Table of Contents

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

​

FORM 10-K

​

☒

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

​

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

For the fiscal year ended December 31, 20182021

​

OR

​

☐

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

​

☐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 001-32324 (CubeSmart)

Commission file number 000-54462 (CubeSmart, L.P.)

​

CUBESMART

CUBESMART, L.P.

(Exact Name of Registrant as Specified in Its Charter)

​

Maryland (CubeSmart)

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20-1024732 (CubeSmart)

Delaware (CubeSmart, L.P.)

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34-1837021 (CubeSmart, L.P.)

(State or Other Jurisdiction of

​

(IRS Employer

Incorporation or Organization)

​

Identification No.)

​

​

​

5 Old Lancaster Road

​

19355

Malvern, Pennsylvania

​

(Zip Code)

(Address of Principal Executive Offices)

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​

​

​

Registrant’s telephone number, including area code (610) 535-5000

​

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

​

Title of each classEach Class

​

Trading Symbol(s)

​

Name of each exchangeEach Exchange on which registeredWhich Registered

Common Shares, $0.01 par value per share, of CubeSmart

​

CUBE

​

New York Stock Exchange

​

Securities registered pursuant to Section 12(g) of the Act: Units of General Partnership Interest of CubeSmart, L.P.

​

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

CubeSmart

Yes

☒

No

☐

CubeSmart, L.P.

Yes

☒

No

☐

​

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

CubeSmart

Yes ☐

◻

No ☒

⌧

CubeSmart, L.P.

Yes ☐

◻

No ☒

⌧

​

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

CubeSmart

Yes

☒

No

☐

CubeSmart, L.P.

Yes

☒

No

☐

​

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

CubeSmart

Yes ☒

⌧

No ☐

◻

CubeSmart, L.P.

Yes ☒

⌧

No ☐

◻

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

CubeSmart

Yes ☒ No ☐

CubeSmart, L.P.

Yes ☒ No ☐

​

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

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

CubeSmart:

​

​

​

​

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

CubeSmart, L.P.:

​

​

​

​

Large accelerated filer ☒

☐

Accelerated filer ☐

☐

Non-accelerated filer ☐

☒

Smaller reporting company

☐

Emerging growth company

☐

CubeSmart, L.P.:

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☒

Smaller reporting company ☐

Emerging growth company ☐

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

​

​

CubeSmart

☐◻

CubeSmart, L.P.

☐◻

​

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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​

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CubeSmart ⌧

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​

​

​

CubeSmart, L.P. ⌧

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​

​

​

​

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

​

​

CubeSmart

Yes

☐

No

☒

CubeSmart, L.P.

Yes

☐

No

☒

​

As of June 29, 2018,30, 2021, the last business day of CubeSmart’s most recently completed second fiscal quarter, the aggregate market value of common shares held by non-affiliates of CubeSmart was $5,988,953,396.$9,345,935,587. As of February 20, 2019,23, 2022, the number of common shares of CubeSmart outstanding was 187,160,187.

224,002,775.

As of June 29, 2018,30, 2021, the last business day of CubeSmart, L.P.’s most recently completed second fiscal quarter, the aggregate market value of the 2,002,2487,284,506 units of limited partnership (the “OP Units”) held by non-affiliates of CubeSmart, L.P. was $64,512,431$337,418,318 based upon the last reported sale price of $32.22$46.32 per share on the New York Stock Exchange on June 29, 201830, 2021 of the common shares of CubeSmart, the sole general partner of CubeSmart, L.P. (For this computation, the market value of all OP Units beneficially owned by CubeSmart has been excluded.)

Documents incorporated by reference: Portions of the Proxy Statement for the 20192022 Annual Meeting of Shareholders of CubeSmart to be filed subsequently with the SEC are incorporated by reference into Part III of this report.

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EXPLANATORY NOTE

​

This report combines the annual reports on Form 10-K for the year ended December 31, 20182021 of CubeSmart (the “Parent Company” or “CubeSmart”) and CubeSmart, L.P. (the “Operating Partnership”). The Parent Company is a Maryland real estate investment trust or REIT,(“REIT”), that owns its assets and conducts its operations through the Operating Partnership, a Delaware limited partnership, and subsidiaries of the Operating Partnership. The Parent Company, the Operating Partnership and their consolidated subsidiaries are collectively referred to in this report as the “Company”. In addition, terms such as “we”, “us”, or “our” used in this report may refer to the Company, the Parent Company and/or the Operating Partnership.

​

The Parent Company is the sole general partner of the Operating Partnership and, as of December 31, 2018,2021, owned a 99.0%99.2% interest in the Operating Partnership. The remaining 1.0%0.8% interest consists of common units of limited partnership interest issued by the Operating Partnership to third parties in exchange for contributions of properties to the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has full and complete authority over the Operating Partnership’s day-to-day operations and management.

​

Management operates the Parent Company and the Operating Partnership as one enterprise. The management teams of the Parent Company and the Operating Partnership are identical, and their constituents are officers of both the Parent Company and of the Operating Partnership.

​

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

​

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

​

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

​

·

●

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

·

●

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

·

●

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

​

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

​

As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have significant assets other than its investment in the Operating Partnership. Therefore, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial

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statements. The separate discussions of the Parent Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company’s operations on a consolidated basis and how management operates the Company.

​

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

​

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TABLE OF CONTENTS

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PART I

​

​

​

5

​

​

​

​

​

Item 1.

​

Business

​

6

​

​

​

​

​

Item 1A.

​

Risk Factors

​

12

16

​

​

​

​

​

Item 1B.

​

Unresolved Staff Comments

​

25

30

​

​

​

​

​

Item 2.

​

Properties

​

26

30

​

​

​

​

​

Item 3.

​

Legal Proceedings

​

28

32

​

​

​

​

​

Item 4.

​

Mining Safety Disclosures

​

28

32

​

​

​

​

​

PART II

​

​

​

28

32

​

​

​

​

​

Item 5.

​

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

​

28

32

​

​

​

​

​

Item 6.

​

Selected Financial Data

​

30

34

​

​

​

​

​

Item 7.

​

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

​

35

34

​

​

​

​

​

Item 7A.

​

Quantitative and Qualitative Disclosures About Market Risk

​

51

46

​

​

​

​

​

Item 8.

​

Financial Statements and Supplementary Data

​

52

47

​

​

​

​

​

Item 9.

​

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

​

52

47

​

​

​

​

​

Item 9A.

​

Controls and Procedures

​

52

47

​

​

​

​

​

Item 9B.

​

Other Information

​

53

48

​

​

​

​

​

PART IIIItem 9C.

​

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

​

53

48

​

​

​

​

​

Item 10.PART III

​

​

​

48

​

​

​

​

​

Item 10.

​

Trustees, Executive Officers, and Corporate Governance

​

53

48

​

​

​

​

​

Item 11.

​

Executive Compensation

​

54

48

​

​

​

​

​

Item 12.

​

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

​

54

49

​

​

​

​

​

Item 13.

​

Certain Relationships and Related Transactions, and Trustee Independence

​

54

49

​

​

​

​

​

Item 14.

​

Principal Accountant Fees and Services

​

54

49

​

​

​

​

​

PART IV

​

​

​

54

49

​

​

​

​

​

Item 15.

​

Exhibits and Financial Statement Schedules

​

54

49

​

​

​

​

​

Item 16.

​

Form 10-K Summary

​

61

55

​

​

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PART I

​

Forward-Looking Statements

​

This Annual Report on Form 10-K, or this Report, together with other statements and information publicly disseminated by the Parent Company and the Operating Partnership, contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Forward-looking statements include statements concerning the Company’s plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. In some cases, forward-looking statements can be identified by terminology such as “believes”, “expects”, “estimates”, “may”, “will”, “should”, “anticipates”, or “intends” or the negative of such terms or other comparable terminology, or by discussions of strategy. Such statements are based on assumptions and expectations that 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. As a result, you should not rely on or construe any forward-looking statements in this Report, or which management or persons acting on their behalf may make orally or in writing from time to time, as predictions of future events or as guarantees of future performance. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this Report or as of the dates otherwise indicated in such forward-looking statements. All of our forward-looking statements, including those in this Report, are qualified in their entirety by this statement.

​

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this Report. Any forward-looking statements should be considered in light of the risks and uncertainties referred to in Item 1A. “Risk Factors” in this Report and in our other filings with the Securities and Exchange Commission (“SEC”). These risks include, but are not limited to, the following:

​

·

●

adverse changes in the national and local economic business,conditions in the real estate industry and other market conditions;

in the markets in which we own and operate self-storage properties;

​

·

●

the effect of competition from existing and new self-storage properties and operators on our ability to maintain or raise occupancy and rental rates;

​

·

●

the execution offailure to execute our business plan;

​

·

●		adverse impacts from the COVID-19 pandemic, other pandemics, quarantines and stay at home orders, including the impact on our ability to operate our self-storage properties, the demand for self-storage, rental rates and fees and rent collection levels;

​

●

reduced availability and increased costs of external sources of capital;

​

·

●		increases in interest rates and operating costs;

​

●

financing risks, including the risk of over-leverage and the corresponding risk of default on our mortgage and other debt and potential inability to refinance existing indebtedness;

or future debt;

​

·

●

increases in interest rates and operating costs;

·

counterparty non-performance related to the use of derivative financial instruments;

​

·

●

risks related to our ability to maintain theour Parent Company’s qualification as a REIT for federal income tax purposes;

​

·

●

the failure of acquisitions and developments to close on expected terms, or at all, or to perform as expected;

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·

●

increases in taxes, fees and assessments from state and local jurisdictions;

​

·

●

the failure of our joint venture partners to fulfill their obligations to us or their pursuit of actions that are inconsistent with our objectives;

​

·

●

reductions in asset valuations and related impairment charges;

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·

●

cyber security breaches, cyber or ransomware attacks or a failure of our networks, systems or technology, which could adversely impact our business, customer and employee relationships;

relationships or result in fraudulent payments;

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·

●

changes in real estate, zoning, use and zoningoccupancy laws or regulations;

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·

●

risks related to or a consequence of natural disasters or acts of violence, pandemics, active shooters, terrorism, insurrection or war that affect the markets in which we operate;

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·

●

potential environmental and other liabilities;

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·

●

uninsured losses;

governmental, administrative and executive orders and laws, which could adversely impact our business operations and customer and employee relationships;

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·

●		uninsured or uninsurable losses and the ability to obtain insurance coverage or recovery from insurance against risks and losses;

​

●the ability to attract and retain talent in the current labor market;

​

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

​

·

●

other risks identified in this Report and, from time to time, in other reports that we file with the SEC or in other documents that we publicly disseminate.

​

Given these uncertainties and the other risks identified elsewhere in this Report, we caution readers not to place undue reliance on forward-looking statements. We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise except as may be required by securities laws. Because of the factors referred to above, the future events discussed in or incorporated by reference in this Report may not occur and actual results, performance or achievement could differ materially from that anticipated or implied in the forward-looking statements.

​

ITEM 1. BUSINESS

ITEM 1.  BUSINESS​

Overview

Overview

​

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

​

As of December 31, 2018,2021, we owned 493(or partially owned and consolidated) 607 self-storage properties located in 2324 states and in the District of Columbia containing an aggregate of approximately 34.643.6 million rentable square feet. As of December 31, 2018,2021, approximately 89.0%92.0% of the rentable square footage at our owned stores was leased to approximately 289,500379,000 customers, and no single customer represented a significant concentration of our revenues. As of December 31, 2018,2021, we owned stores in the District of Columbia and the following 2324 states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah and Virginia. In addition, as of December 31, 2018,2021, we managed 593651 stores for third parties (including 15190 stores containing an aggregate of approximately 9.06.5 million net rentable square feet as part of fiveseven separate unconsolidated real estate ventures) bringing the total number of stores we owned and/or managed to 1,086.1,258. As of December 31, 2018,2021, we managed stores for third parties in the District of Columbia and the following 3436 states: Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Kansas,Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington West Virginia, and Wisconsin.

​

Our self-storage properties are designed to offer affordable and easily-accessible storage space for our residential and commercial customers. Our customers rent storage cubes for their exclusive use, typically on a month-to-month basis. Additionally, some of our stores offer outside storage areas for vehicles and boats. Our stores are designed to accommodate both residential and commercial customers, with features such as wide aisles and load-bearing capabilities for large truck access. All of our stores have a storage associate available to assist our customers during business hours, and 287,331, or approximately 58.2%54.5%, of our owned stores have a manager who resides in an apartment at the store. Our customers can access their storage cubes during business hours, and some of our stores provide customers with 24-hour access through computer-controlled access systems. Our goal is to provide customers with the highest standard of physical attributes and service in the industry. To that end, 419,505, or approximately 85.0%83.2%, of our owned stores include climate-controlled cubes.

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​

The Parent Company was formed in July 2004 as a Maryland REIT. The Parent Company owns its assets and conducts its business through the Operating Partnership, and its subsidiaries. The Parent Company controls the Operating Partnership as its sole general partner and, as of December 31, 2018,2021, owned an approximately 99.0%a 99.2% interest in the Operating Partnership. The Operating Partnership was formed in July 2004 as a Delaware limited partnership and has been engaged in virtually all aspects of the self-storage business, including the development, acquisition, management, ownership and operation of self-storage properties.

​

Impact of COVID-19 on the Consolidated Financial Statements and Business Operations

​

Since the first quarter of 2020, the world has been impacted by the spread of a novel strain of coronavirus, its variants and the disease that they cause known as COVID-19. Our stores have remained open throughout the pandemic and, to date, we have not experienced any material degradation in rent collections or occupancy. However, the duration and scope of the pandemic; actions that have been and continue to be taken by governmental entities, individuals and businesses in response to the pandemic; and the continued impact on economic activity from the pandemic may, individually or in aggregate, impact our future business, financial condition, results of operations, access to capital and share price.

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Acquisition and Disposition Activity

​

As of December 31, 20182021 and 2017,2020, we owned 493607 and 484543 stores, respectively, that contained an aggregate of 34.643.6 million and 33.838.5 million rentable square feet with occupancy levels of 89.0%92.0% and 89.2%92.3%, respectively. A complete listing of, and additionalAdditional information

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about our stores is included in Item 2 of this Report. The following is a summary of our 2018, 20172021, 2020 and 20162019 acquisition and disposition activity:

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Number of

    

Purchase / Sale Price

​

​

​

​

​

​

​

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​

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​

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​

    

Number of

    

Purchase / Sale Price

 

Asset/Portfolio

 

Market

 

Transaction Date

 

Stores

 

(in thousands)

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Metropolitan Statistical Area

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Transaction Date

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Stores

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(in thousands)

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2018 Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

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2021 Acquisitions:

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Minnesota Asset (1)

​

Minneapolis-St. Paul-Bloomington, MN-WI

​

April 2021

​

1

​

$

12,000

​

Maryland Asset

​

Baltimore-Towson, MD

​

June 2021

​

1

​

​

22,075

​

New Jersey/Pennsylvania Assets

​

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

​

July 2021

​

2

​

​

33,000

​

Florida Asset

​

Miami-Fort Lauderdale-Pompano Beach, FL

​

November 2021

​

1

​

​

14,750

​

Georgia Asset

​

Atlanta-Sandy Springs-Marietta, GA

​

November 2021

​

1

​

​

15,200

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Pennsylvania Asset

​

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

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November 2021

​

1

​

​

24,500

​

Nevada Asset

​

Las Vegas-Paradise, NV

​

December 2021

​

1

​

​

21,000

​

Storage West Assets

​

Various (see note 4)

​

December 2021

​

57

​

​

1,648,426

(2)​

Illinois Asset

​

Chicago-Naperville-Joliet, IL-IN-WI

​

December 2021

​

1

​

​

10,300

​

​

​

​

​

​

​

66

​

$

1,801,251

​

​

​

​

​

​

​

​

​

​

​

​

2021 Dispositions:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Colorado/Nevada Assets

​

Denver-Aurora, CO / Las Vegas-Paradise, NV

​

September 2021

​

2

​

$

16,900

​

North Carolina Assets

​

Burlington, NC

​

September 2021

​

2

​

​

21,700

​

Texas Asset

 

Texas Markets - Major

 

January 2018

 

1

 

$

12,200

​

Houston-Sugar Land-Baytown, TX

​

November 2021

​

1

​

​

5,200

​

​

​

​

​

​

​

5

​

$

43,800

​

​

​

​

​

​

​

​

​

​

​

​

2020 Acquisitions:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Texas Asset

 

Texas Markets - Major

 

May 2018

 

1

 

 

19,000

​

San Antonio, TX

​

February 2020

​

1

​

$

9,025

​

Metro DC Asset

 

Baltimore / DC

 

July 2018

 

1

 

 

34,200

Nevada Asset

 

Las Vegas

 

September 2018

 

1

 

 

14,350

North Carolina Asset

 

Charlotte

 

September 2018

 

1

 

 

11,000

California Asset

 

Los Angeles

 

October 2018

 

1

 

 

53,250

Texas Asset

 

Texas Markets - Major

 

October 2018

 

1

 

 

23,150

California Asset

 

San Diego

 

November 2018

 

1

 

 

19,118

New York Asset

 

New York / Northern NJ

 

November 2018

 

1

 

 

37,000

Illinois Asset

 

Chicago

 

December 2018

 

1

 

 

4,250

 

 

 

 

 

10

 

$

227,518

 

 

 

 

 

 

 

 

 

2018 Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arizona Assets

 

Phoenix

 

November 2018

 

2

 

$

17,502

 

 

 

 

 

2

 

$

17,502

 

 

 

 

 

 

 

 

 

2017 Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illinois Asset

 

Chicago

 

April 2017

 

1

 

$

11,200

Maryland Asset

 

Baltimore / DC

 

May 2017

 

1

 

 

18,200

​

Baltimore-Towson, MD

​

April 2020

​

1

​

​

17,200

​

California Asset

 

Sacramento

 

May 2017

 

1

 

 

3,650

Texas Asset

 

Texas Markets - Major

 

October 2017

 

1

 

 

4,050

New Jersey Asset

​

New York-Northern New Jersey-Long Island, NY-NJ-PA

​

April 2020

​

1

​

​

48,450

​

Florida Asset

 

Florida Markets - Other

 

October 2017

 

1

 

 

14,500

​

Palm Bay-Melbourne-Titusville, FL

​

November 2020

​

1

​

​

3,900

​

Illinois Asset

 

