Self-Storage Sector Update: Let The Good Times Roll

Self-Storage Sector Update
May 30, 2014

DJIA: 16,717 | RMZ: 1,023 | 10-Year T-Note: 2.47%
Let the Good Times Roll

Overview
• Self-storage fundamentals continue to impress
• NOI growth forecasts have moved higher…yet again
• Decelerating NOI growth remains likely, albeit at a modest pace
• Portfolio occupancies have reached all-time highs
• New supply is on the radar, but is not a near-term threat
• The private market undervalues self-storage’s cap-ex/NOI growth profile
• The public market gets it, which drives sizeable premiums to asset value
• Valuations were updated in the May 23rd Real Estate Securities Monthly
• Recommendations for PSA and EXR are revised based on relative valuation: Authors:
PSA upgraded to HOLD EXR downgraded to SELL Dave Bragg Ryan Burke
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disseminated to others without written permission. +1 949 640 8780 © 2014, Green Street Advisors, Inc.
Self-Storage Sector Update - May 30, 2014 2
Executive Summary
Operating Fundamentals ● Higher cap rates, solid NOI growth, and low cap-ex make self-storage a great business
Still Strong, but ● NOI growth continues to decelerate from "spectacular" to "great," albeit at a modest pace
Still Decelerating ● New supply isn't expected to present a formidable near-term threat, but is on the radar
● Underlying fundamentals remain strong, but "spectacular" growth would be difficult to repeat
On Our Minds ● Self-storage was recently added to Commercial Property Outlook and Real Estate Securities Monthly
The Pricing ● The disconnect between public and private-market self-storage valuations is quantified therein
Disconnect ● Private-market investors continue to underappreciate the sector's favorable cap-ex/NOI growth profile
● Public-market investors get it, as evidenced by the premiums at which self-storage REIT shares trade
● Properties are simply worth more in the hands of the self-storage REITs
Capital Allocation & ● The self-storage REITs continue to exploit the market's pricing inefficiency through acquisitions
Balance Sheet ● '14 projected acq. volume: PSA down from $1.2B in '13; EXR and CUBE flat (8-10% portfolio expansion)
Looking Good ● PSA is back in the development game; CUBE and EXR remain on the sidelines but are pursuing JVs
● Balance sheets: PSA = bullet proof; EXR = low-30% leverage; CUBE = mid-30% leverage
Asset Values ● Self-storage property values increased over the past year while most sectors drifted up moderately
Recent News is ● Demand from traditional and non-traditional investors (e.g., private equity) remains strong
Positive ● The recent decline in interest rates is bullish for self-storage property values
Recommendations ● Our valuations were updated for 1Q14 in the May 23rd Real Estate Securities Monthly
● Our recommendations for PSA and EXR are revised herein based on relative valuation
● Recommendation changes: PSA upgraded to HOLD; EXR downgraded to SELL
● Our recommendations are: BUY: CUBE HOLD: PSA SELL: EXR
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Real Estate Conditions Summary

Self-Storage in Context: The self-storage sector significantly outpaced the major sectors in Market RevPAF, NOI ,
and asset value growth under a backdrop of strong demand and de minimis new supply in '12 and '13. Self-storage
Market RevPAF and NOI growth will slow, but are expected to remain strong relative to other property types. The
solid NOI growth, low cap-ex, and higher private-market cap rate profile unique to the self-storage sector remains
intact and bodes well for long-term growth in asset values.
M-RevPAF NOI Growth Asset Values

Expected Actual & Momentum Expected Actual & Momentum Recent Changes vs. Forecasts
'14/'15 Growth vs. '12'13 Average
'14/'15 Growth vs. '12'13 Average
Long-Term Forecast Change

Office
Waxing
Waxing
Strip Office
Best
Storage
Ind Mall
Mall Apt
Ind
Momentum
Momentum
Lodging Strip
Storage Sr
Apt Housing
Storage
Waning
Waning
Apt
Worst
Strip
Ind
Sr Office Lodging
Mall
Sr Housing Lodging
Housing
Weakest Strongest Weakest Strongest Worst Best
'14/'15 Average '14/'15 Average Last 12 Mos Change
● Self-storage fundamentals are strong, ● NOI growth is slowing, but is still ● Self-storage is cheap relative to other
but slowing, following several years of expected to outpace other sectors property types
explosive growth ● Expense growth remains in check, but is ● Recent drop in cap rates (i.e., increase in
● Portfolio occupancies are at all-time expected to normalize values) does not fully reflect the sector's
highs, forcing operators to focus more ● Larger operators continue to capitalize long-term growth/cap-ex profile
on increasing rents to drive revenue on benefits of scale through acquisitions ● Unique attributes combine for an
growth moving forward extraordinary long-term growth outlook
Source: Green Street Advisors.

Self-Storage Sector Update – May 30, 2014 4
Self-Storage 101
Demand Factors
Drivers Supply Considerations Other Key Factors
Consistent Demand… Industry Now More Mature The Basics:
Higher cap rates
• Healthy in strong economy • 50,000 facilities
+ Good NOI growth
• Resilient in weak economy • 7-8 / sq. ft. per capita! + Very low cap-ex
• Customers in place > 1 year: = Great business!
greater than 55% for PSA & EXR Fragmented
Public REITs
…Yet Tenant Turnover is Also High • REITs: ~10% market share
• Best-of-breed
• Many stays < 6 months Barriers to New Supply Greater than in • Advantages over private competitors
Seasonality the Past
Bigger is better
• Highest demand in spring/summer • Harder to build in better locations
• Spreads fixed costs
• Population density is key
Types of Demand • Supports Internet marketing
Short-Term (3-12 months) Current Development is Modest Internet = Game Changer
• Marriage/Divorce/Birth/Death • Has replaced Yellow Pages
Customers Want:
• Relocation/Moving/College/Military • Price comparisons & reservations
• Convenient location
Long-Term (12+ months) • Mobile strategy is critical
• Security
• “Extra garage/basement” • Reasonable price Tenant Insurance = profitable!
Commercial / Business (12-36 months)
• “Mini-warehouse”
Source: Green Street Advisors and Self-Storage Almanac.
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disseminated to others without written permission. Use of this report is subject to the Terms of Use listed at the end of the report
Demand Drivers
Portfolio Demographics: Many factors drive self-storage demand, but local population density is arguably the most
important. Income is secondary. The three public REITs covered by Green Street have similar portfolio demographic
qualities on an average 3-mile basis.
3-Mile Population Density (000s) 3-Mile Household Income (000s)

