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’s~~our outstanding common stock might receive a premium for their shares of ~~the Company’s~~our 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 ~~Sovran~~the 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 specified~~specific 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 ~~Sovran~~Life Storage even if a change in control were in the shareholders’ interest. ~~Waivers~~Our bylaws contain a provision exempting from the MGCL control share acquisition statute any and ~~exemptions have been granted to the initial purchasers~~all acquisitions by any person of shares of our ~~former Series C preferred stock in connection with these provisions of the MGCL.~~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’s~~our continuing ability to meet various requirements concerning, among other things, the ownership of ~~its~~our outstanding stock, the nature of ~~its~~our assets, the sources of ~~its~~our income and the amount of ~~its~~our 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 respect~~status 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. The Company has provided certain conveniences for its tenants, including property insurance underwritten by a third party insurance company that pays it commissions. We believetax laws and regulations, and the ~~insurance provided by the insurance company would not constitute a prohibited service to the Company’s tenants. No assurances can be given, however, that~~courts and the IRS ~~will not challenge our position. If the IRS successfully challenged our position, the Company’s qualification~~might 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 Company~~we 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 ~~Company~~Code, we would not be allowed a deduction for distributions to shareholders in computing ~~its~~our taxable income and would be subject to federal income tax (including ~~any applicable alternative minimum tax)~~possibly increased state and local taxes) on ~~its~~our taxable income at regular corporate rates. Unless entitled to relief under certain Code provisions, ~~the Company~~we also would be ineligible for qualification as a REIT for the four taxable years following the year during which ~~its~~our qualification was lost. As a result, distributions to the shareholders would be reduced for each of the years involved. Although ~~the Company~~we currently ~~intends~~intend 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 ~~its~~our Board of Directors to revoke ~~its~~our 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 Will Pay Some Taxes Even if We Qualify as a REIT, Reducing Cash Available for Shareholders

Even if we qualify as a REIT for federal income tax purposes, we are required to pay some federal, state and local taxes on our income and property. For 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 amount, 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 has elected to be treated as a “taxable REIT subsidiary” of the Company for federal income tax purposes. A taxable REIT subsidiary is taxed as a regular corporation and is limited in its ability to deduct interest payments made to us in excess of a certain amount, in addition to other limitations imposed on the deductibility of interest under the TCJA. In addition, if we receive or accrue certain amounts and the underlying economic arrangements between our taxable REIT subsidiary and us are not comparable to similar arrangements among unrelated parties, we 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 we 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 we 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 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.

11Complying 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 Dividend Policy for Our Common Stock in the Future

In 2017, our Board of Directors authorized and we declared quarterly common stock dividends of $0.95 per share in January, and $1.00 per share for April, July and October, for a total 2017 dividend per share annual rate of $3.95 per share. In addition, our Board of Directors authorized and we declared a quarterly common stock dividend of $1.00 per share in January 2018. We can provide no assurance that our Board of Directors will not reduce or eliminate entirely dividend distributions on our common stock in the future.

Our Board of Directors 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 decisions to authorize and pay dividends on our common stock in the future, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our Board of Directors 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 dividend policy could have a material adverse effect on the market price of our common stock.

Market Interest Rates May Influence the Price of Our Common Stock

One of the factors that may influence the price of our common stock in public trading markets or in private transactions is the annual yield on our common stock as compared to yields on other financial instruments. An increase in market interest rates will result in higher yields on other financial instruments, which could adversely affect the price of our common stock.

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

Florida

As of December 31, ~~2008, 147~~2017, 254 of our ~~385~~706 self-storage facilities are located in the states of Texas and Florida. For the year ended December 31, ~~2008,~~2017, these facilities accounted for approximately ~~40.9%~~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 ~~will~~may 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~~

~~None.~~

Item 2.

Properties

~~Item 2. Properties~~

At December 31, ~~2008,~~2017, we held ownership interests in, ~~and~~leased, and/or managed a total of ~~385~~706 Properties situated in ~~twenty-four~~28 states. Among ~~the 385~~our 706 self-storage ~~facilities~~properties are 2798 properties that we manage for ~~a consolidated~~unconsolidated joint ~~venture~~ventures of which we ~~are a majority owner and 25 properties that we manage for a~~have 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 gates~~automated 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 ~~21,000~~18,000 to ~~187,000~~195,000 net rentable square feet, with an average of approximately ~~65,000~~70,000 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. ~~Customers~~Generally, customers have access to their storage ~~areas during business~~space 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, ~~and~~lease, and/or manage as of December 31, ~~2008:~~

2017:


	Number of
	Stores at						Percentage
	December 31,		Square		Number of		of Store
	2008		Feet		Spaces		Revenue			Number of Stores at December 31, 2017		Square Feet		Number of Spaces		Percentage of Store Revenue
Alabama		22		1,602,986		11,885		5.1	%		21		1,581,503		12,157		2.35	%
Arizona		9		506,034		4,474		2.4	%		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		304,859		2,866		2.1	%		11		834,952		8,705		2.16	%
Colorado		4		276,827		2,376		0.5	%
Florida		57		3,652,019		33,327		15.6	%		95		6,422,451		63,243		13.49	%
Georgia		27		1,717,646		13,937		6.3	%		34		2,355,069		20,193		4.23	%
Illinois											45		3,348,867		33,810		7.40	%
Kentucky		2		145,708		1,322		0.3	%		2		142,764		1,322		0.28	%
Louisiana		14		867,593		7,744		3.7	%		16		954,965		8,088		1.66	%
Maine		2		114,145		1,004		0.5	%		5		233,136		2,295		0.61	%
Maryland		4		173,181		2,040		0.9	%		3		138,839		1,619		0.36	%
Massachusetts		14		790,282		7,178		3.8	%		15		817,298		8,244		2.06	%
Michigan		6		348,843		3,010		1.2	%
Mississippi		12		925,621		7,079		3.5	%		12		885,381		6,614		1.48	%
Missouri		7		436,069		3,786		2.1	%		14		948,066		8,498		1.86	%
Nevada											22		1,633,278		13,708		2.81	%
New Hampshire		4		260,503		2,330		1.0	%		10		725,123		6,222		1.40	%
New Jersey											29		2,091,277		21,891		5.79	%
New York		28		1,598,164		14,501		8.6	%		46		2,827,529		28,684		6.77	%
North Carolina		15		796,123		6,959		3.2	%		22		1,361,090		12,632		2.20	%
Ohio		23		1,576,639		12,900		4.4	%		25		1,656,927		13,940		2.72	%
Pennsylvania		6		365,520		2,919		1.4	%		11		688,019		5,961		1.37	%
Rhode Island		4		167,901		1,567		0.9	%		4		205,871		1,922		0.49	%
South Carolina		8		445,528		3,770		1.8	%		14		901,444		7,974		1.67	%
Tennessee		4		295,122		2,430		1.0	%		7		510,619		4,231		0.85	%
Texas		90		6,571,320		53,847		25.3	%		159		11,745,044		97,320		22.51	%
Virginia		18		1,065,013		9,896		4.4	%		18		1,382,818		12,576		2.21	%

Wisconsin											2		169,595		1,726		0.19	%
Total		385		25,003,646		213,147		100.0	%		706		49,611,063		448,897		100.0	%

At December 31, ~~2008,~~2017, the Properties had an average occupancy of ~~80.5%~~88.7% and an annualized rent per occupied square foot of ~~$10.54.~~$14.07.

Item 3.

Legal Proceedings

~~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 course~~motion for the preliminary approval of ~~business, we~~the 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. While~~final approval by the ~~outcome of any litigation~~court, 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.

~~Item 4. Submission of Matters to a Vote of Security Holders~~

~~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.~~

~~Part II~~

expected in 2018.

Item 4.

Mine Safety Disclosures

Not Applicable

Part 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 market~~traded 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 ~~2008,~~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 forth~~summarizes our purchases of our common stock for the ~~quarterly distributions per Unit paid by the Operating Partnership to holders~~year ended December 31, 2017.

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

~~History of Distributions Declared on Units~~


~~1st Quarter, 2007~~		~~$0.620 per unit~~
~~2nd Quarter, 2007~~		~~$0.620 per unit~~
~~3rd Quarter, 2007~~		~~$0.630 per unit~~
~~4th Quarter, 2007~~		~~$0.630 per unit~~

~~1st Quarter, 2008~~		~~$0.630 per unit~~
~~2nd Quarter, 2008~~		~~$0.630 per unit~~
~~3rd Quarter, 2008~~		~~$0.640 per unit~~
~~4th Quarter, 2008~~		~~$0.640 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 currently anticipated.

Equity Securities

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.

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth certain information as of December 31, ~~2008,~~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 274,163 $ 45.72 1,096,464
1995 Award and Option Plan 50,525 $ 26.74 0
1995 Outside Directors’ Stock Option Plan 36,000 $ 45.74 0
Deferred Compensation Plan for Directors (1) 33,512 N/A 35,347
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.

(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.

~~Item 6. Selected Financial Data~~

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) 2008 2007 2006 2005 2004
Operating Data

Operating revenues $ 203,003 $ 192,857 $ 165,369 $ 137,373 $ 122,381
Income from continuing operations 37,326 39,563 37,068 35,357 31,275
Income from discontinued operations (1) 794 434 447 472 1,772
Net income 38,120 39,997 37,515 35,829 33,047
Income from continuing operations per common unit — diluted 1.68 1.79 1.87 1.82 1.44
Net income per common unit — basic 1.72 1.81 1.90 1.87 1.56
Net income per common unit — diluted 1.72 1.81 1.90 1.85 1.55
Distributions declared per common unit 2.54 2.50 2.47 2.44 2.42

Balance Sheet Data

Investment in storage facilities at cost $ 1,389,201 $ 1,322,708 $ 1,136,052 $ 886,191 $ 804,106
Total assets 1,212,626 1,164,588 1,053,159 784,319 719,514
Total debt 623,261 566,517 462,027 339,144 289,075
Total liabilities 692,479 610,757 495,301 364,980 315,049
Limited Partners’ capital interest 15,118 16,951 24,575 22,512 20,829
Partners’ capital 491,947 520,097 516,500 382,705 368,629

Other Data

Net cash provided by operating activities $ 77,132 $ 85,175 $ 64,656 $ 60,724 $ 54,803
Net cash used in investing activities (82,711 ) (190,267 ) (176,567 ) (79,156 ) (71,034 )
Net cash provided by (used in) financing activities 6,055 61,372 154,730 20,238 (765 )

(1)
~~(1)~~		In ~~2008~~2013 we sold ~~one store and in 2004 we sold five~~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 dividends of $0.48 in January and April, and $0.53 in July and October. In 2014 we declared regular quarterly dividends of $0.68 in January, April, July and October. In 2015 we declared regular quarterly dividends of $0.75 in 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.

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.

~~Item 7. Management’s~~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 ~~Exchange~~ 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; ~~our~~the Company’s ability to evaluate, finance and integrate acquired businesses into ~~our~~the Company’s existing business and operations; ~~our~~the Company’s ability to effectively compete in the industry in which ~~we do~~it does business; ~~our~~the Company’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 ~~our~~the Company’s outstanding floating rate debt; ~~our~~the Company’s ability to comply with debt covenants; any future ratings on the Company’s debt instruments; the regional concentration of the Company’s business may subject it to economic downturns in the states of Florida and Texas; the Company’s reliance on ~~our~~its call center; ~~our~~the Company’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 fifth largest operator of self-storage properties in the United States based on ~~facilities~~square feet owned and managed. All of our stores ~~are operated~~conduct business under the ~~user-friendly~~customer-friendly name ~~“Uncle Bob’s Self-Storage”~~^®.

Life Storage ®.

Operating Strategy

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

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:

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

~~Revenues continue to improve as a result of drivers implemented by us, including:~~

Regional marketing which creates effective brand awareness in the cities where we do business;

Our Customer Care Center, ~~which~~established in 2000, answers sales inquiries and makes reservations for all of our ~~properties~~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, ~~259~~396 of our stores offer a free ~~Uncle Bob’s~~Life Storage truck to assist our customers in moving into their spaces, and

	-		~~An increase in internet marketing and sales.~~ also serve as a moving billboard further supporting our branding efforts;

Our dehumidification system, which provides our customers with a better environment to store their goods and improves yields on our 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.

~~In addition~~

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 ~~increasing revenue,~~enter new markets that are in the top 50 Metropolitan Statistical Area (MSA) by acquiring established multi-property portfolios. With this strategy we ~~have worked~~are then able to ~~improve services~~seek out additional acquisition or third party management opportunities to continue to grow market share, branding and amenities at our stores. While this has caused operating expenses to increase over the past five years, it has resulted in a superior storage experience for our customers. Our managers are better qualified and receive a significantly higher level of training than they did five years ago, customer access and security are greatly enhanced as a result of advances in technology, and property appearance and functionality have been improved.

-		~~Our customized property management systems enable us to improve our ability to track trends, set optimal pricing levels, enjoy considerable~~enhance economies of ~~scale in vendor and supply pricing, and control collections and accounts receivable.~~

17scale.

~~Acquiring additional stores:~~

	- C.		In conjunction with the joint venture agreement entered in late May 2008, potential acquisition opportunities over the first nine months of the agreement will be offered to the joint venture. The Operating Partnership’s acquisitions over this period will therefore be limited to facilities that do not fit the joint venture’s investment objectives, but do meet ours.

	-		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.

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.

Expanding and enhancing our existing stores:

Over the past four years, we have undertaken an announced program of expanding and enhancing our properties. Primarily, we have worked to add premium storage (i.e., air-conditioned and/or humidity controlled) space to our portfolio. In 2007, we expended approximately $25 million to add some 444,000 square feet of such space 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. The program entailed construction of new buildings, acquisition of parcels of land contiguous to stores deemed suitable for expansion, and demolition of certain structures to make room for more optimally configured spaces. In 2009, we expect to curtail our expansion program with new expenditures of approximately $15 million on projects that began in 2008.

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 current turmoil in the~~Suppressed economic conditions and a tight credit ~~markets has~~market environment resulted in a decrease in new supply on a national ~~basis. With~~basis from 2010-2015, but the ~~decrease~~out-performance of ~~debt~~the sector compared to other real estate asset classes has drawn new capital to self-storage. The Company experienced significant new competition beginning in 2016, especially in its Texas markets, and ~~equity capital brought about by~~expects noticeable growth in new supply at least through 2019. Despite the ~~credit market tightening in the past year,~~inflow of additional properties, we have seen capitalization rates on quality acquisitions in the top fifty major metropolitan markets (expected annual return on investment) ~~increase~~remain stable at approximately 5.00% to ~~approximately 7.5%~~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 2009. 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 because~~feel 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 on~~prevailing economic landscape.

We believe our ~~stores~~same-store move-ins in ~~those years. In 2008, the Florida market was negatively effected by the current economic downturn and we expect many markets will be effected in 2009 as consumers continue to pull back spending.~~

~~Operating Trends~~

~~In 2008 and 2007, our industry experienced some softness in demand. This was~~2017 were lower than 2016 due to the ~~economic slowdown~~fact that ~~began~~our stores had higher occupancy in ~~late 2007, and~~2017, resulting in ~~part~~less 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 tenant base.)~~

~~While we enjoyed~~ same store revenue growth of approximately 3% to 5% in each of the prior five years, we were only able to achieve 0.5% same store revenue growth in 2008, primarily because of the aforementioned issues. We expect conditions in most of our markets to remain challenging and are forecasting -1% to -2% revenue growth on a same store basis in 2009.

~~Expenses related to operating a self-storage facility have increased substantially over the last five years as~~move-outs is a result of ~~expanded hours, increased~~customers 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 foresee further expansion of our cost base, we do expect the trend of increasing expenses to continue at a pace commensurate with CPI growth. Because almost all of our costs are fixed, should revenue growth fall significantly, operating marginssame store expense increases will be ~~reduced.~~at manageable 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 ~~any~~the 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, or significant declining revenue per storage ~~facility. Impairment~~facility, significant damage sustained from accidents or natural disasters, or an expectation that, more likely than not, a property will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. When 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 ~~flow~~flows 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. ~~At December 31, 2008 and 2007, no~~Estimates of undiscounted cash flows could change based upon changes in market conditions, expected occupancy rates, etc. No 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 and we do not have any current expectation of making significant changes in 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 over which we have significant influence 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 ~~intends~~intend to continue to operate, as a REIT 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 ~~the Company continues~~we continue to qualify as a REIT, itwe will not be taxed, with certain limited exceptions, on the taxable income that is distributed to ~~the Company’s~~our shareholders. If ~~the Company fails~~we fail to qualify as a REIT, any requirement to pay federal income taxes could have a material adverse impact on our financial ~~conditions~~condition and results of operations.

Recent Accounting Pronouncements
See Note 2 to the financial statements.

YEAR ENDED DECEMBER 31, ~~2008~~2017 COMPARED TO
YEAR ENDED DECEMBER 31, ~~2007~~

2016

We recorded rental revenues of ~~$195.2~~$485.3 million for the year ended December 31, ~~2008,~~2017, an increase of ~~$8.6~~$57.2 million or ~~4.6%~~13.4% when compared to ~~2007~~2016 rental revenues of ~~$186.6~~$428.1 million. Of the increase in rental revenue, ~~$1.2~~$5.6 million resulted from a ~~0.7%~~1.6% increase in rental revenues at the ~~326~~430 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, ~~2007)~~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 increase in same store rental revenues was ~~achieved primarily through rate increases on select units averaging 1.9%, offset by~~ a

~~decrease~~ result of a 50 basis point increase in ~~square foot~~average occupancy ~~of 150 basis points, which we believe resulted from general economic conditions, in particular the housing sector. The remaining $7.4 million~~and a 4.3% increase in rental income per square foot. The remaining increase in rental revenue of $73.6 million resulted from the revenues ~~resulted~~ 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 eight self-storage properties sold in 2016 and three ~~stores during 2008 and from having the 31 stores acquired~~self-storage properties sold in ~~2007 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 2008 primarily as a result of $1.1 million of management and acquisition fees generated from our unconsolidated joint venture, Sovran HHF Storage Holdings LLC.~~

~~Property operating and real estate tax expense increased $5.1 million, or 7.3%, in 2008 compared to 2007. Of this increase, $2.7 million were expenses incurred~~ by the facilities acquired in 2008 and from having expenses from the 2007 acquisitions included for a full year of operations. $2.4 million of the increase was due to increased payroll, property taxes, utilities, and maintenance expenses at the 326 core properties considered same stores. We expect same-store operating costs to increase only moderately in 2009 with increases primarily attributable to utilities and property taxes.

General and administrative expenses increased $2.0 million or 13.4% from 2007 to 2008. The increase primarily resulted from the costs associated with operating the properties acquired in 2008 and 2007, and from managing the 25 properties acquired by our joint venture in 2008.

Depreciation and amortization expense increased to $34.4 million in 2008 from $33.9 million in 2007, primarily as a result of additional depreciation taken on real estate assets acquired in 2008, and a full year of depreciation on 2007 acquisitions, offset by a decrease in amortization of in-place customers leases relating to these acquisitions.

Interest expense increased from $33.9 million in 2007 to $38.1 million in 2008 as a result of additional borrowings under our line of credit and term notes to purchase three stores in 2008, as well as an increase in interest rates as a result of our debt refinancing in June 2008.

As described in Note 5 to the financial statements, 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 2007 operations of this facility are reported as discontinued operations.

The decrease in preferred unit distributions from 2007 to 2008 was a result of 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.

~~YEAR ENDED DECEMBER 31, 2007 COMPARED TO~~
~~YEAR ENDED DECEMBER 31, 2006~~

~~We recorded rental revenues of $186.6~~$6.3 million for the year ended December 31, ~~2007, an increase of $26.6~~2016 compared to 2015 primarily due to increased administrative fees earned on customer insurance.

Property operations and maintenance expenses increased $21.4 million or ~~16.6% when~~26.2% in 2016 compared to ~~2006 rental revenues of $160.0 million. Of the increase in rental revenue, $4.8 million resulted from a 3.2% increase in rental revenues at the 284~~2015. The 417 core properties considered in the same store ~~sales (those~~pool experienced a $1.0 million or 1.3% increase in such expenses due to increases in payroll and internet marketing costs. The same store pool benefited from reduced utilities, snow removal costs, insurance and yellow page advertising expense. In addition to the same store increase, property operations and maintenance expenses increased $20.4 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 are included in the ~~consolidated results of operations since January 1, 2006). The increase in~~ same store ~~rental revenues was achieved primarily through rate increases on select units averaging 4.4%~~pool), slightly offset ~~by a~~with the operating expense decrease in square foot occupancy of 175 basis points, which we believe resulted from general economic conditions, in particular the housing sector, and the return to normalcy in Florida after the hurricanes. As of April 1, 2006, the consolidated income statement includes the results of a previously unconsolidated joint venture (Locke Sovran I, LLC) that has been consolidated as a result of ~~an additional investment~~eight 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 a 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 ~~entity by us. The rental income related to Locke Sovran I~~had been leased since November 2013 and are 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 ~~was~~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 ~~year ended December 31, 2007 was~~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 $63.2 million or 25.5% as a result of a 6.5% increase in our 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 our net income presented in the 2016 and 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 $4.4 million or 11.5% from 2015 to 2016. The key drivers of the increase were $0.9 million in expenses recorded in 2016 related to the Company’s name change, and a $1.7 million ~~higher than that included~~increase in ~~2006~~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, including increased travel expenses and software charges, related to managing the increased number of stores in our portfolio as a result of the ~~consolidation~~LifeStorage, LP acquisition and other smaller acquisitions in ~~April 2006. The remaining $20.1~~2016.