Chicago

 

November 2017

 

1

 

 

11,300

Florida Asset

 

Florida Markets - Other

 

December 2017

 

1

 

 

17,750

 

 

 

 

 

7

 

$

80,650

 

 

 

 

 

 

 

 

 

2016 Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metro DC Asset

 

Baltimore / DC

 

January 2016

 

1

 

$

21,000

Texas Assets

 

Texas Markets - Major

 

January 2016

 

2

 

 

24,800

New York Asset

 

New York / Northern NJ

 

January 2016

 

1

 

 

48,500

Texas Asset

 

Texas Markets - Major

 

January 2016

 

1

 

 

11,600

Connecticut Asset

 

Connecticut

 

February 2016

 

1

 

 

19,000

Texas Asset

 

Texas Markets - Major

 

March 2016

 

1

 

 

11,600

Florida Assets

 

Florida Markets - Other

 

March 2016

 

3

 

 

47,925

Colorado Asset

 

Denver

 

April 2016

 

1

 

 

11,350

Texas Asset

 

Texas Markets - Major

 

April 2016

 

1

 

 

11,600

Texas Asset

 

Texas Markets - Major

 

May 2016

 

1

 

 

10,100

Texas Asset

 

Texas Markets - Major

 

May 2016

 

1

 

 

10,800

Illinois Asset

 

Chicago

 

May 2016

 

1

 

 

12,350

Illinois Asset

 

Chicago

 

May 2016

 

1

 

 

16,000

Massachusetts Asset

 

Massachusetts

 

June 2016

 

1

 

 

14,300

Nevada Assets

 

Las Vegas

 

July 2016

 

2

 

 

23,200

Arizona Asset

 

Phoenix

 

August 2016

 

1

 

 

14,525

Minnesota Asset

 

Minneapolis

 

August 2016

 

1

 

 

15,150

Colorado Asset

 

Denver

 

August 2016

 

1

 

 

15,600

Texas Asset

 

Texas Markets - Major

 

September 2016

 

1

 

 

6,100

​

Austin-Round Rock, TX

​

November 2020

​

1

​

​

10,750

​

Texas Asset

 

Texas Markets - Major

 

September 2016

 

1

 

 

5,300

​

Dallas-Fort Worth-Arlington, TX

​

November 2020

​

1

​

​

10,150

​

Nevada Asset

 

Las Vegas

 

October 2016

 

1

 

 

13,250

​

Las Vegas-Paradise, NV

​

December 2020

​

1

​

​

16,800

​

North Carolina Asset

 

Charlotte

 

November 2016

 

1

 

 

10,600

New York Asset

​

New York-Northern New Jersey-Long Island, NY-NJ-PA

​

December 2020

​

1

​

​

6,750

​

Florida Asset

​

Tampa-St. Petersburg-Clearwater, FL

​

December 2020

​

1

​

​

10,000

​

Virginia Asset

​

Washington-Arlington-Alexandria, DC-VA-MD-WV

​

December 2020

​

1

​

​

17,350

​

Storage Deluxe Assets

​

New York-Northern New Jersey-Long Island, NY-NJ-PA

​

December 2020

​

8

​

​

540,000

​

Florida Assets

​

Orlando-Kissimmee, FL / Deltona-Daytona Beach-Ormond Beach, FL

​

December 2020

​

3

​

​

45,500

​

​

​

​

​

​

​

21

​

$

735,875

​

​

​

​

​

​

​

​

​

​

​

​

2020 Disposition:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

New York Asset

​

New York-Northern New Jersey-Long Island, NY-NJ-PA

​

December 2020

​

1

​

$

12,750

​

​

​

​

​

​

​

1

​

$

12,750

​

2019 Acquisitions:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Maryland Asset

​

Baltimore-Towson, MD

​

March 2019

​

1

​

$

22,000

​

Florida Assets

​

Cape Coral-Fort Myers, FL

​

April 2019

​

2

​

​

19,000

​

Arizona Asset

 

Phoenix

 

November 2016

 

1

 

 

14,000

​

Phoenix-Mesa-Scottsdale, AZ

​

May 2019

​

1

​

​

1,550

​

Nevada Asset

 

Las Vegas

 

December 2016

 

1

 

 

14,900

 

 

 

 

 

28

 

$

403,550

HVP III Assets

​

Various (see note 4)

​

June 2019

​

18

​

​

128,250

(3)​

Georgia Asset

​

Atlanta-Sandy Springs-Marietta, GA

​

August 2019

​

1

​

​

14,600

​

South Carolina Asset

​

Charleston-North Charleston, SC

​

August 2019

​

1

​

​

3,300

​

Texas Asset

​

Dallas-Fort Worth-Arlington, TX

​

October 2019

​

1

​

​

7,300

​

Florida Assets

​

Orlando-Kissimmee, FL

​

November 2019

​

3

​

​

32,100

​

California Asset

​

Los Angeles-Long Beach-Santa Ana, CA

​

December 2019

​

1

​

​

18,500

​

​

​

​

​

​

​

29

​

$

246,600

​

​

​

​

​

​

​

​

​

​

​

​

2019 Disposition:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Texas Asset

​

College Station-Bryan, TX

​

October 2019

​

1

​

$

4,146

​

​

​

​

​

​

​

1

​

$

4,146

​

​

​

​

​

​

​

​

​

​

​

​

(1)Acquired by a consolidated joint venture in which we hold a 50% interest.

​

(2)Purchase price represents the acquisition of all 167,557 outstanding partnership units of LAACO, Ltd. (“LAACO”) for $9,838 per unit. At the time of the acquisition, LAACO owned 57 storage properties (the “Storage West Assets”) and 50% ownership interests in two separate joint ventures. Through this acquisition, the Company also acquired LAACO’s wholly-owned subsidiaries, the Los Angeles Athletic Club and the California Yacht Club (the “Club Operations”), which are classified as held

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for sale on the Company’s consolidated balance sheets as of December 31, 2021. See note 4 to our consolidated financial statements.

​

(3)Amount represents the purchase price for 90% of the ownership interest in 191 III CUBE LLC (“HVP III”), which at the time of the acquisition owned 18 storage properties (see note 5 to our consolidated financial statements).

​

The comparability of our results of operations is affected by the timing of acquisition and disposition activities during the periods reported. As of December 31, 2018, 2017,2021, 2020 and 2016,2019, we owned 493, 484,(or partially owned and 475consolidated) 607, 543 and 523 self-storage properties and related assets, respectively. The following table summarizes the change in number of owned stores from January 1, 20162019 through December 31, 2018:2021:

​

 

 

 

 

 

 

 

 

 

    

2018

    

2017

    

2016

 

 

 

 

 

 

 

 

 

Balance - January 1

 

484

 

475

 

445

 

Stores acquired

 

 1

 

 —

 

10

 

Stores developed

 

 —

 

 1

 

 1

 

Balance - March 31

 

485

 

476

 

456

 

Stores acquired

 

 1

 

 3

 

 7

 

Stores developed

 

 —

 

 —

 

 1

 

Stores combined (1)

 

 —

 

(1)

 

 —

 

Balance - June 30

 

486

 

478

 

464

 

Stores acquired

 

 3

 

 —

 

 7

��

Stores developed

 

 1

 

 2

 

 —

 

Balance - September 30

 

490

 

480

 

471

 

Stores acquired

 

 5

 

 4

 

 4

 

Stores developed

 

 —

 

 1

 

 —

 

Stores combined (2)

 

 —

 

(1)

 

 —

 

Stores sold

 

(2)

 

 —

 

 —

 

Balance - December 31

 

493

 

484

 

475

 

​

​

​

​

​

​

​

​

​

    

2021

    

2020

    

2019

 

​

​

​

​

​

​

​

​

Balance - January 1

 

543

 

523

 

493

​

Stores acquired

 

—

 

1

 

1

​

Stores developed

 

1

 

—

 

—

​

Stores combined (1)

​

(1)

​

—

​

—

​

Balance - March 31

 

543

 

524

 

494

​

Stores acquired (2)

 

2

 

2

 

21

​

Stores developed

​

2

​

1

​

2

​

Stores combined (3)

​

—

​

—

​

(1)

​

Balance - June 30

 

547

 

527

 

516

​

Stores acquired

 

2

 

—

 

2

​

Stores developed

​

—

​

—

​

1

​

Stores sold

​

(4)

​

—

​

—

​

Balance - September 30

 

545

 

527

 

519

​

Stores acquired

 

62

 

18

 

5

​

Stores developed

​

1

​

—

​

—

​

Stores combined (3)

​

—

​

(1)

​

—

​

Stores sold

 

(1)

 

(1)

 

(1)

​

Balance - December 31

 

607

 

543

 

523

​

​

​

​

​

​

​

​

​

(1)

On May 16, 2017,March 3, 2021, we acquiredcompleted development of a store located in Sacramento, CAArlington, VA for a total cost of approximately $3.7 million, which$26.4 million. The developed store is located directly adjacent to an existing wholly-ownedconsolidated joint venture store. Given their proximity to each other, the stores have been combined in our store count, as well as for operational and reporting purposes.

​

(2)

For the quarter ended June 30, 2021, includes one store acquired by a consolidated joint venture in which we hold a 50% interest.

​

(3)

On October 2, 2017,May 24, 2019 and November 10, 2020, we acquired a storestores located in Keller, TXTempe, AZ and Merritt Island, FL for approximately $4.1$1.6 million whichand $3.9 million, respectively. In each case, the store acquired is located directly adjacentin near proximity to an existing wholly-owned store. Given their proximity to each other, the stores haveeach acquired store has been combined with the existing store in our store count, as well as for operational and reporting purposes.

​

Financing and Investing Activities

​

The following summarizes certain financing and investing activities during the year ended December 31, 2018:2021:

​

·

●

Store Acquisitions. During 2018, weWe acquired ten self-storage properties located throughoutLAACO, the United States, including one store upon completionowner of construction and the issuance ofStorage West Assets, for a certificate of occupancy, for an aggregate purchase price of $1.69 billion, which included approximately $227.5 million. In connection with these acquisitions,$40.9 million of LAACO debt that we allocatedrepaid at the closing. This acquisition included 57 stores in Arizona (17), California (20), Nevada (13) and Texas (7). As part of this transaction, we also acquired a portion50% interest in two separate unconsolidated joint ventures, each of which own a store in California. Through our acquisition of LAACO, we also acquired the purchase price paid for each store to the intangible value of in-place leases which aggregated $11.3 million.

Club Operations.

​

In addition to LAACO, we acquired eight additional stores which are located in Florida (1), Georgia (1), Illinois (1), Maryland (1), Nevada (1), New Jersey (1), and Pennsylvania (2) for an aggregate purchase price of approximately $140.8 million. Also, a consolidated joint venture in which we hold a 50% interest acquired a store in Minnesota for a purchase price of $12.0 million.

​

9

Table of Contents

·

●

Development Activity.  During 2018, we We completed construction of and opened for operation onefour joint venture storedevelopment properties located in Massachusetts (1), New York.York (1), Pennsylvania (1) and Virginia (1) for a total cost of $95.9 million. As of December 31, 2018,2021, we had sixthree joint venture development properties under construction located in New York (3), Massachusetts (2), and New JerseyVirginia (1), which are expected to be completed by the secondfirst quarter of 2020.2023. As of December 31, 2018,2021, we had invested $82.6$37.8 million of an expected $160.0$92.3 million related to these sixthree projects.

​

·

●		Consolidated Development Joint Venture Buy-outs. We acquired the noncontrolling members’ interests in two previously consolidated development joint ventures for an aggregate of $10.0 million. The stores are located in Massachusetts (1) and New York (1) and are wholly owned by the Company as of December 31, 2021.

​

●

Store Dispositions. On November 28, 2018, weWe sold twofive stores in ArizonaColorado (1), Nevada (1), North Carolina (2) and Texas (1) for an aggregate sales price of approximately $17.5$43.8 million. In connectionconjunction with thesethe sales, we recorded gains that totaled approximately $10.6$32.7 million.

​

·

●		Unconsolidated Real Estate Venture Activity. 191 V CUBE LLC, a newly-formed unconsolidated real estate venture in which we own a 20% interest, acquired five stores for an aggregate purchase price of $143.7 million, of which we contributed $22.6 million. The acquired stores are located in Florida (2), New Jersey (2) and New York (1). 191 IV CUBE LLC, an existing unconsolidated real estate venture in which we own a 20% interest, acquired seven additional stores located in Connecticut (1), Illinois (5) and Maryland (1), for an aggregate purchase price of $108.6 million, of which we contributed $5.7 million. Cube HHF Limited Partnership (“HHF”), an existing unconsolidated real estate venture in which we own a 50% interest, sold seven stores located in Texas for an aggregate sales price of $85.0 million and recorded a gain of $46.9 million in connection with the sale.

​

●

Unsecured Senior Note Activity. On November 30, 2021, the Operating Partnership issued $550.0 million in aggregate principal amount of unsecured senior notes due December 15, 2028, which bear interest at a rate of 2.250% per annum (the “2028 Notes”) and $500.0 million in aggregate principal amount of unsecured senior notes due February 15, 2032, which bear interest at a rate of 2.500% per annum (the “2032 Notes”). On December 23, 2021, with net proceeds from our issuance of the 2028 Notes and 2032 Notes, we redeemed, in full, our $300.0 million of outstanding 4.375% senior notes due 2023.

​

●Mortgage Loan Activity. We repaid two mortgage loans with an aggregate outstanding principal balance of $43.9 million.

​

●Public Equity Offering. On November 19, 2021, we completed an underwritten offering of 15.5 million common shares at a public offering price of $51.00 per share, resulting in net proceeds of $765.6 million, after deducting offering costs.

​

●At-The-Market Equity Program.  During 2018, underProgram Activity. Under our at-the-market equity program, we sold a total of 4.35.0 million common shares at an average sales price of $31.09$40.57 per share, resulting in net proceeds of $200.0 million for the year, under the program of $131.8 million, after deducting offering costs. As of December 31, 2018, 10.52021, 5.9 million common shares remained available for sale under the program. We used the proceeds from the 20182021 sales under the program to fund acquisitionsthe acquisition and development of self-storage properties and for general corporate purposes.

·

Unconsolidated Real Estate Ventures.  During 2018,191 IV CUBE LLC, an unconsolidated real estate venture in which we own a 20% interest, acquired 12 stores for an aggregate purchase price of $129.4 million, of which we contributed $14.1

8

Table of Contents

million. The acquired stores were located in Arizona (2), Connecticut (2), Florida (3), Georgia (2), Maryland (1), and Texas (2).

​

Business Strategy

​

Our business strategy consists of several elements:

​

·

●

Maximize cash flow from our stores — Our operating strategy focuses on maximizing sustainable rents at our stores while achieving and sustaining occupancy targets. We utilize our operating systems and experienced personnel to manage the balance between rental rates, discounts and physical occupancy with an objective of maximizing our rental revenue.

​

·

●

Acquire stores within targeted markets — During 2019,2022, we intend to pursue selective acquisitions in markets that we believe have high barriers to entry, strong demographic fundamentals and demand for storage in excess of storage capacity. We believe the self-storage industry will continue to afford us opportunities for growth through acquisitions due to the highly fragmented composition of the industry. In the past, we have formed joint ventures with unaffiliated third parties, and in the future we may form additional joint ventures, to facilitate the funding of future developments or acquisitions.

​

·

●

Dispose of stores — During 2019,2022, we intend to continue to evaluate opportunities to dispose of assets that have unattractive risk adjustedrisk-adjusted returns. We intend to use proceeds from these transactions to fund acquisitions within targeted markets.

markets and for general corporate purposes.

​

·

●

Grow our third-party management business — We intend to pursue additional third-party management opportunities.  We intendopportunities and to leverage our current platform to take advantage of consolidation in the industry. We plan to utilize our relationships with third-party owners to help source future acquisitions and other investment opportunities.

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Table of Contents

​

Investment and Market Selection Process

​

We maintain a disciplined and focused process in the acquisition and development of self-storage properties. Our investment committee is comprised of four senior officers and led by Christopher P. Marr, our Chief Executive Officer, overseeswho oversee our investment process. Our investment process involves six stages — identification, initial due diligence, economic assessment, investment committee approval (and when required, the approval of our Board of Trustees (the “Board”)), 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 stores, or where we believe that we can acquire a significant number of stores efficiently and within a short period ofover time. We evaluate both the broader market and the immediate trade area, typically three miles around the store, for its ability to support above-average demographic growth. We seek to increase our presence primarily in areas that we expect will experiencewith strong demographics and growth, including, the Northeastern and Mid-Atlantic areas ofbut not exclusively limited to, major metropolitan regions within the United States and areas within Arizona, California, Florida, Georgia, Illinois, and Texas, and to enter additional markets should suitable opportunities arise.

States.

​

·

●

Quality of store — We focus on self-storage properties that have good visibility, ease of access and are located near retail centers, which typically provide high traffic corridors and are generally located near residential communities and commercial customers.

​

·

●

Growth potential — We target acquisitions that offer growth potential through increased operating efficiencies and, in some cases, through additional leasing efforts, renovations or expansions. In addition to acquiring single stores, we seek to invest in portfolio acquisitions, including those offering significant potential for increased operating efficiency and the ability to spread our fixed costs across a large base of stores.

​

Segment

​

We have one reportable segment: we own, operate, develop, manage and acquire self-storage properties.

​

Concentration

​

Our self-storage properties are located in major metropolitan areas as well as suburban areas and have numerous customers per store. No single customer represented a significant concentration of our 20182021 revenues. Our stores in New York, Florida, Texas and California provided approximately 19%, 15%, 9% and 8%, respectively, of our total revenues for the year ended December 31, 2021. Our stores in New York, Florida, Texas and California provided approximately 16%, 15%, 9% and 8%, respectively, of our total revenues for the year ended December 31, 2020. Our stores in Florida, New York, Texas and California provided approximately 17%16%, 16%, 10% and 8%, respectively, of our total revenues for each of the yearsyear ended December 31, 2018, 2017 and 2016.2019.

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Table of Contents

​

Seasonality

Seasonality

​

We typically experience seasonal fluctuations in occupancy levels at our stores, with the levelswhich are generally slightly higher during the summer months due to increased moving activity.

