[LOGO]
ALEX. BROWN & SONS
INCORPORATED
PRESENTATION TO:
THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF
SHURGARD STORAGE CENTERS, INC.
[LOGO]
ALEX. BROWN
JUNE 26, 1996
The information set forth herein was obtained from the management of Shurgard
Storage Centers, Inc. ("Shurgard"), the managements of IDS/Shurgard Income
Growth Partners L.P. ("IDS I"), IDS/Shurgard Income Growth Partners L.P. II
("IDS II") and IDS/Shurgard Income Growth Partners L.P. III ("IDS III") and
other sources that we believe to be reliable, but has not been independently
verified. Alex. Brown & Sons Incorporated ("Alex. Brown") has not made or
obtained an independent evaluation or appraisal of the assets of Shurgard,
IDS I, IDS II or IDS III.
These materials have been prepared for the use of the Special Committee of the
Board of Directors of Shurgard only. The information set forth herein is
confidential and may not be disclosed or provided to any third parties without
the written permission of Alex. Brown.
These materials were prepared as of June 25, 1996 and reflect information made
available to Alex. Brown prior to such date. It does not include information
regarding all of the assessments made by Alex. Brown in arriving at its
conclusion.
ALEX. BROWN
TABLE OF CONTENTS
TAB
---
Transaction Overview and Valuation Summary. . . . . . . . . . . . . . 1
Analysis of Selected Companies . . . . . . . . . . . . . . . . . . . 2
Discounted Cash Flow Analysis . . . . . . . . . . . . . . . . . . . . 3
Analysis of Selected Transactions . . . . . . . . . . . . . . . . . . 4
Summary of Accretion/Dilution Analysis . . . . . . . . . . . . . . . 5
Market Trading Data . . . . . . . . . . . . . . . . . . . . . . . . . 6
[LOGO]
ALEX. BROWN & SONS
INCORPORATED
SHURGARD STORAGE CENTERS, INC.
LOCATIONS OF STORAGE PROPERTIES
Displays locations of Owned Properties, Managed Properties, Corporate
Headquarters and Regional Headquarters of Shurgard Storage Centers, Inc. as
well as the locations of Income Growth Partners L.P., Income Growth Partners
L.P. II, and Income Growth Partners L.P. III on a map of the United States.
[MAP]
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
PORTFOLIO SUMMARY - IDS/SHURGARD INCOME GROWTH PARTNERS L.P.
- - - -----------------------------------------------------------------------------------------------
Rentable Square
Property Address Type Footage Occupancy
- - - ---------------- ---- ------- ---------
Shurgard of Ontario Self-Storage 56,900 78%
2249 South Grove Ave., Ontario CA
Shurgard of Walnut Self-Storage 95,500 71%
21035 East Washington St., Walnut, CA
Shurgard of Margate Self-Storage 75,300 84%
5150 West Copans Road, Margate, FL
Shurgard of Morgan Falls Self-Storage 75,700 93%
7760 Roswell Road, Dunwoody, GA
Shurgard of Burke Self-Storage 31,900 97%
5609 Guinea Road, Fairfax, VA
Shurgard of Midlothian Turnpike Self-Storage 43,500 96%
10110 Midlothian Turnpike, Richmond, VA
Shurgard of S. Military Hwy Self-Storage 48,300 74%
788 South Military Hwy., Virginia Beach, VA
Shurgard of Factoria Square Self-Storage 70,200 98%
4041 124th Avenue SE, Bellevue, WA
2
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
PORTFOLIO SUMMARY - IDS/SHURGARD INCOME GROWTH PARTNERS L.P.
- - - -----------------------------------------------------------------------------------------------
Rentable Square
Property Address Type Footage Occupancy
- - - ---------------- ---- ------- ---------
Shurgard of Canton Self-Storage 58,300(1) 88%
2101 Haggerty Road, Canton, MI
Shurgard of Fraser Self-Storage 72,800(1) 98%
32775 Groesbeck Road, Fraser, MI
Shurgard of Livonia Self-Storage 67,100(1) 95%
30300 Plymouth Road, Livonia, MI
Shurgard of Warren Self-Storage 68,200(1) 89%
2498 10 Mile Road, Warren, MI
- - - -------------------------
(1) TOTAL RENTABLE SQUARE FOOTAGE OF THE PROPERTY. THE PARTNERSHIP OWNS A 70%
INTEREST IN THE JOINT VENTURE WHICH OWNS THE PROPERTY.
3
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
PORTFOLIO SUMMARY - IDS/SHURGARD INCOME GROWTH PARTNERS II L.P.
- - - -----------------------------------------------------------------------------------------------
Rentable Square
Property Address Type Footage Occupancy
- - - ---------------- ---- ------- ---------
Shurgard of Orange Self-Storage 89,600 89%
623 West Collins Ave., Orange, CA
Shurgard of Sterling Heights Self-Storage 103,800 93%
36260 Van Dyke Ave., Sterling Heights, MI
Shurgard of T.C. Jester Self-Storage 64,000 86%
2100 North Loop West, Houston, TX
Shurgard of Newport News North Self-Storage 59,100 91%
13142 N. Jefferson Ave., Newport News, VA
Shurgard of Chesapeake Self-Storage 58,400 91%
940 Professional Place, Chesapeake, VA
Shurgard of Leesburg Self-Storage 27,600 97%
11 Lawson Road SE, Leesburg, VA
Shurgard of Kennydale Self-Storage/ 66,500 88%
1755 NE 48th Street, Renton, WA Retail
Shurgard of Bellefield Self-Storage 66,500 92%
1111 118th Avenue SE, Bellevue, WA
4
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
PORTFOLIO SUMMARY - IDS/SHURGARD INCOME GROWTH PARTNERS III L.P.
- - - ------------------------------------------------------------------------------------------------
Rentable Square
Property Address Type Footage Occupancy
- - - ---------------- ---- ------- ---------
Shurgard of Gilbert Self-Storage 65,800 73%
405 North Gilbert, Gilbert, AZ
Shurgard of Dobson Ranch Self-Storage 58,500 76%
2640 South Alma School Road, Mesa, AZ
Shurgard of Castro Valley Self-Storage/ 72,400 87%
21655 & 21082 Redwood Road, Castro Valley, CA Office
Shurgard of Newark Self-Storage 61,500 92%
37444 Cedar Boulevard, Newark, CA
Shurgard of Sacramento Self-Storage 53,100 94%
8959 Picket Road, Sacramento, CA
Shurgard of San Leandro Self-Storage 58,500 91%
2011 Marina Boulevard, San Leandro, CA
Shurgard of San Lorenzo Self-Storage 54,100 86%
16025 Ashland Avenue, San Lorenzo, CA
Shurgard of Delray Beach Self-Storage 77,300 84%
6000 West Atlantic Avenue, Delray Beach, FL
5
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
PORTFOLIO SUMMARY - IDS/SHURGARD INCOME GROWTH PARTNERS III L.P.
- - - ------------------------------------------------------------------------------------------------
Rentable Square
Property Address Type Footage Occupancy
- - - ---------------- ---- ------- ---------
Shurgard of Norcross Self-Storage 61,800 87%
5010 Jimmy Carter Boulevard, Norcross, GA
Shurgard of Stone Mountain Self-Storage 61,200(2) 96%
840 Hambrick Road, Stone Mountain, GA
Shurgard of Tucker Self-Storage/ 60,000 84%
2660 Mountain Industrial Boulevard, Tucker, GA Office
Shurgard of Forest Park Self-Storage 65,200(3) 92%
5979 Old Dixie Road, Forest Park, GA
Shurgard of Rochester/Utica Self-Storage 56,600 98%
2100 West Utica Road, Utica, MI
Shurgard of Allen Boulevard Self-Storage 42,500 98%
11160 SW Allen Boulevard, Beaverton, OR
Shurgard of Windcrest Self-Storage 86,200 69%
10652 Interstate Hwy 35 N, San Antonio, TX
Shurgard of Tracy Self-Storage 69,600 91%
400 West Larch Road, Tracy, CA
- - - -------------------------
(2) STONE MOUNTAIN PROPERTY INCLUDES APPROXIMATELY 1.5 ACRES OF EXCESS LAND
HELD FOR RESALE.
(3) FOREST PARK PROPERTY INCLUDES APPROXIMATELY 1.99 ACRES OF EXCESS LAND HELD
FOR RESALE.
6
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
SUMMARY OF THE PROPOSED TRANSACTION
- - - --------------------------------------------------------------------------------
TARGETS: IDS/Shurgard Income Growth Partners L.P. ("IDS I")
IDS/Shurgard Income Growth Partners L.P. II ("IDS II")
IDS/Shurgard Income Growth Partners L.P. III ("IDS III")
TRANSACTION STRUCTURE: Two step merger:
1. Tender Offer for up to 65,000, 49,000 and 52,000
of the outstanding units of limited partnership of
IDS I, IDS II and IDS III, respectively, for $257,
$222 and $307 per unit, respectively.
2. Statutory merger of IDS I, IDS II and IDS III into
Shurgard in consideration of the issuance of
10.38, 8.97 and 12.40 shares of Shurgard common
stock (based upon a 20-day average price of
$24.68) for each outstanding unit of IDS I, IDS II
and IDS III, respectively, subject to the collar
described below.