Acquisition related costs were $29.5 million ~~increase~~ in ~~rental revenues resulted from~~2016 related to the acquisition of 31122 stores, ~~during 2007~~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 ~~from having the 42 stores acquired in 2006 included~~Connecticut (2). Such leases had annual lease payments of $6 million with a provision for ~~a full year of operations. Other income increased $0.9 million due~~4% annual increases, and an exclusive option to ~~increased merchandise and insurance sales and the additional incidental revenue generated by truck rentals.~~

~~Property operating and real estate tax expense increased $10.7 million, or 18.1%, in 2007 compared to 2006. Of this increase, $8.2 million were expenses incurred by~~purchase the facilities ~~acquired in 2007 and from having expenses from~~for $120 million. We completed the ~~2006 acquisitions included for a full year~~purchase of ~~operations. $1.9 million of~~these four facilities on February 2, 2015, thus eliminating the ~~increase was due to~~lease payments thereafter.

increased property insurance, utilities, maintenance expenses, and increased property taxes at the 284 core properties considered same stores. The property operating and real estate tax expense related to Locke Sovran I that was included in our results for the year ended December 31, 2007, was $0.6 million higher than that included in 2006 as a result of the consolidation in April 2006.

General and administrative expenses increased $1.1 million or 8.1% from 2006 to 2007. The increase primarily resulted from the costs associated with operating the properties acquired in 2007 and 2006.

Depreciation and amortization expense increased to ~~$33.9~~$117.1 million in ~~2007~~2016 from ~~$25.2~~$58.5 million in ~~2006,~~2015, primarily as a result of ~~additional~~amortization and depreciation ~~taken on real estate assets~~related to the properties acquired in ~~2007, a full year of~~2015 and 2016 and accelerated depreciation on ~~2006 acquisitions, and~~existing signage was replaced as a result of the ~~amortization~~change in name of ~~in-place customers leases relating~~the Company’s storage facilities in 2016 to ~~these acquisitions.~~

Life Storage ®.

Interest expense increased from ~~$29.5~~$37.1 million in ~~2006~~2015 to ~~$33.9~~$54.5 million in ~~2007~~2016. 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 ~~higher interest rates, additional borrowings under~~the payoff of the $150 million 6.38% term loan in April 2016 with a draw on our line of credit which carries a lower interest rate.

During 2016, we sold eight non-strategic storage facilities in Alabama (1), Georgia (1), Mississippi (1), Texas (1), and ~~term notes to purchase 31 stores~~Virginia (4) for net proceeds of approximately $34.1 million, resulting in ~~2007,~~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 approximately $0.5 million. These dispositions were not classified as discontinued operations since they did not meet the ~~consolidation of Locke Sovran I, LLC as of April 1, 2006.~~

~~The casualty gain recorded in 2007 relates to insurance proceeds received in excess of the carrying value of a building damaged by a fire at one of our facilities.~~

The decrease in preferred unit distributions from 2006 to 2007 was a result of 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)	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

For Year Ended December 31,
(dollars in thousands) 2008 2007 2006 2005 2004
Net income $ 38,120 $ 39,997 $ 37,515 $ 35,829 $ 33,047
Minority interest in income 1,563 1,848 1,529 490 499
Depreciation of real estate and amortization of intangible assets exclusive of deferred financing fees 34,421 33,851 25,121 21,040 19,002
Depreciation of real estate included in discontinued operations 46 185 184 182 263
Depreciation and amortization from unconsolidated joint ventures 333 59 168 484 473
Casualty gain — (114 ) — — —
Gain on sale of real estate (716 ) — — — (1,137 )
Preferred unit distributions — (1,256 ) (2,512 ) (4,123 ) (7,168 )
Redemption amount in excess of carrying value of Series B Preferred Stock — — — — (1,415 )
Funds from operations allocable to minority interest in Locke Sovran I and Locke Sovran II (1,564 ) (1,848 ) (1,785 ) (1,499 ) (1,475 )

Funds from operations available to common unitholders $ 72,203 $ 72,722 $ 60,220 $ 52,403 $ 42,089

LIQUIDITY AND CAPITAL RESOURCES

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 our operating cash flow must be used to pay distributions to our unitholders. We believe that our internally generated net cash provided by operating activities and our availability on our line of credit will continue to 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.

Cash flows from operating activities were $77.1 million, $85.2 million and $64.7 million for the years ended December 31, 2008, 2007, and 2006, respectively. The decrease in operating cash flows from 2007 to 2008 was primarily due to a decrease in net income and accounts payable remaining consistent from year to year. The increase in operating cash from 2006 to 2007 was primarily attributable to increased net income, increased non-cash charges for depreciation and amortization, an increase in accounts payable related to property taxes, and a decrease in prepaid insurance.

Cash used in investing activities was $82.7 million, $190.3 million, and $176.6 million for the years ended December 31, 2008, 2007, and 2006 respectively. 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. The increase from 2006 to 2007 was due to increased acquisition activity, an increase in improvements to existing facilities, and additional investment in our consolidated joint ventures.

Cash provided by financing activities was $6.0 million in 2008 compared to $61.4 million in 2007 and $154.7 million in 2006, respectively. Our reduced acquisition activity in 2008 was the driver behind the decrease in cash provided from financing activities from 2007 to 2008. The decrease in cash provided from financing activities from 2006 to 2007 was a result of the proceeds received from our common stock offering in December of 2006 noted below.

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, we entered into a $250 million unsecured term note maturing in June 2012 bearing interest at LIBOR plus 1.625%. 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. The new agreements also provide for a $125 million (expandable to $150 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. The revolving line of credit maturity can be extended at our option until June 2012. At December 31, 2008, there was $111 million available on the unsecured line of credit.

We also maintain a $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%.

In April 2006, the Operating Partnership entered into a $150 million unsecured term note maturing in April 2016 bearing interest at 6.38%. The proceeds from this term note were used to pay down the outstanding balance on the Operating Partnership’s line of credit, to repay a $25 million term note entered in January 2006 and a $15 million term note entered in April 2006, and to make an additional investment into Locke Sovran I, LLC and Locke Sovran II, LLC (consolidated joint ventures). In December 2006, the Company issued 2.3 million shares of its common stock and realized net proceeds of $122.4 million. A portion of the proceeds were used to repay the entire outstanding balance on our line of credit that had been drawn on to finance acquisitions subsequent to April 2006. The remaining proceeds from the 2006 common stock offering were used along with 2007 borrowings under our line of credit to fund 2007 acquisitions.

~~The line of credit facility and term notes currently have investment grade ratings from Standard and Poor’s (BBB-) and Fitch (BBB-).~~

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 ~~distribution~~dividend payouts. ~~As of~~At December 31, ~~2008, we were~~2017, the Company was in compliance with all debt covenants.

In ~~addition~~the event that the Company violates its debt covenants in the future, the amounts due under the agreements could be callable by the lenders and could adversely affect our credit rating requiring us to ~~the unsecured financing mentioned above, our consolidated financial statements also include $109.3 million~~pay higher interest and other debt-related costs. We believe that if operating results remain consistent with historical levels and levels of ~~mortgages payable as detailed below:~~

* 7.80% mortgage note due December 2011, secured by 11 self-storage facilities (Locke Sovran I)other debt and liabilities remain consistent with ~~an aggregate net book value of $43.8 million, principal and interest paid monthly. The~~amounts outstanding ~~balance~~ at December 31, ~~2008~~2017, the entire availability 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 ~~this mortgage was $29.0 million.~~

* 7.19% mortgage note due March 2012, secured by 27 self-storage facilities (Locke Sovran II) with an aggregate net book valueour line of ~~$81.2~~credit will be sufficient to fund ongoing operations, capital improvements, dividends and debt service requirements.

Cash flows from operating activities were $248.6 million, ~~principal~~$225.6 million, and ~~interest paid monthly. The outstanding balance at~~$186.2 million for the years ended December 31, ~~2008 on this mortgage~~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 ~~$42.6 million.~~

* 7.25% mortgage note due December 2011, secured by 1 self-storage facility with an aggregate net book value of $5.8$156.5 million, ~~principal~~$1,796.1 million, and ~~interest paid monthly. Estimated market rate at time of acquisition 5.40%. The outstanding balance at~~$328.7 million for the years ended December 31, ~~2008 on this mortgage~~2017, 2016, and 2015 respectively. The decrease in cash used from 2016 to 2017 was ~~$3.5 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, 2008 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 $3.8 million, principal and interest paid monthly. The outstanding balance at December 31, 2008 on this mortgage was $1.1 million.

* 5.55% mortgage notes due November 2009, secured by 8 self-storage facilities with an aggregate net book value of $34.9 million, interest only paid monthly. Estimated market rate at time of acquisition 6.44%. The outstanding balance at December 31, 2008 on this mortgage was $25.9 million.

* 7.50% mortgage notes due August 2011, secured by 3 self-storage facilities with an aggregate net book value of $14.3 million, principal and interest paid monthly. Estimated market rate at time of acquisition 6.42%. The outstanding balance at December 31, 2008 on this mortgage was $6.1 million.

~~The 7.80% and 7.19% mortgages were incurred in 2001 and 2002 respectively as part~~primarily a result of the ~~financing~~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 ~~consolidated joint ventures. The Operating Partnership assumed~~acquisition of LifeStorage, LP and other acquisitions made in 2016, partially offset by increased proceeds on the ~~7.25%, 6.76%, 6.35%, 5.55% and 7.50% mortgage notes in connection with the acquisitions~~sale of storage facilities in ~~2005 and 2006.~~

2016.

~~On July 7, 2007,~~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 ~~issued 920,244 shares of~~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 ~~holder~~Operating Partnership issued $450 million in senior notes, the proceeds of ~~its 8.375% Series C Preferred Stock upon~~which were used primarily to repay $225 million of then outstanding term notes and to pay down the ~~holder’s election to convert the remaining 1,200,000 shares~~Company’s revolving line of ~~Series C Preferred Stock into common stock.~~

~~During 2008,~~credit. Also, during 2017, the Company ~~issued approximately 285,000~~repurchased 112,554 of the Company’s outstanding common shares ~~via its Dividend Reinvestment and Stock Purchase Plan and Employee Stock Option Plan. We~~for $8.2 million under the Company’s Buyback Program discussed further below. In 2016, the Company received ~~$10.7 million~~net proceeds from the sale of ~~such shares. We expect to issue shares when~~common stock through public offerings of $935.1 million. The Company also received net proceeds from the issuance of term notes of $796.7 million and net proceeds from the Company’s ~~share price and capital needs warrant such issuance.~~

~~During 2008 and 2007,~~revolving credit line of $174.0 million in 2016. Further, the Company ~~did not acquire any shares of its common stock via~~settled pre-issuance interest rate swaps on the ~~Share Repurchase Program authorized~~2026 Notes (discussed further below) for $9.2 million in 2016. Cash provided by ~~the Board of Directors. From the inception~~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 result of the ~~Share Repurchase Program through December 31, 2008,~~previously mentioned 2016 activity and a $43.2 million increase in dividends paid.

For the ~~Company has reacquired a total~~years 2015, 2016 and 2017, see Note 5 to the consolidated financial statements for details of ~~1,171,886 shares pursuant~~the Company’s unsecured line of credit and term note activity, Note 6 to ~~this program. From time~~the consolidated financial statements for the Company’s mortgage activity and related details, and Note 12 to ~~time, subject to market price~~the consolidated financial statements for the Company’s equity activity.

Our line of credit facility and ~~certain loan covenants, the Company may reacquire additional shares.~~

term notes have an investment grade rating from Standard and Poor’s (BBB) and Moody’s (Baa2).

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. ~~Current~~Should 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


~~Contractual~~	~~Payments due by period~~
~~obligations~~	~~Total~~	~~2009~~	~~2010-2011~~	~~2012-2013~~	~~2014 and thereafter~~
~~Line of credit~~	~~$ 14.0 million~~	—	~~$ 14.0 million~~	—	—
~~Term notes~~	~~$500.0 million~~	—	—	~~$350.0 million~~	~~$150.0 million~~
~~Mortgages payable~~	~~$109.3 million~~	~~$28.0 million~~	~~$ 40.3 million~~	~~$ 40.0 million~~	~~$ 1.0 million~~
~~Interest payments~~	~~$136.2 million~~	~~$28.8 million~~	~~$ 53.3 million~~	~~$ 32.6 million~~	~~$ 21.5 million~~
~~Land lease~~	~~$ 1.1 million~~	~~$ 0.1 million~~	~~$ 0.1 million~~	~~$ 0.1 million~~	~~$ 0.8 million~~
~~Building leases~~	~~$ 3.9 million~~	~~$ 0.6 million~~	~~$ 0.3 million~~	~~$ 0.1 million~~	~~$ 2.9 million~~

~~Total~~	~~$764.5 million~~	~~$57.5 million~~	~~$108.0 million~~	~~$422.8 million~~	~~$176.2 million~~

Interest payments ~~includes~~include actual interest on fixed rate debt and estimated interest for floating-rate debt based on December 31, ~~2008~~2017 rates.

ACQUISITION OF PROPERTIES

~~During 2008,~~

In 2017, we ~~used operating cash flow, borrowings pursuant to~~acquired two self-storage facilities comprising 148,000 square feet in 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 ~~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 Ohio~~weighted average capitalization rate for each acquisition was 0%. In 2016, we acquired 122 self-storage facilities comprising ~~0.2~~9.4 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 Company’s 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 ~~Texas~~Wisconsin (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 ~~2.3~~2.0 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. During 2006, we used~~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 ~~cash flow, borrowings pursuant to the line~~results of ~~credit, borrowings under the $150 million 10 year term note, and proceeds from~~these four facilities have been included in the Company’s Dividend Reinvestment and Stock Purchase Plan to acquire 42 Properties in Alabama, Georgia, Florida, Louisiana, Missouri, New Hampshire, New York, Tennessee, and Texas comprising 2.6 million square feet from unaffiliated storage operators.

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.

In ~~conjunction with the joint venture agreement entered in May 2008 (see Note 13~~2017, we added 382,000 square feet to ~~the financial statements), potential acquisition opportunities over the first nine months~~existing Properties and converted 122,000 square feet to premium storage for a total cost of ~~the agreement will be offered to the joint venture. The Operating Partnership’s acquisitions over this period will therefore be limited to facilities that~~approximately $35.2 million. In 2017 we also installed solar panels on two buildings for a total cost of approximately $0.4 million. Although we do not ~~fit~~expect to construct any new facilities in 2018, we do plan to complete $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 joint venture’s investment objectives, but do meet ours. In 2008, the Operating Partnership’s joint venture (Sovran HHF Storage Holdings LLC) acquired 25 properties for approximately $171.5 million. The Operating Partnership’s equity contribution to the joint venture for these purchases was approximately $18.6 million, which was financed through draws on our line of credit.

~~In 2008 we continued our program of expanding and enhancing our existing properties. During 2008 we~~Company spent approximately ~~$25.6~~$47.8 million ~~on such revenue enhancing improvements. In 2009 we~~for recurring capitalized expenditures including roofing, paving, office renovations, and new signs related to our rebranding. We expect to ~~curtail our expansion of current properties with total new~~spend $20 million to $25 million in 2018 on similar capital expenditures ~~less than $15 million on projects started~~as we do not expect significant sign related expenditures in 2008. Funding of the expansions are expected to be provided primarily from borrowings under our line of credit and issuance of common shares through the Company’s Dividend Reinvestment and Stock Purchase Plan.

2018.

DISPOSITION OF PROPERTIES

During ~~2008,~~2017, we sold ~~one~~two non-strategic storage ~~facility located~~facilities in ~~Michigan~~Utah (1) and Texas (1) for net ~~cash~~ proceeds of ~~$7.0~~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 ~~$0.7 million. In 2004, as part of an asset management program,~~the lease which is scheduled in 2020. During 2016, we sold ~~five~~eight non-strategic storage facilities ~~located~~ in ~~Pennsylvania, Tennessee, Ohio,~~Alabama (1), Georgia (1), Mississippi (1), Texas (1), and ~~South Carolina to unaffiliated parties~~Virginia (4) for ~~$11.7~~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 ~~gain~~proceeds of ~~$1.1~~approximately $4.6 million, resulting in a loss of approximately $0.5 million. ~~No sales took place in 2005 through 2007.~~

As part of our ongoing strategy to improve overall operating efficiencies and portfolio quality, we may seek to sell additional Properties to third parties or joint venture ~~programs or third parties~~partners in ~~2009.~~2018.

OFF-BALANCE SHEET ARRANGEMENTS

~~The Operating Partnership has a 20%~~

Our off-balance sheet arrangements consist of our investment in nine self-storage joint ventures in which we have ownership ~~interest~~interests ranging from 5% to 85%, as well as our investment in ~~Sovran HHF Storage Holdings LLC (“Sovran HHF”), a joint venture~~the entity that was formed in May 2008 to acquire self-storage properties that will be managed by the Operating Partnership. The carrying value of the Operating Partnership’s investment at December 31, 2008 was $20.1 million. Twenty five properties were acquired by Sovran HHF as of December 31, 2008 for approximately $171.5 million. The Operating Partnership contributed $18.6 million to the joint venture as its share of capital required to fund the acquisitions.

As manager of Sovran HHF, the Operating Partnership earns a management and call center fee of 7% of gross revenues which totaled $0.5 million for 2008. The Operating Partnership also received an acquisition fee of 0.5% of purchase price for securing purchases for the joint venture. During 2008, the Operating Partnership recorded $0.6 million in acquisition fees. The Operating Partnership’s share of Sovran HHF’s income for 2008 was $0.1 million. At December 31, 2008, Sovran HHF owed the Operating Partnership $0.3 million for payments made by the Operating Partnership on behalf of the joint venture for normal operating expenses of the joint venture.

~~The Operating Partnership also has a 49% ownership interest in Iskalo Office Holdings, LLC, which~~ 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.~~equity method. The ~~Operating Partnership’s investment includes a capital contribution of $49. The carrying value of~~debt held by the ~~Operating Partnership’s investment~~unconsolidated real estate entities is ~~a liability of $0.5 million at December 31, 2008 and $0.4 million at December 31, 2007,~~secured by the real estate owned by these entities and is ~~included in accounts payable and accrued liabilities in the accompanying~~non-recourse to us. See Note 11 to our consolidated balance sheets. For the years ended December 31, 2008, 2007 and 2006, the Operating Partnership’s share of Iskalo Office Holdings, LLC’s (loss) income was ($6,000), $80,000, and $80,000, respectively. The Operating Partnership paid rent to Iskalo Office Holdings, LLC of $600,000, $561,000 and $583,000 in 2008, 2007, and 2006, respectively. Future minimum lease payments under the lease are $0.6 million per year through 2010.

In April 2006, the Operating Partnership made an additional investment of $2.8 million in a former off-balance sheet arrangement known as Locke Sovran I, LLC that increased the Operating Partnership’s ownership to over 70%. As a result of this transaction the Operating Partnership has consolidated the results of operations of

~~Locke Sovran I, LLC in its~~ financial statements ~~since April 1, 2006, the date that it acquired its controlling interest. In June 2008, the Operating Partnership made an~~for additional investment of $6.1 million in Locke Sovran I, LLC that increased the Operating Partnership’s ownership from approximately 70% to 100%. Locke Sovran I, LLC, owns 11 self-storage facilities throughout the United States.

~~A summary of the unconsolidated joint venture’s financial statements as of and for the year ended December 31, 2008 is as follows:~~

Sovran HHF
Storage Iskalo Office
(dollars in thousands) Holdings LLC Holdings, LLC
Balance Sheet Data:
Investment in storage facilities, net $ 170,176 $ —
Investment in office building — 5,507
Other assets 3,912 568

Total Assets $ 174,088 $ 6,075

Due to the Operating Partnership $ 336 $ —
Mortgages payable 79,937 7,169
Other liabilities 1,942 168

Total Liabilities 82,215 7,337

Unaffiliated partners’ equity (deficiency) 73,499 (718 )
Operating Partnership equity (deficiency) 18,374 (544 )

Total Liabilities and Partners’ Equity (deficiency) $ 174,088 $ 6,075

Income Statement Data:
Total revenues $ 6,652 $ 1,127
Total expenses 6,301 1,139

Net income (loss) $ 351 $ (12 )

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, 2008, and with Locke Sovran I, LLC for the three months ended March 31, 2006 (the date prior to which it began to be included in our consolidated results of operations) are as follows:

Year ended December 31,
(dollars in thousands) 2008 2007 2006
Statement of Operations
Other income (management fees and acquisition fee income) $ 1,135 $ — $ 85
General and administrative expenses (corporate office rent) 600 561 583
Equity in income of joint ventures 104 119 172
Distributions from unconsolidated joint ventures 345 98 123

Investing activities
Investment in joint ventures (20,287 ) — —
(Advances to) reimbursement of advances to joint ventures (336 ) — 17

details.

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

As a REIT, ~~the Company is~~we are not required to pay federal income tax on income that ~~it distributes~~we distribute to ~~its~~our shareholders, provided that ~~the amount distributed is equal to~~we satisfy certain requirements, including distributing at least 90% of ~~its~~our 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 its~~we file our federal income tax return, and if ~~it is~~they are paid ~~before~~not later than the date of the first regular dividend of the following year. The first distribution of 2009 may be applied toward the Company’s 2008 distribution requirement. The Company’s source of funds for such distributions is solely and directly from the Operating Partnership.