CUBE EXR PSA CUBE EXR PSA
160 151 $66

$65 $65
140 $65
123 123 $64
120 $64
102
90 $63
($000s)
100 88
(000s)
$62
80 $61
$61 $60
60 $60
$60
40 $59
20 $58
0 $57
Weighted Average** Median Weighted Average** Median
CUBE: highest population density on "average";

lowest on "median" due to its '11 acquisition of the
Storage Deluxe portfolio located in NYC
Source: Scan/US and Green Street Advisors. Based on analysis of >3,000 facilities owned by the REITs.
** Weighted by net rentable square feet.

Supply Growth
A Big Factor: A lack of new construction in the self-storage sector has provided a tailwind for operating fundamentals
for several years. The quality of self-storage supply statistics remains poor as compared to traditional property sectors.
However, the available evidence suggests that new supply growth remains muted and should not have a material
impact on operating fundamentals over the near term.
U.S. Self-Storage Supply Growth The historical growth figures presented are not solely
indicative of new construction, as they include some
60 10% conversions and newly identified existing properties each year.
Self-Storage Facilities (000s) (left-axis)
Annual Growth (% of Existing Stock) (right-axis)
EXR disclosed in its recent Investor Presentation that ~115
new developments are known to be under construction
50 8% and expected to be delivered over the next 12 months
according to Marcus & Millichap. This equates to less
than 0.5% of existing supply.
40 6%
Annual Completions
(% of Existing Stock)
6%
30 4%
4%
20 2%
2%
10 0% 0%
'93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13E '95-'09 '14-'15E '16-'18E
Source: Mini-Storage Messenger - 2014 Self-Storage Almanac and Green Street Advisors (projections).

Self-Storage NOI Growth Outlook & Surprise Index

NOI Growth Forecast: Changes in property valuations stem, in part, from changes in the forecast for fundamentals.
The Self-Storage Surprise Index helps put recent news into perspective by comparing changes in the 3-year forward
NOI growth forecast to the magnitude of past revisions. Our NOI growth forecasts were revised higher post 1Q due to
still-better expectations for '14-'16.
Self-Storage REIT Same-Property NOI Growth Self-Storage Fundamentals Surprise Index
10% Self-Storage Major Sector Avg.*

Surprise Index reading of greater than 50 means recent
8.4% 8.6%
news is good; less than 50 means recent news is bad
8% 7.2%
6.9%
6.6%
6% 5.1% 5.1% 4.9%

56
3.8%
4% 3.2% 3.3% 3.1% 3.0%
An Eventful Year
2% 1.1%
0% A positive surprise driven by better-than-

expected fundamentals and continued
'14-'18 Growth (Ann.)
benefit from the roll-in of new properties
-2% 4.3% to EXR and CUBE's same-store pools
4.1%
-4%
-4.4%
Current Previous
-6%
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14E '15E '16E '17E '18E '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
* Major sectors is an equally-weighted average of apartment, industrial, strip center, mall, and office.
Source: Company documents and Green Street Advisors.

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Fundamentals: Occupancy
Impressive: PSA is by far the largest self-storage operator (>2,200 facilities in the U.S.) and has been public for many
years. Its results are a great proxy for the sector given the lack of historical industry data available and its conservative
same-store methodology. Occupancy levels of 85-90% have long been considered "full" in self-storage, in part due to
frictional vacancy (i.e., lots of move-ins and move-outs). But, continued technological advancement and a lack of new
supply have allowed PSA to maintain occupancy levels well above that range. EXR and CUBE are also recording record-
high occupancy levels.
PSA Same-Store Occupancy PSA Same-Store Occupancy

95% (Annual Average) 200 (y/y Gap)
All-time high projected for '14 160
150
150
93%
'95-'13 Avg. = 90.6%
100
91%
40 70
50
(bps)
89% 30
0
87%
-50
85% -100
-100
-120
83% -150
06 07 08 08 09 10 11 11 12 13 14
3Q 2Q 1Q 4Q 3Q 2Q 1Q 4Q 3Q 2Q 1Q
6
2
4E
6E
8E
'9
'9
'0
'0
'0
'0
'0
'1
'1
'1
'1
'1
Source: Company documents. Forecasts are Green Street estimates.