​

Financing Strategy

​

We maintain a capital structure that we believe is reasonable and prudent and that will enable us to have ample cash flow to cover debt service and make distributions to our shareholders. As of December 31, 2018,2021, our debt to total market capitalization ratio (determined by dividing the carrying value of our total indebtedness by the sum of (a) the market value of the Parent Company’s outstanding common shares and units of the Operating Partnership held by third parties and (b) the carrying value of our total indebtedness) was approximately 24.4%19.7% compared to approximately 23.5%25.6% as of December 31, 2017.2020. Our ratio of debt to the undepreciated cost of our total assets as of December 31, 20182021 was approximately 37.9%41.2% compared to approximately 38.0%41.0% as of December 31, 2017.2020. We expect to finance additional investments in self-storage properties through the most attractive sources of capital available at the time of the transaction, in a manner consistent with maintaining a strong financial position and future financial flexibility, subject to limitations on incurrence of indebtedness in our unsecured credit facilities and the indenture that governs our unsecured notes. These capital sources may include existing cash, borrowings under theour revolving portion of our credit facility, additional secured or unsecured financings, sales of common or preferred shares of the Parent Company in public offerings or private placements, additional issuances of debt securities, issuances of common or preferred units in our Operating Partnership in exchange for contributed properties and formations of joint ventures. We also may sell stores that have unattractive risk adjustedrisk-adjusted returns and use the sales proceeds to fund other acquisitions.

​

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Table of Contents

Competition

Competition

​

Self-storage properties compete based on a number of factors, including location, rental rates, occupancy, security, suitability of the store’s design to prospective customers’ needs and the manner in which the store is operated and marketed. In particular, the number of competing self-storage properties in a market could have a material effect on our occupancy levels, rental rates and on the overall operating performance of our stores. We believe that the primary competition for potential customers of any of our self-storage properties comes from other self-storage providers within a three-mile radius of that store. We believe our stores are well-positioned within their respective markets, and we emphasize customer service, convenience, security, professionalism and cleanliness.

​

Our key competitors include local and regional operators as well as the other public self-storage REITs, including Public Storage, Extra Space Storage Inc., and Life Storage, Inc. and National Storage Affiliates Trust. These companies, some of which operate significantly more stores than we do and have greater resources than we have, and other entities may be able to accept more risk than we determine is prudent for us, including risks with respect to the geographic proximity of investments and the payment of higher acquisition prices. This competition may reduce the number of suitable acquisition opportunities available to us, increase the price required to acquire stores and reduce the demand for self-storage space at our stores. Nevertheless, we believe that our experience in operating, managing, acquiring, developing and obtaining financing for self-storage properties should enable us to compete effectively.

​

Government Regulation

​

We are subject to various laws, ordinances and regulations, including regulations relating to lien sale rights and procedures and various federal, state and local regulations that apply generally to the ownership of real property and the operation of self-storage properties.

​

Under the Americans with Disabilities Act of 1990 and applicable state accessibility act laws (collectively, 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 federal, state and local laws may also impose access and other similar requirements at our stores. 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 stores 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 stores or websites is not in compliance with the ADA or similar state or local requirements would result in the incurrence of additional costs associated with bringing them into compliance.

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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

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ability to sell the real estate or to borrow using the 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 theour properties by a customer even though storage of hazardous substances would be without our knowledge or approval and in violation of the customer’s storage lease agreement with us.

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Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of properties. Whenever the environmental assessment for one of our stores indicates that a store is impacted by soil or groundwater contamination from prior owners/operators or other sources, we work with our environmental consultants and, where appropriate, state governmental agencies, to ensure that the store is either cleaned up, that no cleanup is necessary because the low level of contamination poses no significant risk to public health or the environment, or that the responsibility for cleanup rests with a third party. In certain cases, we have purchased environmental liability insurance coverage to indemnify us against claims for contamination or other adverse environmental conditions that may affect a property.

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We are not aware of any environmental cleanup liability that we believe will have a material adverse effect on us. We cannot provide assurance, 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.

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

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We are not aware of any environmental condition with respect to any of our stores 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 provide assurance, however, that this will continue to be the case.

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Insurance

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We carry comprehensive liability, fire, casualty, extended coverage and rental loss insurance covering all of the properties in our portfolio. We also carry environmental insurance coverage on certain stores 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, flood and environmental hazards, because such coverage is either not available or not available at commercially reasonable rates. Some of our policies, such as those covering losses due to terrorist activities,terrorism, hurricanes, 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. We also carry liabilityAdditionally, we use a combination of insurance products to insure againstprovide risk mitigation for potential liabilities associated with automobiles, workers’ compensation, employment practices, general contractors, directors and officers, employee health-care benefits and personal injuries that might be sustained at our stores as well as director and officer liability insurance.stores.

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Offices

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Our principal executive offices are located at 5 Old Lancaster Road, Malvern, PA 19355. Our telephone number is (610) 535-5000.

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EmployeesHuman Capital

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At CubeSmart, we refer to our employees as teammates, because collaboration towards shared goals defines our workplace. We care deeply about the experience our teammates have working with us. The CubeSmart work experience takes a holistic approach to our teammates’ total wellbeing at work. Our teammate value proposition includes promoting a sense of belonging to a team; providing opportunities to make a meaningful difference at work and in their communities; supporting our teammates’ ongoing personal and professional development; and offering competitive pay and rewards.

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As of December 31, 2018,2021, we employed 2,8152,892 teammates, all within the United States. Of the total employees, approximately 90% were hourly and approximately 10% were salaried. We have no union presence or collective bargaining agreements. Our average teammate tenure as of whom 330December 31, 2021 was 3.5 years.

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Company Culture and Teammate Experience

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We measure our teammates’ experience each year through our Teammate Engagement Survey. In 2021, our annual engagement survey had a 91% participation rate. Results are communicated within individual teams to share what we learned and discuss both the positive aspects about working at CubeSmart and where we have opportunities to improve. In 2021, we identified teams whose engagement was below a certain threshold and provided coaching to the leaders and set goals to increase the attention given to the teammates. Through ongoing conversations and transparent commitment to continuous improvement, every CubeSmart teammate plays a role in building our company culture and making the experience working here the best it can be.

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Teammate Development and Wellbeing

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As part of our culture, we seek to help teammates grow with us and leverage their development both at CubeSmart and beyond. We believe in providing all teammates with training and development opportunities to succeed in their role. We plan, design and deliver training programs for all levels of the organization, from orientation and general job skills to enhancing leadership capabilities through skills trainings and mentoring. In 2021, we provided an average of 17 hours of training per teammate.

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When recruiting new teammates, our talent management team engages with our store management teams and corporate leaders to identify a pool of potential candidates to serve our customers and deliver best-in-class customer service. We recruited, hired and trained 1,488 teammates during the year ended December 31, 2021. Teammate referrals were corporate executiveour top source for the candidates we hired, accounting for 30% of our new teammates. Additionally, more than 390 teammates were promoted into new roles and/or transitioned into new positions to further their career development.

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We believe that career growth and administrative personnelpersonal development is an important part of our teammates’ personal and 2,485 were property-level personnel.professional success. To further support our teammates’ success, we offer a number of benefits aimed at supporting the wellbeing of our teammates and their families. Those benefits include: medical, dental, vision, disability and life insurance coverage. We also offer a variety of programs designed to provide teammates with the ability to rest, rejuvenate and take care of their families such as paid holidays, vacation and sick time, and parental leave. Our Employee Assistance Program is available to all teammates, providing extra support as they and their families experience life changes and challenges.

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Another important part of our teammates’ wellbeing is their connection to a larger sense of purpose. We empower our teammates to find this with us and provide programs and opportunities for them. Our Idea Center provides a forum where teammates can submit ideas to enhance the workplace, streamline systems and processes and identify solutions and best practices. We encourage our teammates to participate in community service and philanthropy, and provide paid time off for teammates who participate in these activities. Also, through our matching gifts program, we match qualified charitable contributions made by teammates up to $100 per teammate each year.

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Diversity, Equity and Inclusion

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Our Philosophy Regarding Respect in the Workplace defines our approach to diversity, inclusion and treatment of differences. Our Philosophy is acknowledged by teammates and states:

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At CubeSmart, we respect, value, and celebrate the unique attributes, characteristics and perspectives that make each teammate who they are. We believe that our relationsbusiness is better because of the diversity of participation, thought, and action that comes from the unique individuals who come to work here. Every teammate deserves the right to come to work as their authentic self. Our goal for CubeSmart is to be a place where people feel supported, listened to, and able to do their personal best. Our philosophy isn’t any different from our philosophy regarding Customer interactions, namely to “treat our Customers as they want to be treated.” When it comes to our teammates, we ask that every teammate “treat our teammates as they want to be treated.”

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As of December 31, 2021, of our total teammate population, 55% were female and 45% were male. Approximately 46% have self-identified as Black or African American, Hispanic or Latino, Asian, American Indian, or of two or more races. The average teammate age was 41; 38% of our teammates were 34 and younger while 39% of our teammates were 45 or older.

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COVID-19 Update

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The situation surrounding the COVID-19 virus in our country continued to impact our teammates and business operations. Throughout the pandemic, we have closely monitored legal requirements and the advice of experts and put actions into place as we found to be necessary. The goal of these actions was to find a way to still provide a differentiated CubeSmart customer experience while safeguarding the health of our teammates and customers and ensuring compliance with frequently-changing government mandates and/or restrictions. The actions we took in 2021 to support the wellbeing of our teammates included:

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●Updating and enacting policies to support the health and safety of our teammates, including related to changing mask and vaccination guidelines, travel, and office visitors;

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●Providing paid time off for teammates to get vaccinated;

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●Collecting vaccination status information from our teammates to inform policy decisions and prepare for potential mandates;

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●Returning corporate office and sales center teammates to in-office work in September with a new hybrid arrangement;

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●Supporting our teammates as the New York City vaccine mandate went into effect to help them understand the impact and guide them on steps needed to get compliant, ensuring our stores remained operational; and

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●Paying out appreciation bonuses to teammates who stayed with us throughout 2021.

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Sustainability

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We are focused on building our company for the long-term to generate sustainable growth. To that end, we have established a cross-functional ESG (Environmental, Social, & Governance) committee responsible for establishing our sustainability priorities and objectives. Management regularly evaluates sustainability risks faced by our portfolio and believe the low obsolescence, geographic diversification, and low emissions of our portfolio help to mitigate those risks. Our Senior Management team reports annually to the Board of Trustees on the status of our ESG program, our progress against the goals we’ve set, and provides updates on the various initiatives we’ve undertaken to improve our sustainability. Our efforts to enact change are highlighted by our sustainability targets which look to track improvements across key ESG metrics and are aligned to the United Nations Sustainable Development Goals.

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A key area of focus from a sustainability perspective is minimizing the impact we make on the environment. Self-storage remains a low-environmental impact business as it consumes less energy and water while emitting fewer greenhouse gases than other real estate property types. We continue to look for ways to further reduce our low impact through a variety of initiatives including solar panel installations, HVAC upgrades, high-efficiency lighting retrofits, energy management systems, and paper reduction through our online rental platform.

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We encourage you to review our Sustainability Report (located on our internet website at www.cubesmart.com) for more detailed information regarding our sustainability programs and initiatives. Nothing on our website, including our Sustainability Report or sections thereof, shall be deemed incorporated by reference into this Annual Report.

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Information Security

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We face risks associated with security breaches through cyber-attacks, cyber intrusions, or otherwise, as well as other significant disruptions of our information technology networks and related systems. The audit committee of the Company’s Board of Trustees is responsible for overseeing management’s risk assessment and risk management processes designed to monitor and control information security risk. A cross-organizational cyber task force meets regularly and management briefs the audit committee on information security matters at least once a year.

We have adopted and implemented an approach to identify and mitigate information security risks that we believe are commercially reasonable for real estate companies. We leverage the Center for Internet Security Critical Security Control Framework as the core of our governance program and include additional best practices from the Cloud Security Alliance, vendors, and other sources as necessary. Since January 1, 2019, we have not experienced any information security breaches that resulted in financial loss. We have insurance coverage designed to help us mitigate cyber risk exposure by offsetting costs involved with recovery and remediation after an information security breach or similar event. We regularly engage independent third parties to test our information security processes and systems as part of our overall enterprise risk management. We also regularly conduct information security training to ensure all employees, including those who may come into possession of confidential financial or personally identifiable information, are good.  Our employees are not unionized.aware of information security risks and to enable them to take steps to mitigate such risks.

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Available Information

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We file registration statements, proxy statements, our annual reportreports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports with the SEC. You may obtain copies of these documents by accessing the SEC’s website at www.sec.gov. Our internet website address is www.cubesmart.com. You also can obtain on our website, free of charge, copies of our annual reportreports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and any amendments to those reports, after we electronically file such reports or amendments with, or furnish them to, the SEC. Our internet website and the information contained therein or connected thereto are not intended to be incorporated by reference into this Report.

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Also available on our website, free of charge, are copies of our Code of Business Conduct and Ethics, our Corporate Governance Guidelines and the charters for each of the committees of our Board — the Audit Committee, the Corporate Governance and Nominating Committee and the Compensation Committee. Copies of each of these documents are also available in print free of charge, upon request by any shareholder. You can obtain copies of these documents by contacting Investor Relations by mail at 5 Old Lancaster Road, Malvern, PA 19355.

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ITEM 1A.  RISK FACTORS

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Overview

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An investment in our securities involves various risks. Investors should carefully consider the risks set forth below together with other information contained in this Report. 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, financial condition, operating results and ability to make distributions to our shareholders.

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Risks Related to our Business and Operations

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Adverse macroeconomic and business conditions may significantly and negatively affect our rental rates, occupancy levels and therefore our results of operations.

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We are susceptible to the effects of adverse macro-economic events that can result in higher unemployment, shrinking demand for products, large-scale business failures and tight credit markets. Our results of operations are sensitive to changes in overall economic conditions that impact consumer spending, including discretionary spending, as well as to increased bad debts due to recessionary pressures. Adverse economic conditions affecting disposable consumer income, such as employment levels, business conditions, inflation, interest rates, tax rates and fuel and energy costs, could reduce consumer spending or cause consumers to shift their spending to other products and services. A general reduction in the level of discretionary spending or shifts in consumer discretionary spending could adversely affect our growth and profitability.

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It is difficult to determine the breadth and duration of economic and financial market disruptions and the many ways in which they may affect our customers and our business in general. Nonetheless, financial and macroeconomic disruptions could have a significant adverse effect on our sales, profitability and results of operations.

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Many states and local jurisdictions are facing severe budgetary problems which may have an adverse impact on our business and financial results.

Many states and jurisdictions are facing severe budgetary problems.  Action that may be taken in response to these problems, such as increases in property taxes on commercial properties, changes to sales taxes or other governmental efforts, including mandating medical insurance for employees, could adversely impact our business and results of operations.

Our financial performance is dependent upon economic and other conditions of the markets in which our stores are located.

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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 stores in Florida, New York, Florida, Texas and California accounted for approximately 17%19%, 16%15%, 10%9% and 8%, respectively, of our total 20182021 revenues. As a result of this geographic concentration of our stores, we are particularly susceptible to adverse market conditions in these 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.

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Our business, financial condition,results of operations and share price have, and may continue to be, impacted by the COVID-19 pandemic and such impact could be materially adverse.

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Since the first quarter of 2020, the world has been impacted by the spread of a novel strain of coronavirus and its variants and the disease that it causes known as COVID-19, which has resulted in global business disruptions and significant volatility in U.S. and international debt and equity markets. There continues to be significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. economy. The extent to which the COVID-19 pandemic ultimately impacts our business, results of operations, financial condition and share price will depend on numerous evolving factors, including, among others: the duration and scope of the pandemic; actions that have been and continue to be taken by governmental entities, individuals and businesses in response to the pandemic; the impact on economic activity from the pandemic and actions taken in response thereto; the impact on capital availability and costs of capital; the impact on our employees any other operational disruptions or difficulties we may face; and, the effect on our customers and their ability to make rental payments. Any of these events, individually or in aggregate, could have a material adverse impact on the Company’s business, financial condition, results of operations and share price.

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We face risks associated with property acquisitions.

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We intend to continue to acquire individual and portfolios of self-storage properties. The purchase agreements that we enter into in connection with acquisitions typically contain closing conditions that need to be satisfied before the acquisitions can be consummated. The satisfaction of many of these conditions is outside of our control, and we therefore cannot assure that any of our pending or future acquisitions will be consummated. These conditions include, among other things, satisfactory examination of the title, zoning and entitlements to the properties, the ability to obtain title insurance and customary closing deliverables and conditions. Moreover, in the

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event we are unable to complete pending or future

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acquisitions, we may have incurred significant legal, accounting, due diligence and other transaction costs in connection with such acquisitions without realizing the expected benefits.

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Those acquisitions that we do consummate would increase our size and may potentially alter our capital structure. Although we believe that future acquisitions that we complete will enhance our financial performance, the success of acquisitions is subject to the risks that:

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acquisitions may fail to perform as expected;

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the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates;

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we may be unable to obtain acquisition financing on favorable terms;

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acquisitions may be located in new markets where we may have limited knowledge and understanding of the local economy, an absence of business relationships in the area or an unfamiliarity with local governmental and permitting procedures; and

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there is only limited recourse, or no recourse, to the former owners of newly acquired properties for unknown or undisclosed liabilities such as the clean-up of undisclosed environmental contamination; claims by customers, vendors or other persons arising on account of actions or omissions of the former owners of the properties; and claims by local governments, adjoining property owners, property owner associations and easement holders for fees, assessments or taxes on other property-related changes. As a result, if a liability were asserted against us based upon ownership of an acquired property, we might be required to pay significant sums to settle it, which could adversely affect our financial results and cash flow.

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In addition, we often do not obtain third-party appraisals of acquired properties and instead rely on internal value determinations by our senior management.determinations.

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We will incur costs and will face integration challenges when we acquire additional stores.

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As we acquire or develop additional self-storage properties and bring additional self-storage properties onto our third partythird-party management platform, we will be subject to risks associated with integrating and managing new stores, including customer retention and mortgage default risks. In the case of a large portfolio purchase, we could experience strains in our existing informationsystems and management capacity.capacities. In addition, acquisitions or developments may cause disruptions in our operations and divert management’s attention away from day-to-day operations. Furthermore, our income may decline because we will be required to depreciate/amortize in future periods costs for acquired real property and intangible assets. Our failure to successfully integrate any future acquisitions into our portfolio could have an adverse effect on our operating costs and our ability to make distributions to our shareholders.

