Extra Space Storage Chairman and CEO Spencer F. Kirk addressed the Wells Fargo 13th Annual Real Estate Securities Conference in New York City last Wednesday. The conference, which was broadcast live over the Internet, was held at the Waldorf-Astoria. An audio file and transcript of the webcast, and the power point presentation that Kirk put together to go with it, can be found online at Extra Space's website.
Kirk gave an overview of Extra Space's performance compared to other public companies. While acknowledging that the recession has hit the self-storage industry, just as it has hit other industries, Kirk noted that "There was a thesis for many years that storage was recession-proof. It is not. Storage is recession-resistant." Kirk continued, "All public companies have gone negative, but the degree to which storage has gone negative is remarkable....we believe that storage as a sector was perhaps last into the recession and we believe that storage as a sector will be amongst the first out of the recession....Extra Space believes that we are going to lead the way." Extra Space, Kirk pointed out, has significantly outperformed other storage companies for 2009. He attributed Extra Space's success to the high tech people it hires, the quality and locations of its properties, and the sensible processes and practices that it uses to, for example, make real-time, web-based data available for all of its facilities.
Kirk was optimistic, he said, because of the trends Extra Space was seeing during the latter half of 2009. "Of course, 2009 has been an arduous, difficult, painful year," Kirk admitted. "It is the first time in 33 years that this company has reported negative numbers either in a private setting or in the public realm." He went on, "We've looked at what has happened in the second half of 2009. We have seen improving occupancies, and the stabilization of not only the asking rates, but actually a drifting up of the rental rates that we are charging our customers. As we exit 2009, we are looking forward to 2010 with less guarded optimism and more straightforward optimism that the worst days are behind us. Seven months straight data from May 2009 to the end of November 2009 have said we haven't had a blip, we haven't had a downturn, rather, we've had consecutive month to month improvement in the rental income we are getting and the occupancy and that to us is part of the holy grail to have occupancies returning and pricing power returning concurrently."
Kirk has been chairman of Extra Space for less than one year. He took over from Kenneth Woolley, Extra Space's previous chairman and CEO, last February. Kirk and Woolley have worked together since 1998. Woolley founded Extra Space in 1998, but is stepping down from his post in order to serve on a three-year assignment with his church. Kirk is Extra Space's largest shareholder, with around 3.3 million shares.
Extra Space, which is based in Salt Lake City, is a real estate investment trust company focusing on self storage. It owns or operates 749 self-storage properties in 33 states and Washington, D.C. Almost 300 properties are wholly-owned, but there are also more than 300 joint ventures and 114 managed properties. All told, there are about 500,000 Extra Space self-storage units and 54 million square feet of storage space.