UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,Washington, DC 20549

FORM 10-K

x
þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 20042005

OR

OR
¨o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from           to          

Commission File Number file number001-32324

U-STORE-IT TRUST

(Exact Name of Registrant as Specified in Its Charter)

Maryland20-1024732
(State of Incorporation)

(I.R.S. Employer

Identification No.)

6745 Engle Road  
Suite 300Maryland20-1024732
(State or Other Jurisdiction of
Incorporation or Organization)		(IRS Employer
Identification No.)
  
6745 Engle Road
Suite 300
Cleveland, Ohio 44130
(440) 234-0700
(Address of Principal Executive Offices) 44130-7993
(Registrant’s Telephone Number)Zip Code)

Registrant’s telephone number, including area code(440) 234-0700
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Name of each exchange on which registered
Common Shares, $0.01 par value per share

 New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  YESþ

NOo

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  YESoNOþ
Indicate by check mark whether the Registrantregistrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.YES þNO o¨

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

Indicate by check mark whether the Registrantregistrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” inRule 12b-2 of the Exchange Act.
Large Accelerated Filer o          Accelerated Filer þ          Non-Accelerated Filer o
Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act Rule 12b-2)Act).YESo¨NO þ

As of June 30, 2004,2005, the last business day of the Registrant’sregistrant’s most recently completed second quarter, there was nothe aggregate market value of common shares held by non-affiliates of the Registrant. The Registrant completed its initial public offering on October 27, 2004.

registrant was $548,074,482.

As of March 21, 2005,February 15, 2006, the number of common shares of the Registrantregistrant outstanding was 37,345,162.

57,010,162.

Documents incorporated by reference: Portions of the Proxy Statement for the 20052006 Annual Meeting of Shareholders of the Registrant to be filed subsequently with the SEC are incorporated by reference into Part III of this report.

TABLE OF CONTENTS

    Page
PART I
3
Item 1.
Business2

Item 1.1A.

 BusinessRisk Factors 411

Item 1B.
Unresolved Staff Comments24
Item 2.

 Properties 2425

Item 3.

 Legal Proceedings 3137

Item 4.

 Submission of Matters to a Vote of Security Holders 3137
PART II
Item 5.
PART II 32

Item 5.

Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 3237

Item 6.

 Selected Financial Data 3439

Item 7.

 Management’s Discussion and Analysis of Financial Condition and Results of Operations 3844

Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk 4858

Item 8.

 Financial Statements and Supplementary Data 4859

Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 48

Item 9A.

59Controls and Procedures48

Item 9B.

Other Information48
Item 9A.
PART III 49Controls and Procedures59
Item 9B.
Other Information59

PART III
Item 10.

 Directors and Executive Officers of the Registrant 4959

Item 11.

 Executive Compensation 4960

Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related ShareholdersShareholder Matters 4960

Item 13.

 Certain Relationships and Related Transactions 5060

Item 14.

 Principal Accountant Fees and Services 5060
PART IV
Item 15.
PART IV 50

Item 15.

Exhibits and Financial Statement Schedules 5060
EX-10.47 Schedule of 2006 Bonus Structure for Exec Officers
EX-10.48 Form of Deferred Share Agreement
EX-10.49 Deferred Share Agreement, Robert J. Amsdell
EX-10.50 Deferred Share Agreement, Steven G. Osgood
EX-10.51 Deferred Share Agreement, Todd C. Amsdell
EX-10.52 Deferred Share Agreement, Tedd D. Towsley
EX-21.1 List of Subsidiaries
EX-23.1 Consent of Independent Accounting Firm
EX-31.1 Section 302 CEO Certification
EX-31.2 Section 302 CFO Certification
EX-32.1 Section 906 Certifications


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PART I

Forward-Looking Statements

This Annual Report onForm 10-K, together with other statements and information publicly disseminated by U-Store-It Trust (“we,” “us,” “our” or the “Company”), contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.1934, as amended (the “Exchange Act”). Such statements are based on assumptions and expectations whichthat may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, future events and actual results, performance, transactions or achievements, financial and otherwise, may differ materially from the results, performance, transactions or achievements expressed or implied by the forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to:

national and local economic, business, real estate and other market conditions;

• national and local economic, business, real estate and other market conditions;
• the competitive environment in which we operate;
• the execution of our business plan;
• financing risks;
• increases in interest rates and operating costs;
• our ability to maintain our status as a real estate investment trust (“REIT”) for federal income tax purposes;
• acquisition and development risks;
• changes in real estate and zoning laws or regulations;
• risks related to natural disasters;
• potential environmental and other liabilities;
• other factors affecting the real estate industry generally or the self-storage industry in particular; and
• other risks identified in this Annual Report onForm 10-K and, from time to time, in other reports we file with the Securities and Exchange Commission (the “SEC”) or in other documents that we publicly disseminate.
the competitive environment in which we operate;

the execution of our business plan;

financing risks;

our ability to maintain our status as a real estate investment trust (“REIT”) for federal income tax purposes;

acquisition and development risks;

potential environmental and other liabilities;

other factors affecting the real estate industry generally or the self-storage industry in particular; and

other risks identified in this Annual Report on Form 10-K and, from time to time, in other reports we file with the Securities and Exchange Commission (the “SEC”) or in other documents that we publicly disseminate.

We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

otherwise except as may be required in securities laws.

ITEM 1.BUSINESS

Overview

We are a self-administered and self-managed real estate company focused on the ownership, operation, acquisition and development of self-storage facilities in the United States.

As of December 31, 2004,2005, we owned and managed 201339 self-storage facilities located in 2126 states and aggregating approximately 13.020.8 million rentable square feet. As of December 31, 2004,2005, we also managed 1413 additional facilities owned by Rising Tide Development, LLC (“Rising Tide Development”), a company owned and controlled by Robert J. Amsdell, our Chairman and Chief Executive Officer, and Barry L. Amsdell, one of our trustees. We also have the right to manage two additional facilities that may be acquired by Rising Tide Development from unaffiliated third parties. As of December 31, 2004,2005, our 201339 facilities were approximately 82.2%81.2% leased to a total of approximately 91,000144,000 tenants and no single customer accounted for more than 1% of our annual rent.


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Our self-storage facilities are designed to offer affordable, easily-accessible and secure storage space for our approximately 144,000 residential and commercial customers. Our customers rent storage units for their exclusive use, typically on amonth-to-month basis. Additionally, some of our facilities offer outside storage areas for vehicles and boats. Our facilities are specifically designed to accommodate both residential and commercial customers, with features such as security systems and wide aisles and load-bearing capabilities for large truck access. All of our facilities have anon-site manager during business hours, and 250, or approximately 74%, of our facilities have a manager who resides in an apartment at the facility. Our customers can access their storage units during business hours, and some of our facilities provide customers with24-hour access through computer controlled access systems.

Our goal is to provide customers with the highest standard of facilities and service in the industry. To that end, approximately 53% of our facilities include climate controlled units, compared to the national average of 24% as cited by the 2006 Self-Storage Almanac.

We were formed in July 2004 to succeed to the self-storage operations owned directly and indirectly by Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell, our Chief Operating Officer, and their affiliated entities and related family trusts (which entities and family trusts are referred to herein as the “Amsdell Entities”). We are organized as a REIT under Maryland real estate investment trust,law, and we believe that we qualify for taxation as a REIT for federal income tax purposes beginning with our short taxable year ended December 31, 2004. From inception until October 2004, we did not have any operations. We commenced operations onas a publicly-traded REIT in October 21, 2004 after completing the mergers of certain Amsdell Partners, Inc. and High Tide LLCEntities with and into us, followed by our initial public offering (“IPO”), and the consummation of various other formation transactions whichthat occurred concurrently with, or shortly after, completion of theour IPO.

We conduct all of our business through U-Store-It, L.P., our operating“operating partnership,” of which we serve as general partner, and its subsidiaries. As of December 31, 2004,2005, we held approximately 97%92% of the aggregate partnership interests in our operating partnership. Since its formation in 1996, our operating partnership has been engaged in virtually all aspects of the self-storage business, including the development, acquisition, ownership and operation of self-storage facilities.

Recent Developments2005 Transactions

Completion of IPOCapital Markets Activity. On
In October 27, 2004,2005, we completed our IPO,a secondary public offering, pursuant to which we sold an aggregate of 28,750,00019,665,000 common shares (including 3,750,000 common2,565,000 shares pursuant to the exercise of the underwriters’ over-allotment option) at an offering price of $16.00$20.35 per share, for gross proceeds of $460.0$400.2 million. As part of our formation transactions, we acquired generalThe offering resulted in net proceeds to the Company, after deducting underwriting discount and limited partner interests in our Operating Partnership from Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdellcommissions and certainexpenses of the Amsdell Entities in exchange for our common shares, and we also acquired U-Store-It Mini Warehouse Co., our management company, for cash. In addition, three additional facilities were contributed to our operating partnership by the Amsdell Entities in exchange for operating partnership units and the assumption of outstanding indebtedness on these facilities.

Revolving Credit Facility.On October 27, 2004, concurrently with the closing of our IPO, we and our operating partnership entered into a three-year, $150.0 million secured revolving credit facility with Lehman Brothers Inc. and Wachovia Capital Markets, LLC, as joint advisors, joint lead arrangers and joint bookrunners.

The facility is scheduled to mature on October 27, 2007, with the option for us to extend the maturity date to October 27, 2008. Borrowings under the facility bear interest at a variable rate based upon a base rate or a Eurodollar rate plus, in each case, a spread depending on our leverage ratio. The credit facility is secured by certain of our self-storage facilities and requires that we maintain a minimum “borrowing base” of properties. We intend to use this new credit facility principally to finance the future acquisition and development of self-storage facilities and for general working capital purposes.

Fixed Rate Mortgage Loans.Also on October 27, 2004, and concurrently with the closing of our IPO, three of our subsidiaries entered into three separate fixed rate mortgage loans with an aggregate principal amountoffering, of approximately $270.0 million ($90.0 million each). Affiliates of Lehman Brothers served as the lenders under these mortgage loans. The mortgage loans are secured by certain of our self-storage facilities, bear interest at 5.09%, 5.19%$378.7 million.

Acquisition, Disposition and 5.33%, and mature in November 2009, May 2010 and January 2011, respectively. These mortgage loans require us to establish reserves relating to the mortgaged facilities for real estate taxes, insurance and capital spending.Consolidation Activities

Post-IPO 2004 Acquisition Activities.

In 2004, concurrently with, or shortly after, the completion of our IPO,2005, we completed the acquisitionacquisitions of 46146 self-storage facilities alltotaling approximately 7.8 million rentable square feet. The aggregate cost of which were pendingthese acquisitions was approximately $547.9 million. We completed the disposition of four self-storage facilities totaling approximately 170,000 rentable square feet for approximately $6.2 million. Additionally, we consolidated eight self-storage facilities into four self-storage facilities (one consolidation related to two properties that we owned at December 31, 2004). As a result of total acquisitions, dispositions and consolidations, we had a net increase of 138 properties in 2005 (See Note 3 to the time of the IPO:

Consolidated and Combined Financial Statements). These activities are discussed in further detail below.
 •Metro Storage LLC. On October 27, 2004, we acquired the Metro Storage portfolio from Metro Storage LLC for a purchase price of $184.0 million. The portfolio consists of 42 self-storage facilities located in five states, Illinois, Indiana, Florida, Ohio and Wisconsin. These facilities contain an aggregate of approximately 2.6 million rentable square feet and were 77.9% occupied as of December 31, 2004. In addition to the $184.0 million purchase price, we anticipate an additional $2.2 million will be incurred for renovation and improvements to the acquired properties.

•Devon Facilities. On October 28, 2004, we acquired two self-storage facilities, one located in Bradenton, FL and one in West Palm Beach, FL, from Devon/Bradenton, L.P. and Devon/West Palm, L.P., respectively, for a total purchase price of $18.2 million. These facilities contain an aggregate of approximately 182,000 rentable square feet and were 92.5% occupied as of December 31, 2004.

•Self-Storage Zone Facility. On November 1, 2004, we acquired one self-storage facility, located in California, MD, from Bay Media Network Limited Partnership for a purchase price of approximately $5.7 million. This facility contains approximately 68,000 rentable square feet and was 91.1% occupied as of December 31, 2004.

•Federal Self-Storage Facility. On November 1, 2004, we acquired one self-storage facility, located in Dania Beach, FL, from Federal Self Storage for a purchase price of approximately $13.9 million. This facility contains approximately 264,000 rentable square feet and was 78.7% occupied as of December 31, 2004.

Quarterly Distribution.On November 16, 2004, our board of trustees declared a pro-rated quarterly distribution of $0.2009 per common share for the period commencing upon completion of our IPO on October 27, 2004 and ending December 31, 2004. The distribution was paid on January 24, 2005 to common shareholders of record on January 10, 2005. This initial pro-rated distribution was based on a distribution of $0.28 per share for a full quarter.

Subsequent 2005 Events.

•Consolidation of Vero Beach, FacilitiesFlorida Facilities.. As of  In January 1, 2005, we consolidated the operations of our two self-storage facilities located in Vero Beach, Florida facilities into one facility.

 •

Acquisition of Option Facility.On  In January 5, 2005, we exercised our option to purchasepurchased the San Bernardino VII, CACalifornia facility from Rising Tide Development (a related party) for the purchase price ofapproximately $7.3 million, consisting of $3.8 million in cash (which cash was used to pay off mortgage indebtedness secured by the

facility) and $3.5 million payable in units in our operating partnership. TheThis facility contains approximately 83,00084,000 rentable square feet and was 85.0% occupied as of December 31, 2004.

feet.


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 •Acquisition of Self-Storage Zone FacilityGaithersburg, MD Facility.. On  In January 14, 2005, we acquired one self-storage facility located in Gaithersburg, MD, from Airpark Storage LLCMaryland for a purchase priceconsideration of approximately $10.7 million, consisting of $4.3 million in cash and the assumption of $6.4 million of indebtedness. The purchase price was adjusted during the second quarter of 2005 to $11.8 million, primarily as a result of the fair market value adjustment for debt. This facility contains approximately 87,000 rentable square feet.

 •Acquisition of Ford Storage Facilities.Portfolio.  OnIn March 1, 2005, we acquired five self-storage facilities, located in central Connecticut, from Ford Storage for an aggregate purchase priceconsideration of approximately $15.5 million. These facilities contain an aggregate oftotal approximately 237,000258,000 rentable square feet.

 •Acquisition ofA-1 Self-Storage Facilities. Self Storage Portfolio.  OnIn March 15, 2005, we acquired five self-storage properties, located in Connecticut, fromA-1 Self Storage for an aggregate purchase priceconsideration of approximately $21.7 million. These facilities contain an aggregate oftotal approximately 193,000201,000 rentable square feet. Our plans are toWe now operate two of these facilities as one facility. In May 2005, we acquired an additional self-storage facility fromA-1 Self Storage for approximately $6.4 million in cash. This facility contains approximately 30,000 rentable square feet and is located in New York.

 •Acquisition of Option Facilities.  OnIn March 18, 2005, we exercised our option to purchasepurchased the Orlando II, FLFlorida and the Boynton Beach II, FLFlorida facilities from Rising Tide Development (a related party) for the purchase priceconsideration of approximately $11.8 million, consisting of $6.7$6.8 million in cash (whichand $5.0 million in units of our operating partnership. An adjustment to the purchase price was finalized during the second quarter of 2005, resulting in a revised purchase price of approximately $10.1 million, which consisted of $6.8 million in cash and $3.3 million in units of our operating partnership after a price reduction of $1.7 million in May 2005. These facilities total approximately 155,000 rentable square feet.
• Acquisition of Liberty Self-Stor Portfolio.  In April 2005, we acquired 18 self-storage facilities from Liberty Self-Stor Ltd., a subsidiary of Liberty Self-Stor, Inc., for consideration of approximately $34.0 million. These facilities total approximately 926,000 rentable square feet and are located in Ohio and New York. In June 2005, we sold one of these facilities, containing approximately 17,000 rentable square feet, for approximately $0.6 million. In addition, in November 2005 we sold three more of these facilities, containing approximately 184,000 rentable square feet, for approximately $5.6 million.
• Acquisition of Frisco I & II, TX and Ocoee, FL Facilities.  In April 2005, we acquired three self-storage facilities from two parties for consideration of approximately $14.9 million. The final purchase price was usedadjusted to pay off mortgage indebtedness secured by$15.2 million primarily as a result of the facilities)fair market value adjustment of debt. These facilities total approximately 199,000 rentable square feet and $5.1are located in Texas and Florida.
• Acquisition of Extra Closet Facilities.  In May 2005, we acquired two facilities from Extra Closet for consideration of approximately $6.8 million. These facilities total approximately 99,000 rentable square feet and are located in Illinois.
• Acquisition of Tempe, AZ Facility.  In July 2005, we acquired one self-storage facility, located in Tempe, Arizona, for consideration of approximately $2.9 million. This facility contains approximately 54,000 rentable square feet.
• Acquisition of Clifton, NJ Facility.  In July 2005, we acquired one self-storage facility, located in Clifton, New Jersey, for consideration of approximately $16.8 million. This facility contains approximately 106,000 rentable square feet.
• Acquisition of National Self Storage Portfolio.  In July 2005, we completed the acquisition of 71 self-storage facilities from various partnerships and other entities affiliated with National Self Storage and the Schomac Group, Inc. (“National Self Storage”) for an aggregate consideration of approximately $212.0 million. The final purchase price was adjusted to $214.5 million payable induring the third quarter of 2005 primarily as a result of the fair market value adjustment of debt. The final purchase price consisted of approximately $61.8 million of units in our operating partnership. The facilities contain an aggregatepartnership, the assumption of approximately 129,000 $83.0 million of outstanding debt, including the fair market value adjustment of debt, by our operating partnership, and approximately $69.7 million in cash. These facilities total approximately 3.7 million


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rentable square feet.feet and include self-storage facilities located in our existing markets in Southern California, Arizona and Tennessee and in new markets in Texas, Northern California, New Mexico, Colorado and Utah. We now operate two of these facilities as one facility.

 •Acquisition of Elizabeth, NJ and Hoboken, NJ Facilities.  In August 2005, we acquired two self-storage facilities, one located in Elizabeth, New Jersey and one in Hoboken, New Jersey, for consideration of approximately $8.2 million. These facilities total approximately 75,000 rentable square feet.
 • New Office LeaseAcquisition of Colorado Portfolio.. On March 29,  In September 2005, we acquired seven self-storage facilities located in Colorado for consideration of approximately $19.5 million. These facilities total approximately 322,000 rentable square feet. The purchase price was adjusted during the fourth quarter of 2005 to $19.6 million as a result of additional acquisition adjustments.
• Acquisition of Miami, FL Facilities.  In September 2005, we acquired two self-storage facilities located in Miami, Florida for consideration of approximately $17.8 million. These facilities total approximately 152,000 rentable square feet. We now operate these two facilities as one facility.
• Acquisition of Pensacola, FL Facility.  In September 2005, we acquired one self-storage facility located in Pensacola, Florida for consideration of approximately $7.9 million. This facility contains approximately 79,000 rentable square feet.
• Acquisition of Texas Portfolio.  In September 2005, we acquired four self-storage facilities located in Texas for consideration of approximately $15.6 million. These facilities total approximately 227,000 rentable square feet. The purchase price was adjusted during the fourth quarter of 2005 to $15.5 million, as a result of additional acquisition adjustments. In November 2005, we acquired an additional self-storage facility from this seller for approximately $5.5 million in cash. This facility contains approximately 76,000 rentable square feet and is located in San Antonio, Texas. We also have agreed to acquire from this seller an additional seven self-storage facilities, for additional consideration of approximately $40.7 million. As described below under “2006 Transactions — Acquisition Activities,” we acquired four of the seven facilities, for consideration of approximately $22.5 million, in March 2006, and we expect to acquire the remaining three facilities, for aggregate consideration of approximately $18.2 million, during the first half of 2006.
• Acquisition of Dallas, TX Portfolio.  In October 2005, we acquired six self-storage facilities located in Dallas, Texas for consideration of approximately $17.6 million, consisting of approximately $12.5 million in cash and the assumption of approximately $5.1 million of indebtedness. The final purchase price was adjusted during the fourth quarter of 2005 to $17.9 million primarily as a result of the fair market value adjustment of debt. The facilities total approximately 323,000 rentable square feet. We also have agreed to acquire from this seller an additional two self-storage facilities, for additional consideration of approximately $4.4 million and the assumption of $7.1 million of existing debt. As described below under “2006 Transactions — Acquisition Activities,” we acquired the two facilities, for consideration of approximately $11.5 million, in January 2006.
• Acquisition of Jacksonville, FL Facility.  In November 2005, we acquired one self-storage facility located in Jacksonville, Florida for consideration of approximately $7.2 million. This facility contains approximately 79,000 rentable square feet.
• Acquisition of California Portfolio.  In December 2005, we acquired six self-storage facilities located in California for consideration of approximately $57.0 million. The final purchase price was adjusted during the fourth quarter of 2005 to $57.2 million primarily as a result of the assumption of certain promissory notes. These facilities total approximately 448,000 rentable square feet.
• Acquisition of Fredericksburg, VA Facilities.  In December 2005, we acquired two self-storage facilities located in Fredericksburg, Virginia for consideration of approximately $13.3 million. The purchase price was adjusted during the fourth quarter of 2005 to $13.4 million as a result of additional acquisition adjustments. These facilities total approximately 131,000 rentable square feet.


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• Acquisition of Nashville, TN Portfolio.  In December 2005, we acquired three self-storage facilities located in Nashville, Tennessee for consideration of approximately $14.7 million. These facilities total approximately 269,000 rentable square feet. We also agreed to acquire from this seller an additional two self-storage facilities, for additional consideration of approximately $13.1 million. As described below under “2006 Transactions — Acquisition Activities,” we acquired the two facilities, for consideration of approximately $13.1 million, in January 2006.
Financing Activities
We entered into the following financings during the year ended December 31, 2005:
• Lehman Brothers Fixed Rate Mortgage Loan.  In July 2005, one of our subsidiaries entered into an office leasea fixed rate mortgage loan agreement with AmsdellLehman Brothers Bank, FSB in the principal amount of $80.0 million. The mortgage loan, which is secured by 24 of our self-storage facilities, bears interest at 5.13% and Amsdell, an entity ownedmatures in August 2012.
• LaSalle Bank Fixed Rate Mortgage Loan.  In August 2005, one of our subsidiaries entered into a fixed rate mortgage loan agreement with LaSalle Bank National Association in the principal amount of $80.0 million. The mortgage loan, which is secured by Robert J. Amsdell29 of our self-storage facilities, bears interest at 4.96% and Barry L. Amsdell,matures in September 2012.
• AEGON USA Fixed Rate Mortgage Loan.  In November 2005, one of our subsidiaries entered into a fixed rate mortgage loan with Transamerica Financial Life Insurance Company, a subsidiary of AEGON USA Realty Advisors, Inc., in the principal amount of $72.5 million. The mortgage loan, which is secured by 37 of our self-storage facilities, bears interest at 5.97% and matures in November 2015. We assumed the obligation to enter into this loan in connection with the National Self Storage acquisition.
• Repayment of Balance under Revolving Credit Facility.  We used a portion of the proceeds from our October 2005 public offering to pay down the outstanding balance under our $150.0 million secured revolving credit facility. The facility was scheduled to terminate on October 27, 2007, with the option for office spaceus to extend the termination date to October 27, 2008. Borrowings under the facility bear interest at a variable rate based upon the prime rate or LIBOR and in each case, a spread depending on our leverage ratio. The credit facility is secured by certain of our self-storage facilities and requires that we maintain a minimum “borrowing base” of properties. As of December 31, 2005, we had no outstanding balance under our revolving credit facility. As of December 31, 2005, we had approximately $131.8 million available under our revolving credit facility as a result of the then available borrowing base of properties under the facility.As described below under “2006 Transactions-Financing Activities,” we replaced our secured revolving credit facility with a $250.0 million unsecured revolving credit facility.
2006 Transactions
Acquisition Activities
• Acquisition of Nashville, TN Portfolio.  In January 2006, we acquired two self-storage facilities located in Nashville, Tennessee for consideration of approximately 18,000$13.1 million. These facilities total approximately 204,000 rentable square feet at The Parkview Building,and are part of five self-storage facilities located in Tennessee that we agreed to acquire pursuant to an agreement entered into in December 2005. As described above under “2005 Transactions — Acquisition, Disposition and Consolidation Activities,” we initially acquired three of these facilities, for aggregate consideration of approximately 40,000 square foot multi-tenant office building$14.7 million, in December 2005.
• Acquisition of Dallas, TX Portfolio.  In January 2006, we acquired two self-storage facilities located at 6745 Engle Road, plusin Dallas, Texas for consideration of approximately 4,000$11.5 million, consisting of approximately $4.4 million in cash and the assumption of approximately $7.1 million of indebtedness. These facilities total approximately 132,000 rentable square feet of an 18,000 square foot office building located at 6751 Engle Road, whichand are both part of Airport Executive Park, a 50-acre office and flex developmentportfolio of eight self-storage facilities located in Cleveland, Ohio. Airport Executive Park is owned by AmsdellDallas, Texas that we agreed to acquire pursuant to an agreement entered into in October 2005. As described above under “2005 Transactions — Acquisition, Disposition and Amsdell. The lease is effective asConsolidation


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Activities,” we initially acquired six of January 1,these facilities for aggregate consideration of approximately $17.9 million in October 2005.
• Acquisition of U-Stor Self Storage Portfolio.  In February 2006, we acquired three self-storage facilities located in Colorado for consideration of approximately $10.9 million. These facilities total approximately 173,000 rentable square feet. We also have agreed to acquire from this seller an additional self-storage facility, for additional consideration of approximately $3.5 million including the assumption of $2.1 million of indebtedness, during the first half of 2006.
• Acquisition of Sure Save Portfolio.  In February 2006, we acquired 24 self-storage facilities from Crownridge Storage Portfolio, LLC and Williams Storage Portfolio III, LLC for consideration of approximately $164.5 million. These facilities total approximately 1.8 million rentable square feet and are located in Arizona, California, Nevada, New Mexico and Texas.
• Acquisition of Texas Portfolio.  In March 2006, we acquired four self-storage facilities located in Texas for consideration of approximately $22.5 million. These facilities total approximately 273,000 rentable square feet and are part of a portfolio of 12 self-storage facilities located in Texas that we agreed to acquire pursuant to an agreement entered into in July 2005. As described above under “2005 Transactions — Acquisition, Disposition and Consolidation Activities,” we initially acquired four of these facilities, for aggregate consideration of $15.6 million, in September 2005 and hasone of these facilities for approximately $5.5 million, in November 2005. We expect to acquire the remaining three facilities, for aggregate consideration of approximately $18.2 million, during the first half of 2006. These three facilities total approximately 213,000 rentable square feet.
Financing Activities
• Term Loan Agreement.  In February 2006, we and our operating partnership entered into a ten-year60-day, unsecured $30 million term loan agreement with one five-year extension option exercisable by us.Wachovia Bank, National Association as the lender. The aggregate amountterm loan bears interest at a variable rate and bears interest at LIBOR plus 175 basis points. The loan proceeds were used to finance a portion of rent payable under this leasethe Sure Save Portfolio. The loan was paid in 2005 will be approximately $260,000.full from proceeds obtained upon entering into a new revolving credit facility in February 2006.
• Revolving Credit Facility.  In February 2006, we and our operating partnership entered into a new three-year $250.0 million unsecured revolving credit facility with Wachovia Bank, National Association, replacing our existing $150.0 million secured revolving facility. The independent trustees have determined thatterms of the new revolving credit facility allow us to increase the amount of rent payablethat may be borrowed up to $350.0 million at a later date, if necessary. The new facility requires that we satisfy certain financial coverage ratios and operating covenants, including a maximum leverage ratio and a minimum interest coverage ratio. Borrowings under the termsnew facility bear interest, at the Company’s option, at either an alternate base rate or a Eurodollar rate, in each case plus an applicable margin. The alternative base interest rate is a fluctuating rate equal to the higher of this leasethe prime rate or the sum of the federal funds effective rate plus 50 basis points. The applicable margin for the alternative base rate will vary from 1.15% to 1.60% depending on the Company’s leverage ratio. The Eurodollar rate is reasonable.a periodic fixed rate equal to LIBOR. The applicable margin for the Eurodollar rate will vary from 0.15% to 0.60% based on the Company’s leverage ratio. The new revolving credit facility is scheduled to terminate in February 2009.

Proposed Acquisitions.As of March 23, 2005, we had entered into definitive agreements to acquire 89 self-storage facilities, as discussed below, for a total purchase price of approximately $272.3 million.

The proposed acquisitions are comprised of the following unrelated transactions:

We have agreed to acquire 67 self-storage facilities from various partnerships and other entities affiliated with National Self Storage and The Schomac Group, Inc. for an aggregate purchase price of approximately $217.0 million. The facilities total approximately 3.6 million rentable square feet and are located in Arizona, California, Colorado, New Mexico, Tennessee, Texas and Utah. The transaction also includes the purchase of four office parks and one mobile home park. The purchase price includes the assumption of up to $118.0 million of indebtedness by our operating partnership upon closing and the issuance of approximately $63.0 million payable in Units in our operating partnership, with the balance to be paid in cash.

We have entered into a contract to acquire 18 self-storage facilities from Liberty Self-Stor Ltd., a subsidiary of Liberty Self-Stor, Inc., for an aggregate purchase price of $34.0 million. The facilities total approximately 863,000 rentable square feet and are located in Ohio and New York.

We have entered into an agreement to purchase one self-storage facility from A-1 Self Storage for $6.4 million. The facility totals approximately 48,000 rentable square feet and is located in New York.

We have also entered into two separate agreements to acquire three facilities from two parties for an aggregate purchase price of $14.9 million. The facilities total approximately 200,000 rentable square feet and are located in Texas (2 properties) and Florida (1 property).

We expect these acquisitions to close on or before June 30, 2005. The closings of the transactions are contingent upon the satisfaction of certain customary conditions. There are no assurances that the conditions will be met or that the transactions will be consummated.

Business Strategy

Our business strategy consists of several elements:
• Maximize cash flow from our facilities — We seek to maximize cash flow from our facilities by:
• Increasing rents — Our operating strategy focuses on achieving the highest sustainable rent levels at each of our facilities.
• Increasing occupancy levels — We focus on increasing occupancy levels at our newly developed, recently acquired or recently expanded facilities.


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Maximize cash flow from our facilities by increasing occupancy levels, increasing rents, controlling operating expenses and expanding and improving our facilities;

Acquire facilities within our targeted markets;

Utilize our development expertise in selective new developments;

Focus on expanding our commercial customer base; and

Continue to grow ancillary revenues.

• Controlling operating expenses — Our regional managers are focused on maximizing profitability at each of our facilities by controlling operating expenses.
• Expanding and improving our facilities — Where we believe we can achieve attractive returns on investment, we expand facilities that have reached near full occupancy or upgrade our facilities by adding features such as climate-controlled units and enhanced security systems.
• Acquire facilities within our targeted markets — We believe the self-storage industry will continue to provide us with opportunities for growth through acquisitions due to the highly fragmented composition of the industry, the lack of sophistication among many operators, the economies of scale available to a large self-storage operator and the difficulties smaller operators face in obtaining capital. We intend to acquire facilities primarily in areas that we consider to be growth markets, such as Arizona, California, Colorado, Florida, Georgia, Illinois, Texas and the Northeastern United States.
• Utilize our development expertise in selective new developments — We seek to use our development expertise and access to multiple financing sources to pursue new developments in areas where we have facilities and perceive there to be unmet demand.
• Focus on expanding our commercial customer base — We seek to focus on expanding the base of commercial customers that use our facilities for their storage and distribution needs. Towards this end, we develop and acquire our facilities with features specifically designed to accommodate commercial customers.
• Continue to grow ancillary revenues — We seek to enhance the cash flow from our facilities by increasing the sales of products and services, such as packing supplies and equipment rentals, that complement our customers’ use of our self-storage facilities. These revenues are included in the Company’s taxable REIT subsidiary.
Investment and Market Selection Process.Process

We intend to focus on targeted investments in acquisition and development of self-storage facilities. Our investment committee, which consists of certain of our executive officers and is led by Steven G. Osgood, our President and Chief Financial Officer, will overseeoversees our investment process. Our investment process involves five stages—stages — identification, initial due diligence, economic assessment, investment committee approval (and when required, board approval) and final due diligence, and documentation. Through our investment committee, we intend to focus on the following criteria:
• Targeted Markets — Our targeted markets include areas where we currently maintain management that can be extended to additional facilities, or where we believe that we can acquire a significant number of facilities efficiently and within a short period of time. We evaluate both the broader market and the immediate area, typically five miles around the facility, for their ability to support above-average demographic growth. We will seek to grow our presence primarily in areas that we consider to be growth markets, such as Arizona, California, Colorado, Florida, Georgia, Illinois, Texas and the Northeastern United States and to enter new markets should suitable opportunities arise.
• Quality of Facility — We focus on self-storage facilities that have good visibility and are located near retail centers, which typically provide high traffic corridors and are generally located near residential communities and commercial customers. In addition, we seek to acquire facilities with anon-site apartment for the manager, security cameras and gated access, accessibility for tractor trailers and good construction.
• Growth Potential — We target acquisitions that offer growth potential through increased operating efficiency and, in some cases, through additional leasing efforts, renovations or expansions. In addition to acquisitions of single facilities, we seek to invest in portfolio acquisitions, searching for situations where there is significant potential for increased operating efficiency and an ability to spread our fixed costs across a large base of facilities.


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Targeted Markets:Our targeted markets include areas where we currently maintain management that can be extended to additional facilities, or where we believe that we can acquire a significant number of facilities efficiently and within a short period of time. We evaluate both the broader market and the immediate area, typically five miles around the facility, for their ability to support above-average demographic growth. We will seek to grow our presence primarily in areas that we consider to be growth markets and to enter new markets should suitable opportunities arise.

Quality of Facility:We focus on self-storage facilities that have good visibility and are located near retail centers, which typically provide high traffic corridors and are generally located near residential communities and commercial customers. In addition, we seek to acquire facilities with an on-site apartment for the manager, security cameras and gated access, accessibility for tractor trailers and good construction.

Growth Potential:We will target acquisitions that offer growth potential through increased operating efficiency and, in some cases, through additional leasing efforts, renovations or expansions. In addition to acquisitions of single facilities, we will seek to invest in portfolio acquisitions, searching for situations where there is significant potential for increased operating efficiency and an ability to spread our fixed costs across a large base of facilities.

From the completion of our IPO through December 31, 2004,2005, we acquired 46192 facilities totaling approximately 3.110.9 million rentable square feet for an aggregate purchase priceconsideration of approximately $221.8$769.7 million. We believe that the self-storage industry will continue to provide us with opportunities for future growth through consolidation due to the highly fragmentedhighly-fragmented composition of the industry, the lack of skilledsophistication among many operators, the economies of scale available to a real estate company with a significant number of self-storage facilities, and the relative scarcity of capital available to thedifficulties smaller operators.operators face in obtaining capital. We intend to take advantage of these opportunities by utilizing our experience in identifying, evaluating and acquiring self-storage facilities. The experience of our

management team and our active history of actively acquiring self-storage facilities give us an advantage in identifying attractive potential acquisitions, as we are well-known within the self-storage brokerage community and are often approached directly by principals interested in selling their facilities. Furthermore, we believe that our ability to offer our operating partnership units as a form of acquisition consideration has helped us, and will continue to help us, pursue acquisitions from tax-sensitive private sellers through tax-deferred transactions.

Operating Segment

We have one reportable operating segment: we own, operate, develop, and acquire self-storage facilities. Our self-storage facilities are located in major metropolitan areas and have numerous tenants per facility. All our operations are within the United States and no single tenant represents 1% or more of our revenues. The facilities in Florida, California, Illinois and CaliforniaNew Jersey provided approximately 28.0%24%, 11.4%11%, 10% and 10.3%8%, respectively, of total revenues for the period October 21, 2004 throughyear ended December 31, 2004.

2005 (See Note 2 to the Consolidated and Combined Financial Statements.)

We experience minor seasonal fluctuations in the occupancy levels of our facilities, which are generally slightly higher during the summer months due to increased moving activity.
Financing Strategy

Although our organizational documents contain no limitation on the amount of debt we may incur, we maintain what we consider to be a conservative capital structure, characterized by the use of leverage in a manner that we believe is reasonable and prudent and that will enable us to have ample cash flow to cover interest expense.debt service. As of December 31, 2004,2005, our debt to total capitalization ratio, determined by dividing the bookcarrying value of our total indebtedness by the sum of (a) the market value of our outstanding common shares and operating partnership units other than held by the Company and (b) the bookcarrying value of our total indebtedness, was approximately 36.3%34%. We expect to finance additional investments in self-storage facilities through the most attractive available source of capital at the time of the transaction, in a manner consistent with maintaining a strong financial position and future financial flexibility. These capital sources may include borrowings under our revolving credit facility, selling common or preferred shares or debt securities through public offerings or private placements, incurring additional secured indebtedness, issuing units in our operating partnership in exchange for contributed property, issuing preferred units in our operating partnership to institutional partners and forming joint ventures. We also may consider selling less productive self-storage facilities from time to time in order to reallocate proceeds from these sales into more productive facilities.

Competition

The continued development of new self-storage facilities has intensified the competition among self-storage operators in many market areas in which we operate. Self-storage facilities compete based on a number of factors, including location, rental rates, security, suitability of the facility’s design to prospective customers’ needs and the manner in which the facility is operated and marketed. In particular, the number of competing self-storage facilities in a particular market could have a material effect on our occupancy levels, rental rates and on the overall operating performance of our facilities. We believe that the primary competition for potential customers of any of our self-storage facilities comes from other self-storage facilities within athree-mile radius of that facility. We believe we have positioned our facilities within their respective markets as high-quality operators that emphasize customer convenience, security and professionalism.


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Our key competitors include:include Public Storage, Storage USA, Shurgard Storage Centers, U-Haul International, Sovran Self Storage and Extra Space Storage Inc. These companies, some of which operate significantly more facilities than we do and have greater resources than we do, and other entities may generally be able to accept more risk than we determine is prudent, including risks with respect to the geographic proximity of facility investments and the payment of higher facility acquisition prices. This competition may generally reduce the number of suitable acquisition opportunities available to us, increase the price required to be able to consummate the acquisition of particular facilities and reduce the demand for self-storage space in certain areas where our facilities are located. Nevertheless, we believe that our experience in operating, acquiring, developing and obtaining financing for self-storage facilities, particularly our customer-oriented approach toward managing our facilities, should enable us to compete effectively.

Government Regulation

We are subject to federal, state and local environmental regulations that apply generally to the ownership of real property and the operation of self-storage facilities.

Under various federal, state and local laws, ordinances and regulations, an owner or operator of real property may become liable for the costs of removal or remediation of hazardous substances released on or in its property. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances. The presence of hazardous substances, or the failure to properly remediate such substances, when released, may adversely affect the property owner’s ability to sell the real estate or to borrow using real estate as collateral, and may cause the property owner to incur substantial remediation costs. In addition to claims for cleanup costs, the presence of hazardous substances on a property could result in a claim by a private party for personal injury or a claim by an adjacent property owner or user for property damage. We may also become liable for the costs of removal or remediation of hazardous substances stored at the facilities by a customer even though storage of hazardous substances would be in violation of the customer’s storage lease agreement with us.

In order to assess the potential for cleanup liability, we obtained an environmental assessment of each of our facilities from a qualified and reputable environmental consulting firm (and intend

Our practice is to conduct suchor obtain environmental assessments prior toin connection with the acquisition or development of additional facilities).facilities. Whenever the environmental assessment for one of our facilities indicatedindicates that thea facility wasis impacted by soil or groundwater contamination from prior owners/operators or other sources, we workedwill work with our environmental consultants and where appropriate, state governmental agencies, to ensure that the facility wasis either cleaned up, that no cleanup wasis necessary because the low level of contamination posedposes no significant risk to public health or the environment, or that the responsibility for cleanup restedrests with a third party. Therefore, we
We are not aware of any environmental cleanup liability that we believe will have a material adverse effect on us. We cannot assure you, however, that these environmental assessments and investigations have revealed or will reveal all potential environmental liabilities, that no prior owner created any material environmental condition not known to us or the independent consultant or that future events or changes in environmental laws will not result in the imposition of environmental liability on us.

We have not received notice from any governmental authority of any material noncompliance, claim or liability in connection with any of theour facilities, nor have we been notified of a claim for personal injury or property damage by a private party in connection with any of theour facilities in connection with environmental conditions.

We are not aware of any environmental condition with respect to any of theour facilities that could reasonably be expected to have a material adverse effect on our financial condition or results of operations, and we do not expect that the cost of compliance with environmental regulations will have a material adverse effect on our financial condition or results of operations. We cannot assure you, however, that this will continue to be the case.


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Insurance

We believe that each of our facilities is covered by adequate fire, flood and property insurance provided by reputable companies and with commercially reasonable deductibles and limits. We maintain comprehensive liability, all-risk property insurance coverage with respect to all of the facilities with policy specifications, limits and deductibles customarily carried for in our industry. We believe that all of our current title insurance policies adequately insure fee title to the facilities.

Offices

Our principal executive office is located at 6745 Engle Road, Suite 300, Cleveland, Ohio 44130. Our telephone number is(440) 234-0700.

We believe that our current facilities are adequate for our present and future operations.

Employees

As of December 31, 2004,2005, we employed approximately 560865 employees, of whom approximately 80130 were corporate executive and administrative personnel and approximately 480735 were management and administrative personnel. We believe that our relations with our employees are good. None of our employees are unionized.

Available Information

We file our annual report onForm 10-K, quarterly reports onForm 10-Q, current reports onForm 8-K, and all amendments to those reports to the Securities and Exchange Commission (the “SEC”). You may obtain copies of these documents by visiting the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549, by calling the SEC at1-800-SEC-0330 or by accessing the SEC’s website at http://www.sec.gov. Our internet website address iswww.u-store-it.comwww.u-store-it.com..  You can obtain on our website, free of charge, a copy of our annual report onForm 10-K, our quarterly reports onForm 10-Q, our current reports onForm 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file such reports or amendments with, or furnish them to, the SEC.SEC as well. Our internet website and the information contained therein or connected thereto are not intended to be incorporated by reference into this Annual Report onForm 10-K.

Also available on our website, free of charge, are copies of our Code of Business Conduct and Ethics, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Corporate Governance Guidelines, and the charters for each of the committees of our board of trustees—trustees — the Audit Committee, the Corporate Governance and Nominating Committee, and the Compensation Committee. Copies of our Code of Business Conduct and Ethics, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Corporate Governance Guidelines, and our committee charters are also available in print free of charge, upon request by any shareholder. You can obtain such copies in print by contacting Investor Relations by mail at our corporate office.

Risk FactorsITEM 1A.  RISK FACTORS

Overview
Investors should carefully consider, among other factors, the risks set forth below. We have separated the risks into three groups:

risks related to our operations;

• risks related to our operations;
• risks related to our organization and structure; and
• tax risks.
risks related to our organization and structure; and

tax risks.

These risks are not the only ones that we may face. Additional risks not presently known to us or that we currently consider immaterial may also impair our business operations and hinder our ability to make expected distributions to our shareholders.


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Risks Related to Our Operations

Our rental revenues are significantly influenced by the economies and other conditions of the markets in which we operate, particularly in Florida, California, Ohio, Illinois and California,Texas where we have high concentrations of self-storage facilities.

We are susceptible to adverse developments in the markets in which we operate, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors. Our facilities in Florida, California, Ohio, Illinois and CaliforniaTexas accounted for approximately 24.8%18%, 11.7%12%, 8%, 8% and 10.4%8%, respectively, of our total rentable square feet as of December 31, 2004.2005. As a result of this geographic concentration of our facilities, we are particularly susceptible to adverse market conditions in these particular areas. Any adverse economic or real estate developments in these markets, or in any of the other markets in which we operate, or any decrease in demand for self-storage space resulting from the local business climate could adversely affect our rental revenues, which could impair our ability to satisfy our debt service obligations and pay distributions to our shareholders.

Because we are primarily focused on the ownership, operation, acquisition and development of self-storage facilities, our rental revenues are significantly influenced by demand for self-storage space generally, and a decrease in such demand would likely have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio.

Because our portfolio of facilities consists primarily of self-storage facilities, we are subject to risks inherent in investments in a single industry. A decrease in the demand for self-storage space would likely have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio. Demand for self-storage space has been and could be adversely affected by weakness in the national, regional and local economies, changes in supply of, or demand for, similar or competing self-storage facilities in an area and the excess amount of self-storage space in a particular market. To the extent that any of these conditions occur, they are likely to affect market rents for self-storage space, which could cause a decrease in our rental revenue. Any such decrease could impair our ability to satisfy debt service obligations and make distributions to our shareholders.

We face significant competition in the self-storage industry, which may impede our ability to retain customers or re-let space when existing customers vacate, or impede our ability to make, or increase the cost of, future acquisitions or developments.

We compete with numerous developers, owners and operators in the self-storage industry, including other REITs, some of which own or may in the future own facilities similar to ours in the same markets in which our facilities are located, and some of which may have greater capital resources. In addition, due to the low cost of each individual self-storage facility, other developers, owners and operators have the capability to build additional facilities that may compete with our facilities.

If our competitors build new facilities that compete with our facilities or offer space at rental rates below current market rates or below the rental rates we currently charge our customers, we may lose potential customers and we may be pressured to discount our rental rates below those we currently charge in order to retain customers. As a result, our rental revenues may decrease, which could impair our ability to satisfy our debt service obligations and to pay distributions to our shareholders. In addition, increased competition for customers may require us to make capital improvements to facilities that we would not have otherwise made. Any unbudgeted capital improvements we undertake may reduce cash available for distributions to our shareholders.

Our rental revenues and operating costs, as well as the value of our self-storage facilities, are subject to risks associated with real estate assets and with the real estate industry.

Our ability to make expected distributions to our shareholders depends on our ability to generate substantial revenues from our facilities. Events and conditions generally applicable to owners and operators of


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real property that are beyond our control may decrease cash available for distribution and the value of our facilities. These events and conditions include:

changes in the national, regional and local economic climate;

• changes in the national, regional and local economic climate;
• hurricanes and other natural disasters that could damage our facilities, cause service interruptions and result in uninsured damages;
• local or regional oversupply, increased competition or reduction in demand for self-storage space;
• inability to collect rent from customers;
• inability to finance facility acquisitions, capital improvements and development on favorable terms;
• increased operating costs, including maintenance, insurance premiums and real estate taxes;
• costs of complying with changes in laws and governmental regulations, including those governing usage, zoning, the environment and taxes; and
• the relative illiquidity of real estate investments.
local or regional oversupply, increased competition or reduction in demand for self-storage space;

inability to collect rent from customers;

inability to finance facility acquisitions, capital improvements and development on favorable terms;

increased operating costs, including maintenance, insurance premiums and real estate taxes;

costs of complying with changes in laws and governmental regulations, including those governing usage, zoning, the environment and taxes; and

the relative illiquidity of real estate investments.

In addition, prolonged periods of economic slowdown or recession, rising interest rates or declining demand for self-storage, or the public perception that any of these events may occur, could result in a general decline in rental revenues, which could impair our ability to satisfy our debt service obligations and to make distributions to our shareholders.

If we are unable to promptly re-let units within our facilities or if the rates upon such re-letting are significantly lower than expected, our rental revenues would be adversely affected and our growth may be impeded.

Virtually all of our leases are on amonth-to-month basis. Delays in re-letting units as vacancies arise would reduce our revenues and could adversely affect our operating performance. In addition, lower than expected rental rates upon re-letting could adversely affect our rental revenues and impede our growth.

We may not be successful in identifying and completing suitable acquisitions or development projects that meet our criteria, which may impede our growth, and even if we are able to identify suitable projects, our future acquisitions and developments may not yield the returns we expect or may result in shareholder dilution.

Our business strategy involves expansion through acquisitions and development projects. These activities require us to identify suitable acquisition or development candidates or investment opportunities that meet our criteria and are compatible with our growth strategy. We may not be successful in identifying suitable self-storage facilities that meet our acquisition or development criteria or in completing acquisitions, developments or investments on satisfactory terms. Similarly, although we currently have the option to purchase 15 self-storage facilities, consisting of 1113 facilities owned by Rising Tide Development and fourtwo facilities which Rising Tide Development has the right to acquire from unaffiliated third parties, Rising Tide Development may not acquire oneeither or moreboth of the four option facilities it currently has under contract, which would reduce the number of facilities available to us pursuant to the option agreement. Failure to identify or complete acquisitions or developments or to purchase oneeither or moreboth of the four option facilities could slow our growth.

We also face significant competition for acquisitions and development opportunities. Some of our competitors have greater financial resources than we do and a greater ability to borrow funds to acquire facilities. These competitors may also be willingand/or able to accept more risk than we can prudently manage, including risks with respect to the geographic proximity of investments and the payment of higher facility acquisition prices. This competition for investments may reduce the number of suitable investment opportunities available to us, may increase acquisition costs and may reduce demand for self-storage space in certain areas where our facilities are located and, as a result, adversely affect our operating results.


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In addition, even if we are successful in identifying suitable acquisitions or development projects, newly acquired facilities may fail to perform as expected and our management may underestimate the costs associated with the integration of the acquired facilities. In addition, any developments we undertake in the future are subject to a number of risks, including, but not limited to, construction delays or cost overruns that may increase project costs, financing risks, the failure to meet anticipated occupancy or rent levels, failure to receive required zoning, occupancy, land use and other governmental permits and authorizations and changes in applicable zoning and land use laws. If any of these problems occur, development costs for a project will increase, and there may be significant costs incurred for projects that are not completed. In deciding whether to acquire or develop a particular facility, we make certain assumptions regarding the expected future performance of that facility. If our acquisition or development facilities fail to perform as expected or incur significant increases in projected costs, our rental revenues could be lower, and our operating expenses higher, than we expect. In addition, the issuance of equity securities for any acquisitions could be substantially dilutive to our shareholders.

We may not be able to adapt our management and operation systems to respond to the integration of additional facilities without disruption or expense.

Since

From the completion of our IPO in October 2004 through December 31, 2005, we have acquired 60 self-storage192 facilities, containing approximately 3.810.9 million rentable square feet for an aggregate cost of approximately $288.8$769.7 million as of December 31, 2005, and in 2006 we

currently have acquired or entered into agreements to acquire an additional 8948 self-storage facilities. In addition, we expect to acquire additional self-storage facilities in the future. We cannot assure you that we will be able to adapt our management, administrative, accounting and operational systems or hire and retain sufficient operational staff to integrate these facilities into our portfolio and manage any future acquisition or development of additional facilities without operating disruptions or unanticipated costs. As we acquire or develop additional facilities, we will be subject to risks associated with managing new facilities, including customer retention and mortgage default. In addition, acquisitions or developments may cause disruptions in our operations and divert management’s attention away fromday-to-day operations. Furthermore, our profitability may suffer because of acquisition-related costs or amortization costs for acquired goodwill and other intangible assets. Our failure to successfully integrate any future facilities into our portfolio could have an adverse effect on our operating costs and our ability to make distributions to our shareholders.

We depend on ouron-site personnel to maximize customer satisfaction at each of our facilities; any difficulties we encounter in hiring, training and retaining skilled field personnel may adversely affect our rental revenues.

As of December 31, 2004,2005, we had approximately 480735 field personnel involved in the management and operation of our facilities. The customer service, marketing skills and knowledge of local market demand and competitive dynamics of our facility managers are contributing factors to our ability to maximize our rental income and to achieve the highest sustainable rent levels at each of our facilities. If we are unable to successfully recruit, train and retain qualified field personnel, our rental revenues may be adversely affected, which could impair our ability to satisfy new debt obligations and make distributions to our shareholders.

We had approximately $380.5$669.3 million of indebtedness outstanding as of December 31, 2004,2005, and this level of indebtedness will result in significant debt service obligations, impede our ability to incur additional indebtedness to fund our growth and expose us to refinancing risk.

We had approximately $380.5$669.3 million of indebtedness outstanding indebtedness as of December 31, 2004.2005. We also intend to incur additional debt in connection with the future acquisition and development of facilities. We also may incur or increase our mortgage debt by obtaining loans secured by some or all of the real estate facilities we acquire or develop. In addition, we may borrow funds if necessary to satisfy the requirement that we distribute to shareholders at least 90% of our annual REIT taxable income, or otherwise as is necessary or advisable, to ensure that we maintain our qualification as a REIT for federal income tax purposes or otherwise avoid paying taxes that can be eliminated through distributions to our shareholders.


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Our substantial debt may harm our business and operating results by:

requiring us to use a substantial portion of our cash flow from operations to pay interest, which reduces the amount available for distributions;

• requiring us to use a substantial portion of our cash flow from operations to pay interest, which reduces the amount available for distributions;
• making us more vulnerable to economic and industry downturns and reducing our flexibility in responding to changing business and economic conditions; and
• limiting our ability to borrow more money for operating or capital needs or to finance acquisitions in the future.
making us more vulnerable to economic and industry downturns and reducing our flexibility in responding to changing business and economic conditions; and

limiting our ability to borrow more money for operating or capital needs or to finance acquisitions in the future.

In addition to the risks discussed above and those normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest, we also are subject to the risk that we will not be able to refinance the existing indebtedness on our facilities (which, in most cases, will not have been fully amortized at maturity) and that the terms of any refinancing we could obtain would not be as favorable as the terms of our existing indebtedness. In particular, as of December 31, 2004,2005, we had $106.1$104.2 million of indebtedness outstanding pursuant to two multi-facility mortgage loans with anticipated repayment dates in 2006. If we are not successful in refinancing debt when it becomes due, we may be forced to dispose of facilities on disadvantageous terms, which might adversely affect our ability to service other debt and to meet our other obligations.

Our mortgage indebtedness contains covenants that restrict our operating, acquisition and disposition activities.

Our mortgage indebtedness contains covenants, including limitations on our ability to incur secured and unsecured indebtedness, sell all or substantially all of our assets and engage in mergers and consolidations and various acquisitions. In addition, our mortgage indebtedness contains limitations on our ability to transfer or encumber the mortgaged facilities without lender consent. These provisions may restrict our ability to pursue business initiatives or acquisition transactions that may be in our best interests. They also may prevent us from selling facilities at times when, due to market conditions, it may be advantageous to do so. In addition, failure to meet any of the covenants could cause an event of default underand/or acceleration of some or all of our indebtedness, which would have an adverse effect on us.

Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a facility or group of facilities subject to mortgage debt.

Most of the facilities we own are pledged as collateral for mortgage debt. If a facility or group of facilities is mortgaged and we are unable to meet mortgage payments, the lender could foreclose on the facilitiesfacility or group of facilities, resulting in the loss of our investment. Any foreclosure on a mortgaged facility or group of facilities could adversely affect the overall value of our portfolio of self-storage facilities.

In the future, we

We could incurhave substantial variable rate debt, and therefore increases in interest rates maywould likely increase our debt service obligations.

As of December 31, 2004,2005, we did not have any variable rate debt outstanding. However, we intend to finance future acquisitions in part by borrowingsborrowing under our revolving credit facility, which bears interest at a variable rate. The interest expense on our variable rate indebtedness will increaseincreases when interest rates increase. Interest rates are currently low relative to historical levels and may increase significantly in the future. A significant increase in interest expense could adversely affect our results of operations. We currently do not expect to utilize hedging arrangements or derivative instruments in connection with our revolving credit facility.

Our organizational documents contain no limitation on the amount of debt we may incur. As a result, we may become highly leveraged in the future.

Our organizational documents contain no limitations on the amount of indebtedness that we or our operating partnership may incur. We could alter the balance between our total outstanding indebtedness and the value of our assets at any time. If we become more highly leveraged, then the resulting increase in debt service could adversely affect our ability to make payments on our outstanding indebtedness and to pay our anticipated distributionsand/or the distributions required to maintain our REIT status, and could harm our financial condition.


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We may not be able to sell facilities when appropriate or on favorable terms, which could significantly impede our ability to respond to economic or other market conditions or adverse changes in the performance of our facilities.

