NASDAQ: SELF. Owner/Operator of Self Storage Facilities in the Northeast, Mid-Atlantic and Midwest. Corporate Presentation December 2016 NASDAQ:SELF

Transcription

1 NASDAQ: SELF Owner/Operator of Self Storage Facilities in the Northeast, Mid-Atlantic and Midwest Corporate Presentation December 2016

2 Important Cautions Regarding Forward- Looking Statements Certain information presented in this presentation may contain "forward-looking statements" within the meaning of the federal securities laws. Forward looking statements include statements concerning Global Self Storage, Inc. s (the Company's ) plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. In some cases, forward looking statements can be identified by terminology such as "believes," "expects," "estimates," "may," "will," "should," "anticipates" or "intends," or the negative of such terms or other comparable terminology, or by discussions of strategy. The Company may also make additional forward looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by the Company or on its behalf, are also expressly qualified by these cautionary statements. All forward-looking statements, including without limitation, the Company's examination of historical operating trends and estimates of future earnings, are based upon the Company's current expectations and various assumptions. The Company's expectations, beliefs and projections are expressed in good faith and it believes there is a reasonable basis for them, but there can be no assurance that the Company's expectations, beliefs and projections will result or be achieved. All forward looking statements apply only as of the date made. The Company undertakes no obligation to publicly update or revise forward looking statements which may be made to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events. Certain information contained in this presentation has been supplied by third parties. While the Company believes such sources are reliable, the Company cannot guarantee the accuracy of any such information and does not represent that such information is accurate or complete. All Company financial results contained herein are qualified in their entirety by reference to the Company s quarterly and annual reports, filings with the Securities and Exchange Commission and other related public disclosures. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful under the securities laws of any such state. Copyright 2016 Global Self Storage, Inc. All Rights Reserved. 2

3 Key Stats: SELF (NasdaqCM) Share Price (12/01/16) $4.89 Market Cap $36.3M Same-Store Revenues 52 Week Low/High $3.56 / $5.96 Common Shares Out. 7.4M Enterprise Value $44.6M Dividend ttm $0.26 Same-Store Income From Operations $2.1M $2.2M $2.3M $2.3M Free Float 7.0M Dividend Yield (12/01/16) 5.2% $1.9M Avg. Daily Volume 3 mo. 18,000 Fiscal Year End December 31 Insider Holdings 3% $1.3M $1.2M $1.4M $1.4M $0.9M 1H H H H H 2016 Source: Capital IQ, Yahoo! Finance, Global Self Storage, Inc.; ttm = trailing 12 months at September 30,

4 Who We Are Global Self Storage is a self-administered and self-managed real estate investment trust (REIT) focused on the self storage market With our recent acquisitions, we now own and operate nine self storage facilities in the Northeast, Mid-Atlantic, and Mid-West Our properties total 652,813 square feet of leasable space 4

5 $35.0B $33.0B $31.0B $29.0B $27.0B $25.0B $23.0B $21.0B $19.0B $17.0B $15.0B $70.0K $68.0K $66.0K $64.0K $62.0K $60.0K $58.0K $56.0K $54.0K $52.0K $50.0K Growing Self Storage Industry Households with a self storage unit have increased from 1 in 17 in 1996 to 1 in 10 today U.S. self storage industry expected to reach $32.6B in 2020, up 16% from 2014 Total self storage facilities nationwide expected to surpass 60,000 by 2020 Self storage acquisitions in 2014 totaled $3 billion $28.1B Projected U.S. Self Storage Market Growth Revenue Facilities $32.6B 60K 52K Self Storage Almanac 5

6 $0. 6B Main Growth Driver: High Occupancy Rates Demand for storage units at all-time high, with occupancy rates topping 90.2% in 2015 Demand supports opportunity for greater price expansion U.S. Self Storage Occupancy 90.2% 89.1% 87.8% 85.0% Sophisticated operators have the ability to increase rents while maintaining occupancy The general decreasing trend for move-in rate discounting also supports higher average rents 75.7% 79.7% Source: 2016 Self Storage Almanac 6

7 Industry Tail Wind: Increasing Rents Historically, the lack of new storage facilities coupled with increasing demand drove rents to all-time highs World s largest self storage company, Public Storage (NYSE: PSA), increased rents 7% in 2015 $70 $65 $60 $55 $50 $45 $40 Average Advertised Rent for 5x5 Unit U.S. Non-climate Controlled Units Climate Controlled Units Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q Self Storage Almanac 7

