Dear Fellow Shareholders,
It has been my honor to work alongside Ken Woolley for almost two decades, including nearly 11 years at Extra Space Storage. I became the CEO of our company on April 1, 2009, and am enthusiastic about our future. The theme of our 2008 annual report is “Timing is Everything,” and it is especially fitting for me as I step into my new role. I believe my experience at Extra Space Storage will make this a seamless transition for our shareholders, partners and employees.
Timing is everything… it’s a saying that held true for Extra Space Storage in 2008 and will be especially relevant in 2009.
Last year, good timing meant raising equity at the right moment. It meant bringing our call center in-house and implementing a customer management technology system that will build stronger relationships with our client base. It also meant meeting new demand for self storage in an economic downturn.
I’m proud of Extra Space Storage for delivering solid performance and seizing opportunities in these unprecedented financial times. Because of the long-term strategy of our management team, we bolstered our balance sheet when many companies did not.
In May 2008, before the credit markets froze, we raised $244.4 million in gross proceeds through a successful follow-on secondary offering of common stock. In October 2008, we raised another $44.1 million in gross proceeds through a direct placement of common stock. At year-end, we had $64.0 million in cash, $88.0 million in undrawn term and construction loans and $73.0 million of availability on our line of credit, bringing our total unused capacity to $225.0 million.
Since the end of 2008, we have drawn an additional $50.0 million on our line of credit with General Electric and we have successfully closed one term loan for $9.1 million and a $50.0 million revolving credit line. We also paid off a $74.4 million loan two months early. By paying off this particular loan, we've freed up another 20 properties on which we can place new debt. We were also able to swap a $64.5 million variable rate term loan to a fixed rate of 4.2% for four and a half years. We now have the capacity to satisfy all of our loan maturities through July 2010 and have time to ride out the challenging credit environment.