Fundamentals: Rent Growth

Now More Important: PSA has a long track record of inflation-beating rent growth that has served as a catalyst for
NOI growth. The downside of PSA's high occupancy relative to its peers is that it will depend much more on rent
increases to drive NOI growth moving forward.
PSA Same-Store Realized Rents PSA Same-Store Realized Rent Growth

Rent / Sq. Ft. Rent Growth 8% (y/y Change since '06)
$20 12%
Rent growth has averaged >3% 6.4%
$18 6%
annually, but with volatility 10% 4.9%
4.3%
$16
4% 3.6%
8%
$14
6% 2%
$12
$10 4%
0%
$8
2%
$6 -2%
0%
$4
-4%
-2%
$2 -4.2%
$0 -4% -6%
06
07
08
08
09
10
11
11
12
13
14
6
2
4E
6E
8E
'9
'9
'0
'0
'0
'0
'0
'1
'1
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
'1
'1
'1

Fundamentals: Expense Growth

Normalizing: The self-storage REITs have achieved impressive expense control over the past few years. Lower
marketing expenses and collection fees, payroll savings, and mild winters (until this year) provided most of the savings.
PSA has benefited disproportionately from its higher occupancy, which makes marketing expenditures less necessary.
However, operating expenses should rise at a faster pace as a result of higher property taxes, repairs/maintenance,
payroll, and collection fees.
Same-Store Expense Growth
(Quarterly y/y Change)
Public Storage Self-Storage Sector Average*
12%
Green Street Forecast
Adjusted for weather-related costs,
PSA Sector Avg. the REITs' 1Q14 expense growth
8% '14 2.0% 2.9% was flat to slightly up
'15 2.0% 2.7%
'16 2.5% 2.8%
4%
0%
-4%
-8%
06
07
07
08
08
09
09
10
10
11
11
12
12
13
13
14
3Q
1Q
3Q
1Q
3Q
1Q
3Q
1Q
3Q
1Q
3Q
1Q
3Q
1Q
3Q
1Q
Source: Company documents. *Includes PSA, EXR, and CUBE.

Fundamentals: NOI Growth

Slowing, but Still Strong: Self-storage has a long track record of impressive NOI growth. The sector's growth is
highly correlated with apartments due to a similar tenant base and short lease terms. Since '96, the correlation
between PSA and apartment growth has been 0.8. This correlation broke down recently, but should ultimately revert
to its long-term average as self-storage revenue growth moderates and expenses normalize.
PSA Same-Store NOI Growth PSA NOI Growth

12% PSA Apartment REITs (Quarterly y/y Change)
12%
PSA SS NOI Growth Apartment REITs
10% 10%
8% 8%
6% 6%
4% 4%
2% 2%
0% 0%
-2% -2%
-4% -4%
-6% -6%
-8% -8%
06 07 08 08 09 10 11 11 12 13 14
6
2
4E
6E
8E
Q Q Q Q Q Q Q Q Q Q Q
'9
'9
'0
'0
'0
'0
'0
'1
'1
3 2 1 4 3 2 1 4 3 2 1
'1
'1
'1

Fundamentals: NOI Growth (cont'd)

'14 = First Year of NOI Deceleration: Our NOI growth projections for '14 are still great by historical standards
(CUBE = 8.0%; EXR = 9.0%; PSA = 6.3%), but reflect modest deceleration. Differences across the REITs' same-store
methodologies are important to consider, but difficult to quantify. EXR and CUBE's 1Q NOI growth appears to be 40-
60 bps higher due to the inclusion of tenant insurance. Both companies expect new property additions to add ~50 bps
to revenue growth in '14. PSA's same-store definition is conservative; EXR and CUBE's are less conservative.
Projected NOI Growth Deceleration (bps) - '13 to '14
-130 -95 No Guidance

Provided
-195 -190
-230
CUBE and EXR have consistently
beaten and raised guidance. This Guidance Midpoint
CUBE trend should be similar, but less EXR Green Street Projection PSA
pronounced for the remainder of '14.
Same-Store Reporting Comparison

Conservative Less Conservative
PSA EXR CUBE
New-Property Roll In
Timing ('14 pool) ● Owned & stabilized as of 1/1/12 ● Owned & stabilized as of 1/1/13
● '11 acqs entered SS pool in '14 ● '12 acqs entered SS pool in '14
Definition of ● Occupancy of ~90% ● Occupancy of 80%+ for 1 year ● Mgmt. determines by market;
"Stabilized" ● or in operations for 3 years ● can be +/- 80%
'14 Expansion ● Doesn't move the needle ● 30% property-count expansion ● 15% property-count expansion
Tenant Insurance ● Excluded from same-store reporting ● Included in same-store reporting
Operating ● Reports all property-level expenses ● Reports some expenses in G&A that PSA includes in operating expenses*:
Expenses ● in operating expenses - Regional Managers - Divisional VPs
- District Managers - Facility Services
Source: Company documents. * Our NAV estimates are adjusted for these differences.

Private-Market Valuation
Underappreciated: Self-storage benefits from a number of attributes including strong NOI growth, low cap-ex and,
more recently, de minimis new supply. These characteristics materialize over the long-run into favorable risk-adjusted
returns on self-storage properties, as detailed in the most recent Commercial Property Outlook and Real Estate
Securities Monthly . Self-storage cap rates in the private market remain well above the major sector average, indicating
investors may not fully appreciate the magnitude of these long-term advantages.
Strong NOI Growth Low Cap-Ex Superior Risk-Adjusted Returns
12%
4.4%
3.7% 9% 8.2%
3.3% 7.1% 6.7%
2.6% 2.3% 2.7%
2.0% 1.8% 5%
1.3%
'99-'13 '14-'18E Long-Term SS Cap-ex as

Apt% of NOI MS SS
Unleveraged Apt
Property-Level MS
Return
= Self-Storage = Apartments = Major Sector Average
…and High Private-Market Cap Rates

Spread = Self-Storage less Major Sector Average …but cap rates quickly retreated to their long-run
100 bps Current Private-Market
relationship with the major sector average
Cap Rates
80 bps 6.2%
60 bps
40 bps 5.6%
Private-market valuations reflected self- 5.4%
20 bps
storage's resilience during the downturn...
0 bps
Self-Storage Apartments Major Sector
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
-20 bps Avg.
*Major sectors is an equally-weighted average of apartment, industrial, strip center, mall, and office.