AGGREGATE
CONSIDERATION PAID:
IDS I IDS II IDS III TOTAL
----- ------ ------- -----
Cash $0 to 16.7mm $0 to 10.9mm $0 to 16.0mm $0 to 43.6mm
Common
Stock $23.4 to 40.1mm $16.0 to 26.9mm $23.6 to 39.6mm $63.0 to 106.6mm
--------------- --------------- --------------- ----------------
$40.1 mm $26.9mm $39.6mm $106.6mm
7
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
SUMMARY OF THE PROPOSED TRANSACTION (CONTINUED)
- - - --------------------------------------------------------------------------------
CALCULATION OF SHURGARD
COMMON STOCK PRICE: 20 trading days average ending on the fifth day
prior to the Special Meeting of each partnership.
COLLAR: Low: If the 20 day average for Shurgard falls below
$22.25, then each unit of limited partnership of
IDS I, IDS II and IDS III shall receive 11.55,
9.98 and 13.80 shares of Shurgard common stock
respectively; provided, however, if the 20 day
average for Shurgard's common stock falls below
$21.50, then the General Partners of each
partnership may elect to terminate the merger
agreement with respect to each applicable
partnership unless Shurgard agrees to pay
additional consideration in an amount equal to
the difference between Shurgard's 20 day average
and $21.50
High: If the 20 day average for Shurgard rises above
$27.75, then each unit of limited partnership of
IDS I, IDS II and IDS III shall receive 9.43,
8.15 and 11.27 shares of Shurgard common stock,
respectively; provided, however, if the 20 day
average for Shurgard's common stock rises above
$28.50, then Shurgard may elect to terminate the
merger agreement.
BREAK-UP FEES: Except as to IDS I, as to which no expense
reimbursement is permissible under the terms of
its limited partnership agreement, Shurgard will
be reimbursed a pro rata portion (based upon the
partnership's relative net asset value) of the
shared transaction expenses (as defined) and
individual transaction expenses (as defined) that
would otherwise be borne by it in the event of
certain termination events.
ACCOUNTING: Taxable transaction/purchase accounting.
8
SHURGARD STORAGE CENTERS, INC.
STOCK CONSIDERATION ANALYSIS
Illustrates the relationship between SHU Stock Price and Equity Purchase Price,
showing Equity Purchase Price at the Low Walk-away, Low Collar, 20-Day Trailing
Average, High Collar and High Walk-away.
[GRAPH]
9
SHURGARD STORAGE CENTERS, INC.
VALUATION SUMMARY: CONSOLIDATED PARTNERSHIPS
- - - --------------------------------------------------------------------------------
Compares Total Real Estate Valuation of Consolidated Partnerships with Implied
Total Valuations of Selected Companies, Discounted Cash Flows and Selected
Transactions.
[GRAPH]
10
SHURGARD STORAGE CENTERS, INC.
VALUATION SUMMARY: IDS I
- - - --------------------------------------------------------------------------------
Compares Total Real Estate Valuation of IDS I with Implied Total Valuations of
Selected Companies, Discounted Cash Flows and Selected Transactions.
[GRAPH]
11
SHURGARD STORAGE CENTERS, INC.
VALUATION SUMMARY: IDS II
- - - --------------------------------------------------------------------------------
Compares Total Real Estate Valuation of IDS II with Implied Total Valuations of
Selected Companies, Discounted Cash Flows and Selected Transactions.
[GRAPH]
12
SHURGARD STORAGE CENTERS, INC.
VALUATION SUMMARY: IDS II
- - - --------------------------------------------------------------------------------
Compares Total Real Estate Valuation of IDS III with Implied Total Valuations of
Selected Companies, Discounted Cash Flows and Selected Transactions.
[GRAPH]
13
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
1997 FFO $ACCRETION / DILUTION SUMMARY [a]
- - - --------------------------------------------------------------------------------
0 % CASH, 100% STOCK
CONSOLIDATED
IDS I IDS II IDS III PARTNERSHIPS
-------------------------- -------------------------- -------------------------- --------------------------
SHU Price Accretion SHU Price Accretion SHU Price Accretion SHU Price Accretion
-------------------------- -------------------------- -------------------------- --------------------------
$21.50 ($0.01) $21.50 ($0.00) $21.50 ($0.00) $21.50 ($0.01)
22.25 (0.01) 22.25 (0.00) 22.25 (0.00) 22.25 (0.01)
24.68 0.01 24.68 0.01 24.68 0.01 24.68 0.02
27.75 0.02 27.75 0.02 27.75 0.03 27.75 0.07
28.50 0.02 28.50 0.02 28.50 0.03 28.50 0.07
20 % CASH, 80% STOCK
CONSOLIDATED
IDS I IDS II IDS III PARTNERSHIPS
-------------------------- -------------------------- -------------------------- --------------------------
SHU Price Accretion SHU Price Accretion SHU Price Accretion SHU Price Accretion
-------------------------- -------------------------- -------------------------- --------------------------
$21.50 ($0.00) $21.50 $0.00 $21.50 $0.01 $21.50 $0.00
22.25 (0.00) 22.25 0.00 22.25 0.01 22.25 0.00
24.68 0.01 24.68 0.01 24.68 0.02 24.68 0.03
27.75 0.02 27.75 0.02 27.75 0.03 27.75 0.07
28.50 0.02 28.50 0.02 28.50 0.03 28.50 0.07
40 % CASH, 60% STOCK
CONSOLIDATED
IDS I IDS II IDS III PARTNERSHIPS
-------------------------- -------------------------- -------------------------- --------------------------
SHU Price Accretion SHU Price Accretion SHU Price Accretion SHU Price Accretion
-------------------------- -------------------------- -------------------------- --------------------------
$21.50 $0.00 $21.50 $0.01 $21.50 $0.01 $22.25 $0.02
22.25 0.00 22.25 0.01 22.25 0.01 22.25 0.02
24.68 0.01 24.68 0.01 24.68 0.02 24.68 0.05
27.75 0.02 27.75 0.02 27.75 0.03 27.75 0.07
28.50 0.02 28.50 0.02 28.50 0.03 28.50 0.07
- - - -------------------------
[a] BASED UPON MANAGEMENT'S PROJECTIONS FOR THE YEAR ENDED DECEMBER 31, 1997.
14
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
1997 FFO %ACCRETION / DILUTION SUMMARY [a]
- - - --------------------------------------------------------------------------------
0 % CASH, 100% STOCK
CONSOLIDATED
IDS I IDS II IDS III PARTNERSHIPS
-------------------------- -------------------------- -------------------------- --------------------------
SHU Price Accretion SHU Price Accretion SHU Price Accretion SHU Price Accretion
-------------------------- -------------------------- -------------------------- --------------------------
$21.50 -0.46% $21.50 -0.15% $21.50 -0.08% $21.50 -0.63%
22.25 -0.46% 22.25 -0.15% 22.25 -0.08% 22.25 -0.63%
24.68 0.24% 24.68 0.33% 24.68 0.62% 24.68 1.06%
27.75 0.96% 27.75 0.83% 27.75 1.34% 27.75 2.83%
28.50 0.96% 28.50 0.83% 28.50 1.34% 28.50 2.83%
20 % CASH, 80% STOCK
CONSOLIDATED
IDS I IDS II IDS III PARTNERSHIPS
-------------------------- -------------------------- -------------------------- --------------------------
SHU Price Accretion SHU Price Accretion SHU Price Accretion SHU Price Accretion
-------------------------- -------------------------- -------------------------- --------------------------
$21.50 -0.17% $21.50 0.06% $21.50 0.22% $21.50 0.09%
22.25 -0.17% 22.25 0.06% 22.25 0.22% 22.25 0.09%
24.68 0.40% 24.68 0.45% 24.68 0.79% 24.68 1.49%
27.75 0.99% 27.75 0.84% 27.75 1.37% 27.75 2.95%
28.50 0.99% 28.50 0.84% 28.50 1.37% 28.50 2.95%
40 % CASH, 60% STOCK
CONSOLIDATED
IDS I IDS II IDS III PARTNERSHIPS
-------------------------- -------------------------- -------------------------- --------------------------
SHU Price Accretion SHU Price Accretion SHU Price Accretion SHU Price Accretion
-------------------------- -------------------------- -------------------------- --------------------------
$21.50 0.14% $21.50 0.26% $21.50 0.53% $21.50 0.85%
22.25 0.14% 22.25 0.26% 22.25 0.53% 22.25 0.85%
24.68 0.57% 24.68 0.56% 24.68 0.97% 24.68 1.94%
27.75 1.02% 27.75 0.86% 27.75 1.41% 27.75 3.08%
28.50 1.02% 28.50 0.86% 28.50 1.41% 28.50 3.08%
[a] BASED UPON MANAGEMENT'S PROJECTIONS FOR THE YEAR ENDED DECEMBER 31, 1997.
15
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
CONSIDERATIONS REGARDING TENDER OFFER (ABSENT ANTICIPATED MERGER)
- - - --------------------------------------------------------------------------------
- Larger equity position in each of IDS I, IDS II and IDS III will help
to maintain Shurgard's position as each partnership's manager (I.E.,
protect approximately $.05 per share of management fee income).
- Presence of senior Shurgard executive as individual general partner,
combined with existing management contracts between Shurgard and each
partnership, provide Shurgard with significant control regardless of
percentage of limited partnership units acquired.
- Each limited partnership unit acquired will be entitled to receive its
pro rata portion of distributions from each partnership and, as
Shurgard affiliates control distributions of the partnerships,
Shurgard can protect its economic interests.
