53113 Storage - Warehouse Leasing in the US Industry Report

Storage & Warehouse Leasing in the US January 2023 3 IBISWorld.com About IBISWorld IBISWorld specializes in industry research with coverage on thousands of global industries. Our comprehensive data and in-depth analysis help businesses of all types gain quick and actionable insights on industries around the world. Busy professionals can spend less time researching and preparing for meetings, and more time focused on making strategic business decisions that benefit you, your company and your clients. We offer research on industries in the US, Canada, Australia, New Zealand, Germany, the UK, Ireland, China and Mexico, as well as industries that are truly global in nature.

Storage & Warehouse Leasing in the US January 2023 6 IBISWorld.com Industry at a Glance Key Statistics $29.2bn Revenue Annual Growth 2018 – 2023 2.1% Annual Growth 2023 – 2028 0.6% Annual Growth 2018 – 2028 $12.0bn Profit Annual Growth 2018 – 2023 2.3% Annual Growth 2018 – 2023 41.0% Profit Margin Annual Growth 2018 – 2023 0.5pp Annual Growth 2018 – 2023 180k Businesses Annual Growth 2018 – 2023 1.6% Annual Growth 2023 – 2028 1.2% Annual Growth 2018 – 2028 217k Employment Annual Growth 2018 – 2023 1.5% Annual Growth 2023 – 2028 0.9% Annual Growth 2018 – 2028 $3.1bn Wages Annual Growth 2018 – 2023 2.3% Annual Growth 2023 – 2028 0.8% Annual Growth 2018 – 2028 Key External Drivers % = 2018 – 23 Annual Growth -5.4% Consumer confidence index 1.2% Per capita disposable income -8.0% Business bankruptcies 1.2pp Homeownership rate -1.1pp Rental vacancy rates Industry Structure POSITIVE IMPACT Concentration Low Industry Globalization Low / Increasing MIXED IMPACT Life Cycle Mature Revenue Volatility Medium Regulation & Policy Medium / Steady Technology Change Medium Barriers to Entry Medium / Increasing NEGATIVE IMPACT Capital Intensity High Industry Assistance Low / Steady Competition High / Increasing Key Trends  The lack of long-term commitments allows operators the flexibility to quickly implement business decisions  The three top operators command a low share of total industry revenue  Operators have to keep producing unique services to maintain and improve their market position  Technology will minimize the number of workers at establishments  Occupancy rates will continue inching closer to 100.0% in large cities  Demand for industry services will keep rising  Lockdowns due to the COVID-19 pandemic initially threatened industry profit

Storage & Warehouse Leasing in the US January 2023 9 IBISWorld.com Industry Performance Key External Drivers Per capita disposable income As disposable income rises, individuals are able to afford secondary storage units, driving up Storage and Warehouse Leasing industry demand. Additionally, increased disposable income enables consumers to acquire more material possessions, often lifting demand for self-storage facilities because some individuals lack the space in their homes for additional belongings. Alternatively, when disposable income drops, many individuals sell possessions and cut back on expenses, such as self-storage units, to save money. Per capita disposable income is expected to increase in 2023, representing a potential opportunity for the industry. Rental vacancy rates Demand for secondary storage typically comes from households that rent rather than own their residences. As a result, when rental vacancy rates rise, more people have moved into houses and will likely demand less secondary storage space, causing industry revenue to decrease. The rental vacancy rate is expected to increase in 2023. Business bankruptcies While a well-performing economy boasts a positive effect on the storage and warehouse leasing industry, a badly performing economy can also boost demand for storage units. Consequently, business bankruptcies are a major driver for the storage and warehouse leasing industry. As businesses go out of business and lose their retail space, they are forced to either sell off their product or put it in storage for a short-term period. In 2023, the level of business bankruptcies is projected to decline, posing a potential threat to the industry. Consumer confidence index The consumer confidence index is a general measure of how well the average household is doing economically to project how likely it is the economy will grow or shrink in the near future. When the Consumer confidence index is higher, it is more likely that people will spend more. The index lost its most points in over a decade in 2020. Similarly, it will decrease in 2023. Homeownership rate Changes in how many people own homes have a substantial effect on demand for the storage and warehouse leasing industry. When more people buy homes, it means there will be increased demand for residential storage for families that are moving in or out. Additionally, higher rates of homeownership generally indicate higher levels of economic activity in other parts of the economy, which bodes well for the industry. The homeownership rate will stay unchanged in 2023.

Storage & Warehouse Leasing in the US January 2023 12 IBISWorld.com Industry Outlook Outlook Industry revenue will grow at a CAGR of 0.6% to $30.1 billion over the next five years, with profit stagnating at 40.9%. Industry profit continues to stagnate  Although technology will minimize the number of workers at establishments, wages will account for a substantial amount of industry profit. Employees that will be required to maintain advancing tech and security systems are more skilled and thus, command higher wages.  With larger operators consolidating more than the smaller ones, price competition will increase. Some companies already offer military discounts, long-term contract discounts and multiple-unit discounts but, they will have to increase or expand these benefits to maintain a competitive edge. Demand will likely stay strong  Occupancy rates will continue inching closer to 100.0% in large cities such as New York, Los Angeles and Chicago, so many operators will open up locations in surrounding suburbs and smaller cities.  The stable percentage of disposable income and rising consumer spending in the coming years also signal that demand for industry services will rise. Innovation and automation will increase efficiency and effectiveness  Advancements in technology such as robotics, biometrics and automation will reduce industry expenses in the long run while also offering a smoother customer experience.  Growing use of cloud systems will enable operators to collect, secure and analyze consumer data to find areas of improvement. Performance Outlook Data Year Revenue ($m) IVA ($m) Establishments (Units) Enterprises (Units) Employment (Units) Exports ($m) Imports ($m) Wages ($m) Domestic Demand ($m) Per capita disposable income ($) 2023 29,171 18,847 189,593 180,456 217,300 N/A N/A 3,072 N/A 46,021 2024 29,287 18,948 191,570 182,411 219,015 N/A N/A 3,094 N/A 46,183 2025 29,399 19,048 194,000 184,838 220,911 N/A N/A 3,118 N/A 46,364 2026 29,560 19,122 196,132 186,941 222,762 N/A N/A 3,142 N/A 46,574 2027 29,763 19,253 198,312 189,081 224,767 N/A N/A 3,169 N/A 46,780 2028 30,052 19,435 200,682 191,375 227,121 N/A N/A 3,202 N/A 47,201 2029 30,327 19,619 202,621 193,241 229,089 N/A N/A 3,230 N/A 47,599

