 $ in millions $40 $30 $20 $10 $ HHF I (20% Owner) HHF II (15% Owner) Iskalo Office Holdings (49% Owner) * The Company does not guarantee the debt of these entities

32 Sovran Self Storage, Inc. PERFORMANCE

33 Steady Occupancy Increases Occupancy levels are at all time highs % 92.00% 90.00% 88.00% 86.00% 84.00% 82.00% 80.00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

34 Demand Drives Asking Rates Strong demand drives asking rates per square foot. $15.00 $14.00 $13.00 $12.00 $11.00 $10.00 $9.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

35 Solid Same Store Sales Growth Strong year over year performance. 8% 7% 6% 5% 4% 3% 2% 1% 0% * Midpoint of guidance

36 *As adjusted **Midpoint of guidance Robust FFO * Per Share Growth $6.00 $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $ **

37 Dividends Per Share We believe in sharing our success with our fellow Shareholders. We have done so every quarter since we went public in $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 *Annualized

38 Five Year Stock Performance 12/31/2015 $ $ $90.00 $80.00 $70.00 $60.00 $ /31/10 $40.00 $30.00 Source: NYSEConnect

39 Sovran Self Storage, Inc. RECENT NEWS

40 Announcements On January 4, 2016 the company expanded its revolving credit line to $500 Million On January 19, 2016, Sovran: Launched a public offering of common stock Announced $398 Million in acquired and contracted acquisitions; strategic entrance into California January 25, 2016, closed million shares of common stock for gross proceeds of $280 million

41 $398 MM Geographically Concentrated Acquisitions Increase Scale New England MA, NH, CT: 8 Stores 592,434 SF New York Metro: 2 Stores 118,587 SF Denver, CO: 1 Store 62,335 SF Los Angeles, CA: 8 Stores 828,877 SF Philadelphia, PA: 2 Stores 92,474 SF Dallas-Ft. Worth, TX: 3 Stores 267,564 SF Phoenix, AZ: 1 Store 68,025 SF Sovran Self Storage Sovran JV UB Management Acquired / Under Contract Property Currently Occupied by Sovran South/Central, FL: 5 Stores 286,008 SF

42 Strategic Entrance into California Acquiring eight stores in Los Angeles MSA High barrier to entry market Surrounds multi-billion dollar mixed use, high density developments Strong submarkets with excellent storage fundamentals Provides brand exposure to commuter traffic on both the 101 and 405 freeways

43 Acquisition Activity in Targeted Markets Recent acquisitions and properties currently under contract have accelerated the portfolio transformation that SSS began several years ago, further improving demographics, rent PSF and geographic footprint Currently achieving $18.30 rent PSF for the CA properties and $13.38 rent PSF for the properties in existing markets Number of Wholly-Owned Properties (1) Greater NYC MA-CT-NH So-Central FL Austin-Dallas- San Antonio, TX Chicago, IL Los Angeles, CA Other Pro Forma 2016 (1) Encompasses CBSA New York-Newark-Jersey City, NY-NJ-PA.

44 Note: The averages for 3 mile household income and 3 mile population are calculated by adding together the respective demographic metrics for each property and dividing by the total number of properties. Enhances Existing Portfolio $18.30 Rent per Occupied Square Foot $12.79 $13.38 $12.94 In-Place Portfolio Acquisition Portfolio California Acquisition Portfolio Others Pro Forma Portfolio 229,394 3 Mile Population 74,790 77,699 77,483 In-Place Portfolio Acquisition Portfolio California Acquisition Portfolio Others Pro Forma Portfolio $64,513 $68,631 3 Mile HH Income $58,869 $59,407 In-Place Portfolio Acquisition Portfolio California Acquisition Portfolio Others Pro Forma Portfolio

45 Summary Excellent industry fundamentals - increasing demand with limited new supply Proven management team Scale and technology provide a clear competitive advantage External growth opportunities Sustainable organic growth potential Balance sheet and liquidity are strong Investment grade ratings from Moody s, S&P and Fitch Quarterly cash dividends paid since 1995

46 Sovran Self Storage, Inc. Company Presentation February 28, 2016