Item 2. Properties

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Item 2. Properties

As of December 31, 2016, we owned or had ownership interests in 1,016 operating stores. Of these stores, 836 are wholly-owned and 180 are held in joint ventures. In addition, we managed an additional 411 stores for third parties bringing the total number of stores which we own and/or manage to 1,427. These stores are located in 38 states, Washington, D.C. and Puerto Rico. We receive a management fee generally equal to approximately 6.0% of cash collected from total revenues to manage the joint venture and third party sites. As of December 31, 2016, we owned and/or managed approximately 107 million square feet of rentable space configured in approximately 960,000 separate storage units. Approximately 70% of our stores are clustered around large population centers, such as Atlanta, Baltimore/Washington, D.C., Boston, Chicago, Dallas, Houston, Las Vegas, Los Angeles, Miami, New York City, Orlando, Philadelphia, Phoenix, St. Petersburg/Tampa and San Francisco/Oakland. These markets contain above-average population and income demographics for stores. The clustering of assets around these population centers enables us to reduce our operating costs through economies of scale. Our acquisitions have given us an increased scale in many core markets as well as a foothold in many markets where we had no previous presence.

We consider a store to be in the lease-up stage after it has been issued a certificate of occupancy, but before it has achieved stabilization. We consider a store to be stabilized once it has achieved either an 80% occupancy rate for a full year measured as of January 1 of the current year, or has been open for three years prior to the January 1 of the current year.

As of December 31, 2016, approximately 850,000 tenants were leasing storage units at the 1,427 operating stores that we own and/or manage, primarily on a month-to-month basis, providing the flexibility to increase rental rates over time as market conditions permit. Existing tenants generally receive rate increases at least annually, for which no direct correlation has been drawn to our vacancy trends. Although leases are short-term in duration, the typical tenant tends to remain at our stores for an extended period of time. For stores that were stabilized as of December 31, 2016, the average length of stay was approximately 14.3 months.

The average annual rent per square foot for our existing customers at stabilized stores, net of discounts and bad debt, was $15.88 for the year ended December 31, 2016, compared to $14.92 for the year ended December 31, 2015. Average annual rent per square foot for new leases was $17.02 for the year ended December 31, 2016, compared to $15.91 for the year ended December 31, 2015. The average discounts, as a percentage of rental revenues, during these periods were 3.3% and 3.2%, respectively.

Our store portfolio is made up of different types of construction and building configurations depending on the site and the municipality where it is located. Most often sites are what we consider “hybrid” facilities, a mix of both drive-up buildings and multi-floor buildings. We have a number of multi-floor buildings with elevator access only, and a number of facilities featuring ground-floor access only.

The following table presents additional information regarding the occupancy of our stabilized stores by state as of December 31, 2016 and 2015. The information as of December 31, 2015, is on a pro forma basis as though all the stores owned at December 31, 2016, were under our control as of December 31, 2015.