Storage & Warehouse Leasing in the US January 2023 15 IBISWorld.com Demand Determinants Overall economic health fluctuations boost demand Economic health indicators such as inflation and per capita disposable income are significant drivers of demand in this industry. For example, when per capita disposable income rises, it means people can now afford more material possessions and therefore must use more storage. Furthermore, this industry is in a rare position to benefit from both high and low levels of economic health. For example, people losing their homes due to inflation will need temporary storage facilities as they are in the process of downsizing or moving. Equally a strong economy with low inflation has the same effect because people seeking to upgrade their lifestyles by purchasing new homes also need temporary storage services. Over the last few years, economic downturns such as the COVID-19 (coronavirus) pandemic and sharp decreases in rental vacancy rates increased revenue to highs of 5.7% and 5.8% in 2020 and 2021, respectively. Seasonal trends impact demand Data shows that moving is the main reason why most American rent temporary storage facilities. This paired with data that shows that most American move between May and September, the warmest month of the year, which translates to higher demand in these months. However, colder months also attract different consumers such as bikers and boat owners that can't use these autos in unfavorable conditions. Unless economic health improves and the cost of moving declines, industry revenue will face turbulence due to US census data showing that Americans are moving at the lowest rates since 1948. Major Markets Residential customers have the most need for industry products  This sector can be further broken down into short-term (21.0% of revenue) and long-term residential customers (48.9% of revenue). Short-term customers are ones that rent storage units for less than 6 months while long-term customers are ones that rent storage units for longer than six months. Short-term and long- term customers respectively account for 21.0% and 48.9% of industry revenue in 2023.  Major lifestyle changes that affect residential customers such as marriage, divorce, new home ownership, new jobs and retirement trigger a rise in demand for industry products and services. In fact, this sector accounts for 34.4% of all industry revenue obtained from of 10-by-10 and 10-by-15-feet spaces. An economical and efficient alternative for commercial operators  This segment includes retail and wholesale companies that store seasonal displays, stock, inventories and equipment. Industry services are often needed when these businesses are expanding or contracting in size. No wonder this segment is the largest user of 10-by-25-feet spaces.  This segment's demand for industrial goods and services has been gradually rising over the last few years, especially among small business operators. As small business activity continues to rise due to support from other platforms such as Etsy, so will demand for storage leasing. A safe choice for peace keepers; the military  Militarily personnel are required to relocate so it's not surprising that they account for 5.9% of industry revenue in 2023 alone. In fact, over 700,000 self-storage units are rented to military personnel in the United States according to the Self-Storage Association.  Because military personnel often lease for a slightly longer term (13.7 months), they usually have access to special discounts and incentives. Demand from this segment will decrease in the coming years due to the

Storage & Warehouse Leasing in the US January 2023 18 IBISWorld.com State Data for Storage & Warehouse Leasing in the US (2023) State Establishments Establishments Growth Rate (2018-2023) Revenue Revenue Growth Rate (2018-2023) Employment Employment Growth Rate (2018-2023) Wages Wages Growth Rate (2018-2023) Alaska 533 1.91% $117.1m 3.73% 850 1.09% $12.5m 4.19% Arizona 4,754 1.07% $666.9m 2.60% 5,552 0.65% $71.3m 3.12% Arkansas 2,118 2.11% $206.0m 4.22% 2,400 2.69% $21.9m 4.63% California 22,903 0.20% $5.0bn 5.59% 34,743 1.77% $534.4m 5.99% Colorado 5,601 3.55% $936.1m 8.15% 6,460 3.73% $98.9m 8.46% Connecticut 2,011 3.02% $112.9m -7.93% 1,088 -8.60% $12.3m -7.16% Delaware 706 4.86% $29.5m -7.05% 425 -1.74% $3.2m -6.03% Florida 14,427 1.16% $2.1bn 4.68% 17,642 2.23% $225.1m 4.99% Georgia 6,410 1.15% $777.2m 3.92% 7,242 2.21% $84.2m 4.73% Hawaii 606 -0.10% $115.0m -1.02% 990 -1.62% $12.3m -0.50% Idaho 1,958 5.83% $256.2m 11.07% 1,697 2.30% $26.8m 11.14% Illinois 6,117 2.39% $977.0m 6.90% 7,345 3.96% $103.4m 7.24% Indiana 2,384 0.99% $304.7m 3.70% 2,623 -0.09% $32.6m 4.26% Iowa 717 -1.24% $70.1m -0.46% 589 -2.10% $7.4m -0.18% Kansas 1,375 0.50% $45.2m -13.62% 628 -10.70% $5.1m -12.21% Kentucky 2,137 1.74% $204.7m 1.28% 1,872 -0.51% $21.7m 1.62% Louisiana 4,722 5.40% $574.7m 5.64% 4,860 2.52% $60.6m 5.90% Maine 836 3.88% $92.1m 4.18% 816 1.43% $9.8m 4.67% Maryland 2,262 -1.29% $704.9m 5.90% 6,315 7.60% $77.1m 6.92% Massachusetts 3,176 1.63% $552.4m 2.79% 3,538 0.35% $59.7m 3.53% Michigan 3,771 3.69% $424.2m 6.01% 3,749 3.37% $45.0m 6.42% Minnesota 1,594 0.06% $180.0m 5.55% 1,457 2.50% $18.7m 5.53% Mississippi 1,378 -1.35% $145.8m 1.15% 1,363 -1.38% $15.6m 1.66% Missouri 2,506 -1.65% $251.6m 0.59% 2,537 -0.61% $26.9m 1.11% Montana 1,155 3.79% $64.0m 0.10% 1,274 3.47% $6.8m 0.65% Nebraska 708 2.40% $145.1m 7.39% 1,037 3.94% $15.5m 7.96% Nevada 2,742 1.81% $384.0m 5.42% 3,917 3.64% $40.8m 5.84% New Hampshire 903 2.87% $134.6m 8.84% 961 3.02% $14.0m 8.82% New Jersey 4,522 1.30% $698.3m 3.03% 4,965 0.13% $74.8m 3.60% New Mexico 2,077 1.71% $187.5m 3.96% 1,873 0.58% $19.8m 4.28% New York 6,895 0.41% $1.4bn 1.11% 9,916 0.17% $155.3m 1.69%

