UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

2017

Commission File Number:

1-13820 (Life Storage, Inc.)

0-24071

SOVRAN ACQUISITION LIMITED PARTNERSHIP
(Life Storage LP)

LIFE STORAGE, INC.

LIFE STORAGE LP

(Exact name of Registrant as specified in its charter)

Maryland (Life Storage, Inc.)

Delaware (Life Storage LP)

16-1194043 (Life Storage, Inc.)

16-1481551 (Life Storage LP)

Delaware16-1481551

(State of incorporation

or organization)

(I.R.S. Employer

Identification No.)

6467 Main Street

Williamsville, NY 14221

(Address of principal executive offices) (Zip code)

(716) 633-1850

(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Securities

Exchanges on which Registered

Common Stock, $.01 Par Value

Not applicableNot Applicable

New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yeso Noþ

Life Storage, Inc.

Yes  ☒    No  ☐

Life Storage LP

Yes  ☒    No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yeso Noþ

Life Storage, Inc.

Yes  ☐    No  ☒

Life Storage LP

Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Life Storage, Inc.

Yes  ☒    No  ☐

Life Storage LP

Yes  ☒    No  ☐

Yesþ Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yeso Noo

Life Storage, Inc.

Yes  ☒    No  ☐

Life Storage LP

Yes  ☒    No  ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.þ

Life Storage, Inc.

☒

Life Storage LP

☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.    (Check one):

Life Storage, Inc.:

Large accelerated filerþ

☒

Accelerated filero

☐

Non-accelerated filer

☐o(Do  (Do not check if a smallersmall reporting company)

Smaller reporting company

☐

Emerging growth company

☐

Life Storage LP:

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐o  (Do not check if a small reporting company)

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso Noþ

Life Storage, Inc.

Yes  ☐    No  ☒

Life Storage LP

Yes  ☐    No  ☒

As of June 30, 2017, 46,565,213 shares of Life Storage, Inc.’s Common Stock, $.01 par value per share, were outstanding, and the aggregate market value of the Common Stock held by non-affiliates of Life Storage, Inc. was approximately $3,450,482,283 (based on the closing price of the Common Stock on the New York Stock Exchange on June 30, 2017). As of February 15, 2010, 27,966,97912, 2018, 46,515,831 shares of Common Stock, $.01 par value per share, were outstanding.

As of June 30, 2017, the aggregate market value of the 217,481 units of limited partnership (the “OP Units”) held by non-affiliates of Life Storage LP was $16,115,342 (based on the closing price of the Common Stock of Life Storage, Inc. on the New York Stock Exchange on June 30, 2017). (For this calculation, the market value of all OP Units of Limited Partnership Interest were outstanding.

beneficially owned by Life Storage, Inc. has been excluded.)

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Definitiveregistrant’s Proxy Statement for the 2018 Annual Meeting of Shareholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrants’ fiscal year ended December 31, 2017.

EXPLANATORY NOTE

This report combines the annual reports on Form 10-K for the year ended December 31, 2017 of Life Storage, Inc. (the “Parent Company”) and Life Storage LP (the “Operating Partnership”). The Parent Company is a real estate investment trust, or REIT, that owns its assets and conducts its operations through the Operating Partnership, a Delaware limited partnership, and subsidiaries of the Operating Partnership.  The Parent Company, the Operating Partnership and their consolidated subsidiaries are collectively referred to in this report as the “Company.” In addition, terms such as “we,” “us,” or “our” used in this report may refer to the Company, the Parent Company and/or the Operating Partnership.

Life Storage Holdings, Inc., a wholly-owned subsidiary of the Parent Company (“Holdings”), is the sole general partner of the Operating Partnership; the Parent Company is a limited partner of the Operating Partnership, and through its ownership of Holdings and its limited partnership interest, controls the operations of the Operating Partnership, holding a 99.5% ownership interest therein as of December 31, 2017. The remaining ownership interests in the Operating Partnership are held by certain former owners of assets acquired by the Operating Partnership. As the owner of the sole general partner of the Operating Partnership, the Parent Company has full and complete authority over the Operating Partnership’s day-to-day operations and management.

Management operates the Parent Company and the Operating Partnership as one enterprise. The management teams of the Parent Company and the Operating Partnership are identical.

There are few differences between the Parent Company and the Operating Partnership, which are reflected in the note disclosures in this report. The Company believes it is important to understand the differences between the Parent Company and the Operating Partnership in the context of how these entities operate as a consolidated enterprise. The Parent Company is a REIT, whose only material asset is its ownership of the partnership interests of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the owner of the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing the debt obligations of the Operating Partnership. The Operating Partnership holds substantially all the assets of the Company and, directly or indirectly, holds the ownership interests in the Company’s real estate ventures. The Operating Partnership conducts the operations of the Company’s business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s direct or indirect incurrence of indebtedness or through the issuance of partnership units of the Operating Partnership.

The substantive difference between the Parent Company’s filings and the Operating Partnership’s filings is the fact that the Parent Company is a REIT with public equity, while the Operating Partnership is a partnership with no publicly traded equity. In the financial statements, this difference is primarily reflected in the equity (or capital for the Operating Partnership) section of the consolidated balance sheets and in the consolidated statements of shareholders’ equity (or partners’ capital). Apart from the different equity treatment, the consolidated financial statements of the Parent Company and the Operating Partnership are nearly identical.

The Company believes that combining the annual reports on Form 10-K of the Parent Company and the Operating Partnership into a single report will:

facilitate a better understanding by the investors of the Parent Company and the Operating Partnership by enabling them to view the business as a whole in the same manner as management views and operates the business;

remove duplicative disclosures and provide a more straightforward presentation in light of the fact that a substantial portion of the disclosure applies to both the Parent Company and the Operating Partnership; and

create time and cost efficiencies through the preparation of one combined report instead of two separate reports.

In order to highlight the differences between the Parent Company and the Operating Partnership, the separate sections in this report for the Parent Company and the Operating Partnership specifically refer to the Parent Company and the Operating Partnership. In the sections that combine disclosures of the Parent Company and the Operating Partnership, this report refers to such disclosures as those of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and real estate ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Parent Company operates the business through the Operating Partnership.


As the owner of the general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have significant assets other than its investment in the Operating Partnership. Therefore, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements. The separate discussions of the Parent Company and the Operating Partnership in this report should be heldread in conjunction with each other to understand the results of the Company’s operations on May 26, 2010 (Part III).

a consolidated basis and how management operates the Company.

This report also includes separate Item 9A - Controls and Procedures sections, signature pages and Exhibit 31 and 32 certifications for each of the Parent Company and the Operating Partnership in order to establish that the Chief Executive Officer and the Chief Financial Officer of the Parent Company and the Chief Executive Officer and the Chief Financial Officer of the Operating Partnership have made the requisite certifications and that the Parent Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended and 18 U.S.C. §1350.


TABLE OF CONTENTS

Part I

5

Item 1. Business

3

5

Item 1A. Risk Factors

8

10

Item 1B. Unresolved Staff Comments

13

15

Item 2. Properties

14

16

Item 3. Legal Proceedings

15

17

Item 4. Submission of Matters to a Vote of Security HoldersMine Safety Disclosures

15

17

Part II

18

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

15

18

Item 6. Selected Financial Data

17

20

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

23

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

30

33

Item 8. Financial Statements and Supplementary Data

31

33

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

53

66

Item 9A. Controls and Procedures

53

66

Item 9B. Other Information

70

Part III

70

Item 10. Directors, Executive Officers and Corporate Governance

55

70

Item 11. Executive Compensation

55

70

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

55

70

Item 13. Certain Relationships and Related Transactions, and Director Independence

57

70

Item 14. Principal Accountant Fees and Services

57

70

Part IV

71

Item 15. Exhibits, Financial Statement Schedules

57

71

Item 16. Form 10-K Summary

76

SIGNATURES

EX-10.5SIGNATURES

77

EX-12.1

EX-21.1

EX-3.1

EX-31.1

EX-10.19

EX-31.2

EX-10.24

EX-10.25

EX-10.27

EX-12.1

EX-21.1

EX-23.1

EX-23.2

EX-31.1

EX-31.2

EX-31.3

EX-31.4

EX-32.1

EX-32.2

EX-101


2

Part I

Part I
When used in this discussion and elsewhere in this document, the words “intends,” “believes,” “expects,” “anticipates,” and similar expressions are intended to identify “forward-looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933 and in Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Operating PartnershipCompany to be materially different from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the effect of competition from new self-storage facilities, which would cause rents and occupancy rates to decline; the Operating Partnership’sCompany’s ability to evaluate, finance and integrate acquired businesses into the Operating Partnership’sCompany’s existing business and operations; the Operating Partnership’sCompany’s ability to effectively compete in the industry in which it does business; the Operating Partnership’sCompany’s existing indebtedness may mature in an unfavorable credit environment, preventing refinancing or forcing refinancing of the indebtedness on terms that are not as favorable as the existing terms; interest rates may fluctuate, impacting costs associated with the Operating Partnership’sCompany’s outstanding floating rate debt; the Operating Partnership’sCompany’s ability to comply with debt covenants; any future ratings on the Operating Partnership’sCompany’s debt instruments; regional concentration of the Operating Partnership’sCompany’s business may subject it to economic downturns in the states of Florida and Texas; the Company’s reliance on its call center; the Operating Partnership’sCompany’s cash flow may be insufficient to meet required payments of operating expenses, principal, interest and distributions;dividends; and tax law changes that may change the taxability of future income.

Item 1.

Business

Item 1. Business
     Sovran Acquisition Limited Partnership (the “Operating Partnership”)

The Company is the entity through which Sovran Self Storage, Inc. (the “Company”), a self-administered and self-managed real estate investment trust (“REIT”), conducts substantially all of the Company’s businesscompany that acquires, owns and owns substantially all of the Company’s assets.manages self-storage properties. We refer to the self-storage properties in which we have an ownership interest, andlease, and/or are managed by us as “Properties.” We began operations on June 26, 1995. We were formed to continue the business of our predecessor company, which had engaged in the self-storage business since 1985. At February 15, 2010,December 31, 2017, we heldhad an ownership interestsinterest in andand/or managed 381 Properties consisting of approximately 24.7 million net rentable square feet, situated706 self-storage properties in 24 states.28 states under the name Life Storage ®. Among our 381 Properties706 self-storage properties are 27 Properties98 properties that we manage for a consolidatedunconsolidated joint venture of which we are a majority owner and 25 Propertiesventures, 42 properties that we manage for a joint venture of whichand have no ownership interest, and two properties that we are a 20% owner.lease. We believe we are the fourthfifth largest operator of self-storage properties in the United States based on facilitiessquare feet owned and managed. Our Properties conduct business under the user-friendlycustomer-friendly name Uncle Bob’s Self-Storage®.

Life Storage ®.

At December 31, 2009,2017, the Parent Company isowned a 98.5%direct or indirect interest in 662 of the Properties through the Operating Partnership, which includes 564 wholly-owned properties and 98 properties owned by unconsolidated joint ventures. In total, we own a 99.5% economic owner ofinterest in the Operating Partnership and controls it through Sovran Holdings, Inc. (“Holdings”),unaffiliated third parties collectively own a wholly owned subsidiary of the Company incorporated in Delaware and the sole general partner of the Operating Partnership. This0.5% limited partnership interest at December 31, 2017. We believe that this structure, is commonly referred toknown as an umbrella partnership real estate investment trust (“UPREIT”). The Board of Directors of Holdings, the members of which are the same as the members of the Board of Directors of the Company, manages the affairs, facilitates our ability to acquire properties by using units of the Operating Partnership by directing the affairs of Holdings. The Company’s limited partner and indirect general partneras currency. By utilizing interests in the Operating Partnership entitle itas currency in facility acquisitions, we may partially defer the seller’s income tax liability which in turn may allow us to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to its ownership interest therein and entitle theobtain more favorable pricing.

The Parent Company to votewas incorporated on all matters requiring a vote of the limited partners.

     The Operating Partnership’s other limited partners are persons who contributed their direct or indirect interests in certain self-storage properties to the Operating Partnership.April 19, 1995 under Maryland law. The Operating Partnership is obligated to redeem each unit ofwas formed on June 1, 1995 as a Delaware limited partnership (“Unit”) at the requestand has engaged in virtually all aspects of the holder thereof for cash equal toself-storage business, including the fair market value of a share of the Company’s common stock, par value $.01 per share (“Common Shares”), at the time of such redemption, provided that the Company at its option may elect to acquire any such Unit presented for redemption for one Common Share or cash. With each such redemption ordevelopment, acquisition, by the Company, the Company’s percentagemanagement, ownership interest in the Operating Partnership will increase. In addition, whenever the Company issues Common Shares, the Company is obligated to contribute any net proceeds therefrom to the Operating Partnership and the Operating Partnership is obligated to issue an equivalent number of Units to the Company.
     The Operating Partnership may issue additional Units to acquire additional self-storage properties in transactions that in certain circumstances defer some or all of the sellers’ tax consequences. The Operating Partnership believes that many potential sellersoperation of self-storage properties have a low tax basis in their properties and

3

would be more willing to sell the properties in transactions that defer Federal income taxes. Offering Units instead of cash for properties may provide potential sellers partial Federal income tax deferral.
facilities. Our principal executive offices are located at 6467 Main Street, Williamsville, New York 14221, our telephone number is (716) 633-1850 and our web sitewebsite iswww.sovranss.comwww.lifestorage.com.

We seek to enhance shareholder value through internal growth and acquisition of additional storage properties. Internal growth is achieved through aggressive property management: increasing rents,optimizing rental rates, increasing occupancy levels, controlling costs, maximizing collections, and strategically expanding and improvingenhancing the Properties. Should demographic and economic conditions warrant, we may develop new properties. We believe that there continuecontinues to be opportunities for growth through acquisitions, and constantlyincluding acquisitions through unconsolidated joint ventures of the Company. We seek to acquire self-storage properties that are susceptible to realization of increased economies of scale and enhancedimproved performance through application of our expertise.

Industry Overview

We believe that self-storage facilities offer inexpensive storage space to residential and commercial users. In addition to fully enclosed and secure storage space, many facilities also offer outside storage for automobiles, recreational vehicles and boats. BetterModern facilities, such as those owned and/or managed by the Operating Partnership,Company, are usually fenced and well lighted with gates that are either manually operated or automated access systems, surveillance cameras, and have a full-time manager. Our customers rent space on a month-to-month basis and typically have access to their storage area during businessspace up to 15 hours a day and in certain circumstances are provided with 24-hour access. Individual storage unitsspaces are secured by the customer’s lock, and the customer has sole control of access to the unit.

space.

According to the 20102018 Self-Storage Almanac, of the approximately 48,700estimated 44,000 core self-storage facilities in the United States less than 11%(those properties identified as having self-storage operated as the core business at the address), approximately 19.2% are managed by the ten largest operators. TheThis results in a highly fragmented industry as the remainder of the industry is characterized by numerous small, local operators. The shortage of skilled operators, the scarcity of capital available to small operators for acquisitions and expansions, internet marketing, call centers, and the potential for savings through economies of scale are factors that are leading to consolidation in the industry. We believe that, as a result of this trend, significant growth opportunities exist for operators with proven management systems and sufficient capital resources.resources to grow either through acquisitions or third-party management platforms.


Property Management

We believe that we have developed substantial expertise inover 30 years of experience acquiring and managing self-storage facilities. Key elementsfacilities, and the combined experience of our key personnel makes us one of the leaders in the industry. We employ the following strategies with respect to our property management:

Our People:

We recognize the importance of quality people to the success of an organization. Accordingly, we hire and train to ensure that associates can reach their full potential. We strive to ensure that each associate conducts themselves in accordance with our core values: Teamwork, Respect, Accountability, Integrity, and Innovation. In turn, we support them with state of the art training tools including an online learning management system, includea company intranet and a network of certified training personnel. Every store team also has frequent, and sometimes daily, interaction with an Area Manager, a Regional Vice President, an Accounting Representative, and other support personnel. As such, our store associates are held to high standards for customer service, store appearance, financial performance, and overall operations.

Training & Development:

Our employees benefit from a wide array of training and development opportunities. New store employees undergo a comprehensive, proprietary training program designed to drive sales and operational results while ensuring the following:

delivery of quality customer service. To supplement their initial training, employees enjoy continuing edification, coaching, and performance feedback, including customer satisfaction surveying, throughout their tenure.

All learning and development activities are facilitated through our online training and development portal. This portal delivers and tracks hundreds of computer-based training and compliance courses; it also administers tests, surveys, and the employee appraisal process. The Company’s training and development program encompasses the tools and support we deem essential to the success of our employees and business.

Marketing and Advertising:

The digital age has changed consumer behavior – the way people shop, their expectations, and the way we communicate with them. As such, we utilize the following strategies to market our properties and products:

Personnel:
     Property managers undergo

We employ a Customer Care Center (call center) that services an average of 43,000 rental inquiries per month. Our Sales Representatives answer incoming sales calls for all of our locations, 364 days a year, 24 hours a day. In addition, they respond to email inquiries and serve as overnight customer service agents to assist customers outside of regular office hours. The team undergoes continuous training that emphasizes closingand coaching in effective storage sales techniques identificationand best practices in customer service, which we believe results in higher conversions of selectedinquiries to rentals.

We maintain a website and involve internal and external expertise to manage our internet presence and leverage a search engine and social media marketing opportunities, networking with possible referral sources,strategy to attract customers and familiarization withgain rentals online, through our customizedcall center and at our stores.  Precise targeting and tracking through campaign management information system. In additionand analysis allows us to frequent contact with Area Managers and other Operating Partnership personnel, property managers receive periodic newsletters via our intranet regardingattract the right customers, at the right time, for reasonable costs of acquisition.

Since the need for storage is largely based on timing, the goal is to create positive brand recognition through a variety of operational issues,channels, both digital and fromtraditional. When the time comes for a customer to time attend “roundtable” seminarsselect a storage company, we want the Life Storage brand to be on the top of their mind. We employ a variety of different strategies to create brand awareness; this includes our Life Storage rental trucks, branded merchandise such as moving and packing supplies, extensive regional marketing in the communities in which we operate, and digital targeting using search, social media and remarketing campaigns. We strive to introduce storage solutions early and often to gain the most exposure as possible for the longest amount of time.

Approximately 47% of our self-storage space is comprised of units with other property managers.temperature and/or humidity control capabilities which we market to corporate, retail and residential customers seeking storage solutions for valuable, sentimental, or otherwise sensitive items.

Marketing and Sales:
     Responding

We also have a fleet of rental trucks that serve as an added incentive to choose our storage facilities. We waive the increased customer demandtruck rental charge for services, we have implemented several programs expected to increase profitability. These programs include:

–A Customer Care Center (call center) that services new and existing customers’ inquiries and facilitates the capture of sales leads that were previously lost;
–Internet marketing, which providesnew move-in customers, information about all of our stores via numerous portals and e-mail;
–A rate management system, that matches product availability with market demand for each type of storage unit at each store, and determines appropriate pricing. The Operating Partnership credits this program in achieving higher yields and controlling discounting;

4

–Dri-guard, that provides humidity-controlled spaces. We became the first self-storage operator to utilize this humidity protection technology. These environmental control systems are a premium storage feature intended to protect metal, electronics, furniture, fabrics and paper from moisture; and
–Uncle Bob’s trucks, that provide customers with convenient, affordable access to vehicles to help move their goods into storage, and which also serve as moving billboards to help advertise our storage facilities.
Ancillary Income:
     Our stores are essentially retail operations and we have in excessbelieve it provides a valuable service and added incentive to choose Life Storage. Further, the prominent display of 160,000our logo turns each truck into a moving billboard.

Ancillary Income:

We know that our 393,000 customers require more than just a storage space. Knowing this, we offer a wide range of other products and services that fulfill their needs while providing us with ancillary income. Whereas our Life Storage trucks are available with no rental charge for new move-in customers, they are available for rent to non-customers and existing customers. AsWe also rent moving dollies and blankets, and we carry a convenience towide assortment of moving and packing supplies including boxes, tape, locks, and other essential items. For those customers we sell items such as locks, boxes, tarps, etc. to make theirwho do not carry storage experience easier. We alsoinsurance, we make available renters insurance through a third party carrier, on which we earn a commission. Incomean administrative fee. We also receive incidental income from incidental truck rentals, billboards and cell towerstowers.


Information Systems:

Each of our primary business functions is also earned by us.

Information Systems:
     Ourlinked to our customized computer systemapplications, many of which are proprietary. These systems provide for consistent, timely and accurate flow of information throughout our critical platforms:

Our proprietary operating software (“ubOS”) is installed at all locations and performs billing, collectionsthe functions necessary for field personnel to efficiently and reservation functionseffectively run a property. This includes customer account management, automatic imposition of late fees, move-in and move-out analysis, generation of essential legal notices, and marketing reports to aid in regional marketing efforts. Financial reports are automatically transmitted to our Corporate Offices overnight to allow for strict accounting oversight.

ubOS is linked with each Property. It also tracksof our primary sales channels (customer care center, internet, store) allowing for real-time access to space type and inventory, pricing, promotions, and other pertinent store information. This robust flow of information usedfacilitates our commitment to capturing prospective customers from all channels.

ubOS provides our revenue management team with raw data on historical pricing, move-in and move-out activity, specials and occupancies, etc. This data is utilized in developing marketing plans based on occupancy levelsthe various algorithms that form the foundation of our revenue management program. Changes to pricing and customer demographics and histories. The systemspecials are “pushed out” to all sales channels instantaneously.

ubOS generates daily, weekly and monthly financial reports for each Propertyproperty that are transmittedprovide our accounting and audit departments with the necessary oversight of transactions; this allows us to maintain proper control of receipts.

Revenue Management:

Our proprietary revenue management system is constantly evolving through the efforts of our principal office each night. The system also requiresrevenue management team comprised of a property managergroup of analysts. We have the ability to input a descriptive explanationchange pricing instantaneously for all debitany single unit type, at any single location, based on the occupancy, competition, and credit transactions, paid-to-dateforecasted changes and all other discretionary activities, which allows the accounting staff at our principal office to promptly review all such transactions. Late charges are automatically imposed. More sensitive activities, such asin demand. By analyzing current customer rent tenures, we can implement rental rate changes and unit size or number changes, are completed only by Area Managers. Our customized management information system permitsincreases at optimal times to increase revenues. Advanced pricing analytics enables us to add new facilitiesreduce the amount of concessions, attracting a more stable customer base and discouraging short-term price shoppers. This system continues to drive revenue stability and/or growth throughout our portfolio with minimal additional overhead expense.

portfolio.

Property Maintenance:

We take great pride in the appearance and structural integrity of our Properties. All of our Properties go through a thorough annual inspection performed by experienced project managers. These inspections provide the basis for short and long term planned projects that are subject to regularall performed under a standardized set of specifications. Routine maintenance such as landscaping, pest control, and routine maintenance procedures, which are designed to maintain the structure and appearance of our buildings and grounds. A staff headquartered in our principal office is responsible for the upkeep of the Properties, and all maintenance servicesnowplowing is contracted throughto local providers such as lawn service, snowplowing, pest control, gate maintenance, HVACto whom we clearly communicate our standards. Further, our software tracks repairs, paving, painting, roofing, etc. A codified setmonitors contractor performance and measures the useful life of specifications has been designed and is applied to all work performed on our Uncle Bob’s stores.assets. As with many other aspects of our Operating Partnership,Company, our size has allowed us to enjoy relatively low maintenance costs because we have the benefit of economies of scale in purchasing, travel, and overhead absorption.

In addition, we continually look to green alternatives and implement energy saving alternatives as new technology becomes available. This includes the installation of solar panels, LED lighting, energy efficient air conditioning units, and cool roofs which are all environmentally friendly and have the potential to reduce energy consumption (thereby reducing costs) in the buildings in which they are installed. We continue to implement and expand the Company’s solar panel initiative which has reduced energy consumption and costs at those installed locations.

Environmental and Other Regulations

We are subject to federal, state, and local environmental regulations that apply generally to the ownership of real property. We have not received notice from any governmental authority or private party of any material environmental noncompliance, claim, or liability in connection with any of the Properties, and are not aware of any environmental condition with respect to any of the Properties that could have a material adverse effect on our financial condition or results of operations.

The Properties are also generally subject to the same types of local regulations governing other real property, including zoning ordinances. We believe that the Properties are in substantial compliance with all such regulations.

Insurance

Each of the Properties is covered by fire and property insurance (including comprehensive liability)liability and business interruption), and all-risk property insurance policies, which are provided by reputable companies and on commercially reasonable terms. In addition, we maintain a policy insuring against environmental liabilities resulting from tenant storage on terms customary for the industry, and title insurance insuring fee title to the Operating Partnership-ownedCompany-owned Properties in an amount that we believe to be adequate.


Federal Income Tax

5

     The Operating Partnership does not pay federal income taxes becauseWe operate, and we intend to continue to operate, in such a manner as to continue to qualify as a partnershipREIT under the Internal Revenue Code of 1986 (the “Code”), but no assurance can be given that we will at all times so qualify. To the extent that we continue to qualify as a REIT, we will not be taxed, with certain limited exceptions, on the taxable income that is distributed to our shareholders. We have elected to treat one of our subsidiaries as a taxable REIT subsidiary. In general, our taxable REIT subsidiary may perform additional services for customers and generally may engage in certain real estate or non-real estate related business. Our taxable REIT subsidiary is subject to corporate federal and state income taxes. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - REIT Qualification and Distribution Requirements.”

The Tax Cuts and Jobs Act

The Tax Cuts and Jobs Act (the “TCJA”) was passed by Congress on December 20, 2017 and signed into law by President Trump on December 22, 2017. The TCJA significantly changed the U.S. federal income tax purposeslaws applicable to businesses and their owners, including REITs and their shareholders. Technical corrections or other amendments to the TCJA or administrative guidance interpreting the TCJA may be forthcoming at any time. We cannot predict the long-term effect of the TCJA or any future law changes on us or our shareholders. A brief summary of the key changes from the TCJA that directly impact us and, potentially, our shareholders is set forth below. The changes described are effective for taxable years beginning after December 31, 2017, unless otherwise noted.

Under the TCJA, the corporate income tax rate is reduced from a maximum rate of 35% to a flat 21% rate. The reduced corporate income tax rate, which is effective for taxable years beginning after December 31, 2017, will apply to income earned by our taxable REIT subsidiary. This reduced rate also applies to the amount that we must withhold from our distributions to non-U.S. shareholders that are designated as capital gain dividends (or that could have been designated as capital gain dividends). The TCJA also repeals the alternative minimum tax imposed on C corporations.

The TCJA reduces the highest marginal income tax rate applicable to U.S. individuals from 39.6% to 37% (excluding the 3.8% Medicare tax on net investment income). Domestic non-corporate taxpayers continue to pay a maximum 20% rate on long-term capital gains and qualified dividend income. However, the TCJA also will allow domestic non-corporate taxpayers to deduct 20% of their dividends from REITs, excluding capital gain dividends and qualified dividend income (which continue to be subject to the 20% rate). As a result, dividend income received by our domestic non-corporate shareholders will be subject to a maximum effective federal income tax rate of 29.6% (plus the 3.8% Medicare tax on net investment income). The cumulative amount that a domestic non-corporate taxpayer may deduct for any taxable year with respect to ordinary REIT dividends from all sources (together with certain other categories of income that are eligible for such 20% deduction) may not exceed 20% of such person’s total taxable income (excluding any net capital gain). The income tax rate changes applicable to domestic non-corporate taxpayers and the 20% deduction for ordinary REIT dividends apply for taxable years beginning after December 31, 2017 and before January 1, 2026.

The TCJA generally limits the deduction for net business interest to 30% of adjusted taxable income (excluding non-business income, net operating losses, business interest income, and, for taxable years beginning before January 1, 2022, computed without regard to depreciation and amortization). This limitation on the deductibility of net business interest could result in additional taxable income for us and our partners are required to include their respective shares of profits and losses in their income tax returns.

taxable REIT subsidiary.

Competition

The primary factors upon which competition in the self-storage industry is based are location, rental rates, suitability of the property’s design to prospective customers’ needs, and the manner in whichhow the property is operated and marketed. We believe we compete successfully on these bases.factors. The extent of competition depends significantly on local market conditions. We seek to locate facilities so aswhere we can increase market share while not to causeadversely affecting any of our Properties to compete with one another for customers, butexisting locations in that market. However, the number of self-storage facilities in a particular area could have a material adverse effect on the performance of any of the Properties.

Several of our competitors including Public Storage, U-Haul, and Extra Space Storage, are larger and have substantially greater financial resources than we do. These larger operators may, among other possible advantages, be capable of greater leverage and the payment of higher prices for acquisitions.

Investment Policy

While we emphasize equity real estate investments, we may, at our discretion, invest in mortgage and other real estate interests related to self-storage properties in a manner consistent with the Company’sour qualification as a REIT. We may also retain a purchase money mortgage for a portion of the sale price in connection with the disposition of Properties from time to time. Should investment opportunities become available, we may look to acquire additional self-storage properties via anew or existing joint-venture partnershippartnerships or similar entity.entities. We may or may not elect to have a significant investment in such a venture, but would use such an opportunity to expand our portfolio of branded and managed properties.

Subject to the percentage of ownership limitations and gross income tests necessary for the Company’s REIT qualification, we also may invest in securities of entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over such entities.


Disposition Policy

Any disposition decision of our Properties is based on a variety of factors, including, but not limited to, the (i) potential to continue to increase cash flow and value, (ii) sale price, (iii) strategic fit with the rest of our portfolio, (iv) potential for, or existence of, environmental or regulatory issues, (v) alternative uses of capital, and (vi) maintaining qualification as a REIT.

During 2009 we2017, the Company sold fivetwo non-strategic storage facilities located in Massachusetts, North Carolinaproperties and Pennsylvania forreceived net cash proceeds of $16.3$16.9 million, resulting in a loss of $1.6a approximately $3.5 million. The Company has subsequently leased one of the properties sold during 2017 and will continue to operate the property through March 2020. Due to the Company’s continuing involvement in this property, the related gain on the sale of this property has been deferred and will be recognized by the Company upon termination of this lease. During 20082016, we sold oneeight non-strategic storage facility locatedproperties in MichiganAlabama, Georgia, Mississippi, Texas and Virginia for net cash proceeds of $7.0approximately $34.1 million, resulting in a gain of $0.7approximately $15.3 million. NoDuring 2015, we sold three non-strategic storage facilities were sold in 2007.

Missouri and South Carolina for net proceeds of approximately $4.6 million, resulting in a loss of approximately $0.5 million.

Distribution Policy

We intend to pay regular quarterly distributions to our unitholders.shareholders. However, future distributions by us will be at the discretion of the Board of Directors and will depend on the actual cash available for distribution, our financial condition and capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Directors deems relevant. In order to maintain the Company’sour qualification as a REIT, the Companywe must make annual distributions to shareholders of at least 90% of the Company’sour REIT taxable income (which does not include capital gains)gains or losses). Under certain circumstances, we may be required to make distributions in excess of cash available for distribution in order to meet this requirement.

     On May 6, 2009, recognizing the need to maintain maximum financial flexibility in light of the current state of the capital markets, our Board of Directors reduced the quarterly distribution from $0.64 per unit to $0.45 per unit, for an annual rate of $1.80 per unit.

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minimum requirements.

Financing Policy

Borrowing Policy
Our Board of Directors currently limits the amount of debt that may be incurred by us to less than 50% of the sum of the market value of the Company’sour issued and outstanding Common and Preferred Stock plus our debt. We, however, may from time to time re-evaluate and modify our borrowing policy in light of thenconsidering current economic conditions, relative costs of debt and equity capital, market values of properties, growth and acquisition opportunities and other factors.
In addition to our Board of Directors’ debt limits, our most restrictive debt covenants limit our leverage. However, we believe cash flow from operations, access to the capital markets and access to our credit facility, as described below, are adequate to execute our current business plan and remain in compliance with our debt covenants.

The following sets forth certain financing activities during the year ended December 31, 2017.

On June 25, 2008, we entered into agreements relating to newDecember 7, 2017, the Operating Partnership issued $450 million in aggregate principal of 3.875% unsecured credit arrangements, and received funds under those arrangements. As part of the agreements, we entered into a $250 million unsecured term note maturing in June 2012 bearing interest at LIBOR plus 1.625%senior notes due December 15, 2027 (the “2027 Senior Notes”). The 2027 Senior Notes were issued at a 0.477% discount to par value. Interest on the 2027 Senior Notes is payable semi-annually on June 15 and December 15, beginning on June 15, 2018. The 2027 Senior Notes are fully and unconditionally guaranteed by the Parent Company. Proceeds received upon issuance, net of discount to par of $2.1 million and underwriting and other offering expenses totaling $4.0 million, totaled $443.9 million. The proceeds from this term note were primarily used to repay $225.0 million of the Operating Partnership’s previousCompany’s then existing variable rate term notes and to repay $210.0 million of the then outstanding balance on the Company’s line of credit.  

Amounts outstanding on the Company’s line of credit that was to mature in September 2008, the Operating Partnership’s term note that was to mature in September 2009, the term note maturing in July 2008, and to provide for working capital. In October 2009, the Operating Partnership repaid $100 million of the term note entered into in June 2008. The 2008 agreements also provide for a $125 million (expandable to $175 million) revolving line of credit maturing June 2011 bearing interest at a variable rate equal to LIBOR plus 1.375%, and requires a 0.25% facility fee. At December 31, 2009, there was $125 million available on the unsecured line of credit.

     We also maintain an $80 million term note maturing September 2013 bearing interest at a fixed rate of 6.26%, a $20 million term note maturing September 2013 bearing interest at a variable rate equal to LIBOR plus 1.50%, and a $150 million unsecured term note maturing in April 2016 bearing interest at 6.38%.
2017 totaled $105.0 million.

To the extent that we desire to obtain additional capital to pay distributions, to provide working capital, to pay existing indebtedness or to finance acquisitions, expansions or development of new properties, we may utilize amounts available under the expanded line of credit, common or preferred stock offerings, floating or fixed rate debt financing, retention of cash flow (subject to satisfying the Company’sour distribution requirements under the REIT rules) or a combination of these methods. Additional debt financing may also be obtained through mortgages on our Properties, which may be recourse, non-recourse, or cross-collateralized and may contain cross-default provisions. We have not established any limit on the number or amount of mortgages that may be placed on any single Property or on our portfolio as a whole, although certain of our existing term loans contain limits on overall mortgage indebtedness. For additional information regarding borrowings and equity activities, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Operations—Liquidity and Capital Resources” and Note 7Notes 5 and 6 to the Consolidated Financial Statements filed herewith.

Employees

We currently employ a total of 1,0511,792 employees, including 381706 property managers, 2447 area managers, and 511 assistant785 associate managers and part-time employees. At our headquarters, in addition to our threefive senior executive officers, we employ 132249 people engaged in various support activities, including accounting, human resources, customer care, and management information systems. None of our employees are covered by a collective bargaining agreement. We consider our employee relations to be excellent.


Available Information

We file with the U.S. Securities and Exchange Commission quarterly and annual reports on Forms 10-Q and 10-K, respectively, current reports on Form 8-K, and proxy statements pursuant to the Securities Exchange Act of 1934, in addition to other information as required. The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1 (800) SEC-0330. We file this information with the SEC electronically, and the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available free of charge on our web site athttp://www.sovranss.comwww.lifestorage.com as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. In addition,

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our codesCodes of ethicsEthics and Charters of our Governance Committee, Audit Committee, and Compensation Committee are available free of charge on our website athttp://www.sovranss.comwww.lifestorage.com.

Also, copies of our annual report and Charters of our Governance Committee, Audit Committee, and Compensation Committee will be made available, free of charge, upon written request to Sovran SelfLife Storage, Inc., Attn: Investor Relations, 6467 Main Street, Williamsville, NY 14221.

Item 1A.

Risk Factors

Item 1A. Risk Factors

You should carefully consider the risks described below, together with all of the other information included in or incorporated by reference into ourForm 10-K,, as part of your evaluation of the Operating Partnership.Company. If any of the following risks actually occur, our business could be harmed. In such case, the trading price of our securities could decline, and you may lose all or part of your investment.

Our Acquisitions May Not Perform as Anticipated

We have completed manyhundreds of acquisitions of self-storage facilities since the Company’sour initial public offering of common stock in June 1995. Our strategyOne of our strategies is to continue to grow by acquiring additional self-storage facilities. Acquisitions entail risks that investments will fail to perform in accordance with our expectations and that ourexpectations. Our judgments with respect to the prices paid for acquired self-storage facilities and the costs of any improvements required to bring an acquired property up to our standards established for the market position intended for that property willmay prove to be inaccurate. Acquisitions also involve general investment risks associated with any new real estate investment.

We May Incur Problems with Our Real Estate Financing

Unsecured Credit Facility, Term Notes and TermSenior Notes.We have a line of credit and term note agreements with a syndicate of financial institutions and other lenders.lenders, along with senior debt of $1,050 million. This unsecured credit facility and the term notes areindebtedness is recourse to us and the required payments are not reduced if the economic performance of any of the properties declines. The unsecured credit facility limitsfacilities limit our ability to make distributions to our unitholders,shareholders, except in limited circumstances.

Rising Interest Rates.Rates. Indebtedness that we incur under the unsecured credit facility and bank term notes bearbears interest at a variable rate. Accordingly, increases in interest rates could increase our interest expense, which would reduce our cash available for distribution and our ability to pay expected distributions to our unitholders.shareholders. We manage our exposure to rising interest rates using interest rate swaps and other available mechanisms. If the amount of our indebtedness bearing interest at a variable rate increases, our unsecured credit facility may require us to enter into additional interest rate swaps.

Refinancing May Not Be Available.It may be necessary for us to refinance our unsecured credit facilityindebtedness through additional debt financing or equity offerings. If we were unable to refinance this indebtedness on acceptable terms, we might be forced to dispose of some of our self-storage facilities upon disadvantageous terms, which might result in losses to us and might adversely affect the cash available for distribution. If prevailing interest rates or other factors at the time of refinancing result in higher interest rates on any refinancings, our interest expense would increase, which would adversely affect our cash available for distribution and our ability to pay expected distributions to unitholders.

Recent turmoil in the credit markets could affect our ability to obtain debt financing on reasonable terms and have other adverse effects on us.The United States credit markets have recently experienced significant dislocations and liquidity disruptions which have caused the spreads on available debt financings to widen considerably. These circumstances have materially impacted liquidity in the debt markets, making financing terms for borrowers less attractive. A prolonged downturn in the credit markets could cause us to seek alternative sources of potentially less attractive financing, and may require us to adjust our business plan accordingly. Continued uncertainty in the credit markets may negatively impact our ability to make acquisitions.
shareholders.

Covenants and Risk of Default. Our unsecured credit facility and term notesloan instruments require us to operate within certain covenants, including financial covenants with respect to leverage, fixed charge coverage, minimum net worth,

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limitations on additional indebtedness and distributiondividend limitations. If we violate any of these covenants or otherwise default under our unsecured credit facility or term notes,these instruments, then our lenders could declare all indebtedness under these facilities to be immediately due and payable which would have a material adverse effect on our business and could require us to sell self-storage facilities under distressdistressed conditions and seek replacement financing on substantially more expensive terms.

Reduction in or Loss of Credit Rating. Certain of our debt instruments require us to maintain an investment grade rating from at least one and in some cases two debt ratings agencies. Should we receive a reduction in our credit rating from the agencies, the interest rate on our line of credit would increase by up to 0.50% and the interest rate on $100 million of our bank term notes would increase by up to 0.65%. Should we fail to attain an investment grade rating from the agencies, the interest rates on our $100 million term note due 2021 and our $175 million term note due 2024 would each increase by 1.750%.


Our Debt Levels May Increase

Our Board of Directors currently has a policy of limiting the amount of our debt at the time of incurrence to less than 50% of the sum of the market value of the Company’sour issued and outstanding common stock and preferred stock plus the amount of our debt at the time that debt is incurred. However, our organizational documents do not contain any limitation on the amount of indebtedness we might incur. Accordingly, our Board of Directors could alter or eliminate the current policy limitation on borrowing without a vote of our unitholders.shareholders. We could become highly leveraged if this policy were changed. However, our ability to incur debt is limited by covenants in our bank credit arrangements.

debt instruments.

We Are Subject to the Risks Posed by Fluctuating Demand and Significant Competition in the Self-Storage Industry

Our self-storage facilities are subject to all operating risks common to the self-storage industry. These risks include but are not limited to the following:

Decreases in demand for rental spaces in a particular locale;

•Decreases in demand for rental spaces in a particular locale;
•Changes in supply of similar or competing self-storage facilities in an area;
•Changes in market rental rates; and
•Inability to collect rents from customers.

Changes in supply of similar or competing self-storage facilities in an area;

Changes in market rental rates; and

Inability to collect rents from customers.

Our current strategy is to acquire interests only in self-storage facilities. Consequently, we are subject to risks inherent in investments in a single industry. Our self-storage facilities compete with other self-storage facilities in their geographic markets. As a result ofDue to competition, the self-storage facilities could experience a decrease in occupancy levels and rental rates, which would decrease our cash available for distribution. We compete in operations and for acquisition opportunities with companies that have substantial financial resources. Competition may reduce the number of suitable acquisition opportunities offered to us and increase the bargaining power of property owners seeking to sell. The self-storage industry has at times experienced overbuilding in response to perceived increases in demand. A recurrence of overbuilding might cause us to experience a decrease in occupancy levels, limit our ability to increase rents, and compel us to offer discounted rents.

Our Real Estate Investments Are Illiquid and Are Subject to Uninsurable Risks and Government Regulation

General Risks.Our investments are subject to varying degrees of risk generally related to the ownership of real property. The underlying value of our real estate investments and our income and ability to make distributions to our unitholdersshareholders are dependent upon our ability to operate the self-storage facilities in a manner sufficient to maintain or increase cash available for distribution. Income from our self-storage facilities may be adversely affected by the following factors:

Changes in national economic conditions;

•Changes in national economic conditions;
•Changes in general or local economic conditions and neighborhood characteristics;
•Competition from other self-storage facilities;
•Changes in interest rates and in the availability, cost and terms of financing;

Changes in general or local economic conditions and neighborhood characteristics;

Competition from other self-storage facilities;

Changes in interest rates and in the availability, cost and terms of financing;

The impact of present or future environmental legislation and compliance with environmental laws;

The ongoing need for capital improvements, particularly in older facilities;

Changes in real estate tax rates and other operating expenses;

Adverse changes in governmental rules and fiscal policies;

Uninsured losses resulting from casualties associated with civil unrest, acts of God, including natural disasters, and acts of war;

Adverse changes in zoning laws; and

Other factors that are beyond our control.

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•The impact of present or future environmental legislation and compliance with environmental laws;
•The ongoing need for capital improvements, particularly in older facilities;
•Changes in real estate tax rates and other operating expenses;
•Adverse changes in governmental rules and fiscal policies;
•Uninsured losses resulting from casualties associated with civil unrest, acts of God, including natural disasters, and acts of war;
•Adverse changes in zoning laws; and
•Other factors that are beyond our control.
Illiquidity of Real Estate May Limit its Value.Real estate investments are relatively illiquid. Our ability to vary our portfolio of self-storage facilities in response to changes in economic and other conditions is limited. In addition, provisions of the Code may limit our ability to profit on the sale of self-storage facilities held for fewer than two years. We may be unable to dispose of a facility when we find disposition advantageous or necessary and the sale price of any disposition may not equal or exceed the amount of our investment.


Uninsured and Underinsured Losses Could Reduce the Value of our Self Storage Facilities.Some losses, generally of a catastrophic nature, that we potentially face with respect to our self-storage facilities may be uninsurable or not insurable at an acceptable cost. Our management uses its discretion in determining amounts, coverage limits and deductibility provisions of insurance, with a view to acquiring appropriate insurance on our investments at a reasonable cost and on suitable terms. These decisions may result in insurance coverage that, in the event of a substantial loss, would not be sufficient to pay the full current market value or current replacement cost of our lost investment. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it infeasible to use insurance proceeds to replace a property after it has been damaged or destroyed. Under those circumstances, the insurance proceeds received by us might not be adequate to restore our economic position with respect to a particular property.

Possible Liability Relating to Environmental Matters.Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on, under, or in that property. Those laws often impose liability even if the owner or operator did not cause or know of the presence of hazardous or toxic substances and even if the storage of those substances was in violation of a customer’s lease. In addition, the presence of hazardous or toxic substances, or the failure of the owner to address their presence on the property, may adversely affect the owner’s ability to borrow using that real property as collateral. In connection with the ownership of the self-storage facilities, we may be potentially liable for any of those costs.

Americans with Disabilities Act.The Americans with Disabilities Act of 1990, or ADA, generally requires that buildings be made accessible to persons with disabilities. A determination that we are not in compliance with the ADA could result in imposition of fines or an award of damages to private litigants. If we were required to make modifications to comply with the ADA, our results of operations and ability to make expected distributions to our unitholdersshareholders could be adversely affected.

There Are Limitations on the Ability to Change Control of Sovran

the Company

Limitation on Ownership and Transfer of Shares.To maintain the Company’sour qualification as a REIT, not more than 50% in value of itsour outstanding shares of stock may be owned, directly or indirectly, by five or fewer individuals, as defined in the Code. To limit the possibility that we will fail to qualify as a REIT under this test, the Company’sour Amended and Restated Articles of Incorporation (“Articles of Incorporation”) include ownership limits and transfer restrictions on shares of itsour stock. The Company’sOur Articles of Incorporation limit ownership of itsour issued and outstanding stock by any single shareholder to 9.8% of the aggregate value of itsour outstanding stock, except that the ownership by some of itsour shareholders is limited to 15%.

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These ownership limits may:

Have the effect of precluding an acquisition of control of the Company by a third party without consent of our Board of Directors even if the change in control would be in the interest of shareholders; and

•Have the effect of precluding an acquisition of control of Sovran by a third party without consent of our Board of Directors even if the change in control would be in the interest of the Company’s shareholders; and
•Limit the opportunity for the Company’s shareholders to receive a premium for shares of its common stock they hold that might otherwise exist if an investor were attempting to assemble a block of common stock in excess of 9.8% or 15%, as the case may be, of the outstanding shares of the Company’s stock or to otherwise effect a change in control of Sovran.

Limit the opportunity for shareholders to receive a premium for shares of our common stock they hold that might otherwise exist if an investor were attempting to assemble a block of common stock in excess of 9.8% or 15%, as the case may be, of the outstanding shares of our stock or to otherwise effect a change in control of the Company.

Our Board of Directors may waive the ownership limits if it is satisfied that ownership by those shareholders in excess of those limits will not jeopardize Company’sour status as a REIT under the Code or in the event it determines that it is no longer in the Company’sour best interests to be a REIT. Waivers have been granted to the former holders of the Company’sour Series C preferred stock, FMR Corporation, and Cohen & Steers, Inc. and Invesco Advisers, Inc. A transfer of itsour common stock and/or preferred stock to a person who, as a result of the transfer, violates the ownership limits may not be effective under some circumstances.

Other Limitations.Other limitations could have the effect of discouraging a takeover or other transaction in which holders of some, or a majority, of the Company’sour outstanding common stock might receive a premium for their shares of the Company’sour common stock that exceeds the then prevailing market price or that those holders might believe to be otherwise in their best interest. The issuance of additional shares of preferred stock could have the effect of delaying or preventing a change in control of Sovranthe Company even if a change in control were in the shareholders’ interest. In addition, the Maryland General Corporation Law, or MGCL, imposes restrictions and requires that specifiedspecific procedures with respect to the acquisition of stated levels of share ownership and business combinations, including combinations with interested shareholders. These provisions of the MGCL could have the effect of delaying or preventing a change in control of SovranLife Storage even if a change in control were in the shareholders’ interest. WaiversOur bylaws contain a provision exempting from the MGCL control share acquisition statute any and exemptions have been granted to the initial purchasersall acquisitions by any person of the Company’s former Series C preferred stock in connection with these provisionsshares of the MGCL.our stock. However, this provision may be amended or eliminated at any time. In addition, under the Operating Partnership’s agreement of limited partnership, in general, we may not merge, consolidate or engage in any combination with another person or sell all or substantially all of our assets unless that transaction includes the merger or sale of all or substantially all of the assets of the Operating Partnership, which requires the approval of the holders of 75% of the limited partnership interests thereof. If we were to own less than 75% of the limited partnership interests in the Operating Partnership, this provision of the limited partnership agreement could have the effect of delaying or preventing us from engaging in some change of control transactions.


The

Our Failure of Sovran Self Storage, Inc. to Qualify as a REIT Would Have Adverse Consequences

     The Company intends

We intend to continue to operate in a manner that will permit itus to qualify as a REIT under the Code. We have not requested and do not plan to request a ruling from the Internal Revenue Service (“IRS”) that we qualify as a REIT, and the statements in this Annual Report on Form 10-K are not binding on the IRS or any court. Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. Continued qualification as a REIT depends upon the Company’sour continuing ability to meet various requirements concerning, among other things, the ownership of itsour outstanding stock, the nature of itsour assets, the sources of itsour income and the amount of itsour distributions to our shareholders. The fact that we hold substantially all of our assets through our Operating Partnership and its shareholders.

     In addition,subsidiaries and joint ventures further complicates the application of the REIT requirements for us. Even a technical or inadvertent mistake could jeopardize our REIT is limited with respectstatus and, given the highly complex nature of the rules governing REITs and the ongoing importance of factual determinations, we cannot provide any assurance that we will continue to qualify as a REIT. Furthermore, Congress and the IRS might make changes to the services it can provide for its tenants. Intax laws and regulations, and the past, the Company has provided certain conveniences for its tenants, including property insurance underwritten by a third party insurance company that pays it commissions. We believe the insurance provided by the insurance company would not constitute a prohibited service to the Company’s tenants. No assurances can be given, however, thatcourts and the IRS will not challenge our position. If the IRS successfully challenged our position, the Company’s qualificationmight issue new rulings, that make it more difficult, or impossible, for us to remain qualified as a REIT could be adversely affected.
REIT.

If the Companywe were to fail to qualify as a REIT in any taxable year and are unable to avail ourselves of certain savings provisions set forth in the CompanyCode, we would not be allowed a deduction for distributions to shareholders in computing itsour taxable income and would be subject to federal income tax (including any applicable alternative minimum tax)possibly increased state and local taxes) on itsour taxable income at regular corporate rates. Unless entitled to relief under certain Code provisions, the Companywe also would be ineligible for qualification as a REIT for

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the four taxable years following the year during which itsour qualification was lost. As a result, distributions to the shareholders would be reduced for each of the years involved. Although the Companywe currently intendsintend to continue to operate in a manner designed to qualify as a REIT, it is possible that future economic, market, legal, tax or other considerations may cause itsour Board of Directors to revoke itsour REIT election.
If we fail to qualify as a REIT for federal income tax purposes and are able to avail ourselves of one or more of the statutory savings provisions in order to maintain our REIT status, we would nevertheless be required to pay penalty taxes of $50,000 or more for each such failure.

We MayWill Pay Some Taxes Even if We Qualify as a REIT, Reducing Cash Available for Unitholders

Shareholders

Even if the Company qualifieswe qualify as a REIT for federal income tax purposes, we are required to pay some federal, foreign, state and local taxes on our income and property. CertainFor example, we will be subject to income tax to the extent we distribute less than 100% of our REIT taxable income (including capital gains). Additionally, we will be subject to a 4% nondeductible excise tax on the Company’s corporateamount, if any, by which dividends paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. Moreover, if we have net income from “prohibited transactions,” that income will be subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property held primarily for sale to customers in the ordinary course of business. The determination as to whether a particular sale is a prohibited transaction depends on the facts and circumstances related to that sale. While we will undertake sales of assets if those assets become inconsistent with our long-term strategic or return objectives, we do not believe that those sales should be considered prohibited transactions, but there can be no assurance that the IRS would not contend otherwise. The need to avoid prohibited transactions could cause us to forego or defer sales of properties that might otherwise be in our best interest to sell.

One of our subsidiaries havehas elected to be treated as a “taxable REIT subsidiaries”subsidiary” of the Company for federal income tax purposes. A taxable REIT subsidiary is taxabletaxed as a regular corporation and is limited in its ability to deduct interest payments made to us in excess of a certain amount.amount, in addition to other limitations imposed on the deductibility of interest under the TCJA. In addition, if the Company receiveswe receive or accruesaccrue certain amounts and the underlying economic arrangements among itsbetween our taxable REIT subsidiariessubsidiary and itus are not comparable to similar arrangements among unrelated parties, the Companywe will be subject to a 100% penalty tax on those payments in excess of amounts deemed reasonable between unrelated parties.

Finally, some state and local jurisdictions may tax some of our income even though as a REIT the Company iswe are not subject to federal income tax on that income because not all states and localities follow the federal income tax treatment of REITs. To the extent that the Companywe are or any taxable REIT subsidiary is required to pay federal, foreign, state or local taxes, we will have less cash available for distribution to unitholders.shareholders.

Complying with REIT Requirements May Limit Our Ability to Hedge Effectively and May Cause Us to Incur Tax Liabilities

The REIT provisions of the Code may limit our ability to hedge our assets and operations. Under these provisions, any income that we generate from transactions intended to hedge our interest rate risk will be excluded from gross income for purposes of the REIT 75% and 95% gross income tests if the instrument hedges interest rate risk on liabilities used to carry or acquire real estate assets or manages the risk of certain currency fluctuations, and such instrument is properly identified under applicable Treasury Regulations. Income from hedging transactions that do not meet these requirements will generally constitute non-qualifying income for purposes of both the REIT 75% and 95% gross income tests. As a result of these rules, we may have to limit our use of hedging techniques that might otherwise be advantageous or implement those hedges through a taxable REIT subsidiary. This could increase the cost of our hedging activities because our taxable REIT subsidiary would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in our taxable REIT subsidiary arising after December 31, 2017 will generally not provide any tax benefit, except for being carried forward against future taxable income in the taxable REIT subsidiary.


Complying with the REIT Requirements May Cause Us to Forgo and/or Liquidate Otherwise Attractive Investments

To qualify as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts that we distribute to our shareholders and the ownership of our shares. To meet these tests, we may be required to take or forgo taking actions that we would otherwise consider advantageous. For instance, in order to satisfy the gross income or asset tests applicable to REITs under the Code, we may be required to forgo investments that we otherwise would make. Furthermore, we may be required to liquidate from our portfolio otherwise attractive investments. In addition, we may be required to make distributions to shareholders at disadvantageous times or when we do not have funds readily available for distribution. These actions could reduce our income and amounts available for distribution to our shareholders. Thus, compliance with the REIT requirements may hinder our investment performance.

If the Operating Partnership Fails to Qualify as a Partnership for Federal Income Tax Purposes, We Could Fail to Qualify as a REIT and Suffer Other Adverse Consequences

We believe that the Operating Partnership is organized and operated in a manner so as to be treated as a partnership and not an association or a publicly traded partnership taxable as a corporation, for federal income tax purposes. As a partnership, the Operating Partnership is not subject to federal income tax on its income. Instead, each of the partners is allocated its share of the Operating Partnership’s income. No assurance can be provided, however, that the IRS will not challenge the Operating Partnership’s status as a partnership for federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating the Operating Partnership as an association or publicly traded partnership taxable as a corporation for federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, would cease to qualify as a REIT. Also, the failure of the Operating Partnership to qualify as a partnership would cause it to become subject to federal corporate income tax, which would reduce significantly the amount of its cash available for distribution to its partners, including us.

The Tax Cuts and Jobs Act May Impact the Attractiveness of an Investment in our Stock in Ways Difficult to Anticipate

The Tax Cuts and Jobs Act (the “TCJA”), signed into law in late 2017, significantly changed the U.S. federal income tax law applicable, and is generally for taxable years beginning after December 31, 2017. The TCJA reduced corporate and non-corporate income tax rates and changed numerous other provisions of the Code that may affect the taxation of REITs and their shareholders. These changes generally appear favorable to REITs; however, certain changes to the U.S. federal income tax laws pursuant to the TCJA could have a material and adverse effect on us. Some of these changes could reduce the relative competitive advantage of companies operating as REITs as opposed to companies not operating as REITs, including:

the reduction in tax rates applicable to individuals and C corporations, which could reduce the relative attractiveness of the generally single-level of taxation on REIT distributions;

the immediate expensing of capital expenditures, which could likewise reduce the relative attractiveness of the REIT structure; and

the limit on the deductibility of interest expense, which could increase the distribution requirement of REITs.

Many changes applicable to individual taxpayers are temporary – applying to taxable years beginning after December 31, 2017 and before January 1, 2026. The TCJA makes numerous other changes to the tax law that do not affect REITs directly, but these changes could impact our shareholders and, therefore, could indirectly affect us.

Furthermore, the TCJA was adopted in a short period of time without hearings. It is likely that Congress will have to review, and possibly modify, provisions of the TCJA in subsequent tax legislation. It is not possible to predict if or when Congress will address changes to the TCJA or when the Internal Revenue Service will issue administrative guidance on the changes made by the TCJA or how any such changes will impact us or an investment in our stock. It is possible that future changes to tax law or guidance promulgated thereunder could adversely impact us.

Shareholders are urged to consult with their tax advisors about the TCJA and any other regulatory or administrative developments and proposals with respect to taxes and their potential effect on investment in our stock.

U.S. Federal Income Tax Treatment of REITs and Investments in REITs May Change, Which May Result in the Loss of Our Tax Benefits of Operating as a REIT

Current U.S. federal income tax treatment of a REIT and an investment in a REIT may be modified by legislative, judicial or administrative action at any time, and we cannot predict when such action may occur. We cannot predict how changes in U.S. federal income tax law will affect us or our investors nor can we predict the long-term impact of tax reforms on REITs.

We May Change the DistributionDividend Policy for Our Common Stock in the Future

In 2009,2017, our boardBoard of directorsDirectors authorized and we declared quarterly distributionscommon stock dividends of $0.64$0.95 per unitshare in January, and $1.00 per share for the first fiscal quarter; the equivalent of anApril, July and October, for a total 2017 dividend per share annual rate of $2.56$3.95 per unit. With respect to the second quartershare. In addition, our Board of 2009, recognizing the need to maintain maximum financial flexibilityDirectors authorized and we declared a quarterly common stock dividend of $1.00 per share in light of the current state of the capital markets, our board of directors reduced the quarterly distribution to $0.45 per unit, for an annual rate of $1.80 per unit. A $0.45 per unit distribution was also declared with respect to the third and fourth quarters of 2009.January 2018. We can provide no assurance that the boardour Board of Directors will not reduce or eliminate entirely dividend distributions on our common stock in the future.


     A recent Internal Revenue Service revenue procedure allows the Company to satisfy the REIT income distribution requirements with respect to its 2010 and 2011 taxable years by distributing up to 90%

Our Board of its dividends for such years on its common stock in shares of its common stock in lieu of paying dividends entirely in cash, so long as the Company follows a process allowing its shareholders to elect cash or stock subject to a cap that the Company imposes on the maximum amount of cash that will be paid. Although the Company may utilize this procedure in the future, it currently has no intent to do so.

     Our board of directorsDirectors will continue to evaluate our distribution policy on a quarterly basis as they monitor the capital markets and the impact of the economy on our operations. The decisiondecisions to authorize and pay distributionsdividends on our common stock in the future, as well as the timing, amount and composition of any such future distributions,dividends, will be at the sole discretion of our boardBoard of directors in light ofDirectors given conditions then existing, including our earnings, financial condition, capital requirements, debt maturities, the availability of capital, applicable REIT and legal restrictions and the general overall economic conditions and other factors. Any change in our distributiondividend policy could have a material adverse effect on the market price of the Company’sour common stock.
The Company

Market Interest Rates May Have Rescission Liability in Connection with SalesInfluence the Price of Unregistered Shares to Certain Investors

     As previously disclosed inOur Common Stock

One of the factors that may influence the price of our Form 10-Q for the three months ended March 31, 2009, from December 2008 through April 2009, the Company sold an aggregate of 653,757 shares of common stock under its dividend reinvestment andin public trading markets or in private transactions is the annual yield on our common stock purchase plan (the “DRSPP”)as compared to yields on other financial instruments. An increase in market interest rates will result in higher yields on other financial instruments, which were not registered undercould adversely affect the Securities Act as a resultprice of the expiration in November 2008 of its registration statement covering the DRSPP. Some or all of those sales, which resulted in proceeds to the Company of approximately $14.0 million, may have violated Section 5 of the Securities Act. Purchasers of shares issued in violation of Section 5 have a right to rescind their purchases for a period of twelve months following the date of original purchase under Section 13 of the Securities Act. As a result, the Company could be required to repurchase some or all of the shares issued under the DRSPP during this period at the original sale price plus statutory interest.

12

our common stock.

Regional Concentration of Our Business May Subject Us to Economic Downturns in the States of Texas and Florida

As of December 31, 2009, 1472017, 254 of our 381706 self-storage facilities are located in the states of Texas and Florida. For the year ended December 31, 2009,2017, these facilities accounted for approximately 42.0%36% of store revenues. This concentration of business in Texas and Florida exposes us to potential losses resulting from a downturn in the economies of those states. If economic conditions in those states continue to deteriorate, we willmay experience a reduction in existing and new business, which may have an adverse effect on our business, financial condition and results of operations.

When We Acquire Properties in New Markets, We Will Be Subject to Increased Operational Risks

We may acquire self-storage properties in markets where we have little or no operational experience. When we enter into new markets, we will be subject to increased risks resulting from our lack of experience and infrastructure in these markets and may need to incur additional costs, both expected and unexpected, to develop our operating capabilities in these markets. These risks could materially and adversely affect us, including our growth prospects, financial condition and results of operations.

Changes in Taxation of Corporate Dividends May Adversely Affect the Value of Our Common Stock

The maximum marginal rate of tax payable by domestic noncorporate taxpayers on dividends received from a regular “C” corporation under current federal law generally is 20%, as opposed to higher ordinary income rates. The reduced tax rate, however, does not apply to distributions paid to domestic noncorporate taxpayers by a REIT on its stock, except for certain limited amounts. The earnings of a REIT that are distributed to its stockholders generally remain subject to less federal income taxation than earnings of a non-REIT “C” corporation that are distributed to its stockholders net of corporate-level income tax. However, the lower rate of taxation to dividends paid by regular “C” corporations could cause domestic noncorporate investors to view the stock of regular “C” corporations as more attractive relative to the stock of a REIT, because the dividends from regular “C” corporations continue to be taxed at a lower rate while distributions from REITs (other than distributions designated as capital gain dividends) are generally taxed at the same rate as other ordinary income for domestic noncorporate taxpayers.

We are heavily dependent on computer systems, telecommunications and the Internet to process transactions, summarize results and manage our business. Security breaches or a failure of such networks, systems or technology could adversely impact our business and customer relationships.

We are heavily dependent upon automated information technology and Internet commerce, with many of our new customers coming from the Internet or the telephone, and the nature of our business involves the receipt and retention of personal information about them. We centrally manage significant components of our operations with our computer systems, including our financial information, and we also rely extensively on third-party vendors to retain data, process transactions and provide other systems services. These systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer worms, viruses and other destructive or disruptive security breaches and catastrophic events.

As a result, our operations could be severely impacted by a natural disaster, terrorist attack or other circumstance that resulted in a significant outage of our systems or those of our third-party providers, despite our use of back up and redundancy measures. Further, viruses and other related risks could negatively impact our information technology processes. We could also be subject to a “cyber-attack” or other data security breach which would penetrate our network security, resulting in misappropriation of our confidential information, including customer personal information. System disruptions and shutdowns could also result in additional costs to repair or replace such networks or information systems and possible legal liability, including government enforcement actions and private litigation. In addition, our customers could lose confidence in our ability to protect their personal information, which could cause them to move out of rented storage spaces. Such events could lead to lost future sales and adversely affect our results of operations.

Item 1B. Unresolved Staff Comments
     None.

Item 1B.

Unresolved Staff Comments

13None.


Item 2.

Properties

Properties

At December 31, 2009,2017, we held ownership interests in, andleased, and/or managed a total of 381706 Properties situated in twenty-four28 states. Among the 381our 706 self-storage facilitiesproperties are 2798 properties that we manage for a consolidatedunconsolidated joint ventureventures of which we are a majority owner and 25 properties that we manage for ahave varying percentage ownership interests. For additional information regarding unconsolidated joint venture of which we are a 20% owner.

ventures, see Note 11 to the Consolidated Financial Statements filed herewith.

Our self-storage facilities offer inexpensive, easily accessible, enclosed storage space to residential and commercial users on a month-to-month basis. Most of our Properties are fenced and well lighted with computerized gatesautomated access systems and are well lighted.surveillance cameras. A majority of the Properties are single-story, thereby providing customers with the convenience of direct vehicle access to their storage spaces. Our stores range in size from 21,00018,000 to 181,000195,000 net rentable square feet, with an average of approximately 65,00070,000 net rentable square feet. The Properties generally are constructed of masonry or steel walls resting on concrete slabs and have standing seam metal, shingle, or tar and gravel roofs. All Properties have a property manager on-site during business hours. CustomersGenerally, customers have access to their storage areas during businessspace up to 15 hours a day, and some commercial customers are provided 24-hour access. Individual storage spaces are secured by a lock furnished by the customer to provide the customer with control of access to the space.

     All of the Properties conduct business under the user-friendly name Uncle Bob’s Self-Storage ®.

The following table provides certain information regarding the Properties in which we have an ownership interest, andlease, and/or manage as of December 31, 2009:

2017:

                
 Number of   
 Stores at Percentage 
 December 31, Square Number of of Store 
 2009 Feet Spaces Revenue 

 

Number of

Stores at

December 31,

2017

 

 

Square

Feet

 

 

Number of

Spaces

 

 

Percentage

of Store

Revenue

 

Alabama 22 1,587,552 11,895  4.9%

 

 

21

 

 

 

1,581,503

 

 

 

12,157

 

 

 

2.35

%

Arizona 9 532,834 4,723  2.3%

 

 

25

 

 

 

1,741,275

 

 

 

15,743

 

 

 

3.00

%

California

 

 

28

 

 

 

2,538,426

 

 

 

22,751

 

 

 

6.28

%

Colorado

 

 

11

 

 

 

769,437

 

 

 

6,828

 

 

 

1.80

%

Connecticut 5 300,860 2,866  1.9%

 

 

11

 

 

 

834,952

 

 

 

8,705

 

 

 

2.16

%

Colorado 4 276,927 2,374  1.3%
Florida 57 3,641,512 33,394  15.1%

 

 

95

 

 

 

6,422,451

 

 

 

63,243

 

 

 

13.49

%

Georgia 27 1,710,528 13,935  6.1%

 

 

34

 

 

 

2,355,069

 

 

 

20,193

 

 

 

4.23

%

Illinois

 

 

45

 

 

 

3,348,867

 

 

 

33,810

 

 

 

7.40

%

Kentucky 2 144,872 1,323  0.6%

 

 

2

 

 

 

142,764

 

 

 

1,322

 

 

 

0.28

%

Louisiana 14 836,350 7,309  3.7%

 

 

16

 

 

 

954,965

 

 

 

8,088

 

 

 

1.66

%

Maine 2 114,265 1,010  0.5%

 

 

5

 

 

 

233,136

 

 

 

2,295

 

 

 

0.61

%

Maryland 4 172,083 2,037  0.9%

 

 

3

 

 

 

138,839

 

 

 

1,619

 

 

 

0.36

%

Massachusetts 12 664,614 6,067  3.2%

 

 

15

 

 

 

817,298

 

 

 

8,244

 

 

 

2.06

%

Michigan 6 354,608 3,035  1.1%
Mississippi 12 922,933 7,116  3.4%

 

 

12

 

 

 

885,381

 

 

 

6,614

 

 

 

1.48

%

Missouri 7 432,039 3,791  2.0%

 

 

14

 

 

 

948,066

 

 

 

8,498

 

 

 

1.86

%

Nevada

 

 

22

 

 

 

1,633,278

 

 

 

13,708

 

 

 

2.81

%

New Hampshire 4 259,555 2,331  1.0%

 

 

10

 

 

 

725,123

 

 

 

6,222

 

 

 

1.40

%

New Jersey

 

 

29

 

 

 

2,091,277

 

 

 

21,891

 

 

 

5.79

%

New York 28 1,590,577 14,566  8.4%

 

 

46

 

 

 

2,827,529

 

 

 

28,684

 

 

 

6.77

%

North Carolina 14 723,262 6,223  2.7%

 

 

22

 

 

 

1,361,090

 

 

 

12,632

 

 

 

2.20

%

Ohio 23 1,558,905 12,900  5.5%

 

 

25

 

 

 

1,656,927

 

 

 

13,940

 

 

 

2.72

%

Pennsylvania 4 208,400 1,630  0.8%

 

 

11

 

 

 

688,019

 

 

 

5,961

 

 

 

1.37

%

Rhode Island 4 168,346 1,565  0.8%

 

 

4

 

 

 

205,871

 

 

 

1,922

 

 

 

0.49

%

South Carolina 8 443,158 3,782  1.7%

 

 

14

 

 

 

901,444

 

 

 

7,974

 

 

 

1.67

%

Tennessee 4 291,204 2,457  0.9%

 

 

7

 

 

 

510,619

 

 

 

4,231

 

 

 

0.85

%

Texas 90 6,624,499 54,563  26.9%

 

 

159

 

 

 

11,745,044

 

 

 

97,320

 

 

 

22.51

%

Virginia 19 1,130,226 10,528  4.3%

 

 

18

 

 

 

1,382,818

 

 

 

12,576

 

 

 

2.21

%

         

Wisconsin

 

 

2

 

 

 

169,595

 

 

 

1,726

 

 

 

0.19

%

Total 381 24,690,109 211,420  100.0%

 

 

706

 

 

 

49,611,063

 

 

 

448,897

 

 

 

100.0

%

         

14

At December 31, 2009,2017, the Properties had an average occupancy of 80.0%88.7% and an annualized rent per occupied square foot of $10.29.
$14.07.


