Expanding our footprint
Operating properties on behalf of third-party owners remains an important opportunity for us. Managed and franchise properties provide us with management fee income and increased tenant reinsurance revenues, while expanding our operating footprint and market knowledge.
Last year we brought 22 new properties to our third-party management platform, operating each under the “Clean and Green” Extra Space Storage brand. We ended the year with 67 managed and franchise locations – nearly a tenth of our overall portfolio.
In addition to the fees and reinsurance income, each management contract gives us a potential acquisition opportunity. In 2008, we purchased two properties from this pipeline and we have acquired interests in a total of 45 properties for $247.5 million from this pipeline since 2005. In addition, we acquired an additional 40.0% interest in an existing joint venture with Prudential for $44.1 million in 2008. Our third-party management strategy gives us an off-market source for future acquisitions with very little integration risk, since we know each property inside and out. We plan to expand our third-party business in 2009. We think it’s an excellent time to pursue this opportunity.