Storage & Warehouse Leasing in the US January 2023 21 IBISWorld.com Competitive Landscape Market Share Concentration Concentration in this industry is Low Larger companies are always looking to expand  Larger players have access to expensive and newer technology such as security and climate-control systems that small, independently owned businesses either cannot afford or do not have. This gives them a competitive advantage that translates to more earnings and faster expansion.  Stronger spending power enables larger operators to achieve greater economies of scale and geographic advantages by purchasing or merging with their competitors in desired locations. For example, Public Storage Inc's expanded its global reach by purchasing 35.0% equity in Shurgard Storage Centers Inc.; the largest self-storage owner and operator in Western Europe. This industry remains a fertile landscape for small businesses and consolidators  Over 90.0% of industry players are either nonemployers or employ fewer than four workers. Such a large percentage of small-scale operators means that merger and acquisition activity is also high.  This industry historically performs well during economic downturns due to increases in demand caused by bankruptcies, divorces and migrations. Such high demand even in uncertain economic conditions encourages larger industry participants to consolidate. Key Success Factors IBISWorld identifies over 200 Key Success Factors for a business. The most important for this industry are: Economies of scale: Operators in this industry that can provide higher volumes of storage services with minimized costs can develop economies of scale and greater profit. Proximity to key markets: Mini warehouses and self-storage facilities need to be geographically located within or close to, population centers. Customers prefer to travel short distances to access their stored items. Economies of scope: Mini warehouses and self-storage operators that offer a wide variety of storage sizes and solutions are able to capture a wider market. Having a good reputation: Self-storage companies that have a good reputation for access, security and price are able to boost patronage. Friendly staff can be a major differentiating factor in such a crowded industry as well. Use of specialist equipment or facilities: Self-storage companies that offer high security, on-site assistance, temperature control, specialized storage space sizes and dust-free environments are able to develop niche markets. Superior financial management and debt management: Successful operators in this industry are able to control costs and manage debt levels.

Storage & Warehouse Leasing in the US January 2023 22 IBISWorld.com Cost Structure Benchmarks Profit  Industry profit, measured as earnings before interest and taxes, has been slightly but steadily increasing for most of the last five years due to low operational costs and low wage costs.  In 2023, industry profit accounts for 41.0% of industry revenue. Industry profit will not change much over the next five years, only falling to a low of 40.9% in 2028. Wages  Wages account for 10.5% of industry revenue in 2023, slightly down from 10.4% in 2018.  Despite the increasing total number of employees in the industry, this share is going to stay relatively stable over the next five years, reaching 10.7% in 2028. This is because enterprise and establishment growth in the same period will create a balancing effect.

Storage & Warehouse Leasing in the US January 2023 23 IBISWorld.com Purchases  The industry has low and stable purchase costs, accounting for only 2.1% of industry revenue in 2023.  Purchases vary by company size, but common purchases include external cleaning and lawn care services, waste removal services, legal and accounting fees and office supplies. Basis of Competition Competition in this industry is High and the trend is Increasing INTERNAL COMPETITION Competition in the industry is high and will continue to rise over the next five years. Competition on security and security systems has intensified recently because consumers are more likely to choose the safest facility affordable. Additionally, operators compete on price, operating hours, contract length, friendliness of staff, name-brand recognition and customer reviews. Proximity is also important; traffic density, driveway access and availability of parking can influence consumers' decisions on choosing one business over the other. Operators in such a crowded and developed industry seek a competitive edge by offering unique financing options, bolstered security and additional amenities such as restrooms and refreshments. Furthermore, large companies use search engine optimizations and location services on web browsers to quickly and accurately find storage facilities near potential customers. Overall, high levels of competition have created conditions for large companies to use resources to increase name recognition, leaving small employers to either spend extra revenue on advertising or risk being acquired. EXTERNAL COMPETITION Competition from alternatives in the industry is low. Alternatives such as renting storage containers and building sheds offer easier access to stored items but don't offer other crucial benefits such as temperature control and satisfactory security. Furthermore, both sheds and shipping containers come with additional hassles such as requiring permits from local governments to be elected in a given location. Barriers to Entry Barriers to Entry in this industry are Medium and the trend is Increasing

Storage & Warehouse Leasing in the US January 2023 24 IBISWorld.com Legal Other than zoning and land development conditions that vary by state, this industry has low legal requirements for new entrants. Start-Up Costs Costs to purchase or lease land or facilities, as well as property taxes, vary across regions and present a major barrier to entry. Most large-scale storage operations look for highly populated areas to open new facilities which can be a highly expensive endeavor. Space is extremely limited and land comes at a much more significant cost than land in rural areas. However, these areas also offer far more profitability and revenue opportunity than less populated parts of the country Differentiation larger operators are able to exert some influence on pricing, hindering growth for new players. Increased levels of consolidation in recent years have made it more difficult for new operators to enter and successfully compete in the industry. Labor Intensity This industry requires substantial upfront investment in wages to successfully launch. Investment in training and certifying customer service reps is important for safety and customer service. Operators that use technological systems as a replacement for workers also need highly skilled workers to maintain such systems. Barriers to Entry Checklist Competition High Concentration Low Life Cycle Stage Mature Technology Change Medium Regulation & Policy Medium Industry Assistance Low Industry Globalization Globalization in this industry is Low and the trend is Increasing The Storage and Warehouse Leasing industry experiences a low but increasing level of globalization. Larger companies, such as AMERCO, operate a small number of self-storage and mini-warehouses in Canada and Mexico. Going forward, globalization will increase as Europe's elderly and divorced seek industry services. Confirming this trend is Public Storage Inc's 35.0% equity interest in Shurgard Storage Centers Inc. which is the largest self-storage owner and operator in Western Europe. Additionally, Extra Space Storage Inc. also has a partial interest in Access, which is a self-storage company operating in Europe and Australia.

Storage & Warehouse Leasing in the US January 2023 25 IBISWorld.com Major Companies Market Share Overview Related Companies Competitors Company Type Employee Segment Revenue ($m) Market Share (%) Profit ($m) Public Storage All Star 500+ Employees 415.9 1.43 299.3 Extra Space Storage Disruptor 500+ Employees 201.9 0.69 109.3 CubeSmart Rising Star 500+ Employees 106.5 0.36 73.1 Derrel's Mini Storage Rising Star 100 – 499 Employees 3.5 0.01 2.2