Item 3.

Legal Proceedings

On or about August 25, 2014, a putative class action was filed against the Company in the Superior Court of New Jersey Law Division Burlington County. The action seeks to obtain declaratory, injunctive and monetary relief for a class of consumers based upon alleged violations by the Company of various statutory laws. On October 17, 2014, the action was removed from the Superior Court of New Jersey Law Division Burlington County to the United States District Court for the District of New Jersey. The Company brought a motion to partially dismiss the complaint for failure to state a claim, and on July 16, 2015, the Company’s motion was granted in part and denied in part. On October 20, 2016, the complaint was amended to add additional claims. The parties have entered into a memorandum of understanding to settle all claims for an aggregate amount of $8.0 million. In February 2018, the normal coursemotion for the preliminary approval of business, wethe proposed class action settlement was granted. The aggregate settlement amount of $8.0 million ($6.0 million after considering income tax impact) has been recorded as a liability of in the Company’s consolidated balance sheet. A portion of the settlement expense relates to self-storage facilities that are managed by the Company through its taxable REIT subsidiary. There is an income tax impact to the Company on that portion of the settlement expense as a result. The settlement is subject to various claims and litigation. Whilefinal approval by the outcome of any litigationcourt, a decision which is inherently unpredictable, we do not believe that any matters currently pending against the Operating Partnership will have a material adverse impact on our financial condition, results of operations or cash flows.

expected in 2018.

Item 4.

Submission of Matters to a Vote of Security Holders

Mine Safety Disclosures

Not Applicable

     No matters were submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise.

PartPart II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

     There

Our Common Stock is no established public trading markettraded on the New York Stock Exchange under the symbol “LSI”. Set forth below are the high and low sales prices for Units. our Common Stock for each full quarterly period within the two most recent fiscal years.

Quarter 2016

 

High

 

 

Low

 

1st

 

$

118.18

 

 

$

98.80

 

2nd

 

$

117.81

 

 

$

98.93

 

3rd

 

$

107.71

 

 

$

86.45

 

4th

 

$

88.89

 

 

$

77.00

 

Quarter 2017

 

High

 

 

Low

 

1st

 

$

89.24

 

 

$

79.38

 

2nd

 

$

87.87

 

 

$

72.08

 

3rd

 

$

83.90

 

 

$

69.00

 

4th

 

$

91.75

 

 

$

77.88

 

As of February 15, 2010,12, 2018, there were 11approximately 590 holders of record of Units.our Common Stock. These figures do not include common shares held by brokers and other institutions on behalf of shareholders.

We have paid quarterly dividends to our shareholders since our inception. Reflected in the table below are the dividends paid in the last two years.

For federal income tax purposes, distributions to shareholders are treated as ordinary income, capital gain, return of capital or a combination thereof. Distributions to shareholders for 2017 represent 83% ordinary income and 17% return of capital.

History of Dividends Declared on Common Stock

January 2016

$

0.85 per share

April 2016

$

0.95 per share

July 2016

$

0.95 per share

October 2016

$

0.95 per share

January 2017

$

0.95 per share

April 2017

$

1.00 per share

July 2017

$

1.00 per share

October 2017

$

1.00 per share

For each quarter in 2016 and 2017, the Operating Partnership paid a cash distribution per unit in an amount equal to the dividend paid on a share of common stock for such quarter.

The following table sets forthsummarizes our purchases of our common stock for the quarterly distributions per Unit paid by the Operating Partnership to holdersyear ended December 31, 2017.


Issuer Purchases of its Units with respect to each such period.

Equity Securities

History of Distributions Declared on Units
March 2008$0.630 per unit
June 2008$0.630 per unit
September 2008$0.640 per unit
December 2008$0.640 per unit
March 2009$0.640 per unit
July 2009$0.450 per unit
October 2009$0.450 per unit
January 2010$0.450 per unit
     The partnership agreement of the Operating Partnership (the “Partnership Agreement”) provides that the Operating Partnership will distribute all available cash (as defined in the Partnership Agreement) on at least a quarterly basis, in amounts determined by the general partner in its sole discretion, to the partners in accordance with their respective percentage interest in the Operating Partnership. Distributions are declared at the discretion of the Board of Directors of Holdings, the general partner of the Operating Partnership and a wholly-owned subsidiary of the Company, and will depend on actual funds from operations of the Operating Partnership, its financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, and such other factors as the Board of Directors may deem relevant. The Board of Directors of Holdings may modify the Operating Partnership’s distribution policy from time to time, subject to the terms of the Partnership Agreement.
     The Operating Partnership’s line of credit contains customary representations, covenants and events of default, including covenants which restrict the ability of the Operating Partnership to make distributions in excess of stated amounts. In general, during any four consecutive fiscal quarters the Operating Partnership may only distribute up to 105% of the Operating Partnership’s funds from operations (as defined in the related agreement). The line of credit contains exceptions to these limitations to allow the Operating Partnership to make any distributions necessary to allow the Company to maintain its status as a REIT. The Operating Partnership does not anticipate that this provision will adversely affect the ability of the Operating Partnership to make distributions, as

Period

 

(a) Total number of shares purchased

 

 

(b) Average price paid per share

 

 

(c) Total number of shares purchased as part of publicly announced plans or programs (1)

 

 

(d) Approx. dollar value of shares that may yet be purchased under

the plans or

programs (1)

 

August 1, 2017 - August 31, 2017

 

 

92,150

 

 

$

72.98

 

 

 

92,150

 

 

$

193,274,647

 

September 1, 2017 - September 30, 2017

 

 

20,404

 

 

 

73.94

 

 

 

20,404

 

 

 

191,765,955

 

October 1, 2017 - December 31, 2017

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

112,554

 

 

 

73.16

 

 

 

112,554

 

 

$

191,765,955

 

 

(1) On August 2, 2017, the Company’s Board of Directors authorized the repurchase of up to $200 million of the Company’s common stock. The program does not have an expiration date but may be suspended or discontinued at any time.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15

currently anticipated.
EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth certain information as of December 31, 2009,2017, with respect to equity compensation plans under which shares of the Company’s Common Stock may be issued.

Plan Category

 

Number of

securities to be

issued upon

exercise of

outstanding

options,

warrants

and rights

 

 

Weighted

average

exercise price

of

outstanding

options,

warrants

and rights

 

 

Number of

securities

remaining

available

for future

issuance

 

Equity compensation plans approved by shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

2005 Award and Option Plan

 

 

76,106

 

 

$

45.59

 

 

 

—

 

2015 Award and Option Plan (2)

 

 

124,402

 

 

$

—

 

 

 

345,383

 

2009 Outside Directors’ Stock Option and Award Plan

 

 

18,500

 

 

$

79.58

 

 

 

67,871

 

Deferred Compensation Plan for Directors (1)

 

 

21,540

 

 

N/A

 

 

 

22,598

 

Equity compensation plans not approved by shareholders:

 

N/A

 

 

N/A

 

 

N/A

 

             
  Number of       
  securities to be       
  issued upon  Weighted average  Number of 
  exercise of  exercise price of  securities 
  outstanding  outstanding  remaining available 
  options, warrants  options, warrants  for future issuance 
Plan Category and rights (#)  and rights ($)  (#) 
             
Equity compensation plans approved by shareholders:            
2005 Award and Option Plan  316,163  $42.86   998,330 
1995 Award and Option Plan  46,300  $27.23   0 
2009 Outside Directors’ Stock Option and Award Plan  9,500  $23.15   137,044 
1995 Outside Directors’ Stock Option Plan  25,505  $46.23   0 
Deferred Compensation Plan for Directors (1)  29,390   N/A   27,671 
Equity compensation plans not approved by shareholders:  N/A   N/A   N/A 

(1)

(1)

Under the Deferred Compensation Plan for Directors, non-employee Directors may defer all or part of their Directors’ fees that are otherwise payable in cash. Directors’ fees that are deferred under the Plan will be credited to each Directors’ account under the Plan in the form of Units. The number of Units credited is determined by dividing the amount of Directors’ fees deferred by the closing price of the Company’s Common Stock on the New York Stock Exchange on the day immediately preceding the day upon which Directors’ fees otherwise would be paid by the Company. A Director is credited with additional Units for dividends on the shares of Common Stock represented by Units in such Directors’ Account. A Director may elect to receive the shares in a lump sum on a date specified by the Director or in quarterly or annual installments over a specified period and commencing on a specified date.

16

(2)

Includes the maximum number of shares (124,402) that could be issued as part of 2015, 2016 and 2017 performance-based awards. The actual number of shares to be issued will be determined at the end of the three-year performance periods in 2018, 2019 and 2020. See Note 9 to our consolidated financial statements filed herewith.


CORPORATE PERFORMANCE GRAPH

The following chart and line-graph presentation compares (i) the Company’s shareholder return on an indexed basis since December 31, 2012 with (ii) the S&P Stock Index and (iii) the National Association of Real Estate Investment Trusts Equity Index.

CUMULATIVE TOTAL SHAREHOLDER RETURN

LIFE STORAGE, INC.

DECEMBER 31, 2012 - DECEMBER 31, 2017

 

 

Dec. 31,

2012

 

 

Dec. 31,

2013

 

 

Dec. 31,

2014

 

 

Dec. 31,

2015

 

 

Dec. 31,

2016

 

 

Dec. 31,

2017

 

S&P

 

 

100.00

 

 

 

132.39

 

 

 

150.51

 

 

 

152.59

 

 

 

170.84

 

 

 

208.14

 

NAREIT

 

 

100.00

 

 

 

102.47

 

 

 

133.35

 

 

 

137.61

 

 

 

149.33

 

 

 

157.14

 

LSI

 

 

100.00

 

 

 

108.13

 

 

 

150.19

 

 

 

191.34

 

 

 

157.66

 

 

 

173.11

 

The foregoing item assumes $100.00 invested on December 31, 2012, with dividends reinvested.

Item 6.

Selected Financial Data

LIFE STORAGE, INC.

The following table sets forth selected financial and operating data on an historical consolidated basis for the Parent Company. The selected historical financial data as of and for the five-year period ended December 31, 2017 are derived from the Parent Company’s consolidated financial statements, which have been audited by Ernst & Young LLP, an independent registered public accounting firm. The consolidated financial statements as of December 31, 2017 and 2016, and for each of the years in the three-year period ended December 31, 2017, and their report thereon, are included herein. The other data presented below is not derived from the financial statements.


The following selected financial and operating information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the consolidated financial statements and related notes thereto of the Parent Company included elsewhere in this Annual Report on Form 10-K:

 

 

At or For Year Ended December 31,

 

(dollars in thousands, except per share data)

 

2017

 

 

2016

 

 

2015

 

 

2014

 

 

2013

 

Operating Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

529,750

 

 

$

462,608

 

 

$

366,602

 

 

$

326,080

 

 

$

273,507

 

Income from continuing operations

 

 

96,809

 

 

 

84,956

 

 

 

113,077

 

 

 

89,057

 

 

 

71,472

 

Income from discontinued operations (1)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,123

 

Net income

 

 

96,809

 

 

 

84,956

 

 

 

113,077

 

 

 

89,057

 

 

 

74,595

 

Net income attributable to common shareholders

 

 

96,365

 

 

 

85,225

 

 

 

112,524

 

 

 

88,531

 

 

 

74,126

 

Income from continuing operations per common share

   attributable to common shareholders – diluted

 

 

2.07

 

 

 

1.96

 

 

 

3.16

 

 

 

2.67

 

 

 

2.26

 

Net income per common share attributable to common

   shareholders – basic

 

 

2.08

 

 

 

1.97

 

 

 

3.18

 

 

 

2.68

 

 

 

2.37

 

Net income per common share attributable to common

   shareholders – diluted

 

 

2.07

 

 

 

1.96

 

 

 

3.16

 

 

 

2.67

 

 

 

2.36

 

Dividends declared per common share (2)

 

 

3.95

 

 

 

3.70

 

 

 

3.20

 

 

 

2.72

 

 

 

2.02

 

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in storage facilities at cost

 

$

4,321,410

 

 

$

4,243,308

 

 

$

2,491,702

 

 

$

2,177,983

 

 

$

1,864,637

 

Total assets

 

 

3,876,774

 

 

 

3,857,984

 

 

 

2,118,822

 

 

 

1,850,727

 

 

 

1,558,894

 

Total debt

 

 

1,726,763

 

 

 

1,653,552

 

 

 

827,643

 

 

 

797,054

 

 

 

623,273

 

Total liabilities

 

 

1,829,078

 

 

 

1,751,399

 

 

 

898,336

 

 

 

861,236

 

 

 

675,245

 

Other Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

248,580

 

 

$

225,550

 

 

$

186,198

 

 

$

146,068

 

 

$

120,646

 

Net cash used in investing activities

 

 

(156,510

)

 

 

(1,796,069

)

 

 

(328,689

)

 

 

(334,993

)

 

 

(114,345

)

Net cash (used in) provided by financing activities

 

 

(106,588

)

 

 

1,587,184

 

 

 

140,968

 

 

 

187,944

 

 

 

(4,032

)

                     
  At or For Year Ended December 31, 
(dollars in thousands, except per unit data) 2009  2008  2007  2006  2005 
Operating Data
                    
Operating revenues $195,011  $200,193  $190,013  $162,541  $134,524 
Income from continuing operations  22,438   37,803   40,184   37,306   34,379 
(Loss) income from discontinued operations (1)  (784)  1,880   1,661   1,738   1,940 
Net income  21,654   39,683   41,845   39,044   36,319 
Net income attributable to common unitholders  20,294   38,120   38,741   35,003   31,706 
Income from continuing operations per common unit attributable to common unitholders— diluted  0.87   1.63   1.73   1.80   1.72 
Net income per common unit attributable to common unitholders — basic  0.84   1.72   1.81   1.90   1.87 
Net income per common unit attributable to common unitholders — diluted  0.84   1.72   1.81   1.90   1.85 
Distributions declared per common unit (2)  1.54   2.54   2.50   2.47   2.44 
                     
Balance Sheet Data
                    
Investment in storage facilities at cost $1,387,583  $1,366,615  $1,300,847  $1,115,255  $865,692 
Total assets  1,185,201   1,212,528   1,164,475   1,053,033   784,195 
Total debt  481,219   623,261   566,517   462,027   339,144 
Total liabilities  520,142   692,381   610,644   495,175   364,856 
Limited partners’ redeemable capital interest  15,005   15,118   16,951   24,575   22,512 
Partners’ capital  650,054   505,029   536,880   533,283   396,827 
                     
Other Data
                    
Net cash provided by operating activities $59,123  $77,132  $85,175  $64,656  $60,724 
Net cash used in investing activities  (4,448)  (82,711)  (190,267)  (176,567)  (79,156)
Net cash (used in) provided by financing activities  (48,451)  6,055   61,372   154,730   20,238 

(1)

(1)

In 20092013 we sold fivefour stores and in 2008 we sold one store whose results of operations and (loss) gain on disposal are classified as discontinued operations for all previous years presented.

(2)

In 20092013 we declared distributionsregular quarterly dividends of $0.48 in March,January and April, and $0.53 in July and October (see Item 5). On January 4, 2010October. In 2014 we declared a distributionregular quarterly dividends of $0.45 per common unit,$0.68 in January, April, July and therefore it is not includedOctober. In 2015 we declared regular quarterly dividends of $0.75 in the 2009 column.January and April, and $0.85 in July and October. In 2016 we declared regular quarterly dividends of $0.85 in January and $0.95 in April, July and October. In 2017 we declared regular quarterly dividends of $0.95 in January and $1.00 in April, July and October.


17

LIFE STORAGE LP

The following table sets forth selected financial and operating data on an historical consolidated basis for the Operating Partnership. The selected historical financial data as of and for the five-year period ended December 31, 2017 are derived from the Operating Partnership’s consolidated financial statements, which have been audited by Ernst & Young LLP, an independent registered public accounting firm. The consolidated financial statements as of December 31, 2017 and 2016, and for each of the years in the three-year period ended December 31, 2017, and their report thereon, are included herein. The other data presented below is not derived from the financial statements.

The following selected financial and operating information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the consolidated financial statements and related notes thereto of the Operating Partnership included elsewhere in this Annual Report on Form 10-K:

 

 

At or For Year Ended December 31,

 

(dollars in thousands, except per unit data)

 

2017

 

 

2016

 

 

2015

 

 

2014

 

 

2013

 

Operating Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

529,750

 

 

$

462,608

 

 

$

366,602

 

 

$

326,080

 

 

$

273,507

 

Income from continuing operations

 

 

96,809

 

 

 

84,956

 

 

 

113,077

 

 

 

89,057

 

 

 

71,472

 

Income from discontinued operations (1)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,123

 

Net income

 

 

96,809

 

 

 

84,956

 

 

 

113,077

 

 

 

89,057

 

 

 

74,595

 

Net income attributable to common unitholders

 

 

96,365

 

 

 

85,225

 

 

 

112,524

 

 

 

88,531

 

 

 

74,126

 

Income from continuing operations per common unit

   attributable to common unitholders – diluted

 

 

2.07

 

 

 

1.96

 

 

 

3.16

 

 

 

2.67

 

 

 

2.26

 

Net income per common unit attributable to common

   unitholders – basic

 

 

2.08

 

 

 

1.97

 

 

 

3.18

 

 

 

2.68

 

 

 

2.37

 

Net income per common unit attributable to common

   unitholders – diluted

 

 

2.07

 

 

 

1.96

 

 

 

3.16

 

 

 

2.67

 

 

 

2.36

 

Distributions declared per common unit (2)

 

 

3.95

 

 

 

3.70

 

 

 

3.20

 

 

 

2.72

 

 

 

2.02

 

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment in storage facilities at cost

 

$

4,321,410

 

 

$

4,243,308

 

 

$

2,491,702

 

 

$

2,177,983

 

 

$

1,864,637

 

Total assets

 

 

3,876,774

 

 

 

3,857,984

 

 

 

2,118,822

 

 

 

1,850,727

 

 

 

1,558,894

 

Total debt

 

 

1,726,763

 

 

 

1,653,552

 

 

 

827,643

 

 

 

797,054

 

 

 

623,273

 

Total liabilities

 

 

1,829,078

 

 

 

1,751,399

 

 

 

898,336

 

 

 

861,236

 

 

 

675,245

 

Other Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

248,580

 

 

$

225,550

 

 

$

186,198

 

 

$

146,068

 

 

$

120,646

 

Net cash used in investing activities

 

 

(156,510

)

 

 

(1,796,069

)

 

 

(328,689

)

 

 

(334,993

)

 

 

(114,345

)

Net cash (used in) provided by financing activities

 

 

(106,588

)

 

 

1,587,184

 

 

 

140,968

 

 

 

187,944

 

 

 

(4,032

)

(1)

In 2013 we sold four stores whose results of operations and gain on disposal are classified as discontinued operations for all previous years presented.

(2)

In 2013 we declared regular quarterly distributions of $0.48 in January and April, and $0.53 in July and October. In 2014 we declared regular quarterly distributions of $0.68 in January, April, July and October. In 2015 we declared regular quarterly distributions of $0.75 in January and April, and $0.85 in July and October. In 2016 we declared regular quarterly distributions of $0.85 in January and $0.95 in April, July and October. In 2017 we declared regular quarterly distributions of $0.95 in January and $1.00 in April, July and October.


Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the financial statements and notes thereto included elsewhere in this report.

Disclosure Regarding Forward-Looking Statements

When used in this discussion and elsewhere in this document, the words “intends,” “believes,” “expects,” “anticipates,” and similar expressions are intended to identify “forward-looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933 and in Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the effect of competition from new self-storage facilities, which would cause rents and occupancy rates to decline; the Operating Partnership’sCompany’s ability to evaluate, finance and integrate acquired businesses into the Operating Partnership’sCompany’s existing business and operations; the Operating Partnership’sCompany’s ability to effectively compete in the industry in which it does business; the Operating Partnership’sCompany’s existing indebtedness may mature in an unfavorable credit environment, preventing refinancing or forcing refinancing of the indebtedness on terms that are not as favorable as the existing terms; interest rates may fluctuate, impacting costs associated with the Operating Partnership’sCompany’s outstanding floating rate debt; the Operating Partnership’sCompany’s ability to comply with debt covenants; any future ratings on the Operating Partnership’sCompany’s debt instruments; the regional concentration of the Operating Partnership’sCompany’s business may subject it to economic downturns in the states of Florida and Texas; the Operating Partnership’sCompany’s reliance on its call center; the Operating Partnership’sCompany’s cash flow may be insufficient to meet required payments of operating expenses, principal, interest and distributions;dividends; and tax law changes that may change the taxability of future income.

Business and Overview

We believe we are the fourthfifth largest operator of self-storage properties in the United States based on facilitiessquare feet owned and managed. All of our stores are operatedconduct business under the user-friendlycustomer-friendly name “Uncle Bob’s Self-Storage”Life Storage ®.

Operating Strategy

Our operating strategy is designed to generate growth and enhance value by:

A.

Increasing operating performance and cash flow through aggressive management of our stores:

We seek to differentiate our self-storage facilities from our competition through innovative marketing and value-added product offerings including:

o

Strategic and efficient Web and Mobile marketing that places Life Storage in front of customers in search engines at the right time for conversion;

–

o

We seek to differentiate our self-storage facilities from our competition through innovative

Regional marketing and value-added product offerings including:which creates effective brand awareness in the cities where we do business;

–

o

Our Customer Care Center, whichestablished in 2000, answers sales inquiries and makes reservations for all of our Properties on a centralized basis,basis. Further, our call center and customer contact software was developed in-house and is 100% supported by our in-house experts;

–

o

The Uncle Bob’s

Our truck move-in program, under which, at present, 258396 of our stores offer a free Uncle Bob’sLife Storage truck to assist our customers in moving into their spaces, and also serve as a moving billboard further supporting our branding efforts;

–

o

Our dehumidification system, known as Dri-guard, which provides our customers with a better environment to store their goods and improves yields on our Properties,Properties;

Our customized computer applications link each of our primary sales channels (customer care center, web, and store) allowing for real time access to space type and inventory, pricing, promotions, and other pertinent store information. This also provides us with raw data on historical and current pricing, move-in and move-out activity, specials and occupancies, etc. This data is then used within the advanced pricing analytics programs employed by our revenue management team;

All of our store employees receive a high level of training. New store associates are assigned a Certified Training Manager as a mentor during their initial training period. In addition, all employees have access to our online training and development portal for initial training as well as continuing education. Finally, we have a company intranet that acts as a communications portal for company policy and procedures, online ordering, incentive rankings, etc.

B.

Acquiring additional stores:

Our objective is to acquire new stores in markets in which we currently operate. This is a proven strategy we have employed over the years as it facilitates our branding efforts, grows market share, and allows us to achieve improved economies of scale through shared advertising, payroll, and other services.


•

We also look to enter new markets that are in the top 50 Metropolitan Statistical Area (MSA) by acquiring established multi-property portfolios. With this strategy we are then able to seek out additional acquisition or third party management opportunities to continue to grow market share, branding and

–Internet marketing and sales. enhance economies of scale.

–

C.

Our “Name your Price” concession differentiates us from the “free month” offer now prevalent in our industry, and allows us to engage the customer in a unique manner. We are able to customize this offer based on occupancies and demand.
–Our customized property management systems enable us to improve our ability to track trends, set optimal pricing levels, enjoy considerable economies of scale in vendor and supply pricing, and control collections and accounts receivable.

18

–In addition, our managers are better qualified and receive a significantly higher level of training than they did in past years, customer access and security are greatly enhanced as a result of advances in technology, and property appearance and functionality have been improved.
B.Acquiring additional stores:
–Our objective is to acquire new stores one or two at a time in markets we currently operate in. By so doing, we can add to our existing base, which should improve market penetration in those areas, and contribute to the benefits achieved from economies of scale.
–We may also enter new markets if we can do so by acquiring a group of stores in those markets. We feel that our marketing efforts and control systems would enhance even those portfolios that have been managed efficiently by independent operators, and that attractive returns can be generated by such acquisitions.
C.Expanding our management business:

–We see our management business as a source of future acquisitions. We may develop additional joint ventures in which we are minority owners and managers of the self-storage facilities acquired by these joint ventures. The joint venture agreements will give us first right of refusal to purchase the managed properties in the event they are offered for sale.

We see our management business as a source of future acquisitions. We hold a minority interest in multiple joint ventures which hold a total of 98 properties that we manage. In addition, we manage 42 self-storage facilities for which we have no ownership. We may enter into additional management agreements and develop additional joint ventures in the future.

D.

Expanding and enhancing our existing stores:

–Over the past five years, we have undertaken a program of expanding and enhancing our Properties. In 2007, we expended approximately $25 million to add some 444,000 square feet of premium space (i.e., air-conditioned and/or humidity controlled) to our Properties; in 2008, we spent approximately $26 million to add 403,000 square feet and to convert 95,000 square feet to premium storage; and in 2009, we completed construction of a new 78,000 square foot facility in Richmond, Virginia, added 175,000 square feet to other existing Properties, and converted 64,000 square feet to premium storage for a total cost of approximately $18 million.

Over the past five years we have undertaken a program of expanding and enhancing our Properties. In 2013, we added 295,000 square feet to existing Properties and converted 9,000 square feet to premium storage for a total cost of approximately $17.9 million; in 2014, we added 272,000 square feet to existing Properties and converted 9,000 square feet to premium storage for a total cost of approximately $18.3 million; in 2015, we added 256,000 square feet to existing Properties and converted 5,000 square feet to premium storage for a total cost of approximately $14.1 million; in 2016, we added 343,000 square feet to existing Properties and converted 55,000 square feet to premium storage for a total cost of approximately $22.4 million; and in 2017, we added 382,000 square feet to existing Properties and converted 122,000 square feet to premium storage for a total cost of approximately $35.2 million. From 2012 through 2017 we also installed solar panels on 23 buildings for a total cost of approximately $7.7 million. Our solar panel initiative, which began in 2011, has reduced energy consumption at those installed locations.

Supply and Demand

/ Operating Trends

We believe the supply and demand model in the self-storage industry is micro market specific in that a majority of our business comes from within a five mile radius of our stores. The currentSuppressed economic conditions and thea tight credit market environment have resulted in a decrease in new supply on a national basis from 2010-2015, but the out-performance of the sector compared to other real estate asset classes has drawn new capital to self-storage. The Company experienced significant new competition beginning in 20082016, especially in its Texas markets, and 2009. Withexpects noticeable growth in new supply at least through 2019. Despite the decreaseinflow of debt and equity capital brought about by the credit market tightening in the past year,additional properties, we have seen capitalization rates on quality acquisitions in the top fifty major metropolitan markets (expected annual return on investment) increaseremain stable at approximately 5.00% to approximately 8.0%5.50%.

Beginning in 2010, subsequent to the economic recession in 2009, we have experienced annual same store sales increases up to and expect continued increases in 2010. From 2003 to 2007,including the historically low interest rates available to developers resulted in increased supply on a national basis.current year. We experienced some of this excess supply in certain markets in Texas and Florida from 2003 to 2007, but becausefeel our recent performance further supports the notion that the self-storage industry holds up well regardless of the demand model, we did not see a widespread effect onprevailing economic landscape.

We believe our storessame-store move-ins in those years. In 2008, the Florida market was negatively affected by the current economic downturn and in 2009 many markets2017 were affected as consumers pulled back spending.

Operating Trends
     Since 2007, our industry has experienced some softness in demand. This waslower than 2016 due to the economic slowdownfact that beganour stores had higher occupancy in late 2007, and2017, resulting in partless space to regional issues, such as the reduction of hurricane driven demand in Florida and the Gulf Coast states, and to an overall slowdown in the housing sector.rent. We believe the housing slowdown has impacted our industry in two ways: 1.) a reduction in lease-up activity resulting from fewer residential real estate transactions (both buyers and sellers of residences use our product in times of transition) and 2.) a contraction of housing construction activity which has reduced the number of people working in the construction trades (trades people are a measurable part of our usual customer base.)
     While we enjoyed same store revenue growth from 2003 through 2008, in 2009 our same store revenue

19

decreased 3.1%, primarily because of the aforementioned issues. We expect conditions in most of our markets to remain challenging and are forecasting -2% to 0% revenue growth on a same store basis in 2010.
     We were able to reduce many expenses at the store operating level in 2009 to mitigate the effect of the revenue decline. Expenses related to operating a self-storage facility had increased substantially over the previous five years asmove-outs is a result of expanded hours, increasedcustomers renting with us for longer periods.

 

 

2017

 

 

2016

 

 

Change

 

Same store move ins

 

 

162,980

 

 

 

167,856

 

 

 

(4,876

)

Same store move outs

 

 

160,007

 

 

 

165,193

 

 

 

(5,186

)

Difference

 

 

2,973

 

 

 

2,663

 

 

 

310

 

Elevated property tax increases is a trend that we experienced from 2014 through 2017. We expect same store expense growth resulting from increases in wages, health care costs, property insurance costs, and property tax increases in 2018, partially offset by decreased internet marketing costs. We believe the costs of amenities (such as Uncle Bob’s trucks). While we do not expect further expense decreases in 2010, we do believesame store expense increases will be at a manageable level of between 2% and 4%.levels.


Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the amounts reported in our financial statements and the accompanying notes. On an on-going basis, we evaluate our estimates and judgments, including those related to carrying values of storage facilities, bad debts, and contingencies and litigation. We base these estimates on experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Assigning purchase price to assets acquired: Upon adoption of Accounting Standards Update 2017-01, most of our self-storage facility acquisitions are not considered business combinations and are treated as asset acquisitions. As a result, the cost of acquired storage facilities is assigned primarily to land, land improvements, building, equipment, and in-place customer leases based on the relative fair values of these assets as of the date of acquisition. We use significant unobservable inputs in our determination of the fair values of these assets. The determination of these inputs involves judgments and estimates that can vary for each individual property based on various factors specific to the properties and the functional, economic and other factors affecting each property. To determine the fair value of land, we use prices per acre derived from observed transactions involving comparable land in similar locations. To determine the fair value of buildings, equipment and improvements, we use financial projections and applicable discount rates to estimate the fair values of properties acquired, as well as current replacement cost estimates based on information derived from construction industry data by geographic region as adjusted for the age, condition, and economic obsolescence associated with these assets. The fair values of in-place customer leases are based on the rent that would be lost due to the amount of time required to replace existing customers which is based on our historical experience with market demand and turnover in our facilities.

Carrying value of storage facilities: We believe our judgment regarding the impairment of the carrying value of our storage facilities is a critical accounting policy. Our policy is to assess anythe carrying value of our storage facilities for impairment of value whenever events or circumstances indicate that the carrying value of a storage facility may not be recoverable. Such events or circumstances would include negative operating cash flow, significant declining revenue per storage facility, significant damage sustained from accidents or natural disasters, or an exceptionexpectation that, more likely than not, a property will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. ImpairmentWhen indicators of impairment exist, impairment is evaluated based upon comparing the sum of the expected undiscounted future cash flows to the carrying value of the storage facility, on a property by property basis. If the sum of the undiscounted cash flowflows is less than the carrying amount,value of the storage facility, an impairment loss is recognized for the amount by which the carrying amount exceeds the fair value of the asset.asset group. If cash flow projections are inaccurate and in the future it is determined that storage facility carrying values are not recoverable, impairment charges may be required at that time and could materially affect our operating results and financial position. Estimates of undiscounted cash flows could change based upon changes in market conditions, expected occupancy rates, etc. At December 31, 2009 and 2008, noNo assets had been determined to be impaired under this policy.

policy in 2017.

Estimated useful lives of long-lived assets: We believe that the estimated lives used for our depreciable, long-lived assets is a critical accounting policy. We periodically evaluate the estimated useful lives of our long-lived assets to determine if any changes are warranted based upon various factors, including changes in the planned usage of the assets, customer demand, etc. Changes in estimated useful lives of these assets could have a material adverse impact on our financial condition or results of operations. In 2017, the Company changed the useful lives of certain assets at self-storage facilities that were identified for replacement as part of the Company’s capital improvement efforts in 2017. Additionally, in 2016, the Company changed the useful lives of existing Uncle Bob’s Self Storage ® signs as a result of the change in the name of the Company’s storage facilities from Uncle Bob’s Self Storage ® to Life Storage ® which required replacement of the existing signage. These changes resulted in a combined increase in depreciation expense of approximately $4.4 million in 2017 as depreciation was accelerated over the new useful lives. The Company estimates that the change related to storage-facility asset replacement will result in an additional increase in depreciation expense of approximately $0.3 million in 2018. We have not made any other significant changes to the estimated useful lives of our long-lived assets in the past and we don’tdo not have any current expectation of making significant changes in 2010.

2018 other than potentially on any assets identified for replacement in 2018.

Consolidation and investment in joint ventures: We consolidate all wholly owned subsidiaries. Partially owned subsidiaries and joint ventures are consolidated when we control the entity or have the power to direct the activities most significant to the economic performance of the entity. Investments in joint ventures that we do not control but forover which we have significant influence over are reported using the equity method. Under the equity method, our investment in joint ventures are stated at cost and adjusted for our share of net earnings or losses and reduced by distributions. Equity in earnings of real estate ventures is generally recognized based on our ownership interest in the earnings of each of the unconsolidated real estate ventures.

Revenue and Expense Recognition: Rental income is recognized when earned pursuant to month-to-month leases for storage space. Promotional discounts are recognized as a reduction to rental income over the promotional period, which is generally during the first month of occupancy. Rental income received prior to the start of the rental period is included in deferred revenue.

Qualification as a REIT: The Company operates,We operate, and intendsintend to continue to operate, as a REIT under the

20

Code, but no assurance can be given that we will at all times so qualify. To the extent that it continueswe continue to qualify as a REIT, the Companywe will not be taxed, with certain limited exceptions, on the taxable income that is distributed to the Company’sour shareholders. If the Company failswe fail to qualify as a REIT, any requirement to pay federal income taxes could have a material adverse impact on our financial conditionscondition and results of operations.


Recent Accounting Pronouncements

     In June 2009, the FASB issued revised accounting guidance under ASC Topic 810, “Consolidation” by issuing SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”). The revised guidance amends previous guidance (as previously required under FASB Interpretation No. 46(R), “Variable Interest Entities”) for determining whether an entity is a variable interest entity (“VIE”) and requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a VIE. Under the revised guidance, an enterprise has a controlling financial interest when it has a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant

See Note 2 to the VIE. The revised guidance also requires an enterprise to assess whether it has an implicit financial responsibility to ensure that a VIE operates as designed when determining whether it has power to direct the activities of the VIE that most significantly impact the entity’s economic performance. The revised guidance also requires ongoing assessments of whether an enterprise is the primary beneficiary of a VIE, requires enhanced disclosures and eliminates the scope exclusion for qualifying special-purpose entities. The revised guidance is effective for the first annual reporting period that begins after November 15, 2009, with early adoption prohibited. The Operating Partnership is currently evaluating the impact that the adoption of the revised guidance will have on its consolidated financial statements.

YEAR ENDED DECEMBER 31, 20092017 COMPARED TO
YEAR ENDED DECEMBER 31, 2008

2016

We recorded rental revenues of $186.9$485.3 million for the year ended December 31, 2009, a decrease2017, an increase of $5.6$57.2 million or 2.9%13.4% when compared to 20082016 rental revenues of $192.5$428.1 million. Of the decreaseincrease in rental revenue, $6.2$5.6 million resulted from a 3.2% decrease1.6% increase in rental revenues at the 352430 core properties considered in same store sales (those properties included in the consolidated results of operations since January 1, 2016, excluding stores not yet stabilized, the properties we sold in 2016 and 2017, six stores significantly impacted by flooding in 2016 and 2017, and two stores that the Company began to fully replace in 2017). The increase in same store rental revenues was a result of a 30 basis point increase in average occupancy and a 0.8% increase in rental income per square foot. The remaining increase in rental revenue of $51.6 million resulted from the stores not included in the same store pool. Other operating income, which includes merchandise sales, insurance administrative fees, truck rentals, management fees and acquisition fees, increased by $9.9 million for the year ended December 31, 2017 compared to 2016 primarily due to increased administrative fees earned on customer insurance, increased management fees earned on managed properties, and increased acquisition fees earned on properties acquired by unconsolidated joint ventures.

Property operations and maintenance expenses increased $19.4 million or 18.8% in 2017 compared to 2016. The 430 core properties considered in the same store pool experienced a $2.3 million or 2.9% increase in such expenses as a result of increases in payroll and higher internet marketing costs in an effort to drive more traffic to the Company’s website as a result of our name change to Life Storage. In addition to the same store increase, property operations and maintenance expenses increased $17.1 million due to the net activity from the stores not included in the same store pool. Real estate tax expense increased $9.8 million or 20.4% in 2017 compared to 2016. The 430 core properties considered in the same store pool experienced a $2.5 million or 6.6% increase which is reflective of a net increase in property tax levies on those properties. In addition to the same store real estate expense increase, real estate taxes increased $7.3 million from the stores not included in the same store pool.

Our 2017 same store results consist of only those properties that have been owned by the Company and included in our consolidated results since January 1, 2016, excluding the stores not yet stabilized, the properties we sold in 2016 and 2017, six stores significantly impacted by flooding in 2016 and 2017, and two stores that the Company began to fully replace in 2017. We believe that same store results is a meaningful measure to investors in evaluating our operating performance because, given the acquisitive nature of the industry, same store results provide information about the overall business after removing the results from those properties that were not consistent from year-to-year. Additionally, same store results are widely used in the real estate industry and the self-storage industry to measure performance. Same store results should be considered in addition to, but not as a substitute for, consolidated results in accordance with GAAP.

The following table sets forth operating data for our 430 same store properties. These results provide information relating to property operating changes without the effects of acquisitions.

Same Store Summary

 

 

Year ended December 31,

 

 

Percentage

 

(dollars in thousands)

 

2017

 

 

2016

 

 

Change

 

Same store rental income

 

$

357,428

 

 

$

351,818

 

 

 

1.6

%

Same store other operating income

 

 

20,063

 

 

 

19,361

 

 

 

3.6

%

Total same store operating income

 

 

377,491

 

 

 

371,179

 

 

 

1.7

%

Payroll and benefits

 

 

32,112

 

 

 

30,857

 

 

 

4.1

%

Real estate taxes

 

 

40,459

 

 

 

37,960

 

 

 

6.6

%

Utilities

 

 

11,686

 

 

 

11,710

 

 

 

(0.2

)%

Repairs and maintenance

 

 

13,613

 

 

 

14,236

 

 

 

(4.4

)%

Office and other operating expenses

 

 

12,140

 

 

 

12,113

 

 

 

0.2

%

Insurance

 

 

4,380

 

 

 

4,257

 

 

 

2.9

%

Advertising

 

 

1,070

 

 

 

1,146

 

 

 

(6.6

)%

Internet marketing

 

 

8,250

 

 

 

6,609

 

 

 

24.8

%

Total same store operating expenses

 

 

123,710

 

 

 

118,888

 

 

 

4.1

%

Same store net operating income

 

$

253,781

 

 

$

252,291

 

 

 

0.6

%


Net operating income increased $37.9 million or 12.2%% as a result of a 0.6% increase in our same store net operating income and the acquisitions completed since January 1, 2016.

Net operating income or “NOI” is a non-GAAP (generally accepted accounting principles) financial measure that we define as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income: interest expense, impairment and casualty losses, operating lease expense, depreciation and amortization expense, loss on sale of real estate, acquisition related costs, general and administrative expense, and deducting from net income: income from discontinued operations, interest income, gain on sale of real estate, and equity in income of joint ventures. We believe that NOI is a meaningful measure to investors in evaluating our operating performance because we utilize NOI in making decisions with respect to capital allocations, in determining current property values, and in comparing period-to-period and market-to-market property operating results. Additionally, NOI is widely used in the real estate industry and the self-storage industry to measure the performance and value of real estate assets without regard to various items included in net income that do not relate to or are not indicative of operating performance, such as depreciation and amortization, which can vary depending on accounting methods and the book value of assets. NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues, operating income and net income. There are material limitations to using a measure such as NOI, including the difficulty associated with comparing results among more than one company and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income. We compensate for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with our analysis of net income.

The following table reconciles NOI generated by our self-storage facilities to our net income presented in the 2017 and 2016 consolidated financial statements.

 

 

Year ended December 31,

 

(dollars in thousands)

 

2017

 

 

2016

 

Net income

 

$

96,809

 

 

$

84,956

 

General and administrative

 

 

50,031

 

 

 

43,103

 

Acquisition related costs

 

 

—

 

 

 

29,542

 

Write-off of acquired property deposits

 

 

—

 

 

 

1,783

 

Operating leases of storage facilities

 

 

424

 

 

 

—

 

Depreciation and amortization

 

 

127,485

 

 

 

117,081

 

Interest expense

 

 

74,362

 

 

 

54,504

 

Interest income

 

 

(7

)

 

 

(67

)

Loss (gain) on sale of storage facilities

 

 

3,503

 

 

 

(15,270

)

Gain on sale of real estate

 

 

—

 

 

 

(623

)

Equity in income of joint ventures

 

 

(3,314

)

 

 

(3,665

)

Net operating income

 

$

349,293

 

 

$

311,344

 

Net operating income

 

 

 

 

 

 

 

 

Same store

 

 

253,781

 

 

 

252,291

 

Other stores and management fee income

 

 

95,512

 

 

 

59,053

 

Total net operating income

 

$

349,293

 

 

$

311,344

 

General and administrative expenses increased $6.9 million or 16.1% from 2016 to 2017. The key drivers of the increase were the New Jersey lawsuit settlement discussed in Note 14 to the consolidated financial statements and $0.9 million in officer severance recorded in 2017.

There were no acquisition related costs recorded in 2017 as no 2017 acquisitions were considered business combinations. Acquisition related costs were $29.5 million in 2016 related to the acquisition of 122 stores during that period, including the acquisition of LifeStorage, LP.

Depreciation and amortization expense increased to $127.5 million in 2017 from $117.1 million in 2016, primarily due to depreciation related to the properties acquired in 2016 and 2017 and accelerated depreciation on storage facility assets identified for replacement in 2017.

Interest expense increased from $54.5 million in 2016 to $74.4 million in 2017. The increase was primarily due to a full year of interest in 2017 on the $600 million 3.5% senior notes issued in June 2016 and the $200 million 3.67% term loan entered into in July 2016, and $9.6 million of interest expense recorded in 2017 related to interest rate swaps settled in 2017 and the termination of the related hedging relationships.


During 2017, we sold two non-strategic storage facilities in Utah (1) and Texas (1) for net proceeds of approximately $16.9 million, resulting in a $3.5 million loss on sale. The Company has subsequently leased one of these properties and has deferred the related gain until the termination of the lease which is scheduled in 2020. During 2016, we sold eight non-strategic storage facilities in Alabama (1), Georgia (1), Mississippi (1), Texas (1), and Virginia (4) for net proceeds of approximately $34.1 million, resulting in a $15.3 million gain on sale. These dispositions were not classified as discontinued operations since they did not meet the criteria for such classification under ASU 2014-08 guidance.

YEAR ENDED DECEMBER 31, 2016 COMPARED TO YEAR ENDED DECEMBER 31, 2015

We recorded rental revenues of $428.1 million for the year ended December 31, 2016, an increase of $89.7 million or 26.5% when compared to 2015 rental revenues of $338.4 million. Of the increase in rental revenue, $16.1 million resulted from a 5.0% increase in rental revenues at the 417 core properties considered in same store sales (those properties included in the consolidated results of operations since January 1, 2008)2015, excluding the properties we sold in 2016 and 2015, three properties purchased prior to January 1, 2015 that have not yet stabilized and three properties significantly impacted by flooding in 2016). The decreaseincrease in same store rental revenues was a result of a 2.1% decrease50 basis point increase in average occupancy and a 4.3% increase in rental income per square footfoot. The remaining increase in rental revenue of $73.6 million resulted from the revenues from the acquisition of 145 properties completed since January 1, 2015 (excluding the four properties purchased in 2015 that had been leased since November 2013 and are included in the same store pool), slightly offset with the revenue decrease as a result of increased move-in incentives usedeight self-storage properties sold in 2009 to attract customers. We also experienced a decrease2016 and three self-storage properties sold in square foot occupancy of 115 basis points, which we believe resulted from general economic conditions, in particular the housing sector. These decreases were partially offset by a $0.6 million increase in rental revenues resulting from having the three stores acquired in 2008 included for a full year of operations.2015. Other operating income, which includes merchandise sales, insurance commissions,administrative fees, truck rentals, management fees and acquisition fees, increased in 2009 primarily as a result of $0.3 million increase in commissions earned from our customer insurance program.

     Property operating and real estate tax expense decreased $2.0 million, or 2.7%, in 2009 compared to 2008. Much of the decrease resulted from numerous expense control initiatives and from a reduction in yellow page advertising at the 352 core properties considered same stores. These expense decreases were partially offset by a 4.1% increase in same store property tax expense and $0.3 million of additional expenses incurred from having the 2008 acquisitions included for a full year of operations. We expect same-store operating costs to increase only moderately in 2010 with increases primarily attributable to utilities and property taxes.
     General and administrative expenses increased $1.4 million or 7.9% from 2008 to 2009. The increase primarily resulted from the write-off of construction in progress projects that were terminated and an increase in internet advertising.
     Depreciation and amortization expense decreased to $33.4 million in 2009 from $33.9 million in 2008, primarily as a result of a $1.0 million decrease in amortization of in-place customers leases relating to previous year acquisitions, offset partially by a full year of depreciation on those acquisitions.
     Interest expense increased from $38.1 million in 2008 to $50.1 million in 2009 as a result of the following factors:

21

•A credit ratings downgrade by Fitch Ratings in May 2009 on our unsecured floating rate notes triggered a 1.75% increase in the interest rate on our $150 million term notes and a 0.375% increase in the interest rate on our $250 million term notes. The increase was effective from May to October of 2009, at which time our credit rating was upgraded back to investment grade rating after the Company’s common stock offering in October 2009;
•At March 31, 2009, the Operating Partnership had violated the leverage ratio covenant contained in the line of credit and term note agreements. In May 2009, the Operating Partnership obtained a waiver of the violation as of March 31, 2009. The fees paid to obtain the waiver were approximately $0.9 million and are included in 2009 interest expense and;
•On October 5, 2009, the Operating Partnership used proceeds from the issuance of common stock to terminate the interest rate swap agreements with notional amounts of $75 million and $25 million (see Note 9 of our financial statements). The total cost to terminate the swaps was $8.4 million and is included as additional interest expense in 2009 and;
•In October 2009, we wrote-off to interest expense $0.6 million of unamortized financing fees related to the $100 million term note that was repaid with the proceeds of the common stock offering.
     The casualty loss recorded in 2009 relates to insurance proceeds received that were less than the carrying value of a building damaged by a fire at one of our facilities.
     During 2009, we sold a parcel of land to the State of Georgia Department of Transportation for their use as part of a road widening project for net cash proceeds of $1.1 million resulting in a gain on sale of $1.1 million.
     As described in Note 5 to the financial statements, during 2009 the Operating Partnership sold five non-strategic storage facilities for net cash proceeds of $16.3 million resulting in a loss of $1.6 million. During 2008 the Operating Partnership sold one non-strategic storage facility for net cash proceeds of $7.0 million resulting in a gain of $0.7 million. The 2009, 2008, and 2007 operations of these facilities and the loss/gain associated with the disposal are reported in income from discontinued operations for all periods presented.
YEAR ENDED DECEMBER 31, 2008 COMPARED TO
YEAR ENDED DECEMBER 31, 2007
     We recorded rental revenues of $192.5$6.3 million for the year ended December 31, 2008, an increase of $8.72016 compared to 2015 primarily due to increased administrative fees earned on customer insurance.

Property operations and maintenance expenses increased $21.4 million or 4.7% when26.2% in 2016 compared to 2007 rental revenues of $183.8 million. Of the increase in rental revenue, $1.3 million resulted from a 0.7% increase in rental revenues at the 3212015. The 417 core properties considered in the same store sales (those properties included in the consolidated results of operations since January 1, 2007). Thepool experienced a $1.0 million or 1.3% increase in such expenses due to increases in payroll and internet marketing costs. The same store rental revenues was achieved primarily through rate increases on select units averaging 1.9%, offset by a decrease in square foot occupancy of 150 basis points, which we believe resultedpool benefited from general economic conditions, in particularreduced utilities, snow removal costs, insurance and yellow page advertising expense. In addition to the housing sector. The remaining $7.4same store increase, property operations and maintenance expenses increased $20.4 million increase in rental revenues resulted from the acquisition of three stores during 2008145 properties completed since January 1, 2015 (excluding the four properties purchased in 2015 that had been leased since November 2013 and from havingare included in the 31 stores acquired in 2007 included for a full year of operations. Other income, which includes merchandise sales, insurance commissions, truck rentals, management fees and acquisition fees, increased in 2008 primarilysame store pool), slightly offset with the operating expense decrease as a result of $1.1eight self-storage properties sold in 2016 and three self-storage properties sold in 2015. Real estate tax expense increased $11.3 million or 30.9% in 2016 compared to 2015. The 417 core properties considered in the same store pool experienced a $1.9 million or 5.3% increase which is reflective of managementa net increase in property tax levies on those properties. In addition to the same store real estate expense increase, real estate taxes increased $9.4 million from the acquisition of 145 properties completed since January 1, 2015 (excluding the four properties purchased in 2015 that had been leased since November 2013 and acquisition fees generated from our unconsolidated joint venture, Sovran HHF Storage Holdings LLC.

     Property operating andare included in the same store pool), slightly offset with the real estate tax expense decrease as a result of eight self-storage properties sold in 2016 and three self-storage properties sold in 2015.

Our 2016 same store results consist of only those properties that were included in our consolidated results since January 1, 2015, excluding the properties we sold in 2016 and 2015, three properties purchased prior to January 1, 2015 that have not yet stabilized and three properties significantly impacted by flooding in 2016. We believe that same store results is a meaningful measure to investors in evaluating our operating performance because, given the acquisitive nature of the industry, same store results provide information about the overall business after removing the results from those properties that were not consistent from year-to-year. Additionally, same store results are widely used in the real estate industry and the self-storage industry to measure performance. Same store results should be considered in addition to, but not as a substitute for, consolidated results in accordance with GAAP.


The following table sets forth operating data for our 417 same store properties. These results provide information relating to property operating changes without the effects of acquisition.

Same Store Summary

 

 

Year ended December 31,

 

 

Percentage

 

(dollars in thousands)

 

2016

 

 

2015

 

 

Change

 

Same store rental income

 

$

339,773

 

 

$

323,664

 

 

 

5.0

%

Same store other operating income

 

 

18,693

 

 

 

17,085

 

 

 

9.4

%

Total same store operating income

 

 

358,466

 

 

 

340,749

 

 

 

5.2

%

Payroll and benefits

 

 

29,754

 

 

 

28,843

 

 

 

3.2

%

Real estate taxes

 

 

36,707

 

 

 

34,847

 

 

 

5.3

%

Utilities

 

 

11,217

 

 

 

11,789

 

 

 

(4.9

)%

Repairs and maintenance

 

 

13,516

 

 

 

13,412

 

 

 

0.8

%

Office and other operating expenses

 

 

11,703

 

 

 

11,373

 

 

 

2.9

%

Insurance

 

 

4,035

 

 

 

4,414

 

 

 

(8.6

)%

Advertising and yellow pages

 

 

1,114

 

 

 

1,352

 

 

 

(17.6

)%

Internet marketing

 

 

6,409

 

 

 

5,557

 

 

 

15.3

%

Total same store operating expenses

 

 

114,455

 

 

 

111,587

 

 

 

2.6

%

Same store net operating income

 

$

244,011

 

 

$

229,162

 

 

 

6.5

%

Net operating income increased $5.0$63.2 million or 7.3%,25.5% as a result of a 6.5% increase in 2008 comparedour same store net operating income and the acquisitions completed since January 1, 2015 (excluding the four properties purchased in 2015 that had been leased since November 2013 and are included in the same store pool).

The following table reconciles NOI generated by our self-storage facilities to 2007. Of this increase, $2.7 million were expenses incurred byour net income presented in the facilities acquired in 20082016 and from having expenses from the 2007 acquisitions included for a full year of operations. $2.3 million of the increase was due to increased payroll, property taxes, utilities, and maintenance expenses at the 321 core properties considered same stores.2015 consolidated financial statements.

 

 

Year ended December 31,

 

(dollars in thousands)

 

2016

 

 

2015

 

Net income

 

$

84,956

 

 

$

113,077

 

General and administrative

 

 

43,103

 

 

 

38,659

 

Acquisition related costs

 

 

29,542

 

 

 

2,991

 

Write-off of acquired property deposits

 

 

1,783

 

 

 

—

 

Operating leases of storage facilities

 

 

—

 

 

 

683

 

Depreciation and amortization

 

 

117,081

 

 

 

58,506

 

Interest expense

 

 

54,504

 

 

 

37,124

 

Interest income

 

 

(67

)

 

 

(5

)

(Gain) loss on sale of storage facilities

 

 

(15,270

)

 

 

494

 

Gain on sale of real estate

 

 

(623

)

 

 

—

 

Equity in income of joint ventures

 

 

(3,665

)

 

 

(3,405

)

Net operating income

 

$

311,344

 

 

$

248,124

 

Net operating income

 

 

 

 

 

 

 

 

Same store

 

 

244,011

 

 

 

229,162

 

Other stores and management fee income

 

 

67,333

 

 

 

18,962

 

Total net operating income

 

$

311,344

 

 

$

248,124

 

General and administrative expenses increased $2.0$4.4 million or 13.4%11.5% from 20072015 to 2008.2016. The key drivers of the increase primarily resultedwere $0.9 million in expenses recorded in 2016 related to the Company’s name change, and a $1.7 million increase in professional fees mainly stemming from an increase in accounting fees related to the acquisition of LifeStorage, LP and an increase in legal fees related to the lawsuit in New Jersey. The remaining $1.8 million increase is the result of various other administrative costs, associated with operating the properties acquired in 2008including increased travel expenses and 2007, and fromsoftware charges, related to managing the 25 properties acquired byincreased number of stores in our joint ventureportfolio as a result of the LifeStorage, LP acquisition and other smaller acquisitions in 2008.2016.

Acquisition related costs were $29.5 million in 2016 related to the acquisition of 122 stores, including the acquisition of LifeStorage, LP. Acquisition related costs for 2015 were $3.0 million related to the acquisition of 27 stores.

The operating lease expense for storage facilities in 2015 relates to leases which commenced in November 2013 with respect to four self-storage facilities in New York (2) and Connecticut (2). Such leases had annual lease payments of $6 million with a provision for 4% annual increases, and an exclusive option to purchase the facilities for $120 million. We completed the purchase of these four facilities on February 2, 2015, thus eliminating the lease payments thereafter.


Depreciation and amortization expense increased to $33.9$117.1 million in 20082016 from $33.4$58.5 million in 2007,

22

2015, primarily as a result of additionalamortization and depreciation taken on real estate assetsrelated to the properties acquired in 2008,2015 and a full year of2016 and accelerated depreciation on 2007 acquisitions, offset byexisting signage was replaced as a decreaseresult of the change in amortizationname of in-place customers leases relatingthe Company’s storage facilities in 2016 to these acquisitions.
Life Storage ®.

Interest expense increased from $33.9$37.1 million in 20072015 to $38.1$54.5 million in 20082016. The increase was primarily due to interest on bridge loan financing entered into to facilitate the LifeStorage, LP acquisition as well as interest on the $600 million 3.5% senior notes issued in June 2016 and the $200 million 3.67% term loan entered into in July 2016, partially offset by reduced interest costs as a result of additional borrowings underthe payoff of the $150 million 6.38% term loan in April 2016 with a draw on our line of credit and term notes to purchase three stores in 2008, as well as an increase inwhich carries a lower interest rates as a result of our debt refinancing in June 2008.

     As described in Note 5 to the financial statements, during 2009, the Operating Partnershiprate.

During 2016, we sold fiveeight non-strategic storage facilities in Massachusetts, North Carolina,Alabama (1), Georgia (1), Mississippi (1), Texas (1), and PennsylvaniaVirginia (4) for net cash proceeds of $16.3approximately $34.1 million, resulting in a $15.3 million gain on sale. During 2015, we sold three non-strategic storage facilities purchased during 2014 and 2015 in Missouri and South Carolina for net proceeds of approximately $4.6 million, resulting in a loss of $1.6approximately $0.5 million. In 2008, the Operating Partnership sold one non-strategic storage facility located in Michigan for net cash proceeds of $7.0 million resulting in a gain of $0.7 million. The 2008 and 2007 operations of these facilities are reportedThese dispositions were not classified as discontinued operations.

     The decrease in preferred stock distributions from 2007 to 2008 was a result ofoperations since they did not meet the conversion of all remaining 1,200,000 shares of the Company’s Series C Preferred Stock into 920,244 shares of common stock in July 2007.
criteria for such classification under ASU 2014-08 guidance.

FUNDS FROM OPERATIONS

We believe that Funds from Operations (“FFO”) provides relevant and meaningful information about our operating performance that is necessary, along with net earnings and cash flows, for an understanding of our operating results. FFO adds back historical cost depreciation, which assumes the value of real estate assets diminishes predictably in the future. In fact, real estate asset values increase or decrease with market conditions. Consequently, we believe FFO is a useful supplemental measure in evaluating our operating performance by disregarding (or adding back) historical cost depreciation.

FFO is defined by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) as net income available to common shareholders computed in accordance with generally accepted accounting principles (“GAAP”), excluding gains or losses on sales of properties, plus impairment of real estate assets, plus depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. We believe that to further understand our performance FFO should be compared with our reported net income and cash flows in accordance with GAAP, as presented in our consolidated financial statements.

In October and November of 2011, NAREIT issued guidance for reporting FFO that reaffirmed NAREIT’s view that impairment write-downs of depreciable real estate should be excluded from the computation of FFO. This view is because impairment write-downs are akin to and effectively reflect the early recognition of losses on prospective sales of depreciable property or represent adjustments of previously charged depreciation. Since depreciation of real estate and gains/losses from sales are excluded from FFO, it is NAREIT’s view that it is consistent and appropriate for write-downs of depreciable real estate to also be excluded. Our calculation of FFO excludes impairment write-downs of investments in storage facilities.

Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, or as an indicator of our ability to make cash distributions.

Reconciliation of Net Income to Funds From Operations

                     
  For Year Ended December 31, 
(dollars in thousands) 2009  2008  2007  2006  2005 
Net income attributable to common unitholders $20,294  $38,120  $38,741  $35,003  $31,706 
Net income attributable to noncontrolling interests  1,360   1,563   1,848   1,529   490 
Depreciation of real estate and amortization of intangible assets exclusive of deferred financing fees  33,385   33,876   33,360   24,653   20,604 
Depreciation of real estate included in discontinued operations.  434   591   676   652   618 
Depreciation and amortization from unconsolidated joint ventures  820   333   59   168   484 
                     

 

 

For Year Ended December 31,

 

(dollars in thousands)

 

2017

 

 

2016

 

 

2015

 

 

2014

 

 

2013

 

Net income attributable to common shareholders

 

$

96,365

 

 

$

85,225

 

 

$

112,524

 

 

$

88,531

 

 

$

74,126

 

Net income attributable to noncontrolling interests in the

   Operating Partnership

 

 

444

 

 

 

398

 

 

 

553

 

 

 

526

 

 

 

469

 

Depreciation of real estate and amortization of intangible assets

   exclusive of debt issuance costs

 

 

125,580

 

 

 

115,531

 

 

 

57,429

 

 

 

50,827

 

 

 

44,369

 

Depreciation of real estate included in discontinued operations

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

313

 

Depreciation and amortization from unconsolidated joint

   ventures

 

 

4,296

 

 

 

2,595

 

 

 

2,435

 

 

 

1,666

 

 

 

1,496

 

Loss (gain) on sale of real estate

 

 

3,503

 

 

 

(15,270

)

 

 

494

 

 

 

(5,176

)

 

 

(2,852

)

Funds from operations allocable to noncontrolling interest in

   the Operating Partnership

 

 

(1,045

)

 

 

(857

)

 

 

(848

)

 

 

(806

)

 

 

(742

)

Funds from operations available to common shareholders

 

$

229,143

 

 

$

187,622

 

 

$

172,587

 

 

$

135,568

 

 

$

117,179

 

23


                     
  For Year Ended December 31, 
(dollars in thousands) 2009  2008  2007  2006  2005 
Casualty gain  —   —   (114)  —   — 
Loss (gain) on sale of real estate  509   (716)  —   —   — 
Funds from operations allocable to noncontrolling interest in consolidated joint ventures  (1,360)  (1,564)  (1,848)  (1,785)  (1,499)
                
Funds from operations available to common unitholders $55,442  $72,203  $72,722  $60,220  $52,403 
                
LIQUIDITY AND CAPITAL RESOURCES

Our line of credit and term notes require us to meet certain financial covenants measured on a quarterly basis, including prescribed leverage, fixed charge coverage, minimum net worth, limitations on additional indebtedness, and limitations on distributiondividend payouts. At December 31, 2009,2017, the Operating PartnershipCompany was in compliance with all debt covenants. The most sensitive covenant is the leverage ratio covenant contained in our line of credit and term note agreements. This covenant limits our total consolidated liabilities to 55% of our gross asset value. At December 31, 2009, our leverage ratio as defined in the agreements was approximately 42.8%. The agreements define total consolidated liabilities to include the liabilities of the Operating Partnership plus our share of liabilities of unconsolidated joint ventures. The agreements also define a prescribed formula for determining gross asset value which incorporates the use of a 9.25% capitalization rate applied to annualized earnings before interest, taxes, depreciation and amortization (“EBITDA”) as defined in the agreements. At March 31, 2009, the Operating Partnership had violated the leverage ratio covenant contained in the line of credit and term note agreements. In May 2009, the Operating Partnership obtained a waiver of the violation as of March 31, 2009. The fees paid to obtain the waiver were approximately $0.9 million and are included in interest expense in 2009. In the event that the Operating PartnershipCompany violates its debt covenants in the future, the amounts due under the agreements could be callable by the lenders.

     On May 6, 2009, we announced a reduction inlenders and could adversely affect our quarterly distribution for the remainder of 2009 from $0.64 per unit to $0.45 per unit. In addition to the reduction in the distribution, in the second quarter of 2009 we changed our policy of declaring the distribution from the last week in the quarter to the first week following the quarter end. As a result of this date change, no distribution was declared in the three months ended June 30, 2009. A distribution of $0.45 per common unit was declared on January 4, 2010 and paid on January 26, 2010. The distribution paid amounted to $12.4 million. In 2010, we expect to declare and pay four distributions in the calendar year.
     On October 5, 2009, the Company completed the public offering of 4,025,000 shares of its common stock at $29.75 per share. Net proceeds to the Operating Partnership after deducting underwriting discounts and commissions and estimated offering expenses were approximately $114.0 million. The Operating Partnership used the net proceeds from the offering to repay $100 million of the Operating Partnership’s unsecured term note due June 2012 and to terminate two interest rate swaps relating to the debt repaid at a cost of $8.4 million. The Operating Partnership used the remaining proceeds along with operating cash flows to payoff a maturing mortgage in December 2009 of $26.1 million.
     We believe that the steps the Operating Partnership has taken, including but not limited to the equity raised from the Company’s common stock offering of approximately $114.0 million, the pay down of $100 million of our term notes, and the reduction in the quarterly distribution, will be adequate to avoid future covenant violations under the current terms of our line of credit and term note agreements.
     Our ability to retain cash flow is limited because the Company operates as a REIT. In order to maintain its REIT status, a substantial portion of the Company’s operating cash flow must be usedrating requiring us to pay dividends to its shareholders. We believe that our internally generated net cash provided by operating activitieshigher interest and our availability on our line of credit will be sufficient to fund ongoing operations, capital improvements, distributions and debt service requirements through June 2011, at which time our revolving line of credit matures. Future draws on our line of credit may be limited due to covenant restrictions.
     Cash flows from operating activities were $59.1 million, $77.1 million and $85.2 million for the years ended December 31, 2009, 2008, and 2007, respectively. The decrease in operating cash flows from 2008 to 2009

24

was primarily due to a decrease in net income. The decrease in net income was primarily a result of lower rental income and increased interest expense. The decrease in operating cash from 2007 to 2008 was primarily attributable to a decrease in net income and accounts payable remaining consistent with the prior year.
     Cash used in investing activities was $4.4 million, $82.7 million, and $190.3 million for the years ended December 31, 2009, 2008, and 2007 respectively. The decrease in cash used from 2008 to 2009 was due to (i) reduced acquisition and capital improvement activity in 2009, (ii) an increase in proceeds from the sale of storage facilities, and (iii) a reduction in the funding of our share of the joint venture entered into in 2008. The decrease in cash used from 2007 to 2008 was attributable to reduced acquisition activity in 2008 as many of the properties acquired were acquired through a joint venture of which we are a 20% owner.
     Cash used in financing activities was $48.5 million in 2009, compared to cash provided by financing activities of $6.0 million in 2008 and $61.4 million in 2007. In 2009, we used our operating cash flow and the proceeds from the Company’s common stock offering to paydown $14.0 million of our line of credit, $100 million of term notes, and a $26.1 million mortgage. Our reduced acquisition activity in 2008 was the driver behind the decrease in cash provided from financing activities from 2007 to 2008.
     On June 25, 2008, we entered into agreements relating to new unsecured credit arrangements, and received funds under those arrangements. As part of the agreements, the Operating Partnership entered into a $250 million unsecured term note maturing in June 2012 bearing interest at LIBOR plus 1.625% (based on the Operating Partnership’s December 31, 2009 credit rating). The proceeds from this term note were used to repay the Operating Partnership’s previous line of credit that was to mature in September 2008, the Operating Partnership’s term note that was to mature in September 2009, the term note maturing in July 2008, and to provide for working capital. We repaid $100 million of this term note with the proceeds of the Company’s common stock offering. The agreements also provide for a $125 million (expandable to $175 million) revolving line of credit maturing June 2011 bearing interest at a variable rate equal to LIBOR plus 1.375% (based on the Operating Partnership’s credit rating at December 31, 2009), and requires a 0.25% facility fee. The interest rate at December 31, 2009 on the Operating Partnership’s available line of credit was approximately 1.61% (1.8% at December 31, 2008). At December 31, 2009, there was $125 million available on the unsecured line of credit.other debt-related costs. We believe that if operating results remain consistent with historical levels and levels of other debt and liabilities remain consistent with amounts outstanding at December 31, 2009,2017, the entire $125 millionavailability under our line of credit could be drawn without violating our debt covenants.

Our ability to retain cash flow is limited because we operate as a REIT. To maintain our REIT status, a substantial portion of our operating cash flow must be used to pay dividends to our shareholders. We believe that our internally generated net cash provided by operating activities and the availability on our line of credit will be sufficient to fund ongoing operations, capital improvements, dividends and debt service requirements.

Cash flows from operating activities were $248.6 million, $225.6 million, and $186.2 million for the years ended December 31, 2017, 2016, and 2015, respectively. The increases in operating cash flows from 2016 to 2017 and from 2015 to 2016 were primarily due to an increase in net income as adjusted for non-cash depreciation and amortization expenses and other non-cash items during these periods.

Cash used in investing activities was $156.5 million, $1,796.1 million, and $328.7 million for the years ended December 31, 2017, 2016, and 2015 respectively. The decrease in cash used from 2016 to 2017 was primarily a result of the acquisition of LifeStorage, LP and other acquisitions made in 2016, partially offset by an increase in the Company’s investment in unconsolidated joint ventures in 2017. The increase in cash used in investing activities from 2015 to 2016 was primarily a result of the acquisition of LifeStorage, LP and other acquisitions made in 2016, partially offset by increased proceeds on the sale of storage facilities in 2016.

Cash used in financing activities was $106.6 million in 2017 compared to cash provided by financing activities of $1,587.2 million in 2016. In 2017, the Company increased its dividends paid on its common stock from $156.2 million in 2016 to $183.7 million in 2017. On December 7, 2017, the Operating Partnership issued $450 million in senior notes, the proceeds of which were used primarily to repay $225 million of then outstanding term notes and to pay down the Company’s revolving line of credit. Also, during 2017, the Company repurchased 112,554 of the Company’s outstanding common shares for $8.2 million under the Company’s Buyback Program discussed further below. In 2016, the Company received net proceeds from the sale of common stock through public offerings of $935.1 million. The Company also maintainreceived net proceeds from the issuance of term notes of $796.7 million and net proceeds from the Company’s revolving credit line of $174.0 million in 2016. Further, the Company settled pre-issuance interest rate swaps on the 2026 Notes (discussed further below) for $9.2 million in 2016. Cash provided by financing activities was $1,587.2 million in 2016 compared to $141.0 million in 2015. The increase from 2015 to 2016 was primarily a $80result of the previously mentioned 2016 activity and a $43.2 million increase in dividends paid.

