tssa fall conference: texas storage performance...

1

© 2018 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied.

TSSA Fall Conference: Texas Storage Performance Overview

October 9, 2018

2© 2018 STR. All Rights Reserved.

Agenda

• STR overview

• TX performance data analysis

• Development review

• Questions

3© 2018 STR. All Rights Reserved. 3

Who is STR?

Years In Business

Driving Force:Data Confidentiality!

33 100% 1Family Owned


STR in Texas in partnership with the TSSA


What is STR’s goal in storage and how do we get there?

Be the go-to source for data and analytics in storage

Benchmark your performance vs. the competition

Assess the state of the industry


STR has a unique approach to data

STR data collection methodology is best in class

Direct from source, no call arounds

100% confidential, aggregated data


STR performance data presented with two viewpoints

1. Full Sample 2. Stabilized

Strategic viewpoint

Includes all open & operating facilities, including those in lease-up

Operational viewpoint

Includes only those facilities that have 12 consecutive months of >85% occupancy


Data collected by STR focuses on key performance indicators

Occupancy

%NRSF RentedNRSF Available

Rental RevenueNRSF Rented

$

Rate Yield

Rental RevenueNRSF Available

$

9© 2018 STR. All Rights Reserved.

• Nationwide and in Texas, secondary and tertiary markets have highest Rate growth, lower Occupancy declines

• Occupancy down… declines largely mirror national occupancy trend

• Realized Rate / Rate growth for Texas below national average

• New supply growth showing signs of slowing

• Increases in supply impacting Full Sample Occupancy

Key Trends


Nationally, Stabilized Occupancy much higher given exclusion of lease-up properties

SFR

& R

evPA

FSFO

0.99

1.03

84.3%

90.1%

0.83

0.93

80%

85%

90%

95%

100%

0.75

0.80

0.85

0.90

0.95

1.00

1.05

Full Sample Stabilized

Key Performance Indicators12 Month Moving Average, August 2018Full Sample versus Stabilized

SFR SFO RevPAF


Nationwide, YoY Realized Rate growth positive while Occupancy declines, particularly in Full Sample data

1.7%2.6%

-2.0%

-0.4%-0.2%

2.2%


Year over Year Percent Change12 Month Moving Average, August 2018Full Sample versus Stabilized

SFR SFO RevPAF


Realizing positive nationwide quarterly performance growth in RevPAF

2.1%

5.3%

3.5%3.1%

2.3%1.5%

0.6%

1.9% 2.2% 2.1%

Q1 '16 Q3 '16 Q1 '17 Q3 '17 Q1 '18

RevPAF3 Month Moving Average YoY % ChangeStabilized


Nationwide, primary and secondary markets experiencing greater Occupancy declines from new supply

1.3%3.2% 3.0%

-2.1% -2.2%

0.9%

-0.8%

0.9%

4.0%

Primary Secondary Tertiary

Year over Year Percent Change12 Month Moving Average, August 2018Full Sample

SFR SFO RevPAF


2.2%

6.0% 6.5%

-0.3% -1.1% -1.7%

1.9%

4.9% 4.7%

Primary Secondary Tertiary

Year over Year Percent Change12 Month Moving Average, August 2018Stabilized SFR SFO RevPAF

Nationwide, secondary and tertiary markets experiencing strong Rate growth


Chicago, Denver, Fort Myers and Tampa lead with highest Realized Rate

1.01 1.11

0.99

1.27

1.08 1.03

1.23 1.26

0.85 0.88

1.13 1.05

0.92 0.98

1.31

Realized Rate, August 201812 Month Moving AverageStabilized


Nationally, average Occupancy above 90% in many markets

91.9%88.7%

85.4%

90.5%88.2%

92.6%89.4%90.7%90.8%89.5%90.1%

88.0%

93.6%

85.2%

90.2%

Occupancy, August 201812 Month Moving AverageStabilized


Strong Rate in Chicago, Denver, Fort Myers and Tampa driving high Yield

0.92 0.99

0.84

1.15

0.95 0.95

1.10 1.14

0.77 0.79

1.02 0.93

0.87 0.84

1.18

RevPAF, August 201812 Month Moving AverageStabilized


Including facilities in lease-up, Occupancy down in most major Texas markets

Houston

Dallas

San Antonio

Austin

Ft. Worth

NRSF, 12MMA as of August 2018, Year over Year Percent Change, Full Sample

85.8% 80.8%

74.3%85.9%

78.8%

-2.6%

-8.8%

-5.1%

2.9%

2.9%


Stabilized facilities also experiencing Occupancy declines while Realized Rate grows in most major Texas markets