As a REIT, ~~the Company~~we must derive at least 95% of ~~its~~our total gross income from income related to real property, interest and dividends. In ~~2008, the Company’s~~2016, 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 Company~~us to maintain ~~its~~our 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 order~~agreement to help mitigate the effects of fluctuations in interest rates on our variable rate debt. ~~At December 31, 2008, we have seven outstanding interest rate swap agreements as summarized below:~~


			~~Fixed~~			~~Floating Rate~~
~~Notional Amount~~	~~Effective Date~~	~~Expiration Date~~	~~Rate Paid~~			~~Received~~
~~$50 Million~~	~~11/14/05~~	~~9/1/09~~		~~4.3900~~	%	~~1 month LIBOR~~
~~$20 Million~~	~~9/4/05~~	~~9/4/13~~		~~4.4350~~	%	~~6 month LIBOR~~
~~$50 Million~~	~~10/10/06~~	~~9/1/09~~		~~4.4800~~	%	~~1 month LIBOR~~
~~$50 Million~~	~~7/1/08~~	~~6/25/12~~		~~4.2825~~	%	~~1 month LIBOR~~
~~$100 Million~~	~~7/1/08~~	~~6/22/12~~		~~4.2965~~	%	~~1 month LIBOR~~
~~$75 Million~~	~~9/1/09~~	~~6/22/12~~		~~4.7100~~	%	~~1 month LIBOR~~
~~$25 Million~~	~~9/1/09~~	~~6/22/12~~		~~4.2875~~	%	~~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 ~~$270~~$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, $500~~September 2018, $100 million of our ~~$514~~$205 million of floating rate unsecured debt is on a fixed rate basis after taking into account ~~the~~our interest rate ~~swaps noted above.~~swap agreements. Based on our outstanding unsecured floating rate debt of ~~$514~~$205 million at December 31, ~~2008,~~2017, a 100 basis point increase in interest rates would ~~increase~~have a $1.1 million effect on our interest ~~expense $0.1 million annually.~~

~~The table below summarizes~~expense. This amount was determined by considering the impact of the hypothetical interest rates on our ~~debt obligations~~borrowing cost and our interest rate ~~derivatives at~~hedge agreements in effect on December 31, 2008. 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 indicative~~impact of the ~~amounts~~reduced level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, we would ~~realize~~consider 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.~~

our capital structure.

INFLATION

Expected Maturity Date Including Discount Fair
(dollars in thousands) 2009 2010 2011 2012 2013 Thereafter Total Value
Line of credit — variable rate LIBOR + 1.375 — — $ 14,000 — — — $ 14,000 $ 14,000

Notes Payable:
Term note — variable rate LIBOR+1.625% — — — $ 250,000 — — $ 250,000 $ 250,000
Term note — variable rate LIBOR+1.50% — — — — $ 20,000 — $ 20,000 $ 20,000
Term note — fixed rate 6.26% — — — — $ 80,000 — $ 80,000 $ 78,865
Term note — fixed rate 6.38% — — — — — $ 150,000 $ 150,000 $ 147,899

Mortgage note — fixed rate 7.80% $ 587 $ 630 $ 27,816 — — — $ 29,033 $ 30,031
Mortgage note — fixed rate 7.19% $ 1,128 $ 1,211 $ 1,301 $ 38,963 — — $ 42,603 $ 44,205
Mortgage note — fixed rate 7.25% $ 141 $ 149 $ 3,220 — — — $ 3,510 $ 3,478
Mortgage note — fixed rate 6.76% $ 23 $ 25 $ 27 $ 29 $ 896 — $ 1,000 $ 1,018
Mortgage note — fixed rate 6.35% $ 26 $ 28 $ 30 $ 31 $ 34 $ 949 $ 1,098 $ 1,100
Mortgage notes — fixed rate 5.55% $ 25,930 — — — — — $ 25,930 $ 26,422
Mortgage notes — fixed rate 7.50% $ 208 $ 222 $ 5,657 — — — $ 6,087 $ 6,188

Interest rate derivatives — liability — — — — — — — $ 25,490

~~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.

~~RECENT ACCOUNTING PRONOUNCEMENTS~~

In September 2006, FASB Statement 157, “Fair Value Measurements” (“SFAS 157”) was issued. SFAS 157 establishes a framework for measuring fair value by providing a standard definition of fair value as it applies to assets and liabilities. SFAS 157, which does not require any new fair value measurements, clarifies the application of other accounting pronouncements that require or permit fair value measurements. The effective date for the Operating Partnership is January 1, 2008 for all financial instruments — see Note 10 to our Consolidated Financial Statements. However, the FASB has delayed the effective date of Statement 157 for all nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15, 2008. The Operating Partnership is evaluating the impact of adopting SFAS 157 on its consolidated financial statements for nonfinancial assets and nonfinancial liabilities.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 allows entities to voluntarily choose, at specified election dates, to measure many financial assets and liabilities at fair value. The effective date for the Operating Partnership is

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

~~January 1, 2008. The adoption of SFAS 159 did not impact the Operating Partnership’s consolidated financial statements.~~

In December 2007, FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (SFAS No. 160), which amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements”, to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements. SFAS No. 160 establishes accounting and reporting standards that require the ownership interests in subsidiaries not held by the parent to be clearly identified, labeled and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity. This statement also requires the amount of consolidated net income attributable to the parent and to the non-controlling interest to be clearly identified and presented on the face of the consolidated statement of income. This Statement applies prospectively to all entities that prepare consolidated financial statements and applies prospectively for fiscal years, and interim periods within those fiscal years, beginning January 1, 2009 for the Operating Partnership. The Operating Partnership is evaluating the impact of SFAS 160 on its consolidated financial statements.

In December 2007, the FASB Statement 141R, “Business Combinations” (“SFAS 141R”) was issued. SFAS 141R replaces SFAS 141. SFAS 141R requires the acquirer of a business to recognize and measure the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at fair value. SFAS 141R also requires transactions costs related to the business combination to be expensed as incurred. SFAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The effective date for the Operating Partnership will be January 1, 2009. We have not yet determined the impact of SFAS 141R related to future acquisitions, if any, on our consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures About Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133” (“SFAS No. 161”). SFAS No. 161 expands quarterly disclosure requirements in SFAS No. 133 about an entity’s derivative instruments and hedging activities. SFAS No. 161 is effective for the Operating Partnership as of January 1, 2009. The Operating Partnership is currently assessing the impact of SFAS No. 161 on our consolidated financial statements.

~~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.

Item 8.

Financial Statements and Supplementary Data

~~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 Partnership~~Life Storage, Inc. (the Parent Company) as of December 31, ~~2008~~2017 and ~~2007,~~2016, and the related consolidated statements of operations, ~~partners’ capital,~~comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, ~~2008. Our audits also included~~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”). ~~These~~In our opinion, the consolidated financial statements ~~and schedule are~~present fairly, in all material respects, the ~~responsibility~~financial position of the ~~Operating Partnership’s management. Our responsibility is to express an opinion on these financial statements~~Parent 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 audits~~have 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 includes~~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 ~~supporting~~regarding the amounts and disclosures in the financial statements. ~~An audit~~Our audits also ~~includes assessing~~included 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 Limited~~the Operating Partnership at December 31, ~~2008~~2017 and ~~2007,~~2016, and the ~~consolidated~~ results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2008,~~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.

We have also ~~have~~ audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), ~~Sovran Acquisition Limited~~the Operating Partnership’s internal control over financial reporting as of December 31, ~~2008,~~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 ~~25, 2009~~27, 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 ~~25, 2009~~27, 2018

LIFE STORAGE, INC.

~~SOVRAN ACQUISITION LIMTED PARTNERSHIP~~
CONSOLIDATED BALANCE SHEETS

	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

December 31,
(dollars in thousands, except unit data) 2008 2007
Assets

Investment in storage facilities:
Land $ 240,525 $ 236,349
Building, equipment, and construction in progress 1,148,676 1,086,359

1,389,201 1,322,708
Less: accumulated depreciation (216,644 ) (183,679 )

Investment in storage facilities, net 1,172,557 1,139,029
Cash and cash equivalents 4,486 4,010
Accounts receivable 2,971 2,794
Receivable from related parties 14 27
Receivable from unconsolidated joint venture 336 —
Investment in unconsolidated joint venture 20,111 —
Prepaid expenses 4,691 4,771
Other assets 7,460 7,574
Net assets of discontinued operations — 6,383

Total Assets $ 1,212,626 $ 1,164,588

Liabilities

Line of credit $ 14,000 $ 100,000
Term notes 500,000 356,000
Accounts payable and accrued liabilities 23,710 23,486
Deferred revenue 5,659 5,602
Fair value of interest rate swap agreements 25,490 1,230
Accrued distributions 14,359 13,922
Mortgages payable 109,261 110,517

Total Liabilities 692,479 610,757

Minority interest — consolidated joint venture 13,082 16,783

Limited partners’ capital interest (419,952 units in 2008 and 422,727 units in 2007) 15,118 16,951

Partners’ Capital

General partner (219,567 units outstanding in 2008 and 2007) 3,650 3,823
Limited partner (21,796,781 and 21,457,019 units outstanding in 2008 and 2007, respectively) 513,459 517,642
Accumulated other comprehensive income (25,162 ) (1,368 )

Total Partners’ Capital 491,947 520,097

Total Liabilities and Partners’ Capital $ 1,212,626 $ 1,164,588

See notes to consolidated financial statements.

LIFE STORAGE, INC.

~~SOVRAN ACQUISITION LIMITED PARTNERSHIP~~
CONSOLIDATED STATEMENTS OF OPERATIONS

	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

Year Ended December 31,
(dollars in thousands, except per unit data) 2008 2007 2006
Revenues

Rental income $ 195,220 $ 186,581 $ 160,011
Other operating income 7,783 6,276 5,358

Total operating revenues 203,003 192,857 165,369

Expenses

Property operations and maintenance 55,739 52,317 43,833
Real estate taxes 19,004 17,370 15,166
General and administrative 17,279 15,234 14,095
Depreciation and amortization 34,421 33,851 25,163

Total operating expenses 126,443 118,772 98,257

Income from operations 76,560 74,085 67,112

Other income (expenses)

Interest expense (38,097 ) (33,861 ) (29,494 )
Interest income 322 954 807
Casualty gain — 114 —
Minority interest — consolidated joint ventures (1,563 ) (1,848 ) (1,529 )
Equity in income of joint ventures 104 119 172

Income from continuing operations 37,326 39,563 37,068
Income from discontinued operations (including gain on disposal of $716 in 2008) 794 434 447

Net income
38,120 39,997 37,515
Preferred unit distributions — (1,256 ) (2,512 )

Net income available to common unitholders $ 38,120 $ 38,741 $ 35,003

Earnings per common unit — basic

Continuing operations $ 1.68 $ 1.79 $ 1.87
Discontinued operations 0.04 0.02 0.03

Earning per unit — basic $ 1.72 $ 1.81 $ 1.90

Earnings per common unit — diluted

Continuing operations $ 1.68 $ 1.79 $ 1.87
Discontinued operations 0.04 0.02 0.03

Earning per unit — diluted $ 1.72 $ 1.81 $ 1.90

Distributions declared per common unit
$ 2.54 $ 2.50 $ 2.47

See notes to consolidated financial statements.

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

Accumulated
Sovran Sovran Self Other Total
Holdings, Inc. Storage Inc. Preferred C Comprehensive Partners’ Limited Partners’
(Dollars in thousands) General Partner Limited Partner Partners Income (loss) Capital Capital Interest
Balance January 1, 2006 $ 4,072 $ 347,179 $ 30,000 $ 1,454 $ 382,705 $ 22,512

Proceeds from issuance of Partnership Units — 147,278 — — 147,278 170
Redemption of Partnership Units — (1,830 ) — — (1,830 ) (958 )
Exercise of stock options — 1,142 — — 1,142 —
Earned portion of non-vested stock — 876 — — 876 —
Stock option expense — 119 — — 119 —
Deferred compensation — 181 — — 181 —
Net income 439 36,171 — — 36,610 905
Increase in fair value of derivatives — — — 674 674 —

Total comprehensive income — — — — 37,284 905
Distributions (573 ) (47,651 ) — — (48,224 ) (1,085 )
Adjustment to reflect limited partners’ redeemable capital at balance sheet date (33 ) (2,998 ) — — (3,031 ) 3,031

Balance December 31, 2006 3,905 480,467 30,000 2,128 516,500 24,575

Proceeds from issuance of Partnership Units — 12,759 — — 12,759 —
Redemption of Partnership Units — (117 ) — — (117 ) (57 )
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 (167 )
Net income 409 38,805 — — 39,214 783
Change in fair value of derivatives — — — (3,496 ) (3,496 ) —

Total comprehensive income — — — — 35,718 783
Distributions (563 ) (53,479 ) — — (54,042 ) (1,064 )
Adjustment to reflect limited partners’ redeemable capital at balance sheet date 72 7,047 — — 7,119 (7,119 )

Balance December 31, 2007 3,823 517,642 — (1,368 ) 520,097 16,951

Proceeds from issuance of Partnership Units — 10,658 — — 10,658 —
Redemption of Partnership Units — (69 ) — — (69 ) (45 )
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 — — 37,399 721
Change in fair value of derivatives — — — (23,794 ) (23,794 ) —

Total comprehensive income — — — — 13,605 721
Distributions (562 ) (55,128 ) — — (55,690 ) (1,070 )
Adjustment to reflect limited partners’ redeemable capital at balance sheet date 14 1,425 — — 1,439 (1,439 )

Balance December 31, 2008 $ 3,650 $ 513,459 $ — $ (25,162 ) $ 491,947 $ 15,118

See notes to consolidated financial ~~statements.~~statements

LIFE STORAGE LP

~~SOVRAN ACQUISITION LIMITED PARTNERSHIP~~
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

Year Ended December 31,
(dollars in thousands) 2008 2007 2006
Operating Activities

Net income $ 38,120 $ 39,997 $ 37,515
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 35,659 34,999 26,340
Gain on sale (716 ) — —
Casualty gain — (114 ) —
Equity in income of joint ventures (104 ) (119 ) (172 )
Distributions from unconsolidated joint venture 345 98 123
Minority interest 1,563 1,848 1,529
Non-vested stock earned 1,444 1,224 876
Stock option expense 279 183 119
Changes in assets and liabilities:
Accounts receivable (171 ) (599 ) (407 )
Prepaid expenses 118 822 (2,029 )
Accounts payable and other liabilities 619 7,082 1,011
Deferred revenue (24 ) (246 ) (249 )

Net cash provided by operating activities 77,132 85,175 64,656

Investing Activities

Acquisition of storage facilities (18,547 ) (138,059 ) (130,251 )
Improvements, equipment additions, and construction in progress (45,709 ) (52,441 ) (37,021 )
Net proceeds from the sale of storage facility 7,002 — —
Casualty insurance proceeds received — 1,692 —
Investment in unconsolidated joint venture (20,287 ) — —
Additional investment in consolidated joint ventures net of cash acquired (6,106 ) — (8,181 )
(Advances to) reimbursement of advances to joint ventures (336 ) — 17
Reimbursement of (payment of) property deposits 1,259 (1,469 ) (1,169 )
Receipts from related parties 13 10 38

Net cash used in investing activities (82,711 ) (190,267 ) (176,567 )

Financing Activities

Net proceeds from sale of common stock 10,842 13,345 148,601
Proceeds from line of credit 14,000 112,000 94,000
Repayment of line of credit and term note (206,000 ) (12,000 ) (184,000 )
Proceeds from term notes 250,000 6,000 150,000
Financing costs (3,085 ) (316 ) (632 )
Distributions paid (57,889 ) (55,973 ) (49,165 )
Redemption of operating partnership units (114 ) (174 ) (2,788 )
Mortgage principal and capital lease payments (1,699 ) (1,510 ) (1,286 )

Net cash provided by financing activities 6,055 61,372 154,730

Net increase (decrease) in cash 476 (43,720 ) 42,819
Cash at beginning of period 4,010 47,730 4,911

Cash at end of period $ 4,486 $ 4,010 $ 47,730

Supplemental cash flow information
Cash paid for interest, net of interest capitalized $ 37,970 $ 32,313 $ 26,647

Fair value of net liabilities assumed on the acquisition of storage facilities 107 1,580 65,650

Distributions declared but unpaid at December 31, 2008, 2007 and 2006 were $14,359, $13,922, and $12,941, respectively.

See notes to consolidated financial statements.

LIFE STORAGE, INC. AND LIFE STORAGE LP

~~SOVRAN ACQUISITION LIMITED PARTNERSHIP —~~ DECEMBER 31, ~~2008~~
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 business~~was 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, ~~2008,~~2017, we had an ownership interest in, ~~and~~and/or managed ~~385~~706 self-storage properties in 2428 states under the name ~~Uncle Bob’s Self~~Life Storage^®. ®. Among our ~~385~~706 self-storage properties are 2798 properties that we manage for ~~a consolidated~~unconsolidated joint ~~venture of which we are a majority owner and 25~~ventures (See Note 11), 42 properties that we manage ~~for an unconsolidated joint venture of which~~and have no ownership interest, and two properties that we ~~are a 20% owner. Over 40%~~lease. During 2017, approximately 23% and 13% of the ~~Operating Partnership’s~~Company’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, 2008, the Company was a 98.1% economic owner~~Presentation : All of the Company’s assets are owned by, and all its operations are conducted through the Operating ~~Partnership and controls it through Sovran~~Partnership. Life Storage Holdings, Inc. ~~(“Holdings”)~~, a ~~wholly owned~~wholly-owned subsidiary of the Parent Company ~~incorporated in Delaware and~~(“Holdings”), is the sole general partner of the Operating ~~Partnership (this structure~~Partnership; 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 directing~~and, through its ownership of Holdings and its limited partnership interest, controls the ~~affairs~~operations 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 partner~~remaining ownership interests in the Operating Partnership ~~entitle it to share in cash distributions from,~~(the “Units”) are held by certain former owners of assets acquired by the Operating Partnership.

We consolidate all wholly owned subsidiaries. Partially owned subsidiaries and injoint ventures are consolidated when we control the ~~profits and losses~~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 ~~proportion to its~~joint ventures that we do not control but for which we have significant influence over are accounted for using the equity method.

Included in the Parent Company’s consolidated balance sheets are noncontrolling redeemable Operating Partnership Units and included in the Operating Partnership’s consolidated balance sheets are limited partners’ redeemable capital interest at redemption value. These interests are presented in the “mezzanine” section of the consolidated balance sheets because they do not meet the functional definition of a liability or equity under current accounting literature. These represent the outside ownership ~~interest therein and entitle the Company to vote on all matters requiring a vote~~interests of the limited ~~partners.~~

~~The other limited~~ partners ofin the Operating Partnership. At December 31, 2017 and December 31, 2016, there were 217,481 noncontrolling redeemable Operating Partnership Units outstanding. These unitholders are ~~persons who contributed their direct or indirect interests in certain self-storage properties~~entitled to receive distributions per unit equivalent to the ~~Operating Partnership.~~dividends declared per share on the Parent Company’s common stock. The Operating Partnership is obligated to redeem each ~~unit~~ of these limited partnership ~~(“Unit”)~~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 ~~(“Common Shares”)~~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~~common share or cash. The Company ~~presently anticipates that it will elect to pay cash to acquire Units presented~~accounts for ~~redemption, rather than issuing Common Shares. With each such redemption the Company’s percentage ownership interest in the~~these noncontrolling redeemable Operating Partnership ~~will increase. In addition, whenever~~Units under the ~~Company issues Common Shares,~~provisions of Accounting Standards Codification (ASC) Topic 480-10-S99. The application of the ~~Company is obligated~~ASC Topic 480-10-S99 accounting model requires the noncontrolling interest to ~~contribute any net proceeds therefrom~~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 ~~Operating Partnership and the Operating Partnership is obligated to issue an equivalent number of Units~~adjustment to the ~~Company. Such limited partners’ redemption rights are reflected in “limited partners’ capital interest” in~~carrying amount of the ~~accompanying balance sheets at the cash redemption amount at the balance sheet date. Capital activity with regard to such limited partners’ redemption rights~~noncontrolling interests is reflected in the ~~accompanying statements~~Parent Company’s dividends in excess 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,~~net income 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. Investments in joint ventures that we do not control but for which we have significant influence over are reported using the equity method.

In April 2006, the Operating Partnership made additional investments of $8,475,000 in Locke Sovran I, LLC and Locke Sovran II, LLC that increased the Operating Partnership’s ownership from approximately 45% to over 70% in each of these joint ventures. As a result of this transaction, from the date that its controlling interest was acquired, the Operating Partnership has consolidated the accounts of Locke Sovran I, LLC in its financial statements. The accounts of Locke Sovran II, LLC were already being included in the Operating Partnership’s ~~financial statements as it has been~~general partner and limited partners capital balances. Accordingly, in the accompanying consolidated balance sheets, noncontrolling interests are reflected at redemption value at December 31, 2017 and 2016, equal to the number of noncontrolling 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 Company’s historical basis of accounting at those dates.

The following is a ~~majority controlled joint venture since 2001.~~ 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 ~~June 2008,~~2016 the Operating Partnership ~~made an additional investment~~issued 90,477 Units with a fair value of ~~$6.1~~$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.

Operating Partnership Units redeemed in ~~Locke Sovran I, LLC that increased~~2016 were redeemed for a total of 41,862 shares of the ~~Operating Partnership’s ownership from approximately 70% to 100%.~~

Parent Company.

Cash and Cash Equivalents: The ~~Operating Partnership~~Company 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 $3.8~~allowance 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 ~~$3.2~~$1.0 million ~~respectively, held in escrow for encumbered properties~~ at December 31, ~~2008~~2017 and ~~2007.~~

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, ~~2008, 2007,~~2017, 2016, and ~~2006,~~2015, advertising costs were ~~$1.4~~$12.3 million, ~~$1.4~~$9.5 million, and ~~$1.0~~$7.3 million, respectively. The ~~Operating Partnership~~Company 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 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, ~~2008~~2017, 2016, and ~~2007~~2015 was ~~$0.4 million. No interest was capitalized during 2006.~~$0.3 million, $0.1 million and $0.1 million, respectively. Repair and maintenance costs are expensed as incurred.

Whenever events or changes in circumstances indicate that the ~~basis~~carrying value of the ~~Operating Partnership’s~~Company’s property may not be recoverable, the ~~Operating Partnership’s~~Company’s policy is to ~~assess any impairment~~complete 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 ~~flow~~flows is less than the carrying amount of the property, an impairment loss is recognized for ~~the~~any amount by which the carrying amount of the asset exceeds the fair value of the asset. AtFor the years ended December 31, ~~2008~~2017, 2016, and ~~2007,~~2015, no assets ~~had~~have been determined to be impaired under this ~~policy~~policy.

