SELF STORAGE

Investment Rationale

Improving Liquidity in Fragmented Market

• Although consolidating, sector continues to be fragmented with the top-20 operators owning 20% of the square footage.
• Liquidity and institutional allocations have improved liquidity and driven cap rates down.

Value Creation Opportunities

• Yield management similar to lodging can help drive top line, while cost controls similar to other small asset investments (for example, manufactured housing communities) are necessary to drive bottom line results.
• Strong and focused management will provide for competitive differentiation in market.

Resilient in Downturn

• Self storage is “somewhat” resilient in an economic downturn.

Diversification

• Small investment dollars per property of $2 to $5 million allows for portfolio diversification.