Houston

Dallas

San Antonio

Austin

Ft. Worth

NRSF, 12MMA as of August 2018, YoY % Change, Stabilized

-1.3%OCC

0.5% Rate

2.3%OCC

-2.6% Rate

-1.0%OCC

2.0% Rate

-3.5%OCC

1.9% Rate

-1.2%OCC

0.9%Rate


Realized Rate for Texas is below national averages

0.92

0.99 0.97

1.03

Texas National

Realized Rate12 Month Moving Average, August 2018Full Sample versus Stabilized Full Sample Stabilized


-1.3%

1.7%

-0.6%

2.6%

Texas National

Realized Rate 12 Month Moving Average, Year over Year % Change, August 2018Full Sample versus Stabilized


Realized Rate growth in Texas is below national levels


Austin and Dallas Realized Rates above national average

1.04

0.83 0.90

1.04

0.84 0.86

0.68 0.63

0.94

0.71

0.92 0.99

1.11

0.84

1.08

0.85 0.88 0.98 0.97

1.03

Aust

in, T

X

Colle

ge S

tatio

n, T

X

Corp

us C

hris

ti, T

X

Dalla

s, T

X

Fort

Wor

th, T

X

Hous

ton,

TX

Kille

en, T

X

McA

llen,

TX

San

Anto

nio,

TX

Sher

man

, TX

Texa

s

Nat

iona

l

Realized Rate12 Month Moving Average, August 2018Full Sample versus Stabilized Full Sample Stabilized

N/A

N/A

N/A N/A


-2.9%

3.5%2.8%

-1.6%

1.1%

-1.8%

4.2%

2.4%

-1.4%

4.7%

-1.3%

1.7%0.9%

3.3%

0.5%

2.0%

-2.6%

1.9%

-0.6%

2.6%

Aust

in, T

X

Colle

ge S

tatio

n, T

X

Corp

us C

hris

ti, T

X

Dalla

s, T

X

Fort

Wor

th, T

X

Hous

ton,

TX

Kille

en, T

X

McA

llen,

TX

San

Anto

nio,

TX

Sher

man

, TX

Texa

s

Nat

iona

l

Realized Rate 12 Month Moving Average Year over Year % Change, August 2018Full Sample versus Stabilized Full Sample Stabilized

N/A N/A

N/A N/A

Stabilized Realized Rate growth strongest in College Station and Fort Worth


Texas Occupancy levels slightly below national average

82.2%84.3%

88.5%90.1%

Texas National

Occupancy12 Month Moving Average, August 2018Full Sample versus Stabilized Full Sample Stabilized


-1.1%

-2.0%

-0.5% -0.4%

Texas National

Occupancy12 Month Moving Average Year over Year % Change, August 2018Full Sample versus Stabilized Full Sample Stabilized

Full Sample Occupancy declines over-performing the national average


Stabilized Occupancy resilient despite new supply

74.3%

79.3%

89.9%

80.8%

85.8% 85.9% 85.6% 84.5%

78.8%

83.6% 82.2%84.3%

88.7% 86.9% 88.2%90.8% 89.5%

85.2%88.5% 90.1%

Aust

in, T

X

Colle

ge S

tatio

n, T

X

Corp

us C

hris

ti, T

X

Dalla

s, T

X

Fort

Wor

th, T

X

Hous

ton,

TX

Kille

en, T

X

McA

llen,

TX

San

Anto

nio,

TX

Sher

man

, TX

Texa

s

Nat

iona

l

Occupancy12 Month Moving Average, August 2018Full Sample versus Stabilized Full Sample Stabilized

N/A

N/A

N/A

N/A


-8.8% -7.8%

5.3%

-5.1%-2.6%

2.9%5.3%

2.6% 2.9%

-7.1%

-1.1% -2.0%-1.2%-0.1%

-1.3% -1.0%

2.3%

-3.5%

-0.5% -0.4%

Aust

in, T

X

Colle

ge S

tatio

n, T

X

Corp

us C

hris

ti, T

X

Dalla

s, T

X

Fort

Wor

th, T

X

Hous

ton,

TX

Kille

en, T

X

McA

llen,

TX

San

Anto

nio,

TX

Sher

man

, TX

Texa

s

Nat

iona

l

Occupancy12 Month Moving Average Year over Year % Change, August 2018Full Sample versus Stabilized Full Sample Stabilized