Storage & Warehouse Leasing in the US January 2023 26 IBISWorld.com Companies with 5.0% industry market share are displayed in the PDF version of this report. You can view insights for all companies associated with this industry on my.ibisworld.com Public Storage Company Overview Description Public Storage is a public company headquartered in California with an estimated 5,800 employees. In the US, the company has a notable market share in at least one industry: Storage & Warehouse Leasing, where they account for an estimated 1.4% of total industry revenue. COMPANY TYPE Public Company TOTAL COMPANY REVENUE $415.9m EMPLOYEES 5,800 Analyst Insights Public Storage has acquired All Storage Public Storage has acquired All Storage for $1.5 billion. All Storage has a large portfolio of self-storage products, which is expected to be highly valuable and enhance the parent company ’ s already robust portfolio of products. Ultimately, this is anticipated to bolster performance and thus, market share over the coming years. Additionally, sales are expected to continue rising along with more acquisitions and expansion of operations. M&A Public Storage has hired a new Chief Operating Officer Public Storage has hired a new Chief Operating Officer. David Lee, who has an extensive background in the storage industry, will be taking the charge. Under this new leadership, the company is expected to increase performance and plans to adjust their operating model to better accommodate their prospective markets. In conjunction with multiple acquisitions, restructuring and new leadership, Public Storage will likely expand their operations and reach. Structural Public Storage celebrates a significant milestone Public Storage released an innovative online storage rental program in late 2019 and it has reached a significant milestone in March of 2022. One million customers have initiated rentals using this website, which classifies this new product as a success. The inclusion of digital-initiated rentals in the company ’ s portfolio enables them to further penetrate into the storage market and effectively compete. Customers have reported how easy and convenient initiating rentals were, as it can be done anywhere using a smartphone. New Activity

Storage & Warehouse Leasing in the US January 2023 27 IBISWorld.com Public Storage Company Overview Industry Market Share, Revenue and Profit Market Share 1.43% Strong 0.2% Current Year (2023) Annual Growth (2019 – 23) Industry Revenue $415.9m Strong 9.9% Current Year (2023) Annual Growth (2019 – 23) Profit Margin 71.96% Strong 4.4% Current Year (2023) Annual Growth (2019 – 23)

Storage & Warehouse Leasing in the US January 2023 28 IBISWorld.com Extra Space Storage Inc. Company Overview Description Extra Space Storage is a public company headquartered in Utah with an estimated 4,309 employees. In the US, the company has a notable market share in at least one industry: Storage & Warehouse Leasing, where they account for an estimated 0.7% of total industry revenue. COMPANY TYPE Public Company TOTAL COMPANY REVENUE $201.9m EMPLOYEES 4,309 Analyst Insights Extra Space Storage Inc. ’ s diversity and inclusion initiatives Joe Margolis, the CEO of Extra Space Storage, announced his pledge to promote diversity and inclusion in late January of 2021. This pledge includes unconscious bias education for employees as well as having “ complex, sometimes difficult, conversations about diversity and inclusion. ” Joe Margolis is also going to be sharing plans for strategic inclusion solutions to the board of directors of the company. Extra Space Storage will also be sharing best and unsuccessful practices with other companies to help them improve upon their diversity and inclusion initiatives. ESG Extra Space Storage now has over 2,000 stores In 2021, Extra Space Storage announced they now operate over 2,000 stores across 40 states and in the District of Columbia. The company now provides 156.0 million square feet of rentable space in their 1.4 million units. This growth was achieved through external investment efforts. In 2020, the company invested $900.0 million to grow the company to this level. Of the 2,000 stores, Extra Space Storage wholly owns 48.0%, 12.0% are owned by Extra Space Storage through joint-ventures and the remaining 40.0% are independently owned and managed. Structural Extra Space Storage recognized for sustainability In November of 2021, Extra Space Storage was named Nareit ’ s annual Leader in the Light award for the second year in a row. This award is presented to real estate companies that demonstrate superior and sustained sustainability practices. The company was also given an A by The Global Real Estate Sustainability Benchmark, which rates 1,500 real estate companies, as their scores were well above the average of other global real estate companies. Extra Space Storage ’ s standing investment score improved by 23.0% in 2021 compared to 2020. ESG Structural

Storage & Warehouse Leasing in the US January 2023 29 IBISWorld.com Extra Space Storage Inc. Company Overview Industry Market Share, Revenue and Profit Market Share 0.69% Moderate 0.1% Current Year (2023) Annual Growth (2019 – 23) Industry Revenue $201.9m Moderate 11.5% Current Year (2023) Annual Growth (2019 – 23) Profit Margin 54.12% Weak 5.6% Current Year (2023) Annual Growth (2019 – 23)

Storage & Warehouse Leasing in the US January 2023 30 IBISWorld.com CubeSmart Company Overview Brands & Trading Names CubeSmart Description CubeSmart is a public company headquartered in Pennsylvania with an estimated 2,892 employees. In the US, the company has a notable market share in at least one industry: Storage & Warehouse Leasing, where they account for an estimated 0.4% of total industry revenue. COMPANY TYPE Public Company TOTAL COMPANY REVENUE $106.5m EMPLOYEES 2,892 Analyst Insights CubeSmart expands through acquisition of LAACO, LTD In December 2021, CubeSmart closed the acquisition of LAACO, LTD, the owner of the Storage West self-storage platform. CubeSmart adds 59 assets in Southern California, Phoenix, Las Vegas and Houston. This acquisition enables CubeSmart to expand their footprint in rapidly growing residential areas. M&A CubeSmart to build $7.5 million self-storage facility In November 2022, CubeSmart announced the construction of a new 105,800-square-foot self-storage facility in Jacksonville, Florida. The project is estimated to cost $7.5 million, which includes the purchase of the property from a TD Bank branch. New Activity

Storage & Warehouse Leasing in the US January 2023 31 IBISWorld.com CubeSmart Company Overview Industry Market Share, Revenue and Profit Market Share 0.36% Moderate 0.1% Current Year (2023) Annual Growth (2019 – 23) Industry Revenue $106.5m Moderate 13.4% Current Year (2023) Annual Growth (2019 – 23) Profit Margin 68.67% Moderate 1.2% Current Year (2023) Annual Growth (2019 – 23)

Storage & Warehouse Leasing in the US January 2023 32 IBISWorld.com Derrel's Mini Storage Inc. Company Overview Brands & Trading Names Derrel's Mini Storage Description Derrel's Mini Storage is a private company headquartered in California with an estimated 188 employees. In the US, the company has a notable market share in at least one industry: Storage & Warehouse Leasing, where they account for an estimated 0.0% of total industry revenue. COMPANY TYPE Private Company TOTAL COMPANY REVENUE $3.5m EMPLOYEES 188 Analyst Insights Derrel's mini storage will build a new facility after decade of litigation 11 years worth of litigation regarding conditional-zoning agreements to build a self-storage location ended in early 2015. The company owned the land since 1998, but was unsuccessful in altering the zoning to accept self-storage. The location resides on busy streets in northwest Visalia, CA. New Activity Hanford Planning Commission approves request for new self-storage location In August 2022, Derrel's mini storage was approved to construct a new self-storage location. The 29.7-acre plot of unused land will house a 28.1-acre storage facility. The company is in the process of pulling the necessary permits. New Activity

Storage & Warehouse Leasing in the US January 2023 33 IBISWorld.com Derrel's Mini Storage Inc. Company Overview Industry Market Share, Revenue and Profit Estimated Industry Market Share 0.01% Weak Current Year (2023) Estimated Industry Revenue $3.5m Weak Current Year (2023) Estimated Profit Margin 64.61% Moderate Current Year (2023)

Storage & Warehouse Leasing in the US January 2023 34 IBISWorld.com Operating Conditions Capital Intensity The level of capital intensity is High This industry has a high level of capital intensity with $1.24 spent for every $1.00 of revenue generated in 2023 alone. Capital investment in the industry includes purchasing land, buildings and equipment. Additionally, industry companies purchase security systems, office furniture, computer technology, software and heavy machinery. Capital investment will keep rising in the coming years due to facility expansions and construction to meet equally rising demand and investment in technology improvements for differentiation.