Public-Market Valuation
Big Premiums: The healthy premiums at which self-storage REIT shares have recently traded are indicative of public-
market appreciation for the sector's strong cap-ex/NOI growth profile. The degree of UAV premium seen recently is
unprecedented, but reflects the argument that private-market cap rates are simply too high.
Current REIT Valuation Metrics
Implied Nominal Cap Rates Premium to Unlevered Asset Value '14 AFFO Yield
21.7%
5.1% 5.4% 5.7%

4.4% 4.7% 4.3%
-0.4% -0.2%
SS Apt MS SS Apt MS 4.4% 4.7% 4.3%

= Self-Storage = Apartments = Major Sector Average
Historical Spreads (Self-Storage less Major Sector Avg.)
Implied Nominal Cap Rates Premium to Unlevered Asset Value '14 AFFO Yield
150 bps 30% 200 bps
The public market places
A correction in private-market
a sizeable premium on 100 bps
pricing would reduce current
100 bps self-storage
20% UAV premiums
Expensive
Expensive
0 bps
50 bps
10% -100 bps AFFO yields reflect
0 bps the cap-ex/NOI
Expensive
-200 bps growth profile,

conveying more
0%
-50 bps palatable REIT
-300 bps valuations
-100 bps -10% -400 bps

'00 '02 '04 '06 '08 '10 '12 '14 '00 '02 '04 '06 '08 '10 '12 '14 '02 '04 '06 '08 '10 '12 '14
*Major sectors is an equally-weighted average of apartment, industrial, strip center, mall, and office.

Public-Market Valuation (cont'd)

Fully Loaded: Fully loaded implied cap rates adjust nominal cap rates for G&A, cap-ex, and near-term NOI growth
prospects. Self-storage is superior to most other property types in these areas. On a "fully loaded" basis, self-storage
REIT valuations look slightly better than apartments and the major sector average. However, visibility on NOI growth
in the self-storage sector is low, so downside risk to the growth estimates does exist.
Components of Fully Loaded Implied Cap Rates

● "Fully Loaded" Implied Cap Rate ■ Nominal Implied Cap Rate ■ Cap-Ex ■ G&A ■ NOI Growth
10%
Prem. to Unlevered Asset Value
8%
6% 6.2%
5.8%
5.4% 5.4% 5.4%
4%
2%
0%
-2%
CUBE EXR PSA Apartment Avg. Major Sector Avg.
Implied Cap Rate 6.1% 5.2% 5.1% 5.7% 5.9%
G&A -0.6% -0.2% -0.2% -0.3% -0.4%
Cap-Ex -0.4% -0.3% -0.3% -0.5% -0.7%
NOI Growth* 1.0% 1.0% 0.8% 0.6% 0.7%
FLICR 6.2% 5.8% 5.4% 5.4% 5.4%
Source: Green Street Advisors. *Based on estimates of reported NOI growth.
NAV and Recommendation Summary

Some Changes: Self-storage NAV estimates increased by 3%, on average, in the May 23rd Real Estate Securities
Monthly , reflecting: (1) recent NOI growth; (2) increases to same-store growth assumptions; and (3) other REIT-
specific adjustments from 1Q14. There are no NAV changes included in this report, but we herein upgrade shares of
PSA to HOLD and downgrade shares of EXR to SELL based on relative valuation.
NAV/sh Estimates - Previously Published in Real Estate Securities Monthly*

Cap Rates Balance Sheet NAV/sh
REIT Ticker Rec Economic Nominal Change Leverage New %∆
CubeSmart CUBE BUY 6.1% 6.4% 0 bps 37% $16.00 +3%
Extra Space EXR SELL ▼ 6.0% 6.3% 0 bps 32% $38.00 +4%
Public Storage PSA HOLD ▲ 5.9% 6.2% 0 bps 18% $135.75 +3%
EXR Downgrade - With All Due Respect

Green Street has not had a SELL recommendation on shares of EXR since 2Q09. EXR shares outperformed PSA and CUBE by nearly 20
percentage points, on average, each year over this time period, during which we primarily held a BUY. The outperformance was warranted by
the significant value created by EXR's top-notch management team through external growth and internal operations. Recent outperformance
leaves EXR shares richly valued relative to its self-storage peers. Our positive view of the company, and its future, remains unchanged.
Implied Nominal Cap Rate Spread Unleveraged Asset Value (UAV) Spread
200 bps EXR Less PSA 10% EXR Less PSA
Expensive
+3%
150 bps 0%
2-Yr Avg.
100 bps -10% Long-Term Avg.
-8%
85 -14%
Expensive
Long-Term Avg.
50 bps 37 -20%
2-Yr Avg.
0 bps -30%
-10
-50 bps -40%
'07 '08 '09 '10 '11 '12 '13 '14 '07 '08 '09 '10 '11 '12 '13 '14
Source: Green Street Advisors. * Published May 23rd.

Comparative Analysis
U.S. Portfolio Data
Company Equity Mkt. Owned Portfolio Rent / Portfolio Cap Rate Cap-Ex Pro Rata Pro Rata Value /
Name Ticker Cap (MM) Facilities (1) Sq. ft. Sq. ft. Grade Nominal Economic per Sq. ft. % of NOI Value (MM) Sq. ft. Sq. ft.
CubeSmart CUBE $2,682 378 25,460 $13.52 B/B+ 6.4% 6.1% $0.50 5.6% $3,518 25,396 $139
Extra Space EXR $6,431 800 59,316 $14.29 A-/B+ 6.3% 6.0% $0.45 4.8% $6,081 39,137 $155
Public Storage PSA $29,973 2,202 141,000 $14.41 A-/B+ 6.2% 5.9% $0.50 5.0% $24,981 145,349 $172
Average/Wtd. Average $13,029 1,127 75,259 $14.30 6.2% 5.9% $0.49 5.0% $19,474 114,468 $166
Same-Property NOI Forecast