Real estate property investments generally cannot be sold quickly. Also, the tax laws applicable to REITs require that we hold our facilities for investment, rather than sale in the ordinary course of business, which may cause us to forgo or defer sales of facilities that otherwise would be in our best interest. Therefore, we may not be able to dispose of facilities promptly, or on favorable terms, in response to economic or other market conditions, which may adversely affect our financial position.

Potential losses may not be covered by insurance, which could result in the loss of our investment in a facility and the future cash flows from the facility.

We carry comprehensive liability, fire, extended coverage and rental loss insurance covering all of the facilities in our portfolio. We believe the policy specifications and insured limits are appropriate and adequate

given the relative risk of loss, the cost of the coverage and industry practice. We do not carry insurance for losses such as loss from riots, war or acts of God, and, in some cases, flooding, because such coverage is not available or is not available at commercially reasonable rates. Some of our policies, such as those covering losses due to terrorism, floods and earthquakes, are insured subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover losses. If we experience a loss at a facility that is uninsured or that exceeds policy limits, we could lose the capital invested in that facility as well as the anticipated future cash flows from that facility. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it impractical or undesirable to use insurance proceeds to replace a facility after it has been damaged or destroyed. In addition, if the damaged facilities are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these facilities were irreparably damaged.

Rising operating expenses could reduce our cash flow and funds available for future distributions.

Our facilities and any other facilities we acquire or develop in the future are and will be subject to operating risks common to real estate in general, any or all of which may negatively affect us. The facilities will be subject to increases in real estate and other tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses. If rents are being paid in an amount that is insufficient to cover operating expenses, then we could be required to expend funds for that facility’s operating expenses.

We could incur significant costs related to government regulation and environmental matters.

We are subject to federal, state and local environmental regulations that apply generally to the ownership of real property and the operation of self-storage facilities. If we fail to comply with those laws, we could be subject to significant fines or other governmental sanctions.

Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at a facility and may be held liable to a governmental entity or to third parties for property damage and for investigation and clean up costs incurred by such parties in connection with contamination. Such liability may be imposed whether or not the owner or operator knew of, or was responsible for, the presence of these hazardous or toxic substances. The cost of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner’s ability to sell or rent such facility or to borrow using such facility as collateral. In addition, in connection with the ownership, operation and management of real properties, we are potentially liable for property damage or injuries to persons and property.

In order

Our practice is to assess the potential for liabilities arising from the environmental condition of our facilities we obtainedconduct or obtain environmental assessments on allin connection with the acquisition or development of our existing facilitiesadditional facilities. We obtain or examine environmental assessments from qualified and reputable environmental consulting firms (and intend to conduct such assessments prior to the acquisition or development of additional facilities). TheseThe environmental assessments received to date have not revealed, nor


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are we aware of, any environmental liability that we believe will have a material adverse effect on us. However, we cannot assure you that any environmental assessments performed have identified or will identify all material environmental conditions, that any prior owner of any facility did not create a material environmental condition not known to us or that a material environmental condition does not otherwise exist with respect to any of our facilities.

We must comply with the Americans with Disabilities Act of 1990, which may require unanticipated expenditures.

Under the Americans with Disabilities Act of 1990 (the “ADA”), all places of public accommodation are required to meet federal requirements related to physical access and use by disabled persons. A number of other U.S. federal, state and local laws may also impose access and other similar requirements at our facilities. A failure to comply with the ADA or similar state or local requirements could result in the governmental imposition

of fines or the award of damages to private litigants affected by the noncompliance. Although we believe that our facilities comply in all material respects with these requirements (or would be eligible for applicable exemptions from material requirements because of adaptive assistance provided), a determination that one or more of our facilities is not in compliance with the ADA or similar state or local requirements would result in the incurrence of additional costs associated with bringing the facilities into compliance. If we are required to make substantial modifications to comply with the ADA or similar state or local requirements, we may be required to incur significant unanticipated expenditures.

We may become subject to litigation or threatened litigation which may divert management time and attention, require us to pay damages and expenses or restrict the operation of our business.

We may become subject to disputes with commercial parties with whom we maintain relationships or other parties with whom we do business. Any such dispute could result in litigation between us and the other parties. Whether or not any dispute actually proceeds to litigation, we may be required to devote significant management time and attention to its successful resolution (through litigation, settlement or otherwise), which would detract from our management’s ability to focus on our business. Any such resolution could involve the payment of damages or expenses by us, which may be significant. In addition, any such resolution could involve our agreement with terms that restrict the operation of our business.

One type of commercial dispute could involve our use of our brand name and other intellectual property (for example, logos, signage and other marks), for which we generally have common law rights but no federal trademark registration. There are other commercial parties, at both a local and national level, that may assert that our use of our brand names and other intellectual property conflict with their rights to use brand names and other intellectual property that they consider to be similar to ours. Any such commercial dispute and related resolution would involve all of the risks described above, including, in particular, our agreement to restrict the use of our brand name or other intellectual property.

If in the future we elect to make joint venture investments, we could be adversely affected by a lack of sole decision-making authority, reliance on joint venture partners’ financial condition and any disputes that might arise between us and our joint venture partners.

Although we currently have no joint venture investments, we may in the future co-invest with third parties through joint ventures. In any such joint venture, we may not be in a position to exercise sole decision-making authority regarding the facilities owned through joint ventures. Investments in joint ventures may, under certain circumstances, involve risks not present when a third party is not involved, including the possibility that joint venture partners might become bankrupt or fail to fund their share of required capital contributions. Joint venture partners may have business interests or goals that are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives. Such investments also have the potential risk of impasse on strategic decisions, such as a sale, because neither we nor the joint venture partner would have full control over the joint venture. Any disputes that may arise between us and our joint venture partners could result in litigation or arbitration that could increase our expenses and distract our officersand/or trustees from focusing their time and effort on our business. In


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addition, we might in certain circumstances be liable for the actions of our joint venture partners, and the activities of a joint venture could adversely affect our ability to qualify as a REIT, even though we do not control the joint venture.

Risks Related to Our Organization and Structure

Our organizational documents contain provisions that may have an anti-takeover effect, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our shares or otherwise benefit our shareholders.

Our declaration of trust and bylaws contain provisions that may have the effect of delaying, deferring or preventing a change in control of our company or the removal of existing management and, as a result, could prevent our shareholders from being paid a premium for their common shares over the then-prevailing market price. These provisions include limitations on the ownership of our common shares, advance notice requirements for shareholder proposals, our board of trustees’ power to reclassify shares and issue additional common shares or preferred shares and the absence of cumulative voting rights.

Our charter documents prohibitprohibits any person (other than members of the Amsdell family and related family trusts and entities which, as a group, may own up to 29% of our common shares) from beneficially owning more than 5% of our common shares (or up to 9.8% in the case of certain designated investment entities, as defined in our declaration of trust).

There are ownership limits and restrictions on transferability in our declaration of trust. In order for us to qualify as a REIT, no more than 50% of the value of our outstanding shares may be owned, actually or constructively, by five or fewer individuals at any time during the last half of each taxable year. To make sure that we will not fail to satisfy this requirement and for anti-takeover reasons, subject to some exceptions, our declaration of trust generally prohibits any shareholder (other than an excepted holder or certain designated investment entities, as defined in our declaration of trust) from owning (actually, constructively or by attribution), more than 5% of the value or number of our outstanding common shares. Our declaration of trust provides an excepted holder limit that allows members of the Amsdell family, certain trusts established for the benefit of members of the Amsdell family and related entities to own up to 29% of our common shares, subject to limitations contained in our declaration of trust. Entities that are defined as designated investment entities in our declaration of trust, which generally includes pension funds, mutual funds, and certain investment management companies, are permitted to own up to 9.8% of our outstanding common shares, so long as each beneficial owner of the shares owned by such designated investment entity would satisfy the 5% ownership limit if those beneficial owners owned directly their proportionate share of the common shares owned by the designated investment entity. Our board of trustees may, but is not required to, except a shareholder who is not an individual for tax purposes from the 5% ownership limit or the 9.8% designated investment entity limit if such shareholder provides information and makes representations to the board that are satisfactory to the board in its reasonable discretion demonstrating that exceeding the 5% ownership limit or the 9.8% designated investment entity limit as to such person would not jeopardize our qualification as a REIT.

These restrictions may:

discourage a tender offer or other transactions or a change in management or control that might involve a premium price for our shares or otherwise be in the best interests of our shareholders; or

 •discourage a tender offer or other transactions or a change in management or control that might involve a premium price for our shares or otherwise be in the best interests of our shareholders; or
 • compel a shareholder who has acquired our shares in excess of these ownership limitations to dispose of the additional shares and, as a result, to forfeit the benefits of owning the additional shares. Any acquisition of our common shares in violation of these ownership restrictions will be voidab initioand will result in automatic transfers of our common shares to a charitable trust, which will be responsible for selling the common shares to permitted transferees and distributing at least a portion of the proceeds to the prohibited transferees.


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Our declaration of trust permits our board of trustees to issue preferred shares with terms that may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our shares or otherwise benefit our shareholders.

Our declaration of trust permits our board of trustees to issue up to 40,000,000 preferred shares, having those preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications, or terms or conditions of redemption as determined by our board. In addition, our board may reclassify any unissued common shares into one or more classes or series of preferred shares. Thus, our board could authorize, without shareholder approval, the issuance of preferred shares with terms and conditions that could have the effect of discouraging a takeover or other transaction in which holders of some or a majority of our shares might receive a premium for their shares over the then-prevailing market price of our shares. We currently do not expect that the board would require shareholder approval prior to such a preferred issuance. In addition, any preferred shares that we issue would rank senior to our common shares with respect to the payment of distributions, in which case we could not pay any distributions on our common shares until full distributions have been paid with respect to such preferred shares.

Our management has limited experience operating a REIT and a public company and therefore, may not be able to successfully operate our company as a REIT and as a public company.

We have limited history operating as a REIT and as a public company. We completed our initial public offeringIPO in October 2004 and believe that we qualify for taxation as a REIT for federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) beginning with our short taxable year ended December 31, 2004. Our board of trustees and executive officers have overall responsibility for our management and, while certain of our officers and trustees have extensive experience in real estate marketing, development, management, finance and law, our executive officers have limited experience in operating a business in accordance with the Internal Revenue Code requirements for maintaining qualification as a REIT and in operating a public company. In addition, we are in the process of developinghave developed control systems and procedures required to operate as a public REIT, and this transitionthese systems and procedures could place a significant strain on our management systems, infrastructure and other resources. We cannot assure you that our past experience will be sufficient to enable us to successfully operate our company as a REIT and as a public company. If we fail to qualify as a REIT, and are not able to avail ourselves of certain savings provisions set forth in the Internal Revenue Code, our distributions to shareholders will not be deductible for federal income tax purposes, and therefore we will be required to pay corporate tax at applicable rates on our taxable income, which will substantially reduce our earnings and may reduce the value of our common shares and adversely affect our ability to raise additional capital. We would not be able to elect to be taxed as a REIT for four years following the year we first failed to qualify unless the Internal Revenue Service (the “IRS”) were to grant us relief under certain statutory provisions.

Certain provisions of Maryland law could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our shares or otherwise benefit our shareholders.

Certain provisions of Maryland law may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of our common shares with the opportunity to realize a premium over the then-prevailing market price of those shares, including:

• “business combination moratorium/fair price” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested shareholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes stringent fair price and super-majority shareholder voting requirements on these combinations; and


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“control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares” from a party other than the issuer) have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two thirds of all the votes entitled to be cast on the matter, excluding all interested shares, and are subject to redemption in certain circumstances.

• “control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares” from a party other than the issuer) have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two thirds of all the votes entitled to be cast on the matter, excluding all interested shares, and are subject to redemption in certain circumstances.
We have opted out of these provisions of Maryland law. However, our board of trustees may opt to make these provisions applicable to us at any time.

Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities collectively own an approximate 26%16.8% beneficial interest in our company on a fully diluted basis and operating partnership and maytherefore have the ability to exercise significant influence on our company and any matter presented to our shareholders.

Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities collectively own approximately 23%15.1% of our outstanding common shares, and an approximate 26%16.8% beneficial interest in our company and operating partnership.on a fully diluted basis. Consequently, these persons and entities may be able to significantly influence the outcome of matters submitted for shareholder action, including the election of our board of trustees and approval of significant corporate transactions, including business combinations, consolidations and mergers and the determination of ourday-to-day business decisions and management policies. As a result, Robert J. Amsdell, Barry L. Amsdell and Todd C. Amsdell have substantial influence on us and could exercise their influence in a manner that conflicts with the interests of our other shareholders.

Robert J. Amsdell, our Chairman and Chief Executive Officer, and Barry L. Amsdell, one of our trustees, have interests, through their ownership of limited partner units in our operating partnership and their ownership, through Rising Tide Development, of the option facilities, that may conflict with the interests of our other shareholders.

Robert J. Amsdell, our Chairman and Chief Executive Officer, and Barry L. Amsdell, one of our trustees, own limited partner units in our operating partnership. These individuals may have personal interests that conflict with the interests of our shareholders with respect to business decisions affecting us and our operating partnership, such as interests in the timing and pricing of facility sales or refinancings in order to obtain favorable tax treatment. As a result, the effect of certain transactions on these unitholders may influence our decisions affecting these facilities.

In addition, Robert J. Amsdell and Barry L. Amsdell own all of the equity interests in Rising Tide Development, which currently owns 1113 of the option facilities and has the right to acquire fourtwo option facilities from unaffiliated third parties. We have options to purchase these 15 option facilities from Rising Tide Development. As a result of their ownership interest in Rising Tide Development, Robert J. Amsdell and Barry L. Amsdell may have personal interests that conflict with the interests of our shareholders with respect to decisions affecting our exercise of our right to purchase any or all of the option facilities or our management of the option facilities. For example, it could be in the best interests of Rising Tide Development, at some time during the term of the option agreement, to seek our agreement to permit it to sell any or all of the option facilities to an outside third party rather than to our operating partnership. Under these circumstances, our interests would conflict with the fiduciary obligations of Robert J. Amsdell and Barry L. Amsdell as officers and directors of the entity that manages Rising Tide Development and their economic interests as the holders of the equity of Rising Tide Development. Although we expect that our decisions regarding our relationship with Rising Tide Development will be made by the independent members of our board of trustees, we cannot assure you that we will not be adversely affected by conflicts arising from Robert J. Amsdell and Barry L. Amsdell’s relationship with Rising Tide Development.


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Our Chairman and Chief Executive Officer has outside business interests that could require significant time and attention and may interfere with his ability to devote time to our business and affairs.

Robert J. Amsdell, our Chairman and Chief Executive Officer, has outside business interests that are not being contributed to our company which could require significant time and attention. These interests include the ownership and operation of certain office and industrial properties and ownership of the entity that owns or in some cases has a right to purchase the option facilities. Mr. Amsdell’s employment agreement permits him to devote time to his outside business interests, so long as such activities do not materially or adversely interfere with his duties to us. In some cases, Mr. Amsdell may have fiduciary obligations associated with these business interests that interfere with his ability to devote time to our business and affairs and that could adversely affect our operations. In particular, Mr. Amsdell also serves as an officer or on the board of directors or comparable governing body of various entities owned and controlled by him and Barry L. Amsdell, which entities manage the office and industrial properties and own the option facilities referred to above. As a result of the customary requirement of a fiduciary to exercise the level of care a prudent person would exercise, Mr. Amsdell may be required, through his service as an officer and director of these various entities, to maintain significant familiarity with the businesses and operations of such entities. As well, Mr. Amsdell may be required from time to time to take action as an officer or director with respect to these entities. These activities could require significant time and attention of Mr. Amsdell.

Our business could be harmed if any of our key personnel, Robert J. Amsdell, Steven G. Osgood, Todd C. Amsdell and Tedd D. Towsley, all of whom have long-standing business relationships in the self-storage industry, terminated his employment with us.

Our continued success depends on the continued services of our Chairman and Chief Executive Officer and our other executive officers. OurFour of our top four executives, Robert J. Amsdell, Steven G. Osgood, Todd C. Amsdell and Tedd D. Towsley, have an average of approximately 2223 years of real estate experience and have worked in the self-storage industry for an average of approximately 1617 years. Although we have employment agreements with our Chairman and Chief Executive Officer and the other members of our senior management team, we cannot provide any assurance that any of them will remain in our employ. The loss of services of one or more members of our senior management team, particularly our Chairman and Chief Executive Officer, could adversely affect our operations and our future growth.

We depend on external sources of capital that are outside of our control; the unavailability of capital from external sources could adversely affect our ability to acquire or develop facilities, satisfy our debt obligationsand/or make distributions to shareholders.

To continue to qualify as a REIT, we are required to distribute to our shareholders each year at least 90% of our REIT taxable income, excluding net capital gains.gains or pay applicable income taxes. In order to eliminate federal income tax, we will be required to distribute annually 100% of our net taxable income, including capital gains. Because of these distribution requirements, we likely will not be able to fund all future capital needs, including capital for acquisitions and facility development, with income from operations. We therefore will have to rely on third-party sources of capital, which may or may not be available on favorable terms, if at all. Our access to third-party sources of capital depends on a number of things, including the market’s perception of our growth potential and our current and potential future earnings and our ability to continue to qualify as a REIT for federal income tax purposes. If we are unable to obtain third-party sources of capital, we may not be able to acquire or develop facilities when strategic opportunities exist, satisfy our debt obligations or make distributions to shareholders that would permit us to qualify as a REIT or avoid paying tax on our REIT taxable income.

Our shareholders have limited control to prevent us from making any changes to our investment and financing policies that they believe could harm our business, prospects, operating results or share price.

Our board of trustees has adopted policies with respect to certain activities. These policies may be amended or revised from time to time at the discretion of our board of trustees without a vote of our shareholders. This means that our shareholders have limited control over changes in our policies. Such changes


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in our policies intended to improve, expand or diversify our business may not have the anticipated effects and consequently may adversely affect our business and prospects, results of operations and share price.

Our rights and the rights of our shareholders to take action against our trustees and officers are limited, and therefore our and our shareholders’ ability to recover damages from our trustees and officers is limited.

Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our declaration of trust and bylaws require us to indemnify our trustees and officers for actions taken by them in those capacities to the extent permitted by Maryland law. Accordingly, in the event that actions taken in good faith by any trustee or officer impede our performance, our and our shareholders’ ability to recover damages from that trustee or officer will be limited.

We may have assumed unknown liabilities in connection with our formation transactions that occurred at the time of our IPO and will not have recourse to Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities for any of these liabilities.

As part of our formation transactions that occurred at the time of our IPO, we acquired certain entitiesand/or assets that are subject to existing liabilities, some of which may be unknown at the present time. Unknown liabilities might include liabilities for cleanup or remediation of undisclosed environmental conditions, claims by customers, vendors or other persons dealing with our predecessor entities (that have not been asserted or threatened to date), tax liabilities, and accrued but unpaid liabilities incurred in the ordinary course of business. While in some instances we may have the right to seek reimbursement against an insurer or another third party for certain of these liabilities, we will not have recourse to Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell or any of the Amsdell Entities for any of these liabilities.

Our share price could be volatile and could decline, resulting in a substantial or complete loss on your investment.

At times the stock markets, including the New York Stock Exchange, on which our common shares are listed, have experienced significant price and volume fluctuations. As a result, the market price of our common shares could be similarly volatile, and investors in our common shares may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects.

The price of our common shares could fluctuate in response to a number of factors, including:

our operating performance and the performance of other similar companies;

actual or anticipated differences in our quarterly operating results;

changes in our revenues or earnings estimates or recommendations by securities analysts;

publication of research reports about us or our industry by securities analysts;

additions and departures of key personnel;

• our operating performance and the performance of other similar companies;
• actual or anticipated differences in our quarterly operating results;
• changes in our revenues or earnings estimates or recommendations by securities analysts;
• publication of research reports about us or our industry by securities analysts;
• additions and departures of key personnel;
• changes in market interest rates;
• strategic decisions by us or our competitors, such as acquisitions, divestments, spin-offs, joint ventures, strategic investments or changes in business strategy;
• the passage of legislation or other regulatory developments that adversely affect us or our industry;
• speculation in the press or investment community;
• actions by institutional shareholders or hedge funds;
• changes in accounting principles;


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strategic decisions by us or our competitors, such as acquisitions, divestments, spin-offs, joint ventures, strategic investments or changes in business strategy;

the passage of legislation or other regulatory developments that adversely affect us or our industry;

speculation in the press or investment community;

actions by institutional shareholders;

changes in accounting principles;

terrorist acts; and

general market conditions, including factors unrelated to our performance.

• terrorist acts; and
• general market conditions, including factors unrelated to our performance.
In the past, securities class action litigation has been instituted against companies following periods of volatility in their stock price. If this type of litigation were to be initiated in respect of our shares, it could result in substantial costs and divert our management’s attention and resources.

A substantialIf a large number of our common shares will be eligible for saleare sold in the near future, whichpublic market, the sales could causereduce the trading price of our common shareshares and impede our ability to raise future capital.
We cannot predict what effect, if any, future sales of our common shares, or the availability of common shares for future sale, will have on the market price to decline significantly.

of our common shares. If our shareholders sell, or the market perceives that our shareholders intend to sell, substantial amounts of our common shares in the public market, the market price of our common shares could decline significantly. These sales also might make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate.

As of December 31, 2004,2005, we had outstanding approximately 37.357.0 million common shares. Of these shares, the approximately 28.848.4 million shares sold in our IPO and our October 2005 public offering are freely tradable, except for any shares held by our “affiliates,” as that term is defined by Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), and approximately 8.6 million additional common shares will be available for sale in the public market beginning in July 2005 following the expiration of lock-up agreements between our management and trustees, on the one hand, and the underwriters of our IPO, on the other hand. The representatives of the underwriters may release these shareholders from their lock-up agreements at any time and without notice, which would allow for earlier sale of shares in the public market.. Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities have been granted registration rights that will enable them to sell shares received in our formation transactions or upon redemption of operating partnership units in market transactions, subject to certain limitations. As restrictions on resale end,Beginning in October 2005, Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities became entitled to require us to register their shares for public sale subject to certain exceptions, limitations and conditions precedent. If they exercise all of their registration rights, approximately 9.7 million shares (which number includes the shares issuable upon the redemption of units in our operating partnership) will become available for sale into the market, subject only to applicable securities rules and regulations, which could reduce the market price for our common shares. In addition, Rising Tide Development is entitled to require us to register approximately 0.2 million of our common shares could drop significantly if the holders of restrictedthat it owns for public sale and, beginning as early as March 2006, Rising Tide Development will be entitled to require us to register another approximately 0.2 million common shares sell them or are perceived by the market as intendingfor public sale, both subject to sell them.

certain exceptions, limitations and conditions precedent.

Tax Risks

If we fail to qualify as a REIT, our distributions to shareholders would not be deductible for federal income tax purposes, and therefore we would be required to pay corporate tax at applicable rates on our taxable income, which would substantially reduce our earnings and may substantially reduce the value of our common shares and adversely affect our ability to raise additional capital.

We have elected to be taxed as a REIT for federal income tax purposes commencing with our first taxable year ending December 31, 2004, and we plan to continue to operate so that we can meet the requirements for qualification and taxation as a REIT. We have not requested and do not plan to request a ruling from the IRS that we qualify as a REIT, and the statements in this Annual Report onForm 10-K are not binding on the IRS or any court. As a REIT, we generally will not be subject to federal income tax on our income that we distribute currently to our shareholders. Many of the REIT requirements, however, are highly technical and complex. The determination that we are a REIT requires an analysis of various factual matters and circumstances that may not be totally within our control. For example, to qualify as a REIT, at least 95% of our gross income must come from specific passive sources, such as rent, that are itemized in the REIT tax laws. In addition, to qualify as a REIT, we cannot own specified amounts of debt and equity securities of some issuers. We also are required to distribute to our shareholders with respect to each year at least 90% of our REIT taxable income (excluding net

capital gains). The fact that we hold substantially all of our assets through the operating partnership and its subsidiaries further complicates the application of the REIT


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requirements for us. Even a technical or inadvertent mistake could jeopardize our REIT 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 tax laws and regulations, and the courts might issue new rulings, that make it more difficult, or impossible, for us to remain qualified as a REIT.

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.

If we fail to qualify as a REIT for federal income tax purposes, and are unable to avail ourselves of certain savings provisions set forth in the Internal Revenue Code, we would be subject to federal income tax at regular corporate rates on all of our income. As a taxable corporation, we would not be allowed to take a deduction for distributions to shareholders in computing our taxable income or pass through long term capital gains to individual shareholders at favorable rates. We also could be subject to the federal alternative minimum tax and possibly increased state and local taxes. We would not be able to elect to be taxed as a REIT for four years following the year we first failed to qualify unless the IRS were to grant us relief under certain statutory provisions. If we failed to qualify as a REIT, we would have to pay significant income taxes, which would reduce our net earnings available for investment or distribution to our shareholders. This likely would have a significant adverse effect on our earnings and likely would adversely affect the value of our securities. In addition, we would no longer be required to pay any distributions to shareholders.

New legislation, enacted October 22, 2004, contained several provisions applicable to REITs, including provisions that could provide relief under specified circumstances in the event we violate a provision of the Internal Revenue Code that would result in our failure to qualify as a REIT. If these relief provisions, which generally would apply to us beginning January 1, 2005, are inapplicable to a particular set of circumstances, we would fail to qualify as a REIT. Even if those relief provisions apply, we would be subject to a penalty tax of at least $50,000 for each disqualifying event in most cases.

We will pay some taxes even if we qualify as a REIT.

Even if we qualify as a REIT for federal income tax purposes, we will be required to pay certain 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% penalty 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. We cannot guarantee that sales of our properties would not be prohibited transactions unless we comply with certain statutory safe-harbor provisions. The need to avoid prohibited transactions could cause us to forego or defer sales of facilities that our predecessors otherwise would have sold or that might otherwise be in our best interest to sell.

In addition, any net taxable income earned directly by our taxable REIT subsidiaries, or through entities that are disregarded for federal income tax purposes as entities separate from our taxable REIT subsidiaries, will be subject to federal and possibly state corporate income tax. We have elected to treat U-Store-It Mini Warehouse Co. as a taxable REIT subsidiary, and we may elect to treat other subsidiaries as taxable REIT subsidiaries in the future. In this regard, several provisions of the laws applicable to REITs and their subsidiaries ensure that a taxable REIT subsidiary will be subject to an appropriate level of federal income taxation. For example, a taxable REIT subsidiary is limited in its ability to deduct certain interest payments made to an affiliated REIT. In addition, the REIT has to pay a 100% penalty tax on some payments that it receives or on some deductions taken by a taxable REIT subsidiary if the economic arrangements between the REIT, the REIT’s customers, and the taxable REIT subsidiary are not comparable to similar arrangements 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 and our affiliates are required to pay federal, state and local taxes, we will have less cash available for distributions to our shareholders.

ITEM 1B.UNRESOLVED STAFF COMMENTS
None.


24

ITEM 2.PROPERTIES

Overview

As of December 31, 2004,2005, we owned 201339 self-storage facilities located in 2126 states and aggregating approximately 13.020.8 million rentable square feet. The following table sets forth certain summary information regarding our facilities by state as of December 31, 2004.

State

  Number of
Facilities
  Number of
Units
  Total
Rentable
Square Feet
  % of Total
Rentable
Square Feet
  Occupancy(1)
 

Florida

  47  29,478  3,217,366  24.8% 86.1%

Illinois

  25  13,407  1,517,252  11.7% 77.1%

California

  25  11,434  1,353,227  10.4% 83.9%

Ohio

  19  8,908  1,121,327  8.6% 84.0%

New Jersey

  11  7,247  760,149  5.9% 84.3%

Indiana

  9  5,419  606,599  4.7% 74.9%

North Carolina

  8  4,743  555,779  4.3% 84.7%

Connecticut

  8  3,877  415,090  3.2% 71.5%

Tennessee

  7  3,070  374,271  2.9% 86.1%

Mississippi

  6  3,071  388,690  3.0% 75.1%

Louisiana

  6  2,329  334,324  2.6% 87.6%

Maryland

  4  3,299  418,638  3.2% 83.5%

Georgia

  5  3,635  431,387  3.3% 83.4%

Michigan

  4  1,787  272,911  2.1% 78.0%

Arizona

  4  2,223  242,030  1.9% 82.5%

Alabama

  3  1,655  234,631  1.8% 71.1%

South Carolina

  3  1,281  214,113  1.6% 80.8%

Pennsylvania

  2  1,585  177,411  1.4% 88.5%

New York

  2  1,563  168,444  1.3% 78.9%

Massachusetts

  2  1,134  115,541  0.9% 72.9%

Wisconsin

  1  489  58,713  0.4% 82.2%
   
  
  
  
   

Total

  201  111,634  12,977,893  100.0% 82.2%
2005.
                     
        Total
  % of Total
    
  Number of
  Number of
  Rentable
  Rentable
    
State
 Facilities  Units  Square Feet  Square Feet  Occupancy (1) 
 
Florida  52   34,506   3,759,740   18.0%   87.9% 
California  43   22,430   2,567,399   12.2%   77.5% 
Ohio  30   13,232   1,709,650   8.2%   80.0% 
Texas  28   12,610   1,593,438   7.7%   76.2% 
Illinois  27   14,157   1,616,430   7.8%   76.4% 
Arizona  21   10,086   1,079,820   5.2%   87.1% 
Tennessee  18   8,665   1,096,615   5.3%   82.3% 
Connecticut  17   7,373   873,860   4.2%   75.7% 
New Jersey  14   9,697   940,657   4.5%   79.7% 
Colorado  12   5,753   646,415   3.1%   78.8% 
New Mexico  10   3,788   407,459   2.0%   90.4% 
Indiana  9   5,419   606,599   2.9%   72.4% 
North Carolina  8   4,743   555,779   2.7%   87.1% 
Louisiana  6   2,329   334,324   1.6%   97.1% 
Mississippi  6   2,478   318,130   1.5%   83.9% 
New York  6   3,195   335,300   1.6%   80.7% 
Georgia  5   3,635   431,387   2.1%   76.4% 
Maryland  5   4,097   505,808   2.4%   79.3% 
Utah  5   2,376   244,948   1.2%   84.5% 
Michigan  4   1,787   272,911   1.3%   80.1% 
Alabama  3   1,655   234,631   1.1%   82.7% 
South Carolina  3   1,281   214,113   1.0%   74.2% 
Massachusetts  2   1,134   115,541   0.6%   71.2% 
Pennsylvania  2   1,585   177,411   0.9%   83.8% 
Virginia  2   1,091   131,368   0.6%   71.6% 
Wisconsin  1   489   58,713   0.3%   70.9% 
                     
Total/Weighted Average
  339   179,591   20,828,446   100.0%   81.2% 
(1)Represents total occupied square feet divided by total rentable square feet, as of December 31, 2004.2005.


25

Our Facilities

The following table sets forth certain additional information with respect to each of our facilities as of December 31, 2004 (unless otherwise indicated).2005. Our ownership of each facility consists of a fee interest in the facility held by U-Store-It, L.P., our operating partnership, or one of its subsidiaries, except for our Morris Township, NJ facility, where we have a ground lease. In addition, small parcels of land at five of our other facilities are subject to a ground lease.
                           
  Year
                  
  Acquired/
  Year
 Rentable
        Manager
  % Climate
 
Facility Location
 Developed(1)  Built Square Feet  Occupancy(2)  Units  Apartment(3)  Controlled(4) 
 
Mobile I, AL †  1997  1987  65,256   89.9%   490   N   7.4% 
Mobile II, AL †  1997  1974/90  126,050   75.8%   794   N   1.3% 
Mobile III, AL  1998  1988/94  43,325   92.1%   371   Y   33.8% 
Chandler, AZ  2005  1985  47,888   85.9%   520   Y   0.0% 
Glendale, AZ  1998  1987  56,580   87.7%   575   Y   0.0% 
Green Valley, AZ  2005  1985  25,400   83.0%   280   N   8.0% 
Scottsdale, AZ  1998  1995  81,300   88.4%   608   Y   10.9% 
Tempe, AZ  2005  1975  53,525   84.5%   408   Y   14.0% 
Tucson I, AZ  1998  1974  60,000   91.4%   504   Y   0.0% 
Tucson II, AZ  1998  1988  44,150   84.0%   536   Y   100.0% 
Tucson III, AZ  2005  1979  49,858   86.3%   579   N   0.0% 
Tucson IV, AZ  2005  1982  48,372   89.9%   553   Y   0.0% 
Tucson IX, AZ  2005  1984  68,866   89.1%   662   Y   0.0% 
Tucson V, AZ  2005  1982  45,428   85.2%   467   Y   0.0% 
Tucson VI, AZ  2005  1982  41,028   91.5%   457   Y   0.0% 
Tucson VII, AZ  2005  1982  52,838   92.4%   640   Y   0.0% 
Tucson VIII, AZ  2005  1979  46,850   85.7%   525   Y   0.0% 
Tucson X, AZ  2005  1981  46,550   84.1%   496   N   0.0% 
Tucson XI, AZ  2005  1974  43,100   88.9%   471   Y   0.0% 
Tucson XII, AZ  2005  1974  42,772   89.1%   516   N   0.0% 
Tucson XIII, AZ  2005  1974  46,192   89.4%   591   Y   0.0% 
Tucson XIV, AZ  2005  1976  49,595   87.2%   590   Y   9.0% 
Tucson XV, AZ †  2005  1985  66,510   87.3%   62   N   0.0% 
Tucson XVI, AZ †  2005  1984  63,018   77.5%   46   N   0.0% 
Apple Valley I, CA  1997  1984  73,580   74.3%   620   Y   0.0% 
Apple Valley II, CA  1997  1988  62,325   79.2%   511   Y   5.3% 
Benicia, CA  2005  1988/93/05  75,040   70.4%   612   Y   0.0% 
Bloomington I, CA  1997  1987  31,246   75.8%   226   N   0.0% 
Bloomington II, CA †  1997  1987  26,060   100.0%   22   N   0.0% 
Citrus Heights, CA  2005  1987  75,906   71.0%   696   Y   0.0% 
Diamond Bar, CA  2005  1988  105,685   84.1%   919   Y   0.0% 
Fallbrook, CA  1997  1985/88  46,534   86.8%   430   Y   0.0% 
Hemet, CA  1997  1989  66,260   94.5%   454   Y   0.0% 
Highland, CA  1997  1987  74,951   77.7%   848   Y   0.0% 
Lancaster, CA  2001  1987  60,875   78.2%   416   Y   0.0% 
Murrieta, CA  2005  1996  50,309   82.8%   492   Y   0.0% 
North Highlands, CA  2005  1980  57,219   76.6%   497   Y   0.0% 
Ontario, CA  1998  1982  80,280   71.1%   840   Y   0.0% 
Orangevale, CA  2005  1980  50,892   82.0%   580   Y   0.0% 
Pleasanton, CA  2005  2003  83,676   58.2%   639   Y   0.0% 
Rancho Cordova, CA  2005  1979  54,128   78.3%   486   Y   0.0% 

Facility Location

  Year Acquired/
Developed(1)
  Year Built
  Rentable
Square Feet
  Occupancy(2)
  Units
  Manager
Apartment(3)
  % Climate
Controlled(4)
 

Mobile I, AL

  1997  1987  65,256  75.8% 490  N  7.4%

Mobile II, AL†

  1997  1974/90  126,050  64.2% 794  N  1.3%

Mobile III, AL

  1998  1988/94  43,325  84.2% 371  Y  33.8%

Glendale, AZ

  1998  1987  56,580  84.3% 575  Y  0.0%

Scottsdale, AZ

  1998  1995  81,300  83.4% 608  Y  10.9%

Tucson I, AZ

  1998  1974  60,000  82.7% 504  Y  0.0%

Tucson II, AZ

  1998  1988  44,150  78.1% 536  Y  100.0%

Apple Valley I, CA

  1997  1984  73,580  92.6% 620  Y  0.0%

Apple Valley II, CA

  1997  1988  62,325  85.5% 511  Y  5.3%

Bloomington I, CA

  1997  1987  31,246  70.7% 226  N  0.0%

Bloomington II, CA†

  1997  1987  26,060  100.0% 22  N  0.0%

Fallbrook, CA

  1997  1985/88  46,534  86.6% 430  Y  0.0%

Hemet, CA

  1997  1989  66,260  94.8% 454  Y  0.0%

Highland, CA

  1997  1987  74,951  84.5% 848  Y  0.0%

Lancaster, CA

  2001  1987  60,875  79.0% 416  Y  0.0%

Ontario, CA

  1998  1982  80,280  83.4% 840  Y  0.0%

Redlands, CA

  1997  1985  63,005  90.6% 563  N  0.0%

Rialto, CA

  1997  1987  100,083  86.4% 808  Y  0.0%

Riverside I, CA

  1997  1989  28,860  90.0% 249  N  0.0%

Riverside II, CA†

  1997  1989  21,880  91.2% 20  N  0.0%

Riverside III, CA

  1998  1989  46,920  88.7% 384  Y  0.0%

San Bernardino I, CA

  1997  1985  46,600  79.5% 453  Y  5.3%

San Bernardino II, CA

  1997  1987  83,418  79.8% 625  Y  2.0%

San Bernardino III, CA

  1997  1987  32,102  81.9% 246  N  0.0%

San Bernardino IV, CA

  1997  1989  57,400  87.2% 591  Y  0.0%

San Bernardino V, CA

  1997  1991  41,781  78.3% 408  Y  0.0%

San Bernardino VI, CA

  1997  1985/92  35,007  79.4% 413  N  0.0%

Sun City, CA

  1998  1989  38,635  83.6% 305  N  0.0%

Temecula I, CA

  1998  1985  39,725  85.7% 316  N  0.0%

Temecula II, CA

  2003* 2003  42,475  57.7% 392  Y  89.5%

Vista, CA

  2001  1988  74,781  90.3% 614  Y  0.0%

Yucaipa, CA

  1997  1989  78,444  69.7% 680  Y  0.0%

Bloomfield, CT

  1997  1987/93/94  48,900  68.2% 455  Y  6.6%

Branford, CT

  1995  1986  51,079  79.2% 438  Y  2.2%

Enfield, CT

  2001  1989  52,975  71.3% 384  Y  0.0%

Gales Ferry, CT

  1995  1987/89  51,780  63.7% 592  N  4.8%

Manchester, CT

  2002  1999/00/01  47,400  70.2% 519  N  37.0%

Milford, CT

  1994  1975  45,181  78.3% 388  N  3.1%

Mystic, CT

  1994  1975/86  50,250  76.8% 551  Y  2.4%

South Windsor, CT

  1994  1976  67,525  66.8% 550  Y  0.8%

Boca Raton, FL

  2001  1998  38,203  95.8% 605  N  67.9%

Boynton Beach, FL

  2001  1999  62,042  93.4% 800  Y  54.0%

Bradenton I, FL

  2004  1979  68,480  81.0% 676  N  2.8%

Bradenton II, FL

  2004  1996  88,103  87.4% 904  Y  40.2%

Cape Coral, FL

  2000* 2000  76,789  94.5% 902  Y  83.0%

Dania, FL

  1994  1988  58,319  96.5% 483  Y  26.9%

Dania Beach, FL

  2004  1984  264,375  53.4% 1,928  N  21.0%

Davie, FL

  2001* 2001  81,235  88.6% 839  Y  55.6%

Deerfield Beach, FL

  1998* 1998  57,770  96.6% 527  Y  39.2%

DeLand, FL

  1998  1987  38,577  96.1% 412  Y  0.0%

26

Facility Location

  Year Acquired/
Developed(1)
  Year Built
  Rentable
Square Feet
  Occupancy(2)
  Units
  Manager
Apartment(3)
  % Climate
Controlled(4)
 

Delray Beach, FL

  2001  1999  68,531  97.4% 819  Y  39.0%

Fernandina Beach, FL

  1996  1986  91,480  96.2% 683  Y  21.7%

Fort Lauderdale, FL

  1999* 1999  70,544  96.9% 655  Y  46.0%

Fort Myers, FL

  1998* 1998  67,256  93.5% 611  Y  67.0%

Lake Worth, FL†

  1998  1998/02  167,946  88.0% 1,293  N  44.9%

Lakeland I, FL

  1994  1988  49,111  99.2% 463  Y  78.1%

Lakeland II, FL

  1996  1984  48,600  92.3% 356  Y  19.5%

Leesburg, FL

  1997  1988  51,995  93.9% 447  Y  5.1%

Lutz I, FL

  2004  2000  72,795  92.9% 658  Y  34.0%

Lutz II, FL

  2004  1999  69,378  92.7% 549  Y  20.4%

Margate I, FL†

  1994  1979/81  55,677  92.1% 343  N  10.5%

Margate II, FL†

  1996  1985  66,135  93.8% 317  Y  65.0%

Merrit Island, FL

  2000* 2000  50,523  94.2% 470  Y  56.4%

Miami I, FL

  1995* 1995  47,200  81.3% 556  Y  52.2%

Miami II, FL

  1994  1987  57,165  53.2% 598  Y  0.1%

Miami III, FL

  1994  1989  67,360  94.9% 573  Y  7.8%

Miami IV, FL

  1995  1987  58,298  80.9% 610  Y  7.0%

Miami V, FL

  1995  1976  77,825  62.9% 369  Y  4.0%

Naples I, FL

  1996  1996  48,150  92.4% 349  Y  26.6%

Naples II, FL

  1997  1985  65,994  81.8% 647  Y  43.9%

Naples III, FL

  1997  1981/83  80,709  72.4% 889  Y  24.0%

Naples IV, FL

  1998  1990  40,023  81.1% 444  N  41.4%

Ocala, FL

  1994  1988  42,086  91.8% 360  Y  9.7%

Orange City, FL

  2004  2001  59,781  78.8% 680  N  39.0%

Orlando, FL

  1997  1987  51,770  87.7% 453  Y  4.8%

Pembroke Pines, FL

  1997* 1997  67,505  92.7% 692  Y  73.1%

Royal Palm Beach, FL†

  1994  1988  98,851  90.8% 670  N  79.2%

Sarasota, FL

  1998* 1998  70,798  91.6% 532  Y  43.0%

St. Augustine, FL

  1996  1985  59,830  83.2% 581  Y  29.6%

Stuart I, FL

  1997  1986  41,694  96.6% 524  Y  27.0%

Stuart II, FL

  1997  1995  89,541  97.8% 896  Y  34.1%

Tampa I, FL

  1994  1987  60,150  77.9% 416  Y  0.0%

Tampa II, FL

  2001  1985  56,047  78.3% 476  Y  16.8%

Vero Beach I, FL

  1997  1986  24,260  97.9% 219  N  23.3%

Vero Beach II, FL

  1998  1987  26,255  96.7% 263  N  23.9%

West Palm Beach I, FL

  2001  1997  68,295  93.3% 1,028  Y  47.3%

West Palm Beach II, FL

  2004  1996  93,915  97.3% 913  Y  77.0%

Alpharetta, GA

  2001  1996  90,685  81.6% 670  Y  74.9%

Decatur, GA

  1998  1986  148,680  75.0% 1,409  Y  3.1%

Norcross, GA

  2001  1997  85,460  86.2% 598  Y  55.1%

Peachtree City, GA

  2001  1997  50,034  88.6% 449  N  74.6%

Smyrna, GA

  2001  2000  56,528  99.4% 509  Y  100.0%

Addison, IL

  2004  1979  31,775  83.5% 377  Y  0.0%

Aurora, IL

  2004  1996  74,440  68.7% 573  Y  6.9%

Bartlett I, IL

  2004  1987  41,394  86.7% 430  Y  0.5%

Bartlett II, IL

  2004  1987/01  51,725  86.9% 421  Y  33.5%

Bellwood, IL

  2001  1999  86,700  83.7% 724  Y  52.1%

Des Plaines, IL

  2004  1978  74,600  86.2% 643  Y  0.0%

Elk Grove Village, IL

  2004  1987  63,638  75.2% 655  Y  0.3%

Glenview, IL

  2004  1998  100,345  81.2% 764  Y  100.0%

Gurnee, IL

  2004  1987/95  80,500  73.6% 741  Y  34.0%

Harvey, IL

  2004  1987  59,816  80.6% 587  Y  3.0%

Joliet, IL

  2004  1993  74,750  68.9% 481  Y  23.3%

Lake Zurich, IL

  2004  1988  46,635  76.9% 450  Y  0.0%

Lombard, IL

  2004  1981  61,242  77.0% 520  Y  18.3%

Mount Prospect, IL

  2004  1979  65,200  74.0% 610  Y  12.6%

Mundelein, IL

  2004  1990  44,900  70.4% 509  Y  8.9%

North Chicago, IL

  2004  1985/90  53,500  79.0% 445  N  0.0%

Plainfield, IL

  2004  1998  54,375  77.6% 410  N  0.0%

Schaumburg, IL

  2004 ��1988  31,157  77.0% 325  N  0.8%

Facility Location

  Year Acquired/
Developed(1)
  Year Built
  Rentable
Square Feet
  Occupancy(2)
  Units
  Manager
Apartment(3)
  % Climate
Controlled(4)
 

Streamwood, IL

  2004  1982  64,565  71.6% 578  N  0.0%

Waukegan, IL

  2004  1977/79  79,950  73.9% 715  Y  8.4%

West Chicago, IL

  2004  1979  48,625  76.0% 440  Y  0.0%

Westmont, IL

  2004  1979  53,900  80.6% 403  Y  0.0%

Wheeling I, IL

  2004  1974  54,900  69.4% 505  Y  0.0%

Wheeling II, IL

  2004  1979  68,025  70.0% 624  Y  7.3%

Woodridge, IL

  2004  1987  50,595  85.2% 477  Y  0.0%

Indianapolis I, IN

  2004  1987/88  43,800  84.0% 332  N  0.0%

Indianapolis II, IN

  2004  1997  45,100  78.9% 460  Y  15.6%

Indianapolis III, IN

  2004  1999  61,325  77.6% 506  Y  32.6%

Indianapolis IV, IN

  2004  1976  68,494  68.4% 616  Y  0.0%

Indianapolis V, IN

  2004  1999  75,025  84.7% 596  Y  33.5%

Indianapolis VI, IN

  2004  1976  73,693  69.2% 730  Y  0.0%

Indianapolis VII, IN

  2004  1992  95,290  68.8% 884  Y  0.0%

Indianapolis VIII, IN

  2004  1975  81,676  74.2% 738  Y  0.0%

Indianapolis IX, IN

  2004  1976  62,196  75.5% 557  Y  0.0%

Baton Rouge I, LA

  1997  1980  55,984  84.9% 464  Y  9.7%

Baton Rouge II, LA

  1997  1980  72,082  83.2% 499  Y  33.7%

Baton Rouge III, LA

  1997  1982  61,078  93.5% 451  Y  10.2%

Baton Rouge IV, LA

  1998  1995  8,920  95.5% 84  N  100.0%

Prairieville, LA

  1998  1991  56,520  84.8% 306  Y  3.0%

Slidell, LA

  2001  1998  79,740  90.1% 525  Y  46.5%

Boston, MA

  2002  2001  61,360  69.7% 630  Y  100.0%

Leominster, MA

  1998* 1987/88/00  54,181  76.6% 504  Y  45.1%

Baltimore, MD

  2001  1999/00  93,750  78.2% 808  Y  45.5%

California, MD

  2004  1998  67,528  91.1% 722  Y  40.1%

Laurel, MD†

  2001  1978/99/00  161,530  82.5% 956  N  63.7%

Temple Hills, MD

  2001  2000  95,830  85.2% 813  Y  77.6%

Grand Rapids, MI

  1996  1976  87,295  71.1% 508  Y  0.0%

Portage, MI

  1996  1980  50,671  92.2% 340  N  0.0%

Romulus, MI

  1997* 1997  43,970  72.9% 318  Y  10.7%

Wyoming, MI

  1996  1987  90,975  79.1% 621  N  0.0%

Biloxi, MS

  1997  1978/93  66,188  78.9% 620  Y  7.4%

Gautier, MS

  1997  1981  35,775  68.1% 306  Y  3.2%

Gulfport I, MS

  1997  1970  73,460  64.2% 513  Y  0.0%

Gulfport II, MS

  1997  1986  64,745  66.0% 436  Y  18.8%

Gulfport III, MS

  1997  1977/93  61,451  87.9% 486  Y  33.2%

Waveland, MS

  1998  1982/83/84/93  87,071  82.1% 710  Y  23.7%

Belmont, NC

  2001  1996/97/98  81,215  80.3% 569  N  7.8%

Burlington I, NC

  2001  1990/91/93/94/98  110,502  81.2% 951  N  4.0%

Burlington II, NC

  2001  1991  39,802  86.6% 392  Y  11.9%

Cary, NC

  2001  1993/94/97  110,464  73.0% 751  N  8.5%

Charlotte, NC

  1999* 1999  69,246  92.0% 740  N  52.4%

Fayetteville I, NC

  1997  1981  41,600  97.3% 352  N  0.0%

Fayetteville II, NC

  1997  1993/95  54,425  98.9% 557  Y  11.9%

Raleigh, NC

  1998  1994/95  48,525  87.7% 431  Y  8.2%

Brick, NJ

  1994  1981  51,892  86.6% 456  Y  0.0%

Cranford, NJ

  1994  1987  91,450  87.6% 848  Y  7.9%

East Hanover, NJ

  1994  1983  107,874  79.6% 1,019  N  1.6%

Fairview, NJ

  1997  1989  28,021  87.9% 452  N  100.0%

Jersey City, NJ

  1994  1985  91,736  82.2% 1,095  Y  0.0%

Linden I, NJ

  1994  1983  100,625  80.4% 1,125  N  2.7%

Linden II, NJ†

  1994  1982  36,000  100.0% 26  N  0.0%

Morris Township, NJ (5)

  1997  1972  76,175  81.3% 573  Y  1.3%

Parsippany, NJ

  1997  1981  66,375  88.2% 613  Y  1.4%

Randolph, NJ

  2002  1998/99  52,232  85.1% 592  Y  82.5%

Sewell, NJ

  2001  1984/98  57,769  82.5% 448  N  4.4%

Jamaica, NY

  2001  2000  90,156  73.7% 928  Y  100.0%

North Babylon, NY

  1998* 1988/99  78,288  84.9% 635  Y  9.1%

Boardman, OH

  1980* 1980/89  66,187  83.0% 525  Y  16.1%

Facility Location

  Year Acquired/
Developed(1)
  Year Built
  Rentable
Square Feet
  Occupancy(2)
  Units
  Manager
Apartment(3)
  % Climate
Controlled(4)
 

Brecksville, OH

  1998  1970/89  64,764  86.5% 410  Y  34.2%

Centerville I, OH

  2004  1976  86,590  78.2% 654  Y  0.0%

Centerville II, OH

  2004  1976  43,600  83.0% 310  N  0.0%

Dayton, OH

  2004  1978  43,420  93.1% 351  N  0.0%

Euclid I, OH

  1988* 1988  47,260  72.6% 441  Y  21.9%

Euclid II, OH

  1988* 1988  48,058  79.4% 381  Y  0.0%

Hudson, OH†

  1998  1987  68,470  85.0% 421  N  13.9%

Lakewood, OH

  1989* 1989  39,523  88.1% 486  Y  24.5%

Mason, OH

  1998  1981  33,700  91.0% 282  Y  0.0%

Miamisburg, OH

  2004  1975  61,050  78.2% 432  Y  0.0%

Middleburg Heights, OH

  1980* 1980  94,150  81.1% 667  Y  0.0%

North Canton I, OH

  1979* 1979  45,532  93.5% 290  Y  0.0%

North Canton II, OH

  1983* 1983  44,380  83.3% 354  Y  15.8%

North Olmsted I, OH

  1979* 1979  48,910  83.6% 449  Y  1.2%

North Olmsted II, OH

  1988* 1988  48,050  83.0% 406  Y  14.1%

North Randall, OH

  1998* 1998/02  80,452  82.2% 803  N  90.3%

Warrensville Heights, OH

  1980* 1980/82/98  90,531  86.9% 746  Y  0.0%

Youngstown, OH

  1977* 1977  66,700  91.6% 500  Y  0.0%

Levittown, PA

  2001  2000  78,230  87.4% 671  Y  36.2%

Philadelphia, PA

  2001  1999  99,181  89.4% 914  N  91.6%

Hilton Head I, SC†

  1997  1981/84  116,766  75.2% 545  Y  5.4%

Hilton Head II, SC

  1997  1979/80  47,620  88.4% 297  Y  0.0%

Summerville, SC

  1998  1989  49,727  86.8% 439  Y  10.1%

Knoxville I, TN

  1997  1984  29,452  87.7% 297  Y  5.4%

Knoxville II, TN

  1997  1985  38,550  98.7% 350  Y  7.0%

Knoxville III, TN

  1998  1991  45,864  86.3% 425  Y  6.7%

Knoxville IV, TN

  1998  1983  59,070  78.0% 456  N  1.1%

Knoxville V, TN

  1998  1977  43,050  86.6% 376  N  0.0%

Memphis I, TN

  2001  1999  86,075  85.3% 622  N  51.3%

Memphis II, TN

  2001  2000  72,210  85.7% 544  N  46.2%

Milwaukee, WI

  2004  1988/92/96  58,713  82.8% 489  Y  0.0%
        ��
     
       

Total/Weighted Average
(201 Facilities)

        12,977,893  82.2% 111,634       
                           
  Year
                  
  Acquired/
  Year
 Rentable
        Manager
  % Climate
 
Facility Location
 Developed(1)  Built Square Feet  Occupancy(2)  Units  Apartment(3)  Controlled(4) 
 
Redlands, CA  1997  1985  63,005   83.9%   563   N   0.0% 
Rialto, CA  1997  1987  100,083   71.5%   808   Y   0.0% 
Riverside I, CA  1997  1989  28,860   79.2%   249   N   0.0% 
Riverside II, CA †  1997  1989  21,880   100.0%   20   N   0.0% 
Riverside III, CA  1998  1989  46,920   88.6%   384   Y   0.0% 
Roseville, CA  2005  1979  60,144   84.9%   594   Y   0.0% 
Sacramento I, CA  2005  1979  56,724   70.4%   565   Y   0.0% 
Sacramento II, CA  2005  1986  62,090   67.7%   585   Y   0.0% 
San Bernardino I, CA  1997  1985  46,600   75.5%   453   Y   5.3% 
San Bernardino II, CA  1997  1987  83,418   62.7%   625   Y   2.0% 
San Bernardino III, CA  1997  1987  32,102   89.6%   246   N   0.0% 
San Bernardino IV, CA  1997  1989  57,400   73.1%   591   Y   0.0% 
San Bernardino V, CA  1997  1991  41,781   81.0%   408   Y   0.0% 
San Bernardino VI, CA  1997  1985/92  35,007   72.5%   413   N   0.0% 
San Bernardino VII, CA  2005  2002/04  83,756   73.5%   636   Y   11.8% 
San Marcos, CA  2005  1979  37,620   80.2%   252   Y   0.0% 
South Sacramento, CA  2005  1979  51,890   53.2%   435   Y   0.0% 
Sun City, CA  1998  1989  38,635   81.1%   305   N   0.0% 
Temecula I, CA  1998  1985  39,725   92.5%   316   N   0.0% 
Temecula II, CA  2003* 2003  42,475   76.8%   392   Y   89.5% 
Vista I, CA  2001  1988  74,781   90.2%   614   Y   0.0% 
Vista II, CA  2005  2001/02/03  147,991   72.2%   1330   Y   3.6% 
Walnut, CA  2005  1987  50,934   85.1%   541   Y   0.0% 
Westminster, CA  2005  1983/98  70,213   87.4%   650   Y   0.0% 
W. Sacramento, CA  2005  1984  39,955   88.6%   487   Y   0.0% 
Yucaipa, CA  1997  1989  78,444   76.7%   680   Y   0.0% 
Aurora I, CO  2005  1981  74,817   70.5%   641   Y   0.0% 
Aurora II, CO  2005  1984  57,454   73.8%   514   Y   0.0% 
Aurora III, CO  2005  1977  33,410   72.5%   317   Y   0.0% 
Avon, CO  2005  1989  28,175   96.6%   397   Y   0.0% 
Colorado Springs, CO  2005  1986  48,005   78.3%   513   Y   0.0% 
Denver, CO  2005  1987  57,145   85.5%   453   Y   0.0% 
Englewood, CO  2005  1981  51,230   87.7%   372   Y   0.0% 
Federal Heights, CO  2005  1980  55,080   69.8%   576   Y   0.0% 
Golden, CO  2005  1985  88,792   74.8%   648   Y   0.0% 
Littleton I , CO  2005  1987  53,690   85.4%   457   Y   38.0% 
Littleton II, CO  2005  1982  46,315   87.8%   365   Y   0.0% 
Northglenn, CO  2005  1980  52,302   77.0%   500   Y   0.0% 
Bloomfield, CT  1997  1987/93/94  48,900   61.9%   455   Y   6.6% 
Branford, CT  1995  1986  51,079   78.3%   438   Y   2.2% 
Bristol, CT  2005  1989/99  53,625   87.9%   504   N   22.4% 
East Windsor, CT  2005  1986/89  46,100   62.9%   326   N   0.0% 
Enfield, CT  2001  1989  52,975   79.0%   384   Y   0.0% 
Gales Ferry, CT  1995  1987/89  51,780   60.6%   592   N   4.8% 
Manchester I, CT (6)  2002  1999/00/01  47,400   58.5%   519   N   37.0% 
Manchester II, CT  2005  1984  53,237   79.2%   419   N   0.0% 