Storage & Warehouse Leasing in the US January 2023 35 IBISWorld.com Technology & Systems Potential Disruptive Innovation: Factors Driving Threat of Change Level Factor Disruptive Effect Description Very Low Rate of Innovation Very Unlikely A ranked measure for the number of patents assigned to an industry. A faster rate of new patent additions to the industry increases the likelihood of a disruptive innovation occurring. Very High Innovation Concentration Very Likely A measure for the mix of patent classes assigned to the industry. A greater concentration of patents in one area increases the likelihood of technological disruption of incumbent operators. Low Ease of Entry Unlikely A qualitative measure of barriers to entry. Fewer barriers to entry increases the likelihood that new entrants can disrupt incumbents by putting new technologies to use. High Rate of Entry Likely Annualized growth in the number of enterprises in the industry, ranked against all other industries. A greater intensity of companies entering an industry increases the pool of potential disruptors. High Market Concentration Likely A ranked measure of the largest core market for the industry. Concentrated core markets present a low-end market or new market entry point for disruptive technologies to capture market share. The rate of new patent technologies entering the industry is low, which limits the potential for innovations. A low rate does not mean that innovations cannot occur, just that the likelihood of some innovation materializing as a threat is lower. However, the concentration of technologies is high in this industry. This suggests that industry operators have exposure to potentially unforeseen areas of innovation. Additionally, this industry's structure makes it difficult for new operators to enter and succeed. These barriers have the potential to disincentivize potential disruptors. Despite these barriers, the industry is experiencing a rapid growth in the number of companies. A difficult operating environment for new entrants combined with a large cohort of them may create a situation where these companies may take on a disruptive trajectory in non-traditional markets. The major markets for this industry are highly concentrated, which implies that the market has a focus on key customer segments. This presents an opportunity for strategic entrance into lower-end markets or unserved markets for innovations to take on a disruptive trajectory. The development of apps in the industry has led to a smoother customer experience. For example, Clutter Inc.'s app lets customers request storage boxes, upload photos of items for storing and schedule time for the company's employee to pick up the items. This eliminates the need for customers to drive to storage locations. Additionally, the mobile app provides an integrated platform for customers to monitor storage, manage the lease, make payments and communicate with the company. Therefore, technologies that enhance customer experience are expected to disrupt traditional operators in the Storage and Warehouse Leasing industry. The level of technology change is Medium This industry has experienced a moderate level of technological change over the past five years. Industry operators use technologies such as biometric security systems to mainly increase facility security and decrease expenditure on wages for security guards and 24/7 front desk employees. Additional technologies such as temperature and

Storage & Warehouse Leasing in the US January 2023 36 IBISWorld.com moisture-control technologies can attract new customers with specialized needs and allow companies to develop niche markets in extreme weather seasons, while also commanding much higher rental rates. Technology and systems innovations will grow in the next five years as industry players continue allocating a portion of their revenue to research and development (R&D). In 2023 alone, 3.2% of industry revenue will be spent on R&D. This growth, however, will not be as rapid as one of the last five years due to the fact that most industry players regardless of size, offer similar technological advantages to consumers. Revenue Volatility The level of volatility is Medium This industry thrives in good and negative macro-economic conditions  Industry players experience revenue increases during unfavorable conditions such as inflations that can cause business closures, evictions and inflated divorce rates. All these cases create a temporary need for temporary storage needs.  Increase in disposable income also increases industry revenue because consumers' level of material possessions rises which in turn leads to greater self-storage demand. For example, increased disposable income drives demand for cars and boats, which are items often kept in storage facilities. Changes in housing demand are an admissible factor  Aging baby boomers generally downsize their households and storage facilities are their desired alternative.  The increasing trend of millennials opting to rent apartments rather than own homes has also increased demand for industry products. In addition, the rise of the availability of remote work has also discouraged workers from owning homes as they would feel tied down to one place. Regulation & Policy The level of regulation is Medium and the trend is Steady Environmental regulations Multiple state and federal laws prohibit the storage of dangerous items within mini-warehouses and storage units and if discovered, owners of self-storage facilities are held accountable. These regulations also require operators to test land and soil for contaminants and other hazardous substances that might arise due to prior use by other industries. Lien laws Lien laws vary by state but generally, they dictate the way that a company is legally permitted to deal with renters. Oftentimes, storage owners are permitted to sell the possessions inside of the storage unit if a renter has defaulted but, when and how much money storage owners can keep from such sales is dictated by state laws. Storage owners must comply with such to avoid lawsuits from defaulters. Accessibility and safety regulations

Storage & Warehouse Leasing in the US January 2023 37 IBISWorld.com Industry players must comply with the Americans with Disabilities Act which requires that buildings be made accessible to persons with disabilities. Operators must also install fire prevention and detection systems. In addition, industry players are also responsible for moisture infiltration, condensation or mold problems. Industry Assistance The level of industry assistance is Low and the trend is Steady Self-Storage Association (SSA) The SSA is a nonprofit organization consisting of more than 20,00 members nationwide. It offers its members a large network database of other self-storage operators, industry information, education, as well as legal and market research databases. Members of the SSA lobby congress on behalf of self-storage businesses and individuals, where they have had a part in influencing over 60 laws since 2011. Real estate investment trusts (REITs) There's little assistance in this industry but most players operate as REITs which offer taxation and depreciation benefits. To qualify as a REIT, a company must have the bulk of its assets and income connected to real estate investment and must distribute at least 90.0 % of its taxable income to shareholders annually in the form of dividends. When a 90.0% distribution is made, REITs only pay tax on the 10.0% that is retained.