- Each limited partnership unit acquired through Shurgard's cash tender
offer will be accretive to its funds from operations--
IDS I IDS II IDS III
----- ----- -------
1997E FFO per unit (1) $25.50 $22.86 $33.44
Interest expense per unit (2) 21.20 18.32 25.33
------ ------ ------
Net accretion 4.30 4.54 8.11
- - - ------------------------------------------------------------------
(1) ASSUMES 95% OF EACH PARTNERSHIP'S FFO WOULD BE ALLOCATED TO THE HOLDERS OF
UNITS OF LIMITED PARTNERSHIPS
(2) BASED UPON ASSUMED INTEREST RATE OF 8.25% PER ANNUM.
16
[LOGO]
ALEX. BROWN & SONS
INCORPORATED
SHURGARD STORAGE CENTERS, INC.
VALUATION SUMMARY: SELECTED PUBLICLY-TRADED REITs
- - - --------------------------------------------------------------------------------
Displays Implied 1996 Equity Valuations of IDS I, IDS II, IDS III and
Consolidated Partnerships based on selected REIT 1996 FFO multiples.
[GRAPH]
17
SHURGARD STORAGE CENTERS, INC.
VALUATION SUMMARY: SELECTED PUBLICLY-TRADED REITs
- - - --------------------------------------------------------------------------------
Displays Implied 1997 Equity Valuations of IDS I, IDS II, IDS III and
Consolidated Partnerships based on selected REIT 1997 FFO multiples.
[GRAPH]
18
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
TRADING DATA OF SELECTED PUBLICLY-TRADED REITs
- - - --------------------------------------------------------------------------------
1996E
52 WEEK --------------------------------
PRICE ------------------ PAYOUT PRICE/
COMPANY TICKER 06/25/96 HIGH LOW DIVIDEND YIELD FFO RATIO FFO
- - - ------------------------------------ -------- -------- -------- -------- -------- -------- -------- -------- -------
- - - ------------------------------------------------------------------------------------------------------------------------------------
Shurgard Storage Centers SHU $25.25 $27.88 - $22.13 $1.88 7.4% $2.27 (2) 83.0% 11.1
Shurgard Storage Centers - Post Acq. SHU 25.25 27.88 - 22.13 1.88 7.4% $2.29 (2) 82.1% 11.0
- - - ------------------------------------------------------------------------------------------------------------------------------------
Public Storage, Inc. PSA 19.88 22.00 - 16.13 0.88 4.4% 1.95 (4) 45.1% 10.2
Storage USA, Inc. SUS 33.13 34.88 - 27.88 2.25 6.8% 2.66 (4) 84.6% 12.5
Sovran Self Storage SSS 26.75 27.50 - 22.38 2.02 7.6% 2.38 (4) 84.9% 11.2
Storage Trust Realty SEA 20.38 24.00 - 18.50 1.64 8.0% 2.05 (4) 80.0% 9.9
------------------------------------------------------------------------------------------------------------
Group High: 8.0% 84.9% 12.5
Group Mean: 7.0% 76.6% 11.0
Group Low: 4.4% 45.1% 9.9
------------------------------------------------------------------------------------------------------------
FULLY
1997E DILUTED
------------------------------- SHARES MARKET DEBT
PAYOUT PRICE/ OUT. CAP. O/S DEBT/
COMPANY FFO RATIO FFO (000) (mm) (mm) (1) TTL. MKT. CAP
- - - ------------------------------------ -------- -------- -------- -------- -------- -------- -------------
- - - ------------------------------------------------------------------------------------------------------------------------
Shurgard Storage Centers $2.35 (2) 80.0% 10.7 23,201 $585.8 $157.3 21.2%
Shurgard Storage Centers - Post Acq. 2.38 (2) 79.0% 10.6 26,577 671.1 183.6 (3) 21.5%
- - - ------------------------------------------------------------------------------------------------------------------------
Public Storage, Inc. 2.16 (4) 40.7% 9.2 76,409 1,518.6 120.8 7.4%
Storage USA, Inc. 2.94 (4) 76.5% 11.3 18,478 612.1 70.8 10.4%
Sovran Self Storage 2.62 (4) 77.1% 10.2 7,542 201.8 23.8 10.6%
Storage Trust Realty 2.31 (4) 71.0% 8.8 8,734 178.0 48.7 21.5%
------------------------------------------------------------------------------------------------
Group High: 80.0% 11.3 $1,518.6 $183.6 21.5%
Group Mean: 70.7% 10.1 $627.9 $100.8 15.4%
Group Low: 40.7% 8.8 $178.0 $23.8 7.4%
------------------------------------------------------------------------------------------------
- - - --------------------------------------------------
SOURCE: ONESOURCE
(1) AS REPORTED IN MARCH 31, 1996 10Q.
(2) ESTIMATE TAKEN FROM COMPANY PROJECTIONS.
(3) ASSUMES 20% OF TRANSACTION CONSIDERATION PAID IN CASH AND $5 MILLION IN
TRANSACTION EXPENSES.
(4) ESTIMATE TAKEN FROM REALTY STOCK REVIEW.
19
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
VALUATION BASED ON SELECTED PUBLICLY TRADED REITS
(IN THOUSANDS)
- - - --------------------------------------------------------------------------------
NET ASSET VALUE OF: IDS I: $40,066,706
IDS II: $26,861,846
IDS III: $39,649,643
------------
CONSOLIDATED PART.: $106,578,195
1996
COMPANY FFO (1) IMPLIED VALUATION AT
- - - ----------------------------------- -------- ----------------------------
12.5 11.0 9.9
Shurgard Storage Centers $52,552 MULTIPLE MULTIPLE MULTIPLE
-------- -------- --------
Shurgard Storage Centers-Post Acq. 62,898
IDS I $3,863 $48,107 $42,493 $38,395
IDS II 2,683 33,405 29,506 26,661
IDS III 4,051 50,446 44,558 40,262
Consolidated Partnerships 10,597 131,958 116,557 105,319
1997
COMPANY FFO (1) IMPLIED VALUATION AT
- - - ------------------------------------ ------- ----------------------------
11.3 10.1 8.8
Shurgard Storage Centers $54,527 MULTIPLE MULTIPLE MULTIPLE
-------- -------- --------
Shurgard Storage Centers-Post Acq. $65,231
IDS I $3,979 $49,550 $43,767 $39,547
IDS II 2,770 34,492 30,467 27,529
IDS III 4,196 52,251 46,153 41,703
Consolidated Partnerships 10,945 136,294 120,387 108,779
- - - ---------------------------------------
(1) ESTIMATE TAKEN FROM COMPANY PROJECTIONS.
20
[LOGO]
SHURGARD STORAGE CENTERS, INC.
VALUATION SUMMARY: DISCOUNTED CASH FLOW ANALYSIS
CONSOLIDATED PARTNERSHIPS
Illustrates the Implied Total Valuations of the Consolidated Partnerships
based on FFO, FAD and FCF.
- - - --------------------------------------------------------------------------------
IMPLIED TOTAL VALUATION: ($ IN THOUSANDS)
[GRAPH]
[a] ADDS BACK BALANCE SHEET ADJUSTMENTS OF $15.2 MILLION FOR MOST
APPROPRIATE COMPARISON TO REAL ESTATE VALUATION.
21
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF CONSOLIDATED PARTNERSHIPS
- - - -------------------------------------------------------------------------------
FUNDS FROM OPERATIONS
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$10,596,500 $10,944,671 $11,303,287 $11,672,662 $12,053,118 $12,444,987 $12,848,613 $13,264,347 $13,692,554 $14,133,606
COMPARED
GROWTH RATE
- - - -----------
2.92%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 70,464,673 57,084,762 127,549,435 11.00% 70,464,673 54,080,301 124,544,974
11.50% 68,932,818 54,575,950 123,508,768 11.50% 68,932,818 51,703,532 120,636,350
12.00% 67,451,732 52,187,892 119,639,624 12.00% 67,451,732 49,441,161 116,892,893
12.50% 66,019,330 49,914,274 115,933,604 12.50% 66,019,330 47,287,207 113,306,537
13.00% 64,633,624 47,749,139 112,382,763 13.00% 64,633,624 45,236,026 109,869,651
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.00% 70,464,673 51,376,286 121,840,958 11.00% 70,464,673 48,929,796 119,394,469
11.50% 68,932,818 49,118,355 118,051,173 11.50% 68,932,818 46,779,386 115,712,204
12.00% 67,451,732 46,969,103 114,420,835 12.00% 67,451,732 44,732,479 112,184,211
12.50% 66,019,330 44,922,846 110,942,176 12.50% 66,019,330 42,783,663 108,802,993
13.00% 64,633,624 42,974,225 107,607,849 13.00% 64,633,624 40,927,833 105,561,458
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.00% 70,464,673 46,705,714 117,170,387 11.OO% 70,464,673 44,675,031 115,139,704
11.50% 68,932,818 44,653,050 113,585,868 11.50% 68,932,818 42,711,613 111,644,431
12.00% 67,451,732 42,699,184 110,150,916 12.00% 67,451,732 40,842,698 108,294,430
12.50% 66,019,330 40,838,951 106,858,281 12.50% 66,019,330 39,063,345 105,082,675
13.00% 64,633,624 39,067,477 103,701,102 13.00% 64,633,624 37,368,891 102,002,516
- - - ------------------------------------------------------
* TOTAL CONSIDERATION PAID FOR CONSOLIDATED PARTNERSHIPS' INTERESTS:
$106.6 MILLION.
+ BASED UPON MANAGEMENT'S PROJECTIONS.