For the years 2015, 2016 and 2017, see Note 5 to the consolidated financial statements for details of the Company’s unsecured line of credit and term note maturing September 2013 bearing interest at a fixed rate of 6.26%, a $20 million term note maturing September 2013 bearing interest at a variable rate equal to LIBOR plus 1.50%, and a $150 million unsecured term note maturing in April 2016 bearing interest at 6.38% (based on our December 31, 2009 credit ratings).

     Prioractivity, Note 6 to the consolidated financial statements for the Company’s October 2009 common stock offering,mortgage activity and related details, and Note 12 to the consolidated financial statements for the Company’s equity activity.

Our line of credit facility and term notes hadhave an investment grade rating from Standard and Poor’s (BBB-). Due to our debt covenant violation(BBB) and operating trends, Fitch Ratings downgraded the Operating Partnership’s rating on its revolving credit facility and term notes to non-investment grade (BB+) in May 2009. As a result of the Company’s common stock offering in October 2009 and the use of proceeds to repay $100 million of term notes, Fitch Ratings upgraded our rating on our line of credit and term notes again to investment grade (BBB-)Moody’s (Baa2). Combined, this credit rating upgrade, the repayment of $100 million of term notes and the termination of the interest rate swaps related to these term notes are expected to reduce our annualized interest by approximately $9.8 million.

     In addition to the unsecured financing mentioned above, our consolidated financial statements also include $81.2 million of mortgages payable as detailed below:
*7.80% mortgage note due December 2011, secured by 11 self-storage facilities (Locke Sovran I) with an aggregate net book value of $42.7 million, principal and interest paid monthly. The outstanding balance at December 31, 2009 on this mortgage was $28.4 million.
*7.19% mortgage note due March 2012, secured by 27 self-storage facilities (Locke Sovran II) with an aggregate net book value of $80.3 million, principal and interest paid monthly. The outstanding balance at December 31, 2009 on this mortgage was $41.5 million.
*7.25% mortgage note due December 2011, secured by 1 self-storage facility with an aggregate net book value

25

of $5.7 million, principal and interest paid monthly. Estimated market rate at time of acquisition 5.40%. The outstanding balance at December 31, 2008 on this mortgage was $3.4 million.
*6.76% mortgage note due September 2013, secured by 1 self-storage facility with an aggregate net book value of $2.0 million, principal and interest paid monthly. The outstanding balance at December 31, 2009 on this mortgage was $1.0 million.
*6.35% mortgage note due March 2014, secured by 1 self-storage facility with an aggregate net book value of $3.7 million, principal and interest paid monthly. The outstanding balance at December 31, 2009 on this mortgage was $1.1 million.
*7.50% mortgage notes due August 2011, secured by 3 self-storage facilities with an aggregate net book value of $14.0 million, principal and interest paid monthly. Estimated market rate at time of acquisition 6.42%. The outstanding balance at December 31, 2009 on this mortgage was $5.9 million.
     The 7.80% and 7.19% mortgages were incurred in 2001 and 2002 respectively as part of the financing of the consolidated joint ventures. The Operating Partnership assumed the 7.25%, 6.76%, 6.35%, and 7.50% mortgage notes in connection with the acquisitions of storage facilities in 2005 and 2006.
     During 2009, the Company issued approximately 1.4 million shares via its Dividend Reinvestment and Stock Purchase Plan and Employee Stock Option Plan. We received $32.6 million from the sale of such shares. The Company’s Dividend Reinvestment and Stock Purchase Plan was suspended in November 2009. The Company plans to reinstate its Dividend Reinvestment and Stock Purchase Plan in 2010 and expects to issue shares when its share price and capital needs warrant such issuance.
     During 2009 and 2008, the Company did not acquire any shares of its common stock via the Share Repurchase Program authorized by the Board of Directors. From the inception of the Share Repurchase Program through December 31, 2009, the Company has reacquired a total of 1,171,886 shares pursuant to this program. From time to time, subject to market price and certain loan covenants, the Company may reacquire additional shares.
Future acquisitions, our expansion and enhancement program, and share repurchases are expected to be funded with future cash flows from operations, draws on our line of credit, issuance of common and preferred stock, the issuance of unsecured term notes, sale of properties, and private placement solicitation of joint venture equity. CurrentShould the capital market conditions may prevent us from accessing other traditional sources of capital including the issuance of common and preferred stock and the issuance of unsecured term notes. Should these capital market conditions persist,markets deteriorate, we may have to curtail acquisitions, our expansion and enhancement program, and share repurchases as we approach June 2011, when our line of credit matures.repurchases.


CONTRACTUAL OBLIGATIONS

The following table summarizes our future contractual obligations:

 

 

Payments due by period (in thousands)

 

Contractual obligations

 

Total

 

 

2018

 

 

2019-2020

 

 

2021-2022

 

 

2023 and

thereafter

 

Line of credit

 

$

105,000

 

 

$

—

 

 

$

105,000

 

 

$

—

 

 

$

—

 

Term notes

 

 

1,625,000

 

 

 

—

 

 

 

100,000

 

 

 

100,000

 

 

 

1,425,000

 

Mortgages payable

 

 

12,674

 

 

 

372

 

 

 

806

 

 

 

3,516

 

 

 

7,980

 

Interest payments

 

 

514,859

 

 

 

65,912

 

 

 

126,483

 

 

 

111,481

 

 

 

210,983

 

Land leases

 

 

9,103

 

 

 

566

 

 

 

1,135

 

 

 

1,137

 

 

 

6,265

 

Expansion and enhancement contracts

 

 

32,807

 

 

 

32,807

 

 

 

—

 

 

 

—

 

 

 

—

 

Building leases

 

 

14,676

 

 

 

2,328

 

 

 

4,068

 

 

 

3,431

 

 

 

4,849

 

Total

 

$

2,314,119

 

 

$

101,985

 

 

$

337,492

 

 

$

219,565

 

 

$

1,655,077

 

ContractualPayments due by period
obligationsTotal20102011-20122013-20142015 and thereafter
Line of credit—————
Term notes$400.0 million—$150.0 million$100.0 million$150.0 million
Mortgages payable$81.2 million$2.2 million$77.1 million$1.9 million—
Interest payments$99.2 million$23.8 million$40.6 million$22.9 million$11.9 million
Interest rate swap payments$11.5 million$7.0 million$4.2 million$0.3 million—
Land lease$1.1 million$0.1 million$0.1 million$0.1 million$0.8 million
Building leases$0.1 million$0.1 million———
Total$593.1 million$33.2 million$272.0 million$125.2 million$162.7 million

Interest payments include actual interest on fixed rate debt and estimated interest for floating-rate debt based on December 31, 20092017 rates. Interest rate swap payments include net settlements of swap liabilities based on

26

forecasted variable rates.
ACQUISITION OF PROPERTIES
     We

In 2017, we acquired no propertiestwo self-storage facilities comprising 148,000 square feet in 2009. During 2008,Illinois (1) and North Carolina (1) for a total purchase price of $22.6 million. As both of these acquisitions were of newly constructed facilities, the weighted average capitalization rate for each acquisition was 0%. In 2016, we used operating cash flow, borrowings pursuant to the line of credit, borrowings under the bank term note, and proceeds from the Company’s Dividend Reinvestment and Stock Purchase Plan to acquire three Properties in Mississippi and Ohioacquired 122 self-storage facilities comprising 0.29.4 million square feet from unaffiliated storage operators. During 2007, we used operating cash flow, borrowings pursuant to the line of credit, borrowings under the bank term note, proceeds from the Company’s Dividend Reinvestment and Stock Purchase Plan, and proceeds from the December 2006 common stock offering to acquire 31 Properties in Alabama,Arizona (1), California (22), Colorado (6), Connecticut (2), Florida (11), Illinois (25), Massachusetts (1), Mississippi (1), New Hampshire (5), Nevada (17), New York (4), Pennsylvania (1), South Carolina (1), Texas (23), Utah (1), and TexasWisconsin (1) for a total purchase price of $1,783.9 million. Based on the trailing financial information of the entities from which the properties were acquired, the weighted average capitalization rate was 3.6% on these purchases and ranged from 0% on recently constructed facilities to 6.7% on mature facilities. In 2015, we acquired 27 self-storage facilities comprising 2.32.0 million square feet in Arizona (1), Connecticut (2), Florida (6), Illinois (2), Massachusetts (1), New York (6), North Carolina (1), Pennsylvania (1), South Carolina (6) and Texas (1) for a total purchase price of $281.2 million. Based on the trailing financial information of the entities from unaffiliated storage operators.

which the properties were acquired, the weighted average capitalization rate was 5.3% on these purchases and ranged from 0% on recently constructed facilities to 6.4% on mature facilities. Four facilities acquired in Connecticut and New York in 2015 had been leased by the Company since November 1, 2013 and the operating results of these four facilities have been included in the Company’s operations since that date.

FUTURE ACQUISITION AND DEVELOPMENT PLANS

Our external growth strategy is to increase the number of facilities we own by acquiring suitable facilities in markets in which we already have operations, or to expand ininto new markets by acquiring several facilities at once in those new markets. No properties were acquired in 2009 and acquisitions in 2010 may be limited due to the fact that, at present, seller’s asking prices remain considerably higher than the Operating Partnership believes market conditions warrant.

In 20092017, we scaled back a planned $550 million program to expand and enhance our existing properties. Instead we spent approximately $18 million to add 175,000added 382,000 square feet to existing Properties and to convert 64,000converted 122,000 square feet to premium storage. Westorage for a total cost of approximately $35.2 million. In 2017 we also completed constructioninstalled solar panels on two buildings for a total cost of a new 78,000 square foot facility in Richmond, Virginia.approximately $0.4 million. Although we do not expect to construct any new facilities in 2010,2018, we do plan to expend upcomplete $40 million to $50 million in expansions and enhancements to existing facilities of which $12.1 million was paid prior to December 31, 2017.

In 2017, the Company spent approximately $47.8 million for recurring capitalized expenditures including roofing, paving, office renovations, and new signs related to our rebranding. We expect to spend $20 million to expand and enhance existing facilities.

$25 million in 2018 on similar capital expenditures as we do not expect significant sign related expenditures in 2018.

DISPOSITION OF PROPERTIES

During 2009,2017, we sold fivetwo non-strategic storage facilities in Massachusetts, North Carolina,Utah (1) and PennsylvaniaTexas (1) for net cash proceeds of $16.3approximately $16.9 million, resulting in a $3.5 million loss on sale. The Company has subsequently leased one of these properties and has deferred the related gain until the termination of the lease which is scheduled in 2020. During 2016, we sold eight non-strategic storage facilities in Alabama (1), Georgia (1), Mississippi (1), Texas (1), and Virginia (4) for net proceeds of approximately $34.1 million, resulting in a $15.3 million gain on sale. During 2015, we sold three non-strategic storage facilities purchased during 2014 and 2015 in Missouri and South Carolina for net proceeds of approximately $4.6 million, resulting in a loss of $1.6approximately $0.5 million. During 2008,

As part of our ongoing strategy to improve overall operating efficiencies and portfolio quality, we sold one non-strategic storage facility located in Michigan for net cash proceeds of $7.0 million resulting in a gain of $0.7 million. No sales took place in 2007.

     We may seek to sell additional Properties to third parties or joint venture programspartners in 2010.2018.


OFF-BALANCE SHEET ARRANGEMENTS

     We have a 20% ownership interest in Sovran HHF Storage Holdings LLC (“Sovran HHF”), a joint venture that was formed in May 2008 to acquire self-storage properties that are managed by us. The carrying value

Our off-balance sheet arrangements consist of our investment at December 31, 2009 was $19.9 million. Twenty five properties were acquired by Sovran HHFin nine self-storage joint ventures in which we have ownership interests ranging from 5% to 85%, as of December 31, 2008 for approximately $171.5 million. We contributed $18.6 million to the joint venturewell as our share of capital required to fundinvestment in the acquisitions.

     As manager of Sovran HHF, we earn a management and call center fee of 7% of gross revenues which totaled $1.2 million and $0.5 million for 2009 and 2008, respectively. We also received an acquisition fee of 0.5% or $0.7 million of purchase price for securing purchases for the joint venture in 2008. Our share of Sovran HHF’s income for 2009 and 2008 was $0.2 million and $0.1 million, respectively. At December 31, 2009, Sovran HHF owed us $0.2 million for payments made by us on behalf of the joint venture.
     We also have a 49% ownership interest in Iskalo Office Holdings, LLC, whichentity that owns the building that houses our corporate office in which we have a 49% ownership. We account for these real estate entities under the Operating Partnership’s headquarters and other tenants. Our investment includes a capital contribution of $49.equity method. The carrying value of our investmentdebt held by the unconsolidated real estate entities is a liability of $0.5 million at December 31, 2009 and 2008,secured by the real estate owned by these entities and is included in accounts payable and accrued liabilities in the accompanyingnon-recourse to us. See Note 11 to our consolidated balance sheets. For the years ended December 31, 2009, 2008 and 2007, our share of Iskalo Office Holdings, LLC’s income (loss) was $7,000, ($6,000), and $80,000, respectively. We paid rent to Iskalo Office Holdings, LLC of $608,000, $600,000 and

27

$561,000 in 2009, 2008, and 2007, respectively. Future minimum lease payments under the lease are $0.6 million per year through 2010.
     A summary of the unconsolidated joint venture’s financial statements as of and for the year ended December 31, 2009 is as follows:
         
  Sovran HHF    
  Storage  Iskalo Office 
(dollars in thousands) Holdings LLC  Holdings, LLC 
Balance Sheet Data:        
Investment in storage facilities, net $168,237  $— 
Investment in office building  —   5,322 
Other assets  3,575   688 
       
Total Assets $171,812  $6,010 
         
Due to the Operating Partnership $173  $— 
Mortgages payable  78,512   7,037 
Other liabilities  2,087   224 
       
Total Liabilities  80,772   7,261 
 
Unaffiliated partners’ equity (deficiency)  72,832   (714)
Operating Partnership equity (deficiency)  18,208   (537)
       
Total Liabilities and Partners’ Equity (deficiency) $171,812  $6,010 
         
Income Statement Data:        
Total revenues $17,702  $1,129 
Total expenses  16,761   1,115 
       
Net income $941  $14 
     We do not expect to have material future cash outlays relating to these joint ventures outside our share of capital for future acquisitions of properties by Sovran HHF. We do not guarantee the debt of Sovran HHF or Iskalo Office Holdings, LLC. A summary of our cash flows arising from the off-balance sheet arrangements with Sovran HHF and Iskalo Office Holdings, LLC for the three years ended December 31, 2009 are as follows:
             
  Year ended December 31, 
(dollars in thousands) 2009  2008  2007 
Statement of Operations            
Other operating income (management fees and acquisition fee income) $1,243  $1,135  $— 
General and administrative expenses (corporate office rent)  608   600   561 
Equity in income of joint ventures  235   104   119 
Distributions from unconsolidated joint ventures  686   345   98 
             
Investing activities            
Investment in joint ventures  (331)  (20,287)  — 
Reimbursement of advances to (advances to) joint ventures  163   (336)  — 

28

additional details.

REIT QUALIFICATION AND DISTRIBUTION REQUIREMENTS OF THE COMPANY AND
IMPACT ON THE OPERATING PARTNERSHIP

As a REIT, the Company iswe are not required to pay federal income tax on income that it distributeswe distribute to itsour shareholders, provided that the amount distributed is equal towe satisfy certain requirements, including distributing at least 90% of itsour REIT taxable income.income for a taxable year. These distributions must be made in the year to which they relate, or in the following year if declared before the Company files itswe file our federal income tax return, and if it isthey are paid beforenot later than the date of the first regular dividend of the following year. The first distribution of 2010 may be applied toward the Company’s 2009 distribution requirement. The Company’s source of funds for such distributions is solely and directly from the Operating Partnership.

As a REIT, the Companywe must derive at least 95% of itsour total gross income from income related to real property, interest and dividends. In 2009, the Company’s2016, our percentage of revenue from such sources exceeded 98%was approximately 97%, thereby passing the 95% test, and no special measures are expected to be required to enable the Companyus to maintain itsour REIT designation.

Although we currently intend to operate in a manner designed to qualify as a REIT, it is possible that future economic, market, legal, tax or other considerations may cause our Board of Directors to revoke our REIT election.

INTEREST RATE RISK

The primary market risk to which we believe we are exposed is interest rate risk, which may result from many factors, including government monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our control.

We have entered into an interest rate swap agreements in orderagreement to help mitigate the effects of fluctuations in interest rates on our variable rate debt. At December 31, 2009, we have three outstanding interest rate swap agreements as summarized below:

FixedFloating Rate
Notional AmountEffective DateExpiration DateRate PaidReceived
$20 Million9/4/059/4/134.4350%6 month LIBOR
$50 Million7/1/086/25/124.2825%1 month LIBOR
$100 Million7/1/086/22/124.2965%1 month LIBOR
Upon renewal or replacement of the credit facility, our total interest may change dependent on the terms we negotiate with the lenders; however, the LIBOR base rates have been contractually fixed on $170$100 million of our floating rate bank debt through the interest rate swap termination dates.
date. Forward starting interest rate swaps have also been used by the Company to hedge the risk of changes in the interest-related cash outflows associated with the potential issuance of long-term debt. See Note 7 to our consolidated financial statements for additional detail related to interest rate swaps.

Through June 2012, allSeptember 2018, $100 million of our $400$205 million of floating rate unsecured debt is on a fixed rate basis after taking into account theour interest rate swaps noted above.swap agreements. Based on our outstanding unsecured floating rate debt of $400$205 million at December 31, 2009,2017, a 100 basis point increase in interest rates would have noa $1.1 million effect on our interest expense.

     The table below summarizes This amount was determined by considering the impact of the hypothetical interest rates on our debt obligationsborrowing cost and our interest rate derivatives athedge agreements in effect on December 31, 2009. The estimated fair value of financial instruments is subjective in nature and is dependent on a number of important assumptions, including discount rates and relevant comparable market information associated with each financial instrument. The use of different market assumptions and estimation methodologies may have a material effect on2017. This analysis does not consider the reported estimated fair value amounts. Accordingly, the estimates presented below are not necessarily indicativeimpact of the amountsreduced level of overall economic activity that could exist in such an environment. Further, in the Operating Partnershipevent of a change of such magnitude, we would realizeconsider taking actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in a current market exchange.

29

our capital structure.

INFLATION

                                 
  Expected Maturity Date Including Discount       
(dollars in thousands) 2010  2011  2012  2013  2014  Thereafter  Total  Fair
Value		 
Line of credit — variable rate LIBOR + 1.375 (1.61% at December 31, 2009)  —   —   —   —   —   —   —   — 
                                 
Notes Payable:                                
Term note — variable rate LIBOR+1.625% (1.86% at December 31, 2009)  —   —  $150,000   —   —   —  $150,000  $150,000 
Term note — variable rate LIBOR+1.50% (2.23% at December 31, 2009)  —   —   —  $20,000   —   —  $20,000  $20,000 
Term note — fixed rate 6.26%  —   —   —  $80,000   —   —  $80,000  $76,958 
Term note — fixed rate 6.38%  —   —   —   —   —  $150,000  $150,000  $136,630 
                                 
Mortgage note — fixed rate 7.80% $630  $27,817   —   —   —   —  $28,447  $29,454 
Mortgage note — fixed rate 7.19% $1,211  $1,301  $38,963   —   —   —  $41,475  $43,133 
Mortgage note — fixed rate 7.25% $149  $3,220   —   —   —   —  $3,369  $3,385 
Mortgage note — fixed rate 6.76% $25  $27  $29  $896   —   —  $977  $1,011 
Mortgage note — fixed rate 6.35% $28  $30  $31  $34  $949   —  $1,072  $1,059 
Mortgage notes — fixed rate 7.50% $222  $5,657   —   —   —   —  $5,879  $6,003 
                                 
Interest rate derivatives — liability  —   —   —   —   —   —   —  $11,524 
INFLATION
We do not believe that inflation has had or will have a direct effect on our operations. Substantially all of the leases at the facilities are on a month-to-month basis which provides us with the opportunity to increase rental rates as each lease matures.

SEASONALITY

Our revenues typically have been higher in the third and fourth quarters, primarily because we increase rental rates on most of our storage units at the beginning of May and because self-storage facilities tend to experience greater occupancy during the late spring, summer and early fall months due to the greater incidence of residential moves and college student activity during these periods. However, we believe that our customer mix, diverse geographic locations, rental structure and expense structure provide adequate protection against undue fluctuations in cash flows and net revenues during off-peak seasons. Thus, we do not expect seasonality to materially affect materially distributions to unitholders.

shareholders.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

The information required is incorporated by reference to the information appearing under the caption “Interest Rate Risk” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” above.

30

Item 8.

Financial Statements and Supplementary Data


Report of Independent Registered Public Accounting Firm

The

To the Shareholders and the Board of Directors and Partners of Sovran Acquisition Limited Partnership

Life Storage, Inc.

Opinion on the Financial Statement

We have audited the accompanying consolidated balance sheets of Sovran Acquisition Limited PartnershipLife Storage, Inc. (the Parent Company) as of December 31, 20092017 and 2008,2016, and the related consolidated statements of operations, partners’ capital and comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2009. Our audits also included2017, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). TheseIn our opinion, the consolidated financial statements and schedule arepresent fairly, in all material respects, the responsibilityfinancial position of the Operating Partnership’s management. Our responsibility is to express an opinion on these financial statementsParent Company at December 31, 2017 and schedule based on our audits.

2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We conducted our auditshave also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the Parent Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 27, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Parent Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Parent Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesmisstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Parent Company’s auditor since 1994.

Buffalo, New York

February 27, 2018


Report of Independent Registered Public Accounting Firm

To the Partners and the Board of Directors of Life Storage LP

Opinion on the Financial Statement

We have audited the accompanying consolidated balance sheets of Life Storage LP (the Operating Partnership) as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income, partners’ capital and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Sovran Acquisition Limitedthe Operating Partnership at December 31, 20092017 and 2008,2016, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009,2017, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

     As discussed in Note 2 to the consolidated financial statements, the Operating Partnership retrospectively adjusted the consolidated financial statements as a result of the Operating Partnership’s adoption of Statement of Financial Accounting Standards No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an Amendment of ARB No. 51” (codified in FASB ASC Topic 810 “Consolidation”) on January 1, 2009.

We have also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), Sovran Acquisition Limitedthe Operating Partnership’s internal control over financial reporting as of December 31, 2009,2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 201027, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on the Operating Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Operating Partnership’s auditor since 2016.

Buffalo, New York

February 26, 201027, 2018


31

LIFE STORAGE, INC.

SOVRAN ACQUISITION LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS

         
  December 31, 
(dollars in thousands, except unit data)��2009  2008 
Assets
        
Investment in storage facilities:        
Land $237,684  $236,655 
Building, equipment, and construction in progress  1,149,899   1,129,960 
       
   1,387,583   1,366,615 
Less: accumulated depreciation  (245,178)  (212,301)
       
Investment in storage facilities, net  1,142,405   1,154,314 
Cash and cash equivalents  10,710   4,486 
Accounts receivable  2,405   2,934 
Receivable from related parties  —   14 
Receivable from unconsolidated joint venture  173   336 
Investment in unconsolidated joint venture  19,944   20,111 
Prepaid expenses  4,250   4,647 
Other assets  5,314   7,460 
Net assets of discontinued operations  —   18,226 
       
Total Assets $1,185,201  $1,212,528 
       
         
Liabilities
        
Line of credit $—  $14,000 
Term notes  400,000   500,000 
Accounts payable and accrued liabilities  22,339   23,701 
Deferred revenue  5,060   5,570 
Fair value of interest rate swap agreements  11,524   25,490 
Accrued distributions  —   14,359 
Mortgages payable  81,219   109,261 
       
Total Liabilities  520,142   692,381 
 
Limited partners’ redeemable capital interest (419,952 units in 2009 and 2008)  15,005   15,118 
         
Partners’ Capital
        
General partner (219,567 units outstanding in 2009 and 2008)  3,495   3,650 
Limited partner (27,327,460 and 21,796,781 units outstanding in 2009 and 2008, respectively)  644,742   513,459 
Accumulated other comprehensive income  (11,265)  (25,162)
       
Total Controlling Partners’ Capital  636,972   491,947 
Noncontrolling interest- consolidated joint venture  13,082   13,082 
       
Total Partners’ Capital  650,054   505,029 
       
Total Liabilities and Partners’ Capital $1,185,201  $1,212,528 
       
See notes to financial statements.

 

 

December 31,

 

(dollars in thousands, except share data)

 

2017

 

 

2016

 

Assets

 

 

 

 

 

 

 

 

Investment in storage facilities:

 

 

 

 

 

 

 

 

Land

 

$

786,628

 

 

$

786,764

 

Building, equipment, and construction in progress

 

 

3,534,782

 

 

 

3,456,544

 

 

 

 

4,321,410

 

 

 

4,243,308

 

Less: accumulated depreciation

 

 

(624,314

)

 

 

(535,704

)

Investment in storage facilities, net

 

 

3,697,096

 

 

 

3,707,604

 

Cash and cash equivalents

 

 

9,167

 

 

 

23,685

 

Accounts receivable

 

 

7,331

 

 

 

5,469

 

Receivable from unconsolidated joint ventures

 

 

1,397

 

 

 

1,223

 

Investment in unconsolidated joint ventures

 

 

133,458

 

 

 

67,300

 

Prepaid expenses

 

 

6,757

 

 

 

6,649

 

Fair value of interest rate swap agreements

 

 

205

 

 

 

—

 

Trade name

 

 

16,500

 

 

 

16,500

 

Other assets

 

 

4,863

 

 

 

29,554

 

Total Assets

 

$

3,876,774

 

 

$

3,857,984

 

Liabilities

 

 

 

 

 

 

 

 

Line of credit

 

$

105,000

 

 

$

253,000

 

Term notes, net

 

 

1,609,089

 

 

 

1,387,525

 

Accounts payable and accrued liabilities

 

 

92,941

 

 

 

75,132

 

Deferred revenue

 

 

9,374

 

 

 

9,700

 

Fair value of interest rate swap agreements

 

 

—

 

 

 

13,015

 

Mortgages payable

 

 

12,674

 

 

 

13,027

 

Total Liabilities

 

 

1,829,078

 

 

 

1,751,399

 

Noncontrolling redeemable Operating Partnership Units at redemption value

 

 

19,373

 

 

 

18,091

 

Shareholders’ Equity

 

 

 

 

 

 

 

 

Common stock $.01 par value, 100,000,000 shares authorized, 46,552,222 shares outstanding at December 31, 2017 (46,454,606 at December 31, 2016)

 

 

466

 

 

 

464

 

Additional paid-in capital

 

 

2,363,171

 

 

 

2,348,567

 

Dividends in excess of net income

 

 

(327,727

)

 

 

(239,062

)

Accumulated other comprehensive loss

 

 

(7,587

)

 

 

(21,475

)

Total Shareholders’ Equity

 

 

2,028,323

 

 

 

2,088,494

 

Noncontrolling interest in consolidated subsidiary

 

 

—

 

 

 

—

 

Total Equity

 

 

2,028,323

 

 

 

2,088,494

 

Total Liabilities and Shareholders’ Equity

 

$

3,876,774

 

 

$

3,857,984

 

32

SOVRAN ACQUISITION LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
             
  Year Ended December 31, 
(dollars in thousands, except per unit data) 2009  2008  2007 
Revenues
            
Rental income $186,892  $192,474  $183,802 
Other operating income  8,119   7,719   6,211 
          
Total operating revenues  195,011   200,193   190,013 
             
Expenses
            
Property operations and maintenance  51,955   54,858   51,466 
Real estate taxes  19,591   18,706   17,095 
General and administrative  18,650   17,279   15,234 
Depreciation and amortization  33,384   33,876   33,360 
          
Total operating expenses  123,580   124,719   117,155 
          
             
Income from operations  71,431   75,474   72,858 
             
Other income (expenses)
            
Interest expense  (50,050)  (38,097)  (33,861)
Interest income  85   322   954 
Casualty (loss) gain  (390)  —   114 
Gain on sale of land  1,127   —   — 
Equity in income of joint ventures  235   104   119 
          
             
Income from continuing operations  22,438   37,803   40,184 
(Loss) income from discontinued operations (including loss on disposal of $1,636 in 2009 and gain on disposal of $716 in 2008)  (784)  1,880   1,661 
          
Net income
  21,654   39,683   41,845 
Preferred unit distributions  —   —   (1,256)
Net income attributable to noncontrolling interest  (1,360)  (1,563)  (1,848)
          
Net income attributable to common unitholders $20,294  $38,120  $38,741 
          
             
Earnings per common unit attributable to common unitholders — basic
            
Continuing operations $0.87  $1.63  $1.73 
Discontinued operations  (0.03)  0.09   0.08 
          
Earning per unit — basic $0.84  $1.72  $1.81 
          
             
Earnings per common unit attributable to common unitholders — diluted
            
Continuing operations $0.87  $1.63  $1.73 
Discontinued operations  (0.03)  0.09   0.08 
          
Earning per unit — diluted $0.84  $1.72  $1.81 
          
             
Distributions declared per common unit
 $1.54  $2.54  $2.50 
See notes to consolidated financial statements.


33

LIFE STORAGE, INC.

SOVRAN ACQUISITION LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL AND COMPREHENSIVE INCOME
OPERATIONS

                     
              Accumulated    
  Sovran  Sovran Self      Other  Total Controlling 
  Holdings, Inc.  Storage Inc.  Preferred C  Comprehensive  Partners’ 
(Dollars in thousands) General Partner  Limited Partner  Partners  Income (loss)  Capital 
Balance January 1, 2007  3,905   480,467   30,000   2,128   516,500 
 
Proceeds from issuance of Partnership Units  —   12,759   —   —   12,759 
Redemption of Partnership Units  —   (117)  —   —   (117)
Exercise of stock options  —   425   —   —   425 
Earned portion of non-vested stock  —   1,224   —   —   1,224 
Stock option expense  —   183   —   —   183 
Deferred compensation  —   161   —   —   161 
Conversion of Series C Units to partnership units  —   30,000   (30,000)  —   — 
Conversion of partnership units to shares of common stock  —   167   —   —   167 
Net income  409   38,805   —   —   39,214 
Change in fair value of derivatives  —   —   —   (3,496)  (3,496)
                    
Total comprehensive income  —   —   —   —   35,718 
Distributions  (563)  (53,479)  —   —   (54,042)
Adjustment to reflect limited partners’ redeemable capital at balance sheet date  72   7,047   —   —   7,119 
                
Balance December 31, 2007  3,823   517,642   —   (1,368)  520,097 
 
Proceeds from issuance of Partnership Units  —   10,658   —   —   10,658 
Redemption of Partnership Units  —   (69)  —   —   (69)
Exercise of stock options  —   72   —   —   72 
Earned portion of non-vested stock  —   1,444   —   —   1,444 
Stock option expense  —   279   —   —   279 
Deferred compensation  —   112   —   —   112 
Net income  375   37,024   —   —   37,399 
Change in fair value of derivatives  —   —   —   (23,794)  (23,794)
                    
Total comprehensive income  —   —   —   —   13,605 
Distributions  (562)  (55,128)  —   —   (55,690)
Adjustment to reflect limited partners’ redeemable capital at balance sheet date  14   1,425   —   —   1,439 
                
Balance December 31, 2008  3,650   513,459   —   (25,162)  491,947 
 
Proceeds from issuance of Partnership Units  —   146,534   —   —   146,534 
Exercise of stock options  —   62   —   —   62 
Earned portion of non-vested stock  —   1,379   —   —   1,379 
Stock option expense  —   321   —   —   321 
Deferred compensation  —   114   —   —   114 
Net income  184   19,732   —   —   19,916 
Change in fair value of derivatives  —   —   —   13,897   13,897 
                    
Total comprehensive income  —   —   —   —   33,813 
Distributions  (338)  (36,704)  —   —   (37,042)
Adjustment to reflect limited partners’ redeemable capital at balance sheet date  (1)  (155)  —   —   (156)
                
Balance December 31, 2009 $3,495  $644,742  $—  $(11,265) $636,972 
See notes to financial statements.

 

 

Year Ended December 31,

 

(dollars in thousands, except per share data)

 

2017

 

 

2016

 

 

2015

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

485,303

 

 

$

428,121

 

 

$

338,435

 

Other operating income

 

 

44,447

 

 

 

34,487

 

 

 

28,167

 

Total operating revenues

 

 

529,750

 

 

 

462,608

 

 

 

366,602

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Property operations and maintenance

 

 

122,794

 

 

 

103,388

 

 

 

81,915

 

Real estate taxes

 

 

57,663

 

 

 

47,876

 

 

 

36,563

 

General and administrative

 

 

50,031

 

 

 

43,103

 

 

 

38,659

 

Acquisition costs

 

 

—

 

 

 

29,542

 

 

 

2,991

 

Write-off of acquired property deposits

 

 

—

 

 

 

1,783

 

 

 

—

 

Operating leases of storage facilities

 

 

424

 

 

 

—

 

 

 

683

 

Depreciation and amortization

 

 

127,485

 

 

 

117,081

 

 

 

58,506

 

Total operating expenses

 

 

358,397

 

 

 

342,773

 

 

 

219,317

 

Income from operations

 

 

171,353

 

 

 

119,835

 

 

 

147,285

 

Other income (expenses)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(74,362

)

 

 

(47,175

)

 

 

(37,124

)

Interest expense – bridge financing commitment fee

 

 

—

 

 

 

(7,329

)

 

 

—

 

Interest income

 

 

7

 

 

 

67

 

 

 

5

 

(Loss) gain on sale of storage facilities

 

 

(3,503

)

 

 

15,270

 

 

 

(494

)

Gain on sale of real estate

 

 

��

 

 

 

623

 

 

 

—

 

Equity in income of joint ventures

 

 

3,314

 

 

 

3,665

 

 

 

3,405

 

Net income

 

 

96,809

 

 

 

84,956

 

 

 

113,077

 

Net income attributable to noncontrolling interest in the Operating Partnership

 

 

(444

)

 

 

(398

)

 

 

(553

)

Net loss attributable to noncontrolling interest in consolidated subsidiary

 

 

—

 

 

 

667

 

 

 

—

 

Net income attributable to common shareholders

 

$

96,365

 

 

$

85,225

 

 

$

112,524

 

Earnings per common share attributable to common shareholders - basic

 

$

2.08

 

 

$

1.97

 

 

$

3.18

 

Earnings per common share attributable to common shareholders - diluted

 

$

2.07

 

 

$

1.96

 

 

$

3.16

 

34

SOVRAN ACQUISITION LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
             
  Year Ended December 31, 
(dollars in thousands) 2009  2008  2007 
Operating Activities
            
Net income $21,654  $39,683  $41,845 
Adjustments to reconcile net income to net cash provided by operating activities:            
Depreciation and amortization  35,656   35,659   34,999 
Loss (gain) on sale of storage facilities  1,636   (716)  — 
Gain on sale of land  (1,127)  —   — 
Casualty loss (gain)  390   —   (114)
Equity in income of joint ventures  (235)  (104)  (119)
Distributions from unconsolidated joint venture  686   345   98 
Non-vested stock earned  1,379   1,444   1,224 
Stock option expense  321   279   183 
Changes in assets and liabilities:            
Accounts receivable  509   (171)  (599)
Prepaid expenses  413   118   822 
Accounts payable and other liabilities  (1,677)  619   7,082 
Deferred revenue  (462)  (24)  (246)
          
Net cash provided by operating activities  59,143   77,132   85,175 
             
Investing Activities
            
Acquisition of storage facilities  —   (18,547)  (138,059)
Improvements, equipment additions, and construction in progress  (22,261)  (45,709)  (52,441)
Net proceeds from the sale of storage facility  16,309   7,002   — 
Net proceeds from the sale of land  1,140   —   — 
Casualty insurance proceeds received  518   —   1,692 
Investment in unconsolidated joint venture  (331)  (20,287)  — 
Additional investment in consolidated joint ventures net of cash acquired  —   (6,106)  — 
Reimbursement of advances (advances) to joint ventures  163   (336)  — 
Reimbursement of (payment of) property deposits  —   1,259   (1,469)
Receipts from related parties  14   13   10 
          
Net cash used in investing activities  (4,448)  (82,711)  (190,267)
             
Financing Activities
            
Net proceeds from sale of common stock  146,710   10,842   13,345 
Proceeds from line of credit  30,000   14,000   112,000 
Repayment of line of credit and term note  (144,000)  (206,000)  (12,000)
Proceeds from term notes  —   250,000   6,000 
Financing costs  —   (3,085)  (316)
Distributions paid  (53,139)  (57,889)  (55,973)
Redemption of operating partnership units  —   (114)  (174)
Mortgage principal and capital lease payments  (28,042)  (1,699)  (1,510)
          
Net cash (used in) provided by financing activities  (48,471)  6,055   61,372 
          
Net increase (decrease) in cash  6,224   476   (43,720)
Cash at beginning of period  4,486   4,010   47,730 
          
Cash at end of period $10,710  $4,486  $4,010 
          
             
Supplemental cash flow information            
Cash paid for interest, net of interest capitalized $49,154  $37,970  $32,313 
             
Fair value of net liabilities assumed on the acquisition of storage facilities  —   107   1,580 
Distributions declared but unpaid at December 31, 2009, 2008 and 2007 were $0, $14,359, and $13,922, respectively.
See notes to consolidated financial statements.


35

LIFE STORAGE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

Year Ended December 31,

 

(dollars in thousands)

 

2017

 

 

2016

 

 

2015

 

Net income

 

$

96,809

 

 

$

84,956

 

 

$

113,077

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Effective portion of gain (loss) on derivatives net of reclassification to interest

   expense

 

 

13,888

 

 

 

(7,060

)

 

 

(1,410

)

Total comprehensive income

 

 

110,697

 

 

 

77,896

 

 

 

111,667

 

Comprehensive income attributable to noncontrolling interest in the Operating

   Partnership

 

 

(508

)

 

 

(365

)

 

 

(546

)

Comprehensive loss attributable to noncontrolling interest in consolidated

   subsidiary

 

 

—

 

 

 

667

 

 

 

—

 

Comprehensive income attributable to common shareholders

 

$

110,189

 

 

$

78,198

 

 

$

111,121

 

See notes to consolidated financial statements.


LIFE STORAGE, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

SOVRAN ACQUISITION LIMITED PARTNERSHIP —

(dollars in thousands, except share data)

 

Common

Stock

Shares

 

 

Common

Stock

 

 

Additional

Paid-in

Capital

 

 

Dividends in

Excess of

Net Income

 

 

Accumulated

Other

Comprehensive

Income (loss)

 

 

Total

Shareholders’

Equity

 

Balance January 1, 2015

 

 

34,105,955

 

 

 

341

 

 

 

1,156,225

 

 

 

(167,692

)

 

 

(13,005

)

 

 

975,869

 

Net proceeds from the issuance of common stock

 

 

2,329,911

 

 

 

23

 

 

 

210,119

 

 

 

—

 

 

 

—

 

 

 

210,142

 

Net proceeds from the issuance of common stock

   through Dividend Reinvestment Plan

 

 

151,246

 

 

 

1

 

 

 

13,925

 

 

 

—

 

 

 

—

 

 

 

13,926

 

Exercise of stock options

 

 

30,900

 

 

 

1

 

 

 

1,632

 

 

 

—

 

 

 

—

 

 

 

1,633

 

Issuance of non-vested stock

 

 

64,244

 

 

 

1

 

 

 

(1

)

 

 

—

 

 

 

—

 

 

 

—

 

Earned portion of non-vested stock

 

 

—

 

 

 

—

 

 

 

6,254

 

 

 

—

 

 

 

—

 

 

 

6,254

 

Stock option expense

 

 

—

 

 

 

—

 

 

 

210

 

 

 

—

 

 

 

—

 

 

 

210

 

Deferred compensation outside directors

 

 

28,417

 

 

 

—

 

 

 

59

 

 

 

—

 

 

 

—

 

 

 

59

 

Carrying value less than redemption value on redeemed

   noncontrolling interest

 

 

—

 

 

 

—

 

 

 

(80

)

 

 

—

 

 

 

—

 

 

 

(80

)

Adjustment to redemption value of noncontrolling

   redeemable Operating Partnership Units

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,328

)

 

 

—

 

 

 

(3,328

)

Net income attributable to common shareholders

 

 

—

 

 

 

—

 

 

 

—

 

 

 

112,524

 

 

 

—

 

 

 

112,524

 

Change in fair value of derivatives

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,410

)

 

 

(1,410

)

Dividends

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(113,484

)

 

 

—

 

 

 

(113,484

)

Balance December 31, 2015

 

 

36,710,673

 

 

 

367

 

 

 

1,388,343

 

 

 

(171,980

)

 

 

(14,415

)

 

 

1,202,315

 

Net proceeds from the issuance of common stock

 

 

9,545,000

 

 

 

96

 

 

 

934,867

 

 

 

—

 

 

 

—

 

 

 

934,963

 

Net proceeds from the issuance of common stock

   through Dividend Reinvestment Plan

 

 

133,666

 

 

 

1

 

 

 

13,165

 

 

 

—

 

 

 

—

 

 

 

13,166

 

Conversion of operating partnership units to common

   shares

 

 

41,862

 

 

 

—

 

 

 

4,795

 

 

 

—

 

 

 

—

 

 

 

4,795

 

Issuance of non-vested stock

 

 

23,405

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Earned portion of non-vested stock

 

 

—

 

 

 

—

 

 

 

7,216

 

 

 

—

 

 

 

—

 

 

 

7,216

 

Stock option expense

 

 

—

 

 

 

—

 

 

 

89

 

 

 

—

 

 

 

—

 

 

 

89

 

Deferred compensation outside directors

 

 

—

 

 

 

—

 

 

 

92

 

 

 

—

 

 

 

—

 

 

 

92

 

Adjustment to redemption value of noncontrolling

   redeemable Operating Partnership Units

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,457

 

 

 

—

 

 

 

4,457

 

Net income attributable to common shareholders

 

 

—

 

 

 

—

 

 

 

—

 

 

 

85,225

 

 

 

—

 

 

 

85,225

 

Amortization of terminated hedge included in AOCI

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

458

 

 

 

458

 

Change in fair value of derivatives

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(7,518

)

 

 

(7,518

)

Dividends

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(156,764

)

 

 

—

 

 

 

(156,764

)

Balance December 31, 2016

 

 

46,454,606

 

 

 

464

 

 

 

2,348,567

 

 

 

(239,062

)

 

 

(21,475

)

 

 

2,088,494

 

Net proceeds from the issuance of common stock

   through Dividend Reinvestment Plan

 

 

199,809

 

 

 

2

 

 

 

15,632

 

 

 

—

 

 

 

—

 

 

 

15,634

 

Exercise of stock options

 

 

1,100

 

 

 

—

 

 

 

43

 

 

 

—

 

 

 

—

 

 

 

43

 

Purchase of outstanding shares

 

 

(112,554

)

 

 

(1

)

 

 

(8,233

)

 

 

—

 

 

 

—

 

 

 

(8,234

)

Issuance of non-vested stock

 

 

51,276

 

 

 

1

 

 

 

(1

)

 

 

—

 

 

 

—

 

 

 

—

 

Forfeiture of non-vested stock

 

 

(42,015

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Earned portion of non-vested stock

 

 

—

 

 

 

—

 

 

 

7,148

 

 

 

—

 

 

 

—

 

 

 

7,148

 

Stock option expense

 

 

—

 

 

 

—

 

 

 

15

 

 

 

—

 

 

 

—

 

 

 

15

 

Adjustment to redemption value of noncontrolling

   redeemable Operating Partnership Units

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,697

)

 

 

—

 

 

 

(1,697

)

Net income attributable to common shareholders

 

 

—

 

 

 

—

 

 

 

—

 

 

 

96,365

 

 

 

—

 

 

 

96,365

 

Amortization of terminated hedge included in AOCI

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

917

 

 

 

917

 

Change in fair value of derivatives, net of reclassifications

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,971

 

 

 

12,971

 

Dividends

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(183,333

)

 

 

—

 

 

 

(183,333

)

Balance December 31, 2017

 

 

46,552,222

 

 

$

466

 

 

$

2,363,171

 

 

$

(327,727

)

 

$

(7,587

)

 

$

2,028,323

 

See notes to consolidated financial statements


LIFE STORAGE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Year Ended December 31,

 

(dollars in thousands)

 

2017

 

 

2016

 

 

2015

 

Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

96,809

 

 

$

84,956

 

 

$

113,077

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

127,485

 

 

 

117,081

 

 

 

58,506

 

Amortization of debt issuance costs and bond discount

 

 

4,289

 

 

 

9,688

 

 

 

1,184

 

Loss (gain) on sale of storage facilities

 

 

3,503

 

 

 

(15,270

)

 

 

494

 

Gain on sale of real estate

 

 

—

 

 

 

(623

)

 

 

—

 

Write-off of acquired property deposits

 

 

—

 

 

 

1,783

 

 

 

—

 

Equity in income of joint ventures

 

 

(3,314

)

 

 

(3,665

)

 

 

(3,405

)

Distributions from unconsolidated joint venture

 

 

7,055

 

 

 

5,207

 

 

 

4,821

 

Non-vested stock earned

 

 

7,148

 

 

 

7,308

 

 

 

6,313

 

Stock option expense

 

 

15

 

 

 

89

 

 

 

210

 

Deferred income taxes

 

 

(2,578

)

 

 

—

 

 

 

—

 

Changes in assets and liabilities (excluding the effects of acquisitions):

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(1,862

)

 

 

4,814

 

 

 

(1,038

)

Prepaid expenses

 

 

(162

)

 

 

(230

)

 

 

1,132

 

Advances to joint ventures

 

 

(174

)

 

 

(294

)

 

 

(346

)

Accounts payable and other liabilities

 

 

10,692

 

 

 

18,494

 

 

 

5,847

 

Deferred revenue

 

 

(326

)

 

 

(3,788

)

 

 

(597

)

Net cash provided by operating activities

 

 

248,580

 

 

 

225,550

 

 

 

186,198

 

Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of storage facilities, net of cash acquired

 

 

(21,880

)

 

 

(1,750,267

)

 

 

(280,010

)

Improvements, equipment additions, and construction in progress

 

 

(83,657

)

 

 

(72,852

)

 

 

(41,739

)

Net proceeds from the sale of real estate

 

 

18,872

 

 

 

34,697

 

 

 

4,646

 

Investment in unconsolidated joint ventures

 

 

(69,911

)

 

 

(6,438

)

 

 

(6,151

)

Property deposits

 

 

66

 

 

 

(1,209

)

 

 

(5,435

)

Net cash used in investing activities

 

 

(156,510

)

 

 

(1,796,069

)

 

 

(328,689

)

Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Net proceeds from sale of common stock

 

 

15,677

 

 

 

948,129

 

 

 

225,701

 

Purchase of outstanding shares

 

 

(8,234

)

 

 

—

 

 

 

—

 

Proceeds from line of credit

 

 

276,000

 

 

 

1,102,000

 

 

 

330,000

 

Repayment of line of credit

 

 

(424,000

)

 

 

(928,000

)

 

 

(300,000

)

Proceeds from term notes, net of discount

 

 

447,853

 

 

 

796,682

 

 

 

—

 

Repayment of term notes

 

 

(225,000

)

 

 

(150,000

)

 

 

—

 

Debt issuance costs

 

 

(3,961

)

 

 

(15,273

)

 

 

—

 

Settlement of forward starting interest rate swaps

 

 

—

 

 

 

(9,166

)

 

 

—

 

Dividends paid - common stock

 

 

(183,711

)

 

 

(156,249

)

 

 

(113,039

)

Distributions to noncontrolling interest holders

 

 

(859

)

 

 

(742

)

 

 

(555

)

Redemption of operating partnership units

 

 

—

 

 

 

—

 

 

 

(1,005

)

Mortgage principal payments

 

 

(353

)

 

 

(197

)

 

 

(134

)

Net cash (used in) provided by financing activities

 

 

(106,588

)

 

 

1,587,184

 

 

 

140,968

 

Net (decrease) increase in cash

 

 

(14,518

)

 

 

16,665

 

 

 

(1,523

)

Cash at beginning of period

 

 

23,685

 

 

 

7,020

 

 

 

8,543

 

Cash at end of period

 

$

9,167

 

 

$

23,685

 

 

$

7,020

 

Supplemental cash flow information

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for interest, net of interest capitalized

 

$

70,924

 

 

$

39,856

 

 

$

35,926

 

 

Cash paid for income taxes, net of refunds

 

$

1,180

 

 

$

981

 

 

$

1,084

 

See notes to consolidated financial statements.


LIFE STORAGE LP

CONSOLIDATED BALANCE SHEETS

 

 

December 31,

 

(dollars in thousands, except unit data)

 

2017

 

 

2016

 

Assets

 

 

 

 

 

 

 

 

Investment in storage facilities:

 

 

 

 

 

 

 

 

Land

 

$

786,628

 

 

$

786,764

 

Building, equipment, and construction in progress

 

 

3,534,782

 

 

 

3,456,544

 

 

 

 

4,321,410

 

 

 

4,243,308

 

Less: accumulated depreciation

 

 

(624,314

)

 

 

(535,704

)

Investment in storage facilities, net

 

 

3,697,096

 

 

 

3,707,604

 

Cash and cash equivalents

 

 

9,167

 

 

 

23,685

 

Accounts receivable

 

 

7,331

 

 

 

5,469

 

Receivable from unconsolidated joint ventures

 

 

1,397

 

 

 

1,223

 

Investment in unconsolidated joint ventures

 

 

133,458

 

 

 

67,300

 

Prepaid expenses

 

 

6,757

 

 

 

6,649

 

Fair value of interest rate swap agreements

 

 

205

 

 

 

-

 

Trade name

 

 

16,500

 

 

 

16,500

 

Other assets

 

 

4,863

 

 

 

29,554

 

Total Assets

 

$

3,876,774

 

 

$

3,857,984

 

Liabilities

 

 

 

 

 

 

 

 

Line of credit

 

$

105,000

 

 

$

253,000

 

Term notes, net

 

 

1,609,089

 

 

 

1,387,525

 

Accounts payable and accrued liabilities

 

 

92,941

 

 

 

75,132

 

Deferred revenue

 

 

9,374

 

 

 

9,700

 

Fair value of interest rate swap agreements

 

 

-

 

 

 

13,015

 

Mortgages payable

 

 

12,674

 

 

 

13,027

 

Total Liabilities

 

 

1,829,078

 

 

 

1,751,399

 

Limited partners’ redeemable capital interest at redemption value (217,481 units outstanding at December 31, 2017 and December 31, 2016)

 

 

19,373

 

 

 

18,091

 

Partners’ Capital

 

 

 

 

 

 

 

 

General partner (467,697 and 466,721 units outstanding at December 31, 2017

   and December 31, 2016, respectively)

 

 

20,478

 

 

 

21,065

 

Limited partners (46,084,525 and 45,987,885 units outstanding at December 31, 2017

   and December 31, 2016, respectively)

 

 

2,015,432

 

 

 

2,088,904

 

Accumulated other comprehensive loss

 

 

(7,587

)

 

 

(21,475

)

Total Controlling Partners’ Capital

 

 

2,028,323

 

 

 

2,088,494

 

Noncontrolling interest in consolidated subsidiary

 

 

—

 

 

 

—

 

Total Partners’ Capital

 

 

2,028,323

 

 

 

2,088,494

 

Total Liabilities and Partners’ Capital

 

$

3,876,774

 

 

$

3,857,984

 

See notes to consolidated financial statements.


LIFE STORAGE LP

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

Year Ended December 31,

 

(dollars in thousands, except per unit data)

 

2017

 

 

2016

 

 

2015

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

485,303

 

 

$

428,121

 

 

$

338,435

 

Other operating income

 

 

44,447

 

 

 

34,487

 

 

 

28,167

 

Total operating revenues

 

 

529,750

 

 

 

462,608

 

 

 

366,602

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Property operations and maintenance

 

 

122,794

 

 

 

103,388

 

 

 

81,915

 

Real estate taxes

 

 

57,663

 

 

 

47,876

 

 

 

36,563

 

General and administrative

 

 

50,031

 

 

 

43,103

 

 

 

38,659

 

Acquisition costs

 

 

-

 

 

 

29,542

 

 

 

2,991

 

Write-off of acquired property deposits

 

 

-

 

 

 

1,783

 

 

 

-

 

Operating leases of storage facilities

 

 

424

 

 

 

-

 

 

 

683

 

Depreciation and amortization

 

 

127,485

 

 

 

117,081

 

 

 

58,506

 

Total operating expenses

 

 

358,397

 

 

 

342,773

 

 

 

219,317

 

Income from operations

 

 

171,353

 

 

 

119,835

 

 

 

147,285

 

Other income (expenses)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(74,362

)

 

 

(47,175

)

 

 

(37,124

)

Interest expense – bridge financing commitment fee

 

 

-

 

 

 

(7,329

)

 

 

-

 

Interest income

 

 

7

 

 

 

67

 

 

 

5

 

(Loss) gain on sale of storage facilities

 

 

(3,503

)

 

 

15,270

 

 

 

(494

)

Gain on sale of real estate

 

 

-

 

 

 

623

 

 

 

-

 

Equity in income of joint ventures

 

 

3,314

 

 

 

3,665

 

 

 

3,405

 

Net income

 

 

96,809

 

 

 

84,956

 

 

 

113,077

 

Net income attributable to noncontrolling interest in the Operating Partnership

 

 

(444

)

 

 

(398

)

 

 

(553

)

Net loss attributable to noncontrolling interest in consolidated subsidiary

 

 

-

 

 

 

667

 

 

 

-

 

Net income attributable to common unitholders

 

$

96,365

 

 

$

85,225

 

 

$

112,524

 

Earnings per common unit attributable to common unitholders - basic

 

$

2.08

 

 

$

1.97

 

 

$

3.18

 

Earnings per common unit attributable to common unitholders - diluted

 

$

2.07

 

 

$

1.96

 

 

$

3.16

 

Net income attributable to general partner

 

$

968

 

 

$

856

 

 

$

1,131

 

Net income attributable to limited partners

 

 

95,397

 

 

 

84,369

 

 

 

111,393

 

See notes to consolidated financial statements.


LIFE STORAGE LP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

Year Ended December 31,

 

(dollars in thousands)

 

2017

 

 

2016

 

 

2015

 

Net income

 

$

96,809

 

 

$

84,956

 

 

$

113,077

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Effective portion of gain (loss) on derivatives net of reclassification

   to interest expense

 

 

13,888

 

 

 

(7,060

)

 

 

(1,410

)

Total comprehensive income

 

 

110,697

 

 

 

77,896

 

 

 

111,667

 

Comprehensive income attributable to noncontrolling interest

   in the Operating Partnership

 

 

(508

)

 

 

(365

)

 

 

(546

)

Comprehensive loss attributable to noncontrolling interest in

   consolidated subsidiary

 

 

—

 

 

 

667

 

 

 

—

 

Comprehensive income attributable to common unitholders

 

$

110,189

 

 

$

78,198

 

 

$

111,121

 

See notes to consolidated financial statements.


LIFE STORAGE LP

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(dollars in thousands)

 

Life Storage

Holdings, Inc.

General

Partner

 

 

Life Storage, Inc. Limited

Partner

 

 

Accumulated

Other

Comprehensive

Income (loss)

 

 

Total

Controlling

Partners’

Capital

 

Balance January 1, 2015

 

 

9,895

 

 

 

978,979

 

 

 

(13,005

)

 

 

975,869

 

Net proceeds from the issuance of Partnership Units

 

 

2,123

 

 

 

208,019

 

 

 

—

 

 

 

210,142

 

Net proceeds from the issuance of Partnership Units through

   Dividend Reinvestment Plan

 

 

139

 

 

 

13,787

 

 

 

—

 

 

 

13,926

 

Exercise of stock options

 

 

16

 

 

 

1,617

 

 

 

—

 

 

 

1,633

 

Earned portion of non-vested stock

 

 

63

 

 

 

6,191

 

 

 

—

 

 

 

6,254

 

Stock option expense

 

 

2

 

 

 

208

 

 

 

—

 

 

 

210

 

Deferred compensation outside directors

 

 

—

 

 

 

59

 

 

 

—

 

 

 

59

 

Carrying value less than redemption value on redeemed

   noncontrolling interest

 

 

(10

)

 

 

(70

)

 

 

—

 

 

 

(80

)

Adjustment to redemption value of noncontrolling redeemable

   Operating Partnership Units

 

 

—

 

 

 

(3,328

)

 

 

—

 

 

 

(3,328

)

Net income attributable to common unitholders

 

 

1,131

 

 

 

111,393

 

 

 

—

 

 

 

112,524

 

Change in fair value of derivatives

 

 

(14

)

 

 

14

 

 

 

(1,410

)

 

 

(1,410

)

Distributions

 

 

(1,140

)

 

 

(112,344

)

 

 

—

 

 

 

(113,484

)

Balance December 31, 2015

 

 

12,205

 

 

 

1,204,525

 

 

 

(14,415

)

 

 

1,202,315

 

Net proceeds from the issuance of Partnership Units

 

 

9,349

 

 

 

925,614

 

 

 

—

 

 

 

934,963

 

Net proceeds from the issuance of Partnership Units through

   Dividend Reinvestment Plan

 

 

132

 

 

 

13,034

 

 

 

—

 

 

 

13,166

 

Conversion of operating partnership units to common shares

 

 

—

 

 

 

4,795

 

 

 

—

 

 

 

4,795

 

Issuance of operating partnership units

 

 

95

 

 

 

(95

)

 

 

—

 

 

 

—

 

Earned portion of non-vested stock

 

 

72

 

 

 

7,144

 

 

 

—

 

 

 

7,216

 

Stock option expense

 

 

1

 

 

 

88

 

 

 

—

 

 

 

89

 

Deferred compensation outside directors

 

 

1

 

 

 

91

 

 

 

—

 

 

 

92

 

Adjustment to redemption value of noncontrolling redeemable

   Operating Partnership Units

 

 

—

 

 

 

4,457

 

 

 

—

 

 

 

4,457

 

Net income attributable to common unitholders

 

 

856

 

 

 

84,369

 

 

 

—

 

 

 

85,225

 

Amortization of terminated hedge included in AOCI

 

 

4

 

 

 

(4

)

 

 

458

 

 

 

458

 

Change in fair value of derivatives

 

 

(75

)

 

 

75

 

 

 

(7,518

)

 

 

(7,518

)

Distributions

 

 

(1,575

)

 

 

(155,189

)

 

 

—

 

 

 

(156,764

)

Balance December 31, 2016

 

 

21,065

 

 

 

2,088,904

 

 

 

(21,475

)

 

 

2,088,494

 

Net proceeds from the issuance of Partnership Units through

   Dividend Reinvestment Plan

 

 

157

 

 

 

15,477

 

 

 

—

 

 

 

15,634

 

Exercise of stock options

 

 

1

 

 

 

42

 

 

 

 

 

 

 

43

 

Purchase of outstanding units

 

 

(82

)

 

 

(8,152

)

 

 

—

 

 

 

(8,234

)

Issuance of non-vested stock

 

 

1

 

 

 

(1

)

 

 

—

 

 

 

—

 

Forfeiture of non-vested stock

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Earned portion of non-vested stock

 

 

71

 

 

 

7,077

 

 

 

—

 

 

 

7,148

 

Stock option expense

 

 

—

 

 

 

15

 

 

 

—

 

 

 

15

 

Adjustment to redemption value of noncontrolling redeemable

   Operating Partnership Units

 

 

—

 

 

 

(1,697

)

 

 

—

 

 

 

(1,697

)

Net income attributable to common unitholders

 

 

968

 

 

 

95,397

 

 

 

—

 

 

 

96,365

 

Amortization of terminated hedge included in AOCI

 

 

9

 

 

 

(9

)

 

 

917

 

 

 

917

 

Change in fair value of derivatives, net of reclassifications

 

 

130

 

 

 

(130

)

 

 

12,971

 

 

 

12,971

 

Distributions

 

 

(1,842

)

 

 

(181,491

)

 

 

—

 

 

 

(183,333

)

Balance December 31, 2017

 

$

20,478

 

 

$

2,015,432

 

 

$

(7,587

)

 

$

2,028,323

 

See notes to consolidated financial statements


LIFE STORAGE LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Year Ended December 31,

 

(dollars in thousands)

 

2017

 

 

2016

 

 

2015

 

Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

96,809

 

 

$

84,956

 

 

$

113,077

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

127,485

 

 

 

117,081

 

 

 

58,506

 

Amortization of debt issuance costs and bond discount

 

 

4,289

 

 

 

9,688

 

 

 

1,184

 

Loss (gain) on sale of storage facilities

 

 

3,503

 

 

 

(15,270

)

 

 

494

 

Gain on sale of real estate

 

 

-

 

 

 

(623

)

 

 

—

 

Write-off of acquired property deposits

 

 

-

 

 

 

1,783

 

 

 

—

 

Equity in income of joint ventures

 

 

(3,314

)

 

 

(3,665

)

 

 

(3,405

)

Distributions from unconsolidated joint venture

 

 

7,055

 

 

 

5,207

 

 

 

4,821

 

Non-vested stock earned

 

 

7,148

 

 

 

7,308

 

 

 

6,313

 

Stock option expense

 

 

15

 

 

 

89

 

 

 

210

 

Deferred income taxes

 

 

(2,578

)

 

 

—

 

 

 

—

 

Changes in assets and liabilities (excluding the effects of acquisitions):

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(1,862

)

 

 

4,814

 

 

 

(1,038

)

Prepaid expenses

 

 

(162

)

 

 

(230

)

 

 

1,132

 

Advances to joint ventures

 

 

(174

)

 

 

(294

)

 

 

(346

)

Accounts payable and other liabilities

 

 

10,692

 

 

 

18,494

 

 

 

5,847

 

Deferred revenue

 

 

(326

)

 

 

(3,788

)

 

 

(597

)

Net cash provided by operating activities

 

 

248,580

 

 

 

225,550

 

 

 

186,198

 

Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of storage facilities, net of cash acquired

 

 

(21,880

)

 

 

(1,750,267

)

 

 

(280,010

)

Improvements, equipment additions, and construction in progress

 

 

(83,657

)

 

 

(72,852

)

 

 

(41,739

)

Net proceeds from the sale of real estate

 

 

18,872

 

 

 

34,697

 

 

 

4,646

 

Investment in unconsolidated joint ventures

 

 

(69,911

)

 

 

(6,438

)

 

 

(6,151

)

Property deposits

 

 

66

 

 

 

(1,209

)

 

 

(5,435

)

Net cash used in investing activities

 

 

(156,510

)

 

 

(1,796,069

)

 

 

(328,689

)

Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Net proceeds from sale of partnership units

 

 

15,677

 

 

 

948,129

 

 

 

225,701

 

Purchase of outstanding units

 

 

(8,234

)

 

 

—

 

 

 

—

 

Proceeds from line of credit

 

 

276,000

 

 

 

1,102,000

 

 

 

330,000

 

Repayment of line of credit

 

 

(424,000

)

 

 

(928,000

)

 

 

(300,000

)

Proceeds from term notes, net of discount

 

 

447,853

 

 

 

796,682

 

 

 

—

 

Repayment of term notes

 

 

(225,000

)

 

 

(150,000

)

 

 

—

 

Debt issuance costs

 

 

(3,961

)

 

 

(15,273

)

 

 

—

 

Settlement of forward starting interest rate swaps

 

 

—

 

 

 

(9,166

)

 

 

—

 

Distributions to unitholders

 

 

(183,711

)

 

 

(156,249

)

 

 

(113,039

)

Distributions to noncontrolling interest holders

 

 

(859

)

 

 

(742

)

 

 

(555

)

Redemption of operating partnership units

 

 

—

 

 

 

—

 

 

 

(1,005

)

Mortgage principal payments

 

 

(353

)

 

 

(197

)

 

 

(134

)

Net cash (used in) provided by financing activities

 

 

(106,588

)

 

 

1,587,184

 

 

 

140,968

 

Net (decrease) increase in cash

 

 

(14,518

)

 

 

16,665

 

 

 

(1,523

)

Cash at beginning of period

 

 

23,685

 

 

 

7,020

 

 

 

8,543

 

Cash at end of period

 

$

9,167

 

 

$

23,685

 

 

$

7,020

 

Supplemental cash flow information

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for interest, net of interest capitalized

 

$

70,924

 

 

$

39,856

 

 

$

35,926

 

Cash paid for income taxes, net of refunds

 

$

1,180

 

 

$

981

 

 

$

1,084

 

See notes to consolidated financial statements.


LIFE STORAGE, INC. AND LIFE STORAGE LP

DECEMBER 31, 2009
2017

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION

     Sovran Acquisition Limited Partnership (the “Operating Partnership”) is the entity through

The Parent Company, which Sovran Self Storage, Inc. (the “Company”),operates as a self-administered and self-managed real estate investment trust (“REIT”(a “REIT”), conducts substantially all of its businesswas formed on April 19, 1995 to own and owns substantially all of its assets.operate self-storage facilities throughout the United States. On June 26, 1995, the Parent Company commenced operations through the Operating Partnership, effective with the completion of its initial public offering. The Parent Company, the Operating Partnership and their consolidated subsidiaries are collectively referred to in this report as the “Company.” In addition, terms such as “we,” “us,” or “our” used in this report may refer to the Company, the Parent Company and/or the Operating Partnership.

At December 31, 2009,2017, we had an ownership interest in, andand/or managed 381706 self-storage properties in 2428 states under the name Uncle Bob’s SelfLife Storage®. ®. Among our 381706 self-storage properties are 2798 properties that we manage for a consolidatedunconsolidated joint venture of which we are a majority owner and 25ventures (See Note 11), 42 properties that we manage for an unconsolidated joint venture of whichand have no ownership interest, and two properties that we are a 20% owner. Approximately 42%lease. During 2017, approximately 23% and 13% of the Operating Partnership’sCompany’s revenue iswas derived from stores in the states of Texas and Florida.

     AsFlorida, respectively.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of December 31, 2009, the Company was a 98.5% economic ownerPresentation : All of the Company’s assets are owned by, and all its operations are conducted through the Operating Partnership and controls it through SovranPartnership. Life Storage Holdings, Inc. (“Holdings”), a wholly ownedwholly-owned subsidiary of the Parent Company incorporated in Delaware and(“Holdings”), is the sole general partner of the Operating Partnership (this structurePartnership; the Parent Company is commonly referred to as an umbrella partnership REIT or “UPREIT”). The board of directors of Holdings, the members of which are also members of the Board of Directors of the Company, manages the affairsa limited partner of the Operating Partnership, by directingand, through its ownership of Holdings and its limited partnership interest, controls the affairsoperations of Holdings.the Operating Partnership, holding a 99.5% ownership interest therein as of December 31, 2017. The Company’s limited partner and indirect general partnerremaining ownership interests in the Operating Partnership entitle it to share in cash distributions from, and in the profits and losses(the “Units”) are held by certain former owners of assets acquired by the Operating Partnership in proportion to its ownership interest therein and entitle the Company to vote on all matters requiring a vote of the limited partners.

     The other limited partners of the Operating Partnership are persons who contributed their direct or indirect interests in certain self-storage properties to the Operating Partnership. The Operating Partnership is obligated to redeem each unit of limited partnership (“Unit”) at the request of the holder thereof for cash equal to the fair market value of a share of the Company’s common stock (“Common Shares”) at the time of such redemption, provided that the Company at its option may elect to acquire any Unit presented for redemption for one Common Share or cash. The Company has, in the past, elected to pay cash to acquire Units presented for redemption, but may issue Common Shares in the future for such redemptions. With each such redemption the Company’s percentage ownership interest in the Operating Partnership will increase. In addition, whenever the Company issues Common Shares, the Company is obligated to contribute any net proceeds therefrom to the Operating Partnership and the Operating Partnership is obligated to issue an equivalent number of Units to the Company. Such limited partners’ redemption rights are reflected in “limited partners’ redeemable capital interest” in the accompanying balance sheets at the cash redemption amount at the balance sheet date. Capital activity with regard to such limited partners’ redemption rights is reflected in the accompanying statements of partners’ capital.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: Our consolidated financial statements include the accounts of the Operating Partnership, Locke Sovran I, LLC, and Locke Sovran II, LLC, which is a majority owned joint venture. All intercompany transactions and balances have been eliminated.

We consolidate all wholly owned subsidiaries. Partially owned subsidiaries and joint ventures are consolidated when we control the entity. Our consolidated financial statements include the accounts of the Parent Company, the Operating Partnership, Life Storage Solutions, LLC (the Parent Company’s taxable REIT subsidiary), Warehouse Anywhere LLC (an entity owned 60% by Life Storage Solutions, LLC), and all other wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. Investments in joint ventures that we do not control but for which we have significant influence over are reportedaccounted for using the equity method.

     In June 2008,

Included in the Parent Company’s consolidated balance sheets are noncontrolling redeemable Operating Partnership Units and included in the Operating Partnership made an additional investment of $6.1 million in Locke Sovran I, LLC that increased the Operating Partnership’s ownership from approximately 70% to 100%.