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The acquisition of new stores that lack operating history with us will make it more difficult to predict revenue potential.

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We intend to continue to acquire additional stores.individual and portfolios of self-storage properties. These acquisitions could fail to perform in accordance with expectations. If we fail to accurately estimate occupancy levels, rental rates, operating costs or costs of improvements to bring an acquired store up to the standards established for our intended market position, the performance of the store may be below expectations. Acquired stores may have characteristics or deficiencies affecting their valuation or revenue potential that we have not yet discovered. We cannot assure that the performance of stores acquired by us will increase or be maintained under our management.

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Our development activities may be more costly or difficult to complete than we anticipate.

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We intend to continue to develop self-storage properties where market conditions warrant such investment. Once made, these investments may not produce results in accordance with our expectations. Risks associated with development and construction activities include:

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the unavailability of favorable financing sources in the debt and equity markets;

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construction cost overruns, including on account of rising interest rates, diminished availability of materials and labor, and increases in the costs of materials and labor;

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construction delays and failure to achieve target occupancy levels and rental rates, resulting in a lower than projected return on our investment; and

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complications (including building moratoriums and anti-growth legislation) in obtaining necessary zoning, occupancy and other governmental permits.

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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 stores, satisfy our debt obligations and/or make distributions to shareholders.

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We depend on external sources of capital to fund acquisitions and development, to satisfy our debt obligations and to make distributions to our shareholders required to maintain our status as a REIT, and these sources of capital may not be available on favorable terms, if at all. Our access to external sources of capital depends on a number of factors, 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 external sources of capital, we may not be able to acquire or develop properties 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.

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We may incur impairment charges.

We evaluate on a quarterly basis our real estate portfolio for indicators of impairment. Impairment charges reflect management’s judgment of the probability and severity of the decline in the value of real estate assets we own. These charges and provisions may be required in the future as a result of factors beyond our control, including, among other things, changes in the economic environment and market conditions affecting the value of real property assets or natural or man-made disasters. If we are required to take impairment charges, our results of operations will be adversely impacted.

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

Our stores and any other stores 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.  Our stores are subject to increases in operating expenses such as real estate and other taxes, personnel costs including the cost of providing specific medical coverage to our employees, utilities, insurance, administrative expenses, and costs for repairs and maintenance.  If operating expenses increase without a corresponding increase in revenues, our profitability could diminish and limit our ability to make distributions to our shareholders.

We cannot assure our ability to pay dividends in the future.

Historically, we have paid quarterly distributions to our shareholders, and we intend to continue to pay quarterly dividends and to make distributions to our shareholders in amounts such that all or substantially all of our taxable income in each year, subject to certain adjustments, is distributed.  This, along with other factors, should enable us to continue to qualify for the tax benefits accorded to a REIT under the Internal Revenue Code.  We have not established a minimum dividends payment level, and all future distributions will be made at the discretion of our Board.  Our ability to pay dividends will depend upon, among other factors:

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the operational and financial performance of our stores;

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capital expenditures with respect to existing and newly acquired stores;

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general and administrative costs associated with our operation as a publicly-held REIT;

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maintenance of our REIT status;

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the amount of, and the interest rates on, our debt;

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the absence of significant expenditures relating to environmental and other regulatory matters; and

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other risk factors described in this Report.

Certain of these matters are beyond our control and any significant difference between our expectations and actual results could have a material adverse effect on our cash flow and our ability to make distributions to shareholders.

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If we are unable to promptly re-let our cubes or if the rates upon such re-letting are significantly lower than expected, our business and results of operations would be adversely affected.

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We derive revenues principally from rents received from customers who rent cubes at our self-storage properties under month-to-month leases. Any delay in re-letting cubes as vacancies arise would reduce our revenues and harm our operating results. In addition, lower than expected rental rates upon re-letting could adversely affect our revenues and impede our growth.

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Store ownership through joint ventures may limit our ability to act exclusively in our interest.

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We have in the past co-investedco-invest with, and we may continue to 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 stores 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, in cases where neither we nor the joint venture partner would have full control over the joint venture. In other circumstances, joint venture partners may have the ability without our agreement to make certain major decisions, including decisions about sales, capital expenditures, and/or financing. 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 officers and/or Trustees from focusing their time and effort on our business. In 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.

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We face significant competition for customers and acquisition and development opportunities.

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Actions by our competitors may decrease or prevent increases of the occupancy and rental rates of our stores. We compete with numerous developers, owners and operators of self-storage properties, including other REITs, as well as on-demand storage providers, some of which own or may in the future own stores similar to ours in the same submarkets in which our stores are located and some of which may have greater capital resources. In addition, due to the relatively low cost of each individual self-storage property, other developers, owners and operators have the capability to build additional stores that may compete with our stores.

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If our competitors build new stores that compete with our stores or offer space at rental rates below the rental rates we currently charge our customers, we may lose potential customers, and we may be pressured to reduce our rental rates below those we currently charge in order to retain customers when our customers’ leases expire. As a result, our financial condition, cash flow, cash available for distribution, market price of our shares and ability to satisfy our debt service obligations could be materially adversely affected. In addition, increased competition for customers may require us to make capital improvements to our stores that we would not have otherwise made. Any unbudgeted capital improvements we undertake may reduce cash available for distributions to our shareholders.

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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 stores. These competitors may also be willing to accept more risk than we can prudently manage, including risks with respect to the geographic proximity of investments and the payment of higher 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 stores are located and, as a result, adversely affect our operating results.

We may become subject to litigation or threatened litigation which may divert management’s 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.

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, internet domains, and other intellectual property that they consider to be

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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.​

We also could be sued for personal injuries and/or property damage occurring on our properties.  We maintain liability insurance with limits that we believe are adequate to provide for the defense and/or payment of any damages arising from such lawsuits.  There can be no assurance that such coverage will cover all costs and expenses from such suits.

Legislative actions and changes may cause our general and administrative costs and compliance costs to increase.

In order to comply with laws adopted by federal, state or local government or regulatory bodies, we may be required to increase our expenditures and hire additional personnel and additional outside legal, accounting and advisory services, all of which may cause our general and administrative and compliance costs to increase.  Significant workforce-related legislative changes could increase our expenses and adversely affect our operations.  Examples of possible workforce-related legislative changes include changes to an employer's obligation to recognize collective bargaining units, the process by which collective bargaining agreements are negotiated or imposed, minimum wage requirements, and health care and medical and family leave mandates.  In addition, changes in the regulatory environment affecting health care reimbursements, and increased compliance costs related to enforcement of federal and state wage and hour statutes and common law related to overtime, among others, could cause our expenses to increase without an ability to pass through any increased expenses through higher prices. 

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

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We carry comprehensive liability, fire, casualty, extended coverage and rental loss insurance covering all of the properties in our portfolio. We also carry environmental insurance coverage on certain stores 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, floodingflood and environmental hazards, because such coverage is either not available or is not available at commercially reasonable rates. Some of our policies, such as those covering losses due to terrorism, hurricanes, 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 store that is uninsured or that exceeds policy limits, we could lose the capital invested in that store as well as the anticipated future cash flows from that store. 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 store after it has been damaged or destroyed. In addition, if the damaged stores are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these stores were irreparably damaged.

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Additionally, we use a combination of insurance products, some of which include deductibles and self-insured retention amounts, to provide risk mitigation for potential liabilities associated with automobiles, workers’ compensation, employment practices, general contractors, cyber risks, crime, directors and officers, employee health-care benefits and personal injuries that might be sustained at our stores. Liabilities associated with the risks that are retained by us are estimated, in part, by considering historical claims experience and actuarial assumptions. Our results of operations could be materially impacted by claims and other expenses related to such insurance plans if future occurrences and claims differ from these assumptions and historical trends.

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Our insurance coverage may not comply with certain loan requirements.

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Certain of our stores serve as collateral for our mortgage-backed debt, some of which we assumed in connection with our acquisition of stores and requires us to maintain insurance, deductibles, retentions and other policy terms at levels and on terms that are not commercially reasonable in the current insurance environment. We may be unable to obtain required insurance coverage if the cost and/or availability make it impractical or impossible to comply with debt covenants. If we cannot comply with a lender’s requirements, the lender could declare a default, which could affect our ability to obtain future financing and have a material adverse effect on our results of operations and cash flows and our ability to obtain future financing. In addition, we may be required to self-insure against certain losses or our insurance costs may increase.

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Potential liability for environmental contamination could result in substantial costs.

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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 properties. If we fail to comply with those laws, we could be subject to significant fines or other governmental sanctions.

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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 property 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 our ability to sell or rent such property or to borrow using such property as collateral. In addition, in connection with the ownership, operation and management of properties, we are potentially liable for property damage or injuries to persons and property.

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Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of additional stores. We carry environmental insurance coverage on certain stores in our portfolio. 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 stores). The environmental assessments received to date have not revealed, nor do we have actual knowledge of, any environmental liability that we believe will have a material adverse effect on us. However, we cannot assure that our environmental assessments have identified or will identify all material environmental conditions, that any prior owner of any property did not create a material environmental condition not actually known to us, that environmental conditions on neighboring properties will not have an impact on any of our properties, or that a material environmental condition does not otherwise exist with respect to any of our properties.

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Americans with Disabilities Act and applicable state accessibility act compliance may require unanticipated expenditures.

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Under 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 federal, state and local laws may also impose access and other similar requirements at our properties.properties or websites. 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 properties and websites 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 properties or websites 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 properties or websites 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, which could have an adverse effect on our operating costs and our ability to make distributions to our shareholders.

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Privacy concerns could result in regulatory changes that may harm our business.

Personal privacy has become a significant issue in the jurisdictions in which we operate.  Many jurisdictions in which we operate, including California, have imposed restrictions and requirements on the use of personal information by those collecting such information.  The regulatory framework for privacy issues is rapidly evolving and future enactment of more restrictive laws, rules, or regulations and/or future enforcement actions or investigations could have a materially adverse impact on us through increased costs or restrictions on our business.  Failure to comply with such laws and regulations could result in consent orders or regulatory penalties and significant legal liability, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition.

We face system security risks as we depend upon automated processes and the Internetinternet, and webreaches of, or failures in the performance of, our information technology systems could damage our reputation, cause us to incur substantial additional costs and become subject us to litigation if our systems are penetrated.litigation.

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We are increasingly dependent upon automated information technology processes and Internetinternet commerce, and many of our new customers come from the telephone or over the Internet.internet. Moreover, the nature of our business involves the receipt and retention of personal information about our customers. We also rely extensively on third-party vendors to retain data, process transactions and provide other systems and services. These systems, and our systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, malware and other destructive or disruptive security breaches and catastrophic events, such as a natural disaster or a terrorist event or cyber-attack. In addition, experienced computer programmers and hackers may be able to penetrate our security systems and misappropriate our confidential information, create system disruptions or cause shutdowns. Such data security breaches as well as system disruptions and shutdowns could result in additional costs to repair or replace such networks or information systems and possible legal liability, including government enforcement actions and private litigation. In addition, our customers could lose confidence in our ability to protect their personal information, which could cause them to discontinue leasing at our self-storage properties.stores. 

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If we are unable to attract and retain team members or contract with third parties having the specialized skills or technologies needed to support our systems, implement improvements to our customer-facing technology in a timely manner, allow accurate visibility to product availability when customers are ready to rent, quickly and efficiently fulfill our customers rental and payment methods they demand or provide a convenient and consistent experience for our customers regardless of the ultimate sales channel, our ability to compete and our results of operations could be adversely affected.

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Terrorist attacks and other acts of violence or war may adversely impact our performance and may affect the markets on which our securities are traded.

Terrorist attacks against our stores, the United States or our interests, may negatively impact our operations and the value of our securities.  Attacks or armed conflicts could negatively impact the demand for self-storage and increase the cost of insurance coverage for

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our stores, which could reduce our profitability and cash flow.  Furthermore, any terrorist attacks or armed conflicts could result in increased volatility in or damage to the United States and worldwide financial markets and economy.

Risks Related to the Real Estate Industry

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Our performance and the value of our self-storage properties are subject to risks associated with our properties and with the real estate industry.

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Our rental revenues, and operating costs and the value of our real estate assets, and consequently the value of our securities, are subject to the risk that if our stores do not generate revenues sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and ability to pay distributions to our shareholders will be adversely affected. Events or conditions beyond our control that may adversely affect our operations or the value of our properties include but are not limited to:

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downturns in the national, regional and local economic climate;

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local or regional oversupply, increased competition or reduction in demand for self-storage space;

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vacancies or changes in market rents for self-storage space;

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inability to collect rent from customers;

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

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changes in interest rates and availability of financing;

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hurricanes, earthquakes and other natural disasters, civil disturbances, terrorist acts or acts of war that may result in uninsured or underinsured losses;

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significant expenditures associated with acquisitions and development projects, such as debt service payments, real estate taxes, insurance and maintenance costs which are generally not reduced when circumstances cause a reduction in revenues from a property;

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

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the relative illiquidity of real estate investments.

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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.

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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.

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Because our real estate portfolio consists primarily of self-storage properties, we are subject to risks inherent in investments in a single industry. A decrease in the demand for self-storage space would have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio. Demand for self-storage space 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 properties 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.

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Because real estate is illiquid, we may not be able to sell properties when appropriate.

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Real estate property investments generally cannot be sold quickly. Also, the tax laws applicable to REITs require that we hold our properties for investment, rather than for sale in the ordinary course of business, which may cause us to forgo or defer sales of properties

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that otherwise would be in our best interest. Therefore, we may not be able to dispose of properties promptly, or on favorable terms, in response to economic or other market conditions, which may adversely affect our financial position.

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Risks Related to our Qualification and Operation as a REIT

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Failure to qualify as a REIT would subject us to U.S. federal income tax which would reduce the cash available for distribution to our shareholders.

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We operate our business to qualify to be taxed as a REIT for federal income tax purposes. We have not requested and do not plan to request a ruling from the IRSInternal Revenue Service (“IRS”) that we qualify as a REIT, and the statements in this Report are not binding on the IRS or any court. As a REIT, we generally will not be subject to federal income tax on the 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 and joint ventures further complicates the application of the REIT 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. Changes to rules governing REITs were made by legislation commonly known as the Tax Cuts and Jobs Act (the “TCJA”) and the Protecting Americans From Tax Hikes Act of 2015, signed into law on December 22, 2017 and December 18, 2015, respectively, and Congress and the IRS mightmay make further 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.

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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. For tax years beginning before January 1, 2018, weWe 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 followinguntil the fifth taxable that begins after the taxable 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.

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Furthermore, we owned a subsidiary REIT (“PSI”) that was liquidated on December 31, 2018. Prior to liquidation, PSI was independently subject to, and was required to comply with, the same REIT requirements that we must satisfy in order to qualify as a REIT, together with all other rules applicable to REITs. If PSI failed to qualify as a REIT during our period of ownership, and certain statutory relief provisions do not apply, as a result of a protective election made jointly by PSI and CubeSmart, PSI willshould be taxed as a taxable REIT subsidiary. See the section entitled “Taxation of CubeSmart−Requirements for Qualification−Taxable REIT Subsidiaries” in Exhibit 99.1 for more information regarding taxable REIT subsidiaries.

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LAACO was a publicly traded partnership immediately prior to our acquisition of it on December 9, 2021. Failure of 90% or more of a publicly traded partnership’s gross income to be “qualifying income” under Section 7704 of the Internal Revenue Code in each of its tax years could result in such entity being taxed as a corporation rather than a partnership for U.S. federal income tax purposes. If LAACO failed to qualify as a partnership for U.S. federal income tax purposes immediately prior to our acquisition of it, and certain relief provisions do not apply, it might adversely affect our ability to satisfy the income and asset tests for REIT qualification. In addition, LAACO’s classification as a corporation for U.S. federal income tax purposes would mean that it has corporate income tax liabilities for all tax years during which it is classified as a corporation for U.S. federal income tax purposes.

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Failure of the Operating Partnership (or a subsidiary partnership or joint venture) to be treated as a partnership would have serious adverse consequences to our shareholders.

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If the IRS were to successfully challenge the tax status of the Operating Partnership or any of its subsidiary partnerships or joint ventures for federal income tax purposes, the Operating Partnership or the affected subsidiary partnership or joint venture would be taxable as a corporation. In such event, we likely would cease to qualify as a REIT and the imposition of a corporate tax on the Operating Partnership, a subsidiary partnership or joint venture would reduce the amount of cash available for distribution from the Operating Partnership to us and ultimately to our shareholders.

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To maintain our REIT status, we may be forced to borrow funds on a short-term basis during unfavorable market conditions.

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As a REIT, we are subject to certain distribution requirements, including the requirement to distribute 90% of our REIT taxable income, excluding net capital gains, which may result in our having to make distributions at a disadvantageous time or to borrow funds at unfavorable rates. Compliance with this requirement may hinder our ability to operate solely on the basis of maximizing profits.

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We will pay some taxes even if we qualify as a REIT, which will reduce the cash available for distribution to our shareholders.

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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.

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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 some of our subsidiaries as taxable REIT subsidiaries, 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

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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.

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We have made taxable REIT subsidiary elections for the corporate subsidiaries of LAACO that hold the Club Operations and we intend to sell the assets in such subsidiaries to a third-party purchaser. If the purchase price for the assets of the subsidiaries exceeds our tax basis in such assets, then we may face corporate tax liability, which could have an adverse impact on our ability to make distributions.

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We face possible federal, state and local tax audits.

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Because we are organized and qualify as a REIT, we are generally not subject to federal income taxes, but are subject to certain state and local taxes. Certain entities through which we own real estate either have undergone, or are currently undergoing, tax audits. Although we believe that we have substantial arguments in favor of our positions in the ongoing audits, in some instances there is no controlling precedent or interpretive guidance on the specific point at issue. Collectively, tax deficiency notices received to date from the jurisdictions conducting the ongoing audits have not been material. However, there can be no assurance that future audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations.

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Legislative or regulatory tax changes related to REITs could materially and adversely affect our business.

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At any time, the federal income tax laws or regulations governing REITs or the administrative interpretations of those laws or regulations may be changed, possibly with retroactive effect. We cannot predict if or when any new federal income tax law, regulation or administrative interpretation, or any amendment to any existing federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective or whether any such law, regulation or interpretation may take effect retroactively. We and our shareholders could be adversely affected by any such change in, or any new, federal income tax law, regulation or administrative interpretation.