Company '14 Same-Property Guidance Same-Property Revenue Growth Same-Property Expense Growth Same-Property NOI Growth
Name Ticker Revenue Expense NOI 2014 2015 2016 2014 2015 2016 2014 2015 2016
CubeSmart CUBE 5.3 - 6.3% 3.0 - 3.8% 6.5 - 7.5% 6.5% 4.7% 3.5% 3.3% 3.0% 3.0% 8.0% 5.6% 3.7%
Extra Space EXR 6.0 - 7.0% 3.0 - 4.0% 7.0 - 9.0% 7.3% 4.9% 3.7% 3.5% 3.0% 2.8% 9.0% 5.7% 4.0%
Public Storage PSA - - - 5.1% 3.9% 3.4% 2.0% 2.0% 2.5% 6.3% 4.6% 3.8%
Wtd. Average 6.2% 3.5% 7.6% 5.6% 4.2% 3.5% 2.4% 2.3% 2.6% 6.9% 4.9% 3.8%
FFO / AFFO Estimates

Company '14 FFO Guidance Range FFO / Sh AFFO / Sh AFFO Growth
Name Ticker Low to High 2014 2015 2016 2014 2015 2016 2014 2015 2016
CubeSmart CUBE $0.99 to $1.02 $1.03 $1.13 $1.24 $0.86 $0.97 $1.07 13% 13% 10%
Extra Space EXR $2.41 to $2.49 $2.48 $2.74 $2.97 $2.28 $2.53 $2.74 22% 11% 8%
Public Storage PSA - to - $8.03 $8.63 $9.25 $7.50 $8.04 $8.63 8% 7% 7%
Wtd. Average 11% 8% 8%
Valuation
Company Leverage Debt to Implied Warr. Observed Prem. / Disc. To AFFO Yield Dividend AFFO / Div
Name NAV Ratio EBITDA Cap Rate Price Assets NAV Warr. Price Rec. 2014 2015 Yield Coverage
CubeSmart $16.00 37% 5.8x 5.9% $19.00 9% 14% -3.9% BUY 4.7% 5.3% 2.9% 165%
Extra Space $38.00 32% 5.0x 5.0% $51.25 25% 38% 2.3% SELL 4.4% 4.8% 3.6% 121%
Public Storage $135.75 18% 0.2x 5.1% $172.50 22% 27% -0.1% HOLD 4.4% 4.7% 3.2% 134%
Wtd. Average 22% 1.6x 5.1% 21% 28% 0.0% 4.4% 4.8% 3.3% 135%

(1) # of stores including managed facilities: EXR = 1,052; CUBE = 526. PSA is not in the property management business in a big way.

Self-Storage Sector Update - May 30, 2014
Green Street Advisors’ Disclosure Statement