8 Industry Opportunities Continued ownership consolidation with large and midsize operators purchasing facilities owned and managed by smaller operators Growing difference in operational management expertise between the larger and more sophisticated operators and the rest of the field Internet and technology making it easier for consumers to rent units Self-service kiosks, Internet marketing, 24/7 call centers 8

9 Highly Fragmented Self Storage Market Top six publicly traded self storage companies (REITs) control only 13.8% of the market (6,900 properties) >86% of the U.S. market share by square foot is not owned by a REIT 30,000 operators manage 50,000 self storage facilities 75% of all self storage operators only manage a single facility 86% of U.S. market non-reit properties 5.6% 3.8% 1.6% 1.4% 0.8% 0.6% Source: 2015 Self Storage Almanac; Sovran Self Storage converting to Life Storage as of 8/15/2016 9

10 Our Portfolio of Self Storage Facilities Facilities located in secondary or tertiary cities in the Northeast, Mid-Atlantic and Mid-West Properties located near metropolitan areas Excellent road or highway exposure Prominent road-side signage Easily accessible Clean, well-maintained properties with minimal deferred maintenance Strong market fundamentals (demographics) High barriers to entry (zoning) Bolingbrook, IL Dolton, IL Fishers, IN Rochester, NY Merrillville, IN Facilities 9 Units 4,973 Leasable Sq. Ft. 652,813 Occupancy 91.4% Lima, OH Sadsburyville, PA Summerville I & II, SC 10

11 Our 652,813 Leasable Square Feet 54% Traditional Indoor Storage 42% Climate Controlled Storage 4% Outdoor Storage Boats/Cars/RVs 11

12 How We Attract and Retain High Quality Tenants We focus on tenant quality over tenant quantity in all of our marketing and operational efforts Utilize referral marketing to generate new tenant inquiries Referrals generally produce our highest quality new tenants Strong Internet and social media presence generate new tenant inquiries Select facilities offer referral discounts and complementary truck rental 12

13 Why Customers Choose Us: High Quality Service & Facilities Property managers are encouraged to maintain the highest security and cleanliness standards Employees are motivated to deliver courteous, attentive customer service All facilities include on-site 24/7 rental and payment kiosks as well as 24/7 call centers Our goal is to make our customers experience as pleasant and hassle-free as possible Easy Gate Access 24/7 Security Monitoring 24/7 Rental & Payment Kiosks 13

14 Same-Store Properties Annual Comparison 12 Months Ended Dec 31, 2015 Dec 31, 2014 Change % Change Revenues $4,439,407 $3,979,492 $459, % Costs of Operations $1,800,982 $1,804,818 $(3,836) (0.2%) Net Operating Income $2,638,425 $2,174,674 $463, % Sq. Ft. Occupancy 87.9% 87.7% 0.2% 0.3% Annual Revenue/Leased Sq. Ft. $10.40 $9.04 $ % For further details, please refer to the company s 2015 Annual Report 14

15 Same-Store Properties Quarterly Comparison 3 Months Ended Sept 30, 2016 Sept 30, 2015 Change % Change Revenues $1,241,531 $1,153,217 $88, % Costs of Operations $479,225 $419,079 $60, % Net Operating Income $762,306 $734,138 $28, % Sq. Ft. Occupancy 91.4% 89.3% 2.0% 2.3% Annual Revenue/Leased Sq. Ft. $11.19 $10.63 $ % For further details, please refer to the company s Q Q. 15

16 Combined Store Properties Quarterly Comparison 3 Months Ended Sept. 30, 2016 Sept. 30, 2015 Change % Change Revenues $1,348,638 $1,153,217 $195, % Costs of Operations $523,008 $419,079 $103, % Net Operating Income $825,630 $734,138 $91, % Net Leasable Sq. Ft. at Period End 652, , , % Net Leased Sq. Ft. at Period End 596, , , % For further details, please refer to the company s Q Q. 16

17 Operational Progress by Facility Q3-16 Year Opened Unit Count Net Leasable Sq. Ft. 1 Occupancy by Sq. Ft. Sept 30, 2016 Sept 30, 2015 Bolingbrook, IL , % 96.0% Dolton, IL , % 96.1% Merrillville, IN , % 96.6% Rochester, NY , % 88.1% Sadsburyville, PA , % 79.3% Summerville I, SC , % 79.2% Summerville II, SC , % 89.9% *Fishers, IN , % 78.3% *Lima, OH , % 98.5% TOTAL 4, , % 89.1% 1. New construction added more net leasable square feet vs comparable period. *Non-same stores 17