22
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF CONSOLIDATED PARTNERSHIPS
- - - -------------------------------------------------------------------------------
FUNDS AVAILABLE FOR DISTRIBUTION
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$10,163,063 $10,498,231 $10,843,454 $11,199,033 $11,565,280 $11,942,515 $12,331,066 $12,731,274 $13,143,489 $13,568,069
COMPARED
GROWTH RATE
- - - ------------
2.93%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 67,611,067 55,578,026 123,189,094 11.00% 67,611,067 52,652,867 120,263,934
11.50% 66,141,000 53,135,434 119,276,434 11.50% 66,141,000 50,338,832 116,479,832
12.00% 64,719,659 50,810,408 115,530,067 12.00% 64,719,659 48,136,176 112,855,835
12.50% 63,345,041 48,596,801 111,941,843 12.50% 63,345,041 46,039,075 109,384,116
13.00% 62,015,241 46,488,815 108,504,055 13.00% 62,015,241 44,042,035 1O6,057,276
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.OO% 67,611,067 50,020,224 117,631,291 11.00% 67,611,067 47,638,308 115,249,376
11.50% 66,141,000 47,821,891 113,962,891 11.50% 66,141,000 45,544,658 111,685,658
12.00% 64,719,659 45,729,367 110,449,026 12.00% 64,719,659 43,551,778 108,271,437
12.50% 63,345,041 43,737,121 107,082,162 12.50% 63,345,041 41,654,401 104,999,442
13.00% 62,015,241 41,839,933 103,855,174 13.00% 62,015,241 39,847,555 101,862,796
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.OO% 67,611,067 45,472,931 113,083,998 11.00% 67,611,067 43,495,847 111,106,914
11.50% 66,141,000 43,474,446 109,615,446 11.50% 66,141,000 41,584,253 107,725,253
12.00% 64,719,659 41,572,152 106,291,811 12.00% 64,719,659 39,764,667 104,484,326
12.50% 63,345,041 39,761,019 103,106,061 12.5O% 63,345,041 38,032,279 101,377,321
13.00% 62,015,241 38,036,303 100,051,543 13.00% 62,015,241 36,382,551 98,397,791
- - - -----------------------------------------------------
* TOTAL CONSIDERATION PAID FOR CONSOLIDATED PARTNERSHIPS' INTERESTS:
$106.6 MILLION.
+ BASED UPON MANAGEMENT'S PROJECTIONS.
23
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF CONSOLIDATED PARTNERSHIPS
- - - -------------------------------------------------------------------------------
FREE CASH FLOW
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$11,172,263 $11,507,431 $11,852,654 $12,208,233 $12,574,480 $12,951,715 $13,340,266 $13,740,474 $14,152,689 $14,577,269
COMPARED
GROWTH RATE
- - - ------------
2.70%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 73,554,480 59,527,188 133,081,669 11.00% 73,554,480 56,394,178 129,948,659
11.50% 71,961,834 56,911,035 128,872,869 11.50% 71,961,834 53,915,717 125,877,552
12.00% 70,421,864 54,420,801 124,842,665 12.00% 70,421,864 51,556,548 121,978,412
12.50% 68,932,407 52,049,904 120,982,311 12.50% 68,932,407 49,310,435 118,242,843
13.00% 67,491,405 49,792,132 117,283,538 13.00% 67,491,405 47,171,494 114,662,899
Cash Terminal Total Cash Terminal
Flow Value Value Flow Value Total
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.00% 73,554,480 53,574,469 127,128,950 11.O0% 73,554,480 51,023,304 124,577,784
11.50% 71,961,834 51,219,931 123,181,766 11.50% 71,961,834 48,780,887 120,742,721
12.00% 70,421,864 48,978,721 119,400,585 12.00% 70,421,864 46,646,401 117,068,265
12.50% 68,932,407 46,844,914 115,777,321 12.50% 68,932,407 44,614,203 113,546,611
13.00% 67,491,405 44,812,919 112,304,324 13.00% 67,491,405 42,678,970 110,170,376
Cash Terminal Total Cash Terminal
Flow Value Value Flow Value Total
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.OO% 73,554,480 48,704,063 122,258,543 11.00% 73,554,480 46,586,495 120,140,975
11.50% 71,961,834 46,563,574 118,525,408 11.50% 71,961,834 44,539,071 116,500,905
12.00% 70,421,864 44,526,110 114,947,974 12.00% 70,421,864 42,590,192 113,012,056
12.50% 68,932,407 42,586,285 111,518,692 12.50% 68,932,407 40,734,707 109,667,115
13.00% 67,491,405 40,739,017 108,230,423 13.00% 67,491,405 38,967,756 106,459,161
- - - ------------------------------------------------------
* TOTAL CONSIDERATION PAID FOR CONSOLIDATED PARTNERSHIPS' INTERESTS:
$106.6 MILLION .
+ BASED UPON MANAGEMENT'S PROJECTIONS.
24
SHURGARD STORAGE CENTERS, INC.
VALUATION SUMMARY: DISCOUNTED CASH FLOW ANAYLSIS
IDS I
Illustrates the Implied Total Valuations of IDS I based on FFO, FAD and FCF.
- - - --------------------------------------------------------------------------------
IMPLIED TOTAL VALUATION ($ IN THOUSANDS)
[GRAPH]
[a] ADDS BACK BALANCE SHEET ADJUSTMENTS OF $303.3 THOUSAND FOR MOST
APPROPRIATE COMPARISON TO REAL ESTATE VALUATION.
25
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF IDS I
- - - -------------------------------------------------------------------------------
FUNDS FROM OPERATIONS
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$3,863,100 $3,978,993 $4,098,363 $4,221,314 $4,347,953 $4,478,392 $4,612,743 $4,751,126 $4,893,660 $5,040,469
COMPARED
GROWTH RATE
- - - ------------
2.70%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 25,433,371 20,315,892 45,749,263 11.OO% 25,433,371 19,246,635 44,680,006
11.50% 24,882,673 19,423,031 44,305,704 11.50% 24,882,673 18,400,767 43,283,439
12.00% 24,350,188 18,573,146 42,923,333 12.00% 24,350,188 17,595,612 41,945,799
12.50% 23,835,170 17,763,988 41,599,157 12.50% 23,835,170 16,829,041 40,664,211
13.00% 23,336,906 16,993,438 40,330,344 13.00% 23,336,906 16,099,047 39,435,952
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.00% 25,433,371 18,284,303 43,717,674 11.00%. 25,433,371 17,413,622 42,846,993
11.50% 24,882,673 17,480,728 42,363,401 11.50% 24,882,673 16,648,313 41,530,985
12.00% 24,350,188 16,715,831 41,066,019 12.00% 24,350,188 15,919,839 40,270,027
12.50% 23,835,170 15,987,589 39,822,758 12.50% 23,835,170 15,226,275 39,061,445
13.00% 23,336,906 15,294,094 38,631,000 13.00% 23,336,906 14,565,804 37,902,710
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.00% 25,433,371 16,622,094 42,055,465 11.00% 25,433,371 15,899,394 41,332,765
11.50% 24,882,673 15,891,571 40,774,244 11.50% 24,882,673 15,200,633 40,083,306
12.00% 24,350,188 15,196,210 39,546,398 12.00% 24,350,188 14,535,505 38,885,693
12.50% 23,835,170 14,534,172 38,369,341 12.50% 23,835,170 13,902,251 37,737,421
13.00% 23,336,906 13,903,722 37,240,628 13.00% 23,336,906 13,299,212 36,636,118
- - - -----------------------------------------------------
* TOTAL CONSIDERATION PAID FOR CONSOLIDATED PARTNERSHIPS' INTERESTS:
$40.1 MILLION .
+ BASED UPON MANAGEMENT'S PROJECTIONS.
26
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF IDS I
- - - -------------------------------------------------------------------------------
FUNDS AVAILABLE FOR DISTRIBUTION
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$3,717,643 $3,829,173 $3,944,048 $4,062,370 $4,184,241 $4,309,768 $4,439,061 $4,572,233 $4,709,400 $4,850,682
COMPARED
GROWTH RATE
- - - -----------
2.70%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 24,475,734 19,550,943 44,026,678 11.OO% 24,475,734 18,521,946 42,997,681
11.50% 23,945,771 18,619,701 42,637,472 11.50% 23,945,771 17,707,927 41,653,698
12.00% 23,433,336 17,873,816 41,307,151 12.00% 23,433,336 16,933,089 40,366,424
12.50% 22,937,709 17,095,125 40,032,834 12.50% 22,937,709 16,195,381 39,133,091
13.00% 22,458,207 16,353,589 38,811,795 13.00% 22,458,207 15,492,873 37,951,080
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.OO% 24,475,734 17,595,849 42,071,583 11.00% 24,475,734 16,757,951 41,233,686
11.50% 23,945,771 16,822,531 40,768,302 11.50% 23,945,771 16,021,458 39,967,229
12.00% 23,433,336 16,086,434 39,519,770 12.00% 23,433,336 15,320,413 38,753,749
12.50% 22,937,709 15,385,612 38,323,322 12.50% 22,937,709 14,652,964 37,590,674
13.00% 22,458,207 14,718,230 37,176,436 13.00% 22,458,207 14,017,362 36,475,568
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.00% 24,475,734 15,996,226 40,471,961 11.00% 24,475,734 15,300,738 39,776,473
11.50% 23,945,771 15,293,210 39,238,981 11.50% 23,945,771 14,628,288 38,574,059
12.00% 23,433,336 14,624,031 38,057,367 12.00% 23,433,336 13,988,204 37,421,539
12.50% 22,937,709 13,986,920 36,924,630 12.50% 22,937,709 13,378,793 36,316,503
13.00% 22,458,207 13,380,209 35,838,415 13.00% 22,458,207 12,798,461 35,256,667
* TOTAL CONSIDERATION PAID FOR PARTNERSHIP'S INTERESTS: $40.1 MILLION.
