Life Storage Investor Presentation September 2017
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 1934. 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, 2016 as filed with the Securities and Exchange Commission. We are under no obligation to update any such forward looking statements. 1
Life Storage Locations as of 6/30/17 National platform with exposure to high growth markets. Recent acquisitions expanded footprint into Nevada and California. 697 self storage facilities 49 million 26 net rentable sq. ft. 17 27 11 6 45 5 6 9 5 7 43 396,074 customers 12 22 24 46 14 7 7 6 24 8 6 5 9 13 $5.2 billion enterprise value 30+ years industry experience 697 Locations 25 18 61 8 16 8 10 12 9 88 quarters consecutive dividends 566 Wholly Owned 94 Joint Venture 37 Managed Major markets Four or fewer stores 21 8 19
Bigger Better Stronger In 2016, Life Storage completed a transformational deal that enhanced the Company s portfolio and balance sheet in multiple ways. Size & Scale: No. of Stores (wholly owned) 452 566 25% Square Footage 30.6 million 39.7 million 30% Rental Units 270,755 354,046 31% Qualitative: 12/31/2015 6/30/17 % Inc. Avg. Age of Stores (wholly owned) 21.3 years 20.1 years (6%) Climate Controlled Sq. Ft. 12.9 million 18.1 million 40% Rate per Sq. Ft. $12.83 $13.36 4% Avg. Annual Revenue per Store $831,202 $909,142 9% Population 3 mile radius 78,742 88,789 13% Population 5 mile radius 189,781 216,737 14% Financial: Credit Rating BBB /Baa3* BBB/Baa2 +1 grade Credit Line Capacity $300 mil. $500 mil. 67% Wgtd. Avg. Debt Maturity Tenure 4.7 years 6.4 years 36% Increased scale by 30% Upgraded age, size & quality of portfolio Greater geographic diversification Strengthened demographic profile Improved credit rating to BBB/Baa2 *Prior to 12/1/15
The Strength of the Brand When you think of a company called Life Storage, what comes to mind? (three adjectives open ended) Helpful Convenient Secure Clean Safe Reliable Good Rates Easy Big Spacious Affordable
Embedded Growth Drivers Joint Venture Agreements 3rd Party Management Program Certificate of Occupancy & Lease up Stores Expansions & Enhancements $30+ million planned in 2017 (50% already funded) 120+ Non Same Store Properties
Joint Venture Revenue Streams Accelerating Relationships with joint venture partners allows Life Storage to grow its national footprint, leverage existing resources, and generate additional fee income with limited capital commitment. Pro Rata Share of Joint Venture FFO Joint Venture Fee Income *in thousands $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 *in thousands $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $1,000 $0 2010 2011 2012 2013 2014 2015 2016 2017* $0 2010 2011 2012 2013 2014 2015 2016 2017* *expected
3 rd Party Management Gaining Traction Since rebranding to Life Storage, our 3 rd party management revenues are expected to grow by ~67%* on a year over year basis. $1,800 3 rd Party Management Fee Income $1,600 $1,400 $1,200 36% CAGR Since 2011 67% *in thousands $1,000 $800 $600 $400 $200 $0 2010 2011 2012 2013 2014 2015 2016 2017* *Expected revenues 2017
C of O and Lease-up Properties
C of O and Lease-up Properties * Market Acquired Cost Sq. Ft. Occupancy at June 30, 2017 Estimated Annualized NOI at stabilization Estimated Cap Rate Chicago, IL May 2014 $5.50 MM 51,928 96.1% $534,000 9.71% Chattanooga, TN Sep 2014 6.55 MM 57,260 92.7% 563,000 8.60% Chicago, IL Nov 2014 5.75 MM 106,225 89.1% 557,000 9.69% Chicago, IL Mar 2015 8.69 MM 64,775 87.1% 735,000 8.46% Phoenix, AZ June 2015 7.90 MM 64,068 94.5% 638,000 8.08% Boston, MA June 2015 10.29 MM 63,475 86.1% 800,000 7.77% Phoenix, AZ Feb 2016 9.28 MM 67,795 94.2% 713,000 7.68% Miami, FL Feb 2016 11.27 MM 69,801 84.4% 851,000 7.55% Los Angeles, CA Mar 2016 18.60 MM 79,375 80.4% 1,253,000 6.74% Charleston, SC July 2016 8.62 MM 70,165 22.2% 858,000 9.95% Chicago, IL Nov 2016 8.88 MM 68,235 42.5% 750,000 8.45% Chicago, IL Feb 2017 10.09 MM 78,098 9.1% 822,800 8.15% Austin, TX Apr 2017 Lease** 58,611 44.2% 1,030,000 7.30% $111.42 MM 899,811 $10,104,800 8.05% *Does not include Legacy Life locations **Option to purchase for $14.1 Million in 2020
Expansions & Enhancements Convert existing units to premium space including climate/humidity control Construct new buildings with added amenities Significantly upgrade property appearance, visibility and relevancy
120 Non Same-Store Assets
Conservative Financial Ratios Investment grade ratings and conservative financial ratios provide for financial flexibility. 6.0 5.0 Debt to EBITDA Conservative Metrics Debt / EBITDA 5.6x Debt Service Coverage 5.2x Debt to Gross Assets 39.0% 4.0 3.0 2010 2011 2012 2013 2014 2015 2016 2017* Investment Grade Ratings Moody s: Baa2 S&P: BBB 6.0 Debt Service Coverage 40.0% Debt to Gross Assets 5.0 4.0 30.0% 3.0 2.0 2010 2011 2012 2013 2014 2015 2016 2017* 20.0% 2010 2011 2012 2013 2014 2015 2016 2017* * As of 6/30/17
Well Positioned Balance Sheet Life Storage has a solid, unsecured balance sheet with no debt maturities until December, 2019. $600 $600 $500 Investment Grade Credit Ratings In millions $400 $300 $331 $325 Moody s: Baa2 S&P: BBB $200 $175 $200 Weighted Average Maturity 6.4 Years $100 $100 $0 Bank Term Notes Line Institutions Public Bond Mortgage *As of 6/30/17
Growing Shareholder Value Life Storage is well positioned to continue cash flow and dividend growth, supported by multiple revenue drivers, a favorable payout ratio and a solid balance sheet. $6.00 Robust FFO* Per Share $4.50 Strong & Growing Dividend $4.00 $5.00 $3.50 $3.00 $4.00 $2.50 $3.00 $2.00 $1.50 $2.00 2010 2011 2012 2013 2014 2015 2016 2017** $1.00 2010 2011 2012 2013 2014 2015 2016 2017* *Expected 2010 2011 2012 2013 2014 2015 2016 2017*** Payout Ratio 73.5% 65.5% 54.9% 52.7% 62.2% 64.8% 71.3% 74.9% * As adjusted **Midpoint of guidance ***Expected
Life Storage Investor Presentation September 2017