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 on~~assessment, it is determined that it is more likely than not that the ~~Operating Partnership’s financial position or results~~fair 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 $6.8 million and $6.2 million~~Cash held in escrow for encumbered properties at December 31, ~~2008,~~2017 and ~~2007,~~2016, totaled $292,000 and $238,000, respectively. ~~Accumulated amortization on the loan acquisition costs was approximately $2.5 million and $3.8 million~~Property deposits at December 31, ~~2008,~~2017 and ~~2007,~~2016 were $0.9 million and $2.4 million, respectively. ~~Loan~~In 2016, a decision was made to not proceed with the acquisition ~~costs are amortized over~~of two properties on which the ~~terms of the related debt. The note receivable of $2.8 million represents~~Company had previously made property deposits totaling $1.8 million. As 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. Property~~result, these property deposits were ~~$0.1 million~~abandoned and ~~$1.5 million at December 31, 2008 and 2007, respectively.~~

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 Partnership~~Company 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 Partnership~~Company amortizes in-place customer leases on a straight-line basis over 12 months (the estimated future benefit period). ~~At December 31, 2008,~~

Investment in Unconsolidated Joint Ventures : The Company’s investment in unconsolidated joint ventures where the ~~gross carrying amount~~Company 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 million~~accounting 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 $5.2 million~~

~~Amortization expense, including amortization of in-place customer leases, was $1.3 million, $4.8 million and $1.0 million~~adjusted for the ~~periods ended December 31, 2008, 2007~~Company’s share of net earnings or losses and ~~2006, 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.~~

~~Minority Interest~~: The minority interest reflects the outside ownership interest of the joint venture partner’s interest in Locke Sovran II, LLC. Amounts allocated to these interests are reflected as an expense in the income statement and increase the minority interest on the balance sheet. Distributions to these partners reduce these balances. The limited partners’ capital interest reflects the outside ownership interest of the limited partners of the Operating Partnership. At December 31, 2008, Operating Partnership minority interest ownership was 419,952 Units, or 1.9% (at December 31, 2007 422,727 Units, or 1.9%). The redemption value of the Units at December 31, 2008 and 2007 was $15.1 million and $17.0 million, respectively. The Operating Partnership is obligated to redeem each 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, 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.

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 made~~elected 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 ~~taxes~~taxes. 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 amounts~~year ended December 31, 2017 and federal and state income tax expense of ~~net assets exceeds the tax basis by approximately $74~~$0.4 million and ~~$72~~$1.3 million atduring the years ended December 31, ~~2008~~2016 and ~~2007, respectively.~~

~~Comprehensive Income~~~~: Comprehensive income consists of net income~~2015, respectively, which are included in general and ~~the change in value of derivatives used for hedging purposes and is reported~~administrative expenses in the consolidated statements of ~~partners’ capital. Comprehensive~~operations. The 2017 income ~~was $13.6 million, $35.7~~tax benefit includes current tax expense of $1.5 million and ~~$37.3 million for the years ended~~deferred tax benefit of $2.5 million. At December 31, ~~2008, 2007,~~2017 and ~~2006, 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 Partnership adopted SFAS No. 133, “Accounting~~Company accounts for ~~Derivative Instruments~~derivatives in accordance with ASC Topic 815 “ Derivatives and ~~Hedging Activities,” as amended,~~Hedging” , which requires companies to carry all derivatives on the balance sheet at fair value. The ~~Operating Partnership~~Company 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’s~~Company’s use of derivative instruments is limited to cash flow hedges ~~as defined in SFAS No. 133,~~ of certain interest rate risks.

Recent Accounting Pronouncements: In ~~February 2007,~~May 2014, the FASB issued ~~SFAS No. 159, “The Fair Value Option~~ASU 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for ~~Financial Assets~~those goods or services. ASU 2014-09 is effective for fiscal years, and ~~Financial Liabilities” (“SFAS 159”)~~interim periods within those years, beginning after December 15, 2017. The Company has the option 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). ~~SFAS 159~~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 the 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 December 15, 2018. Early adoption is permitted for all entities, thought the Company does not expect to ~~voluntarily choose, at specified election dates,~~adopt ASU 2016-02 early. The Company is currently evaluating the impact of adopting the new leases standard on its consolidated financial statements.

In March 2016, the FASB issued ASU 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 ~~measure many~~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 issued 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 classification on the statement of cash 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 ~~liabilities at fair value.~~activities is a business. The amendments in this update are effective ~~date~~ for annual periods beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption of this update is permitted and the ~~Operating Partnership is~~Company adopted this update effective January 1, ~~2008.~~2017. The adoption of ~~SFAS 159 did~~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 properties that we acquire do not ~~impact~~meet the ~~Operating Partnership’s consolidated financial statements.~~

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 ~~December 2007,~~February 2017, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS No. 160”), which amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements”, to improve the relevance, comparability,ASU 2017-05, “Other Income – Gains and transparency of the financial information that a reporting entity provides in its consolidated financial statements. SFAS No. 160 establishes accounting and reporting standards that require the ownership interests in subsidiaries not held by the parent to be clearly identified, labeled and presented in the consolidated statement of financial position within equity, but separateLosses from the ~~parent’s equity. This statement also requires~~Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the ~~amount~~Scope of ~~consolidated net income attributable to~~Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” which clarifies the ~~parent~~scope and ~~to the non-controlling interest to be clearly identified and presented~~application of ASC 610-20 on the ~~face~~sale or transfer of ~~the consolidated statement of income.~~nonfinancial assets, including real estate, and in substance nonfinancial assets to noncustomers, including partial sales. The amendments in this update are effective ~~date~~ for ~~the Operating Partnership will be January 1, 2009. The Operating Partnership has not yet determined the impact of SFAS 160 on our consolidated financial statements~~

~~141R applies prospectively to business combinations for which the acquisition date is on or after the~~annual periods beginning ~~of the first annual reporting period beginning on or~~ after December 15, ~~2008.~~2017, and interim periods within those annual periods. The ~~effective date for the Operating Partnership will be~~implementation of this update as of January 1, ~~2009. The Operating Partnership has not yet determined~~2018 could potentially impact the ~~impact~~accounting treatment of ~~SFAS 141R related~~future real estate sales of the Company if such sales are to ~~future acquisitions, if any, on our consolidated financial statements.~~

parties who are also customers of the Company.

In ~~March 2008,~~May 2017, the FASB issued ~~SFAS No. 161, “Disclosures About Derivative Instruments~~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 ~~Hedging Activities — an amendment~~interim periods within those annual periods. The implementation of FASB Statement No. 133” (“SFAS No. 161”). SFAS No. 161 expands quarterly disclosure requirements in SFAS No. 133 about an entity’s derivative instruments and hedging activities. The effective date for the Operating Partnership will bethis update as of January 1, ~~2009.~~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 subject to the guidance in ASU 2017-09 and could potentially be accounted for differently than under the previous guidance concerning such changes.

Stock-Based Compensation : The ~~Operating Partnership is currently assessing~~Company accounts for stock-based compensation under the ~~impact~~provisions of ~~SFAS No. 161 on our consolidated financial statements.~~

~~Stock-Based~~ ASC Topic 718, “ Compensation~~: Effective January 1, 2006, the Operating Partnership adopted Statement 123(R) and uses the modified-prospective method. Under the modified-prospective method, the Operating Partnership~~ - Stock Compensation ”. The Company recognizes compensation cost in ~~the~~its financial statements ~~issued subsequent to January 1, 2006~~ for all share based payments granted, modified, or settled ~~after~~during the ~~date of adoption as well as for any~~period. For awards ~~that were granted prior to~~with 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 Partnership~~Company recorded compensation expense (included in general and administrative expense) of ~~$279,000, $183,000~~$15,000, $89,000, and ~~$119,000~~$210,000, respectively, related to stock options ~~under Statement 123(R)~~ and ~~$1.4~~$7.1 million, ~~$1.2~~$7.2 million, and ~~$876,000~~$6.3 million, respectively, related to amortization of non-vested stock grants for the years ended December 31, ~~2008, 2007~~2017, 2016, and ~~2006, respectively.~~2015. The ~~Operating Partnership~~Company uses the Black-Scholes Merton option pricing model to estimate the fair value of stock options granted subsequent to the adoption of ~~FAS 123(R).~~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~~weighted-average fair value of options granted during ~~2008 follows:~~

Weighted Average Range
Expected life (years) 6.53 4.50 - 7.00
Risk free interest rate 3.78 % 2.65 - 3.94%
Expected volatility 22.61 % 22.40% - 24.30%
Expected dividend yield 6.1 % 6.00% - 7.00%
Fair value $ 4.79 $3.21 - $5.10

the year ended December 31, 2015 was $9.90. There were no options granted during the years ended December 31, 2017 and 2016.

To determine expected volatility, the ~~Operating Partnership~~Company uses historical volatility based on daily closing prices of ~~the Company’s~~its 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’s~~Company’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 Partnership~~Company reports earnings per share and earnings per unit data in accordance with ~~Statement~~ASC Topic 260, “Earnings Per Share .” Under ASC Topic 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 ~~Financial Accounting Standards No. 128, “Earnings Per Share.” In computing earnings per unit,~~earnings-per-share pursuant to the two-class method. The Parent Company and the Operating Partnership ~~excludes preferred~~ have calculated their basic and diluted earnings per share/unit ~~distributions from net income to arrive at net income available to common unitholders.~~ using the two-class method.

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

(Amounts in thousands, Year Ended December 31,
except per unit data) 2008 2007 2006
Numerator:
Net income from continuing operations available to common unitholders $ 37,326 $ 38,307 $ 34,556

Denominator: 22,184 21,381 18,393
Denominator for basic earnings per unit - weighted average units
Effect of Dilutive Securities:
Stock options and warrants and non-vested stock 21 49 70

Denominator for diluted earnings per unit - adjusted weighted average units and assumed conversion 22,205 21,430 18,463

Basic Earnings per Common Unit from continuing operations $ 1.68 $ 1.79 $ 1.87
Basic Earnings per Common Unit $ 1.72 $ 1.81 $ 1.90

Diluted Earnings per Common Unit from continuing operations $ 1.68 $ 1.79 $ 1.87
Diluted Earnings per Common Unit $ 1.72 $ 1.81 $ 1.90

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

Not included in the effect of dilutive securities above are 13,750 stock options and 133,512 unvested restricted shares for the year ended December 31, 2017; 107,283 unvested restricted shares for the year ended December 31, 2016; 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 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, ~~2008~~2017 and December 31, ~~2007.~~

2016.


(Dollars in thousands)	2008			2007			2017			2016
Cost:
Beginning balance	$	1,322,708		$	1,136,052		$	4,243,308		$	2,491,702
Acquisition of storage facilities		18,454			136,653			22,638			1,714,029
Additional investment in consolidated joint ventures		2,473			—
Improvements and equipment additions		44,998			45,806			84,332			65,860
Increase in construction in progress		761			6,621
Net (decrease) increase in construction in progress								(141	)		7,525
Dispositions		(193	)		(2,424	)		(28,727	)		(35,808	)

Ending balance	$	1,389,201		$	1,322,708		$	4,321,410		$	4,243,308

Accumulated Depreciation:
Beginning balance	$	183,679		$	154,449		$	535,704		$	465,195
Additions during the year		33,100			30,011			102,674			87,219
Dispositions		(135	)		(781	)		(14,064	)		(16,710	)

Ending balance	$	216,644		$	183,679		$	624,314		$	535,704

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.

~~The~~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 price~~Solar 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. The value~~Disclosures” and were accounted for as business combinations in accordance with the principles 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. During 2008, the Operating Partnership acquired three storage facilities for $18.9 million. Substantially all of theFASB ASC Topic 805 “Business Combinations.”

The purchase price of ~~these~~the two 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’s~~Company’s operations since the respective acquisition dates. ~~During 2007,~~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 ~~acquired 31 storage facilities for $141.3 million. Substantially all~~Units valued based on the market price of the ~~purchase price~~Company’s common stock at the date of ~~these facilities was allocated~~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 Operating Partnership Units, the assumption of $1.3 million of other net liabilities and $2.5 million for the settlement of a straight-line rent liability in connection with the acquisition of self-storage facilities.

The Company measures the fair value of in-place customer lease intangible assets based on the Company’s experience with customer turnover and the estimated cost to ~~land ($27.7 million), building ($110.0 million), equipment ($1.5 million) and~~replace the in-place leases. The Company amortizes in-place customer leases ~~($2.1 million)~~on a 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 not amortized, by calculating discounted cash flows utilizing the ~~operating results of the acquired facilities have been~~relief from royalty method.

In-place customer leases are included in other assets on the ~~Operating Partnership’s operations since the respective acquisition dates.~~

~~5. DISCONTINUED OPERATIONS~~

In April 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 operations of this facility and the gain on sale are reportedCompany’s consolidated balance sheets at December 31 as ~~discontinued operations. The amounts in the 2007 and 2006 financial statements~~follows:

(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 operations~~in-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, ~~2008, 2007~~2017, 2016, and ~~2006.~~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 summary~~Company has subsequently leased one of the ~~amounts reported as discontinued operations:~~

Year Ended December 31,
(dollars in thousands) 2008 2007 2006
Total revenue $ 233 $ 912 $ 927
Property operations and maintenance expense (76 ) (196 ) (202 )
Real estate tax expense (33 ) (97 ) (94 )
Depreciation and amortization expense (46 ) (185 ) (184 )
Net realized gain on sale of property 716 — —

Total income from discontinued operations $ 794 $ 434 $ 447

~~6. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)~~

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

The ~~following unaudited pro forma Condensed Statement~~change in name of ~~Operations is presented as if (i)~~ the 31Company’s storage facilities ~~purchased during 2007, (ii) the 42~~from Uncle Bob’s Self Storage ® to Life Storage ® required replacement of signage at all existing storage facilities ~~purchased during 2006, (iii) the additional~~which are currently included in investment in ~~Locke Sovran I, LLC and Locke Sovran II, LLC in April 2006, and (iv)~~storage facilities, net on the ~~related indebtedness incurred and assumed on these transactions had all occurred at January 1, 2006. Such unaudited pro forma information is based upon the historical statements~~consolidated 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 forth~~of 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 December 31,
(dollars in thousands, except unit data) 2007 2006
Pro forma total operating revenues $ 199,569 $ 191,505

Pro forma net income $ 42,582 $ 34,825

Pro forma earnings per common unit — diluted $ 1.92 $ 1.55

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.

7.5. 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 new~~Company exercised the expansion feature on its existing amended unsecured credit ~~arrangements,~~agreement and ~~received funds under those arrangements. As part of~~increased the ~~agreements,~~revolving credit limit from $300 million to $500 million. The interest rate on the ~~Operating Partnership entered into~~revolving credit facility bears interest at a ~~$250~~variable 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%. The proceeds from this term note were used to repay~~a margin based on the ~~Operating Partnership’s previous line of~~Company’s credit ~~that was to mature in September 2008,~~rating (at December 31, 2017 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. The new agreements also provide for a $125 million (expandable to $150 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.margin is 1.15%). The interest rate at December 31, ~~2008~~2017 on the ~~Operating Partnership’s available~~Company’s line of credit was approximately ~~1.8% (5.5%~~2.63% (1.79% at December 31, ~~2007)~~2016). At December 31, ~~2008,~~2017, there was ~~$111~~$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 $80~~restricts 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 2013~~July 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 2013~~April 2024 bearing interest at a ~~variable~~fixed rate ~~equal~~of 4.533%. The interest rate on the term note increases to ~~LIBOR plus 1.50%, and~~6.283% 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 2016~~August 5, 2021 bearing interest at ~~6.38%~~a fixed rate of 5.54%. The interest rate on the term note increases to 7.29% if the notes are not rated by at least one rating agency, the credit rating on the notes is downgraded or if the Company’s credit rating is downgraded.

The line of credit and term notes require the Company 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 dividend payouts. At December 31, 2017, the Company was in compliance with such covenants.

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, 2017, the entire availability 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.

6. MORTGAGES PAYABLE AND ~~OTHER~~ DEBT ~~DISCLOSURES~~

MATURITIES

Mortgages payable at December 31, ~~2008~~2017 and ~~December 31, 2007~~2016 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) 2008 2007
7.80% mortgage note due December 2011, secured by 11 self-storage facilities (Locke Sovran I) with an aggregate net book value of $43.8 million, principal and interest paid monthly $ 29,033 $ 29,084
7.19% mortgage note due March 2012, secured by 27 self-storage facilities (Locke Sovran II) with an aggregate net book value of $81.2 million, principal and interest paid monthly 42,603 43,645
7.25% mortgage note due December 2011, secured by 1 self-storage facility with an aggregate net book value of $5.8 million, principal and interest paid monthly. Estimated market rate at time of acquisition 5.40% 3,510 3,643
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 1,000 1,022
6.35% mortgage note due March 2014, secured by 1 self-storage facility with an aggregate net book value of $3.8 million, principal and interest paid monthly 1,098 1,122
5.55% mortgage notes due November 2009, secured by 8 self-storage facilities with an aggregate net book value of $34.9 million, interest only paid monthly. Estimated market rate at time of acquisition 6.44% 25,930 25,719
7.50% mortgage notes due August 2011, secured by 3 self-storage facilities with an aggregate net book value of $14.3 million, principal and interest paid monthly. Estimated market rate at time of acquisition 6.42% 6,087 6,282

Total mortgages payable $ 109,261 $ 110,517

The Operating Partnership assumed the 7.25%, 6.76%, 6.35%, 5.55% and 7.50% mortgage notes in connection with the acquisitions of storage facilities in 2005 and 2006. The 7.25%, 5.55%, 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 6.44%. The carrying value of these three mortgages approximates the actual principal balance of the mortgages payable. An immaterial premium exists at December 31, 2008, which will be amortized over the remaining term of the mortgages based on the effective interest method.

The table below summarizes the ~~Operating Partnership’s~~Company’s debt obligations and interest rate derivatives at December 31, ~~2008.~~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 ~~note~~notes and mortgage ~~note~~notes 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 Partnership~~Company 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

Expected Maturity Date Including Discount Fair
(dollars in thousands) 2009 2010 2011 2012 2013 Thereafter Total Value
Line of credit — variable rate LIBOR + 1.375 (1.84% at December 31, 2008) — — $ 14,000 — — — $ 14,000 $ 14,000

Notes Payable:
Term note — variable rate LIBOR+1.625% (2.09% at December 31, 2008) — — — $ 250,000 — — $ 250,000 $ 250,000
Term note — variable rate LIBOR+1.50% (4.62% at December 31, 2008) — — — — $ 20,000 — $ 20,000 $ 20,000
Term note — fixed rate 6.26% — — — — $ 80,000 — $ 80,000 $ 78,865
Term note — fixed rate 6.38% — — — — — $ 150,000 $ 150,000 $ 147,899

Mortgage note — fixed rate 7.80% $ 587 $ 630 $ 27,816 — — — $ 29,033 $ 30,031
Mortgage note — fixed rate 7.19% $ 1,128 $ 1,211 $ 1,301 $ 38,963 — — $ 42,603 $ 44,205
Mortgage note — fixed rate 7.25% $ 141 $ 149 $ 3,220 — — — $ 3,510 $ 3,478
Mortgage note — fixed rate 6.76% $ 23 $ 25 $ 27 $ 29 $ 896 — $ 1,000 $ 1,018
Mortgage note — fixed rate 6.35% $ 26 $ 28 $ 30 $ 31 $ 34 $ 949 $ 1,098 $ 1,100
Mortgage notes — fixed rate 5.55% $ 25,930 — — — — — $ 25,930 $ 26,422
Mortgage notes — fixed rate 7.50% $ 208 $ 222 $ 5,657 — — — $ 6,087 $ 6,188

Interest rate derivatives — liability — — — — — — — $ 25,490

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 Partnership~~Company 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 Partnership~~Company 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 ~~sheet~~sheets at fair value and the related gains or losses are deferred in shareholders’ equity or partners’ capital as Accumulated Other Comprehensive ~~Income~~Loss (“~~AOCI”~~AOCL”). These deferred gains and losses are ~~amortized into~~recognized 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 ~~immaterial~~de minimis in ~~2008, 2007,~~2017, 2016, and ~~2006.~~

2015.

The ~~Operating Partnership~~Company has ~~entered into seven~~one interest rate swap ~~agreements~~agreement in effect at December 31, 2017 as detailed below to effectively convert ~~a total of $270~~$100 million of variable-rate debt to fixed-rate debt.

Notional Amount

Effective Date

Expiration Date

Fixed

Rate Paid

Floating Rate

Received

$100 Million

9/4/13

9/4/18

1.3710

~~Fixed~~

~~Floating Rate~~

~~Notional Amount~~

~~Effective Date~~

~~Expiration Date~~

~~Rate Paid~~

~~Received~~

~~$50 Million~~

~~11/14/05~~

~~9/1/09~~

~~4.3900~~

1 month LIBOR

~~$20 Million~~

~~9/4/05~~

~~9/4/13~~

~~4.4350~~

~~6 month LIBOR~~

~~$50 Million~~

~~10/10/06~~

~~9/1/09~~

~~4.4800~~

~~1 month LIBOR~~

~~$50 Million~~

~~7/1/08~~

~~6/25/12~~

~~4.2825~~

~~1 month LIBOR~~

~~$100 Million~~

~~7/1/08~~

~~6/22/12~~

~~4.2965~~

~~1 month LIBOR~~

~~$75 Million~~

~~9/1/09~~

~~6/22/12~~

~~4.7100~~

~~1 month LIBOR~~

~~$25 Million~~

~~9/1/09~~

~~6/22/12~~

~~4.2875~~

~~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 ~~SFAS No. 133,~~FASB ASC Topic 815 “ Derivatives and Hedging ”, held by the ~~Operating Partnership.~~Company at December 31, 2017. During ~~2008, 2007,~~2017, 2016, and ~~2006,~~2015, the net reclassification from ~~AOCI~~AOCL to interest expense was ~~$2.6~~$12.3 million, ~~($1.1)~~$4.6 million, and ~~($0.5)~~$5.2 million, respectively, based on payments ~~(receipts)~~ made ~~or received~~ under the swap agreements. Based on current interest rates, the ~~Operating Partnership~~Company estimates that payments received under the interest rate swaps ~~will~~in 2018 would be ~~approximately $10.6 million in 2009. Receipts~~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 liability~~an asset of ~~$25.5 million and $1.2~~$0.2 million at December 31, ~~2008,~~2017 and ~~2007 respectively.~~a liability of $13.0 million at December 31, 2016.