N/A

N/A

N/A

N/A

Stabilized Occupancy down slightly in many Texas markets


0.76 0.83 0.85

0.93

Texas National

RevPAF12 Month Moving Average, August 2018Full Sample versus Stabilized Full Sample Stabilized

Lower Realized Rates lead to lower Yield in Texas


-2.4%

-0.2%

-1.1%

2.2%

Texas National

RevPAF12 Month Moving Average Year over Year % Change, August 2018Full Sample versus Stabilized Full Sample Stabilized

Occupancy, Rate declines drive decreasing Yield


Stabilized Yield strongest in primary markets

0.78

0.66

0.81 0.84

0.72 0.74

0.58 0.54

0.74

0.59

0.76 0.83

0.99

0.73

0.95

0.77 0.79 0.84 0.85

0.93

Aust

in, T

X

Colle

ge S

tatio

n, T

X

Corp

us C

hris

ti, T

X

Dalla

s, T

X

Fort

Wor

th, T

X

Hous

ton,

TX

Kille

en, T

X

McA

llen,

TX

San

Anto

nio,

TX

Sher

man

, TX

Texa

s

Nat

iona

l

RevPAF12 Month Moving Average, August 2018Full Sample versus Stabilized Full Sample Stabilized

N/A

N/A

N/A

N/A


-11.5%

-4.6%

8.2%

-6.6%

-1.6%

1.0%

9.8%

5.1%1.4%

-2.7% -2.4%-0.2%-0.3%

3.2%

-0.8%

1.0%

-0.3% -1.6% -1.1%

2.2%

Aust

in, T

X

Colle

ge S

tatio

n, T

X

Corp

us C

hris

ti, T

X

Dalla

s, T

X

Fort

Wor

th, T

X

Hous

ton,

TX

Kille

en, T

X

McA

llen,

TX

San

Anto

nio,

TX

Sher

man

, TX

Texa

s

Nat

iona

l

RevPAF12 Month Moving Average Year over Year % Change, August 2018Full Sample versus Stabilized Full Sample Stabilized

N/A

N/A

N/A

N/A

Stabilized Yield growth flat in most markets


Rate growth leads as Occupancy lags in many markets

-2.9%

3.5% 2.8%

-1.6%

1.1%

-1.8%

4.2%2.4%

-1.4%

4.7%

-1.3%

1.7%

-8.8% -7.8%

5.3%

-5.1%-2.6%

2.9%5.3%

2.6% 2.9%

-7.1%

-1.1% -2.0%

Aust

in, T

X

Colle

ge S

tatio

n, T

X

Corp

us C

hris

ti, T

X

Dalla

s, T

X

Fort

Wor

th, T

X

Hous

ton,

TX

Kille

en, T

X

McA

llen,

TX

San

Anto

nio,

TX

Sher

man

, TX

Texa

s

Nat

iona

l

Realized Rate and Occupancy12 Month Moving Average Year over Year % Change, August 2018Full Sample Square Foot Rate Square Foot Occupancy


0.9%

3.3%

0.5%2.0%

-2.6%

1.9%

-0.6%

2.6%

-1.2%-0.1%

-1.3% -1.0%

2.3%

-3.5%

-0.5% -0.4%

Aust

in, T

X

Colle

ge S

tatio

n, T

X

Corp

us C

hris

ti, T

X

Dalla

s, T

X

Fort

Wor

th, T

X

Hous

ton,

TX

Kille

en, T

X

McA

llen,

TX

San

Anto

nio,

TX

Sher

man

, TX

Texa

s

Nat

iona

l

Realized Rate and Occupancy12 Month Moving Average Year over Year % Change, August 2018Stabilized Square Foot Rate Square Foot Occupancy

N/A N/A N/A N/A

Stabilized Occupancy and Rate growth mostly flat


Austin highlight: Realized Rate growth has returned over the past year

-15%

-10%

-5%

0%

5%

10%

Realized Rate, Occupancy and Yield12 Month Moving AverageYear over Year % ChangeStabilized

SFR SFO RevPAF


College Station highlight: slowing growth in Realized Rate

-15%

-10%

-5%

0%

5%

10%


SFR SFO RevPAF


Dallas highlight: neutral performance

-15%

-10%

-5%

0%

5%

10%


SFR SFO RevPAF


Ft. Worth highlight: neutral performance

-15%

-10%

-5%

0%

5%

10%


SFR SFO RevPAF


Houston highlight: Occupancy growth post-Harvey

Hurricane Harvey

-15%

-10%

-5%

0%

5%

10%


SFR SFO RevPAF


San Antonio highlight: Occupancy declines dragging Yield

-15%

-10%

-5%

0%

5%

10%


SFR SFO RevPAF

© 2018 STR. All Rights Reserved.