The TCJA made significant changes to the U.S. federal income tax rules for taxation of individuals and corporations, generally effective for taxable years beginning after December 31, 2017. In addition to reducing corporate and non-corporate tax rates, the TCJA made changes to the number of provisions of the Code that may affect the taxation of REITs and their security holders. While the changes in the TCJA generally appear to be favorable with respect to REITs, certain changes to the U.S. federal income tax laws enacted by the TCJA could have a material and adverse effect on us. For example, certain changes in law pursuant to the TCJA could reduce the relative competitive advantage of operating as a REIT as compared with operating as a C corporation, including by:

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reducing the rate of tax applicable to individuals and C corporations, which could reduce the relative attractiveness of the generally single level of taxation on REIT distributions;

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

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

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Most of the changes applicable to individuals are temporary and apply only to taxable years beginning after December 31, 2017 and before January 1, 2026. The TCJA made numerous large and small changes to the tax rules that do not affect REITs directly but may affect our shareholders and may indirectly affect us.

Moreover, Congressional leaders have recognized that the process of adopting extensive tax legislation in a short amount of time without hearings and substantial time for review is likely to have led to drafting errors, issues needing clarification and unintended consequences that will have to be reviewed in subsequent tax legislation. At this point, although certain additional guidance has been provided by Treasury and the IRS, it is not clear when Congress will address these issues or when the Internal Revenue Service will issue additional administrative guidance on the changes made in the TCJA.

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

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Dividends paid by REITs do not qualify for the reduced tax rates provided under current law.

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Dividends paid by REITs are generally not eligible for the reduced 15% maximum tax rate for dividends paid to individuals (20% for those with taxable income above certain thresholds that are adjusted annually under current law). The more favorable rates applicable to regular corporate dividends could cause shareholders who are individuals to perceive investments in REITs to be relatively less attractive than investments in the stock of non-REIT corporations that pay dividends to which more favorable rates apply, which could reduce the value of REIT stocks.

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Legislation modifies the rules applicable to partnership tax audits.

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The Bipartisan Budget Act of 2015 effective for taxable years beginning after December 31, 2017, requires our Operating Partnership and any subsidiary partnership to pay the hypothetical increase in partner-level taxes (including interest and penalties) resulting from an adjustment of partnership tax items on audit or in other tax proceedings, unless the partnership elects an alternative method under which the taxes resulting from the adjustment (and interest and penalties) are assessed at the partner level. Many uncertaintiesUncertainties remain as to the application of these rules including the application of the alternative method to partners that are REITs, and the impact they will have on us. However, itIt is possible that partnerships in which we invest may be subject to U.S. federal income tax, interest and penalties in the event of a U.S. federal income tax audit as a result of these law changes.

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Risks Related to our Debt Financings

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We face risks related to current debt maturities, including refinancing risk.

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Certain of our mortgages, bank loans and unsecured debt (including our senior notes) will have significant outstanding balances on their maturity dates, commonly known as “balloon payments.” We may not have the cash resources available to repay those amounts, and we may have to raise funds for such repayment either through the issuance of equity or debt securities, additional bank borrowings (which may include extension of maturity dates), joint ventures or asset sales. Furthermore, we are restricted from incurring certain additional

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indebtedness and making certain other changes to our capital and debt structure under the terms of the Credit Facility (defined below) and senior notes and the indentureindentures governing the Credit Facility and senior notes.

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There can be no assurance that we will be able to refinance our debt on favorable terms or at all. To the extent we cannot refinance debt on favorable terms or at all, we may be forced to dispose of properties on disadvantageous terms or pay higher interest rates, either of which would have an adverse impact on our financial performance and ability to pay dividends to our shareholders.

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As a result of our interest rate hedges, swap agreements and other, similar arrangements, we face counterparty risks.

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We may be exposed to the potential risk of counterparty default or non-payment with respect to interest rate hedges, swap agreements, floors, caps and other interest rate hedging contracts that we may enter into from time to time, in which event we could suffer a material loss on the value of those agreements. Although these agreements may lessen the impact of rising interest rates on us, they also expose us to the risk that other parties to the agreements will not perform or that we cannot enforce the agreements. There is no assurance that our potential counterparties on these agreements will perform their obligations under such agreements.

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Financing our future growth plan or refinancing existing debt maturities could be impacted by negative capital market conditions.

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From time to time, domestic financial markets experience volatility and uncertainty. At times in recent years liquidity has tightened in the domestic financial markets, including the investment grade debt and equity capital markets from which we historically sought financing. Consequently, there is greater uncertainty regarding our ability to access the credit markets in order to attract financing on reasonable terms; there can be no assurance that we will be able to continue to issue common or preferred equity securities at a reasonable price. Our ability to finance new acquisitions and refinance future debt maturities could be adversely impacted by our inability to secure permanent financing on reasonable terms, if at all.

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The terms and covenants relating to our indebtedness could adversely impact our economic performance.

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Like other real estate companies that incur debt, we are subject to risks associated with debt financing, such as the insufficiency of cash flow to meet required debt service payment obligations and the inability to refinance outstanding indebtedness at maturity. If our debt cannot be paid, refinanced or extended at maturity, we may not be able to make distributions to shareholders at expected levels or at all and may not be able to acquire new stores. Failure to make distributions to our shareholders could result in our failure to qualify as a REIT for federal income tax purposes. Furthermore, an increase in our interest expense could adversely affect our cash flow and ability to make distributions to shareholders. If we do not meet our debt service obligations, any stores securing such indebtedness could be foreclosed on, which would have a material adverse effect on our cash flow and ability to make distributions and, depending on the number of stores foreclosed on, could threaten our continued viability.

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Our Credit Facility (defined below) contains (and any new or amended facility we may enter into from time to time will likely contain) customary affirmative and negative covenants, including financial covenants that, among other things, require us to comply with certain liquidity and net worthother tests. Our ability to borrow under the Credit Facility is (and any new or amended facility we may enter into from time to time will be) subject to compliance with such financial and other covenants. In the event that we fail to satisfy these covenants, we would be in default under the Credit Facility and may be required to repay such debt with capital from other sources. Under such circumstances, other sources of debt or equity capital may not be available to us, or may be available only on unattractive terms. Moreover, the presence of such covenants in our credit agreements could cause us to operate our business with a view toward compliance with such covenants, which might not produce optimal returns for shareholders. Similarly, the indenture under which we have issued unsecured senior notes contains customary financial covenants, including limitations on incurrence of additional indebtedness.

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Increases in interest rates on variable ratevariable-rate indebtedness would increase our interest expense, which could adversely affect our cash flow and ability to make distributions to shareholders. Rising interest rates could also restrict our ability to refinance existing debt when it matures. In addition, an increase in interest rates could decrease the amounts that third parties are willing to pay for our assets, thereby limiting our ability to alter our portfolio promptly in relation to economic or other conditions.

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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.

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Our organizational documents do not limit the amount of indebtedness that we 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 distributions and/or the distributions required to maintain our REIT status, and could harm our financial condition.

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Changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect our financial results.

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As of December 31, 2018,2021, we had $495.5 million ofdid not have any outstanding debt outstanding that was indexed to the London Interbank Offered Rate (“LIBOR”) other than borrowings under our Revolver (defined below). On July 27, 2017, the Financial Conduct Authority (“FCA”), which regulates LIBOR, announced its intention to phase out LIBOR rates by the end of 2021. On March 5, 2021, the ICE Benchmark Administration Limited (“IBA”) announced an 18-month extension (to June 30, 2023) on certain U.S. dollar LIBOR rates, including the rate that our Revolver is indexed to. It is not possible to predict the further effect of the FCA’s announcement,these announcements, any changes in the methods by which LIBOR is determined, or any other reforms to LIBOR that may be enacted in the United Kingdom, the European Union or elsewhere. Such developments may cause LIBOR to perform differently than in the past, or cease to exist. In addition, any other legal or regulatory changes made by the FCA, ICE Benchmark Administration Limited,the IBA, the European Money Markets Institute (formerly Euribor-EBF), the European Commission or any other successor governance or oversight body, or future changes adopted by such body, in the method by which LIBOR is determined or the transition from LIBOR to a successor benchmark may result in, among other things, a sudden or prolonged increase or decrease in LIBOR, a delay in the publication of LIBOR, and changes in the rules or methodologies in LIBOR, which may discourage market participants from continuing to administer or to participate in LIBOR’s determination, and, in certain situations, could result in LIBOR no longer being determined and published. If a published U.S. dollar LIBOR rate isbecomes unavailable,

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after 2021, the interest rates on our debt which is indexed to LIBOR will be determined using alternative methods, which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if U.S. dollar LIBOR was available in its current form. Further, the same costs and risks that may lead to the unavailability of U.S. dollar LIBOR may make one or more of the alternative methods impossible or impracticable to determine. Any of these proposals or consequences could have a material adverse effect on our financing costs, and as a result, our financial condition, operating results and cash flows.

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Risks Related to our Organization and Structure

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We are dependent upon our senior management team whose continued service is not guaranteed.

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Our executive team, including our named executive officers, has extensive self-storage, real estate and public company experience. Our Chief Executive Officer, Chief Financial Officer, Chief Legal Officer and Chief LegalOperating Officer are parties to the Company’s executive severance plan, however, we cannot provide assurance that any of them will remain in our employment. The loss of services of one or more members of our senior management team could adversely affect our operations and our future growth.

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We are dependent upon our on-site personnel to maximize customer satisfaction; any difficulties we encounter in hiring, training and retaining skilled field personnel may adversely affect our rental revenues.

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As of December 31, 2018,2021, we had 2,4852,431 property-level personnel involved in the management and operation of our stores. The customer service, marketing skills and knowledge of local market demand and competitive dynamics of our store managers are contributing factors to our ability to maximize our rental income and to achieve the highest sustainable rent levels at each of our stores. We compete with various other companies in attracting and retaining qualified and skilled personnel. Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. If there is an increase in these costs or if we fail to attract and retain qualified and skilled personnel, our business and operating results could be adversely affected.

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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.

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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:

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“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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·

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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.

​

We have opted out of these provisions of Maryland law. However, our Board may opt to make these provisions applicable to us at any time without shareholder approval.

​

Our Trustees also have the discretion, granted in our bylaws and Maryland law, without shareholder approval to, among other things (1) create a staggered Board, (2) amend our bylaws or repeal individual bylaws in a manner that provides the Board with greater authority, and (3) issue additional equity securities. Any such action could inhibit or impede a third party from making a proposal to acquire us at a price that could be beneficial to our shareholders.

​

23

Table of Contents

Our shareholders have limited control to prevent us from making any changes to our investment and financing policies.

​

Our Board 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 without a vote of our shareholders. This means that our shareholders have limited control over changes in our policies. Such changes 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.

​

Maryland law provides that a trustee 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 on our behalf, 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 shareholders’ ability to recover damages from that Trustee or officer will be limited.

​

Our declaration of trust permits our Board 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 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.

​

Risks Related to our Securities

​

Additional issuances of equity securities may be dilutive to shareholders.

​

The interests of our shareholders could be diluted if we issue additional equity securities to finance future acquisitions or developments or to repay indebtedness. Our Board may authorize the issuance of additional equity securities, including preferred shares, without shareholder approval. Our ability to execute our business strategy depends upon our access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including common and preferred equity.

​

26

Table of Contents

Many factors could have an adverse effect on the market value of our securities.

​

A number of factors might adversely affect the price of our securities, many of which are beyond our control. These factors include:

​

·

●

increases in market interest rates, relative to the dividend yield on our shares. If market interest rates go up, prospective purchasers of our securities may require a higher yield. Higher market interest rates would not, however, result in more funds for us to distribute and, to the contrary, would likely increase our borrowing costs and potentially decrease funds available for distribution. Thus, higher market interest rates could cause the market price of our equity securities to go down;

​

·

●

anticipated benefit of an investment in our securities as compared to investment in securities of companies in other industries (including benefits associated with tax treatment of dividends and distributions);

​

·

●

perception by market professionals of REITs generally and REITs comparable to us in particular;

​

·

●

level of institutional investor interest in our securities;

​

·

●

relatively low trading volumes in securities of REITs;

​

24

Table of Contents

·

●

our results of operations and financial condition;

​

·

●

investor confidence in the stock market generally; and

​

·

●

additions and departures of key personnel.

​

The market value of our equity securities is based primarily upon the market’s perception of our growth potential and our current and potential future earnings and cash distributions. Consequently, our equity securities may trade at prices that are higher or lower than our net asset value per equity security. If our future earnings or cash distributions are less than expected, it is likely that the market price of our equity securities will diminish.

​

The market price of our common shares has been, and may continue to be, particularly volatile, and our shareholders may be unable to resell their shares at a profit.

​

The market price of our common shares has been subject to significant fluctuation and may continue to fluctuate or decline. Between January 1, 20162019 and December 31, 2018,2021, the closing price per share of our common shares has ranged from a high of $33.30$57.02 (on March 31, 2016)December 30, 2021) to a low of $22.94$20.85 (on July 10, 2017)March 23, 2020). In the past several years, REIT securities have experienced high levels of volatility and significant increases in value from their historic lows.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If our share price is volatile, we may become the target of securities litigation. Securities litigation, which could result in substantial costs and divert our management’s attention and resources from our business.

​

​

27

Table of Contents

General Risk Factors

​

Many states and local jurisdictions are facing severe budgetary problems which may have an adverse impact on our business and financial results.

​

Many states and jurisdictions are facing severe budgetary problems. Action that may be taken in response to these problems, such as increases in property taxes on commercial properties, changes to sales taxes or other governmental efforts, including mandating medical insurance, paid time off and severance payments for employees, could adversely impact our business and results of operations.

​

We may incur impairment charges.

​

We evaluate on a quarterly basis our real estate portfolio for indicators of impairment. Impairment charges reflect management’s judgment of the probability and severity of the decline in the value of real estate assets we own. These charges and provisions may be required in the future as a result of factors beyond our control, including, among other things, changes in the economic environment and market conditions affecting the value of real property assets or natural or man-made disasters. If we are required to take impairment charges, our results of operations will be adversely impacted.

​

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

​

Our stores and any other stores 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. Our stores are subject to increases in operating expenses such as real estate, sales and other taxes, personnel costs including mandated minimum hourly wage rates and the cost of providing specific medical coverage and governmental mandated benefits to our employees, utilities, customer acquisition costs, insurance, administrative expenses and costs for repairs and maintenance. If operating expenses continue to increase without a corresponding increase in revenues, our profitability could diminish and limit our ability to make distributions to our shareholders.

​

We cannot assure our ability to pay dividends in the future.

​

Historically, we have paid quarterly distributions to our shareholders, and we intend to continue to pay quarterly dividends and to make distributions to our shareholders in amounts such that all or substantially all of our taxable income in each year, subject to certain adjustments, is distributed. This, along with other factors, should enable us to continue to qualify for the tax benefits accorded to a REIT under the Internal Revenue Code. We have not established a minimum dividends payment level, and all future distributions will be made at the discretion of our Board. Our ability to pay dividends will depend upon, among other factors:

​

●the operational and financial performance of our stores;

​

●capital expenditures with respect to existing and newly acquired stores;

​

●general and administrative costs associated with our operation as a publicly-held REIT;

​

●maintenance of our REIT status;

​

●the amount of, and the interest rates on, our debt;

​

●the absence of significant expenditures relating to environmental and other regulatory matters; and

​

●other risk factors described in this Report.

​

Certain of these matters are beyond our control and any significant difference between our expectations and actual results could have a material adverse effect on our cash flow and our ability to make distributions to shareholders.

​

We may become subject to litigation or threatened litigation which may divert management’s 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,

28

Table of Contents

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.

​

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, internet domains 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.

​

We also could be sued for personal injuries and/or property damage occurring on our properties. We maintain liability insurance with limits that we believe are adequate to provide for the defense and/or payment of any damages arising from such lawsuits. There can be no assurance that such coverage will cover all costs and expenses from such suits.

​

Legislative actions and changes may cause our general and administrative costs and compliance costs to increase.

​

In order to comply with laws adopted by federal, state or local government or regulatory bodies, we may be required to increase our expenditures and hire additional personnel and additional outside legal, accounting and advisory services, all of which may cause our general and administrative and compliance costs to increase. Significant workforce-related legislative changes could increase our expenses and adversely affect our operations. Examples of possible workforce-related legislative changes include changes to an employer's obligation to recognize collective bargaining units, the process by which collective bargaining agreements are negotiated or imposed, minimum wage requirements and health care and medical and family leave mandates. In addition, changes in the regulatory environment affecting health care reimbursements, and increased compliance costs related to enforcement of federal and state wage and hour statutes and common law related to overtime, among others, could cause our expenses to increase without an ability to pass through any increased expenses through higher prices. 

​

Privacy concerns could result in regulatory changes that may harm our business.

​

Personal privacy has become a significant issue in the jurisdictions in which we operate. Many jurisdictions in which we operate, including California and New York, have imposed restrictions and requirements on the use of personal information by those collecting such information. The regulatory framework for privacy issues is rapidly evolving and future enactment of more restrictive laws, rules or regulations and/or future enforcement actions or investigations could have a materially adverse impact on us through increased costs or restrictions on our business. Failure to comply with such laws and regulations could result in consent orders or regulatory penalties and significant legal liability, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition.

​

Terrorist attacks, active shooter incidents and other acts of violence or war may adversely impact our performance and may affect the markets on which our securities are traded.

​

Terrorist attacks at or against our stores, the United States or our interests, may negatively impact our operations and the value of our securities. Attacks, armed conflicts or active-shooter situations could negatively impact the demand for self-storage and increase the cost of insurance coverage for our stores, which could reduce our profitability and cash flow. Furthermore, any terrorist attacks, armed conflicts or active-shooter situations could result in increased volatility in or damage to the United States and worldwide financial markets and economy.

​

Failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, results of operations, financial condition, and stock price.

​

Pursuant to the Sarbanes-Oxley Act of 2002, we are required to provide a report by management on internal control over financial reporting, including management’s assessment of the effectiveness of internal control. Changes to our business will necessitate ongoing changes to our internal control systems and processes. Internal control over financial reporting may not prevent or detect misstatement because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business, results of operations, and financial condition could be materially harmed, we could fail to meet our reporting obligations, and there could be a material adverse effect on the market price of our common shares.

​

29

Table of Contents

ITEM 1B. UNRESOLVED STAFF COMMENTS

​

None.