The Company’s agreement with its interest rate swap counterparty contains provisions pursuant to which the Company could be declared in default of its 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 rate 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 the interest rate swap agreement. As of December 31, 2017, the Company had not posted any collateral related to the interest rate swap agreements.

The changes in AOCL for the 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 SFAS No. 157, “Fair~~provisions of ASC Topic 820 “ Fair Value Measurements~~” (SFAS 157. This statement defines fair value, establishes a framework for measuring fair value~~ and expands the related disclosure requirements. This statement applies under other accounting pronouncements that require or permit fair value measurements. The statement 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. SFAS 157 defines fair value based upon an exit price model.

~~Relative to SFAS 157, the FASB issued FASB Staff Positions (FSP) 157-1, 157-2, and 157-3. FSP 157-1 amends SFAS 157 to exclude SFAS No. 13, “Accounting for Leases,~~Disclosures” (SFAS 13) and its related interpretive accounting pronouncements that address leasing transactions, while FSP 157-2 delays the effective date of the application 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 SFAS 157 as of January 1, 2008, with the exception of the application of the statement to non-recurring~~and nonfinancial assets and ~~nonfinancial~~ liabilities. ~~Non-recurring nonfinancial assets and nonfinancial liabilities for which we have not applied the provisions of SFAS 157 include those measured at fair value in a business combination.~~

~~SFAS 157~~ASC Topic 820 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, ~~2008 (in~~2017 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 (25,490 ) — (25,490 ) —

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 ~~2005~~2015 Award and Option Plan (the ~~“Plan”~~“2015 Plan”) which replaced the expired ~~1995~~2005 Award and Option Plan for the purpose of attracting and retaining the Company’s executive officers and other key ~~employees. 1,500,000~~employees, such plans being the “Plans”. There were 561,000 shares ~~were~~ authorized for issuance under the 2015 Plan. ~~The options~~Options 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, ~~2008,~~2017, options for ~~324,688~~76,106 shares were outstanding under the Plans and options for ~~1,096,464~~345,383 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”) which replaced the 1995 Outside Directors’ Stock Option Plan ~~(the Non-employee Plan)~~ for the purpose of attracting and retaining the services of experienced and knowledgeable outside directors. ~~The~~Prior to 2016, the Non-employee Plan ~~provides~~provided 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, ~~effective in 2004~~ 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 ~~2008, 1,820~~2017, 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, ~~2008,~~2017, options for ~~36,000~~18,500 common shares and 3,145 of non-vested shares ~~of 9,160~~ were outstanding under the Non-employee ~~Plan and~~Plans. As of December 31, 2017 options for no67,871 shares of common stock were available for future issuance.

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


	2008					2007					2006
				Weighted					Weighted					Weighted
				average					average					average
				exercise					exercise					exercise		2017					2016				2015
	Options			price		Options			price		Options			price		Options			Weighted average exercise price		Options		Weighted average exercise price		Options			Weighted average exercise price
Outstanding at beginning of year:		168,125		$	42.54		113,225		$	35.77		142,900		$	32.68		95,706		$	52.08		95,706	$	52.08		115,606		$	48.54

Granted		201,163			43.12		74,000			52.49		14,000			51.78		—			—		—		—		11,000			91.58
Exercised		(2,600	)		27.78		(13,100	)		32.44		(37,675	)		30.33		(1,100	)		39.00		—		—		(30,900	)		52.87
Forfeited		(6,000	)		36.86		(6,000	)		59.62		(6,000	)		33.05


Adjusted / (forfeited)																	—			—		—		—		—			—
Outstanding at end of year		360,688		$	43.06		168,125		$	42.54		113,225		$	35.77		94,606		$	52.24		95,706	$	52.08		95,706		$	52.08

Exercisable at end of year		118,025		$	38.84		82,625		$	34.45		74,225		$	31.14		93,106		$	51.85		92,706	$	51.31		63,815		$	48.73

A summary of the Company’s stock options outstanding at December 31, ~~2008~~2017 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 31,475 $ 21.58 31,475 $ 21.58
$30.00 - 39.99 33,050 $ 35.35 19,550 $ 34.11
$40.00 - 57.79 296,163 $ 46.21 67,000 $ 48.33

Total 360,688 $ 43.06 118,025 $ 38.84

Intrinsic value of outstanding stock options at December 31, 2008 $ 506,184
Intrinsic value of exercisable stock options at December 31, 2008 $ 506,184
Intrinsic value of stock options exercised in 2008 $ 37,691

The intrinsic value of stock options exercised during the years ended December 31, 2017, 2016, and 2015 was $0.1 million, $0, and $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, ~~2008,~~2017, or the price on the date of exercise for those exercised during the year. As of December 31, ~~2008,~~2017, there was approximately ~~$1.1 million~~$7,000 of total unrecognized compensation cost related to ~~non-vested share-based~~stock option compensation arrangements granted under our stock award plans. That cost is expected to be recognized over a weighted-average period of approximately ~~5.2~~0.5 years. The weighted average remaining contractual life of all options is ~~8.0~~1.9 years, and for exercisable options is ~~5.7~~1.8 years.

Non-vested ~~Stock~~

stock

The Company has also issued ~~289,587~~ shares of non-vested stock to employees which vest over ~~two~~one 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, ~~2008,~~2017, the fair market value of the non-vested stock on the date of grant ranged from ~~$20.38~~$74.36 to ~~$59.81.~~$89.07. During ~~2008, 43,893~~2017, 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 ~~market~~fair value ~~of shares as they are issued. The unearned portion is then amortized and charged~~ratably to expense over the vesting period. The Company uses the average of the high and 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:


	2008					2007					2006
				Weighted					Weighted					Weighted
	Non-			average		Non-			average		Non-			average
	vested			grant date		vested			grant date		vested			grant date		2017					2016					2015
	Shares			fair value		Shares			fair value		Shares			fair value		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:		115,896		$	45.54		96,453		$	40.21		71,411		$	30.39		258,163		$	58.89		305,520		$	59.09		310,463		$	51.93

Granted		45,713			41.50		43,989			53.79		41,719			53.86		51,276			85.17		23,405			89.30		64,665			94.74
Vested		(30,802	)		42.71		(24,546	)		39.39		(16,677	)		32.29		(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		130,807		$	44.79		115,896		$	45.54		96,453		$	40.21		170,809		$	71.75		258,163		$	58.89		305,520		$	59.09

Compensation expense of ~~$1.4~~$7.1 million, ~~$1.2~~$7.2 million, and ~~$0.9~~$6.3 million was recognized for the vested portion of non-vested stock grants in ~~2008, 2007~~2017, 2016, and ~~2006,~~2015, respectively. The fair value of non-vested stock that vested during ~~2008, 2007~~2017, 2016, and ~~2006~~2015 was ~~$1.3~~$5.7 million, ~~$1.0~~$4.9 million, and ~~$0.5~~$4.2 million, respectively. The total unrecognized compensation cost related to non-vested stock was ~~$4.8~~$8.2 million at December 31, ~~2008,~~2017, and the remaining weighted-average period over which this expense will be recognized was 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 Partnership~~Company qualifying under certain age and service requirements are eligible to be a participant in a 401(k) Plan. ~~The Operating Partnership contributes~~In 2015, the Company contributed to the Plan at the rate of ~~50%~~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 Partnership~~Company was approximately ~~$284,000, $256,000,~~$703,000, $505,000, and ~~$166,000~~$276,000 for the years ended December 31, ~~2008, 2007~~2017, 2016, and ~~2006,~~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, 2008 was $20.1 million. Twenty five properties were acquired by Sovran HHF~~Company’s unconsolidated joint ventures is as ~~of December 31, 2008 for approximately $171.5 million. The Operating Partnership contributed $18.6~~follows:

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

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.

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 32^nd 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, 2008, the carrying value~~agreements, none of the ~~Operating Partnership’s investment in Sovran HHF exceeds its share~~joint ventures are consolidated by the Company. Due to the Company’s significant influence over the operations of each of the ~~underlying~~joint ventures, all joint ventures are accounted for under the equity ~~in net assets~~method of ~~Sovran HHF by approximately $1.7 million as a result~~accounting.

The carrying values of the ~~capitalization of certain acquisition related costs. This difference is not amortized, it is included~~Company’s investments in ~~the carrying value of the investment, which is~~joint 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~~consolidated statements of operations, totaled $6.6 million, $4.9 million and call center fee of 7% of gross revenues which totaled $0.5 million for 2008. The Operating Partnership also received an acquisition fee of 0.5% of purchase price for securing purchases for the joint venture. During 2008, the Operating Partnership recorded $0.7$4.9 million in ~~acquisition fees.~~2017, 2016 and 2015 respectively. The ~~Operating Partnership’s~~Company will also earn management fees upon commencement of the operation of storage facilities owned by Urban Box, McDonald, and N32.

The Company’s share of ~~Sovran HHF’s~~the unconsolidated joint ventures’ income ~~for 2008 was $0.1 million. At December 31, 2008, Sovran HHF owed the Operating Partnership $0.3 million for payments made by the Operating Partnership on behalf of the 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(loss) is a liability of $0.5 million at December 31, 2008 and $0.4 million at December 31, 2007, and is included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets. For the years ended December 31, 2008, 2007 and 2006, the Operating Partnership’s share of Iskalo Office Holdings, LLC’s (loss) income was ($6,000), $80,000, and $80,000, respectively. The Operating Partnership paid rent to Iskalo Office Holdings, LLC of $600,000, $561,000 and $583,000 in 2008, 2007, and 2006, respectively. Future minimum lease payments under the lease are $0.6 million per year through 2010.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, ~~2008~~2017 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

The ~~Operating Partnership~~Company 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. PREFERRED STOCK~~

	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 ~~July~~March 3, ~~2002,~~2015, the Company ~~entered into an agreement providing for~~completed the ~~issuance~~public offering of ~~2,800,000~~1,380,000 shares of ~~8.375% Series C Convertible Cumulative Preferred Stock~~its common stock at $90.40 per share. Net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses were approximately $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 (“~~Series C Preferred”~~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 ~~a privately negotiated transaction. The Company immediately issued 1,600,000~~aggregate offering price of shares of the ~~Series C Preferred~~Company’s common stock. The Equity Program expired in May 2017.

During 2017 and ~~issued~~2016, the ~~remaining 1,200,000~~Company did not issue any shares ~~on November 27, 2002. The offering price was $25.00 per share resulting in net proceeds for the Series C Preferred and related~~of common stock ~~warrants of $67.9 million after expenses. In 2004,~~under the Equity Program.

During 2015, the Company issued ~~306,748~~949,911 shares of common stock under the Equity Program at a weighted average issue price of $96.80 per share, generating net proceeds of $90.6 million after deducting $1.1 million of sales commissions paid to Jefferies, Piper, and HSBC, 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 of the Company’s outstanding common shares (“Buyback Program”). The Buyback Program allows the Company to purchase shares of its common stock in ~~connection~~accordance with applicable securities laws on the ~~conversion~~open 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 one~~repurchased 112,554 of the ~~holders~~Company’s outstanding common shares for $8.2 million under the Buyback Program, resulting in a weighted average purchase price of ~~the Series C Preferred Stock requesting the conversion of 1,200,000 shares of Series C Preferred Stock into common stock. On July 7, 2007,~~$73.16 per share.

In 2013, the Company implemented a Dividend Reinvestment Plan. The Company issued ~~920,244~~199,809, 133,666 and 151,246 shares under the plan in 2017, 2016, and 2015, respectively. On August 2, 2017, the Company’s Board of ~~its common stock to~~Directors suspended the holder of its 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. As a result of the conversion, $30.0 million recorded in preferred partners capital was reclassified to limited partners’ capital in 2007.Dividend Reinvestment Plan.

~~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, ~~2008~~2017 and ~~2007~~2016 (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

2008 Quarter Ended
March 31 June 30 Sept. 30 Dec. 31
Operating revenue $ 49,619 $ 50,120 $ 52,497 $ 50,767
Income from continuing operations (a) $ 9,045 $ 10,033 $ 9,711 $ 8,537
Income from discontinued operations (a) $ 82 $ 712 $ — $ —
Net Income $ 9,127 $ 10,745 $ 9,711 $ 8,537
Net income available to common unitholders $ 9,127 $ 10,745 $ 9,711 $ 8,537
Net Income Per Common Unit
Basic $ 0.41 $ 0.49 $ 0.44 $ 0.38
Diluted $ 0.41 $ 0.48 $ 0.44 $ 0.38

	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.

2007 Quarter Ended
March 31 June 30 Sept. 30 Dec. 31
Operating revenue (a) $ 44,371 $ 47,872 $ 50,765 $ 49,849
Income from continuing operations (a) $ 9,636 $ 8,117 $ 10,972 $ 10,838
Income from discontinued operations (a) $ 100 $ 114 $ 118 $ 102
Net Income $ 9,736 $ 8,231 $ 11,090 $ 10,940
Net income available to common unitholders $ 9,108 $ 7,603 $ 11,090 $ 10,940
Net Income Per Common Unit
Basic $ 0.44 $ 0.36 $ 0.51 $ 0.50
Diluted $ 0.44 $ 0.36 $ 0.51 $ 0.50


~~(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 one property sold in 2008 as described in Note 5.

~~16.~~

14. COMMITMENTS AND CONTINGENCIES

The ~~Operating Partnership’s~~Company’s current practice is to conduct environmental investigations in connection with property acquisitions. At this time, the ~~Operating Partnership~~Company 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’s~~Company’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, 2017, 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 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 motion for the preliminary approval of the 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 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 final approval by the court, a decision which is expected in 2018.

15. SUBSEQUENT EVENTS

On January 3, 2018, the Company declared a quarterly dividend of $1.00 per common share. The dividend was paid on January 26, 2018 to shareholders of record on January 16, 2018. The total dividend paid amounted to $46.5 million.

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

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

~~None.~~

Item 9A.

Controls and Procedures

~~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 ~~our~~the 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 ~~our~~the Parent Company’s management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, ~~our~~the Parent Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that ~~our~~the Parent Company’s disclosure controls and procedures were effective at December 31, ~~2008.~~2017. There have not been changes in the ~~Operating Partnership’s~~Parent Company’s internal controls or in other factors that could significantly affect these controls during the quarter ended December 31, ~~2008.~~

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, ~~2008. Internal~~2017. 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. ~~Our~~The 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 Partnership~~Parent Company are being made only in accordance with authorizations of management and directors of the ~~Operating Partnership;~~Parent Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the ~~Operating Partnership’s~~Parent 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 ~~our~~the Parent Company’s internal control over financial reporting as of December 31, ~~2008~~2017 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 ~~our~~the Parent Company’s internal control over financial reporting was effective as of December 31, ~~2008~~2017 based on the criteria in Internal Control-Integrated Framework issued by COSO.

The effectiveness of the ~~Operating Partnership’s~~Parent Company’s internal control over financial reporting as of December 31, ~~2008~~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/ Robert J. Attea~~	~~/s/~~S/ David L. Rogers	/S/ Andrew J. Gregoire
Chief Executive Officer	Chief Financial Officer

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’s~~Life Storage, Inc.’s internal control over financial reporting as of December 31, ~~2008,~~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’s~~In 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’s~~Parent 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 Partnership~~Life Storage LP (the Operating Partnership) maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2008,~~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 Limited~~the Operating Partnership as of December 31, ~~2008~~2017 and ~~2007, and~~2016, 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, ~~2008 of Sovran Acquisition Limited Partnership~~2017, and the related notes and schedule and our report dated February ~~25, 2009~~27, 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.

Definition and Limitations of Internal Control Over Financial Reporting

/s/ Ernst & Young LLP

Buffalo, New York

February ~~25, 2009~~27, 2018

Item 9B.

Other Information

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 21, 2009,~~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 Partnership~~Company has adopted a code of ethics that applies to all of its directors, officers, and employees. The ~~Operating Partnership~~Company 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’s~~2018 Proxy Statement ~~for the Annual Meeting of Shareholders of the Company to be held on May 21, 2009.~~

and is 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, 2008, the Company beneficially owns 22,016,348 Units which constitute 98.1% 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 21, 2009.~~

~~RECENT SALES OF UNREGISTERED SECURITIES~~

~~During 2008, 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, 2008, in connection with the Sovran Self Storage, Inc. 2005 Award~~

Certain Relationships and ~~Option Plan, the Operating Partnership issued 16,500 Units to the Company.~~Related Transactions, and Director Independence

	-		On January 22, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $2,550,829 to the Operating Partnership in exchange for 72,540 Units.

	-		On February 22, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $411,761 to the Operating Partnership in exchange for 11,036 Units.

	-		~~On February 26, 2008, in connection with the Sovran Self Storage, Inc. 2005 Award and Option Plan, the Operating Partnership issued 8,932 Units to the Company.~~

	-		~~On February 26, 2008, in connection with the Deferred Compensation Plan for Directors of Sovran Self Storage, Inc., the Operating Partnership issued 6,141 Units to the Company.~~

	-		~~On March 19, 2008, the Operating Partnership redeemed 200 Units from a partner for $7,788.~~

	-		~~On March 20, 2008, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 1,000 Units to the Company for $27,220.~~

	-		On March 24, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $357,504 to the Operating Partnership in exchange for 9,120 Units.

	-		On April 23, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $2,094,124 to the Operating Partnership in exchange for 48,975 Units.

	-		~~On May 21, 2008, in connection with the Company’s director’s compensation plan, the Operating Partnership issued 1,820 Units to the Company.~~

	-		On May 22, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $429,729 to the Operating Partnership in exchange for 9,878 Units.

	-		~~On June 6, 2008, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 200 Units to the Company for $6,929.~~

	-		~~On January 17, 2008, in connection with the Sovran Self Storage, Inc. 2005 Award and Option Plan, the Operating Partnership issued 18,461 Units to the Company.~~

	-		On June 23, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $405,838 to the Operating Partnership in exchange for 9,538 Units.

	-		~~On July 10, 2008, the Operating Partnership redeemed 375 Units from a partner for $15,300.~~

	-		On July 22, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $2,327,769 to the Operating Partnership in exchange for 60,471 Units.

	-		~~On August 14, 2008, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 300 Units to the Company for $10,394.~~

	-		On August 22, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $415,634 to the Operating Partnership in exchange for 10,850 Units.

	-		~~On September 8, 2008, in connection with the Sovran Self Storage, Inc. 1995 Award and Option Plan, the Operating Partnership issued 1,100 Units to the Company for $27,674.~~

	-		On September 22, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $393,416 to the Operating Partnership in exchange for 9,775 Units.

	-		~~On September 29, 2008, the Operating Partnership redeemed 2,200 Units from a partner for $91,330.~~

	-		On October 22, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $524,304 to the Operating Partnership in exchange for 15,603 Units.

	-		On November 24, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $397,052 to the Operating Partnership in exchange for 15,858 Units.

	-		On December 22, 2008, in connection with the Sovran Self Storage, Inc. Dividend Reinvestment and Stock Purchase Plan, the Company transferred $367,019 to the Operating Partnership in exchange for 11,664 Units.

~~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’s~~2018 Proxy Statement ~~for the Annual Meeting of Shareholders to be held on May 21, 2009.~~

~~Item 14. Principal Accountant Fees~~ and ~~Services~~is 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’s~~2018 Proxy Statement ~~for the Annual Meeting of Shareholders to be held on May 21, 2009.~~and is incorporated herein by reference.

~~Part IV~~

~~Item 15. Exhibits, Financial Statement Schedules~~

Part IV

Item 15.

~~(a)~~

Exhibits, Financial Statement Schedules

(a)

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

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

(i)

Consolidated Balance Sheets as of December 31, ~~2008~~2017 and ~~2007.~~2016;


	(ii)		Consolidated Statements of Operations for Years Ended December 31, ~~2008, 2007,~~2017, 2016 and ~~2006.~~2015;


	(iii)		Consolidated Statements of ~~Partners’ Capital~~Comprehensive Income for Years Ended December 31, ~~2008, 2007,~~2017, 2016 and ~~2006.~~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, ~~2008, 2007,~~2017, 2016 and ~~2006.~~2015; and


	~~(v)~~ (vi)		Notes to Consolidated Financial Statements.

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

(i)

Consolidated Balance Sheets as of 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 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, ~~2008~~2017 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*		Amended and Restated Articles of Incorporation of the Parent Company.
~~3.1~~
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 Limited~~the 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 Limited~~the Operating Partnership dated July 30, 1999 and July 3, ~~2002.~~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).
~~10.1*+~~
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 4.1 to the 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 ~~Registrant~~Parent Company, the Operating Partnership, and Robert J. ~~Attea.~~Attea (incorporated by reference to Exhibit 10.3 to the Parent Company’s Annual Report on Form 10-K filed February 27, 2009).

~~10.2*+~~ 10.4+		Amendment to Employment Agreement between the ~~Registrant~~Parent Company, the Operating Partnership and ~~Kenneth F. Myszka.~~Robert J. Attea (incorporated by reference to Exhibit 10.1 to the Parent Company’s Current Report on Form 8-K filed January 21, 2015).

~~10.3*+~~ 10.5+		Amendment to Employment Agreement between the ~~Registrant~~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).

10.7+		Amendment to Employment Agreement between the Parent Company, the Operating Partnership, and Kenneth F. Myszka (incorporated by reference to Exhibit 10.2 to the 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.~~Rogers (incorporated by reference to Exhibit 10.5 to the Parent Company’s Annual Report on Form 10-K filed February 27, 2009).

