SELF STORAGE 2017 MARKET REPORT New York Self Storage Association Investment Forum- January, 2017 Presented by: Chris Sonne

Self Storage WeBSITE www.cbre.us/services/valuationadvisory/self-storage UBS Annual Self Storage Summit

REIT NOI GROWTH

SELF STORAGE TRENDS IN THE USA UBS Annual Self Storage Summit

REIS REGIONS UBS Annual Self Storage Summit

SELF STORAGE TRENDS IN THE WEST REGION WA OR NV UT AZ CO CA SELF STORAGE TRENDS IN THE WEST REGION UBS Annual Self Storage Summit

SELF STORAGE TRENDS IN THE South Atlantic REGION TN GA FL SC NC VA MD DE SELF STORAGE TRENDS IN THE South Atlantic REGION UBS Annual Self Storage Summit

SELF STORAGE TRENDS IN THE Midwest REGION MO MN IL IN OH MI MO IA MN WI IL IN OH MI SELF STORAGE TRENDS IN THE Midwest REGION UBS Annual Self Storage Summit

SELF STORAGE TRENDS IN THE Northeast REGION NY PA MD DE CT RI MA NJ SELF STORAGE TRENDS IN THE Northeast REGION UBS Annual Self Storage Summit

SELF STORAGE TRENDS IN THE SOUTHWEST REGION TX OK SELF STORAGE TRENDS IN THE SOUTHWEST REGION UBS Annual Self Storage Summit

ANNUAL RETURNS BY PROPERTY SECTOR UBS Annual Self Storage Summit

Self storage reit performance UBS Annual Self Storage Summit

Self storage time series trends Source: CoStar UBS Annual Self Storage Summit

SELF STORAGE TRANSACTION ACTIVITY Number of Transaction & Volume Source: CoStar UBS Annual Self Storage Summit

Self storage transaction activity Top 10 States for 2015 Source: CoStar UBS Annual Self Storage Summit

Portfolio sales UBS Annual Self Storage Summit

CMBS Maturing loans UBS Annual Self Storage Summit

3.29% 10.9% $129.6 Billion CMBS 3.0 CMBS loan losses in 2008? Loan losses between 1995 and 2015 on $1.3 trillion? 3.29% CMBS loan losses in 2008? 10.9% 2017 & 2018 debt due? $129.6 Billion Source: TREPP, LLC

KEY INDICATORS UBS Annual Self Storage Summit

Treasury Interest Rate & Self Storage Cap Rates UBS Annual Self Storage Summit

BAND OF INVESTMENT UBS Annual Self Storage Summit

MORTGAGE EQUITY

CAP RATE ANALYTICS

Cap/Yield Rate Sustainability Market sentiment is uncertain as to the timing of the next economic downturn. However, the majority estimate the severity and length of a downturn will not be nearly as bad as The Great Recession. As the same time, the CMBS market is facing the Great Wall of debt or maturities in 2017 and 2018. Uncertainties such as these in the market can cause a loss of investor confidence. On the other hand, market perception is that self storage is recession resistant and many consider self storage a safe haven for investment. As a result, investor interest in the sector remains high and cap rate compression continues, albeit at a slow rate of decline.

THE LAWYER SLIDE UBS Annual Self Storage Summit

NEW construction trends UBS Annual Self Storage Summit

NEW construction trends UBS Annual Self Storage Summit

NEW CONSTRUCTION FORECAST 2016: 570 2017: 910 2018: 400 UBS Annual Self Storage Summit

Resources TOP MARKETS – NEW STARTS New York Denver Phoenix Dallas FW Dodge STR REIS SSPQ US Census Survey Research TOP MARKETS – NEW STARTS New York Denver Phoenix Dallas Miami Houston Washington DC Nashville Chicago Charlotte MIAMI – NEW STARTS STR FW Dodge 43 14

TRADE AREA ANALYSIS – QUALITATIVE & QUANTITATIVE

TRADE AREA ANALYSIS - CONCLUSION

DISCOUNTED CASH FLOW UBS Annual Self Storage Summit

DISCOUNTED CASH FLOW UBS Annual Self Storage Summit

Transitions – From BearCub to Cal Bear UBS Annual Self Storage Summit

Transitions – From BearCub to Cal Bear

QUESTIONS & ANSWERS UBS Annual Self Storage Summit

For more information regarding this presentation please contact: R. Christian Sonne, CRE, MAI, MRICS Executive Vice President | National Self Storage Valuation Group Leader T +1 949 809 375 F +1 714 234 0334 Email.chris.sonne@cbre.com