27

                           
  Year
                  
  Acquired/
  Year
 Rentable
        Manager
  % Climate
 
Facility Location
 Developed(1)  Built Square Feet  Occupancy(2)  Units  Apartment(3)  Controlled(4) 
 
Milford, CT  1994  1975  45,181   81.0%   388   N   3.1% 
Monroe, CT  2005  1996/03  66,909   90.1%   411   N   0.0% 
Mystic, CT  1994  1975/86  50,250   72.0%   551   Y   2.4% 
Newington I, CT †  2005  1978/97  54,920   87.7%   264   N   0.0% 
Newington II, CT  2005  1979/81  36,490   86.2%   222   N   0.0% 
Old Saybrook I, CT  2005  1982/88/00  91,288   77.7%   725   N   6.3% 
Old Saybrook II, CT  2005  1988/02  26,875   74.7%   256   N   30.0% 
South Windsor, CT  1994  1976  67,525   64.0%   550   Y   0.8% 
Stamford, CT  2005  1997  29,326   86.9%   369   N   31.2% 
Boca Raton, FL  2001  1998  38,203   97.5%   605   N   67.9% 
Boynton Beach I, FL  2001  1999  62,042   96.1%   800   Y   54.0% 
Boynton Beach II, FL  2005  2001  62,276   91.0%   609   Y   81.5% 
Bradenton I, FL  2004  1979  68,480   75.2%   676   N   2.8% 
Bradenton II, FL  2004  1996  88,103   84.6%   904   Y   40.2% 
Cape Coral, FL  2000* 2000  76,789   96.4%   902   Y   83.0% 
Dania Beach, FL (6)  2004  1984  264,375   84.5%   1928   N   21.0% 
Dania, FL  1994  1988  58,319   98.5%   483   Y   26.9% 
Davie, FL  2001* 2001  81,235   91.9%   839   Y   55.6% 
Deerfield Beach, FL  1998* 1998  57,770   97.1%   527   Y   39.2% 
DeLand, FL  1998  1987  38,577   93.5%   412   Y   0.0% 
Delray Beach, FL  2001  1999  68,531   97.0%   819   Y   39.0% 
Fernandina Beach, FL †  1996  1986  91,480   95.8%   683   Y   21.7% 
Ft. Lauderdale, FL  1999  1999  70,544   97.8%   655   Y   46.0% 
Ft. Myers, FL  1998  1998  67,256   95.3%   611   Y   67.0% 
Gulf Breeze, FL  2005  1982/04  79,455   97.0%   701   N   64.0% 
Jacksonville, FL  2005  2005  79,366   14.9%   761   N   100.0% 
Lake Worth, FL †  1998  1998/02  167,946   89.3%   1293   N   44.9% 
Lakeland I, FL  1994  1988  49,111   96.5%   463   Y   78.1% 
Lakeland II, FL  1996  1984  48,600   86.6%   356   Y   19.5% 
Leesburg, FL  1997  1988  51,995   91.7%   447   Y   5.1% 
Lutz I, FL  2004  2000  72,795   85.9%   658   Y   34.0% 
Lutz II, FL  2004  1999  69,378   86.4%   549   Y   20.4% 
Margate I, FL †  1994  1979/81  55,677   91.2%   343   N   10.5% 
Margate II, FL †  1996  1985  66,135   93.2%   317   Y   65.0% 
Merrit Island, FL  2000  2000  50,523   94.1%   470   Y   56.4% 
Miami I, FL  1995  1995  47,200   89.0%   556   Y   52.2% 
Miami II, FL  1994  1987  57,165   65.3%   598   Y   0.1% 
Miami III, FL  1994  1989  67,360   93.8%   573   Y   7.8% 
Miami IV, FL  1995  1987  58,298   86.5%   610   Y   7.0% 
Miami V, FL  1995  1976  77,825   81.1%   369   Y   4.0% 
Miami VI, FL  2005  1988/03  152,075   76.8%   1504   N   93.0% 
Naples I, FL  1996  1996  48,150   90.4%   349   Y   26.6% 
Naples II, FL  1997  1985  65,994   91.7%   647   Y   43.9% 
Naples III, FL  1997  1981/83  80,709   83.4%   889   Y   24.0% 
Naples IV, FL  1998  1990  40,023   83.8%   444   N   41.4% 
Ocala, FL  1994  1988  42,086   93.9%   360   Y   9.7% 
Ocoee, FL  2005  1997  76,258   93.9%   665   Y   15.5% 

28

                           
  Year
                  
  Acquired/
  Year
 Rentable
        Manager
  % Climate
 
Facility Location
 Developed(1)  Built Square Feet  Occupancy(2)  Units  Apartment(3)  Controlled(4) 
 
Orange City, FL  2004  2001  59,781   83.9%   680   N   39.0% 
Orlando I, FL (6)  1997  1987  51,770   85.2%   453   Y   4.8% 
Orlando II, FL  2005  2002/04  92,944   87.2%   788   N   74.1% 
Pembroke Pines, FL  1997  1997  67,505   95.3%   692   Y   73.1% 
Royal Palm Beach, FL †  1994  1988  98,851   83.5%   670   N   79.2% 
Sarasota, FL  1998  1998  70,798   90.5%   532   Y   43.0% 
St. Augustine, FL  1996  1985  59,830   86.8%   581   Y   29.6% 
Stuart I, FL  1997  1986  41,694   95.8%   524   Y   27.0% 
Stuart II, FL  1997  1995  89,541   95.9%   896   Y   34.1% 
Tampa I, FL  1994  1987  60,150   89.4%   416   Y   0.0% 
Tampa II, FL  2001  1985  56,047   88.2%   476   Y   16.8% 
Vero Beach, FL  1997  1986/87  50,515   95.5%   482   N   23.9% 
West Palm Beach I, FL  2001  1997  68,295   95.8%   1028   Y   47.3% 
West Palm Beach II, FL  2004  1996  93,915   95.7%   913   Y   77.0% 
Alpharetta, GA  2001  1996  90,685   71.1%   670   Y   74.9% 
Decatur, GA  1998  1986  148,680   71.7%   1409   Y   3.1% 
Norcross, GA  2001  1997  85,460   79.6%   598   Y   55.1% 
Peachtree City, GA  2001  1997  50,034   73.5%   449   N   74.6% 
Smyrna, GA  2001  2000  56,528   94.7%   509   Y   100.0% 
Addison, IL  2004  1979  31,775   92.0%   377   Y   0.0% 
Aurora, IL  2004  1996  74,440   61.0%   573   Y   6.9% 
Bartlett I, IL  2004  1987  41,394   86.3%   430   Y   0.5% 
Bartlett II, IL  2004  1987  51,725   78.4%   421   Y   33.5% 
Bellwood, IL  2001  1999  86,700   89.3%   724   Y   52.1% 
Des Plaines, IL (6)  2004  1978  74,600   81.2%   643   Y   0.0% 
Elk Grove Village, IL  2004  1987  63,638   85.7%   655   Y   0.3% 
Glenview, IL  2004  1998  100,345   74.6%   764   Y   100.0% 
Gurnee, IL  2004  1987  80,500   65.3%   741   Y   34.0% 
Harvey, IL  2004  1987  59,816   92.5%   587   Y   3.0% 
Joliet, IL  2004  1993  74,750   62.2%   481   Y   23.3% 
Lake Zurich, IL  2004  1988  46,635   81.1%   450   Y   0.0% 
Lombard, IL †  2004  1981  61,242   80.2%   520   Y   18.3% 
Mount Prospect, IL  2004  1979  65,200   70.9%   610   Y   12.6% 
Mundelein, IL  2004  1990  44,900   65.4%   509   Y   8.9% 
North Chicago, IL  2004  1985  53,500   85.1%   445   N   0.0% 
Plainfield I, IL  2004  1998  54,375   80.3%   410   N   0.0% 
Plainfield II, IL  2005  2000  52,450   70.5%   368   N   16.8% 
Schaumburg, IL  2004  1988  31,157   84.0%   325   N   0.8% 
Streamwood, IL  2004  1982  64,565   71.0%   578   N   0.0% 
Warrensville, IL  2005  1977/89  46,728   87.7%   382   N   0.0% 
Waukegan, IL  2004  1977  79,950   72.3%   715   Y   8.4% 
West Chicago, IL  2004  1979  48,625   80.0%   440   Y   0.0% 
Westmont, IL  2004  1979  53,900   69.2%   403   Y   0.0% 
Wheeling I, IL  2004  1974  54,900   74.5%   505   Y   0.0% 
Wheeling II, IL  2004  1979  68,025   64.7%   624   Y   7.3% 
Woodridge, IL  2004  1987  50,595   82.4%   477   Y   0.0% 

29

                           
  Year
                  
  Acquired/
  Year
 Rentable
        Manager
  % Climate
 
Facility Location
 Developed(1)  Built Square Feet  Occupancy(2)  Units  Apartment(3)  Controlled(4) 
 
Indianapolis I, IN  2004  1987  43,800   79.1%   332   N   0.0% 
Indianapolis II, IN  2004  1997  45,100   81.2%   460   Y   15.6% 
Indianapolis III, IN  2004  1999  61,325   79.9%   506   Y   32.6% 
Indianapolis IV, IN�� 2004  1976  68,494   61.4%   616   Y   0.0% 
Indianapolis IX, IN  2004  1976  62,196   74.5%   557   Y   0.0% 
Indianapolis V, IN  2004  1999  75,025   81.2%   596   Y   33.5% 
Indianapolis VI, IN  2004  1976  73,693   71.7%   730   Y   0.0% 
Indianapolis VII, IN  2004  1992  95,290   60.8%   884   Y   0.0% 
Indianapolis VIII, IN  2004  1975  81,676   72.4%   738   Y   0.0% 
Baton Rouge I, LA  1997  1980  55,984   99.0%   464   Y   9.7% 
Baton Rouge II, LA  1997  1980  72,082   94.0%   499   Y   33.7% 
Baton Rouge III, LA  1997  1982  61,078   99.4%   451   Y   10.2% 
Baton Rouge IV, LA  1998  1995  8,920   99.7%   84   N   100.0% 
Prairieville, LA  1998  1991  56,520   93.9%   306   Y   3.0% 
Slidell, LA  2001  1998  79,740   98.7%   525   Y   46.5% 
Boston, MA  2002  2001  61,360   68.8%   630   Y   100.0% 
Leominster, MA  1998  1987/88/00  54,181   73.9%   504   Y   45.1% 
Baltimore, MD  2001  1999/00  93,750   75.0%   808   Y   45.5% 
California, MD  2004  1998  67,528   82.9%   722   Y   40.1% 
Gaithersburg, MD  2005  1998  87,170   67.8%   798   Y   100.0% 
Laurel, MD †  2001  1978/99/00  161,530   82.4%   956   N   63.7% 
Temple Hills, MD  2001  2000  95,830   86.3%   813   Y   77.6% 
Grand Rapids, MI  1996  1976  87,295   77.3%   508   Y   0.0% 
Portage, MI (6)  1996  1980  50,671   90.8%   340   N   0.0% 
Romulus, MI  1997  1997  43,970   65.2%   318   Y   10.7% 
Wyoming, MI  1996  1987  90,975   84.0%   621   N   0.0% 
Biloxi, MS  1997  1978/93  66,188   94.6%   620   Y   7.4% 
Gautier, MS  1997  1981  35,775   97.2%   306   Y   3.2% 
Gulfport I, MS  1997  1970  73,460   83.0%   513   Y   0.0% 
Gulfport II, MS  1997  1986  64,745   88.7%   436   Y   18.8% 
Gulfport III, MS  1997  1977/93  61,451   82.5%   486   Y   33.2% 
Waveland, MS  1998  1982/83/84/93  16,511   2.5%   117   Y   23.7% 
Belmont, NC  2001  1996/97/98  81,215   94.4%   569   N   7.8% 
Burlington I, NC  2001  1990/91/93/94/98  110,502   84.1%   951   N   4.0% 
Burlington II, NC  2001  1991  39,802   82.1%   392   Y   11.9% 
Cary, NC  2001  1993/94/97  110,464   78.2%   751   N   8.5% 
Charlotte, NC  1999  1999  69,246   92.3%   740   N   52.4% 
Fayetteville I, NC  1997  1981  41,600   93.2%   352   N   0.0% 
Fayetteville II, NC  1997  1993/95  54,425   97.4%   557   Y   11.9% 
Raleigh, NC  1998  1994/95  48,525   81.8%   431   Y   8.2% 
Brick, NJ  1994  1981  51,892   81.0%   456   Y   0.0% 
Clifton, NJ  2005  2001  105,625   78.9%   1014   Y   100.0% 
Cranford, NJ  1994  1987  91,450   83.2%   848   Y   7.9% 
East Hanover, NJ  1994  1983  107,874   77.2%   1019   N   1.6% 
Elizabeth, NJ  2005  1925/97  40,202   54.3%   686   N   45.0% 
Fairview, NJ  1997  1989  28,021   83.7%   452   N   100.0% 
Hoboken, NJ  2005  1945/97  34,681   86.7%   750   N   100.0% 

30

                           
  Year
                  
  Acquired/
  Year
 Rentable
        Manager
  % Climate
 
Facility Location
 Developed(1)  Built Square Feet  Occupancy(2)  Units  Apartment(3)  Controlled(4) 
 
Jersey City, NJ  1994  1985  91,736   82.3%   1095   Y   0.0% 
Linden I, NJ  1994  1983  100,625   72.0%   1125   N   2.7% 
Linden II, NJ †  1994  1982  36,000   100.0%   26   N   0.0% 
Morris Township, NJ (5)  1997  1972  76,175   79.6%   573   Y   1.3% 
Parsippany, NJ  1997  1981  66,375   86.8%   613   Y   1.4% 
Randolph, NJ  2002  1998/99  52,232   77.1%   592   Y   82.5% 
Sewell, NJ  2001  1984/98  57,769   81.6%   448   N   4.4% 
Albuquerque I, NM  2005  1985  65,876   87.3%   633   Y   0.0% 
Albuquerque II, NM  2005  1985  59,022   97.6%   553   Y   0.0% 
Albuquerque III, NM  2005  1978  41,163   89.7%   460   Y   0.0% 
Albuquerque IV, NM  2005  1986  56,554   80.1%   536   Y   0.0% 
Carlsbad, NM  2005  1975  40,159   92.9%   348   Y   0.0% 
Deming, NM  2005  1973/83  33,100   82.7%   256   Y   0.0% 
Las Cruces, NM  2005  1984  44,050   96.8%   406   Y   0.0% 
Lovington, NM  2005  1975  15,950   93.1%   172   Y   0.0% 
Silver City, NM  2005  1972  27,075   99.3%   256   Y   0.0% 
Truth or Consequences, NM  2005  1977/99/00  24,510   89.7%   168   Y   0.0% 
Endicott, NY  2005  1989  35,330   81.5%   297   Y   0.0% 
Jamaica, NY  2001  2000  90,156   68.0%   928   Y   100.0% 
New Rochelle, NY †  2005  1998  30,343   89.1%   402   N   0.0% 
North Babylon, NY  1998  1988/99  78,288   78.0%   635   Y   9.1% 
Riverhead, NY  2005  1985/86/99  41,410   87.6%   346   N   0.0% 
Southold, NY †  2005  1989  59,773   93.8%   587   N   0.0% 
Boardman, OH  1980  1980/89  66,187   80.5%   525   Y   16.1% 
Brecksville, OH †  1998  1970/89  64,764   82.6%   410   Y   34.2% 
Canton I, OH  2005  1979/87  40,545   75.0%   414   Y   0.0% 
Canton II, OH  2005  1997  31,700   85.7%   201   N   0.0% 
Centerville I, OH  2004  1976  86,590   75.5%   654   Y   0.0% 
Centerville II, OH  2004  1976  43,600   76.8%   310   N   0.0% 
Cleveland I, OH  2005  1997/99  46,400   81.0%   353   Y   0.0% 
Cleveland II, OH  2005  2000  58,652   50.0%   591   Y   0.0% 
Dayton I, OH  2004  1978  43,420   83.7%   351   N   0.0% 
Dayton II, OH  2005  1989/00  47,550   67.4%   368   N   0.0% 
Euclid I, OH  1988* 1988  47,260   77.4%   441   Y   21.9% 
Euclid II, OH  1988* 1988  48,058   76.3%   381   Y   0.0% 
Hudson, OH †  1998  1987  68,470   88.9%   421   N   13.9% 
Lakewood, OH  1989* 1989  39,523   81.7%   486   Y   24.5% 
Louisville, OH  2005  1988/90  60,402   88.8%   390   N   0.0% 
Marblehead, OH  2005  1988/98  76,500   66.8%   388   N   0.0% 
Mason, OH  1998  1981  33,700   89.2%   282   Y   0.0% 
Mentor, OH  2005  1983/99  61,284   77.7%   454   N   23.1% 
Miamisburg, OH †  2004  1975  61,050   84.3%   432   Y   0.0% 
Middleburg Hts, OH  1980* 1980  94,150   76.2%   667   Y   0.0% 
North Canton I, OH  1979* 1979  45,532   92.0%   290   Y   0.0% 
North Canton II, OH  1983* 1983  44,380   90.8%   354   Y   15.8% 
North Olmsted I, OH  1979* 1979  48,910   86.4%   449   Y   1.2% 

31

                           
  Year
                  
  Acquired/
  Year
 Rentable
        Manager
  % Climate
 
Facility Location
 Developed(1)  Built Square Feet  Occupancy(2)  Units  Apartment(3)  Controlled(4) 
 
North Olmsted II, OH  1988* 1988  48,050   80.2%   406   Y   14.1% 
North Randall, OH  1998* 1998/02  80,452   79.1%   803   N   90.3% 
Perry, OH  2005  1992/97  68,851   73.1%   431   Y   0.0% 
Warrensville Hts, OH  1980* 1980/82/98  90,531   84.9%   746   Y   0.0% 
Westlake, OH  2005  2001  62,800   96.3%   460   Y   0.0% 
Willoughby, OH  2005  1997  33,639   75.7%   274   Y   0.0% 
Youngstown, OH  1977* 1977  66,700   87.1%   500   Y   0.0% 
Levittown, PA  2001  2000  78,230   85.8%   671   Y   36.2% 
Philadelphia, PA  2001  1999  99,181   82.3%   914   N   91.6% 
Hilton Head I, SC †  1997  1981/84  116,766   70.1%   545   Y   5.4% 
Hilton Head II, SC †  1997  1979/80  47,620   83.6%   297   Y   0.0% 
Summerville, SC  1998  1989  49,727   74.7%   439   Y   10.1% 
Alcoa, TN  2005  1986  42,550   85.5%   351   Y   0.0% 
Antioch, TN  2005  1985/98  76,445   80.8%   565   Y   8.5% 
Cordova, TN  2005  1987  54,725   67.1%   388   Y   0.0% 
Knoxville I, TN  1997  1984  29,452   83.8%   297   Y   5.4% 
Knoxville II, TN  1997  1985  38,550   91.9%   350   Y   7.0% 
Knoxville III, TN  1998  1991  45,864   87.3%   425   Y   6.7% 
Knoxville IV, TN  1998  1983  59,070   82.3%   456   N   1.1% 
Knoxville V, TN  1998  1977  43,050   88.3%   376   N   0.0% 
Knoxville VI, TN  2005  1975  64,040   94.0%   576   Y   0.0% 
Knoxville VII, TN  2005  1983  55,394   92.5%   448   Y   0.0% 
Knoxville VIII, TN  2005  1978  97,098   81.6%   777   Y   0.0% 
Memphis I, TN  2001  1999  86,075   88.0%   622   N   51.3% 
Memphis II, TN  2001  2000  72,210   91.9%   544   N   46.2% 
Memphis III, TN  2005  1983  39,790   70.3%   365   Y   5.0% 
Memphis IV, TN  2005  1986  38,950   80.7%   330   Y   0.0% 
Memphis V, TN  2005  1981  61,270   50.6%   474   Y   0.0% 
Nashville I, TN  2005  1984  109,090   67.0%   686   Y   0.0% 
Nashville II, TN  2005  1986/00  82,992   82.0%   635   Y   13.2% 
Austin, TX  2005  2001  59,758   90.4%   549   Y   70.0% 
Baytown, TX  2005  1981  39,150   74.4%   380   Y   0.0% 
Bryan, TX  2005  1994  60,650   68.9%   498   Y   0.0% 
College Station, TX  2005  1993  26,750   81.6%   348   N   0.0% 
Dallas, TX  2005  2000  59,905   74.4%   568   Y   40.0% 
El Paso I, TX  2005  1980  60,034   79.9%   552   Y   0.0% 
El Paso II, TX  2005  1980  49,296   87.7%   428   Y   0.0% 
El Paso III, TX  2005  1980  71,500   83.5%   649   Y   0.0% 
El Paso IV, TX  2005  1983  73,776   82.0%   584   Y   0.0% 
El Paso V, TX  2005  1982  63,050   87.5%   402   Y   0.0% 
El Paso VI, TX  2005  1985  36,820   84.3%   271   Y   0.0% 
El Paso VII, TX †  2005  1982  35,800   81.5%   19   N   0.0% 
Fort Worth, TX  2005  2000  50,731   68.2%   409   Y   40.0% 
Frisco I, TX  2005  1996  51,079   78.0%   447   Y   17.4% 
Frisco II, TX  2005  1998/02  71,539   82.4%   514   Y   25.6% 
Greenville I , TX  2005  2001/04  60,560   76.4%   458   Y   30.6% 
Greenville II, TX  2005  2001  45,850   69.8%   320   N   40.5% 

32

                           
  Year
                  
  Acquired/
  Year
 Rentable
        Manager
  % Climate
 
Facility Location
 Developed(1)  Built Square Feet  Occupancy(2)  Units  Apartment(3)  Controlled(4) 
 
Houston I, TX  2005  1981  101,780   81.7%   631   Y   0.0% 
Houston II, TX  2005  1977  74,700   75.0%   435   Y   0.0% 
Houston III, TX  2005  1984  62,370   66.7%   492   Y   0.0% 
Houston IV, TX  2005  1987  44,175   87.3%   401   Y   6.0% 
La Porte, TX  2005  1984  45,050   73.6%   440   Y   19.0% 
McKinney, TX  2005  1996  52,970   94.5%   373   Y   12.6% 
N Richland Hills, TX  2005  2002  57,375   70.1%   459   Y   62.0% 
Roanoke, TX  2005  1996/01  59,600   80.5%   483   Y   31.9% 
San Antonio, TX  2005  2005  75,120   1.2%   581   Y   79.0% 
Sherman I, TX  2005  1998  55,425   86.9%   525   Y   20.0% 
Sherman II, TX  2005  1996  48,625   90.5%   394   Y   36.0% 
Murray II, UT  2005  1978  47,246   86.6%   350   Y   0.0% 
Murray I, UT  2005  1976  60,780   87.4%   702   N   0.0% 
Murray III, UT †  2005  1978  26,400   80.0%   24   Y   0.0% 
Salt Lake City I, UT  2005  1976  56,646   78.9%   778   Y   0.0% 
Salt Lake City II, UT  2005  1978  53,876   87.4%   522   Y   0.0% 
Fredericksburg I, VA  2005  2001/04  69,750   63.1%   581   N   26.5% 
Fredericksburg II, VA  2005  1998/01  61,618   81.3%   510   N   100.0% 
Milwaukee, WI  2004  1988  58,713   70.9%   489   Y   0.0% 
                           
Total/Weighted Average (339 facilities)
        20,828,446   81.2%   179,591         

*Denotes facilities developed by us.
†Denotes facilities that contain a material amount of commercial rentable square footage. All of this commercial space, which was developed in conjunction with the self-storage units, is located within or adjacent to our self-storage facilities and is managed by our self-storage facility managers. As of December 31, 2004,2005, there was a total of approximately 400,000628,000 rentable square feet of commercial space at these facilities.
(1)Represents the year acquired, for those facilities acquired from a third party, or the year developed, for those facilities developed by us.
(2)Represents occupied square feet divided by total rentable square feet, as of December 31, 2004.feet.
(3)Indicates whether a facility has anon-site apartment where a manager resides, as of December 31, 2004.resides.
(4)Represents the percentage of rentable square feet in climate-controlled units, as of December 31, 2004.units.
(5)We do not own the land at this facility. We have leased the land pursuant to a ground lease that expires in 2008. We2008, but have ninefive-year renewal options.
(6)We have ground leases for certain small parcels of land adjacent to these facilities that expire between 2007 and 2015.

33

Our growth has been achieved by internal growth and by adding facilities to our portfolio each year through acquisitions and development. The tables set forth below show the average occupancy and annual rent per occupied square foot for our existing facilities owned as of December 31, 2005 for each of the last five years, grouped by the year end during which we first owned or operated the facility.

ExistingOur Facilities by Year Acquired—Acquired — Average Occupancy

Year Acquired(1)

  Number of
Facilities
  Current Rentable
Square Feet
  Average Occupancy During the
Twelve Months Ended December 31,
 
      2000
  2001
  2002
  2003
  2004
 

1996 or earlier

  41  2,599,851  84.5% 83.2% 80.9% 81.2% 83.5%

1997

  46  2,672,957  83.1% 82.2% 81.0% 82.8% 84.1%

1998

  25  1,478,077  84.0% 82.1% 81.3% 84.2% 85.0%

1999

  2  138,054  45.6% 67.2% 81.3% 82.0% 88.0%

2000

  6  418,024  71.0% 76.0% 81.7% 85.5% 87.6%

2001

  27  2,107,610     73.6% 75.7% 80.6% 84.9%

2002

  7  405,966        83.3% 82.9% 83.9%

2003

  1  42,475           20.4% 48.7%

2004

  46  3,114,879              77.6%

All Existing Facilities

  201  12,977,893  83.0% 81.3% 79.9% 82.1% 84.0%
                             
     Current
  Average Occupancy During the Twelve Months Ended 
  Number of
  Rentable
  December 31,(2) 
Year Acquired(1)
 Facilities  Square Feet  2001  2002  2003  2004  2005 
 
1996 or earlier  41   2,599,851   83.2%  80.9%  81.2%  83.5%  83.4%
1997  46   2,699,212   82.2%  81.0%  82.8%  84.1%  83.7%
1998  24   1,381,262   82.1%  81.3%  84.2%  85.0%  85.4%
1999  2   138,054   67.2%  81.3%  82.0%  88.0%  92.4%
2000  6   418,024   76.0%  81.7%  85.5%  87.6%  87.5%
2001  27   2,107,610   73.6%  75.7%  80.6%  84.9%  85.4%
2002  7   405,966       83.3%  82.9%  83.9%  81.9%
2003  1   42,475           20.4%  48.7%  74.9%
2004  46   3,114,879               77.6%  77.9%
2005  139   7,921,113                   80.3%
                             
All Facilities Owned as of December 31, 2005
  339   20,828,446   81.3%  79.9%  82.1%  84.0%  82.2%
(1)For facilities developed by us, Year Acquired represents the year in which such facilities were acquired by us or our operating partnership from an affiliated entity, which in some cases is later than the year developed.

Existing Facilities by Year Acquired—Annual Rent Per Occupied Square Foot

Year Acquired(1)

  Number of
Facilities
  Annual Rent Per Occupied Square Foot for the
Twelve Months Ended December 31,
    2000
  2001
  2002
  2003
  2004

1996 or earlier

  41  $10.26  $10.71  $10.79  $10.59  $10.66

1997

  46  $8.40  $8.81  $9.04  $9.21  $9.52

1998

  25  $8.54  $8.73  $8.82  $8.89  $9.34

1999

  2  $7.14  $7.10  $7.66  $8.25  $9.50

2000

  6  $7.66  $13.10  $13.33  $13.26  $13.29

2001

  27      $11.21  $10.88  $10.12  $10.56

2002

  7          $14.41  $13.31  $13.49

2003

  1              $8.75  $12.94

2004

  46                  $12.22

All Existing Facilities

  201  $9.13  $9.77  $10.13  $10.04  $10.44
(1)For facilities developed by us, Year Acquired“Year Acquired” represents the year in which such facilities were acquired by our operating partnership from an affiliated entity, which in some cases is later than the year developed.
(2)Determined by dividing the sum of the month-end occupied square feet for the group of facilities for each twelve month period by the sum of their month-end rentable square feet for the period.
Our Facilities by Year Acquired — Annual Rent Per Occupied Square Foot
                         
     Annual Rent Per Occupied Square Foot For the Twelve Months Ended
 
  Number of
  December 31,(2) 
Year Acquired(1)
 Facilities  2001  2002  2003  2004  2005 
 
1996 or earlier  41  $10.71  $10.79  $10.59  $10.66  $10.98 
1997  46  $8.81  $9.04  $9.21  $9.52  $10.01 
1998  24  $8.73  $8.82  $8.89  $9.34  $9.72 
1999  2  $7.10  $7.66  $8.25  $9.50  $10.81 
2000  6  $13.10  $13.33  $13.26  $13.29  $14.41 
2001  27  $11.21  $10.88  $10.12  $10.56  $11.04 
2002  7      $14.41  $13.31  $13.49  $13.91 
2003  1          $8.75  $12.94  $13.21 
2004  46              $12.22  $10.73 
2005  139                  $8.90 
                         
All Facilities Owned as of December 31, 2005
  339  $9.77  $10.13  $10.04  $10.44  $10.37 


34

The following tables set forth a reconciliation of our annual rent per occupied square foot data to the historical financial results for the periods presented.

      Average Occupied Square Feet for the Twelve Months Ended
December 31,(2)

Year Acquired(1)

  Number of
Facilities
  2000
  2001
  2002
  2003
  2004

1996 or earlier

  41  2,194,358  2,162,101  2,101,927  2,112,101  2,170,825

1997

  46  2,218,478  2,189,309  2,162,901  2,212,059  2,247,471

1998

  25  1,183,996  1,176,562  1,187,768  1,244,593  1,257,058

1999

  2  63,455  93,479  113,112  114,052  121,776

2000

  6  21,681  277,770  296,103  321,549  366,338

2001

  27     410,084  1,544,456  1,701,143  1,790,554

2002

  7        153,790  339,036  340,977

2003

  1           3,606  20,694

2004

  46              402,889

All Existing Facilities

  201  5,681,968  6,309,305  7,560,057  8,048,139  8,718,582

      Total Revenues for the Twelve Months Ended
December 31,(3)

Year Acquired(1)

  Number of
Facilities
  2000
  2001
  2002
  2003
  2004

1996 or earlier

  41  $22,523  $23,165  $22,683  $22,372  $23,140

1997

  46   18,639   19,297   19,561   20,382   21,392

1998

  25   10,109   10,274   10,475   11,061   11,739

1999

  2   453   664   866   941   1,156

2000

  6   166   3,639   3,947   4,265   4,867

2001

  27       4,597   16,800   17,224   18,914

2002

  7           2,216   4,513   4,600

2003

  1               32   268

2004

  46                   4,925

All Existing Facilities—Before Adjustments

  201  $51,890  $61,636  $76,548  $80,790  $91,001

Plus:

                       

Revenues from Discontinued Operations(4)

      1,033   553   —     —     —  

Other Adjustments(5)

      167   87   37   24   607

Total Revenues(6)

     $53,090  $62,276  $76,585  $80,814  $91,608
(1)For facilities developed by us, Year Acquired“Year Acquired” represents the year in which such facilities were acquired by us or our operating partnership from an affiliated entity, which in some cases is later than the year developed.
(2)Determined by dividing the aggregate rental revenue for each twelve month period by the average of the month-end occupied square feet for the period. Rental revenue includes customer rental revenues, access, administrative and late fees and revenues from auctions, but does not include ancillary revenues generated at our facilities.
The following tables set forth a reconciliation of our annual rent per occupied square foot data to our historical financial results for the periods presented.
                         
     Average Occupied Square Feet For the Twelve Months Ended
 
  Number of
  December 31,(2) 
Year Acquired(1)
 Facilities  2001  2002  2003  2004  2005 
 
1996 or earlier  41   2,162,101   2,101,927   2,112,101   2,170,825   2,167,726 
1997  46   2,189,309   2,162,901   2,212,059   2,247,471   2,257,945 
1998  24   1,176,562   1,187,768   1,244,593   1,257,058   1,216,370 
1999  2   93,479   113,112   114,052   121,776   127,585 
2000  6   277,770   296,103   321,549   366,338   365,632 
2001  27   410,084   1,544,456   1,701,143   1,790,554   1,800,901 
2002  7       153,790   339,036   340,977   332,649 
2003  1           3,606   20,694   31,801 
2004  46               402,889   2,425,283 
2005  139                   3,157,146 
                         
All Facilities Owned as of December 31, 2005
  339   6,309,305   7,560,057   8,048,139   8,718,582   13,883,038 
                         
  Number of
  Total Revenues for the Twelve Months Ended December 31,(3) 
Year Acquired(1)
 Facilities  2001  2002  2003  2004  2005 
     (Dollars in thousands) 
 
1996 or earlier  41  $23,408  $22,683  $22,372  $23,140  $23,800 
1997  46   19,499   19,561   20,382   21,558   22,599 
1998  24   10,382   10,475   11,061   11,573   11,818 
1999  2   664   866   941   1,156   1,379 
2000  6   3,639   3,947   4,265   4,867   5,269 
2001  27   4,597   16,800   17,224   18,914   19,883 
2002  7       2,216   4,513   4,600   4,627 
2003  1           32   268   420 
2004  46               4,925   26,021 
2005  139                   28,104 
                         
All Facilities Owned as of December 31, 2005 — Before Adjustments
  339  $62,189  $76,548  $80,790  $91,001  $143,920 
Plus:                        
Other Adjustments(4)      87   37   24   607   4,201 
                         
Total Revenues(5)
     $62,276  $76,585  $80,814  $91,608  $148,121 


35

(1)For facilities developed by us, “Year Acquired” represents the year in which such facilities were acquired by our operating partnership from an affiliated entity, which in some cases is later than the year developed.
(2)Represents the average of the aggregate month-end occupied square feet for the twelve monthtwelve-month period for each group of facilities.
(3)Represents the result obtained by multiplying annual rent per occupied square foot by the average occupied square feet for the twelve month period for each group of facilities.
(4)Represents revenues generated by seven facilities sold between 2000Between 2001 and 2001, which are included in the historical financial statements but excluded from the above analysis which accounts only for the 155 existing facilities.
(5)Represents interest and other income and2004, amounts represents primarily ancillary revenues generated by three facilities contributed by certain Amsdell Entities to our operating partnership through October 20, 2004 and all ancillary income after that date,prior to our IPO, which are reflected in the historical financial statements but excluded from the above analysis which accounts only for rental revenues and other property related income. For 2005, amount represents ancillary revenue and Rising Tide management fees.
(6)
(5)Represents total revenues as presented in theour historical financial statements. `

Planned Renovations and Improvements

We recently undertook a capital improvements and renovations program involving our existing facilities. We spent a total of $5.7approximately $16.2 million between 2000 and 20042005 on this program. These renovations and improvements included office upgrades, adding climate control at selected units, construction of parking areas and general facility upgrades. We anticipate spending approximately an additional $8.2$12.0 million in 20052006 in renovations and improvements for our facilities that were owned at March 31, 2005.1, 2006. The bulk of this cost relates to facilities acquired since our IPO. These renovations and improvements will include re-signing and re-branding the facilities, adding climate control at selected facilities and implementing general facility upgrades. In connection with our pending acquisitions, we anticipate incurring additional costs for renovations and improvements.

Option Facilities

In additionconnection with our IPO, we entered into an option agreement with Rising Tide Development to our existing facilities, as of March 23, 2005, we also have options to purchase 15acquire 18 self-storage facilities, currently consisting of 1113 facilities owned by Rising Tide Development, and fourtwo facilities whichthat Rising Tide Development has the right to acquire from unaffiliated third parties. Inparties, and three facilities that we have acquired since our IPO pursuant to the event thatexercise of our options. Rising Tide Development doesmay elect not to acquire anyeither or both of the four option facilities it currently has under contract, which would reduce the number of facilities which we haveavailable to us pursuant to the option to purchase would reduce accordingly.agreement. These 15 facilities either are currently under development or not yet fully stabilized. Any purchase of an option facility by us will be at a purchase price equal to the lower of (i) a price determined by multiplying in-place net operating income at the time of purchase by 12.5 and (ii) the fair market value of the option facility as determined by an appraisal process involving third party appraisers. The option will become exercisable with respect to each particular self-storage facility when that facility achieves an occupancy of 85.0%85% at the end of the month for three consecutive months, and will expire in October 2008. None of the remaining 15 self-storage facilities that we have the option to purchase met the 85% occupancy requirement as of December 31, 2005. We expect that the purchase option will become exercisable with respect to a majority of the option facilities by October 2008. The determination to purchase any of the option facilities will be made by the independent members of our board of trustees. If the option is not exercised for any facility within the option period, Rising Tide Development will be required to move expeditiously to sell the facility to an unrelated third party. Rising Tide Development received no cash consideration for entering into the option agreement.

On January 5, 2005,

Since the completion of our IPO, we exercised our option to purchase the San Bernardino VII, CA facility from Rising Tide Development for a purchase price of $7.3 million, consisting of $3.8 million in cash (which cash was used to pay off mortgage indebtedness secured by the facility) and $3.5 million payable in units in our operating partnership. The facility contains approximately 83,000 rentable square feet and was 84.9% occupied as of December 31, 2004.

On March 18, 2005, we exercised ourthree option to purchase the Orlando II, FL and the Boynton Beach II, FL facilities from Rising Tide Development for an aggregate purchase price of $11.8approximately $17.4 million, consisting of $6.7an aggregate of $6.8 million in cash (which cash was used to pay off mortgage indebtedness secured by the facility) and $5.1 million payable in units in our operating partnership. The facilities contain an aggregate of approximately 129,000 rentable square feetpartnership and were 90.1% and 90.3% occupied, respectively, as of December 31, 2004.$10.6 million in cash.


36

ITEM 3.LEGAL PROCEEDINGS

We are not presently involved in any material litigation nor, to our knowledge, is any material litigation threatened against us or our properties. We are involved in routine litigation arising in the ordinary course of business, none of which we believe to be material.

ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On October 19, 2004, our sole shareholder at the time authorized and approved, by unanimous written consent, our IPO transactions, our 2004 Equity Incentive Plan, and the issuance

No matters were submitted to a vote of our common shares upon redemptionshareholders during the fourth quarter of units in our operating partnership.

2005.

PART II

ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common shares began trading on the New York Stock Exchange under the symbol “YSI” on October 22, 2004. As of March 21, 2005,February 17, 2006, there were approximately 1924 registered record holders of our common shares. This figure does not include beneficial owners who hold shares in nominee name. The following table shows the high and low sales prices per share for our common shares, as reported by the New York Stock Exchange composite tape, and the cash distributionsdividends declared in the fourth quarter of 2004 for our commonwith respect to such shares:

2004

  High
  Low
  Cash
Distributions
Declared

Fourth quarter (October 22, 2004 to December 31, 2004)

  17.77  16.40  $0.2009

On February 22, 2005, our board of trustees declared a quarterly distribution of $0.28 per common share for the period ending March 31, 2005. The distribution is payable on April 25, 2005 to common shareholders of record on April 11, 2005. This quarterly distribution of $0.28 per common share is equivalent to $1.12 per common share on an annualized basis.

             
        Cash Dividends
 
  High  Low  Declared 
 
2004
            
Fourth quarter (October 22 through December 31) $17.77  $16.40  $0.2009 
2005
            
First quarter $17.58  $15.90  $0.28 
Second quarter $19.99  $16.64  $0.28 
Third quarter $22.13  $18.82  $0.28 
Fourth quarter $21.93  $19.04  $0.29 
Distributions to shareholders are usually taxable as ordinary income, although a portion of the distribution may be designated as capital gain or may constitute a tax-free return of capital. Annually, we provide each of our shareholders a statement detailing distributions paid during the preceding year and their characterization as ordinary income, capital gain or return of capital.

The characterization of the Company’s dividends for 2005 was 46% ordinary income and 54% return of capital.

We intend to continue to declare quarterly distributions. However, we cannot provide any assurance as to the amount or timing of future distributions. Under our new revolving credit facility, in the fourth quarter of 2007 we are restricted from paying distributions on our common shares that would exceed an amount equal to the greater of (i) a certain percentage of our funds from operations and (ii) such amount as may be necessary to maintain our REIT status.

Recent Sales

To the extent that we make distributions in excess of Unregistered Securities; Useour earnings and profits, as computed for federal income tax purposes, these distributions will represent a return of Proceeds from Registered Securities and Issuer Purchases of Equity Securities

(a) Upon our formation in July 2004, High Tide LLC was issued 100 common sharescapital, rather than a dividend, for total consideration of $1,500 in cash in order to provide our initial capitalization. In October 2004, High Tide LLC was reorganizedfederal income tax purposes. Distributions that are treated as a Maryland REIT throughreturn of capital for federal income tax purposes generally will not be taxable as a merger into us pursuantdividend to a reorganizationU.S. shareholder, but will reduce the shareholder’s basis in its shares (but not below zero) and merger agreement. Upon completiontherefore can result in the shareholder having a higher gain upon a subsequent sale of this merger, those shares were canceled and retired without paymentsuch shares. Return of any consideration therefor. The issuancecapital distributions in excess of a shareholder’s basis generally will be treated as gain from the sale of such shares was effected in reliance upon an exemption from registration provided by Section 4(2) under the Securities Act.

for federal income tax purposes.

In connection withOctober 2005, we completed a secondary public offering of our formation transactions, units of limited partnership in our operating partnership and common shares, were issued to certain persons transferring interests and other assets to us in consideration of the transfer of such interests and assets as follows:

Robert J. Amsdell, our Chairman and Chief Executive Officer, received approximately 151,000 shares (with a valuegenerating net proceeds of approximately $2.4 million) in connection with the merger of High Tide LLC and Amsdell Partners, Inc., which were existing partners of the operating partnership, into us;

The Robert J. Amsdell Family Irrevocable Trust, a trust formed for the benefit of the family of Robert J. Amsdell, received approximately 3.9$378.7 million, shares (with a value of approximately $62.7 million) in connection with the merger of High Tide LLC and Amsdell Partners, Inc., which were existing partners of our operating partnership, into us;

Barry L. Amsdell, one of our trustees, received approximately 151,000 shares (with a value of approximately $2.4 million) in connection with the merger of High Tide LLC and Amsdell Partners, Inc., which were existing partners of our operating partnership, into us;

The Loretta Amsdell Family Irrevocable Trust, a trust formed for the benefit of the family of Barry L. Amsdell, received approximately 3.9 million shares (with a value of approximately $62.7 million) in connection with the merger of High Tide LLC and Amsdell Partners, Inc., which were existing partners of our operating partnership, into us;

Todd C. Amsdell, our Chief Operating Officer, received approximately 430,000 shares (with a value of approximately $6.9 million) in connection with the merger of High Tide LLC and Amsdell Partners, Inc., which were existing partners of our operating partnership, into us; and

Entities owned and controlled by Robert J. Amsdell and Barry L. Amsdell received approximately 1.1 million operating partnership units (with a value of approximately $18.1 million) as a result of the contribution of three facilities to our operating partnership and the reorganization of the operating partnership, and we assumed approximately $10.4 million of indebtedness of these entities.

The foregoing issuances occurred pursuant to agreements dated as of July 30, 2004. All of such persons irrevocably committed to the transfer of such interests and assets prior to the filing of our registration statement on Form S-11 relating to our IPO. The issuance of such units and shares was effected in reliance upon an exemption from registration provided by Section 4(2) under the Securities Act.

(b) The effective date of our registration statement filed on Form S-11 (File No. 333-117848) under the Securities Act relating to the IPO was October 21, 2004. An aggregate of 28,750,000 common shares were sold (including 3,750,000 common shares sold pursuant to the underwriters’ over-allotment option) at an offering price of $16.00 per share. Lehman Brothers Inc. acted as sole bookrunning manager of the IPO. Citigroup Global Markets, Inc., Wachovia Capital Markets, LLC, AG Edwards & Sons, Inc., Legg Mason Wood Walker, Incorporated and Raymond James & Associates, Inc. acted as co-managers of the IPO.

The IPO has been completed. The aggregate sales price for all of the shares sold in the IPO was $460.0 million. Theafter deducting underwriting discount and commissions and expenses of the offering. A portion of these proceeds was used to repay certain outstanding indebtedness, including (i) $108.3 million to repay the outstanding balance under our then existing revolving credit facility and (ii) $39.8 million to repay outstanding mortgage loans secured by 37 of our facilities. Approximately


37

$110.2 million of the net proceeds was used to fund the acquisition of 19self-storage facilities. The remaining approximately $120.4 million of net proceeds has been used for the acquisition and development of additionalself-storage facilities, budgeted capital improvements and general corporate purposes. As a result of the offering and the aforementioned repayment of outstanding indebtedness, we believe that our financial advisory fees were $32.2 million, noneflexibility has been significantly improved, particularly since additional amounts are available for borrowing to fund future acquisitions and development of which was paid tofacilities and other cash needs.
We completed our affiliates. We receivedinitial public offering of our common shares, generating net proceeds of approximately $425.0 million, after deducting underwriting discount and commissions financial advisory fees and expenses of the IPO.

We utilized the netoffering. A portion of these proceeds from the IPOwas used to repay a portion(i) approximately $135.1 million of our existing term loan provided by an affiliate of Lehman Brothers ($135.1 million),(ii) $16.6 million, plus $0.9 million for prepayment penalties, to repay mortgage indebtedness secured by our facilities ($16.6(iii) $23.0 million plus $0.9 million to pay associated prepayment penalties), to fund the purchase of U-Store-It Mini Warehouse Co., our management company ($23.0 million, of which approximately $18.7 million was paid to us by Robert J. Amsdell and Barry L. Amsdell in repayment of loans), to repay the outstanding balance of a loan made to us by Robert J. Amsdell and Barry L. Amsdell ($1.6 million) and (iv) $221.8 million to acquire the 46 acquisition facilities ($221.8 million).facilities.


38

(c) We did not repurchase any of our common shares during the period covered by this report.

ITEM 6.SELECTED FINANCIAL DATA

The following table sets forth selected consolidated financial and operating data on a historical consolidated basis for the Company, and on a combined historical basis for Acquiport/Amsdell (the “Predecessor”). The selected historical financial information as of December 31, 2005 and 2004 and for each of the periods indicated in the five-year period ended December 31, 2005 were derived from audited financial statements. Historical information for the Company has not been presented prior to October 21, 2004, the date on which the Company consummated the mergers of Amsdell Partners, Inc. and High Tide LLC with and into the Company, because during the period prior to the mergers, the Company did not have material corporate activity. At December 31, 2004, the Company owned 201 storage facilities.

The Predecessor’s combined historical financial information includes the following entities, which are the entities referred to collectively in thisForm 10-K as Acquiport/Amsdell, for periods prior to October 21, 2004: the operating partnership (formerly known as Acquiport/Amsdell I Limited Partnership)Partnership, which is sometimes referred to herein as “Acquiport I”) and its consolidated subsidiaries, AcquiportAcquiport/Amsdell III, LLC (“Acquiport III”), Acquiport IV, LLC, Acquiport V, LLC, Acquiport VI, LLC, Acquiport VII, LLC, and USI II, LLC. Acquiport/AmsdellThe Predecessor also includes three additional facilities, Lakewood, OH, Lake Worth, FL, and Vero Beach I, FL which were contributed to U-Store-It, L.P. in connection with the IPO. All intercompany balances and transactions are eliminated in consolidation and combination. At October 20, 2004, Acquiport/Amsdellthe Predecessor owned 155 storageself-storage facilities.

The owners of the Predecessor were entities owned by Robert J. Amsdell and Barry L. Amsdell and certain others who had minor ownership interests.

The following data should be read in conjunction with the audited financial statements and notes thereto of the Company and itsthe Predecessor and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this report.


39

THE COMPANY AND THE PREDECESSOR
                         
  The Company  The Predecessor(1) 
     Period
  Period
    
     October 21,
  January 1,
    
  Year Ended
  through
  through
    
  December 31,  December 31,  October 20,  Year Ended December 31, 
  2005  2004  2004  2003  2002  2001 
  (Dollars and shares in thousands, except per share data) 
 
Statement of Operations Data:
                        
Revenues:                        
Rental income $138,120  $21,314  $65,631  $76,898  $72,719  $59,120 
Other property related income  10,001   1,452   3,211   3,916   3,866   3,156 
                         
Total revenues  148,121   22,766   68,842   80,814   76,585   62,276 
                         
Operating expenses:                        
Property operating expenses  54,952   9,635   26,031   28,096   26,075   20,977 
Property operating expense —  related party  43   —   —   —   —   — 
Depreciation  39,949   5,800   16,528   19,494   19,656   14,168 
General and administrative  17,786   4,140   —   —   —   — 
General and administrative —  related party  736   114   —   —   —   — 
Management fees — related party(2)  —   —   3,689   4,361   4,115   3,358 
                         
Total operating expenses  113,466   19,689   46,248   51,951   49,846   38,503 
                         
Operating income  34,655   3,077   22,594   28,863   26,739   23,773 
Interest:                        
Interest expense on loans  (32,370)  (4,428)  (19,385)  (15,128)  (15,944)  (13,430)
Loan procurement amortization expense  (1,785)  (240)  (5,727)  (1,015)  (1,079)  (1,182)
Early extinguishment of debt  (93)  (7,012)  —   —   —   — 
Costs incurred to acquire management company —  related party  —   (22,152)  —   —   —   — 
Loss on sale of storage facilities  —   —   —   —   —   (2,459)
Interest income  2,405   37   69   12   —   — 
Other  (47)  (78)  —   —   —   — 
                         
Income (loss) from continuing operations before minority interest  2,765   (30,796)  (2,449)  12,732   9,716   6,702 
                         
Minority interest  (199)  898   —   —   —   — 
                         
Income (loss) from continuing operations  2,566   (29,898)  (2,449)  12,732   9,716   6,702 
Discontinued operations:                        
Income from operations  32   —   —   171   312   194 
Gain on sale of storage facilities  179   —   —   3,329   —   — 
                         
Income from discontinued operations  211   —   —   3,500   312   194 
                         
Net income (loss) $2,777  $(29,898) $(2,449) $16,232  $10,028  $6,896 
                         


40

  The Company
  The Predecessor(1)
 
  Period
October 21,
2004 through
December 31,
  Period
January 1,
2004 through
October 20,
  Year Ended December 31,
 
  2004
  2004
  2003
  2002
  2001
  2000
 
  (Dollars in thousands, except per share data) 

Statement of Operations Data:

                        

Revenues:

                        

Rental income

 $21,314  $65,631  $76,898  $72,719  $59,120  $49,992 

Other property related income

  1,452   3,211   3,916   3,866   3,156   3,098 
  
 
 
 
 
 

Total revenues

  22,766   68,842   80,814   76,585   62,276   53,090 
  
 
 
 
 
 

Operating expenses:

                        

Property operating expenses

  9,635   26,031   28,096   26,075   20,977   17,580 

Depreciation

  5,800   16,528   19,494   19,656   14,168   12,786 

General and administrative

  4,254   —     —     —     —     —   

Management fees—related party

  —     3,689   4,361   4,115   3,358   2,836 
  
 
 
 
 
 

Total operating expenses

  19,689   46,248   51,951   49,846   38,503   33,202 
  
 
 
 
 
 

Operating income

  3,077   22,594   28,863   26,739   23,773   19,888 

Interest expense

  (4,428)  (19,385)  (15,128)  (15,944)  (13,430)  (11,514)

Loan procurement amortization expense

  (240)  (5,727)  (1,015)  (1,079)  (1,182)  (898)

Early extinguishment of debt

  (7,012)  —     —     —     —     —   

Costs incurred to acquire management company

  (22,152)  —     —     —     —     —   

Gain (loss) on sale of storage facilities

  —     —     —     —     (2,459)  448 

Other

  (41)  69   12   —     —     —   
  
 
 
 
 
 

Income (loss) from continuing operations before minority interest

  (30,796)  (2,449)  12,732   9,716   6,702   7,924 
  
 
 
 
 
 

Minority interest

  898   —     —     —     —     —   

Discontinued operations:

                        

Income from operations

  —     —     171   312   194   326 

Gain on sale of storage facilities

  —     —     3,329   —     —     —   
  
 
 
 
 
 

Income from discontinued operations

  —     —     3,500   312   194   326 
  
 
 
 
 
 

Net income (loss)

 $(29,898) $(2,449) $16,232  $10,028  $6,896  $8,250 
  
 
 
 
 
 

Net loss per share (basic and diluted)

 $(0.80)                    
  
                    

Weighted average common shares outstanding (basic and diluted)

  37,477,920                     
  
                    

Distribution declared

 $

0.2009

 

 

                    
  
                    

                         
  The Company  The Predecessor(1) 
     Period
  Period
    
     October 21,
  January 1,
    
  Year Ended
  through
  through
    
  December 31,  December 31,  October 20,  Year Ended December 31, 
  2005  2004  2004  2003  2002  2001 
  (Dollars and shares in thousands, except per share data) 
 
Basic and diluted earnings (loss) per share from continuing operations $0.07  $(0.80)                
                         
Basic and diluted earnings per share from discontinued operations  —   —                 
                         
Basic and diluted earnings (loss) per share $0.07  $(0.80)                
                         
Weighted average basic common shares outstanding(3)  42,120   37,478                 
                         
Weighted average diluted common shares outstanding(3)  42,203   37,478                 
                         
Distribution declared(4) $1.13  $0.2009                 
                         
Balance Sheet Data (as of end of period):
                        
Storage facilities, net $1,246,295  $729,155      $395,599  $411,232  $378,179 
Total assets  1,481,488   775,874       412,219   421,400   392,016 
Loans payable and capital lease obligations  669,338   380,652       271,945   270,413   242,184 
Total liabilities  714,376   405,432       280,470   278,987   249,854 
Minority interest  64,108   11,062       —   —   — 
Shareholders’/owners’ equity  703,004   359,380       131,749   142,413   142,162 
Total liabilities and shareholders’/owners’ equity  1,481,488   775,874       412,219   421,400   392,016 
Other Data:
                        
Net operating income  93,126   13,131   42,811   52,718   50,510   41,299 
Funds from operations for the operating partnership  42,914   (24,996)  14,079   32,604   29,885   23,812 
Number of facilities (end of period)  339   201   155   155   159   152 
Total rentable square feet (end of period)  20,828,446   12,977,893   9,683,014   9,863,014   10,050,274   9,520,547 
Occupancy (end of period)  81.2%  82.2%  85.2%  82.6%  79.2%  78.6%
Cash dividends declared per share(4) $1.13  $0.2009                 
Cash Flow data:
                        
Net cash flow provided by (used in):                        
Operating activities $48,850  $9,415  $25,523  $34,227  $31,642  $23,570 
Investing activities  (392,694)  (229,075)  (5,114)  (2,507)  (33,212)  (127,683)
Financing activities  516,457   246,078   (25,845)  (25,729)  (818)  105,049 
Reconciliation of Net Income (Loss) to Funds from Operations (FFO):
                        
Net Income (loss)(5) $2,777  $(29,898) $(2,449) $16,232  $10,028  $6,896 
Plus:                        
Depreciation  39,949   5,800   16,528   19,494   19,656   14,168 
Minority interest  199   (898)  —   —   —   — 
Depreciation included in discontinued operations  168   —   —   207   201   289 
Loss on sale of storage facilities  —   —   —   —   —   2,459 

41

                         
  The Company  The Predecessor(1) 
     Period
  Period
    
     October 21,
  January 1,
    
  Year Ended
  through
  through
    
  December 31,  December 31,  October 20,  Year Ended December 31, 
  2005  2004  2004  2003  2002  2001 
  (Dollars and shares in thousands, except per share data) 
 
Less:                        
Gain on sale of storage facilities  (179)  —   —   (3,329)  —   — 
                         
FFO for the operating partnership $42,914  $(24,996) $14,079  $32,604  $29,885  $23,812 
                         
FFO allocable to minority interest $(2,864) $(733)                
                         
FFO attributable to common shareholders $40,050  $(24,263)                
                         
Reconciliation of Net Income (Loss) to Net Operating Income:
                        
Net Income (loss)(5) $2,777  $(29,898) $(2,449) $16,232  $10,028  $6,896 
Plus:                        
Interest:                        
Interest expense on loans  32,370   4,428   19,385   15,128   15,944   13,430 
Loan procurement amortization expense  1,785   240   5,727   1,015   1,079   1,182 
Minority interest  199   (898)  —   —   —   — 
Early extinguishment of debt  93   7,012   —   —   —   — 
Costs incurred to acquire management company — related party(5)  —   22,152   —   —   —   — 
Loss on sale of storage facilities  —   —   —   —   —   2,459 
Other  47   78   —   —   —   — 
Less:                        
Income from discontinued operations  (32)  —   —   (171)  (312)  (194)
Gain on sale of storage facilities  (179)  —   —   (3,329)  —   — 
Interest income  (2,405)  (37)  (69)  (12)  —   — 
                         
Operating income $34,655  $3,077  $22,594  $28,863  $26,739  $23,773 
Plus:                        
General and administrative/ Management fees to related party  18,522   4,254   3,689   4,361   4,115   3,358 
Depreciation  39,949   5,800   16,528   19,494   19,656   14,168 
                         
Net operating income $93,126  $13,131  $42,811  $52,718  $50,510  $41,299 
                         
(1)Represents historical financial data of our operating partnership, and its subsidiaries, including three additional facilities that were acquired by our operating partnership from certain of the Amsdell Entities in connection with the IPO. See Note 1 to the financial statements.