     In December 2007, the FASB issued additional accounting guidance now codified in ASC Topic 810, “Consolidation” through the issuance of FASB Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS No. 160”) which was adopted by the Operating Partnership on January 1, 2009. The additional guidance requires that the portion of equity in a subsidiary attributable to the owners of the subsidiary other than the parent or the parent’s affiliates be labeled “noncontrolling interests” and presented in the consolidated

36

balance sheet as a component of equity. The additional guidance does not significantly change the Operating Partnership’s past accounting practices with respect to the attribution of net income between controlling and noncontrolling interests, however, the provisions of the additional guidance require that earnings attributable to noncontrolling interests be reported as part of consolidated earnings and not as a separate component of income or expense. In addition, the additional guidance requires the disclosure of the attribution of consolidated earnings to the controlling and noncontrolling interests on the face of the statement of operations. The presentation and disclosure requirements of the additional guidance are applied retrospectively and all prior period information has been presented and disclosed in accordance with these new requirements. The adoption of this additional guidance did not result in any differences between net income available to common unitholders as previously reported and net income attributable to common unitholders as currently reported.
     As a result of the adoption of these additional guidelines we now present noncontrolling interests in Locke Sovran II, LLC as a separate component of equity, called “Noncontrolling interests — consolidated joint venture” in the consolidated balance sheets. Prior to the adoption of these additional guidelines, the noncontrolling interests in Locke Sovran I, LLC and Locke Sovran II, LLC were called “Minority interest — consolidated joint venture” and were presented in the “mezzanine” section of the consolidated balance sheet, above equity. The following table sets forth the activity in the noncontrolling interest — consolidated joint venture:
         
(Dollars in thousands) 2009  2008 
Beginning balance noncontrolling interests — consolidated joint venture $13,082  $16,783 
Carrying value of Locke Sovran I, LLC purchased in 2008 for $6.1 million  —   (3,701)
Net income attributable to noncontrolling interests — consolidated joint venture  1,360   1,563 
Distributions  (1,360)  (1,563)
       
Ending balance noncontrolling interests — consolidated joint venture $13,082  $13,082 
       
     Included in the consolidated balance sheets are limited partners’ redeemable capital interest.interest at redemption value. These interests are presented in the “mezzanine” section of the consolidated balance sheetsheets because they don’tdo not meet the functional definition of a liability or equity under current authorative accounting literature. These represent the outside ownership interests of the limited partners in the Operating Partnership. At December 31, 20092017 and 2008,December 31, 2016, there was 419,952 limited partners’were 217,481 noncontrolling redeemable operating partnershipOperating Partnership Units outstanding. These unitholders are entitled to receive distributions per unit equivalent to the dividends declared per share on the Parent Company’s common stock. The Operating Partnership is obligated to redeem each of these limited partnership Units in the Operating Partnership at the request of the holder thereof for cash equal to the fair market value of a share of the Parent Company’s common stock based on a 10-day average of the daily market price, at the time of such redemption, provided that the Company at its option may elect to acquire any such Unit presented for redemption for one common share or cash. Effective January 1, 2009, the Operating PartnershipThe Company accounts for these noncontrolling redeemable Operating Partnership Units under the provisions of FASB ASCAccounting Standards Codification (ASC) Topic 480-10-S99. The application of the FASB ASC Topic 480-10-S99 accounting model requires the noncontrolling interest to follow normal noncontrolling interest accounting and then be marked to redemption value at the end of each reporting period if higher (but never adjusted below that normal noncontrolling interest accounting amount). The offset to the adjustment to the carrying amount of the noncontrolling redeemable Operating Partnership Unitsinterests is reflected in the Parent Company’s dividends in excess of net income and in the Operating Partnership’s general partner and limited partners’ capital.partners capital balances. Accordingly, in the accompanying consolidated balance sheet, limited partners’ redeemable capitalsheets, noncontrolling interests are reflected at redemption value at December 31, 20092017 and December 31, 2008,2016, equal to the number of Unitsnoncontrolling interest units outstanding multiplied by the fair market value of the Parent Company’s common stock at that date. Redemption value exceeded the value determined under the Operating Partnership’sCompany’s historical basis of accounting at those dates.

         
(Dollars in thousands) 2009  2008 
Beginning balance limited partners’ redeemable capital interest $15,118  $16,951 
Redemption of Operating Partnership Units  —   (115)
Redemption value in excess of carrying value  —   70 
Net income attributable to limited partners’ redeemable capital interests  378   721 
Distributions  (647)  (1,070)
Adjustment to redemption value  156   (1,439)
       
Ending balance limited partners’ redeemable capital interest $15,005  $15,118 
       

37

The following is a reconciliation of the Parent Company’s noncontrolling redeemable Operating Partnership Units and the Operating Parnership’s limited partners’ redeemable capital interest for the year ending December 31:

(Dollars in thousands)

 

2017

 

 

2016

 

Beginning balance

 

$

18,091

 

 

$

18,171

 

Redemption of units

 

 

—

 

 

 

(4,795

)

Issuance of units

 

 

—

 

 

 

9,516

 

Net income attributable to noncontrolling interests in

   Operating Partnership

 

 

444

 

 

 

398

 

Distributions

 

 

(859

)

 

 

(742

)

Adjustment to redemption value

 

 

1,697

 

 

 

(4,457

)

Ending balance

 

$

19,373

 

 

$

18,091

 

In 2016 the Operating Partnership issued 90,477 Units with a fair value of $9.5 million to acquire self-storage properties. The fair value of the Units on the dates of issuance was determined based upon the fair market value of the Company’s common stock on those dates.

Retrospective ImpactOperating Partnership Units redeemed in 2016 were redeemed for a total of New Accounting Pronouncement Adopted January 1, 2009 (in thousands):
Statement41,862 shares of Operations:
             
  For the Year Ended December 31, 2008: 
  As Previously       
  Reported adjusted       
  for discontinued       
  operations  Adjustments  As Adjusted 
             
Net income  38,120   1,563   39,683 
Net income attributable to noncontrolling interest  —   1,563   1,563 
             
  For the Year Ended December 31, 2007: 
  As Previously       
  Reported adjusted       
  for discontinued       
  operations  Adjustments  As Adjusted 
             
Net income  39,997   1,848   41,845 
Net income attributable to noncontrolling interest  —   1,848   1,848 
Balance Sheet:
             
  December 31, 2008: 
  As Previously Reported  Adjustments  As Adjusted 
             
Minority interest — consolidated joint venture  13,082   (13,082)  — 
Noncontrolling interest — consolidated joint venture  —   13,082   13,082 
Total partners’ capital  491,947   13,082   505,029 
             
Statement of Cash Flows:
             
  For the Year Ended December 31, 2008: 
  As Previously Reported  Adjustments  As Adjusted 
             
Net income  38,120   1,563   39,683 
Minority interest  1,563   (1,563)  — 
             
             
  For the Year Ended December 31, 2007: 
  As Previously Reported  Adjustments  As Adjusted 
             
Net income  39,997   1,848   41,845 
Minority interest  1,848   (1,848)  — 
the Parent Company.

Cash and Cash Equivalents: The Operating PartnershipCompany considers all highly liquid investments purchased with maturities of three months or less to be cash equivalents.

Accounts Receivable : Accounts receivable are composed of trade and other receivables recorded at billed amounts and do not bear interest. The cash balance includes $2.3allowance for doubtful accounts is the Company’s best estimate of the amount of probable uncollectible amounts in the Company’s existing accounts receivable. The Company determines the allowance based on a number of factors, including experience, credit worthiness of customers, and current market and economic conditions. The Company reviews the allowance for doubtful accounts on a regular basis. Account balances are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts is recorded as a reduction of accounts receivable and amounted to $0.7 million and $3.8$1.0 million respectively, held in escrow for encumbered properties at December 31, 20092017 and 2008.

2016, respectively.

Revenue and Expense Recognition: Rental income is recognized when earned pursuant to month-to-month leases for storage space. Promotional discounts are recognized as a reduction to rental income over the promotional period, which is generally during the first month of occupancy. Rental income received prior to the start of the rental period is included in deferred revenue. Equity in earnings of real estate joint ventures that we have significant influence over is recognized based on our ownership interest in the earnings of these entities.

Cost of operations, general and administrative expense, interest expense and advertising costs are expensed as incurred. For the years ended December 31, 2009, 2008,2017, 2016, and 2007,2015, advertising costs were $1.9$12.3 million, $1.4$9.5 million, and $1.4$7.3 million, respectively. The Operating PartnershipCompany accrues property taxes based on estimates and historical trends. If these estimates are incorrect, the timing and amount of expense recognition would be affected.

Other Operating Income: Consists Other operating income consists primarily of sales of storage-related merchandise (locks and packing supplies), insurance commissions,administrative fees, incidental truck rentals, and management and acquisition fees from unconsolidated joint ventures.

Investment in Storage Facilities: Storage facilities are recorded at cost. The purchase price of acquired facilities is allocated to land, land improvements, building, equipment, and in-place customer leases based on the relative fair value of each component. component or based on the fair value of each component if accounted for as a business combination. The fair values of land are determined based upon comparable market sales information. The fair values of buildings are determined based upon estimates of current replacement costs adjusted for depreciation on the properties. For the years ended December 31, 2016 and 2015, $29.5 million and $3.0 million of acquisition related costs were incurred and expensed, respectively. There were no acquisition related costs expensed in 2017.

Depreciation is computed using the straight-line method over estimated useful lives of forty years for

38

buildings and improvements, and five to twenty years for furniture, fixtures and equipment. Estimated useful lives are reevaluated when facts and circumstances indicate that the economic lives of assets do not extend to their currently assigned useful lives. Expenditures for significant renovations or improvements that extend the useful life of assets are capitalized. Depreciation expense was $102.7 million, $87.2 million and $55.1 million for the years ending December 31, 2017, 2016, and 2015, respectively. Interest and other costs incurred during the construction period of major expansions are capitalized. Capitalized interest during the years ended December 31, 2009, 2008,2017, 2016, and 20072015 was $0.2, $0.4$0.3 million, $0.1 million and $0.4$0.1 million, respectively. Repair and maintenance costs are expensed as incurred.


Whenever events or changes in circumstances indicate that the basiscarrying value of the Operating Partnership’sCompany’s property may not be recoverable, the Operating Partnership’sCompany’s policy is to assess any impairmentcomplete an assessment of value.impairment. Impairment is evaluated based upon comparing the sum of the property’s expected undiscounted future cash flows to the carrying value of the property, on a property by property basis.property. If the sum of the undiscounted cash flowflows is less than the carrying amount of the property, an impairment loss is recognized for theany amount by which the carrying amount of the asset exceeds the fair value of the asset. AtFor the years ended December 31, 20092017, 2016, and 2008,2015, no assets hadhave been determined to be impaired under this policypolicy.

In general, sales of real estate and accordingly,related profits / losses are recognized when all consideration has changed hands and risks and rewards of ownership have been transferred.

Trade Name : The Company’s trade name, which was acquired in 2016, has an indefinite life and is not amortized but is reviewed for impairment annually or more frequently when facts and circumstances indicate that the carrying value of the Company’s trade name may not be recoverable. We may elect to perform a qualitative assessment that considers economic, industry and company-specific factors as part of our annual test. If, after completing this policy had no impact onassessment, it is determined that it is more likely than not that the Operating Partnership’s financial position or resultsfair value of operations.

the trade name is less than its carrying value, we proceed to a quantitative test. We did not elect to perform a qualitative assessment in 2017.

Quantitative testing requires a comparison of the fair value of the trade name to its carrying value. We use a discounted cash flow analysis under the relief-from-royalty method to estimate the fair value of the trade name. This method incorporates various assumptions, including projected revenue growth rates, the terminal growth rate, the royalty rate to be applied, and the discount rate utilized. If the carrying value exceeds the fair value, the trade name is considered impaired to the extent that the carrying value exceeds the fair value. We did not record any impairment in 2017.

Other Assets: Included in other assets are net loan acquisition costs, a note receivable,cash balances held in escrow for encumbered properties, property deposits and the value placed on in-place customer leases at the time of acquisition. The loan acquisition costs were $5.9 million and $6.8 millionCash held in escrow for encumbered properties at December 31, 2009,2017 and 2008,2016, totaled $292,000 and $238,000, respectively. Accumulated amortization on the loan acquisition costs was approximately $3.4 million and $2.5 million at December 31, 2009, and 2008, respectively. Loan acquisition costs are amortized over the terms of the related debt. The note receivable of $2.8 million represents a note from certain investors of Locke Sovran II, LLC. The note bears interest at LIBOR plus 2.4% and matures upon the dissolution of Locke Sovran II, LLC. There were no propertyProperty deposits at December 31, 20092017 and $0.12016 were $0.9 million at December 31, 2008.

and $2.4 million, respectively. In 2016, a decision was made to not proceed with the acquisition of two properties on which the Company had previously made property deposits totaling $1.8 million. As a result, these property deposits were abandoned and are included in write-off of acquired property deposits on the accompanying consolidated statements of operations. No such expenses were incurred in 2017 or 2015.

The Operating PartnershipCompany allocates a portion of the purchase price of acquisitions to in-place customer leases. The methodology used to determine the fair value of in-place customer leases is based on the Operating Partnership’s experience with customer turnover.described in Note 8. The Operating PartnershipCompany amortizes in-place customer leases on a straight-line basis over 12 months (the estimated future benefit period). At December 31, 2009,

Investment in Unconsolidated Joint Ventures : The Company’s investment in unconsolidated joint ventures where the gross carrying amountCompany has significant influence but not control, and joint ventures which are variable interest entities in which the Company is not the primary beneficiary, are recorded under the equity method of in-place customer leases was $5.4 millionaccounting in the accompanying consolidated financial statements. Under the equity method, the Company’s investment in unconsolidated joint ventures is stated at cost and the accumulated amortization was $5.4 million

     Amortization expense, including amortization of in-place customer leases, was $2.1 million, $2.5 million and $4.8 millionadjusted for the periods ended December 31, 2009, 2008Company’s share of net earnings or losses and 2007, respectively.
reduced by distributions. Equity in earnings of unconsolidated joint ventures is generally recognized based on the Company’s ownership interest in the earnings of each of the unconsolidated joint ventures. For the purposes of presentation in the statement of cash flows, the Company follows the “look through” approach for classification of distributions from joint ventures. Under this approach, distributions are reported under operating cash flow unless the facts and circumstances of a specific distribution clearly indicate that it is a return of capital (e.g., a liquidating dividend or distribution of the proceeds from the joint venture’s sale of assets), in which case it is reported as an investing activity.

Accounts Payable and Accrued Liabilities: Accounts payable and accrued liabilities consists primarily of trade payables, accrued interest, and property tax accruals. The Operating Partnership accrues property tax expense based on estimates and historical trends. Actual expense could differ from these estimates.

Income Taxes: The Company qualifies as a REIT under the Internal Revenue Code of 1986, as amended, and will generally not be subject to corporate income taxes to the extent it distributes at least 90% of its taxable income to its shareholders and complies with certain other requirements. Accordingly, no provision

The Company has been madeelected to treat one of its subsidiaries as a taxable REIT subsidiary. In general, the Company’s taxable REIT subsidiary may perform additional services for tenants and generally may engage in certain real estate or non-real estate related business. A taxable REIT subsidiary is subject to corporate federal and state income taxestaxes. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities.


The Company recorded federal and state income tax benefit of $1.0 million in the accompanying financial statements. On an aggregate basis, the Operating Partnership’s reported amountsyear ended December 31, 2017 and federal and state income tax expense of net assets exceeds the tax basis by approximately $73$0.4 million and $74$1.3 million atduring the years ended December 31, 20092016 and 2008, respectively.

Comprehensive Income: Comprehensive income consists of net income2015, respectively, which are included in general and the change in value of derivatives used for hedging purposes and is reportedadministrative expenses in the consolidated statements of partners’ capital. Comprehensiveoperations.  The 2017 income was $33.8 million, $13.6tax benefit includes current tax expense of $1.5 million and $35.7 million for the years endeddeferred tax benefit of $2.5 million. At December 31, 2009, 2008,2017 and 2007, respectively.
2016, there were no material unrecognized tax benefits. Interest and penalties relating to uncertain tax positions will be recognized in income tax expense when incurred. As of December 31, 2017 and 2016, the Company had no interest or penalties related to uncertain tax provisions. Income taxes payable at December 31, 2017 and 2016 and the net deferred tax liability of our taxable REIT subsidiary at December 31, 2016 are classified within accounts payable and accrued liabilities in the consolidated balance sheets. Prepaid income taxes at December 31, 2017 and 2016 are classified within prepaid expenses, while the net deferred tax asset of our taxable REIT subsidiary at December 31, 2017 is classified within other assets in the consolidated balance sheets. As of December 31, 2017, the Company’s taxable REIT subsidiary has prepaid taxes of $0.1 million, deferred tax assets of $3.6 million and a deferred tax liability of $1.7 million. As of December 31, 2016, the Company’s taxable REIT subsidiary has prepaid taxes of $0.4 million, deferred tax assets of $1.5 million and a deferred tax liability of $2.2 million.

The Tax Cuts and Jobs Act (the “TCJA”) was passed by Congress on December 20, 2017 and signed into law by President Trump on December 22, 2017. The TCJA significantly changed the U.S. federal income tax laws applicable to businesses and their owners, including REITs and their shareholders. Under the TCJA, the corporate income tax rate is reduced from a maximum rate of 35% to a flat 21% rate. The reduced corporate income tax rate, which is effective for taxable years beginning after December 31, 2017, will apply to income earned by our taxable REIT subsidiary. As a result, the deferred tax assets and deferred tax liabilities of our taxable REIT subsidiary are remeasured at December 31, 2017 using the 21% corporate income tax rate. The impact of the remeasurement is not material to the Company.

Derivative Financial Instruments: The Operating PartnershipCompany accounts for derivatives in accordance with ASC Topic 815 “Derivatives and Hedging ”Hedging”, which requires companies to carry all derivatives on the balance sheet at fair value. The Operating PartnershipCompany determines the fair value of derivatives by reference to quoted market prices.using an income approach. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it. The Operating Partnership’sCompany’s use of derivative instruments is limited to cash flow hedges of certain interest rate risks.

39

Recent Accounting Pronouncements: In June 2009,May 2014, the FASB issued revised accounting guidance under ASC Topic 810, “Consolidation” by issuing SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)ASU 2014-09, “Revenue from Contracts with Customers,” (“SFAS 167”). The revised guidance amends previous guidance (as previously required under FASB Interpretation No. 46(R)which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605), “Variable Interest Entities”) for determining whether an entity is a variable interest entity (“VIE”) and requires an enterpriseentity to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interestrecognize revenue in a VIE. Underway that depicts the revised guidance,transfer of promised goods or services to customers in an enterprise has a controlling financial interest when it has a)amount that reflects the powerconsideration to direct the activities of a VIE that most significantly impact the entity’s economic performance and b) the obligation to absorb losses ofwhich the entity expects to be entitled to in exchange for those goods or the right to receive benefits from the entity that could potentially be significant to the VIE. The revised guidance also requires an enterprise to assess whether it has an implicit financial responsibility to ensure that a VIE operates as designed when determining whether it has power to direct the activities of the VIE that most significantly impact the entity’s economic performance. The revised guidance also requires ongoing assessments of whether an enterprise is the primary beneficiary of a VIE, requires enhanced disclosures and eliminates the scope exclusion for qualifying special-purpose entities. The revised guidanceservices. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company has the first annualoption to apply the provisions of ASU 2014-09 either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the new guidance recognized at the date of initial application (the modified retrospective transition method). The Company has adopted the standard using the retrospective transition method as of January 1, 2018. Leases are specifically excluded from the scope of ASU 2014-09, therefore, upon analysis, the Company concluded that beginsthe adoption of the new standard did not have any impact on the timing or amounts of the Company’s rental revenue from customers which represents over 90% of the Company’s total operating revenues. We have evaluated the other revenue streams material to the Company and have concluded that the adoption of the new standard did not have any material impact on the timing or amounts of the Company’s material revenue streams and no cumulative effect adjustment is required as of the date of initial application. Also, as part of the Company’s adoption of ASU 2014-09, the Company has elected to apply the guidance only to contracts that are not completed contracts at the date of initial application. Further, related to the Company’s management fee revenue stream, the Company has elected to apply a practical expedient provided in the new standard which allows the Company to recognize revenue in the amount of management fees to which the Company has a right to invoice as that amount corresponds directly with the value to the customer of the entity’s performance completed to date.  

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. This guidance revises existing practice related to accounting for leases under ASC 840 Leases for both lessees and lessors. The new guidance in ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The lease liability will be equal to the present value of lease payments and the right-of-use asset will be based on the lease liability, subject to adjustment such as for initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating or finance. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840) while finance leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). While the new standard maintains similar accounting for lessors as under ASC 840, the new standard reflects updates to, among other things, align with certain changes to the lessee model. ASU 2016-02 is effective for fiscal years and interim periods, within those years, beginning after NovemberDecember 15, 2009, with early2018. Early adoption prohibited.is permitted for all entities, thought the Company does not expect to adopt ASU 2016-02 early. The Operating PartnershipCompany is currently evaluating the impact thatof adopting the adoption of the revised guidance will havenew leases standard on its consolidated financial statements.

In May 2009,March 2016, the FASB issued accounting guidance now codifiedASU 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments”. ASU 2016-06 simplifies the embedded derivative analysis for debt instruments containing contingent call or put options by removing the requirement to assess whether a contingent event is related to interest rates or credit risks. ASU 2016-06 is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2016. The implementation of this update did not result in any changes to our consolidated financial statements.


In March 2016, the FASB issued ASU 2016-07, “Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting”. ASU 2016-07 eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an adjustment must be made to the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. ASU 2016-07 is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2016. The implementation of this update did not result in any changes to our consolidated financial statements.

In March 2016, the FASB ASC Topic 855, “Subsequent Events”. FASB ASC Topic 855 establishes general standards forissued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting” as part of its simplification initiative, which involves several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and disclosureclassification on the statement of eventscash flows. ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company adopted the guidance in ASU 2016-09 effective January 1, 2017 and has elected to recognize forfeitures of share-based payments as they occur beginning in 2017. The implementation of this update did not result in any material changes to our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a Consensus of the Emerging Issues Task Force)” in an effort to reduce existing diversity in practice related to the classification of certain cash receipts and cash payments on the statements of cash flows. The guidance addresses the classification of cash flows related to, among other things, distributions received from equity method investees. The amendments in this update are effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The implementation of this update as of January 1, 2018 did not have a material impact on the Company’s financial statements.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a Consensus of the Emerging Issues Task Force)” which requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update are effective for annual periods beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption of this update is permitted. Other than modifications to the statement of cash flows, the adoption of ASU 2016-18 is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” which is intended to assist entities with evaluating whether a set of transferred assets and activities is a business. The amendments in this update are effective for annual periods beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption of this update is permitted and the Company adopted this update effective January 1, 2017. The adoption of ASU 2017-01 has potential impact on the accounting treatment of properties acquired subsequent to the date of adoption. Property acquisitions treated as business combinations under previous guidance may no longer be treated as business combinations subsequent to the adoption of ASU 2017-01. To the extent that occurproperties that we acquire do not meet the definition of a “business” under ASU 2017-01, future acquisitions of properties may be accounted for as asset acquisitions resulting in the capitalization of acquisition costs incurred in connection with these transactions and the allocation of the purchase price and related acquisition costs to the assets acquired based on their relative fair values. There were no properties acquired in 2017 that would have been accounted for as business combinations prior to the adoption of ASU 2017-01.

In February 2017, the FASB issued ASU 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” which clarifies the scope and application of ASC 610-20 on the sale or transfer of nonfinancial assets, including real estate, and in substance nonfinancial assets to noncustomers, including partial sales. The amendments in this update are effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The implementation of this update as of January 1, 2018 could potentially impact the balance sheet date but beforeaccounting treatment of future real estate sales of the Company if such sales are to parties who are also customers of the Company.

In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this update are effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The implementation of this update as of January 1, 2018 did not have a material impact on the Company’s financial statements, however, all future changes to the terms or conditions of any of the Company’s share-based payment awards are availablesubject to the guidance in ASU 2017-09 and could potentially be issued (“subsequent events”). More specifically, FASB ASC Topic 855 sets forthaccounted for differently than under the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition in the financial statements, identifies the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that should be made about events or transactions that occur after the balance sheet date. FASB ASC Topic 855 provides largely the sameprevious guidance on subsequent events which previously existed only in auditing literature. We adopted FASB ASC Topic 855 on April 1, 2009. We have evaluated subsequent events through February 26, 2010, the date this quarterly report on Form 10-K was filed with the U.S. Securities and Exchange Commission. See Note 17 for further information regarding our evaluation of subsequent events.

concerning such changes.

Stock-Based Compensation: Effective January 1, 2006, The Company accounts for stock-based compensation under the Operating Partnership adoptedprovisions of ASC Topic 718, “Compensation —- Stock Compensation” (formerly, FASB Statement 123R) and uses the modified-prospective method. Under the modified-prospective method, the Operating Partnership ”. The Company recognizes compensation cost in theits financial statements issued subsequent to January 1, 2006 for all share based payments granted, modified, or settled afterduring the date of adoption as well as for anyperiod. For awards that were granted prior towith graded vesting, compensation cost is recognized on a straight-line basis over the adoption date for which the requisite service period has not been completed as of the adoption date.related vesting period.


The Operating PartnershipCompany recorded compensation expense (included in general and administrative expense) of $321,000, $279,000$15,000, $89,000, and $183,000$210,000, respectively, related to stock options and $1.4$7.1 million, $1.4$7.2 million, and $1.2$6.3 million, respectively, related to amortization of non-vested stock grants for the years ended December 31, 2009, 20082017, 2016, and 2007, respectively.2015. The Operating PartnershipCompany uses the Black-Scholes Merton option pricing model to estimate the fair value of stock options granted subsequent to the adoption of ASC Topic 718. The application of this pricing model involves assumptions that are judgmental and sensitive in the determination of compensation expense. The weighted average for key assumptions used in determining the fair value of options granted during 2009 follows:

         
  Weighted Average  Range 
Expected life (years)  4.50   4.50 
Risk free interest rate  2.04%  1.65 — 2.63%
Expected volatility  38.65%  36.40% — 41.10%
Expected dividend yield  9.43%  5.40% — 12.60%
Fair value $2.73  $1.59 — $7.35 
     The weighted-average fair value of options granted during the year ended December 31, 2015 was $9.90. There were no options granted during the years ended December 31, 20082017 and 2007, were $4.79 and $6.86, respectively.
2016.

To determine expected volatility, the Operating PartnershipCompany uses historical volatility based on daily closing

40

prices of the Company’sits Common Stock over periods that correlate with the expected terms of the options granted. The risk-free rate is based on the United States Treasury yield curve at the time of grant for the expected life of the options granted. Expected dividends are based on the Operating Partnership’sCompany’s history and expectation of dividend payouts. The expected life of stock options is based on the midpoint between the vesting date and the end of the contractual term. The Company recognizes any forfeitures as they occur.

During 2017, 2016, and 2015, the Company issued performance based non-vested stock awards to certain executives. The fair value for the performance based awards in 2017, 2016 and 2015 was estimated at the time the awards were granted using a Monte Carlo pricing model applying the following weighted-average assumptions:

 

 

2017

 

 

2016

 

 

2015

 

Expected life (years)

 

 

3.0

 

 

 

3.0

 

 

 

3.0

 

Risk free interest rate

 

 

1.79

%

 

 

1.53

%

 

 

1.33

%

Expected volatility

 

 

19.92

%

 

 

19.37

%

 

 

18.88

%

Fair value

 

$

82.06

 

 

$

80.24

 

 

$

101.43

 

The Monte Carlo pricing model was not used to value any other 2017, 2016, and 2015 non-vested shares granted as no market conditions were present in these awards. The value of these other non-vested shares was equal to the stock price on the date of grant.

Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

3. EARNINGS PER SHARE AND EARNINGS PER UNIT

The Operating PartnershipCompany reports earnings per share and earnings per unit data in accordance with ASC Topic 260, “Earnings Per Share.” Effective January 1, 2009, FASB .” Under ASC Topic 260 was updated for the issuance of FASB Staff Position (“FSP”) EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities", or FSP EITF 03-6-1, with transition guidance included in FASB ASC Topic 260-10-65-2. Under FSP EITF 03-6-1,260-10, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and shall be included in the computation of earnings-per-unitearnings-per-share pursuant to the two-class method. The codification update requires retrospective restatement of all prior period earnings per unit data to conform with its provisions. TheParent Company and the Operating Partnership hashave calculated its 2009their basic and diluted earnings per share/unit using the two-class method.

The Operating Partnership has also calculated itsfollowing table sets forth the computation of basic and diluted earnings per unit amounts for 2008 and 2007 undercommon share utilizing the two-class method and it resulted in no change in basic and diluted earnings per unit as previously reported. method.

 

 

Year Ended December 31,

 

(Amounts in thousands, except per share data)

 

2017

 

 

2016

 

 

2015

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

 

$

96,365

 

 

$

85,225

 

 

$

112,524

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Denominator for basic earnings per share - weighted average

   shares

 

 

46,373

 

 

 

43,184

 

 

 

35,379

 

Effect of Dilutive Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options and non-vested stock

 

 

117

 

 

 

223

 

 

 

222

 

Denominator for diluted earnings per share - adjusted weighted

   average shares and assumed conversion

 

 

46,490

 

 

 

43,407

 

 

 

35,601

 

Basic Earnings per common share attributable to common

   shareholders

 

$

2.08

 

 

$

1.97

 

 

$

3.18

 

Diluted Earnings per common share attributable to common

   shareholders

 

$

2.07

 

 

$

1.96

 

 

$

3.16

 


The following table sets forth the computation of basic and diluted earnings per common unit utilizing the two-class method.

 

 

Year Ended December 31,

 

(Amounts in thousands, except per unit data)

 

2017

 

 

2016

 

 

2015

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common unitholders

 

$

96,365

 

 

$

85,225

 

 

$

112,524

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Denominator for basic earnings per unit - weighted average units

 

 

46,373

 

 

 

43,184

 

 

 

35,379

 

Effect of Dilutive Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options and non-vested stock

 

 

117

 

 

 

223

 

 

 

222

 

Denominator for diluted earnings per unit - adjusted weighted

   average units and assumed conversion

 

 

46,490

 

 

 

43,407

 

 

 

35,601

 

Basic Earnings per common unit attributable to common

   unitholders

 

$

2.08

 

 

$

1.97

 

 

$

3.18

 

Diluted Earnings per common unit attributable to common

   unitholders

 

$

2.07

 

 

$

1.96

 

 

$

3.16

 

             
(Amounts in thousands, Year Ended December 31, 
except per unit data) 2009  2008  2007 
Numerator:            
Net income from continuing operations attributable to common unitholders $21,078  $36,240  $37,080 
             
Denominator:            
Denominator for basic earnings per unit - weighted average units  24,207   22,184   21,381 
Effect of Dilutive Securities:            
Stock options and warrants and non-vested stock  10   21   49 
          
             
Denominator for diluted earnings per unit - adjusted weighted average units and assumed conversion  24,217   22,205   21,430 
             
Basic Earnings per Common Unit from continuing operations attributable to common unitholders $0.87  $1.63  $1.73 
 
Basic Earnings per Common Unit attributable to common unitholders $0.84  $1.72  $1.81 
             
Diluted Earnings per Common Unit from continuing operations attributable to common unitholders $0.87  $1.63  $1.73 
Diluted Earnings per Common Unit attributable to common unitholders $0.84  $1.72  $1.81 

Not included in the effect of dilutive securities above are 333,07213,750 stock options and 125,871 unvested

41

restricted shares for the year ended December 31, 2009; 262,247 stock options and 124,161133,512 unvested restricted shares for the year ended December 31, 2008; and 67,500 stock options and 105,2662017; 107,283 unvested restricted shares for the year ended December 31, 2007, because their effect2016; and 5,500 stock options and 152,835 unvested restricted shares for the year ended December 31, 2015.  The effects of including these securities would be antidilutive.
have been anti-dilutive.  

4. INVESTMENT IN STORAGE FACILITIES

AND INTANGIBLE ASSETS

The following summarizes activity in storage facilities during the years ended December 31, 20092017 and December 31, 2008.2016.

(Dollars in thousands)

 

2017

 

 

2016

 

Cost:

 

 

 

 

 

 

 

 

Beginning balance

 

$

4,243,308

 

 

$

2,491,702

 

Acquisition of storage facilities

 

 

22,638

 

 

 

1,714,029

 

Improvements and equipment additions

 

 

84,332

 

 

 

65,860

 

Net (decrease) increase in construction in progress

 

 

(141

)

 

 

7,525

 

Dispositions

 

 

(28,727

)

 

 

(35,808

)

Ending balance

 

$

4,321,410

 

 

$

4,243,308

 

Accumulated Depreciation:

 

 

 

 

 

 

 

 

Beginning balance

 

$

535,704

 

 

$

465,195

 

Additions during the year

 

 

102,674

 

 

 

87,219

 

Dispositions

 

 

(14,064

)

 

 

(16,710

)

Ending balance

 

$

624,314

 

 

$

535,704

 

         
(Dollars in thousands) 2009  2008 
Cost:        
Beginning balance $1,366,615  $1,300,847 
Acquisition of storage facilities  —   18,454 
Additional investment in consolidated joint ventures  —   2,473 
Improvements and equipment additions  26,256   44,273 
(Decrease) increase in construction in progress  (4,121)  761 
Dispositions  (1,167)  (193)
       
Ending balance $1,387,583  $1,366,615 
       
         
Accumulated Depreciation:        
Beginning balance $212,301  $179,880 
Additions during the year  33,096   32,556 
Dispositions  (219)  (135)
       
Ending balance $245,178  $212,301 
       

The Company acquired two self-storage facilities during 2017. The acquisition of these facilities were accounted for as asset acquisitions (See Note 2 for further discussion of the Company’s adoption of the accounting guidance under ASU 2017-01 as of January 1, 2017). The cost of these facilities, including closing costs, were assigned to land, buildings, equipment and improvements based upon their relative fair values.

On July 15, 2016, the Company acquired all of the outstanding partnership interests in LifeStorage, LP, a Delaware limited partnership (“LS”). Pursuant to the acquisition, the Company acquired 83 self-storage properties throughout the country, including the following markets: Chicago, Illinois; Las Vegas, Nevada; Sacramento, California; Austin, Texas; and Los Angeles, California. Pursuant to the terms of the Agreement and Plan of Merger dated as of May 18, 2016 by and among LS, the Operating Partnership, allocates purchase priceSolar Lunar Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Operating Partnership, and Fortis Advisors LLC, a Delaware limited liability company, as Sellers’ Representative, the Company paid aggregate consideration of approximately $1.3 billion, of which $482 million was paid to discharge existing indebtedness of LS (including prepayment penalties and defeasance costs totaling $15.5 million).

Including the LS acquisition, the Company acquired 122 facilities during 2016. The acquisition of three stores that were acquired at certificate of occupancy were accounted for as asset acquisitions. The cost of these stores, including closing costs, was assigned to land, building, equipment and improvements components based upon their relative fair values. The assets and liabilities of the other 119 storage facilities acquired in 2016, which primarily consist of tangible and intangible assets, were measured at fair value on the date of acquisition in accordance with the principles of FASB ASC Topic 820, “Fair Value Measurements and liabilities acquired based on their estimated fair values. Disclosures” and were accounted for as business combinations in accordance with the principles of FASB ASC Topic 805 “Business Combinations.”


The value of land and buildings are determined at replacement cost. Intangible assets, which represent the value of existing customer leases, are recorded at their estimated fair values. The Operating Partnership did not acquire any storage facilities in 2009. During 2008, the Operating Partnership acquired three storage facilities for $18.9 million. Substantially allpurchase price of the purchase price for thesetwo facilities was allocated to land ($3.7 million), building ($14.7 million), equipment ($0.1 million)acquired in 2017 and in-place customer leases ($0.4 million) and the 122 facilities acquired in 2016 has been assigned as follows:

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Consideration paid

 

 

Acquisition Date Fair Value

 

State

 

Number of

Properties

 

 

Date of

Acquisition

 

Purchase

Price

 

 

Cash Paid

 

 

Net Other

Liabilities

Assumed

(Assets

Acquired)

 

 

Land

 

 

Building,

Equipment,

and

Improvements

 

 

Closing

Costs

Expensed

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IL

 

 

1

 

 

2/23/2017

 

$

10,089

 

 

$

10,076

 

 

$

13

 

 

$

771

 

 

$

9,318

 

 

$

—

 

NC

 

 

1

 

 

12/14/2017

 

 

12,549

 

 

 

12,550

 

 

 

(1

)

 

 

1,110

 

 

 

11,439

 

 

 

—

 

Total acquired 2017

 

 

2

 

 

 

 

$

22,638

 

 

$

22,626

 

 

$

12

 

 

$

1,881

 

 

$

20,757

 

 

$

—

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Consideration paid

 

 

Acquisition Date Fair Value

 

 

 

 

 

States

 

Number of

Properties

 

 

Date of

Acquisition

 

Purchase

Price

 

 

Cash Paid

 

 

Value of

Operating

Partnership

Units

Issued

 

 

Mortgage

Assumed

 

 

Net Other

Liabilities

Assumed

(Assets

Acquired)

 

 

Land

 

 

Building,

Equipment,

and

Improvements

 

 

In-Place

Customer

Leases

 

 

Trade

Name

 

 

Closing

Costs

Expensed

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FL

 

 

4

 

 

1/6/2016

 

$

20,350

 

 

$

20,246

 

 

$

—

 

 

$

—

 

 

$

104

 

 

$

6,646

 

 

$

13,339

 

 

$

365

 

 

$

—

 

 

$

437

 

CA

 

 

4

 

 

1/21/2016

 

 

80,603

 

 

 

80,415

 

 

 

—

 

 

 

—

 

 

 

188

 

 

 

28,420

 

 

 

51,145

 

 

 

1,038

 

 

 

—

 

 

 

397

 

NH

 

 

5

 

 

1/21/2016

 

 

55,435

 

 

 

55,151

 

 

 

—

 

 

 

—

 

 

 

284

 

 

 

13,281

 

 

 

41,237

 

 

 

917

 

 

 

—

 

 

 

657

 

MA

 

 

1

 

 

1/21/2016

 

 

11,387

 

 

 

11,362

 

 

 

—

 

 

 

—

 

 

 

25

 

 

 

4,880

 

 

 

6,341

 

 

 

166

 

 

 

—

 

 

 

81

 

TX

 

 

3

 

 

1/21/2016

 

 

38,975

 

 

 

38,819

 

 

 

—

 

 

 

—

 

 

 

156

 

 

 

19,796

 

 

 

18,598

 

 

 

581

 

 

 

—

 

 

 

299

 

AZ

 

 

1

 

 

2/1/2016

 

 

9,275

 

 

 

9,261

 

 

 

—

 

 

 

—

 

 

 

14

 

 

 

988

 

 

 

8,224

 

 

 

63

 

 

 

—

 

 

 

136

 

FL

 

 

1

 

 

2/12/2016

 

 

11,274

 

 

 

11,270

 

 

 

—

 

 

 

—

 

 

 

4

 

 

 

2,294

 

 

 

8,980

 

 

 

—

 

 

 

—

 

 

 

—

 

PA

 

 

1

 

 

2/17/2016

 

 

5,750

 

 

 

5,732

 

 

 

—

 

 

 

—

 

 

 

18

 

 

 

1,768

 

 

 

3,879

 

 

 

103

 

 

 

—

 

 

 

164

 

CO

 

 

1

 

 

2/29/2016

 

 

12,600

 

 

 

12,549

 

 

 

—

 

 

 

—

 

 

 

51

 

 

 

4,528

 

 

 

7,915

 

 

 

157

 

 

 

—

 

 

 

188

 

CA

 

 

3

 

 

3/16/2016

 

 

68,832

 

 

 

63,965

 

 

 

4,472

 

 

 

—

 

 

 

395

 

 

 

22,647

 

 

 

45,371

 

 

 

814

 

 

 

—

 

 

 

313

 

CA

 

 

1

 

 

3/17/2016

 

 

17,320

 

 

 

17,278

 

 

 

—

 

 

 

—

 

 

 

42

 

 

 

6,728

 

 

 

10,339

 

 

 

253

 

 

 

—

 

 

 

132

 

CA

 

 

1

 

 

4/11/2016

 

 

36,750

 

 

 

33,346

 

 

 

3,294

 

 

 

—

 

 

 

110

 

 

 

17,445

 

 

 

18,840

 

 

 

465

 

 

 

—

 

 

 

141

 

CT

 

 

2

 

 

4/14/2016

 

 

17,313

 

 

 

17,152

 

 

 

—

 

 

 

—

 

 

 

161

 

 

 

6,142

 

 

 

10,904

 

 

 

267

 

 

 

—

 

 

 

204

 

NY

 

 

2

 

 

4/26/2016

 

 

24,312

 

 

 

20,143

 

 

 

—

 

 

 

4,249

 

 

 

(80

)

 

 

5,710

 

 

 

18,201

 

 

 

401

 

 

 

—

 

 

 

372

 

FL

 

 

1

 

 

5/2/2016

 

 

8,100

 

 

 

4,006

 

 

 

—

 

 

 

4,036

 

 

 

58

 

 

 

3,018

 

 

 

4,922

 

 

 

160

 

 

 

—

 

 

 

161

 

TX

 

 

1

 

 

5/5/2016

 

 

10,800

 

 

 

10,708

 

 

 

—

 

 

 

—

 

 

 

92

 

 

 

2,333

 

 

 

8,302

 

 

 

165

 

 

 

—

 

 

 

133

 

NY

 

 

2

 

 

5/19/2016

 

 

8,400

 

 

 

8,366

 

 

 

—

 

 

 

—

 

 

 

34

 

 

 

714

 

 

 

7,521

 

 

 

165

 

 

 

—

 

 

 

213

 

CA, CO, FL, IL, MS, NV, TX, UT, WI

 

 

83

 

 

7/15/2016

 

 

1,299,740

 

 

 

1,335,274

 

 

 

—

 

 

 

—

 

 

 

(35,534

)

 

 

150,660

 

 

 

1,085,750

 

 

 

46,830

 

 

 

16,500

 

 

 

25,398

 

SC

 

 

1

 

 

7/29/2016

 

 

8,620

 

 

 

8,617

 

 

 

—

 

 

 

—

 

 

 

3

 

 

 

920

 

 

 

7,700

 

 

 

—

 

 

 

—

 

 

 

—

 

CO

 

 

1

 

 

8/4/2016

 

 

8,900

 

 

 

8,831

 

 

 

—

 

 

 

—

 

 

 

69

 

 

 

5,062

 

 

 

3,679

 

 

 

159

 

 

 

—

 

 

 

119

 

FL

 

 

1

 

 

9/27/2016

 

 

10,500

 

 

 

10,407

 

 

 

—

 

 

 

—

 

 

 

93

 

 

 

2,809

 

 

 

7,523

 

 

 

168

 

 

 

—

 

 

 

244

 

IL

 

 

1

 

 

11/17/2016

 

 

8,884

 

 

 

7,125

 

 

 

1,750

 

 

 

—

 

 

 

9

 

 

 

371

 

 

 

8,513

 

 

 

—

 

 

 

—

 

 

 

—

 

FL

 

 

1

 

 

12/20/2016

 

 

9,800

 

 

 

6,900

 

 

 

—

 

 

 

2,966

 

 

 

(66

)

 

 

3,268

 

 

 

6,378

 

 

 

154

 

 

 

—

 

 

 

98

 

Total acquired 2016

 

 

122

 

 

 

 

$

1,783,920

 

 

$

1,796,923

 

 

$

9,516

 

 

$

11,251

 

 

$

(33,770

)

 

$

310,428

 

 

$

1,403,601

 

 

$

53,391

 

 

$

16,500

 

 

$

29,887

 

All properties acquired were purchased from unrelated third parties. The operating results of the facilities acquired facilities have been included in the Operating Partnership’sCompany’s operations since the respective acquisition dates.

5. DISCONTINUED OPERATIONS
     During 2009, The $22.6 million of cash paid for the facilities acquired in 2017 includes $0.5 million of deposits that were paid in 2015 and $0.6 million of deposits that were paid in 2016, when these facilities originally went under contract. The $1,796.9 million of cash paid for the properties acquired during 2016 includes payment for cash acquired of $40.9 million and $5.3 million of deposits that were paid in 2015 when certain of these properties originally went under contract. Closing costs totaling $345,000 were incurred and expensed in 2015 related to facilities acquired in 2016 and are reflected in totals for the respective 2016 acquisitions in the chart above.

Non-cash investing activities during 2017 include the assumption of net other liabilities totaling $12,000. Non-cash investing activities during 2016 include the issuance of $9.5 million in Operating Partnership sold five non-strategic storage facilitiesUnits valued based on the market price of the Company’s common stock at the date of acquisition, the assumption of three mortgages with acquisition-date fair values of $11.3 million, and the assumption of net other liabilities of $7.2 million. Non-cash investing activities during 2015 include the issuance of $2.1 million in Massachusetts, North Carolina, and Pennsylvania for net cash proceeds of $16.3 million resulting in a loss of $1.6 million. In April 2008, the Operating Partnership sold one non-strategic storage facility locatedUnits, the assumption of $1.3 million of other net liabilities and $2.5 million for the settlement of a straight-line rent liability in Michigan for net cash proceedsconnection with the acquisition of $7.0 million resulting in a gainself-storage facilities.

The Company measures the fair value of $0.7 million. The operations of these facilitiesin-place customer lease intangible assets based on the Company’s experience with customer turnover and the loss or gainestimated cost to replace the in-place leases. The Company amortizes in-place customer leases on salea straight-line basis over 12 months (the estimated future benefit period). The Company measures the value of trade names, which have an indefinite life and are reportednot amortized, by calculating discounted cash flows utilizing the relief from royalty method.


In-place customer leases are included in other assets on the Company’s consolidated balance sheets at December 31 as discontinued operations. The amounts in the 2008 and 2007 financial statementsfollows:

(dollars in thousands)

 

2017

 

 

2016

 

In-place customer leases

 

$

75,241

 

 

$

75,611

 

Accumulated amortization

 

 

(75,241

)

 

 

(50,782

)

Net carrying value at the end of period

 

$

-

 

 

$

24,829

 

Amortization expense related to the operationsin-place customer leases was $24.8 million, $29.9 million, and the net assets of this property have been reclassified and are presented as discontinued operations and net assets from discontinued operations, respectively. Cash flows of discontinued operations have not been segregated from the cash flows of continuing operations on the accompanying consolidated statement of cash flows$3.4 million, for the years ended December 31, 2009, 20082017, 2016, and 2007.2015, respectively. No amortization expense is expected in 2018.

Property Dispositions

During 2017 the Company sold two non-strategic properties and received net cash proceeds of $16.9 million. The following is a summaryCompany has subsequently leased one of the amounts reported as discontinued operations:

             
  Year Ended December 31, 
(dollars in thousands) 2009  2008  2007 
Total revenue $2,187  $3,043  $3,757 
Property operations and maintenance expense  (643)  (956)  (1,048)
Real estate tax expense  (258)  (332)  (372)
Depreciation and amortization expense  (434)  (591)  (676)
Net realized (loss) gain on sale of property  (1,636)  716   — 
          
Total (loss) income from discontinued operations $(784) $1,880  $1,661 
          

42

properties sold during 2017 and will continue to operate the property through March 2020. Due to the Company’s continuing involvement in this property, the related gain on the sale of this property has been deferred and will be recognized by the Company upon termination of this lease. During 2016 the Company sold eight non-strategic properties and received net cash proceeds of $34.1 million. During 2015 the Company sold three non-strategic properties and received cash proceeds of $4.6 million.

Change in Useful Life Estimates

6. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The following unaudited pro forma Condensed Statementchange in name of Operations is presented as if the 31Company’s storage facilities purchased during 2007 andfrom Uncle Bob’s Self Storage ® to Life Storage ® required replacement of signage at all existing storage facilities which are currently included in investment in storage facilities, net on the related indebtedness incurred and assumed on these transactions had all occurred at January 1, 2007. Such unaudited pro forma information is based upon the historical statementsconsolidated balance sheets. The replacement of operations of the Operating Partnership. It should be read in conjunction with the financial statements of the Operating Partnership. In management’s opinion, all adjustments necessary to reflect the effects of these transactions have been made. This unaudited pro forma information does not purport to represent what the actual results of operations of the Operating Partnership would have been assuming such transactions hadthis signage has been completed as set forthof December 31, 2017. As a result of this replacement of signage, the Company reassessed the estimated useful lives of the then existing signage in 2016. This useful life reassessment resulted in an increase in depreciation expense of approximately $0.5 million in 2017 and $8.2 million in 2016 as depreciation was accelerated over the new remaining useful lives. The Company does not estimate any further impact on depreciation expense as a result of the replacement of the Uncle Bob’s Self Storage ® signage which is now fully depreciated.

As part of the Company’s capital improvement efforts during 2017, buildings at certain self-storage facilities were identified for replacement. As a result of the decision to replace these buildings, the Company reassessed the estimated useful lives of the then existing buildings. This useful life reassessment resulted in an increase in depreciation expense of approximately $3.9 million in 2017. The Company estimates that the change in estimated useful lives of buildings identified for replacement as of December 31, 2017 will result in an increase in depreciation expense of approximately $0.3 million in 2018.

The accelerated depreciation resulting from the events discussed above nor does it purport to represent the results of operations for future periods.

     
  Year Ended 
(dollars in thousands, except unit data) December 31, 2007 
Pro forma total operating revenues $199,569 
Pro forma net income $42,582 
Pro forma earnings per common unit — diluted $1.92 
7.reduced both basic and diluted earnings per share/unit by approximately $0.09 and approximately $0.19 per share/unit in 2017 and 2016, respectively.

5. UNSECURED LINE OF CREDIT AND TERM NOTES

Borrowings outstanding on our unsecured line of credit and term notes are as follows:

( Dollars in thousands )

 

Dec. 31, 2017

 

 

Dec. 31, 2016

 

Revolving line of credit borrowings

 

$

105,000

 

 

$

253,000

 

 

 

 

 

 

 

 

 

 

Term note due June 4, 2020

 

 

100,000

 

 

 

325,000

 

Term note due August 5, 2021

 

 

100,000

 

 

 

100,000

 

Term note due April 8, 2024

 

 

175,000

 

 

 

175,000

 

Senior term note due July 1, 2026

 

 

600,000

 

 

 

600,000

 

Senior term note due December 15, 2027

 

 

450,000

 

 

 

—

 

Term note due July 21, 2028

 

 

200,000

 

 

 

200,000

 

Total term note principal balance outstanding

 

$

1,625,000

 

 

$

1,400,000

 

Less: unamortized debt issuance costs

 

 

(10,962

)

 

 

(9,323

)

Less: unamortized senior term note discount

 

 

(4,949

)

 

 

(3,152

)

Term notes payable

 

$

1,609,089

 

 

$

1,387,525

 

     On June 25, 2008,

In January 2016, the Operating Partnership entered into agreements relating to newCompany exercised the expansion feature on its existing amended unsecured credit arrangements,agreement and received funds under those arrangements. As part ofincreased the agreements,revolving credit limit from $300 million to $500 million. The interest rate on the Operating Partnership entered intorevolving credit facility bears interest at a $250variable annual rate equal to LIBOR plus a margin based on the Company’s credit rating (at December 31, 2017 the margin is 1.10%), and requires an annual 0.15% facility fee. The Company’s unsecured credit agreement also includes a $325 million unsecured term note maturing June 4, 2020. In 2017, the Company repaid $225 million under this term note, resulting in June 2012$100 million outstanding at December 31, 2017, with the term note bearing interest at LIBOR plus 1.625% (baseda margin based on the Operating Partnership’sCompany’s credit rating (at December 31, 2009 credit rating). In October 2009,2017 the Operating Partnership repaid $100 million of this term note. The new agreements also provide for a $125 million (expandable to $175 million) revolving line of credit maturing June 2011 bearing interest at a variable rate equal to LIBOR plus 1.375% (based on the Operating Partnership’s credit rating at December 31, 2009), and requires a 0.25% facility fee.margin is 1.15%). The interest rate at December 31, 20092017 on the Operating Partnership’s availableCompany’s line of credit was approximately 1.61% (1.8%2.63% (1.79% at December 31, 2008)2016). At December 31, 2009,2017, there was $125$395 million available on the unsecured line of credit.

The revolving line of credit has a maturity date of December 10, 2019.

On December 7, 2017, the Operating Partnership issued $450 million in aggregate principal amount of 3.875% unsecured senior notes due December 15, 2027 (the “2027 Senior Notes”). The 2027 Senior Notes were issued at a 0.477% discount to par value. Interest on the 2027 Senior Notes is payable semi-annually on June 15 and December 15, beginning on June 15, 2018. The 2027 Senior Notes are fully and unconditionally guaranteed by the Parent Company. Proceeds received upon issuance, net of discount to par of $2.1 million and underwriting discount and other offering expenses totaling $4.0 million, totaled $443.9 million.

On June 20, 2016, the Operating Partnership issued $600 million in aggregate principal amount of 3.50% unsecured senior notes due July 1, 2026 (the “2026 Senior Notes”). The 2026 Senior Notes were issued at a 0.553% discount to par value. Interest on the 2026 Senior Notes is payable semi-annually in arrears on January 1 and July 1. The 2026 Senior Notes are fully and unconditionally guaranteed by the Parent Company. Proceeds received upon issuance, net of discount to par of $3.3 million and underwriting discount and other offering expenses of $5.5 million, totaled $591.2 million.

The indenture under which the 2027 Senior Notes and the 2026 Senior Notes were issued restricts the ability of the Company and its subsidiaries to incur debt unless the Company and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more than 1.5:1 on all outstanding debt, after giving effect to the incurrence of the debt. The indenture also maintains an $80restricts the ability of the Company and its subsidiaries to incur secured debt unless the Company and its consolidated subsidiaries comply with a secured debt leverage ratio not to exceed 40% after giving effect to the incurrence of the debt. The indenture also contains other financial and customary covenants, including a covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Company and its consolidated subsidiaries. At December 31, 2017, the Company was in compliance with such covenants.

On May 17, 2016, the Company entered into two senior unsecured acquisition bridge facilities (the “Bridge Facilities”) totaling $1,675 million with the Company’s third-party advisors to the LS acquisition (see Note 4). In consideration for the bridge financing commitments, the Company paid fees totaling $7.3 million which are included as interest expense – bridge financing commitment fee in the 2016 consolidated statement of operations. The Bridge Facilities commitments were not drawn upon and were terminated on June 29, 2016.  

On July 21, 2016, the Company entered into a $200 million term note maturing September 2013July 21, 2028 bearing interest at a fixed rate of 6.26%,3.67%.

On April 8, 2014, the Company entered into a $20$175 million term note maturing September 2013April 2024 bearing interest at a variablefixed rate equalof 4.533%. The interest rate on the term note increases to LIBOR plus 1.50%, and6.283% if the Company is not rated by at least one rating agency or if the Company’s credit rating is downgraded.

In 2011, the Company entered into a $150$100 million unsecured term note maturing in April 2016August 5, 2021 bearing interest at 6.38% (baseda fixed rate of 5.54%. The interest rate on the Operating Partnership’sterm note increases to 7.29% if the notes are not rated by at least one rating agency, the credit rating at December 31, 2009).

on the notes is downgraded or if the Company’s credit rating is downgraded.

The line of credit and term notes require the Operating PartnershipCompany to meet certain financial covenants, measured on a quarterly basis, including prescribed leverage, fixed charge coverage, minimum net worth, limitations on additional indebtedness and limitations on distributiondividend payouts. At December 31, 2009,2017, the Operating PartnershipCompany was in compliance with its debtsuch covenants. At March 31, 2009, the Operating Partnership had violated the leverage ratio covenant contained in the line of credit and term note agreements. In May 2009, the Operating Partnership obtained a waiver of the violation as of March 31, 2009. The fees paid to obtain the waiver were approximately $0.9 million and are included in interest expense for the year ended December 31, 2009.

     As a result of the debt covenant violation and operating trends, Fitch Ratings downgraded the Operating Partnership’s rating on its revolving credit facility and term notes to non-investment grade in May 2009. In October 2009, Fitch Ratings adjusted the Operating Partnership’s rating on its revolving credit facility and term notes back to investment grade.

We believe that if operating results remain consistent with historical levels and levels of other debt and liabilities remain consistent with amounts outstanding at December 31, 20092017, the entire $125 millionavailability on the line of credit could be drawn without violating our debt covenants.

The Company’s fixed rate term notes contain a provision that allows for the noteholders to call the debt upon a change of control of the Company at an amount that includes a make whole premium based on rates in effect on the date of the change of control.

Deferred debt issuance costs and the discount on the outstanding term notes are both presented as reductions of term notes in the accompanying consolidated balance sheets at December 31, 2017 and December 31, 2016. Amortization expense related to these deferred debt issuance costs, which exclude costs related to the Bridge Facilities, was $3.0 million, $1.7 million and $1.2 million for the periods ended December 31, 2017, 2016 and 2015, respectively, and is included in interest expense in the consolidated statements of operations.


43

8.6. MORTGAGES PAYABLE AND OTHER DEBT DISCLOSURES
MATURITIES

Mortgages payable at December 31, 20092017 and December 31, 20082016 consist of the following:

(dollars in thousands)

 

December 31,

2017

 

 

December 31,

2016

 

4.98% mortgage note due January 1, 2021 secured by one self-

   storage facility with an aggregate net book value of $9.6 million,

   principal and interest paid monthly (effective interest rate 5.22%)

 

$

2,916

 

 

$

2,966

 

4.065% mortgage note due April 1, 2023, secured by one self-

   storage facility with an aggregate net book value of $7.6 million,

   principal and interest paid monthly (effective interest rate 4.30%)

 

 

4,119

 

 

 

4,207

 

5.26% mortgage note due November 1, 2023, secured by one self-

   storage facility with an aggregate net book value of $8.0 million,

   principal and interest paid monthly (effective interest rate 5.56%)

 

 

3,939

 

 

 

4,002

 

5.99% mortgage note due May 1, 2026, secured by one self-

   storage facility with an aggregate net book value of $6.6 million,

   principal and interest paid monthly (effective interest rate 6.23%)

 

 

1,700

 

 

 

1,852

 

Total mortgages payable

 

$

12,674

 

 

$

13,027

 

         
  December 31,  December 31, 
(dollars in thousands) 2009  2008 
7.80% mortgage note due December 2011, secured by 11 self-storage facilities (Locke Sovran I) with an aggregate net book value of $42.7 million, principal and interest paid monthly $28,447  $29,033 
7.19% mortgage note due March 2012, secured by 27 self-storage facilities (Locke Sovran II) with an aggregate net book value of $80.3 million, principal and interest paid monthly  41,475   42,603 
7.25% mortgage note due December 2011, secured by 1 self-storage facility with an aggregate net book value of $5.7 million, principal and interest paid monthly. Estimated market rate at time of acquisition 5.40%  3,369   3,510 
6.76% mortgage note due September 2013, secured by 1 self-storage facility with an aggregate net book value of $2.0 million, principal and interest paid monthly  977   1,000 
6.35% mortgage note due March 2014, secured by 1 self-storage facility with an aggregate net book value of $3.7 million, principal and interest paid monthly  1,072   1,098 
5.55% mortgage notes secured by 8 self storage facilities paid December 1, 2009  —   25,930 
7.50% mortgage notes due August 2011, secured by 3 self-storage facilities with an aggregate net book value of $14.0 million, principal and interest paid monthly. Estimated market rate at time of acquisition 6.42%  5,879   6,087 
       
Total mortgages payable $81,219  $109,261 
       
     The Operating Partnership assumed the 7.25%, 6.76%, 6.35%, and 7.50% mortgage notes in connection with the acquisitions of storage facilities in 2005 and 2006. The 7.25% and 7.50% mortgages were recorded at their estimated fair value based upon the estimated market rates at the time of the acquisitions ranging from 5.40% to 6.42%. The carrying value of these two mortgages approximates the actual principal balance of the mortgages payable. An immaterial premium exists at December 31, 2009, which will be amortized over the remaining term of the mortgages based on the effective interest method.

The table below summarizes the Operating Partnership’sCompany’s debt obligations and interest rate derivatives at December 31, 2009.2017. The estimated fair value of financial instruments is subjective in nature and is dependent on a number of important assumptions, including discount rates and relevant comparable market information associated with each financial instrument. The fair value of the fixed rate term notenotes and mortgage notenotes were estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. These assumptions are considered Level 2 inputs within the fair value hierarchy as described in Note 8. The carrying values of our variable rate debt instruments approximate their fair values as these debt instruments bear interest at current market rates that approximate market participant rates. This is considered a Level 2 input within the fair value hierarchy. The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Accordingly, the estimates presented below are not necessarily indicative of the amounts the Operating PartnershipCompany would realize in a current market exchange.

 

 

 

 

 

 

Expected Maturity Date Including Discount

 

 

 

 

 

(dollars in thousands)

 

2018

 

 

2019

 

 

2020

 

 

2021

 

 

2022

 

 

Thereafter

 

 

Total

 

 

Fair Value

 

Line of credit—variable rate LIBOR +

   1.10% (2.63% at December 31, 2017)

 

 

—

 

 

$

105,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

105,000

 

 

$

105,000

 

Notes Payable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term note—variable rate LIBOR+1.15%

   (2.53% at December 31, 2017)

 

 

—

 

 

 

—

 

 

$

100,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

100,000

 

 

$

100,000

 

Term note—fixed rate 5.54%

 

 

—

 

 

 

—

 

 

 

—

 

 

$

100,000

 

 

 

—

 

 

 

—

 

 

$

100,000

 

 

$

109,192

 

Term note—fixed rate 4.533%

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

175,000

 

 

$

175,000

 

 

$

181,510

 

Term note—fixed rate 3.50%

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

600,000

 

 

$

600,000

 

 

$

585,092

 

Term note—fixed rate 3.875%

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

450,000

 

 

$

450,000

 

 

$

449,076

 

Term note—fixed rate 3.67%

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

200,000

 

 

$

200,000

 

 

$

192,447

 

Mortgage note—fixed rate 4.98%

 

$

53

 

 

$

56

 

 

$

59

 

 

$

2,748

 

 

 

—

 

 

 

—

 

 

$

2,916

 

 

$

3,007

 

Mortgage note—fixed rate 4.065%

 

$

92

 

 

$

96

 

 

$

99

 

 

$

104

 

 

$

108

 

 

$

3,620

 

 

$

4,119

 

 

$

4,112

 

Mortgage note—fixed rate 5.26%

 

$

67

 

 

$

71

 

 

$

74

 

 

$

78

 

 

$

83

 

 

$

3,566

 

 

$

3,939

 

 

$

4,169

 

Mortgage note—fixed rate 5.99%

 

$

160

 

 

$

170

 

 

$

181

 

 

$

192

 

 

$

203

 

 

$

794

 

 

$

1,700

 

 

$

1,822

 

Total

 

$

372

 

 

$

105,393

 

 

$

100,413

 

 

$

103,122

 

 

$

394

 

 

$

1,432,980

 

 

$

1,742,674

 

 

 

 

 

44

                                 
  Expected Maturity Date Including Discount     Fair
(dollars in thousands) 2010 2011 2012 2013 2014 Thereafter Total Value
Line of credit — variable rate LIBOR + 1.375 (1.61% at December 31, 2009)  —   —   —   —   —   —   —   — 
                                 
Notes Payable:                                
Term note — variable rate LIBOR+1.625% (1.86% at December 31, 2009)  —   —  $150,000   —   —   —  $150,000  $150,000 
Term note — variable rate LIBOR+1.50% (2.23% at December 31, 2009)  —   —   —  $20,000   —   —  $20,000  $20,000 
Term note — fixed rate 6.26%  —   —   —  $80,000   —   —  $80,000  $76,958 
Term note — fixed rate 6.38%  —   —   —   —   —  $150,000  $150,000  $136,630 
                                 
Mortgage note — fixed rate 7.80% $630  $27,817   —   —   —   —  $28,447  $29,454 
Mortgage note — fixed rate 7.19% $1,211  $1,301  $38,963   —   —   —  $41,475  $43,133 
Mortgage note — fixed rate 7.25% $149  $3,220   —   —   —   —  $3,369  $3,385 
Mortgage note — fixed rate 6.76% $25  $27  $29  $896   —   —  $977  $1,011 
Mortgage note — fixed rate 6.35% $28  $30  $31  $34  $949   —  $1,072  $1,059 
Mortgage notes — fixed rate 7.50% $222  $5,657   —   —   —   —  $5,879  $6,003 
                       ��         
Interest rate derivatives — liability  —   —   —   —   —   —   —  $11,524 
9.7. DERIVATIVE FINANCIAL INSTRUMENTS

Interest rate swaps are used to adjust the proportion of total debt that is subject to variable interest rates. The interest rate swaps require the Operating PartnershipCompany to pay an amount equal to a specific fixed rate of interest times a notional principal amount and to receive in return an amount equal to a variable rate of interest times the same notional amount. The notional amounts are not exchanged. Forward starting interest rate swaps have also been used by the Company to hedge the risk of changes in the interest-related cash outflows associated with the potential issuance of long-term debt. No other cash payments are made unless the contract is terminated prior to its maturity, in which case the contract would likely be settled for an amount equal to its fair value. The Operating PartnershipCompany enters into interest rate swaps with a number of major financial institutions to minimize counterparty credit risk.


     The interest

Interest rate swaps qualify and are designated as hedges of the amount of future cash flows related to interest payments on variable rate debt. Therefore, the interest rate swaps are recorded in the consolidated balance sheetsheets at fair value and the related gains or losses are deferred in shareholders’ equity or partners’ capital as Accumulated Other Comprehensive IncomeLoss (“AOCI”AOCL”). These deferred gains and losses are amortized intorecognized in interest expense during the period or periods in which the related interest payments affect earnings. However, to the extent that the interest rate swaps are not perfectly effective in offsetting the change in value of the interest payments being hedged, the ineffective portion of these contracts is recognized in earnings immediately. Ineffectiveness was immaterialde minimis in 2009, 2008,2017, 2016, and 2007.

2015.

The Operating PartnershipCompany has threeone interest rate swap agreementsagreement in effect at December 31, 20092017 as detailed below to effectively convert a total of $170$100 million of variable-rate debt to fixed-rate debt.

Notional Amount

Effective Date

Expiration Date

Fixed

Rate Paid

Floating Rate

Received

$100 Million

FixedFloating Rate
Notional AmountEffective DateExpiration DateRate PaidReceived
$20 Million9/4/05

9/4/13

9/4/18

4.4350

%

1.3710

6 month LIBOR
$50 Million

%

7/1/086/25/124.2825%

1 month LIBOR

$100 Million7/1/086/22/124.2965%1 month LIBOR

     The

In the fourth quarter of 2017, the Company terminated hedges and settled the interest rate swap agreements on $225 million of the Company’s variable rate debt in connection with repayment of the related variable rate term notes. The Company settled these interest rate swap agreements for a total of $9.6 million which is included in interest expense in the 2017 consolidated statement of operations. As a result of the termination, no gains or losses related to the terminated interest rate swaps are included in AOCL at December 31, 2017.

In the fourth quarter of 2015, the Company entered into forward starting interest rate swap agreements with a total notional value of $50 million. In the first quarter of 2016, the Company entered into additional forward starting interest rate swap agreements with a total notional value of $100 million. These forward starting interest rate swap agreements were entered into to hedge the risk of changes in the interest-related cash flows associated with the potential issuance of fixed rate long-term debt. In conjunction with the issuance of the 2026 Senior Notes (see Note 5), the Company terminated these hedges and settled the forward starting swap agreements for approximately $9.2 million. The $9.2 million has been deferred in AOCL and is being amortized as additional interest expense over the ten-year term of the 2026 Senior Notes or until such time as interest payments on the 2026 Senior Notes are no longer probable. Consistent with the Company’s accounting policy, the cash outflow related to the settlement of the forward starting swap agreements is reflected as a financing activity in the 2016 consolidated statement of cash flows.

The remaining interest rate swap agreement is the only derivative instruments,instrument, as defined by FASB ASC Topic 815

45

“ Derivatives and Hedging ”, held by the Operating Partnership.Company at December 31, 2017. During 2009, 2008,2017, 2016, and 2007,2015, the net reclassification from AOCIAOCL to interest expense was $9.7$12.3 million, $2.6$4.6 million, and ($1.1)$5.2 million, respectively, based on payments (receipts) made or received under the swap agreements. Based on current interest rates, the Operating PartnershipCompany estimates that payments received under the interest rate swaps willin 2018 would be approximately $7.0 million in 2010.de minimis. Payments made or received under the interest rate swap agreements will be reclassified to interest expense as settlements occur. The fair value of the swap agreements, including accrued interest, was a liabilityan asset of $11.5 million and $25.5$0.2 million at December 31, 2009,2017 and 2008 respectively.
         
  Jan. 1, 2009  Jan. 1, 2008 
  to  to 
(dollars in thousands) Dec. 31, 2009  Dec. 31, 2008 
Adjustments to interest expense:        
Realized loss reclassified from accumulated other comprehensive loss to interest expense $(9,687) $(2,601)
         
Adjustments to other comprehensive income (loss):        
Realized loss reclassified to interest expense for 2009 and 2008, respectively  9,687   2,601 
Unrealized gain (loss) from changes in the fair value of the effective portion of the interest rate swaps for 2009 and 2008, respectively  4,210   (26,395)
       
Gain (loss) included in other comprehensive income (loss) $13,897  $(23,794)
       
     In October 2009, the Operating Partnership prepaid $100a liability of $13.0 million in variable rate term notes. In October 2009, the Operating Partnership also terminated twoat December 31, 2016.