+ BASED UPON MANAGEMENT'S PROJECTIONS.
27
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF IDS I
- - - -------------------------------------------------------------------------------
FREE CASH FLOW
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$3,717,643 $3,829,173 $3,944,048 $4,062,370 $4,184,241 $4,309,768 $4,439,061 $4,572,233 $4,709,400 $4,850,682
COMPARED
GROWTH RATE
-----------
2.70%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 24,475,734 19,550,943 44,026,678 11.00% 24,475,734 18,521,946 42,997,681
11.50% 23,945,771 18,691,701 42,637,472 11.50% 23,945,771 17,707,927 41,653,698
12.00% 23,433,336 17,873,816 41,307,151 12 00% 23,433,336 16,933,089 40,366,424
12.50% 22,937,709 17,095,125 40,032,834 12.50% 22,937,709 16,195,381 39,133,091
13.00% 22,458,207 16,353,589 38,811,795 13.00% 22,458,207 15,492,873 37,951,080
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.00% 24,475,734 17,595,849 42,071,583 11.00% 24,475,734 16,757,951 41,233,686
11.50% 23,945,771 16,822,531 40,768,302 11.50% 23,945,771 16,021,458 39,967,229
12.00% 23,433,336 16,086,434 39,519,770 12.00% 23,433,336 15,320,413 38,753,749
12.50% 22,937,709 15,385,612 38,323,322 12.50% 22,937,709 14,652,964 37,590,674
13.00% 22,458,207 14,718,230 37,176,436 13.00% 22,458,207 14,017,362 36,475,568
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.00% 24,475,734 15,996,226 40,471,961 11.O0% 24,475,734 15,300,738 39,776,473
11.50% 23,945,771 15,293,210 39,238,981 11.50% 23,945,771 14,628,288 38,574,059
12.00% 23,433,336 14,624,031 38,057,367 12.00% 23,433,336 13,988,204 37,421,539
12.50% 22,937,709 13,986,920 36,924,630 12.50% 22,937,709 13,378,793 36,316,503
13.00% 22,458,207 13,380,209 35,838,415 13.00% 22,458,207 12,798,461 35,256,667
* TOTAL CONSIDERATION PAID FOR PARTNERSHIP'S REAL ESTATE ASSETS: $40.4
MILLION.
+ BASED UPON MANAGEMENT'S PROJECTIONS.
28
SHURGARD STORAGE CENTERS, INC.
VALUATION SUMMARY: DISCOUNTED CASH FLOW ANALYSIS
IDS II
- - - --------------------------------------------------------------------------------
Illustrates the Implied Total Valuations of IDS II based on FFO, FAD and FCF.
IMPLIED TOTAL VALUATION ($ IN THOUSANDS)
[GRAPH]
[a] ADDS BACK BALANCE SHEET ADJUSTMENTS OF $3.7 MILLION FOR MOST APPROPRIATE
COMPARISON IN REAL ESTATE VALUATION.
29
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF IDS II
- - - -------------------------------------------------------------------------------
FUNDS FROM OPERATIONS
- - - -------------------------------------------------------------------------------------------------------------------------------
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$2,682,500 $2,769,794$ 2,859,707 $2,952,317 $3,047,706 $3,145,956 $3,247,153 $3,351,387 $3,458,748 $3,569,329
COMPARED
GROWTH RATE
- - - -----------
2.90%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 17,818,537 14,413,063 32,231,601 11.00% 17,818,537 13,654,481 31,473,018
11.50% 17,431,343 13,779,625 31,210,968 11.50% 17,431,343 13,054,382 30,485,725
12.00% 17,056,979 13,176,676 30,233,654 12.00% 17,056,979 12,483,166 29,540,145
12.50% 16,694,917 12,602,620 29,297,537 12.50% 16,694,917 11,939,325 28,634,241
13.00% 16,344,655 12,055,956 28,400,611 13.00% 16,344,655 11,421,432 27,766,087
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.00% 17,818,537 12,971,757 30,790,294 11.00% 17,818,537 12,354,054 30,172,591
11.50% 17,431,343 12,401,663 29,833,006 11.50% 17,431,343 11,811,107 29,242,450
12.00% 17,056,979 11,859,008 28,915,987 12.00% 17,056,979 11,294,293 28,351,272
12.50% 16,694,917 11,342,358 28,037,275 12.50% 16,694,917 10,802,246 27,497,163
13.00% 16,344,655 10,850,360 27,195,016 13.00% 16,344,655 10,333,676 25,678,332
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.00% 17,818,537 11,792,506 29,611,044 11.00% 17,818,537 11,279,789 29,098,326
11.50% 17,431,343 11,274,239 28,705,582 11.50% 17,431,343 10,784,055 28,215,398
12.00% 17,056,979 10,780,916 27,837,895 12.00% 17,056,979 10,312,181 27,369,159
12.50% 16,694,917 10,311,235 27,006,152 12.50% 16,694,917 9,862,920 26,557,837
13.00% 16,344,655 9,863,964 26,208,619 13.00% 16,344,655 9,435,096 25,779,751
- - - -----------------------------------------------------
* TOTAL CONSIDERATION PAID FOR PARTNERSHIP'S INTERESTS: $26.9 MILLION.
+ BASED UPON MANAGEMENT'S PROJECTIONS.
30
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF CONSOLIDATED PARTNERSHIPS
- - - -------------------------------------------------------------------------------
FUNDS AVAILABLE FOR DISTRIBUTION
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$2,575,801 $2,659,894 $2,746,510 $2,835,724 $2,927,615 $3,022,262 $3,119,749 $3,220,161 $3,323,584 $3,430,111
COMPARED
GROWTH RATE
- - - -----------
2.91%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 17,116,066 13,851,937 30,968,004 11.00% 17,116,066 13,122,888 30,238,954
11.50% 16,744,082 13,243,160 29,987,243 11.50% 16,744,082 12,546,152 29,290,234
12.00% 16,384,425 12,663,684 29,048,110 12.00% 16,384,425 11,997,175 28,381,600
12.50% 16,036,588 12,111,978 28,148,566 12.50% 16,036,588 11,474,506 27,511,094
13.00% 15,700,089 11,586,596 27,286,685 13.00% 15,700,089 10,976,775 26,676,864
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.00% 17,116,066 12,466,744 29,582,810 11.00% 17,116,066 11,873,089 28,989,156
11.50% 16,744,082 11,918,844 28,662,927 11.50% 16,744,082 11,351,280 28,095,363
12.00% 16,384,425 11,397,316 27,781,741 12.00% 16,384,425 10,854,587 27,239,012
12.50% 16,036,588 10,900,780 26,937,369 12.50% 16,036,588 10,381,696 26,418,284
13.00% 15,700,089 10,427,937 26,128,026 13.00% 15,700,089 9,931,368 25,631,457
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.00% 17,116,066 11,333,403 28,449,470 11.00% 17,116,066 10,840,647 27,956,713
11.50% 16,744,082 10,835,313 27,579,395 11.50% 16,744,082 10,364,212 27,108,295
12.00% 16,384,425 10,361,196 26,745,622 12.00% 16,384,425 9,910,710 26,295,135
12.50% 16,036,588 9,909,800 25,946,389 12.50% 16,036,588 9,478,940 25,515,528
13.00% 15,700,089 9,479,942 25,180,031 13.00% 15,700,089 9,067,771 24,767,860
- - - -----------------------------------------------------
* TOTAL CONSIDERATION PAID FOR PARTNERSHIP'S INTERESTS: $26.9 MILLION.
+ BASED UPON MANAGEMENT'S PROJECTIONS.
31
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF IDS II
- - - -------------------------------------------------------------------------------------------------------------------------------
FREE CASH FLOW
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$2,803,101 $2,887,194 $2,973,810 $3,063,024 $3,154,915 $3,249,562 $3,347,049 $3,447,461 $3,550,884 $3,657,411
COMPARED
GROWTH RATE
- - - ------------
2.70%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 18,454,689 14,741,399 33,196,088 11.00% 18,454,689 13,965,536 32,420,225
11.50% 18,055,097 14,093,531 32,148,628 11.50% 18,055,097 13,351,766 31,406,863
12.00% 17,668,721 13,476,846 31,145,567 12.00% 17,668,721 12,767,538 30,436,259
12.50% 17,295,019 12,889,713 30,184,732 12.50% 17,295,019 12,211,307 29,506,326
13.00% 16,933,474 12,330,595 29,264,070 13.00% 16,933,474 11,681,617 28,615,091
Cash Terminal Total Cash Terminal
Flow Value Value Flow Value Total
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.00% 18,454,689 13,267,259 31,721,948 11.00% 18,454,689 12,635,485 31,090,174
11.50% 18,055,097 12,684,178 30,739,275 11.50% 18,055,097 12,080,169 30,135,266
12.00% 17,668,721 12,129,161 29,797,882 12.00% 17,668,721 11,551,582 29,220,303
12.50% 17,295,019 11,600,742 28,895,761 12.50% 17,295,019 11,048,326 28,343,345
13.00% 16,933,474 11,097,536 28,031,010 13.00% 16,933,474 10,569,082 27,502,556
Cash Terminal Total Cash Terminal
Flow Value Value Flow Value Total
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.00% 18,454,689 12,061,144 30,515,833 11.00% 18,454,689 11,536,747 29,991,436
11.50% 18,055,097 11,531,071 29,586,167 11.50% 18,055,097 11,029,720 29,084,817
12.00% 17,668,721 11,026,510 28,695,231 12.00% 17,668,721 10,547,097 28,215,818
12.50% 17,295,019 10,546,129 27,841,148 12.50% 17,295,019 10,087,602 27,382,621
13.00% 16,933,474 10,088,669 27,022,143 13.00% 16,933,474 9,650,031 26,583,505
- - - ----------------------------------------------
* TOTAL CONSIDERATION PAID FOR PARTNERSHIP'S REAL ESTATE ASSETS: $30.5
MILLION.