Storage & Warehouse Leasing in the US January 2023 38 IBISWorld.com Key Statistics Industry Data Year Revenue ($m) IVA ($m) Establishments (Units) Enterprises (Units) Employment (Units) Exports ($m) Imports ($m) Wages ($m) Domestic Demand ($m) Per capita disposable income ($) 2014 20,297 13,159 159,516 153,517 182,929 N/A N/A 2,260 N/A 40,117 2015 22,337 14,501 171,757 165,420 196,339 N/A N/A 2,506 N/A 41,383 2016 24,008 15,560 170,079 163,345 194,675 N/A N/A 2,475 N/A 41,822 2017 25,564 16,201 167,222 160,148 193,342 N/A N/A 2,524 N/A 42,699 2018 26,308 17,079 173,967 166,719 201,352 N/A N/A 2,741 N/A 43,885 2019 26,636 17,081 176,743 169,177 204,777 N/A N/A 2,809 N/A 44,645 2020 28,143 17,939 179,311 171,848 209,317 N/A N/A 2,905 N/A 47,255 2021 29,781 19,114 187,204 177,817 217,604 N/A N/A 3,088 N/A 48,617 2022 29,262 18,930 188,422 179,243 216,763 N/A N/A 3,068 N/A 45,897 2023 29,171 18,847 189,593 180,456 217,300 N/A N/A 3,072 N/A 46,021 2024 29,287 18,948 191,570 182,411 219,015 N/A N/A 3,094 N/A 46,183 2025 29,399 19,048 194,000 184,838 220,911 N/A N/A 3,118 N/A 46,364 2026 29,560 19,122 196,132 186,941 222,762 N/A N/A 3,142 N/A 46,574 2027 29,763 19,253 198,312 189,081 224,767 N/A N/A 3,169 N/A 46,780 2028 30,052 19,435 200,682 191,375 227,121 N/A N/A 3,202 N/A 47,201 Annual Change Year Revenue (%) IVA (%) Establishments (%) Enterprises (%) Employment (%) Exports (%) Imports (%) Wages (%) Domestic Demand (%) Per capita disposable income (%) 2014 6.82 8.21 3.05 2.95 3.06 N/A N/A 0.75 N/A 3.00 2015 10.1 10.2 7.67 7.75 7.33 N/A N/A 10.9 N/A 3.15 2016 7.48 7.30 -0.98 -1.26 -0.85 N/A N/A -1.22 N/A 1.06 2017 6.48 4.12 -1.68 -1.96 -0.69 N/A N/A 1.97 N/A 2.09 2018 2.90 5.41 4.03 4.10 4.14 N/A N/A 8.59 N/A 2.77 2019 1.24 0.01 1.59 1.47 1.70 N/A N/A 2.46 N/A 1.73 2020 5.65 5.02 1.45 1.57 2.21 N/A N/A 3.41 N/A 5.84 2021 5.82 6.55 4.40 3.47 3.95 N/A N/A 6.32 N/A 2.88 2022 -1.75 -0.97 0.65 0.80 -0.39 N/A N/A -0.66 N/A -5.60 2023 -0.32 -0.44 0.62 0.67 0.24 N/A N/A 0.13 N/A 0.26 2024 0.39 0.53 1.04 1.08 0.78 N/A N/A 0.70 N/A 0.35 2025 0.38 0.53 1.26 1.33 0.86 N/A N/A 0.76 N/A 0.39 2026 0.54 0.38 1.09 1.13 0.83 N/A N/A 0.77 N/A 0.45 2027 0.68 0.68 1.11 1.14 0.90 N/A N/A 0.85 N/A 0.44 2028 0.96 0.94 1.19 1.21 1.04 N/A N/A 1.03 N/A 0.90 Key Ratios Year IVA/Revenue (%) Imports/ Demand (%) Exports/ Revenue (%) Revenue per Employee ($'000) Wages/ Revenue (%) Employees per estab. (Units) Average Wage ($) 2014 64.8 N/A N/A 111 11.1 1.15 12,352 2015 64.9 N/A N/A 114 11.2 1.14 12,762 2016 64.8 N/A N/A 123 10.3 1.14 12,715 2017 63.4 N/A N/A 132 9.87 1.16 13,055 2018 64.9 N/A N/A 131 10.4 1.16 13,613 2019 64.1 N/A N/A 130 10.5 1.16 13,716 2020 63.7 N/A N/A 134 10.3 1.17 13,877 2021 64.2 N/A N/A 137 10.4 1.16 14,192 2022 64.7 N/A N/A 135 10.5 1.15 14,154 2023 64.6 N/A N/A 134 10.5 1.15 14,138 2024 64.7 N/A N/A 134 10.6 1.14 14,127 2025 64.8 N/A N/A 133 10.6 1.14 14,113 2026 64.7 N/A N/A 133 10.6 1.14 14,105 2027 64.7 N/A N/A 132 10.6 1.13 14,099 2028 64.7 N/A N/A 132 10.7 1.13 14,097 Figures are inflation adjusted to 2023

