LaFollette Storage LA FOLLETTE, TN OFFERING MEMORANDUM

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1 OFFERING MEMORANDUM

2 CONFIDENTIALITY AND DISCLAIMER The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. NON-ENDORSEMENT NOTICE Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

3 TABLE OF CONTENTS Section 1 PROPERTY DESCRIPTION Section 2 PRICING AND FINANCIAL ANALYSIS Section 3 DEMOGRAPHIC ANALYSIS Section 4 RENT COMPARABLES Section 5 RECENT SALES

4 PROPERTY DESCRIPTION LaFollette Storage

5 OFFERING SUMMARY No. of Units** PROPERTY DESCRIPTION Unit Type: Climate Controlled Units As of 5/10/2016 UNITS MONTHLY RENT OCCUPANCY Annual Size Total Units Total SqFt Rent PSF # Units SqFt Unit Mix Units Economic TOTALS ,954 $56,232 $ % 73.8% 71.9% Unit Type: Dehumidified Units Unit Type Approx. Square Feet UNITS MONTHLY RENT OCCUPANCY Annual Size Total Units Total SqFt Rent PSF # Units SqFt Units Economic TOTALS ,790 $22,140 $ % 54.9% 54.7% Total Unit Type: Non-Climate Controlled Units UNITS MONTHLY RENT OCCUPANCY Annual Size Total Units Total SqFt Rent PSF # Units SqFt Units Economic TOTALS ,902 $204,984 $ % 82.9% 81.6% Unit Type: Parking UNITS MONTHLY RENT OCCUPANCY Annual Size Total Units Total SqFt Rent PSF # Units SqFt Units Economic TOTALS 10 6 $5, % 60.0% Unit Type: Double Units UNITS MONTHLY RENT OCCUPANCY Annual Size Total Units Total SqFt Rent PSF # Units SqFt Units Economic TOTALS $3,840 $ % 100.0% 100.0% Price $1,795,000 Down Payment 30% / $538,500 Total Units 253 Price per Unit $7,095 Gross Square Feet 33,075 Rentable Square Feet 31,127 Price per Rentable Square Foot $57.67 Year Built 1984 Lot Size 2.36 Acres (MOL) Vital Data CAP Rate - Current 8.40% Net Operating Income - Current $150,717 Net Cash Flow After Debt Service - Current 11.62% / $62,573 Total Return - Current 16.43% / $88,480 CAP Rate - Pro Forma 9.38% Net Operating Income - Pro Forma $168,446 Net Cash Flow After Debt Service - Pro Forma 14.91% / $80,301 Total Return - Pro Forma 19.72% / $106,209 TOTAL ,127 $292,596 $ % 80.1% 77.5% Major Employers Company Local Employees Campbell County School Dst 400 Campbell County Dept Educatn 300 Walmart 300 Cumberland Village 180 Lowes 158 Campbell Cmprhensive High Schl 150 La Follette Utilities 97 Dixie Roofing 91 Food City Matix Corporation of America 90 City of La Follette 85 Campbell County Sheriffs Off 84 Demographics 2014 Total Population 2019 Total Population 2014 Total Households 2019 Total Households 3-Miles 5-Miles 8-Miles 10,762 19,513 29,422 10,529 19,554 29,740 4,354 7,711 11,818 4,271 7,753 12,000 Median HH Income $27,094 $30,869 $31,762 Per Capita Income (based on Total Average (Mean) HH Income $14,685 $16,084 $16,948 $35,653 $40,102 $41,783 1