+ BASED UPON MANAGEMENT'S PROJECTIONS.
32
SHURGARD STORAGE CENTERS, INC.
VALUATION SUMMARY: DISCOUNTED CASH FLOW ANALYSIS
IDS III
Illustrates the Implied Total Valuations of IDS III based on FFO, FAD and FCF.
- - - ------------------------------------------------------------------------------
IMPLIED TOTAL VALUATION ($ IN THOUSANDS)
[GRAPH]
[a] ADDS BACK BALANCE SHEET ADJUSTMENTS OF $11.2 MILLION FOR MOST
APPROPRIATE COMPARISON TO REAL ESTATE VALUATION.
33
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF IDS III
- - - -------------------------------------------------------------------------------------------------------------------------------
FUNDS FROM OPERATIONS
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$4,050,900 $4,195,884 $4,345,218 $4,499,031 $4,657,459 $4,820,640 $4,988,716 $5,161,834 $5,340,146 $5,523,808
COMPARED
GROWTH RATE
- - - ------------
3.15%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 27,212,764 22,355,806 49,568,571 11.00% 27,212,764 21,179,185 48,391,949
11.50% 26,618,802 21,373,294 47,992,096 11.50% 26,618,802 20,248,383 46,867,185
12.00% 26,044,566 20,438,071 46,482,636 12.00% 26,044,566 19,362,383 45,406,949
12.50% 25,489,244 19,547,666 45,036,909 12.50% 25,489,244 18,518,841 44,008,085
13.00% 24,952,063 18,699,745 43,651,808 13.00% 24,952,063 17,715,548 42,667,611
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.00% 27,212,764 20,120,226 47,332,990 11.OO% 27,212,764 19,162,120 46,374,884
11.50% 26,618,802 19,235,964 45,854,766 11.50% 26,618,802 18,319,966 44,938,768
12.00% 26,044,566 18,394,264 44,438,829 12.00% 26,044,566 17,518,346 43,562,912
12.50% 25,489,244 17,592,899 43,082,143 12.50% 25,489,244 16,755,142 42,244,386
13.00% 24,952,063 16,829,771 41,781,834 13.00% 24,952,063 16,028,353 40,980,416
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.00% 27,212,764 18,291,114 45,503,879 11.00% 27,212,764 17,495,848 44,708,613
11.50% 26,618,802 17,487,240 44,106,042 11.50% 26,618,802 16,726,925 43,345,727
12.00% 26,044,566 16,722,058 42,766,624 12.00% 26,044,566 15,995,012 42,039,578
12.50% 25,489,244 15,993,545 41,482,788 12.50% 25,489,244 15,298,173 40,787,417
13.00% 24,952,063 15,299,792 40,251,855 13.00% 24,952,063 14,634,583 39,586,646
- - - -----------------------------------------------------
* TOTAL CONSIDERATION PAID FOR PARTNERSHIP'S INTERESTS: $39.6 MILLION.
+ BASED UPON MANAGEMENT'S PROJECTIONS.
34
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF IDS II
- - - -------------------------------------------------------------------------------
FUNDS AVAILABLE FOR DISTRIBUTION
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$3,869,619 $4,009,165 $4,152,897 $4,300,940 $4,453,426 $4,610,485 $4,772,257 $4,938,882 $5,110,505 S5,287,277
COMPARISON
GROWTH RATE
- - - ------------
3.17%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 26,019,270 21,402,457 47,421,727 11.00% 26,019,270 20,276,011 46,295,282
11.50% 25,451,150 20,461,842 45,912,993 11.50% 25,451,150 19,384,903 44,836,054
12.00% 24,901,901 19,566,502 44,468,403 12.00% 24,901,901 18,536,686 43,438,587
12.50% 24,370,747 18,714,067 43,084,815 12.50% 24,370,747 17,729,116 42,099,864
13.00% 23,856,949 17,902,306 41,759,255 13.00% 23,856,949 16,960,079 40,817,028
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.00% 26,019,270 19,262,211 45,281,481 11.00% 26,019,270 18,344,963 44,364,233
11.50% 25,451,150 18,415,658 43,866,809 11.50% 25,451,150 17,538,722 42,989,872
12.00% 24,901,901 17,609,851 42,511,753 12.00% 24,901,901 16,771,287 41,673,189
12.50% 24,370,747 16,842,661 41,213,408 12.50% 24,370,747 16,040,629 40,411,376
13.00% 23,856,949 16,112,075 39,969,024 13.00% 23,856,949 15,344,834 39,201,782
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.00% 26,019,270 17,511,101 43,530,371 11.00% 26,019,270 16,749,749 42,769,019
11.50% 25,451,150 16,741,507 42,192,658 11.50% 25,451,150 16,013,616 41,464,766
12.00% 24,901,901 16,008,956 40,910,857 12.00% 24,901,901 15,312,914 40,214,816
12.50% 24,370,747 15,311,510 39,682,257 12.50% 24,370,747 14,645,792 39,016,539
13.00% 23,856,949 14,647,341 38,504,290 13.00% 23,856,949 14,010,500 37,867,449
- - - -----------------------------------------------------
* TOTAL CONSIDERATION PAID FOR PARTNERSHIP'S INTERESTS: $39.6 MILLION.
+ BASED UPON MANAGEMENT'S PROJECTIONS.
35
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
DISCOUNTED CASH FLOW ANALYSIS OF IDS III
- - - ------------------------------------------------------------------------------------------------------------------------------
FREE CASH FLOW
- - - -------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
- - - -------------------------------------------------------------------------------------------------------------------------------
$4,651,519 $4,791,065 $4,934,797 $5,082,840 $5,235,326 $5,392,385 $5,554,157 $5,720,782 $5,892,405 $6,069,177
COMPARED
GROWTH RATE
- - - -----------
2.70%
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 9.0% Terminal Cap Rate = 9.5%
11.00% 30,624,061 24,462,157 55,086,218 11.00% 30,624,061 23,174,675 53,798,736
11.50% 29,960,970 23,387,073 53,348,043 11.50% 29,960,970 22,156,174 52,117,144
12.00% 29,319,811 22,363,734 51,683,544 12.00% 29,319,811 21,186,695 50,506,506
12.50% 28,699,683 21,389,435 50,089,118 12.50% 28,699,683 20,263,675 48,963,358
13.00% 28,099,728 20,461,624 48,561,352 13.00% 28,099,728 19,384,697 47,484,425
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 10.0% Terminal Cap Rate = 10.5%
11.00% 30,624,061 22,015,941 52,640,002 11.00% 30,624,061 20,967,563 51,591,624
11.50% 29,960,970 21,048,365 51,009,336 11.50% 29,960,970 20,046,062 50,007,032
12.00% 29,319,811 20,127,360 49,447,171 12.00% 29,319,811 19,168,915 48,488,725
12.50% 28,699,683 19,250,491 47,950,174 12.50% 28,699,683 18,333,801 47,033,484
13.00% 28,099,728 18,415,462 46,515,190 13.00% 28,099,728 17,538,535 45,638,263
Cash Terminal Total Cash Terminal Total
Flow Value Value Flow Value
---- ----- ----- ---- ----- -----
Terminal Cap Rate = 11.0% Terminal Cap Rate = 11.5%
11.00% 30,624,061 20,014,492 50,638,553 11.00% 30,624,061 19,144,297 49,768,358
11.50% 29,960,970 19,134,878 49,095,848 11.50% 29,960,970 18,302,926 48,263,897
12.00% 29,319,811 18,297,600 47,617,411 12.00% 29,319,811 17,502,052 46,821,863
12.50% 28,699,683 17,500,447 46,200,129 12.50% 28,699,683 16,739,558 45,439,240
13.00% 28,099,728 16,741,329 44,841,057 13.00% 28,099,728 16,013,445 44,113,173
- - - -----------------------------------------------------
* TOTAL CONSIDERATION PAID FOR PARTNERSHIP'S REAL ESTATE ASSETS:
$50.9 MILLION.
* BASED UPON MANAGEMENT'S PROJECTIONS.
36
[LOGO]
SHURGARD STORAGE CENTERS, INC.
