Spencer Kirk, chairman and CEO of Extra Space Storage Inc. (NYSE: EXR), joined REIT.com for a CEO Spotlight video interview at REITWorld 2012: NAREIT’s Annual Convention for All Things REIT at the Manchester Grand Hyatt in San Diego.
Extra Space Storage Inc. owns and operates more than 882 self-storage facilities in 34 states and the District of Columbia. It is the second-largest owner-operator of self-storage properties in the country and the largest self-storage management company.
Having made a number of deals recently, Spencer was asked about the company’s goal behind its acquisition strategy.
“Our primary goal is to grow the REIT. Unlike most other storage companies, we have assets that we fully own, assets that we partially own in a joint-venture relationship and assets that we own nothing of because it’s a managed property,” Kirk said.
Regardless he said the properties are all branded Extra Space. The company’s strategy is to take the majority of the assets and convert them into wholly owned assets. During the past year, Kirk said Extra Space has done more than $500 million in acquisitions that were just branded out of the pipeline of Extra Space that the company doesn’t own.
In terms of some of the fundamentals drivers that are benefiting the self-storage sector, Kirk pointed to the sector providing a need-based product that he said does well in both good and bad economies. Additionally, he acknowledged that there is not much new supply coming into the marketplace, which bodes well for the industry.
Kirk also discussed the impact of weather-related events such as Hurricane Sandy that battered the East Coast. Kirk said that while the company benefited from the need for storage space as rentals increased, he said there were also expenses accrued as a result of the storm.
Extra Space recently topped Green Street Advisors’ management and value-added metric. Kirk attributed this to the senior managing team being intact for more than a dozen years.
“It’s a very cohesive group, and we work very well together,” said Kirk, adding that the company has created a culture of innovation."