6 PROPERTY DESCRIPTION PROPERTY PHOTOS 2

7 PROPERTY DESCRIPTION PROPERTY PHOTOS 3

8 PROPERTY DESCRIPTION AREA MAPS Local Map Regional Map 4

9 PROPERTY DESCRIPTION AERIAL PHOTO 5

10 PROPERTY DESCRIPTION INVESTMENT OVERVIEW Investment Highlights 31,127 Net Rentable Square Feet Only Facility in Market with Climate Control Visible along 900 Feet of Jacksboro Pike 35 Minutes from Knoxville 80 Percent Physical Occupancy 8.40 Current CAP Rate LaFollette Storage is a 31,127 net rentable square foot self storage facility situated on approximately 2.36 acres of land in LaFollette, Tennessee. The subject property was built in 1984 and has 253 total units including storage and parking. 6,744 square feet of the 30,779 is premium storage, 24,035 square feet is traditional storage. Self Storage units range in size from 35 to 360 square feet. Amenities at this property include, but are not limited to: climate controlled storage, humidity controlled storage, drive up self storage units, perimeter fencing, digital video surveillance, and a central managers' office. LaFollette Storage is located on Canyon Lane and is visible along approximately 900 feet of Jacksboro Pike, which carries 17,320 cars per day past the property. The facility is located about 35 minutes from Knoxville and is located in the metropolitan area of Knoxville. Knoxville s metro population includes 858,000 residents and a Gross Metro Product of $38.5 Billion according to Forbes. The area s major industries are Energy, Telecomm, Financial Services, and Education. The largest employer in the Knoxville area is the US Department of Energy Oak Ridge, which is located about 45 minutes from LaFollette Storage. Although the immediate market does not offer population density, the supply of self storage in the area is very low, only four square feet per capita, encouraging high occupancy and low price elasticity. The facility is currently operating at 80 percent occupancy in terms of number of square footage, and 71.4 percent in terms of rent collected. Gross collected revenue for the year of 2015 is up 10 percent over This has been achieved through rental increases and revenue management. While this improvement is impressive, there is still upside for a new owner. The property has a very limited web presence, there is an existing domain however there is no active website. A storage property with a website is uncommon in the area, and would help to increase occupancy, especially being that LaFollette Storage is the highest quality storage property in this market and the rural tenant base tends to travel farther to find storage. Offered at $1,795,000, this investment presents a unique opportunity for an investor to acquire a self storage facility in the Knoxville, Tennessee MSA. This acquisition offers the benefits of cash flow from day one of operations as well as the ability to add value to the facility through improved management. Based on in place income this listing offers an unlevered return of 8.40 percent and an 11.6 percent cash on cash return with financing. Even with the addition of third party management, a new owner could realize a 14.9 percent cash on cash return in the Pro Forma, through continued improvements in operations. 6

11 PROPERTY DESCRIPTION PROPERTY SUMMARY The Offering Property LaFollette Storage Property Address 146 Canyon Ln La Follette, TN Assessor's Parcel Number 091L J 091E Site Description Total Units 253 Units Sizes 35 to 360 Square Foot Units Gross Square Feet 33,075 Rentable Square Feet 31,127 Year Built 1984 Lot Size 2.36 Acres (MOL) Type of Ownership Fee Simple Number of Buildings 11 Storage Buildings Number of Stories Single Story Buildings Parking Ten Spaces for Rent Street Frontage Visibility along 900 feet of Jacksboro Pike Cross Street South Avenue Traffic Counts (Vehicles per Day) 17,320 Cars Per Day on Jacksboro Pike Highway Access 7.5 Miles from I-75 Construction Foundation Framing Exterior Walls Parking Surface Roof Fencing Entry Poured Concrete Steel Metal Asphalt Shingled Gable Chain Link Fencing Electronic Gate Mechanical Climate Control Security 4,954 Rentable Square Feet Digital Video Surveillance 7

12 PROPERTY DESCRIPTION PROPERTY AMENITIES Property Amenities Climate Controlled Storage Units Drive-Up Storage Units Parking Spaces for Rent Leasing Office Perimeter Fencing Signage and Visibility on Jacksboro Pike Digital Video Surveillance Exterior Lighting Throughout Electronic Gate Entry Un 8