Storage & Warehouse Leasing in the US January 2023 39 IBISWorld.com Industry Financial Statement Historical Average Industry Multiples 2018 2019 2020 2021 3-Year 5-Year 10-Year EBIT/Revenue 50.2 40.2 47.1 56.7 48.0 47.7 45.4 EBITDA/Revenue 60.3 52.5 71.1 88.5 70.7 65.5 59.2 Leverage Ratio 15.0 1.9 1.4 1.1 1.5 7.2 12.4 Industry Tax Structure 2018 2019 2020 2021 3-Year 5-Year 10-Year Taxes Paid/Revenue 4.6 5.3 6.7 7.5 6.5 5.9 5.5 Income Statement 2018 2019 2020 2021 3-Year 5-Year 10-Year Total Revenue 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Business receipts 11.4 15.1 54.1 56.0 41.7 30.2 25.0 Cost of goods 1.6 2.1 21.1 20.7 14.6 9.4 5.3 Gross Profit 98.4 97.9 78.9 79.3 85.4 90.6 94.7 Expenses Salaries and wages 4.5 4.9 14.5 13.8 11.1 8.5 6.9 Advertising 0.4 0.5 3.6 3.9 2.7 1.8 1.1 Depreciation 8.6 10.9 9.4 8.3 9.5 9.3 8.9 Depletion 0.0 0.0 1.6 2.1 1.2 0.8 0.4 Amortization 1.5 1.5 13.0 21.3 11.9 7.8 4.5 Rent paid 4.0 3.5 4.8 4.2 4.2 4.4 4.2 Repairs 1.9 2.5 1.7 0.9 1.7 1.8 2.1 Bad debts 0.6 0.2 0.1 0.1 0.1 0.3 0.4 Employee benefit programs 0.2 0.2 1.0 4.2 1.8 1.2 0.8 Compensation of officers 0.9 1.1 0.7 10.6 4.1 2.9 2.2 Taxes paid 4.6 5.3 6.7 7.5 6.5 5.9 5.5 Interest Income 3.3 2.8 14.9 1.7 6.5 5.1 4.0 Other Income Royalties 0.2 0.3 8.8 11.1 6.7 4.1 2.1 Rent Income 2.9 2.9 2.2 1.1 2.1 2.4 2.6 Net Income 35.3 24.1 11.5 13.3 16.3 22.6 25.2 Balance Sheet 2018 2019 2020 2021 3-Year 5-Year 10-Year Assets Cash and Equivalents 2.5 2.5 6.3 5.5 4.8 4.0 3.7 Notes and accounts receivable 2.1 1.9 14.5 12.7 9.7 6.7 4.3 Allowance for bad debts 0.0 0.0 1.1 1.0 0.7 0.4 0.2 Inventories 0.0 0.0 5.0 4.8 3.3 2.0 1.0 Other current assets 1.8 1.8 5.3 5.4 4.1 3.2 2.8 Other investments 37.2 46.3 44.6 39.1 43.3 40.6 37.1 Property, Plant and Equipment 42.5 35.8 35.2 30.6 33.9 37.3 41.1 Accumulated depreciation 9.3 8.4 19.8 16.2 14.8 12.7 11.0 Intangible assets (Amortizable) 6.7 5.6 6.1 9.8 7.1 7.1 6.1 Accumulated amortization 1.7 1.3 1.1 1.2 1.2 1.4 1.3 Other assets 7.5 6.8 8.8 9.0 8.2 7.9 6.8 Total assets 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Accounts payable 0.8 0.7 8.7 7.5 5.6 3.7 2.4 Liabilities and Net Worth Mort, notes, and bonds under 1 yr 2.1 1.7 7.6 8.1 5.8 4.1 2.7 Other current liabilities 2.9 2.3 8.2 8.0 6.2 4.8 5.0 Loans from shareholders 1.6 1.3 4.7 3.1 3.0 2.5 2.5 Mort, notes, bonds, 1 yr or more 31.0 26.1 28.1 34.5 29.6 30.2 29.5 Other liabilities 4.4 4.2 9.2 10.8 8.1 7.0 6.0 Total liabilities 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Capital stock 10.2 11.8 11.4 7.7 10.3 10.1 9.9 Additional paid-in capital 53.4 53.3 41.8 34.0 43.1 47.5 51.3 Retained earnings, appropriated 0.0 0.0 1.1 0.8 0.6 0.4 0.2 Retained earnings-unappropriated 0.0 0.0 13.3 18.1 10.5 6.3 3.1 Cost of treasury stock 0.5 0.5 6.3 10.0 5.6 3.6 2.0 Net worth 57.2 63.7 50.3 43.8 52.6 54.2 55.2

Storage & Warehouse Leasing in the US January 2023 40 IBISWorld.com Liquidity Ratios 2018 2019 2020 2021 3-Year 5-Year 10-Year Current Ratio 1.1 1.3 1.5 1.3 1.4 1.4 1.2 Quick Ratio 1.1 1.3 1.3 1.1 1.2 1.3 1.2 Sales/Receivables 5.2 52.8 6.9 7.9 22.5 15.5 10.8 Days' Receivables 70.7 6.9 53.1 46.4 35.5 51.1 58.7 Days' Inventory 25.7 3.0 86.4 84.0 57.8 43.1 48.4 Inventory Turnover 14.2 120.6 4.2 4.3 43.0 33.1 21.6 Payables Turnover 0.2 2.9 2.4 2.8 2.7 1.7 0.9 Days' Payables 1,611.4 126.6 151.0 131.9 136.5 740.2 2,091.5 Sales/Working Capital 0.9 12.4 4.5 5.1 7.4 4.8 3.8 Coverage Ratios 2018 2019 2020 2021 3-Year 5-Year 10-Year Interest Coverage 423.9 178.4 238.9 15.7 144.4 261.5 320.4 Debt Service Coverage Ratio 2.9 1.4 1.7 2.3 1.8 2.5 2.9 Leverage Ratios 2018 2019 2020 2021 3-Year 5-Year 10-Year Fixed Assets/Net Worth 1.2 0.9 1.5 1.6 1.3 1.3 1.3 Debt/Net Worth 1.7 1.6 2.0 2.3 1.9 1.9 1.8 Tangible Net Worth 0.6 0.6 0.5 0.4 0.5 0.5 0.6 Operating Ratios 2018 2019 2020 2021 3-Year 5-Year 10-Year Return on Net Worth, % 9.7 63.1 93.6 129.7 95.4 61.0 34.7 Return on Assets, % 5.5 40.2 47.1 56.7 48.0 30.9 17.8 Sales/Total Assets 0.1 1.0 1.0 1.0 1.0 0.6 0.4 EBITDA/Revenue 60.3 52.5 71.1 88.5 70.7 65.5 59.2 EBIT/Revenue 50.2 40.2 47.1 56.7 48.0 47.7 45.4 Cash Flow & Debt Service Ratios (% of sales) 2018 2019 2020 2021 3-Year 5-Year 10-Year Cash from Trading 97.2 79.0 78.6 78.9 78.8 88.4 94.3 Cash after Operations 91.4 50.1 55.7 45.2 50.3 63.5 79.0 Net Cash after Operations 88.6 93.7 57.1 72.2 74.3 81.0 84.4 Debt Service P&I Coverage 2.7 5.9 1.4 1.5 2.9 3.0 3.1 Interest Coverage (Operating Cash) 8.7 8.7 2.0 2.0 4.2 6.1 7.4 Source: IRS SOI Tax Stats; US Census Bureau; IBISWorld

Storage & Warehouse Leasing in the US January 2023 41 IBISWorld.com Additional Resources Additional Resources Self Storage Association http://www.selfstorage.org The National Association of Real Estate Investment Trusts http://www.reit.com Inside Self-Storage http://www.insideselfstorage.com US Census Bureau http://www.census.gov Industry Jargon MINIWAREHOUSE A facility designed or operated exclusively for the storage of goods in individual compartments or rooms, none of which exceeds 500 square feet in area. OCCUPANCY RATE The amount of storage space occupied as a percentage of total available storage space. REAL ESTATE INVESTMENT TRUST (REIT) A legal entity that uses pooled investor capital to purchase and manage income property or mortgage loans. To qualify, the entity must distribute at least 90.0% of taxable income. Glossary BARRIERS TO ENTRY High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry. CAPITAL INTENSITY Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor. IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than $0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of capital for every $1 of labor. CONSTANT PRICES The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e. year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld ’ s reports are made using the US Bureau of Economic Analysis ’ implicit GDP price deflator. DOMESTIC DEMAND Spending on industry goods and services within the United States, regardless of their country of origin. It is derived by adding imports to industry revenue, and then subtracting exports. EMPLOYMENT The number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers and executives within the industry. ENTERPRISE A division that is separately managed and keeps management accounts. Each enterprise consists of one or more establishments that are under common ownership or control. ESTABLISHMENT The smallest type of accounting unit within an enterprise, an establishment is a single physical location where business is conducted or where services or industrial operations are performed. Multiple establishments under common control make up an enterprise. EXPORTS Total value of industry goods and services sold by US companies to customers abroad. IMPORTS Total value of industry goods and services brought in from foreign countries to be sold in the United States. INDUSTRY CONCENTRATION An indicator of the dominance of the top four players in an industry. Concentration is considered high if the top