​

ITEM 2. PROPERTIES

25

Table of Contents

ITEM 2.  PROPERTIES

​

As of December 31, 2018,2021, we owned 493607 self-storage properties that contain approximately 34.643.6 million rentable square feet and are located in 2324 states and the District of Columbia. The following table sets forth summary information regarding our stores by state as of December 31, 2018.2021.

​

 

 

 

 

 

 

 

 

 

 

 

    

    

    

    

    

Total

    

% of Total

    

    

 

 

Number of

 

 

 

Rentable

 

Rentable

 

Period-end

 

​

​

​

​

​

​

​

​

​

​

​

​

​

    

    

    

    

    

Total

    

% of Total

    

    

 

​

​

Number of

​

Number of

​

Rentable

​

Rentable

​

Ending

 

State

 

Stores

 

Cubes

 

Square Feet

 

Square Feet

 

Occupancy

 

​

Stores

​

Units

​

Square Feet

​

Square Feet

​

Occupancy

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

Florida

 

80

 

58,210

 

5,972,181

 

17.2

%  

89.4

%  

 

90

 

65,018

 

6,801,203

 

15.6

%  

95.0

%  

Texas

 

66

 

39,407

 

4,637,296

 

13.4

%  

88.3

%  

 

75

​

45,751

 

5,358,803

​

12.3

%  

92.8

%  

California

 

63

​

45,099

 

4,741,051

​

10.9

%  

94.0

%  

New York

 

47

 

62,686

 

3,576,590

 

10.3

%  

81.3

%  

 

58

​

82,438

 

4,593,319

​

10.5

%  

89.5

%  

California

 

42

 

28,596

 

3,052,908

 

8.8

%  

89.1

%  

Arizona

 

48

​

28,121

 

3,070,755

​

7.0

%  

92.5

%  

Illinois

 

42

 

25,271

 

2,695,599

 

7.8

%  

89.7

%  

 

43

​

25,905

 

2,761,024

​

6.3

%  

93.2

%  

Arizona

 

31

 

17,608

 

1,893,512

 

5.5

%  

92.3

%  

New Jersey

 

25

 

16,878

 

1,700,724

 

4.9

%  

92.0

%  

 

28

​

20,488

 

1,983,294

​

4.6

%  

92.3

%  

Nevada

 

22

​

14,613

 

1,700,457

​

3.9

%  

93.0

%  

Maryland

 

16

 

13,034

 

1,320,367

 

3.8

%  

91.3

%  

​

19

​

16,143

 

1,585,705

​

3.6

%  

91.8

%  

Georgia

 

18

 

11,072

 

1,317,737

 

3.8

%  

91.3

%  

 

21

​

13,151

 

1,562,380

​

3.6

%  

92.7

%  

Ohio

 

20

 

11,127

 

1,290,003

 

3.7

%  

89.9

%  

 

20

​

11,129

 

1,294,303

​

3.0

%  

91.4

%  

Massachusetts

​

20

​

12,996

 

1,256,014

​

2.9

%  

85.0

%  

Connecticut

 

22

 

10,682

 

1,178,620

 

3.4

%  

91.5

%  

 

22

​

10,759

 

1,197,402

​

2.8

%  

91.8

%  

Virginia

 

10

 

7,889

 

788,260

 

2.3

%  

90.5

%  

 

11

​

9,972

 

965,100

​

2.2

%  

84.0

%  

Pennsylvania

 

12

​

9,057

 

890,594

​

2.0

%  

78.0

%  

Tennessee

 

9

​

5,673

 

755,595

​

1.7

%  

91.7

%  

Colorado

 

10

​

5,540

 

654,265

​

1.5

%  

93.2

%  

North Carolina

 

10

 

6,279

 

722,500

 

2.1

%  

87.4

%  

 

9

​

5,345

 

611,298

​

1.4

%  

93.8

%  

Colorado

 

11

 

6,019

 

697,299

 

2.0

%  

89.2

%  

Massachusetts

 

11

 

7,242

 

668,883

 

1.9

%  

89.5

%  

Nevada

 

 8

 

5,131

 

642,342

 

1.9

%  

93.0

%  

Tennessee

 

 7

 

4,450

 

618,060

 

1.8

%  

90.8

%  

Pennsylvania

 

 9

 

6,034

 

608,866

 

1.8

%  

91.4

%  

South Carolina

 

8

​

3,877

 

432,389

​

1.0

%  

95.9

%  

Washington D.C.

 

 5

 

5,301

 

410,075

 

1.2

%  

76.9

%  

 

5

​

5,293

 

409,484

​

0.9

%  

92.5

%  

Utah

 

 4

 

2,306

 

239,398

 

0.7

%  

89.1

%  

 

4

​

2,386

 

293,988

​

0.7

%  

86.3

%  

Rhode Island

 

 4

 

1,978

 

237,195

 

0.7

%  

91.5

%  

 

4

​

2,037

 

247,305

​

0.6

%  

93.4

%  

New Mexico

 

 3

 

1,676

 

182,261

 

0.5

%  

92.8

%  

 

3

​

1,693

 

182,261

​

0.4

%  

91.6

%  

Minnesota

 

 1

 

1,026

 

100,928

 

0.3

%  

93.2

%  

​

2

​

1,827

 

176,296

​

0.4

%  

77.5

%  

Indiana

 

 1

 

577

 

67,604

 

0.2

%  

93.4

%  

 

1

​

583

 

70,380

​

0.2

%  

90.0

%  

Total/Weighted Average

 

493

 

350,479

 

34,619,208

 

100.0

%  

89.0

%  

Total/Weighted average

 

607

​

444,894

​

43,594,665

​

100.0

%  

92.0

%  

​

We have grown by adding stores to our portfolio through acquisitions and development. The tables set forth below show the averageending occupancy, annual rent per occupied square foot and total revenues for our stores owned as of December 31, 2018,2021, and for each of the previous three years, grouped by the year during which we first owned or operated the store.

​

Stores by Year Acquired - Average– Ending Occupancy

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rentable

 

Average Occupancy

 

Year Acquired (1)

    

# of Stores

    

Square Feet

    

2018

    

2017

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

2015 and earlier

 

443

 

30,419,868

 

92.5

% 

92.6

%  

91.9

% 

2016

 

30

 

2,442,005

 

85.5

% 

79.9

%  

67.8

% 

2017

 

 9

 

763,343

 

45.9

% 

39.1

%  

 —

 

2018

 

11

 

993,992

 

56.7

% 

 —

 

 —

 

All Stores Owned as of December 31, 2018

 

493

 

34,619,208

 

90.5

% 

91.2

%  

90.7

% 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Rentable

​

Ending Occupancy

 

Year Acquired (1)

    

# of Stores

    

Square Feet

    

2021

    

2020

    

2019

 

​

​

​

​

​

​

​

​

​

​

​

​

2018 and earlier

 

486

 

34,631,955

 

92.9

%  

93.0

%  

90.2

%  

2019

 

31

 

2,022,899

 

92.6

%  

87.9

%  

76.6

%  

2020

 

21

 

1,805,317

 

87.6

%  

83.7

%  

—

​

2021

 

69

 

5,134,492

 

87.5

%  

—

​

—

​

All stores owned as of December 31, 2021

 

607

 

43,594,663

 

92.0

%  

92.3

%  

89.5

%  

​

​

​

2630

Table of Contents

Stores by Year Acquired - Annual Rent Per Occupied Square Foot (2)

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rent per Square Foot

 

Year Acquired (1)

    

# of Stores

    

2018

    

2017

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015 and earlier

 

443

 

$

17.52

 

$

16.92

 

$

16.24

 

2016

 

30

 

 

16.14

 

 

15.36

 

 

15.24

 

2017

 

 9

 

 

19.99

 

 

19.11

 

 

 —

 

2018

 

11

 

 

24.76

 

 

 —

 

 

 —

 

All Stores Owned as of December 31, 2018

 

493

 

$

17.58

 

$

16.84

 

$

16.18

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Annual Rent per Occupied Square Foot

 

Year Acquired (1)

    

# of Stores

    

2021

    

2020

    

2019

 

​

​

​

​

​

​

​

​

​

​

​

​

 

2018 and earlier

 

486

​

$

19.79

​

$

17.89

​

$

17.97

​

2019

 

31

​

​

16.89

​

​

14.62

​

​

14.54

​

2020

 

21

​

​

29.21

​

​

26.62

​

​

—

​

2021

 

69

​

​

19.71

​

​

—

​

​

—

​

All stores owned as of December 31, 2021

 

607

​

$

20.00

​

$

18.10

​

$

17.81

​

​

Stores by Year Acquired - Total Revenues (dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Revenues

 

Year Acquired (1)

    

# of Stores

    

2021

    

2020

    

2019

 

​

​

​

​

​

​

​

​

​

​

​

​

 

2018 and earlier

 

486

​

$

684,058

​

$

604,479

​

$

593,565

​

2019

 

31

​

 

33,572

​

 

26,271

​

 

11,841

​

2020

 

21

​

 

46,822

​

 

4,337

​

 

—

​

2021

 

69

​

 

8,668

​

 

—

​

 

—

​

All stores owned as of December 31, 2021

 

607

​

$

773,120

​

$

635,087

​

$

605,406

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenues

 

Year Acquired (1)

    

# of Stores

    

2018

    

2017

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015 and earlier

 

443

 

$

522,579

 

$

504,521

 

$

479,029

 

2016

 

30

 

 

35,593

 

 

31,391

 

 

16,005

 

2017

 

 9

 

 

7,563

 

 

2,102

 

 

 —

 

2018

 

11

 

 

4,137

 

 

 —

 

 

 —

 

All Stores Owned as of December 31, 2018

 

493

 

$

569,872

 

$

538,014

 

$

495,034

 

(1)

Represents the year acquired for those stores we acquired from a third party or the year placed in service for those stores we 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 the impact of promotional discounts, which reduce rental income over the promotional period, of $19.9$19.7 million, $18.2$15.3 million and $17.4$21.5 million for the periods ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively.

​

Unconsolidated Real Estate Ventures

​

As of December 31, 2018,2021, we held common ownership interests ranging from 10% to 50% in fourseven unconsolidated real estate ventures for an aggregate investment balancecarrying value of $95.8$119.8 million. We formedhold interests in these real estate ventures with unaffiliated third parties to acquire, own and operate self-storage properties in select markets. As of December 31, 2018,2021, these fourseven unconsolidated real estate ventures owned 12990 self-storage properties that containcontained an aggregate of approximately 7.76.5 million net rentable square feet. The self-storage properties owned by these fourseven real estate ventures are managed by us and are located in Texas (37)Arizona (2), South Carolina (22)California (2), Michigan (17)Connecticut (6), Florida (8), Georgia (10), Illinois (5), Maryland (2), Massachusetts (13), Tennessee (10), Georgia (7), Florida (6), Connecticut (5)Minnesota (1), New Jersey (2), New York (1), North Carolina (5)(1), Arizona (2)Pennsylvania (1), Rhode Island (2), South Carolina (4), Texas (35) and Vermont (2), and Maryland (1).

​

On September 5, 2018, we invested $5.0 million in exchange for 100% of the Class A Preferred Unitspreferred units of Capital Storage Partners, LLC (“Capital Storage”), a then newly formed venture that acquired 22 self-storage properties that containcontained an aggregate of approximately 1.31.7 million net rentable square feet. The stores owned by Capital Storage are located in Florida (4), Oklahoma (5), and Texas (13). The Class A Preferred Units earnpreferred units earned an 11% cumulative dividend prior to any other distributions. On August 24, 2021, the Class A preferred units and all accrued and unpaid dividends were redeemed and paid, respectively. We no longer have an ownership interest in Capital Storage.

​

Each of thesethe seven real estate ventures has assets and liabilities that we do not consolidate in our financial statements.

​

We account for our investments in real estate ventures using the equity method when it is determined that we have the ability to exercise significant influence over the venture. See note 5 to theour consolidated financial statements for further disclosure regarding the assets, liabilities and operating results of our unconsolidated real estate ventures which we account for using the equity method of accounting.

​

Capital Expenditures

​

We have a capital improvement program that includescovers office upgrades, addingaddition of climate control to selectedselect cubes, construction of parking areas and other store upgrades. For 2019,2022, we anticipate spending approximately $5.0$8.5 million to $10.0$13.5 million associated with these capital

31

Table of Contents

expenditures. For 2019,2022, we also anticipate spending approximately $10.0$10.5 million to $15.0$15.5 million on recurring capital expenditures and approximately $30.0$27.0 million to $45.0$37.0 million on the development of new self-storage properties.

​

27

Table of Contents

ITEM 3.  LEGAL PROCEEDINGS

​

To our knowledge, no legal proceedings are pending against us, other than routine actions and administrative proceedings, and other actions not deemed material, and which, in the aggregate, are not expected to have a material adverse effect on our financial condition, results of operations or cash flows.

​

ITEM 4.  MINING SAFETY DISCLOSURES

​

Not applicable.

​

PART II

​

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

​

Repurchase of Parent Company Common and Preferred Shares

​

The following table provides information about repurchases of the Parent Company’s common and preferred shares during the three months ended December 31, 2018:2021:

 

 

 

 

 

 

 

 

 

 

    

Total
Number of
Shares
Purchased (1)

    

Average
Price Paid
Per Share

     

Total
Number of
Shares
Purchased
as Part of
Publicly
Announced
Plans or Programs

    

Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plans or
Programs

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

    

Total
Number of
Shares
Purchased (1)

    

Average
Price Paid
Per Share

     

Total
Number of
Shares
Purchased
as Part of
Publicly
Announced
Plans or Programs

    

Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plans or
Programs

 

​

​

​

​

​

​

​

​

​

​

​

October 1 - October 31

 

147

 

$

28.00

 

N/A

 

3,000,000

 

​

446

​

$

48.96

​

N/A

​

3,000,000

​

November 1 - November 30

 

37

 

$

30.33

 

N/A

 

3,000,000

 

​

158

​

$

54.99

​

N/A

​

3,000,000

​

December 1 - December 31

 

232

 

$

30.67

 

N/A

 

3,000,000

 

​

41

​

$

54.52

​

N/A

​

3,000,000

​

Total

 

416

 

$

29.70

 

N/A

 

3,000,000

 

 

645

​

$

50.79

 

N/A

 

3,000,000

​

​

(1)

Represents common shares withheld by the Parent Company upon the vesting of restricted shares to cover employee tax obligations.

​

On September 27, 2007, theThe Parent Company announced that the Board of Trustees approvedadopted a share repurchase program in 2007 for up to 3.0 million of the Parent Company’s outstanding common shares. Unless terminated earlier by resolution of the Board of Trustees, the program will expire when the number of authorized shares has been repurchased. The Parent Company has made no repurchases under this program to date.

​

Market Information for and Holders of Record of Common Shares

​

As of December 31, 2018,2021, there were approximately 131157 registered record holders of the Parent Company’s common shares and 1324 holders (other than the Parent Company) of the Operating Partnership’s common units. These amounts do not include common shares held by brokers and other institutions on behalf of shareholders. The Parent Company’s common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol CUBE. There is no established trading market for units of the Operating Partnership.

​

Since our initial quarter as a publicly-traded REIT, we have made regular quarterly distributions to our shareholders. Distributions to shareholders are usually taxable as ordinary income, although a portion of the distribution may be designated as a capital gain or may constitute a tax-free return of capital. Annually, we provide each of the Parent Company’s common shareholders a statement detailing the tax characterization of dividends paid during the preceding year as ordinary income, capital gain or return of capital. The characterization of the Parent Company’s dividends for 20182021 consisted of a 78.190%92.6365% ordinary income distribution and a 13.653%7.3635% capital gain distribution, and an 8.157% returndistribution.

​

32

Table of capital distribution from earnings and profits.Contents

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 Credit Facility, we are restricted from paying distributions on the Parent Company’s common shares in excess of the greater of (i) 95% of our funds from operations, and (ii) such amount as may be necessary to maintain our REIT status.

28

Table of Contents

​

To the extent that we make distributions in excess of our earnings and profits, as computed for federal income tax purposes, these distributions will represent a return of capital, rather than a dividend, for federal income tax purposes. Distributions that are treated as a return of capital for federal income tax purposes generally will not be taxable as a dividend to a U.S. shareholder, but will reduce the shareholder’s basis in its shares (but not below zero) and therefore can result in the shareholder having a higher gain upon a subsequent sale of such shares. Return of capital distributions in excess of a shareholder’s basis generally will be treated as gain from the sale of such shares for federal income tax purposes.

​

Recent Sales of Unregistered Equity Securities and Use of Proceeds

​

Recent Sales of Operating Partnership Unregistered Equity Securities

​

As previously disclosed, on December 7, 2017, the Operating Partnership entered into an agreement to acquire a self-storage property located in Texas for $12.2 million, and agreed to fund a portion of the acquisition price in the form of common units, designated Class B Units.  On January 31, 2018, the Operating Partnership closed on the acquisition and funded approximately $4.8 million of the acquisition price through the issuance of 168,011 common units.  Following a 13-month lock-up period, the holder may tender the common units for redemption by the Operating Partnership for a cash amount per common unit equal to the market value of an equivalent number of common shares of the Company.  The Company has the right, but not the obligation, to assume and satisfy the redemption obligation of the Operating Partnership by issuing one common share in exchange for each common unit tendered for redemption.  The common units were sold to a single accredited investor unaffiliated with the Company in a private placement transaction exempt from the registration requirements of the Securities Act of 1933 pursuant to Section 4(a)(2) of such Act.None.

​

Securities Authorized Under Equity Compensation Plans

Other information about our equity compensation plans is incorporated herein by reference to Part III, Item 12 of this Annual Report on Form 10-K.

29

Table of Contents

Share Performance Graph

​

The SEC requires us to present a chart comparing the cumulative total shareholder return, assuming reinvestment of dividends, on our common shares with the cumulative total shareholder return of (i) a broad equity index and (ii) a published industry or peer group index. The following chart compares the yearly cumulative total shareholder return for our common shares with the cumulative shareholder return of companies on (i) the S&P 500 Index, (ii) the Russell 2000 Index and (iii) the FTSE NAREIT All Equity REIT Index as provided by NAREIT for the period beginning December 31, 20132016 and ending December 31, 2018.2021.