  The Company
  The Predecessor(1)
 
  

Period

October 21,

2004 through

December 31,

  

Period

January 1,

2004 through

October 20,

  Year Ended December 31,
 
  2004
  2004
  2003
  2002
  2001
  2000
 
  (Dollars in thousands, except per share data) 

Balance Sheet Data (as of end of period):

                        

Storage facilities, net of accumulated depreciation

 $729,155      $395,599  $411,232  $378,179  $255,911 

Total assets

  775,874       412,219   421,400   392,016   268,307 

Loans payable and capital lease obligations

  380,652       271,945   270,413   242,184   148,149 

Total liabilities

  405,432       280,470   278,987   249,854   155,309 

Minority interest

  11,062       —     —     —     —   

Shareholders’/owners’ equity

  359,380       131,749   142,413   142,162   112,999 

Total liabilities and shareholders’/owners’ equity

  775,874       412,219   421,400   392,016   268,307 

Cash Flow data:

                        

Net cash flow provided by (used in):

                        

Operating activities

 $9,415  $25,523  $34,227  $31,642  $23,570  $22,304 

Investing activities

  (229,075)  (5,114)  (2,507)  (33,212)  (127,683)  (654)

Financing activities

  246,078   (25,845)  (25,729)  (818)  105,049   (21,172)

Other data:

                        

Net operating income(2)

  13,131   42,811   52,718   50,510   41,299   35,510 

Funds from operations(3)

  (24,996)  14,079   32,604   29,885   23,812   20,717 

Number of facilities (end of period)

  201   155   155   159   152   130 

Total rentable square feet (end of period)

  12,977,893   9,683,014   9,863,014   10,050,274   9,520,547   7,647,052 

Occupancy (end of period)

  82.2%  85.2%  82.6%  79.2%  78.6%  80.9%

Reconciliation of Net Income to Funds from Operations(3):

                        

Net Income (Loss)

 $(29,898) $(2,449) $16,232  $10,028  $6,896  $8,250 

Plus:

                        

Depreciation

  5,800   16,528   19,494   19,656   14,168   12,786 

Depreciation included in discontinued operations

  —     —     207   201   289   129 

Loss on sale of storage facilities

  —     —     —     —     2,459   —   

Less:

                        

Minority interest

  (898)  —     —     —     —       

Gain on sale of storage facilities

  —     —     (3,329)  —     —     (448)
  
 
 
 
 
 

FFO for the operating partnership

 $(24,996) $14,079  $32,604  $29,885  $23,812  $20,717 
  
 
 
 
 
 

FFO allocable to minority interest

 $733                     
  
                    

FFO attributable to common shareholders

 $(24,263)                    
  
                    

Reconciliation of Net Income (Loss) to Net Operating Income (3):

                        

Net Income (Loss)

 $(29,898) $(2,449) $16,232  $10,028  $6,896  $8,250 

Plus:

                        

Management fees to related party/general and administrative(4)

  4,254   3,689   4,361   4,115   3,358   2,836 

Depreciation

  5,800   16,528   19,494   19,656   14,168   12,786 

Interest expense

  4,428   19,385   15,128   15,944   13,430   11,514 

Loan procurement amortization expense

  240   5,727   1,015   1,079   1,182   898 

(Gain) Loss from discontinued operations

  —     —     —     —     2,459   (448)

Early extinguishment of debt

  7,012   —     —     —           

Costs incurred to acquire management company

  22,152   —     —     —     —     —   

Other

  41   (69)  (12)  —     —     —   

Less:

                        

Income from discontinued operations

  —     —     (171)  (312)  (194)  (326)

Minority interest

  (898)  —     —     —     —     —   

Gain on sale of storage facilities

  —     —     (3,329)  —     —     —   
  
 
 
 
 
 

Net operating income

 $13,131  $42,811  $52,718  $50,510  $41,299  $35,510 
  
 
 
 
 
 

(2)We define net operating income, “NOI”, as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding backPrior to net income: interest expense, loan procurement amortization expense, minority interest, loss on sale of storage facilities, depreciation andthe IPO, management fees to related party/party were paid to U-Store-It Mini Warehouse Co., the prior manager of our self-storage facilities that was acquired at the time of our IPO.
(3)Excludes 5,198,855 operating partnership units issued at our IPO and in connection with the acquisition of facilities subsequent to our IPO. Operating partnership units have been excluded from the earnings per share calculations as there would be no effect on the earnings per share since, upon conversion, the minority interests’ share of income would also be added back to net income.

42

(4)The Company’s board of trustees declared a pro rata dividend of $0.2009 per common share on November 16, 2004 and full quarterly dividends of $0.28 per common share on February 22, 2005, May 31, 2005 and August 24, 2005 and $0.29 per common share on November 30, 2005.
(5)For the period from October 21, 2004 through December 31, 2004, amount includes a one-time management contract termination charge of approximately $22.2 million related to the termination of our management contracts as a result of the purchase of U-Store-It Mini Warehouse Co. and approximately $7.0 million of expenses related to the early extinguishment of debt at the time of our IPO. Additionally, for the period from October 21, 2004 through December 31, 2004, general and administrative; and deducting from net income: income from discontinued operations and gains on saleadministrative expense includes a one-time compensation charge of self-storage facilities. NOI is not a measureapproximately $2.4 million for deferred shares granted to certain members of performance calculatedour senior management team in accordanceconnection with GAAP.our IPO.

We use NOI

Non-GAAP Financial Measures
Funds From Operations
Funds from operations, which we refer to as“FFO,” is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance at each of our facilities, and for all of our facilities in the aggregate. NOI should not be considered as a substitute for operating income, net income, cash flows provided by operating, investing and financing activities, or other income statement or cash flow statement data preparedperformance. We calculate FFO in accordance with GAAP.

We believe NOI is useful to investors in evaluating our operating performance because:

it is one of the primary measures used by our management and our facility managers to evaluate the economic productivity of our facilities, including our ability to lease our facilities, increase pricing and occupancy and control our property operating expenses;

it is widely usedbest practices described in the real estate industry and the self-storage industry to measure the performance of real estate assets without regard to various items included inWhite Paper. The White Paper defines FFO as net income that do not relate to or are not indicative(computed in accordance with GAAP), excluding gains (or losses) from sales of operating performance, such asproperty, plus depreciation and amortization, which can vary depending upon accounting methods and book value of assets;after adjustments for unconsolidated partnerships and

we believe it helps investors joint ventures. Adjustments for unconsolidated partnerships and joint ventures, if any, are calculated to meaningfully comparereflect FFO on the resultssame basis.
Management uses FFO as a key performance indicator in evaluating the operations of our operating performance from period to period by removing the impact of the capital structure (primarily interest expense on our outstanding indebtedness) and depreciation of our basis in our assets from our operating results.

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 its analysis of net income. 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.

(3)Funds from operations, which is referred to as “FFO,” is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. We calculate FFO in accordance with the best practices described in the April 2002 National Policy Bulletin of the National Association of Real Estate Investment Trusts (“NAREIT”), which is referred to as the “White Paper.” The White Paper defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization of operating real estate and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures, if any, are calculated to reflect FFO on the same basis.

facilities. Given the nature of our business as a real estate owner and operator, we believe that FFO is helpful to management and investors as a starting point in measuring our operational performance because it excludes various items included in net income that do not relate to or are not indicative of our operating performance, such as gains (or losses) from sales of property and depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of our financial performance, is not an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, and is not indicative of funds available to fund our cash needs, including our ability to make distributions. Our computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the White Paper or that interpret the White Paper differently than we do.

NOI
We define net operating income, which we refer to as “NOI,” as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income: interest expense on loans, loan procurement amortization expense, early extinguishment of debt, the charge incurred to acquireU-Store-It Mini Warehouse Co., minority interest, loss on sale of storage facilities, other, depreciation and general and administrative/management fees to related party; and deducting from net income: income from discontinued operations, gains on sale of self-storage facilities and interest income. NOI is not a measure of performance calculated in accordance with GAAP.
We use NOI as a measure of operating performance at each of our facilities, and for all of our facilities in the aggregate. NOI should not be considered as a substitute for operating income, net income, cash flows provided by operating, investing and financing activities, or other income statement or cash flow statement data prepared in accordance with GAAP.
We believe NOI is useful to investors in evaluating our operating performance because:
(4)Management fees to related party have historically been paid to U-Store-It Mini Warehouse Co., an entity that upon completion
• It is one of the offeringprimary measures used by our management and our facility managers to evaluate the economic productivity of our facilities, including our ability to lease our facilities, increase pricing and occupancy and control our property operating expenses;
• It is partwidely used in the real estate industry and the self-storage industry to measure the performance of the Company.real estate assets without regard to various items included in net income that do not relate to or are not


43

indicative of operating performance, such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets; and
• We believe it helps our investors to meaningfully compare the results of our operating performance from period to period by removing the impact of our capital structure (primarily interest expense on our outstanding indebtedness) and depreciation of our basis in our assets from our operating results.
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. 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.
ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report. Where appropriate, the following discussion includes analysis of the effects of the Company’s initial public offering (“IPO”), the formation transactions and related refinancing transactions and certain other transactions. The Company makes certain statements in this section that are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this report entitled “Forward-Looking Statements”.Statements.” Certain risk factors may cause actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see the section in this report entitled “Risk Factors.”
Overview

OVERVIEW

On October 27, 2004, the Company completed its IPO, pursuant to which it sold an aggregate of 28,750,000 common shares (including 3,750,000 shares pursuant to the exercise of the underwriters’ over-allotment option) at an offering price of $16.00 per share. The IPO resulted in gross proceeds to the Company of approximately $460.0 million.

On October 7, 2005, the Company completed a secondary public offering, pursuant to which it sold an aggregate of 19,665,000 common shares (including 2,565,000 shares pursuant to the exercise of the underwriters’ option) at an offering price of $20.35 per share, for gross proceeds of $400.2 million.

The Company is an integrated self-storage real estate company, which means that it has in–housein-house capabilities in the operation, design, development, leasing, and acquisition of self-storage facilities. At the completion of the IPODecember 31, 2005 and its formation transactions,2004, the Company owned 339 and 201 self-storage facilities, respectively, totaling approximately 20.8 and 13.0 million rentable square feet.

feet, respectively.

The Company derives revenues principally from rents received from its customers who rent units at its self-storage facilities undermonth-to-month leases. Therefore, our operating results depend materially on our ability to retain our existing customers and lease our available self-storage units to new customers while maintaining and, where possible, increasing our pricing levels. In addition, our operating results depend on the ability of our customers to make required rental payments to us. We believe that our decentralized approach to the management and operation of our facilities, which places an emphasis on local, market level oversight and control, allows us to respond quickly and effectively to changes in local market conditions, where appropriate increasing rents while maintaining occupancy levels, or increasing occupancy levels while maintaining pricing levels.

We experience

The Company experiences minor seasonal fluctuations in the occupancy levels of our facilities, which are generally slightly higher during the summer months due to increased moving activity.

In the future, we intendthe Company intends to focus on increasing our internal growth and selectively pursuing targeted acquisitions and developments of self-storage facilities. We intend to incur additional debt in connection with any such future acquisitions or developments.


44

The Company has one reportable operating segment: we own, operate, develop, and acquire self-storage facilities. The Company’s self-storage facilities are located in major metropolitan areas and have numerous tenants per facility. All our operations are within the United States and no single tenant represents 1% or more of our revenues. The facilities in Florida, California, Illinois and New Jersey provided approximately 24%, 11%, 10% and 8%, respectively, of total revenues for the year ended December 31, 2005.
Summary of Critical Accounting Policies and Estimates

Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated and combined financial statements.statements included in this report. Certain of the accounting policies used in the preparation of these consolidated and combined financial statements are particularly important for an understanding of the financial position and results of operationoperations presented in the historical consolidated and combined financial statements included in this report. We have also provided aA summary of significant accounting policies is also provided in the notes to our consolidated and combined financial statements (See Note 2)2 to the Consolidated and Combined Financial Statements). These policies require the application of judgment and assumptions by management and, as a result, are subject to a degree of uncertainty. Due to this uncertainty, actual results could differ from estimates calculated and utilized by management.

Basis of Presentation

The accompanying consolidated and combined financial statements include all of the accounts of the Company, the operating partnership and the wholly-owned subsidiaries of ourthe operating partnership. The mergers of Amsdell Partners, Inc. and High Tide LLC with and into the Company, and the property interests contributed to the operating partnership by the Predecessor, have been accounted for as a reorganization of entities under common control and accordingly, were recorded at the Predecessor’s historical cost basis. Prior to the combination, the Company had no significant operations; therefore, the combined operations for the period prior to October 21, 2004, represent the operations of the Predecessor.

For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this Annual Report onForm 10-K.
Self-Storage Facilities

The Company records self-storage facilities at cost less accumulated depreciation. Depreciation on the buildings and equipment is recorded on a straight-line basis over their estimated useful lives, which range from five to 40 years. Expenditures for significant renovations or improvements that extend the useful life of assets are capitalized. Repairs and maintenance costs are expensed as incurred.

When facilities are acquired, the purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on estimated fair values. When a portfolio of facilities is acquired, the purchase price is allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates, which take into account the relative size, age and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available. Allocations to the individual assets and liabilities are based upon comparable market sales information for land, buildings and improvements and estimates of depreciated replacement cost of equipment.

In allocating the purchase price, the Company determines whether the acquisition includes intangible assets or liabilities. Substantially all of the leases in place at acquired properties are at market rates, as the majority of the leases aremonth-to-month contracts. Accordingly, to date no portion of the purchase price has been allocated to above-or below-market lease intangibles. The Company also considers whether the in-place, at market leases for any facility represent an intangible asset. Based upon the Company’s experience, leases of this nature generally re-let in less than 30 days andlease-up costs are minimal. Accordingly, to datethe Company has no tangible asset has beenintangible assets recorded for in-place, at market leases.leases as of December 31, 2005 and 2004. Additionally, to date no intangible asset has been recorded for the value of tenant relationships, because the Company does not have any concentrations of significant tenants and the average tenant turnover is fairly frequent (less than one year).frequent.


45

Long-lived assets are classified as held“held for useuse” are reviewed for impairment when events and circumstances indicate that there may be an impairment. The carrying value of these long-lived assets are compared to the undiscounted future net operating cash flows attributable to the assets. An impairment loss is recorded if the net carrying value of the asset exceeds the fair value based on its undiscounted future net operating cash flows attributable to the asset and circumstances indicate that the carrying value of the real estate asset may not be recoverable. The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. NoThe Company recorded an asset impairment charges have been recognized throughcharge of $2.3 million for the year ended December 31, 2004.

2005 related to hurricane damage (See Note 16 to the Consolidated and Combined Financial Statements).

The Company considers long-lived assets to be “held for sale” upon satisfaction of the following criteria: (a) management commits to a plan to sell a facility (or group of facilities), (b) the facility is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such facilities, (c) an active program to locate a buyer and other actions required to complete the plan to sell the facility have been initiated, (d) the sale of the facility is probable and transfer of the asset is expected to be completed within one year, (e) the facility is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Typically these criteria are all met when the relevant asset is under contract, significant non-refundable deposits have been made by the potential buyer, the assets are immediately available for transfer and there are no contingencies related to the sale that may prevent the transaction from closing. In most transactions, these contingencies are not satisfied until the actual closing of the transactiontransaction; and, accordingly, the facility is not identified as held for sale until the closing actually occurs. However, each potential transaction is evaluated based on its separate facts and circumstances.

Revenue Recognition

Management has determined that all our leases with tenants are operating leases. Rental income is recognized in accordance with the terms of the lease agreements or contracts, which generally aremonth-to-month. Revenues from long-term operating leases are recognized on a straight-line basis over the term of the lease. The excess of rents recognized over amounts contractually due pursuant to the underlying leases is included in rents received in advance, and contractually due but unpaid rents are included in other assets.

Share OptionsBased Payments

We apply the fair value method of accounting for thecontingently issued shares and share options issued under our incentive award plan at the date of consummation of our IPO.plan. Accordingly, share compensation expense was recorded ratably over the vesting period relating to such contingently issued shares and options. The Company has elected to recognize compensation expense on a straight-line method over the requisite service period. Additionally, certain restricted share units awarded to our chief executive officer vest immediately upon his retirement from the Company as he has reached the retirement age set forth in his award agreement. Accordingly, share compensation expense related to this issuance was expensed fully in 2005.
Minority Interest
As of September 30, 2005, the Company recorded the operating partnership units issued in connection with the National Self Storage transaction as conditionally redeemable as the result of a special redemption right (see Note 3 and Note 6 for a discussion of the National Self Storage transaction). On October 25, 2005, the sellers in the National Self Storage transaction agreed to terminate the Special Redemption Right, effective as of July 15, 2005 (the first date on which National Self Storage facilities were acquired by the operating partnership under the purchase agreement). From the issuance date until October 25, 2005, the Company elected to accrete changes in the redemption value of the National Self Storage Units issued over the period from the date of issuance to the earliest redemption date (one-year from the date of initial issuance) on a pro


46

rata basis. Upon termination of the Special Redemption Right, the Company classified these units in minority interest. The amount of accretion recorded through October 25, 2005 was approximately $3.0 million. Effective October 26, 2005, minority interest represents issued and outstanding operating partnership units. Income is allocated to the holders of the operating partnership units based on their ownership percentage of the operating partnership. This ownership percentage, as well as the total net assets of the operating partnership, change when additional units are issued. Such changes results in an allocation between stockholders’ transactions for the period as the “Adjustment for Minority Interest in operating partnership” (rather than separately allocating the minority interest for each individual capital transaction).
Recent Accounting Pronouncements
In March 2005, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations” (“FIN 47”). FIN 47 clarifies the definition and treatment of conditional asset retirement obligations as discussed in FASB Statement No. 143, “Accounting for Asset Retirement Obligations”. A conditional asset retirement obligation is defined as an asset retirement activity in which the timingand/or

There have been no recent accounting pronouncements or interpretations method of settlement are dependent on future events that havemay be outside the control of the Company. FIN 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. FIN 47 is intended to provide more information about long-lived assets, more information about future cash outflows for these obligations and more consistent recognition of these liabilities. The Company initially adopted FIN 47 at December 31, 2005 and the adoption of this interpretation did not yet been implemented that will have a material impact on our financial statements.

the Company.

Results of Operations

The following discussion of our results of operations should be read in conjunction with the consolidated and combined financial statements and the accompanying notes thereto. Historical results set forth in the consolidated and combined statements of operations reflect only the existing facilities and should not be taken as indicative of future operations.

Comparison of the Year Ended December 31, 20042005 to the Year Ended December 31, 20032004

For purposes of the following comparison of operating results for the years ended December 31, 20042005 and December 31, 2003, we have2004, the Company has combined the results of operations for the Company for the period from October 21, 2004 through December 31, 2004 and the Predecessor for the period from January 1, 2004 through October 20, 2004. Internally, the Company uses combined reporting to evaluate its operating performance and believes that this presentation will provide investors with additional insight into our financial results.

Acquisition and Development Activities

The comparability of the Company’s results of operationoperations is significantly affected by development, redevelopment and acquisition activities in 20042005 and 2003.2004. At December 31, 20042005 and 20032004, the Company owned interests in 201339 and 155201 self-storage facilities and related assets, respectively.

In 2005, 146 self storage facilities were acquired for approximately $547.9 million. During 2005 four self-storage facilities were sold for approximately $6.2 million, and accordingly results of operations for these facilities have been accounted for as discontinued operations. Based upon total acquisitions, dispositions and consolidations, the Company had a net increase of 138 properties in 2005 (See Note 3 to the Consolidated and Combined Financial Statements).
In 2004, 46 self-storage facilities were acquired for approximately $221.8 million. All of these facilities were acquired concurrently with, or shortly after, the completion of the IPO.


47

In 2003, one self-storage facility was acquired for approximately $3.2 million and the Company completed and placed in service one expansion of an existing self-storage facility for approximately $2.5 million. During this same period four self-storage facilities and one commercial property were sold, which facilities and property have been accounted for as discontinued operations.

A comparison of income (loss) from continuing operations before minority interest for the years ended December 31, 20042005 and 20032004 is as follows:

   ($ in thousands) 
   2004(1)
  2003
 

REVENUES:

         

Rental income

  $86,945  $76,898 

Other property related income

   4,663   3,916 
   
 

Total revenues

   91,608   80,814 
          

OPERATING EXPENSES:

         

Property operating expenses

   35,666   28,096 

Depreciation

   22,328   19,494 

General and administrative

   4,254   —   

Management fees - related party

   3,689   4,361 
   
 

Total operating expenses

   65,937   51,951 
          

OPERATING INCOME

   25,671   28,863 
          
OTHER INCOME (EXPENSE):         

Interest expense

   (23,813)  (15,128)

Loan procurement amortization expense

   (5,967)  (1,015)

Early extinguishment of debt

   (7,012)  —   

Cost incurred to acquire management company

   (22,152)  —   

Other

   28   12 
   
 

Total other expense

   (58,916)  (16,131)
          

INCOME (LOSS) FROM CONTINUING OPERATIONS

   (33,245)  12,732 
         
  Year Ended December 31, 
  2005  2004 (1) 
  (Dollars in thousands) 
 
REVENUES:        
Rental income $138,120  $86,945 
Other property related income  10,001   4,663 
         
Total revenues  148,121   91,608 
OPERATING EXPENSES:        
Property operating expenses  54,952   35,666 
Property operating expense — related party  43   — 
Depreciation  39,949   22,328 
General and administrative  17,786   4,140 
General and administrative — related party  736   114 
Management fees — related party  —   3,689 
         
Total operating expenses  113,466   65,937 
OPERATING INCOME  34,655   25,671 
OTHER INCOME (EXPENSE):        
Interest:        
Interest expense on loans  (32,370)  (23,813)
Loan procurement amortization expense  (1,785)  (5,967)
Early extinguishment of debt  (93)  (7,012)
Cost incurred to acquire management company — related party  —   (22,152)
Interest income  2,405   106 
Other  (47)  (78)
         
Total other expense  (31,890)  (58,916)
         
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST $2,765  $(33,245)
         
(1)The twelve months ended December 31, 2004 represents consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from January 1, 2004 to October 20, 2004. The operating results for the year ended December 31, 2004 are not comparable to future expected operating results of the Company since they include various IPO-related charges.
Comparison of Operating Results for the Years Ended December 31, 2005 and 2004 (Not including discontinued operations)
Total Revenues
Rental income increased from $86.9 million in 2004 to $138.1 million in 2005, an increase of $51.2 million, or 58.9%. This increase is primarily attributable to (i) the acquisition of 146 facilities in 2005 and (ii) an increase in revenues from our pool of “same-store” facilities of approximately $3.8 million (see “Same-Store Facility Results” on page 52).
Other property related income increased from $4.7 million in 2004 to $10.0 million in 2005, an increase of $5.3 million, or 114.5%. This increase is primarily attributable to the acquisition of 146 facilities in 2005.


48

Total Operating Expenses
Property operating expenses increased from $35.7 million in 2004 to $55.0 million in 2005, an increase of $19.3 million, or 54.2%. This increase is primarily attributable to the acquisition of 146 facilities in 2005 offset by a decrease in operating expenses from our pool of “same-store” facilities of approximately $2.0 million (see “Same-Store Facility Results” below).
General and administrative costs began with the Company’s IPO in October 2004. As a result, general and administrative expenses increased $14.2 million to $18.5 million in 2005 from $4.3 million in 2004, primarily from incurring a full year of general and administrative costs. General and administrative costs included a charge of approximately $4.7 million in 2005 and approximately $2.8 million in 2004, an increase of $1.9 million, for compensation expense to certain members of the Company’s senior management team. The $4.7 million of general and administrative expense incurred in 2005 included approximately $2.5 million of bonuses and approximately $2.2 million of share compensation expense. The $2.8 million incurred in 2004 included approximately $0.4 million for bonuses and approximately $2.4 million for share compensation expense. During 2005, administrative costs included expenses related to being a public company, including, audit and legal fees, board of trustee fees, Sarbanes Oxley compliance costs and investor relations costs which totaled approximately $3.4 million in 2005, of which $1.1 million related to Sarbanes Oxley compliance costs. The remaining general and administrative costs increased approximately $8.9 million to $10.4 million in 2005 from $1.5 million in 2004, which increase related primarily to administrative salaries and miscellaneous expenses incurred for the full year of 2005.
Management fees decreased from $3.7 million in 2004 to $0.0 million in 2005, a decrease of $3.7 million, or 100%. This decrease is attributable to the acquisition of our management company effective October 27, 2004 in connection with our IPO. Management fees from our wholly-owned subsidiaries were eliminated subsequent to October 27, 2004 and were replaced with management company expenses, which are recorded in general and administrative expenses. Depreciation increased from $22.3 million in 2004 to $39.9 million in 2005, an increase of $17.6 million, or 78.9%. The increase is partially attributable to the acquisition of 146 additional facilities in 2005 resulting in $8.8 million of the total increase. Additionally, the increase is partially attributable to a “step up” in the carrying amount of fixed assets due to the purchase of outside partners’ interests in the Predecessor in May 2004 and the acquisition of 46 facilities in the fourth quarter of 2004. The above increases were partially offset by lower depreciation on fully amortized equipment with lives significantly shorter than new buildings and improvements.
Total Other Expenses
Interest expense increased from $23.8 million in 2004 to $32.4 million in 2005, an increase of $8.6 million, or 35.9%. The increase is attributable to a higher amount of outstanding debt in 2005 primarily resulting from the financing of certain of the Company’s acquisitions in 2005 with additional borrowings.
Loan procurement amortization expense decreased from $6.0 million in 2004 to $1.8 million in 2005, a decrease of $4.2 million, or 70.1%. This decrease is primarily attributable to loan procurement costs incurred in connection with the Predecessor entering into a $424.5 million term loan in May 2004, which was used to purchase the interests of outside partners in the Predecessor.
In the fourth quarter of 2004, the Company incurred a charge of $7.0 million for the early extinguishment of debt primarily due to the incurrence of approximately $0.9 million of prepayment penalties and the write-off of $6.1 million of unamortized loan procurement costs.
Cost incurred to acquire the management company as part of our IPO transactions resulted in a one-time charge of $22.2 million in 2004.
Interest income increased to $2.4 million in 2005 from $0.1 million in 2004. This increase is primarily attributable to the investment of excess proceeds received in October 2005 from the Company’s secondary public offering.


49

Comparison of the Year Ended December 31, 2004 to the Year Ended December 31, 2003
For purposes of the following comparison of operating results for the years ended December 31, 2004 and December 31, 2003, we combined the results of operations for the Company for the period from October 21, 2004 through December 31, 2004 and the Predecessor for the period from January 1, 2004 through October 20, 2004. Internally, the Company uses combined reporting to evaluate its operating performance and believes that this presentation will provide investors with additional insight into our financial results.
Acquisition and Development Activities
The comparability of the Company’s results of operations is significantly affected by development, redevelopment and acquisition activities in 2004 and 2003. At December 31, 2004 and 2003 the Company owned interests in 201 and 155 self-storage facilities and related assets, respectively.
In 2004, 46 self-storage facilities were acquired for approximately $221.8 million. All of these facilities were acquired concurrently with, or shortly after, the completion of the IPO.
In 2003, one self-storage facility was acquired for approximately $3.2 million and the Company completed and placed in service one expansion of an existing self-storage facility for approximately $2.5 million. During this same period, four self-storage facilities and one commercial property were sold, which facilities and property have been accounted for as discontinued operations.
A comparison of income (loss) from continuing operations before minority interest for the years ended December 31, 2004 and 2003 is as follows:
         
  Year Ended December 31, 
  2004(1)  2003 
  (Dollars in thousands) 
 
REVENUES:        
Rental income $86,945  $76,898 
Other property related income  4,663   3,916 
         
Total revenues  91,608   80,814 
OPERATING EXPENSES:        
Property operating expenses  35,666   28,096 
Property operating expense — related party  —   — 
Depreciation  22,328   19,494 
General and administrative  4,140   — 
General and administrative — related party  114   — 
Management fees — related party  3,689   4,361 
         
Total operating expenses  65,937   51,951 
OPERATING INCOME  25,671   28,863 
OTHER INCOME (EXPENSE):        
Interest:        
Interest expense on loans  (23,813)  (15,128)
Loan procurement amortization expense  (5,967)  (1,015)
Early extinguishment of debt  (7,012)  — 
Cost incurred to acquire management company — related party  (22,152)  — 
Interest income  106   12 
Other  (78)  — 
         
Total other expense  (58,916)  (16,131)
         
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST $(33,245) $12,732 
         


50

(1)The twelve months ended December 31, 2004 represents consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from January 1, 2004 to October 20, 2004. The operating results for the year ended December 31, 2004 are not comparable to future expected operating results of the Company since they include various IPO-related charges.
Comparison of Operating Results for the Years Ended December 31, 2004 and 2003 (Not including discontinued operations)

Total Revenues

Rental income increased from $76.9 million in 2003 to $86.9 million in 2004, an increase of $10.0 million, or 13.0%13.1%. This increase is primarily attributable to (i) the acquisition of 46 facilities in 2004 and (ii) an increase in revenues from our pool of “same-store” facilities of approximately $4.7 million (see same-store discussion“Same-Store Facility Results” on page 44)52).

Other property related income increased from $3.9 million in 2003 to $4.7 million in 2004, an increase of $0.8 million, or 20.5%19.1%. This increase is primarily attributable to the acquisition of 46 facilities in 2004.

Total Operating Expenses

Property operating expenses increased from $28.1 million in 2003 to $35.7 million in 2004, an increase of $7.6 million, or 27.0%26.9%. This increase is primarily attributable to (i) the acquisition of 46 facilities in 2004 and (ii) an increase in operating expenses from our pool of “same-store” facilities of approximately $3.7 million (see same-store discussion on page 44)“Same-Store Facility Results” below).

Management fees decreased from $4.4 million in 2003 to $3.7 million in 2004, a decrease of $0.7 million, or 15.9%15.4%. This decrease is primarily attributable to the acquisition of our management company effective October 27, 2004 in connection with our IPO. Management fees with our wholly-owned subsidiaries were eliminated subsequent to October 27, 2004 and were replaced with management company expenses, which are recorded in general and administrative expenses.

General and administrative costs began with the Company’s IPO in October 2004. Therefore, general and administrative expenses increased from $0.0 in 2003 to $4.3 million in 2004. Included in these costs is a charge of $2.4 million for deferred shares granted to certain members of our senior management team and $0.4 million of cash bonuses paid to these executives. The remaining $1.5 million includes expenses for our management company and other costs incurred in connection with being a public company.

Depreciation increased from $19.5 million in 2003 to $22.3 million in 2004, an increase of $2.8 million, or 14.4%14.5%. This increase is partially attributable to a “step up” in the carrying amount of fixed assets due to the purchase of outside partners’ interests in the Predecessor in May 2004, which was partially offset by lower depreciation on fully amortized equipment with lives significantly shorter than new buildings and improvements. The increase is also attributable to the acquisition of 46 additional facilities in 2004.

Total Other Expenses
Interest expense increased from $15.1 million in 2003 to $23.8 million in 2004, an increase of $8.7 million, or 57.6%57.4%. The increase is attributable to a higher amount of outstanding debt and higher interest rates in 2004 primarily resulting from loans obtained in connection with our formation transactions.

Loan procurement amortization expense increased from $1.0 million in 2003 to $6.0 million in 2004, an increase of $5.0 million, or 500.0%487.9%. This increase is primarily attributable to deferred financing costs incurred in connection with obtaining a $424.5 million term loan in May 2004 that was used to purchase interests of outside partners in the Predecessor.


51

In the fourth quarter of 2004, the Company incurred a charge of $7.0 million for the early extinguishment of debt primarily due to the incurrence of approximately $0.9 million of prepayment penalties and the write-off of $6.1 million of unamortized loan costs.

Cost incurred to acquire the management company as part of our IPO transactions resulted in a one-time charge of $22.2 million in 2004.

ComparisonImpact of Hurricanes
Hurricanes that occurred during the Year End December 31, 2003 to the Year Ended December 31, 2002

Acquisition and Development Activities

The comparabilitythree months ended September 30, 2005 caused damage at certain of the Company’s resultsself-storage facilities located in Alabama, Louisiana and Mississippi. Under the provisions of operationsSFAS 144, “Accounting for the Impairment of or Disposal of Long-Lived Assets” (“SFAS 144”), the Company determined there were indicators of impairment and accordingly tested the assets for recoverability. After an assessment of the damage sustained at the Waveland, Mississippi facility, the Company determined that a charge for impairment of approximately $2.3 million was required because the estimated undiscounted future cash flows did not support the carrying value. The Company has comprehensive insurance coverage for property damage. Although the Company currently expects the insurance proceeds to cover the entire loss incurred, the Company was required to record the impairment charge, and to record an offsetting insurance recovery balance of $2.3 million, of which $0.5 million was received in October 2005. While the Company expects the insurance proceeds will be sufficient to cover the entire replacement cost of the damaged facility, certain deductibles and limitations will apply and no assurances can be made that proceeds will be sufficient to cover the costs of the entire restoration.  To the extent that insurance proceeds, which are on a replacement cost basis, ultimately exceed the net book value of the damaged facility, a gain will be recognized in the period when all contingencies related to the insurance claim have been resolved. The related insurance receivable is significantly affected by development, redevelopment, acquisition and disposition activitiesincluded in 2003 and 2002. Atother assets as of December 31, 2003 and 2002 the Company owned interests in 155 and 159 self-storage facilities and related assets, respectively.

In 2003, one self-storage facility was acquired for approximately $3.2 million,2005 and the Company completedasset impairment charge and placedinsurance recovery are recorded net in service one expansion of an existing self-storage facilitythe same line item for approximately $2.5 million. During this same period four self-storage facilities and one commercial property were sold, which have been accounted for as discontinued operations.

In 2002, three facilities were acquired for approximately $19.4 million and the Company completed and placed in service four significant development facilities for approximately $19.1 million and nine expansions of existing facilities for approximately $5.2 million.

A comparison of income from continuing operationsoperating expenses for the yearsyear ended December 31, 2003 and 2002 is as follows:

   ($ in thousands) 
   2003
  2002
 

REVENUES:

         

Rental income

  $76,898  $72,719 

Other property related income

   3,916   3,866 
   
 

Total revenues

   80,814   76,585 
          

OPERATING EXPENSES:

         

Property operating expenses

   28,096   26,075 

Depreciation

   19,494   19,656 

Management fees - related party

   4,361   4,115 
   
 

Total operating expenses

   51,951   49,846 
          

OPERATING INCOME

   28,863   26,739 
          

OTHER INCOME (EXPENSE):

         

Interest expense

   (15,128)  (15,944)

Loan procurement amortization expense

   (1,015)  (1,079)

Other

   12   —   
   
 

Total other expense

   (16,131)  (17,023)
          

INCOME (LOSS) FROM CONTINUING OPERATIONS

   12,732   9,716 

Comparison of Operating Results for the Years Ended December 31, 2003 and 2002 (Not including discontinued operations)

Total Revenues

Rental income increased from $72.7 million in 2002 to $76.9 million in 2003, an increase of $4.2 million, or 5.8%. $3.5 million of this increase is attributable to increased occupancy and $0.7 million of this increase is attributable to increased rents.

Other property related income remained flat at $3.9 million in 2002 and 2003.

Total Operating Expenses

Property operating expenses increased from $26.1 million in 2002 to $28.1 million in 2003, an increase of $2.0 million, or 7.7%. Payroll expenses increased by approximately $0.6 million, attributable to higher incentive payments as a result of increased revenues and increased number of personnel. Property taxes and insurance increased by approximately $0.7 million. This increase is primarily attributable to increased assessed values resulting in higher real estate taxes. Other operating costs increased by approximately $1.0 million. This increase is primarily attributable to significantly higher snow removal costs associated with the unusually severe winter in 2003.

Management fees increased from $4.1 million in 2002 to $4.4 million in 2003, or 7.3%. This increase is attributable to higher revenues, on which management fees are based. Most of our management agreements during the periods presented provided that management fees were based on 5.35% of total revenues collected.

Depreciation decreased from $19.7 million in 2002 to $19.5 million in 2003, or 1.0%. This decrease is attributable to fully amortized equipment with lives significantly shorter than new buildings and improvements.

Interest expense decreased from $15.9 million in 2002 to $15.1 million in 2003, or 5.0%. The decrease is due to lower interest rates in 2003 on variable rate debt outstanding during both periods.

Impact of 2004 Hurricanes

2005.

Hurricanes in late summer and early fall of 2004 caused damage at five of the Company’s 4752 facilities that are located in Florida. The Company estimates thatincurred uninsured damages resulting from the recent hurricanes will totalof approximately $0.3 million (primarily, insurance deductibles).$0.4 million. These damages did not cause any material service interruption and all of the facilities are currently fully operational. The damages at these facilities did not result in an impairment of the facilities’ net carrying values at December 31, 2004.

Same-Store Facility Results

The Company considers its same-store portfolio to consist of only those facilities owned at the beginning and at the end of the applicable periods presented and that had an occupancy of at least 70% as of the first day of such periods.


52

The following same-store presentation is considered to be useful to investors in evaluating our performance because it provides information relating to changes in facility-level operating performance without taking into account the effects of acquisitions, developments or dispositions. The following table sets forth operating data for our same-store portfolio for the periods presented.

   Three months
ended
December 31,
  Percent
Change
  Year Ended
December 31,
  Percent
Change
  Year Ended
December 31,
  Percent
Change
 
   2004
  2003
   2004
  2003
   2003
  2002
  
   ($ in thousands) 

Same-store revenues

  $20,663  $19,177  7.7% $79,403  $74,661  6.4% $60,958  $59,300  2.8%

Same-store property operating expenses

   7,914   6,749  17.3%  29,085   25,410  14.5%  20,657   19,589  5.5%

Non same-store revenues

   6,933   1,661      12,205   6,153      19,856   17,285    

Non same-store property operating expenses

   4,188   822      6,581   2,686      7,439   6,486    

Total revenues

   27,596   20,838      91,608   80,814      80,814   76,585    

Total property operating expenses

   12,102   7,571      35,666   28,096      28,096   26,075    

Number of facilities included in same-store analysis

   142          142          121        

                         
  Year Ended
  Year Ended
    
  December 31,  December 31,    
        Percent
        Percent
 
  2005  2004 (1)  Change  2004 (1)  2003  Change 
  (Dollars in thousands) 
 
Same-store revenues $89,403  $85,627   4.4% $79,403  $74,661   6.4%
Same-store property operating expenses $30,710  $32,754   (6.2)% $29,085  $25,410   14.5%
Non same-store revenues $58,718  $5,981      $12,205  $6,153     
Non same-store property operating expenses $24,285  $2,912      $6,581  $2,686     
Total revenues $148,121  $91,608      $91,608  $80,814     
Total property operating expenses $54,995  $35,666      $35,666  $28,096     
Number of facilities included in same-store analysis  153           142         
(1)The twelve months ended December 31, 2004 represents same store sales for the consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from January 1, 2004 to October 20, 2004.
Comparison of the Year Ended December 31, 2005 to the Year Ended December 31, 2004
Same-store revenues increased from $85.6 million in 2004 to $89.4 million in 2005, an increase of $3.8 million, or 4.4%. Approximately $0.0 million of this increase was attributable to increased occupancy and $3.8 million of this increase was attributable to increased rents.
Same-store property operating expenses decreased from $32.8 million in 2004 to $30.8 million in 2005, a decrease of $2.0 million, or 6.2%. This decrease was primarily attributable to lower marketing, insurance expense, payroll expense, repairs and maintenance and other operating expense, partially offset by increased property taxes. Other same-store operating costs also decreased due to costs incurred in connection with changes in the Company’s logo, higher computer costs and bad debt expense in 2004.
Comparison of the Year Ended December 31, 2004 to the Year Ended December 31, 2003

Same-store revenues increased from $74.7 million in 2003 to $79.4 million in 2004, an increase of $4.7 million, or 6.4%. Approximately $2.1 million of this increase was attributable to increased occupancy and $2.6 million of this increase was attributable to increased rents.

Same-store property operating expenses increased from $25.4 million in 2003 to $29.1 million in 2004, an increase of $3.7 million, or 14.5%. This increase was primarily attributable to increased payroll expenses caused by an increase in the number of personnel and related costs including facility managers, higher compensation costs for performance incentives, district managers hired during the year to fill previously vacant job positions and lengthening the operating hours of some of our facilities. Other same-store operating costs also increased due to costs incurred in connection with changes in the Company’s logo, higher computer costs and bad debt expense.


53

Cash Flows
Comparison of the Year Ended December 31, 20032005 to the Year Ended December 31, 20022004

Same-store revenues

A comparison of cash flow operating, investing and financing activities for the years ended December 31, 2005 and 2004 is as follows:
             
  Year Ended December 31, 
  2005  2004 (1)  Increase 
  (Dollars in millions) 
 
Net cash flow provided by (used in):            
Operating activities $48.9  $34.9  $14.0 
Investing activities $(392.7) $(234.2) $158.5 
Financing activities $516.5  $220.2  $296.3 
(1)The twelve months ended December 31, 2004 represents cash flows for the consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from January 1, 2004 to October 20, 2004.
Cash provided by operations increased from $59.3$34.9 million in 20022004 to $61.0$48.9 million in 2003,2005, an increase of $1.7$14.0 million, or 2.8%39.8%. Approximately $0.2 million of thisThe increase wasis primarily attributable to increased occupancy and $1.5 millionthe acquisition of this increase was attributable to increased rents.

Same-store property operating expenses146 self storage facilities in 2005.

Cash used in investing activities increased from $19.6$234.2 million in 20022004 to $20.7$392.7 million in 2003,2005, an increase of $1.1$158.5 million or 5.5%67.7%. ThisThe increase wasis primarily attributable to 146 self-storage facilities acquired in 2005 versus 46 self storage facilities acquired in 2004.
Cash provided by financing activities increased payroll expenses, property taxes,from $220.2 million in 2004 to $516.5 million in 2005, an increase of $296.3 million. This increase is primarily attributable to the proceeds from the secondary offering of approximately $378.7 million and insurance.

completion of certain financing agreements of approximately $232.5 million compared to proceeds from the IPO and new borrowings totaling approximately $695.0 million, partially offset by the repayment of certain existing loans in 2004 of approximately $585.6 million.

Cash FlowsComparison of the Year Ended December 31, 2004 to the Year Ended December 31, 2003

A comparison of cash flow operating, investing and financing activities for the years ended December 31, 2004 and 2003 is as follows:

   ($ in millions)  Increase
   2004
  2003
  $

Net cash flow provided by (used in):

           

Operating activities

  $34.9  $34.2  0.7

Investing activities

  $(234.2) $(2.5) 231.7

Financing activities

  $220.2  $(25.7) 245.9

Comparison of the Year Ended December 31, 2004 to the Year Ended December 31, 2003

             
  Year Ended December 31,    
  2004 (1)  2003  Increase 
  (Dollars in millions) 
 
Net cash flow provided by (used in):            
Operating activities $34.9  $34.2  $0.7 
Investing activities $(234.2) $(2.5) $231.7 
Financing activities $220.2  $(25.7) $245.9 
(1)The twelve months ended December 31, 2004 represents cash flows for the consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from January 1, 2004 to October 20, 2004.
Cash provided by operations increased from $34.2 million in 2003 to $34.9 million in 2004, an increase of $0.7 million, or 2.0%. The increase is primarily attributable to an increase in the income from continuing operations.

Cash used in investing activities increased from $2.5 million in 2003 to $234.2 million in 2004, an increase of $231.7 million. The increase inis primarily attributable to a much larger number of self-storage facilities acquired in 2004 versus 2003.


54

Cash provided by financing activities increased from a use of $25.7 million in 2003 to $220.2 million provided in 2004, an increase of $245.9 million. This increase is primarily attributable to the proceeds from the IPO and new borrowings, partially offset by the repayment of certain existing loans in 2004.

A comparison of cash flow operating, investing and financing activities for the years ended December 31, 2003 and 2002 is as follows:

   ($ in millions)  

Increase

(decrease)

 
   2003
  2002
  $
 

Net cash flow provided by (used in):

            

Operating activities

  $34.2  $31.6  2.6 

Investing activities

  $(2.5) $(33.2) 30.7 

Financing activities

  $(25.7) $(0.8) (24.9)

Comparison of the Year Ended December 31, 2003 to the Year Ended December 31, 2002

Cash provided by operations increased from $31.6 million in 2002 to $34.2 million in 2003, an increase of $2.6 million, or 8.2%. This increase is primarily attributable to an increase in the income from continuing operations.

Cash used in investing activities decreased from $33.2 million in 2002 to $2.5 million in 2003, a decrease of $30.7 million, or 92.5%. This decrease is primarily attributable to a decrease in acquisitions and improvements of self-storage facilities in 2003, as compared to 2002.

Cash used in financing activities increased from $0.8 million in 2002 to $25.7 million in 2003, an increase of $24.9 million. This increase is primarily attributable to lower borrowings and partner contributions required as a result of the reduced level of acquisition activity of self-storage facilities in 2003 as compared to 2002.

Liquidity and Capital Resources

As of December 31, 2005, we had approximately $201 million in available cash and cash equivalents. In addition, the full amount of our new $250.0 million three-year revolving credit facility was available for draw as of March 1, 2006.
In July 2005, YSI VI LLC (“YSI VI”), an indirect subsidiary of the Company, entered into a fixed rate mortgage loan agreement with Lehman Brothers Bank, FSB, as the lender, in the principal amount of $80.0 million. The mortgage loan, which is secured by 24 of the Company’s self-storage facilities, bears interest at 5.13% and matures in August 2012. The mortgage loan will become immediately due and payable, and the lender will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. This mortgage loan requires YSI VI to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under this mortgage loan with respect to certain exceptions to the non-recourse provisions of the loan.
In July 2005, as part of the National Self Storage acquisition, the operating partnership assumed certain mortgage indebtedness totaling approximately $80.8 million, which indebtedness is secured by 69 of the Company’s self-storage facilities, bearing interest at rates ranging from 6.02% to 8.96% and matures on dates ranging from 2007 through 2014. Since a portion of the debt was assumed at above market rates, the assumed debt was adjusted as part of the purchase price allocation during the third quarter of 2005, to a fair market value of approximately $83.0 million at effective interest rates ranging from 5.00% to 5.59%. The Company refinanced approximately $39.8 million of the assumed mortgages in November 2005 with a multi-facility fixed rate mortgage with Transamerica Financial Life Insurance, a subsidiary of AEGON USA Realty Advisors, Inc., in the principal amount of $72.5 million. The mortgage loan, which is secured by 37 of the Company’s self-storage facilities, bears interest at 5.97% and matures in November 2015. The excess cash was used for acquisition and general corporate purposes. The remaining ten mortgage loans from the National Self Storage acquisition are collateralized by first mortgage liens against 32 storage facilities owned by various indirect subsidiaries of the Company. The mortgage loans will become immediately due and payable, and the lenders will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. The mortgage loans require the Company to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under these mortgage loans with respect to certain exceptions to the non-recourse provisions of the loans.
In August 2005, YASKY LLC (“YASKY”), an indirect subsidiary of the Company, entered into a fixed rate mortgage loan agreement with LaSalle Bank National Association, as the lender, in the principal amount of $80.0 million. The mortgage loan, which is secured by 29 of the Company’s self-storage facilities, bears interest at 4.96% and matures in September 2012. The mortgage loan will become immediately due and payable, and the lender will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. This mortgage loan requires YASKY to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under this mortgage loan with respect to certain exceptions to the non-recourse provisions of the loan.
In October 2005, we completed a secondary public offering of our common shares, generating net proceeds of approximately $378.7 million, after deducting underwriting discount and commissions and expenses of the offering. A portion of these proceeds was used to repay certain outstanding indebtedness, including (i) $108.3 million to repay the outstanding balance under our then existing revolving credit facility and (ii) $39.8 million to repay outstanding mortgage loans secured by 37 of our facilities. Approximately $110.2 million of the net proceeds were used to fund the acquisition of 19 self-storage facilities. The


55

remaining approximately $120.4 million of net proceeds were used for the acquisition and development of additional self-storage facilities, budgeted capital improvements and general corporate purposes. As a result of the IPOoffering and related formation transactions, the Companyaforementioned repayment of outstanding indebtedness, we believe that our financial flexibility has been significantly improved, particularly since additional amounts are available for borrowing to fund future acquisitions and development of facilities and other cash needs.
As a substantially different capital structure thanresult of the Predecessor. Aspay down of debt in connection with our October 2005 offering, as of December 31, 2004, the Company2005, we had no outstanding balance under our then existing revolving credit facility and we had total indebtedness outstanding of approximately $380.5 million, as compared$669.3 million. This indebtedness has maturity dates from November 2006 to the Predecessor who had $271.6 million of debt outstanding at December 31, 2003.

On October 27, 2004, our operating partnership entered into a $150 million revolving credit facility, which was undrawn at December 31, 2004. The Company may use borrowings under the facility to satisfy a portion of its short-term and long-term liquidity needs.

The Company has approximately $110.5 million of indebtedness outstanding pursuant to four existing mortgage loans secured by 53 of its facilities. These mortgage loans, which were incurred prior to the IPO, include:

a commercial mortgage-backed securities loan secured by 41November 2015. Each of the Company’s existing facilities, which currently has a principal balance of approximately $66.2 million, bears interest at a fixed rate of 8.16% and has an anticipated repayment date in November 2006;

a commercial mortgage-backed securities loan secured by ten of the Company’s existing facilities, which currently has a principal balance of approximately $39.9 million, bears interest at a fixed rate of 7.13% and has an anticipated repayment date in December 2006;

a mortgage loan secured by the West Palm Beach, FL facility, which currently has a principal balance of approximately $2.6 million, bears interest at a fixed rate of 7.71% and matures in December 2008; and

a mortgage loan secured by the Peachtree City, GA facility, which currently has a principal balance of approximately $1.8 million, bears interest at a fixed rate of 8.43% and matures in August 2009.

Each of these loans representing this indebtedness has customary restrictions on transfer or encumbrances of the mortgaged facilities.

In connection with the IPO, on October 27, 2004, three of the Company’s subsidiaries also entered into three separate fixed rate mortgage loans with an aggregate principal amount of approximately $270.0 million. The first mortgage loan is secured by 26 of the Company’s facilities, has an initial outstanding principal balance of $90.0 million, bears interest at 5.09% and matures in November 2009. The second mortgage loan is secured by 21 of the Company’s facilities, has an initial outstanding principal balance of $90.0 million, bears interest at 5.19% and matures in May 2010. The third mortgage loan is secured by 18 of the Company’s facilities, has an initial outstanding principal balance of $90.0 million, bears interest at 5.33% and matures in January 2011. Each of these loans has customary restrictions on transfer or encumbrance of the mortgaged facilities. The primary purpose of these three new mortgage loans was to repay the portion of the Company’s existing term loan that was not repaid from the proceeds of the IPO.

Also in connection with the IPO, on October 27, 2004, theFebruary 2006, our operating partnership entered into a new three-year, $150.0$250.0 million unsecured revolving credit facility. The credit facility which was undrawnallows us to increase the amount that may be borrowed up to $350.0 million at December 31, 2004.a later date. The facility is scheduled to mature on October 27, 2007,in February 2009, with the option to extend thefor aone-year extended maturity date to October 27, 2008.date. Borrowings under the facility bear interest, at a variable rate based upon aour option, at either an alternative base rate or a Eurodollar rate, plus, in each case, a spreadplus an applicable margin depending on the Company’sour leverage ratio. The credit facilityalternative base interest rate is secured by certaina fluctuating rate equal to the higher of the Company’s self-storage facilities and requires thatprime rate or the Company maintainsum of the federal funds effective rate plus 50 basis points. The applicable margin for the alternative base rate will vary from 1.15% to 1.60%. The Eurodollar rate is a minimum “borrowing base” of properties.periodic fixed rate equal to LIBOR. The primary purpose ofapplicable margin for the Eurodollar rate will vary from 0.15% to 0.60%. We intend to use this new credit facility isprincipally to fundfinance the future acquisition andacquisitions, development ofself-storage facilities, debt repayments and for general working capital purposes (as noted above,purposes. Upon entering into this agreement, we utilized the Company may use itfacility to satisfy other short and longrepay a $30.0 million 60-day term liquidity needs). The revolvingloan.

Our ability to borrow under this new credit facility provides for aggregate borrowings of upwill be subject to $150.0 million and containsour ongoing compliance with the following financial covenants, among others:

Maximum total indebtedness to total asset value of 65%;

• Maximum total indebtedness to total asset value of 65%;
• Minimum interest coverage ratio of 2.0:1.0;
• Minimum fixed charge coverage ratio of 1.6:1.0;
• Minimum tangible net worth of $675.0 million plus 75% of net proceeds from equity issuances after December 31, 2005.
Minimum interest coverage ratio of 2.0:1;

Minimum fixed charge coverage ratio of 1.7:1; and

Minimum tangible net worth of $400.0 million.

The revolving credit facility also has customary restrictions on transfer or encumbrances of the facilities that secure the loan.

The Company’sOur cash flow from operations has historically has been one itsof our primary sources of liquidity to fund debt service, distributions and capital expenditures. The Company derivesWe derive substantially all of itsour revenue from customers who lease space from us at itsour facilities. Therefore, the Company’sour ability to generate cash from operations is dependent on the rents that the Company iswe are able to charge and collect from itsour customers. While the

Company believeswe believe that facilities in which the Company invests—we invest — self-storage facilities—facilities — are less sensitive to near-term economic downturns, prolonged economic downturns will adversely affect its cash flow from operations.

As a REIT, the Company is now required to distribute at least 90% of its REIT taxable income, excluding capital gains, to its shareholders on an annual basis in

In order to qualify as a REIT for federal income tax purposes.

purposes, we are required to distribute at least 90% of our REIT taxable income, excluding capital gains, to our shareholders on an annual basis or pay federal income tax.