Storage & Warehouse Leasing in the US January 2023 42 IBISWorld.com players account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less than 40%. INDUSTRY REVENUE The total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); and capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded. INDUSTRY VALUE ADDED (IVA) The market value of goods and services produced by the industry minus the cost of goods and services used in production. IVA is also described as the industry's contribution to GDP, or profit plus wages and depreciation. INTERNATIONAL TRADE The level of international trade is determined by ratios of exports to revenue and imports to domestic demand. For exports/revenue: low is less than 5%, medium is 5% to 20%, and high is more than 20%. Imports/domestic demand: low is less than 5%, medium is 5% to 35%, and high is more than 35%. LIFE CYCLE All industries go through periods of growth, maturity and decline. IBISWorld determines an industry's life cycle by considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments; the amount of change the industry's products are undergoing; the rate of technological change; and the level of customer acceptance of industry products and services. NONEMPLOYING ESTABLISHMENT Businesses with no paid employment or payroll, also known as nonemployers. These are mostly set up by self- employed individuals. PROFIT IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company ’ s profitability. It is calculated as revenue minus expenses, excluding interest and tax. REGIONS West | CA, NV, OR, WA, HI, AK Great Lakes | OH, IN, IL, WI, MI Mid-Atlantic | NY, NJ, PA, DE, MD New England | ME, NH, VT, MA, CT, RI Plains | MN, IA, MO, KS, NE, SD, ND Rocky Mountains | CO, UT, WY, ID, MT Southeast | VA, WV, KY, TN, AR, LA, MS, AL, GA, FL, SC, NC Southwest | OK, TX, NM, AZ VOLATILITY The level of volatility is determined by averaging the absolute change in revenue in each of the past five years. Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%; and low volatility is less than ±3%. WAGES The gross total wages and salaries of all employees in the industry.

Storage & Warehouse Leasing in the US January 2023 IBISWORLD.COM 43 Call Preparation Questions Role Specific Questions Sales & Marketing Does your company lease primarily to consumers or businesses? The Storage and Warehouse Leasing industry rents and leases space for self-storage to both individuals and businesses. Although residential customers comprise the majority of demand, commercial operators and military personnel are also significant markets. What, if any, portions of your business experience increased demand during periods of slow economic growth? The Storage and Warehouse Leasing industry can benefit from both economic upturn and downturn. During periods of downturn, people need to temporarily store household goods while they downsize homes or rent smaller apartments to save money. Consumers may actually increase use of industry's services when some event pushes them out of their home, e.g. the COVID-19 (coronavirus) pandemic. Strategy & Operations Has your company explored acquisition opportunities in locations with well-established, dynamic commercial markets? Self-storage operators seek locations with above-average population growth and income levels, such as high- density metropolitan areas. Smaller companies that operate in highly sought-after areas are likely acquisition candidates for larger companies looking to expand. How much does your company spend on advertising annually? Do you know how his compares to your competitors? In 2021, the average self-storage operator spent an estimated 1.2% of total revenue on advertising costs. As operators attempt to gain an advantage in the increasingly competitive self-storage market, advertising and promotional costs have increased. Technology How has your company leveraged online platforms to reduce reliance on in-house personnel? Operators have sought to add value in an increasingly competitive market by offering online reservation and payment services. For example, Public Storage reported that 69.0% of its new reservations in 2017 were booked through its website, in comparison to 36.0% in 2010. Have you successfully reduced wage payments through automation in recent years? Wages as a percentage of revenue have been steady over the past five years as operators have installed more automated technologies. These include security cameras and locking systems, which have reduced the cost of running facilities. Compliance Is your company adequately prepared to adjust to changing environmental standards? Owners of self-storage facilities are responsible for hazardous materials and contaminants stored on premises. This comes under various hazardous materials laws that prohibit the storage of dangerous items within mini warehouses. Do you work with trade associations or other interest groups to advance your company's interest? The self-storage industry is represented by a variety of associations, including the Self-Storage Association (SSA). The SSA offers its members a large network database of other self-storage operators, as well as legal and market research educational databases.

Storage & Warehouse Leasing in the US January 2023 IBISWORLD.COM 44 Finance How does your company's profit compare with your main competitors'? As a result of the COVID-19 (coronavirus) pandemic, profit margins are expected to decline in 2020 and 2021. Many operators have invested in labor saving technologies that have helped bring down wage costs and bolster profit in the long run. Do you have problems with tenants paying on time? Oftentimes, storage owners are permitted to sell the possessions inside of the storage unit that has not been paid for. The auspices under which storage owners can sell these items and how much money they can keep from the sale can vary between states. External Impacts Questions Impact: House price index What impacts does the housing price index have on demand for your company's services? Is the price for homes expected to increase? As housing becomes less affordable, fewer individuals purchase property, which increases the need for storage space. Impact: Rental vacancy rates What is the ratio of your costumers that rent their residences to those that buy? Is your company prepared to contend with less demand for secondary storage? Demand for secondary storage typically comes from households that rent rather than own their residences. As a result, when rental vacancy rates rise, more people have moved into houses and will demand less secondary storage space, decreasing industry revenue. Impact: Per capita disposable income How has the current level of per capita disposable income affected your company? How can you take advantage when disposable income increases? In 2020, per capita disposable income is forecast to rise due to direct federal support via multiple stimulus bills to address the COVID-19 (coronavirus) pandemic.

Storage & Warehouse Leasing in the US January 2023 IBISWORLD.COM 45 Internal Issues Questions Issue: Use of specialist equipment or facilities Do you have security measures at your facilities (i.e. camera or guards)? If not, have you considered offering these services as a perk? Self-storage companies that offer high security, on-site assistance, temperature control, specialized storage space sizes and dust-free environments are able to develop niche markets. Issue: Economies of scope How many storage options do you have? Which ones have you noticed sell out the fastest? Mini warehouses and self-storage operators that offer a wide variety of storage sizes and solutions are able to capture a wider market. Issue: Proximity to key markets What range does your company have in terms of viable operating area? Do you have a competitive pricing strategy? Mini warehouses and self-storage facilities need to be geographically located within, or close to, population centers. Customers prefer to travel short distances to access their stored items.

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