​

Picture 1Graphic

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period Ending

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31,

 

Index

    

12/31/2013

    

12/31/2014

    

12/31/2015

    

12/31/2016

    

12/31/2017

    

12/31/2018

 

    

2016

    

2017

    

2018

    

2019

    

2020

    

2021

 

CubeSmart

 

100.00 

 

142.54

 

203.01

 

183.03

 

206.31

 

213.29

 

 

100.00

 

112.74

​

116.59

​

133.05

​

148.58

​

259.40

​

S&P 500 Index

 

100.00 

 

113.69

 

115.26

 

129.05

 

157.22

 

150.33

 

 

100.00

 

121.83

​

116.49

​

153.17

​

181.35

​

233.41

​

Russell 2000 Index

 

100.00 

 

104.89

 

100.26

 

121.63

 

139.44

 

124.09

 

 

100.00

 

114.65

​

102.02

​

128.06

​

153.62

​

176.39

​

NAREIT All Equity REIT Index

 

100.00 

 

128.03

 

131.64

 

143.00

 

155.41

 

149.12

 

FTSE NAREIT All Equity REIT Index

 

100.00

 

108.67

​

104.28

​

134.17

​

127.30

​

179.87

​

ITEM 6.  SELECTED FINANCIAL DATA

CUBESMART

The following table sets forth selected financial and operating data on a historical consolidated basis for the Parent Company.  The selected historical financial data as of and for each of the years in the five-year period ended December 31, 2018 are derived from the Parent Company’s consolidated financial statements, which financial statements have been audited by KPMG LLP, an independent registered public accounting firm.  The consolidated financial statements as of December 31, 2018 and 2017, and for each of the years in the three-year period ended December 31, 2018, and the report thereon, are included herein.  The selected data should be read in conjunction with the consolidated financial statements for the year ended December 31, 2018, the related notes, and the independent registered public accounting firm’s report. The other data presented below is not derived from the audited financial statements included herein.

30

Table of Contents

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31,

 

 

    

2018

    

2017

    

2016

    

2015

    

2014

 

 

 

(in thousands, except per share data)

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

517,535

 

$

489,043

 

$

449,601

 

$

392,476

 

$

330,898

 

Other property related income

 

 

60,156

 

 

55,001

 

 

50,255

 

 

45,189

 

 

40,065

 

Property management fee income

 

 

20,253

 

 

14,899

 

 

10,183

 

 

6,856

 

 

6,000

 

Total revenues

 

 

597,944

 

 

558,943

 

 

510,039

 

 

444,521

 

 

376,963

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

 

196,866

 

 

181,508

 

 

165,847

 

 

153,172

 

 

132,701

 

Depreciation and amortization

 

 

143,350

 

 

145,681

 

 

161,865

 

 

151,789

 

 

126,813

 

General and administrative

 

 

37,712

 

 

34,745

 

 

32,823

 

 

28,371

 

 

28,422

 

Acquisition related costs

 

 

 —

 

 

1,294

 

 

6,552

 

 

3,301

 

 

7,484

 

Total operating expenses

 

 

377,928

 

 

363,228

 

 

367,087

 

 

336,633

 

 

295,420

 

OTHER (EXPENSE) INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense on loans

 

 

(62,132)

 

 

(56,952)

 

 

(50,399)

 

 

(43,736)

 

 

(46,802)

 

Loan procurement amortization expense

 

 

(2,313)

 

 

(2,638)

 

 

(2,577)

 

 

(2,324)

 

 

(2,190)

 

Equity in losses of real estate ventures

 

 

(865)

 

 

(1,386)

 

 

(2,662)

 

 

(411)

 

 

(6,255)

 

Gains from sale of real estate, net

 

 

10,576

 

 

 —

 

 

 —

 

 

17,567

 

 

475

 

Other

 

 

206

 

 

872

 

 

1,062

 

 

(228)

 

 

(405)

 

Total other expense

 

 

(54,528)

 

 

(60,104)

 

 

(54,576)

 

 

(29,132)

 

 

(55,177)

 

INCOME FROM CONTINUING OPERATIONS

 

 

165,488

 

 

135,611

 

 

88,376

 

 

78,756

 

 

26,366

 

DISCONTINUED OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

336

 

Total discontinued operations

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

336

 

NET INCOME

 

 

165,488

 

 

135,611

 

 

88,376

 

 

78,756

 

 

26,702

 

NET (INCOME) LOSS ATTRIBUTABLE TO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONCONTROLLING INTERESTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests in the Operating Partnership

 

 

(1,820)

 

 

(1,593)

 

 

(941)

 

 

(960)

 

 

(307)

 

Noncontrolling interest in subsidiaries

 

 

221

 

 

270

 

 

470

 

 

(84)

 

 

(16)

 

NET INCOME ATTRIBUTABLE TO THE COMPANY

 

 

163,889

 

 

134,288

 

 

87,905

 

 

77,712

 

 

26,379

 

Distribution to preferred shareholders

 

 

 —

 

 

 —

 

 

(5,045)

 

 

(6,008)

 

 

(6,008)

 

Preferred share redemption charge

 

 

 —

 

 

 —

 

 

(2,937)

 

 

 —

 

 

 —

 

NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS

 

$

163,889

 

$

134,288

 

$

79,923

 

$

71,704

 

$

20,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share from continuing operations attributable to common shareholders

 

$

0.89

 

$

0.74

 

$

0.45

 

$

0.43

 

$

0.13

 

Basic earnings per share from discontinued operations attributable to common shareholders

 

$

 —

 

$

 —

 

$

 —

 

$

 —

 

$

0.01

 

Basic earnings per share attributable to common shareholders

 

$

0.89

 

$

0.74

 

$

0.45

 

$

0.43

 

$

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations attributable to common shareholders

 

$

0.88

 

$

0.74

 

$

0.45

 

$

0.42

 

$

0.13

 

Diluted earnings per share from discontinued operations attributable to common shareholders

 

$

 —

 

$

 —

 

$

 —

 

$

 —

 

$

0.01

 

Diluted earnings per share attributable to common shareholders

 

$

0.88

 

$

0.74

 

$

0.45

 

$

0.42

 

$

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average basic shares outstanding (1)

 

 

184,653

 

 

180,525

 

 

178,246

 

 

168,640

 

 

149,107

 

Weighted-average diluted shares outstanding (1)

 

 

185,495

 

 

181,448

 

 

179,533

 

 

170,191

 

 

150,863

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AMOUNTS ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

163,889

 

$

134,288

 

$

79,923

 

$

71,704

 

$

20,040

 

Total discontinued operations

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

331

 

Net income

 

$

163,889

 

$

134,288

 

$

79,923

 

$

71,704

 

$

20,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31,

 

 

    

2018

    

2017

    

2016

    

2015

    

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Storage properties, net

 

$

3,600,968

 

$

3,408,790

 

$

3,326,816

 

$

2,872,983

 

$

2,625,129

 

Total assets

 

 

3,752,972

 

 

3,545,336

 

 

3,475,028

 

 

3,104,164

 

 

2,776,906

 

Unsecured senior notes, net

 

 

1,143,524

 

 

1,142,460

 

 

1,039,076

 

 

741,904

 

 

493,957

 

Revolving credit facility

 

 

195,525

 

 

81,700

 

 

43,300

 

 

 —

 

 

78,000

 

Unsecured term loans, net

 

 

299,799

 

 

299,396

 

 

398,749

 

 

398,183

 

 

397,617

 

Mortgage loans and notes payable, net

 

 

108,246

 

 

111,434

 

 

114,618

 

 

111,455

 

 

194,844

 

Total liabilities

 

 

1,980,704

 

 

1,855,646

 

 

1,759,384

 

 

1,393,183

 

 

1,277,465

 

Noncontrolling interests in the Operating Partnership

 

 

55,819

 

 

54,320

 

 

54,407

 

 

66,128

 

 

49,823

 

Total CubeSmart shareholders' equity

 

 

1,709,678

 

 

1,629,134

 

 

1,655,382

 

 

1,643,327

 

 

1,448,026

 

Noncontrolling interests in subsidiaries

 

 

6,771

 

 

6,236

 

 

5,855

 

 

1,526

 

 

1,592

 

Total liabilities and equity

 

 

3,752,972

 

 

3,545,336

 

 

3,475,028

 

 

3,104,164

 

 

2,776,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of stores

 

 

493

 

 

484

 

 

475

 

 

445

 

 

421

 

Total rentable square feet (in thousands)

 

 

34,619

 

 

33,760

 

 

32,858

 

 

30,361

 

 

28,622

 

Occupancy percentage

 

 

89.0

%  

 

89.2

%  

 

89.7

%  

 

90.2

%  

 

89.1

%  

Cash dividends declared per common share (2)

 

$

1.22

 

$

1.11

 

$

0.90

 

$

0.69

 

$

0.55

 

(1)

OP units have been excluded from the earnings per share calculations as the related income or loss is presented in noncontrolling interests in the Operating Partnership.

(2)

We announced full quarterly dividends of $0.13 and $0.484 per common and preferred shares, respectively, on February 25, 2014, May 28, 2014, and August 5, 2014; dividends of $0.16 and $0.484 per common and preferred shares, respectively, on December 16, 2014, February 24, 2015, May 27, 2015, and August 4, 2015; dividends of $0.21 and $0.484 per common and preferred shares, respectively, on December 10, 2015, February 16, 2016, June 1, 2016, and August 2, 2016; dividends of $0.174 per preferred share on September 2, 2016; dividends of $0.27 per common share on December 15, 2016, February 14, 2017, May 31, 2017, and July 25, 2017; dividends of $0.30 per common share on December 14, 2017, February 13, 2018, May 30, 2018, and August 7, 2018; and dividends of $0.32 per common share on December 13, 2018.

CUBESMART, L.P.

The following table sets forth selected financial and operating data on a historical consolidated basis for the Operating Partnership.  The selected historical financial data as of and for each of the years in the five-year period ended December 31, 2018 are derived from the Operating Partnership’s consolidated financial statements, which financial statements have been audited by KPMG LLP, an independent registered public accounting firm.  The consolidated financial statements as of December 31, 2018 and 2017, and for each of the years in the three-year period ended December 31, 2018, and the report thereon, are included herein.  The selected data should be read in conjunction with the consolidated financial statements for the year ended December 31, 2018, the related notes, and the independent registered public accounting firm’s report. The other data presented below is not derived from the audited financial statements included herein.

32

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31,

 

 

    

2018

    

2017

    

2016

    

2015

    

2014

 

 

 

(in thousands, except per unit data)

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

517,535

 

$

489,043

 

$

449,601

 

$

392,476

 

$

330,898

 

Other property related income

 

 

60,156

 

 

55,001

 

 

50,255

 

 

45,189

 

 

40,065

 

Property management fee income

 

 

20,253

 

 

14,899

 

 

10,183

 

 

6,856

 

 

6,000

 

Total revenues

 

 

597,944

 

 

558,943

 

 

510,039

 

 

444,521

 

 

376,963

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

 

196,866

 

 

181,508

 

 

165,847

 

 

153,172

 

 

132,701

 

Depreciation and amortization

 

 

143,350

 

 

145,681

 

 

161,865

 

 

151,789

 

 

126,813

 

General and administrative

 

 

37,712

 

 

34,745

 

 

32,823

 

 

28,371

 

 

28,422

 

Acquisition related costs

 

 

 —

 

 

1,294

 

 

6,552

 

 

3,301

 

 

7,484

 

Total operating expenses

 

 

377,928

 

 

363,228

 

 

367,087

 

 

336,633

 

 

295,420

 

OTHER (EXPENSE) INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense on loans

 

 

(62,132)

 

 

(56,952)

 

 

(50,399)

 

 

(43,736)

 

 

(46,802)

 

Loan procurement amortization expense

 

 

(2,313)

 

 

(2,638)

 

 

(2,577)

 

 

(2,324)

 

 

(2,190)

 

Equity in losses of real estate ventures

 

 

(865)

 

 

(1,386)

 

 

(2,662)

 

 

(411)

 

 

(6,255)

 

Gains from sale of real estate, net

 

 

10,576

 

 

 —

 

 

 —

 

 

17,567

 

 

475

 

Other

 

 

206

 

 

872

 

 

1,062

 

 

(228)

 

 

(405)

 

Total other expense

 

 

(54,528)

 

 

(60,104)

 

 

(54,576)

 

 

(29,132)

 

 

(55,177)

 

INCOME FROM CONTINUING OPERATIONS

 

 

165,488

 

 

135,611

 

 

88,376

 

 

78,756

 

 

26,366

 

DISCONTINUED OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

336

 

Total discontinued operations

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

336

 

NET INCOME

 

 

165,488

 

 

135,611

 

 

88,376

 

 

78,756

 

 

26,702

 

NET LOSS (INCOME) ATTRIBUTABLE TO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONCONTROLLING INTERESTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interest in subsidiaries

 

 

221

 

 

270

 

 

470

 

 

(84)

 

 

(16)

 

NET INCOME ATTRIBUTABLE TO CUBESMART L.P.

 

 

165,709

 

 

135,881

 

 

88,846

 

 

78,672

 

 

26,686

 

Operating Partnership interests of third parties

 

 

(1,820)

 

 

(1,593)

 

 

(941)

 

 

(960)

 

 

(307)

 

NET INCOME ATTRIBUTABLE TO OPERATING PARTNER

 

 

163,889

 

 

134,288

 

 

87,905

 

 

77,712

 

 

26,379

 

Distribution to preferred unitholders

 

 

 —

 

 

 —

 

 

(5,045)

 

 

(6,008)

 

 

(6,008)

 

Preferred unit redemption charge

 

 

 —

 

 

 —

 

 

(2,937)

 

 

 —

 

 

 —

 

NET INCOME ATTRIBUTABLE TO COMMON UNITHOLDERS

 

$

163,889

 

$

134,288

 

$

79,923

 

$

71,704

 

$

20,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per unit from continuing operations attributable to common unitholders

 

$

0.89

 

$

0.74

 

$

0.45

 

$

0.43

 

$

0.13

 

Basic earnings per unit from discontinued operations attributable to common unitholders

 

$

 —

 

$

 —

 

$

 —

 

$

 —

 

$

0.01

 

Basic earnings per unit attributable to common unitholders

 

$

0.89

 

$

0.74

 

$

0.45

 

$

0.43

 

$

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per unit from continuing operations attributable to common unitholders

 

$

0.88

 

$

0.74

 

$

0.45

 

$

0.42

 

$

0.13

 

Diluted earnings per unit from discontinued operations attributable to common unitholders

 

$

 —

 

$

 —

 

$

 —

 

$

 —

 

$

0.01

 

Diluted earnings per unit attributable to common unitholders

 

$

0.88

 

$

0.74

 

$

0.45

 

$

0.42

 

$

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average basic units outstanding (1)

 

 

184,653

 

 

180,525

 

 

178,246

 

 

168,640

 

 

149,107

 

Weighted-average diluted units outstanding (1)

 

 

185,495

 

 

181,448

 

 

179,533

 

 

170,191

 

 

150,863

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AMOUNTS ATTRIBUTABLE TO COMMON UNITHOLDERS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

163,889

 

$

134,288

 

$

79,923

 

$

71,704

 

$

20,040

 

Total discontinued operations

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

331

 

Net income

 

$

163,889

 

$

134,288

 

$

79,923

 

$

71,704

 

$

20,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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At December 31,

 

 

    

2018

    

2017

    

2016

    

2015

    

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Storage properties, net

 

$

3,600,968

 

$

3,408,790

 

$

3,326,816

 

$

2,872,983

 

$

2,625,129

 

Total assets

 

 

3,752,972

 

 

3,545,336

 

 

3,475,028

 

 

3,104,164

 

 

2,776,906

 

Unsecured senior notes, net

 

 

1,143,524

 

 

1,142,460

 

 

1,039,076

 

 

741,904

 

 

493,957

 

Revolving credit facility

 

 

195,525

 

 

81,700

 

 

43,300

 

 

 —

 

 

78,000

 

Unsecured term loans, net

 

 

299,799

 

 

299,396

 

 

398,749

 

 

398,183

 

 

397,617

 

Mortgage loans and notes payable, net

 

 

108,246

 

 

111,434

 

 

114,618

 

 

111,455

 

 

194,844

 

Total liabilities

 

 

1,980,704

 

 

1,855,646

 

 

1,759,384

 

 

1,393,183

 

 

1,277,465

 

Operating Partnership interests of third parties

 

 

55,819

 

 

54,320

 

 

54,407

 

 

66,128

 

 

49,823

 

Total CubeSmart L.P. Capital

 

 

1,709,678

 

 

1,629,134

 

 

1,655,382

 

 

1,643,327

 

 

1,448,026

 

Noncontrolling interests in subsidiaries

 

 

6,771

 

 

6,236

 

 

5,855

 

 

1,526

 

 

1,592

 

Total liabilities and capital

 

 

3,752,972

 

 

3,545,336

 

 

3,475,028

 

 

3,104,164

 

 

2,776,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of stores

 

 

493

 

 

484

 

 

475

 

 

445

 

 

421

 

Total rentable square feet (in thousands)

 

 

34,619

 

 

33,760

 

 

32,858

 

 

30,361

 

 

28,622

 

Occupancy percentage

 

 

89.0

%  

 

89.2

%  

 

89.7

%  

 

90.2

%  

 

89.1

%  

Cash dividends declared per common unit (2)

 

$

1.22

 

$

1.11

 

$

0.90

 

$

0.69

 

$

0.55

 

(1)

OP units have been excluded from the earnings per unit calculations as the related income or loss is presented in Operating Partnership interest of third parties.

(2)

We announced full quarterly dividends of $0.13 and $0.484 per common and preferred units, respectively, on February 25, 2014, May 28, 2014, and August 5, 2014; dividends of $0.16 and $0.484 per common and preferred units, respectively, on December 16, 2014, February 24, 2015, May 27, 2015, and August 4, 2015; dividends of $0.21 and $0.484 per common and preferred units, respectively, on December 10, 2015, February 16, 2016, June 1, 2016, and August 2, 2016; dividends of $0.174 per preferred unit on September 2, 2016; dividends of $0.27 per common unit on December 15, 2016, February 14, 2017, May 31, 2017, and July 25, 2017; dividends of $0.30 per common unit on December 14, 2017, February 13, 2018, May 30, 2018, and August 7, 2018; and dividends of $0.32 per common share on December 13, 2018.