The Company’s agreement with its interest rate swap agreements that were designated as hedgescounterparty contains provisions pursuant to which the Company could be declared in default of forecastedits derivative obligation, if any, if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender. The interest paymentsrate swap agreement also incorporates other loan covenants of the Company. Failure to comply with the loan covenant provisions would result in the Company being in default on variable rate debt. Realized losses recognized in interest expense in 2009 include $8.4 million in costs to terminate the interest rate swaps. swap agreement. As of December 31, 2017, the Company had not posted any collateral related to the interest rate swap agreements.

The cost approximatedchanges in AOCL for the fair market values of the swaps at the date of termination.years ended December 31, 2017, 2016, and 2015 are summarized as follows:

(dollars in thousands)

 

Jan. 1, 2017

to

Dec. 31, 2017

 

 

Jan. 1, 2016

to

Dec. 31, 2016

 

 

Jan. 1, 2015

to

Dec. 31, 2015

 

Accumulated other comprehensive loss beginning of period

 

$

(21,475

)

 

$

(14,415

)

 

$

(13,005

)

Realized loss reclassified from accumulated other

   comprehensive loss to interest expense

 

 

13,185

 

 

 

5,044

 

 

 

5,229

 

Unrealized gain (loss) from changes in the fair value of the

   effective portion of the interest rate swaps

 

 

703

 

 

 

(12,104

)

 

 

(6,639

)

Gain (loss) included in other comprehensive loss

 

 

13,888

 

 

 

(7,060

)

 

 

(1,410

)

Accumulated other comprehensive loss end of period

 

$

(7,587

)

 

$

(21,475

)

 

$

(14,415

)

10.

8. FAIR VALUE MEASUREMENTS

     In September 2006,

The Company applies the FASB issued additional accounting guidance underprovisions of ASC Topic 820 “Fair Value Measurements” through the issuance of SFAS No. 157, “Fair Value Measurements,” (“SFAS 157”). The additional guidance defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. This additional guidance applies under other codification standards that require or permit fair value measurements. The additional guidance indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. FASB ASC Topic 820 defines fair value based upon an exit price model.

     In 2008 and 2009, the FASB issued additional guidance under ASC Topic 820 through the issuance of FASB Staff Positions (FSP) 157-1, 157-2, and 157-3. FSP 157-1 provides additional guidance under ASC Topic 820 to exclude FASB ASC Topic 840, “LeasesDisclosures” and its related interpretive accounting guidance that address leasing transactions, while FSP 157-2 delays the effective date of the application of the fair value guidelines added to FASB ASC Topic 820 through the issuance of SFAS 157 to fiscal years beginning after November 15, 2008 for all nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. FSP 157-3 addresses considerations in determining the fair value of aits financial asset when the market for that asset is not active.
     We adopted, as of January 1, 2008, the additional guidance in FASBand nonfinancial assets and liabilities. ASC Topic 820 through the issuance of SFAS 157, with the exception of the application of the statement to non-recurring nonfinancial assets and nonfinancial liabilities. We applied the provisions of the additional guidance issued in SFAS 157 in determining the fair value of our nonfinancial assets and nonfinancial liabilities on a nonrecurring basis effective January 1, 2009. Assets that are measured on a nonrecurring basis include those measured at fair value in a business combination accounted for under the provisions of the updated codification standard, as well as investments in storage facilities in circumstances when we determine that those assets are impaired under the provisions of FASB ASC Topic 360-10-35, “Property, Plant and Equipment — Subsequent Measurement”. No non-recurring fair value measurements

46

were made during the year ended December 31, 2009.
     FASB ASC Topic 820, through the additional guidance provided by SFAS 157, establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.corroboration. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Refer to Note 6 for presentation of the fair values of debt obligations which are disclosed at fair value on a recurring basis.

The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2009 (in2017 and December 31, 2016 (dollars in thousands):

 

 

Asset

(Liability)

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps

 

$

205

 

 

 

—

 

 

$

205

 

 

 

—

 

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps

 

$

(13,015

)

 

 

—

 

 

$

(13,015

)

 

 

—

 

                 
  Asset      
  (Liability) Level 1 Level 2 Level 3
Interest rate swaps  (11,524)  —   (11,524)  — 

Interest rate swaps are over the counter securities with no quoted readily available Level 1 inputs, and therefore are measured at fair value using inputs that are directly observable in active markets and are classified within Level 2 of the valuation hierarchy, using the income approach.

11.

During 2016, assets and liabilities measured at fair value on a non-recurring basis included the assets acquired and liabilities assumed in connection with the acquisition of storage facilities accounted for as business combinations (see note 4), including the LS acquisition. To determine the fair value of land, the Company used prices per acre derived from observed transactions involving comparable land in similar locations, which is considered a Level 2 input. To determine the fair value of buildings, equipment and improvements, the Company used current replacement cost based on information derived from construction industry data by geographic region which is considered a Level 2 input. The replacement cost is then adjusted for the age, condition, and economic obsolescence associated with these assets, which are considered Level 3 inputs. The fair value of in-place customer leases is based on the rent lost due to the amount of time required to replace existing customers and the cost to replace in-place tenants which are based on the Company’s historical experience with turnover at its facilities and on market rental rates and estimated downtime required to replace the in-place leases, all of which are Level 3 inputs. The average downtime is based upon estimated demand information including the number of potential customers exhibited in historical property interest data. The fair value of trade names is based on royalty payments avoided had the trade name been owned by a third party which is determined using market royalty rates. Other assets acquired and liabilities assumed in the acquisitions consist primarily of prepaid or accrued real estate taxes and deferred revenues from advance monthly rentals paid by customers. The fair values of these assets and liabilities are based on their carrying values as they typically turn over within one year from the acquisition date and these are Level 3 inputs. There were no acquisitions made in 2017 that were accounted for as business combinations.

9. STOCK OPTIONS AND NON-VESTED STOCK

BASED COMPENSATION

The Company established the 20052015 Award and Option Plan (the “Plan”“2015 Plan”) which replaced the expired 19952005 Award and Option Plan for the purpose of attracting and retaining the Company’s executive officers and other key employees. 1,500,000employees, such plans being the “Plans”. There were 561,000 shares were authorized for issuance under the 2015 Plan. The optionsOptions granted under the Plans vest ratably over four and eight years, and must be exercised within ten years from the date of grant. The exercise price for qualified incentive stock options must be at least equal to the fair market value of the common shares at the date of grant. As of December 31, 2009,2017, options for 362,46376,106 shares were outstanding under the Plans and options for 998,330345,383 shares of common stock were available for future issuance.

The Company may also grant other stock-based awards under the 2015 Plan, including restricted stock and performance-based awards.

The Company also established the 2009 Outside Directors’ Stock Option and Award Plan (the Non-employee Plan)“Non-employee Plan”) which replaced the 1995 Outside Directors’ Stock Option Plan for the purpose of attracting and retaining the services of experienced and knowledgeable outside directors. ThePrior to 2016, the Non-employee Plan providesprovided for the initial granting of options to purchase 3,500 shares of common stock and for the annual granting of options to purchase 2,000 shares of common stock to each eligible director. Such options vest over a one-year period for initial awards and immediately upon subsequent grants. The issuance of stock options to directors was discontinued in 2016. In addition, each outside director receives non-vested shares annually equal to 80% of the annual fees paid to them. During the restriction period, the non-vested shares may not be sold, transferred, or otherwise encumbered. The holder of the non-vested shares has all rights of a holder of common shares, including the right to vote and receive dividends. During 2009, 3,4562017, 3,145 non-vested shares were issued to outside directors. Such non-vested shares vest over a one-year period. The total shares reserved under the Non-employee Plan is 150,000. The exercise price for options granted under the Non-employee Plan is equal to the fair market value at the date of grant. As of December 31, 2009,2017, options for 35,00518,500 common shares and 3,145 of non-vested shares of 12,161 were outstanding under the Non-employee Plans andPlans. As of December 31, 2017 options for 137,04467,871 shares of common stock were available for future issuance.


47

A summary of the Company’s stock option activity and related information for the years ended December 31 follows:

 

 

2017

 

 

2016

 

 

2015

 

 

 

Options

 

 

Weighted

average

exercise

price

 

 

Options

 

 

Weighted

average

exercise

price

 

 

Options

 

 

Weighted

average

exercise

price

 

Outstanding at beginning of year:

 

 

95,706

 

 

$

52.08

 

 

 

95,706

 

 

$

52.08

 

 

 

115,606

 

 

$

48.54

 

Granted

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

11,000

 

 

 

91.58

 

Exercised

 

 

(1,100

)

 

 

39.00

 

 

 

—

 

 

 

—

 

 

 

(30,900

)

 

 

52.87

 

Adjusted / (forfeited)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Outstanding at end of year

 

 

94,606

 

 

$

52.24

 

 

 

95,706

 

 

$

52.08

 

 

 

95,706

 

 

$

52.08

 

Exercisable at end of year

 

 

93,106

 

 

$

51.85

 

 

 

92,706

 

 

$

51.31

 

 

 

63,815

 

 

$

48.73

 

                         
  2009  2008  2007 
      Weighted      Weighted      Weighted 
      average      average      average 
      exercise      exercise      exercise 
  Options  price  Options  price  Options  price 
Outstanding at beginning of year:  360,688  $43.06   168,125  $42.54   113,225  $35.77 
                         
Granted  51,500   23.99   201,163   43.12   74,000   52.49 
Exercised  (4,225)  21.46   (2,600)  27.78   (13,100)  32.44 
Forfeited  (10,495)  44.53   (6,000)  36.86   (6,000)  59.62 
                   
                         
Outstanding at end of year  397,468  $40.78   360,688  $43.06   168,125  $42.54 
                         
Exercisable at end of year  159,701  $40.71   118,025  $38.84   82,625  $34.45 

A summary of the Company’s stock options outstanding at December 31, 20092017 follows:

 

 

Outstanding

 

 

Exercisable

 

Exercise Price Range

 

Options

 

 

Weighted

average

exercise

price

 

 

Options

 

 

Weighted

average

exercise

price

 

$30.00 – 39.99

 

 

500

 

 

$

35.73

 

 

 

500

 

 

$

35.73

 

$40.00 – 69.99

 

 

76,606

 

 

$

44.68

 

 

 

76,606

 

 

$

44.68

 

$70.00 – 91.58

 

 

17,500

 

 

$

85.78

 

 

 

16,000

 

 

$

86.71

 

Total

 

 

94,606

 

 

$

52.24

 

 

 

93,106

 

 

$

51.85

 

Intrinsic value of outstanding stock options at December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

$

3,512,314

 

Intrinsic value of exercisable stock options at December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

$

3,492,589

 

                 
  Outstanding  Exercisable 
      Weighted      Weighted 
      average      average 
      exercise      exercise 
Exercise Price Range Options  price  Options  price 
$20.375 — 29.99  72,750  $22.35   33,250  $21.88 
$30.00 — 39.99  37,050  $35.05   22,050  $34.87 
$40.00 — 57.79  287,668  $46.18   104,401  $47.94 
             
Total  397,468  $40.78   159,701  $40.71 
                 
Intrinsic value of outstanding stock options at December 31, 2009             $1,034,302 
Intrinsic value of exercisable stock options at December 31, 2009             $505,412 

The intrinsic value of stock options exercised during the years ended December 31, 2009, 2008,2017, 2016, and 2007, were $50,188, $37,691,2015 was $0.1 million, $0, and $346,306$1.4 million, respectively.

Proceeds from stock options exercised during the years ended December 31, 2017, 2016, and 2015 amounted to $0.1 million, $0, and $1.6 million, respectively.

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock at December 31, 2009,2017, or the price on the date of exercise for those exercised during the year. As of December 31, 2009,2017, there was approximately $1.0 million$7,000 of total unrecognized compensation cost related to non-vested share-basedstock option compensation arrangements granted under our stock award plans. That cost is expected to be recognized over a weighted-average period of approximately 4.60.5 years. The weighted average remaining contractual life of all options is 7.41.9 years, and for exercisable options is 5.81.8 years.

Non-vested Stock

stock

The Company has also issued 348,732 shares of non-vested stock to employees which vest over twoone to nine year periods. During the restriction period, the non-vested shares may not be sold, transferred, or otherwise encumbered. The holder of the non-vested shares has all rights of a holder of common shares, including the right to vote and receive dividends. For issuances of non-vested stock during the year ended December 31, 2009,2017, the fair market value of the non-vested stock on the date of grant ranged from $21.82$74.36 to $35.15.$89.07. During 2009, 59,5902017, 51,276 shares of non-vested stock were issued to employees and directors with an aggregate fair value of $1.8$4.4 million. The Company charges additional paid-in capital for the marketfair value of shares as they are issued. The unearned portion is then amortized and chargedratably to expense over the vesting period. The Company uses the average of the high and

48

low price of its common stock on the date the award is granted as the fair value for non-vested stock awards.awards that do not have a market condition.


A summary of the status of unvested shares of stock issued to employees and directors as of and during the years ended December 31 follows:

 

 

2017

 

 

2016

 

 

2015

 

 

 

Non-vested

Shares

 

 

Weighted

average

grant date

fair value

 

 

Non-vested

Shares

 

 

Weighted

average

grant date

fair value

 

 

Non-vested

Shares

 

 

Weighted

average

grant date

fair value

 

Unvested at beginning of year:

 

 

258,163

 

 

$

58.89

 

 

 

305,520

 

 

$

59.09

 

 

 

310,463

 

 

$

51.93

 

Granted

 

 

51,276

 

 

 

85.17

 

 

 

23,405

 

 

 

89.30

 

 

 

64,665

 

 

 

94.74

 

Vested

 

 

(96,615

)

 

 

58.95

 

 

 

(70,762

)

 

 

69.82

 

 

 

(69,187

)

 

 

60.28

 

Forfeited

 

 

(42,015

)

 

 

38.53

 

 

 

—

 

 

 

—

 

 

 

(421

)

 

 

76.07

 

Unvested at end of year

 

 

170,809

 

 

$

71.75

 

 

 

258,163

 

 

$

58.89

 

 

 

305,520

 

 

$

59.09

 

                         
  2009  2008  2007 
      Weighted      Weighted      Weighted 
      average     average  Non-  average 
  Non-vested  grant date fair  Non-vested  grant date fair  vested  grant date fair 
  Shares  value  Shares  value  Shares  value 
Unvested at beginning of year:  130,807  $44.79   115,896  $45.54   96,453  $40.21 
                         
Granted  59,590   29.70   45,713   41.50   43,989   53.79 
Vested  (35,349)  41.25   (30,802)  42.71   (24,546)  39.39 
Forfeited  (455)  43.95   —   —   —   — 
                   
                         
Unvested at end of year  154,593  $39.79   130,807  $44.79   115,896  $45.54 

Compensation expense of $1.4$7.1 million, $1.4$7.2 million, and $1.2$6.3 million was recognized for the vested portion of non-vested stock grants in 2009, 20082017, 2016, and 2007,2015, respectively. The fair value of non-vested stock that vested during 2009, 20082017, 2016, and 20072015 was $1.5$5.7 million, $1.3$4.9 million, and $1.0$4.2 million, respectively. The total unrecognized compensation cost related to non-vested stock was $5.2$8.2 million at December 31, 2009,2017, and the remaining weighted-average period over which this expense will be recognized was 5.64.2 years.

12.

Performance-based awards

During 2017, 2016 and 2015, the Company granted performance-based awards that entitle the recipients to earn up to 48,762, 37,082 and 42,538 shares, respectively, if certain performance criteria are achieved over a three-year period. The actual number of shares to be issued will be determined at the end of a three year period, and no performance-based shares were issued in 2017, 2016 or 2015. The performance-based awards granted are based upon the Company’s performance over a three-year period depending on the Company’s total shareholder return relative to a group of peer companies. Performance based awards are recognized as compensation expense based on the fair value on the date of grant, the number of shares ultimately expected to vest and the vesting period. For accounting purposes, the performance shares are considered to have a market condition. The effect of the market condition is reflected in the grant date fair value of the award and thus, compensation expense is recognized on this type of award provided that the requisite service is rendered (regardless of whether the market condition is achieved). The Company estimated the fair value of each performance-based award granted under the Plans on the date of grant using a Monte Carlo simulation that uses the assumptions noted in Note 2.

During 2017, compensation expense of $2.6 million (included in the $7.1 million discussed above) was recognized for performance awards granted in 2017 and prior. The total unrecognized compensation cost related to non-vested performance awards was $3.0 million at December 31, 2017 and the weighted-average period over which this expense will be recognized is 1.9 years.

Deferred compensation plan for directors

Under the Deferred Compensation Plan for Directors, non-employee Directors may defer all or part of their Directors’ fees that are otherwise payable in cash. Directors’ fees that are deferred under this plan are credited to each Directors’ account under the plan in the form of Units. The number of Units credited is determined by dividing the amount of Directors’ fees deferred by the closing price of the Company’s Common Stock on the New York Stock Exchange on the day immediately preceding the day upon which Directors’ fees otherwise would be paid by the Company. A Director is credited with additional Units for dividends on the shares of Common Stock represented by Units in such Directors’ Account. A Director may elect to receive the shares in a lump sum on a date specified by the Director or in quarterly or annual installments over a specified period and commencing on a specified date. The Directors may not elect to receive cash in lieu of shares. Under this plan there were a total of 21,540 units outstanding at December 31, 2017. Fees that were earned and credited to Directors’ accounts are recorded as compensation expense and totaled $0.1 million annually in each of 2016 and 2015. No fees were elected to be deferred by any non-employee Directors in 2017.

10. RETIREMENT PLAN

Employees of the Operating PartnershipCompany qualifying under certain age and service requirements are eligible to be a participant in a 401(k) Plan. The Operating Partnership contributesIn 2015, the Company contributed to the Plan at the rate of 10%25% of the first 4% of gross wages that the employee contributes. Beginning on January 1, 2016, the Company contributes to the Plan at the rate of 33% of the first 5% of gross wages that the employee contributes. Total expense to the Operating PartnershipCompany was approximately $114,000, $284,000,$703,000, $505,000, and $256,000$276,000 for the years ended December 31, 2009, 20082017, 2016, and 2007,2015, respectively.


13.

11. INVESTMENT IN JOINT VENTURES

     The Operating Partnership has a 20% ownership interest in Sovran HHF Storage Holdings LLC (“Sovran HHF”), a joint venture that was formed in May 2008 to acquire self-storage properties that will be managed by the Operating Partnership. The carrying value

A summary of the Operating Partnership’s investment at December 31, 2009 was $19.9 million. Twenty five properties were acquired by Sovran HHFCompany’s unconsolidated joint ventures is as of December 31, 2008 for approximately $171.5 million. In 2008, the Operating Partnership contributed $18.6follows:

Venture

 

Number of

Properties

 

 

Company

common

ownership

interest

 

 

Carrying value

of investment

at Dec. 31, 2017

 

Carrying value

of investment

at Dec. 31, 2016

Sovran HHF Storage Holdings LLC (“Sovran HHF”)1

 

 

57

 

 

20%

 

 

$85.1 million

 

$43.8 million

Sovran HHF Storage Holdings II LLC (“Sovran HHF II”)2

 

 

30

 

 

15%

 

 

$13.3 million

 

$13.5 million

191 III Holdings LLC (“191 III”)3

 

 

6

 

 

20%

 

 

$9.4  million

 

$0.7  million

Life Storage-SERS Storage LLC (“SERS”)4

 

 

3

 

 

20%

 

 

$3.6  million

 

N/A

Iskalo Office Holdings, LLC (“Iskalo”)5

 

N/A

 

 

49%

 

 

($0.4  million)

 

($0.4  million)

Urban Box Coralway Storage, LLC (“Urban Box”)6

 

 

1

 

 

85%

 

 

$4.1  million

 

$4.1  million

SNL/Orix 1200 McDonald Ave., LLC (“McDonald”)7

 

 

1

 

 

5%

 

 

$2.7  million

 

$2.7  million

SNL Orix Merrick, LLC (“Merrick”)8

 

 

1

 

 

5%

 

 

$2.5   million

 

$2.5   million

Review Avenue Partners, LLC (“RAP”)9

 

 

1

 

 

40%

 

 

$11.5 million

 

N/A

N 32nd Street Self Storage, LLC (“N32”)10

 

 

1

 

 

46%

 

 

$1.3  million

 

N/A

1

Sovran HHF owns self-storage facilities in Arizona (11), Colorado (4), Florida (3), Georgia (1), Kentucky (2), Nevada (5), New Jersey (2), Ohio (6), Pennsylvania (1), Tennessee (2) and Texas (20). In June 2017, Sovran HHF acquired 18 self-storage facilities for $330 million in Arizona, Nevada and Tennessee. In connection with this acquisition, Sovran HHF entered into $135 million of mortgage debt which is secured by 16 of the self-storage facilities acquired. During the year ended December 31, 2017, the Company contributed $39.6 million as its share of capital to fund the acquisition, $3.6 million to fund the repayment of certain mortgages held by the joint venture, and an additional $0.1 million to fund capital projects. During the year ended December 31, 2017, the Company received $4.5 million of distributions from Sovran HHF. As of December 31, 2017, the carrying value of the Company’s investment in Sovran HHF exceeds its share of the underlying equity in net assets of Sovran HHF by approximately $1.7 million as a result of the capitalization of certain acquisition related costs in 2008. This difference is included in the carrying value of the investment.

2

Sovran HHF II owns self-storage facilities in New Jersey (17), Pennsylvania (3), and Texas (10). During the year ended December 31, 2017, the Company received $1.7 million of distributions from Sovran HHF II.

3

191 III owns six self-storage facilities in California. During 2017, 191 III acquired these six self-storage facilities for a total of $104.1 million. In connection with the acquisition of these self-storage facilities, 191 III entered into $57.2 million of mortgage debt which is secured by the self-storage facilities acquired. During 2017 and 2016, the Company contributed $9.3 million and $0.7 million, respectively, as its share of capital to fund these acquisitions. During the year ended December 31, 2017, the Company received $0.5 million of distributions from 191 III.

4

In May 2017, the Company executed a joint venture agreement, Life Storage-SERS Storage LLC (“SERS”), with an unrelated third party with the purpose of acquiring and operating self-storage facilities. SERS owns three self-storage facilities in Georgia. During 2017, SERS acquired these three self-storage facilities for a total of $39.1 million. In connection with the acquisition of these self-storage facilities, SERS entered into $22.0 million of mortgage debt which is secured by the self-storage facilities acquired. During 2017, the Company contributed $3.6 million as its share of capital to fund these acquisitions.

5

Iskalo owns the building that houses the Company’s headquarters and other tenants. The Company paid rent to Iskalo of $1.2 million, $1.2 million and $1.1 million during the years ended December 31, 2017, 2016, and 2015, respectively. During the year ended December 31, 2017, the Company received $0.2 million of distributions from Iskalo.

6

Urban Box is currently developing a self-storage facility in Florida.

7

McDonald is currently developing a self-storage facility in New York. During 2016, the Company contributed $0.4 million of common capital and $2.3 million of preferred capital to McDonald as its share of capital to develop the property. McDonald entered into a non-recourse mortgage loan in order to finance the future development costs, with $6.4 million of principal outstanding at December 31, 2017.

8

Merrick owns a self-storage facility in New York. During 2016, the Company contributed $0.4 million of common capital and $2.1 million of preferred capital to Merrick as its share of capital to develop the property. Merrick has entered into a non-recourse mortgage loan with $9.3 million of principal outstanding at December 31, 2017.

9

In January 2017, the Company executed a joint venture agreement, Review Avenue Partners, LLC (“RAP”), with an unrelated third party. The Company contributed $12.5 million of common capital to RAP during the year ended December 31, 2017. RAP is currently operating a self-storage property in New York.

10

In April 2017, the Company executed a joint venture agreement, N 32nd Street Self Storage, LLC (“N32”), with an unrelated third party. The Company contributed $1.3 million of common capital to N32 during the year ended December 31, 2017. N32 is currently developing a self-storage property in Arizona.


Based on the facts and circumstances of each of the Company’s joint ventures, the Company has determined that none of the joint ventures are a variable interest entity (VIE) in accordance with ASC 810, Consolidation. As a result, the Company used the voting model under ASC 810 to determine whether or not to consolidate the joint ventures. Based upon each member’s substantive participation rights over the activities as stipulated in the joint venture as its share of capital required to fund the acquisitions. As of December 31, 2009, the carrying valueagreements, none of the Operating Partnership’s investment in Sovran HHF exceeds its sharejoint ventures are consolidated by the Company. Due to the Company’s significant influence over the operations of each of the underlyingjoint ventures, all joint ventures are accounted for under the equity in net assetsmethod of Sovran HHF by approximately $1.7 million as a resultaccounting.

The carrying values of the capitalization of certain acquisition related costs. This difference is not amortized, it is includedCompany’s investments in the carrying value of the investment, which isjoint ventures are assessed for other-than-temporary impairment on a periodic basis.

     Asbasis and no such impairments have been recorded on any of the Company’s investments in joint ventures.

The Company earns management and/or call center fees ranging from 6% to 7% of joint venture gross revenues as manager of Sovran HHF, HHF II, 191 III, SERS, RAP and Merrick. These fees, which are included in other operating income in the Operating Partnership earns a management and call center feeconsolidated statements of 7% of gross revenues whichoperations, totaled $1.2$6.6 million, $4.9 million and $0.5$4.9 million for 2009in 2017, 2016 and 2008,2015 respectively. The Operating PartnershipCompany will also received an acquisition feeearn management fees upon commencement of 0.5% or $0.7 millionthe operation of purchase price for securing purchases for the joint venture in 2008. storage facilities owned by Urban Box, McDonald, and N32.

The Operating Partnership’sCompany’s share of Sovran HHF’s income for 2009 and 2008 was $0.2 million and $0.1 million, respectively. At December 31, 2009, Sovran HHF owed the Operating Partnership $0.2 million for payments made by the Operating Partnership on behalf of theunconsolidated joint venture.

     The Operating Partnership also has a 49% ownership interest in Iskalo Office Holdings, LLC, which owns the building that houses the Operating Partnership’s headquarters and other tenants. The Operating Partnership’s investment includes a capital contribution of $49. The carrying value of the Operating Partnership’s investment is a

49

liability of $0.5 million at December 31, 2009 and 2008, and is included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets. For the years ended December 31, 2009, 2008 and 2007, the Operating Partnership’s share of Iskalo Office Holdings, LLC’sventures’ income (loss) was $7,000, ($6,000), and $80,000, respectively. The Operating Partnership paid rent to Iskalo Office Holdings, LLC of $608,000, $600,000 and $561,000 in 2009, 2008, and 2007, respectively. Future minimum lease payments under the lease are $0.6 million per year through 2010.is as follows:

(dollars in thousands)

Venture

 

Year Ended

December 31, 2017

 

 

Year Ended

December 31, 2016

 

 

Year Ended

December 31, 2015

 

Sovran HHF

 

$

2,517

 

 

$

2,033

 

 

$

1,953

 

Sovran HHF II

 

 

1,530

 

 

 

1,403

 

 

 

1,263

 

191 III

 

 

13

 

 

 

—

 

 

 

—

 

SERS

 

 

(12

)

 

 

—

 

 

 

—

 

Urban Box

 

 

—

 

 

 

15

 

 

 

—

 

RAP

 

 

(967

)

 

 

—

 

 

 

—

 

Iskalo

 

 

233

 

 

 

214

 

 

 

189

 

 

 

$

3,314

 

 

$

3,665

 

 

$

3,405

 

A summary of the combined unconsolidated joint ventures’ financial statements as of and for the year ended December 31, 20092017 is as follows:

(dollars in thousands)

 

 

 

 

Balance Sheet Data:

 

 

 

 

Investment in storage facilities, net

 

$

1,075,101

 

Investment in office building, net

 

 

4,810

 

Other assets

 

 

16,622

 

Total Assets

 

$

1,096,533

 

Due to the Company

 

$

1,397

 

Mortgages payable

 

 

459,028

 

Other liabilities

 

 

10,721

 

Total Liabilities

 

$

471,146

 

Unaffiliated partners’ equity

 

 

492,332

 

Company equity

 

 

133,055

 

Total Partners’ Equity

 

 

625,387

 

Total Liabilities and Partners’ Equity

 

$

1,096,533

 

Income Statement Data:

 

 

 

 

Total revenues

 

$

96,301

 

Property operating expenses

 

 

(31,008

)

Administrative, management and call center fees

 

 

(7,668

)

Depreciation and amortization of customer list

 

 

(21,165

)

Amortization of financing fees

 

 

(810

)

Income tax expense

 

 

(252

)

Interest expense

 

 

(14,571

)

Net income

 

$

20,827

 

         
  Sovran HHF    
  Storage  Iskalo Office 
(dollars in thousands) Holdings LLC  Holdings, LLC 
Balance Sheet Data:        
Investment in storage facilities, net $168,237  $— 
Investment in office building  —   5,322 
Other assets  3,575   688 
       
Total Assets $171,812  $6,010 
       
         
Due to the Operating Partnership $173  $— 
Mortgages payable  78,512   7,037 
Other liabilities  2,087   224 
       
Total Liabilities  80,772   7,261 
         
Unaffiliated partners’ equity (deficiency)  72,832   (714)
Operating Partnership equity (deficiency)  18,208   (537)
       
Total Liabilities and Partners’ Equity (deficiency) $171,812  $6,010 
       
         
Income Statement Data:        
Total revenues $17,702  $1,129 
Total expenses  16,761   1,115 
       
Net income $941  $14 
       

The Operating PartnershipCompany does not guarantee the debt of Sovran HHF or Iskalo Office Holdings, LLC.any of its equity method investees.


We do not expect to have material future cash outlays relating to these joint ventures outside our share of capital for future acquisitions of properties. A summary of our revenues, expenses and cash flows arising from the off-balance sheet arrangements with unconsolidated joint ventures for the three years ended December 31, 2017 are as follows:

14. PARTNERS’ CAPITAL

 

 

Year ended December 31,

 

(dollars in thousands)

 

2017

 

 

2016

 

 

2015

 

Operating activities

 

 

 

 

 

 

 

 

 

 

 

 

Other operating income (management fees and acquisition fee income)

 

$

8,090

 

 

$

4,891

 

 

$

4,889

 

General and administrative expenses (corporate office rent)

 

 

1,192

 

 

 

1,214

 

 

 

1,053

 

Equity in income of joint ventures

 

 

3,314

 

 

 

3,665

 

 

 

3,405

 

Distributions from unconsolidated joint ventures

 

 

7,055

 

 

 

5,207

 

 

 

4,821

 

Advances to joint ventures

 

 

(174

)

 

 

(294

)

 

 

(346

)

Investing activities

 

 

 

 

 

 

 

 

 

 

 

 

Investment in unconsolidated joint ventures

 

 

(69,911

)

 

 

(6,438

)

 

 

(6,151

)

12. SHAREHOLDERS’ EQUITY

On October 5, 2009,March 3, 2015, the Company completed the public offering of 4,025,0001,380,000 shares of its common stock at $29.75$90.40 per share. Net proceeds to the Operating PartnershipCompany after deducting underwriting discounts and commissions and offering expenses were approximately $114.0$119.5 million.

On January 20, 2016, the Company completed the public offering of 2,645,000 shares of its common stock at $105.75 per share. Net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses were approximately $269.7 million.

On May 25, 2016, the Company completed the public offering of 6,900,000 shares of its common stock at $100.00 per share. Net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses were approximately $665.4 million.

Until May 2017, the Company had maintained a continuous equity offering program (“Equity Program”) with Wells Fargo Securities, LLC, Jefferies LLC (“Jeffries”), SunTrust Robinson Humphrey, Inc., Piper Jaffray & Co. (“Piper”), HSBC Securities (USA) Inc. (“HSBC”), and BB&T Capital Markets, a division of BB&T Securities, LLC, pursuant to which the Company could sell up to $225 million in aggregate offering price of shares of the Company’s common stock. The Equity Program expired in May 2017.

During 2009,2017 and 2016, the Company did not issue any shares of common stock under the Equity Program.

During 2015, the Company issued 1,430,521949,911 shares via its Dividend Reinvestment and Stock Purchase Plan. The Operating Partnership received $32.6 million fromof common stock under the saleEquity Program at a weighted average issue price of such shares. During 2008 and 2007, the Operating Partnership issued 285,308 and 252,816 shares, respectively, via this plan and received$96.80 per share, generating net proceeds of approximately $10.7$90.6 million after deducting $1.1 million of sales commissions paid to Jefferies, Piper, and $12.8HSBC, as well as other expenses of $0.2 million.

On August 2, 2017, the Company’s Board of Directors authorized the repurchase of up to $200 million respectively.of the Company’s outstanding common shares (“Buyback Program”). The Company’s Dividend Reinvestment and Stock Purchase Plan was suspended in November 2009.

     On July 3, 2002,Buyback Program allows the Company entered into an agreement providing for the issuance of 2,800,000 shares of 8.375% Series C Convertible Cumulative Preferred Stock (“Series C Preferred”) in a privately negotiated transaction. The Company immediately issued 1,600,000 shares of the Series C Preferred and issued the remaining 1,200,000 shares on November 27, 2002. The offering price was $25.00 per share resulting in net proceeds for the Series C Preferred and related common stock warrants of $67.9 million after expenses. In 2004, the Company issued 306,748to purchase shares of its common stock in connectionaccordance with applicable securities laws on the conversionopen market, through privately negotiated transactions, or through other methods of 400,000 shares of Series C Preferred Stock into common stock.acquiring shares. The Buyback Program may be suspended or discontinued at any time.  During 2005,2017, the Company issued 920,244 shares of its common stock in connection with a written notice from onerepurchased 112,554 of the holdersCompany’s outstanding common shares for $8.2 million under the Buyback Program, resulting in a weighted average purchase price of $73.16 per share.

In 2013, the Series C Preferred Stock requestingCompany implemented a Dividend Reinvestment Plan. The Company issued 199,809, 133,666 and 151,246 shares under the conversionplan in 2017, 2016, and 2015, respectively. On August 2, 2017, the Company’s Board of 1,200,000 shares of Series C Preferred Stock into common stock. On July 7, 2007, we issued 920,244 shares of our common stock toDirectors suspended the holder of our Series C Preferred Stock upon the holder’s election to convert the remaining 1,200,000 shares of Series C Preferred Stock into common stock.Dividend Reinvestment Plan.


50

15.13. SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of quarterly results of Life Storage, Inc. operations for the years ended December 31, 20092017 and 20082016 (dollars in thousands, except per share data):

 

 

2017 Quarter Ended

 

 

 

Mar. 31

 

 

Jun. 30

 

 

Sept. 30

 

 

Dec. 31

 

Operating revenue

 

$

128,320

 

 

$

132,784

 

 

$

135,568

 

 

$

133,078

 

Net income

 

 

20,525

 

 

 

19,432

 

 

 

35,667

 

 

 

21,185

 

Net income attributable to common shareholders

 

 

20,429

 

 

 

19,355

 

 

 

35,496

 

 

 

21,085

 

Net income per share attributable to common shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.44

 

 

$

0.42

 

 

$

0.76

 

 

$

0.45

 

Diluted

 

$

0.44

 

 

$

0.42

 

 

$

0.76

 

 

$

0.45

 

 

 

2016 Quarter Ended

 

 

 

Mar. 31

 

 

Jun. 30

 

 

Sept. 30

 

 

Dec. 31

 

Operating revenue

 

$

99,124

 

 

$

107,005

 

 

$

127,801

 

 

$

128,678

 

Net income (loss)

 

 

28,230

 

 

 

43,504

 

 

 

(4,969

)

 

 

18,191

 

Net income (loss) attributable to common shareholders

 

 

28,339

 

 

 

43,456

 

 

 

(4,738

)

 

 

18,168

 

Net income (loss) per share attributable to common shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.74

 

 

$

1.04

 

 

$

(0.10

)

 

$

0.39

 

Diluted

 

$

0.73

 

 

$

1.03

 

 

$

(0.10

)

 

$

0.39

 

The following is a summary of quarterly results of Life Storage LP operations for the years ended December 31, 2017 and 2016 (dollars in thousands, except per unit data).:

 

 

2017 Quarter Ended

 

 

 

Mar. 31

 

 

Jun. 30

 

 

Sept. 30

 

 

Dec. 31

 

Operating revenue

 

$

128,320

 

 

$

132,784

 

 

$

135,568

 

 

$

133,078

 

Net income

 

 

20,525

 

 

 

19,432

 

 

 

35,667

 

 

 

21,185

 

Net income attributable to common unitholders

 

 

20,429

 

 

 

19,355

 

 

 

35,496

 

 

 

21,085

 

Net income per unit attributable to common unitholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.44

 

 

$

0.42

 

 

$

0.76

 

 

$

0.45

 

Diluted

 

$

0.44

 

 

$

0.42

 

 

$

0.76

 

 

$

0.45

 

                 
  2009 Quarter Ended
  March 31 June 30 Sept. 30 Dec. 31 (b)
Operating revenue $48,846  $48,097  $49,551  $48,517 
Income (loss) from continuing operations (a) $7,873  $6,436  $8,722  $(593)
(Loss) income from discontinued operations (a) $247  $306  $(752) $(585)
Net Income(Loss) $8,120  $6,742  $7,970  $(1,178)
Net income (loss) attributable to common unitholders $7,780  $6,402  $7,630  $(1,518)
Net Income (Loss) Per Unit Attributable to Common Unitholders                
Basic $0.35  $0.28  $0.32  $(0.06)
Diluted $0.35  $0.28  $0.32  $(0.06)

 

 

2016 Quarter Ended

 

 

 

Mar. 31

 

 

Jun. 30

 

 

Sept. 30

 

 

Dec. 31

 

Operating revenue

 

$

99,124

 

 

$

107,005

 

 

$

127,801

 

 

$

128,678

 

Net income

 

 

28,230

 

 

 

43,504

 

 

 

(4,969

)

 

 

18,191

 

Net income attributable to common unitholders

 

 

28,339

 

 

 

43,456

 

 

 

(4,738

)

 

 

18,168

 

Net income per unit attributable to common unitholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.74

 

 

$

1.04

 

 

$

(0.10

)

 

$

0.39

 

Diluted

 

$

0.73

 

 

$

1.03

 

 

$

(0.10

)

 

$

0.39

 

See note 4 for a discussion of property acquisitions made during 2016 and the depreciation resulting from the change in estimated useful lives of Uncle Bob’s Self Storage ® signage and buildings identified for replacement at certain of the Company’s self-storage facilities. See note 5 for financing transactions entered into in 2017 and 2016.

                 
  2008 Quarter Ended
  March 31 June 30 Sept. 30 Dec. 31
Operating revenue (a) $48,925  $49,421  $51,769  $50,078 
Income from continuing operations (a) $9,271  $10,166  $9,743  $8,623 
Income from discontinued operations (a) $318  $1,000  $308  $254 
Net Income $9,589  $11,166  $10,051  $8,877 
Net income attributable to common unitholders $9,127  $10,745  $9,711  $8,537 
Net Income Per Unit Attributable to Common Unitholders                
Basic $0.41  $0.49  $0.44  $0.38 
Diluted $0.41  $0.48  $0.44  $0.38 

(a)Data as presented in this table differ from the amounts as presented in the Operating Partnership’s quarterly reports due to the impact of discontinued operations accounting with respect to the five properties sold in 2009 and the one property sold in 2008 as described in Note 5.
(b)As discussed in Note 9, in the fourth quarter of 2009 the Operating Partnership recorded $8.4 million in interest expense related to the termination of two interest rate swap agreements.
16.

14. COMMITMENTS AND CONTINGENCIES

The Operating Partnership’sCompany’s current practice is to conduct environmental investigations in connection with property acquisitions. At this time, the Operating PartnershipCompany is not aware of any environmental contamination of any of its facilities that individually or in the aggregate would be material to the Operating Partnership’sCompany’s overall business, financial condition, or results of operations.

Future minimum lease payments on a building lease, the lease of the Company’s headquarters and the lease of a self-storage facility are as follows (dollars in thousands):

Year ending December 31:

 

 

 

 

2018

 

$

2,894

 

2019

 

 

2,788

 

2020

 

 

2,415

 

2021

 

 

2,284

 

2022

 

 

2,284

 

Thereafter

 

 

11,114

 

Total

 

$

23,779

 

At December 31, 2009, we have a contract2017, the Company has signed contracts in place with third party contractors for expansion and enhancements at its existing facilities. The Company expects to pay $32.8 million under these contracts in 2018.

On or about August 25, 2014, a potential buyerputative class action was filed against the Company in the Superior Court of New Jersey Law Division Burlington County. The action seeks to obtain declaratory, injunctive and monetary relief for a class of consumers based upon alleged violations by the Company of various statutory laws. On October 17, 2014, the action was removed from the Superior Court of New Jersey Law Division Burlington County to the United States District Court for the possible saleDistrict of two propertiesNew Jersey. The Company brought a motion to partially dismiss the complaint for approximately $2.4failure to state a claim, and on July 16, 2015, the Company’s motion was granted in part and denied in part. On October 20, 2016, the complaint was amended to add additional claims. The parties have entered into a memorandum of understanding to settle all claims for an aggregate amount of $8.0 million. In February 2018, the motion for the preliminary approval of the proposed class action settlement was granted. The saleaggregate settlement amount of these properties$8.0 million ($6.0 million after considering income tax impact) has been recorded as a liability in the Company’s consolidated balance sheet. A portion of the settlement expense relates to self-storage facilities that are managed by the Company through its taxable REIT subsidiary. There is an income tax impact to the Company on that portion of the settlement expense as a result. The settlement is subject to significant contingencies as of December 31, 2009, includingfinal approval by the potential buyer’s satisfactory completion of an inspection of the properties and the buyer securing funds from its lender to finance the transaction. While there can be no assurances that we will successfully complete the sale of these properties, based upon the status of our dealings with the potential buyer, the sale of these propertiescourt, a decision which is expected to close in March 2010. Should these sales occur, the Operating Partnership would recognize a loss of approximately $0.1 million on the disposal of these properties in the first quarter of 2010.

51

2018.

17.15. SUBSEQUENT EVENTS

On January 4, 2010,3, 2018, the Operating PartnershipCompany declared a quarterly distributiondividend of $0.45$1.00 per common unit.share. The distributiondividend was paid on January 26, 20102018 to unitholdersshareholders of record on January 14, 2010.16, 2018. The total distributiondividend paid amounted to $12.4$46.5 million.


     In January and February 2010, the Operating Partnership entered into contracts for the sale of ten non-strategic properties in North Carolina, Georgia, Michigan, and Virginia for approximately $25.0 million. The sales of these properties are subject to significant contingencies and there is no assurance that the properties will be sold. Should the sales occur, the Operating Partnership would recognize an aggregate gain of approximately $7.7 million.

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

52None.

Item 9A.

Controls and Procedures

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
     None.
Item 9A. Controls and Procedures
(Parent Company)

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

     Our

The Parent Company’s management conducted an evaluation of the effectiveness of the design and operation of ourthe Parent Company’s disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of ourthe Parent Company’s management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, ourthe Parent Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that ourthe Parent Company’s disclosure controls and procedures were effective at December 31, 2009.2017. There have not been changes in the Operating Partnership’sParent Company’s internal controls or in other factors that could significantly affect these controls during the quarter ended December 31, 2009.

2017.

Management’s Report on Life Storage, Inc. Internal Control Over Financial Reporting

     Our management

Management of Life Storage, Inc. (the “Parent Company”) is responsible for establishing and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2009. Internal2017. The Parent Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. OurThe Parent Company’s system of internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Operating Partnership;Parent Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Operating PartnershipParent Company are being made only in accordance with authorizations of management and directors of the company;Parent Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Operating Partnership’sParent Company’s assets that could have a material effect on the financial statements.

     Our

The Parent Company’s management performed an assessment of the effectiveness of ourthe Parent Company’s internal control over financial reporting as of December 31, 20092017 based upon criteria in Internal Control —– Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (''COSO’’(2013 Framework) (“COSO”). Based on our assessment, management determined that ourthe Parent Company’s internal control over financial reporting was effective as of December 31, 20092017 based on the criteria in Internal Control-Integrated Framework issued by COSO.

The effectiveness of the Operating Partnership’sParent Company’s internal control over financial reporting as of December 31, 20092017 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included in Item 9A herein.

/S/ Robert J. Attea

/S/ David L. Rogers

/S/ Andrew J. Gregoire

Robert J. Attea

Chief Executive Officer

David L. Rogers

Chief Financial Officer

53


Report of Independent Registered Public Accounting Firm
The

To the Shareholders and the Board of Directors and Partners of Sovran Acquisition Limited Partnership

Life Storage, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Sovran Acquisition Limited Partnership’sLife Storage, Inc.’s internal control over financial reporting as of December 31, 2009,2017, based on criteria established in Internal Control—Control���Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Sovran Acquisition Limited Partnership’sIn our opinion, Life Storage, Inc. (the Parent Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Parent Company as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and schedule and our report dated February 27, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

The Parent Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Life Storage, Inc. Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’sParent Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Parent Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Buffalo, New York

February 27, 2018


Controls and Procedures (Operating Partnership)

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

The Operating Partnership’s management conducted an evaluation of the effectiveness of the design and operation of the Operating Partnership’s disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of the Operating Partnership’s management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Operating Partnership’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Operating Partnership’s disclosure controls and procedures were effective at December 31, 2017. There have not been changes in the Operating Partnership’s internal controls or in other factors that could significantly affect these controls during the quarter ended December 31, 2017.

Management’s Report on Life Storage LP Internal Control Over Financial Reporting

Management of Life Storage LP (the “Operating Partnership”) is responsible for establishing and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2017. The Operating Partnership’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Operating Partnership’s system of internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Operating Partnership; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Operating Partnership are being made only in accordance with authorizations of management and directors of the Operating Partnership; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Operating Partnership’s assets that could have a material effect on the financial statements.

The Operating Partnership’s management performed an assessment of the effectiveness of the Operating Partnership’s internal control over financial reporting as of December 31, 2017 based upon criteria in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (“COSO”). Based on our assessment, management determined that the Operating Partnership’s internal control over financial reporting was effective as of December 31, 2017 based on the criteria in Internal Control-Integrated Framework issued by COSO.

The effectiveness of the Operating Partnership’s internal control over financial reporting as of December 31, 2017 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included in Item 9A herein.

/S/ David L. Rogers

/S/ Andrew J. Gregoire

Chief Executive Officer

Chief Financial Officer


Report of Independent Registered Public Accounting Firm

To the Partners and the Board of Directors of Life Storage LP

Opinion on Internal Control over Financial Reporting

We have audited Life Storage LP’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Sovran Acquisition Limited PartnershipLife Storage LP (the Operating Partnership) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009,2017, based on the COSO criteria.

We have also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Sovran Acquisition Limitedthe Operating Partnership as of December 31, 20092017 and 2008, and2016, the related consolidated statements of operations, comprehensive income, partners’ capital and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2009 of Sovran Acquisition Limited Partnership2017, and the related notes and schedule and our report dated February 26, 201027, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

The Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Life Storage LP Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Buffalo, New York

February 26, 201027, 2018


Item 9B.

Other Information

54

None.

Part III

Item 10.

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance
     Through Holdings, a wholly-owned subsidiary of the Company and the sole general partner of the Operating Partnership, the Company controls the Operating Partnership. The Board of Directors of Holdings, the members of which are the same as the members of the Board of Directors of the Company, manages the affairs of the Operating Partnership by directing the affairs of the general partner of the Operating Partnership. The Operating Partnership has no directors, or executive officers. Consequently, this information incorporated by reference reflects information with respect to the directors and executive officers of the Company and Holdings.

The information contained in the Parent Company’s Proxy Statement for the 2018 Annual Meeting of Shareholders to be filed with the SEC within 120 days of the Company to be held on May 26, 2010,fiscal year ended December 31, 2017 (“2018 Proxy Statement”), with respect to directors, executive officers, audit committee, and audit committee financial experts of the Company and Section 16(a) beneficial ownership reporting compliance, is incorporated herein by reference in response to this item.

The Operating PartnershipCompany has adopted a code of ethics that applies to all of its directors, officers, and employees. The Operating PartnershipCompany has made the Code of Ethics available on its website at http://www.sovranss.com.www.lifestorage.com.

Item 11.

Executive Compensation

Item 11. Executive Compensation
     Through Holdings, a wholly-owned subsidiary of the Company and the sole general partner of the Operating Partnership, the Company controls the Operating Partnership. The Board of Directors of Holdings, the members of which are the same as the members of the Board of Directors of the Company, manages the affairs of the Operating Partnership by directing the affairs of the general partner of the Operating Partnership. The Directors and Officers of Holdings receive their compensation from the Company and are not separately compensated by Holdings. Consequently, the information incorporated by reference reflects compensation paid to the Directors and executive officers of the Company.

The information required is incorporated by reference to “Executive Compensation” and “Director Compensation” in the Company’s2018 Proxy Statement for the Annual Meeting of Shareholders of the Company to be held on May 26, 2010.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Mattersis incorporated herein by reference.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

     The Operating Partnership has no directors or officers. No director or officer of the Company or Holdings beneficially owns any Units.
     At December 31, 2009, the Company beneficially owns 27,547,027 Units which constitute 98.5% of all outstanding Units. No other person holds more than a 5% beneficial ownership in the Operating Partnership.

The information required herein is incorporated by reference to “Stock Ownership By Directors and Executive Officers” and “Security Ownership of Certain Beneficial Owners” in the 2018 Proxy Statement for the Annual Meeting of Shareholders of the Company to be held on May 26, 2010.

RECENT SALES OF UNREGISTERED SECURITIES
     During 2009, the Operating Partnership issued Units in private placements in reliance on the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, in the amounts and for the consideration set forth below:
is incorporated herein by reference.

Item 13.

–On January 2, 2009, in connection with the Sovran Self Storage, Inc. 2005 Award

Certain Relationships and Option Plan, the Operating Partnership issued 5,000 Units to the Company.Related Transactions, and Director Independence

55

–On January 22, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $525,834 to the Operating Partnership in exchange for 19,306 Units.
–On February 23, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $394,956 to the Operating Partnership in exchange for 17,386 Units.
–On February 25, 2009, in connection with the Sovran Self Storage, Inc. 2005 Award and Option Plan, the Operating Partnership issued 9,482 Units to the Company.
–On March 23, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $371,718 to the Operating Partnership in exchange for 19,379 Units.
–On April 24, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $12,364,541 to the Operating Partnership in exchange for 586,022 Units.
–On May 21, 2009, in connection with the Company’s director’s compensation plan, the Operating Partnership issued 3,456 Units to the Company.
–On May 29, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $2,500,020 to the Operating Partnership in exchange for 106,552 Units.
–On June 19, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $14,100,101 to the Operating Partnership in exchange for 592,098 Units.
–On June 26, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $373,817 to the Operating Partnership in exchange for 16,610 Units.
–On July 27, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $383,354 to the Operating Partnership in exchange for 20,221 Units.
–On August 26, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $386,669 to the Operating Partnership in exchange for 14,172 Units.
–On September 25, 2009, in connection with the Sovran Self Storage, Inc. 2005 Award and Option Plan, the Operating Partnership issued 41,651 Units to the Company.
–On September 28, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $349,316 to the Operating Partnership in exchange for 11,351 Units.
–On October 1, 2009, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 500 Units to the Company for $10,188.
–On October 5, 2009, the Company transferred $113,971,150 to the Operating Partnership in exchange for 4,025,000 Units.
–On October 15, 2009, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan,

56

the Operating Partnership issued 200 Units to the Company for $4,320.
–On October 26, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $472,051 to the Operating Partnership in exchange for 15,602 Units.
–On November 4, 2009, in connection with the Company’s director’s compensation plan, the Operating Partnership issued 11,798 Units to the Company.
–On November 27, 2009, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $377,991 to the Operating Partnership in exchange for 11,822 Units.
–On November 30, 2009, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 750 Units to the Company for $16,200.
–On December 1, 2009, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 1,375 Units to the Company for $29,700.
–On December 14, 2009, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 1,000 Units to the Company for $21,600.
–On December 22, 2009, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 400 Units to the Company for $8,640.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required herein is incorporated by reference to “Certain Transactions” and “Election of Directors—Director Independence” in the Company’s2018 Proxy Statement for the Annual Meeting of Shareholders to be held on May 26, 2010.
Item 14. Principal Accountant Fees and Servicesis incorporated herein by reference.

Item 14.

Principal Accountant Fees and Services

The information required herein is incorporated by reference to “Appointment of Independent Auditor”Registered Public Accounting Firm” in the Company’s2018 Proxy Statement for the Annual Meeting of Shareholders to be held on May 26, 2010.and is incorporated herein by reference.


Part IV
Part IV

Item 15.

Exhibits, Financial Statement Schedules

Item 15. Exhibits, Financial Statement Schedules
     (a) 

(a)

Documents filed as part of this Annual Report on Form 10-K:

1.

The following consolidated financial statements of Sovran Acquisition Limited PartnershipLife Storage, Inc. are included in Item 8.

(i)

Consolidated Balance Sheets as of December 31, 20092017 and 2008.2016;

(ii)

Consolidated Statements of Operations for Years Ended December 31, 2009, 2008,2017, 2016 and 2007.2015;

(iii)

Consolidated Statements of Partners’ Capital and Comprehensive Income for Years Ended December 31, 2009, 2008,2017, 2016 and 2007.2015;

(iv)

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2017, 2016 and 2015;

(iv)

(v)

Consolidated Statements of Cash Flows for Years Ended December 31, 2009, 2008,2017, 2016 and 2007.2015; and

(v)

(vi)

Notes to Consolidated Financial Statements.

57The following consolidated financial statements of Life Storage LP are included in Item 8.

(i)

Consolidated Balance Sheets as of December 31, 2017 and 2016;

2.

(ii)

Consolidated Statements of Operations for Years Ended December 31, 2017, 2016 and 2015;

(iii)

Consolidated Statements of Comprehensive Income for Years Ended December 31, 2017, 2016 and 2015;

(iv)

Consolidated Statements of Partners’ Capital for the Years Ended December 31, 2017, 2016 and 2015;.

(v)

Consolidated Statements of Cash Flows for Years Ended December 31, 2017, 2016 and 2015; and

(vi)

Notes to Consolidated Financial Statements.

2.

The following financial statement Schedule as of the period ended December 31, 20092017 is included in this Annual Report on Form 10-K.

Schedule III Real Estate and Accumulated Depreciation.

Schedule III Real Estate and Accumulated Depreciation at December 31, 2017.

All other Consolidated financial schedules are omitted because they are inapplicable, not required, or the information is included elsewhere in the consolidated financial statements or the notes thereto.


3.Exhibits

3.Exhibits

The exhibits required to be filed as part of this Annual Report on Form 10-K have been included as follows:

3.1

  3.1*

Amended and Restated Articles of Incorporation of the Parent Company.

  3.2

Articles Supplementary to the Amended and Restated Articles of Incorporation of the Parent Company classifying and designating the Series A Junior Participating Cumulative Preferred Stock (incorporated by reference to Exhibit 3.1 to the Parent Company’s Form 8-A filed December 3, 1996).

  3.3

Articles Supplementary to the Amended and Restated Articles of Incorporation of the Parent Company classifying and designating the 9.85% Series B Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit 1.6 to the Parent Company’s Form 8-A filed July 29, 1999).

  3.4

Articles Supplementary to the Amended and Restated Articles of Incorporation of the Parent Company classifying and designating the 8.375% Series C Convertible Cumulative Preferred Stock (incorporated by reference to Exhibit 4.1 to the Parent Company’s Current Report on Form 8-K filed July 12, 2002).

  3.5

Articles Supplementary to the Amended and Restated Articles of Incorporation of the Parent Company reclassifying shares of Series B Cumulative Redeemable Preferred Stock into Preferred Stock. (incorporated by reference to Exhibit 3.1 to the Parent Company’s Current Report on Form 8-K filed May 31, 2011).

  3.6

Articles of Amendment of the Parent Company (incorporated by reference to Exhibit 3.1 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed August 11, 2016).

  3.7

Bylaws, as amended, of the Parent Company (incorporated by reference to Exhibit 3.2 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed August 11, 2016).

  3.8

Amendment to Bylaws (incorporated by reference to Exhibit 3.1 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed May 19, 2017).

  3.9

Amended and Restated Certificate of Limited Partnership (incorporated by reference to Exhibit 3.3 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed August 11, 2016).

  3.10

Agreement of Limited Partnership of Sovran Acquisition Limitedthe Operating Partnership (incorporated by reference to Exhibit 3.1 on Form 10 filed April 22, 1998).

3.2

  3.11

Amendments to the Agreement of Limited Partnership of Sovran Acquisition Limitedthe Operating Partnership dated July 30, 1999 and July 3, 2002 (incorporated by reference to Exhibit 10.13 to the Parent Company’s Annual Report on Form 10-K filed February 27, 2009).

  3.12

Amendment to Agreement of Limited Partnership of the Operating Partnership (incorporated by reference to Exhibit 3.4 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed August 11, 2016).

  4.1

Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Parent Company’s Registration Statement on Form S-11 (File No. 33-91422) filed June 19, 1995). P

  4.2

Base Indenture, dated as of June 20, 2016, among the Company, the Operating Partnership and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 3.24.1 to Registrant’sthe Parent Company and the Operating Partnership’s Current Report on Form 8-K filed June 20, 2016).

  4.3

First Supplemental Indenture, dated as of June 20, 2016, among the Parent Company, the Operating Partnership and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.2 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed June 20, 2016).

  4.4

Form of Note representing the Notes (incorporated by reference to Exhibit 4.3 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed June 20, 2016).

  4.5

Form of Guarantee (included in Exhibit 4.4).

  4.6

Second Supplemental Indenture, dated as of December 7, 2017, among the Parent Company, the Operating Partnership and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.1 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed December 7, 2017).

  4.7

Form of Note representing the Notes (incorporated by reference to Exhibit 4.2 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed December 7, 2017).

  4.8

Form of Guarantee (included in Exhibit 4.7).

10.1+

2015 Award and Option Plan, as amended (incorporated by reference to Exhibit 10.1 to the Parent Company and the Operating Partnership’s Annual Report on Form 10-K filed February 27, 2017).

10.2+

2005 Award and Option Plan, as amended (incorporated by reference to Exhibit 10.1 to Parent Company’s Report on Form 10-K filed February 28, 2012).


10.3+

Employment Agreement between the Parent Company, the Operating Partnership, and Robert J. Attea (incorporated by reference to Exhibit 10.3 to the Parent Company’s Annual Report on Form 10-K filed February 27, 2009).

10.1+

10.4+

Amendment to Employment Agreement between the RegistrantParent Company, the Operating Partnership and Robert J. Attea (incorporated by reference to Exhibit 10.1 to Registrant’sthe Parent Company’s Current Report on Form 8-K filed January 21, 2015).

10.5+

Amendment to Employment Agreement between the Parent Company, the Operating Partnership and Robert J Attea (incorporated by reference to Exhibit 10.5 to the Parent Company and the Operating Partnership’s Annual Report on Form 10-K filed February 27, 2017).

10.6+

Employment Agreement between the Parent Company, the Operating Partnership, and Kenneth F. Myszka (incorporated by reference to Exhibit 10.4 to the Parent Company’s Annual Report on Form 10-K filed February 27, 2009).

10.2+

10.7+

Amendment to Employment Agreement between the RegistrantParent Company, the Operating Partnership, and Kenneth F. Myszka (incorporated by reference to Exhibit 10.2 to Registrant’sthe Parent Company’s Current Report on Form 8-K filed January 21, 2015).

10.8+

Amendment to Employment Agreement between the Parent Company, the Operating Partnership and Kenneth J. Myszka (incorporated by reference to Exhibit 10.8 to the Parent Company and the Operating Partnership’s Annual Report on Form 10-K filed February 27, 2017).

10.9+

Employment Agreement between the Parent Company, the Operating Partnership, and David L. Rogers (incorporated by reference to Exhibit 10.5 to the Parent Company’s Annual Report on Form 10-K filed February 27, 2009).

10.3+

10.10+

Amendment to Employment Agreement between the RegistrantParent Company, the Operating Partnership and David L. Rogers (incorporated by reference to Exhibit 10.3 to Registrant’sthe Parent Company’s Current Report on Form 8-K filed January 21, 2015).

10.11+

Amendment to Employment Agreement between the Parent Company, the Operating Partnership and David L. Rogers (incorporated by reference to Exhibit 10.11 to the Parent Company and the Operating Partnership’s Annual Report on Form 10-K filed February 27, 2009)2017).

10.4

10.12+

Form of restricted stock grant pursuant to the 2005 Award and Option Plan (incorporated by reference to Exhibit 10.6 to the Parent Company’s Report on Form 10-K filed February 28, 2012).

10.13+

Form of stock option grant pursuant to 2005 Award and Option Plan (incorporated by reference to Exhibit 10.7 to the Parent Company’s Report on Form 10-K filed February 28, 2012).

10.14+

Deferred Compensation Plan for Directors (incorporated by reference to the Parent Company’s Schedule 14A Proxy Statement filed April 8, 2015).

10.15

Amended Indemnification Agreements with members of the Board of Directors and Executive Officers (incorporated by reference to Exhibit 10.35 and 10.36 to Registrant’sthe Parent Company’s Current Report on Form 8-K filed July 20, 2006).

10.16

Amended Indemnification Agreements with Executive Officers (incorporated by reference to Exhibit 10.36 to the Parent Company’s Current Report on Form 8-K filed July 20, 2006).

10.5*

Promissory Note between Locke Sovran II, LLC and PNC Bank, National Association.

10.6

10.17

Third

Sixth Amended and Restated Revolving Credit and Term Loan Agreement dated as of December 10, 2014 among Registrant, the Parent Company, the Operating Partnership, Wells Fargo Bank, National Association, Manufacturers and Traders Trust Company and certain other lenders named thereina party thereto or which may become a party thereto (collectively, the “Lenders”), Manufacturers and Traders Trust Company, as administrative agent for itself and the other Lenders, Wells Fargo Bank, National Association, as syndication agent, and U.S. Bank National Association, HSBC Bank USA, National Association, PNC Bank, National Association, and SunTrust Bank as co-documentation agents, for themselves and the other Lenders (incorporated by reference to Exhibit 10.1 filed into the Parent Company’s Current Report on Form 8-K filed June 27, 2008)December 15, 2014).

10.7

10.18

Cornerstone Acquisition

Agreement Regarding Revolving Credit Commitment Increases and AmendmentsFirst Amendment to Certain Loan AgreementsCredit Agreement dated January 4, 2016 among the Parent Company, the Operating Partnership, Manufacturers & Traders Trust Company, as Administrative Agent, and various other financial institutions (incorporated by reference to Exhibits 10.30, 10.31, 10.32, 10.33 and 10.34 of Registrant’sExhibit 10.1 to the Parent Company’s Current Report on Form 8-K filed June 26, 2006)January 4, 2016).

10.8

10.19*

$150 million, 6.38% Senior Guaranteed Notes, Series C due April 26, 2016, and

Amendments to Second AmendmentSixth Amended and Restated Revolving Credit and Term Loan Agreement dated December 16, 2004 and Amendment to Agreement.

10.20

Note Purchase Agreement dated September 4, 2003as of August 5, 2011 among the Parent Company, the Operating Partnership and the institutions named in Schedule A thereto as purchasers of $100 million, 5.54% Senior Guaranteed Notes, Series D due August 5, 2021 (incorporated by reference to Exhibits 10.27, 10.28, and 10.29 ofExhibit 10.2 to the Registrant’sParent Company’s Current Report on Form 8-K filed May 1, 2006)August 8, 2011).

10.9

10.21

Promissory

Note between Locke Sovran I, LLCPurchase Agreement dated as of April 8, 2014 among the Parent Company, the Operating Partnership and GMAC Commercial Mortgage Corporationthe institutions named in Schedule A thereto as purchasers of $175 million, 4.533% Senior Guaranteed Notes, Series E due April 8, 2024 (incorporated by reference to Exhibit 10.21 as filed in10.1 to the Parent Company’s AnnualCurrent Report on Form 10-K,8-K filed March 1, 2007)April 9, 2014).

10.10

10.22

Amendment No. 2 to Note Purchase Agreement (2011) dated June 29, 2016 by and among the Parent Company, and the Operating Partnership and the Required Holders (incorporated by reference to Exhibit 10.1 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed July 6, 2016).


10.23

Amendment No. 2 to Note Purchase Agreement (2014) dated June 29, 2016 by and among the Parent Company and the Operating Partnership and the Required Holders (incorporated by reference to Exhibit 10.2 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed July 6, 2016).

10.24*

Amendments to Note Purchase Agreement (2011).

10.25*

Amendments to Note Purchase Agreement (2014).

10.26

Note Purchase Agreement dated as of July 21, 2016 among the Parent Company and the Operating Partnership and the institutions named in Schedule A thereto as purchasers (incorporated by reference to Exhibit 10.1 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed July 26, 2016).

10.27*

Amendment to Note Purchase Agreement (2016).

10.28+

2009 Outside Directors Stock Option and Award Plan, as amended (incorporated by reference to Exhibit 10.2 to the Parent Company’s Current Report on Form 8-K filed April 6, 2016).

10.29+

Outside Director Fee Schedule (incorporated by reference to Exhibit 10.1 to the Parent Company’s Current Report on Form 8-K filed April 6, 2016).

10.30+

Annual Incentive Compensation Plan for Executive Officers (incorporated by reference to Exhibit 10.1 to the Parent Company’s Current Report on Form 8-K filed February 21, 2012).

10.31+

Amended and Restated Employment Agreement between the Parent Company, the Operating Partnership and Andrew J. Gregoire dated November 1, 2017 (incorporated by reference to Exhibit 10.5 to the Parent Company and the Operating Partnership’s Quarterly Report on Form 10-Q filed November 3, 2017).

10.32+

Employment Agreement between the Parent Company, the Operating Partnership and Paul Powell amended and restated effective January 1, 2009 (incorporated by reference to Exhibit 10.2 to the Parent Company’s Current Report on Form 8-K filed February 14, 2012).

10.33+

Separation Agreement between the Parent Company, the Operating Partnership and Paul Powell dated November 1, 2017(incorporated by reference to Exhibit 10.3 to the Parent Company and the Operating Partnership’s Quarterly Report on Form 10-Q filed November 3, 2017).

10.34+

Amended and Restated Employment Agreement between the Parent Company, the Operating Partnership and Edward F. Killeen dated November 1, 2017(incorporated by reference to Exhibit 10.6 to the Parent Company and the Operating Partnership’s Quarterly Report on Form 10-Q filed November 3, 2017).

10.35+

Employment Agreement between the Parent Company, the Operating Partnership and Joseph Saffire dated November 1, 2017 (incorporated by reference to Exhibit 10.1 to the Parent Company and the Operating Partnership’s Quarterly Report on Form 10-Q filed November 3, 2017).

10.36+

Form of Long Term Incentive Restricted Stock Award Notice (incorporated by reference to Exhibit 10.2 to the Parent Company and the Operating Partnership’s Quarterly Report on Form 10-Q filed November 3, 2017).

10.37

Indemnification Agreement dated September 25, 2009July 16, 2012 between Registrantthe Parent Company, the Operating Partnership and JamesStephen R. Boldt,Rusmisel, a director of the Company (incorporated by reference to Exhibit 10.1 to Registrant’sthe Parent Company’s Current Report on Form 8-K filed September 25, 2009)July 17, 2012).

10.38

Indemnification Agreement dated January 30, 2015 between the Parent Company, the Operating Partnership and Arthur L. Havener, Jr., a director of the Parent Company (incorporated by reference to Exhibit 10.1 to the Parent Company’s Current Report on Form 8-K filed February 3, 2015).

10.39

Indemnification Agreement dated January 30, 2015 between the Parent Company, the Operating Partnership and Mark G. Barberio, a director of the Parent Company (incorporated by reference to Exhibit 10.2 to the Parent Company’s Current Report on Form 8-K filed February 3, 2015).

10.40

Indemnification Agreement dated as of November 1, 2017, by and among the Parent Company, the Operating Partnership and Carol Hansell, a director of the Parent Company (incorporated by reference to Exhibit 10.4 to the Parent Company and the Operating Partnership’s Quarterly Report on Form 10-Q filed November 3, 2017).

10.41+

Form of Long Term Incentive Restricted Stock Award Notice pursuant to 2005 Award and Option Plan (incorporated by reference to Exhibit 10.1 to the Parent Company’s Current Report on Form 8-K filed December 29, 2014).

10.42+

Form of Performance-Based Vesting Restricted Stock Award Notice pursuant to 2005 Award and Option Plan (incorporated by reference to Exhibit 10.2 to the Parent Company’s Current Report on Form 8-K filed December 29, 2014).

10.43+

Form of Long Term Incentive Restricted Stock Award Notice pursuant to 2015 Award and Option Plan (incorporated by reference to Exhibit 10.1 to the Parent Company’s Current Report on Form 8-K filed December 22, 2015).

10.44+

Form of Performance-Based Award Notice pursuant to 2015 Award and Option Plan (incorporated by reference to Exhibit 10.2 to the Parent Company’s Current Report on Form 8-K filed December 22, 2015).

58


12.1*

10.45+

Form of Long Term Incentive Restricted Stock Award Notice (incorporated by reference to Exhibit 10.1 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed December 28, 2016).

10.46+

Form of Performance-Based Award Notice (incorporated by reference to Exhibit 10.2 to the Parent Company and the Operating Partnership’s Current Report on Form 8-K filed December 28, 2016).