SELECTED PROPERTY ACQUISITIONS
- - - ------------------------------------------------------------------------------------------------------------------------------
HISTORICAL (1)
---------------------------------------------------
PRICE REV EXP NOI CAP CAP EX
DATE (000s) (000s) (000s) (000S) RATE(3) (000s)(3)
--------- -------- -------- ------- -------- ----------------------
SHURGARD ACQUISITION OF:
--------------------------------------------------------------------------------------------------------------------
IDS/Shurgard Income Growth Ptnrs. Pending $40,370 $5,868 $2,121 $3,747 8.9% $135
IDS/Shurgard Income Growth Ptnrs. II Pending 30,520 4,309 1,526 2,782 8.8% 99
IDS/Shurgard Income Growth Ptnrs. III Pending 50,890 7,225 2,740 4,485 8.5% 166
Consolidated Partnerships Pending 121,780 17,401 6,387 11,014 8.7% 400
--------------------------------------------------------------------------------------------------------------------
SHU
Colonial Self-Storage 09/01/94 $34,000 $5,390 $1,772 $3,618 10.3% 124
National Self-Storage
(4 properties) Bid 15,700 2,007 615 1,392 8.6% 46
SUS
Portfolio Acquisition
(13 properties) 09/12/95 53,800 7,741 2,155 5,586 10.1% 178
Portfolio Acquisition
(25 properties) 04/13/95 74,882 10,864 3,352 7,512 9.7% 250
Portfolio Acquisition
(16 properties) 04/13/95 68,685 9,440 2,459 6,981 9.8% 217
SEA
Balcor/Colonial Storage Pending 67,100 8,822 2,758 6,064 8.7% 203
Income Fund-86
Portfolio Acquisition
(14 properties) 10/06/95 29,300 4,062 1,301 2,761 9.1% 93
- - - -------------------------------------------------------------------------------------------------------------------------
PROJECTIONS (2)
-------------------------------------------------------
REV EXP NOI CAP CAP EX OCCUP.
(000s) (000s) (000s) RATE(3) (000s)(3) AT SALE
--------- ------- -------- --------------------- --------
SHURGARD ACQUISITION OF:
---------------------------------------------------------------------------------------------------------------
IDS/Shurgard Income Growth Ptnrs. $6,324 $2,251 $4,073 9.7% $145 89.2%
IDS/Shurgard Income Growth Ptnrs. II 4,639 1,570 3,069 9.7% 107 86.8%
IDS/Shurgard Income Growth Ptnrs. III 7,882 2,878 5,004 9.5% 181 89.0%
Consolidated Partnerships 18,845 6,699 12,146 9.6% 433 88.3%
---------------------------------------------------------------------------------------------------------------
SHU
Colonial Self-Storage $5,722 $2,017 $3,705 10.5% 132 91.0%
National Self-Storage
(4 properties) 2,345 767 1,578 9.7% 54 89.9%
SUS
Portfolio Acquisition
(13 properties) 7,786 2,172 5,614 10.1% 179 83.0%
Portfolio Acquisition
(25 properties) 9,876 2,884 6,992 9.0% 227 NA
Portfolio Acquisition
(16 properties) 9,384 2,388 6,996 9.9% 216 NA
SEA
Balcor/Colonial Storage
Income Fund-86 8,648 2,424 6,224 9.0% 199 87.9%
Portfolio Acquisition
(14 properties) 4,270 1,462 2,808 9.2% 98 84.2%
- - - ------------------------------------
(1) LAST REPORTED ANNUAL FINANCIAL INFORMATION BEFORE COMPANY BEGAN
ACQUISITION.
(2) COMPANY'S FORWARD PROJECTIONS OR ANNUALIZED STUB PERIOD
IMMEDIATELY PRIOR TO TRANSACTION.
(3) CALCULATED AS 2.3% OF PRIOR YEAR END RENTAL INCOME. CAPITAL EXPENDITURES
FOR BALCOR TRANSACTIONS ARE 2.5% OF PRIOR YEAR RENTAL INCOME. CAPITAL
EXPENDITURES FOR PRUDENTIAL-BACHE TRANSACTIONS ARE $0.17 PER SQUARE FOOT.
SHURGARD STORAGE CENTERS, INC.
SELECTED PROPERTY ACQUISITIONS
- - - ------------------------------------------------------------------------------------------------------------------------------
HISTORICAL (1)
---------------------------------------------------
PRICE REV EXP NOI CAP CAP EX
DATE (000s) (000s) (000s) (000S) RATE(3) (000s)(3)
--------- -------- -------- ------- -------- ----------------------
SSS
---
Portfolio Acquisition
(12 properties) 06/30/95 $25,361 $3,624 $995 $2,629 10.0% 83
PSA
---
Prudential-Bache/Watson & Taylor 1 06/14/96 17,200 NA NA 1,538 8.5% 77
(6 properties)
Prudential-Bache/Watson & Taylor 2 06/14/96 18,000 NA NA 1,648 8.6% 98
(8 properties)
Prudential-Bache/Watson & Taylor 3 06/14/96 11,100 NA NA 1,168 9.9% 70
(7 properties plus land)
Prudential-Bache/Watson & Taylor 4 06/14/96 12,200 NA NA 1,261 9.7% 73
(5 properties plus land)
Storage Properties, Inc. Pending 24,475 3,582 1,415 2,167 8.5% 82
Southern Self Storage 02/29/96 52,000 NA NA NA NA NA
U-HAUL
------
Balcor/Colonial Storage
Income Fund-86 Bid 69,000 8,822 2,758 6,064 8.5% 203
- - - ------------------------------------------------------------------------------------------------------------------------------
PROJECTIONS (2)
--------------------------------------------------------
REV EXP NOI CAP CAP EX OCCUP.
(000s) (000s) (000s) RATE(3) (000s)(3) AT SALE
--------- ------- -------- --------------------- --------
SSS
---
Portfolio Acquisition
(12 properties) $3,648 $928 $2,720 10.4% 84 86.7%
PSA
---
Prudential-Bache/Watson & Taylor 1 NA NA 1,675 9.3% 77 NA
(6 properties)
Prudential-Bache/Watson & Taylor 2 NA NA 1,840 9.7% 98 NA
(8 properties)
Prudential-Bache/Watson & Taylor 3 NA NA 1,284 10.9% 70 NA
(7 properties plus land)
Prudential-Bache/Watson & Taylor 4 NA NA 1,320 10.2% 73 NA
(5 properties plus land)
Storage Properties, Inc. NA NA NA NA NA 91.0%
Southern Self Storage NA NA NA NA NA NA
U-HAUL
------
Balcor/Colonial Storage
Income Fund-86 8,648 2,424 6,224 8.7% 199 87.9%
-----------------------------------------------
CAP RATE:(4) HIGH 10.3% 10.5%
MEAN 9.4% 9.7%
LOW 8.5% 9.0%
-----------------------------------------------
- - - ------------------------------------------------------------------------------
(1) LAST REPORTED ANNUAL FINANCIAL INFORMATION BEFORE COMPANY BEGAN
ACQUISITION.
(2) COMPANY'S FORWARD PROJECTIONS OR ANNUALIZED STUB PERIOD IMMEDIATELY PRIOR
TO TRANSACTION.
(3) CALCULATED AS 2.3% OF PRIOR YEAR END RENTAL INCOME. CAPITAL EXPENDITURES
FOR BALCOR TRANSACTIONS ARE 2.5% OF PRIOR YEAR RENT RENTAL INCOME.
CAPITAL EXPENDITURES FOR PRUDENTIAL-BACHE TRANSACTIONS ARE $0.17 PER SQUARE
FOOT.
(4) EXCLUDES COLONIAL SELF STORAGE TRANSACTION COMPLETED IN 1994 AND U-HAUL
BID FOR BALCOR/COLONIAL STORAGE INCOME FUND 86..
38
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
VALUATION BASED ON SELECTED REAL ESTATE TRANSACTIONS
(IN THOUSANDS)
- - - -------------------------------------------------------------------------------
Total Real Estate Valuation for: IDS I: $40,370,000
IDS II: $30,520,000
IDS III: $50,890,000
------------
CONSOLIDATED PART.: $121,780,000
HISTORICAL CAP RATE IMPLIED VALUATION
------------------------- ---------------------------
1995 NOI LOW MEAN HIGH HIGH MEAN LOW
-------- ---- ---- ----- ------- ------- -------
IDS I $3,747 8.5% 9.4% 10.3% $44,125 $40,063 $36,456
IDS II 2,782 8.5% 9.4% 10.3% 32,768 29,751 27,073
IDS III 4,485 8.5% 9.4% 10.3% 52,821 47,959 43,640
CONS. PARTNERSHIPS 11,014 8.5% 9.4% 10.3% 129,713 117,773 107,169
PROJECTED CAP RATE IMPLIED VALUATION
------------------------- ---------------------------
1996 NOI LOW MEAN HIGH HIGH MEAN LOW
-------- ---- ---- ----- ------- ------- -------
IDS I $4,073 9.0% 9.7% 10.5% $45,365 $41,859 $38,760
IDS II 3,069 9.0% 9.7% 10.5% 34,181 31,539 29,204
IDS III 5,004 9.0% 9.7% 10.5% 55,732 51,424 47,617
CONS. PARTNERSHIPS 12,146 9.0% 9.7% 10.5% 135,279 124,822 115,581
39
[LOGO]
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF CONSOLIDATED PARTNERSHIPS
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 0.0% CASH
100.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ --------
SHURGARD STORAGE CENTERS, INC:
FFO per share:- $2.27 $2.35
ASSUMING PURCHASE PRICE OF:
$40,066,700 for IDS I
$26,861,846 for IDS II
$39,649,643 for IDS II
FFO per share: $2.29 [a] $2.37 [a]
--------------------------------------------------------------
ACCRETION ($): $0.02 $0.02
ACCRETION (%): 0.88% 1.06%
--------------------------------------------------------------
- - - -------------------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD, IDS I, IDS II AND IDS III.
REFLECTS ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF EACH
PARTNERSHIP'S INCOME.
40
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF IDS I PARTNERSHIPS
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 0.0% CASH
100.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ -------
SHURGARD STORAGE CENTERS, INC:
FFO per share: $2.27 $2.35
ASSUMING PURCHASE PRICE OF:
$40,066,700 for IDS I
FFO per share: $2.27 [a] $2.36 [a]
--------------------------------------------------------------
ACCRETION ($): $0.00 $0.01
ACCRETION (%): 0.05% 0.24%
--------------------------------------------------------------
- - - -------------------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD AND IDS I.