Analyst Certification – The research analysts listed below hereby certify that all of the views expressed in this research report accurately reflect their personal views about any and all of the subject companies or securities. They also certify that no part of their compensation was, is, or will be directly or indirectly
related to the specific recommendation(s) or view(s) in this report. Research Analysts: Dave Bragg and Ryan Burke
Issuers of this Report: U.S. and EEA: This report has been prepared by analysts working for Green Street Advisors (GSA (U.S.)) and/or Green Street Advisors (U.K.) Limited (GSA (UK)), both of which are subsidiaries of Green Street Holdings, Inc.
This report is issued in the U.S.A by GSA (U.S.). GSA (UK) accepts no responsibility for this report to the extent that it is relied upon by persons based in the U.S.A. GSA (U.S.) is regulated by FINRA and the United States Securities and Exchange Commission, and its headquarters is located at 660 Newport
Center Drive, Suite 800, Newport Beach, CA 92660.
This report is issued in the European Economic Area (EEA) by GSA (UK). GSA (U.S.) accepts no responsibility for this report to the extent that it is relied upon by persons based in the EEA. GSA (UK) is registered in England, (Company number. 6471304), and its registered office is 22 Grosvenor Square, 3rd
Floor, London, W1K 6LF. GSA (UK) is authorized and regulated by the Financial Services Authority in the United Kingdom and is entered on the FSA’s register (no. 482269]).
References to “Green Street” in Disclosures in this section and in the Other Important Information section apply to:
• GSA (U.S.) to the extent that this report has been disseminated in the U.S.A; or
• GSA (UK) to the extent that this report has been disseminated in the EEA.
Green Street Advisors U.S. is exempt from the requirement to hold an Australian financial services license under the Act in respect of the financial services; and is regulated by the SEC under U.S. laws, which differ from Australian laws.
Green Street Advisors UK Ltd. is exempt from the requirement to hold an Australian financial services license under the Act in respect of the financial services; and is regulated by the FSA under UK laws, which differ from Australian laws.
Green Street reserves the right to update the disclosures and policies set out in this document at any time. We encourage a careful comparison of these disclosures and policies with those of other research providers, and welcome the opportunity to discuss them.
For Green Street’s advisory customers, this research report is for informational purposes only and the firm is not responsible for implementation. Nor can the firm be liable for suitability obligations.
Affiliate Disclosures: Green Street does not directly engage in investment banking, underwriting or advisory work with any of the companies in our coverage universe. However, the following are potential conflicts regarding our affiliates that should be considered:
• Green Street is affiliated with, and at times assists, Eastdil Secured, a real estate brokerage and investment bank, when Eastdil Secured provides investment banking services to companies in Green Street’s coverage universe. Green Street is never part of the underwriting syndicate, selling group
or marketing effort but Green Street may receive compensation from Eastdil Secured for consulting services that Green Street provides to Eastdil Secured related to Eastdil Secured's investment banking services. Green Street does not control, have ownership in, or make any business or investment
decisions for, Eastdil Secured.
• Green Street has an advisory practice servicing investors seeking to acquire interests in publicly-traded companies. Green Street may provide such valuation services to prospective acquirers of companies which are the subject(s) of Green
Street’s research reports.
• An affiliate of Green Street is the investment manager of an equity securities portfolio on behalf of a single client. The portfolio contains securities of issuers covered by Green Street’s research department. The affiliate also acts as a sub-adviser to an outside Investment Management firm. The sub-
advisor will develop and provide a suggested asset allocation model based on published research that is received from the research department. The affiliate is located in a separate office, employs an investment strategy based on Green Street’s published research, and does not trade with Green
Street’s trading desk.
Other Important Information
Management of Conflicts of Interest: Conflicts of interest can seriously impinge the ability of analysts to do their job, and investors should demand unbiased research. In that spirit, Green Street adheres to the following policies regarding conflicts of interest:
• Green Street employees are prohibited from owning the shares of any company in our coverage universe.
• Green Street employees do not serve as officers or directors of any of our subject companies.
• Green Street does not commit capital or make markets in any securities.
• Neither Green Street nor its employees/analysts receives any compensation from subject companies for inclusion in our research.
• Green Street does not directly engage in investment banking or underwriting work with any subject companies.
Please also have regard to the Affiliate Disclosures listed above when considering the extent to which you place reliance on this research presentation and any research recommendations made herein.
A number of companies covered by Green Street research reports, including PSA, pay an annual fee to receive Green Street’s research reports. Green Street may periodically solicit this business from the subject companies. In the aggregate, annual fees for GSA (U.S.) and GSA (UK) research reports received from
subject companies represent approximately 3% of each of GSA (U.S.)’s and GSA (UK)'s respective total revenues.
Green Street publishes research reports covering issuers that may offer and sell securities in an initial or secondary offering. Broker-dealers involved with selling the issuer’s securities or their affiliates may pay compensation to GSA upon their own initiative, or at the request of Green Street's clients in the form of “soft
dollars,” for receiving research reports published by Green Street.
The information contained in this presentation is based on data obtained from sources we deem to be reliable; it is not guaranteed as to accuracy and does not purport to be complete. This presentation is produced solely for informational purposes and is not intended to be used as the primary basis of investment
decisions. Because of individual client requirements, it is not, and it should not be construed as, advice designed to meet the particular investment needs of any investor. This presentation is not an offer or the solicitation of an offer to sell or buy any security.
Green Street Advisors is an accredited member of the Investorside Research Association, whose mission is to increase investor and pensioner trust in the U.S. capital markets system through the promotion and use of investment research that is financially aligned with investor interests.
Green Street generally prohibits research analysts from sending draft research reports to subject companies. However, it should be presumed that the analyst(s) who authored this presentation has(/have) had discussions with the subject company to ensure factual accuracy prior to publication, and has(/have) had
assistance from the company in conducting due diligence, including visits to company sites and meetings with company management and other representatives.
This report is a property-sector review and does not contain the amount of in-depth company-specific analysis sufficient to make informed investment decisions about one specific issuer disclosed in this report. For a more thorough analysis, please review this report in conjunction with GSA’s company-specific
research which is available at www.greenstreetadvisors.com.
Terms of Use
Protection of Proprietary Rights: To the extent that this presentation is issued by GSA (U.S.), this material is the proprietary and confidential information of Green Street Advisors, Inc., and is protected by copyright. To the extent that this presentation is issued by GSA (UK), this material is the proprietary and
confidential information of Green Street Advisors (U.K.) Limited, and is protected by copyright.
This presentaion may be used solely for reference for internal business purposes. This presentation may not be reproduced, re-distributed, sold, lent, licensed or otherwise transferred without the prior consent of Green Street. All other rights with respect to this presentation are reserved by Green Street.
EEA Recipients: For use only by Professional Clients and Eligible Counterparties: GSA (UK) is authorized by the Financial Services Authority of the United Kingdom to issue this presentation to "Professional Clients" and "Eligible Counterparties" only and is not authorized to issue this presentation to "Retail
Clients", as defined by the rules of the Financial Services Authority. This presentation is provided in the United Kingdom for the use of the addressees only and is intended for use only by a person or entity that qualifies as a "Professional Client" or an "Eligible Counterparty". Consequently, this presentation is
intended for use only by persons having professional experience in matters relating to investments. This presentation is not intended for use by any other person. In particular, this presentation intended only for use by persons who have received written notice from GSA (UK) that he/she/it has
been classified, for the purpose of receiving services from GSA (UK), as either a "Professional Client" or an "Eligible Counterparty". Any other person who receives this presentation should not act on the contents of this presentation.
Use of this report is subject to the Terms of Use listed at the end of the report
Green Street Advisors’ Disclosure Statement

Review of Recommendations:
• Unless otherwise indicated, Green Street reviews all investment recommendations on at least a monthly basis.
• The research recommendation contained in this report was first released for distribution on the date identified on the cover of this report.
• Green Street will furnish upon request available investment information supporting the recommendation(s) contained in this report.
At any given time, Green Street publishes roughly the same number of “BUY” recommendations that it does “SELL” recommendations. Green Street’s “BUYs” have historically achieved far higher total returns than its ”HOLDs”, which, in turn, have outperformed its “SELLs”.
Year Buy Hold Sell Universe3

Recommendation Distribution (as of 5/23/14) 2014 YTD 17.7% 14.6% 10.8% 14.4%
2013 4.1% 0.6% 1.7% 2.2%
60% 2012 24.5% 24.7% 18.9% 23.0%
2011 18.9% 7.6% -4.7% 7.6%
% of Securities Rated
2010 43.3% 32.8% 26.6% 33.8%

2009 59.0% 47.7% 6.0% 37.9%
40% 2008 -28.1% -30.9% -52.6% -37.3%
40% 36% 2007 -6.9% -22.4% -27.8% -19.7%