Stabilized Store Data Based on Location



		Company	Pro forma	Company	Pro forma	Company		Pro forma
Location	Number of Stores	Number of Units as of December 31, 2016 (1)	Number of Units as of December 31, 2015	Net Rentable Square Feet as of December 31, 2016 (2)	Net Rentable Square Feet as of December 31, 2015	Square Foot Occupancy % December 31, 2016		Square Foot Occupancy % December 31, 2015
Wholly-Owned Stores
Alabama	8	4,635	4,585	556,241	559,526	89.3	%	88.3	%
Arizona	21	12,795	12,677	1,408,358	1,414,864	91.7	%	90.4	%
California	143	109,771	108,156	11,425,653	11,399,051	93.8	%	94.8	%
Colorado	13	6,685	6,562	823,284	822,499	89.6	%	89.4	%
Connecticut	6	3,856	3,847	395,257	395,411	91.4	%	92.7	%
Florida	77	55,459	54,612	5,873,089	5,848,836	92.6	%	92.8	%
Georgia	48	28,956	28,281	3,715,001	3,698,127	90.4	%	90.1	%
Hawaii	9	8,534	8,445	602,171	599,373	95.2	%	92.1	%
Illinois	25	17,359	17,139	1,913,921	1,930,543	90.1	%	89.6	%
Indiana	15	7,848	7,718	940,069	944,399	91.2	%	88.5	%
Kansas	1	533	532	49,999	49,991	97.6	%	91.9	%
Kentucky	10	5,874	5,840	756,870	755,610	90.0	%	86.2	%
Louisiana	2	1,406	1,406	149,930	150,090	93.7	%	92.1	%
Maryland	28	21,372	21,271	2,189,772	2,191,424	90.6	%	91.3	%
Massachusetts	37	23,124	22,891	2,295,634	2,305,068	91.0	%	92.2	%
Minnesota	1	765	765	74,400	74,400	73.2	%	76.7	%
Mississippi	3	1,510	1,477	217,922	221,482	87.2	%	81.9	%
Missouri	6	3,292	3,238	386,161	385,961	90.7	%	93.2	%
Nevada	15	9,110	9,132	1,313,820	1,314,665	92.9	%	89.9	%
New Hampshire	2	1,045	1,029	126,053	126,133	91.9	%	93.0	%
New Jersey	58	45,721	45,213	4,498,968	4,495,243	92.6	%	91.5	%
New Mexico	12	6,590	6,575	748,843	750,433	91.7	%	91.9	%
New York	22	20,088	20,022	1,651,030	1,648,534	90.1	%	91.7	%
North Carolina	11	6,876	6,806	761,677	761,323	90.5	%	92.0	%
Ohio	17	9,534	9,460	1,248,860	1,246,238	91.7	%	91.0	%
Oregon	3	2,140	2,156	250,180	250,130	91.2	%	92.7	%
Pennsylvania	14	9,667	9,651	1,047,731	1,044,720	90.3	%	87.3	%
Rhode Island	2	1,280	1,235	131,421	131,356	93.9	%	91.4	%
South Carolina	20	11,331	11,228	1,509,641	1,515,789	88.3	%	87.5	%
Tennessee	23	12,869	12,723	1,764,606	1,781,216	90.6	%	89.1	%
Texas	85	55,509	54,871	7,151,963	7,112,255	88.7	%	89.3	%
Utah	8	4,394	4,231	543,202	523,056	88.8	%	94.1	%
Virginia	39	29,909	29,484	3,164,742	3,163,910	90.4	%	89.5	%
Washington	7	4,301	4,285	509,278	509,358	95.2	%	91.1	%
Washington, DC	1	1,220	1,214	99,689	99,439	93.8	%	91.5	%
Total Wholly-Owned Stabilized	796	547,748	541,116	60,618,052	60,543,119	91.4	%	91.3	%

Joint-Venture Stores
Alabama	1	619	601	75,356	74,866	91.2	%	93.4	%
Arizona	6	3,745	3,689	429,173	428,724	94.9	%	93.6	%
California	47	34,034	33,526	3,283,592	3,277,679	94.4	%	95.2	%
Colorado	2	1,313	1,308	157,986	158,375	89.2	%	93.9	%
Connecticut	5	3,762	3,763	403,910	404,790	92.2	%	92.8	%
Delaware	1	518	597	64,510	71,610	93.0	%	81.2	%
Florida	12	10,010	9,894	1,003,254	1,002,944	91.8	%	93.8	%
Georgia	1	611	605	81,820	81,950	85.5	%	89.5	%
Illinois	4	2,691	2,695	288,115	287,400	90.6	%	89.6	%
Indiana	1	445	446	56,650	57,114	94.7	%	91.4	%
Kansas	2	846	846	109,375	109,165	91.4	%	90.5	%
Kentucky	3	1,377	1,449	153,895	171,525	91.6	%	85.5	%
Maryland	7	5,896	5,860	529,369	529,527	90.6	%	91.7	%
Massachusetts	9	5,111	5,008	534,107	536,027	92.1	%	91.7	%
Michigan	5	3,203	3,166	396,179	395,764	92.7	%	92.7	%
Missouri	1	543	538	61,375	61,075	89.2	%	91.7	%
Nevada	2	1,209	1,203	123,565	123,495	94.2	%	94.5	%
New Hampshire	2	796	801	83,685	85,111	90.5	%	94.8	%
New Jersey	13	10,377	10,288	1,030,147	1,028,267	91.2	%	92.2	%
New Mexico	2	1,046	1,048	134,371	134,115	90.5	%	91.3	%
New York	8	7,721	7,668	650,917	648,615	93.1	%	93.1	%
Ohio	5	2,879	2,860	381,432	381,462	90.5	%	89.6	%
Oregon	1	651	655	64,970	64,970	93.7	%	94.0	%
Pennsylvania	4	2,684	2,680	312,895	311,091	90.9	%	88.2	%
Tennessee	6	3,824	3,774	474,790	474,875	92.2	%	91.5	%
Texas	10	5,795	5,725	672,669	673,611	89.8	%	93.9	%
Virginia	7	5,091	5,074	514,037	513,932	88.0	%	89.6	%
Washington, DC	1	1,694	1,547	104,450	102,488	88.1	%	89.4	%
Total Joint-Venture Stabilized	168	118,491	117,314	12,176,594	12,190,567	92.2	%	92.8	%

