2018 SELF-STORAGE U.S. Investment Forecast 2018 U.S. Self-Storage Forecast To Our Valued Clients: The impressive growth illustrated by the self-storage sector over the past several years has given way to the inevitable wave of construc- tion currently coming to market, but the outlook remains particularly compelling. Strong economic growth, including robust job creation, rising wages and elevated confi dence levels, will align with positive demographics to reinforce demand trends. The storage needs of the 80 million-strong millennial generation should support self-storage, particularly as this generation favors the fl exibility and mobility of a rental lifestyle. In addition, the anticipated expansion of small businesses in the coming year could reinforce the need for self-storage space. Together, these positive demand drivers should nearly keep pace with construction on a macro level. Self-storage construction has been concentrated in markets with vast population and employment growth, but numerous metros have yet to see a signifi cant wave of development. While this has caused the investment climate to become increasingly tactical, a wide range of options remain available. Even within metros that have seen signifi cant development, niche opportunities exist. Numerous service innovations and fl exible storage solutions have begun to emerge that could reshape the sector. For hands-on investors who are illingw to engage innovative ideas, the potential for outsize growth remains. The new tax law could play a signifi cant role in the outlook for self-storage investment. In addition to spurring economic growth and lifting sentiment among consumers and businesses alike, the fi nalization of the law has begun to alleviate the uncertainty that modestly slowed investor activity. With key provisions such as the 1031 tax-deferred exchange, mortgage interest deductibility and real estate depreciation changing little, investors will be well positioned to revive their strategies in 2018, supporting increased market liquidity and transaction velocity. This alignment of these positive factors portends a dynamic year for the sector. Undoubtedly, new challenges will emerge in 2018, but numerous forward-looking metrics still point to additional runway for self-storage investments. As you recalibrate your investment strategies in this dynamic climate, our investment professionals stand ready to help you evaluate your options and implement your strategies. Sincerely, Joel Deis John Chang Vice President, National Director | National Self-Storage Group First Vice President, National Director | Research Services 1 Table of Contents National Perspective Executive Summary ......................................................................................................................................... 3 U.S. Economy .................................................................................................................................................. 4 2018 National Demographic Trends ................................................................................................................. 5 U.S. Self-Storage Overview .............................................................................................................................. 6 2018 National Inventory Trends ........................................................................................................................ 7 U.S. Investment Outlook .................................................................................................................................. 8 U.S. Capital Markets ........................................................................................................................................ 9 Market Overviews Atlanta.............................................................................................................................................................10 Austin ..............................................................................................................................................................11 Baltimore .........................................................................................................................................................12 Bay Area .........................................................................................................................................................13 Boston ............................................................................................................................................................14 Charlotte .........................................................................................................................................................15 Chicago ..........................................................................................................................................................16 Cincinnati ........................................................................................................................................................17 Cleveland ........................................................................................................................................................18 Columbus .......................................................................................................................................................19 Dallas/Fort Worth ............................................................................................................................................20 Denver ............................................................................................................................................................21 Houston ..........................................................................................................................................................22 Indianapolis .....................................................................................................................................................23 Las Vegas .......................................................................................................................................................24 Los Angeles ....................................................................................................................................................25 Minneapolis-St. Paul .......................................................................................................................................26 Nashville ..........................................................................................................................................................27 New Haven-Fairfield County............................................................................................................................28 New York City .................................................................................................................................................29 Orange County ...............................................................................................................................................30 Orlando ...........................................................................................................................................................31 Philadelphia .....................................................................................................................................................32 Phoenix ...........................................................................................................................................................33 Portland ..........................................................................................................................................................34 Raleigh ............................................................................................................................................................35 Riverside-San Bernardino ...............................................................................................................................36 Sacramento ....................................................................................................................................................37 Salt Lake City ..................................................................................................................................................38 San Antonio ....................................................................................................................................................39 San Diego .......................................................................................................................................................40 Seattle-Tacoma ...............................................................................................................................................41 South Florida ...................................................................................................................................................42 St. Louis ..........................................................................................................................................................43 Tampa-St. Petersburg .....................................................................................................................................44 Washington, D.C. ............................................................................................................................................45