REFLECTS ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF
PARTNERSHIP'S INCOME.
41
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF IDS II PARTNERSHIP
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 0.0% CASH
100.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ ------
SHURGARD STORAGE CENTERS, INC:
FFO per share: $2.27 $2.35
ASSUMING PURCHASE PRICE OF:
$26,861,846 for IDS II
FFO per share: $2.27 [a] $2.36 [a]
-------------------------------------------------------------------
ACCRETION ($): $0.00 $0.01
ACCRETION (%): 0.12% 0.33%
-------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD AND IDS II.
REFLECTS ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF
PARTNERSHIP'S INCOME.
42
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF IDS III PARTNERSHIP
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 0.0% CASH
100.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ ------
SHURGARD STORAGE CENTERS, INC:
FFO PER SHARE: $2.27 S2.35
ASSUMING PURCHASE PRICE OF:
$39,649,643 for IDS III
FFO per share: $2.28 [a] $2.36 [a]
-------------------------------------------------------------------
ACCRETION ($): $0.01 $0.01
ACCRETION (%): 0.40% 0.62
-------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD AND IDS III. REFLECTS
ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF
PARTNERSHIP'S INCOME.
43
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF CONSOLIDATED PARTNERSHIPS
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 20.0% CASH
80.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ ------
SHURGARD STORAGE CENTERS, INC:
FFO per share: $2.27 $2.35
ASSUMING PURCHASE PRICE OF:
$40,066,700 for IDS I
$26,861,846 for IDS II
$39,649,643 for IDS II
FFO per share: $2.30 [a] $2.38 [a]
-------------------------------------------------------------------
ACCRETION ($): $0.03 $0.03
ACCRETION (%): 1.20% 1.49%
-------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD, IDS I, IDS II AND IDS III.
REFLECTS ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF EACH
PARTNERSHIP'S INCOME.
44
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF IDS I PARTNERSHIP
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 20.0% CASH
80.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ ------
SHURGARD STORAGE CENTERS, INC:
FFO per share: $2.27 $2.35
ASSUMING PURCHASE PRICE OF:
$40,066,700 for IDS I
FFO per share: $2.27 [a] $2.36 [a]
-------------------------------------------------------------------
ACCRETION ($): $0.00 $0.01
ACCRETION (%): 0.17% 0.40%
-------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD AND IDS I.
REFLECTS ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF
PARTNERSHIP'S INCOME.
45
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF IDS II PARTNERSHIP
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 20.0% CASH
80.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ ------
SHURGARD STORAGE CENTERS, INC:
FFO per share: $2.27 $2.35
ASSUMING PURCHASE PRICE OF:
$26,861,846 for IDS II
FFO per share: $2.27 [a] $2.36 [a]
-------------------------------------------------------------------
ACCRETION ($): $0.00 $0.01
ACCRETION (%): 0.20% 0.45%
-------------------------------------------------------------------
- - - -------------------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD AND IDS II.
REFLECTS ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF
PARTNERSHIP'S INCOME.
46
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF IDS III PARTNERSHIP
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 20.0% CASH
80.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ ------
SHURGARD STORAGE CENTERS, INC:
FFO per share: $2.27 $2.35
ASSUMING PURCHASE PRICE OF:
$39,649,643 for IDS III
FFO per share: $2.28 [a] $2.37 [a]
-------------------------------------------------------------------
ACCRETION ($): $0.01 $0.02
ACCRETION (%): 0.52% 0.79%
-------------------------------------------------------------------
- - - -----------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD AND IDS III.
REFLECTS ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF
PARTNERSHIP'S INCOME.
47
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF CONSOLIDATED PARTNERSHIPS
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 40.0% CASH
60.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ ------
SHURGARD STORAGE CENTERS, INC:
FFO per share: $2.27 $2.35
ASSUMING PURCHASE PRICE OF:
$40,066,700 for IDS I
$26,861,846 for IDS II
$39,649,643 for IDS III
FFO per share: $2.38 [a] $2.40 [a]
-------------------------------------------------------------------
ACCRETION ($): $0.04 $0.05
ACCRETION (%): 1.55% 1.94%
-------------------------------------------------------------------
- - - -----------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD,IDS I, IDS II, AND IDS III.
REFLECTS ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF EACH
PARTNERSHIP'S INCOME.
48
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF IDS I PARTNERSHIP
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 40.0% CASH
60.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ ------
SHURGARD STORAGE CENTERS, INC:
FFO per share: $2.27 $2.35
ASSUMING PURCHASE PRICE OF:
$40,066,700 for IDS I
FFO per share: $2.28 [a] $2.36 [a]
-------------------------------------------------------------------
ACCRETION ($): $0.01 $0.01
ACCRETION (%): 0.29% 0.57%
-------------------------------------------------------------------
- - - -----------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD AND IDS I.
REFLECTS ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF
PARTNERSHIP'S INCOME.
49
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF IDS II PARTNERSHIP
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 40.0% CASH
60.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ ------
SHURGARD STORAGE CENTERS, INC:
FFO per share: $2.27 $2.35
ASSUMING PURCHASE PRICE OF:
$26,861,846 for IDS II
FFO per share: $2.28 [a] $2.36 [a]
-------------------------------------------------------------------
ACCRETION ($): $0.01 $0.01
ACCRETION (%): 0.29% 0.56%
-------------------------------------------------------------------
- - - -----------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD AND IDS II.
REFLECTS ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF EACH
PARTNERSHIP'S INCOME.
50
ALEX. BROWN
SHURGARD STORAGE CENTERS, INC.
ACCRETION/DILUTION ANALYSIS
ACQUISITION OF IDS III PARTNERSHIP
- - - -------------------------------------------------------------------------------
FINANCING ASSUMPTION: 40.0% CASH
60.0% STOCK
20-DAY AVERAGE STOCK PRICE: $24.68
1996 1997
------ ------
SHURGARD STORAGE CENTERS, INC:
FFO per share: $2.27 S2.35
ASSUMING PURCHASE PRICE OF:
$39,649,643 for IDS III
FFO per share: $2.28 [a] $2.37 [a]
-------------------------------------------------------------------
ACCRETION ($): $0.01 $0.02
ACCRETION (%): 0.65% 0.97%
-------------------------------------------------------------------
- - - -----------------------------------------------------------------------
[a] PRO FORMA FUNDS FROM OPERATIONS FOR SHURGARD AND IDS III.
REFLECTS ANTICIPATED SAVINGS IN GENERAL AND ADMINISTRATIVE EXPENSES AND
ADDITIONAL INTEREST EXPENSE AND THE LOSS OF SHURGARD'S PORTION OF
PARTNERSHIP'S INCOME.
51
[LOGO]
6
Tracks Stock Price for Shurgard Storage Centers, Inc. from 6/26/95 to 6/24/96,
showing both the Close Price and the 20 Day Trailing Average.
SHURGARD STORAGE CENTERS, INC.
SHU DAILY PRICE ACTIVITY 06/25/95 - 06/25/96
[GRAPH]
52
Tracks the Indexed Price of S&P, NAREIT, SHU, SEA, SSS and PSA from 6/30/95 to
6/25/96.
SHURGARD STORAGE CENTERS, INC.
INDEXED PRICE PERFORMANCE: 06/30/95 - 06/25/96
[GRAPH]
53
ALEX.BROWN
SHURGARD STORAGE CENTERS, INC.
SECONDARY TRADING DATA FOR IDS PARTNERSHIPS
- - - -------------------------------------------------------------------------------
MERGER/TENDER
PARTNERSHIP DATE HIGH LOW UNITS PRICE PER UNIT
- - - --------------------------------- ----- ------- ------- ----- --------------
IDS I
04/96 $214.00 $185.25 220 $257.00
03/96 180.00 177.00 80
148,202 units outstanding 02/96 197.00 197.00 20
Initial Value: $250 per unit 01/96 198.00 184.00 100
12/95 197.00 197.00 84
11/95 200.00 185.00 121
10/95 190.00 180.00 32
09/95 198.53 170.00 125
IDS II
04/96 $170.00 $170.00 26 $222.00
03/96 180.40 162.00 52
115,100 units outstanding 02/96 178.63 165.00 112
Initial Value: s250 per unit 01/96 185.00 183.07 28
11/95 185.60 170.00 51
10/95 185.98 175.00 215
O9/95 185.97 166.00 71
08/95 178.58 150.00 238
IDS III
04/96 $200.00 $200.00 20 $307.00
03/96 200.00 165.00 176
119,215 units outstanding 02/96 187.40 170.00 78
Initial Value: $250 per unit 01/96 173.25 173.25 40
12/95 195.00 195.00 60
11/95 187.50 184.90 34
10/95 175.00 175.00 20
09/95 175.00 175.00 160
- - - -----------------------------
* SOURCE: BLOOMBERG
54
ALEX.BROWN
SHURGARD STORAGE CENTERS, INC.
ANALYST FFO ESTIMATES
- - - --------------------------------------------------------------------------------
1996 1997
---- ----
Alex. Brown 2.30 2.40
Dain Bosworth 2.25 2.45
Dean Witter Reynolds 2.30 2.46
Merrill Lynch 2.30 2.45
Morgan Keegan 2.28 2.50
Prudential Securities 2.28 2.43
Raymond James 2.28 --
Robertson Stephens 2.27 2.51
---- ----
Mean 2.28 2.46
Median 2.28 2.45
55