~~10.4~~ 10.10+		Amendment to Employment Agreement between the Parent Company, the Operating Partnership and David L. Rogers (incorporated by reference to Exhibit 10.3 to the 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, 2017).

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’s~~the Parent Company’s Current Report on Form 8-K filed July 20, 2006).
10.16
~~10.5~~		~~Promissory Note between Locke Sovran II, LLC and PNC Bank, National Association~~ Amended Indemnification Agreements with Executive Officers (incorporated by reference to Exhibit ~~10.22~~10.36 to ~~Registrant’s~~the Parent Company’s Current Report on Form ~~10-K~~8-K filed ~~March 27, 2003)~~July 20, 2006).

~~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 therein~~a 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 in~~to 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 ~~Amendments~~First Amendment to ~~Certain Loan Agreements~~Credit 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’s~~Exhibit 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 Amendment~~Sixth 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, 2003~~as 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 of~~Exhibit 10.2 to the ~~Registrant’s~~Parent 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, LLC~~Purchase Agreement dated as of April 8, 2014 among the Parent Company, the Operating Partnership and ~~GMAC Commercial Mortgage Corporation~~the 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 in~~10.1 to the Parent Company’s ~~Annual~~Current Report on Form ~~10-K,~~8-K filed ~~March 1, 2007)~~April 9, 2014).

12.1* 10.22		~~Statement Re: Computation of Earnings~~ Amendment No. 2 to ~~Fixed Charges.~~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).
21.1*		~~Subsidiaries~~

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 July 16, 2012 between the Parent Company, the Operating Partnership and Stephen R. Rusmisel, a director of the Company (incorporated by reference to Exhibit ~~21 as filed in~~10.1 to the Parent Company’s ~~Annual~~Current Report on Form ~~10-K,~~8-K filed ~~March 1, 2007)~~July 17, 2012).

24.1* 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).

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 of Life Storage, Inc. and Life Storage LP

21.1*		Subsidiaries of the Company.

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 required to be filed as an exhibit to this Form 10-K.~~arrangement.

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.~~ By:	/s/ Andrew J. Gregoire
	~~Its:~~	~~General Partner~~

~~February 27, 2009~~	~~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/~~ /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~~Life Storage LP

/s/ Kenneth F. Myszka	President and Director of ~~Directors~~ Life Storage, Inc. and Life Storage	February 27, 2018
Kenneth F. Myszka	Holdings, Inc., general partner of Life Storage LP

/s/ David L. Rogers	Chief Executive Officer ~~and Director~~ (Principal Executive Officer) of Life	February 27, ~~2009~~2018

~~/s/ Kenneth F. Myszka~~ ~~Kenneth F. Myszka~~	~~President, Chief Operating Officer and Director~~	~~February 27, 2009~~

~~/s/~~ David L. Rogers ~~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 27, ~~2009~~2018
Andrew J. Gregoire	Officer) of Life Storage, Inc. and Life Storage Holdings, Inc., general partner of Life Storage LP
~~/s/ John Burns~~ ~~John Burns~~	~~Director~~	~~February 27, 2009~~

~~/s/ Michael A. Elia~~ ~~Michael A. Elia~~	~~Director~~	~~February 27, 2009~~

~~/s/ Anthony P. Gammie~~ ~~Anthony P. Gammie~~	~~Director~~	~~February 27, 2009~~

~~/s/~~ /s/ Charles E. Lannon	Director of Life Storage, Inc.	February 27, 2018
Charles E. Lannon

/s/ Stephen R. Rusmisel	Director of Life Storage, Inc.	February 27, ~~2009~~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

Carol Hansell

Life Storage, Inc.

~~Sovran Acquisition Limited Partnership~~
Schedule III
Combined Real Estate and Accumulated Depreciation
(in thousands)

December 31, ~~2008~~2017

			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 Life on
Subsequent 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
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 $ 528 $ 363 2,207 $ 2,570 $ 706 1980 6/26/1995 5 to 40 years
Boston-Metro II MA 680 1,616 361 680 1,977 2,657 699 1986 6/26/1995 5 to 40 years
E. Providence RI 345 1,268 650 345 1,918 2,263 573 1984 6/26/1995 5 to 40 years
Charleston l SC 416 1,516 2,029 416 3,545 3,961 768 1985 6/26/1995 5 to 40 years
Lakeland I FL 397 1,424 1,436 397 2,860 3,257 626 1985 6/26/1995 5 to 40 years
Charlotte NC 308 1,102 1,076 747 1,739 2,486 563 1986 6/26/1995 5 to 40 years
Tallahassee I FL 770 2,734 1,869 770 4,603 5,373 1,476 1973 6/26/1995 5 to 40 years
Youngstown OH 239 1,110 1,298 239 2,408 2,647 628 1980 6/26/1995 5 to 40 years
Cleveland-Metro II OH 701 1,659 768 701 2,427 3,128 764 1987 6/26/1995 5 to 40 years
Tallahassee II FL 204 734 903 198 1,643 1,841 508 1975 6/26/1995 5 to 40 years
Pt. St. Lucie FL 395 1,501 854 779 1,971 2,750 758 1985 6/26/1995 5 to 40 years
Deltona FL 483 1,752 2,037 483 3,789 4,272 922 1984 6/26/1995 5 to 40 years
Middletown NY 224 808 796 224 1,604 1,828 526 1988 6/26/1995 5 to 40 years
Buffalo I NY 423 1,531 1,651 497 3,108 3,605 1,015 1981 6/26/1995 5 to 40 years
Rochester I NY 395 1,404 485 395 1,889 2,284 613 1981 6/26/1995 5 to 40 years
Salisbury MD 164 760 451 164 1,211 1,375 408 1979 6/26/1995 5 to 40 years
New Bedford MA 367 1,325 447 367 1,772 2,139 635 1982 6/26/1995 5 to 40 years
Fayetteville NC 853 3,057 749 853 3,806 4,659 1,194 1980 6/26/1995 5 to 40 years
Jacksonville I FL 152 728 961 687 1,154 1,841 416 1985 6/26/1995 5 to 40 years
Columbia I SC 268 1,248 447 268 1,695 1,963 613 1985 6/26/1995 5 to 40 years
Rochester II NY 230 847 442 234 1,285 1,519 421 1980 6/26/1995 5 to 40 years
Savannah l GA 463 1,684 3,791 816 5,122 5,938 1,072 1981 6/26/1995 5 to 40 years
Greensboro NC 444 1,613 514 444 2,127 2,571 770 1986 6/26/1995 5 to 40 years
Raleigh I NC 649 2,329 844 649 3,173 3,822 1,029 1985 6/26/1995 5 to 40 years
New Haven CT 387 1,402 912 387 2,314 2,701 657 1985 6/26/1995 5 to 40 years
Atlanta-Metro I GA 844 2,021 659 844 2,680 3,524 904 1988 6/26/1995 5 to 40 years
Atlanta-Metro II GA 302 1,103 349 303 1,451 1,754 541 1988 6/26/1995 5 to 40 years
Buffalo II NY 315 745 1,638 517 2,181 2,698 530 1984 6/26/1995 5 to 40 years
Raleigh II NC 321 1,150 654 321 1,804 2,125 548 1985 6/26/1995 5 to 40 years
Columbia II SC 361 1,331 594 374 1,912 2,286 655 1987 6/26/1995 5 to 40 years
Columbia III SC 189 719 1,079 189 1,798 1,987 506 1989 6/26/1995 5 to 40 years
Columbia IV SC 488 1,188 508 488 1,696 2,184 590 1986 6/26/1995 5 to 40 years
Atlanta-Metro III GA 430 1,579 1,884 602 3,291 3,893 753 1988 6/26/1995 5 to 40 years
Orlando I FL 513 1,930 446 513 2,376 2,889 864 1988 6/26/1995 5 to 40 years

Life Storage, Inc.

Schedule III

Cost Capitalized Life on
Subsequent 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
Encum and and and Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed

Sharon PA 194 912 440 194 1,352 1,546 450 1975 6/26/1995 5 to 40 years
Ft. Lauderdale FL 1,503 3,619 770 1,503 4,389 5,892 1,229 1985 6/26/1995 5 to 40 years
West Palm l FL 398 1,035 265 398 1,300 1,698 515 1985 6/26/1995 5 to 40 years
Atlanta-Metro IV GA 423 1,015 364 424 1,378 1,802 515 1989 6/26/1995 5 to 40 years
Atlanta-Metro V GA 483 1,166 926 483 2,092 2,575 556 1988 6/26/1995 5 to 40 years
Atlanta-Metro VI GA 308 1,116 497 308 1,613 1,921 620 1986 6/26/1995 5 to 40 years
Atlanta-Metro VII GA 170 786 529 174 1,311 1,485 463 1981 6/26/1995 5 to 40 years
Atlanta-Metro VIII GA 413 999 615 413 1,614 2,027 612 1975 6/26/1995 5 to 40 years
Baltimore I MD 154 555 1,362 306 1,765 2,071 413 1984 6/26/1995 5 to 40 years
Baltimore II MD 479 1,742 2,783 479 4,525 5,004 870 1988 6/26/1995 5 to 40 years
Augusta I GA 357 1,296 824 357 2,120 2,477 667 1988 6/26/1995 5 to 40 years
Macon I GA 231 1,081 467 231 1,548 1,779 524 1989 6/26/1995 5 to 40 years
Melbourne I FL 883 2,104 1,570 883 3,674 4,557 1,151 1986 6/26/1995 5 to 40 years
Newport News VA 316 1,471 736 316 2,207 2,523 756 1988 6/26/1995 5 to 40 years
Pensacola I FL 632 2,962 1,091 651 4,034 4,685 1,422 1983 6/26/1995 5 to 40 years
Augusta II GA 315 1,139 768 315 1,907 2,222 590 1987 6/26/1995 5 to 40 years
Hartford-Metro I CT 715 1,695 1,038 715 2,733 3,448 798 1988 6/26/1995 5 to 40 years
Atlanta-Metro IX GA 304 1,118 2,443 619 3,246 3,865 732 1988 6/26/1995 5 to 40 years
Alexandria VA 1,375 3,220 1,975 1,376 5,194 6,570 1,445 1984 6/26/1995 5 to 40 years
Pensacola II FL 244 901 464 244 1,365 1,609 535 1986 6/26/1995 5 to 40 years
Melbourne II FL 834 2,066 1,124 1,591 2,433 4,024 924 1986 6/26/1995 5 to 40 years
Hartford-Metro II CT 234 861 1,881 612 2,364 2,976 568 1992 6/26/1995 5 to 40 years
Atlanta-Metro X GA 256 1,244 1,753 256 2,997 3,253 755 1988 6/26/1995 5 to 40 years
Norfolk I VA 313 1,462 795 313 2,257 2,570 755 1984 6/26/1995 5 to 40 years
Norfolk II VA 278 1,004 347 278 1,351 1,629 497 1989 6/26/1995 5 to 40 years
Birmingham I AL 307 1,415 1,550 384 2,888 3,272 701 1990 6/26/1995 5 to 40 years
Birmingham II AL 730 1,725 560 730 2,285 3,015 820 1990 6/26/1995 5 to 40 years
Montgomery l AL 863 2,041 624 863 2,665 3,528 931 1982 6/26/1995 5 to 40 years
Jacksonville II FL 326 1,515 415 326 1,930 2,256 679 1987 6/26/1995 5 to 40 years
Pensacola III FL 369 1,358 2,724 369 4,082 4,451 908 1986 6/26/1995 5 to 40 years
Pensacola IV FL 244 1,128 714 719 1,367 2,086 504 1990 6/26/1995 5 to 40 years
Pensacola V FL 226 1,046 531 226 1,577 1,803 564 1990 6/26/1995 5 to 40 years
Tampa I FL 1,088 2,597 951 1,088 3,548 4,636 1,249 1989 6/26/1995 5 to 40 years
Tampa II FL 526 1,958 742 526 2,700 3,226 952 1985 6/26/1995 5 to 40 years
Tampa III FL 672 2,439 577 672 3,016 3,688 1,034 1988 6/26/1995 5 to 40 years
Jackson I MS 343 1,580 2,204 796 3,331 4,127 725 1990 6/26/1995 5 to 40 years
Jackson II MS 209 964 590 209 1,554 1,763 581 1990 6/26/1995 5 to 40 years
Richmond VA 443 1,602 720 443 2,322 2,765 777 1987 8/25/1995 5 to 40 years
Orlando II FL 1,161 2,755 964 1,162 3,718 4,880 1,272 1986 9/29/1995 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

Life Storage, Inc.

Schedule III

Cost Capitalized Life on
Subsequent 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
Encum and and and Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed

Birmingham III AL 424 1,506 671 424 2,177 2,601 833 1970 1/16/1996 5 to 40 years
Macon II GA 431 1,567 723 431 2,290 2,721 720 1989/94 12/1/1995 5 to 40 years
Harrisburg I PA 360 1,641 596 360 2,237 2,597 745 1983 12/29/1995 5 to 40 years
Harrisburg II PA (1 ) 627 2,224 947 692 3,106 3,798 932 1985 12/29/1995 5 to 40 years
Syracuse I NY 470 1,712 1,291 472 3,001 3,473 829 1987 12/27/1995 5 to 40 years
Ft. Myers FL 205 912 305 206 1,216 1,422 530 1988 12/28/1995 5 to 40 years
Ft. Myers II FL 412 1,703 440 413 2,142 2,555 889 1991/94 12/28/1995 5 to 40 years
Newport News II VA 442 1,592 1,161 442 2,753 3,195 649 1988/93 1/5/1996 5 to 40 years
Montgomery II AL 353 1,299 269 353 1,568 1,921 588 1984 1/23/1996 5 to 40 years
Charleston II SC 237 858 624 232 1,487 1,719 482 1985 3/1/1996 5 to 40 years
Tampa IV FL 766 1,800 645 766 2,445 3,211 772 1985 3/28/1996 5 to 40 years
Arlington I TX 442 1,767 282 442 2,049 2,491 675 1987 3/29/1996 5 to 40 years
Arlington II TX 408 1,662 1,031 408 2,693 3,101 800 1986 3/29/1996 5 to 40 years
Ft. Worth TX 328 1,324 327 328 1,651 1,979 549 1986 3/29/1996 5 to 40 years
San Antonio I TX 436 1,759 1,115 436 2,874 3,310 852 1986 3/29/1996 5 to 40 years
San Antonio II TX 289 1,161 536 289 1,697 1,986 535 1986 3/29/1996 5 to 40 years
Syracuse II NY 481 1,559 2,364 671 3,733 4,404 904 1983 6/5/1996 5 to 40 years
Montgomery III AL 279 1,014 989 433 1,849 2,282 526 1988 5/21/1996 5 to 40 years
West Palm II FL 345 1,262 325 345 1,587 1,932 535 1986 5/29/1996 5 to 40 years
Ft. Myers III FL 229 884 299 229 1,183 1,412 379 1986 5/29/1996 5 to 40 years
Pittsburgh PA 545 1,940 1,326 545 3,266 3,811 795 1990 6/19/1996 5 to 40 years
Lakeland II FL 359 1,287 1,048 359 2,335 2,694 747 1988 6/26/1996 5 to 40 years
Springfield MA 251 917 2,263 297 3,134 3,431 787 1986 6/28/1996 5 to 40 years
Ft. Myers IV FL 344 1,254 267 310 1,555 1,865 522 1987 6/28/1996 �� 5 to 40 years
Cincinnati OH (2 ) 557 1,988 757 688 2,614 3,302 216 1988 7/23/1996 5 to 40 years
Dayton OH (2 ) 667 2,379 433 683 2,796 3,479 246 1988 7/23/1996 5 to 40 years
Baltimore III MD 777 2,770 432 777 3,202 3,979 985 1990 7/26/1996 5 to 40 years
Jacksonville III FL 568 2,028 929 568 2,957 3,525 963 1987 8/23/1996 5 to 40 years
Jacksonville IV FL 436 1,635 509 436 2,144 2,580 725 1985 8/26/1996 5 to 40 years
Pittsburgh II PA 627 2,257 1,395 631 3,648 4,279 1,116 1983 8/28/1996 5 to 40 years
Jacksonville V FL 535 2,033 300 538 2,330 2,868 842 1987/92 8/30/1996 5 to 40 years
Charlotte II NC 487 1,754 409 487 2,163 2,650 613 1995 9/16/1996 5 to 40 years
Charlotte III NC 315 1,131 337 315 1,468 1,783 441 1995 9/16/1996 5 to 40 years
Orlando III FL 314 1,113 919 314 2,032 2,346 633 1975 10/30/1996 5 to 40 years
Rochester III NY 704 2,496 1,208 707 3,701 4,408 927 1990 12/20/1996 5 to 40 years
Youngstown ll OH 600 2,142 2,040 693 4,089 4,782 819 1988 1/10/1997 5 to 40 years
Cleveland lll OH 751 2,676 1,772 751 4,448 5,199 1,166 1986 1/10/1997 5 to 40 years
Cleveland lV OH 725 2,586 1,350 725 3,936 4,661 1,089 1978 1/10/1997 5 to 40 years
Cleveland V OH (1 ) 637 2,918 1,602 701 4,456 5,157 1,412 1979 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

Life Storage, Inc.

Schedule III

Cost Capitalized Life on
Subsequent 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
Encum and and and Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed

Cleveland Vl OH 495 1,781 875 495 2,656 3,151 773 1979 1/10/1997 5 to 40 years
Cleveland Vll OH 761 2,714 1,272 761 3,986 4,747 1,152 1977 1/10/1997 5 to 40 years
Cleveland Vlll OH 418 1,921 1,573 418 3,494 3,912 1,002 1970 1/10/1997 5 to 40 years
Cleveland lX OH 606 2,164 1,347 606 3,511 4,117 819 1982 1/10/1997 5 to 40 years
Grand Rapids l MI (2 ) 455 1,631 948 624 2,410 3,034 211 1976 1/17/1997 5 to 40 years
Grand Rapids ll MI 219 790 833 219 1,623 1,842 480 1983 1/17/1997 5 to 40 years
Kalamazoo MI (2 ) 516 1,845 1,726 694 3,393 4,087 259 1978 1/17/1997 5 to 40 years
Lansing MI (2 ) 327 1,332 1,527 542 2,644 3,186 210 1987 1/17/1997 5 to 40 years
Holland MI 451 1,830 1,888 451 3,718 4,169 1,022 1978 1/17/1997 5 to 40 years
San Antonio lll TX (1 ) 474 1,686 417 504 2,073 2,577 585 1981 1/30/1997 5 to 40 years
Universal TX 346 1,236 297 346 1,533 1,879 472 1985 1/30/1997 5 to 40 years
San Antonio lV TX 432 1,560 1,650 432 3,210 3,642 825 1995 1/30/1997 5 to 40 years
Houston-Eastex TX 634 2,565 1,255 634 3,820 4,454 1,027 1993/95 3/26/1997 5 to 40 years
Houston-Nederland TX 566 2,279 343 566 2,622 3,188 762 1995 3/26/1997 5 to 40 years
Houston-College TX 293 1,357 563 293 1,920 2,213 518 1995 3/26/1997 5 to 40 years
Lynchburg-Lakeside VA 335 1,342 1,271 335 2,613 2,948 657 1982 3/31/1997 5 to 40 years
Lynchburg-Timberlake VA 328 1,315 962 328 2,277 2,605 648 1985 3/31/1997 5 to 40 years
Lynchburg-Amherst VA 155 710 323 152 1,036 1,188 335 1987 3/31/1997 5 to 40 years
Christiansburg VA 245 1,120 581 245 1,701 1,946 427 1985/90 3/31/1997 5 to 40 years
Chesapeake VA 260 1,043 1,180 260 2,223 2,483 550 1988/95 3/31/1997 5 to 40 years
Danville VA 326 1,488 223 326 1,711 2,037 502 1988 3/31/1997 5 to 40 years
Orlando-W 25th St FL 289 1,160 737 616 1,570 2,186 458 1984 3/31/1997 5 to 40 years
Delray l-Mini FL 491 1,756 630 491 2,386 2,877 762 1969 4/11/1997 5 to 40 years
Savannah ll GA 296 1,196 347 296 1,543 1,839 471 1988 5/8/1997 5 to 40 years
Delray ll-Safeway FL 921 3,282 466 921 3,748 4,669 1,155 1980 5/21/1997 5 to 40 years
Cleveland X-Avon OH 301 1,214 2,079 304 3,290 3,594 640 1989 6/4/1997 5 to 40 years
Dallas-Skillman TX 960 3,847 1,127 960 4,974 5,934 1,512 1975 6/30/1997 5 to 40 years
Dallas-Centennial TX 965 3,864 1,241 943 5,127 6,070 1,498 1977 6/30/1997 5 to 40 years
Dallas-Samuell TX (1 ) 570 2,285 786 611 3,030 3,641 912 1975 6/30/1997 5 to 40 years
Dallas-Hargrove TX 370 1,486 515 370 2,001 2,371 649 1975 6/30/1997 5 to 40 years
Houston-Antoine TX 515 2,074 562 515 2,636 3,151 797 1984 6/30/1997 5 to 40 years
Atlanta-Alpharetta GA 1,033 3,753 429 1,033 4,182 5,215 1,307 1994 7/24/1997 5 to 40 years
Atlanta-Marietta GA (1 ) 769 2,788 458 825 3,190 4,015 938 1996 7/24/1997 5 to 40 years
Atlanta-Doraville GA 735 3,429 306 735 3,735 4,470 1,116 1995 8/21/1997 5 to 40 years
GreensboroHilltop NC 268 1,097 377 268 1,474 1,742 405 1995 9/25/1997 5 to 40 years
GreensboroStgCch NC 89 376 1,528 89 1,904 1,993 399 1997 9/25/1997 5 to 40 years
Baton Rouge-Airline LA (1 ) 396 1,831 908 421 2,714 3,135 710 1982 10/9/1997 5 to 40 years
Baton Rouge-Airline2 LA 282 1,303 311 282 1,614 1,896 496 1985 11/21/1997 5 to 40 years
Harrisburg-Peiffers PA 635 2,550 533 637 3,081 3,718 833 1984 12/3/1997 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
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

Life Storage, Inc.