13 PRICING AND FINANCIAL ANALYSIS LaFollette Storage

14 PRICING AND FINANCIAL ANALYSIS UNIT MIX Unit Type: Climate Controlled Units As of 5/10/2016 Size Total Units Units Unit SqFt Total SqFt SqFt Rate Monthly Annual Rent PSF # Units SqFt Economic 6x $76.00 $76 $0 $912 $ % 0.0% 0.0% 7x $80.00 $80 $80 $960 $ % 100.0% 100.0% 8x $90.00 $90 $90 $1,080 $ % 100.0% 100.0% 10x $ $840 $480 $10,080 $ % 57.1% 57.1% 10x , $ $1,050 $600 $12,600 $ % 57.1% 57.1% 10x ,400 1,200 $ $1,330 $1,140 $15,960 $ % 85.7% 85.7% 10x $ $720 $480 $8,640 $ % 66.7% 66.7% 12x $ $500 $500 $6,000 $ % 100.0% 100.0% TOTALS ,954 3,656 $4,686 $3,370 $56,232 $ % 73.8% 71.9% Unit Type: Dehumidified Units Size Total Units UNITS Unit SqFt Units Total SqFt SqFt Rate Monthly Annual Rent PSF # Units SqFt Economic 5x $60.00 $180 $120 $2,160 $ % 66.7% 66.7% 6x $70.00 $210 $140 $2,520 $ % 66.7% 66.7% 7x $76.00 $228 $152 $2,736 $ % 66.7% 66.7% 8x $75.00 $75 $75 $900 $ % 100.0% 100.0% 9x $ $345 $115 $4,140 $ % 33.3% 33.3% 8x $ $120 $0 $1,440 $ % 0.0% 0.0% 8x $ $127 $127 $1,524 $ % 100.0% 100.0% 10x $ $560 $280 $6,720 $ % 50.0% 50.0% TOTALS , $1,845 $1,009 $22,140 $ % 54.9% 54.7% Unit Type: Non-Climate Controlled Units Size Total Units UNITS MONTHLY RENT OCCUPANCY UNITS Unit SqFt Units Total SqFt SqFt Rate Monthly MONTHLY RENT MONTHLY RENT Annual OCCUPANCY OCCUPANCY Rent PSF # Units SqFt Economic 5x $40.00 $120 $80 $1,440 $ % 66.7% 66.7% 6x $46.00 $414 $414 $4,968 $ % 100.0% 100.0% 7x $47.00 $376 $376 $4,512 $ % 100.0% 100.0% 7x $54.00 $432 $324 $5,184 $ % 75.0% 75.0% 6x $60.00 $540 $360 $6,480 $ % 66.7% 66.7% 9x $65.00 $65 $0 $780 $ % 0.0% 0.0% 7x ,610 1,260 $63.00 $1,449 $1,134 $17,388 $ % 78.3% 78.3% 6x $78.00 $78 $0 $936 $ % 0.0% 0.0% 8x $97.00 $97 $0 $1,164 $ % 0.0% 0.0% 7x $67.00 $670 $268 $8,040 $ % 40.0% 40.0% 9x $72.00 $648 $432 $7,776 $ % 66.7% 66.7% 7x $78.00 $312 $156 $3,744 $ % 50.0% 50.0% 10x ,500 1,200 $80.00 $1,200 $960 $14,400 $ % 80.0% 80.0% 9x $86.00 $430 $344 $5,160 $ % 80.0% 80.0% 10x $84.00 $84 $84 $1,008 $ % 100.0% 100.0% 10

15 PRICING AND FINANCIAL ANALYSIS UNIT MIX Unit Type: Non-Climate Controlled Units Size Total Units UNITS Unit SqFt Units Total SqFt SqFt Rate Monthly Annual Rent PSF # Units SqFt Economic 9x $88.00 $176 $176 $2,112 $ % 100.0% 100.0% 10x $93.00 $93 $93 $1,116 $ % 100.0% 100.0% 7x $95.00 $285 $285 $3,420 $ % 100.0% 100.0% 9x $94.00 $282 $282 $3,384 $ % 100.0% 100.0% 10x ,170 1,040 $97.00 $873 $776 $10,476 $ % 88.9% 88.9% 7x $ $412 $206 $4,944 $ % 50.0% 50.0% 10x $99.00 $99 $99 $1,188 $ % 100.0% 100.0% 8x $ $112 $112 $1,344 $ % 100.0% 100.0% 11x ,540 1,232 $ $1,100 $880 $13,200 $ % 80.0% 80.0% 10x ,700 1,700 $ $1,170 $1,170 $14,040 $ % 100.0% 100.0% 9x $ $120 $0 $1,440 $ % 0.0% 0.0% 10x $ $620 $620 $7,440 $ % 100.0% 100.0% 10x $ $600 $360 $7,200 $ % 60.0% 60.0% 15x $ $250 $250 $3,000 $ % 100.0% 100.0% 11x $ $110 $0 $1,320 $ % 0.0% 0.0% 10x ,200 1,200 $ $750 $750 $9,000 $ % 100.0% 100.0% 12x $ $130 $130 $1,560 $ % 100.0% 100.0% 13x $ $138 $138 $1,656 $ % 100.0% 100.0% 11x $ $272 $272 $3,264 $ % 100.0% 100.0% 10x ,430 2,430 $ $1,305 $1,305 $15,660 $ % 100.0% 100.0% 10x $ $150 $150 $1,800 $ % 100.0% 100.0% 11x ,430 1,430 $ $770 $770 $9,240 $ % 100.0% 100.0% 18x $ $175 $175 $2,100 $ % 100.0% 100.0% 18.5x $ $175 $0 $2,100 $ % 0.0% 0.0% TOTALS ,902 19,808 $17,082 $13,931 $204,984 $ % 82.9% 81.6% Unit Type: Parking Size Total Units UNITS Unit SqFt Units Total SqFt SqFt Rate Monthly Annual Rent PSF # Units SqFt Economic Parking $45.00 $450 $270 $5, % % TOTALS 10 6 $450 $270 $5, % 60.0% Unit Type: Double Units Size Total Units Units Unit SqFt Total SqFt SqFt Rate Monthly MONTHLY RENT MONTHLY RENT Annual OCCUPANCY OCCUPANCY UNITS MONTHLY RENT OCCUPANCY Rent PSF # Units SqFt Economic 6x $65.00 $65 $65 $780 $ % 100.0% 100.0% 13x $ $117 $117 $1,404 $ % 100.0% 100.0% 13x $ $138 $138 $1,656 $ % 100.0% 100.0% TOTALS $320 $320 $3,840 $ % 100.0% 100.0% TOTAL ,127 24,927 $24,383 $18,900 $292,596 $ % 80.1% 77.5% 11