10.47

Agreement and Plan of Merger, by and among LifeStorage, LP, the Operating Partnership, Solar Lunar Sub, LLC, and Fortis Advisors LLC, as Sellers’ Representative dated as of May 18, 2016 (incorporated by reference to Exhibit 2.1 to the Parent Company’s Current Report on Form 8-K filed May 19, 2016).

10.48+

Form of Long Term Incentive Restricted Stock Award Notice (incorporated by reference to Exhibit 10.1 to the Parent Company and Operating Partnership’s Current Report on Form 8-K filed February 27, 2017).

10.49+

Form of Performance-Based Award Notice (incorporated by reference to Exhibit 10.2 to the Parent Company and Operating Partnership’s Current Report on Form 8-K filed February 27, 2017).

10.50+

Form of Long Term Incentive Restricted Stock Award Notice (incorporated by reference to Exhibit 10.1 to the Parent Company and Operating Partnership’s Current Report on Form 8-K filed January 4, 2018).

10.51+

Form of Performance-Based Award Notice (incorporated by reference to Exhibit 10.2 to the Parent Company and Operating Partnership’s Current Report on Form 8-K filed January 4, 2018).

12.1*

Statement Re: Computation of Earnings to Fixed Charges.Charges of Life Storage, Inc. and Life Storage LP

21.1*

Subsidiaries of the Company.

24.1*

23.1*

Consent of Independent Registered Public Accounting Firm

23.2*

Consent of Independent Registered Public Accounting Firm

24.1*

Powers of Attorney (included on signature pages).

31.1*

Certification of Chief Executive Officer of Life Storage, Inc. pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

31.2*

31.2*

Certification of Chief Financial Officer of Life Storage, Inc. pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

32.1*

31.3*

Certification of Chief Executive Officer of Life Storage LP pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

31.4*

Certification of Chief Financial Officer of Life Storage LP pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

32.1*

Certification of Chief Executive Officer and Chief Financial Officer of Life Storage, Inc. Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Certification of Chief Executive Officer and Chief Financial Officer of Life Storage LP Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*

The following financial statements from the Life Storage, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL, as follows:

(i)     Consolidated Balance Sheets at December 31, 2017 and 2016;

(ii)    Consolidated Statements of Operations for Years Ended December 31, 2017, 2016 and 2015;

(iii)  Consolidated Statements of Comprehensive Income for Years Ended December 31, 2017, 2016 and 2015;

(iv)   Consolidated Statements of Shareholders’ Equity for Years Ended December 31, 2017, 2016 and 2015;

(v)    Consolidated Statements of Cash Flows for Years Ended December 31, 2017, 2016 and 2015; and

(vi)   Notes to Consolidated Financial Statements

The following financial statements from the Life Storage LP’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL, as follows:

(i)     Consolidated Balance Sheets at December 31, 2017 and 2016;

(ii)    Consolidated Statements of Operations for Years Ended December 31, 2017, 2016 and 2015;

(iii)  Consolidated Statements of Comprehensive Income for Years Ended December 31, 2017, 2016 and 2015;

(iv)   Consolidated Statements of Partners’ Capital for Years Ended December 31, 2017, 2016 and 2015;

(v)    Consolidated Statements of Cash Flows for Years Ended December 31, 2017, 2016 and 2015; and


(vi)   Notes to Consolidated Financial Statements

*

Filed herewith.

+ 

*

Filed herewith.

+

Management contract or compensatory plan or arrangement.

59

Item 16.

Form 10-K Summary

Not applicable. 


SIGNATURES

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

February 27, 2018

SOVRAN ACQUISITION LIMITED PARTNERSHIP

LIFE STORAGE, INC.

By:  

Sovran Holdings, Inc.  

Its: General Partner 

By:

/s/ Andrew J. Gregoire

February 26, 2010

By:  

/s/ David L. Rogers  
David L. Rogers, 

Andrew J. Gregoire

Chief Financial Officer

(Principal Accounting Officer)

February 27, 2018

LIFE STORAGE LP

By:

/s/ Andrew J. Gregoire

Andrew J. Gregoire

Chief Financial Officer

(Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Sovran Holdings, Inc., as general partner of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

Signature

Title

Date

/s/ Robert J. Attea

Chairman of Board and Director of Life Storage, Inc.

February 27, 2018

Robert J. Attea

Chairman

and Life Storage Holdings, Inc., general partner of the Board of Directors
Chief Executive Officer and Director
(Principal Executive Officer)Life Storage LP

February 26, 2010

/s/ Kenneth F. Myszka

President and Director of Life Storage, Inc. and Life Storage

February 27, 2018

Kenneth F. Myszka

President, Chief Operating
Officer and Director

Holdings, Inc., general partner of Life Storage LP

February 26, 2010

/s/ David L. Rogers

Chief Executive Officer (Principal Executive Officer) of Life

February 27, 2018

David L. Rogers

Storage, Inc. and Life Storage Holdings, Inc., general partner of Life Storage LP

/s/ Andrew J. Gregoire

Chief Financial Officer (Principal
Financial and Accounting Officer)

February 26, 201027, 2018

Andrew J. Gregoire

Officer) of Life Storage, Inc. and Life Storage Holdings, Inc., general partner of Life Storage LP

/s/ John Burns

Director

February 26, 2010

  John Burns
/s/ James R. BoldtDirectorFebruary 26, 2010
  James R. Boldt
/s/ Anthony P. GammieDirectorFebruary 26, 2010
  Anthony P. Gammie

/s/ Charles E. Lannon

Director of Life Storage, Inc.

February 26, 201027, 2018

Charles E. Lannon

/s/ Stephen R. Rusmisel

Director of Life Storage, Inc.

February 27, 2018

Stephen R. Rusmisel

/s/ Arthur L. Havener, Jr.

Director of Life Storage, Inc.

February 27, 2018

Arthur L. Havener, Jr.

/s/ Mark G. Barberio

Director of Life Storage, Inc.

February 27, 2018

Mark G. Barberio

/s/ Carol Hansell

Director of Life Storage, Inc.

February 27, 2018

60

Carol Hansell


Life Storage, Inc.

Sovran Acquisition Limited Partnership
Schedule III

Combined Real Estate and Accumulated Depreciation

(in thousands)

December 31, 20092017

 

 

 

 

 

 

Initial Cost to Company

 

 

Cost

Capitalized

Subsequent

to

Acquisition

 

 

Gross Amount at Which

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

Life on

which

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Charleston

 

SC

 

 

 

$

416

 

 

$

1,516

 

 

$

2,370

 

 

$

416

 

 

$

3,886

 

 

$

4,302

 

 

$

1,683

 

 

1985

 

6/26/1995

 

5 to 40 years

Lakeland

 

FL

 

 

 

 

397

 

 

 

1,424

 

 

 

1,704

 

 

 

397

 

 

 

3,128

 

 

 

3,525

 

 

 

1,375

 

 

1985

 

6/26/1995

 

5 to 40 years

Charlotte

 

NC

 

 

 

 

308

 

 

 

1,102

 

 

 

3,534

 

 

 

747

 

 

 

4,197

 

 

 

4,944

 

 

 

1,357

 

 

1986

 

6/26/1995

 

5 to 40 years

Youngstown

 

OH

 

 

 

 

239

 

 

 

1,110

 

 

 

2,582

 

 

 

239

 

 

 

3,692

 

 

 

3,931

 

 

 

1,379

 

 

1980

 

6/26/1995

 

5 to 40 years

Cleveland

 

OH

 

 

 

 

701

 

 

 

1,659

 

 

 

3,825

 

 

 

1,036

 

 

 

5,149

 

 

 

6,185

 

 

 

1,538

 

 

1987/15

 

6/26/1995

 

5 to 40 years

Pt. St. Lucie

 

FL

 

 

 

 

395

 

 

 

1,501

 

 

 

1,054

 

 

 

779

 

 

 

2,171

 

 

 

2,950

 

 

 

1,259

 

 

1985

 

6/26/1995

 

5 to 40 years

Orlando - Deltona

 

FL

 

 

 

 

483

 

 

 

1,752

 

 

 

2,324

 

 

 

483

 

 

 

4,076

 

 

 

4,559

 

 

 

1,875

 

 

1984

 

6/26/1995

 

5 to 40 years

NY Metro-Middletown

 

NY

 

 

 

 

224

 

 

 

808

 

 

 

4,442

 

 

 

224

 

 

 

5,250

 

 

 

5,474

 

 

 

996

 

 

1988/17

 

6/26/1995

 

5 to 40 years

Buffalo

 

NY

 

 

 

 

423

 

 

 

1,531

 

 

 

3,620

 

 

 

497

 

 

 

5,077

 

 

 

5,574

 

 

 

2,080

 

 

1981

 

6/26/1995

 

5 to 40 years

Rochester

 

NY

 

 

 

 

395

 

 

 

1,404

 

 

 

(141

)

 

 

395

 

 

 

1,263

 

 

 

1,658

 

 

 

731

 

 

1981

 

6/26/1995

 

5 to 40 years

Jacksonville

 

FL

 

 

 

 

152

 

 

 

728

 

 

 

3,883

 

 

 

687

 

 

 

4,076

 

 

 

4,763

 

 

 

1,189

 

 

1985

 

6/26/1995

 

5 to 40 years

Columbia

 

SC

 

 

 

 

268

 

 

 

1,248

 

 

 

775

 

 

 

268

 

 

 

2,023

 

 

 

2,291

 

 

 

1,051

 

 

1985

 

6/26/1995

 

5 to 40 years

Boston

 

MA

 

 

 

 

363

 

 

 

1,679

 

 

 

885

 

 

 

363

 

 

 

2,564

 

 

 

2,927

 

 

 

1,341

 

 

1980

 

6/26/1995

 

5 to 40 years

Rochester

 

NY

 

 

 

 

230

 

 

 

847

 

 

 

2,322

 

 

 

234

 

 

 

3,165

 

 

 

3,399

 

 

 

939

 

 

1980

 

6/26/1995

 

5 to 40 years

Boston

 

MA

 

 

 

 

680

 

 

 

1,616

 

 

 

878

 

 

 

680

 

 

 

2,494

 

 

 

3,174

 

 

 

1,262

 

 

1986

 

6/26/1995

 

5 to 40 years

Savannah

 

GA

 

 

 

 

463

 

 

 

1,684

 

 

 

4,925

 

 

 

1,445

 

 

 

5,627

 

 

 

7,072

 

 

 

2,433

 

 

1981

 

6/26/1995

 

5 to 40 years

Greensboro

 

NC

 

 

 

 

444

 

 

 

1,613

 

 

 

3,444

 

 

 

444

 

 

 

5,057

 

 

 

5,501

 

 

 

1,822

 

 

1986

 

6/26/1995

 

5 to 40 years

Raleigh-Durham

 

NC

 

 

 

 

649

 

 

 

2,329

 

 

 

1,487

 

 

 

649

 

 

 

3,816

 

 

 

4,465

 

 

 

1,892

 

 

1985

 

6/26/1995

 

5 to 40 years

Hartford-New Haven

 

CT

 

 

 

 

387

 

 

 

1,402

 

 

 

4,020

 

 

 

387

 

 

 

5,422

 

 

 

5,809

 

 

 

1,594

 

 

1985

 

6/26/1995

 

5 to 40 years

Atlanta

 

GA

 

 

 

 

844

 

 

 

2,021

 

 

 

1,009

 

 

 

844

 

 

 

3,030

 

 

 

3,874

 

 

 

1,588

 

 

1988

 

6/26/1995

 

5 to 40 years

Atlanta

 

GA

 

 

 

 

302

 

 

 

1,103

 

 

 

698

 

 

 

303

 

 

 

1,800

 

 

 

2,103

 

 

 

950

 

 

1988

 

6/26/1995

 

5 to 40 years

Buffalo

 

NY

 

 

 

 

315

 

 

 

745

 

 

 

4,040

 

 

 

517

 

 

 

4,583

 

 

 

5,100

 

 

 

1,433

 

 

1984

 

6/26/1995

 

5 to 40 years

Raleigh-Durham

 

NC

 

 

 

 

321

 

 

 

1,150

 

 

 

3,468

 

 

 

321

 

 

 

4,618

 

 

 

4,939

 

 

 

1,110

 

 

1985

 

6/26/1995

 

5 to 40 years

Columbia

 

SC

 

 

 

 

361

 

 

 

1,331

 

 

 

917

 

 

 

374

 

 

 

2,235

 

 

 

2,609

 

 

 

1,203

 

 

1987

 

6/26/1995

 

5 to 40 years

Columbia

 

SC

 

 

 

 

189

 

 

 

719

 

 

 

1,200

 

 

 

189

 

 

 

1,919

 

 

 

2,108

 

 

 

1,408

 

 

1989

 

6/26/1995

 

5 to 40 years

Columbia

 

SC

 

 

 

 

488

 

 

 

1,188

 

 

 

2,081

 

 

 

488

 

 

 

3,269

 

 

 

3,757

 

 

 

1,228

 

 

1986

 

6/26/1995

 

5 to 40 years

Atlanta

 

GA

 

 

 

 

430

 

 

 

1,579

 

 

 

2,343

 

 

 

602

 

 

 

3,750

 

 

 

4,352

 

 

 

1,605

 

 

1988

 

6/26/1995

 

5 to 40 years

Orlando

 

FL

 

 

 

 

513

 

 

 

1,930

 

 

 

856

 

 

 

513

 

 

 

2,786

 

 

 

3,299

 

 

 

1,536

 

 

1988

 

6/26/1995

 

5 to 40 years

Sharon

 

PA

 

 

 

 

194

 

 

 

912

 

 

 

586

 

 

 

194

 

 

 

1,498

 

 

 

1,692

 

 

 

818

 

 

1975

 

6/26/1995

 

5 to 40 years

Ft. Lauderdale

 

FL

 

 

 

 

1,503

 

 

 

3,619

 

 

 

1,302

 

 

 

1,503

 

 

 

4,921

 

 

 

6,424

 

 

 

2,387

 

 

1985

 

6/26/1995

 

5 to 40 years

West Palm

 

FL

 

 

 

 

398

 

 

 

1,035

 

 

 

500

 

 

 

398

 

 

 

1,535

 

 

 

1,933

 

 

 

875

 

 

1985

 

6/26/1995

 

5 to 40 years

Atlanta

 

GA

 

 

 

 

423

 

 

 

1,015

 

 

 

606

 

 

 

424

 

 

 

1,620

 

 

 

2,044

 

 

 

776

 

 

1989

 

6/26/1995

 

5 to 40 years

Atlanta

 

GA

 

 

 

 

483

 

 

 

1,166

 

 

 

1,271

 

 

 

483

 

 

 

2,437

 

 

 

2,920

 

 

 

1,140

 

 

1988

 

6/26/1995

 

5 to 40 years

Atlanta

 

GA

 

 

 

 

308

 

 

 

1,116

 

 

 

833

 

 

 

308

 

 

 

1,949

 

 

 

2,257

 

 

 

1,075

 

 

1986

 

6/26/1995

 

5 to 40 years

Atlanta

 

GA

 

 

 

 

170

 

 

 

786

 

 

 

906

 

 

 

174

 

 

 

1,688

 

 

 

1,862

 

 

 

860

 

 

1981

 

6/26/1995

 

5 to 40 years

Atlanta

 

GA

 

 

 

 

413

 

 

 

999

 

 

 

853

 

 

 

413

 

 

 

1,852

 

 

 

2,265

 

 

 

1,077

 

 

1975

 

6/26/1995

 

5 to 40 years

Baltimore

 

MD

 

 

 

 

154

 

 

 

555

 

 

 

1,492

 

 

 

306

 

 

 

1,895

 

 

 

2,201

 

 

 

874

 

 

1984

 

6/26/1995

 

5 to 40 years

Baltimore

 

MD

 

 

 

 

479

 

 

 

1,742

 

 

 

3,018

 

 

 

479

 

 

 

4,760

 

 

 

5,239

 

 

 

2,007

 

 

1988

 

6/26/1995

 

5 to 40 years

Melbourne

 

FL

 

 

 

 

883

 

 

 

2,104

 

 

 

1,932

 

 

 

883

 

 

 

4,036

 

 

 

4,919

 

 

 

2,181

 

 

1986

 

6/26/1995

 

5 to 40 years

Newport News

 

VA

 

 

 

 

316

 

 

 

1,471

 

 

 

1,045

 

 

 

316

 

 

 

2,516

 

 

 

2,832

 

 

 

1,346

 

 

1988

 

6/26/1995

 

5 to 40 years

Pensacola

 

FL

 

 

 

 

632

 

 

 

2,962

 

 

 

1,669

 

 

 

651

 

 

 

4,612

 

 

 

5,263

 

 

 

2,560

 

 

1983

 

6/26/1995

 

5 to 40 years

Hartford

 

CT

 

 

 

 

715

 

 

 

1,695

 

 

 

1,420

 

 

 

715

 

 

 

3,115

 

 

 

3,830

 

 

 

1,541

 

 

1988

 

6/26/1995

 

5 to 40 years

Atlanta

 

GA

 

 

 

 

304

 

 

 

1,118

 

 

 

2,906

 

 

 

619

 

 

 

3,709

 

 

 

4,328

 

 

 

1,607

 

 

1988

 

6/26/1995

 

5 to 40 years

Alexandria

 

VA

 

 

 

 

1,375

 

 

 

3,220

 

 

 

2,894

 

 

 

1,376

 

 

 

6,113

 

 

 

7,489

 

 

 

3,083

 

 

1984

 

6/26/1995

 

5 to 40 years

Pensacola

 

FL

 

 

 

 

244

 

 

 

901

 

 

 

692

 

 

 

244

 

 

 

1,593

 

 

 

1,837

 

 

 

860

 

 

1986

 

6/26/1995

 

5 to 40 years

Melbourne

 

FL

 

 

 

 

834

 

 

 

2,066

 

 

 

3,528

 

 

 

1,591

 

 

 

4,837

 

 

 

6,428

 

 

 

1,626

 

 

1986/15

 

6/26/1995

 

5 to 40 years


Life Storage, Inc.

Schedule III

 

 

 

 

 

 

Initial Cost to Company

 

 

Cost

Capitalized

Subsequent

to

Acquisition

 

 

Gross Amount at Which

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

Life on

which

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Hartford

 

CT

 

 

 

 

234

 

 

 

861

 

 

 

3,561

 

 

 

612

 

 

 

4,044

 

 

 

4,656

 

 

 

1,311

 

 

1992

 

6/26/1995

 

5 to 40 years

Atlanta

 

GA

 

 

 

 

256

 

 

 

1,244

 

 

 

2,325

 

 

 

256

 

 

 

3,569

 

 

 

3,825

 

 

 

1,584

 

 

1988

 

6/26/1995

 

5 to 40 years

Norfolk

 

VA

 

 

 

 

313

 

 

 

1,462

 

 

 

2,718

 

 

 

313

 

 

 

4,180

 

 

 

4,493

 

 

 

1,573

 

 

1984

 

6/26/1995

 

5 to 40 years

Birmingham

 

AL

 

 

 

 

307

 

 

 

1,415

 

 

 

1,918

 

 

 

385

 

 

 

3,255

 

 

 

3,640

 

 

 

1,496

 

 

1990

 

6/26/1995

 

5 to 40 years

Birmingham

 

AL

 

 

 

 

730

 

 

 

1,725

 

 

 

2,992

 

 

 

730

 

 

 

4,717

 

 

 

5,447

 

 

 

1,639

 

 

1990

 

6/26/1995

 

5 to 40 years

Montgomery

 

AL

 

 

 

 

863

 

 

 

2,041

 

 

 

1,491

 

 

 

863

 

 

 

3,532

 

 

 

4,395

 

 

 

1,694

 

 

1982

 

6/26/1995

 

5 to 40 years

Jacksonville

 

FL

 

 

 

 

326

 

 

 

1,515

 

 

 

1,432

 

 

 

326

 

 

 

2,947

 

 

 

3,273

 

 

 

1,253

 

 

1987

 

6/26/1995

 

5 to 40 years

Pensacola

 

FL

 

 

 

 

369

 

 

 

1,358

 

 

 

3,249

 

 

 

369

 

 

 

4,607

 

 

 

4,976

 

 

 

2,014

 

 

1986

 

6/26/1995

 

5 to 40 years

Pensacola

 

FL

 

 

 

 

244

 

 

 

1,128

 

 

 

2,828

 

 

 

720

 

 

 

3,480

 

 

 

4,200

 

 

 

1,282

 

 

1990

 

6/26/1995

 

5 to 40 years

Pensacola

 

FL

 

 

 

 

226

 

 

 

1,046

 

 

 

896

 

 

 

226

 

 

 

1,942

 

 

 

2,168

 

 

 

1,007

 

 

1990

 

6/26/1995

 

5 to 40 years

Tampa

 

FL

 

 

 

 

1,088

 

 

 

2,597

 

 

 

1,038

 

 

 

1,088

 

 

 

3,635

 

 

 

4,723

 

 

 

2,100

 

 

1989

 

6/26/1995

 

5 to 40 years

Clearwater

 

FL

 

 

 

 

526

 

 

 

1,958

 

 

 

1,581

 

 

 

526

 

 

 

3,539

 

 

 

4,065

 

 

 

1,729

 

 

1985

 

6/26/1995

 

5 to 40 years

Clearwater-Largo

 

FL

 

 

 

 

672

 

 

 

2,439

 

 

 

1,218

 

 

 

672

 

 

 

3,657

 

 

 

4,329

 

 

 

1,824

 

 

1988

 

6/26/1995

 

5 to 40 years

Jackson

 

MS

 

 

 

 

343

 

 

 

1,580

 

 

 

2,643

 

 

 

796

 

 

 

3,770

 

 

 

4,566

 

 

 

1,553

 

 

1990

 

6/26/1995

 

5 to 40 years

Jackson

 

MS

 

 

 

 

209

 

 

 

964

 

 

 

1,070

 

 

 

209

 

 

 

2,034

 

 

 

2,243

 

 

 

1,009

 

 

1990

 

6/26/1995

 

5 to 40 years

Providence

 

RI

 

 

 

 

345

 

 

 

1,268

 

 

 

2,078

 

 

 

486

 

 

 

3,205

 

 

 

3,691

 

 

 

1,265

 

 

1984

 

6/26/1995

 

5 to 40 years

Norfolk - Virginia Beach

 

VA

 

 

 

 

1,142

 

 

 

4,998

 

 

 

3,585

 

 

 

1,142

 

 

 

8,583

 

 

 

9,725

 

 

 

3,428

 

 

1989/93/95/16

 

6/26/1995

 

5 to 40 years

Richmond

 

VA

 

 

 

 

443

 

 

 

1,602

 

 

 

1,111

 

 

 

443

 

 

 

2,713

 

 

 

3,156

 

 

 

1,434

 

 

1987

 

8/25/1995

 

5 to 40 years

Orlando

 

FL

 

 

 

 

1,161

 

 

 

2,755

 

 

 

2,311

 

 

 

1,162

 

 

 

5,065

 

 

 

6,227

 

 

 

2,296

 

 

1986/15

 

9/29/1995

 

5 to 40 years

Syracuse

 

NY

 

 

 

 

470

 

 

 

1,712

 

 

 

1,685

 

 

 

472

 

 

 

3,395

 

 

 

3,867

 

 

 

1,604

 

 

1987

 

12/27/1995

 

5 to 40 years

Ft. Myers

 

FL

 

 

 

 

205

 

 

 

912

 

 

 

567

 

 

 

206

 

 

 

1,478

 

 

 

1,684

 

 

 

837

 

 

1988

 

12/28/1995

 

5 to 40 years

Ft. Myers

 

FL

 

 

 

 

412

 

 

 

1,703

 

 

 

767

 

 

 

412

 

 

 

2,470

 

 

 

2,882

 

 

 

1,455

 

 

1991/94

 

12/28/1995

 

5 to 40 years

Harrisburg

 

PA

 

 

 

 

360

 

 

 

1,641

 

 

 

133

 

 

 

360

 

 

 

1,774

 

 

 

2,134

 

 

 

1,027

 

 

1983

 

12/29/1995

 

5 to 40 years

Harrisburg

 

PA

 

 

 

 

627

 

 

 

2,224

 

 

 

4,080

 

 

 

692

 

 

 

6,239

 

 

 

6,931

 

 

 

2,213

 

 

1985

 

12/29/1995

 

5 to 40 years

Newport News

 

VA

 

 

 

 

442

 

 

 

1,592

 

 

 

1,434

 

 

 

442

 

 

 

3,026

 

 

 

3,468

 

 

 

1,454

 

 

1988/93

 

1/5/1996

 

5 to 40 years

Montgomery

 

AL

 

 

 

 

353

 

 

 

1,299

 

 

 

1,138

 

 

 

353

 

 

 

2,437

 

 

 

2,790

 

 

 

1,086

 

 

1984

 

1/23/1996

 

5 to 40 years

Charleston

 

SC

 

 

 

 

237

 

 

 

858

 

 

 

1,062

 

 

 

245

 

 

 

1,912

 

 

 

2,157

 

 

 

936

 

 

1985

 

3/1/1996

 

5 to 40 years

Tampa

 

FL

 

 

 

 

766

 

 

 

1,800

 

 

 

1,060

 

 

 

766

 

 

 

2,860

 

 

 

3,626

 

 

 

1,392

 

 

1985

 

3/28/1996

 

5 to 40 years

Dallas-Ft.Worth

 

TX

 

 

 

 

442

 

 

 

1,767

 

 

 

471

 

 

 

442

 

 

 

2,238

 

 

 

2,680

 

 

 

1,209

 

 

1987

 

3/29/1996

 

5 to 40 years

Dallas-Ft.Worth

 

TX

 

 

 

 

408

 

 

 

1,662

 

 

 

1,312

 

 

 

408

 

 

 

2,974

 

 

 

3,382

 

 

 

1,499

 

 

1986

 

3/29/1996

 

5 to 40 years

Dallas-Ft.Worth

 

TX

 

 

 

 

328

 

 

 

1,324

 

 

 

448

 

 

 

328

 

 

 

1,772

 

 

 

2,100

 

 

 

1,739

 

 

1986

 

3/29/1996

 

5 to 40 years

San Antonio

 

TX

 

 

 

 

436

 

 

 

1,759

 

 

 

1,548

 

 

 

436

 

 

 

3,307

 

 

 

3,743

 

 

 

1,598

 

 

1986

 

3/29/1996

 

5 to 40 years

San Antonio

 

TX

 

 

 

 

289

 

 

 

1,161

 

 

 

2,484

 

 

 

289

 

 

 

3,645

 

 

 

3,934

 

 

 

457

 

 

2012

 

3/29/1996

 

5 to 40 years

Montgomery

 

AL

 

 

 

 

279

 

 

 

1,014

 

 

 

1,515

 

 

 

433

 

 

 

2,375

 

 

 

2,808

 

 

 

1,053

 

 

1988

 

5/21/1996

 

5 to 40 years

West Palm

 

FL

 

 

 

 

345

 

 

 

1,262

 

 

 

653

 

 

 

345

 

 

 

1,915

 

 

 

2,260

 

 

 

931

 

 

1986

 

5/29/1996

 

5 to 40 years

Ft. Myers

 

FL

 

 

 

 

229

 

 

 

884

 

 

 

2,855

 

 

 

383

 

 

 

3,585

 

 

 

3,968

 

 

 

939

 

 

1986

 

5/29/1996

 

5 to 40 years

Syracuse

 

NY

 

 

 

 

481

 

 

 

1,559

 

 

 

2,656

 

 

 

671

 

 

 

4,025

 

 

 

4,696

 

 

 

1,871

 

 

1983

 

6/5/1996

 

5 to 40 years

Lakeland

 

FL

 

 

 

 

359

 

 

 

1,287

 

 

 

1,335

 

 

 

359

 

 

 

2,622

 

 

 

2,981

 

 

 

1,370

 

 

1988

 

6/26/1996

 

5 to 40 years

Boston - Springfield

 

MA

 

 

 

 

251

 

 

 

917

 

 

 

2,554

 

 

 

297

 

 

 

3,425

 

 

 

3,722

 

 

 

1,638

 

 

1986

 

6/28/1996

 

5 to 40 years

Ft. Myers

 

FL

 

 

 

 

344

 

 

 

1,254

 

 

 

657

 

 

 

310

 

 

 

1,945

 

 

 

2,255

 

 

 

1,011

 

 

1987

 

6/28/1996

 

5 to 40 years

Cincinnati

 

OH

 

 

 

 

557

 

 

 

1,988

 

 

 

996

 

 

 

688

 

 

 

2,853

 

 

 

3,541

 

 

 

976

 

 

1988

 

7/23/1996

 

5 to 40 years

Baltimore

 

MD

 

 

 

 

777

 

 

 

2,770

 

 

 

791

 

 

 

777

 

 

 

3,561

 

 

 

4,338

 

 

 

1,847

 

 

1990

 

7/26/1996

 

5 to 40 years

Jacksonville

 

FL

 

 

 

 

568

 

 

 

2,028

 

 

 

1,903

 

 

 

568

 

 

 

3,931

 

 

 

4,499

 

 

 

1,800

 

 

1987

 

8/23/1996

 

5 to 40 years

Jacksonville

 

FL

 

 

 

 

436

 

 

 

1,635

 

 

 

1,191

 

 

 

436

 

 

 

2,826

 

 

 

3,262

 

 

 

1,316

 

 

1985

 

8/26/1996

 

5 to 40 years

Jacksonville

 

FL

 

 

 

 

535

 

 

 

2,033

 

 

 

638

 

 

 

538

 

 

 

2,668

 

 

 

3,206

 

 

 

1,477

 

 

1987/92

 

8/30/1996

 

5 to 40 years

Charlotte

 

NC

 

 

 

 

487

 

 

 

1,754

 

 

 

701

 

 

 

487

 

 

 

2,455

 

 

 

2,942

 

 

 

1,248

 

 

1995

 

9/16/1996

 

5 to 40 years


Life Storage, Inc.

Schedule III

 

 

 

 

 

 

Initial Cost to Company

 

 

Cost

Capitalized

Subsequent

to

Acquisition

 

 

Gross Amount at Which

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life on

which

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Charlotte

 

NC

 

 

 

 

315

 

 

 

1,131

 

 

 

524

 

 

 

315

 

 

 

1,655

 

 

 

1,970

 

 

 

890

 

 

1995

 

9/16/1996

 

5 to 40 years

Orlando

 

FL

 

 

 

 

314

 

 

 

1,113

 

 

 

1,417

 

 

 

314

 

 

 

2,530

 

 

 

2,844

 

 

 

1,223

 

 

1975

 

10/30/1996

 

5 to 40 years

Rochester

 

NY

 

 

 

 

704

 

 

 

2,496

 

 

 

2,975

 

 

 

707

 

 

 

5,468

 

 

 

6,175

 

 

 

2,118

 

 

1990

 

12/20/1996

 

5 to 40 years

Youngstown

 

OH

 

 

 

 

600

 

 

 

2,142

 

 

 

2,773

 

 

 

693

 

 

 

4,822

 

 

 

5,515

 

 

 

1,874

 

 

1988

 

1/10/1997

 

5 to 40 years

Cleveland

 

OH

 

 

 

 

751

 

 

 

2,676

 

 

 

4,465

 

 

 

751

 

 

 

7,141

 

 

 

7,892

 

 

 

2,578

 

 

1986

 

1/10/1997

 

5 to 40 years

Cleveland

 

OH

 

 

 

 

725

 

 

 

2,586

 

 

 

2,524

 

 

 

725

 

 

 

5,110

 

 

 

5,835

 

 

 

2,268

 

 

1978

 

1/10/1997

 

5 to 40 years

Cleveland

 

OH

 

 

 

 

637

 

 

 

2,918

 

 

 

2,082

 

 

 

701

 

 

 

4,936

 

 

 

5,637

 

 

 

2,765

 

 

1979

 

1/10/1997

 

5 to 40 years

Cleveland

 

OH

 

 

 

 

495

 

 

 

1,781

 

 

 

4,140

 

 

 

495

 

 

 

5,921

 

 

 

6,416

 

 

 

1,571

 

 

1979/17

 

1/10/1997

 

5 to 40 years

Cleveland

 

OH

 

 

 

 

761

 

 

 

2,714

 

 

 

1,829

 

 

 

761

 

 

 

4,543

 

 

 

5,304

 

 

 

2,315

 

 

1977

 

1/10/1997

 

5 to 40 years

Cleveland

 

OH

 

 

 

 

418

 

 

 

1,921

 

 

 

2,944

 

 

 

418

 

 

 

4,865

 

 

 

5,283

 

 

 

2,071

 

 

1970

 

1/10/1997

 

5 to 40 years

Cleveland

 

OH

 

 

 

 

606

 

 

 

2,164

 

 

 

1,533

 

 

 

606

 

 

 

3,697

 

 

 

4,303

 

 

 

1,691

 

 

1982

 

1/10/1997

 

5 to 40 years

San Antonio

 

TX

 

 

 

 

474

 

 

 

1,686

 

 

 

814

 

 

 

504

 

 

 

2,470

 

 

 

2,974

 

 

 

1,119

 

 

1981

 

1/30/1997

 

5 to 40 years

San Antonio

 

TX

 

 

 

 

346

 

 

 

1,236

 

 

 

652

 

 

 

346

 

 

 

1,888

 

 

 

2,234

 

 

 

918

 

 

1985

 

1/30/1997

 

5 to 40 years

San Antonio

 

TX

 

 

 

 

432

 

 

 

1,560

 

 

 

2,134

 

 

 

432

 

 

 

3,694

 

 

 

4,126

 

 

 

1,739

 

 

1995

 

1/30/1997

 

5 to 40 years

Houston-Beaumont

 

TX

 

 

 

 

634

 

 

 

2,565

 

 

 

4,625

 

 

 

634

 

 

 

7,190

 

 

 

7,824

 

 

 

2,081

 

 

1993/95/16

 

3/26/1997

 

5 to 40 years

Houston-Beaumont

 

TX

 

 

 

 

566

 

 

 

2,279

 

 

 

577

 

 

 

566

 

 

 

2,856

 

 

 

3,422

 

 

 

1,423

 

 

1995

 

3/26/1997

 

5 to 40 years

Houston-Beaumont

 

TX

 

 

 

 

293

 

 

 

1,357

 

 

 

702

 

 

 

293

 

 

 

2,059

 

 

 

2,352

 

 

 

960

 

 

1995

 

3/26/1997

 

5 to 40 years

Chesapeake

 

VA

 

 

 

 

260

 

 

 

1,043

 

 

 

4,760

 

 

 

260

 

 

 

5,803

 

 

 

6,063

 

 

 

1,650

 

 

1988/95

 

3/31/1997

 

5 to 40 years

Orlando-W 25th St

 

FL

 

 

 

 

289

 

 

 

1,160

 

 

 

2,486

 

 

 

616

 

 

 

3,319

 

 

 

3,935

 

 

 

1,024

 

 

1984

 

3/31/1997

 

5 to 40 years

Delray

 

FL

 

 

 

 

491

 

 

 

1,756

 

 

 

805

 

 

 

491

 

 

 

2,561

 

 

 

3,052

 

 

 

1,371

 

 

1969

 

4/11/1997

 

5 to 40 years

Savannah

 

GA

 

 

 

 

296

 

 

 

1,196

 

 

 

586

 

 

 

296

 

 

 

1,782

 

 

 

2,078

 

 

 

912

 

 

1988

 

5/8/1997

 

5 to 40 years

Delray

 

FL

 

 

 

 

921

 

 

 

3,282

 

 

 

940

 

 

 

921

 

 

 

4,222

 

 

 

5,143

 

 

 

2,118

 

 

1980

 

5/21/1997

 

5 to 40 years

Cleveland-Avon

 

OH

 

 

 

 

301

 

 

 

1,214

 

 

 

2,344

 

 

 

304

 

 

 

3,555

 

 

 

3,859

 

 

 

1,534

 

 

1989

 

6/4/1997

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

965

 

 

 

3,864

 

 

 

1,773

 

 

 

943

 

 

 

5,659

 

 

 

6,602

 

 

 

2,806

 

 

1977

 

6/30/1997

 

5 to 40 years

Atlanta-Alpharetta

 

GA

 

 

 

 

1,033

 

 

 

3,753

 

 

 

797

 

 

 

1,033

 

 

 

4,550

 

 

 

5,583

 

 

 

2,303

 

 

1994

 

7/24/1997

 

5 to 40 years

Atlanta-Marietta

 

GA

 

 

 

 

769

 

 

 

2,788

 

 

 

724

 

 

 

825

 

 

 

3,456

 

 

 

4,281

 

 

 

1,733

 

 

1996

 

7/24/1997

 

5 to 40 years

Atlanta-Doraville

 

GA

 

 

 

 

735

 

 

 

3,429

 

 

 

517

 

 

 

735

 

 

 

3,946

 

 

 

4,681

 

 

 

2,039

 

 

1995

 

8/21/1997

 

5 to 40 years

Greensboro-Hilltop

 

NC

 

 

 

 

268

 

 

 

1,097

 

 

 

911

 

 

 

231

 

 

 

2,045

 

 

 

2,276

 

 

 

863

 

 

1995

 

9/25/1997

 

5 to 40 years

Greensboro-StgCch

 

NC

 

 

 

 

89

 

 

 

376

 

 

 

1,947

 

 

 

89

 

 

 

2,323

 

 

 

2,412

 

 

 

988

 

 

1997

 

9/25/1997

 

5 to 40 years

Baton Rouge-Airline

 

LA

 

 

 

 

396

 

 

 

1,831

 

 

 

1,234

 

 

 

421

 

 

 

3,040

 

 

 

3,461

 

 

 

1,425

 

 

1982

 

10/9/1997

 

5 to 40 years

Baton Rouge-Airline2

 

LA

 

 

 

 

282

 

 

 

1,303

 

 

 

564

 

 

 

282

 

 

 

1,867

 

 

 

2,149

 

 

 

923

 

 

1985

 

11/21/1997

 

5 to 40 years

Harrisburg-Peiffers

 

PA

 

 

 

 

635

 

 

 

2,550

 

 

 

777

 

 

 

637

 

 

 

3,325

 

 

 

3,962

 

 

 

1,680

 

 

1984

 

12/3/1997

 

5 to 40 years

Tampa-E. Hillsborough

 

FL

 

 

 

 

709

 

 

 

3,235

 

 

 

1,030

 

 

 

709

 

 

 

4,265

 

 

 

4,974

 

 

 

2,145

 

 

1985

 

2/4/1998

 

5 to 40 years

NY Metro-Middletown

 

NY

 

 

 

 

843

 

 

 

3,394

 

 

 

1,113

 

 

 

843

 

 

 

4,507

 

 

 

5,350

 

 

 

2,168

 

 

1989/95

 

2/4/1998

 

5 to 40 years

Chesapeake-Military

 

VA

 

 

 

 

542

 

 

 

2,210

 

 

 

542

 

 

 

542

 

 

 

2,752

 

 

 

3,294

 

 

 

1,370

 

 

1996

 

2/5/1998

 

5 to 40 years

Chesapeake-Volvo

 

VA

 

 

 

 

620

 

 

 

2,532

 

 

 

1,561

 

 

 

620

 

 

 

4,093

 

 

 

4,713

 

 

 

1,839

 

 

1995

 

2/5/1998

 

5 to 40 years

Virginia Beach-Shell

 

VA

 

 

 

 

540

 

 

 

2,211

 

 

 

569

 

 

 

540

 

 

 

2,780

 

 

 

3,320

 

 

 

1,370

 

 

1991

 

2/5/1998

 

5 to 40 years

Norfolk-Naval Base

 

VA

 

 

 

 

1,243

 

 

 

5,019

 

 

 

1,039

 

 

 

1,243

 

 

 

6,058

 

 

 

7,301

 

 

 

2,993

 

 

1975

 

2/5/1998

 

5 to 40 years

Boston-Northbridge

 

MA

 

 

 

 

441

 

 

 

1,788

 

 

 

1,203

 

 

 

694

 

 

 

2,738

 

 

 

3,432

 

 

 

895

 

 

1988

 

2/9/1998

 

5 to 40 years

Greensboro-High Point

 

NC

 

 

 

 

397

 

 

 

1,834

 

 

 

1,109

 

 

 

397

 

 

 

2,943

 

 

 

3,340

 

 

 

1,313

 

 

1993

 

2/10/1998

 

5 to 40 years

Titusville

 

FL

 

 

 

 

492

 

 

 

1,990

 

 

 

1,282

 

 

 

688

 

 

 

3,076

 

 

 

3,764

 

 

 

1,047

 

 

1986/90

 

2/25/1998

 

5 to 40 years

Boston-Salem

 

MA

 

 

 

 

733

 

 

 

2,941

 

 

 

2,000

 

 

 

733

 

 

 

4,941

 

 

 

5,674

 

 

 

2,308

 

 

1979

 

3/3/1998

 

5 to 40 years

Providence

 

RI

 

 

 

 

702

 

 

 

2,821

 

 

 

4,269

 

 

 

702

 

 

 

7,090

 

 

 

7,792

 

 

 

2,310

 

 

1984/88

 

3/26/1998

 

5 to 40 years

Chattanooga-Lee Hwy

 

TN

 

 

 

 

384

 

 

 

1,371

 

 

 

652

 

 

 

384

 

 

 

2,023

 

 

 

2,407

 

 

 

1,063

 

 

1987

 

3/27/1998

 

5 to 40 years

Chattanooga-Hwy 58

 

TN

 

 

 

 

296

 

 

 

1,198

 

 

 

2,333

 

 

 

414

 

 

 

3,413

 

 

 

3,827

 

 

 

1,354

 

 

1985

 

3/27/1998

 

5 to 40 years

Ft. Oglethorpe

 

GA

 

 

 

 

349

 

 

 

1,250

 

 

 

1,871

 

 

 

464

 

 

 

3,006

 

 

 

3,470

 

 

 

1,137

 

 

1989

 

3/27/1998

 

5 to 40 years


Life Storage, Inc.

Schedule III

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to

 

 

Gross Amount at Which

 

 

 

 

 

 

 

 

 

 

which

 

 

 

 

 

 

Initial Cost to Company

 

 

Acquisition

 

 

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Birmingham-Walt

 

AL

 

 

 

 

544

 

 

 

1,942

 

 

 

1,335

 

 

 

544

 

 

 

3,277

 

 

 

3,821

 

 

 

1,635

 

 

1984

 

3/27/1998

 

5 to 40 years

Salem-Policy

 

NH

 

 

 

 

742

 

 

 

2,977

 

 

 

655

 

 

 

742

 

 

 

3,632

 

 

 

4,374

 

 

 

1,766

 

 

1980

 

4/7/1998

 

5 to 40 years

Raleigh-Durham

 

NC

 

 

 

 

775

 

 

 

3,103

 

 

 

973

 

 

 

775

 

 

 

4,076

 

 

 

4,851

 

 

 

1,978

 

 

1988/91

 

4/9/1998

 

5 to 40 years

Raleigh-Durham

 

NC

 

 

 

 

940

 

 

 

3,763

 

 

 

1,087

 

 

 

940

 

 

 

4,850

 

 

 

5,790

 

 

 

2,353

 

 

1990/96

 

4/9/1998

 

5 to 40 years

Youngstown-Warren

 

OH

 

 

 

 

522

 

 

 

1,864

 

 

 

1,414

 

 

 

569

 

 

 

3,231

 

 

 

3,800

 

 

 

1,543

 

 

1986

 

4/22/1998

 

5 to 40 years

Youngstown-Warren

 

OH

 

 

 

 

512

 

 

 

1,829

 

 

 

2,831

 

 

 

633

 

 

 

4,539

 

 

 

5,172

 

 

 

1,662

 

 

1986/16

 

4/22/1998

 

5 to 40 years

Jackson

 

MS

 

 

 

 

744

 

 

 

3,021

 

 

 

280

 

 

 

744

 

 

 

3,301

 

 

 

4,045

 

 

 

1,632

 

 

1995

 

5/13/1998

 

5 to 40 years

Houston-Katy

 

TX

 

 

 

 

419

 

 

 

1,524

 

 

 

4,101

 

 

 

419

 

 

 

5,625

 

 

 

6,044

 

 

 

1,759

 

 

1994

 

5/20/1998

 

5 to 40 years

Melbourne

 

FL

 

 

 

 

662

 

 

 

2,654

 

 

 

3,705

 

 

 

662

 

 

 

6,359

 

 

 

7,021

 

 

 

1,687

 

 

1985/07/15

 

6/2/1998

 

5 to 40 years

Vero Beach

 

FL

 

 

 

 

489

 

 

 

1,813

 

 

 

1,783

 

 

 

584

 

 

 

3,501

 

 

 

4,085

 

 

 

1,186

 

 

1997

 

6/12/1998

 

5 to 40 years

Houston-Humble

 

TX

 

 

 

 

447

 

 

 

1,790

 

 

 

2,588

 

 

 

740

 

 

 

4,085

 

 

 

4,825

 

 

 

1,631

 

 

1986

 

6/16/1998

 

5 to 40 years

Houston-Webster

 

TX

 

 

 

 

635

 

 

 

2,302

 

 

 

634

 

 

 

635

 

 

 

2,936

 

 

 

3,571

 

 

 

1,284

 

 

1997

 

6/19/1998

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

548

 

 

 

1,988

 

 

 

442

 

 

 

548

 

 

 

2,430

 

 

 

2,978

 

 

 

1,163

 

 

1997

 

6/19/1998

 

5 to 40 years

San Marcos

 

TX

 

 

 

 

324

 

 

 

1,493

 

 

 

2,233

 

 

 

324

 

 

 

3,726

 

 

 

4,050

 

 

 

1,451

 

 

1994

 

6/30/1998

 

5 to 40 years

Austin-McNeil

 

TX

 

 

 

 

492

 

 

 

1,995

 

 

 

2,646

 

 

 

510

 

 

 

4,623

 

 

 

5,133

 

 

 

1,633

 

 

1994

 

6/30/1998

 

5 to 40 years

Austin-FM

 

TX

 

 

 

 

484

 

 

 

1,951

 

 

 

1,044

 

 

 

481

 

 

 

2,998

 

 

 

3,479

 

 

 

1,269

 

 

1996

 

6/30/1998

 

5 to 40 years

Hollywood-Sheridan

 

FL

 

 

 

 

1,208

 

 

 

4,854

 

 

 

701

 

 

 

1,208

 

 

 

5,555

 

 

 

6,763

 

 

 

2,744

 

 

1988

 

7/1/1998

 

5 to 40 years

Pompano Beach-Atlantic

 

FL

 

 

 

 

944

 

 

 

3,803

 

 

 

876

 

 

 

944

 

 

 

4,679

 

 

 

5,623

 

 

 

2,277

 

 

1985

 

7/1/1998

 

5 to 40 years

Pompano Beach-Sample

 

FL

 

 

 

 

903

 

 

 

3,643

 

 

 

650

 

 

 

903

 

 

 

4,293

 

 

 

5,196

 

 

 

2,075

 

 

1988

 

7/1/1998

 

5 to 40 years

Boca Raton-18th St

 

FL

 

 

 

 

1,503

 

 

 

6,059

 

 

 

(1,767

)

 

 

851

 

 

 

4,944

 

 

 

5,795

 

 

 

2,414

 

 

1991

 

7/1/1998

 

5 to 40 years

Hollywood-N.21st

 

FL

 

 

 

 

840

 

 

 

3,373

 

 

 

651

 

 

 

840

 

 

 

4,024

 

 

 

4,864

 

 

 

2,003

 

 

1987

 

8/3/1998

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

550

 

 

 

1,998

 

 

 

872

 

 

 

550

 

 

 

2,870

 

 

 

3,420

 

 

 

1,276

 

 

1996

 

9/29/1998

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

670

 

 

 

2,407

 

 

 

1,865

 

 

 

670

 

 

 

4,272

 

 

 

4,942

 

 

 

1,813

 

 

1996

 

10/9/1998

 

5 to 40 years

Cincinnati-Batavia

 

OH

 

 

 

 

390

 

 

 

1,570

 

 

 

1,462

 

 

 

390

 

 

 

3,032

 

 

 

3,422

 

 

 

1,205

 

 

1988

 

11/19/1998

 

5 to 40 years

Jackson-N.West

 

MS

 

 

 

 

460

 

 

 

1,642

 

 

 

797

 

 

 

460

 

 

 

2,439

 

 

 

2,899

 

 

 

1,191

 

 

1984

 

12/1/1998

 

5 to 40 years

Houston-Katy

 

TX

 

 

 

 

507

 

 

 

2,058

 

 

 

1,843

 

 

 

507

 

 

 

3,901

 

 

 

4,408

 

 

 

1,564

 

 

1993

 

12/15/1998

 

5 to 40 years

Providence

 

RI

 

 

 

 

447

 

 

 

1,776

 

 

 

1,041

 

 

 

447

 

 

 

2,817

 

 

 

3,264

 

 

 

1,320

 

 

1986/94

 

2/2/1999

 

5 to 40 years

Lafayette-Pinhook 1

 

LA

 

 

 

 

556

 

 

 

1,951

 

 

 

1,465

 

 

 

556

 

 

 

3,416

 

 

 

3,972

 

 

 

1,674

 

 

1980

 

2/17/1999

 

5 to 40 years

Lafayette-Pinhook2

 

LA

 

 

 

 

708

 

 

 

2,860

 

 

 

1,331

 

 

 

708

 

 

 

4,191

 

 

 

4,899

 

 

 

1,675

 

 

1992/94

 

2/17/1999

 

5 to 40 years

Lafayette-Ambassador

 

LA

 

 

 

 

314

 

 

 

1,095

 

 

 

(1,091

)

 

 

314

 

 

 

4

 

 

 

318

 

 

 

97

 

 

1975

 

2/17/1999

 

5 to 40 years

Lafayette-Evangeline

 

LA

 

 

 

 

188

 

 

 

652

 

 

 

1,671

 

 

 

188

 

 

 

2,323

 

 

 

2,511

 

 

 

1,078

 

 

1977

 

2/17/1999

 

5 to 40 years

Lafayette-Guilbeau

 

LA

 

 

 

 

963

 

 

 

3,896

 

 

 

1,192

 

 

 

963

 

 

 

5,088

 

 

 

6,051

 

 

 

2,218

 

 

1994

 

2/17/1999

 

5 to 40 years

Phoenix-Gilbert

 

AZ

 

 

 

 

651

 

 

 

2,600

 

 

 

1,339

 

 

 

772

 

 

 

3,818

 

 

 

4,590

 

 

 

1,688

 

 

1995

 

5/18/1999

 

5 to 40 years

Phoenix-Glendale

 

AZ

 

 

 

 

565

 

 

 

2,596

 

 

 

783

 

 

 

565

 

 

 

3,379

 

 

 

3,944

 

 

 

1,571

 

 

1997

 

5/18/1999

 

5 to 40 years

Phoenix-Mesa

 

AZ

 

 

 

 

330

 

 

 

1,309

 

 

 

2,606

 

 

 

733

 

 

 

3,512

 

 

 

4,245

 

 

 

1,262

 

 

1986

 

5/18/1999

 

5 to 40 years

Phoenix-Mesa

 

AZ

 

 

 

 

339

 

 

 

1,346

 

 

 

816

 

 

 

339

 

 

 

2,162

 

 

 

2,501

 

 

 

940

 

 

1986

 

5/18/1999

 

5 to 40 years

Phoenix-Mesa

 

AZ

 

 

 

 

291

 

 

 

1,026

 

 

 

1,160

 

 

 

291

 

 

 

2,186

 

 

 

2,477

 

 

 

881

 

 

1976

 

5/18/1999

 

5 to 40 years

Phoenix-Mesa

 

AZ

 

 

 

 

354

 

 

 

1,405

 

 

 

723

 

 

 

354

 

 

 

2,128

 

 

 

2,482

 

 

 

948

 

 

1986

 

5/18/1999

 

5 to 40 years

Phoenix-Camelback

 

AZ

 

 

 

 

453

 

 

 

1,610

 

 

 

1,101

 

 

 

453

 

 

 

2,711

 

 

 

3,164

 

 

 

1,281

 

 

1984

 

5/18/1999

 

5 to 40 years

Phoenix-Bell

 

AZ

 

 

 

 

872

 

 

 

3,476

 

 

 

3,659

 

 

 

872

 

 

 

7,135

 

 

 

8,007

 

 

 

2,538

 

 

1984

 

5/18/1999

 

5 to 40 years

Phoenix-35th Ave

 

AZ

 

 

 

 

849

 

 

 

3,401

 

 

 

972

 

 

 

849

 

 

 

4,373

 

 

 

5,222

 

 

 

2,060

 

 

1996

 

5/21/1999

 

5 to 40 years

Portland

 

ME

 

 

 

 

410

 

 

 

1,626

 

 

 

2,031

 

 

 

410

 

 

 

3,657

 

 

 

4,067

 

 

 

1,517

 

 

1988

 

8/2/1999

 

5 to 40 years

Space Coast-Cocoa

 

FL

 

 

 

 

667

 

 

 

2,373

 

 

 

1,009

 

 

 

667

 

 

 

3,382

 

 

 

4,049

 

 

 

1,564

 

 

1982

 

9/29/1999

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

335

 

 

 

1,521

 

 

 

946

 

 

 

335

 

 

 

2,467

 

 

 

2,802

 

 

 

987

 

 

1985

 

11/9/1999

 

5 to 40 years

NY Metro-Middletown

 

NY

 

 

 

 

276

 

 

 

1,312

 

 

 

1,333

 

 

 

276

 

 

 

2,645

 

 

 

2,921

 

 

 

1,076

 

 

1998

 

2/2/2000

 

5 to 40 years

Boston-N. Andover

 

MA

 

 

 

 

633

 

 

 

2,573

 

 

 

1,083

 

 

 

633

 

 

 

3,656

 

 

 

4,289

 

 

 

1,543

 

 

1989

 

2/15/2000

 

5 to 40 years


Life Storage, Inc.

Schedule III

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to

 

 

Gross Amount at Which

 

 

 

 

 

 

 

 

 

 

which

 

 

 

 

 

 

Initial Cost to Company

 

 

Acquisition

 

 

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Houston-Seabrook

 

TX

 

 

 

 

633

 

 

 

2,617

 

 

 

572

 

 

 

633

 

 

 

3,189

 

 

 

3,822

 

 

 

1,435

 

 

1996

 

3/1/2000

 

5 to 40 years

Ft. Lauderdale

 

FL

 

 

 

 

384

 

 

 

1,422

 

 

 

874

 

 

 

384

 

 

 

2,296

 

 

 

2,680

 

 

 

949

 

 

1994

 

5/2/2000

 

5 to 40 years

Birmingham-Bessemer

 

AL

 

 

 

 

254

 

 

 

1,059

 

 

 

2,165

 

 

 

332

 

 

 

3,146

 

 

 

3,478

 

 

 

990

 

 

1998

 

11/15/2000

 

5 to 40 years

NY Metro-Brewster

 

NY

 

 

 

 

1,716

 

 

 

6,920

 

 

 

1,805

 

 

 

1,981

 

 

 

8,460

 

 

 

10,441

 

 

 

2,358

 

 

1991/97

 

12/27/2000

 

5 to 40 years

Austin-Lamar

 

TX

 

 

 

 

837

 

 

 

2,977

 

 

 

3,643

 

 

 

966

 

 

 

6,491

 

 

 

7,457

 

 

 

1,450

 

 

1996/99

 

2/22/2001

 

5 to 40 years

Houston

 

TX

 

 

 

 

733

 

 

 

3,392

 

 

 

1,360

 

 

 

841

 

 

 

4,644

 

 

 

5,485

 

 

 

1,432

 

 

1993/97

 

3/2/2001

 

5 to 40 years

Ft.Myers

 

FL

 

 

 

 

787

 

 

 

3,249

 

 

 

762

 

 

 

902

 

 

 

3,896

 

 

 

4,798

 

 

 

1,339

 

 

1997

 

3/13/2001

 

5 to 40 years

Boston-Dracut

 

MA

 

 

 

 

1,035

 

 

 

3,737

 

 

 

772

 

 

 

1,104

 

 

 

4,440

 

 

 

5,544

 

 

 

1,821

 

 

1986

 

12/1/2001

 

5 to 40 years

Boston-Methuen

 

MA

 

 

 

 

1,024

 

 

 

3,649

 

 

 

849

 

 

 

1,091

 

 

 

4,431

 

 

 

5,522

 

 

 

1,770

 

 

1984

 

12/1/2001

 

5 to 40 years

Columbia

 

SC

 

 

 

 

883

 

 

 

3,139

 

 

 

1,496

 

 

 

942

 

 

 

4,576

 

 

 

5,518

 

 

 

1,726

 

 

1985

 

12/1/2001

 

5 to 40 years

Myrtle Beach

 

SC

 

 

 

 

552

 

 

 

1,970

 

 

 

1,181

 

 

 

589

 

 

 

3,114

 

 

 

3,703

 

 

 

1,258

 

 

1984

 

12/1/2001

 

5 to 40 years

Maine-Saco

 

ME

 

 

 

 

534

 

 

 

1,914

 

 

 

997

 

 

 

938

 

 

 

2,507

 

 

 

3,445

 

 

 

967

 

 

1988

 

12/3/2001

 

5 to 40 years

Boston-Plymouth

 

MA

 

 

 

 

1,004

 

 

 

4,584

 

 

 

2,401

 

 

 

1,004

 

 

 

6,985

 

 

 

7,989

 

 

 

2,465

 

 

1996

 

12/19/2001

 

5 to 40 years

Boston-Sandwich

 

MA

 

 

 

 

670

 

 

 

3,060

 

 

 

631

 

 

 

714

 

 

 

3,647

 

 

 

4,361

 

 

 

1,448

 

 

1984

 

12/19/2001

 

5 to 40 years

Syracuse

 

NY

 

 

 

 

294

 

 

 

1,203

 

 

 

1,217

 

 

 

327

 

 

 

2,387

 

 

 

2,714

 

 

 

819

 

 

1987

 

2/5/2002

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

734

 

 

 

2,956

 

 

 

967

 

 

 

784

 

 

 

3,873

 

 

 

4,657

 

 

 

1,480

 

 

1984

 

2/13/2002

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

394

 

 

 

1,595

 

 

 

562

 

 

 

421

 

 

 

2,130

 

 

 

2,551

 

 

 

823

 

 

1985

 

2/13/2002

 

5 to 40 years

San Antonio-Hunt

 

TX

 

 

 

 

381

 

 

 

1,545

 

 

 

6,688

 

 

 

618

 

 

 

7,996

 

 

 

8,614

 

 

 

1,369

 

 

1980/17

 

2/13/2002

 

5 to 40 years

Houston-Humble

 

TX

 

 

 

 

919

 

 

 

3,696

 

 

 

724

 

 

 

919

 

 

 

4,420

 

 

 

5,339

 

 

 

1,682

 

 

1998/02

 

6/19/2002

 

5 to 40 years

Houston-Pasadena

 

TX

 

 

 

 

612

 

 

 

2,468

 

 

 

478

 

 

 

612

 

 

 

2,946

 

 

 

3,558

 

 

 

1,136

 

 

1999

 

6/19/2002

 

5 to 40 years

Houston-League City

 

TX

 

 

 

 

689

 

 

 

3,159

 

 

 

824

 

 

 

688

 

 

 

3,984

 

 

 

4,672

 

 

 

1,444

 

 

1994/97

 

6/19/2002

 

5 to 40 years

Houston-Montgomery

 

TX

 

 

 

 

817

 

 

 

3,286

 

 

 

2,231

 

 

 

1,119

 

 

 

5,215

 

 

 

6,334

 

 

 

1,838

 

 

1998

 

6/19/2002

 

5 to 40 years

Houston-S. Hwy 6

 

TX

 

 

 

 

407

 

 

 

1,650

 

 

 

856

 

 

 

407

 

 

 

2,506

 

 

 

2,913

 

 

 

793

 

 

1997

 

6/19/2002

 

5 to 40 years

Houston-Beaumont

 

TX

 

 

 

 

817

 

 

 

3,287

 

 

 

3,517

 

 

 

817

 

 

 

6,804

 

 

 

7,621

 

 

 

1,495

 

 

1996/17

 

6/19/2002

 

5 to 40 years

The Hamptons

 

NY

 

 

 

 

2,207

 

 

 

8,866

 

 

 

914

 

 

 

2,207

 

 

 

9,780

 

 

 

11,987

 

 

 

3,718

 

 

1989/95

 

12/16/2002

 

5 to 40 years

The Hamptons

 

NY

 

 

 

 

1,131

 

 

 

4,564

 

 

 

629

 

 

 

1,131

 

 

 

5,193

 

 

 

6,324

 

 

 

1,953

 

 

1998

 

12/16/2002

 

5 to 40 years

The Hamptons

 

NY

 

 

 

 

635

 

 

 

2,918

 

 

 

442

 

 

 

635

 

 

 

3,360

 

 

 

3,995

 

 

 

1,270

 

 

1997

 

12/16/2002

 

5 to 40 years

The Hamptons

 

NY

 

 

 

 

1,251

 

 

 

5,744

 

 

 

789

 

 

 

1,252

 

 

 

6,532

 

 

 

7,784

 

 

 

2,361

 

 

1994/98

 

12/16/2002

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

1,039

 

 

 

4,201

 

 

 

349

 

 

 

1,039

 

 

 

4,550

 

 

 

5,589

 

 

 

1,643

 

 

1995/99

 

8/26/2003

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

827

 

 

 

3,776

 

 

 

551

 

 

 

827

 

 

 

4,327

 

 

 

5,154

 

 

 

1,537

 

 

1998/01

 

10/1/2003

 

5 to 40 years

Stamford

 

CT

 

 

 

 

2,713

 

 

 

11,013

 

 

 

764

 

 

 

2,713

 

 

 

11,777

 

 

 

14,490

 

 

 

4,200

 

 

1998

 

3/17/2004

 

5 to 40 years

Houston-Tomball

 

TX

 

 

 

 

773

 

 

 

3,170

 

 

 

1,876

 

 

 

773

 

 

 

5,046

 

 

 

5,819

 

 

 

1,727

 

 

2000

 

5/19/2004

 

5 to 40 years

Houston-Conroe

 

TX

 

 

 

 

1,195

 

 

 

4,877

 

 

 

463

 

 

 

1,195

 

 

 

5,340

 

 

 

6,535

 

 

 

1,817

 

 

2001

 

5/19/2004

 

5 to 40 years

Houston-Spring

 

TX

 

 

 

 

1,103

 

 

 

4,550

 

 

 

529

 

 

 

1,103

 

 

 

5,079

 

 

 

6,182

 

 

 

1,832

 

 

2001

 

5/19/2004

 

5 to 40 years

Houston-Bissonnet

 

TX

 

 

 

 

1,061

 

 

 

4,427

 

 

 

2,920

 

 

 

1,061

 

 

 

7,347

 

 

 

8,408

 

 

 

2,382

 

 

2003

 

5/19/2004

 

5 to 40 years

Houston-Alvin

 

TX

 

 

 

 

388

 

 

 

1,640

 

 

 

1,052

 

 

 

388

 

 

 

2,692

 

 

 

3,080

 

 

 

883

 

 

2003

 

5/19/2004

 

5 to 40 years

Clearwater

 

FL

 

 

 

 

1,720

 

 

 

6,986

 

 

 

323

 

 

 

1,720

 

 

 

7,309

 

 

 

9,029

 

 

 

2,563

 

 

2001

 

6/3/2004

 

5 to 40 years

Houston-Missouri City

 

TX

 

 

 

 

1,167

 

 

 

4,744

 

 

 

3,620

 

 

 

1,566

 

 

 

7,965

 

 

 

9,531

 

 

 

2,379

 

 

1998

 

6/23/2004

 

5 to 40 years

Chattanooga-Hixson

 

TN

 

 

 

 

1,365

 

 

 

5,569

 

 

 

1,882

 

 

 

1,365

 

 

 

7,451

 

 

 

8,816

 

 

 

2,519

 

 

1998/02

 

8/4/2004

 

5 to 40 years

Austin-Round Rock

 

TX

 

 

 

 

2,047

 

 

 

5,857

 

 

 

951

 

 

 

1,976

 

 

 

6,879

 

 

 

8,855

 

 

 

2,366

 

 

2000

 

8/5/2004

 

5 to 40 years

Long Island-Bayshore

 

NY

 

 

 

 

1,131

 

 

 

4,609

 

 

 

284

 

 

 

1,131

 

 

 

4,893

 

 

 

6,024

 

 

 

1,584

 

 

2003

 

3/15/2005

 

5 to 40 years

Syracuse - Cicero

 

NY

 

 

 

 

527

 

 

 

2,121

 

 

 

3,309

 

 

 

527

 

 

 

5,430

 

 

 

5,957

 

 

 

1,133

 

 

1988/02/16

 

3/16/2005

 

5 to 40 years

Boston-Springfield

 

MA

 

 

 

 

612

 

 

 

2,501

 

 

 

646

 

 

 

612

 

 

 

3,147

 

 

 

3,759

 

 

 

934

 

 

1965/75

 

4/12/2005

 

5 to 40 years

Stamford

 

CT

 

 

 

 

1,612

 

 

 

6,585

 

 

 

408

 

 

 

1,612

 

 

 

6,993

 

 

 

8,605

 

 

 

2,324

 

 

2002

 

4/14/2005

 

5 to 40 years

Montgomery-Richard

 

AL

 

 

 

 

1,906

 

 

 

7,726

 

 

 

499

 

 

 

1,906

 

 

 

8,225

 

 

 

10,131

 

 

 

2,646

 

 

1997

 

6/1/2005

 

5 to 40 years

Houston-Jones

 

TX

 

 

 

 

1,214

 

 

 

4,949

 

 

 

372

 

 

 

1,215

 

 

 

5,320

 

 

 

6,535

 

 

 

1,747

 

 

1997/99

 

6/6/2005

 

5 to 40 years


Life Storage, Inc.