The nature of the Company’sour business, coupled with the requirement that the Companywe distribute a substantial portion of itsour income on an annual basis, will cause the Companyus to have substantial liquidity needs over both the short term and the long term. The Company’sOur short-term liquidity needs consist primarily of funds necessary to pay operating expenses associated with itsour facilities, refinancing of certain mortgage indebtedness, interest expense and scheduled principal payments on debt, expected distributions to limited partners and shareholders and recurring capital expenditures. These expenses, as well as the amount of recurring capital expenditures that the Company incurs,we incur, will vary from year to year, in some cases significantly. For 2005 the Company expects2006 we expect to incur approximately $8.2$12.0 million of costs for recurring capital expenditures. The Company expectsIn addition, we anticipate spending an additional approximately


56

$4.2 million in 2006 for renovations and improvements at our facilities that were owned as of December 31, 2005. We expect to meet itsour short-term liquidity needs through cash generated from operations and, if necessary, from borrowings under itsour revolving credit facility.

The Company’sCompany has two fixed rate mortgage loans outstanding for an aggregate principal amount of $104.2 million, which management anticipates refinancing in 2006 with new mortgage loans. The Company anticipates refinancing the first mortgage of $65.1 million on or before November 1, 2006, and the remaining mortgage of $39.1 million on or before December 10, 2006.
In February 2006 the Company and the operating partnership entered into a60-day, unsecured $30 million term loan agreement with Wachovia Bank, National Association as the lender. The term loan bore interest at a variable rate of LIBOR plus 175 basis points. The proceeds of the loan were used to finance a portion of the acquisition of the Sure Save Portfolio. The loan was paid in full from proceeds obtained upon entering into a new revolving credit facility in February 2006.
Our long-term liquidity needs consist primarily of funds necessary to pay for development of new facilities, redevelopment of operating facilities, non-recurring capital expenditures, acquisitions of facilities and repayment of indebtedness at maturity. In particular, the Company intendswe intend to actively pursue the acquisition of additional facilities, which will require additional capital. The Company doesWe do not expect that itwe will have sufficient funds on hand to cover these long-term cash requirements. The CompanyWe will have to satisfy these needs through either additional borrowings, including borrowings under itsour revolving credit facility, sales of common or preferred sharesand/or cash generated through facility dispositions and joint venture transactions.

The Company believes

We believe that, as a publicly traded REIT, itwe will have access to multiple sources of capital to fund long-term liquidity requirements, including the incurrence of additional debt and the issuance of additional equity. However, as a new public company, the Companywe cannot assureprovide any assurance that this will be the case. The Company’sOur ability to incur additional debt will be dependent on a number of factors, including itsour degree of leverage, the value of itsour unencumbered assets and borrowing restrictions that may be imposed by lenders. The Company’sOur ability to access the equity capital markets will be dependent on a number of factors as well, including general market conditions for REITs and market perceptions about us.
Other Material Changes in Financial Position
             
  December 31,    
  2005  2004  Increase 
  (Dollars in thousands) 
 
Selected Assets
            
Storage facilities — net $1,246,295  $729,155  $517,140 
Restricted cash  14,672   7,211   7,461 
Other assets  8,986   3,399   5,587 
Selected Liabilities
            
Accounts payable and accrued expenses $18,872  $10,958  $7,914 
Rents received in advance  8,857   5,835   3,022 
Distributions payable  16,624   7,532   9,092 
Storage facilities increased $517.1 million, restricted cash increased $7.5 million and other assets increased $5.6 million from December 31, 2004 to December 31, 2005, primarily due to the Company.acquisition of 146 self-storage facilities during the year ended December 31, 2005. The increase in other assets also includes a $1.7 million insurance receivable related to damage incurred at our Waveland, Mississippi facility from Hurricane Katrina.
Accounts payable and accrued expenses increased $7.9 million and rents received in advance increased $3.0 million during the year ended December 31, 2005. These increases are primarily attributable to the acquisition of 146 self storage facilities during the same period. Distributions payable increased $9.1 million primarily as a result of the completed public secondary offering during the fourth quarter of 2005 and the related


57

declaration of distributions prior to year end payable in January 2006 and a partial distribution for the fourth quarter 2004, paid in 2005.
Contractual Obligations

The following table summarizes our known contractual obligations as of December 31, 2004 (dollars in thousands):

   Payments Due by Period

Contractual Obligations

  Total
  Less Than 1
Year
  1-3 Years
  3-5
Years
  More Than 5
Years

Loans Payable

  $380,496  $2,352  $114,116  $97,800  $166,228

Contractual Capital Lease Obligations

   156   85   71   —     —  

Ground Leases and Third Party Office Lease

   837   169   298   126   244

Related Party Office Lease

   3,359   262   632   663   1,802

Employment Contracts

   3,117   1,100   2,017   —     —  
   
  
  
  
  

Total

  $387,965  $3,968  $117,134  $98,589  $168,274
   
  
  
  
  

The Company expects2005:

                     
  Payments Due by Period 
     Less Than 1
  1-3
  3-5
  More Than 5
 
Contractual Obligations
 Total  Year  Years  Years  Years 
  (Dollars in thousands) 
 
Loans and Notes Payable $665,941  $111,449  $29,267  $205,783  $319,442 
Interest Payments  176,689   35,450   58,734   48,372   34,133 
Contractual Capital Lease Obligations  56   39   17   —   — 
Ground Leases and Third Party Office Lease  670   152   224   94   200 
Related Party Office Lease  4,188   473   884   908   1,923 
Employment Contracts  3,535   1,508   1,990   37   — 
                     
Total $851,079  $149,071  $91,116  $255,194  $355,698 
                     
We expect that the contractual obligations owed in 20052006 will be satisfied from the refinancing of two existing loans in 2006, out of cash generated from operations and, if necessary, from draws underon the Company’s line of credit.

The Company doesrevolving credit facility.

Off-Balance Sheet Arrangements
We do not currently have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on its financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

arrangements.

See Item 7A, Quantitative and Qualitative Disclosures About Market Risk, for a discussion of the impact of inflation on the Company.

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s future income, cash flows and fair values relevant to financial instruments depend upon prevailing interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates.

Effect of Changes in Interest Rates on our Outstanding Debt

As of December 31, 2004,2005, the Company had no variable rate debt outstanding. The Company does not currently use derivative financial instruments to reduce its exposure to changes in interest rates.
As of December 31, 2005, the Company had approximately $380.5$669.3 million of fixed rate debt outstanding.outstanding (representing 100% of its total debt). A change in the interest rates on fixed rate debt generally impacts the fair market value of our debt but it has no impact on interest incurred or cash flow. To determine the fair value, the fixed rate debt is discounted at a rate based on an estimate of current lending rates, assuming the debt is outstanding through maturity or projected refinancing dates. At December 31, 20042005 the fair value of the debt is estimated to be $378.6$649.3 million. A 100 basis point increase in interest rates would result in a decrease in the fair value of this fixed rate debt of approximately $12.7$21.3 million at December 31, 2004.2005. A 100 basis point decrease in interest rates would result in an increase in the fair value of our fixed rate debt of approximately $13.3$22.5 million at December 31, 2004.

In connection with the Company’s IPO and the formation transactions, the Company repaid all of its existing outstanding variable rate debt. As a result, all of our outstanding debt was fixed rate debt at December 31, 2004.

2005.

Inflation

Virtually all of the Company’s customers rent units in itsthe Company’s facilities subject to short-term, typicallymonth-to-month, leases, which provide the Company with the ability to increase rental rates as each


58

lease expires, thereby enabling us to seek to mitigate exposure to increased costs and expenses resulting from inflation. However, there is no assurance that the market will accept rental increases.

ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial statements required by this item appear with an Index to Financial Statements and Schedules, starting onpage F-1 of this report.

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined inRule 13a-15(e) under the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by this report.December 31, 2005. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective.

effective as of December 31, 2005.

Management’s Report on Internal Control Over Financial Reporting
Management’s report on internal control over financial reporting and the attestation report of Deloitte & Touche LLP, our independent registered public accounting firm, on management’s assessment of internal control over financial reporting are set forth on pages F-1and F-2 of this Annual Report onForm 10-K, and are incorporated herein by reference.
Changes in Internal Controls Over Financial Reporting

There has been no change in our internal control over financial reporting during our most recentlast fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. However, we completed our IPO in October 2004 and, in connection with being a public company, we have begun the process of reviewing our policies and procedures on internal control over financial reporting in anticipation of the requirement to comply with Section 404 of the Sarbanes-Oxley Act of 2002, for the year ending December 31, 2005.

ITEM 9B.OTHER INFORMATION

None.

Not applicable.
PART III

ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

We have adopted a Code of Ethics for Principal Executive Officer and Senior Financial Officers, which is available on our website atwww.u-store-it.com. We intend to disclose any amendment to, or a waiver from, a provision of our Code of Ethics for Principal Executive Officer and Senior Financial Officers on our website within four business days following the date of the amendment or waiver.

The information required by this item regarding trustees and executive officers is hereby incorporated by reference to the material appearing in the Proxy Statement for the Annual Shareholders Meeting to be held in 20052006 (the “Proxy Statement”) under the captions “Proposal 1: Election of Trustees,” “Executive Officers” and “Information Regarding Corporate Governance and the Board of Trustees and Committee Meetings.its Committees.” The information required by this item regarding compliance with Section 16(a) of the Exchange Act is hereby incorporated by reference to the material appearing in the Proxy Statement under the caption “Other Matters—Matters — Section 16(a) Beneficial Ownership Reporting Compliance.”


59

ITEM 11.EXECUTIVE COMPENSATION

The information required by this item is hereby incorporated by reference to the material appearing in the Proxy Statement under the captions “Information Regarding Corporate Governance and the Board of Trustees and Committee Meetings—its Committees — Trustee Compensation,” “Executive Compensation and Other Information,” and “Compensation Committee Interlocks and Insider Participation, Compensation Committee Report on Executive Compensation” and “Performance Graph.Participation.”

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDERSSHAREHOLDER MATTERS

The information regarding security ownership of certain beneficial owners and management required by this item is hereby incorporated by reference to the material appearing in the Proxy Statement under the caption “Principal Shareholders.”

The following table sets forth certain information regarding our equity compensation plans as of December 31, 2004.

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 under equity
compensation plans
(excluding securities
reflected in column(a))
   (a)  (b)  (c)

Equity compensation plans approved by shareholders

  938,500  $16.00  1,905,810

Equity compensation plans not approved by shareholders

  —     —    —  

Total

  938,500  $16.00  1,905,810

2005.

             
        Number of securities
 
        remaining available for
 
  Number of securities to
  Weighted-average
  future issuance under equity
 
  be issued upon exercise
  exercise price of
  compensation plans
 
  of outstanding options,
  outstanding options,
  (excluding securities
 
Plan Category
 warrants and rights  warrants and rights  reflected in column(a)) 
  (a)  (b)  (c) 
 
Equity compensation plans approved by shareholders  899,000(1) $16.00(2)  1,766,257 
Equity compensation plans not approved by shareholders  —   —   — 
             
Total  899,000  $16.00   1,766,257 
             
(1)Excludes 314,428 shares subject to outstanding restricted share unit awards.
(2)This number reflects the weighted-average exercise price of outstanding options and has been calculated exclusive of outstanding restricted unit awards.
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is hereby incorporated by reference to the material appearing in the Proxy Statement under the caption “Certain Relationships and Related Transactions.”

ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is hereby incorporated by reference to the material appearing in the Proxy Statement under the caption “Other Matters—Matters — Relationship with Independent Accountants.”

PART IV

ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of this report:
1. Financial Statements.
The response to this portion of Item 15 is submitted as a separate section of this report.
2. Financial Statement Schedules.
The response to this portion of Item 15 is submitted as a separate section of this report.


60

1.Financial Statements.

Theresponse to this portion of Item 15 is submitted as a separate section of this report.

2.Financial Statement Schedules.

Theresponse to this portion of Item 15 is submitted as a separate section of this report.

3.Exhibits.

3. Exhibits.
The list of exhibits filed with this report is set forth in response to Item 15(b). The required exhibit index has been filed with the exhibits.

(b) Exhibits.  The following documents are filed as exhibits to this report:
 (b)Exhibits. The following documents are filed as exhibits to this report:

Exhibit No.
   
Exhibit No.
 3.1
*2.1* Agreement for Sale and Purchase, dated as of October 3, 2005, by and between Crownridge Storage Portfolio, LLC, Williams Storage Portfolio III, LLC, and U-Store-It, L.P., incorporated by reference to Exhibit 2.1 to the Company’s Current Report onForm 8-K, filed on February 10, 2006.
2.2*First Amendment to Agreement for Sale and Purchase, dated as of November 17, 2005, by and between Crownridge Storage Portfolio, LLC, Williams Storage Portfolio III, LLC, and U-Store-It, L.P., incorporated by reference to Exhibit 2.2 to the Company’s Current Report onForm 8-K, filed on February 10, 2006.
2.3*Second Amendment to Agreement for Sale and Purchase, dated as of December 1, 2005, by and between Crownridge Storage Portfolio, LLC, Williams Storage Portfolio III, LLC, and U-Store-It, L.P., incorporated by reference to Exhibit 2.3 to the Company’s Current Report onForm 8-K, filed on February 10, 2006.
3.1*Articles of Amendment and Restatement of Declaration of Trust of U-Store-It Trust, incorporated by reference to Exhibit 3.1 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
 3.2*3.2* Bylaws of U-Store-It Trust, incorporated by reference to Exhibit 3.2 to Amendment No. 2 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848.
 4.1*4.1* Form of Common Share Certificate, incorporated by reference to Exhibit 4.1 to Amendment No. 3 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848.
10.110*.1* Second Amended and Restated Agreement of Limited Partnership of U-Store-It, L.P. dated as of October 27, 2004, incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.210*.2* Loan Agreement dated as of October 27, 2004 by and between YSI I LLC and Lehman Brothers HoldingsHoldings. Inc. d/b/a Lehman Capital, a division of Lehman Brothers Holdings Inc., incorporated by reference to Exhibit 10.2 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.310*.3* Loan Agreement dated as of October 27, 2004 by and between YSI II LLC and Lehman Brothers Holdings Inc. d/b/a/ Lehman Capital, a division of Lehman Brothers Holdings Inc., incorporated by reference to Exhibit 10.3 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.

Exhibit No.
10.4* 
10.4*Loan Agreement dated as of October 27, 2004 by and between YSI III LLC and Lehman Brothers Bank, FSB, incorporated by reference to Exhibit 10.4 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10
10.5*.5* Credit Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P., the several lenders from time to time parties thereto, Lehman Brothers Inc., Wachovia Capital Markets, LLC, SunTrust Bank, LaSalle Bank National Association and Lehman Commercial Paper Inc., incorporated by reference to Exhibit 10.5 to the Company’s Current Report on
Form 8-K, filed on November 2, 2004.
10
10.6*.6*† 2004 Equity Incentive Plan of U-Store-It Trust effective as of October 19, 2004, incorporated by reference to Exhibit 10.6 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10
10.7*.7* Stock Purchase Agreement dated as of October 27, 2004 by and among U-Store-It Trust, Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell, the Robert J. Amsdell Family Irrevocable Trust dated June 4, 1998 and the Loretta Amsdell Family Irrevocable Trust dated June 4, 1998, relating to the purchase of U-Store-It Mini Warehouse Co., incorporated by reference to Exhibit 10.7 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10
10.8*.8* Marketing and Ancillary Services Agreement dated as of October 27, 2004 by and between
U-Store-It Mini Warehouse Co. and Rising Tide Development, LLC incorporated by reference to Exhibit 10.8 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10
10.9*.9* Property Management Agreement dated as of October 27, 2004 by and between YSI Management LLC and Rising Tide Development, LLC, incorporated by reference to Exhibit 10.9 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.


61

10.10* 
Exhibit No.
10.10*Option Agreement dated as of October 27, 2004 by and between U-Store-It, L.P. and Rising Tide Development, LLC, incorporated by reference to Exhibit 10.10 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10
10.11*.11* Registration Rights Agreement dated as of October 27, 2004 by and among U-Store-It Trust, Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell, the Robert J. Amsdell Family Irrevocable Trust dated June 4, 1998, the Loretta Amsdell Family Irrevocable Trust dated June 4, 1998, Amsdell Holdings I, Inc., Amsdell and Amsdell and Robert J. Amsdell, Trustee, incorporated by reference to Exhibit 10.11 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10
10.12*.12*† Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust,
U-Store-It, L.P. and Robert J. Amsdell, incorporated by reference to Exhibit 10.12 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10
10.13*.13*† Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust,
U-Store-It, L.P. and Steven G. Osgood, incorporated by reference to Exhibit 10.13 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10
10.14*.14*† Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust,
U-Store-It, L.P. and Barry L. Amsdell, incorporated by reference to Exhibit 10.14 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10
10.15*.15*† Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust,
U-Store-It, L.P. and Todd C. Amsdell, incorporated by reference to Exhibit 10.15 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.

Exhibit No.
10
10.16*.16*† Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust,
U-Store-It, L.P. and Tedd D. Towsley, incorporated by reference to Exhibit 10.16 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.1710*.17*† Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust,
U-Store-It, L.P. and John C. Dannemiller, incorporated by reference to Exhibit 10.17 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.1810*.18*† Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust,
U-Store-It, L.P. and Thomas A Commes, incorporated by reference to Exhibit 10.18 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.1910*.19*† Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust,
U-Store-It, L.P. and David J. LaRue, incorporated by reference to Exhibit 10.19 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.2010*.20*† Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust,
U-Store-It, L.P. and Harold S. Haller, incorporated by reference to Exhibit 10.20 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.2110*.21*† Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust,
U-Store-It, L.P. and William M. Diefenderfer III, incorporated by reference to Exhibit 10.21 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.2210*.22*† Indemnification Agreement dated as of February 22, 2006 by and among U-Store-It Trust, U-Store-It, L.P. and Kathleen A. Weigand, incorporated by reference to Exhibit 10.2 to the Company’s Current Report onForm 8-K, filed on February 28, 2006.
10.23*†Noncompetition Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Robert J. Amsdell, incorporated by reference to Exhibit 10.22 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.2310*.24*† Noncompetition Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Steven G. Osgood, incorporated by reference to Exhibit 10.23 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.2410*.25*† Noncompetition Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Todd C. Amsdell, incorporated by reference to Exhibit 10.24 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.

62

Exhibit No.
10.25
*10.26*† Noncompetition Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Tedd D. Towsley, incorporated by reference to Exhibit 10.25 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.2610*.27*† Noncompetition Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Barry L. Amsdell, incorporated by reference to Exhibit 10.26 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.2710*.28*† Employment Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Robert J. Amsdell, incorporated by reference to Exhibit 10.27 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.2810*.29*† Employment Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Steven G. Osgood, incorporated by reference to Exhibit 10.28 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.2910*.30*† Employment Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Todd C. Amsdell, incorporated by reference to Exhibit 10.29 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.
10.3010*.31*† Employment Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Tedd D. Towsley, incorporated by reference to Exhibit 10.30 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.

Exhibit No.
10.32*† Employment Agreement dated as of February 22, 2006 by and between U-Store-It Trust and Kathleen A. Weigand, incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K filed on February 28, 2006.
10
10.31*.33* Purchase and Sale Agreement dated as of August 13, 2004 by and between Acquiport/Amsdell I Limited Partnership and Metro Storage LLC, incorporated by reference to Exhibit 10.17 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848.
10
10.32*.34* Amendment to Purchase and Sale Agreement dated as of September 8, 2004 by and between Acquiport/Amsdell I Limited Partnership and Metro Storage LLC, incorporated by reference to Exhibit 10.18 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848.
10
10.33*.35* Contribution Agreement dated as of July 30, 2004 by and between Acquiport/Amsdell I Limited Partnership and Robert J. Amsdell, as Trustee incorporated by reference to Exhibit 10.2 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848.
10
10.34*.36* Contribution Agreement dated as July 30, 2004 by and between Acquiport/Amsdell I Limited Partnership and Amsdell Holdings I, Inc. incorporated by reference to Exhibit 10.3 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848.333-117848
10
10.35*.37* Contribution Agreement dated as of July 30, 2004 by and between Acquiport/Amsdell I Limited Partnership and Amsdell and Amsdell incorporated by reference to Exhibit 10.4 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848.333-117848
10
10.36*.38* Agreement and Plan of Merger and Reorganization dated as of July 30, 2004 by and between the Company and High Tide LLC incorporated by reference to Exhibit 10.5 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848.333-117848
10
10.37*.39* Agreement and Plan of Merger dated as of July 30, 2004 by and between the Company and Amsdell Partners, Inc. incorporated by reference to Exhibit 10.6 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848.333-117848
10
10.38*.40* Partnership Reorganization Agreement dated as of July 30, 2004 by and among High Tide LLC, Amsdell Partners, Inc., Amsdell Holdings I, Inc. and Acquiport/Amsdell I Limited Partnership incorporated by reference to Exhibit 10.7 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848.
10
10.39*.41* Purchase and Sale Agreement, dated as of March 1, 2005, by and between U-Store-It, L.P. and various partnerships and other entities affiliated with National Self Storage and The Schomac Group, Inc. named therein incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.March 4, 2005.

63

10.40† 
Exhibit No.
10.42*†Form of NonQualified Share Option Agreement. (3 YearAgreement (Three-Year Vesting), incorporated by reference to Exhibit 10.40 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, filed on March 31, 2005.
10
10.41.43* Office Lease, dated March 29, 2005, by and between Amsdell and Amsdell and U-Store-It, L.P., incorporated by reference to Exhibit 10.41 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, filed on March 31, 2005.
10
10.42.44*† Timesharing Agreement, dated October 22,Trustee Compensation Schedule, incorporated by reference to Exhibit 10.43 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, by and between Amsdell Holdings I, Inc. and
U-Store-It Mini Warehouse Co.filed on March 31, 2005.
10
10.43†.45*† Trustee Compensation Schedule.
10.44†Schedule of 2004 Bonuses for Named Executive Officers, incorporated by reference to Exhibit 10.44 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, filed on March 31, 2005.
10.46*†Schedule of 2005 Bonuses for Named Executive Officers, incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K, filed on December 23, 2005.
10.47†Schedule of 2006 Bonus Structure for Named Executive Officers.
10
10.45†.48† Form of Deferred Share Agreement.
10.49†Deferred Share Agreement, dated as of December 22, 2005, by and between U-Store-It Trust and Robert J. Amsdell.
10.50†Deferred Share Agreement, dated as of December 22, 2005, by and between U-Store-It Trust and Steven G. Osgood.
10.51†Deferred Share Agreement, dated as of December 22, 2005, by and between U-Store-It Trust and Todd C. Amsdell.
10.52†Deferred Share Agreement, dated as of December 22, 2005, by and between U-Store-It Trust and Tedd D. Towsley.
10.53*†Deferred Share Agreement, dated as of February 22, 2006, by and between U-Store-It Trust and Kathleen A. Weigand incorporated by reference to Exhibit 10.3 to the Company’s Current Report onForm 8-K filed on March 1, 2006.
10.54*†Form of NonQualified Share Option Agreement (Deferred 3 YearThree-Year Vesting)., incorporated by reference to Exhibit 10.45 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, filed on March 31, 2005.
10
10.46†.55*† Form of Trustee Restricted Share Agreement.
21.1*List of Subsidiaries,Agreement, incorporated by reference to Exhibit 21.1 to Amendment No. 210.46 to the Company’s Registration StatementAnnual Report onForm S-11, File No. 333-117848.10-K for the year ended December 31, 2004, filed on March 31, 2005.
10
23.1.56* Consent of Deloitte & Touche LLP.U-Store-It Trust Deferred Trustees Plan, incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K, filed on June 6, 2005.
10
31.1.57* Certification of Chief Executive Officer requiredLease, dated June 29, 2005 by Rule 13a-14(a)/15d-14(a) underand between Amsdell and Amsdell and U-Store-It, L.P., incorporated by reference to Exhibit 10.2 to the Exchange Act, as adopted pursuant to Section 302 ofCompany’s Quarterly Report onForm 10-Q for the Sarbanes-Oxley Act of 2002.quarter ended June 30, 2005, filed on August 12, 2005.
10
31.2.58* Certification of Chief Financial Officer requiredLease, dated June 29, 2005 by Rule 13a-14(a)/15d-14(a) underand between Amsdell and Amsdell and U-Store-It, L.P., incorporated by reference to Exhibit 10.3 to the Exchange Act, as adopted pursuantCompany’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005.
10.59*Non-Exclusive Aircraft Lease Agreement dated July 1, 2005 by and between Aqua Sun Investments, L.L.C. and U-Store-It, L.P., incorporated by reference to Section 302 ofExhibit 10.4 to the Sarbanes-Oxley Act of 2002.Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005.
10.60*Amendment to Purchase and Sale Agreement, dated May 31, 2005 by and between U-Store-It, L.P. and various partnerships and other entities affiliated with National Self Storage and the Schomac Group, Inc. named therein, incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005.
10.61*Second Amendment to Purchase and Sale Agreement, dated July 5, 2005 by and between U-Store-It, L.P. and various partnerships and other entities affiliated with National Self Storage and the Schomac Group, Inc. named therein, incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005.

64

     
Exhibit No.
  
 
 10.62* Third Amendment to Purchase and Sale Agreement, dated July 20, 2005 by and between U-Store-It, L.P. and various partnerships and other entities affiliated with National Self Storage and the Schomac Group, Inc. named therein, incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005.
 10.63* Loan Agreement, dated July 19, 2005 by and between YSI VI LLC and Lehman Brothers Bank, FSB, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2005, filed on November 14, 2005.
 10.64* Loan Agreement, dated August 4, 2005 by and between YASKY LLC and LaSalle Bank National Association, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2005, filed on November 14, 2005.
 10.65* Secured Promissory Note, dated November 1, 2005 between YSI XX LP and Transamerica Financial Life Insurance Company, incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K, filed on November 4, 2005.
 10.66* Form of Security Interest regarding fixed rate mortgage loan between YSI XX LP and TransAmerica Financial Life Insurance Company, incorporated by reference to Exhibit 10.2 to the Company’s Current Report onForm 8-K, filed on November 4, 2005.
 21.1 List of Subsidiaries.
 23.1 Consent of Independent Registered Public Accounting Firm.
 31.1 Certification of Chief Executive Officer required byRule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 31.2 Certification of Chief Financial Officer required byRule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 99.1* Acknowledgement and Agreement of Adjustment to Acquisition Consideration, dated May 14, 2005, by and between Rising Tide Development, LLC and U-Store-It, L.P., incorporated by reference to Exhibit 99.1 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2004, filed on August 12, 2005.
Exhibit No.
*
32.1Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*Incorporated herein by reference as above indicated.
†Denotes a management contract or compensatory plan, contract or arrangement.

65

(c)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.
U-STORE-IT TRUST
By: 
/s/  Steven G. Osgood
Steven G. Osgood,
President and Chief Financial Statement Schedules. TheOfficer
Date: March 1, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following documents are filed as a partpersons on behalf of this report:the Registrant and in the capacities and on the dates indicated:
Signature
Title
Date
By:
/s/  Robert J. Amsdell

Robert J. Amsdell		Chairman of the Board of Trustees and Chief Executive Officer (Principal Executive Officer)March 1, 2006
By:
/s/  Steven G. Osgood

Steven G. Osgood		President and Chief Financial Officer (Principal Financial Officer)March 1, 2006
By:
/s/  Tedd D. Towsley

Tedd D. Towsley		Vice President and Treasurer (Principal Accounting Officer)March 1, 2006
By:
/s/  Barry L. Amsdell

Barry L. Amsdell		TrusteeMarch 1, 2006
By:
/s/  Thomas A. Commes

Thomas A. Commes		TrusteeMarch 1, 2006
By:
/s/  John C. Dannemiller

John C. Dannemiller		TrusteeMarch 1, 2006
By:
/s/  William M. Diefenderfer III

William M. Diefenderfer III		TrusteeMarch 1, 2006
By:
/s/  Harold S. Haller

Harold S. Haller		TrusteeMarch 1, 2006
By:
/s/  David J. LaRue

David J. LaRue		TrusteeMarch 1, 2006


66

The response to this portion of Item 15 is submitted as a separate section of this report.

FINANCIAL STATEMENTS
INDEX TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

  Page No.

Consolidated and Combined Financial Statements of U-Store-It Trust (“The Company”) and Subsidiaries (The “Company”) and Acquiport/Amsdell (“The Predecessor”(The “Predecessor”)

 

Management’s Report on Internal Control Over Financial Reporting
F-1
Report of Independent Registered Public Accounting Firm

 F-2

Report of Independent Registered Public Accounting Firm
F-3
Consolidated Balance SheetSheets for U-Store-It Trust and Subsidiariesthe Company as of December 31, 20042005 and the Consolidated and Combined Balance Sheet for Acquiport/Amsdell as of December 31, 2003

2004
 F-3
F-4

Consolidated Statement of Operations for U-Store-It Trustthe Company for the year ended December 31, 2005, and Subsidiaries for the period from October 21, 2004 through December 31, 2004, and the Consolidated and Combined Statements of Operations for Acquiport/Amsdellthe Predecessor for the period from January 1, 2004 through October 20, 2004 and for the yearsyear ended December 31, 2003 and 2002

 F-4
F-5

Consolidated Statement of Shareholders’ Equity for U-Store-It Trustthe Company for the year ended December 31, 2005 and Subsidiaries for the period from October 21, 2004 through December 31, 2004, and the Consolidated and Combined Statements of Owners’ Equity (Deficit) for Acquiport/Amsdellthe Predecessor for the period from January 1, 2004 through October 20, 2004 and for the yearsyear ended December 31, 2003 and 2002

 F-5
F-6

Consolidated Statement of Cash Flows for U-Store-It Trustthe Company for the year ended December 31, 2005 and Subsidiaries for the period October 21, 2004 through December 31, 2004 and the Consolidated and Combined Statements of Cash Flows for the Acquiport/AmsdellPredecessor for the period from January 1, 2004 through October 20, 2004 and for the yearsyear ended December 31, 2003 and 2002

 F-6
F-7

Notes to Consolidated and Combined Financial Statements

 F-8F-10

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Shareholders of U-Store-It Trust
Management of U-Store-It Trust and subsidiaries (The “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRule 13a-15(f). In evaluating the Company’s internal control over financial reporting, management based its evaluation on the framework inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an assessment of the effectiveness of the Company’s internal control over financial reporting. Based on the evaluation under the framework inInternal Control Integrated Framework,management has determined that the Company’s internal control over financial reporting was effective as of December 31, 2005.
Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is included herein.
     February 27, 2006


F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of

U-Store-It Trust

Cleveland, Ohio
We have audited management’s assessment, included within this December 31, 2005Form 10-K ofU-Store-It Trust (the “Company”) on Page F-1 under the heading of “Management’s Report on Internal Control Over Financial Reporting,” that the Company maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. The 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. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.
A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel 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 the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on the criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2005, and the related consolidated statement of operations, shareholders’ equity, and cash flows for the year ended December 31, 2005, and the financial statement schedule as of and for the year ended December 31, 2005 of the Company and our report dated February 27, 2006 expressed an unqualified opinion on those financial statements and financial statement schedule.
/s/  DELOITTE & TOUCHE LLP
Cleveland, Ohio
February 27, 2006


F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
U-Store-It Trust
Cleveland, Ohio
We have audited the accompanying consolidated balance sheetsheets of U-Store-It Trust and subsidiaries (the “Company”) as of December 31, 20042005 and the consolidated and combined balance sheet of Acquiport/Amsdell (the “Predecessor”), as defined in Note 1, as of December 31, 2003, respectively, and2004, the related consolidated statements of operations, shareholders’ equity, and cash flows of the Company for the year ended December 31, 2005 and for the period from October 21, 2004 (commencement of operations) through December 31, 2004, and the related consolidated and combined statements of operations, owners’ equity (deficit), and cash flows of the PredecessorAcquiport/Amsdell (the “Predecessor”) for the period from January 1, 2004 through October 20, 2004, and for the yearsyear ended December 31, 2003 and 2002.2003. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s and the Predecessor’s management. Our responsibility is to express an opinion on thethese financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Neither the Company nor the Predecessor are required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company’s or the Predecessor’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20042005 and the consolidated and combined financial position of the Predecessor as of December 31, 2003,2004, the results of the Company’s operations and cash flows for the year ended December 31, 2005 and for the period from October 21, 2004 (commencement of operations) through December 31, 2004, and the results of the Predecessor’s operations and cash flows for the period from January 1, 2004 through October 20, 2004, and for the yearsyear ended December 31, 2003, and 2002, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

herein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, based on the criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2006 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
/s/  DELOITTE & TOUCHE LLP

Cleveland, Ohio
February 27, 2006


F-3

March 30, 2005

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”“COMPANY”)

CONSOLIDATED AND COMBINED BALANCE SHEETS

($ in thousands)

   THE COMPANY
December 31, 2004
  THE PREDECESSOR
December 31, 2003

ASSETS

        

Storage facilities—net

  $729,155  $395,599

Cash

   28,485   7,503

Restricted cash

   7,211   3,772

Loan procurement costs—net of amortization

   7,624   2,461

Other assets

   3,399   2,884
   
 

TOTAL ASSETS

  $775,874  $412,219
   
 

LIABILITIES AND SHAREHOLDERS’/OWNERS’ EQUITY

        

LIABILITIES

        

Loans payable

  $380,496  $271,571

Capital lease obligations

   156   374

Accounts payable and accrued expenses

   10,958   3,218

Distributions payable

   7,532   —  

Accrued management fees—related parties

   —     370

Rents received in advance

   5,835   4,552

Security deposits

   455   385
   
 

Total Liabilities

   405,432   280,470

COMMITMENTS AND CONTINGENCIES

   —     —  

MINORITY INTEREST

   11,062   —  

SHAREHOLDERS’/OWNERS’ EQUITY

        

Common shares, $.01 par value, 200,000,000 shares authorized, 37,345,162 issued and outstanding

   373   —  

Additional paid in capital

   396,662   —  

Retained deficit

   (37,430)  —  

Unearned share grant compensation

   (225)  —  

Owners’ equity

   —     131,749
   
 

Total shareholders’/owners’ equity

   359,380   131,749
   
 

TOTAL LIABILITIES AND SHAREHOLDERS’/OWNERS’ EQUITY

  $775,874  $412,219
   
 

         
  December 31, 
  2005  2004 
  (Dollars in thousands, except par value amounts) 
 
ASSETS
Storage facilities — net $1,246,295  $729,155 
Cash and cash equivalents  201,098   28,485 
Restricted cash  14,672   7,211 
Loan procurement costs — net of amortization  10,437   7,624 
Other assets  8,631   3,138 
Other assets due from related parties  355   261 
         
TOTAL ASSETS $1,481,488  $775,874 
         
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES        
Loans payable $669,282  $380,496 
Capital lease obligations  56   156 
Accounts payable and accrued expenses  18,798   10,958 
Accounts payable and accrued expenses due to related party  74   — 
Distributions payable  16,624   7,532 
Rents received in advance  8,857   5,835 
Security deposits  685   455 
         
Total Liabilities  714,376   405,432 
COMMITMENTS AND CONTINGENCIES  —   — 
MINORITY INTEREST  64,108   11,062 
SHAREHOLDERS’ EQUITY        
Common shares, $.01 par value, 200,000,000 shares authorized, 57,010,162 in 2005 and 37,345,162 in 2004 issued and outstanding  570   373 
Additional paid in capital  795,244   396,662 
Accumulated deficit  (91,253)  (37,430)
Unearned share grant compensation  (1,557)  (225)
         
Total shareholders’ equity  703,004   359,380 
         
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $1,481,488  $775,874 
         
See accompanying notes to the consolidated and combined financial statements.


F-4

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”(THE “COMPANY”) AND


ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

($ in thousands, except per share data)

   THE
COMPANY
  THE PREDECESSOR
 
   For the Period
October 21, 2004
to December 31,
2004
  For the Period
January 1, 2004
to October 20,
2004
  Year ended
December 31,
2003
  Year ended
December 31,
2002
 

REVENUES:

                 

Rental income

  $21,314  $65,631  $76,898  $72,719 

Other property related income

   1,452   3,211   3,916   3,866 
   
 
 
 

Total revenues

   22,766   68,842   80,814   76,585 

OPERATING EXPENSES:

                 

Property operating expenses

   9,635   26,031   28,096   26,075 

Depreciation

   5,800   16,528   19,494   19,656 

General and administrative

   4,254   —     —     —   

Management fees—Related party

   —     3,689   4,361   4,115 
   
 
 
 

Total operating expenses

   19,689   46,248   51,951   49,846 

OPERATING INCOME

   3,077   22,594   28,863   26,739 

OTHER INCOME (EXPENSE):

                 

Interest expense

   (4,428)  (19,385)  (15,128)  (15,944)

Loan procurement amortization expense

   (240)  (5,727)  (1,015)  (1,079)

Early extinguishment of debt

   (7,012)  —     —     —   

Costs incurred to acquire management company

   (22,152)  —     —     —   

Other

   (41)  69   12   —   
   
 
 
 

Total other expense

   (33,873)  (25,043)  (16,131)  (17,023)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST

   (30,796)  (2,449)  12,732   9,716 

MINORITY INTEREST

   898   —     —     —   
   
 
 
 

NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS

   (29,898)  (2,449)  12,732   9,716 

DISCONTINUED OPERATIONS

                 

Income from operations

   —     —     171   312 

Gain on sale of storage facilities

   —     —     3,329   —   
   
 
 
 

Income from discontinued operations

   —     —     3,500   312 

NET INCOME (LOSS)

  $(29,898) $(2,449) $16,232  $10,028 
   
 
 
 

Basic and diluted loss per share

  $(0.80)            
   
            

Weighted-average common shares outstanding—   basic and fully diluted

   37,477,920             
   
            

                 
  THE
  THE
 
  COMPANY  PREDECESSOR 
     For the Period
  For the Period
    
  Year Ended
  October 21, 2004
  January 1, 2004
  Year Ended
 
  December 31,
  to December 31,
  to October 20,
  December 31,
 
  2005  2004  2004  2003 
  (Dollars and shares in thousands, except per share data) 
 
REVENUES:                
Rental income $138,120  $21,314  $65,631  $76,898 
Other property related income  10,001   1,452   3,211   3,916 
                 
Total revenues  148,121   22,766   68,842   80,814 
OPERATING EXPENSES:                
Property operating expenses  54,952   9,635   26,031   28,096 
Property operating expense — related party  43   —   —   — 
Depreciation  39,949   5,800   16,528   19,494 
General and administrative  17,786   4,140   —   — 
General and administrative — related party  736   114   —   — 
Management fees — related party  —   —   3,689   4,361 
                 
Total operating expenses  113,466   19,689   46,248   51,951 
OPERATING INCOME  34,655   3,077   22,594   28,863 
OTHER EXPENSE:                
Interest:                
Interest expense on loans  (32,370)  (4,428)  (19,385)  (15,128)
Loan procurement amortization expense  (1,785)  (240)  (5,727)  (1,015)
Early extinguishment of debt  (93)  (7,012)  —   — 
Costs incurred to acquire management company — related party  —   (22,152)  —   — 
Interest income  2,405   37   69   12 
Other  (47)  (78)  —   — 
                 
Total other expense  (31,890)  (33,873)  (25,043)  (16,131)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST  2,765   (30,796)  (2,449)  12,732 
MINORITY INTEREST  (199)  898   —   — 
                 
NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS  2,566   (29,898)  (2,449)  12,732 
DISCONTINUED OPERATIONS                
Income from operations  32   —   —   171 
Gain on sale of storage facilities  179   —   —   3,329 
                 
Income from discontinued operations  211   —   —   3,500 
                 
NET INCOME (LOSS) $2,777  $(29,898) $(2,449) $16,232 
                 
Basic and diluted earnings (loss) per share from continuing operations $0.07  $(0.80)        
Basic and diluted earnings per share from discontinued operations  —   —         
                 
Basic and diluted earnings (loss) per share $0.07  $(0.80)        
                 
Weighted-average common shares outstanding —  basic  42,120   37,478         
                 
Weighted-average common shares outstanding — diluted  42,203   37,478         
                 
Distributions declared per share of common stock $1.13  $0.2009         
                 
See accompanying notes to the consolidated and combined financial statements.


F-5

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”(THE “COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

CONSOLIDATED AND COMBINED STATEMENTS OF SHAREHOLDERS’ EQUITY
AND OWNERS’ EQUITY (DEFICIT)

(in thousands)

   Common Shares
  Additional
Paid in
Capital
  Unearned
Grant Shares
Compensation
  Retained
Deficit
  Owners’
Equity (Deficit)
  Total
 
   Number
  Amount
      

The Predecessor

                            

Balance at January 1, 2002

  —    $—    $—    $—    $—    $142,162  $142,162 

Net income

  —     —     —     —     —     10,028   10,028 

Cash contributions

  —     —     —     —     —     16,666   16,666 

Cash distributions

  —     —     —     —     —     (26,443)  (26,443)
   
  
  
 
 
 
 

Balance at December 31, 2002

  —     —     —     —     —     142,413   142,413 

Net income

  —     —     —     —     —     16,232   16,232 

Cash contributions

  —     —     —     —     —     1,788   1,788 

Cash distributions

  —     —     —     —     —     (28,684)  (28,684)
   
  
  
 
 
 
 

Balance at December 31, 2003

  —     —     —     —     —     131,749   131,749 

Net loss

  —     —     —     —     —     (2,449)  (2,449)

Contributions

  —     —     —     —     —     128,724   128,724 

Cash distributions

  —     —     —     —     —     (18,297)  (18,297)

Issuance of note receivable from owner

  —     —     —     —     —     (277,152)  (277,152)
   
  
  
 
 
 
 

Balance at October 20, 2004

  —     —     —     —     —     (37,425)  (37,425)

The Company

                            

Reclassify Predecessor owners’ deficit

  —     —     (37,961)  —     —     37,961   —   

Reclassify Predecessor owners’ deficit relative to contribution of facilities at historic cost for partnership units

  —     —     536   —     —     (536)  —   

Net proceeds from sale of common shares

  28,750   287   424,702   —     —     —     424,989 

Grant of restricted shares

  —     —     2,675   (2,675)  —     —     —   

Amortization of restricted shares

  —     —     —     2,450   —     —     2,450 

Issuance of restricted shares

  20   —     —     —     —     —     —   

Issuance of shares to former owners, property contributions

  7,409   74   (74)  —     —     —     —   

Issuance of shares to former owners, management company acquisition

  1,166   12   18,648               18,660 

Share compensation expense

  —     —     96   —     —     —     96 

Record minority interests for former owners’ continuing interests

  —     —     (11,960)  —     —     —     (11,960)

Net loss

  —     —     —     —     (29,898)  —     (29,898)

Distributions

  —     —     —     —     (7,532)  —     (7,532)
   
  
  
 
 
 
 
   37,345  $373  $396,662  $(225) $(37,430) $—    $359,380 
   
  
  
 
 
 
 

                             
        Additional
  Unearned
     Owners’
    
  Common Shares  Paid in
  Grant Shares
  Accumulated
  Equity
    
  Number  Amount  Capital  Compensation  Deficit  (Deficit)  Total 
  (Dollars in thousands) 
 
The Predecessor                            
Balance at December 31, 2002  —  $—  $—  $—  $—  $142,413  $142,413 
Net income  —   —   —   —   —   16,232   16,232 
Cash contributions  —   —   —   —   —   1,788   1,788 
Cash distributions  —   —   —   —   —   (28,684)  (28,684)
                             
Balance at December 31, 2003  —   —   —   —   —   131,749   131,749 
Net loss  —   —   —   —   —   (2,449)  (2,449)
Contributions  —   —   —   —   —   128,724   128,724 
Cash distributions  —   —   —   —   —   (18,297)  (18,297)
Issuance of note receivable from owner  —   —   —   —   —   (277,152)  (277,152)
                             
Balance at October 20, 2004  —   —   —   —   —   (37,425)  (37,425)
The Company                            
Reclassify Predecessor owners’ deficit  —   —   (37,961)  —   —   37,961   — 
Reclassify Predecessor owners’ deficit relative to contribution of facilities at historic cost for partnership units  —   —   536   —   —   (536)  — 
Net proceeds from sale of common shares  28,750   287   424,702   —   —   —   424,989 
Grant of restricted share units  —   —   2,675   (2,675)  —   —   — 
Amortization of restricted share units  —   —   —   2,450   —   —   2,450 
Issuance of restricted shares  20   —   —   —   —   —   — 
Issuance of shares to former owners, property contributions  7,409   74   (74)  —   —   —   — 
Issuance of shares to former owners, management company acquisition  1,166   12   18,648               18,660 
Share compensation expense  —   —   96   —   —   —   96 
Record minority interests for former owners’ continuing interests  —   —   (11,960)  —   —   —   (11,960)
Net loss  —   —   —   —   (29,898)  —   (29,898)
Distributions  —   —   —   —   (7,532)  —   (7,532)
                             
Balance at December 31, 2004  37,345  $373  $396,662  $(225) $(37,430) $—  $359,380 
Net proceeds from sale of common shares  19,665   197   378,550   —   —   —   378,747 
Grant of restricted share units  —   —   3,066   (3,066)  —   —   — 
Issuance of restricted share units  —   —   82   —   —   —   82 
Amortization of restricted share units  —   —   —   1,734   —   —   1,734 
Share compensation expense  —   —   510   —   —   —   510 
Adjustment for minority interest in operating partnership  —   —   16,374   —   —   —   16,374 
Net income  —   —   —   —   2,777   —   2,777 
Accretion of operating partnership units  —   —   —   —   (2,976)  —   (2,976)
Distributions  —   —   —   —   (53,624)  —   (53,624)
                             
Balance at December 31, 2005  57,010  $570  $795,244  $(1,557) $(91,253) $—  $703,004 
                             
See accompanying notes to the consolidated and combined financial statements.


F-6

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”(THE “COMPANY”) AND


ACQUIPORT/AMSDELL (THE “PREDECESSOR”)



CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

                 
  THE COMPANY  THE PREDECESSOR 
     For the Period
  For the Period
    
  Year Ended
  October 21, 2004 to
  January 1, 2004 to
  Year Ended
 
  December 31,
  December 31,
  October 20,
  December 31,
 
  2005  2004  2004  2003 
  (Dollars in thousands) 
 
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net income (loss) $2,777  $(29,898) $(2,449) $16,232 
Adjustments to reconcile net income (loss) to net cash provided by operating activities                
Depreciation and amortization  41,902   6,040   22,255   20,716 
Early extinguishment of debt  93   7,012   —   — 
Equity compensation expense  2,244   2,546   —   — 
Accretion of fair market value of debt  (378)  —   —   — 
Costs incurred to acquire management company — related party  —   22,152   —   — 
Minority interest  199   (898)  —   — 
Gain on sale of storage facilities  (179)  —   —   (3,329)
Changes in other operating accounts:                
Other assets  (3,187)  3,021   118   657 
Accounts payable and accrued expenses  5,421   (1,978)  5,664   (205)
Other liabilities  (42)  1,418   (65)  156 
                 
Net cash provided by operating activities  48,850   9,415   25,523   34,227 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Acquisitions, additions and improvements to storage facilities  (383,760)  (224,525)  (2,865)  (8,808)
Acquisitions, additions and improvements to storage facilities — related party  (10,889)  (451)  —   — 
Acquisition of management company, net — related party  —   (3,492)  —   — 
Net proceeds from sales of storage facilities  6,203   —   —   8,068 
Insurance settlements  500   —   583   — 
Increase in restricted cash  (4,748)  (607)  (2,832)  (1,767)
                 
Net cash used in investing activities  (392,694)  (229,075)  (5,114)  (2,507)


F-7

($ in thousands)

  THE COMPANY
  THE PREDECESSOR
 
  For the Period
October 21, 2004 to
December 31, 2004
  For the Period
January 1, 2004 to
October 20, 2004
  Year ended
December 31, 2003
  Year ended
December 31, 2002
 

CASH FLOWS FROM OPERATING ACTIVITIES:

                

Net income (loss)

 $(29,898) $(2,449) $16,232  $10,028 

Adjustments to reconcile net income (loss) to net cash provided by operating activities

                

Depreciation and amortization

  6,040   22,255   20,716   20,936 

Early extinguishment of debt

  7,012   —     —     —   

Share compensation expense

  2,546   —     —     —   

Costs incurred to acquire management company

  22,152   —     —     —   

Minority interest in net loss of subsidiaries

  (898)  —     —     —   

Gain on sales of storage facilities

  —     —     (3,329)  —   

Changes in other operating accounts:

                

Other assets

  3,021   118   657   (33)

Accounts payable and accrued expenses

  (1,978)  5,664   (205)  602 

Other liabilities

  1,418   (65)  156   109 
  
 
 
 

Net cash provided by operating activities

  9,415   25,523   34,227   31,642 

CASH FLOWS FROM INVESTING ACTIVITIES:

                

Additions and improvements to storage facilities

  (224,976)  (2,865)  (8,808)  (33,319)

Acquisition of management company, net

  (3,492)  —     —     —   

Disposals of storage facilities

  —     583   —     —   

Net proceeds from sales of storage facilities

  —     —     8,068   —   

Increase in restricted cash

  (607)  (2,832)  (1,767)  107 
  
 
 
 

Net cash used in investing activities

  (229,075)  (5,114)  (2,507)  (33,212)

CASH FLOWS FROM FINANCING ACTIVITIES:

                

Proceeds from sale of common shares

  424,989   —     —     —   

Proceeds from:

                

Loans payable

  270,000   424,500   3,934   30,392 

Notes payable—related parties

  —     3,961   —     —   

Principal payments on:

                

Loans payable

  (437,849)  (147,725)  (2,093)  (21,040)

Notes payable—related parties

  (1,600)  (2,361)  —     —   

Capital lease obligations

  (21)  (197)  (309)  (233)

Cash contributions from owners

  —     108   1,788   16,666 

Loan made to owners

  —     (277,152)  —     —   

Cash distributions to owners

  —     (18,297)  (28,684)  (26,443)

Pre-payment penalty on debt extinguishment

  (887)  —     —     —   

Loan procurement costs

  (8,554)  (8,682)  (365)  (160)
  
 
 
 

Net cash provided by (used in) financing activities

  246,078   (25,845)  (25,729)  (818)
  
 
 
 

NET INCREASE (DECREASE) IN CASH

  26,418   (5,436)  5,991   (2,388)

CASH—Beginning of period

  2,067   7,503   1,512   3,900 
  
 
 
 

CASH—End of period

 $28,485  $2,067  $7,503  $1,512 
  
 
 
 

CASH PAID FOR INTEREST

 $9,032  $15,080  $15,648  $15,386 
  
 
 
 

CASH PAID FOR TAXES

 $25  $—    $—    $—   
  
 
 
 

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS — (Continued)

                 
  THE COMPANY  THE PREDECESSOR 
     For the Period
  For the Period
    
  Year Ended
  October 21, 2004 to
  January 1, 2004 to
  Year Ended
 
  December 31,
  December 31,
  October 20,
  December 31,
 
  2005  2004  2004  2003 
  (Dollars in thousands) 
 
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Net proceeds from sale of common shares  378,747   424,989   —   — 
Proceeds from:                
Loans payable  232,457   270,000   424,500   3,934 
Notes payable — related parties  —   —   3,961   — 
Principal payments on:                
Loans payable  (43,075)  (437,849)  (147,725)  (2,093)
Notes payable — related parties  —   (1,600)  (2,361)  — 
Capital lease obligations  (100)  (21)  (197)  (309)
Cash contributions from owners  —   —   108   1,788 
Loan made to owners  —   —   (277,152)  — 
Cash distributions to owners  —   —   (18,297)  (28,684)
Minority interest distributions  (2,349)  —   —   — 
Shareholder distributions  (44,532)  —   —   — 
Pre-payment penalty on debt extinguishment  —   (887)  —   — 
Loan procurement costs  (4,691)  (8,554)  (8,682)  (365)
                 
Net cash provided by (used in) financing activities  516,457   246,078   (25,845)  (25,729)
                 
NET INCREASE (DECREASE) IN CASH  172,613   26,418   (5,436)  5,991 
CASH AND CASH EQUIVALENTS — Beginning of period  28,485   2,067   7,503   1,512 
                 
CASH AND CASH EQUIVALENTS — End of period $201,098  $28,485  $2,067  $7,503 
                 
CASH PAID FOR INTEREST $33,893  $9,032  $15,080  $15,648 
                 
CASH PAID FOR TAXES $315  $25  $—  $— 
                 
Supplemental disclosure of noncash activities:                
Contribution of facilities from prior owners for operating partnership units:                
Investment in real estate $—  $10,762  $—  $— 
Mortgage loans  —   (10,365)  —   — 
Other, net  —   139   —   — 
                 
Net assets acquired  —   536   —   — 
                 


F-8

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS — (Continued)

                 
  THE COMPANY  THE PREDECESSOR 
     For the Period
  For the Period
    
  Year Ended
  October 21, 2004 to
  January 1, 2004 to
  Year Ended
 
  December 31,
  December 31,
  October 20,
  December 31,
 
  2005  2004  2004  2003 
  (Dollars in thousands) 
 
                 
Acquisition of management company from prior owners:                
Assets acquired (excluding cash of $730)  —   659   —   — 
Liabilities assumed  —   (536)  —   — 
                 
Net assets acquired  —   123   —   — 
                 
Acquisition of facilities:                
Issuance of OP units  (68,594)  —   —   — 
Mortgage loans  (99,782)  —   —   — 
Other, net  (1,660)  (4,526)  —   — 
Acquisition of partnership interests:                
Investment in real estate  —   —   128,672   — 
Contribution related tostep-up in basis
  —   —   (128,672)  — 
                 
Reclassification of owners’ deficit to additional paid in capital  —   37,961   —   — 
Accrual for transfer of deferred financing fee assumed at merger date  —   (2,547)  2,547   — 
Record minority interest for limited partnership units in the operating partnership by reclassifying from additional paid in capital  —   11,960   —   — 
Items capitalized for funds yet to be disbursed  —   (427)  —   — 
Accrual for offering costs (reclassified to shareholders equity)  —   (3,668)  3,668   — 
Accrual for distributions  16,624   7,532   —   — 
Grant of restricted share units and restricted shares to management executives and trustees  3,148   2,675   —   — 

See accompanying notes to the consolidated and combined financial statements.


F-9

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”(THE “COMPANY”) AND


ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS—(Continued)

($ in thousands)

  THE COMPANY
  THE PREDECESSOR
 
  For the Period
October 21, 2004 to
December 31, 2004
  For the Period
January 1, 2004 to
October 20, 2004
  Year ended
December 31, 2003
 Year ended
December 31, 2002
 

Supplemental disclosure of noncash activities:

               

Contribution of facilities from prior owners for operating partnership units:

               

Investment in real estate

 $10,762  $—    $—   $—   

Mortgage loans

  (10,365)  —     —    —   

Other, net

  139   —     —    —   
  
 
 
 

Net assets acquired

  536   —     —    —   
  
 
 
 

Acquisition of management company from prior owners:

               

Assets acquired (excluding cash of $730)

  659   —     —    —   

Liabilities assumed

  (536)  —     —    —   
  
 
 
 

Net assets acquired

  123   —     —    —   
  
 
 
 

Acquisition of 46 facilities:

               

Investment in real estate

  223,437   —     —    —   

Mortgage loans

  (90,000)  —     —    —   

Other, net

  (4,526)  —     —    —   
  
 
 
 

Net assets acquired

  128,911   —     —    —   
  
 
 
 

Acquisition of three facilities:

               

Investment in real estate

  —     —     —    19,497 

Other, net

  —     —     —    (70)
  
 
 
 

Net assets acquired

  —     —     —    19,427 
  
 
 
 

Acquisition of four facilities:

               

Investment in real estate, from related party

  —     —     —    19,110 

Mortgage loans, assumed

  —     —     —    (19,110)
  
 
 
 

Net assets acquired

  —     —     —    —   
  
 
 
 

Acquisition of partnership interests:

               

Investment in real estate

  —     128,672   —    —   

Contribution related to step-up in basis

  —     (128,672)  —    —   
  
 
 
 

Acquisition of minority interest:

               

Investment in real estate

  —     —     —    577 

Elimination of receivable

  —     —     —    (125)
  
 
 
 

Cash paid to acquire the facilities

  —     —     —    452 
  
 
 
 

Reclassification of owners’ deficit to additional paid in capital

  37,961   —     —    —   

Accrual for transfer of deferred financing fee assumed at merger date

  (2,547)  2,547   —    —   

Record minority interest for limited partnership units in the operating partnership by reclassifying from additional paid in capital

  11,960   —     —    —   

Items capitalized for funds yet to be disbursed

  (427)  —     —    —   

Accrual for offering costs (reclassified to shareholders equity)

  (3,668)  3,668   —    —   

Accrual for distributions

  7,532   —     —    —   

Grant of deferred share units and restricted shares to management executives and trustees

  2,675   —     —    —   
  
 
 
 

See accompanying notes to the consolidated and combined financial statements.