Schedule III

Cost Capitalized Life on
Subsequent 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
Encum and and and Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed

Chesapeake-Military VA 542 2,210 322 542 2,532 3,074 717 1996 2/5/1998 5 to 40 years
Chesapeake-Volvo VA 620 2,532 880 620 3,412 4,032 916 1995 2/5/1998 5 to 40 years
Virginia Beach-Shell VA 540 2,211 229 540 2,440 2,980 723 1991 2/5/1998 5 to 40 years
Virginia Beach-Central VA 864 3,994 730 864 4,724 5,588 1,331 1993/95 2/5/1998 5 to 40 years
Norfolk-Naval Base VA 1,243 5,019 729 1,243 5,748 6,991 1,604 1975 2/5/1998 5 to 40 years
Tampa-E.Hillsborough FL 709 3,235 740 709 3,975 4,684 1,215 1985 2/4/1998 5 to 40 years
Northbridge MA (2 ) 441 1,788 960 694 2,495 3,189 191 1988 2/9/1998 5 to 40 years
Harriman NY 843 3,394 469 843 3,863 4,706 1,111 1989/95 2/4/1998 5 to 40 years
Greensboro-High Point NC 397 1,834 551 397 2,385 2,782 654 1993 2/10/1998 5 to 40 years
Lynchburg-Timberlake VA 488 1,746 487 488 2,233 2,721 606 1990/96 2/18/1998 5 to 40 years
Titusville FL (2 ) 492 1,990 934 688 2,728 3,416 203 1986/90 2/25/1998 5 to 40 years
Salem MA 733 2,941 1,014 733 3,955 4,688 1,120 1979 3/3/1998 5 to 40 years
Chattanooga-Lee Hwy TN 384 1,371 534 384 1,905 2,289 549 1987 3/27/1998 5 to 40 years
Chattanooga-Hwy 58 TN 296 1,198 2,077 414 3,157 3,571 569 1985 3/27/1998 5 to 40 years
Ft. Oglethorpe GA 349 1,250 583 349 1,833 2,182 517 1989 3/27/1998 5 to 40 years
Birmingham-Walt AL 544 1,942 807 544 2,749 3,293 835 1984 3/27/1998 5 to 40 years
East Greenwich RI 702 2,821 1,069 702 3,890 4,592 1,023 1984/88 3/26/1998 5 to 40 years
Durham-Hillsborough NC 775 3,103 672 775 3,775 4,550 1,028 1988/91 4/9/1998 5 to 40 years
Durham-Cornwallis NC 940 3,763 712 940 4,475 5,415 1,203 1990/96 4/9/1998 5 to 40 years
Salem-Policy NH 742 2,977 464 742 3,441 4,183 891 1980 4/7/1998 5 to 40 years
Warren-Elm OH (1 ) 522 1,864 1,175 569 2,992 3,561 717 1986 4/22/1998 5 to 40 years
Warren-Youngstown OH 512 1,829 1,817 675 3,483 4,158 667 1986 4/22/1998 5 to 40 years
Indian Harbor Beach FL 662 2,654 -619 662 2,035 2,697 612 1985 6/2/1998 5 to 40 years
Jackson 3 - I55 MS 744 3,021 128 744 3,149 3,893 879 1995 5/13/1998 5 to 40 years
Katy-N.Fry TX 419 1,524 3,268 419 4,792 5,211 572 1994 5/20/1998 5 to 40 years
Hollywood-Sheridan FL 1,208 4,854 352 1,208 5,206 6,414 1,411 1988 7/1/1998 5 to 40 years
Pompano Beach-Atlantic FL 944 3,803 315 944 4,118 5,062 1,139 1985 7/1/1998 5 to 40 years
Pompano Beach-Sample FL 903 3,643 329 903 3,972 4,875 1,051 1988 7/1/1998 5 to 40 years
Boca Raton-18th St FL 1,503 6,059 705 1,503 6,764 8,267 1,850 1991 7/1/1998 5 to 40 years
Vero Beach FL 489 1,813 110 489 1,923 2,412 573 1997 6/12/1998 5 to 40 years
Humble TX 447 1,790 2,199 740 3,696 4,436 721 1986 6/16/1998 5 to 40 years
Houston-Old Katy TX (1 ) 659 2,680 372 698 3,013 3,711 734 1996 6/19/1998 5 to 40 years
Webster TX 635 2,302 129 635 2,431 3,066 660 1997 6/19/1998 5 to 40 years
Carrollton TX 548 1,988 283 548 2,271 2,819 606 1997 6/19/1998 5 to 40 years
Hollywood-N.21st FL 840 3,373 350 840 3,723 4,563 1,034 1987 8/3/1998 5 to 40 years
San Marcos TX 324 1,493 629 324 2,122 2,446 585 1994 6/30/1998 5 to 40 years
Austin-McNeil TX 492 1,995 317 510 2,294 2,804 665 1994 6/30/1998 5 to 40 years
Austin-FM TX 484 1,951 442 481 2,396 2,877 646 1996 6/30/1998 5 to 40 years
Jacksonville-Center NC 327 1,329 672 327 2,001 2,328 442 1995 8/6/1998 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

Life Storage, Inc.

Schedule III

(dollars in thousands)

Cost Capitalized Life on
Subsequent 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
Encum and and and Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed

Jacksonville-Gum Branch NC 508 1,815 1,272 508 3,087 3,595 663 1989 8/17/1998 5 to 40 years
Jacksonville-N.Marine NC 216 782 601 216 1,383 1,599 411 1985 9/24/1998 5 to 40 years
Euless TX 550 1,998 654 550 2,652 3,202 635 1996 9/29/1998 5 to 40 years
N. Richland Hills TX 670 2,407 1,362 670 3,769 4,439 801 1996 10/9/1998 5 to 40 years
Batavia OH 390 1,570 867 390 2,437 2,827 553 1988 11/19/1998 5 to 40 years
Jackson-N.West MS 460 1,642 462 460 2,104 2,564 642 1984 12/1/1998 5 to 40 years
Katy-Franz TX 507 2,058 1,595 507 3,653 4,160 634 1993 12/15/1998 5 to 40 years
W.Warwick RI 447 1,776 793 447 2,569 3,016 632 1986/94 2/2/1999 5 to 40 years
Lafayette-Pinhook 1 LA 556 1,951 926 556 2,877 3,433 877 1980 2/17/1999 5 to 40 years
Lafayette-Pinhook2 LA 708 2,860 267 708 3,127 3,835 807 1992/94 2/17/1999 5 to 40 years
Lafayette-Ambassador LA 314 1,095 627 314 1,722 2,036 572 1975 2/17/1999 5 to 40 years
Lafayette-Evangeline LA 188 652 1,414 188 2,066 2,254 558 1977 2/17/1999 5 to 40 years
Lafayette-Guilbeau LA 963 3,896 767 963 4,663 5,626 1,099 1994 2/17/1999 5 to 40 years
Gilbert-Elliot Rd AZ 651 2,600 1,097 772 3,576 4,348 767 1995 5/18/1999 5 to 40 years
Glendale-59th Ave AZ 565 2,596 539 565 3,135 3,700 755 1997 5/18/1999 5 to 40 years
Mesa-Baseline AZ 330 1,309 719 733 1,625 2,358 397 1986 5/18/1999 5 to 40 years
Mesa-E.Broadway AZ 339 1,346 583 339 1,929 2,268 433 1986 5/18/1999 5 to 40 years
Mesa-W.Broadway AZ 291 1,026 583 291 1,609 1,900 359 1976 5/18/1999 5 to 40 years
Mesa-Greenfield AZ 354 1,405 334 354 1,739 2,093 445 1986 5/18/1999 5 to 40 years
Phoenix-Camelback AZ 453 1,610 783 453 2,393 2,846 570 1984 5/18/1999 5 to 40 years
Phoenix-Bell AZ 872 3,476 828 872 4,304 5,176 1,069 1984 5/18/1999 5 to 40 years
Phoenix-35th Ave AZ 849 3,401 657 849 4,058 4,907 972 1996 5/21/1999 5 to 40 years
Westbrook ME 410 1,626 1,753 410 3,379 3,789 623 1988 8/2/1999 5 to 40 years
Cocoa FL 667 2,373 746 667 3,119 3,786 750 1982 9/29/1999 5 to 40 years
Cedar Hill TX 335 1,521 346 335 1,867 2,202 478 1985 11/9/1999 5 to 40 years
Monroe NY 276 1,312 1,153 276 2,465 2,741 439 1998 2/2/2000 5 to 40 years
N.Andover MA 633 2,573 753 633 3,326 3,959 649 1989 2/15/2000 5 to 40 years
Seabrook TX 633 2,617 315 633 2,932 3,565 683 1996 3/1/2000 5 to 40 years
Plantation FL 384 1,422 367 384 1,789 2,173 411 1994 5/2/2000 5 to 40 years
Birmingham-Bessemer AL 254 1,059 1,151 254 2,210 2,464 350 1998 11/15/2000 5 to 40 years
Brewster NY (2 ) 1,716 6,920 903 1,981 7,558 9,539 577 1991/97 12/27/2000 5 to 40 years
Austin-Lamar TX (2 ) 837 2,977 486 966 3,334 4,300 285 1996/99 2/22/2001 5 to 40 years
Houston-E.Main TX (2 ) 733 3,392 568 841 3,852 4,693 308 1993/97 3/2/2001 5 to 40 years
Ft.Myers-Abrams FL (2 ) 787 3,249 365 902 3,499 4,401 306 1997 3/13/2001 5 to 40 years
Dracut MA (1 ) 1,035 3,737 590 1,104 4,258 5,362 762 1986 12/1/2001 5 to 40 years
Methuen MA (1 ) 1,024 3,649 560 1,091 4,142 5,233 736 1984 12/1/2001 5 to 40 years
Columbia 5 SC (1 ) 883 3,139 1,204 942 4,284 5,226 703 1985 12/1/2001 5 to 40 years
Myrtle Beach SC (1 ) 552 1,970 841 589 2,774 3,363 503 1984 12/1/2001 5 to 40 years
Kingsland GA (1 ) 470 1,902 2,875 666 4,581 5,247 521 1989 12/1/2001 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

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

Cost Capitalized Life on
Subsequent 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
Encum and and and Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed

Saco ME (1 ) 534 1,914 278 570 2,156 2,726 388 1988 12/3/2001 5 to 40 years
Plymouth MA 1,004 4,584 2,261 1,004 6,845 7,849 868 1996 12/19/2001 5 to 40 years
Sandwich MA (1 ) 670 3,060 400 714 3,416 4,130 625 1984 12/19/2001 5 to 40 years
Syracuse NY (1 ) 294 1,203 372 327 1,542 1,869 312 1987 2/5/2002 5 to 40 years
Houston-Westward TX (1 ) 853 3,434 851 912 4,226 5,138 772 1976 2/13/2002 5 to 40 years
Houston-Boone TX (1 ) 250 1,020 484 268 1,486 1,754 273 1983 2/13/2002 5 to 40 years
Houston-Cook TX (1 ) 285 1,160 315 306 1,454 1,760 275 1986 2/13/2002 5 to 40 years
Houston-Harwin TX (1 ) 449 1,816 593 480 2,378 2,858 433 1981 2/13/2002 5 to 40 years
Houston-Hempstead TX (1 ) 545 2,200 935 583 3,097 3,680 523 1974/78 2/13/2002 5 to 40 years
Houston-Kuykendahl TX (1 ) 517 2,090 1,179 553 3,233 3,786 509 1979/83 2/13/2002 5 to 40 years
Houston-Hwy 249 TX (1 ) 299 1,216 1,053 320 2,248 2,568 357 1983 2/13/2002 5 to 40 years
Mesquite-Hwy 80 TX (1 ) 463 1,873 620 496 2,460 2,956 414 1985 2/13/2002 5 to 40 years
Mesquite-Franklin TX (1 ) 734 2,956 678 784 3,584 4,368 594 1984 2/13/2002 5 to 40 years
Dallas-Plantation TX (1 ) 394 1,595 283 421 1,851 2,272 335 1985 2/13/2002 5 to 40 years
San Antonio-Hunt TX (1 ) 381 1,545 666 411 2,181 2,592 355 1980 2/13/2002 5 to 40 years
Humble-5250 FM TX 919 3,696 341 919 4,037 4,956 658 1998/02 6/19/2002 5 to 40 years
Pasadena TX 612 2,468 231 612 2,699 3,311 439 1999 6/19/2002 5 to 40 years
League City-E.Main TX 689 3,159 267 689 3,426 4,115 563 1994/97 6/19/2002 5 to 40 years
Montgomery TX 817 3,286 2,040 1,119 5,024 6,143 602 1998 6/19/2002 5 to 40 years
Texas City TX 817 3,286 123 817 3,409 4,226 576 1999 6/19/2002 5 to 40 years
Houston-Hwy 6 TX 407 1,650 178 407 1,828 2,235 305 1997 6/19/2002 5 to 40 years
Lumberton TX 817 3,287 178 817 3,465 4,282 578 1996 6/19/2002 5 to 40 years
The Hamptons l NY 2,207 8,866 615 2,207 9,481 11,688 1,450 1989/95 12/16/2002 5 to 40 years
The Hamptons 2 NY 1,131 4,564 479 1,131 5,043 6,174 758 1998 12/16/2002 5 to 40 years
The Hamptons 3 NY 635 2,918 322 635 3,240 3,875 480 1997 12/16/2002 5 to 40 years
The Hamptons 4 NY 1,251 5,744 340 1,252 6,083 7,335 919 1994/98 12/16/2002 5 to 40 years
Duncanville TX 1,039 4,201 41 1,039 4,242 5,281 584 1995/99 8/26/2003 5 to 40 years
Dallas-Harry Hines TX 827 3,776 297 827 4,073 4,900 531 1998/01 10/1/2003 5 to 40 years
Stamford CT 2,713 11,013 298 2,713 11,311 14,024 1,408 1998 3/17/2004 5 to 40 years
Houston-Tomball TX 773 3,170 1,771 773 4,941 5,714 512 2000 5/19/2004 5 to 40 years
Houston-Conroe TX 1,195 4,877 106 1,195 4,983 6,178 598 2001 5/19/2004 5 to 40 years
Houston-Spring TX 1,103 4,550 249 1,103 4,799 5,902 585 2001 5/19/2004 5 to 40 years
Houston-Bissonnet TX 1,061 4,427 2,646 1,061 7,073 8,134 631 2003 5/19/2004 5 to 40 years
Houston-Alvin TX 388 1,640 849 388 2,489 2,877 227 2003 5/19/2004 5 to 40 years
Clearwater FL 1,720 6,986 74 1,720 7,060 8,780 837 2001 6/3/2004 5 to 40 years
Houston-Missouri City TX 1,167 4,744 456 1,566 4,801 6,367 563 1998 6/23/2004 5 to 40 years
Chattanooga-Hixson TN 1,365 5,569 761 1,365 6,330 7,695 757 1998/02 8/4/2004 5 to 40 years
Austin-Round Rock TX 2,047 5,857 665 2,051 6,518 8,569 727 2000 8/5/2004 5 to 40 years
East Falmouth MA 1,479 5,978 153 1,479 6,131 7,610 602 1998 2/23/2005 5 to 40 years

Cost Capitalized Life on
Subsequent 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
Encum and and and Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed

Cicero NY 527 2,121 499 527 2,620 3,147 270 1988/02 3/16/2005 5 to 40 years
Bay Shore NY 1,131 4,609 57 1,131 4,666 5,797 469 2003 3/15/2005 5 to 40 years
Springfield-Congress MA 612 2,501 93 612 2,594 3,206 260 1965/75 4/12/2005 5 to 40 years
Stamford-Hope CT 1,612 6,585 192 1,612 6,777 8,389 666 2002 4/14/2005 5 to 40 years
Houston-Jones TX 3,510 1,214 4,949 77 1,215 5,025 6,240 470 1997/99 6/6/2005 5 to 40 years
Montgomery-Richard AL 1,906 7,726 106 1,906 7,832 9,738 737 1997 6/1/2005 5 to 40 years
Oxford MA 470 1,902 1,577 470 3,479 3,949 191 2002 6/23/2005 5 to 40 years
Austin-290E TX 537 2,183 160 537 2,343 2,880 218 2003 7/12/2005 5 to 40 years
SanAntonio-Marbach TX 556 2,265 202 556 2,467 3,023 220 2003 7/12/2005 5 to 40 years
Austin-South 1st TX 754 3,065 149 754 3,214 3,968 293 2003 7/12/2005 5 to 40 years
Pinehurst TX 484 1,977 1,357 484 3,334 3,818 211 2002/04 7/12/2005 5 to 40 years
Marietta-Austell GA 811 3,397 428 811 3,825 4,636 343 2003 9/15/2005 5 to 40 years
Baton Rouge-Florida LA 719 2,927 1,935 719 4,862 5,581 280 1984/94 11/15/2005 5 to 40 years
Cypress TX 721 2,994 1,087 721 4,081 4,802 305 2003 1/13/2006 5 to 40 years
Texas City TX 867 3,499 94 867 3,593 4,460 280 2003 1/10/2006 5 to 40 years
San Marcos-Hwy 35S TX 628 2,532 449 982 2,627 3,609 205 2001 1/10/2006 5 to 40 years
Baytown TX 596 2,411 78 596 2,489 3,085 199 2002 1/10/2006 5 to 40 years
Webster NY 937 3,779 111 937 3,890 4,827 290 2002/06 2/1/2006 5 to 40 years
Houston-Jones Rd 2 TX 707 2,933 2,018 707 4,951 5,658 315 2000 3/9/2006 5 to 40 years
Cameron-Scott LA 1,000 411 1,621 131 411 1,752 2,163 147 1997 4/13/2006 5 to 40 years
Lafayette-Westgate LA 463 1,831 73 463 1,904 2,367 140 2001/04 4/13/2006 5 to 40 years
Broussard LA 601 2,406 1,231 601 3,637 4,238 216 2002 4/13/2006 5 to 40 years
Congress-Lafayette LA 1,098 542 1,319 2,084 542 3,403 3,945 134 1997/99 4/13/2006 5 to 40 years
Manchester NH 832 3,268 57 832 3,325 4,157 231 2000 4/26/2006 5 to 40 years
Nashua NH 617 2,422 373 617 2,795 3,412 175 1989 6/29/2006 5 to 40 years
Largo 2 FL 2,478 1,270 5,037 157 1,270 5,194 6,464 343 1998 6/22/2006 5 to 40 years
Pinellas Park FL 929 3,676 104 929 3,780 4,709 245 2000 6/22/2006 5 to 40 years
Tarpon Springs FL 2,301 696 2,739 96 696 2,835 3,531 184 1999 6/22/2006 5 to 40 years
New Orleans LA 4,196 1,220 4,805 75 1,220 4,880 6,100 320 2000 6/22/2006 5 to 40 years
St Louis-Meramec MO 4,841 1,113 4,359 176 1,113 4,535 5,648 293 1999 6/22/2006 5 to 40 years
St Louis-Charles Rock MO 766 3,040 79 766 3,119 3,885 200 1999 6/22/2006 5 to 40 years
St Louis-Shackelford MO 2,433 828 3,290 124 828 3,414 4,242 222 1999 6/22/2006 5 to 40 years
St Louis-W.Washington MO 3,873 734 2,867 533 734 3,400 4,134 223 1980/01 6/22/2006 5 to 40 years
St Louis-Howdershell MO 899 3,596 174 899 3,770 4,669 248 2000 6/22/2006 5 to 40 years
St Louis-Lemay Ferry MO 890 3,552 167 890 3,719 4,609 239 1999 6/22/2006 5 to 40 years
St Louis-Manchester MO 3,658 697 2,711 92 697 2,803 3,500 183 2000 6/22/2006 5 to 40 years
Arlington-Little Rd TX 2,020 1,256 4,946 145 1,256 5,091 6,347 329 1998/03 6/22/2006 5 to 40 years
Dallas-Goldmark TX 605 2,434 47 605 2,481 3,086 162 2004 6/22/2006 5 to 40 years
Dallas-Manana TX 607 2,428 107 607 2,535 3,142 165 2004 6/22/2006 5 to 40 years

Cost Capitalized Life on
Subsequent 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
Encum and and and Accum. Date of Date statement
Description ST brance Land Improvements Improvements Land Improvements Total Deprec. Construction Acquired is computed