33% 31% 30% 2006 45.8% 29.6% 19.5% 31.6%
30% 2005 26.3% 18.5% -1.8% 15.9%
2004 42.8% 28.7% 16.4% 29.4%
2003 43.3% 37.4% 21.8% 34.8%
2002 17.3% 2.8% 2.6% 5.4%
20% 2001 34.9% 19.1% 13.0% 21.1%
2000 53.4% 28.9% 5.9% 29.6%
1999 12.3% -9.0% -20.5% -6.9%
1998 -1.6% -15.1% -15.5% -12.1%
1997 36.7% 14.8% 7.2% 18.3%
0% 1996 47.6% 30.7% 18.9% 32.1%
1995 22.9% 13.9% 0.5% 13.5%
BUY HOLD SELL 1994 20.8% -0.8% -8.7% 3.1%
1993 27.3% 4.7% 8.1% 12.1%
GSA (US) GSA (UK) Cumulative Total Return 10566.3% 856.2% 1.8% 961.4%
Annualized 24.5% 11.2% 0.1% 11.7%
The chart below shows CUBE’s price performance over the last three years, along The chart below shows EXR’s price performance over the last three years, along The chart below shows PSA’s price performance over the last three years, along
with Green Street’s recommendations during that time. with Green Street’s recommendations during that time. with Green Street’s recommendations during that time.
CUBE Price Perform ance

EXR Price Perform ance PSA Price Perform ance
(w ith Green Street Recommendations 4)
$70 (w ith Green Street Recommendations 4) (w ith Green Street Recommendations 4)
S $200 H H
$24 H $60 B S
HB H S S B H
H SHS B $50 SH H
B S $150 H
$16 H B H H $40 HB
H
B
$30 B $100
$8 $20
$50
$10
$0
$0 $0
7-11
10-11
1-12
4-12
7-12
10-12
1-13
4-13
7-13
10-13
1-14
4-14
7-11
10-11
1-12
4-12
7-12
10-12
1-13
4-13
7-13
10-13
1-14
4-14
7-11
10-11
1-12
4-12
7-12
10-12
1-13
4-13
7-13
10-13
1-14
4-14
The results shown in the table in the upper right corner are hypothetical; they do not represent the actual trading of securities. Actual performance will vary from this hypothetical performance due to, but not limited to 1) advisory fees and other expenses that one would pay; 2) transaction costs; 3) the inability to
execute trades at the last published price (the hypothetical returns assume execution at the last closing price); 4) the inability to maintain an equally-weighted portfolio in size (the hypothetical returns assume an equal weighting); and 5) market and economic factors will almost certainly cause one to invest differently
than projected by the model that simulated the above returns. All returns include the reinvestment of dividends. Past performance, particularly hypothetical performance, can not be used to predict future performance.
(1) Results are for recommendations made by Green Street’s North American Research Team only (includes securities in the US, Canada, and Australia). Uses recommendations given in Green Street's "Real Estate Securities Monthly" from January 28, 1993 through May 23, 2014. Historical results from January 28,
1993 through October 1, 2013 were independently verified by an international "Big 4" accounting firm. The accounting firm did not verify the stated results subsequent to October 1, 2013. As of October 1, 2013, the annualized total return of Green Street’s recommendations since January 28, 1993 was: Buy +24.5%,
Hold +10.9%, Sell -0.3%, Universe +11.5%.
(2) Company inclusion in the calculation of total return has been based on whether the companies were listed in the primary exhibit of Green Street’s "Real Estate Securities Monthly”. Beginning April 28, 2000, Gaming C-Corps and Hotel C-Corps, with the exception of Starwood Hotels and Homestead Village, were no
longer included in the primary exhibit and therefore no longer included in the calculation of total return. Beginning March 3, 2003, the remaining Hotel companies were excluded.
(3) All securities covered by Green Street with a published rating that were included in the calculation of total return. Excludes “not rated” securities.
(4) Green Street has only three recommendations: BUY (“B”), HOLD (“H”) and SELL (“S”). The firm does not consistently publish price targets and therefore price targets are not included in this graph. Per NASD rule 2711, “Buy” = Most attractively valued stocks. We recommend overweight position; “Hold” = Fairly
valued stocks. We recommend market-weighting; “Sell” = Least attractively valued stocks. We recommend underweight position.
Green Street will furnish upon request available investment information regarding the recommendation
Green Street Advisors North American Team