Managed Stores
Alabama	11	5,755	5,596	754,204	738,753	90.5	%	88.0	%
Arizona	2	1,122	1,055	156,791	166,623	92.8	%	96.0	%
California	72	49,282	48,538	5,897,368	5,826,771	93.5	%	92.2	%
Colorado	16	8,988	8,733	1,067,294	1,035,678	86.8	%	85.5	%
Connecticut	2	1,414	1,312	182,140	171,775	92.4	%	93.4	%
Florida	46	31,743	31,622	3,823,063	3,838,650	92.5	%	92.4	%
Georgia	8	4,069	3,921	578,752	580,042	93.0	%	92.5	%
Hawaii	6	4,578	4,817	352,453	349,952	91.9	%	92.5	%
Illinois	11	6,489	6,518	698,319	698,247	90.4	%	83.8	%
Indiana	4	2,022	2,017	238,283	237,493	91.0	%	84.6	%
Kentucky	2	1,331	1,333	218,707	219,777	89.0	%	90.8	%
Louisiana	1	987	985	133,325	131,865	95.0	%	90.9	%
Maryland	19	14,008	13,924	1,370,012	1,366,149	91.2	%	87.5	%
Massachusetts	3	1,546	1,531	182,945	182,735	93.3	%	94.7	%
Michigan	6	3,352	3,335	416,434	416,290	92.4	%	86.3	%
Missouri	4	2,154	2,215	253,639	251,792	92.3	%	80.5	%
Nevada	10	7,956	7,986	944,870	944,420	91.8	%	87.1	%
New Jersey	5	3,181	3,176	307,035	309,529	91.8	%	88.9	%
New Mexico	1	819	806	107,695	103,535	92.7	%	86.4	%
New York	3	2,675	2,679	219,448	220,248	89.5	%	91.2	%
North Carolina	17	7,264	7,212	1,013,263	1,012,737	92.7	%	91.3	%
Ohio	5	2,268	2,206	274,870	272,915	90.5	%	92.7	%
Oklahoma	11	5,771	5,768	959,984	960,786	80.7	%	80.5	%
Oregon	1	447	455	39,430	39,419	91.1	%	97.7	%
Pennsylvania	18	10,747	10,649	1,247,860	1,244,340	91.3	%	90.4	%
South Carolina	4	2,619	2,609	351,148	348,771	93.1	%	89.2	%
Tennessee	4	2,152	2,125	282,263	290,183	94.0	%	90.4	%
Texas	34	19,788	19,545	2,808,646	2,730,806	85.9	%	87.5	%
Utah	5	2,760	2,532	404,827	380,047	93.6	%	92.2	%
Virginia	7	4,245	4,242	437,319	437,929	89.3	%	89.3	%
Washington	3	1,552	1,561	181,697	181,769	89.1	%	87.9	%
Puerto Rico	4	2,735	2,676	289,704	286,772	87.3	%	87.4	%
Total Managed Stabilized	345	215,819	213,679	26,193,788	25,976,798	90.9	%	89.7	%
Total Stabilized Stores	1,309	882,058	872,109	98,988,434	98,710,484	91.4	%	91.0	%


(1)	Represents unit count as of December 31, 2016, which may differ from unit count as of December 31, 2015, due to unit conversions or expansions.


(2)	Represents net rentable square feet as of December 31, 2016, which may differ from net rentable square feet as of December 31, 2015, due to unit conversions or expansions.

The following table presents additional information regarding the occupancy of our lease-up stores by state as of December 31, 2016 and 2015. The information as of December 31, 2015, is on a pro forma basis as though all the stores owned at December 31, 2016, were under our control as of December 31, 2015.