Dallas-Manderville TX 1,073 4,276 54 1,073 4,330 5,403 284 2003 6/22/2006 5 to 40 years
Ft. Worth-Granbury TX 1,813 549 2,180 84 549 2,264 2,813 149 1998 6/22/2006 5 to 40 years
Ft. Worth-Grapevine TX 2,150 644 2,542 49 644 2,591 3,235 169 1999 6/22/2006 5 to 40 years
San Antonio-Blanco TX 963 3,836 50 963 3,886 4,849 255 2004 6/22/2006 5 to 40 years
San Antonio-Broadway TX 773 3,060 99 773 3,159 3,932 208 2000 6/22/2006 5 to 40 years
San Antonio-Huebner TX 2,254 1,175 4,624 98 1,175 4,722 5,897 300 1998 6/22/2006 5 to 40 years
Chattanooga-Lee Hwy II TN 619 2,471 52 619 2,523 3,142 161 2002 8/7/2006 5 to 40 years
Lafayette-Evangeline LA 699 2,784 1,862 699 4,646 5,345 186 1995/99 8/1/2006 5 to 40 years
Montgomery-E.S.Blvd AL 1,158 4,639 234 1,158 4,873 6,031 296 1996/97 9/28/2006 5 to 40 years
Auburn-Pepperell Pkwy AL 590 2,361 122 590 2,483 3,073 146 1998 9/28/2006 5 to 40 years
Auburn-Gatewood Dr AL 694 2,758 67 694 2,825 3,519 163 2002/03 9/28/2006 5 to 40 years
Columbus-Williams Rd GA 736 2,905 118 736 3,023 3,759 180 2002/04/06 9/28/2006 5 to 40 years
Columbus-Miller Rd GA 975 3,854 85 975 3,939 4,914 229 1995 9/28/2006 5 to 40 years
Columbus-Armour Rd GA 0 3,680 64 0 3,744 3,744 224 2004/05 9/28/2006 5 to 40 years
Columbus-Amber Dr GA 439 1,745 58 439 1,803 2,242 106 1998 9/28/2006 5 to 40 years
Concord NH 813 3,213 1,912 813 5,125 5,938 203 2000 10/31/2006 5 to 40 years
Buffalo-Lagner NY 532 2,119 210 532 2,329 2,861 102 1993/07 3/30/2007 5 to 40 years
Buffalo-Transit NY 437 1,794 67 437 1,861 2,298 89 1998 3/30/2007 5 to 40 years
Buffalo-Lake NY 638 2,531 241 638 2,772 3,410 136 1997 3/30/2007 5 to 40 years
Buffalo-Union NY 348 1,344 89 348 1,433 1,781 67 1998 3/30/2007 5 to 40 years
Buffalo-Niagara Falls NY 323 1,331 48 323 1,379 1,702 66 1998 3/30/2007 5 to 40 years
Buffalo-Youngs NY 315 2,185 84 316 2,268 2,584 84 1999/00 3/30/2007 5 to 40 years
Buffalo-Sheridan NY 961 3,827 85 961 3,912 4,873 177 1999 3/30/2007 5 to 40 years
Buffalo-Transit NY 375 1,498 217 375 1,715 2,090 86 1990/95 3/30/2007 5 to 40 years
Rochester-Phillips NY 1,003 4,002 58 1,003 4,060 5,063 183 1999 3/30/2007 5 to 40 years
Greenville MS 1,100 4,386 96 1,100 4,482 5,582 239 1994 1/11/2007 5 to 40 years
Port Arthur TX 929 3,647 119 930 3,765 4,695 178 2002/04 3/8/2007 5 to 40 years
Beaumont TX 1,537 6,018 195 1,537 6,213 7,750 294 2003/06 3/8/2007 5 to 40 years
Huntsville AL 1,607 6,338 110 1,607 6,448 8,055 262 1989/06 6/1/2007 5 to 40 years
Huntsville AL 1,016 4,013 101 1,017 4,113 5,130 168 1993/07 6/1/2007 5 to 40 years
Gulfport MS 1,423 5,624 18 1,423 5,642 7,065 228 1998/05 6/1/2007 5 to 40 years
Huntsville AL 1,206 4,775 49 1,206 4,824 6,030 196 1998/06 6/1/2007 5 to 40 years
Mobile AL 1,216 4,819 106 1,216 4,925 6,141 200 2000/07 6/1/2007 5 to 40 years
Gulfport MS 1,345 5,325 22 1,345 5,347 6,692 217 2002/04 6/1/2007 5 to 40 years
Huntsville AL 1,164 4,624 47 1,164 4,671 5,835 190 2002/06 6/1/2007 5 to 40 years
Foley AL 1,346 5,474 71 1,347 5,544 6,891 230 2003/06 6/1/2007 5 to 40 years
Pensacola FL 1,029 4,180 86 1,029 4,266 5,295 182 2003/06 6/1/2007 5 to 40 years
Auburn AL 686 2,732 74 686 2,806 3,492 117 2003 6/1/2007 5 to 40 years
Gulfport MS 1,811 7,152 23 1,811 7,175 8,986 289 2004/06 6/1/2007 5 to 40 years


~~(1)~~		~~These properties are encumbered through one mortgage loan with an outstanding balance of $42.6 million at December 31, 2008.~~

~~(2)~~		~~These properties are encumbered through one mortgage loan with an outstanding balance of $29.0 million at December 31, 2008.~~

December 31, 2008 December 31, 2007 December 31, 2006
Cost:
Balance at beginning of period $ 1,322,708 $ 1,136,052 $ 886,191
Additions during period:
Acquisitions through foreclosure $ — $ — $ —
Other acquisitions 18,454 136,653 212,957
Improvements, etc. 48,232 52,427 37,003

66,686 189,080 249,960

Deductions during period:
Cost of real estate sold (193 ) (193 ) (2,424 ) (2,424 ) (99 ) (99 )

Balance at close of period $ 1,389,201 $ 1,322,708 $ 1,136,052

Accumulated Depreciation:
Balance at beginning of period $ 183,679 $ 154,449 $ 129,340
Additions during period:
Depreciation expense $ 33,100 $ 30,011 $ 25,163

33,100 30,011 25,163

Deductions during period:
Accumulated depreciation of real estate sold (135 ) (135 ) (781 ) (781 ) (54 ) (54 )

Balance at close of period $ 216,644 $ 183,679 $ 154,449

Maryland (Life Storage, Inc.) Delaware (Life Storage LP)		16-1194043 (Life Storage, Inc.) 16-1481551 (Life Storage LP)
~~Delaware~~		~~16-1481551~~

(State of incorporation or organization)		(I.R.S. Employer Identification No.)


	Title of Securities	Exchanges on which Registered
Common Stock, $.01 Par Value	~~Not Applicable~~	~~Not Applicable~~	New York Stock Exchange

							Life Storage, Inc.:
Large accelerated filerþ	☒	Accelerated filero	☐	~~Non-accelerated filer~~o		~~Smaller reporting company~~o
Non-accelerated filer		~~(Do~~ ☐ (Do not check if a ~~smaller~~small reporting company)		Smaller reporting company	☐
Emerging growth company	☐
Life Storage LP:
Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a small reporting company)	Smaller reporting company	☐
Emerging growth company	☐

Life Storage, Inc.		Yes ☒ No ☐
Life Storage LP		Yes ☒ No ☐

Life Storage, Inc.		Yes ☐ No ☒
Life Storage LP		Yes ☐ No ☒


Part I	5
Item 1. Business	3 5
Item 1A. Risk Factors	8 10
Item 1B. Unresolved Staff Comments	12 15
Item 2. Properties	13 16
Item 3. Legal Proceedings	14 17
Item 4. ~~Submission of Matters to a Vote of Security Holders~~Mine Safety Disclosures	14 17

Part II	18
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14 18
Item 6. Selected Financial Data	16 20
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17 23
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	29 33
Item 8. Financial Statements and Supplementary Data	30 33
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	49 66
Item ~~9a.~~9A. Controls and Procedures	49 66
Item 9B. Other Information	70

Part III	70
Item 10. Directors, Executive Officers and Corporate Governance	51 70
Item 11. Executive Compensation	51 70
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	51 70
Item 13. Certain Relationships and Related Transactions, and Director Independence	53 70
Item 14. Principal Accountant Fees and Services	53 70

Part IV	71
Item 15. Exhibits, Financial Statement Schedules	53 71
Item 16. Form 10-K Summary	76
~~SIGNATURES~~		56
~~EX-3.2~~SIGNATURES	77
~~EX-10.1~~
~~EX-10.2~~ EX-3.1
~~EX-10.3~~ EX-10.19
~~EX-12.1~~ EX-10.24
~~EX-21.1~~ EX-10.25
~~EX-31.1~~ EX-10.27
~~EX-31.2~~ 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

	-		~~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 provides~~new 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;

	-		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-in their goods, and which also serve as moving billboards to help advertise our storage facilities.

	•		~~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 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;~~

	•		~~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.~~


	Sovran HHF
	Storage		Iskalo Office
(dollars in thousands)	Holdings LLC		Holdings, LLC
Balance Sheet Data:
Investment in storage facilities, net	$	170,176	$	—
Investment in office building		—		5,507
Other assets		3,912		568

Total Assets	$	174,088	$	6,075


Due to the Operating Partnership	$	336	$	—
Mortgages payable		79,937		7,169
Other liabilities		1,942		168

Total Liabilities		82,215		7,337

Unaffiliated partners’ equity (deficiency)		73,499		(718	)
Operating Partnership equity (deficiency)		18,374		(544	)

Total Liabilities and Partners’ Equity (deficiency)	$	174,088	$	6,075


Income Statement Data:
Total revenues	$	6,652	$	1,127
Total expenses		6,301		1,139

Net income (loss)	$	351	$	(12	)


	Expected Maturity Date Including Discount														Fair
(dollars in thousands)	2009		2010		2011		2012		2013		Thereafter		Total		Value
Line of credit — variable rate LIBOR + 1.375		—		—	$	14,000		—		—		—	$	14,000	$	14,000

Notes Payable:
Term note — variable rate LIBOR+1.625%		—		—		—	$	250,000		—		—	$	250,000	$	250,000
Term note — variable rate LIBOR+1.50%		—		—		—		—	$	20,000		—	$	20,000	$	20,000
Term note — fixed rate 6.26%		—		—		—		—	$	80,000		—	$	80,000	$	78,865
Term note — fixed rate 6.38%		—		—		—		—		—	$	150,000	$	150,000	$	147,899

Mortgage note — fixed rate 7.80%	$	587	$	630	$	27,816		—		—		—	$	29,033	$	30,031
Mortgage note — fixed rate 7.19%	$	1,128	$	1,211	$	1,301	$	38,963		—		—	$	42,603	$	44,205
Mortgage note — fixed rate 7.25%	$	141	$	149	$	3,220		—		—		—	$	3,510	$	3,478
Mortgage note — fixed rate 6.76%	$	23	$	25	$	27	$	29	$	896		—	$	1,000	$	1,018
Mortgage note — fixed rate 6.35%	$	26	$	28	$	30	$	31	$	34	$	949	$	1,098	$	1,100
Mortgage notes — fixed rate 5.55%	$	25,930		—		—		—		—		—	$	25,930	$	26,422
Mortgage notes — fixed rate 7.50%	$	208	$	222	$	5,657		—		—		—	$	6,087	$	6,188

Interest rate derivatives — liability		—		—		—		—		—		—		—	$	25,490


	December 31,
(dollars in thousands, except unit data)	2008			2007
Assets
Investment in storage facilities:
Land	$	240,525		$	236,349
Building, equipment, and construction in progress		1,148,676			1,086,359

		1,389,201			1,322,708
Less: accumulated depreciation		(216,644	)		(183,679	)

Investment in storage facilities, net		1,172,557			1,139,029
Cash and cash equivalents		4,486			4,010
Accounts receivable		2,971			2,794
Receivable from related parties		14			27
Receivable from unconsolidated joint venture		336			—
Investment in unconsolidated joint venture		20,111			—
Prepaid expenses		4,691			4,771
Other assets		7,460			7,574
Net assets of discontinued operations		—			6,383

Total Assets	$	1,212,626		$	1,164,588


Liabilities
Line of credit	$	14,000		$	100,000
Term notes		500,000			356,000
Accounts payable and accrued liabilities		23,710			23,486
Deferred revenue		5,659			5,602
Fair value of interest rate swap agreements		25,490			1,230
Accrued distributions		14,359			13,922
Mortgages payable		109,261			110,517

Total Liabilities		692,479			610,757

Minority interest — consolidated joint venture		13,082			16,783

Limited partners’ capital interest (419,952 units in 2008 and 422,727 units in 2007)		15,118			16,951

Partners’ Capital
General partner (219,567 units outstanding in 2008 and 2007)		3,650			3,823
Limited partner (21,796,781 and 21,457,019 units outstanding in 2008 and 2007, respectively)		513,459			517,642
Accumulated other comprehensive income		(25,162	)		(1,368	)

Total Partners’ Capital		491,947			520,097

Total Liabilities and Partners’ Capital	$	1,212,626		$	1,164,588

(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


										Accumulated
	Sovran			Sovran Self						Other			Total
	Holdings, Inc.			Storage Inc.			Preferred C			Comprehensive			Partners’			Limited Partners’
(Dollars in thousands)	General Partner			Limited Partner			Partners			Income (loss)			Capital			Capital Interest
Balance January 1, 2006	$	4,072		$	347,179		$	30,000		$	1,454		$	382,705		$	22,512

Proceeds from issuance of Partnership Units		—			147,278			—			—			147,278			170
Redemption of Partnership Units		—			(1,830	)		—			—			(1,830	)		(958	)
Exercise of stock options		—			1,142			—			—			1,142			—
Earned portion of non-vested stock		—			876			—			—			876			—
Stock option expense		—			119			—			—			119			—
Deferred compensation		—			181			—			—			181			—
Net income		439			36,171			—			—			36,610			905
Increase in fair value of derivatives		—			—			—			674			674			—

Total comprehensive income		—			—			—			—			37,284			905
Distributions		(573	)		(47,651	)		—			—			(48,224	)		(1,085	)
Adjustment to reflect limited partners’ redeemable capital at balance sheet date		(33	)		(2,998	)		—			—			(3,031	)		3,031

Balance December 31, 2006		3,905			480,467			30,000			2,128			516,500			24,575

Proceeds from issuance of Partnership Units		—			12,759			—			—			12,759			—
Redemption of Partnership Units		—			(117	)		—			—			(117	)		(57	)
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			(167	)
Net income		409			38,805			—			—			39,214			783
Change in fair value of derivatives		—			—			—			(3,496	)		(3,496	)		—

Total comprehensive income		—			—			—			—			35,718			783
Distributions		(563	)		(53,479	)		—			—			(54,042	)		(1,064	)
Adjustment to reflect limited partners’ redeemable capital at balance sheet date		72			7,047			—			—			7,119			(7,119	)

Balance December 31, 2007		3,823			517,642			—			(1,368	)		520,097			16,951

Proceeds from issuance of Partnership Units		—			10,658			—			—			10,658			—
Redemption of Partnership Units		—			(69	)		—			—			(69	)		(45	)
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			721
Change in fair value of derivatives		—			—			—			(23,794	)		(23,794	)		—

Total comprehensive income		—			—			—			—			13,605			721
Distributions		(562	)		(55,128	)		—			—			(55,690	)		(1,070	)
Adjustment to reflect limited partners’ redeemable capital at balance sheet date		14			1,425			—			—			1,439			(1,439	)

Balance December 31, 2008	$	3,650		$	513,459		$	—		$	(25,162	)	$	491,947		$	15,118


	Weighted Average			Range
Expected life (years)		6.53		4.50 - 7.00
Risk free interest rate		3.78	%	2.65 - 3.94%
Expected volatility		22.61	%	22.40% - 24.30%
Expected dividend yield		6.1	%	6.00% - 7.00%
Fair value	$	4.79		$3.21 - $5.10


(Amounts in thousands,	Year Ended December 31,
except per unit data)	2008		2007		2006
Numerator:
Net income from continuing operations available to common unitholders	$	37,326	$	38,307	$	34,556

Denominator:		22,184		21,381		18,393
Denominator for basic earnings per unit - weighted average units
Effect of Dilutive Securities:
Stock options and warrants and non-vested stock		21		49		70


Denominator for diluted earnings per unit - adjusted weighted average units and assumed conversion		22,205		21,430		18,463

Basic Earnings per Common Unit from continuing operations	$	1.68	$	1.79	$	1.87
Basic Earnings per Common Unit	$	1.72	$	1.81	$	1.90

Diluted Earnings per Common Unit from continuing operations	$	1.68	$	1.79	$	1.87
Diluted Earnings per Common Unit	$	1.72	$	1.81	$	1.90

	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


	Asset
	(Liability)			Level 1		Level 2			Level 3
Interest rate swaps		(25,490	)		—		(25,490	)		—


Intrinsic value of outstanding stock options at December 31, 2008	$	506,184
Intrinsic value of exercisable stock options at December 31, 2008	$	506,184
Intrinsic value of stock options exercised in 2008	$	37,691


	2008 Quarter Ended
	March 31		June 30		Sept. 30		Dec. 31
Operating revenue	$	49,619	$	50,120	$	52,497	$	50,767
Income from continuing operations (a)	$	9,045	$	10,033	$	9,711	$	8,537
Income from discontinued operations (a)	$	82	$	712	$	—	$	—
Net Income	$	9,127	$	10,745	$	9,711	$	8,537
Net income available to common unitholders	$	9,127	$	10,745	$	9,711	$	8,537
Net Income Per Common Unit
Basic	$	0.41	$	0.49	$	0.44	$	0.38
Diluted	$	0.41	$	0.48	$	0.44	$	0.38


	2007 Quarter Ended
	March 31		June 30		Sept. 30		Dec. 31
Operating revenue (a)	$	44,371	$	47,872	$	50,765	$	49,849
Income from continuing operations (a)	$	9,636	$	8,117	$	10,972	$	10,838
Income from discontinued operations (a)	$	100	$	114	$	118	$	102
Net Income	$	9,736	$	8,231	$	11,090	$	10,940
Net income available to common unitholders	$	9,108	$	7,603	$	11,090	$	10,940
Net Income Per Common Unit
Basic	$	0.44	$	0.36	$	0.51	$	0.50
Diluted	$	0.44	$	0.36	$	0.51	$	0.50


							Cost Capitalized													Life on
							Subsequent 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
		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	$	528	$	363		2,207	$	2,570	$	706	1980		6/26/1995	5 to 40 years
Boston-Metro II	MA			680		1,616		361		680		1,977		2,657		699	1986		6/26/1995	5 to 40 years
E. Providence	RI			345		1,268		650		345		1,918		2,263		573	1984		6/26/1995	5 to 40 years
Charleston l	SC			416		1,516		2,029		416		3,545		3,961		768	1985		6/26/1995	5 to 40 years
Lakeland I	FL			397		1,424		1,436		397		2,860		3,257		626	1985		6/26/1995	5 to 40 years
Charlotte	NC			308		1,102		1,076		747		1,739		2,486		563	1986		6/26/1995	5 to 40 years
Tallahassee I	FL			770		2,734		1,869		770		4,603		5,373		1,476	1973		6/26/1995	5 to 40 years
Youngstown	OH			239		1,110		1,298		239		2,408		2,647		628	1980		6/26/1995	5 to 40 years
Cleveland-Metro II	OH			701		1,659		768		701		2,427		3,128		764	1987		6/26/1995	5 to 40 years
Tallahassee II	FL			204		734		903		198		1,643		1,841		508	1975		6/26/1995	5 to 40 years
Pt. St. Lucie	FL			395		1,501		854		779		1,971		2,750		758	1985		6/26/1995	5 to 40 years
Deltona	FL			483		1,752		2,037		483		3,789		4,272		922	1984		6/26/1995	5 to 40 years
Middletown	NY			224		808		796		224		1,604		1,828		526	1988		6/26/1995	5 to 40 years
Buffalo I	NY			423		1,531		1,651		497		3,108		3,605		1,015	1981		6/26/1995	5 to 40 years
Rochester I	NY			395		1,404		485		395		1,889		2,284		613	1981		6/26/1995	5 to 40 years
Salisbury	MD			164		760		451		164		1,211		1,375		408	1979		6/26/1995	5 to 40 years
New Bedford	MA			367		1,325		447		367		1,772		2,139		635	1982		6/26/1995	5 to 40 years
Fayetteville	NC			853		3,057		749		853		3,806		4,659		1,194	1980		6/26/1995	5 to 40 years
Jacksonville I	FL			152		728		961		687		1,154		1,841		416	1985		6/26/1995	5 to 40 years
Columbia I	SC			268		1,248		447		268		1,695		1,963		613	1985		6/26/1995	5 to 40 years
Rochester II	NY			230		847		442		234		1,285		1,519		421	1980		6/26/1995	5 to 40 years
Savannah l	GA			463		1,684		3,791		816		5,122		5,938		1,072	1981		6/26/1995	5 to 40 years
Greensboro	NC			444		1,613		514		444		2,127		2,571		770	1986		6/26/1995	5 to 40 years
Raleigh I	NC			649		2,329		844		649		3,173		3,822		1,029	1985		6/26/1995	5 to 40 years
New Haven	CT			387		1,402		912		387		2,314		2,701		657	1985		6/26/1995	5 to 40 years
Atlanta-Metro I	GA			844		2,021		659		844		2,680		3,524		904	1988		6/26/1995	5 to 40 years
Atlanta-Metro II	GA			302		1,103		349		303		1,451		1,754		541	1988		6/26/1995	5 to 40 years
Buffalo II	NY			315		745		1,638		517		2,181		2,698		530	1984		6/26/1995	5 to 40 years
Raleigh II	NC			321		1,150		654		321		1,804		2,125		548	1985		6/26/1995	5 to 40 years
Columbia II	SC			361		1,331		594		374		1,912		2,286		655	1987		6/26/1995	5 to 40 years
Columbia III	SC			189		719		1,079		189		1,798		1,987		506	1989		6/26/1995	5 to 40 years
Columbia IV	SC			488		1,188		508		488		1,696		2,184		590	1986		6/26/1995	5 to 40 years
Atlanta-Metro III	GA			430		1,579		1,884		602		3,291		3,893		753	1988		6/26/1995	5 to 40 years
Orlando I	FL			513		1,930		446		513		2,376		2,889		864	1988		6/26/1995	5 to 40 years


	December 31, 2008						December 31, 2007						December 31, 2006
Cost:
Balance at beginning of period				$	1,322,708					$	1,136,052					$	886,191
Additions during period:
Acquisitions through foreclosure	$	—					$	—					$	—
Other acquisitions		18,454						136,653						212,957
Improvements, etc.		48,232						52,427						37,003

					66,686						189,080						249,960

Deductions during period:
Cost of real estate sold		(193	)		(193	)		(2,424	)		(2,424	)		(99	)		(99	)

Balance at close of period				$	1,389,201					$	1,322,708					$	1,136,052


Accumulated Depreciation:
Balance at beginning of period				$	183,679					$	154,449					$	129,340
Additions during period:
Depreciation expense	$	33,100					$	30,011					$	25,163

					33,100						30,011						25,163

Deductions during period:
Accumulated depreciation of real estate sold		(135	)		(135	)		(781	)		(781	)		(54	)		(54	)

Balance at close of period				$	216,644					$	183,679					$	154,449