16 PRICING AND FINANCIAL ANALYSIS FINANCIAL OVERVIEW Location 146 Canyon Ln La Follette, TN Price $1,795,000 Down Payment 30% / $538,500 Number of Units 253 Gross Square Feet 33,075 Rentable Square Feet 31,127 CAP Rate - Current 8.40% CAP Rate- Pro Forma 9.38% Year Built 1984 Lot Size 2.36 Acres (MOL) Type of Ownership Fee Simple Financing Annualized Operating Data Current Pro Forma ential Rent $292,596 $292,596 Other Income $16,879 $20,092 ential Income $309,475 $312,688 Less: Vacancy/Deductions 28.6% / $83,657 (15.0%) 43,889 Effective Gross Income $225,818 $268,799 Less: Expenses $75,101 $100,353 Net Operating Income $150,717 $168,446 Net Cash Flow Before Debt Service $150,717 $168,446 Debt Service $88,144 $88,144 Debt Coverage Ratio Net Cash Flow After Debt Service 11.62% / $62, % / $80,301 Principal Reduction $25,908 $25,908 Total Return 16.43% / $88, % / $106,209 FIRST TRUST DEED Loan Amount $1,256,500 Loan Type Proposed New Interest Rate 5.0% Amortization 25 Years Loan information is time sensitive and subject to change. Contact your local Marcus & Millichap Capital Corporation representative. Expenses Real Estate Taxes $5,452 $12,924 Insurance $3,735 $3,735 Utilities $11,204 $11,204 Repairs & Maintenance $7,782 $7,782 Marketing & Promotion $905 $2,400 On-Site Payroll $29,069 $29,069 Management Fee $0 $16,128 General & Administration $8,676 $8,676 Reserves/Replacements $3,113 $3,113 Bank Charges $3,203 $3,360 Telephone $1,962 $1,962 Total Expenses $75,101 $100,353 % of EGI 33.3% 37.3% 12

17 PRICING AND FINANCIAL ANALYSIS INCOME AND EXPENSES Total Number of Units 253 Total Gross Square Feet 33,075 Total Rentable Square Feet 31,127 Income Current Per SF Pro Forma Per SF GROSS POTENTIAL RENT $292,596 $9.40 $292,596 $9.40 Additional Income $16,879 $0.54 $20,092 $0.65 TOTAL OTHER INCOME $16,879 $0.54 $20,092 $0.65 GROSS POTENTIAL INCOME $309,475 $9.94 $312,688 $10.05 Vacancy/Collection Allowance 28.6% / $83,657 $2.69 (15.0%) 43,889 $1.41 EFFECTIVE GROSS INCOME $225,818 $7.25 $268,799 $8.64 Total Expenses $75,101 $2.41 $100,353 $3.22 % of EGI 33.3% 37.3% NET OPERATING INCOME $150,717 $4.84 $168,446 $5.41 * Current Revenue is based on Actual Management Summary Reports from January through April of 2016 Annualized Comments 13