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)



NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

1. ORGANIZATION

1.  ORGANIZATION
U-Store-It Trust (“we” or the “Company”) was formed in July 2004 to succeed the self-storage operations owned directly and indirectly by Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and their affiliated entities and related family trusts (which entities and trusts are referred to herein as the(the “Amsdell Entities”). The Company commenced operations on October 21, 2004, after completing the mergers of Amsdell Partners, Inc. and High Tide LLC with and into the Company. The Company subsequently completed an initial public offering (“IPO”) of its common shares on October 27, 2004 concurrently with the consummation of various formation transactions. The IPO consisted of the sale of an aggregate of 28,750,000 common shares (including 3,750,000 shares pursuant to the exercise of the underwriters’ over-allotment option) at an offering price of $16.00 per share, generating gross proceeds of $460.0 million. The IPO resulted in net proceeds to the Company, after deducting underwriting discount and commission,commissions, financial advisory fees and expenses of the IPO, of approximately $425.0 million. As a result of the mergers, the IPO and the formation transactions, the Company owns the sole general partner interest in U-Store-It, L.P., a Delaware limited partnership that was formed in July 1996 under the name Acquiport/Amsdell I Limited Partnership and was renamed U-Store-It, L.P. upon the completion of the IPO (the “Operating Partnership”“operating partnership”), and owned approximately 97% of the aggregate partnership interests in the Operating Partnershipoperating partnership at December 31, 2004. The Company is a real estate company engaged in the business of owning, acquiring, developing and operating self-storage properties for business and personal use undermonth-to-month leases and is operated as a real estate investment trust (“REIT”), for federal income tax purposes. All of the Company’s assets are held by, and operations are conducted through, the Operating Partnershipoperating partnership and its subsidiaries.

The financial statements covered in this report represent the results of operations and financial condition of Acquiport/Amsdell (the “Predecessor”) prior to the IPO and the formation transactions (“Formation Transactions”) and of the Company after October 21, 2004. The Predecessor was not a legal entity but rather a combination of certain real estate entities and operations as described below. Concurrent with the consummation of the IPO, the Company and the Operating Partnership,operating partnership, together with the partners and members of affiliated partnerships and limited liability companies of the Predecessor and other parties which held direct or indirect ownership interests in the properties (the “Participants”), completed certain formation transactions (the “Formation Transactions”).the Formation Transactions. The Formation Transactions were designed to (i) continue the operations of the Operating Partnership,operating partnership, (ii) acquire the management rights with respect to the Predecessor’s existing facilities and three facilities contributed to the operating partnership by entities owned by Robert J. Amsdell and Barry L. Amsdell; (iii) enable the Company to raise necessary capital for the Operating Partnershipoperating partnership to repay a portion of the existing term loan provided by an affiliate of Lehman Brothers and other indebtedness related to the three facilities acquired by the Operating Partnershipoperating partnership from entities owned by Robert J. Amsdell and Barry L. Amsdell and on four of the other existing facilities; (iv) enable the Company to qualify as a REIT for federal income tax purposes commencing the day prior to the closing of the IPO; and (v) permit such entities owned by Robert J. Amsdell and Barry L. Amsdell to defer the recognition of gain related to the three facilities that were contributed to the Operating Partnership.operating partnership. These formation transactionsFormation Transactions are described in detail in the Company’s Registration Statement onForm S-11 filed with the Securities and Exchange Commission (the “SEC”) in connection with the IPO.

The Predecessor was comprised

In October 2005, the Company completed a secondary public offering, pursuant to which it sold an aggregate of 19,665,000 common shares (including 2,565,000 shares pursuant to the exercise of the following entities: the Operating Partnership (formerly known as Acquiport/Amsdell I Limited Partnership, which is sometimes referred to herein as “Acquiport I”) and its consolidated subsidiaries, Acquiport/Amsdell III, LLC (“Acquiport III”), Acquiport IV, LLC, Acquiport V, LLC, Acquiport VI, LLC, Acquiport VII, LLC, and USI II, LLC (“USI II”).underwriters’ option) at an offering price of $20.35 per share, for gross proceeds of $400.2 million. The Predecessor also included three additional facilities, Lakewood, OH, Lake Worth, FL, and Vero Beach I, FL, which were contributedoffering resulted in net proceeds to the Operating PartnershipCompany, after deducting underwriting discount and commissions and expenses of the offering, of approximately $378.7 million. As a result of the secondary offering and the National Self Storage acquisition (see Note 3) the Company owns approximately 92% of the aggregate partnership interests in connection with the IPO. All intercompany balances and transactions are eliminated inoperating partnership at December 31, 2005.


F-10

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”(THE “COMPANY”) AND


ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

consolidation and combination. At December 31, 2004 and 2003, the Company and the Predecessor owned 201 and 155 self-storage facilities, respectively.

In connection with the IPO, Amsdell Partners, Inc., the prior corporate general partner of the Operating Partnership, and High Tide LLC, which previously owned substantially all of the limited partner interests in the Operating Partnership, merged with and into the Company, with the Participants receiving approximately 8.6 million common shares of the Company. Additionally, the Participants exchanged their interests in U-Store-It Mini Warehouse Co. (the prior manager of the self-storage facilities), for approximately $23.0 million. Concurrently with the purchase of U-Store-It Mini Warehouse Co., the Company contributed its ownership interest in U-Store-It Mini Warehouse Co. and its membership interests in YSI Management LLC to the Operating Partnership for units. The mergers of Amsdell Partners, Inc. and High Tide LLC with and into the Company were accounted for as mergers of entities under common control and accordingly, were recorded by the Company at the transferors’ historical cost basis. The purchase of the management company has been determined to not represent the purchase of a “business” for purposes of applying Financial Accounting Standards Board Statement (“FASB”) No. 141, “Business Combinations” and is recorded as a contract termination charge, net of assets and liabilities assumed of $0.8 million.

In May 2004, an entity (High Tide LLC) controlled by members of the Amsdell family acquired the only outside partnership interests in Acquiport I, which were held by partners that were not affiliated with the Amsdell family. High Tide LLC obtained an approximate $277.0 million loan from Acquiport I (the “High Tide Note”) to fund its purchase of approximately 71.8% of these partnership interests. As discussed in the following paragraph, this loan was funded with proceeds of the term loan. For financial statement purposes, the Acquiport I loan receivable from High Tide LLC was presented as a component of equity. In addition, Acquiport I applied push down accounting relating to this change in ownership, resulting in a step-up in basis of partnership assets of approximately $129.0 million, which is recorded to storage facilities. This step-up in basis was recorded in accordance with the Predecessor’s policy relating to purchase price allocations. The High Tide Note was settled upon completion of the Company’s IPO.

One of the partners’ limited partnership interests purchased by High Tide LLC was purchased from an institutional investment fund and the other was purchased from an entity controlled by an officer of Acquiport/Amsdell (Square Foot Companies, LLC, which owned a 0.61% interest in Acquiport I). Acquiport I provided funding for the acquisition to High Tide LLC utilizing proceeds of a $424.5 million term loan that Acquiport I obtained from an affiliate of Lehman Brothers. The remaining proceeds of this term loan were used to pay off Acquiport I’s revolving line of credit of approximately $142.0 million and to pay financing costs. The loan was repaid in full on October 27, 2004 with a portion of the proceeds from the IPO. As a result of this purchase, the Amsdell family ownership of Acquiport I increased from approximately 28% to 100%, leaving no unaffiliated partners.

Through the Operating Partnership,operating partnership, the Company owns and manages 339 and 201 storage facilities as of December 31, 2004.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2005 and 2004, respectively.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Combination—The accompanying consolidated financial statements include all of the accounts of the Company, the Operating Partnershipoperating partnership and wholly owned subsidiaries. The mergers of Amsdell Partners, Inc. and High Tide LLC with and into the Company and the property interests contributed to the Operating Partnershipoperating partnership by the Predecessor have been accounted for as a reorganization of entities under common control and accordingly were recorded at the Predecessor’s historical cost basis. Prior to the combination, the Company had no significant operations; therefore, the combined operations for the period

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

prior to October 21, 2004 represent the operations of the Predecessor. The combination did not require any material adjustments to conform the accounting policies of the separate entities. All significant intercompany balances and transactions have been eliminated in the consolidated and combined financial statements. The real estate entities included in the accompanying consolidated and combined financial statements of the Predecessor have been consolidated and combined on the basis that, for the periods presented, such entities were under common management.

Operating Segment—The Company has one reportable operating segment; it owns, operates, develops, and manages storage facilities. The storage facilities are located in major metropolitan areas and have numerous tenants per facility. No single tenant represents 10%1% or more of ourthe Company’s revenues. The facilities in Florida, California, Illinois and CaliforniaNew Jersey provided 28.0%approximately 24%, 11.4%11%, 10% and 10.3%8%, respectively, of total revenues for the period from October 21, 2004 throughyear ended December 31, 2004. The Company uses net operating income as a measure of operating performance at each of the facilities and for all of its facilities in the aggregate.

2005.

Storage Facilities—Storage facilities are recorded at cost less accumulated depreciation. Depreciation on the buildings and equipment is recorded on a straight-line basis over their estimated useful lives, which range from five to forty40 years. Expenditures for significant renovations or improvements that extend the useful life of assets are capitalized. Repairs and maintenance costs are expensed as incurred.

Upon acquisition of a facility, we have allocatedallocate the purchase price to the tangible and intangible assets acquired and liabilities assumed based on estimated fair values. Acquisitions of portfolios of facilities are allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates which take into account the relative size, age, and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available. Allocations to the individual assets and liabilities are based upon comparable market sales information for land, building and improvements and estimates of depreciated replacement cost of equipment. In allocating the purchase price, the Company determines whether the acquisitions include intangible assets or liabilities. Substantially all of the leases in place at acquired properties are at market rates, as the majority of the leases aremonth-to-month contracts. Accordingly, to date no portion of the purchase price has been allocated to above or below market lease intangibles. The Company also considers whether in-place, at market leases represent an intangible asset. Based on the Company’s experience, leases of this nature generally re-let in less than 30 days andlease-up costs are minimal. Accordingly, to datethe Company had no intangible assetassets recorded for in-place, at market leases has been recorded.as of December 31, 2005. Additionally, to date no intangible asset has been recorded for the value of tenant relationships, because the Company does not have any concentrations of significant tenants and the average tenant turnover is fairly frequent (less than one year).

frequent.

We evaluate long-lived assets which are heldas “held for useuse” for impairment when events and circumstances indicate that there may be an impairment. We compare theThe carrying value of these long-lived assets are compared to the undiscounted future net operating cash flows attributable to the assets. An impairment loss is recorded if the net carrying value of the asset exceeds the fair value based on its undiscounted future net operating cash flows attributable to the asset. asset and circumstances indicate that the carrying value of the real estate asset may not be recoverable.


F-11

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. NoThe Company recorded $2.3 million of asset impairment charges have been recognized inthrough December 31, 2005 (See Note 15 to the periods reported herein.

Consolidated and Combined Financial Statements).

We consider long-lived assets to be “held for sale” upon satisfaction of the following criteria: (a) management commits to a plan to sell a facility (or group of facilities), (b) the facility is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such facilities, (c) an active program to locate a buyer and other actions required to complete the plan to sell the facility have been initiated, (d) the sale of the facility is probable and transfer of the asset is expected to be completed within in one year, (e) the facility is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

Typically these criteria are all met when the relevant asset is under contract, significant non-refundable deposits have been made by the potential buyer, the assets are immediately available for transfer and there are no contingencies related to the sale that may prevent the transaction from closing. In most transactions, these conditions or criteria are not satisfied until the actual closing of the transactiontransaction; and, accordingly, the facility is not identified as held for sale until the closing actually occurs. However, each potential transaction is evaluated based on its separate facts and circumstances.

During 2005, the Company sold four of its storage facilities located in Ohio that were acquired as part of the Liberty Self-Stor Portfolio acquisition (see Note 3). During 2003, the Predecessor sold five of its storage facilities located throughout the United States. These sales have been accounted for as discontinued operations and, accordingly, the accompanying financial statements and notes reflect the results of operations of the storage facilities sold as discontinued operations (see Note 8)9). It is our policy to allocate interest expense to facilities disposed of by sale based on the principal amount of the debt that will or could be paid off upon sale.

Cash and Cash Equivalents — The Company considers all highly liquid instruments with maturities of 90 days or less as cash equivalents.
Restricted Cash—Restricted cash consists of cash deposits required for capital replacement, purchase deposits, and expense reserves in connection with the requirements of our loan agreements.

Loan Procurement Costs—Loan procurement costs related to borrowings consist of $8.4$13.0 million and $6.1$8.4 million at December 31, 20042005 and 2003,2004, respectively. These amounts are reported net of accumulated amortization of $0.8$2.6 million and $3.6$0.8 million as of December 31, 20042005 and 2003,2004, respectively. The costs are amortized over the life of the related debt using the effective interest rate method and reported as loan procurement amortization expense.

Other Assets—Other assets consist primarily of accounts receivable, insurance recovery receivables and prepaid expenses.

Accounts receivable was $4.2 million and $2.3 million as of December 31, 2005 and 2004, respectively. The Company has recorded an allowance of approximately $0.8 million and $0.3 million related to accounts receivable as of December 31, 2005 and 2004, respectively.

Environmental Costs—Our policypractice is to accrue remediation costs and other environmental expenses when it is probable that remediation and other similar activities will be required and the related costs can be reasonably estimated. All of our storage facilities have been the subject of independent Phase Iconduct or obtain environmental assessments and our policy is to have such assessments conducted on all new storage facility acquisitions. Although there can be no assurance that there is noin connection with the acquisition or development of additional facilities. Whenever the environmental contamination at our facilities, management is not aware of any contamination at anyassessment for one of our facilities indicates that individuallya facility is impacted by soil or ingroundwater contamination from prior owners/operators or other sources, we will work with our environmental consultants and where appropriate, state governmental agencies, to ensure that the aggregate would be materialfacility is either cleaned up, that no cleanup is necessary because the low level of contamination poses no significant risk to our business operations,public health or financial statements.the environment, or that the responsibility for cleanup rests with a third party.


F-12

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Revenue Recognition—Management has determined that all of our leases are operating leases. Rental income is received in accordance with the terms of the leases, which generally aremonth-to-month. Revenues from long-term operating leases are recognized on a straight-line basis over the term of the lease. The excess of rents received over amounts contractually due pursuant to the underlying leases is included in rents received in advance in the accompanying consolidated and combined balance sheets and contractually due but unpaid rents are included in other assets.

Advertising Costs — The Company incurs advertising costs primarily attributable to print advertisements in telephone books. The Company recognizes the costs when the related telephone book is first published. The Company recognized $3.6 million, $2.4 million, and $1.0 in advertising expenses for the years ended 2005, 2004 and 2003, respectively.
Equity IPOOffering Costs—Underwriting discount and commissions, financial advisory fees and IPOoffering costs are reflected as a reduction to additional paid-in capital.

Other Property Related Income—Other property related income consists primarily of late fees and administrative charges prior to October 27, 2004. Revenues from sales of storage supplies and other ancillary revenues and related costs were earned by U-Store-It Mini Warehouse Co. (the “Property Manager”) prior to October 27, 2004 and are not included in the operations of the Predecessor. Effective October 27, 2004, upon acquisition of the Property Manager, these ancillary revenues and costs are included in our operations, and YSI Management, LLC, a wholly owned subsidiary of the Operating Partnership,operating partnership, became the new property manager of the facilities.

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

Capitalized Interest — The Company capitalizes interest incurred on the construction of material storage facilities. Interest is capitalized to the related assets using a weighted-average rate of the Company’s credit facility and loans payable. The Company did not capitalize any interest for the years ended December 31, 2005 and 2004.
Derivative Financial Instruments—We carry all derivatives on the balance sheet at fair value. We determined the fair value of derivatives by reference to quoted market prices. The accounting for changes in the fair value of a derivative instrument depends on whether the derivative has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it. Our use of derivative instruments has been limited to cash flow hedges, of certain interest rate risks. At December 31, 2005 and 2004, the Company had no outstanding derivative contracts.

Income Taxes—The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), commencingbeginning with its taxable year endedthe period from October 21, 2004 (commencement of operations) through December 31, 2004. The Company has been organized and has operated in a manner that it believes has allowed it to qualify for taxation as a REIT under the Code commencing, with the taxable year endedperiod from October 21, 2004 (commencement of operations) through December 31, 2004,2004. and the Company intends to continue to be organized and operate in this manner. As a REIT, the Company is not required to pay federal corporate income taxes on its taxable income to the extent it is currently distributed to our shareholders.

The characterization of the Company’s dividends for 2005 was 46% ordinary income and 54% return of capital.

However, qualification and taxation as a REIT depends upon the Company’s ability to meet the various qualification tests imposed under the Code related to annual operating results, asset diversification, distribution levels and diversity of stock ownership. Accordingly, no assurance can be given that the Company will continue to be organized or continue to operate in a manner so as to remain qualified as a REIT. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax (including any applicable alternative minimum tax) on the Company’s taxable income at regular corporate tax rates.


F-13

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The Company has elected to treat U-Store-It Mini Warehouse Co. as a taxable REIT subsidiary (a “TRS”). In general, a TRS may perform non-customary services for tenants, hold assets that the Company cannot hold directly and generally may engage in any real estate or non-real estate related business. A TRS is subject to corporate federal and state income taxes on its taxable income at regular statutory tax rates. The Company has provided forincluded in “other income” $0.0 and $0.1 million of income taxes for 2005 and the period from October 27, 2004 through December 31, 2004, respectively and is included in “other” income, and a deferred tax asset of $0.1 million is included in other assets“other assets” as a net deferred tax asset at December 31, 2005 and 2004.

Each member of the Predecessor is treated as a partnership for federal and state income tax purposes, so the tax effects of the Predecessor’s operations are the responsibility of the partners and members of these entities. Accordingly, the Predecessor does not record any provision for income taxes in the consolidated and combined financial statements.

Earnings per Share—Earnings Basic earnings per share is calculated based on the weighted average number of shares of our common shares and deferredrestricted share units outstandingand/or vested during the period. The assumed exerciseperiod (prior to the dilutive impact of outstanding sharestock options and contingently issued shares). Diluted earnings per share is calculated using the effectweighted average number of shares outstanding during the vestingperiod adjusted for the dilutive impact of share options, unvested restricted shares that has been granted or has been committed to be granted, alland contingently issuable shares outstanding during the period using the treasury stock method are notthat totaled approximately 83,000 in 2005, unless the effect of such increase would be anti-dilutive. There were no dilutive shares for the period from October 21,27, 2004 through December 31, 2004.

Share OptionsBased Payments—We apply the fair value method of accounting for thecontingently issued shares and share options issued under our incentive award plan at the date of consummation of our IPO.plan. Accordingly, share compensation expense was recorded ratably over the vesting period relating to such contingently issued shares and options.

The Company has elected to recognize compensation expense on a straight-line method over the requisite service period. Additionally, certain restricted share units awarded to our chief executive officer vest immediately upon his retirement from the company as he has reached the retirement age set forth in his award agreement. Accordingly, share compensation expense related to this issuance, was expensed fully in 2005.

Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Minority Interest — As of September 30, 2005, the Company recorded the operating partnership units issued in connection with the National Self Storage transaction as conditionally redeemable as the result of a special redemption right (see Note 3 and Note 6 for a discussion of the National Self Storage transaction). On October 25, 2005, the sellers in the National Self Storage transaction agreed to terminate the Special Redemption Right, effective as of July 15, 2005 (the first date on which National Self Storage facilities were acquired by the operating partnership under the purchase agreement). From the issuance date until October 25, 2005, the Company elected to accrete changes in the redemption value of the National Self Storage Units issued over the period from the date of issuance to the earliest redemption date (one-year from the date of initial issuance) on a pro rata basis. Upon termination of the Special Redemption Right, the Company classified these units in minority interest. The amount of accretion recorded through October 25, 2005 was approximately $3.0 million. Effective October 26, 2005, minority interest represents issued and outstanding operating partnership units. Income is allocated to the holders of the operating partnership units based on their ownership percentage of the operating partnership. This ownership percentage, as well as the total net assets of the operating partnership, change when additional units are issued. Such changes results in an allocation between stockholders’ transactions for the period as the “Adjustment for Minority Interest in operating partnership” (rather than separately allocating the minority interest for each individual capital transaction).


F-14

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Reclassifications—Certain prior year amounts have been reclassified to conform to current year presentation.

Recent Accounting Pronouncements—In December, 2004,March 2005, the Financial Accounting Standards Board (“FASB”) issued SFASFASB Interpretation No. 47, (“FIN 47”), “Accounting for Conditional Asset Retirement Obligations”. FIN 47 clarifies the definition and treatment of conditional asset retirement obligations as discussed in FASB Statement No. 143, Accounting for Asset Retirement Obligations. A conditional asset retirement obligation is defined as an asset retirement activity in which the timingand/or method of settlement are dependent on future events that may be outside the control of the Company. FIN 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. FIN 47 is intended to provide more information about long-lived assets, more information about future cash outflows for these obligations and more consistent recognition of these liabilities. The Company adopted FIN 47 during 2005 and the adoption of this interpretation did not have a material impact on the Company.
In December, 2004, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 123 (revised(Revised 2004), “Share-Based Payment” (“(“SFAS No. 123-R”), which is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation.”SFAS No. 123-R supersedes Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and amends SFAS No. 95, “Statement of Cash Flows.”SFAS No. 123-R requires the fair value of all share-based payments to employees to be recognized in the consolidated statement of operations. The Company early adoptedSFAS No. 123-R in 2004 and has included $2.2 million and $2.5 million of compensation expense relating to outstanding deferred shares, restricted shares and options in its 2005 and 2004 statement of operations.

3. STORAGE FACILITIES

operations, respectively.

3.  STORAGE FACILITIES
The following summarizes the real estate assets of the Company and the Predecessor as of:

   The Company
  The Predecessor
 

Description

  December 31,
2004
  December 31,
2003
 
   ($ in thousands) 

Land

  $136,168  $51,449 

Buildings and improvements

   635,718   388,410 

Equipment

   79,742   55,322 
   
 

Total

   851,628   495,181 

Less accumulated depreciation

   (122,473)  (99,582)
   
 

Storage facilities—net

  $729,155  $395,599 
   
 

         
  December 31,
  December 31,
 
Description
 2005  2004 
  (Dollars in thousands) 
 
Land $301,188  $136,168 
Buildings and improvements  958,759   635,718 
Equipment  125,456   79,742 
Construction in progress  1,383   — 
         
Total  1,386,786   851,628 
Less accumulated depreciation  (140,491)  (122,473)
         
Storage facilities — net $1,246,295  $729,155 
         
The carrying value of storage facilities has increased from December 31, 2003,2004, primarily as a result of the application of push down accounting relating to the change in ownership of the Operating Partnership in May 2004, discussed in Note 1, and thenet acquisition of 46138 self storage facilities acquired at, or shortly after,in 2005.
The Company completed the closing offollowing acquisitions, dispositions and consolidations during the IPO.

year ended December 31, 2005:
• Consolidation of Vero Beach, Florida Facilities.  In January 2005, the Company consolidated the operations of its two self-storage facilities located in Vero Beach, Florida into one facility.
• Acquisition of Option Facility.  In January 2005, the Company purchased the San Bernardino VII, California facility from Rising Tide Development (a related party) for approximately $7.3 million, consisting of $3.8 million in cash (which cash was used to pay off mortgage indebtedness secured by


F-15

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”(THE “COMPANY”) AND


ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

the facility) and $3.5 million in units in our operating partnership. This facility contains approximately 84,000 rentable square feet.

• Acquisition of Gaithersburg, MD Facility.  In January 2005, the Company acquired one self-storage facility in Gaithersburg, Maryland for consideration of approximately $10.7 million, consisting of $4.3 million in cash and the assumption of $6.4 million of indebtedness. The purchase price was adjusted during the second quarter of 2005 to $11.8 million, primarily as a result of the fair market value adjustment for debt. This facility contains approximately 87,000 rentable square feet.
• Acquisition of Ford Storage Portfolio.  In March 2005, the Company acquired five self-storage facilities, located in central Connecticut, from Ford Storage for consideration of approximately $15.5 million. These facilities total approximately 258,000 rentable square feet.
• Acquisition ofA-1 Self Storage Portfolio.  In March 2005, the Company acquired five self-storage properties, located in Connecticut, fromA-1 Self Storage for consideration of approximately $21.7 million. These facilities total approximately 201,000 rentable square feet. The Company now operates two of these facilities as one facility. In May 2005, the Company acquired an additional self-storage facility fromA-1 Self Storage for approximately $6.4 million in cash. This facility contains approximately 30,000 rentable square feet and is located in New York.
• Acquisition of Option Facilities.  In March 2005, the Company purchased the Orlando II, Florida and the Boynton Beach II, Florida facilities from Rising Tide Development (a related party) for consideration of approximately $11.8 million, consisting of $6.8 million in cash and $5.0 million in units of our operating partnership. An adjustment to the purchase price was finalized during the second quarter of 2005, resulting in a revised purchase price of approximately $10.1 million, which consisted of $6.8 million in cash and $3.3 million in units of our operating partnership after a price reduction of $1.7 million in May 2005. These facilities total approximately 155,000 rentable square feet.
• Acquisition of Liberty Self-Stor Portfolio.  In April 2005, the Company acquired 18 self-storage facilities from Liberty Self-Stor Ltd., a subsidiary of Liberty Self-Stor, Inc., for consideration of approximately $34.0 million. These facilities total approximately 926,000 rentable square feet and are located in Ohio and New York. In June 2005, the Company sold one of these facilities, containing approximately 17,000 rentable square feet, for approximately $0.6 million. In addition, in November 2005 the Company sold three more of these facilities, containing approximately 184,000 rentable square feet, for approximately $5.6 million.
• Acquisition of Frisco I & II, TX and Ocoee, FL Facilities.  In April 2005, the Company acquired three self-storage facilities from two parties for consideration of approximately $14.9 million. The final purchase price was adjusted to $15.2 million primarily as a result of the fair market value adjustment of debt. These facilities total approximately 199,000 rentable square feet and are located in Texas and Florida.
• Acquisition of Extra Closet Facilities.  In May 2005, the Company acquired two facilities from Extra Closet for consideration of approximately $6.8 million. These facilities total approximately 99,000 rentable square feet and are located in Illinois.
• Acquisition of Tempe, AZ Facility.  In July 2005, the Company acquired one self-storage facility, located in Tempe, Arizona, for consideration of approximately $2.9 million. This facility contains approximately 54,000 rentable square feet.
• Acquisition of Clifton, NJ Facility.  In July 2005, the Company acquired one self-storage facility, located in Clifton, New Jersey, for consideration of approximately $16.8 million. This facility contains approximately 106,000 rentable square feet.


F-16

4. LOANS PAYABLE

A summary of outstanding indebtedness as of December 31, 2004 and 2003 is as follows ($ in thousands):

   The
Company
  The
Predecessor

Description

  December 31,
2004
  December 31,
2003
The $90,000 loan from Lehman Brothers Holdings, Inc. (“Lehman Capital”) to YSI I LLC requires interest only payments until November 2005 and monthly debt service payments of $517 per month from November 2005 through May 2010. Interest is paid at the fixed rate of 5.19% through May 2010. The loan is collateralized by first mortgage liens against 21 storage facilities of YSI I LLC, which had a net book value of $96,529 at December 31, 2004.  $90,000  $—  
The $90,000 loan from Lehman Capital to YSI II LLC requires interest only payments until November 2005 and monthly debt service payments of $524 per month from November 2005 through January 2011. Interest is paid at the fixed rate of 5.325% through January 2011. The loan is collateralized by first mortgage liens against 18 storage facilities of YSI II LLC, which had a net book value of $98,059 at December 31, 2004.   90,000   —  
The $90,000 loan from Lehman Brothers Bank, FSB (“Lehman Brothers Bank”) to YSI III LLC, requires interest only payments until November 2005 and monthly debt service payments of $511 per month from November 2005 through November 2009. Interest is paid at the fixed rate of 5.085% through November 2009. The loan is collateralized by first mortgage liens against 26 storage facilities of YSI III LLC, which had a net book value of $130,152 at December 31, 2004.   90,000   —  
The $70,000 loan from Lehman Capital to Acquiport III requires payments of $548 per month which includes interest payable monthly at 8.16% per annum through November 1, 2006, which is referred to in the loan agreement as the “anticipated repayment date.” The Company intends to repay the loan on or before the anticipated repayment date. After October 31, 2006, the loan requires interest at the greater of 13.16% and a defined Treasury rate plus 5%, additional monthly principal payments based on defined net cash flow and final repayment by November 1, 2025. The loan is collateralized by first mortgage liens against 41 storage facilities of Acquiport III, which had a net book value of $113,191, and restricted cash of $1,319 at December 31, 2004.   66,217   67,162
The $42,000 mortgage loan from Lehman Brothers Bank to USI II requires principal payments of $300 per month and interest at 7.13% per annum through December 11, 2006, which is referred to in the loan agreement as the “anticipated repayment date.” The Company intends to repay the loan on or before the anticipated repayment date. After December 10, 2006, the loan requires interest at the greater of 12.13% and a defined Treasury rate plus 5%, additional monthly principal payments based on defined net cash flow and final repayment by December 11, 2025. The loan is collateralized by first mortgage liens against all 10 storage facilities of USI II, which had a net book value of $41,239 at December 31, 2004.   39,878   40,564

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”(THE “COMPANY”) AND


ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

• Acquisition of National Self Storage Portfolio.  In July 2005, the Company completed the acquisition of 71 self-storage facilities from various partnerships and other entities affiliated with National Self Storage and the Schomac Group, Inc. (“National Self Storage”) for an aggregate consideration of approximately $212.0 million. The final purchase price was adjusted to $214.5 million during the third quarter of 2005 primarily as a result of the fair market value adjustment of debt. The final purchase price consisted of approximately $61.8 million of units in our operating partnership, the assumption of approximately $83.0 million of outstanding debt, including the fair market value adjustment of debt, by our operating partnership, and approximately $69.7 million in cash. These facilities total approximately 3.7 million rentable square feet and include self-storage facilities located in our existing markets in Southern California, Arizona and Tennessee and in new markets in Texas, Northern California, New Mexico, Colorado and Utah. The Company now operates two of these facilities as one facility.
• Acquisition of Elizabeth, NJ and Hoboken, NJ Facilities.  In August 2005, the Company acquired two self-storage facilities, one located in Elizabeth, New Jersey and one in Hoboken, New Jersey, for consideration of approximately $8.2 million. These facilities total approximately 75,000 rentable square feet.
• Acquisition of Colorado Portfolio.  In September 2005, the Company acquired seven self-storage facilities located in Colorado for consideration of approximately $19.5 million. These facilities total approximately 317,000 rentable square feet. The purchase price was adjusted during the fourth quarter of 2005 to $19.6 million as a result of additional acquisition costs.
• Acquisition of Miami, FL Facilities.  In September 2005, the Company acquired two self-storage facilities located in Miami, Florida for consideration of approximately $17.8 million. These facilities total approximately 152,000 rentable square feet. The Company now operates these two facilities as one facility.
• Acquisition of Pensacola, FL Facility.  In September 2005, the Company acquired one self-storage facility located in Pensacola, Florida for consideration of approximately $7.9 million. This facility contains approximately 79,000 rentable square feet.
• Acquisition of Texas Portfolio.  In September 2005, the Company acquired four self-storage facilities located in Texas for consideration of approximately $15.6 million. These facilities total approximately 227,000 rentable square feet. The purchase price was adjusted during the fourth quarter of 2005 to $15.5 million, as a result of additional acquisition costs. In November 2005, the Company acquired an additional self-storage facility from this seller for approximately $5.5 million in cash. This facility contains approximately 76,000 rentable square feet and is located in San Antonio, Texas. The Company also has agreed to acquire from this seller an additional seven self-storage facilities, for additional consideration of approximately $40.7 million. As described below in Note 18, Subsequent Events. The Company acquired four of the seven facilities, for consideration of approximately $22.5 million in March of 2006, and the Company expects to acquire the remaining three facilities, for aggregate consideration of approximately $18.2 million, during the first half of 2006.
• Acquisition of Dallas, TX Portfolio.  In October 2005, the Company acquired six self-storage facilities located in Dallas, Texas for consideration of approximately $17.6 million, consisting of approximately $12.5 million in cash and the assumption of approximately $5.1 million of indebtedness. The final purchase price was adjusted during the fourth quarter of 2005 to $17.9 million primarily as a result of the fair market value adjustment of debt. The facilities total approximately 323,000 rentable square feet. The Company also has agreed to acquire from this seller an additional two self-storage facilities, for additional consideration of approximately $4.4 million and the assumption of $7.1 million of existing


F-17

   The
Company
  The
Predecessor

Description

  December 31,
2004
  December 31,
2003
The other loans payable assumed in conjunction with the acquisition of facilities require interest payable monthly at fixed rates ranging from 7.71% to 8.43% per annum and a weighted average of 8.01% at December 31, 2004 and 7.38% to 8.43% per annum and a weighted average of 7.74% at December 31, 2003. These loans require monthly payments of principal and interest, are due from 2008 to 2009, contain covenants with respect to net worth and are collateralized by first mortgage liens against two facilities at December 31, 2004 with a net book value of $7,488.  4,401  9,648
The $180,000 unsecured revolving line of credit from First Union Securities, Inc. (“First Union”) to Acquiport I required interest only payments at the base rate (defined as the higher of prime rate and the Federal funds rate plus 0.5%) or the adjusted LIBOR rate as defined by the line of credit agreement as selected by the borrower from time to time. At December 31, 2003, the outstanding balance required interest at 3.57% pursuant to the LIBOR contract entered into under the terms of the credit agreement. This loan was paid in full on May 4, 2004.  —    142,462
The $6,183 mortgage loan from Wachovia to Lake Worth, FL required interest payable monthly at a variable rate of LIBOR plus 200 basis points. For time periods prior to August 16, 2004, the Company fixed the interest rate at 6.85% through an executed interest rate swap agreement. The loan was collateralized by a first mortgage lien against the facility, which had a net book value of $9,543, at December 31, 2003. This loan was paid off as part of the IPO and the Formation Transactions.  —    5,816
The $2,200 mortgage loan from Charter One Bank to Lakewood, OH required interest payable monthly at 2.50% plus the Current Index (defined as the weekly average yield on the United States Treasury Securities adjusted to a constant maturity of one year as made available by the Federal Reserve Board). The rate of interest changes every 12 months but shall never exceeded 13.00% per annum or be less than 7.00% per annum. The loan required monthly payments for principal and interest. The loan was collateralized by a first mortgage lien against the property, which had a net book value of $1,120, at December 31, 2003. Interest at December 31, 2003 was 7.00%. This loan was paid off as part of the IPO and the Formation Transactions.  —    2,033
The $2,000 construction loan from Wachovia to Lake Worth, FL required interest payable monthly at LIBOR. The terms of the construction loan required completion within 24 months of the loan agreement at which time the loan converted to a permanent loan. Interest only payments were required through the construction phase. Conversion to a permanent loan was effective on December 20, 2003 with a maturity date of December 19, 2004. At December 31, 2003, the outstanding balance required monthly payments of principal and interest at 3.15% per annum, and the loan was collateralized by a second mortgage lien against the facility, which had a net book value of $9,543 at December 31, 2003. This loan was paid off as part of the IPO and the Formation Transactions.  —    2,000

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”(THE “COMPANY”) AND


ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

debt. As described below in Note 18, Subsequent Events, the Company acquired the two facilities, for consideration of approximately $11.5 million, in January 2006.

• Acquisition of Jacksonville, FL Facility.  In November 2005, the Company acquired one self-storage facility located in Jacksonville, Florida for consideration of approximately $7.2 million. This facility contains approximately 79,000 rentable square feet.
• Acquisition of California Portfolio.  In December 2005, the Company acquired six self-storage facilities located in California for consideration of approximately $57.0 million. The final purchase price was adjusted during the fourth quarter of 2005 to $57.2 million primarily as a result of the assumption of certain promissory notes. These facilities total approximately 448,000 rentable square feet.
• Acquisition of Fredericksburg, VA Facilities.  In December 2005, the Company acquired two self-storage facilities located in Fredericksburg, Virginia for consideration of approximately $13.3 million. The purchase price was adjusted during the fourth quarter of 2005 to $13.4 million as a result of additional acquisition costs. These facilities total approximately 131,000 rentable square feet.
• Acquisition of Nashville, TN Portfolio.  In December 2005, the Company acquired three self-storage facilities located in Nashville, Tennessee for consideration of approximately $14.7 million. These facilities total approximately 269,000 rentable square feet. The Company also agreed to acquire from this seller an additional two self-storage facilities, for additional consideration of approximately $13.1 million. As described below in Note 17, Subsequent Events, the Company acquired the two facilities, for consideration of approximately $13.1 million, in January 2006.
The above acquisitions are included in the Company’s results of operations from and after the date of acquisition. Self-storage facility acquisitions are initially recorded at the estimated fair values of the net assets acquired at the date of acquisition. These values are based in part on preliminary third-party market valuations. Because these fair values are based on currently available information and assumptions and estimates that the Company believes are reasonable at such time, they are subject to reallocation as additional information becomes available.
The purchase price allocations were finalized during the fourth quarter of 2005 for all acquisitions completed through September 30, 2005. As a result, during the fourth quarter, the Company adjusted the allocation of certain assigned values of fixed assets of approximately $2.5 million, related to acquisitions completed in the third quarter, primarily between land and buildings. The adjustment did not have a material impact on depreciation expense for the period. During the first half of 2006 the Company anticipates finalizing purchase price allocations for acquisitions completed during the fourth quarter of 2005.
The following table summarizes the number of self-storage facilities placed into service for 2004 and 2005:
         
  2005  2004 
 
Balance — Beginning of year  201   155 
Facilities acquired  146   46 
Facilities consolidated(1)  (4)  — 
Facilities sold  (4)  — 
         
Balance — End of Year  339   201 
         
(1)The Company operates two of the facilities owned as of December 31, 2004 as one facility and six of the facilities acquired in 2005 as three facilities.


F-18

   The
Company
  The
Predecessor

Description

  December 31,
2004
  December 31,
2003
The $1,287 mortgage loan from First Security—State to Acquiport I required interest only payments payable monthly at a fixed rate of 9.35% per annum through April 1, 2006. The loan was collateralized by a first mortgage lien against one storage facility which had a net book value of $1,412 at December 31, 2003. This loan was paid off as part of the IPO and the Formation Transactions.   —     1,153
The Vero Beach I, FL facility participated with other non-combined entities in a $10,000 revolving credit facility with Huntington National Bank. Interest was payable monthly at 2.50% per annum plus the thirty day LIBOR rate. The credit facility had a maturity date of December 12, 2006. The amount of allocated debt associated with specific draws related to the Vero Beach I, FL facility was $733. A first mortgage lien against the storage facility had been pledged as collateral for the credit facility, which had a net book value of $918 at December 31, 2003. Interest at December 31, 2003 was 3.71%. This loan was paid off as part of the IPO and the Formation Transactions.   —     733
The Operating Partnership has a $150,000 secured revolving credit facility with a group of banks led by Lehman Brothers, Inc. and Wachovia Capital Markets, LLC. The credit facility bears interest at a variable rate based upon a base rate or a Eurodollar rate plus, in each case, a spread depending on our leverage ratio. No amounts were outstanding under this facility at December 31, 2004. This credit facility is scheduled to mature in October 2007, with an option to extend the term for one year at the Company’s option.   —     —  
In April 2004, Acquiport I entered into a loan agreement with Lehman Brothers Bank for $424,500. A portion of the proceeds was used to pay off the $180,000 unsecured revolving line of credit from First Union. The remaining proceeds were used to pay costs and expenses incurred in connection with the closing of the loan, including, without limitation, loaning a portion of the proceeds to High Tide LLC pursuant to the High Tide Note (Note 1), or for other general corporate purposes. The loan required an initial escrow deposit of $610 for taxes, insurance and to establish a replacement reserve. This loan was paid off as part of the IPO and the Formation Transactions.   —     —  
   
  

Total

  $380,496  $271,571
   
  

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

4.  REVOLVING CREDIT FACILITY
As of December 31, 2005, the Company and its operating partnership, had in place a three-year $150 million secured revolving credit facility, for which there was no outstanding balance at December 31, 2005 and December 31, 2004. As of December 31, 2005, the Company had approximately $131.8 million available under the Company’s revolving credit facility as a result of the then available borrowing base of properties under the facility. The annualcredit facility bears interest at a variable rate based upon the prime rate or LIBOR and in each case, a spread depending on the Company’s leverage ratio, which rate was 6.52% at December 31, 2005. This credit facility is scheduled to terminate on October 27, 2007, with an option for the Company to extend the termination date to October 27, 2008. The credit facility requires a commitment fee based on the unused portion of the credit facility, which fee was 0.3% at December 31, 2005. The credit facility is secured by certain of the Company’s self-storage facilities and requires that the Company maintain a minimum “borrowing base” of properties. As of December 31, 2005 and December 31, 2004, the Company’s credit facility was collateralized by certain of its self-storage facilities with net book values of approximately $333.7 million and $242.0 million, respectively. This facility was replaced by a new unsecured revolving credit facility in February 2006 (see Note 18).
5.  LOANS AND NOTES PAYABLE
In July 2005, YSI VI LLC (“YSI VI”), an indirect subsidiary of the Company, entered into a fixed rate mortgage loan agreement with Lehman Brothers Bank, FSB, (“Lehman Brothers Bank”) as the lender, in the principal amount of $80.0 million. The mortgage loan, which is secured by 24 of the Company’s self-storage facilities, bears interest at 5.13% and matures in August 2012. The mortgage loan will become immediately due and payable, and the lender will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. This mortgage loan requires YSI VI to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under this mortgage loan with respect to certain exceptions to the non-recourse provisions of the loan.
In July 2005, as part of the National Self Storage acquisition, the operating partnership assumed certain mortgage indebtedness totaling approximately $80.8 million, which indebtedness was secured by 69 of the Company’s self-storage facilities, bearing interest at rates ranging from 6.02% to 8.96% and matures on dates ranging from 2007 through 2014. Since a portion of the debt was assumed at above market rates, the assumed debt was adjusted as part of the purchase price allocation during the third quarter of 2005, to a fair market value of approximately $83.0 million at effective interest rates ranging from 5.00% to 5.59%. The Company refinanced approximately $39.8 million of the assumed mortgages with a multi-facility fixed rate mortgage with Transamerica Financial Life Insurance, a subsidiary of AEGON USA Realty Advisors, Inc., in the principal amount of $72.5 million. The mortgage loan, which is secured by 37 of the Company’s self-storage facilities, bears interest at 5.97% and matures in November 2015. The excess cash can be used for operating and planned acquisition activity. The remaining ten mortgage loans from the National Self Storage acquisition are collateralized by first mortgage liens against the other 32 storage facilities owned by various indirect subsidiaries of the Company. The mortgage loans will become immediately due and payable, and the lenders will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. The mortgage loans require the Company to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under these mortgage loans with respect to certain exceptions to the non-recourse provisions of the loans.
In August 2005, YASKY LLC (“YASKY”), an indirect subsidiary of the Company, entered into a fixed rate mortgage loan agreement with LaSalle Bank National Association, as the lender, in the principal amount


F-19

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

of $80.0 million. The mortgage loan, which is secured by 29 of the Company’s self-storage facilities, bears interest at 4.96% and matures in September 2012. The mortgage loan will become immediately due and payable, and the lender will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. This mortgage loan requires YASKY to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under this mortgage loan with respect to certain exceptions to the non-recourse provisions of the loan.
In December 2005, as part of the California portfolio acquisition (See Note 3), the Company assumed two promissory notes for approximately $0.2 million. The notes are non-interest bearing, require monthly payments and mature in 2010.
YSI I LLC, an indirect subsidiary of the Company, has a $90 million loan from Lehman Brothers Holdings, Inc. (“Lehman Capital”) which requires interest only payments until November 2005 and monthly debt service payments from November 2005 through May 2010. Interest is paid at the fixed rate of 5.19% through May 2010. The loan is collateralized by first mortgage liens against 21 storage facilities.
YSI II LLC, an indirect subsidiary of the Company, has a $90 million loan from Lehman Capital which requires interest only payments until November 2005 and monthly debt service payments from November 2005 through January 2011. Interest is paid at the fixed rate of 5.325% through January 2011. The loan is collateralized by first mortgage liens against 18 storage facilities.
YSI III LLC, an indirect subsidiary of the Company, has a $90 million loan from Lehman Brothers Bank, which requires interest only payments until November 2005 and monthly debt service payments from November 2005 through November 2009. Interest is paid at the fixed rate of 5.085% through November 2009. The loan is collateralized by first mortgage liens against 26 storage facilities.
Acquiport/Amsdell III, LLC, an indirect subsidiary of the Company, has a $70 million loan from Lehman Capital that requires principal payments which include interest payable monthly at 8.16% per annum through November 1, 2006, which is referred to in the loan agreement as the “anticipated repayment date.” The Company intends to repay the loan on or before the anticipated repayment date through refinancing. After October 31, 2006, the loan requires interest at the greater of 13.16% and a defined Treasury rate plus 5%, additional monthly principal payments based on defined net cash flow and final repayment by November 1, 2025. The loan is collateralized by first mortgage liens against 41 storage facilities. The Company maintains a defeasance reserve of approximately $1.2 million in restricted cash.
USI II, LLC, an indirect subsidiary of the Company, has a $42 million mortgage loan from Lehman Brothers Bank which requires principal payments and interest at 7.13% per annum through December 11, 2006, which is referred to in the loan agreement as the “anticipated repayment date.” The Company intends to repay the loan on or before the anticipated repayment date through refinancing. After December 10, 2006, the loan requires interest at the greater of 12.13% and a defined Treasury rate plus 5%, additional monthly principal payments based on defined net cash flow and final repayment by September 11, 2026. The loan is collateralized by first mortgage liens against all 10 storage facilities.


F-20

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The Company’s mortgage loans and notes are summarized as follows:
         
  December 31,
  December 31,
 
  2005  2004 
  (Dollars in thousands) 
 
8.16% loans due November 2006 $65,090  $66,217 
7.13% loans due December 2006  39,132   39,878 
5.085% loans due November 2009  89,870   90,000 
5.19% loans due May 2010  89,872   90,000 
5.325% loans due January 2011  89,875   90,000 
5.13% loans due August 2012  80,000   — 
4.96% loans due September 2012  80,000   — 
5.97% loans due November 2015  72,352   — 
Other fixed rate mortgage loans payable with maturity dates ranging from 2007 through 2014 at stated interest rates ranging from 6.02% to 8.96% and effective interest rates ranging from 5.00% to 5.97%, reflecting 17 mortgage loans at December 31, 2005 and two mortgage loans at December 31, 2004  59,588   4,401 
Other notes  162   — 
         
   665,941   380,496 
Fair market value adjustment on loans and notes, net  3,341   — 
         
Total $669,282  $380,496 
         
As of December 31, 2005, and December 31, 2004, the Company’s mortgage loans payable were collateralized by certain of its self-storage facilities with net book values of approximately $910 million and $487 million, respectively.
The following table presented below represents the future principal payment requirements on the outstanding mortgage loans payable as ofat December 31, 2004 are ($ in thousands):

Year

  Amount

2005

  $2,352

2006

   109,037

2007

   5,079

2008

   7,641

2009

   90,159

2010 and Thereafter

   166,228
   

Total

  $380,496
   

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

5. MINORITY INTERESTS

Minority2005:

     
Year
 Amount 
  (Dollars in thousands) 
 
2006 $111,449 
2007  12,704 
2008  16,563 
2009  93,877 
2010  111,906 
2011 and thereafter  319,442 
     
  $665,941 
     
6.  MINORITY INTERESTS
Operating partnership minority interests relate to the interests in the Operating Partnershipoperating partnership that are not owned by the Company, which, at December 31, 2005 and December 31, 2004, amounted to approximately 2.9%. 8% and 3%, respectively.
In conjunction with the formation of the Company, certain former owners contributed properties to the Operating Partnershipoperating partnership and received units in the Operating Partnership (“Units”)operating partnership concurrently with the closing of the IPO.


F-21

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Limited partners who acquired Units in the Formation Transactions have the right, beginning on October 27, 2005, to require the Operating Partnershipoperating partnership to redeem part or all of their Unitsoperating partnership units for cash or, at the Company’s option, common shares, based upon the fair market value of an equivalent number of common shares for which the Unitsoperating partnership units would have been redeemed if the Company had assumed and satisfied the Operating Partnership’soperating partnership’s obligation by paying common shares. The market value of the Company’s common shares for this purpose will be equal to the average of the closing trading price of the Company’s common shares on the New York Stock Exchange for the ten trading days before the day on which the Company received the redemption notice. Upon consummation of the IPO, the carrying value of the net assets of the Operating Partnershipoperating partnership was allocated to minority interests. Pursuant to three contribution agreements and three option exercises in 2005, entities owned by the Company’s Chief Executive Officer and one of its trustees received an aggregate of 1,129,515 Units1,524,358 operating partnership units for threesix properties with a net historical basis of $0.5$7.3 million.

6. RELATED PARTY TRANSACTIONS

In conjunction with the National Self Storage acquisition, National Self Storage received 3,674,497 operating partnership units. As provided in the partnership agreement of December 31, 2004,the operating partnership, these units are redeemable by the unitholders for cash or, at the Company’s option, common shares, beginning one year after the date of issuance (i.e., beginning in July 2006), on aone-for-one basis. The National Self Storage acquisition purchase agreement beginning in July 2006 also included a provision which granted the sellers a special redemption right permitting the sellers, under certain circumstances, beginning one year after issuance of the units, to redeem a portion of their units by requiring the Company to purchase, and simultaneously transfer to them, real estate properties to be identified by them at a price equal to the fair value of units redeemed (the “Special Redemption Right”).
The units issued to National Self Storage were considered conditionally redeemable because they were redeemable at the option of the holder with no specified or determinable redemption date. The units had no preference to the Company’s other outstanding operating partnership units. Under the provisions of the Emerging Issues Task Force (“EITF”)Classification and Measurement of Redeemable Securities,D-98R (“EITF D-98R”), the Company classified these units as a separate minority interest line item (“Conditionally Redeemable Operating Partnership Units”) and elected the accretion method under EITF D-98R to record increases or decreases in the redemption value of such units (as of September 30, 2005) as an adjustment to retained earnings over the period from the date of issuance to the earliest redemption date. On October 25, 2005, the sellers in the National Self Storage transaction agreed to terminate the Special Redemption Right, effective as of July 15, 2005 (the first date on which National Self Storage facilities were acquired by the operating partnership under the purchase agreement). Upon termination of the Special Redemption Right, the Company classified these units in minority interest. The amount of accretion recorded through October 25, 2005 was approximately $3.0 million.
7.  RELATED PARTY TRANSACTIONS
In connection with the IPO, the Company entered into option agreements with Rising Tide Development, LLC (“Rising Tide Development”), a company owned and controlled by Robert J. Amsdell, the Company’s Chairman and Chief Executive Officer, and Barry L. Amsdell, one of its trustees, to acquire 18 self-storage facilities, consisting, as of 14December 31, 2005, of 13 facilities owned by Rising Tide Development, and fourtwo facilities which Rising Tide Development has the right to acquire from unaffiliated third parties.parties and three facilities which have since been acquired by the Company pursuant to the exercise of its options. The option agreementsoptions become exercisable with respect to each particular self-storage facility if and when that facility achieves ana month-end occupancy level of 85% at the end of the month for three consecutive months. None of the remaining self-storage facilities that we have the option to purchase met the occupancy requirement as of December 31, 2005. The purchase price will be equal to the lower of (i) a price determined by multiplying in-place net operating income at the time of purchase by 12.5 and (ii) the fair market value of the option facility as determined by an appraisal process involving third party appraisers. The


F-22

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Company’s option to acquire these facilities will expire on October 27, 2008. The determination to purchase any of the option facilities will be made by the independent members of the Company’s board of trustees. Refer to Note 15 relating toDuring 2005, the exercise of theCompany exercised its option to purchase three of these facilities subsequentfor an aggregate purchase price of approximately $17.4 million, consisting of an aggregate of $6.8 million in operating partnership units and $10.6 million in cash after a price reduction of $1.7 million of consideration in May 2005. The price reduction resulted from a discovery that the calculation of the March purchase price was not made in accordance with the terms specified in the option agreement, which resulted in the overpayment. On May 14, 2005, the Company entered into an agreement with Rising Tide Development pursuant to December 31, 2004.

which 100,202 units in the operating partnership previously issued to Rising Tide Development were cancelled and $28,057 in cash (representing the distribution paid with respect to such units in April 2005) was returned to the Company.

The Predecessor’s self-storage facilities were operated by the Property Manager,U-Store-It Mini Warehouse Co. (the “Property Manager”), which was affiliated through common ownership with Amsdell Partners, Inc., High Tide Limited Partnership, and Amsdell Holdings I, Inc. Pursuant to the relevant property management agreements, Acquiport I and Acquiport III paid the Property Manager monthly management fees of 5.35% of monthly gross rents (as defined in the related management agreements); USI II paid the Property Manager a monthly management fee of 5.35% of USI’sUSI II’s monthly effective gross income (as defined)defined in the related management agreements); and the owners of the Lake Worth, FL, Lakewood, OH, and Vero Beach I, FL facilities paid the Property Manager monthly management fees of 6% of monthly gross receipts through October 21, 2004, and 5.35% thereafter (as defined)defined in the related management agreements). Effective October 27, 2004 upon acquisition of the Property Manager, the management contract with U-Store-It Mini Warehouse Co. was terminated and a new management agreement was entered into with YSI Management, LLC. Beginning October 27, 2004 management fees relating to our wholly-owned subsidiaries are eliminated in consolidation.
Effective October 27, 2004, YSI Management LLC, a wholly ownedwholly-owned subsidiary of the Operating Partnership,operating partnership, entered into a management contract with Rising Tide Development to provide property management services to the option facilities for a fee equal to the greater of 5.35% of the gross revenues of each facility or $1,500 per facility per month. Management fees earned by YSI Management LLC, from Rising Tide Development, were approximately $71,000$0.4 million for the year ended December 31, 2005 and $0.1 million for the period from October 21, 2004 through December 31, 2004. Accounts receivable from Rising Tide Development at December 31, 2005 and 2004 was approximately $271,000.

During 2003, the Predecessor purchased two storage facilities from an affiliated entity for $5.7 million.

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

The Company engages,$0.4 and $0.3 million, respectively, and is included in other assets. This receivable represents expenses paid on behalf of Rising Tide Development by YSI Management LLC that will be reimbursed under standard business terms.

In 2004 the Predecessor engaged, Amsdell Construction, a company owned by Robert J. Amsdell, the Company’s Chief Executive Officer, and Barry L. Amsdell, a trustee of the Company, to maintain and improve its self-storage facilities. The total payments incurred by the Company to Amsdell Construction for the year ended December 31, 2005 was approximately $0.3 million and related to the rebuilding of a South Carolina facility destroyed by fire in 2004. The total payments incurred by the Company to Amsdell Construction for the period from October 21, 2004 through December 31, 2004 was approximately $0.5 million. The total amount of payments incurred by the Predecessorpredecessor to Amsdell Construction for the period from January 1, 2004 through October 20, 2004 and the yearsyear ended December 31, 2003 and 2002 were $2.2 million $2.6 million, respectively.
In March 2005, the operating partnership entered into an office lease agreement with Amsdell and $6.1 million, respectively.