Schedule III

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to

 

 

Gross Amount at Which

 

 

 

 

 

 

 

 

 

 

which

 

 

 

 

 

 

Initial Cost to Company

 

 

Acquisition

 

 

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Boston-Oxford

 

MA

 

 

 

 

470

 

 

 

1,902

 

 

 

1,521

 

 

 

470

 

 

 

3,423

 

 

 

3,893

 

 

 

1,046

 

 

2002

 

6/23/2005

 

5 to 40 years

Austin-290E

 

TX

 

 

 

 

537

 

 

 

2,183

 

 

 

6,061

 

 

 

491

 

 

 

8,290

 

 

 

8,781

 

 

 

744

 

 

2003/17

 

7/12/2005

 

5 to 40 years

San Antonio-Marbach

 

TX

 

 

 

 

556

 

 

 

2,265

 

 

 

591

 

 

 

556

 

 

 

2,856

 

 

 

3,412

 

 

 

959

 

 

2003

 

7/12/2005

 

5 to 40 years

Austin-South 1st

 

TX

 

 

 

 

754

 

 

 

3,065

 

 

 

330

 

 

 

754

 

 

 

3,395

 

 

 

4,149

 

 

 

1,114

 

 

2003

 

7/12/2005

 

5 to 40 years

Houston-Pinehurst

 

TX

 

 

 

 

484

 

 

 

1,977

 

 

 

1,565

 

 

 

484

 

 

 

3,542

 

 

 

4,026

 

 

 

1,056

 

 

2002/04

 

7/12/2005

 

5 to 40 years

Atlanta-Marietta

 

GA

 

 

 

 

811

 

 

 

3,397

 

 

 

578

 

 

 

811

 

 

 

3,975

 

 

 

4,786

 

 

 

1,297

 

 

2003

 

9/15/2005

 

5 to 40 years

Baton Rouge

 

LA

 

 

 

 

719

 

 

 

2,927

 

 

 

2,669

 

 

 

719

 

 

 

5,596

 

 

 

6,315

 

 

 

1,392

 

 

1984/94

 

11/15/2005

 

5 to 40 years

San Marcos-Hwy 35S

 

TX

 

 

 

 

628

 

 

 

2,532

 

 

 

3,431

 

 

 

982

 

 

 

5,609

 

 

 

6,591

 

 

 

922

 

 

2001/16

 

1/10/2006

 

5 to 40 years

Houston-Baytown

 

TX

 

 

 

 

596

 

 

 

2,411

 

 

 

329

 

 

 

596

 

 

 

2,740

 

 

 

3,336

 

 

 

814

 

 

2002

 

1/10/2006

 

5 to 40 years

Houston-Cypress

 

TX

 

 

 

 

721

 

 

 

2,994

 

 

 

2,340

 

 

 

721

 

 

 

5,334

 

 

 

6,055

 

 

 

1,455

 

 

2003

 

1/13/2006

 

5 to 40 years

Rochester

 

NY

 

 

 

 

937

 

 

 

3,779

 

 

 

230

 

 

 

937

 

 

 

4,009

 

 

 

4,946

 

 

 

1,246

 

 

2002/06

 

2/1/2006

 

5 to 40 years

Houston-Jones Rd 2

 

TX

 

 

 

 

707

 

 

 

2,933

 

 

 

2,884

 

 

 

707

 

 

 

5,817

 

 

 

6,524

 

 

 

1,666

 

 

2000

 

3/9/2006

 

5 to 40 years

Lafayette

 

LA

 

 

 

 

411

 

 

 

1,621

 

 

 

270

 

 

 

411

 

 

 

1,891

 

 

 

2,302

 

 

 

608

 

 

1997

 

4/13/2006

 

5 to 40 years

Lafayette

 

LA

 

 

 

 

463

 

 

 

1,831

 

 

 

198

 

 

 

463

 

 

 

2,029

 

 

 

2,492

 

 

 

644

 

 

2001/04

 

4/13/2006

 

5 to 40 years

Lafayette

 

LA

 

 

 

 

601

 

 

 

2,406

 

 

 

1,480

 

 

 

601

 

 

 

3,886

 

 

 

4,487

 

 

 

1,154

 

 

2002

 

4/13/2006

 

5 to 40 years

Lafayette

 

LA

 

 

 

 

542

 

 

 

1,319

 

 

 

2,229

 

 

 

542

 

 

 

3,548

 

 

 

4,090

 

 

 

986

 

 

1997/99

 

4/13/2006

 

5 to 40 years

Manchester

 

NH

 

 

 

 

832

 

 

 

3,268

 

 

 

184

 

 

 

832

 

 

 

3,452

 

 

 

4,284

 

 

 

1,055

 

 

2000

 

4/26/2006

 

5 to 40 years

Clearwater-Largo

 

FL

 

 

 

 

1,270

 

 

 

5,037

 

 

 

455

 

 

 

1,270

 

 

 

5,492

 

 

 

6,762

 

 

 

1,625

 

 

1998

 

6/22/2006

 

5 to 40 years

Clearwater-Pinellas Park

 

FL

 

 

 

 

929

 

 

 

3,676

 

 

 

344

 

 

 

929

 

 

 

4,020

 

 

 

4,949

 

 

 

1,166

 

 

2000

 

6/22/2006

 

5 to 40 years

Clearwater-Tarpon Spring

 

FL

 

 

 

 

696

 

 

 

2,739

 

 

 

267

 

 

 

696

 

 

 

3,006

 

 

 

3,702

 

 

 

889

 

 

1999

 

6/22/2006

 

5 to 40 years

New Orleans

 

LA

 

 

 

 

1,220

 

 

 

4,805

 

 

 

332

 

 

 

1,220

 

 

 

5,137

 

 

 

6,357

 

 

 

1,548

 

 

2000

 

6/22/2006

 

5 to 40 years

St Louis-Meramec

 

MO

 

 

 

 

1,113

 

 

 

4,359

 

 

 

479

 

 

 

1,113

 

 

 

4,838

 

 

 

5,951

 

 

 

1,427

 

 

1999

 

6/22/2006

 

5 to 40 years

St Louis-Charles Rock

 

MO

 

 

 

 

766

 

 

 

3,040

 

 

 

1,500

 

 

 

766

 

 

 

4,540

 

 

 

5,306

 

 

 

1,105

 

 

1999

 

6/22/2006

 

5 to 40 years

St Louis-Shackelford

 

MO

 

 

 

 

828

 

 

 

3,290

 

 

 

222

 

 

 

828

 

 

 

3,512

 

 

 

4,340

 

 

 

1,055

 

 

1999

 

6/22/2006

 

5 to 40 years

St Louis-W.Washington

 

MO

 

 

 

 

734

 

 

 

2,867

 

 

 

2,520

 

 

 

734

 

 

 

5,387

 

 

 

6,121

 

 

 

1,255

 

 

1980/01/15

 

6/22/2006

 

5 to 40 years

St Louis-Howdershell

 

MO

 

 

 

 

899

 

 

 

3,596

 

 

 

356

 

 

 

899

 

 

 

3,952

 

 

 

4,851

 

 

 

1,166

 

 

2000

 

6/22/2006

 

5 to 40 years

St Louis-Lemay Ferry

 

MO

 

 

 

 

890

 

 

 

3,552

 

 

 

475

 

 

 

890

 

 

 

4,027

 

 

 

4,917

 

 

 

1,186

 

 

1999

 

6/22/2006

 

5 to 40 years

St Louis-Manchester

 

MO

 

 

 

 

697

 

 

 

2,711

 

 

 

224

 

 

 

697

 

 

 

2,935

 

 

 

3,632

 

 

 

868

 

 

2000

 

6/22/2006

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

1,256

 

 

 

4,946

 

 

 

572

 

 

 

1,256

 

 

 

5,518

 

 

 

6,774

 

 

 

1,601

 

 

1998/03

 

6/22/2006

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

605

 

 

 

2,434

 

 

 

215

 

 

 

605

 

 

 

2,649

 

 

 

3,254

 

 

 

771

 

 

2004

 

6/22/2006

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

607

 

 

 

2,428

 

 

 

241

 

 

 

607

 

 

 

2,669

 

 

 

3,276

 

 

 

793

 

 

2004

 

6/22/2006

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

1,073

 

 

 

4,276

 

 

 

134

 

 

 

1,073

 

 

 

4,410

 

 

 

5,483

 

 

 

1,298

 

 

2003

 

6/22/2006

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

549

 

 

 

2,180

 

 

 

1,184

 

 

 

549

 

 

 

3,364

 

 

 

3,913

 

 

 

889

 

 

1998

 

6/22/2006

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

644

 

 

 

2,542

 

 

 

169

 

 

 

644

 

 

 

2,711

 

 

 

3,355

 

 

 

809

 

 

1999

 

6/22/2006

 

5 to 40 years

San Antonio-Blanco

 

TX

 

 

 

 

963

 

 

 

3,836

 

 

 

233

 

 

 

963

 

 

 

4,069

 

 

 

5,032

 

 

 

1,237

 

 

2004

 

6/22/2006

 

5 to 40 years

San Antonio-Broadway

 

TX

 

 

 

 

773

 

 

 

3,060

 

 

 

2,200

 

 

 

773

 

 

 

5,260

 

 

 

6,033

 

 

 

1,287

 

 

2000

 

6/22/2006

 

5 to 40 years

San Antonio-Huebner

 

TX

 

 

 

 

1,175

 

 

 

4,624

 

 

 

396

 

 

 

1,175

 

 

 

5,020

 

 

 

6,195

 

 

 

1,454

 

 

1998

 

6/22/2006

 

5 to 40 years

Nashua

 

NH

 

 

 

 

617

 

 

 

2,422

 

 

 

619

 

 

 

617

 

 

 

3,041

 

 

 

3,658

 

 

 

905

 

 

1989

 

6/29/2006

 

5 to 40 years

Lafayette

 

LA

 

 

 

 

699

 

 

 

2,784

 

 

 

3,836

 

 

 

699

 

 

 

6,620

 

 

 

7,319

 

 

 

1,435

 

 

1995/99/16

 

8/1/2006

 

5 to 40 years

Chattanooga-Lee Hwy II

 

TN

 

 

 

 

619

 

 

 

2,471

 

 

 

208

 

 

 

619

 

 

 

2,679

 

 

 

3,298

 

 

 

785

 

 

2002

 

8/7/2006

 

5 to 40 years

Montgomery-E.S.Blvd

 

AL

 

 

 

 

1,158

 

 

 

4,639

 

 

 

1,283

 

 

 

1,158

 

 

 

5,922

 

 

 

7,080

 

 

 

1,673

 

 

1996/97

 

9/28/2006

 

5 to 40 years

Auburn-Pepperell Pkwy

 

AL

 

 

 

 

590

 

 

 

2,361

 

 

 

600

 

 

 

590

 

 

 

2,961

 

 

 

3,551

 

 

 

858

 

 

1998

 

9/28/2006

 

5 to 40 years

Auburn-Gatewood Dr

 

AL

 

 

 

 

694

 

 

 

2,758

 

 

 

403

 

 

 

694

 

 

 

3,161

 

 

 

3,855

 

 

 

882

 

 

2002/03

 

9/28/2006

 

5 to 40 years

Columbus-Williams Rd

 

GA

 

 

 

 

736

 

 

 

2,905

 

 

 

406

 

 

 

736

 

 

 

3,311

 

 

 

4,047

 

 

 

947

 

 

2002/04/06

 

9/28/2006

 

5 to 40 years

Columbus-Miller Rd

 

GA

 

 

 

 

975

 

 

 

3,854

 

 

 

1,394

 

 

 

975

 

 

 

5,248

 

 

 

6,223

 

 

 

1,219

 

 

1995

 

9/28/2006

 

5 to 40 years

Columbus-Armour Rd

 

GA

 

 

 

 

-

 

 

 

3,680

 

 

 

337

 

 

 

-

 

 

 

4,017

 

 

 

4,017

 

 

 

1,153

 

 

2004/05

 

9/28/2006

 

5 to 40 years


Life Storage, Inc.

Schedule III

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to

 

 

Gross Amount at Which

 

 

 

 

 

 

 

 

 

 

which

 

 

 

 

 

 

Initial Cost to Company

 

 

Acquisition

 

 

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Columbus-Amber Dr

 

GA

 

 

 

 

439

 

 

 

1,745

 

 

 

394

 

 

 

439

 

 

 

2,139

 

 

 

2,578

 

 

 

637

 

 

1998

 

9/28/2006

 

5 to 40 years

Concord

 

NH

 

 

 

 

813

 

 

 

3,213

 

 

 

2,072

 

 

 

813

 

 

 

5,285

 

 

 

6,098

 

 

 

1,413

 

 

2000

 

10/31/2006

 

5 to 40 years

Houston-Beaumont

 

TX

 

 

 

 

929

 

 

 

3,647

 

 

 

453

 

 

 

930

 

 

 

4,099

 

 

 

5,029

 

 

 

1,098

 

 

2002/04

 

3/8/2007

 

5 to 40 years

Houston-Beaumont

 

TX

 

 

 

 

1,537

 

 

 

6,018

 

 

 

642

 

 

 

1,537

 

 

 

6,660

 

 

 

8,197

 

 

 

1,858

 

 

2003/06

 

3/8/2007

 

5 to 40 years

Buffalo-Langner Rd

 

NY

 

 

 

 

532

 

 

 

2,119

 

 

 

3,600

 

 

 

532

 

 

 

5,719

 

 

 

6,251

 

 

 

1,060

 

 

1993/07/15

 

3/30/2007

 

5 to 40 years

Buffalo-Transit Rd

 

NY

 

 

 

 

437

 

 

 

1,794

 

 

 

702

 

 

 

437

 

 

 

2,496

 

 

 

2,933

 

 

 

672

 

 

1998

 

3/30/2007

 

5 to 40 years

Buffalo-Lake Ave

 

NY

 

 

 

 

638

 

 

 

2,531

 

 

 

2,964

 

 

 

638

 

 

 

5,495

 

 

 

6,133

 

 

 

1,007

 

 

1997/06

 

3/30/2007

 

5 to 40 years

Buffalo-Union Rd

 

NY

 

 

 

 

348

 

 

 

1,344

 

 

 

529

 

 

 

348

 

 

 

1,873

 

 

 

2,221

 

 

 

502

 

 

1998

 

3/30/2007

 

5 to 40 years

Buffalo-NF Blvd

 

NY

 

 

 

 

323

 

 

 

1,331

 

 

 

249

 

 

 

323

 

 

 

1,580

 

 

 

1,903

 

 

 

464

 

 

1998

 

3/30/2007

 

5 to 40 years

Buffalo-Young St

 

NY

 

 

 

 

315

 

 

 

2,185

 

 

 

1,206

 

 

 

316

 

 

 

3,390

 

 

 

3,706

 

 

 

868

 

 

1999/00

 

3/30/2007

 

5 to 40 years

Buffalo-Sheridan Dr

 

NY

 

 

 

 

961

 

 

 

3,827

 

 

 

2,638

 

 

 

961

 

 

 

6,465

 

 

 

7,426

 

 

 

1,472

 

 

1999

 

3/30/2007

 

5 to 40 years

Bufrfalo-Transit Rd

 

NY

 

 

 

 

375

 

 

 

1,498

 

 

 

749

 

 

 

375

 

 

 

2,247

 

 

 

2,622

 

 

 

570

 

 

1990/95

 

3/30/2007

 

5 to 40 years

Rochester-Phillips Rd

 

NY

 

 

 

 

1,003

 

 

 

4,002

 

 

 

145

 

 

 

1,003

 

 

 

4,147

 

 

 

5,150

 

 

 

1,143

 

 

1999

 

3/30/2007

 

5 to 40 years

San Antonio-Foster

 

TX

 

 

 

 

676

 

 

 

2,685

 

 

 

466

 

 

 

676

 

 

 

3,151

 

 

 

3,827

 

 

 

915

 

 

2003/06

 

5/21/2007

 

5 to 40 years

Huntsville-Memorial Pkwy

 

AL

 

 

 

 

1,607

 

 

 

6,338

 

 

 

1,113

 

 

 

1,677

 

 

 

7,381

 

 

 

9,058

 

 

 

1,927

 

 

1989/06

 

6/1/2007

 

5 to 40 years

Huntsville-Madison 1

 

AL

 

 

 

 

1,016

 

 

 

4,013

 

 

 

467

 

 

 

1,017

 

 

 

4,479

 

 

 

5,496

 

 

 

1,241

 

 

1993/07

 

6/1/2007

 

5 to 40 years

Bilox-Gulfport

 

MS

 

 

 

 

1,423

 

 

 

5,624

 

 

 

222

 

 

 

1,423

 

 

 

5,846

 

 

 

7,269

 

 

 

1,615

 

 

1998/05

 

6/1/2007

 

5 to 40 years

Huntsville-Hwy 72

 

AL

 

 

 

 

1,206

 

 

 

4,775

 

 

 

401

 

 

 

1,206

 

 

 

5,176

 

 

 

6,382

 

 

 

1,408

 

 

1998/06

 

6/1/2007

 

5 to 40 years

Mobile-Airport Blvd

 

AL

 

 

 

 

1,216

 

 

 

4,819

 

 

 

391

 

 

 

1,216

 

 

 

5,210

 

 

 

6,426

 

 

 

1,454

 

 

2000/07

 

6/1/2007

 

5 to 40 years

Bilox-Gulfport

 

MS

 

 

 

 

1,345

 

 

 

5,325

 

 

 

159

 

 

 

1,301

 

 

 

5,528

 

 

 

6,829

 

 

 

1,493

 

 

2002/04

 

6/1/2007

 

5 to 40 years

Huntsville-Madison 2

 

AL

 

 

 

 

1,164

 

 

 

4,624

 

 

 

330

 

 

 

1,164

 

 

 

4,954

 

 

 

6,118

 

 

 

1,344

 

 

2002/06

 

6/1/2007

 

5 to 40 years

Foley-Hwy 59

 

AL

 

 

 

 

1,346

 

 

 

5,474

 

 

 

1,592

 

 

 

1,347

 

 

 

7,065

 

 

 

8,412

 

 

 

1,683

 

 

2003/06/15

 

6/1/2007

 

5 to 40 years

Pensacola 6-Nine Mile

 

FL

 

 

 

 

1,029

 

 

 

4,180

 

 

 

213

 

 

 

1,029

 

 

 

4,393

 

 

 

5,422

 

 

 

1,289

 

 

2003/06

 

6/1/2007

 

5 to 40 years

Auburn-College St

 

AL

 

 

 

 

686

 

 

 

2,732

 

 

 

245

 

 

 

686

 

 

 

2,977

 

 

 

3,663

 

 

 

838

 

 

2003

 

6/1/2007

 

5 to 40 years

Biloxi-Gulfport

 

MS

 

 

 

 

1,811

 

 

 

7,152

 

 

 

163

 

 

 

1,811

 

 

 

7,315

 

 

 

9,126

 

 

 

1,960

 

 

2004/06

 

6/1/2007

 

5 to 40 years

Pensacola 7-Hwy 98

 

FL

 

 

 

 

732

 

 

 

3,015

 

 

 

118

 

 

 

732

 

 

 

3,133

 

 

 

3,865

 

 

 

900

 

 

2006

 

6/1/2007

 

5 to 40 years

Montgomery-Arrowhead

 

AL

 

 

 

 

1,075

 

 

 

4,333

 

 

 

347

 

 

 

1,075

 

 

 

4,680

 

 

 

5,755

 

 

 

1,263

 

 

2006

 

6/1/2007

 

5 to 40 years

Montgomery-McLemore

 

AL

 

 

 

 

885

 

 

 

3,586

 

 

 

286

 

 

 

885

 

 

 

3,872

 

 

 

4,757

 

 

 

1,028

 

 

2006

 

6/1/2007

 

5 to 40 years

Houston-Beaumont

 

TX

 

 

 

 

742

 

 

 

3,024

 

 

 

373

 

 

 

742

 

 

 

3,397

 

 

 

4,139

 

 

 

876

 

 

2002/05

 

11/14/2007

 

5 to 40 years

Hattiesburg-Clasic

 

MS

 

 

 

 

444

 

 

 

1,799

 

 

 

212

 

 

 

444

 

 

 

2,011

 

 

 

2,455

 

 

 

526

 

 

1998

 

12/19/2007

 

5 to 40 years

Biloxi-Ginger

 

MS

 

 

 

 

384

 

 

 

1,548

 

 

 

159

 

 

 

384

 

 

 

1,707

 

 

 

2,091

 

 

 

423

 

 

2000

 

12/19/2007

 

5 to 40 years

Foley-7905 St Hwy 59

 

AL

 

 

 

 

437

 

 

 

1,757

 

 

 

198

 

 

 

437

 

 

 

1,955

 

 

 

2,392

 

 

 

495

 

 

2000

 

12/19/2007

 

5 to 40 years

Jackson-Ridgeland

 

MS

 

 

 

 

1,479

 

 

 

5,965

 

 

 

596

 

 

 

1,479

 

 

 

6,561

 

 

 

8,040

 

 

 

1,700

 

 

1997/00

 

1/17/2008

 

5 to 40 years

Jackson-5111

 

MS

 

 

 

 

1,337

 

 

 

5,377

 

 

 

279

 

 

 

1,337

 

 

 

5,656

 

 

 

6,993

 

 

 

1,425

 

 

2003

 

1/17/2008

 

5 to 40 years

Cincinnati-Robertson

 

OH

 

 

 

 

852

 

 

 

3,409

 

 

 

281

 

 

 

852

 

 

 

3,690

 

 

 

4,542

 

 

 

845

 

 

2003/04

 

12/31/2008

 

5 to 40 years

Richmond-Bridge Rd

 

VA

 

 

 

 

1,047

 

 

 

5,981

 

 

 

2,722

 

 

 

1,047

 

 

 

8,703

 

 

 

9,750

 

 

 

1,528

 

 

2009/16

 

10/1/2009

 

5 to 40 years

Raleigh-Durham

 

NC

 

 

 

 

846

 

 

 

4,095

 

 

 

229

 

 

 

846

 

 

 

4,324

 

 

 

5,170

 

 

 

809

 

 

2000

 

12/28/2010

 

5 to 40 years

Charlotte-Wallace

 

NC

 

 

 

 

961

 

 

 

3,702

 

 

 

1,272

 

 

 

961

 

 

 

4,974

 

 

 

5,935

 

 

 

788

 

 

2008/16

 

12/29/2010

 

5 to 40 years

Raleigh-Durham

 

NC

 

 

 

 

574

 

 

 

3,975

 

 

 

268

 

 

 

575

 

 

 

4,242

 

 

 

4,817

 

 

 

763

 

 

2008

 

12/29/2010

 

5 to 40 years

Charlotte-Westmoreland

 

NC

 

 

 

 

513

 

 

 

5,317

 

 

 

47

 

 

 

513

 

 

 

5,364

 

 

 

5,877

 

 

 

964

 

 

2009

 

12/29/2010

 

5 to 40 years

Charlotte-Matthews

 

NC

 

 

 

 

1,129

 

 

 

4,767

 

 

 

156

 

 

 

1,129

 

 

 

4,923

 

 

 

6,052

 

 

 

913

 

 

2009

 

12/29/2010

 

5 to 40 years

Raleigh-Durham

 

NC

 

 

 

 

381

 

 

 

3,575

 

 

 

107

 

 

 

381

 

 

 

3,682

 

 

 

4,063

 

 

 

672

 

 

2008

 

12/29/2010

 

5 to 40 years

Charlotte-Zeb Morris

 

NC

 

 

 

 

965

 

 

 

3,355

 

 

 

133

 

 

 

965

 

 

 

3,488

 

 

 

4,453

 

 

 

635

 

 

2007

 

12/29/2010

 

5 to 40 years

Fair Lawn

 

NJ

 

 

 

 

796

 

 

 

9,467

 

 

 

417

 

 

 

796

 

 

 

9,884

 

 

 

10,680

 

 

 

1,648

 

 

1999

 

7/14/2011

 

5 to 40 years

Elizabeth

 

NJ

 

 

 

 

885

 

 

 

3,073

 

 

 

755

 

 

 

885

 

 

 

3,828

 

 

 

4,713

 

 

 

575

 

 

1988

 

7/14/2011

 

5 to 40 years

Saint Louis-High Ridge

 

MO

 

 

 

 

197

 

 

 

2,132

 

 

 

90

 

 

 

197

 

 

 

2,222

 

 

 

2,419

 

 

 

444

 

 

2007

 

7/28/2011

 

5 to 40 years


Life Storage, Inc.

Schedule III

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to

 

 

Gross Amount at Which

 

 

 

 

 

 

 

 

 

 

which

 

 

 

 

 

 

Initial Cost to Company

 

 

Acquisition

 

 

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Atlanta-Decatur

 

GA

 

 

 

 

1,043

 

 

 

8,252

 

 

 

111

 

 

 

1,043

 

 

 

8,363

 

 

 

9,406

 

 

 

1,366

 

 

2006

 

8/17/2011

 

5 to 40 years

Houston-Humble

 

TX

 

 

 

 

825

 

 

 

4,201

 

 

 

567

 

 

 

825

 

 

 

4,768

 

 

 

5,593

 

 

 

810

 

 

1993

 

9/22/2011

 

5 to 40 years

Dallas-Fort Worth

 

TX

 

 

 

 

693

 

 

 

3,552

 

 

 

169

 

 

 

693

 

 

 

3,721

 

 

 

4,414

 

 

 

656

 

 

2001

 

9/22/2011

 

5 to 40 years

Houston-Hwy 6N

 

TX

 

 

 

 

1,243

 

 

 

3,106

 

 

 

175

 

 

 

1,243

 

 

 

3,281

 

 

 

4,524

 

 

 

603

 

 

2000

 

9/22/2011

 

5 to 40 years

Austin-Cedar Park

 

TX

 

 

 

 

1,559

 

 

 

2,727

 

 

 

100

 

 

 

1,559

 

 

 

2,827

 

 

 

4,386

 

 

 

527

 

 

1998

 

9/22/2011

 

5 to 40 years

Houston-Katy

 

TX

 

 

 

 

691

 

 

 

4,435

 

 

 

2,488

 

 

 

691

 

 

 

6,923

 

 

 

7,614

 

 

 

1,009

 

 

2000/15

 

9/22/2011

 

5 to 40 years

Houston-Deer Park

 

TX

 

 

 

 

1,012

 

 

 

3,312

 

 

 

257

 

 

 

1,012

 

 

 

3,569

 

 

 

4,581

 

 

 

617

 

 

1998

 

9/22/2011

 

5 to 40 years

Houston-W.Little York

 

TX

 

 

 

 

575

 

 

 

3,557

 

 

 

209

 

 

 

575

 

 

 

3,766

 

 

 

4,341

 

 

 

705

 

 

1998

 

9/22/2011

 

5 to 40 years

Houston-Pasadena

 

TX

 

 

 

 

705

 

 

 

4,223

 

 

 

234

 

 

 

705

 

 

 

4,457

 

 

 

5,162

 

 

 

784

 

 

2000

 

9/22/2011

 

5 to 40 years

Houston-Friendswood

 

TX

 

 

 

 

1,168

 

 

 

2,315

 

 

 

289

 

 

 

1,168

 

 

 

2,604

 

 

 

3,772

 

 

 

467

 

 

1994

 

9/22/2011

 

5 to 40 years

Houston-Spring

 

TX

 

 

 

 

2,152

 

 

 

3,027

 

 

 

339

 

 

 

2,152

 

 

 

3,366

 

 

 

5,518

 

 

 

638

 

 

1993

 

9/22/2011

 

5 to 40 years

Houston-W.Sam Houston

 

TX

 

 

 

 

402

 

 

 

3,602

 

 

 

271

 

 

 

402

 

 

 

3,873

 

 

 

4,275

 

 

 

660

 

 

1999

 

9/22/2011

 

5 to 40 years

Austin-Pond Springs Rd

 

TX

 

 

 

 

1,653

 

 

 

4,947

 

 

 

479

 

 

 

1,653

 

 

 

5,426

 

 

 

7,079

 

 

 

904

 

 

1984

 

9/22/2011

 

5 to 40 years

Houston-Spring

 

TX

 

 

 

 

1,474

 

 

 

4,500

 

 

 

138

 

 

 

1,456

 

 

 

4,656

 

 

 

6,112

 

 

 

813

 

 

2006

 

9/22/2011

 

5 to 40 years

Austin-Round Rock

 

TX

 

 

 

 

177

 

 

 

3,223

 

 

 

190

 

 

 

177

 

 

 

3,413

 

 

 

3,590

 

 

 

595

 

 

1999

 

9/22/2011

 

5 to 40 years

Houston-Silverado Dr

 

TX

 

 

 

 

1,438

 

 

 

4,583

 

 

 

178

 

 

 

1,438

 

 

 

4,761

 

 

 

6,199

 

 

 

814

 

 

2000

 

9/22/2011

 

5 to 40 years

Houston-Sugarland

 

TX

 

 

 

 

272

 

 

 

3,236

 

 

 

199

 

 

 

272

 

 

 

3,435

 

 

 

3,707

 

 

 

632

 

 

2001

 

9/22/2011

 

5 to 40 years

Houston-Westheimer Rd

 

TX

 

 

 

 

536

 

 

 

2,687

 

 

 

276

 

 

 

536

 

 

 

2,963

 

 

 

3,499

 

 

 

525

 

 

1997

 

9/22/2011

 

5 to 40 years

Houston-Wilcrest Dr

 

TX

 

 

 

 

1,478

 

 

 

4,145

 

 

 

219

 

 

 

1,478

 

 

 

4,364

 

 

 

5,842

 

 

 

733

 

 

1999

 

9/22/2011

 

5 to 40 years

Houston-Woodlands

 

TX

 

 

 

 

1,315

 

 

 

6,142

 

 

 

298

 

 

 

1,315

 

 

 

6,440

 

 

 

7,755

 

 

 

1,055

 

 

1997

 

9/22/2011

 

5 to 40 years

Houston-Woodlands

 

TX

 

 

 

 

3,189

 

 

 

3,974

 

 

 

216

 

 

 

3,189

 

 

 

4,190

 

 

 

7,379

 

 

 

702

 

 

2000

 

9/22/2011

 

5 to 40 years

Houston-Katy Freeway

 

TX

 

 

 

 

1,049

 

 

 

5,175

 

 

 

530

 

 

 

1,049

 

 

 

5,705

 

 

 

6,754

 

 

 

971

 

 

1999

 

9/22/2011

 

5 to 40 years

Houston-Webster

 

TX

 

1,700

 

 

2,054

 

 

 

2,138

 

 

 

2,895

 

 

 

2,054

 

 

 

5,033

 

 

 

7,087

 

 

 

508

 

 

1982/17

 

9/22/2011

 

5 to 40 years

Newport News-Brick Kiln

 

VA

 

 

 

 

2,848

 

 

 

5,892

 

 

 

108

 

 

 

2,848

 

 

 

6,000

 

 

 

8,848

 

 

 

1,021

 

 

2004

 

9/29/2011

 

5 to 40 years

Penasacola-Palafox

 

FL

 

 

 

 

197

 

 

 

4,281

 

 

 

696

 

 

 

197

 

 

 

4,977

 

 

 

5,174

 

 

 

754

 

 

1996

 

11/15/2011

 

5 to 40 years

Miami

 

FL

 

 

 

 

2,960

 

 

 

12,077

 

 

 

329

 

 

 

2,960

 

 

 

12,406

 

 

 

15,366

 

 

 

1,743

 

 

2005

 

5/16/2012

 

5 to 40 years

Chicago - Lake Forest

 

IL

 

 

 

 

1,932

 

 

 

11,606

 

 

 

203

 

 

 

1,932

 

 

 

11,809

 

 

 

13,741

 

 

 

1,679

 

 

1996/04

 

6/6/2012

 

5 to 40 years

Chicago - Schaumburg

 

IL

 

 

 

 

1,940

 

 

 

4,880

 

 

 

295

 

 

 

1,940

 

 

 

5,175

 

 

 

7,115

 

 

 

763

 

 

1998

 

6/6/2012

 

5 to 40 years

Norfolk - E. Little Creek

 

VA

 

 

 

 

911

 

 

 

5,862

 

 

 

75

 

 

 

911

 

 

 

5,937

 

 

 

6,848

 

 

 

871

 

 

2007

 

6/20/2012

 

5 to 40 years

Atlanta-14th St.

 

GA

 

 

 

 

1,560

 

 

 

6,766

 

 

 

77

 

 

 

1,560

 

 

 

6,843

 

 

 

8,403

 

 

 

982

 

 

2009

 

7/18/2012

 

5 to 40 years

Jacksonville - Middleburg

 

FL

 

 

 

 

644

 

 

 

5,719

 

 

 

92

 

 

 

644

 

 

 

5,811

 

 

 

6,455

 

 

 

800

 

 

2008

 

9/18/2012

 

5 to 40 years

Jacksonville - Orange Park

 

FL

 

 

 

 

772

 

 

 

3,882

 

 

 

84

 

 

 

772

 

 

 

3,966

 

 

 

4,738

 

 

 

556

 

 

2007

 

9/18/2012

 

5 to 40 years

Jacksonville - St. Augustine

 

FL

 

 

 

 

739

 

 

 

3,858

 

 

 

93

 

 

 

739

 

 

 

3,951

 

 

 

4,690

 

 

 

567

 

 

2007

 

9/18/2012

 

5 to 40 years

Atlanta - NE Expressway

 

GA

 

 

 

 

1,384

 

 

 

9,266

 

 

 

80

 

 

 

1,384

 

 

 

9,346

 

 

 

10,730

 

 

 

1,293

 

 

2009

 

9/18/2012

 

5 to 40 years

Atlanta - Kennesaw

 

GA

 

 

 

 

856

 

 

 

4,315

 

 

 

111

 

 

 

856

 

 

 

4,426

 

 

 

5,282

 

 

 

610

 

 

2008

 

9/18/2012

 

5 to 40 years

Atlanta - Lawrenceville

 

GA

 

 

 

 

855

 

 

 

3,838

 

 

 

123

 

 

 

855

 

 

 

3,961

 

 

 

4,816

 

 

 

553

 

 

2007

 

9/18/2012

 

5 to 40 years

Atlanta - Woodstock

 

GA

 

 

 

 

1,342

 

 

 

4,692

 

 

 

110

 

 

 

1,342

 

 

 

4,802

 

 

 

6,144

 

 

 

676

 

 

2009

 

9/18/2012

 

5 to 40 years

Raleigh-Durham

 

NC

 

 

 

 

2,337

 

 

 

4,901

 

 

 

256

 

 

 

2,337

 

 

 

5,157

 

 

 

7,494

 

 

 

731

 

 

2002

 

9/19/2012

 

5 to 40 years

Chicago - Lindenhurst

 

IL

 

 

 

 

1,213

 

 

 

3,129

 

 

 

219

 

 

 

1,213

 

 

 

3,348

 

 

 

4,561

 

 

 

481

 

 

1999/06

 

9/27/2012

 

5 to 40 years

Chicago - Orland Park

 

IL

 

 

 

 

1,050

 

 

 

5,894

 

 

 

174

 

 

 

1,050

 

 

 

6,068

 

 

 

7,118

 

 

 

818

 

 

2007

 

12/10/2012

 

5 to 40 years

Phoenix-83rd

 

AZ

 

 

 

 

910

 

 

 

3,656

 

 

 

224

 

 

 

910

 

 

 

3,880

 

 

 

4,790

 

 

 

535

 

 

2008

 

12/18/2012

 

5 to 40 years

Chicago-North Austin

 

IL

 

 

 

 

2,593

 

 

 

5,029

 

 

 

348

 

 

 

2,593

 

 

 

5,377

 

 

 

7,970

 

 

 

693

 

 

2005

 

12/20/2012

 

5 to 40 years

Chicago-North Western

 

IL

 

 

 

 

1,718

 

 

 

6,466

 

 

 

710

 

 

 

1,798

 

 

 

7,096

 

 

 

8,894

 

 

 

882

 

 

2005

 

12/20/2012

 

5 to 40 years

Chicago-West Pershing

 

IL

 

 

 

 

395

 

 

 

3,226

 

 

 

185

 

 

 

395

 

 

 

3,411

 

 

 

3,806

 

 

 

432

 

 

2008

 

12/20/2012

 

5 to 40 years

Chicago - North Broadway

 

IL

 

 

 

 

2,373

 

 

 

9,869

 

 

 

147

 

 

 

2,373

 

 

 

10,016

 

 

 

12,389

 

 

 

1,267

 

 

2011

 

12/20/2012

 

5 to 40 years

Brandenton

 

FL

 

 

 

 

1,501

 

 

 

3,775

 

 

 

187

 

 

 

1,501

 

 

 

3,962

 

 

 

5,463

 

 

 

530

 

 

1997

 

12/21/2012

 

5 to 40 years


Life Storage, Inc.

Schedule III

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to

 

 

Gross Amount at Which

 

 

 

 

 

 

 

 

 

 

which

 

 

 

 

 

 

Initial Cost to Company

 

 

Acquisition

 

 

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Ft. Myers-Cleveland

 

FL

 

 

 

 

515

 

 

 

2,280

 

 

 

154

 

 

 

515

 

 

 

2,434

 

 

 

2,949

 

 

 

330

 

 

1998

 

12/21/2012

 

5 to 40 years

Clearwater-Drew St.

 

FL

 

 

 

 

1,234

 

 

 

4,018

 

 

 

230

 

 

 

1,234

 

 

 

4,248

 

 

 

5,482

 

 

 

553

 

 

2000

 

12/21/2012

 

5 to 40 years

Clearwater-N. Myrtle

 

FL

 

 

 

 

1,555

 

 

 

5,978

 

 

 

172

 

 

 

1,555

 

 

 

6,150

 

 

 

7,705

 

 

 

806

 

 

2000

 

12/21/2012

 

5 to 40 years

Austin-Cedar Park

 

TX

 

 

 

 

1,246

 

 

 

5,740

 

 

 

227

 

 

 

1,246

 

 

 

5,967

 

 

 

7,213

 

 

 

777

 

 

2006

 

12/27/2012

 

5 to 40 years

Austin-Round Rock

 

TX

 

 

 

 

774

 

 

 

3,327

 

 

 

178

 

 

 

774

 

 

 

3,505

 

 

 

4,279

 

 

 

466

 

 

2004

 

12/27/2012

 

5 to 40 years

Austin-Round Rock

 

TX

 

 

 

 

632

 

 

 

1,985

 

 

 

127

 

 

 

632

 

 

 

2,112

 

 

 

2,744

 

 

 

310

 

 

2007

 

12/27/2012

 

5 to 40 years

Chicago-Aurora

 

IL

 

 

 

 

269

 

 

 

3,126

 

 

 

337

 

 

 

269

 

 

 

3,463

 

 

 

3,732

 

 

 

431

 

 

2010

 

12/31/2012

 

5 to 40 years

San Antonio - Marbach

 

TX

 

 

 

 

337

 

 

 

2,005

 

 

 

229

 

 

 

337

 

 

 

2,234

 

 

 

2,571

 

 

 

305

 

 

2005

 

2/11/2013

 

5 to 40 years

Long Island - Lindenhurst

 

NY

 

 

 

 

2,122

 

 

 

8,735

 

 

 

546

 

 

 

2,122

 

 

 

9,281

 

 

 

11,403

 

 

 

1,102

 

 

2002

 

3/22/2013

 

5 to 40 years

Boston - Somerville

 

MA

 

 

 

 

1,553

 

 

 

7,186

 

 

 

186

 

 

 

1,506

 

 

 

7,419

 

 

 

8,925

 

 

 

885

 

 

2008

 

3/22/2013

 

5 to 40 years

Long Island - Deer Park

 

NY

 

 

 

 

1,096

 

 

 

8,276

 

 

 

109

 

 

 

1,096

 

 

 

8,385

 

 

 

9,481

 

 

 

953

 

 

2009

 

8/29/2013

 

5 to 40 years

Long Island - Amityville

 

NY

 

 

 

 

2,224

 

 

 

10,102

 

 

 

107

 

 

 

2,224

 

 

 

10,209

 

 

 

12,433

 

 

 

1,145

 

 

2009

 

8/29/2013

 

5 to 40 years

Colorado Springs - Scarlet

 

CO

 

 

 

 

629

 

 

 

5,201

 

 

 

221

 

 

 

629

 

 

 

5,422

 

 

 

6,051

 

 

 

582

 

 

2006

 

9/30/2013

 

5 to 40 years

Toms River - Route 37 W

 

NJ

 

 

 

 

1,843

 

 

 

6,544

 

 

 

140

 

 

 

1,843

 

 

 

6,684

 

 

 

8,527

 

 

 

707

 

 

2007

 

11/26/2013

 

5 to 40 years

Lake Worth - S Military

 

FL

 

 

 

 

868

 

 

 

5,306

 

 

 

700

 

 

 

868

 

 

 

6,006

 

 

 

6,874

 

 

 

624

 

 

2000

 

12/4/2013

 

5 to 40 years

Austin-Round Rock

 

TX

 

 

 

 

1,547

 

 

 

5,226

 

 

 

183

 

 

 

1,547

 

 

 

5,409

 

 

 

6,956

 

 

 

610

 

 

2008

 

12/27/2013

 

5 to 40 years

Hartford-Bristol

 

CT

 

 

 

 

1,174

 

 

 

8,816

 

 

 

124

 

 

 

1,174

 

 

 

8,940

 

 

 

10,114

 

 

 

901

 

 

2004

 

12/30/2013

 

5 to 40 years

Piscataway - New Brunswick

 

NJ

 

 

 

 

1,639

 

 

 

10,946

 

 

 

113

 

 

 

1,639

 

 

 

11,059

 

 

 

12,698

 

 

 

1,112

 

 

2006

 

12/30/2013

 

5 to 40 years

Fort Lauderdale - 3rd Ave

 

FL

 

 

 

 

7,629

 

 

 

11,918

 

 

 

374

 

 

 

7,629

 

 

 

12,292

 

 

 

19,921

 

 

 

1,236

 

 

1998

 

1/9/2014

 

5 to 40 years

West Palm - Mercer

 

FL

 

 

 

 

15,680

 

 

 

17,520

 

 

 

825

 

 

 

15,680

 

 

 

18,345

 

 

 

34,025

 

 

 

1,864

 

 

2000

 

1/9/2014

 

5 to 40 years

Austin - Manchaca

 

TX

 

 

 

 

3,999

 

 

 

4,297

 

 

 

722

 

 

 

3,999

 

 

 

5,019

 

 

 

9,018

 

 

 

553

 

 

1998/02

 

1/17/2014

 

5 to 40 years

San Antonio

 

TX

 

 

 

 

2,235

 

 

 

6,269

 

 

 

358

 

 

 

2,235

 

 

 

6,627

 

 

 

8,862

 

 

 

691

 

 

2012

 

2/10/2014

 

5 to 40 years

Portland

 

ME

 

 

 

 

2,146

 

 

 

6,418

 

 

 

254

 

 

 

2,146

 

 

 

6,672

 

 

 

8,818

 

 

 

670

 

 

2000

 

2/11/2014

 

5 to 40 years

Portland-Topsham

 

ME

 

 

 

 

493

 

 

 

5,234

 

 

 

108

 

 

 

493

 

 

 

5,342

 

 

 

5,835

 

 

 

530

 

 

2006

 

2/11/2014

 

5 to 40 years

Chicago - St. Charles

 

IL

 

 

 

 

1,837

 

 

 

6,301

 

 

 

556

 

 

 

1,837

 

 

 

6,857

 

 

 

8,694

 

 

 

691

 

 

2004/13

 

3/31/2014

 

5 to 40 years

Chicago - Ashland

 

IL

 

 

 

 

598

 

 

 

4,789

 

 

 

231

 

 

 

598

 

 

 

5,020

 

 

 

5,618

 

 

 

494

 

 

2014

 

5/5/2014

 

5 to 40 years

San Antonio - Walzem

 

TX

 

 

 

 

2,000

 

 

 

3,749

 

 

 

512

 

 

 

2,000

 

 

 

4,261

 

 

 

6,261

 

 

 

444

 

 

1997

 

5/13/2014

 

5 to 40 years

St. Louis - Woodson

 

MO

 

 

 

 

2,444

 

 

 

5,966

 

 

 

1,593

 

 

 

2,444

 

 

 

7,559

 

 

 

10,003

 

 

 

711

 

 

1998

 

5/22/2014

 

5 to 40 years

St. Louis - Mexico

 

MO

 

 

 

 

638

 

 

 

3,518

 

 

 

1,800

 

 

 

638

 

 

 

5,318

 

 

 

5,956

 

 

 

451

 

 

1998/16

 

5/22/2014

 

5 to 40 years

St. Louis - Vogel

 

MO

 

 

 

 

2,010

 

 

 

3,544

 

 

 

306

 

 

 

2,010

 

 

 

3,850

 

 

 

5,860

 

 

 

373

 

 

2000

 

5/22/2014

 

5 to 40 years

St. Louis - Manchester

 

MO

 

 

 

 

508

 

 

 

2,042

 

 

 

393

 

 

 

508

 

 

 

2,435

 

 

 

2,943

 

 

 

246

 

 

1996

 

5/22/2014

 

5 to 40 years

St. Louis - North Highway

 

MO

 

 

 

 

1,989

 

 

 

4,045

 

 

 

2,429

 

 

 

1,989

 

 

 

6,474

 

 

 

8,463

 

 

 

484

 

 

1997

 

5/22/2014

 

5 to 40 years

St. Louis - Dunn

 

MO

 

 

 

 

1,538

 

 

 

4,510

 

 

 

2,803

 

 

 

1,538

 

 

 

7,313

 

 

 

8,851

 

 

 

508

 

 

2000

 

5/22/2014

 

5 to 40 years

Trenton-Hamilton Twnship

 

NJ

 

 

 

 

5,161

 

 

 

7,063

 

 

 

1,082

 

 

 

5,161

 

 

 

8,145

 

 

 

13,306

 

 

 

743

 

 

1980

 

6/5/2014

 

5 to 40 years

NY Metro-Fishkill

 

NY

 

 

 

 

1,741

 

 

 

6,006

 

 

 

388

 

 

 

1,741

 

 

 

6,394

 

 

 

8,135

 

 

 

599

 

 

2005

 

6/11/2014

 

5 to 40 years

Atlanta-Peachtree City

 

GA

 

 

 

 

2,263

 

 

 

4,931

 

 

 

501

 

 

 

2,263

 

 

 

5,432

 

 

 

7,695

 

 

 

547

 

 

2007

 

6/12/2014

 

5 to 40 years

Wayne - Willowbrook

 

NJ

 

 

 

 

-

 

 

 

2,292

 

 

 

269

 

 

 

-

 

 

 

2,561

 

 

 

2,561

 

 

 

576

 

 

2000

 

6/12/2014

 

5 to 40 years

Asbury Park - 1st Ave

 

NJ

 

 

 

 

819

 

 

 

4,734

 

 

 

655

 

 

 

819

 

 

 

5,389

 

 

 

6,208

 

 

 

490

 

 

2003

 

6/18/2014

 

5 to 40 years

Farmingdale - Tinton Falls

 

NJ

 

 

 

 

1,097

 

 

 

5,618

 

 

 

361

 

 

 

1,097

 

 

 

5,979

 

 

 

7,076

 

 

 

551

 

 

2004

 

6/18/2014

 

5 to 40 years

Lakewood - Route 70

 

NJ

 

 

 

 

626

 

 

 

4,549

 

 

 

243

 

 

 

626

 

 

 

4,792

 

 

 

5,418

 

 

 

445

 

 

2003

 

6/18/2014

 

5 to 40 years

Matawan - Highway 34

 

NJ

 

 

 

 

1,512

 

 

 

9,707

 

 

 

806

 

 

 

1,512

 

 

 

10,513

 

 

 

12,025

 

 

 

955

 

 

2005

 

7/10/2014

 

5 to 40 years

St. Petersburg - Gandy

 

FL

 

 

 

 

2,958

 

 

 

6,904

 

 

 

256

 

 

 

2,958

 

 

 

7,160

 

 

 

10,118

 

 

 

617

 

 

2007

 

8/28/2014

 

5 to 40 years

Chesapeake - Campostella

 

VA

 

 

 

 

2,349

 

 

 

3,875

 

 

 

295

 

 

 

2,349

 

 

 

4,170

 

 

 

6,519

 

 

 

363

 

 

2000

 

9/5/2014

 

5 to 40 years

San Antonio-Castle Hills

 

TX

 

 

 

 

2,658

 

 

 

8,190

 

 

 

444

 

 

 

4,544

 

 

 

6,748

 

 

 

11,292

 

 

 

608

 

 

2002

 

9/10/2014

 

5 to 40 years

Chattanooga - Broad St

 

TN

 

 

 

 

759

 

 

 

5,608

 

 

 

256

 

 

 

759

 

 

 

5,864

 

 

 

6,623

 

 

 

493

 

 

2014

 

9/18/2014

 

5 to 40 years

New Orleans-Kenner

 

LA

 

 

 

 

5,771

 

 

 

10,375

 

 

 

472

 

 

 

5,771

 

 

 

10,847

 

 

 

16,618

 

 

 

922

 

 

2008

 

10/10/2014

 

5 to 40 years

                                                 
                  Cost Capitalized                
                  Subsequent to Gross Amount at Which             Life on
          Initial Cost to Company Acquisition Carried at Close of Period             which
              Building, Building,    ��Building,                 depreciation
              Equipment Equipment     Equipment                 in latest income
      Encum     and and     and     Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed
Boston-Metro I MA     $363  $1,679  $545  $363   2,224  $2,587  $778   1980   6/26/1995   5 to 40 years 
Boston-Metro II MA      680   1,616   383   680   1,999   2,679   764   1986   6/26/1995   5 to 40 years 
E. Providence RI      345   1,268   688   345   1,956   2,301   631   1984   6/26/1995   5 to 40 years 
Charleston l SC      416   1,516   2,080   416   3,596   4,012   878   1985   6/26/1995   5 to 40 years 
Lakeland I FL      397   1,424   1,465   397   2,889   3,286   703   1985   6/26/1995   5 to 40 years 
Charlotte NC      308   1,102   1,124   747   1,787   2,534   617   1986   6/26/1995   5 to 40 years 
Tallahassee I FL      770   2,734   1,889   770   4,623   5,393   1,599   1973   6/26/1995   5 to 40 years 
Youngstown OH      239   1,110   1,317   239   2,427   2,666   705   1980   6/26/1995   5 to 40 years 
Cleveland-Metro II OH      701   1,659   822   701   2,481   3,182   840   1987   6/26/1995   5 to 40 years 
Tallahassee II FL      204   734   923   198   1,663   1,861   565   1975   6/26/1995   5 to 40 years 
Pt. St. Lucie FL      395   1,501   885   779   2,002   2,781   817   1985   6/26/1995   5 to 40 years 
Deltona FL      483   1,752   2,077   483   3,829   4,312   1,032   1984   6/26/1995   5 to 40 years 
Middletown NY      224   808   817   224   1,625   1,849   570   1988   6/26/1995   5 to 40 years 
Buffalo I NY      423   1,531   1,660   497   3,117   3,614   1,115   1981   6/26/1995   5 to 40 years 
Rochester I NY      395   1,404   491   395   1,895   2,290   678   1981   6/26/1995   5 to 40 years 
Salisbury MD      164   760   463   164   1,223   1,387   460   1979   6/26/1995   5 to 40 years 
Jacksonville I FL      152   728   1,028   688   1,220   1,908   454   1985   6/26/1995   5 to 40 years 
Columbia I SC      268   1,248   447   268   1,695   1,963   664   1985   6/26/1995   5 to 40 years 
Rochester II NY      230   847   452   234   1,295   1,529   466   1980   6/26/1995   5 to 40 years 
Savannah l GA      463   1,684   3,832   805   5,174   5,979   1,213   1981   6/26/1995   5 to 40 years 
Greensboro NC      444   1,613   2,846   444   4,459   4,903   831   1986   6/26/1995   5 to 40 years 
Raleigh I NC      649   2,329   855   649   3,184   3,833   1,126   1985   6/26/1995   5 to 40 years 
New Haven CT      387   1,402   962   387   2,364   2,751   732   1985   6/26/1995   5 to 40 years 
Atlanta-Metro I GA      844   2,021   670   844   2,691   3,535   987   1988   6/26/1995   5 to 40 years 
Atlanta-Metro II GA      302   1,103   369   303   1,471   1,774   588   1988   6/26/1995   5 to 40 years 
Buffalo II NY      315   745   1,662   517   2,205   2,722   601   1984   6/26/1995   5 to 40 years 
Raleigh II NC      321   1,150   655   321   1,805   2,126   611   1985   6/26/1995   5 to 40 years 
Columbia II SC      361   1,331   599   374   1,917   2,291   722   1987   6/26/1995   5 to 40 years 
Columbia III SC      189   719   1,079   189   1,798   1,987   563   1989   6/26/1995   5 to 40 years 
Columbia IV SC      488   1,188   508   488   1,696   2,184   648   1986   6/26/1995   5 to 40 years 
Atlanta-Metro III GA      430   1,579   1,941   602   3,348   3,950   854   1988   6/26/1995   5 to 40 years 
Orlando I FL      513   1,930   474   513   2,404   2,917   934   1988   6/26/1995   5 to 40 years 
Sharon PA      194   912   441   194   1,353   1,547   492   1975   6/26/1995   5 to 40 years 
Ft. Lauderdale FL      1,503   3,619   839   1,503   4,458   5,961   1,362   1985   6/26/1995   5 to 40 years 

61

Life Storage, Inc.

Schedule III

                                                 
                  Cost Capitalized                
                  Subsequent to Gross Amount at Which             Life on
          Initial Cost to Company Acquisition Carried at Close of Period             which
              Building, Building,     Building,                 depreciation
              Equipment Equipment     Equipment                 in latest income
      Encum     and and     and     Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed
West Palm l FL      398   1,035   292   398   1,327   1,725   560   1985   6/26/1995   5 to 40 years 
Atlanta-Metro IV GA      423   1,015   375   424   1,389   1,813   562   1989   6/26/1995   5 to 40 years 
Atlanta-Metro V GA      483   1,166   939   483   2,105   2,588   619   1988   6/26/1995   5 to 40 years 
Atlanta-Metro VI GA      308   1,116   521   308   1,637   1,945   676   1986   6/26/1995   5 to 40 years 
Atlanta-Metro VII GA      170   786   562   174   1,344   1,518   511   1981   6/26/1995   5 to 40 years 
Atlanta-Metro VIII GA      413   999   645   413   1,644   2,057   672   1975   6/26/1995   5 to 40 years 
Baltimore I MD      154   555   1,369   306   1,772   2,078   464   1984   6/26/1995   5 to 40 years 
Baltimore II MD      479   1,742   2,810   479   4,552   5,031   994   1988   6/26/1995   5 to 40 years 
Augusta I GA      357   1,296   832   357   2,128   2,485   732   1988   6/26/1995   5 to 40 years 
Macon I GA      231   1,081   469   231   1,550   1,781   579   1989   6/26/1995   5 to 40 years 
Melbourne I FL      883   2,104   1,577   883   3,681   4,564   1,254   1986   6/26/1995   5 to 40 years 
Newport News VA      316   1,471   780   316   2,251   2,567   824   1988   6/26/1995   5 to 40 years 
Pensacola I FL      632   2,962   1,105   651   4,048   4,699   1,559   1983   6/26/1995   5 to 40 years 
Augusta II GA      315   1,139   769   315   1,908   2,223   657   1987   6/26/1995   5 to 40 years 
Hartford-Metro I CT      715   1,695   1,061   715   2,756   3,471   883   1988   6/26/1995   5 to 40 years 
Atlanta-Metro IX GA      304   1,118   2,521   619   3,324   3,943   829   1988   6/26/1995   5 to 40 years 
Alexandria VA      1,375   3,220   2,166   1,376   5,385   6,761   1,612   1984   6/26/1995   5 to 40 years 
Pensacola II FL      244   901   420   244   1,321   1,565   586   1986   6/26/1995   5 to 40 years 
Melbourne II FL      834   2,066   1,136   1,591   2,445   4,036   998   1986   6/26/1995   5 to 40 years 
Hartford-Metro II CT      234   861   1,881   612   2,364   2,976   638   1992   6/26/1995   5 to 40 years 
Atlanta-Metro X GA      256   1,244   1,803   256   3,047   3,303   847   1988   6/26/1995   5 to 40 years 
Norfolk I VA      313   1,462   938   313   2,400   2,713   827   1984   6/26/1995   5 to 40 years 
Norfolk II VA      278   1,004   375   278   1,379   1,657   540   1989   6/26/1995   5 to 40 years 
Birmingham I AL      307   1,415   1,559   384   2,897   3,281   786   1990   6/26/1995   5 to 40 years 
Birmingham II AL      730   1,725   619   730   2,344   3,074   898   1990   6/26/1995   5 to 40 years 
Montgomery l AL      863   2,041   626   863   2,667   3,530   1,018   1982   6/26/1995   5 to 40 years 
Jacksonville II FL      326   1,515   423   326   1,938   2,264   746   1987   6/26/1995   5 to 40 years 
Pensacola III FL      369   1,358   2,741   369   4,099   4,468   1,027   1986   6/26/1995   5 to 40 years 
Pensacola IV FL      244   1,128   714   719   1,367   2,086   550   1990   6/26/1995   5 to 40 years 
Pensacola V FL      226   1,046   543   226   1,589   1,815   614   1990   6/26/1995   5 to 40 years 
Tampa I FL      1,088   2,597   988   1,088   3,585   4,673   1,360   1989   6/26/1995   5 to 40 years 
Tampa II FL      526   1,958   798   526   2,756   3,282   1,032   1985   6/26/1995   5 to 40 years 
Tampa III FL      672   2,439   583   672   3,022   3,694   1,115   1988   6/26/1995   5 to 40 years 
Jackson I MS      343   1,580   2,213   796   3,340   4,136   817   1990   6/26/1995   5 to 40 years 
Jackson II MS      209   964   597   209   1,561   1,770   635   1990   6/26/1995   5 to 40 years 
Richmond VA      443   1,602   826   443   2,428   2,871   851   1987   8/25/1995   5 to 40 years 
Orlando II FL      1,161   2,755   976   1,162   3,730   4,892   1,378   1986   9/29/1995   5 to 40 years 
Birmingham III AL      424   1,506   691   424   2,197   2,621   903   1970   1/16/1996   5 to 40 years 
Macon II GA      431   1,567   734   431   2,301   2,732   785   1989/94   12/1/1995   5 to 40 years 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to

 

 

Gross Amount at Which

 

 

 

 

 

 

 

 

 

 

which

 

 

 

 

 

 

Initial Cost to Company

 

 

Acquisition

 

 

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Orlando-Celebration

 

FL

 

 

 

 

6,091

 

 

 

4,641

 

 

 

423

 

 

 

6,091

 

 

 

5,064

 

 

 

11,155

 

 

 

430

 

 

2006

 

10/21/2014

 

5 to 40 years

Austin-Cedar Park

 

TX

 

 

 

 

4,196

 

 

 

8,374

 

 

 

626

 

 

 

4,196

 

 

 

9,000

 

 

 

13,196

 

 

 

750

 

 

2003

 

10/28/2014

 

5 to 40 years

Chicago - Pulaski

 

IL

 

 

 

 

889

 

 

 

4,700

 

 

 

1,051

 

 

 

889

 

 

 

5,751

 

 

 

6,640

 

 

 

439

 

 

2014

 

11/14/2014

 

5 to 40 years

Houston - Gessner

 

TX

 

 

 

 

1,599

 

 

 

5,813

 

 

 

3,490

 

 

 

1,599

 

 

 

9,303

 

 

 

10,902

 

 

 

532

 

 

2006/17

 

12/18/2014

 

5 to 40 years

New England - Danbury

 

CT

 

 

 

 

9,747

 

 

 

18,374

 

 

 

201

 

 

 

9,747

 

 

 

18,575

 

 

 

28,322

 

 

 

1,367

 

 

1999

 

2/2/2015

 

5 to 40 years

New England - Milford

 

CT

 

 

 

 

9,642

 

 

 

23,352

 

 

 

147

 

 

 

9,642

 

 

 

23,499

 

 

 

33,141

 

 

 

1,737

 

 

1999

 

2/2/2015

 

5 to 40 years

Long Island - Hicksville

 

NY

 

 

 

 

5,153

 

 

 

27,401

 

 

 

121

 

 

 

5,153

 

 

 

27,522

 

 

 

32,675

 

 

 

2,032

 

 

2002

 

2/2/2015

 

5 to 40 years

Long Island - Farmingdale

 

NY

 

 

 

 

4,931

 

 

 

20,415

 

 

 

278

 

 

 

4,931

 

 

 

20,693

 

 

 

25,624

 

 

 

1,518

 

 

2000

 

2/2/2015

 

5 to 40 years

Chicago - Alsip

 

IL

 

 

 

 

2,579

 

 

 

4,066

 

 

 

3,331

 

 

 

2,579

 

 

 

7,397

 

 

 

9,976

 

 

 

336

 

 

1986/17

 

2/5/2015

 

5 to 40 years

Chicago - N. Pulaski

 

IL

 

 

 

 

1,719

 

 

 

6,971

 

 

 

396

 

 

 

1,719

 

 

 

7,367

 

 

 

9,086

 

 

 

540

 

 

2015

 

3/9/2015

 

5 to 40 years

Fort Myers - Tamiami Trail

 

FL

 

 

 

 

1,793

 

 

 

4,382

 

 

 

180

 

 

 

1,793

 

 

 

4,562

 

 

 

6,355

 

 

 

328

 

 

2004

 

4/1/2015

 

5 to 40 years

Dallas - Allen

 

TX

 

 

 

 

3,864

 

 

 

4,777

 

 

 

290

 

 

 

3,864

 

 

 

5,067

 

 

 

8,931

 

 

 

374

 

 

2002

 

4/16/2015

 

5 to 40 years

Jacksonville - Beach Blvd.

 

FL

 

 

 

 

2,118

 

 

 

6,501

 

 

 

65

 

 

 

2,118

 

 

 

6,566

 

 

 

8,684

 

 

 

456

 

 

2013

 

4/21/2015

 

5 to 40 years

Space Coast - Vero Beach

 

FL

 

 

 

 

1,169

 

 

 

4,409

 

 

 

319

 

 

 

1,169

 

 

 

4,728

 

 

 

5,897

 

 

 

328

 

 

1997

 

5/1/2015

 

5 to 40 years

Port St. Lucie - Federal Hwy.

 

FL

 

 

 

 

4,957

 

 

 

6,045

 

 

 

229

 

 

 

4,957

 

 

 

6,274

 

 

 

11,231

 

 

 

437

 

 

2001

 

5/1/2015

 

5 to 40 years

West Palm - N. Military

 

FL

 

 

 

 

3,372

 

 

 

4,206

 

 

 

143

 

 

 

3,372

 

 

 

4,349

 

 

 

7,721

 

 

 

300

 

 

1985

 

5/1/2015

 

5 to 40 years

Ft. Myers - Bonita Springs

 

FL

 

 

 

 

2,687

 

 

 

5,012

 

 

 

208

 

 

 

2,687

 

 

 

5,220

 

 

 

7,907

 

 

 

370

 

 

2000

 

5/1/2015

 

5 to 40 years

Phoenix - Tatum Blvd.

 

AZ

 

 

 

 

852

 

 

 

7,052

 

 

 

184

 

 

 

852

 

 

 

7,236

 

 

 

8,088

 

 

 

509

 

 

2015

 

6/16/2015

 

5 to 40 years

Boston - Lynn

 

MA

 

 

 

 

2,110

 

 

 

8,182

 

 

 

119

 

 

 

2,110

 

 

 

8,301

 

 

 

10,411

 

 

 

548

 

 

2015

 

6/16/2015

 

5 to 40 years

Syracuse - Ainsely Dr.

 

NY

 

 

 

 

2,711

 

 

 

3,795

 

 

 

125

 

 

 

2,711

 

 

 

3,920

 

 

 

6,631

 

 

 

250

 

 

2000

 

8/25/2015

 

5 to 40 years

Syracuse - Cicero

 

NY

 

 

 

 

668

 

 

 

1,957

 

 

 

91

 

 

 

668

 

 

 

2,048

 

 

 

2,716

 

 

 

135

 

 

2002

 

8/25/2015

 

5 to 40 years

Syracuse - Camillus

 

NY

 

 

 

 

473

 

 

 

5,368

 

 

 

95

 

 

 

473

 

 

 

5,463

 

 

 

5,936

 

 

 

333

 

 

2005/11

 

8/25/2015

 

5 to 40 years

Syracuse - Manlius

 

NY

 

 

 

 

834

 

 

 

1,705

 

 

 

1,038

 

 

 

834

 

 

 

2,743

 

 

 

3,577

 

 

 

120

 

 

2000/17

 

8/25/2015

 

5 to 40 years

Charlotte - Brookshire Blvd.

 

NC

 

 

 

 

718

 

 

 

2,977

 

 

 

890

 

 

 

718

 

 

 

3,867

 

 

 

4,585

 

 

 

232

 

 

2000

 

9/1/2015

 

5 to 40 years

Charleston III

 

SC

 

 

 

 

7,604

 

 

 

9,086

 

 

 

287

 

 

 

7,604

 

 

 

9,373

 

 

 

16,977

 

 

 

576

 

 

2005

 

9/1/2015

 

5 to 40 years

Myrtle Beach II

 

SC

 

 

 

 

2,511

 

 

 

6,147

 

 

 

298

 

 

 

2,511

 

 

 

6,445

 

 

 

8,956

 

 

 

410

 

 

1999

 

9/1/2015

 

5 to 40 years

Columbia VI

 

SC

 

 

 

 

3,640

 

 

 

3,452

 

 

 

127

 

 

 

3,640

 

 

 

3,579

 

 

 

7,219

 

 

 

228

 

 

2004/08

 

9/1/2015

 

5 to 40 years

Hilton Head - Bluffton

 

SC

 

 

 

 

3,084

 

 

 

3,192

 

 

 

158

 

 

 

3,084

 

 

 

3,350

 

 

 

6,434

 

 

 

213

 

 

1998

 

9/1/2015

 

5 to 40 years

Philadelphia - Eagleville

 

PA

 

 

 

 

1,926

 

 

 

4,498

 

 

 

1,250

 

 

 

1,926

 

 

 

5,748

 

 

 

7,674

 

 

 

258

 

 

2010

 

12/30/2015

 

5 to 40 years

Orlando - University

 

FL

 

 

 

 

882

 

 

 

5,756

 

 

 

290

 

 

 

882

 

 

 

6,046

 

 

 

6,928

 

 

 

308

 

 

2001

 

1/6/2016

 

5 to 40 years

Orlando - N. Powers

 

FL

 

 

 

 

2,567

 

 

 

2,838

 

 

 

83

 

 

 

2,567

 

 

 

2,921

 

 

 

5,488

 

 

 

157

 

 

1997

 

1/6/2016

 

5 to 40 years

Sarasota - North Port

 

FL

 

 

 

 

4,884

 

 

 

10,014

 

 

 

(344

)

 

 

4,278

 

 

 

10,276

 

 

 

14,554

 

 

 

386

 

 

2001/06

 

1/6/2016

 

5 to 40 years

Los Angeles - E. Commercial

 

CA

 

 

 

 

6,512

 

 

 

12,352

 

 

 

409

 

 

 

6,512

 

 

 

12,761

 

 

 

19,273

 

 

 

680

 

 

2004

 

1/21/2016

 

5 to 40 years

Los Angeles - E. Slauson

 

CA

 

 

 

 

3,998

 

 

 

13,547

 

 

 

254

 

 

 

3,998

 

 

 

13,801

 

 

 

17,799

 

 

 

681

 

 

2012

 

1/21/2016

 

5 to 40 years

Los Angeles - Westminster

 

CA

 

 

 

 

4,636

 

 

 

14,826

 

 

 

175

 

 

 

4,636

 

 

 

15,001

 

 

 

19,637

 

 

 

733

 

 

2006

 

1/21/2016

 

5 to 40 years

Los Angeles - Calabasas

 

CA

 

 

 

 

13,274

 

 

 

10,419

 

 

 

455

 

 

 

13,274

 

 

 

10,874

 

 

 

24,148

 

 

 

572

 

 

2004/14

 

1/21/2016

 

5 to 40 years

Portsmouth - Kingston

 

NH

 

 

 

 

1,713

 

 

 

2,709

 

 

 

47

 

 

 

1,713

 

 

 

2,756

 

 

 

4,469

 

 

 

141

 

 

2003

 

1/21/2016

 

5 to 40 years

Portsmouth - Danville

 

NH

 

 

 

 

1,615

 

 

 

3,333

 

 

 

70

 

 

 

1,615

 

 

 

3,403

 

 

 

5,018

 

 

 

171

 

 

2003

 

1/21/2016

 

5 to 40 years

Portsmouth - Hampton Falls

 

NH

 

 

 

 

2,445

 

 

 

6,295

 

 

 

107

 

 

 

2,445

 

 

 

6,402

 

 

 

8,847

 

 

 

309

 

 

2005

 

1/21/2016

 

5 to 40 years

Portsmouth - Lee

 

NH

 

 

 

 

3,078

 

 

 

2,861

 

 

 

76

 

 

 

3,078

 

 

 

2,937

 

 

 

6,015

 

 

 

148

 

 

2000

 

1/21/2016

 

5 to 40 years

Portsmouth - Heritage

 

NH

 

 

 

 

4,430

 

 

 

26,040

 

 

 

183

 

 

 

4,430

 

 

 

26,223

 

 

 

30,653

 

 

 

1,272

 

 

1985/99

 

1/21/2016

 

5 to 40 years

Boston - Salisbury

 

MA

 

 

 

 

4,880

 

 

 

6,342

 

 

 

163

 

 

 

4,880

 

 

 

6,505

 

 

 

11,385

 

 

 

320

 

 

2003

 

1/21/2016

 

5 to 40 years

Dallas - Frisco

 

TX

 

 

 

 

6,191

 

 

 

5,088

 

 

 

157

 

 

 

6,191

 

 

 

5,245

 

 

 

11,436

 

 

 

271

 

 

2003

 

1/21/2016

 

5 to 40 years

Dallas - McKinney

 

TX

 

 

 

 

8,097

 

 

 

7,047

 

 

 

100

 

 

 

8,097

 

 

 

7,147

 

 

 

15,244

 

 

 

367

 

 

2003

 

1/21/2016

 

5 to 40 years

Dallas - McKinney

 

TX

 

 

 

 

5,508

 

 

 

6,462

 

 

 

76

 

 

 

5,508

 

 

 

6,538

 

 

 

12,046

 

 

 

328

 

 

2002

 

1/21/2016

 

5 to 40 years

Phoenix - 48th

 

AZ

 

 

 

 

988

 

 

 

8,224

 

 

 

69

 

 

 

988

 

 

 

8,293

 

 

 

9,281

 

 

 

424

 

 

2015

 

2/1/2016

 

5 to 40 years

62


Life Storage, Inc.