18 PRICING AND FINANCIAL ANALYSIS EXPENSES Current Per SF Pro Forma Per SF Real Estate Taxes $5,452 $0.18 $12,924 $0.42 Insurance $3,735 $0.12 $3,735 $0.12 Utilities $11,204 $0.36 $11,204 $0.36 Repairs & Maintenance $7,782 $0.25 $7,782 $0.25 Marketing & Promotion $905 $0.03 $2,400 $0.08 On-Site Payroll $29,069 $0.93 $29,069 $0.93 Management Fee $0 $0.00 $16,128 $0.52 General & Administration $8,676 $0.28 $8,676 $0.28 Reserves/Replacements $3,113 $0.10 $3,113 $0.10 Bank Charges $3,203 $0.10 $3,360 $0.11 Telephone $1,962 $0.06 $1,962 $0.06 TOTAL EXPENSES $75,101 $2.41 $100,353 $3.22 % of EGI 33.3% 37.3% 1) Pro Forma Expense Real Estate Taxes has been adjusted to reflect a sale 2) Current and Pro Forma Expense Insurance has been adjusted to reflect industry standards 3) Current and Pro Forma Expense Repairs & Maintenance has been adjusted to $0.25 per rentable square foot 4) Pro Forma Expense Marketing & Promotion has been adjusted to reflect industry standards 5) Pro Forma Expense Management Expense has been added at 6% of EGI 6) Current and Pro Forma Expense Reserves/Replacements has been added to reflect industry standards 7) Pro Forma Expense Bank Charges has been increased to reflect Pro Forma revenues 14

19 DEMOGRAPHIC ANALYSIS LaFollette Storage

20 DEMOGRAPHIC ANALYSIS DEMOGRAPHIC REPORT 3 Miles 5 Miles 8 Miles 2000 Population 11,470 19,674 28, Population 11,042 20,037 29, Population 10,762 19,513 29, Population 10,529 19,554 29, Households 4,828 7,985 11, Households 4,474 7,919 12, Households 4,354 7,711 11, Households 4,271 7,753 12, Average Household Size Daytime Population 3,496 5,213 6, Owner Housing Units 54.88% 60.41% 62.81% 2000 Renter Housing Units 35.04% 29.61% 24.89% 2000 Vacant 10.08% 9.98% 12.30% 2014 Owner Housing Units 55.58% 63.23% 67.78% 2014 Renter Housing Units 44.42% 36.77% 32.22% 2014 Vacant 17.13% 17.44% 20.23% 2019 Owner Housing Units 55.59% 63.38% 67.89% 2019 Renter Housing Units 44.41% 36.62% 32.11% 2019 Vacant 18.16% 18.49% 21.38% $ 0 - $14, % 27.1% 25.3% $ 15,000 - $24, % 15.5% 15.6% $ 25,000 - $34, % 13.1% 13.5% $ 35,000 - $49, % 18.6% 18.1% $ 50,000 - $74, % 13.7% 14.9% $ 75,000 - $99, % 6.9% 6.9% $100,000 - $124, % 3.0% 3.3% $125,000 - $149, % 0.6% 0.9% $150,000 - $199, % 0.7% 0.7% $200,000 - $249, % 0.4% 0.5% $250, % 0.5% 0.5% 2014 Median Household Income $27,094 $30,869 $31, Per Capita Income $14,685 $16,084 $16, Average Household Income $35,653 $40,102 $41,783 Demographic data 2012 by Experian. 16