The Company’s principal office, which is located in Cleveland, Ohio and is approximately 19,000 square feet, is leased from a partnershipAmsdell, an entity owned by Robert J. Amsdell and Barry L. Amsdell, for office space of approximately 18,000 square feet at The Parkview Building, an approximately 40,000 square foot multi-tenant office building located at 6745 Engle Road, plus approximately 4,000 square feet of an 18,000 square foot office building located at 6751 Engle Road, which are both part of Airport Executive Park, a50-acre office and flex development located in Cleveland, Ohio. Airport Executive Park is owned by Amsdell and Amsdell. This new lease, which was effective as of January 1, 2005, replaced the original office lease, entered into in October


F-23

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

2004, between a subsidiary of the operating partnership and Amsdell and Amsdell and has a ten-year term, with one five-year extension option exercisable by the operating partnership. The Company’s disinterested trustees approved the terms of, and the entry into, the office lease by the operating partnership.
In June 2005, the operating partnership entered into another office lease agreement with Amsdell and Amsdell for additional office space of approximately 1,588 square feet of rentable space in The Parkview Building. This office lease was effective as of May 7, 2005 and has an approximately two-year term expiring on April 30, 2007. The operating partnership has the option to extend this office lease for an additional three-year period at the then prevailing market rate upon the same terms and conditions contained in this office lease. The fixed minimum rent under the terms of this office lease is $1,800 per month from June 1, 2005 to April 30, 2006, and $1,900 per month from May 1, 2006 to April 30, 2007. The Company’s disinterested trustees approved the terms of, and the entry into, the office lease by the operating partnership.
In June 2005, the operating partnership also entered into amonth-to-month office lease agreement with Amsdell and Amsdell for office space of approximately 3,500 square feet of an office building located at 6779 Engle Road. The lease was effective as of May 1, 2005. The fixed minimum rent under the terms of the lease is $3,700 per month. The Company’s disinterested trustees approved the terms of, and the entry into, themonth-to-month office lease agreement by the operating partnership.
In December 2005, the operating partnership entered into an office lease agreement with Amsdell and Amsdell for additional office space of approximately 3,000 square feet of rentable space at 6751 Engle Road. This office lease is effective as of January 1, 2006 and has a nine-year term expiring on December 31, 2014. The operating partnership has the option to extend this office lease for an additional five-year period at the then prevailing market rate upon the same terms and conditions contained in this office lease. At inception, the fixed minimum rent under the terms of this office lease is $3,137 per month and then escalates to $3,771 per month by the end of the lease term. The Company’s disinterested trustees approved the terms of, and the entry into, the office lease by the operating partnership.
In December 2005, the operating partnership entered into an office lease agreement with Amsdell and Amsdell for additional office space of approximately 3,190 square feet of rentable space in The Parkview Building. This office lease is effective as of February 1, 2006 and has an approximately nine-year term expiring on December 31, 2014. The operating partnership has the option to extend this office lease for an additional five-year period at the then prevailing market rate upon the same terms and conditions contained in this office lease. At inception, the fixed minimum rent under the terms of this office lease is $2,387 per month and then escalates to $2,901 per month by the end of the lease term. The Company’s disinterested trustees approved the terms of, and the entry into, the office lease by the operating partnership.
In December 2005, the operating partnership entered into an office lease agreement with Amsdell and Amsdell for additional office space of approximately 4,077 square feet of rentable space in The Parkview Building. This office lease is effective as of May 1, 2006 and has an approximately 104 month term expiring on December 31, 2014. The operating partnership has the option to extend this office lease for an additional five-year period at the then prevailing market rate upon the same terms and conditions contained in this office lease. The fixed minimum rent under the terms of this office lease is $3,051 per month from May 1, 2007 and then escalates to $3,709 per month by the end of the lease term. The Company’s disinterested trustees approved the terms of, and the entry into, the office lease by the operating partnership.
The total amount of lease payments incurred under thisthe three office leases effective as of December 31, 2005 was approximately $0.4 million for the year ended December 31, 2005. The total amount of lease by the Companypayments incurred under former leases for the period from October 21, 2004 through December 31, 2004 was approximately $40,000. Effective January 1, 2005 this lease agreement was modified and replaced with a new lease agreement dated March 29, 2005 (see Note 15).


F-24

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Total future minimum rental payments under the new related party lease agreementagreements entered into as of December 31, 20042005 are as follows:

($ in thousands)
   Related Party
Amount

2005

  $262

2006

   308

2007

   324

2008

   324

2009

   339

2010 and Thereafter

   1,802
   

Total

  $3,359
   

     
  Related Party
 
  Amount 
  (Dollars in thousands) 
 
2006 $473 
2007  446 
2008  438 
2009  454 
2010  454 
2011 and Thereafter  1,923 
     
Total $4,188 
     
The Company chartersbills Amsdell and Amsdell for the cost of certain services. As of December 31, 2005, the Company recorded a receivable as of December 31, 2005 of $10,172.
The Company chartered an aircraft from Aqua Sun Investments, LLC,L.L.C. (“Aqua Sun”), a company owned by Robert J. Amsdell and Barry L. Amsdell. The Company iswas under contract pursuant to a timesharing agreement to reimburse Aqua Sun Investments, LLC at the rate of $1,250 for each hour of use of the aircraft and the payment of actualcertain expenses associated with the use of the aircraft. As described in the paragraph below, effective June 30, 2005 the timesharing agreement was terminated by mutual agreement of the parties thereto and was replaced on July 1, 2005 with a non-exclusive aircraft lease agreement with Aqua Sun (the “Aircraft Lease”). The Company’s disinterested trustees approved the terms of, and the entry into, the non-exclusive aircraft lease agreement by the operating partnership.
Under the Aircraft Lease with Aqua Sun, the operating partnership may lease for corporate use from time to time an airplane owned by Aqua Sun. Under the terms of the Aircraft Lease, the operating partnership may lease use of the airplane owned by Aqua Sun at an hourly rate of $1,450 per flight hour. Aqua Sun is responsible for various costs associated with operation of the airplane, including insurance, storage and maintenance and repair, but the operating partnership is responsible for fuel costs and the costs of pilots and other cabin personnel required for its use of the airplane. The Aircraft Lease, which was effective as of July 1, 2005, has a one-year term and is automatically renewed for additional one-year periods unless terminated by either party. Either party may terminate the agreement with or without cause upon 60 days’ prior notice to the other party. The total amount incurred for such aircraft charters described above by the Company for the year ended December 31, 2005 was approximately $0.4 million. The total amount incurred for aircraft charters by the Company for the period from October 21, 2004 through December 31, 2004 was approximately $74,000.$0.1 million.
The Company engages Dunlevy Building Systems Inc., a company owned by John Dunlevy, abrother-in-law of Robert J. Amsdell and Barry L. Amsdell, for construction, zoning consultant and general contractor services at certain of its self-storage facilities. The total payments incurred by the Company to Dunlevy Building Systems Inc. for the year ended December 31, 2005 was approximately $40,000.
The Company engages Deborah Dunlevy Designs, a company owned by Deborah Dunlevy, a sister of Robert J. Amsdell and Barry L. Amsdell, for interior design services at certain of its self-storage facilities and offices. The total payments incurred by the Company to Deborah Dunlevy Designs for the year ended December 31, 2005 was approximately $56,000.
Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the “Amsdell Entities” that acquired common shares or operating partnership units in the formation transactions which took place at the time of the IPO


F-25

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

received certain registration rights. An aggregate of approximately 9.7 million common shares acquired in the formation transactions are subject to a registration rights agreement (including approximately 1.1 million shares issuable upon redemption of approximately 1.1 million operating partnership units issued in the formation transactions). Beginning in October 2005, Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities who acquired common shares or operating partnership units in the IPO transactions received registration rights. Beginning as early as October 27, 2005, they will bebecame entitled to require usthe Company to register their shares for public sale subject to certain exceptions, limitations and conditions precedent.

Todd C. Amsdell, our Chief Operating Officer, earned

In addition, Rising Tide Development received registration rights with respect to the operating partnership units it received in connection with the Company’s acquisition of three option facilities. An aggregate of approximately $0.20.4 million common shares (which shares are issuable upon redemption of approximately 0.4 million operating partnership units issued in connection with the Company’s option exercises) are subject to a registration rights agreement. Beginning as early as January 2006, Rising Tide Development will be entitled to require the Company to register approximately 0.2 million of a bonussuch common shares for public sale subject to certain exceptions, limitations and conditions precedent. Rising Tide Development will be entitled to require the period October 21, 2004 through December 31, 2004, in additionCompany to register the deferred share units earnedremaining approximately 0.2 million common shares for public sale, subject to certain exceptions, limitations and valued at $1.0 million, discussed in Note 11.

Additional related party disclosures are discussed in Notes 1, 5, 9, 11 and 15.

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

conditions precedent, beginning as early as March 2006.

8.  FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of financial instruments, including cash, accounts receivable, and accounts payable approximates their respective book values at December 31, 20042005 and 2003.2004. The Company has fixed interest rate loans with a carrying value of $380.5$669.3 million at December 31, 20042005 and fixed and variable rate loans with a carrying value of $271.9$380.5 million at December 31, 2003.2004. The estimated fair value of these fixed and variable rate loans were $378.6$649.3 million and $279.2$378.6 million at December 31, 20042005 and 2003,2004, respectively. This estimate is based on discounted cash flow analyses assuming market interest rates for comparable obligations at December 31, 20042005 and 2003.

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

8. DISCONTINUED OPERATIONS

2004.

9.  DISCONTINUED OPERATIONS
During 2005, the Company sold four of its storage facilities located in Ohio that were acquired as part of the Liberty Self-Stor Portfolio (See Note 3) acquisition for net proceeds of $6.2 million. During the year ended December 31, 2003, the Predecessor sold five storage facilities for net proceeds of $8.1 million. In accordance with the terms of the 2003 Defeasance Agreements, approximately $1.4 million of the net proceeds related to the sale of the Indio Property storage facility was placed in a restricted cash account.


F-26

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The results of operations of the storage facilities through the sale date have been presented in the following table. Interest expense and related amortization of loan procurement costs have been attributed to the sold storage facilities as applicable based upon the transaction and included in discontinued operations.

The results of operations of the four storage facilities sold in 2005 and the five storage facilities sold in 2003 were as follows:

   

Year ended

December 31,

 

Description

  2003
  2002
 
   ($ in thousands) 

Revenues

  $1,015  $1,199 

Property operating expenses

   (399)  (440)

Depreciation

   (207)  (201)

Management fees to related party

   (52)  (64)

Interest expense

   (186)  (182)
   
 

Income from operations

   171   312 

Gain on sale of storage facilities

   3,329   —   
   
 

Income from discontinued operations

  $3,500  $312 
   
 

9. COMMITMENTS AND CONTINGENCIES

             
  Year Ended December 31, 
Description
 2005  2004  2003 
  (Dollars in thousands) 
 
Revenues $546  $—  $1,015 
Property operating expenses  (246)  —   (399)
Depreciation  (168)  —   (207)
Management fees to related party  (28)  —   (52)
Interest expense  (72)  —   (186)
             
Income from operations  32   —   171 
Gain on sale of storage facilities  179   —   3,329 
             
Income from discontinued operations $211  $—  $3,500 
             
10.  COMMITMENTS AND CONTINGENCIES
The Company has capital lease obligations for security camera systems with a cost of $2.6 million. These systems are included in equipment in the accompanying balance sheet and are being depreciated over five years.

Future minimum lease payments at December 31, 20042005 are:

   Amount
   ($ in thousands)

2005

  $115

2006

   49

2007

   22
   

Total future minimum lease payments

   186

Less—imputed interest at 8%

   30
   

Present value of lease payments

  $156
   

     
  Amount 
  (Dollars in thousands) 
 
2006 $49 
2007  22 
     
Total future minimum lease payments  71 
Less — imputed interest at 8%  15 
     
Present value of lease payments $56 
     
The Company currently owns sixone self-storage facility subject to a ground lease and five self storage facilities having small parcels of land that are subject to ground leases. The Company recorded rent expense of $24approximately $0.2 million for the year ended 2005 and approximately $24,000 for the period from October 21, 2004 through December 31, 2004. The Predecessor recorded rent expense of $76approximately $76,000 for the period from January 1, 2004 through October 20, 2004. The Predecessor also recorded rent expense of $46 and $73approximately $46,000 related to these leases in the yearsyear ended December 31, 2003, and 2002, respectively, all of which related to minimum lease payments.


F-27

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”(THE “COMPANY”) AND


ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

Total future minimum rental payments under noncancelablenon-cancelable ground leases and a related party office lease in effect as of December 31, 20042005 are as follows:

   Third Party
Amount
  Related Party
Amount
   ($ in thousands)

2005

  $169  $262

2006

   152   308

2007

   146   324

2008

   76   324

2009

   50   339

2010 and Thereafter

   244   1,802
   
  

Total

  $837  $3,359
   
  

         
  Third Party
  Related Party
 
  Amount  Amount 
  (Dollars in thousands) 
 
2006 $152  $473 
2007  148   446 
2008  76   438 
2009  50   454 
2010  44   454 
2011 and Thereafter  200   1,923 
         
Total $670  $4,188 
         
Each of the Company and the Predecessor has been named as a defendant in a number of lawsuits in the ordinary course of business. In most instances, these claims are covered by the Company’s liability insurance coverage. Management believes that the ultimate settlement of the suits will not have a material adverse effect on the Company’s financial statements.

10. RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

11.  RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS
In the normal course of its business, the Company encounters economic risks. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk on its interest-bearing liabilities. Credit risk is the risk of inability or unwillingness of tenants to make required rent and other payments. Market risk is the risk of declines in the value of properties due to changes in rental rates, occupancy, interest rates or other market factors affecting the valuation of properties held by the Company.

Interest rate swaps are used to reduce the portion of total debt that is subject to variable interest rates. An interest rate swap requires the Company to pay an amount equal to a specific fixed rate of interest times a notional principal amount and entitles the Company to receive in return an amount equal to a variable rate of interest times the same notional amount. 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 Company enters into contracts of this nature with major financial institutions to minimize counterparty credit risk.

As of December 31, 2005, the Company had not entered into any contracts of this nature.

The Predecessor had an interest rate swap that was undesignated during 2004 and 2003 and did not qualify for hedge accounting treatment; therefore, the swap was recorded at fair value and the related gains or losses were recorded in the statement of operations. The notional amount outstanding for the swap was approximately $5.8 million at December 31, 2003. The approximate fair value of the swap was a liability of $0.1 million at December 31, 2003, and is included in accounts payable and accrued expenses in the consolidated and combined balance sheets. The amount recognized as a reduction to interest expense due to changes in fair value was approximately $0.1 million and $0.2 million during the years ended December 31, 2004 and 2003, respectively. The swap matured on August 16, 2004.

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

11. SHARE-BASED EMPLOYEE COMPENSATION PLANS

12.  SHARE-BASED COMPENSATION PLANS
On October 19, 2004, the Company’s sole shareholder approved a share-based employee compensation plan, the 2004 Equity Incentive Plan (the “Plan”). The purpose of the Plan is to attract and retain highly qualified executive officers, trustees and key-employeeskey employees and other persons and to motivate such officers, trustees, key-employeeskey employees and other persons to serve the Company and its affiliates to expend maximum effort to improve the business results and earnings of the Company, by providing to such persons an opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company. To this


F-28

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

end, the Plan provides for the grant of share options, share appreciation rights, restricted shares, share units, unrestricted shares, dividend equivalent rights and cash awards. Any of these awards may, but need not, be made as performance incentives to reward attainment of annual or long-term performance goals. Share options granted under the Plan may be non-qualified share options or incentive share options.

The Plan is administered by the Compensation Committee of the Company’s Board of Trustees (the “Compensation Committee”), which is appointed by the Board of Trustees. The Compensation Committee interprets the Plan and determines the terms and provisions of option grants and share awards. A total of 3,000,000 common shares are reserved for issuance under the Plan. The maximum number of common shares subject to options, share appreciation rights, or time-vested restricted shares that can be awarded under the Plan to any person is 500,000 per calendar year. The maximum number orof common shares that can be awarded under the Plan to any person, other than pursuant to an option, share appreciation rights or time-vested restricted shares, that can be awarded to any person is 250,000 per calendar year. To the extent that options expire unexercised or are terminated, surrendered or canceled, the options and share awards become available for future grants under the Plan, unless the Plan has been terminated.

Under the Plan, the Compensation Committee determines the vesting schedule of each share award and option. MembersAt the closing of the IPO, the newly appointed non-employee members of the Board of Trustees have beenwere granted restricted share awards pursuant to the Plan as a one-time payment for joining the board and as an advance for service to be provided for the remainder of their board fees. In each case, the number of restricted shares granted to trustees was equal to the dollar value of the fee divided by the fair market value of a common share on the date the fee would have been paid.2004 and 2005. Concurrently with the closing of the IPO, the Company also granted options under the Plan to certain of its employees and executive officers to purchase an aggregate of 950,000 common shares. The options granted to executive officers vest ratably over a three year period, one-third per year on each of the first three anniversaries of the grant date. The options granted to other employees of the Company vest evenly over a three year period, one-third per year on each of the third, fourth and fifth anniversaries of the grant date. The exercise price for options is equivalent to the fair market value of the underlying common shares at the grant date. The Compensation Committee also determines the term of each option, which shall not exceed 10 years from the grant date.

Share Options
The fair value for options granted in 2004, was estimated at the time the options were granted using the Black-Scholes option-pricing model applying the following weighted average assumptions:

     
Assumptions:
 2004 
 
Risk-free interest rate  4.38%
Expected dividend yield  7.0%
Volatility  26.25%
Weighted average expected life of the options  10 years 
Weighted average fair value of options granted $1.90 

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including the expected stock price volatility.

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

The Company determined the volatility by comparing a 100 day period of volatility of industry competitors in June 2004. No options were granted in 2005.

In 2005 and 2004, the Company recognized compensation expense related to deferred shares, restricted shares and options issued to employees and trusteesexecutives of $2.5 million. Includedapproximately $0.5 million and $0.1 million, respectively, which was recorded primarily in general and administrative expense. As of December 31, 2005, the Company had approximately $1.1 million of unrecognized compensation expense is approximately $2.4 million which representcost related to unvested stock options that will be recorded over the fair value of the deferred shares granted of 146,875 at $16.00 per deferred share to certain members of the Company’s management team at consummation of the IPO. These shares did not have any vesting or forfeiture requirements.next four years.


F-29

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The table below summarizes the option activity under Plan for the year ended December 31, 2005 and the period from October 21, 2004 through December 31, 2004:

   Common Shares
Subject to Options
  Weighted Average
Exercise Price
Per Option

Options granted

  950,000  $16.00

Options canceled

  11,500  $16.00

Options exercised

  —     —  

Balance at December 31, 2004

  938,500  $16.00

                 
  2005  2004 
     Weighted Average
     Weighted Average
 
  Common Shares
  Exercise Price
  Common Shares
  Exercise Price
 
  Subject to Options  Per Option  Subject to Options  Per Option 
 
Outstanding at beginning of period  938,500  $16.00   —   — 
Options granted  —   —   950,000  $16.00 
Options canceled  39,500  $16.00   11,500  $16.00 
Options exercised  —   —   —   — 
                 
Outstanding at end of period  899,000  $16.00   938,500  $16.00 
                 
The following table summarizes information regarding options outstanding at December 31, 2004:

  Options Outstanding
 Options Not Exercisable
Exercise Prices
 Options
 Weighted-
Average
remaining
Contractual life
In years
 Weighted
average
exercise
price
 Options
 Weighted
average
exercise
price
$16.00 500,000 2.8 $16.00 500,000 $16.00
$16.00 438,500 4.8 $16.00 438,500 $16.00

2005:

                     
  Options Outstanding  Options Not Exercisable 
     Weighted-
          
     Average
  Weighted
     Weighted
 
     Remaining
  Average
     Average
 
     Contractual Life
  Exercise
     Exercise
 
Exercise Prices
 Options  in Years  Price  Options  Price 
 
$16.00  500,000   1.8  $16.00   333,333  $16.00 
$16.00  399,000   3.8  $16.00   399,000  $16.00 
Restricted Shares
On December 22, 2005, 163,677 restricted share units were granted to certain executives. The shares are equally divided between time-vesting shares and market-based shares with values of $20.62 and $13.82 per share respectively (market-based shares granted to the CEO that vest immediately are valued at $20.62). The fair value of the restricted share units at grant date was approximately $3.0 million. A Monte Carlo simulation analyses was used in estimating the fair value of themarket-based shares. The time-vesting shares vest ratably over a five-year period, one-fifth per year on each of the first five anniversaries of the grant date. The market-based shares vest ratably over a five-year period, one-fifth per year on each of the first five anniversaries of the grant date if the average annual total shareholder return for the Company equals or exceeds ten percent. Additionally, anymarket-based shares that do not vest on a previous anniversary will vest on a subsequent anniversary date if the average annual total shareholder return from grant date equals exceeds ten percent. Certain restricted share units awarded to the chief executive officer vest immediately upon his retirement from the Company as he has reached the retirement age set forth in his award agreement. Accordingly, 72,745 shares issued to Robert J. Amsdell, valued at approximately $1.5 million, was fully recorded as share compensation expense in 2005. As of December 31, 2005 the Company had $1.6 million of unrecognized compensation cost related to unvested restricted share units that will be recorded over the next five years.


F-30

U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The fair value for restricted share units granted in 2005, was estimated at the time the units were granted. Awards that contain a market feature were valued using a Monte Carlo-pricing model applying the following weighted average assumptions:
     
Assumptions:
 2005 
 
Risk-free interest rate  4.69%
Volatility of total annual return  19.0%
Weighted average expected life of the units  5 years 
Weighted average fair value of units granted $18.73 
The restricted share units granted to certain executive officers, as discussed in the previous paragraph, were granted in the form of deferred share units, entitling the holders thereof to receive common shares at a future date. Holders of the deferred share units are not entitled to any of the rights of a shareholder with respect to the deferred share units unless and until the common shares relating to the deferred share unit award has been delivered to such holder. However, the holders of the deferred share units are entitled to receive dividend equivalent payments, upon the Company’s payment of a cash dividend on outstanding common shares.
In May 2005, the Company implemented the Deferred Trustees Plan, a component of the Plan, upon the approval of the Company’s board of trustees. Pursuant to the terms of the Deferred Trustees Plan, each non-employee member of the board of trustees may elect to receive all of his annual cash retainers and meeting fees payable for service on the board of trustees or any committee of the board of trustees in the form of either all common shares or all deferred share units.
Pursuant to the terms of the Deferred Trustees Plan, under the equity incentive plan, certain trustees elected to receive their board of trustee fees in 2005 in the form of deferred share units. At December 31, 2005 an aggregate of 3,876 deferred share units were granted to those trustees and were valued at $21.05 per share.
During 2004, there were an aggregate of 20,315 restricted shares granted to our trustees. The restricted shares were granted on October 27, 2004 and were valued at a price of $16.00 per share. The value of the restricted shares iswas recognized as compensation expense over the vesting or service period.period during 2004 and 2005.
In 2005 and 2004, the Company recognized compensation expense related to restricted shares and restricted share units issued to employees and trustees of approximately $1.7 million and $2.4 million, respectively and was recorded in general and administrative expense. Included in compensation expense for 2005 is approximately $1.5 million which represents the vested portion of the fair value of the restricted share units granted of 163,677 at a range of $13.82 to $20.62 per restricted share units to certain members of the Company’s management team. The restricted share compensation expense in 2004 represents the fair value of the restricted share units granted of 146,875 at $16.00 per restricted share unit to certain members of the Company’s management team at consummation of the IPO. The 2004 units did not have any vesting or forfeiture requirements.


F-31

12. EARNINGS PER SHAREU-STORE-IT TRUST AND SHAREHOLDER’S EQUITYSUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

13.  EARNINGS PER SHARE AND SHAREHOLDER’S EQUITY
The following, is a summary of the elements used in calculating basic and diluted earnings per share ($ in thousands except per share amounts):

   

For the Period October 21,
2004 through

December 31, 2004

 

Net loss attributable to common shares

  $(29,898)

Weighted average common shares outstanding—basic

   37,477,920 

Potentially dilutive common shares(1):

     

Share options

   —   

Restricted shares

   —   

Adjusted weighted average common shares outstanding—diluted

   37,477,920 

Net loss per share—basic and diluted

  $(0.80)
share:
         
     For the Period
 
     October 21, 2004
 
  Year Ended
  through
 
  December 31,
  December 31,
 
  2005  2004 
  (Dollars and shares in thousands,except per share amounts) 
 
Income (loss) from continuing operations $2,566  $(29,898)
Discontinued operations  211   — 
         
Net income (loss) attributable to common shares $2,777  $(29,898)
         
Weighted average common shares outstanding — basic  42,120   37,478 
Potentially dilutive common shares(1):        
Share options and restricted share units  83    — — 
         
Adjusted weighted average common shares outstanding — diluted  42,203   37,478 
         
Income (loss) from continuing operations per share — basic and diluted $0.07  $(0.80)
Income (loss) from discontinued operations — basic and diluted  —   — 
         
Net income (loss) per share — basic and diluted $0.07  $(0.80)
         
(1)For the year ended 2005, the potentially dilutive shares of 45,467 were not included in the earnings per share calculation as the shares were based on meeting market conditions that have not occurred as of December 31, 2005. For the period October 21, 2004 through December 31, 2004, the potentially dilutive shares of 65,748approximately 66,000 were not included in the earnings per share calculation as their effect is antidilutive.

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

The Unitsoperating partnership units and common shares have essentially the same economic characteristics as they share equally in the total net income or loss and distributions of the Operating Partnership. A Unitoperating partnership. An operating partnership unit may be redeemed for cash, or at the Company’s option, common shares on aone-for-one basis beginning on October 27, 2005. Outstanding minority interest Unitsunits in the Operating Partnershipoperating partnership were 1,129,5155,198,855 as of December 31, 2004.2005. There were 37,345,16257,010,162 common shares outstanding as of December 31, 2004.2005. The outstanding common shares as of December 31, 2004,2005, exclude 146,875223,496 of deferred sharesshare units granted to certain members of the Company’s management team (Note 11)12) which are treated as outstanding basic shares for computational purposes of earnings per share.

On November 16, 2004, the board of trustees declared a distribution to common shareholders of record and the Operating Partnership declared a distribution to unitholders of record, in each case as of January 10, 2005, of $0.2009 per common share and Unit, for the period commencing upon completion of the IPO and ending December 31, 2004. This distribution was paid on January 24, 2005. This initial pro-rated distribution was based on a distribution of $0.28 per share for a full quarter.

Concurrently with the closing of the IPO, the Company granted Steven G. Osgood, Todd C. Amsdell and Tedd D. Towsley options to purchase 200,000 shares, 200,000 shares and 100,000 shares, respectively. The options have an exercise price equal to the market value of the underlying common shares on the date of the grant ($16.00), and they become exercisable in three equal annual installments on October 27, 2005, 2006 and 2007.

Share-based compensation cost of approximately $0.5 million and $0.1 million has been recorded for options outstanding for the year ended December 31, 2005 and for the period October 21, 2004 through December 31, 2004, respectively, using the fair value of the options calculated using the Black-Scholes method.


F-32

13. PRO FORMAU-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL INFORMATION (UNAUDITED)STATEMENTS — (Continued)

In May 2004,

14.  INCOME TAXES
         
  December 31, 
  2005  2004 
  (Dollars in millions) 
 
Income tax provision        
Current        
U.S. Federal $—  $0.1 
Deferred        
U.S. Federal  —   — 
         
Income tax provision $—  $0.1 
         
Effective income tax rate        
Statutory federal income tax rate  34%  34%
State and local income taxes  9%  9%
         
Effective income tax rate  43%  43%
         
                 
  December 31, 
  2005  2004 
  Assets  Liabilities  Assets  Liabilities 
 
Deferred taxes Share based compensation $1.6  $1.6  $0.9  $0.9 
Other  0.1   —   0.1   — 
                 
Deferred taxes $1.7  $1.6  $1.0  $0.9 
                 
Deferred income taxes are established for temporary differences between financial reporting basis and tax basis of assets and liabilities at the Predecessor entered intoenacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for deferred tax assets is provided if the Company believes all or some portion of the deferred tax asset will not be realized. No valuation allowance was recorded at December 31, 2005 and 2004. The Company had a $424.5net deferred tax asset of $0.1 million, term loan agreementwhich are included in order to acquireother assets, at December 31, 2005 and 2004. The Company believes it is more likely than not the outside partnership interests in Acquiport I, which were held by partners that were not affiliated withtax asset will be realized.
15.  PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
During the Amsdell family, and to pay downyear ended December 31, 2005, the amounts outstanding under Acquiport I’s revolving credit facilityCompany acquired 146 self-storage facilities for an aggregate purchase price of approximately $142.0$547.9 million as described in Note 3. The Company also acquired 46 self-storage facilities in 2004 subsequent to the Company’s IPO for an aggregate purchase price of approximately $221.8 million. Additionally, The Company sold four of the facilities acquired in 2005 for approximately $6.2 million and consolidated four other facilities resulting in a net addition of 138 facilities in 2005.
The unaudited condensed consolidated pro forma financial information set forth below reflect adjustments to paythe Company’s historical financial data to give effect to the following as if each had occurred on January 1, 2004 which are primarily the acquisitions and related financing costs. The $424.5 million term loan andassumed indebtedness completed from the acquisition of the outside partnership interests in Acquiport I are discussed in Note 1 above. This loan was paid off upon completion of the IPO.

Concurrently with, or shortly after, completiontime of the IPO the Company completed the acquisition of 46 self-storage facilities:

•Metro Storage LLC.    On October 27, 2004, we acquired the Metro Storage portfolio from Metro Storage LLC for a purchase price of $184.0 million. The portfolio consists of 42 self-storage facilities located in five states, Illinois, Indiana, Florida, Ohio and Wisconsin.

•Devon Facilities.    On October 28, 2004, we acquired two self-storage facilities, one located in Bradenton, FL and one in West Palm Beach, FL, from Devon/Bradenton, L.P. and Devon/West Palm, L.P., respectively, for a total purchase price of $18.2 million.

•Self-Storage Zone Facility.    On November 1, 2004, we acquired one self-storage facility, located in California, MD, from Bay Media Network Limited Partnership for a purchase price of approximately $5.7 million.

•Federal Self-Storage Facility.    On November 1, 2004, we acquired one self-storage facility, located in Dania Beach, FL, from Federal Self Storage for a purchase price of approximately $13.9 million.

through December 31, 2005.

The unaudited pro forma information includedpresented below is presented as ifdoes not purport to represent what the acquisitionCompany’s actual results of the 46 facilities discussed above, the IPO transactions and related financing transactions, and the pay-off of the $424.5 million term loan had all occurred as of the first day ofoperations would have been for the periods presented.

indicated, nor does it purport to represent the Company’s future results of operations.


F-33

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”(THE “COMPANY”) AND


ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)

The pro forma information excludes $2.5 million of compensation expense related to the IPO, $7.0 million of losses on early extinguishment of debt, $4.5 million of loan procurement amortization expense, $22.2 million for the costs incurred to acquire U-Store-It Mini Warehouse Co., a reduction of $11.4 million of interest expense related to the buyout of former partners, an increase in $11.7 for additional interest expense and loan amortization expense as the result of the incurrence of new senior mortgage debt and the payoff of other related debt, all of which were incurred during the year ended December 31, 2004. Additionally, we have included an estimate for annualized general and administrative expenses primarily relating to executive employment agreements and other costs as a result of being a public company. The pro forma information is based on the assumption that the Company’s common shares and loans payable had been outstanding as of the beginning of the period presented.

The following table summarizes, on a pro forma basis, our consolidated results of operations for the years ended December 31, 20042005 and 20032004 based on the assumptions described above ($above:
         
  2005  2004 
  (unaudited) 
  (Dollars in thousands, except per share data) 
 
Pro forma total revenues $180,828  $171,258 
Pro forma net income $6,950  $(18,574)
Pro forma diluted earnings per share $0.16  $(0.50)
16.  ASSET IMPAIRMENT AND INSURANCE RECOVERY
As a result of hurricanes that occurred during the three months ended September 30, 2005, the Company incurred damage at certain of its self-storage facilities located in thousands, except per share data):Alabama, Louisiana and Mississippi. Under the provisions of SFAS 144, “Accounting for the Impairment of or Disposal of Long-Lived Assets” (“SFAS 144”), the Company determined that there were indicators of impairment and accordingly tested the assets for recoverability. After an assessment of the damage sustained at the Waveland, Mississippi facility, the Company determined that a charge for impairment of approximately $2.3 million was required because the estimated undiscounted future cash flows did not support the carrying value of the assets. The Company has comprehensive insurance coverage for property damage. Although the Company currently expects it is probable the insurance proceeds will cover the entire loss incurred, the Company is required to record the impairment charge, and to record an offsetting insurance recovery of $2.3 million, of which $0.5 million was received in October 2005. While the Company expects the insurance proceeds will be sufficient to cover the entire replacement cost of the damaged facility, certain deductibles and limitations will apply and no assurances can be made that proceeds will be sufficient to cover the costs of the entire restoration. To the extent that insurance proceeds, which are on a replacement cost basis, ultimately exceed the net book value of the damaged facility, a gain will be recognized in the period when all contingencies related to the insurance claim have been resolved. The related insurance receivable is included in other assets as of December 31, 2005, and the asset impairment charge and insurance recovery are recorded net in the same line item for operating expenses for the year ended December 31, 2005.


F-34

   2004
  2003
   (unaudited)

Pro forma revenues

  $117,371  $108,181

Pro forma net income

  $6,236  $6,363

Pro forma earnings per common share—basic

  $0.17  $0.17

Pro forma earnings per common share—diluted

  $0.17  $0.17

14. SELECTED QUARTERLYU-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL DATA (UNAUDITED)STATEMENTS — (Continued)

17.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The following is a summary of selected quarterly information for the Company and the Predecessor for years ended December 31, 20042005 and 2003:

   Consolidated and Combined Quarter Ended
 

Year

  March 31,
  June 30,
  September 30,
  December 31,(1)
  Year Ended
December 31,
 
   ($ in thousands, except per share data) 

2004

                     

Revenues

  $20,524  $21,207  $22,281  $27,596  $91,608 

Income (loss) before minority interests

   3,084   (1,223)  (2,271)  (32,835)  (33,245)

Net income (loss)

   3,084   (1,223)  (2,271)  (31,937)  (32,347)

Net loss per share—basic and diluted

   —     —     —     (0.80)  (0.80)

2003

                     

Revenues

  $19,391  $19,904  $20,681  $20,838  $80,814 

Gain on sale of storage facilities

   —     293   1,288   1,748   3,329 

Net income

   2,135   3,909   4,918   5,270   16,232 
2004:
                     
  Consolidated and Combined Quarter Ended 
              Year Ended
 
Year
 March 31,  June 30,  September 30,  December 31,(1)(2)  December 31, 
  (Dollars in thousands, except per share data) 
 
2005
                    
Revenues $29,715  $33,784  $41,303  $43,319  $148,121 
Income (loss) before minority interests  1,677   2,301   1,860   (3,073)  2,765 
Net income (loss)  1,617   2,204   1,665   (2,709)  2,777 
Net loss per share — basic and diluted  0.04   0.06   0.04   (0.05)  0.07 
2004
                    
Revenues $20,524  $21,207  $22,281  $27,596  $91,608 
Income (loss) before minority interests  3,084   (1,223)  (2,271)  (32,835)  (33,245)
Net income (loss)  3,084   (1,223)  (2,271)  (31,937)  (32,347)
Net loss per share-basic and diluted  —   —   —   (.80)  (.80)
(1)The three monthsquarter ended December 31, 2004 represents consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from October 1, 2004 to October 20, 2004. The operating results for the quarter ended December 31, 2004 are not comparable to future expected operating results of the Company since they include various IPO-related charges.
(2)The quarter ended December 31, 2005 includes approximately $1.5 million of compensation expense for restricted share units and approximately $2.1 million of bonuses for certain management employees.

15. SUBSEQUENT EVENTS

18.  SUBSEQUENT EVENTS
The Company completed the following acquisitionstransactions subsequent to December 31, 2004:

2005:
 •

Acquisition of Option Facility.Nashville, TN Portfolio.  OnIn January 5, 2005,2006, the Company exercised its option to purchase the San Bernardino VII, CA facility from Rising Tide Development (a related party—see Note 6)acquired two self-storage facilities located in Nashville, Tennessee for the purchase priceconsideration of $7.3 million, consisting of $3.8 million in cash (which cash was used to pay off

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

mortgage indebtedness secured by the facility) and $3.5 million payable in units in the Operating Partnership. The facility contains approximately 83,000$13.1 million. These facilities total approximately 204,000 rentable square feet and was 84.9% occupied asare part of December 31, 2004.

•Acquisition of Self-Storage Zone Facility.    On January 14, 2005, the Company acquired one self-storage facility from Airpark Storage LLC in Gaithersburg, Maryland for the purchase price of $10.7 million, consisting of $4.3 million cash and $6.4 million of indebtedness. The facility contains approximately 87,000 rentable square feet.

•Acquisition of Ford Storage Facilities.    On March 1, 2005, the Company acquired five self-storage facilities located in central Connecticut, from Ford StorageTennessee that the Company agreed to acquire pursuant to an agreement entered in December 2005. As described in Note 3, the Company initially acquired three of these facilities, for an aggregate purchase priceconsideration of $15.5 million. These facilities contain an aggregate of approximately 237,000 rentable square feet.$14.7 million, in December 2005.

 •Acquisition of A-1 Self-Storage Facilities.Dallas, TX Portfolio.  On March 15, 2005,In January 2006, the Company acquired fivetwo self-storage properties,facilities located in Connecticut, from A-1 Self StorageDallas, Texas for an aggregate purchase price of $21.7 million in cash. These facilities contain an aggregateconsideration of approximately 193,000 rentable square feet.The Company plans to operate two of these facilities as one facility.

•Acquisition of Option Facilities.    On March 18, 2005, the Company exercised its option to purchase the Orlando II, Florida and the Boynton Beach II, Florida facilities from Rising Tide Development (a related party—see Note 6) for the purchase price of $11.8$11.5 million, consisting of $6.7approximately $4.4 million in cash (which cash was used to pay off mortgage indebtedness secured byand the facilities) and $5.1assumption of approximately $7.1 million in units of the Operating Partnership. Theindebtedness. These facilities containtotal approximately 129,000132,000 rentable square feet and are part of a portfolio of eight self-storage facilities located in Dallas, Texas that the Company agreed to acquire pursuant to an agreement entered into in October 2005. As described in Note 3, the Company initially acquired six of these facilities, for aggregate consideration of $17.9 million in October 2005.


F-35

• Acquisition of U-Stor Self Storage Portfolio.  In February 2006, the Company acquired three self-storage facilities located in Colorado for consideration of approximately $10.9 million. These facilities total approximately 173,000 rentable square feet. The Company also has agreed to acquire from this seller an additional self-storage facility, for additional consideration of approximately $3.5 million including the assumption of $2.1 million of indebtedness, during the first half of 2006.
• Acquisition of Sure Save Portfolio.  In February 2006, the Company acquired 24 self-storage facilities from Crownridge Storage Portfolio, LLC and Williams Storage Portfolio III, LLC for consideration of approximately $164.5 million. These facilities total approximately 1.8 million rentable square feet and are located in Arizona, California, Nevada, New Mexico and Texas.
• Term Loan Agreement.  In February 2006 the Company entered into a60-day, unsecured $30 million term loan agreement with Wachovia Bank, National Association as the lender. The term loan bears interest at LIBOR plus 175 basis points. The loan proceeds were 90.1%used to finance a portion of the acquisition of the Sure Save Portfolio. The loan was paid in full from proceeds obtained upon entering into a new revolving credit facility in February 2006.
• Revolving Credit Facility.  In February 2006 the Company and 90.3% occupied asthe operating partnership entered into a new three-year $250.0 million revolving credit facility, replacing the Company’s existing $150.0 million facility. The terms of December 31, 2004.the new agreement allows the Company to increase the credit limit up to $350.0 million if necessary, at a later date. Under terms of the agreement, the Company is required to satisfy certain financial and operating covenants including leverage ratio and interest coverage ratio. Borrowings under the new facility bear interest, at the Company’s option, at either an alternate base rate or a Eurodollar rate, in each case plus an applicable margin. The alternative base interest rate is a fluctuating rate equal to the higher of the prime rate or the sum of the federal funds effective rate plus 50 basis points. The applicable margin for the alternative base rate will vary from 1.15% to 1.60% depending on the Company’s leverage ratio. The revolving credit agreement expires in February 2009 and is unsecured.
• Acquisition of Texas Portfolio.  In March 2006, the Company acquired four self-storage facilities located in Texas, for consideration of approximately $22.5 million. These facilities total approximately 273,000 rentable square feet and are part of a portfolio of 12 self-storage facilities located in Texas that the Company agreed to acquire pursuant to an agreement entered into in July 2005. As described above in Note 3, the Company initially acquired four of these facilities, for aggregate consideration of $15.6 million, in September 2005, and one of these facilities for $5.5 million, in November 2005. The Company expects to acquire the remaining three facilities, for aggregate consideration of approximately $18.2 million, during the first half of 2006. These three facilities total approximately 213,000 rentable square feet.


F-36

In addition, the Company has entered into definitive agreements to acquire an additional 89 self-storage facilities, as discussed below, for a total purchase price of $272.3 million.

The acquisitions are comprised of the following unrelated transactions:

The Company has agreed to acquire 67 self-storage facilities from various partnerships and other entities affiliated with National Self Storage and The Schomac Group, Inc. for an aggregate purchase price of approximately $217.0 million. The facilities total approximately 3.6 million rentable square feet and are located in Arizona, California, Colorado, New Mexico, Tennessee, Texas and Utah. The transaction also includes the purchase of four office parks and one mobile home park. The purchase price includes the assumption of up to $118.0 million of indebtedness by our Operating Partnership upon closing and the issuance of approximately $63.0 million payable in Units in our Operating Partnership, with the balance to be paid in cash.

The Company entered into a contract to acquire 18 self-storage facilities from Liberty Self-Stor Ltd., a subsidiary of Liberty Self-Stor, Inc., for an aggregate price of $34.0 million, The facilities total approximately 863,000 rentable square feet and are located in Ohio and New York.

The Company has entered into an agreement to purchase one self-storage facility from A-1 Self Storage for $6.4 million. The facility totals approximately 48,000 rentable square feet and is located in New York.

The Company has also entered into two separate agreements to acquire three facilities from two parties for an aggregate purchase price of $14.9 million. The facilities total approximately 200,000 rentable square feet and are located in Texas (2 properties) and Florida (1 property).

The Company expects these acquisitions to close on or before June 30, 2005. The closings of the transactions are contingent upon the satisfaction of certain customary conditions. There are no assurances that the conditions will be met or that the transactions will be consummated.

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

On March 29, 2005, the Company entered into an office lease agreement with Amsdell and Amsdell, an entity owned by Robert J. Amsdell and Barry L. Amsdell, for office space of approximately 18,000 square feet at The Parkview Building, an approximately 40,000 square foot multi-tenant office building located at 6745 Engle Road, plus approximately 4,000 square feet of an approximately 18,000 square foot office building located at 6751 Engle Road, which are both part of Airport Executive Park, a 50-acre office and flex development located in Cleveland, Ohio. Airport Executive Park is owned by Amsdell and Amsdell. The lease is effective as of January 1, 2005 and has a ten-year term, with one five-year extension option exercisable by us. The aggregate amount of rent payable under this lease in 2005 will be approximately $260,000.

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

SCHEDULE III

REAL ESTATE AND RELATED DEPRECIATION

DECEMBER 31, 20042005
                                     
        Initial Cost  Gross Carrying Amount
       
        Building
  Costs
  at December 31, 2005       
        and
  Subsequent
     Building and
     Accumulated
  Year
 
  Encum-
     Improve-
  to
     Improve-
     Depreciation
  Acquired/
 
Description
 brances  Land  ments  Acquisition  Land  ments  Total  (O)  Developed 
  (Dollars in thousands) 
 
Mobile I, AL  (N)  149   1,429   572   225   1,925   2,150   489   1997 
Mobile II, AL  (F)  226   2,524   749   301   3,198   3,499   1,025   1997 
Mobile III, AL  (A)  167   1,849   240   237   2,019   2,256   447   1998 
Chandler, AZ  (N)  327   1,257   73   327   1,330   1,657   31   2005 
Glendale, AZ  (A)  201   2,265   806   418   2,854   3,272   546   1998 
Green Valley, AZ  (H)  298   1,153   18   298   1,171   1,469   26   2005 
Scottsdale, AZ  (A)  443   4,879   1,521   883   5,960   6,843   1,132   1998 
Tempe, AZ  (F)  749   2,159   18   749   2,177   2,926   57   2005 
Tucson I, AZ  (A)  188   2,078   712   384   2,594   2,978   499   1998 
Tucson II, AZ  (A)  188   2,078   786   391   2,661   3,052   497   1998 
Tucson, AZ  (L)  711   2,736   5   711   2,741   3,452   65   2005 
Tucson, AZ  (L)  532   2,048   44   532   2,092   2,624   48   2005 
Tucson, AZ  (L)  674   2,595   31   674   2,626   3,300   61   2005 
Tucson, AZ  (L)  515   1,980   28   515   2,008   2,523   47   2005 
Tucson, AZ  (L)  440   1,692   37   440   1,729   2,169   40   2005 
Tucson, AZ  (L)  670   2,576   34   670   2,610   3,280   61   2005 
Tucson, AZ  (L)  589   2,265   20   589   2,285   2,874   53   2005 
Tucson, AZ  (L)  724   2,786   23   724   2,809   3,533   65   2005 
Tucson, AZ  (L)  424   1,633   22   424   1,655   2,079   39   2005 
Tucson, AZ  (L)  439   1,689   41   439   1,730   2,169   40   2005 
Tucson, AZ  (L)  671   2,582   40   671   2,622   3,293   61   2005 
Tucson, AZ  (L)  587   2,258   11   587   2,269   2,856   54   2005 
Tucson, AZ  1,264   540   2,076   31   540   2,107   2,647   48   2005 
Tucson, AZ  1,358   707   2,721   9   707   2,730   3,437   63   2005 
Apple Valley I, CA  (D)  140   1,570   1,386   476   2,620   3,096   470   1997 
Apple Valley II, CA  (G)  160   1,787   1,109   431   2,625   3,056   514   1997 
Benicia, CA  (N)  2,392   7,028   4   2,392   7,032   9,424   34   2005 
Bloomington I, CA  (N)  42   463   365   100   770   870   166   1997 
Bloomington II, CA  (N)  54   604   408   144   922   1,066   175   1997 
Citrus Heights, CA  (L)  1,633   4,793   20   1,633   4,813   6,446   116   2005 
Diamond Bar, CA  2,618   2,522   7,404   9   2,524   7,411   9,935   174   2005 
Fallbrook, CA  (C)  133   1,492   1,362   433   2,554   2,987   441   1997 
Hemet, CA  (D)  125   1,396   1,236   417   2,340   2,757   417   1997 
Highland, CA  (D)  215   2,407   1,770   582   3,810   4,392   735   1997 
Lancaster, CA  (G)  390   2,247   813   556   2,894   3,450   512   2001 
Murrieta, CA  (N)  1,883   5,532   3   1,883   5,535   7,418   26   2005 
North Highlands, CA  (L)  868   2,546   9   868   2,555   3,423   61   2005 
Ontario, CA  (A)  292   3,289   1,713   688   4,606   5,294   789   1998 
Orangevale, CA  (L)  1,423   4,175   15   1,423   4,190   5,613   100   2005 
Pleasanton, CA  (N)  2,799   8,222   4   2,799   8,226   11,025   39   2005 
Rancho Cordova, CA  (L)  1,094   3,212   12   1,094   3,224   4,318   77   2005 
Redlands, CA  (C)  196   2,192   1,032   449   2,971   3,420   652   1997 
Rialto, CA  (A)  277   3,098   1,542   672   4,245   4,917   896   1997 
Riverside I, CA  (N)  42   465   489   141   855   996   160   1997 


F-37

(Dollars in thousands)

      Initial Cost
     

Gross Carrying Amount

at December 31, 2004

      
Description  Encum-
brances
  Land
  Building
and
Improve-
ments
  Costs Sub-
sequent to
Acqui-
sition
  Land
  Building
and
Improve-
ments
  Total
  Accum-
ulated
Deprecia-
tion (G)
  Year
Acquired/
Developed

Mobile I, AL

  (F) $149  $1,429  $744  $225  $2,097  $2,322  $635  1997

Mobile II, AL

  (F)  226   2,524   729   301   3,178   3,479   929  1997

Mobile III, AL

  (A)  167   1,849   459   237   2,238   2,475   603  1998

Glendale, AZ

  (A)  201   2,265   1,038   418   3,086   3,504   719  1998

Scottsdale, AZ

  (A)  443   4,879   2,040   883   6,479   7,362   1,486  1998

Tucson I, AZ

  (A)  188   2,078   947   384   2,829   3,213   658  1998

Tucson II, AZ

  (A)  188   2,078   1,021   391   2,896   3,287   655  1998

Apple Valley I, CA

  (D)  140   1,570   1,590   476   2,824   3,300   599  1997

Apple Valley II, CA

  (F)  160   1,787   1,331   431   2,847   3,278   656  1997

Bloomington I, CA

  (F)  42   463   434   100   839   939   214  1997

Bloomington II, CA

  (F)  54   604   443   144   957   1,101   211  1997

Fallbrook, CA

  (C)  133   1,492   1,527   432   2,720   3,152   539  1997

Hemet, CA

  (D)  125   1,396   1,375   417   2,479   2,896   510  1997

Highland, CA

  (D)  215   2,407   1,998   582   4,038   4,620   894  1997

Lancaster, CA

  (F)  390   2,247   780   556   2,861   3,417   382  2001

Ontario, CA

  (A)  292   3,289   1,926   688   4,819   5,507   1,026  1998

Redlands, CA

  (C)  196   2,192   1,228   449   3,167   3,616   806  1997

Rialto, CA

  (A)  277   3,098   1,865   672   4,568   5,240   1,095  1997

Riverside I, CA

  (F)  42   465   552   141   918   1,059   207  1997

Riverside II, CA

  (F)  42   423   379   114   730   844   163  1997

Riverside III, CA

  (A)  91   1,035   1,089   310   1,905   2,215   395  1998

San Bernardino I, CA

  (F)  67   748   867   217   1,465   1,682   297  1997

San Bernardino II, CA

  (C)  152   1,704   1,424   450   2,830   3,280   607  1997

San Bernardino III, CA

  (F)  51   572   976   182   1,417   1,599   261  1997

San Bernardino IV, CA

  (C)  152   1,695   1,397   444   2,800   3,244   601  1997

San Bernardino V, CA

  (F)  112   1,251   949   306   2,006   2,312   463  1997

San Bernardino VI, CA

  (F)  98   1,093   802   242   1,751   1,993   421  1997

Sun City, CA

  (A)  140   1,579   930   324   2,325   2,649   522  1998

Temecula I, CA

  (A)  184   2,038   1,241   435   3,028   3,463   654  1998

Temecula II, CA

  (F)  476   2,697   6   476   2,703   3,179   155  2003

Vista, CA

  (D)  711   4,076   1,899   1,118   5,568   6,686   636  2001

Yucaipa, CA

  (C)  198   2,221   1,583   525   3,477   4,002   798  1997

Bloomfield, CT

  (A)  78   880   2,181   360   2,779   3,139   443  1997

Branford, CT

  (A)  217   2,433   1,417   504   3,563   4,067   1,059  1995

Enfield, CT

  (D)  424   2,424   265   473   2,640   3,113   609  2001

Gales Ferry, CT

  (A)  240   2,697   1,277   489   3,725   4,214   971  1995

Manchester, CT

  (D)  540   3,096   208   563   3,281   3,844   598  2002

Milford, CT

  (B)  87   1,050   1,024   274   1,887   2,161   427  1994

Mystic, CT

  (B)  136   1,645   1,678   410   3,049   3,459   662  1994

South Windsor, CT

  (B)  90   1,127   950   272   1,895   2,167   368  1994

                                     
        Initial Cost  Gross Carrying Amount
       
        Building
  Costs
  at December 31, 2005       
        and
  Subsequent
     Building and
     Accumulated
  Year
 
  Encum-
     Improve-
  to
     Improve-
     Depreciation
  Acquired/
 
Description
 brances  Land  ments  Acquisition  Land  ments  Total  (O)  Developed 
  (Dollars in thousands) 
 
Riverside II, CA  (N)  42   423   330   114   681   795   135   1997 
Riverside III, CA  (A)  91   1,035   936   310   1,752   2,062   289   1998 
Roseville, CA  (L)  1,284   3,767   9   1,284   3,776   5,060   90   2005 
Sacramento, CA  (L)  1,152   3,380   27   1,152   3,407   4,559   80   2005 
Sacramento, CA  (L)  790   2,319   10   790   2,329   3,119   57   2005 
Sacramento, CA  (L)  1,406   4,128   16   1,406   4,144   5,550   99   2005 
San Bernardino I, CA  (N)  67   748   798   217   1,396   1,613   244   1997 
San Bernardino II, CA  (C)  152   1,704   1,271   451   2,676   3,127   513   1997 
San Bernardino III, CA  (F)  51   572   1,018   182   1,459   1,641   303   1997 
San Bernardino IV, CA  (C)  152   1,695   1,558   444   2,961   3,405   682   1997 
San Bernardino V, CA  (F)  112   1,251   970   306   2,027   2,333   520   1997 
San Bernardino VI, CA  (F)  98   1,093   822   242   1,771   2,013   470   1997 
San Bernardino, CA  (G)  1,872   5,391   9   1,872   5,400   7,272   277   2005 
San Marcos, CA  (I)  775   2,288   9   776   2,296   3,072   54   2005 
Sun City, CA  (A)  140   1,579   762   324   2,157   2,481   403   1998 
Temecula I  (A)  184   2,038   1,033   435   2,820   3,255   510   1998 
Temecula II, CA  (N)  476   2,697   6   476   2,703   3,179   288   2003 
Vista, CA  (N)  4,629   13,599   3   4,629   13,602   18,231   65   2005 
Vista, CA  (D)  711   4,076   1,972   1,118   5,641   6,759   883   2001 
Walnut, CA  (N)  1,578   4,635   4   1,578   4,639   6,217   22   2005 
West Sacramento, CA  (N)  1,222   3,590   3   1,222   3,593   4,815   17   2005 
Westminister, CA  (I)  1,740   5,142   10   1,740   5,152   6,892   120   2005 
Yucaipa, CA  (C)  198   2,221   1,381   526   3,274   3,800   645   1997 
Aurora, CO  (N)  736   1,637   35   736   1,672   2,408   24   2005 
Aurora, CO  (N)  352   783   8   352   791   1,143   12   2005 
Avon, OH  (N)  1,012   2,252   6   1,012   2,258   3,270   33   2005 
Centennial, CO  (L)  1,268   2,820   14   1,268   2,834   4,102   69   2005 
Colorado Springs, CO  (N)  771   1,717   20   771   1,737   2,508   25   2005 
Denver, CO  (N)  1,105   2,459   8   1,105   2,467   3,572   36   2005 
Denver, CO  (L)  878   1,953   15   878   1,968   2,846   48   2005 
Denver, CO  (L)  1,343   2,986   91   1,343   3,077   4,420   73   2005 
Englewood, CO  (N)  981   2,183   13   981   2,196   3,177   32   2005 
Golden, CO  (L)  1,683   3,744   11   1,683   3,755   5,438   91   2005 
Littleton, CO  (N)  1,121   2,495   7   1,121   2,502   3,623   37   2005 
Northglenn, CO  (L)  862   1,917   41   862   1,958   2,820   48   2005 
Bloomfield, CT  (A)  78   880   2,162   360   2,760   3,120   505   1997 
Branford, CT  (A)  217   2,433   1,072   504   3,218   3,722   819   1995 
Bristol, CT  (G)  1,819   3,161   22   1,821   3,181   5,002   154   2005 
East Windsor, CT  (F)  744   1,294   46   744   1,340   2,084   65   2005 
Enfield, CT  (D)  424   2,424   267   473   2,642   3,115   773   2001 
Gales Ferry, CT  (A)  240   2,697   1,247   489   3,695   4,184   1,052   1995 
Manchester, CT  (D)  540   3,096   212   563   3,285   3,848   807   2002 
Manchester, CT  (G)  996   1,730   18   996   1,748   2,744   84   2005 
Milford, CT  (B)  87   1,050   948   274   1,811   2,085   397   1994 
Monroe, CT  (G)  2,004   3,483   105   2,004   3,588   5,592   170   2005 
Mystic, CT  (B)  136   1,645   1,570   410   2,941   3,351   646   1994 
Newington, CT  (G)  1,059   1,840   11   1,059   1,850   2,909   90   2005 
Newington, CT  (G)  911   1,584   26   911   1,610   2,521   77   2005 
Old Saybrook, CT  (G)  3,092   5,374   160   3,094   5,532   8,626   263   2005 