Lease-up Store Data Based on Location



		Company	Pro forma	Company	Pro forma	Company		Pro forma
Location	Number of Stores	Number of Units as of December 31, 2016 (1)	Number of Units as of December 31, 2015	Net Rentable Square Feet as of December 31, 2016 (2)	Net Rentable Square Feet as of December 31, 2015	Square Foot Occupancy % December 31, 2016		Square Foot Occupancy % December 31, 2015
Wholly-Owned Stores
Arizona	2	1,496	894	185,887	122,092	90.5	%	72.9	%
California (3)	4	2,633	1,210	260,216	133,252	73.1	%	37.7	%
Connecticut	1	1,108	1,107	89,820	89,820	92.3	%	90.0	%
Florida	2	1,238	1,235	153,893	158,283	92.9	%	67.5	%
Georgia	5	3,115	1,898	352,755	219,515	67.4	%	63.5	%
Illinois	4	3,568	1,667	308,723	134,464	56.7	%	69.8	%
Maryland	1	988	988	103,135	103,135	94.2	%	89.8	%
Massachusetts	3	2,719	754	206,276	67,431	68.4	%	79.8	%
North Carolina	3	2,517	1,986	231,083	187,024	73.1	%	52.3	%
Oregon	1	597	597	76,797	76,347	96.2	%	67.9	%
South Carolina	2	1,366	1,344	137,295	137,350	82.2	%	65.7	%
Texas	10	6,112	6,131	788,381	716,894	84.8	%	68.0	%
Utah	1	617	—	77,336	—	20.7	%	—	%
Virginia	1	558	502	55,900	56,405	93.6	%	89.2	%
Total Wholly-Owned in Lease-up	40	28,632	20,313	3,027,497	2,202,012	76.9	%	67.4	%

Joint-Venture Stores
Arizona	1	603	606	62,200	62,200	87.1	%	39.2	%
Colorado	1	816	—	84,830	—	38.1	%	—	%
Florida	1	637	—	66,816	—	1.5	%	—	%
New Jersey	1	869	873	74,152	74,521	92.8	%	45.3	%
New York	3	3,853	1,109	209,522	66,950	49.6	%	25.7	%
Oregon	2	795	285	71,605	27,100	45.1	%	31.8	%
South Carolina	1	669	649	78,085	70,570	66.4	%	28.0	%
Texas	1	533	—	55,275	—	58.6	%	—	%
Washington	1	634	—	82,485	—	66.8	%	—	%
Total Joint-Venture in Lease-up	12	9,409	3,522	784,970	301,341	55.0	%	34.4	%

Managed Stores
Arizona	1	836	—	89,695	—	62.9	%	—	%
California	5	3,920	1,608	491,191	209,030	66.1	%	58.4	%
Colorado	4	2,417	1,173	273,520	134,844	64.1	%	59.0	%
Connecticut	1	360	—	37,436	—	71.6	%	—	%
Florida	3	1,994	1,407	194,571	150,438	88.1	%	60.3	%
Georgia	3	1,922	553	225,376	69,367	43.5	%	54.4	%
Illinois	8	4,919	672	492,235	46,417	34.3	%	83.6	%
Indiana	2	964	—	111,112	—	45.3	%	—	%
Kentucky	2	1,439	—	138,076	—	8.0	%	—	%
Maryland	3	1,726	1,318	144,230	115,650	84.8	%	75.7	%
Massachusetts	2	1,920	902	153,533	70,106	48.0	%	56.7	%
Minnesota	1	626	—	62,597	—	93.8	%	—	%
Missouri	1	608	—	63,100	—	41.6	%	—	%
Nevada	1	1,450	1,470	197,351	196,486	88.8	%	66.2	%
New Hampshire	1	372	—	35,196	—	47.6	%	—	%
New Jersey	2	882	—	126,396	—	43.6	%	—	%
New York	1	534	344	56,150	33,684	77.0	%	91.0	%
North Carolina	7	4,284	1,611	464,431	199,433	55.1	%	54.2	%
Ohio	2	736	528	87,663	64,500	60.7	%	59.3	%
Oklahoma	1	360	—	68,235	—	13.6	%	—	%
South Carolina	4	2,905	1,616	325,511	165,011	48.6	%	65.6	%
Texas	7	4,846	570	534,569	65,409	22.8	%	2.4	%
Utah	1	375	—	44,149	—	62.9	%	—	%
Virginia	1	455	455	51,299	51,289	91.0	%	93.2	%
Wisconsin	2	1,935	—	226,813	—	21.0	%	—	%
Total Managed in Lease-up	66	42,785	14,227	4,694,435	1,571,664	50.6	%	61.1	%

Total Lease-up Stores	118	80,826	38,062	8,506,902	4,075,017	60.4	%	62.5	%


(1)	Represents unit count as of December 31, 2016, which may differ from unit count as of December 31, 2015, due to unit conversions or expansions.


(2)	Represents net rentable square feet as of December 31, 2016, which may differ from net rentable square feet as of December 31, 2015, due to unit conversions or expansions.


(3)	In October 2014, a store located in Venice, California was damaged by fire. In 2016, the store was re-opened for operation and is continuing to lease up.

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