18 Bolingbrook: 296 North Weber Road Opened units 66,250 leasable sq. ft. 11,300 sq. ft. of outside storage (auto/rv/boat) 94% occupancy Expansion in process - expected to begin leasing new units by year-end Adding 306 climate controlled and traditional storage units, totaling 44,260 leasable sq. ft. by eliminating 32,700 sq. ft. of outdoor storage (98 parking spots). 18

19 Dolton: Woodlawn Avenue Opened units 86,725 leasable sq. ft. 9,900 sq. ft. of outside storage (auto/rv/boat) 94% occupancy 19

20 Merrillville: 6590 Broadway Opened in units 71,420 leasable sq. ft. 11,170 sq. ft. of outside storage (auto/rv/boat) 93% occupancy Currently evaluating Merrillville store for expansion potential. 20

21 Rochester: 2255 Buffalo Road Opened units 68,017 leasable sq. ft. 88% occupancy Indoor, drive-thru, 100% climate controlled facility 21

22 Sadsburyville: 21 Aim Boulevard Opened units 79,004 leasable sq. ft. 13,000 sq. ft. of outside storage (auto/rv/boat) 91% occupancy Recently completed expansion New construction includes 219 climate controlled storage units totaling 16,756 leasable sq. ft. 94% of the first floor and 72% of the entire new building have been leased, since its completion in May 2015 (as of Sept. 30, 2016). 22

23 Summerville I: 1713 Old Trolley Road Opened in units 72,700 leasable sq. ft. 86% occupancy (up from 74% at March 31, 2016) 23

24 Summerville II: 900 North Gum Street Opened units 41,458 leasable sq. ft. 5,300 sq. ft. of outside storage (auto/rv/boat) 92% occupancy 24

25 New Acquisition - Fishers: 96 th & Olio Road Opened in units 81,471 leasable sq. ft. 84% occupancy $7.7 million acquisition closed Sept. 26, 2016 Operating under company management as of Sept. 26, 2016 Fishers will initially contribute to the company s Non-Same Store results. Retail building currently leased to Montessori school 67% unit occupancy presents opportunity for improvement 25

26 New Acquisition - Lima: 1910 W Robb Ave. 739 units 85,768 leasable sq. ft. 98% occupancy $5.3 million acquisition closed Aug. 29, 2016 Operating under company management as of Aug. 30, 2016 Lima will initially contribute to the company s Non-Same Store results. 26

27 Acquisition and Expansion Opportunities We seek to acquire facilities where our professional management can: Improve revenue rate management & occupancy rates Expand leasable square footage on existing property Convert lower-rent outdoor or traditional units into higherrent climate controlled units Recently closed acquisitions: Lima, Ohio: $5.3M Fishers, Indiana (Indianapolis suburb): $7.7M Recently entered into agreement to purchase two facilities for $7.8M 1 : Millbrook, NY & Clinton, CT $10.9M of expansion capital includes cash, cash equivalents and marketable securities (as of 9/30/16; prior to Millbrook and Clinton acquisition) Lima, OH 75% of the 30,000+ self storage operators in the U.S. are single facility owners/operators Millbrook, NY Fishers, IN Clinton, CT 1) Obligation to close subject to certain terms and conditions. Affiliated party transaction. Purchase price includes $900,000 payment contingent upon receiving, among other things, expansion approval from local authorities. 27

28 Key Takeaways Q combined same store and non-same store revenues up 16.9% and same-store income from operations up 12.5% compared to Q same-store revenues up 12% and same-store income from operations up 21% compared to 2014 Pricing power leading to rental rate growth maintaining occupancy while increasing rents Company distributed $0.26 of dividends over the past 12 months 1 Fragmented market creates attractive consolidation opportunities Acquired two stores since August, 2016 Recently entered into agreement to acquire stores in Millbrook, NY and Clinton, CT for a total of $7.8 Million 1) As of September 30,

29 NASDAQ: SELF Global Self Storage Website: Global Self Storage, Inc. Mark C. Winmill President and CEO New York, NY (212) x201 Liolios Group, Inc. Michael Koehler (949)