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) ANDF-38

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

      Initial Cost
     

Gross Carrying Amount

at December 31, 2004

      
Description  Encum-
brances
  Land
  Building
and
Improve-
ments
  Costs Sub-
sequent to
Acqui-
sition
  Land
  Building
and
Improve-
ments
  Total
  Accum-
ulated
Deprecia-
tion (G)
  Year
Acquired/
Developed

Boca Raton, FL

  (C) 529  3,054  1,369  812  4,140  4,952  724  2001

Boynton Beach, FL

  (F) 667  3,796  1,466  958  4,971  5,929  914  2001

Bradenton, FL

  (F) 1,931  5,561  3  1,931  5,564  7,495  48  2004

Bradenton, FL

  (F) 1,180  3,324  8  1,180  3,332  4,512  28  2004

Cape Coral, FL

  (C) 472  2,769  2,159  830  4,570  5,400  887  2000

Dania, FL

  (F) 205  2,068  1,442  481  3,234  3,715  834  1994

Dania Beach, FL

  (F) 3,584  10,324  3  3,584  10,327  13,911  88  2004

Davie, FL

  (D) 1,268  7,183  525  1,373  7,603  8,976  1,074  2001

Deerfield Beach, FL

  (F) 946  2,999  1,746  1,311  4,380  5,691  525  1998

DeLand, FL

  (A) 113  1,258  848  286  1,933  2,219  413  1998

Delray Beach, FL

  (F) 798  4,539  485  883  4,939  5,822  1,069  2001

Fernandina Beach, FL

  (A) 189  2,111  3,463  523  5,240  5,763  1,149  1996

Ft. Lauderdale, FL

  (D) 937  3,646  2,126  1,384  5,325  6,709  681  1999

Ft. Myers, FL

  (F) 303  3,329  236  328  3,540  3,868  901  1998

Lake Worth, FL

  (C) 183  6,597  4,785  183  11,382  11,565  2,539  1998

Lakeland I, FL

  (F) 81  896  882  256  1,603  1,859  447  1994

Lakeland II, FL

  (F) 49  551  409  103  906  1,009  248  1996

Leesburg, FL

  (A) 96  1,079  705  214  1,666  1,880  410  1997

Lutz, FL

  (F) 992  2,868  4  992  2,872  3,864  25  2004

Lutz, FL

  (F) 901  2,478  7  901  2,485  3,386  21  2004

Margate I, FL

  (F) 161  1,763  1,318  399  2,843  3,242  563  1994

Margate II, FL

  (A) 132  1,473  1,747  383  2,969  3,352  666  1996

Merrit Island, FL

  (F) 716  2,983  373  796  3,276  4,072  422  2000

Miami I, FL

  (D) 179  1,999  1,513  484  3,207  3,691  705  1995

Miami II, FL

  (F) 188  2,052  567  286  2,521  2,807  628  1994

Miami III, FL

  (F) 253  2,544  1,520  561  3,756  4,317  1,008  1994

Miami IV, FL

  (F) 193  2,174  1,640  516  3,491  4,007  834  1995

Miami V, FL

  (A) 193  2,165  1,085  364  3,079  3,443  858  1995

Naples I, FL

  (F) 90  1,010  2,231  270  3,061  3,331  592  1996

Naples II, FL

  (F) 148  1,652  4,288  558  5,530  6,088  1,035  1997

Naples III, FL

  (F) 139  1,561  3,483  598  4,585  5,183  1,177  1997

Ocala, FL

  (F) 55  558  548  155  1,006  1,161  259  1994

Orange City, FL

  (F) 1,191  3,209  3  1,191  3,212  4,403  27  2004

Orlando, FL

  (A) 187  2,088  423  240  2,458  2,698  755  1997

Pembroke Pines, FL

  (D) 337  3,772  2,897  953  6,053  7,006  1,336  1997

Royal Palm Beach, FL

  (C) 205  2,148  2,745  741  4,357  5,098  1,379  1994

Sarasota, FL

  (F) 333  3,656  989  529  4,449  4,978  1,017  1998

St. Augustine, FL

  (A) 135  1,515  3,165  383  4,432  4,815  949  1996

Stuart I, FL

  (A) 154  1,726  1,060  319  2,621  2,940  673  1997

Stuart II, FL

  (F) 324  3,625  2,651  685  5,915  6,600  1,365  1997

Naples IV, FL

  (A) 262  2,980  721  407  3,556  3,963  955  1998

Tampa I, FL

  (F) 124  1,252  543  220  1,699  1,919  536  1994

Tampa II, FL

  (F) 330  1,887  410  330  2,297  2,627  436  2001

Vero Beach I, FL

  (F) 71  774  223  171  897  1,068  178  1997

Vero Beach II, FL

  (F) 88  1,009  227  88  1,236  1,324  363  1998

West Palm Beach, FL

  2,542  719  3,420  1,367  835  4,671  5,506  964  2001

West Palm Beach, FL

  (F) 2,129  8,671  8  2,129  8,679  10,808  86  2004

Alpharetta, GA

  (C) 806  4,720  745  967  5,304  6,271  1,082  2001

                                     
        Initial Cost  Gross Carrying Amount
       
        Building
  Costs
  at December 31, 2005       
        and
  Subsequent
     Building and
     Accumulated
  Year
 
  Encum-
     Improve-
  to
     Improve-
     Depreciation
  Acquired/
 
Description
 brances  Land  ments  Acquisition  Land  ments  Total  (O)  Developed 
  (Dollars in thousands) 
 
Old Saybrook, CT  (G)  1,135   1,973   55   1,137   2,026   3,163   97   2005 
South Windsor, CT  (B)  90   1,127   933   272   1,878   2,150   408   1994 
Stamford, CT  (G)  1,941   3,374   40   1,943   3,412   5,355   163   2005 
Boca Raton, FL  (C)  529   3,054   1,453   813   4,223   5,036   944   2001 
Boynton Beach, FL  (G)  667   3,796   1,491   958   4,996   5,954   1,182   2001 
Bradenton, FL  (N)  1,931   5,561   79   1,931   5,640   7,571   338   2004 
Bradenton, FL  (N)  1,180   3,324   38   1,180   3,362   4,542   203   2004 
Cape Coral, FL  (C)  472   2,769   2,192   830   4,603   5,433   1,040   2000 
Dania Beach, FL  (N)  3,584   10,324   182   3,584   10,506   14,090   630   2004 
Dania, FL  (N)  205   2,068   1,187   481   2,979   3,460   664   1994 
Davie, FL  (D)  1,268   7,183   591   1,373   7,669   9,042   1,551   2001 
Deerfield Beach, FL  (F)  946   2,999   1,770   1,311   4,404   5,715   651   1998 
DeLand, FL  (A)  113   1,258   695   286   1,780   2,066   306   1998 
Delray Beach, FL  (F)  798   4,539   500   883   4,954   5,837   1,358   2001 
Fernandina Beach, FL  (A)  189   2,111   3,207   523   4,984   5,507   1,006   1996 
Ft. Lauderdale, FL  (D)  937   3,646   2,144   1,384   5,343   6,727   836   1999 
Ft. Myers, FL  (F)  303   3,329   252   328   3,556   3,884   1,002   1998 
Gulf Breeze, FL  (N)  2,035   5,863   5   2,035   5,868   7,903   76   2005 
Jacksonville, FL  (N)  1,862   5,362   9   1,862   5,371   7,233   46   2005 
Lake Worth, FL  (C)  183   6,597   4,893   183   11,490   11,673   3,063   1998 
Lakeland I, FL  (F)  81   896   891   256   1,612   1,868   498   1994 
Lakeland II, FL  (N)  49   551   376   103   873   976   244   1996 
Leesburg, FL  (A)  96   1,079   691   214   1,652   1,866   439   1997 
Lutz, FL  (N)  901   2,478   33   901   2,511   3,412   152   2004 
Lutz, FL  (N)  992   2,868   28   992   2,896   3,888   175   2004 
Margate I, FL  (F)  161   1,763   1,334   399   2,859   3,258   659   1994 
Margate II, FL  (A)  132   1,473   1,552   383   2,774   3,157   537   1996 
Merrit Island, FL  (F)  716   2,983   398   796   3,301   4,097   609   2000 
Miami I, FL  (D)  179   1,999   1,509   484   3,203   3,687   803   1995 
Miami II, FL  (N)  188   2,052   588   286   2,542   2,828   697   1994 
Miami III, FL  (G)  253   2,544   1,205   561   3,441   4,002   797   1994 
Miami IV, FL  (N)  193   2,174   1,644   516   3,495   4,011   910   1995 
Miami V, FL  (A)  193   2,165   826   364   2,820   3,184   674   1995 
Miami, FL  (N)  4,577   13,185   4   4,577   13,189   17,766   170   2005 
Naples I, FL  (N)  90   1,010   2,216   270   3,046   3,316   669   1996 
Naples II, FL  (G)  148   1,652   4,083   558   5,325   5,883   979   1997 
Naples III, FL  (F)  139   1,561   3,517   598   4,619   5,217   1,327   1997 
Naples IV, FL  (A)  262   2,980   374   407   3,209   3,616   691   1998 
Ocala, FL  (N)  55   558   463   155   921   1,076   206   1994 
Ocoee, FL  (N)  1,286   3,705   29   1,286   3,735   5,021   129   2005 
Orange City, FL  (N)  1,191   3,209   42   1,191   3,251   4,442   196   2004 
Orlando, FL  (A)  187   2,088   404   240   2,439   2,679   800   1997 
Orlando, FL  (F)  1,030   2,968   32   1,030   3,000   4,030   115   2005 
Pembroke Pines, FL  (D)  337   3,772   2,472   953   5,628   6,581   1,040   1997 
Royal Palm Beach, FL  (C)  205   2,148   2,522   742   4,133   4,875   1,278   1994 
Sarasota, FL  (F)  333   3,656   997   529   4,457   4,986   1,146   1998 
St. Augustine, FL  (A)  135   1,515   2,956   383   4,223   4,606   856   1996 
Stuart I, FL  (A)  154   1,726   1,085   319   2,646   2,965   728   1997 
Stuart II, FL  (G)  324   3,625   2,258   685   5,522   6,207   1,074   1997 

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) ANDF-39

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

      Initial Cost
     

Gross Carrying Amount

at December 31, 2004

      
Description  Encum-
brances
  Land
  Building
and
Improve-
ments
  Costs Sub-
sequent to
Acqui-
sition
  Land
  Building
and
Improve-
ments
  Total
  Accum-
ulated
Deprecia-
tion (G)
  Year
Acquired/
Developed

Decatur, GA

  (A) 616  6,776  328  616  7,104  7,720  2,080  1998

Norcross, GA

  (D) 514  2,930  590  632  3,402  4,034  541  2001

Peachtree City, GA

  1,859  435  2,532  460  529  2,898  3,427  482  2001

Smyrna, GA

  (C) 750  4,271  42  750  4,313  5,063  870  2001

Addison, IL

  (E) 428  3,531  6  428  3,537  3,965  30  2004

Aurora, IL

  (F) 644  3,652  3  644  3,655  4,299  31  2004

Bartlett, IL

  (F) 1,126  2,197  3  1,126  2,200  3,326  19  2004

Bartlett, IL

  (F) 931  2,493  6  931  2,499  3,430  21  2004

Bellwood, IL

  (F) 1,012  5,768  443  1,012  6,211  7,223  1,144  2001

Des Plaines, IL

  (E) 1,564  4,327  5  1,564  4,332  5,896  37  2004

Elk Grove Village, IL

  (E) 1,446  3,535  3  1,446  3,538  4,984  30  2004

Glenview, IL

  (E) 3,740  10,367  2  3,740  10,369  14,109  89  2004

Gurnee, IL

  (E) 1,521  5,440  2  1,521  5,442  6,963  47  2004

Harvey, IL

  (E) 869  3,635  6  869  3,641  4,510  31  2004

Joliet, IL

  (E) 547  4,704  2  547  4,706  5,253  40  2004

Lake Zurich, IL

  (E) 2,102  2,187  2  2,102  2,189  4,291  19  2004

Lombard, IL

  (E) 1,305  3,938  3  1,305  3,941  5,246  34  2004

Mount Prospect, IL

  (E) 1,701  3,114  4  1,701  3,118  4,819  27  2004

Mundelein, IL

  (E) 1,498  2,782  2  1,498  2,784  4,282  24  2004

North Chicago, IL

  (E) 1,073  3,006  2  1,073  3,008  4,081  26  2004

Plainfield, IL

  (F) 1,770  1,715  2  1,770  1,717  3,487  15  2004

Schaumburg, IL

  (F) 538  645  2  538  647  1,185  6  2004

Streamwood, IL

  (F) 1,447  1,662  2  1,447  1,664  3,111  14  2004

Waukegan, IL

  (E) 1,198  4,363  2  1,198  4,365  5,563  37  2004

West Chicago, IL

  (F) 1,071  2,249  2  1,071  2,251  3,322  19  2004

Westmont, IL

  (E) 1,155  3,873  1  1,155  3,874  5,029  33  2004

Wheeling, IL

  (F) 857  3,213  2  857  3,215  4,072  28  2004

Wheeling, IL

  (E) 793  3,816  2  793  3,818  4,611  33  2004

Woodridge, IL

  (E) 943  3,397  2  943  3,399  4,342  29  2004

Indianapolis, IN

  (E) 1,229  2,834  3  1,229  2,837  4,066  24  2004

Indianapolis, IN

  (F) 641  3,154  2  641  3,156  3,797  27  2004

Indianapolis, IN

  (E) 2,138  3,633  2  2,138  3,635  5,773  31  2004

Indianapolis, IN

  (F) 406  3,496  2  406  3,498  3,904  30  2004

Indianapolis, IN

  (E) 908  4,755  2  908  4,757  5,665  41  2004

Indianapolis, IN

  (E) 1,133  4,103  3  1,133  4,106  5,239  35  2004

Indianapolis, IN

  (E) 887  3,548  3  887  3,551  4,438  30  2004

Indianapolis, IN

  (E) 1,871  1,230  2  1,871  1,232  3,103  11  2004

Indianapolis, IN

  (E) 669  2,434  2  669  2,436  3,105  21  2004

Baton Rouge I, LA

  (F) 112  1,248  621  208  1,773  1,981  481  1997

Baton Rouge II, LA

  (F) 118  1,181  1,055  267  2,087  2,354  508  1997

Baton Rouge III, LA

  (F) 133  1,487  763  271  2,112  2,383  566  1997

Baton Rouge IV, LA

  (A) 32  377  156  64  501  565  126  1998

Prairieville, LA

  (A) 90  1,004  235  90  1,239  1,329  343  1998

Slidell, LA

  (D) 188  3,175  1,513  802  4,074  4,876  592  2001

Boston, MA

  (C) 1,516  8,628  115  1,516  8,743  10,259  1,341  2002

Leominster, MA

  (D) 90  1,519  2,248  338  3,519  3,857  592  1998

Baltimore, MD

  (F) 1,050  5,997  705  1,159  6,593  7,752  1,173  2001

California, MD

  (F) 1,486  4,280  5  1,486  4,285  5,771  37  2004

                                     
        Initial Cost  Gross Carrying Amount
       
        Building
  Costs
  at December 31, 2005       
        and
  Subsequent
     Building and
     Accumulated
  Year
 
  Encum-
     Improve-
  to
     Improve-
     Depreciation
  Acquired/
 
Description
 brances  Land  ments  Acquisition  Land  ments  Total  (O)  Developed 
  (Dollars in thousands) 
 
Tampa I, FL  (N)  124   1,252   359   220   1,515   1,735   402   1994 
Tampa II, FL  (N)  330   1,887   412   330   2,299   2,629   566   2001 
Tampa, FL  (G)  1,589   4,576   9   1,589   4,584   6,173   177   2005 
Vero Beach, FL  (N)  159   1,783   333   259   2,016   2,275   475   1998/1997 
West Palm Beach, FL  2,542   719   3,420   1,387   835   4,691   5,526   1,233   2001 
West Palm Beach, FL  (N)  2,129   8,671   96   2,129   8,767   10,896   605   2004 
Alpharetta, GA  (C)  806   4,720   788   967   5,347   6,314   1,458   2001 
Decatur, GA  (A)  616   6,776   (463)  616   6,313   6,929   1,477   1998 
Norcross, GA  (D)  514   2,930   608   632   3,420   4,052   733   2001 
Peachtree City, GA  1,859   435   2,532   477   529   2,915   3,444   647   2001 
Smyrna, GA  (C)  750   4,271   56   750   4,327   5,077   1,146   2001 
Addison, IL  (E)  428   3,531   57   428   3,588   4,016   215   2004 
Aurora, IL  (N)  644   3,652   30   644   3,682   4,326   221   2004 
Bartlett, IL  (N)  931   2,493   45   931   2,538   3,469   152   2004 
Bartlett, IL  (G)  1,126   2,197   53   1,126   2,250   3,376   135   2004 
Bellwood, IL  (G)  1,012   5,768   484   1,012   6,252   7,264   1,532   2001 
Des Plaines, IL  (E)  1,564   4,327   28   1,564   4,355   5,919   263   2004 
Elk Grove Village, IL  (E)  1,446   3,535   143   1,446   3,678   5,124   220   2004 
Glenview, IL  (E)  3,740   10,367   33   3,740   10,400   14,140   624   2004 
Gurnee, IL  (E)  1,521   5,440   128   1,521   5,568   7,089   329   2004 
Harvey, IL  (E)  869   3,635   40   869   3,675   4,544   221   2004 
Joliet, IL  (E)  547   4,704   39   547   4,743   5,290   286   2004 
Lake Zurich, IL  (E)  2,102   2,187   40   2,102   2,227   4,329   134   2004 
Lombard, IL  (E)  1,305   3,938   189   1,305   4,127   5,432   240   2004 
Mount Prospect, IL  (E)  1,701   3,114   52   1,701   3,166   4,867   190   2004 
Mundelein, IL  (E)  1,498   2,782   59   1,498   2,841   4,339   170   2004 
North Chicago, IL  (E)  1,073   3,006   55   1,073   3,061   4,134   184   2004 
Plainfield, IL  (N)  1,770   1,715   46   1,770   1,761   3,531   108   2004 
Plainfield, IL  (N)  694   2,000   50   694   2,050   2,744   63   2005 
Schaumburg, IL  (N)  538   645   69   538   714   1,252   43   2004 
Streamwood, IL  (F)  1,447   1,662   80   1,447   1,742   3,189   105   2004 
Warrenville, IL  (F)  1,066   3,072   25   1,066   3,097   4,163   93   2005 
Waukegan, IL  (E)  1,198   4,363   56   1,198   4,419   5,617   266   2004 
West Chicago, IL  (G)  1,071   2,249   74   1,071   2,323   3,394   138   2004 
Westmont, IL  (E)  1,155   3,873   32   1,155   3,905   5,060   235   2004 
Wheeling, IL  (F)  857   3,213   111   857   3,324   4,181   196   2004 
Wheeling, IL  (E)  793   3,816   167   793   3,983   4,776   232   2004 
Woodridge, IL  (E)  943   3,397   39   943   3,436   4,379   207   2004 
Indianapolis, IN  (N)  641   3,154   49   641   3,203   3,844   192   2004 
Indianapolis, IN  (F)  406   3,496   74   406   3,570   3,976   213   2004 
Indianapolis, IN  (E)  1,871   1,230   51   1,871   1,281   3,152   77   2004 
Indianapolis, IN  (E)  669   2,434   59   669   2,493   3,162   152   2004 
Indianapolis, IN  (E)  1,229   2,834   33   1,229   2,867   4,096   172   2004 
Indianapolis, IN  (E)  2,138   3,633   51   2,138   3,684   5,822   221   2004 
Indianapolis, IN  (E)  908   4,755   183   908   4,938   5,846   290   2004 
Indianapolis, IN  (E)  887   3,548   76   887   3,624   4,511   215   2004 
Indianapolis, IN  (E)  1,133   4,103   80   1,133   4,183   5,316   249   2004 
Baton Rouge I, LA  (N)  112   1,248   479   208   1,631   1,839   376   1997 
Baton Rouge II, LA  (F)  118   1,181   1,072   267   2,104   2,371   574   1997 

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) ANDF-40

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

      Initial Cost
     

Gross Carrying Amount

at December 31, 2004

      
Description  Encum-
brances
  Land
  Building
and
Improve-
ments
  Costs Sub-
sequent to
Acqui-
sition
  Land
  Building
and
Improve-
ments
  Total
  Accum-
ulated
Deprecia-
tion (G)
  Year
Acquired/
Developed

Laurel, MD

  (C) 1,409  8,035  2,958  1,928  10,474  12,402  1,517  2001

Temple Hills, MD

  (D) 1,541  8,788  1,878  1,800  10,407  12,207  1,570  2001

Grand Rapids, MI

  (F) 185  1,821  1,167  325  2,848  3,173  766  1996

Portage, MI

  (F) 104  1,160  699  237  1,726  1,963  431  1996

Romulus, MI

  (F)��308  1,743  520  418  2,153  2,571  259  1997

Wyoming, MI

  (F) 191  2,135  917  354  2,889  3,243  776  1996

Biloxi, MS

  (F) 148  1,652  670  279  2,191  2,470  578  1997

Gautier, MS

  (F) 93  1,040  120  93  1,160  1,253  387  1997

Gulfport I, MS

  (F) 128  1,438  563  156  1,973  2,129  662  1997

Gulfport II, MS

  (F) 117  1,306  492  179  1,736  1,915  530  1997

Gulfport III, MS

  (F) 172  1,928  864  338  2,626  2,964  693  1997

Waveland, MS

  (A) 215  2,481  1,040  392  3,344  3,736  866  1998

Belmont, NC

  (F) 385  2,196  364  451  2,494  2,945  499  2001

Burlington I, NC

  (F) 498  2,837  84  498  2,921  3,419  641  2001

Burlington II, NC

  (F) 320  1,829  126  340  1,935  2,275  362  2001

Cary, NC

  (F) 543  3,097  111  543  3,208  3,751  474  2001

Charlotte, NC

  (C) 782  4,429  1,294  1,068  5,437  6,505  629  1999

Fayetteville I, NC

  (F) 156  1,747  773  301  2,375  2,676  582  1997

Fayetteville II, NC

  (C) 213  2,301  872  399  2,987  3,386  769  1997

Raleigh, NC

  (A) 209  2,398  421  296  2,732  3,028  720  1998

Brick, NJ

  (B) 234  2,762  1,289  485  3,800  4,285  957  1994

Cranford, NJ

  (B) 290  3,493  2,357  779  5,361  6,140  1,351  1994

East Hanover, NJ

  (B) 504  5,763  4,016  1,315  8,968  10,283  2,277  1994

Fairview, NJ

  (F) 246  2,759  438  246  3,197  3,443  953  1997

Jersey City, NJ

  (B) 397  4,507  2,922  1,010  6,816  7,826  1,771  1994

Linden I, NJ

  (B) 517  6,008  3,452  1,170  8,807  9,977  1,728  1994

Linden II, NJ

  (B) 0  2  854  189  667  856  14  1994

Morris Township, NJ

  (D) 500  5,602  2,915  1,072  7,945  9,017  1,924  1997

Parsippany, NJ

  (A) 475  5,322  2,359  909  7,247  8,156  1,825  1997

Randolph, NJ

  (D) 855  4,872  1,163  1,108  5,782  6,890  932  2002

Sewell, NJ

  (C) 484  2,766  1,073  706  3,617  4,323  693  2001

Jamaica, NY

  (D) 2,043  11,658  241  2,043  11,899  13,942  2,186  2001

North Babylon, NY

  (C) 225  2,514  3,809  568  5,980  6,548  1,147  1998

Boardman, OH

  (C) 64  745  2,067  287  2,589  2,876  1,005  1980

Brecksville, OH

  (A) 228  2,545  1,199  442  3,530  3,972  834  1998

Centerville, OH

  (E) 471  3,705  4  471  3,709  4,180  32  2004

Centerville, OH

  (F) 332  1,757  2  332  1,759  2,091  15  2004

Dayton, OH

  (F) 323  2,070  2  323  2,072  2,395  18  2004

Euclid I, OH

  (A) 200  1,053  1,793  317  2,729  3,046  1,117  1988

Euclid II, OH

  (A) 359  0  1,559  461  1,457  1,918  229  1988

Hudson, OH

  (A) 195  2,198  556  274  2,675  2,949  710  1998

Lakewood, OH

  (F) 405  854  398  405  1,252  1,657  573  1989

Mason, OH

  (A) 127  1,419  184  149  1,581  1,730  467  1998

Miamisburg, OH

  (E) 375  2,410  2  375  2,412  2,787  21  2004

Middleburg Heights, OH

  (A) 63  704  1,691  332  2,126  2,458  474  1980

North Canton I, OH

  (F) 209  846  729  304  1,480  1,784  887  1979

North Canton II, OH

  (F) 70  1,226  1,196  239  2,253  2,492  1,364  1983

North Olmsted I, OH

  (A) 63  704  1,204  214  1,757  1,971  460  1979

                                     
        Initial Cost  Gross Carrying Amount
       
        Building
  Costs
  at December 31, 2005       
        and
  Subsequent
     Building and
     Accumulated
  Year
 
  Encum-
     Improve-
  to
     Improve-
     Depreciation
  Acquired/
 
Description
 brances  Land  ments  Acquisition  Land  ments  Total  (O)  Developed 
  (Dollars in thousands) 
 
Baton Rouge III, LA  (N)  133   1,487   568   271   1,917   2,188   429   1997 
Baton Rouge IV, LA  (A)  32   377   115   64   460   524   100   1998 
Prairieville, LA  (A)  90   1,004   128   90   1,132   1,222   272   1998 
Slidell, LA  (D)  188   3,175   1,543   802   4,104   4,906   811   2001 
Boston, MA  (C)  1,516   8,628   127   1,516   8,755   10,271   1,902   2002 
Leominster, MA  (D)  90   1,519   2,266   338   3,537   3,875   698   1998 
Baltimore, MD  (G)  1,050   5,997   799   1,173   6,673   7,846   1,577   2001 
California, MD  (N)  1,486   4,280   40   1,486   4,320   5,806   259   2004 
Gaithersburg, MD  6,421   3,124   9,000   15   3,124   9,015   12,139   465   2005 
Laurel, MD  (C)  1,409   8,035   3,070   1,929   10,585   12,514   2,068   2001 
Temple Hills, MD  (D)  1,541   8,788   1,897   1,800   10,426   12,226   2,121   2001 
Grand Rapids, MI  (F)  185   1,821   1,174   325   2,855   3,180   874   1996 
Portage, MI  (N)  104   1,160   725   237   1,752   1,989   497   1996 
Romulus, MI  (F)  308   1,743   529   418   2,162   2,580   383   1997 
Wyoming, MI  (F)  191   2,135   924   354   2,896   3,250   887   1996 
Biloxi, MS  (N)  148   1,652   588   279   2,109   2,388   444   1997 
Gautier, MS  (N)  93   1,040   2   93   1,042   1,135   290   1997 
Gulfport I, MS  (N)  128   1,438   513   156   1,923   2,079   514   1997 
Gulfport II, MS  (N)  117   1,306   448   179   1,692   1,871   408   1997 
Gulfport III, MS  (G)  172   1,928   743   338   2,505   2,843   537   1997 
Waveland, MS  (A)  215   2,481   (2,131)  392   173   565   49   1998 
Belmont, NC  (N)  385   2,196   436   451   2,566   3,017   649   2001 
Burlington I, NC  (F)  498   2,837   95   498   2,932   3,430   820   2001 
Burlington II, NC  (N)  320   1,829   163   340   1,972   2,312   478   2001 
Cary, NC  (F)  543   3,097   133   543   3,230   3,773   611   2001 
Charlotte, NC  (C)  782   4,429   1,297   1,068   5,440   6,508   909   1999 
Fayetteville I, NC  (N)  156   1,747   692   301   2,294   2,595   561   1997 
Fayetteville II, NC  (C)  213   2,301   634   399   2,749   3,148   582   1997 
Raleigh, NC  (A)  209   2,398   176   296   2,487   2,783   521   1998 
Brick, NJ  (B)  234   2,762   1,120   485   3,631   4,116   899   1994 
Clifton, NJ  (F)  4,346   12,520   19   4,346   12,539   16,885   323   2005 
Cranford, NJ  (B)  290   3,493   1,937   779   4,941   5,720   1,093   1994 
East Hanover, NJ  (B)  504   5,763   3,301   1,315   8,253   9,568   1,834   1994 
Elizabeth, NJ  (N)  751   2,164   47   751   2,211   2,962   47   2005 
Fairview, NJ  (N)  246   2,759   148   246   2,907   3,153   744   1997 
Hoboken, NJ  (N)  1,370   3,947   146   1,370   4,093   5,463   85   2005 
Jersey City, NJ  (B)  397   4,507   2,381   1,010   6,275   7,285   1,410   1994 
Linden I, NJ  (B)  517   6,008   2,845   1,170   8,200   9,370   1,378   1994 
Linden II, NJ  (B)  —   2   854   189   667   856   32   1994 
Morris Township, NJ  (D)  500   5,602   2,321   1,072   7,351   8,423   1,552   1997 
Parsippany, NJ  (A)  475   5,322   1,841   909   6,729   7,638   1,465   1997 
Randolph, NJ  (D)  855   4,872   1,180   1,108   5,799   6,907   1,272   2002 
Sewell, NJ  (C)  484   2,766   1,074   707   3,617   4,324   898   2001 
Albuquerque, NM  (L)  1,039   3,395   65   1,039   3,460   4,499   85   2005 
Albuquerque, NM  (L)  1,163   3,801   59   1,163   3,860   5,023   95   2005 
Albuquerque, NM  (L)  664   2,171   57   664   2,228   2,892   55   2005 
Albuquerque, NM  1,020   519   1,697   57   519   1,754   2,273   42   2005 
Carlsbad, NM  (H)  490   1,613   17   490   1,630   2,120   38   2005 
Deming, NM  (H)  338   1,114   13   338   1,127   1,465   27   2005 

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) ANDF-41

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

     Initial Cost
   

Gross Carrying Amount

at December 31, 2004

    
Description Encum-
brances
  Land
 Building
and
Improve-
ments
 Costs Sub-
sequent to
Acqui-
sition
 Land
 Building
and
Improve-
ments
 Total
 Accum-
ulated
Deprecia-
tion (G)
 Year
Acquired/
Developed

North Olmsted II, OH

 (C)  290  1,129  1,007  469  1,957  2,426  709 1988

North Randall, OH

 (C)  515  2,323  2,712  898  4,652  5,550  688 1998

Warrensville Heights, OH

 (B)  525  766  2,876  935  3,232  4,167  527 1980

Youngstown, OH

 (F)  67  0  1,582  204  1,445  1,649  699 1977

Levittown, PA

 (C)  926  5,296  749  926  6,045  6,971  1,035 2001

Philadelphia, PA

 (D)  1,461  8,334  417  1,461  8,751  10,212  2,058 2001

Hilton Head I, SC

 (A)  129  1,446  6,357  798  7,134  7,932  1,649 1997

Hilton Head II, SC

 (A)  150  1,767  996  315  2,598  2,913  681 1997

Summerville, SC

 (A)  143  1,643  710  313  2,183  2,496  549 1998

Knoxville I, TN

 (F)  99  1,113  221  102  1,331  1,433  421 1997

Knoxville II, TN

 (F)  117  1,308  259  129  1,555  1,684  431 1997

Knoxville III, TN

 (A)  182  2,053  772  331  2,676  3,007  673 1998

Knoxville IV, TN

 (A)  158  1,771  771  310  2,390  2,700  562 1998

Knoxville V, TN

 (A)  134  1,493  482  235  1,874  2,109  478 1998

Memphis I, TN

 (F)  677  3,880  781  677  4,661  5,338  811 2001

Memphis II, TN

 (F)  395  2,276  74  395  2,350  2,745  452 2001

Milwaukee, WI

 (E)  375  4,333  3  375  4,336  4,711  37 2004

Corporate Office, OH

     0  0  1,400  0  1,400  1,400  686 1977
     
 
 
 
 
 
 
  
     $105,785 $553,169 $192,674 $136,168 $715,460 $851,628 $122,473  
     
 
 
 
 
 
 
  

                                     
        Initial Cost  Gross Carrying Amount
       
        Building
  Costs
  at December 31, 2005       
        and
  Subsequent
     Building and
     Accumulated
  Year
 
  Encum-
     Improve-
  to
     Improve-
     Depreciation
  Acquired/
 
Description
 brances  Land  ments  Acquisition  Land  ments  Total  (O)  Developed 
  (Dollars in thousands) 
 
Las Cruces, NM  (H)  611   2,012   29   611   2,041   2,652   48   2005 
Lovington, NM  (H)  168   554   17   168   571   739   14   2005 
Silver City, NM  (H)  153   504   14   153   518   671   12   2005 
Truth or Consequences, NM  (H)  10   34   21   10   55   65   1   2005 
Endicott, NY  (N)  779   838   14   779   852   1,631   39   2005 
Jamaica, NY  (D)  2,043   11,658   262   2,043   11,920   13,963   2,923   2001 
New Rochelle, NY  (F)  1,673   4,827   27   1,674   4,853   6,527   167   2005 
North Babylon, NY  (C)  225   2,514   3,818   569   5,988   6,557   1,329   1998 
Riverhead, NY  (N)  1,068   1,149   44   1,068   1,193   2,261   54   2005 
Southold, NY  (N)  2,079   2,238   36   2,079   2,274   4,353   104   2005 
Boardman, OH  (C)  64   745   2,068   287   2,590   2,877   1,092   1980 
Brecksville, OH  (A)  228   2,545   920   442   3,251   3,693   656   1998 
Canton, OH  (N)  138   679   55   137   735   872   31   2005 
Canton, OH  (N)  122   595   26   120   623   743   25   2005 
Centerville, OH  (E)  471   3,705   51   471   3,756   4,227   225   2004 
Centerville, OH  (G)  332   1,757   34   332   1,791   2,123   107   2004 
Cleveland, OH  (N)  525   2,592   83   524   2,676   3,200   107   2005 
Cleveland, OH  (N)  290   1,427   113   289   1,541   1,830   63   2005 
Dayton, OH  (N)  441   2,176   75   440   2,252   2,692   91   2005 
Dayton, OH  (G)  323   2,070   36   323   2,106   2,429   126   2004 
Euclid I, OH  (A)  200   1,053   1,843   317   2,779   3,096   1,193   1988 
Euclid II, OH  (A)  359   —   1,544   461   1,442   1,903   250   1988 
Hudson, OH  (A)  195   2,198   383   274   2,502   2,776   546   1998 
Lakewood, OH  (N)  405   854   373   405   1,227   1,632   588   1989 
Louisville, OH  (N)  257   1,260   38   255   1,300   1,555   53   2005 
Marblehead, OH  (N)  374   1,843   65   373   1,909   2,282   75   2005 
Mason, OH  (A)  127   1,419   17   149   1,414   1,563   347   1998 
Mentor, OH  (N)  206   1,011   43   204   1,056   1,260   43   2005 
Miamisburg, OH  (E)  375   2,410   59   375   2,469   2,844   148   2004 
Middleburg Heights, OH  (A)  63   704   1,600   332   2,035   2,367   432   1980 
North Canton I, OH  (N)  209   846   460   304   1,211   1,515   665   1979 
North Canton II, OH  (N)  70   1,226   (45)  239   1,012   1,251   151   1983 
North Olmsted I, OH  (A)  63   704   1,089   214   1,642   1,856   390   1979 
North Olmsted II, OH  (C)  290   1,129   987   469   1,937   2,406   730   1988 
North Randall, OH  (C)  515   2,323   2,744   899   4,683   5,582   876   1998 
Perry, OH  (N)  290   1,427   60   288   1,489   1,777   60   2005 
Warrensville Heights, OH  (B)  525   766   2,783   935   3,139   4,074   515   1980 
Westlake, OH  (N)  509   2,508   80   508   2,589   3,097   105   2005 
Willoughby, OH  (N)  239   1,178   70   238   1,249   1,487   51   2005 
Youngstown, OH  (F)  67   —   1,596   204   1,459   1,663   733   1977 
Levittown, PA  (C)  926   5,296   757   926   6,053   6,979   1,384   2001 
Philadelphia, PA  (D)  1,461   8,334   460   1,461   8,794   10,255   2,753   2001 
Hilton Head I, SC  (A)  129   1,446   6,482   798   7,259   8,057   1,628   1997 
Hilton Head II, SC  (A)  150   1,767   977   320   2,574   2,894   707   1997 
Summerville, SC  (A)  143   1,643   513   313   1,986   2,299   402   1998 
Alcoa, TN  (M)  254   2,113   23   255   2,135   2,390   49   2005 
Antioch, TN  (N)  588   4,906   —   588   4,906   5,494   —   2005 

F-42

                                     
        Initial Cost  Gross Carrying Amount
       
        Building
  Costs
  at December 31, 2005       
        and
  Subsequent
     Building and
     Accumulated
  Year
 
  Encum-
     Improve-
  to
     Improve-
     Depreciation
  Acquired/
 
Description
 brances  Land  ments  Acquisition  Land  ments  Total  (O)  Developed 
  (Dollars in thousands) 
 
Cordova, TN  (I)  296   2,482   81   296   2,563   2,859   56   2005 
Knoxville I, TN  (N)  99   1,113   72   102   1,182   1,284   299   1997 
Knoxville II, TN  (N)  117   1,308   131   129   1,427   1,556   343   1997 
Knoxville III, TN  (A)  182   2,053   524   331   2,428   2,759   491   1998 
Knoxville IV, TN  (A)  158   1,771   565   310   2,184   2,494   408   1998 
Knoxville V, TN  (A)  134   1,493   320   235   1,712   1,947   360   1998 
Knoxville, TN  (M)  439   3,653   31   440   3,683   4,123   84   2005 
Knoxville, TN  (M)  312   2,594   23   311   2,618   2,929   60   2005 
Knoxville, TN  (M)  585   4,869   47   584   4,917   5,501   112   2005 
Memphis I, TN  (G)  677   3,880   967   677   4,847   5,524   1,089   2001 
Memphis II, TN  (N)  395   2,276   85   395   2,361   2,756   605   2001 
Memphis, TN  (I)  212   1,779   55   212   1,834   2,046   42   2005 
Memphis, TN  (I)  160   1,342   46   160   1,388   1,548   32   2005 
Memphis, TN  (I)  209   1,753   31   209   1,784   1,993   42   2005 
Nashville, TN  (N)  405   3,379   —   405   3,379   3,784   —   2005 
Nashville, TN  (N)  593   4,950   —   593   4,950   5,543   —   2005 
Austin, TX  (N)  2,239   2,038   5   2,239   2,042   4,281   28   2005 
Baytown, TX  (K)  946   863   17   947   879   1,826   24   2005 
Bryan, TX  (K)  1,394   1,268   29   1,395   1,296   2,691   35   2005 
College Station, TX  (J)  812   740   19   812   759   1,571   17   2005 
Dallas, TX  (N)  2,475   2,253   5   2,475   2,258   4,733   32   2005 
El Paso, TX  (L)  1,983   1,805   66   1,983   1,871   3,854   42   2005 
El Paso, TX  (L)  1,319   1,201   28   1,319   1,229   2,548   28   2005 
El Paso, TX  (L)  2,408   2,192   24   2,408   2,216   4,624   50   2005 
El Paso, TX  (L)  2,073   1,888   43   2,073   1,931   4,004   43   2005 
El Paso, TX  (H)  1,758   1,617   4   1,758   1,621   3,379   36   2005 
El Paso, TX  (H)  660   607   11   660   618   1,278   14   2005 
El Paso, TX  (H)  563   517   18   563   535   1,098   12   2005 
Fort Worth, TX  (N)  1,253   1,141   5   1,253   1,146   2,399   16   2005 
Frisco, TX  (F)  1,093   3,148   20   1,093   3,167   4,260   109   2005 
Frisco, TX  3,618   1,564   4,507   24   1,564   4,531   6,095   155   2005 
Greenville, TX  (N)  1,848   1,682   4   1,848   1,686   3,534   23   2005 
Greenville, TX  (N)  1,337   1,217   9   1,337   1,226   2,563   17   2005 
Houston, TX  (K)  1,420   1,296   26   1,421   1,321   2,742   35   2005 
Houston, TX  (K)  1,510   1,377   32   1,511   1,408   2,919   38   2005 
Houston, TX  580   575   524   27   575   551   1,126   12   2005 
Houston, TX  (J)  960   875   19   961   893   1,854   20   2005 
La Porte, TX  (K)  842   761   21   843   781   1,624   21   2005 
McKinney, TX  1,437   1,632   1,486   6   1,632   1,492   3,124   14   2005 
North Richland Hills, TX  (N)  2,252   2,049   5   2,252   2,054   4,306   28   2005 
Roanoke, TX  (N)  1,337   1,217   13   1,337   1,230   2,567   17   2005 
San Antonio, TX  (N)  2,895   2,635   4   2,895   2,639   5,534   24   2005 
Sherman, TX  1,671   1,904   1,733   8   1,904   1,741   3,645   16   2005 
Sherman, TX  2,000   1,337   1,217   —   1,337   1,217   2,554   11   2005 
Murray, UT  (L)  3,847   1,017   20   3,847   1,037   4,884   25   2005 
Murray, UT  (L)  1,182   312   13   1,182   325   1,507   8   2005 
Murray, UT  (L)  965   255   7   965   262   1,227   6   2005 
Salt Lake City, UT  (L)  2,695   712   30   2,695   742   3,437   19   2005 

F-43

                                     
        Initial Cost  Gross Carrying Amount
       
        Building
  Costs
  at December 31, 2005       
        and
  Subsequent
     Building and
     Accumulated
  Year
 
  Encum-
     Improve-
  to
     Improve-
     Depreciation
  Acquired/
 
Description
 brances  Land  ments  Acquisition  Land  ments  Total  (O)  Developed 
  (Dollars in thousands) 
 
Salt Lake City, UT  (L)  2,074   548   19   2,074   567   2,641   14   2005 
Fredericksburg, VA  (N)  1,680   4,840   2   1,680   4,842   6,522   —   2005 
Fredericksburg, VA  (N)  1,757   5,062   3   1,757   5,065   6,822   —   2005 
Milwaukee, WI  (E)  375   4,333   62   375   4,395   4,770   262   2004 
Corporate Office, OH      —   —   3,359   —   3,359   3,359   1,182   1977 
Construction in Progress  —           1,383   —   1,383   1,383   —     
                                     
       270,776   932,709   183,301   301,188   1,085,598   1,386,786   140,491     
                                     
(A)This facility is part of the 41 storage facilities pool which secures the $70.0 million$70,000 loan from Lehman Capital.

(B)This facility is part of the 10 storage facilities pool which secures the $42.0 million$42,000 loan from Lehman Brothers Bank.

(C)This facility is part of the 21 storage facilities pool which secures the $90.0 million$90,000 loan from Lehman Capital.Brothers Bank.

(D)This facility is part of the 18 storage facilities pool which secures the $90.0 million$90,000 loan from Lehman Capital.Brothers Bank.

(E)This facility is part of the 26 storage facilities pool which secures the $90.0 million$90,000 loan from Lehman Brothers Bank.

(F)This facility is part of the 29 storage facilities pool which secures the $80,000 loan from LaSalle Bank.
(G)This facility is part of the 24 storage facilities pool which secures the $80,000 loan from Lehman Brothers Bank.
(H)This facility is part of the 10 storage facilities pool which secures the $8,437 loan from LaSalle Bank.
(I)This facility is part of the 6 storage facilities pool which secures the $10,464 loan from LaSalle Bank.
(J)This facility is part of the 2 storage facilities pool which secures the $1,759 loan from Wells Fargo and GMAS.
(K)This facility is part of the 5 storage facilities pool which secures the $4,555 loan from LaSalle Bank and Deutsche Bank.
(L)This facility is part of the 37 storage facilities pool which secures the $72,458 loan from AEGON USA Realty Advisors.
(M)This facility is part of the 4 storage facilities pool which secures the $8,506 loan from LaSalle Bank and Morgan Bank.
(N)This facility participates in the $150.0 million revolving line of credit from Lehman Brothers, , Inc. and Wachovia Capital Markets, LLC.

(G)
(O)Depreciation on the buildings and improvements is recorded on a straight-line basis over their estimated useful lives, which range from five to forty40 years.

F-44

U-STORE-IT TRUST AND SUBSIDIARIES (“THE COMPANY”) AND

ACQUIPORT/AMSDELL (THE “PREDECESSOR”)

Activity in real estate facilities during 2005, 2004 2003 and 20022003 was as follows:

   2004(1)
  2003
  2002

Storage Facilities

            

Balance of beginning of year

  $495,181  $492,067  $439,358

Acquisitions & Improvements

   228,500   8,808   52,709

Dispositions and other

   (725)  (5,694)  —  

Step up adjustment

   128,672   —     —  
   
 
 

Balance at end of year

  $851,628  $495,181  $492,067
   
 
 

Accumulated Depreciation

            

Balance at beginning of year

   99,582   80,835   61,179

Depreciation expense

   22,328   19,494   19,656

Disposition and other

   563   (747)  —  
   
 
 

Balance at end of year

   122,473   99,582   80,835
   
 
 

Net storage facility assets

  $729,155  $395,599  $411,232
   
 
 

             
  2005  2004  2003 
  (Dollars in thousands) 
 
Storage facilities            
Balance at beginning of year  851,628   495,181   492,067 
Acquisitions & improvements  564,305   228,500   8,808 
Dispositions and other  (30,530)  (725)  (5,694)
Construction in progress  1,383   —   — 
Step up adjustment  —   128,672   — 
             
Balance at end of year  1,386,786   851,628   495,181 
             
Accumulated Depreciation            
Balance at beginning of year  122,473   99,582   80,835 
Depreciation expense  39,949   22,328   19,494 
Dispositions and other  (21,931)  563   (747)
             
Balance at end of year  140,491   122,473   99,582 
             
Net Storage facility assets  1,246,295   729,155   395,599 
             
The unaudited aggregate costs of storage facility assets for U.S. federal income tax purposes as of December 31, 20042005 is approximately $739.7$1,242 million.

(1)The twelve months ended December 31, 2004 represents consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor for January 1, 2004 to October 20, 2004.

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.

U-STORE-IT TRUST
By:/S/ STEVEN G. OSGOOD

Steven G. Osgood, President and

Chief Financial Officer

Date: March 30, 2005


F-45

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 Registrant and in the capacities and on the dates indicated:

Signature

Title

Date

By:

/S/ ROBERT J. AMSDELL

Robert J. Amsdell

Chairman of the Board of Trustees and Chief Executive Officer (Principal Executive Officer)

March 30, 2005

By:

/S/ STEVEN G. OSGOOD

Steven G. Osgood

President and Chief Financial Officer (Principal Financial Officer)

March 30, 2005

By:

/S/ TEDD D. TOWSLEY

Tedd D. Towsley

Vice President and Treasurer (Principal Accounting Officer)

March 30, 2005

By:

/S/ BARRY L. AMSDELL

Barry L. Amsdell

Trustee

March 30, 2005

By:

/S/ THOMAS A. COMMES

Thomas A. Commes

Trustee

March 30, 2005

By:

/S/ JOHN C. DANNEMILLER

John C. Dannemiller

Trustee

March 30, 2005

By:

/S/ WILLIAM M. DIEFENDERFER III

William M. Diefenderfer III

Trustee

March 30, 2005

By:

/S/ HAROLD S. HALLER

Harold S. Haller

Trustee

March 30, 2005

By:

/S/ DAVID J. LARUE

David J. LaRue

Trustee

March 30, 2005

EXHIBIT INDEX

Exhibit No.
  3.1*Articles of Amendment and Restatement of Declaration of Trust of U-Store-It Trust, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
  3.2*Bylaws of U-Store-It Trust, incorporated by reference to Exhibit 3.2 to Amendment No. 2 to the Company’s Registration Statement on Form S-11, File No. 333-117848.
  4.1*Form of Common Share Certificate, incorporated by reference to Exhibit 4.1 to Amendment No. 3 to the Company’s Registration Statement on Form S-11, File No. 333-117848.
10.1*Second Amended and Restated Agreement of Limited Partnership of U-Store-It, L.P. dated as of October 27, 2004, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.2*Loan Agreement dated as of October 27, 2004 by and between YSI I LLC and Lehman Brothers Holdings Inc. d/b/a Lehman Capital, a division of Lehman Brothers Holdings Inc., incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.3*Loan Agreement dated as of October 27, 2004 by and between YSI II LLC and Lehman Brothers Holdings Inc. d/b/a/ Lehman Capital, a division of Lehman Brothers Holdings Inc., incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.4*Loan Agreement dated as of October 27, 2004 by and between YSI III LLC and Lehman Brothers Bank, FSB, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.5*Credit Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P., the several lenders from time to time parties thereto, Lehman Brothers Inc., Wachovia Capital Markets, LLC, SunTrust Bank, LaSalle Bank National Association and Lehman Commercial Paper Inc., incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.6*†2004 Equity Incentive Plan of U-Store-It Trust effective as of October 19, 2004, incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.7*Stock Purchase Agreement dated as of October 27, 2004 by and among U-Store-It Trust, Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell, the Robert J. Amsdell Family Irrevocable Trust dated June 4, 1998 and the Loretta Amsdell Family Irrevocable Trust dated June 4, 1998, relating to the purchase of U-Store-It Mini Warehouse Co., incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.8*Marketing and Ancillary Services Agreement dated as of October 27, 2004 by and between U-Store-It Mini Warehouse Co. and Rising Tide Development, LLC incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.9*Property Management Agreement dated as of October 27, 2004 by and between YSI Management LLC and Rising Tide Development, LLC, incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.10*Option Agreement dated as of October 27, 2004 by and between U-Store-It, L.P. and Rising Tide Development, LLC, incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.

Exhibit No.
10.11*Registration Rights Agreement dated as of October 27, 2004 by and among U-Store-It Trust, Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell, the Robert J. Amsdell Family Irrevocable Trust dated June 4, 1998, the Loretta Amsdell Family Irrevocable Trust dated June 4, 1998, Amsdell Holdings I, Inc., Amsdell and Amsdell and Robert J. Amsdell, Trustee, incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.12*†Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Robert J. Amsdell, incorporated by reference to Exhibit 10.12 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.13*†Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Steven G. Osgood, incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.14*†Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Barry L. Amsdell, incorporated by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.15*†Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Todd C. Amsdell, incorporated by reference to Exhibit 10.15 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.16*†Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Tedd D. Towsley, incorporated by reference to Exhibit 10.16 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.17*†Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and John C. Dannemiller, incorporated by reference to Exhibit 10.17 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.18*†Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Thomas A Commes, incorporated by reference to Exhibit 10.18 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.19*†Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and David J. LaRue, incorporated by reference to Exhibit 10.19 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.20*†Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Harold S. Haller, incorporated by reference to Exhibit 10.20 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.21*†Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and William M. Diefenderfer III, incorporated by reference to Exhibit 10.21 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.22*†Noncompetition Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Robert J. Amsdell, incorporated by reference to Exhibit 10.22 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.23*†Noncompetition Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Steven G. Osgood, incorporated by reference to Exhibit 10.23 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.24*†Noncompetition Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Todd C. Amsdell, incorporated by reference to Exhibit 10.24 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.

Exhibit No.
10.25*†Noncompetition Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Tedd D. Towsley, incorporated by reference to Exhibit 10.25 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.26*†Noncompetition Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Barry L. Amsdell, incorporated by reference to Exhibit 10.26 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.27*†Employment Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Robert J. Amsdell, incorporated by reference to Exhibit 10.27 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.28*†Employment Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Steven G. Osgood, incorporated by reference to Exhibit 10.28 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.29*†Employment Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Todd C. Amsdell, incorporated by reference to Exhibit 10.29 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.30*†Employment Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Tedd D. Towsley, incorporated by reference to Exhibit 10.30 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.31*Purchase and Sale Agreement dated as of August 13, 2004 by and between Acquiport/Amsdell I Limited Partnership and Metro Storage LLC, incorporated by reference to Exhibit 10.17 to Amendment No. 1 to the Company’s Registration Statement on Form S-11, File No. 333-117848.
10.32*Amendment to Purchase and Sale Agreement dated as of September 8, 2004 by and between Acquiport/Amsdell I Limited Partnership and Metro Storage LLC, incorporated by reference to Exhibit 10.18 to Amendment No. 1 to the Company’s Registration Statement on Form S-11, File No. 333-117848.
10.33*Contribution Agreement dated as of July 30, 2004 by and between Acquiport/Amsdell I Limited Partnership and Robert J. Amsdell, as Trustee incorporated by reference to Exhibit 10.2 to Amendment No. 1 to the Company’s Registration Statement on Form S-11, File No. 333-117848.
10.34*Contribution Agreement dated as July 30, 2004 by and between Acquiport/Amsdell I Limited Partnership and Amsdell Holdings I, Inc. incorporated by reference to Exhibit 10.3 to Amendment No. 1 to the Company’s Registration Statement on Form S-11, File No. 333-117848.
10.35*Contribution Agreement dated as of July 30, 2004 by and between Acquiport/Amsdell I Limited Partnership and Amsdell and Amsdell incorporated by reference to Exhibit 10.4 to Amendment No. 1 to the Company’s Registration Statement on Form S-11, File No. 333-117848.
10.36*Agreement and Plan of Merger and Reorganization dated as of July 30, 2004 by and between the Company and High Tide LLC incorporated by reference to Exhibit 10.5 to Amendment No. 1 to the Company’s Registration Statement on Form S-11, File No. 333-117848.
10.37*Agreement and Plan of Merger dated as of July 30, 2004 by and between the Company and Amsdell Partners, Inc. incorporated by reference to Exhibit 10.6 to Amendment No. 1 to the Company’s Registration Statement on Form S-11, File No. 333-117848.
10.38*Partnership Reorganization Agreement dated as of July 30, 2004 by and among High Tide LLC, Amsdell Partners, Inc., Amsdell Holdings I, Inc. and Acquiport/Amsdell I Limited Partnership incorporated by reference to Exhibit 10.7 to Amendment No. 1 to the Company’s Registration Statement on Form S-11, File No. 333-117848.

Exhibit No.
10.39*Purchase and Sale Agreement, dated as of March 1, 2005, by and between U-Store-It, L.P. and various partnerships and other entities affiliated with National Self Storage and The Schomac Group, Inc. named therein incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.
10.40†Form of NonQualified Share Option Agreement (3 Year Vesting).
10.41Office Lease, dated March 29, 2005, by and between Amsdell and Amsdell and U-Store-It, L.P.
10.42Timesharing Agreement, dated October 22, 2004 by and between Amsdell Holdings I, Inc. and U-Store-It Mini Warehouse Co.
10.43†Trustee Compensation Schedule.
10.44†Schedule of 2004 Bonuses for Named Executive Officers.
10.45†Form of NonQualified Share Option Agreement (Deferred 3 Year Vesting).
10.46†Form of Trustee Restricted Share Agreement.
21.1*List of Subsidiaries, incorporated by reference to Exhibit 21.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-11, File No. 333-117848.
23.1Consent of Deloitte & Touche LLP.
31.1Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*Incorporated herein by reference as above indicated.
†Denotes a management contract or compensatory plan, contract or arrangement.