21 DEMOGRAPHIC ANALYSIS SUMMARY REPORT Geography: 8 miles Population In 2014, the population in your selected geography is 29,421. The population has changed by 1.63% since It is estimated that the population in your area will be 29,740 five years from now, which represents a change of 1.08% from the current year. The current population is 48.64% male and 51.35% female. The median age of the population in your area is 41.8, compare this to the Entire US average which is The population density in your area is people per square mile. Households There are currently 11,817 households in your selected geography. The number of households has changed by 0.14% since It is estimated that the number of households in your area will be 11,999 five years from now, which represents a change of 1.53% from the current year. The average household size in your area is 2.46 persons. Income In 2014, the median household income for your selected geography is $31,762, compare this to the Entire US average which is currently $51,972. The median household income for your area has changed by 21.65% since It is estimated that the median household income in your area will be $36,580 five years from now, which represents a change of 15.17% from the current year. The current year per capita income in your area is $16,947, compare this to the Entire US average, which is $28,599. The current year average household income in your area is $41,783, compare this to the Entire US average which is $74,533. Race & Ethnicity The current year racial makeup of your selected area is as follows: 97.31% White, 0.32% Black, 0.07% Native American and 0.33% Asian/Pacific Islander. Compare these to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% Native American and 5.02% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 1.51% of the current year population in your selected area. Compare this to the Entire US average of 17.13%. Housing In 2000, there were 8,451 owner occupied housing units in your area and there were 3,349 renter occupied housing units in your area. The median rent at the time was $289. Employment In 2014, there are 6,658 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 41.58% of employees are employed in white-collar occupations in this geography, and 58.41% are employed in blue-collar occupations. In 2014, unemployment in this area is 10.59%. In 2000, the average time traveled to work was 30.1 minutes. Demographic data 2012 by Experian. 17

22 DEMOGRAPHIC ANALYSIS TRAFFIC COUNTS Traffic Count data 2012 by TrafficMetrix. All rights reserved. Two-way, average daily traffic volumes. * Traffic Count Estimate 18

23 RENT COMPARABLES LaFollette Storage

24 RENT COMPARABLES RENT COMPARABLES MAP Property Name Address City State Zip Phone Distance from Subject Sq. Ft. LaFollette Storage 146 Canyon Ln La Follette TN (423) Miles 31,167 1) Club Norris Dock & Storage 896 Shawnee Dr Jacksboro TN (423) Miles 11,000 2) Behind TJ's 1708 E Central Ave La Follette TN Miles 18,850 3) All Seasons Self Storage 131 Indian Mound Cir Jacksboro TN (423) Miles 17,320 4) Stone Mill Self Storage 255 Stone Mill Rd Jacksboro TN Miles 6,744 5) J&S Storage 3653 Gen. Carl W Stiner Hwy La Follette TN Miles 13,876 6) Volunteer Self-Storage 4399 Gen. Carl W Stiner Hwy La Follette TN (423) Miles 18,545 20

25 RENT COMPARABLES RENT COMPARABLES Non-Climate Controlled Property Distance from Subject Unit Size Rate Unit Size Rate Unit Size Rate Unit Size Rate Unit Size Rate Average $/SF LaFollette Storage - 5x7 35 Sq Ft $ x7 49 Sq Ft $ x Sq Ft $ x Sq Ft $ x Sq Ft $ $0.76 Club Norris Dock & Storage 1.8 Miles 5x5 25 Sq Ft N/A 5x10 50 Sq Ft N/A 10x Sq Ft N/A 10x Sq Ft $ x Sq Ft N/A $0.30 All Seasons Self Storage 3.7 Miles 5x5 25 Sq Ft N/A 5x10 50 Sq Ft $ x Sq Ft $ x Sq Ft $ x Sq Ft $90.00 $0.57 Stone Mill Self Storage 5.1 Miles 5x5 25 Sq Ft - 5x10 50 Sq Ft $ x Sq Ft $ x Sq Ft $ x Sq Ft $90.00 $0.61 J&S Storage 6.5 Miles 5x5 25 Sq Ft N/A 5x10 50 Sq Ft $ x Sq Ft $ x Sq Ft $ x Sq Ft - $0.56 Volunteer Self-Storage 8 Miles 5x5 25 Sq Ft N/A 5x10 50 Sq Ft N/A 10x Sq Ft $ x Sq Ft - 10x Sq Ft - $0.50 Subject $/SF $1.14 $0.96 $0.80 $0.66 $0.63 $0.76 Average Comparable $/SF N/A $0.80 $0.57 $0.47 $0.45 $0.57 the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any 21

26 RENT COMPARABLES RENT COMPARABLES Non Climate Unit Rent per Square Foot $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 Non Climate Controlled Average $0.20 $0.10 $0.00 $0.76 $0.30 $0.57 $0.61 $0.56 $0.50 LaFollette Storage Club Norris Dock & Storage All Seasons Self Storage Stone Mill Self Storage J&S Storage Volunteer Self Storage Rent per Square Foot $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 Subject Comp Avg $0.40 $0.20 $0.00 5x10 c/c 10x10 c/c 10x15 c/c 10x20 c/c 5x5 5x10 10x10 10x15 10x20 the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any 22