Austin Submarkets

Legend

Submarket

Austin CBD

Austin Northwest/Arboretum

Austin US-290/I-35 Area

Round Rock/Georgetown

San Marcos/Austin Surrounding

South Austin/Airport

SFO: +0.2%SFR: +0.5%

SFO: -10.2%SFR: -7.0%

SFO: -19.4%SFR: -2.6%

SFO: -3.0%SFR: +0.7%

SFO: -4.2%SFR: -0.4%

SFO: -5.7%SFR: +0.7%

Round Rock / Georgetown

Austin US-290/I-35 Area, TX

South Austin/Airport, TX

San Marcos/Austin Surrounding, TX

Austin Northwest/Arboretum, TX

Austin CBD, TX

+4.9%NRSF

+0.0%NRSF

+11.2%NRSF

+19.5%NRSF

+20.4%NRSF

+0.4%NRSF

1. Performance data is Full Sample, 12 Month Moving Average, Year over Year % Change. August 20182. Supply data is % NRSF increase in last 12 months


Nationally, NRSF growth showing signs of slowing

5.4%

3.8%

Sept 2017 to Sept 2018 Sept 2018 to Sept 2019

Top 56 Markets: Percent NRSF IncreaseExcluding Expansions


Nationally, number of deliveries expected to slow as well

516

483


Top 56 Markets: Number New Properties OpenExcluding Expansions


Nationally, number of deliveries expected to slow

0

10

20

30

40At

lant

a, G

A

Aust

in, T

X

Bost

on, M

A

Char

lott

e, N

C

Chic

ago,

IL

Dalla

s, T

X

Denv

er, C

O

Fort

Wor

th, T

X

Hous

ton,

TX

Los A

ngel

es, C

A

Mia

mi,

FL

Min

neap

olis

, MN

Nas

hvill

e, T

N

New

Yor

k, N

Y

Orla

ndo,

FL

Phila

delp

hia,

PA

Phoe

nix,

AZ

Port

land

, OR

Rive

rsid

e, C

A

Sacr

amen

to, C

A

San

Anto

nio,

TX

San

Dieg

o, C

A

San

Fran

cisc

o, C

A

Seat

tle, W

A

Tam

pa, F

L

Was

hing

ton,

DC

Top 25 Markets: Number of New PropertiesLast 12 Months versus Next 12 Months



In Texas, NRSF growth showing signs of slowing

157.5165.9

171.9

Sept 2017 Sept 2018 Sept 2019 (w/o Expansions)

Top 8 Texas Markets: Total NRSF (in millions)Excluding Expansions

5.4% Increase

3.6% Increase


In Texas, NRSF growth showing signs of slowing

5.4%

3.6%


Top 8 Texas Markets: Total NRSF (in millions)Excluding Expansions


New supply growth showing signs of slowing

0.0%

8.1%

10.9%

4.3%2.6%

0.0%

2.2%

4.8% 5.4%

0.2%

8.0%

3.8% 4.1%2.2% 1.5%

0.0%

5.0%3.6%

Amar

illo,

TX

Aust

in, T

X

Dalla

s, T

X

Fort

Wor

th, T

X

Hous

ton,

TX

Kille

en, T

X

Lubb

ock,

TX

San

Anto

nio,

TX

Texa

s

Percent Change in Net Rentable Square Feet (NRSF)Last 12 Months versus Next 12 Months Excludes Expansions

Last 12m (w/o Expansions) Next 12m (w/o Expansions)


Increases in supply impact Full Sample occupancy

8.0%

3.8% 4.1%2.2% 1.5%

5.0%

-8.8%

-5.1%-2.5%

2.9%5.4%

2.7%Au

stin

, TX

Dalla

s, T

X

Fort

Wor

th, T

X

Hous

ton,

TX

Kille

en, T

X

San

Anto

nio,

TX

Percent Change in Supply (NRSF) & Percent Change in Occupancy (12MMA)August 2017 versus August 2018, Full Sample

NRSF % Change SFO % Change

48

© 2018 STR, Inc. All Rights Reserved. Any reprint, use or republication of all or a part of this presentation without the prior written approval of STR, Inc. or STR Global, Ltd. trading as STR (collectively “STR”) is strictly prohibited. Any such reproduction shall specifically credit STR as the source. This presentation is based on data collected by STR. No strategic advice or marketing recommendation is intended or implied.

Questions?

tssa fall conference: texas storage performance...

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