Research 660 Newport Center Drive, Suite 800 Newport Beach, CA 92660 +1.949.640.8780 Trading & Institutional Sales 600 North Pearl Street, Suite 2310 Dallas, TX 75201
1.800.263.1388 (Trading) +1.214.855.5905 (Sales)
Macro Research Mike Kirby, Director of Research mkirby@greenst.com Trading Michael Vranich, Managing Director, Trading mvranich@greenst.com
Craig Leupold, President cleupold@greenst.com Laurie Hauck, Vice President, Trading lhauck@greenst.com
David Alexander, Vice President, Trading dalexander@greenst.com
REIT Research Scott Lee, Vice President, Trading slee@greenst.com
• Health Care/Lab Michael Knott, CFA, Managing Director mknott@greenst.com Institutional Sales Anthony Scalia, Director, Institutional Sales ascalia@greenst.com
Space Tom McDonough, Senior Associate tmcdonough@greenst.com Tim Joy, Vice President, Institutional Sales tjoy@greenst.com
Scott Bell, Vice President, Institutional Sales sbell@greenst.com
Conor Wagner, Associate* cwagner@greenst.com Seth Laughlin, Vice President, Institutional Sales slaughlin@greenst.com
Eric Lovett, Institutional Sales elovett@greenst.com
• Industrial/Tower Eric Frankel, Analyst efrankel@greenst.com Kris Hoffman, Vice President, Institutional Sales khoffman@greenst.com
Dillon Essma, Associate dessma@greenst.com
• Lodging Lukas Hartwich, CFA, Analyst lhartwich@greenst.com Subscription Sales & Marketing 660 Newport Center Drive, Suite 800 Newport Beach, CA 92660 +1.949.640.8780
Jonathan Taylor, CPA, Associate jtaylor@greenst.com
Sales Damon Scott, Managing Director, Subscription Sales dscott@greenst.com
Kevin Johnson, Manager, Subscription Sales kjohnson@greenst.com
• Office/Data Centers Michael Knott, CFA, Managing Director mknott@greenst.com
Jed Reagan, Analyst jreagan@greenst.com
John Bejjani, CFA, Senior Associate jbejjani@greenst.com Marketing Rosemary Pugh, Manager, Marketing rpugh@greenst.com
Bayle Smith, Associate bsmith@greenst.com
• Residential/Self- Dave Bragg, Managing Director dbragg@greenst.com Advisory & Consulting 660 Newport Center Drive, Suite 800 Newport Beach, CA 92660 +1.949.640.8780
Storage Ryan Burke, Senior Associate rburke@greenst.com
Kevin Tyler, Associate ktyler@greenst.com Consulting Jim Sullivan, Managing Director jsullivan@greenst.com
David Segall, Associate dsegall@greenst.com Dirk Aulabaugh, Senior Director daulabaugh@greenst.com
Matt Wokasch, CFA, Vice President mwokasch@greenst.com
• Retail/Net Lease Cedrik Lachance, Managing Director clachance@greenst.com Phil Owens, CFA, Vice President powens@greenst.com
David De La Rosa, Vice President ddelarosa@greenst.com
Jason White, Analyst jwhite@greenst.com
Justin Brown, Associate jbrown@greenst.com
Daniel Busch, Analyst dbusch@greenst.com Dawn Seo, Associate dseo@greenst.com
Ashley Kirby, Associate akirby@greenst.com
Jay Carlington, CFA, Associate jcarlington@greenst.com
Chris Lucas, Associate clucas@greenst.com
Spenser Allaway, Associate sallaway@greenst.com
Real Estate Analytics/ Andrew McCulloch, CFA, Managing Director amcculloch@greenst.com

Quant Peter Rothemund, CFA, Analyst prothemund@greenst.com
Jason Moore, CFA, Analyst jmoore@greenst.com
Kawika Tarayao, CFA, Analyst ktarayao@greenst.com
Matt Larriva, Associate mlarriva@greenst.com
Joi Mar, Associate jmar@greenst.com
Casey Thormahlen, Associate* cthormahlen@greenst.com
Administration 660 Newport Center Drive, Suite 800 Newport Beach, CA 92660 +1.949.640.8780
Administration Warner Griswold, CFA, Chief Operating Officer wgriswold@greenst.com

Michael Kao, Managing Director, Technology mkao@greenst.com
Robyn Francis, Manager, Compliance rfrancis@greenst.com
Jimmy Meek, Controller, Accounting jmeek@greenst.com
* These employees operate in a support capacity and are not yet registered representatives/research analysts. All employees listed in the “Research” section without an asterisk (*) are registered representatives/research analysts.

Self-Storage Sector Update: Let The Good Times Roll

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Self-Storage Sector Update

May 30, 2014

Let the Good Times Roll

Important disclosure on page 18

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

Real Estate Conditions Summary

M-RevPAF NOI Growth Asset Values

'14/'15 Growth vs. '12'13 Average

Long-Term Forecast Change

Source: Green Street Advisors.

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

Source: Green Street Advisors and Self-Storage Almanac.

3-Mile Population Density (000s) 3-Mile Household Income (000s)

160 151 $66

CUBE: highest population density on "average";

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

Self-Storage NOI Growth Outlook & Surprise Index

Self-Storage REIT Same-Property NOI Growth Self-Storage Fundamentals Surprise Index

10% Self-Storage Major Sector Avg.*

6% 5.1% 5.1% 4.9%

0% A positive surprise driven by better-than-

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

PSA Same-Store Occupancy PSA Same-Store Occupancy

Source: Company documents. Forecasts are Green Street estimates.

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

Fundamentals: Rent Growth

PSA Same-Store Realized Rents PSA Same-Store Realized Rent Growth

Source: Company documents. Forecasts are Green Street estimates.

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

Fundamentals: Expense Growth

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

Fundamentals: NOI Growth

PSA Same-Store NOI Growth PSA NOI Growth

Source: Company documents. Forecasts are Green Street estimates.

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

Fundamentals: NOI Growth (cont'd)

-130 -95 No Guidance

Same-Store Reporting Comparison

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

Strong NOI Growth Low Cap-Ex Superior Risk-Adjusted Returns

'99-'13 '14-'18E Long-Term SS Cap-ex as

= Self-Storage = Apartments = Major Sector Average

…and High Private-Market Cap Rates

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

5.1% 5.4% 5.7%

SS Apt MS SS Apt MS 4.4% 4.7% 4.3%

-200 bps growth profile,

-100 bps -10% -400 bps

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

Public-Market Valuation (cont'd)

Components of Fully Loaded Implied Cap Rates

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

NAV and Recommendation Summary

NAV/sh Estimates - Previously Published in Real Estate Securities Monthly*

CubeSmart CUBE BUY 6.1% 6.4% 0 bps 37% $16.00 +3%

EXR Downgrade - With All Due Respect

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

Same-Property NOI Forecast

FFO / AFFO Estimates

Source: Green Street Advisors.

www.greenstreetadvisors.com © 2014, Green Street Advisors, Inc.

Green Street Advisors’ Disclosure Statement