Marr: We look at a host of variables in determining the value of an asset. Ultimately, we have a yield-based, relative value approach to valuation.
Do you always rebrand the acquired facility, or do you sometimes leverage the existing facility name and reputation?
Doll: We always rebrand. To leave the existing facility name in place suggests you have no brand value and that you have not realized the economies and benefits of scale in the marketing and operations of self-storage facilities. We always rebrand.
Halverson: We develop a transition plan for all new acquisitions with the goal in all transactions to rebrand as an Extra Space Storage location. This is essential for the facility to take advantage of our platforms, training and marketing power.
Marr: We always rebrand acquired facilities. That enables us to most fully leverage the strong brand equity and significant scale advantages that we have established with CubeSmart.
Piegza: We rebrand. We believe our reputation is excellent and each acquisition enables us to expand our footprint. Further, Uncle Bob’s Internet presence alone makes a positive impact on any newly acquired store.
Is there anything else you’d like to share with our audience about the acquisition opportunity?
Doll: The REITs provide an excellent exit strategy for the individual owner. I can’t speak for them all, but as a group, they are professional, they are proven, and most are focused on making sure the transaction is extremely smooth so their reputation as a buyer is known as the “go-to guys.”
Public Storage acquires properties without a financing contingency. The transaction is never dependent on raising equity or securing debt financing, and with the highest credit ratings in the REIT industry, sellers know we can close.
Halverson: Extra Space Storage is an active acquirer and is looking to grow its portfolio. The company has a strong reputation for negotiating transactions that are mutually beneficial and for executing on agreed upon terms.
Marr: Over the course of the last three years, we have been the most active in our sector on the transaction front. During that period, we have established ourselves as a preferred buyer due to the speed at which we can transact and a reputation for closing without re-trading.