27 RENT COMPARABLES MARKET SATURATION Saturation Estimate Per Capita Demand for Self Storage in Knoxville, TN: 9.39 Sq Ft 3-Mile Target Market Facilities in 1-mile radius* 3 3 Sq. Ft. in marketplace** 60,629 60,629 Residents in 1-mile radius 10,762 = 5.63 SF/person 10,529 = 5.76 SF/person Undersupplied Undersupplied 5-Mile Target Market Facilities in 3-mile radius* 4 4 Sq. Ft. in marketplace** 77,949 77,949 Residents in 3-mile radius 19,513 = 3.99 SF/person 19,554 = 3.99 SF/person Undersupplied Undersupplied 8-Mile Target Market Facilities in 5-mile radius* 7 7 Sq. ft. in marketplace** 118, ,814 Residents in 5-mile radius 29,422 = 4.0 SF/person 29,740 = 4.0 SF/person Undersupplied Undersupplied 23

28 RECENT SALES LaFollette Storage

29 RECENT SALES RECENT SALES MAP 1) 2) 3) 4) 5) LaFollette Storage Pro Storage City Storage Mid-Tenn Storage Advance Stor-Guard Pro Storage 25

30 RECENT SALES CAP RATE AND PRICE PER RENTABLE SQUARE Average Cap Rate Subject Pro Storage City Storage Mid-Tenn Storage Advance Stor-Guard Average Price per Rentable Square Feet Subject Pro Storage City Storage Mid-Tenn Storage Advance Stor-Guard Pro Storage 26

31 RECENT SALES RECENT SALES LaFollette Storage 146 Canyon Ln La Follette, TN Total Units: 253 Offering Price: $1,795,000 Rentable SF: 31,127 Price/SF: $57.67 Year Built: 1984 CAP Rate: 8.40% Subject Property Comments LaFollette Storage is being offered as a facility with strong cash flow, a track record of revenue growth, and upside in continued improvement. 1 Pro Storage 311 Glendale Dr Chattanooga, TN Close of Escrow: 8/31/2015 Sale Price: $1,875,000 Total Units: 395 Price/SF: $43.18 Rentable SF: 43,420 CAP Rate: 7.93% Year Built: 1941 Comments Pro Storage was sold as a cash flowing facility with high occupancy and the potential for expansion. 2 City Storage 2220 Park Dr Chattanooga, TN Close of Escrow: 5/1/2015 Sale Price: $2,200,000 Total Units: 344 Price/SF: $54.96 Rentable SF: 40,029 CAP Rate: 7.86% Year Built: 1984 Comments City Storage was sold based on current income with upside potential in occupancy. 27

32 RECENT SALES RECENT SALES 3 Mid-Tenn Storage 136 River Rock Blvd Murfreesboro, TN Close of Escrow: 11/18/2014 Sale Price: $3,251,000 Total Units: 437 Price/SF: $61.72 Rentable SF: 52,675 CAP Rate: 6.49% Year Built: 1998 Comments Mid-Tenn Storage was sold as a cash flowing facility with high occupancy and the potential for limited expansion. 4 Advance Stor-Guard 1120 Tennessee 76 White House, TN Close of Escrow: 2/19/2015 Sale Price: $3,000,000 Total Units: 297 Price/SF: $55.94 Rentable SF: 53,625 CAP Rate: 7.55% Year Built: 2006 Comments Advance Stor-Guard was sold as a cash flowing facility with high occupancy and the potential for significant expansion. 5 Pro Storage 6631 Maynardville Hwy Knoxville, TN Close of Escrow: 12/7/2015 Sale Price: $3,630,892 Total Units: 452 Price/SF: $65.90 Rentable SF: 55,094 CAP Rate: Year Built: 1985 Comments The Pro Storage property included room for expansion and was located on 7 acres of land in Knoxville. 28

33 OFFERING MEMORANDUM Jody McKibben Regional Manager Marcus & Millichap REIS Seattle License: TN: Tel: (615) Fax: (615) Offices Throughout the U.S and Canada