Schedule III

                                                 
                  Cost Capitalized                
                  Subsequent to Gross Amount at Which             Life on
          Initial Cost to Company Acquisition Carried at Close of Period             which
              Building, Building,     Building,                 depreciation
              Equipment Equipment     Equipment                 in latest income
      Encum     and and     and     Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed
Harrisburg I PA      360   1,641   599   360   2,240   2,600   819   1983   12/29/1995   5 to 40 years 
Harrisburg II PA  (1)  627   2,224   958   692   3,117   3,809   1,018   1985   12/29/1995   5 to 40 years 
Syracuse I NY      470   1,712   1,313   472   3,023   3,495   923   1987   12/27/1995   5 to 40 years 
Ft. Myers FL      205   912   310   206   1,221   1,427   573   1988   12/28/1995   5 to 40 years 
Ft. Myers II FL      412   1,703   458   413   2,160   2,573   947   1991/94   12/28/1995   5 to 40 years 
Newport News II VA      442   1,592   1,180   442   2,772   3,214   731   1988/93   1/5/1996   5 to 40 years 
Montgomery II AL      353   1,299   653   353   1,952   2,305   633   1984   1/23/1996   5 to 40 years 
Charleston II SC      237   858   623   232   1,486   1,718   529   1985   3/1/1996   5 to 40 years 
Tampa IV FL      766   1,800   649   766   2,449   3,215   844   1985   3/28/1996   5 to 40 years 
Arlington I TX      442   1,767   319   442   2,086   2,528   730   1987   3/29/1996   5 to 40 years 
Arlington II TX      408   1,662   1,070   408   2,732   3,140   881   1986   3/29/1996   5 to 40 years 
Ft. Worth TX      328   1,324   331   328   1,655   1,983   598   1986   3/29/1996   5 to 40 years 
San Antonio I TX      436   1,759   1,121   436   2,880   3,316   937   1986   3/29/1996   5 to 40 years 
San Antonio II TX      289   1,161   543   289   1,704   1,993   582   1986   3/29/1996   5 to 40 years 
Syracuse II NY      481   1,559   2,391   671   3,760   4,431   1,015   1983   6/5/1996   5 to 40 years 
Montgomery III AL      279   1,014   998   433   1,858   2,291   575   1988   5/21/1996   5 to 40 years 
West Palm II FL      345   1,262   354   345   1,616   1,961   577   1986   5/29/1996   5 to 40 years 
Ft. Myers III FL      229   884   298   229   1,182   1,411   413   1986   5/29/1996   5 to 40 years 
Lakeland II FL      359   1,287   1,065   359   2,352   2,711   814   1988   6/26/1996   5 to 40 years 
Springfield MA      251   917   2,267   297   3,138   3,435   885   1986   6/28/1996   5 to 40 years 
Ft. Myers IV FL      344   1,254   292   310   1,580   1,890   567   1987   6/28/1996   5 to 40 years 
Cincinnati OH  (2)  557   1,988   775   688   2,632   3,320   299   1988   7/23/1996   5 to 40 years 
Dayton OH  (2)  667   2,379   433   683   2,796   3,479   340   1988   7/23/1996   5 to 40 years 
Baltimore III MD      777   2,770   434   777   3,204   3,981   1,087   1990   7/26/1996   5 to 40 years 
Jacksonville III FL      568   2,028   931   568   2,959   3,527   1,052   1987   8/23/1996   5 to 40 years 
Jacksonville IV FL      436   1,635   520   436   2,155   2,591   789   1985   8/26/1996   5 to 40 years 
Jacksonville V FL      535   2,033   321   538   2,351   2,889   908   1987/92   8/30/1996   5 to 40 years 
Charlotte II NC      487   1,754   425   487   2,179   2,666   674   1995   9/16/1996   5 to 40 years 
Charlotte III NC      315   1,131   338   315   1,469   1,784   485   1995   9/16/1996   5 to 40 years 
Orlando III FL      314   1,113   953   314   2,066   2,380   702   1975   10/30/1996   5 to 40 years 
Rochester III NY      704   2,496   2,335   707   4,828   5,535   1,029   1990   12/20/1996   5 to 40 years 
Youngstown ll OH      600   2,142   2,073   693   4,122   4,815   939   1988   1/10/1997   5 to 40 years 
Cleveland lll OH      751   2,676   1,798   751   4,474   5,225   1,300   1986   1/10/1997   5 to 40 years 
Cleveland lV OH      725   2,586   1,354   725   3,940   4,665   1,206   1978   1/10/1997   5 to 40 years 
Cleveland V OH  (1)  637   2,918   1,629   701   4,483   5,184   1,563   1979   1/10/1997   5 to 40 years 
Cleveland Vl OH      495   1,781   899   495   2,680   3,175   865   1979   1/10/1997   5 to 40 years 
Cleveland Vll OH      761   2,714   1,337   761   4,051   4,812   1,273   1977   1/10/1997   5 to 40 years 
Cleveland Vlll OH      418   1,921   1,655   418   3,576   3,994   1,110   1970   1/10/1997   5 to 40 years 
Cleveland lX OH      606   2,164   1,363   606   3,527   4,133   917   1982   1/10/1997   5 to 40 years 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to

 

 

Gross Amount at Which

 

 

 

 

 

 

 

 

 

 

which

 

 

 

 

 

 

Initial Cost to Company

 

 

Acquisition

 

 

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Miami

 

FL

 

 

 

 

2,294

 

 

 

8,980

 

 

 

182

 

 

 

2,294

 

 

 

9,162

 

 

 

11,456

 

 

 

467

 

 

2016

 

2/12/2016

 

5 to 40 years

Philadelphia - Glenolden

 

PA

 

 

 

 

1,768

 

 

 

3,879

 

 

 

312

 

 

 

1,768

 

 

 

4,191

 

 

 

5,959

 

 

 

199

 

 

1970

 

2/17/2016

 

5 to 40 years

Denver - Thornton

 

CO

 

 

 

 

4,528

 

 

 

7,915

 

 

 

123

 

 

 

4,528

 

 

 

8,038

 

 

 

12,566

 

 

 

388

 

 

2011

 

2/29/2016

 

5 to 40 years

Los Angeles - Costa Mesa

 

CA

 

 

 

 

17,976

 

 

 

25,145

 

 

 

564

 

 

 

17,976

 

 

 

25,709

 

 

 

43,685

 

 

 

1,161

 

 

2005

 

3/16/2016

 

5 to 40 years

Los Angeles - Irving

 

CA

 

 

 

 

-

 

 

 

6,318

 

 

 

684

 

 

 

-

 

 

 

7,002

 

 

 

7,002

 

 

 

629

 

 

1985

 

3/16/2016

 

5 to 40 years

Los Angeles - Durante

 

CA

 

 

 

 

4,671

 

 

 

13,908

 

 

 

114

 

 

 

4,671

 

 

 

14,022

 

 

 

18,693

 

 

 

631

 

 

2015

 

3/16/2016

 

5 to 40 years

Los Angeles - Wildomar

 

CA

 

 

 

 

6,728

 

 

 

10,340

 

 

 

321

 

 

 

6,728

 

 

 

10,661

 

 

 

17,389

 

 

 

502

 

 

2005

 

3/17/2016

 

5 to 40 years

Los Angeles - Torrance

 

CA

 

 

 

 

17,445

 

 

 

18,839

 

 

 

444

 

 

 

17,445

 

 

 

19,283

 

 

 

36,728

 

 

 

885

 

 

2003

 

4/11/2016

 

5 to 40 years

New Haven - Wallingford

 

CT

 

 

 

 

3,618

 

 

 

5,286

 

 

 

258

 

 

 

3,618

 

 

 

5,544

 

 

 

9,162

 

 

 

251

 

 

2000

 

4/14/2016

 

5 to 40 years

New Haven - Waterbury

 

CT

 

 

 

 

2,524

 

 

 

5,618

 

 

 

154

 

 

 

2,524

 

 

 

5,772

 

 

 

8,296

 

 

 

261

 

 

2001

 

4/14/2016

 

5 to 40 years

New York - Mahopac

 

NY

 

4,119

 

 

2,373

 

 

 

5,089

 

 

 

339

 

 

 

2,373

 

 

 

5,428

 

 

 

7,801

 

 

 

227

 

 

1991/94

 

4/26/2016

 

5 to 40 years

New York - Mount Vernon

 

NY

 

 

 

 

3,337

 

 

 

13,112

 

 

 

128

 

 

 

3,337

 

 

 

13,240

 

 

 

16,577

 

 

 

568

 

 

2013

 

4/26/2016

 

5 to 40 years

Pt. St. Lucie

 

FL

 

3,939

 

 

4,140

 

 

 

7,176

 

 

 

284

 

 

 

4,140

 

 

 

7,460

 

 

 

11,600

 

 

 

370

 

 

2002

 

5/2/2016

 

5 to 40 years

Dallas - Lewisville

 

TX

 

 

 

 

2,333

 

 

 

8,302

 

 

 

219

 

 

 

2,333

 

 

 

8,521

 

 

 

10,854

 

 

 

378

 

 

2007

 

5/5/2016

 

5 to 40 years

Buffalo - Cayuga

 

NY

 

 

 

 

499

 

 

 

5,198

 

 

 

(796

)

 

 

499

 

 

 

4,402

 

 

 

4,901

 

 

 

183

 

 

2006

 

5/19/2016

 

5 to 40 years

Buffalo - Lackawanna

 

NY

 

 

 

 

215

 

 

 

2,323

 

 

 

268

 

 

 

215

 

 

 

2,591

 

 

 

2,806

 

 

 

109

 

 

2006

 

5/19/2016

 

5 to 40 years

Austin - S. Congress

 

TX

 

 

 

 

1,030

 

 

 

8,163

 

 

 

83

 

 

 

1,030

 

 

 

8,246

 

 

 

9,276

 

 

 

320

 

 

1984

 

7/15/2016

 

5 to 40 years

Austin - W Braker

 

TX

 

 

 

 

1,210

 

 

 

14,833

 

 

 

102

 

 

 

1,210

 

 

 

14,935

 

 

 

16,145

 

 

 

571

 

 

2003

 

7/15/2016

 

5 to 40 years

Austin - Highway 290

 

TX

 

 

 

 

930

 

 

 

12,269

 

 

 

73

 

 

 

930

 

 

 

12,342

 

 

 

13,272

 

 

 

478

 

 

1999

 

7/15/2016

 

5 to 40 years

Austin - Killeen

 

TX

 

 

 

 

3,070

 

 

 

20,782

 

 

 

181

 

 

 

3,070

 

 

 

20,963

 

 

 

24,033

 

 

 

862

 

 

2005

 

7/15/2016

 

5 to 40 years

Austin - Round Rock

 

TX

 

 

 

 

830

 

 

 

6,129

 

 

 

71

 

 

 

830

 

 

 

6,200

 

 

 

7,030

 

 

 

244

 

 

1986

 

7/15/2016

 

5 to 40 years

Austin - Georgetown

 

TX

 

 

 

 

1,530

 

 

 

10,647

 

 

 

92

 

 

 

1,530

 

 

 

10,739

 

 

 

12,269

 

 

 

437

 

 

2001/15

 

7/15/2016

 

5 to 40 years

Austin - Pflugerville

 

TX

 

 

 

 

750

 

 

 

9,238

 

 

 

110

 

 

 

750

 

 

 

9,348

 

 

 

10,098

 

 

 

362

 

 

2005

 

7/15/2016

 

5 to 40 years

Chicago - Algonquin

 

IL

 

 

 

 

1,430

 

 

 

14,958

 

 

 

46

 

 

 

1,430

 

 

 

15,004

 

 

 

16,434

 

 

 

580

 

 

2006

 

7/15/2016

 

5 to 40 years

Chicago - Carpentersville

 

IL

 

 

 

 

350

 

 

 

4,710

 

 

 

26

 

 

 

350

 

 

 

4,736

 

 

 

5,086

 

 

 

183

 

 

2004

 

7/15/2016

 

5 to 40 years

Chicago - W. Addison

 

IL

 

 

 

 

2,770

 

 

 

25,112

 

 

 

133

 

 

 

2,770

 

 

 

25,245

 

 

 

28,015

 

 

 

965

 

 

2007

 

7/15/2016

 

5 to 40 years

Chicago - State St.

 

IL

 

 

 

 

1,190

 

 

 

19,159

 

 

 

163

 

 

 

1,190

 

 

 

19,322

 

 

 

20,512

 

 

 

729

 

 

2009

 

7/15/2016

 

5 to 40 years

Chicago -W. Grand

 

IL

 

 

 

 

1,720

 

 

 

10,628

 

 

 

124

 

 

 

1,720

 

 

 

10,752

 

 

 

12,472

 

 

 

408

 

 

2007

 

7/15/2016

 

5 to 40 years

Chicago - Libertyville

 

IL

 

 

 

 

3,670

 

 

 

26,660

 

 

 

254

 

 

 

3,670

 

 

 

26,914

 

 

 

30,584

 

 

 

1,020

 

 

2009

 

7/15/2016

 

5 to 40 years

Chicago - Aurora

 

IL

 

 

 

 

1,090

 

 

 

20,033

 

 

 

97

 

 

 

1,090

 

 

 

20,130

 

 

 

21,220

 

 

 

775

 

 

2009

 

7/15/2016

 

5 to 40 years

Chicago - Morton Grove

 

IL

 

 

 

 

1,610

 

 

 

14,914

 

 

 

666

 

 

 

1,610

 

 

 

15,580

 

 

 

17,190

 

 

 

581

 

 

2009

 

7/15/2016

 

5 to 40 years

Chicago - Bridgeview

 

IL

 

 

 

 

3,770

 

 

 

19,990

 

 

 

152

 

 

 

3,770

 

 

 

20,142

 

 

 

23,912

 

 

 

792

 

 

2008

 

7/15/2016

 

5 to 40 years

Chicago - Addison

 

IL

 

 

 

 

1,340

 

 

 

11,881

 

 

 

386

 

 

 

1,340

 

 

 

12,267

 

 

 

13,607

 

 

 

466

 

 

2008

 

7/15/2016

 

5 to 40 years

Chicago - W Diversey

 

IL

 

 

 

 

1,670

 

 

 

10,811

 

 

 

54

 

 

 

1,670

 

 

 

10,865

 

 

 

12,535

 

 

 

412

 

 

2010

 

7/15/2016

 

5 to 40 years

Chicago - Elmhurst

 

IL

 

 

 

 

670

 

 

 

18,729

 

 

 

67

 

 

 

670

 

 

 

18,796

 

 

 

19,466

 

 

 

712

 

 

2008

 

7/15/2016

 

5 to 40 years

Chicago - Elgin

 

IL

 

 

 

 

1,130

 

 

 

12,584

 

 

 

152

 

 

 

1,130

 

 

 

12,736

 

 

 

13,866

 

 

 

492

 

 

2003

 

7/15/2016

 

5 to 40 years

Chicago - N. Paulina St.,

 

IL

 

 

 

 

5,600

 

 

 

12,721

 

 

 

74

 

 

 

5,600

 

 

 

12,795

 

 

 

18,395

 

 

 

491

 

 

2006

 

7/15/2016

 

5 to 40 years

Chicago - Matteson

 

IL

 

 

 

 

1,590

 

 

 

12,053

 

 

 

76

 

 

 

1,590

 

 

 

12,129

 

 

 

13,719

 

 

 

488

 

 

2007

 

7/15/2016

 

5 to 40 years

Chicago - S. Heights

 

IL

 

 

 

 

1,050

 

 

 

4,960

 

 

 

89

 

 

 

1,050

 

 

 

5,049

 

 

 

6,099

 

 

 

206

 

 

2006

 

7/15/2016

 

5 to 40 years

Chicago - W. Grand

 

IL

 

 

 

 

1,780

 

 

 

8,928

 

 

 

132

 

 

 

1,780

 

 

 

9,060

 

 

 

10,840

 

 

 

348

 

 

2007

 

7/15/2016

 

5 to 40 years

Chicago - W 30th St

 

IL

 

 

 

 

600

 

 

 

15,574

 

 

 

149

 

 

 

600

 

 

 

15,723

 

 

 

16,323

 

 

 

596

 

 

2008

 

7/15/2016

 

5 to 40 years

Chicago - Mokena

 

IL

 

 

 

 

3,230

 

 

 

18,623

 

 

 

215

 

 

 

3,230

 

 

 

18,838

 

 

 

22,068

 

 

 

737

 

 

2008

 

7/15/2016

 

5 to 40 years

Chicago - Barrington

 

IL

 

 

 

 

1,890

 

 

 

9,395

 

 

 

681

 

 

 

1,890

 

 

 

10,076

 

 

 

11,966

 

 

 

383

 

 

2015

 

7/15/2016

 

5 to 40 years

Chicago - Naperville

 

IL

 

 

 

 

2,620

 

 

 

11,933

 

 

 

101

 

 

 

2,620

 

 

 

12,034

 

 

 

14,654

 

 

 

484

 

 

2015

 

7/15/2016

 

5 to 40 years

Chicago - Forest Park

 

IL

 

 

 

 

1,100

 

 

 

10,087

 

 

 

707

 

 

 

1,100

 

 

 

10,794

 

 

 

11,894

 

 

 

407

 

 

2015

 

7/15/2016

 

5 to 40 years

Chicago - La Grange

 

IL

 

 

 

 

960

 

 

 

13,019

 

 

 

53

 

 

 

960

 

 

 

13,072

 

 

 

14,032

 

 

 

505

 

 

2015

 

7/15/2016

 

5 to 40 years

63


Life Storage, Inc.

Schedule III

                                                 
                  Cost Capitalized                
                  Subsequent to Gross Amount at Which             Life on
          Initial Cost to Company Acquisition Carried at Close of Period             which
              Building, Building,     Building,                 depreciation
              Equipment Equipment     Equipment                 in latest income
      Encum     and and     and     Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed
Grand Rapids l MI  (2)  455   1,631   981   624   2,443   3,067   292   1976   1/17/1997   5 to 40 years 
Grand Rapids ll MI      219   790   879   219   1,669   1,888   535   1983   1/17/1997   5 to 40 years 
Kalamazoo MI  (2)  516   1,845   1,729   694   3,396   4,090   367   1978   1/17/1997   5 to 40 years 
Lansing MI  (2)  327   1,332   1,627   542   2,744   3,286   293   1987   1/17/1997   5 to 40 years 
Holland MI      451   1,830   1,899   451   3,729   4,180   1,143   1978   1/17/1997   5 to 40 years 
San Antonio lll TX  (1)  474   1,686   442   504   2,098   2,602   644   1981   1/30/1997   5 to 40 years 
Universal TX      346   1,236   467   346   1,703   2,049   522   1985   1/30/1997   5 to 40 years 
San Antonio lV TX      432   1,560   1,695   432   3,255   3,687   927   1995   1/30/1997   5 to 40 years 
Houston-Eastex TX      634   2,565   1,172   634   3,737   4,371   1,139   1993/95   3/26/1997   5 to 40 years 
Houston-Nederland TX      566   2,279   356   566   2,635   3,201   837   1995   3/26/1997   5 to 40 years 
Houston-College TX      293   1,357   568   293   1,925   2,218   572   1995   3/26/1997   5 to 40 years 
Lynchburg-Lakeside VA      335   1,342   1,274   335   2,616   2,951   743   1982   3/31/1997   5 to 40 years 
Lynchburg-Timberlake VA      328   1,315   976   328   2,291   2,619   725   1985   3/31/1997   5 to 40 years 
Lynchburg-Amherst VA      155   710   337   152   1,050   1,202   372   1987   3/31/1997   5 to 40 years 
Christiansburg VA      245   1,120   583   245   1,703   1,948   478   1985/90   3/31/1997   5 to 40 years 
Chesapeake VA      260   1,043   1,188   260   2,231   2,491   627   1988/95   3/31/1997   5 to 40 years 
Danville VA      326   1,488   246   326   1,734   2,060   561   1988   3/31/1997   5 to 40 years 
Orlando-W 25th St FL      289   1,160   744   616   1,577   2,193   507   1984   3/31/1997   5 to 40 years 
Delray l-Mini FL      491   1,756   672   491   2,428   2,919   833   1969   4/11/1997   5 to 40 years 
Savannah ll GA      296   1,196   347   296   1,543   1,839   526   1988   5/8/1997   5 to 40 years 
Delray ll-Safeway FL      921   3,282   488   921   3,770   4,691   1,266   1980   5/21/1997   5 to 40 years 
Cleveland X-Avon OH      301   1,214   2,106   304   3,317   3,621   742   1989   6/4/1997   5 to 40 years 
Dallas-Skillman TX      960   3,847   1,500   960   5,347   6,307   1,651   1975   6/30/1997   5 to 40 years 
Dallas-Centennial TX      965   3,864   1,276   943   5,162   6,105   1,635   1977   6/30/1997   5 to 40 years 
Dallas-Samuell TX  (1)  570   2,285   795   611   3,039   3,650   990   1975   6/30/1997   5 to 40 years 
Dallas-Hargrove TX      370   1,486   530   370   2,016   2,386   712   1975   6/30/1997   5 to 40 years 
Houston-Antoine TX      515   2,074   561   515   2,635   3,150   872   1984   6/30/1997   5 to 40 years 
Atlanta-Alpharetta GA      1,033   3,753   458   1,033   4,211   5,244   1,428   1994   7/24/1997   5 to 40 years 
Atlanta-Marietta GA  (1)  769   2,788   465   825   3,197   4,022   1,031   1996   7/24/1997   5 to 40 years 
Atlanta-Doraville GA      735   3,429   318   735   3,747   4,482   1,230   1995   8/21/1997   5 to 40 years 
GreensboroHilltop NC      268   1,097   391   268   1,488   1,756   458   1995   9/25/1997   5 to 40 years 
GreensboroStgCch NC      89   376   1,539   89   1,915   2,004   463   1997   9/25/1997   5 to 40 years 
Baton Rouge-Airline LA  (1)  396   1,831   966   421   2,772   3,193   796   1982   10/9/1997   5 to 40 years 
Baton Rouge-Airline2 LA      282   1,303   312   282   1,615   1,897   551   1985   11/21/1997   5 to 40 years 
Harrisburg-Peiffers PA      635   2,550   532   637   3,080   3,717   940   1984   12/3/1997   5 to 40 years 
Chesapeake-Military VA      542   2,210   343   542   2,553   3,095   789   1996   2/5/1998   5 to 40 years 
Chesapeake-Volvo VA      620   2,532   908   620   3,440   4,060   1,015   1995   2/5/1998   5 to 40 years 
Virginia Beach-Shell VA      540   2,211   276   540   2,487   3,027   797   1991   2/5/1998   5 to 40 years 
Virginia Beach-Central VA      864   3,994   752   864   4,746   5,610   1,464   1993/95   2/5/1998   5 to 40 years 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to

 

 

Gross Amount at Which

 

 

 

 

 

 

 

 

 

 

which

 

 

 

 

 

 

Initial Cost to Company

 

 

Acquisition

 

 

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

depreciation

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Chicago - Glenview

 

IL

 

 

 

 

3,210

 

 

 

8,519

 

 

 

62

 

 

 

3,210

 

 

 

8,581

 

 

 

11,791

 

 

 

344

 

 

2014/15

 

7/15/2016

 

5 to 40 years

Dallas - Richardson

 

TX

 

 

 

 

630

 

 

 

10,282

 

 

 

57

 

 

 

630

 

 

 

10,339

 

 

 

10,969

 

 

 

410

 

 

2001

 

7/15/2016

 

5 to 40 years

Dallas - Arlington

 

TX

 

 

 

 

790

 

 

 

12,785

 

 

 

81

 

 

 

790

 

 

 

12,866

 

 

 

13,656

 

 

 

496

 

 

2007

 

7/15/2016

 

5 to 40 years

Dallas - Plano

 

TX

 

 

 

 

1,370

 

 

 

10,166

 

 

 

70

 

 

 

1,370

 

 

 

10,236

 

 

 

11,606

 

 

 

394

 

 

1998

 

7/15/2016

 

5 to 40 years

Dallas - Mesquite

 

TX

 

 

 

 

620

 

 

 

8,771

 

 

 

41

 

 

 

620

 

 

 

8,812

 

 

 

9,432

 

 

 

340

 

 

2016

 

7/15/2016

 

5 to 40 years

Dallas - S Good Latimer

 

TX

 

 

 

 

4,030

 

 

 

8,029

 

 

 

115

 

 

 

4,030

 

 

 

8,144

 

 

 

12,174

 

 

 

319

 

 

2016

 

7/15/2016

 

5 to 40 years

Boulder - Arapahoe

 

CO

 

 

 

 

3,690

 

 

 

12,074

 

 

 

72

 

 

 

3,690

 

 

 

12,146

 

 

 

15,836

 

 

 

474

 

 

1992

 

7/15/2016

 

5 to 40 years

Boulder - Odell

 

CO

 

 

 

 

2,650

 

 

 

15,304

 

 

 

39

 

 

 

2,650

 

 

 

15,343

 

 

 

17,993

 

 

 

603

 

 

1998

 

7/15/2016

 

5 to 40 years

Boulder - Arapahoe

 

CO

 

 

 

 

11,540

 

 

 

15,571

 

 

 

171

 

 

 

11,540

 

 

 

15,742

 

 

 

27,282

 

 

 

616

 

 

1984

 

7/15/2016

 

5 to 40 years

Boulder - Broadway

 

CO

 

 

 

 

2,670

 

 

 

5,623

 

 

 

64

 

 

 

2,670

 

 

 

5,687

 

 

 

8,357

 

 

 

229

 

 

1992

 

7/15/2016

 

5 to 40 years

Houston - Westpark

 

TX

 

 

 

 

2,760

 

 

 

8,288

 

 

 

158

 

 

 

2,760

 

 

 

8,446

 

 

 

11,206

 

 

 

342

 

 

1996

 

7/15/2016

 

5 to 40 years

Houston - C. Jester

 

TX

 

 

 

 

8,080

 

 

 

10,114

 

 

 

157

 

 

 

8,080

 

 

 

10,271

 

 

 

18,351

 

 

 

404

 

 

2008

 

7/15/2016

 

5 to 40 years

Houston - Bay Pointe

 

TX

 

 

 

 

1,960

 

 

 

9,585

 

 

 

100

 

 

 

1,960

 

 

 

9,685

 

 

 

11,645

 

 

 

380

 

 

1972

 

7/15/2016

 

5 to 40 years

Houston - FM 529

 

TX

 

 

 

 

680

 

 

 

3,951

 

 

 

126

 

 

 

680

 

 

 

4,077

 

 

 

4,757

 

 

 

163

 

 

2005

 

7/15/2016

 

5 to 40 years

Houston - Jones

 

TX

 

 

 

 

1,260

 

 

 

2,382

 

 

 

93

 

 

 

1,260

 

 

 

2,475

 

 

 

3,735

 

 

 

109

 

 

1994

 

7/15/2016

 

5 to 40 years

Jackson - Flowood

 

MS

 

 

 

 

680

 

 

 

20,066

 

 

 

115

 

 

 

680

 

 

 

20,181

 

 

 

20,861

 

 

 

786

 

 

2000

 

7/15/2016

 

5 to 40 years

Las Vegas - Spencer

 

NV

 

 

 

 

1,020

 

 

 

25,152

 

 

 

99

 

 

 

1,020

 

 

 

25,251

 

 

 

26,271

 

 

 

964

 

 

2000

 

7/15/2016

 

5 to 40 years

Las Vegas - Maule

 

NV

 

 

 

 

2,510

 

 

 

11,822

 

 

 

(864

)

 

 

1,510

 

 

 

11,958

 

 

 

13,468

 

 

 

457

 

 

2005

 

7/15/2016

 

5 to 40 years

Las Vegas - Wigwam

 

NV

 

 

 

 

590

 

 

 

16,838

 

 

 

96

 

 

 

590

 

 

 

16,934

 

 

 

17,524

 

 

 

642

 

 

2008

 

7/15/2016

 

5 to 40 years

Las Vegas - Stufflebeam

 

NV

 

 

 

 

350

 

 

 

6,977

 

 

 

229

 

 

 

350

 

 

 

7,206

 

 

 

7,556

 

 

 

280

 

 

1996

 

7/15/2016

 

5 to 40 years

Las Vegas - Ft. Apache

 

NV

 

 

 

 

1,470

 

 

 

11,047

 

 

 

162

 

 

 

1,470

 

 

 

11,209

 

 

 

12,679

 

 

 

437

 

 

2004

 

7/15/2016

 

5 to 40 years

Las Vegas - North

 

NV

 

 

 

 

390

 

 

 

7,042

 

 

 

121

 

 

 

390

 

 

 

7,163

 

 

 

7,553

 

 

 

278

 

 

2005

 

7/15/2016

 

5 to 40 years

Las Vegas - Warm Springs

 

NV

 

 

 

 

1,340

 

 

 

5,141

 

 

 

103

 

 

 

1,340

 

 

 

5,244

 

 

 

6,584

 

 

 

260

 

 

2004

 

7/15/2016

 

5 to 40 years

Las Vegas - Conestoga

 

NV

 

 

 

 

1,420

 

 

 

10,295

 

 

 

132

 

 

 

1,420

 

 

 

10,427

 

 

 

11,847

 

 

 

417

 

 

2007

 

7/15/2016

 

5 to 40 years

Las Vegas - Warm Springs

 

NV

 

 

 

 

1,080

 

 

 

16,436

 

 

 

112

 

 

 

1,080

 

 

 

16,548

 

 

 

17,628

 

 

 

631

 

 

2007

 

7/15/2016

 

5 to 40 years

Las Vegas - Nellis

 

NV

 

 

 

 

790

 

 

 

5,233

 

 

 

131

 

 

 

790

 

 

 

5,364

 

 

 

6,154

 

 

 

225

 

 

1995

 

7/15/2016

 

5 to 40 years

Las Vegas - Cheyenne

 

NV

 

 

 

 

1,470

 

 

 

17,366

 

 

 

87

 

 

 

1,470

 

 

 

17,453

 

 

 

18,923

 

 

 

698

 

 

2004

 

7/15/2016

 

5 to 40 years

Las Vegas - Dean Martin

 

NV

 

 

 

 

3,050

 

 

 

23,333

 

 

 

91

 

 

 

3,050

 

 

 

23,424

 

 

 

26,474

 

 

 

985

 

 

2005

 

7/15/2016

 

5 to 40 years

Las Vegas - Flamingo

 

NV

 

 

 

 

980

 

 

 

13,451

 

 

 

144

 

 

 

980

 

 

 

13,595

 

 

 

14,575

 

 

 

519

 

 

2007

 

7/15/2016

 

5 to 40 years

Las Vegas - North

 

NV

 

 

 

 

330

 

 

 

15,651

 

 

 

75

 

 

 

330

 

 

 

15,726

 

 

 

16,056

 

 

 

602

 

 

2007

 

7/15/2016

 

5 to 40 years

Las Vegas - Henderson

 

NV

 

 

 

 

570

 

 

 

12,676

 

 

 

128

 

 

 

570

 

 

 

12,804

 

 

 

13,374

 

 

 

505

 

 

2005

 

7/15/2016

 

5 to 40 years

Las Vegas - North

 

NV

 

 

 

 

520

 

 

 

10,105

 

 

 

81

 

 

 

520

 

 

 

10,186

 

 

 

10,706

 

 

 

399

 

 

2002

 

7/15/2016

 

5 to 40 years

Las Vegas - Farm

 

NV

 

 

 

 

1,510

 

 

 

9,388

 

 

 

79

 

 

 

1,510

 

 

 

9,467

 

 

 

10,977

 

 

 

365

 

 

2008

 

7/15/2016

 

5 to 40 years

Los Angeles - Torrance

 

CA

 

 

 

 

5,250

 

 

 

32,363

 

 

 

197

 

 

 

5,250

 

 

 

32,560

 

 

 

37,810

 

 

 

1,243

 

 

2004

 

7/15/2016

 

5 to 40 years

Los Angeles - Irvine

 

CA

 

 

 

 

2,520

 

 

 

18,402

 

 

 

252

 

 

 

2,520

 

 

 

18,654

 

 

 

21,174

 

 

 

721

 

 

2002

 

7/15/2016

 

5 to 40 years

Los Angeles - Palm Desert

 

CA

 

 

 

 

2,660

 

 

 

16,589

 

 

 

159

 

 

 

2,660

 

 

 

16,748

 

 

 

19,408

 

 

 

654

 

 

2002

 

7/15/2016

 

5 to 40 years

Milwaukee - Green Bay

 

WI

 

 

 

 

750

 

 

 

14,720

 

 

 

29

 

 

 

750

 

 

 

14,749

 

 

 

15,499

 

 

 

569

 

 

2005

 

7/15/2016

 

5 to 40 years

Orlando - Winter Garden

 

FL

 

 

 

 

640

 

 

 

6,688

 

 

 

58

 

 

 

640

 

 

 

6,746

 

 

 

7,386

 

 

 

265

 

 

2006

 

7/15/2016

 

5 to 40 years

Orlando - Longwood

 

FL

 

 

 

 

1,230

 

 

 

9,586

 

 

 

97

 

 

 

1,230

 

 

 

9,683

 

 

 

10,913

 

 

 

371

 

 

2000

 

7/15/2016

 

5 to 40 years

Orlando - Overland

 

FL

 

 

 

 

1,080

 

 

 

3,713

 

 

 

116

 

 

 

1,080

 

 

 

3,829

 

 

 

4,909

 

 

 

153

 

 

2000

 

7/15/2016

 

5 to 40 years

Sacramento - Calvine

 

CA

 

 

 

 

2,280

 

 

 

17,069

 

 

 

75

 

 

 

2,280

 

 

 

17,144

 

 

 

19,424

 

 

 

661

 

 

2004

 

7/15/2016

 

5 to 40 years

Sacramento - Folsom

 

CA

 

 

 

 

1,200

 

 

 

22,150

 

 

 

44

 

 

 

1,200

 

 

 

22,194

 

 

 

23,394

 

 

 

839

 

 

2005

 

7/15/2016

 

5 to 40 years

Sacremento - Pell

 

CA

 

 

 

 

540

 

 

 

8,874

 

 

 

51

 

 

 

540

 

 

 

8,925

 

 

 

9,465

 

 

 

347

 

 

2004

 

7/15/2016

 

5 to 40 years

Sacremento - Goldenland

 

CA

 

 

 

 

2,010

 

 

 

8,944

 

 

 

60

 

 

 

2,010

 

 

 

9,004

 

 

 

11,014

 

 

 

367

 

 

2005

 

7/15/2016

 

5 to 40 years

Sacremento - Woodland

 

CA

 

 

 

 

860

 

 

 

10,569

 

 

 

56

 

 

 

860

 

 

 

10,625

 

 

 

11,485

 

 

 

407

 

 

2003

 

7/15/2016

 

5 to 40 years

Sacremento - El Camino

 

CA

 

 

 

 

1,450

 

 

 

12,239

 

 

 

78

 

 

 

1,450

 

 

 

12,317

 

 

 

13,767

 

 

 

475

 

 

2002

 

7/15/2016

 

5 to 40 years

64


Life Storage, Inc.

Schedule III

                                                 
                  Cost Capitalized                
                  Subsequent to Gross Amount at Which             Life on
          Initial Cost to Company Acquisition Carried at Close of Period             which
              Building, Building,     Building,                 depreciation
              Equipment Equipment     Equipment                 in latest income
      Encum     and and     and     Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed
Norfolk-Naval Base VA      1,243   5,019   744   1,243   5,763   7,006   1,760   1975   2/5/1998   5 to 40 years 
Tampa-E.Hillsborough FL      709   3,235   750   709   3,985   4,694   1,331   1985   2/4/1998   5 to 40 years 
Northbridge MA  (2)  441   1,788   990   694   2,525   3,219   263   1988   2/9/1998   5 to 40 years 
Harriman NY      843   3,394   490   843   3,884   4,727   1,225   1989/95   2/4/1998   5 to 40 years 
Greensboro-High Point NC      397   1,834   554   397   2,388   2,785   732   1993   2/10/1998   5 to 40 years 
Lynchburg-Timberlake VA      488   1,746   498   488   2,244   2,732   680   1990/96   2/18/1998   5 to 40 years 
Titusville FL  (2)  492   1,990   934   688   2,728   3,416   292   1986/90   2/25/1998   5 to 40 years 
Salem MA      733   2,941   1,236   733   4,177   4,910   1,255   1979   3/3/1998   5 to 40 years 
Chattanooga-Lee Hwy TN      384   1,371   536   384   1,907   2,291   613   1987   3/27/1998   5 to 40 years 
Chattanooga-Hwy 58 TN      296   1,198   2,090   414   3,170   3,584   657   1985   3/27/1998   5 to 40 years 
Ft. Oglethorpe GA      349   1,250   584   349   1,834   2,183   574   1989   3/27/1998   5 to 40 years 
Birmingham-Walt AL      544   1,942   831   544   2,773   3,317   922   1984   3/27/1998   5 to 40 years 
East Greenwich RI      702   2,821   1,080   702   3,901   4,603   1,151   1984/88   3/26/1998   5 to 40 years 
Durham-Hillsborough NC      775   3,103   710   775   3,813   4,588   1,143   1988/91   4/9/1998   5 to 40 years 
Durham-Cornwallis NC      940   3,763   749   940   4,512   5,452   1,342   1990/96   4/9/1998   5 to 40 years 
Salem-Policy NH      742   2,977   468   742   3,445   4,187   994   1980   4/7/1998   5 to 40 years 
Warren-Elm OH  (1)  522   1,864   1,218   569   3,035   3,604   814   1986   4/22/1998   5 to 40 years 
Warren-Youngstown OH      512   1,829   1,860   675   3,526   4,201   779   1986   4/22/1998   5 to 40 years 
Indian Harbor Beach FL      662   2,654   -602   662   2,052   2,714   674   1985   6/2/1998   5 to 40 years 
Jackson 3 - I55 MS      744   3,021   132   744   3,153   3,897   964   1995   5/13/1998   5 to 40 years 
Katy-N.Fry TX      419   1,524   3,284   419   4,808   5,227   704   1994   5/20/1998   5 to 40 years 
Hollywood-Sheridan FL      1,208   4,854   358   1,208   5,212   6,420   1,548   1988   7/1/1998   5 to 40 years 
Pompano Beach-Atlantic FL      944   3,803   352   944   4,155   5,099   1,254   1985   7/1/1998   5 to 40 years 
Pompano Beach-Sample FL      903   3,643   341   903   3,984   4,887   1,175   1988   7/1/1998   5 to 40 years 
Boca Raton-18th St FL      1,503   6,059   832   1,503   6,891   8,394   2,043   1991   7/1/1998   5 to 40 years 
Vero Beach FL      489   1,813   116   489   1,929   2,418   635   1997   6/12/1998   5 to 40 years 
Humble TX      447   1,790   2,246   740   3,743   4,483   824   1986   6/16/1998   5 to 40 years 
Houston-Old Katy TX  (1)  659   2,680   377   698   3,018   3,716   810   1996   6/19/1998   5 to 40 years 
Webster TX      635   2,302   131   635   2,433   3,068   727   1997   6/19/1998   5 to 40 years 
Carrollton TX      548   1,988   295   548   2,283   2,831   668   1997   6/19/1998   5 to 40 years 
Hollywood-N.21st FL      840   3,373   363   840   3,736   4,576   1,139   1987   8/3/1998   5 to 40 years 
San Marcos TX      324   1,493   2,012   324   3,505   3,829   667   1994   6/30/1998   5 to 40 years 
Austin-McNeil TX      492   1,995   494   510   2,471   2,981   729   1994   6/30/1998   5 to 40 years 
Austin-FM TX      484   1,951   462   481   2,416   2,897   714   1996   6/30/1998   5 to 40 years 
Jacksonville-Center NC      327   1,329   678   327   2,007   2,334   500   1995   8/6/1998   5 to 40 years 
Jacksonville-Gum Branch NC      508   1,815   1,271   508   3,086   3,594   761   1989   8/17/1998   5 to 40 years 
Jacksonville-N.Marine NC      216   782   721   216   1,503   1,719   468   1985   9/24/1998   5 to 40 years 
Euless TX      550   1,998   660   550   2,658   3,208   709   1996   9/29/1998   5 to 40 years 
N. Richland Hills TX      670   2,407   1,540   670   3,947   4,617   905   1996   10/9/1998   5 to 40 years 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to

 

 

Gross Amount at Which

 

 

 

 

 

 

 

 

 

 

which

 

 

 

 

 

 

 

 

Initial Cost to Company

 

 

Acquisition

 

 

Carried at Close of Period

 

 

 

 

 

 

 

 

 

 

depreciation

 

 

 

 

 

 

 

 

 

 

 

 

Building,

 

 

Building,

 

 

 

 

 

 

Building,

 

 

 

 

 

 

 

 

��

 

 

 

 

 

in latest

 

 

 

 

 

 

 

 

 

 

 

 

Equipment

 

 

Equipment

 

 

 

 

 

 

Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

New

 

 

 

Encum

 

 

 

 

 

 

and

 

 

and

 

 

 

 

 

 

and

 

 

 

 

 

 

Accum.

 

 

Date of

 

Date

 

statement

Description

 

ST

 

brance

 

 

Land

 

 

Impvmts.

 

 

Impvmts.

 

 

Land

 

 

Impvmts.

 

 

Total

 

 

Deprec.

 

 

Const.

 

Acquired

 

is computed

Sacremento - Bayou

 

CA

 

 

 

 

 

 

1,640

 

 

 

21,603

 

 

 

88

 

 

 

1,640

 

 

 

21,691

 

 

 

23,331

 

 

 

833

 

 

2005

 

7/15/2016

 

5 to 40 years

Sacremento - Calvine

 

CA

 

 

 

 

 

 

2,120

 

 

 

24,650

 

 

 

59

 

 

 

2,120

 

 

 

24,709

 

 

 

26,829

 

 

 

957

 

 

2003

 

7/15/2016

 

5 to 40 years

Sacremento - El Dorado Hills

 

CA

 

 

 

 

 

 

1,610

 

 

 

24,829

 

 

 

48

 

 

 

1,610

 

 

 

24,877

 

 

 

26,487

 

 

 

958

 

 

2007

 

7/15/2016

 

5 to 40 years

Sacramento - Fruitridge

 

CA

 

 

 

 

 

 

1,480

 

 

 

15,695

 

 

 

176

 

 

 

1,480

 

 

 

15,871

 

 

 

17,351

 

 

 

623

 

 

2007

 

7/15/2016

 

5 to 40 years

San Antonio - US 281

 

TX

 

 

 

 

 

 

1,380

 

 

 

8,457

 

 

 

139

 

 

 

1,380

 

 

 

8,596

 

 

 

9,976

 

 

 

329

 

 

2003

 

7/15/2016

 

5 to 40 years

Austin - San Marcos

 

TX

 

 

 

 

 

 

990

 

 

 

7,323

 

 

 

56

 

 

 

990

 

 

 

7,379

 

 

 

8,369

 

 

 

292

 

 

2016

 

7/15/2016

 

5 to 40 years

Charleston

 

SC

 

 

 

 

 

 

920

 

 

 

7,700

 

 

 

57

 

 

 

920

 

 

 

7,757

 

 

 

8,677

 

 

 

296

 

 

2016

 

7/29/2016

 

5 to 40 years

Denver - Westminster

 

CO

 

 

 

 

 

 

5,062

 

 

 

3,679

 

 

 

307

 

 

 

5,062

 

 

 

3,986

 

 

 

9,048

 

 

 

141

 

 

2000

 

8/4/2016

 

5 to 40 years

Chicago - Arlington Hgts.

 

IL

 

 

 

 

 

 

370

 

 

 

8,513

 

 

 

104

 

 

 

370

 

 

 

8,617

 

 

 

8,987

 

 

 

242

 

 

2016

 

11/17/2016

 

5 to 40 years

Orlando - Curry Ford

 

FL

 

 

2,916

 

 

 

3,268

 

 

 

6,378

 

 

 

114

 

 

 

3,268

 

 

 

6,492

 

 

 

9,760

 

 

 

180

 

 

2016

 

12/20/2016

 

5 to 40 years

Chicago - Lombard

 

IL

 

 

 

 

 

 

771

 

 

 

9,318

 

 

 

0

 

 

 

771

 

 

 

9,318

 

 

 

10,089

 

 

 

199

 

 

2017

 

2/23/2017

 

5 to 40 years

Austin - Mary St.

 

TX

 

 

 

 

 

 

0

 

 

 

0

 

 

 

6

 

 

 

0

 

 

 

6

 

 

 

6

 

 

 

0

 

 

2017

 

4/3/2017

 

5 to 40 years

Charlotte - Morehead St..

 

NC

 

 

 

 

 

 

1,110

 

 

 

11,439

 

 

 

1

 

 

 

1,110

 

 

 

11,440

 

 

 

12,550

 

 

 

24

 

 

2017

 

12/14/2017

 

5 to 40 years

Construction in Progress

 

 

 

 

 

 

 

 

0

 

 

 

0

 

 

 

14,383

 

 

 

0

 

 

 

14,383

 

 

 

14,383

 

 

 

0

 

 

2017

 

 

 

 

Corporate Office

 

NY

 

 

 

 

 

 

0

 

 

 

68

 

 

 

38,947

 

 

 

1,633

 

 

 

37,382

 

 

 

39,015

 

 

 

20,892

 

 

2000

 

5/1/2000

 

5 to 40 years

 

 

 

 

$

12,674

 

 

$

773,702

 

 

$

2,974,075

 

 

$

573,633

 

 

$

786,628

 

 

$

3,534,782

 

 

$

4,321,410

 

 

$

624,314

 

 

 

 

 

 

 

65

90

Life Storage, Inc.

Schedule III

(dollars in thousands)

                                                 
                  Cost Capitalized                
                  Subsequent to Gross Amount at Which             Life on
          Initial Cost to Company Acquisition Carried at Close of Period             which
              Building, Building,     Building,                 depreciation
              Equipment Equipment     Equipment                 in latest income
      Encum     and and     and     Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed
Batavia OH      390   1,570   909   390   2,479   2,869   625   1988   11/19/1998   5 to 40 years 
Jackson-N.West MS      460   1,642   480   460   2,122   2,582   707   1984   12/1/1998   5 to 40 years 
Katy-Franz TX      507   2,058   1,599   507   3,657   4,164   741   1993   12/15/1998   5 to 40 years 
W.Warwick RI      447   1,776   813   447   2,589   3,036   717   1986/94   2/2/1999   5 to 40 years 
Lafayette-Pinhook 1 LA      556   1,951   977   556   2,928   3,484   973   1980   2/17/1999   5 to 40 years 
Lafayette-Pinhook2 LA      708   2,860   285   708   3,145   3,853   895   1992/94   2/17/1999   5 to 40 years 
Lafayette-Ambassador LA      314   1,095   665   314   1,760   2,074   631   1975   2/17/1999   5 to 40 years 
Lafayette-Evangeline LA      188   652   1,507   188   2,159   2,347   628   1977   2/17/1999   5 to 40 years 
Lafayette-Guilbeau LA      963   3,896   776   963   4,672   5,635   1,224   1994   2/17/1999   5 to 40 years 
Gilbert-Elliot Rd AZ      651   2,600   1,101   772   3,580   4,352   864   1995   5/18/1999   5 to 40 years 
Glendale-59th Ave AZ      565   2,596   556   565   3,152   3,717   852   1997   5/18/1999   5 to 40 years 
Mesa-Baseline AZ      330   1,309   2,399   733   3,305   4,038   482   1986   5/18/1999   5 to 40 years 
Mesa-E.Broadway AZ      339   1,346   593   339   1,939   2,278   493   1986   5/18/1999   5 to 40 years 
Mesa-W.Broadway AZ      291   1,026   874   291   1,900   2,191   414   1976   5/18/1999   5 to 40 years 
Mesa-Greenfield AZ      354   1,405   336   354   1,741   2,095   516   1986   5/18/1999   5 to 40 years 
Phoenix-Camelback AZ      453   1,610   834   453   2,444   2,897   665   1984   5/18/1999   5 to 40 years 
Phoenix-Bell AZ      872   3,476   871   872   4,347   5,219   1,196   1984   5/18/1999   5 to 40 years 
Phoenix-35th Ave AZ      849   3,401   666   849   4,067   4,916   1,094   1996   5/21/1999   5 to 40 years 
Westbrook ME      410   1,626   1,759   410   3,385   3,795   728   1988   8/2/1999   5 to 40 years 
Cocoa FL      667   2,373   775   667   3,148   3,815   850   1982   9/29/1999   5 to 40 years 
Cedar Hill TX      335   1,521   377   335   1,898   2,233   535   1985   11/9/1999   5 to 40 years 
Monroe NY      276   1,312   1,159   276   2,471   2,747   515   1998   2/2/2000   5 to 40 years 
N.Andover MA      633   2,573   808   633   3,381   4,014   755   1989   2/15/2000   5 to 40 years 
Seabrook TX      633   2,617   343   633   2,960   3,593   768   1996   3/1/2000   5 to 40 years 
Plantation FL      384   1,422   415   384   1,837   2,221   463   1994   5/2/2000   5 to 40 years 
Birmingham-Bessemer AL      254   1,059   1,194   254   2,253   2,507   411   1998   11/15/2000   5 to 40 years 
Brewster NY  (2)  1,716   6,920   905   1,981   7,560   9,541   797   1991/97   12/27/2000   5 to 40 years 
Austin-Lamar TX  (2)  837   2,977   496   966   3,344   4,310   400   1996/99   2/22/2001   5 to 40 years 
Houston-E.Main TX  (2)  733   3,392   572   841   3,856   4,697   428   1993/97   3/2/2001   5 to 40 years 
Ft.Myers-Abrams FL  (2)  787   3,249   374   902   3,508   4,410   424   1997   3/13/2001   5 to 40 years 
Dracut MA  (1)  1,035   3,737   590   1,104   4,258   5,362   887   1986   12/1/2001   5 to 40 years 
Methuen MA  (1)  1,024   3,649   567   1,091   4,149   5,240   856   1984   12/1/2001   5 to 40 years 
Columbia 5 SC  (1)  883   3,139   1,212   942   4,292   5,234   816   1985   12/1/2001   5 to 40 years 
Myrtle Beach SC  (1)  552   1,970   881   589   2,814   3,403   582   1984   12/1/2001   5 to 40 years 
Kingsland GA  (1)  470   1,902   2,914   666   4,620   5,286   642   1989   12/1/2001   5 to 40 years 
Saco ME  (1)  534   1,914   279   570   2,157   2,727   452   1988   12/3/2001   5 to 40 years 
Plymouth MA      1,004   4,584   2,282   1,004   6,866   7,870   1,043   1996   12/19/2001   5 to 40 years 
Sandwich MA  (1)  670   3,060   408   714   3,424   4,138   714   1984   12/19/2001   5 to 40 years 
Syracuse NY  (1)  294   1,203   402   327   1,572   1,899   358   1987   2/5/2002   5 to 40 years 

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

Cost:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

4,243,308

 

 

$

2,491,702

 

 

$

2,177,983

 

Additions during period:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions through foreclosure

 

—

 

 

—

 

 

—

 

Other acquisitions

 

 

22,638

 

 

 

1,714,029

 

 

 

278,572

 

Improvements, etc.

 

 

84,191

 

 

 

73,385

 

 

 

42,046

 

 

 

 

106,829

 

 

 

1,787,414

 

 

 

320,618

 

Deductions during period:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of assets disposed

 

 

(28,727

)

 

 

(35,808

)

 

 

(6,899

)

Impairment write-down

 

—

 

 

—

 

 

—

 

Casualty loss

 

—

 

 

—

 

 

—

 

 

 

 

(28,727

)

 

 

(35,808

)

 

 

(6,899

)

Balance at close of period

 

$

4,321,410

 

 

$

4,243,308

 

 

$

2,491,702

 

Accumulated Depreciation:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

535,704

 

 

$

465,195

 

 

$

411,701

 

Additions during period:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense

 

 

102,674

 

 

 

87,219

 

 

 

55,101

 

 

 

 

102,674

 

 

 

87,219

 

 

 

55,101

 

Deductions during period:

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation of assets disposed

 

 

(14,064

)

 

 

(16,710

)

 

 

(1,607

)

Accumulated depreciation on impaired asset

 

—

 

 

—

 

 

—

 

Accumulated depreciation on casualty loss

 

—

 

 

—

 

 

—

 

 

 

 

(14,064

)

 

 

(16,710

)

 

 

(1,607

)

Balance at close of period

 

$

624,314

 

 

$

535,704

 

 

$

465,195

 

66

The aggregate cost of real estate for U.S. federal income tax purposes is $4,388,101 at December 31, 2017.

91

                                                 
                  Cost Capitalized                
                  Subsequent to Gross Amount at Which             Life on
          Initial Cost to Company Acquisition Carried at Close of Period             which
              Building, Building,     Building,                 depreciation
              Equipment Equipment     Equipment                 in latest income
      Encum     and and     and     Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed
Houston-Westward TX  (1)  853   3,434   855   912   4,230   5,142   883   1976   2/13/2002   5 to 40 years 
Houston-Boone TX  (1)  250   1,020   495   268   1,497   1,765   319   1983   2/13/2002   5 to 40 years 
Houston-Cook TX  (1)  285   1,160   326   306   1,465   1,771   323   1986   2/13/2002   5 to 40 years 
Houston-Harwin TX  (1)  449   1,816   597   480   2,382   2,862   506   1981   2/13/2002   5 to 40 years 
Houston-Hempstead TX  (1)  545   2,200   935   583   3,097   3,680   627   1974/78   2/13/2002   5 to 40 years 
Houston-Kuykendahl TX  (1)  517   2,090   1,258   553   3,312   3,865   601   1979/83   2/13/2002   5 to 40 years 
Houston-Hwy 249 TX  (1)  299   1,216   1,053   320   2,248   2,568   428   1983   2/13/2002   5 to 40 years 
Mesquite-Hwy 80 TX  (1)  463   1,873   655   496   2,495   2,991   482   1985   2/13/2002   5 to 40 years 
Mesquite-Franklin TX  (1)  734   2,956   678   784   3,584   4,368   694   1984   2/13/2002   5 to 40 years 
Dallas-Plantation TX  (1)  394   1,595   283   421   1,851   2,272   394   1985   2/13/2002   5 to 40 years 
San Antonio-Hunt TX  (1)  381   1,545   781   408   2,299   2,707   431   1980   2/13/2002   5 to 40 years 
Humble-5250 FM TX      919   3,696   363   919   4,059   4,978   763   1998/02   6/19/2002   5 to 40 years 
Pasadena TX      612   2,468   232   612   2,700   3,312   514   1999   6/19/2002   5 to 40 years 
League City-E.Main TX      689   3,159   269   689   3,428   4,117   658   1994/97   6/19/2002   5 to 40 years 
Montgomery TX      817   3,286   2,066   1,119   5,050   6,169   736   1998   6/19/2002   5 to 40 years 
Texas City TX      817   3,286   129   817   3,415   4,232   671   1999   6/19/2002   5 to 40 years 
Houston-Hwy 6 TX      407   1,650   182   407   1,832   2,239   359   1997   6/19/2002   5 to 40 years 
Lumberton TX      817   3,287   191   817   3,478   4,295   670   1996   6/19/2002   5 to 40 years 
The Hamptons l NY      2,207   8,866   627   2,207   9,493   11,700   1,714   1989/95   12/16/2002   5 to 40 years 
The Hamptons 2 NY      1,131   4,564   489   1,131   5,053   6,184   890   1998   12/16/2002   5 to 40 years 
The Hamptons 3 NY      635   2,918   357   635   3,275   3,910   566   1997   12/16/2002   5 to 40 years 
The Hamptons 4 NY      1,251   5,744   357   1,252   6,100   7,352   1,078   1994/98   12/16/2002   5 to 40 years 
Duncanville TX      1,039   4,201   46   1,039   4,247   5,286   693   1995/99   8/26/2003   5 to 40 years 
Dallas-Harry Hines TX      827   3,776   297   827   4,073   4,900   641   1998/01   10/1/2003   5 to 40 years 
Stamford CT      2,713   11,013   304   2,713   11,317   14,030   1,732   1998   3/17/2004   5 to 40 years 
Houston-Tomball TX      773   3,170   1,775   773   4,945   5,718   648   2000   5/19/2004   5 to 40 years 
Houston-Conroe TX      1,195   4,877   109   1,195   4,986   6,181   734   2001   5/19/2004   5 to 40 years 
Houston-Spring TX      1,103   4,550   253   1,103   4,803   5,906   716   2001   5/19/2004   5 to 40 years 
Houston-Bissonnet TX      1,061   4,427   2,663   1,061   7,090   8,151   822   2003   5/19/2004   5 to 40 years 
Houston-Alvin TX      388   1,640   852   388   2,492   2,880   296   2003   5/19/2004   5 to 40 years 
Clearwater FL      1,720   6,986   82   1,720   7,068   8,788   1,020   2001   6/3/2004   5 to 40 years 
Houston-Missouri City TX      1,167   4,744   3,459   1,566   7,804   9,370   746   1998   6/23/2004   5 to 40 years 
Chattanooga-Hixson TN      1,365   5,569   1,182   1,365   6,751   8,116   947   1998/02   8/4/2004   5 to 40 years 
Austin-Round Rock TX      2,047   5,857   675   2,051   6,528   8,579   902   2000   8/5/2004   5 to 40 years 
Cicero NY      527   2,121   564   527   2,685   3,212   355   1988/02   3/16/2005   5 to 40 years 
Bay Shore NY      1,131   4,609   59   1,131   4,668   5,799   593   2003   3/15/2005   5 to 40 years 
Springfield-Congress MA      612   2,501   106   612   2,607   3,219   337   1965/75   4/12/2005   5 to 40 years 
Stamford-Hope CT      1,612   6,585   201   1,612   6,786   8,398   855   2002   4/14/2005   5 to 40 years 
Houston-Jones TX  3,369   1,214   4,949   82   1,215   5,030   6,245   603   1997/99   6/6/2005   5 to 40 years 

67

                                                 
                  Cost Capitalized                
                  Subsequent to Gross Amount at Which             Life on
          Initial Cost to Company Acquisition Carried at Close of Period             which
              Building, Building,     Building,                 depreciation
              Equipment Equipment     Equipment                 in latest income
      Encum     and and     and     Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed
Montgomery-Richard AL      1,906   7,726   135   1,906   7,861   9,767   950   1997   6/1/2005   5 to 40 years 
Oxford MA      470   1,902   1,577   470   3,479   3,949   288   2002   6/23/2005   5 to 40 years 
Austin-290E TX      537   2,183   167   537   2,350   2,887   291   2003   7/12/2005   5 to 40 years 
SanAntonio-Marbach TX      556   2,265   206   556   2,471   3,027   290   2003   7/12/2005   5 to 40 years 
Austin-South 1st TX      754   3,065   148   754   3,213   3,967   388   2003   7/12/2005   5 to 40 years 
Pinehurst TX      484   1,977   1,361   484   3,338   3,822   303   2002/04   7/12/2005   5 to 40 years 
Marietta-Austell GA      811   3,397   433   811   3,830   4,641   449   2003   9/15/2005   5 to 40 years 
Baton Rouge-Florida LA      719   2,927   927   719   3,854   4,573   295   1984/94   11/15/2005   5 to 40 years 
Cypress TX      721   2,994   1,094   721   4,088   4,809   414   2003   1/13/2006   5 to 40 years 
Texas City TX      867   3,499   106   867   3,605   4,472   377   2003   1/10/2006   5 to 40 years 
San Marcos-Hwy 35S TX      628   2,532   450   982   2,628   3,610   274   2001   1/10/2006   5 to 40 years 
Baytown TX      596   2,411   86   596   2,497   3,093   266   2002   1/10/2006   5 to 40 years 
Webster NY      937   3,779   116   937   3,895   4,832   392   2002/06   2/1/2006   5 to 40 years 
Houston-Jones Rd 2 TX      707   2,933   2,013   707   4,946   5,653   447   2000   3/9/2006   5 to 40 years 
Cameron-Scott LA  977   411   1,621   136   411   1,757   2,168   205   1997   4/13/2006   5 to 40 years 
Lafayette-Westgate LA      463   1,831   83   463   1,914   2,377   193   2001/04   4/13/2006   5 to 40 years 
Broussard LA      601   2,406   1,250   601   3,656   4,257   315   2002   4/13/2006   5 to 40 years 
Congress-Lafayette LA  1,072   542   1,319   2,101   542   3,420   3,962   224   1997/99   4/13/2006   5 to 40 years 
Manchester NH      832   3,268   90   832   3,358   4,190   320   2000   4/26/2006   5 to 40 years 
Nashua NH      617   2,422   489   617   2,911   3,528   256   1989   6/29/2006   5 to 40 years 
Largo 2 FL      1,270   5,037   171   1,270   5,208   6,478   487   1998   6/22/2006   5 to 40 years 
Pinellas Park FL      929   3,676   109   929   3,785   4,714   344   2000   6/22/2006   5 to 40 years 
Tarpon Springs FL      696   2,739   110   696   2,849   3,545   263   1999   6/22/2006   5 to 40 years 
New Orleans LA      1,220   4,805   83   1,220   4,888   6,108   450   2000   6/22/2006   5 to 40 years 
St Louis-Meramec MO      1,113   4,359   190   1,113   4,549   5,662   414   1999   6/22/2006   5 to 40 years 
St Louis-Charles Rock MO      766   3,040   111   766   3,151   3,917   282   1999   6/22/2006   5 to 40 years 
St Louis-Shackelford MO      828   3,290   141   828   3,431   4,259   315   1999   6/22/2006   5 to 40 years 
St Louis-W.Washington MO      734   2,867   555   734   3,422   4,156   328   1980/01   6/22/2006   5 to 40 years 
St Louis-Howdershell MO      899   3,596   180   899   3,776   4,675   350   2000   6/22/2006   5 to 40 years 
St Louis-Lemay Ferry MO      890   3,552   208   890   3,760   4,650   338   1999   6/22/2006   5 to 40 years 
St Louis-Manchester MO      697   2,711   96   697   2,807   3,504   258   2000   6/22/2006   5 to 40 years 
Arlington-Little Rd TX  1,951   1,256   4,946   159   1,256   5,105   6,361   463   1998/03   6/22/2006   5 to 40 years 
Dallas-Goldmark TX      605   2,434   58   605   2,492   3,097   228   2004   6/22/2006   5 to 40 years 
Dallas-Manana TX      607   2,428   115   607   2,543   3,150   233   2004   6/22/2006   5 to 40 years 
Dallas-Manderville TX      1,073   4,276   62   1,073   4,338   5,411   398   2003   6/22/2006   5 to 40 years 
Ft. Worth-Granbury TX  1,751   549   2,180   90   549   2,270   2,819   210   1998   6/22/2006   5 to 40 years 
Ft. Worth-Grapevine TX      644   2,542   52   644   2,594   3,238   238   1999   6/22/2006   5 to 40 years 
San Antonio-Blanco TX      963   3,836   55   963   3,891   4,854   357   2004   6/22/2006   5 to 40 years 
San Antonio-Broadway TX      773   3,060   106   773   3,166   3,939   293   2000   6/22/2006   5 to 40 years 

68

                                                 
                  Cost Capitalized                
                  Subsequent to Gross Amount at Which             Life on
          Initial Cost to Company Acquisition Carried at Close of Period             which
              Building, Building,     Building,                 depreciation
              Equipment Equipment     Equipment                 in latest income
      Encum     and and     and     Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed
San Antonio-Huebner TX  2,177   1,175   4,624   118   1,175   4,742   5,917   424   1998   6/22/2006   5 to 40 years 
Chattanooga-Lee Hwy II TN      619   2,471   62   619   2,533   3,152   228   2002   8/7/2006   5 to 40 years 
Lafayette-Evangeline LA      699   2,784   1,885   699   4,669   5,368   310   1995/99   8/1/2006   5 to 40 years 
Montgomery-E.S.Blvd AL      1,158   4,639   304   1,158   4,943   6,101   433   1996/97   9/28/2006   5 to 40 years 
Auburn-Pepperell Pkwy AL      590   2,361   152   590   2,513   3,103   214   1998   9/28/2006   5 to 40 years 
Auburn-Gatewood Dr AL      694   2,758   111   694   2,869   3,563   237   2002/03   9/28/2006   5 to 40 years 
Columbus-Williams Rd GA      736   2,905   118   736   3,023   3,759   263   2002/04/06   9/28/2006   5 to 40 years 
Columbus-Miller Rd GA      975   3,854   129   975   3,983   4,958   333   1995   9/28/2006   5 to 40 years 
Columbus-Armour Rd GA      0   3,680   98   0   3,778   3,778   324   2004/05   9/28/2006   5 to 40 years 
Columbus-Amber Dr GA      439   1,745   63   439   1,808   2,247   155   1998   9/28/2006   5 to 40 years 
Concord NH      813   3,213   1,919   813   5,132   5,945   337   2000   10/31/2006   5 to 40 years 
Buffalo-Langner Rd NY      532   2,119   442   532   2,561   3,093   171   1993/07   3/30/2007   5 to 40 years 
Buffalo-Transit Rd NY      437   1,794   76   437   1,870   2,307   142   1998   3/30/2007   5 to 40 years 
Buffalo-Lake Ave NY      638   2,531   242   638   2,773   3,411   219   1997   3/30/2007   5 to 40 years 
Buffalo-Union Rd NY      348   1,344   108   348   1,452   1,800   108   1998   3/30/2007   5 to 40 years 
Buffalo-Niagara Falls Blvd NY      323   1,331   64   323   1,395   1,718   104   1998   3/30/2007   5 to 40 years 
Buffalo-Young St NY      315   2,185   118   316   2,302   2,618   147   1999/00   3/30/2007   5 to 40 years 
Buffalo-Sheridan Dr NY      961   3,827   101   961   3,928   4,889   280   1999   3/30/2007   5 to 40 years 
Lockport-Transit Rd NY      375   1,498   253   375   1,751   2,126   142   1990/95   3/30/2007   5 to 40 years 
Rochester-Phillips Rd NY      1,003   4,002   63   1,003   4,065   5,068   289   1999   3/30/2007   5 to 40 years 
Greenville MS      1,100   4,386   116   1,100   4,502   5,602   360   1994   1/11/2007   5 to 40 years 
Port Arthur-9595 Hwy69 TX      929   3,647   123   930   3,769   4,699   279   2002/04   3/8/2007   5 to 40 years 
Beaumont-Dowlen Rd TX      1,537   6,018   224   1,537   6,242   7,779   460   2003/06   3/8/2007   5 to 40 years 
Huntsville-Memorial Pkwy AL      1,607   6,338   171   1,607   6,509   8,116   436   1989/06   6/1/2007   5 to 40 years 
Huntsville-Madison 1 AL      1,016   4,013   151   1,017   4,163   5,180   285   1993/07   6/1/2007   5 to 40 years 
Gulfport-Ocean Springs MS      1,423   5,624   45   1,423   5,669   7,092   373   1998/05   6/1/2007   5 to 40 years 
Huntsville-Hwy 72 AL      1,206   4,775   69   1,206   4,844   6,050   324   1998/06   6/1/2007   5 to 40 years 
Mobile-Airport Blvd AL      1,216   4,819   132   1,216   4,951   6,167   339   2000/07   6/1/2007   5 to 40 years 
Gulfport-Hwy 49 MS      1,345   5,325   42   1,345   5,367   6,712   354   2002/04   6/1/2007   5 to 40 years 
Huntsville-Madison 2 AL      1,164   4,624   52   1,164   4,676   5,840   314   2002/06   6/1/2007   5 to 40 years 
Foley-Hwy 59 AL      1,346   5,474   95   1,347   5,568   6,915   380   2003/06   6/1/2007   5 to 40 years 
Pensacola 6-Nine Mile FL      1,029   4,180   92   1,029   4,272   5,301   307   2003/06   6/1/2007   5 to 40 years 
Auburn-College St AL      686   2,732   85   686   2,817   3,503   197   2003   6/1/2007   5 to 40 years 
Gulfport-Biloxi MS      1,811   7,152   47   1,811   7,199   9,010   472   2004/06   6/1/2007   5 to 40 years 
Pensacola 7-Hwy 98 FL      732   3,015   34   732   3,049   3,781   217   2006   6/1/2007   5 to 40 years 
Montgomery-Arrowhead AL      1,075   4,333   35   1,076   4,367   5,443   294   2006   6/1/2007   5 to 40 years 
Montgomery-McLemore AL      885   3,586   19   885   3,605   4,490   244   2006   6/1/2007   5 to 40 years 
San Antonio-Foster TX      676   2,685   135   676   2,820   3,496   194   2003/06   5/21/2007   5 to 40 years 
Beaumont-S.Major TX      742   3,024   113   742   3,137   3,879   181   2002/05   11/14/2007   5 to 40 years 

69

                                                 
                  Cost Capitalized                
                  Subsequent to Gross Amount at Which             Life on
          Initial Cost to Company Acquisition Carried at Close of Period             which
              Building, Building,     Building,                 depreciation
              Equipment Equipment     Equipment                 in latest income
      Encum     and and     and     Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed
Hattiesburg-Clasic MS      444   1,799   73   444   1,872   2,316   99   1998   12/19/2007   5 to 40 years 
Biloxi-Ginger MS      384   1,548   46   384   1,594   1,978   84   2000   12/19/2007   5 to 40 years 
Foley-7905 St Hwy 59 AL      437   1,757   34   437   1,791   2,228   93   2000   12/19/2007   5 to 40 years 
Ridgeland MS      1,479   5,965   85   1,479   6,050   7,529   297   1997/00   1/17/2008   5 to 40 years 
Jackson-5111 MS      1,337   5,377   61   1,337   5,438   6,775   267   2003   1/17/2008   5 to 40 years 
Cincinnati-Robertson OH      852   3,409   75   852   3,484   4,336   90   2003/04   12/31/2008   5 to 40 years 
Richmond-Bridge Rd VA      1,047   5,981   0   1,047   5,981   7,028   0   2009   10/1/2009   5 to 40 years 
Construction in progress          0   0   9,846   0   9,846   9,846   0   2009         
Corporate Office NY      0   68   11,167   1,616   9,619   11,235   7,819   2000   5/1/2000   5 to 40 years 
                       
          $225,290  $875,528  $286,765  $237,684  $1,149,899  $1,387,583  $245,178             
                                   
(1)These properties are encumbered through one mortgage loan with an outstanding balance of $41.5 million at December 31, 2009.
(2)These properties are encumbered through one mortgage loan with an outstanding balance of $28.4 million at December 31, 2009.

70

                         
  December 31, 2009  December 31, 2008  December 31, 2007 
Cost:                        
Balance at beginning of period     $1,366,615      $1,300,847      $1,115,255 
Additions during period:                        
Acquisitions through foreclosure $—      $—      $—     
Other acquisitions  —       18,454       136,653     
Improvements, etc.  22,135       47,507       51,363     
                      
       22,135       65,961       188,016 
                         
Deductions during period:                        
Cost of real estate sold  (1,167)  (1,167)  (193)  (193)  (2,424)  (2,424)
                   
Balance at close of period     $1,387,583      $1,366,615      $1,300,847 
                      
                         
Accumulated Depreciation:                        
Balance at beginning of period     $212,301      $179,880      $151,138 
Additions during period:                        
Depreciation expense $33,096      $32,556      $29,523     
                      
       33,096       32,556       29,523 
                         
Deductions during period:                        
Accumulated depreciation of real estate sold  (219)  (219)  (135)  (135)  (781)  (781)
                   
Balance at close of period     $245,178      $212,301      $179,880 
                      

71