​

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ITEM 6.  [Reserved]

​

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. Some of the statements we make in this section 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”. 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

​

We are an integrated self-storage real estate company, and as such we have in-house capabilities in the operation, design, development, leasing, management and acquisition of self-storage properties. The Parent Company’s operations are conducted solely through the Operating Partnership and its subsidiaries. The Parent Company has elected to be taxed as a REIT for U.S. federal income tax purposes. As of December 31, 20182021 and December 31, 2017,2020, we owned 493(or partially owned and 484consolidated) 607 self-storage properties respectively, totaling approximately 34.643.6 million rentable square feet and 33.8543 self-storage properties totaling approximately 38.5 million rentable square feet, respectively. As of December 31, 2018,2021, we owned stores in the District of Columbia and the following 2324 states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah and Virginia. In addition, as of December 31, 2018,2021, we managed 593651 stores for third parties (including 15190 stores containing an aggregate of approximately 9.06.5 million net rentable square feet as part of fiveseven separate unconsolidated real estate ventures), bringing the total number of stores we owned and/or managed to 1,086.1,258. As of December 31, 2018,2021, we managed stores for third parties in the District of Columbia and the following 3436 states: Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Kansas,Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington West Virginia, and Wisconsin.

​

We derive revenues principally from rents received from customers who rent cubes at our self-storage properties under month-to-month leases. Therefore, our operating results depend materially on our ability to retain our existing customers and lease our available self-storage cubes 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. Our approach to the management and operation of our stores combines centralized marketing, revenue management and other operational support with local operations teams that provide market-level oversight and control.management. We believe this approach allows us to respond quickly and effectively to changes in local market conditions and to maximize revenues by managing rental rates and occupancy levels.

​

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

​

Our results of operations may be sensitive to changes in overall economic conditions that impact consumer spending, including discretionary spending and moving trends, as well as to increased bad debts due to recessionary pressures. Adverse economic conditions affecting disposable consumer income, such as employment levels, business conditions, interest rates, tax rates, fuel and energy costs, and other matters could reduce consumer spending or cause consumers to shift their spending to other products and services. A general reduction in the level of discretionary spending or shifts in consumer discretionary spending could adversely affect our growth and profitability.

​

We continue our focus on maximizing internal growth opportunities and selectively pursuing targeted acquisitions and developments of self-storage properties.

​

We have one reportable segment: we own, operate, develop, manage and acquire self-storage properties.

​

Our self-storage properties are located in major metropolitan and suburban areas and have numerous customers per store. No single customer represents a significant concentration of our revenues. Our stores in Florida, New York, Florida, Texas and California provided approximately 17%19%, 16%15%, 10%,9% and 8%, respectively, of total revenues for the year ended December 31, 2018.2021.

​

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Summary of Critical Accounting Policies and Estimates

​

Set forth below is a summary of the accounting policies and estimates that management believes are critical to the preparation of the consolidated financial statements included in this Report. Certain of the accounting policies used in the preparation of these consolidated financial statements are particularly important for an understanding of the financial position and results of operations presented in the historical consolidated financial statements included in this Report. A summary of significant accounting policies is also provided in the

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notesnote 2 to our consolidated financial statements (see note 2 to the consolidated financial statements).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 materially from estimates calculated and utilized by management.

​

Basis of Presentation

​

The accompanying consolidated financial statements include all of the accounts of the Company, and its majority-owned and/or controlled subsidiaries. The portion of these entities not owned by the Company is presented as noncontrolling interests as of and during the periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation.

​

When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a variable interest entity (“VIE”), and if the Company is deemed to be the primary beneficiary, in accordance with authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) on the consolidation of VIEs. To the extent that the Company (i) has the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and (ii) has the obligation or rights to absorb the VIE's losses or receive its benefits, then the Company is considered the primary beneficiary. The Company may also consider additional factors included in the authoritative guidance, such as whether or not it is the partner in the VIE that is most closely associated with the VIE. When an entity is not deemed to be a VIE, the Company considers the provisions of additional FASB guidance to determine whether a general partner, or the general partners as a group, controls a limited partnership or similar entity when the limited partners have certain rights. The Company consolidates (i) entities that are VIEs and of which the Company is deemed to be the primary beneficiary and (ii) entities that are non-VIEs which the Company controls and in which the limited partners do not have substantive participating rights, or the ability to dissolve the entity or remove the Company without cause.cause nor substantive participating rights.

​

Self-Storage Properties

​

The Company records self-storage properties at cost less accumulated depreciation. Depreciation on the buildings, improvements and equipment is recorded on a straight-line basis over their estimated useful lives, which range from five to 39 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 stores 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 stores is acquired, the purchase price is allocated to the individual stores 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 store 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, buildingsbuilding and improvements and estimates of depreciated replacement cost of equipment.

In allocatingequipment are recorded based upon their respective fair values as estimated by management. If appropriate, the purchase price for an acquisition, the Company determines whether the acquisition includes intangible assets or liabilities.  The Company allocates a portion of the purchase price to an intangible asset attributableattributed to the value of in-place leases. This intangible asset is generally amortized to expense over the expected remaining term of the respective leases. Substantially all of the storage leases in place at acquired stores are at market rates, as the majority of the leases are month-to-month contracts. Accordingly, to date, no portion of the purchase price has been allocated to above- or below-market lease intangibles.intangibles associated with storage leases assumed at acquisition. Above- or below- market lease intangibles associated with assumed leases in which the Company serves as lessee are recorded as an adjustment to the right-of-use asset and reflect the difference between the contractual amounts to be paid pursuant to each in-place lease and management’s estimate of fair market lease rates. These amounts are amortized over the term of the lease. To date, no intangible asset has been recorded for the value of customer relationships, because the Company does not have any concentrations of significant customers and the average customer turnover is fairly frequent.

​

Long-lived assets classified as “held for use” are reviewed for impairment when events and circumstances such as declines in occupancy and operating results indicate that there may be an impairment. The carrying value of these long-lived assets is compared to the undiscounted future net operating cash flows, plus a terminal value, attributable to the assets to determine if the store’s basis is recoverable. If a store’s basis is not considered recoverable, an impairment loss is recorded to the extent the net carrying value of the asset exceeds the fair value. The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. There were no impairment losses recognized in accordance with these procedures during the years ended December 31, 2018, 2017,2021, 2020 and 2016.2019.

​

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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 storean asset (or group of stores)assets), (b) the storeasset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such stores,assets, (c) an active program to locate a buyer and other actions required to complete the plan to sell the storeasset have been initiated, (d) the sale of the storeasset is probable and transfer of the asset is expected to be completed within one year, (e) the storeasset 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

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Table of Contents

transaction from closing. However, each potential transaction is evaluated based on its separate facts and circumstances. StoresAssets classified as held for sale are reported at the lesser of carrying value or fair value less estimated costs to sell.sell and are not depreciated. The Club Operations that we acquired through our acquisition of LAACO have been classified as held for sale as of December 31, 2021. There were no stores classified as held for sale as of December 31, 2021.

​

Revenue Recognition

Management has determined that all our leases with customers are operating leases.  Rental income is recognized in accordance with the terms of the leases, which generally are month to month.  Property management fee income is recognized monthly as services are performed and in accordance with the terms of the related management agreements.

The Company recognizes gains from sale of real estate in accordance with the guidance on transfer of nonfinancial assets. Payments received from purchasers prior to closing are recorded as deposits.  Profit on real estate sold is recognized when a valid contract exists, the collectability of the sales price is reasonably assured and the control of the property has transferred.

Noncontrolling Interests

Noncontrolling interests are the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent.  The ownership interests in the subsidiary that are held by owners other than the parent are noncontrolling interests.  In accordance with authoritative guidance issued on noncontrolling interests in consolidated financial statements, such noncontrolling interests are reported on the consolidated balance sheets within equity/capital, separately from the Parent Company’s equity/capital.  The guidance also requires that noncontrolling interests are adjusted each period so that the carrying value equals the greater of its carrying value based on the accumulation of historical cost or its redemption value.  On the consolidated statements of operations, revenues, expenses, and net income or loss from less-than-wholly-owned subsidiaries are reported at the consolidated amounts, including both the amounts attributable to the Parent Company and noncontrolling interests.  Presentation of consolidated equity/capital activity is included for both quarterly and annual financial statements, including beginning balances, activity for the period and ending balances for shareholders’ equity/capital, noncontrolling interests, and total equity/capital.

Investments in Unconsolidated Real Estate Ventures

​

The Company accounts for its investments in unconsolidated real estate ventures under the equity method of accounting when it is determined that the Company has the ability to exercise significant influence over the venture. Under the equity method, investments in unconsolidated real estate ventures are recorded initially at cost, as investments in real estate entities, and subsequently adjusted for equity in earnings (losses), and cash contributions, less cash distributions and impairments. On a periodic basis, management also assesses whether there are any indicators that the carrying value of the Company’s investments in unconsolidated real estate entities may be other than temporarily impaired. An investment is impaired only if the fair value of the investment, as estimated by management, is less than the carrying value of the investment and the decline is other than temporary. To the extent impairment that is other than temporary has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the fair value of the investment, as estimated by management. Fair value is determined through various valuation techniques, including but not limited to, discounted cash flow models, quoted market values and third partythird-party appraisals. There were no impairment losses related to the Company’s investments in unconsolidated real estate ventures recognized during the years ended December 31, 2018, 20172021, 2020 and 2016.2019.

​

Income Taxes

The Parent Company elected to be taxed as aDifferences between the Company's net investment in unconsolidated real estate investment trust under Sections 856-860ventures and its underlying equity in the net assets of the Internal Revenue Code beginning withventures are primarily a result of the period from October 21, 2004 (commencementCompany acquiring interests in existing unconsolidated real estate ventures. As of operations) through December 31, 2004.  In management’s opinion,2021, the requirements to maintain these elections are being met.  Accordingly, no provision for federal income taxes has been reflectedCompany’s net investment in unconsolidated real estate ventures was greater than its underlying equity in the consolidated financial statements other than for operations conducted through our taxable REIT subsidiaries.

Earnings and profits, which determine the taxability of distributions to shareholders, differ from net income reported for financial reporting purposes due to differences in cost basis, the estimated useful lives used to compute depreciation, and the allocation of net income and loss for financial versus tax reporting purposes.

The Parent Company is subject to a 4% federal excise tax if sufficient taxable income is not distributed within prescribed time limits.  The excise tax equals 4%assets of the annual amount, if any,unconsolidated real estate ventures by whichan aggregate of $33.6 million. There were no such differences as of December 31, 2020. These differences are amortized over the sum of (a) 85%lives of the Parent Company’s ordinary income, (b) 95% of the Parent Company’s net capital gains, and (c) 100% of prior year taxable income exceeds cash distributions and certain taxes paidself-storage properties owned by the Parent Company.

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Table of Contents

Recent Accounting Pronouncements

   In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The purpose of this updated guidancereal estate ventures. This amortization is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The transition guidance provides companies with the option of early adopting the new standard using a modified retrospective transition methodincluded in any interim period after issuance of the update, or alternatively requires adoption for fiscal years beginning after December 15, 2018. This adoption method will require the Company to recognize the cumulative effect of initially applying the new guidance as an adjustment to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retainedequity in earnings as of the beginning of the fiscal year that the Company adopts the update. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.


   In February 2017, as part of the new revenue standard, the FASB issued ASU No. 2017-05 – Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance, which focuses on recognizing gains and losses from the transfer of nonfinancial assets in contracts with non-customers. Specifically, the new guidance defines “in substance nonfinancial asset”, unifies guidance related to partial sales of nonfinancial assets, eliminates rules specifically addressing sales of real estate removes exceptions to the financial asset derecognition model, and clarifies the accounting for contributions of nonfinancial assets to joint ventures. The new guidance became effective on January 1, 2018 when the Company adopted the new revenue standard. Upon adoption, the majority of the Company’s sale transactions are now treated as dispositions of nonfinancial assets rather than dispositions of a business given the FASB’s recently revised definition of a business (see ASU No. 2017-01 below). Additionally, in partial sale transactions where the Company sells a controlling interest in real estate but retains a noncontrolling interest, the Company will now fully recognize a gain or loss on the fair value measurement of the retained interest as the new guidance eliminates the partial profit recognition model. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position or results of operations.

In January 2017, the FASB issued ASU No. 2017-01 - Business Combinations (Topic 805): Clarifying the Definition of a Business, which changes the definition of a business to include an input and a substantive process that together significantly contribute to the ability to create outputs. A framework is provided to evaluate when an input and a substantive process are present.  The new guidance also narrows the definition of outputs, which are defined as the results of inputs and substantive processes that provide goods or services to customers, other revenue, or investment income. The standard became effective on January 1, 2018. Upon adoption of the new guidance, the majority of the Company’s future property acquisitions will now be considered asset acquisitions, resulting in the capitalization of acquisition related costs incurred in connection with these transactions and the allocation of purchase price and acquisition related costs to the assets acquired based on their relative fair values. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position or results of operations.

In November 2016, the FASB issued ASU No. 2016-18 - Statement of Cash Flows (Topic 230): Restricted Cash, which requires the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The new guidance also requires entities to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. The standard became effective on January 1, 2018 and requires the use of the retrospective transition method. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements as the update primarily relates to financial statement presentation and disclosures.

In August 2016, the FASB issued ASU No. 2016-15 – Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The eight items that the ASU provides classification guidance on include (1) debt prepayment and extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investments, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows and application of the predominance principle. The standard became effective on January 1, 2018 and requires the use of the retrospective transition method. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements as the update primarily relates to financial statement presentation and disclosures.

In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use

38

Table of Contents

asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.  Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company adopted the standard on January 1, 2019, the date it became effective for public companies, using the modified retrospective approach. Upon adoption, the Company elected the package of practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classification. In addition, the Company elected the practical expedient that allows reporting entities to use hindsight to determine the lease term for existing leases. The Company expects to record lease liabilities of approximately $55.0 million and right-of-use assets of approximately $50.0 million, primarily related to the Company’s ten ground leases in which it serves as lessee.

In May 2014, the FASB issued ASU No. 2014-09 - Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new guidance outlines a five-step process for customer contract revenue recognition that focuses on transfer of control as opposed to transfer of risk and rewards. The new guidance also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. In May 2016, the FASB issued ASU No. 2016-12 - Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which amends ASU No. 2014-09 and is intended to address implementation issues that were raised by stakeholders. ASU No. 2016-12 provides practical expedients on collectability, noncash consideration, presentation of sales tax and contract modifications and completed contracts in transition. Both standards became effective on January 1, 2018. The Company finalized the impact of the adoption of ASU No. 2014-09 and ASU No. 2016-12 on the Company’s consolidated financial statements and related disclosures and adopted the standards using the modified retrospective transition method. The standards did not have a material impactventures on the Company’s consolidated statements of operations.

​

Recent Accounting Pronouncements

​

For a discussion of recent accounting pronouncements affecting our business, see note 2 to the Company’s consolidated financial position or results of operations primarily because most of its revenue is derived from lease contracts, which are excluded from the scope of the new guidance. The Company’s insurance fee revenue, property management fee revenue, and merchandise sale revenue are included in the scope of the new guidance, however, the Company identified similar performance obligations under this standard as compared with deliverables and separate units of account identified under its previous revenue recognition methodology. Accordingly, revenue recognized under the new guidance does not differ materially from revenue recognized under previous guidance and there is no material prior year impact.statements.

​

Results of Operations

​

The following discussion of our results of operations should be read in conjunction with the consolidated financial statements and the accompanying notes thereto. Historical results set forth in the consolidated statements of operations reflect only the existing stores for each period presented and should not be taken as indicative of future operations. We consider our same-store portfolio to consist of only those stores owned and operated on a stabilized basis at the beginning and at the end of the applicable years presented. We consider a store to be stabilized once it has achieved an occupancy rate that we believe, based on our assessment of market-specific data, is representative of similar self-storage assets in the applicable market for a full year measured as of the most recent January 1 and has not been significantly damaged by natural disaster or undergone significant renovation. We believe that same-store results are useful to investors in evaluating our performance because they provide information relating to changes in store-level operating performance without taking into account the effects of acquisitions, developments or dispositions. As of December 31, 2018,2021, we owned 456506 same-store properties and 37101 non same-store properties. All of the non same-store properties were 20172020 and 20182021 acquisitions, dispositions, developed stores, stores with a significant portion of net rentable square footage taken out of service or stores that have not yet reached stabilization as defined above. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this Report.

​

36

Table of Contents

The comparability of our results of operations is affected by the timing of acquisition and disposition activities during the periods reported. As of December 31, 2018, 2017,2021, 2020 and 2016,2019, we owned 493, 484,(or partially owned and 475consolidated) 607, 543 and 523 self-storage properties and related assets, respectively.

39

Table of Contents

​

The following table summarizes the change in number of owned stores from January 1, 20162019 through December 31, 2018:2021:

​

 

 

 

 

 

 

 

    

2018

    

2017

    

2016

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

    

2021

    

2020

    

2019

 

​

​

​

​

​

​

​

​

Balance - January 1

 

484

 

475

 

445

 

 

543

 

523

 

493

​

Stores acquired

 

 1

 

 —

 

10

 

 

—

 

1

 

1

​

Stores developed

 

 —

 

 1

 

 1

 

 

1

 

—

 

—

​

Stores combined (1)

​

(1)

​

—

​

—

​

Balance - March 31

 

485

 

476

 

456

 

 

543

 

524

 

494

​

Stores acquired

 

 1

 

 3

 

 7

 

Stores acquired (2)

 

2

 

2

 

21

​

Stores developed

 

 —

 

 —

 

 1

 

​

2

​

1

​

2

​

Stores combined (1)

 

 —

 

(1)

 

 —

 

Stores combined (3)

​

—

​

—

​

(1)

​

Balance - June 30

 

486

 

478

 

464

 

 

547

 

527

 

516

​

Stores acquired

 

 3

 

 —

 

 7

 

 

2

 

—

 

2

​

Stores developed

 

 1

 

 2

 

 —

 

​

—

​

—

​

1

​

Stores sold

​

(4)

​

—

​

—

​

Balance - September 30

 

490

 

480

 

471

 

 

545

 

527

 

519

​

Stores acquired

 

 5

 

 4

 

 4

 

 

62

 

18

 

5

​

Stores developed

 

 —

 

 1

 

 —

 

​

1

​

—

​

—

​

Stores combined (2)

 

 —

 

(1)

 

 —

 

Stores combined (3)

​

—

​

(1)

​

—

​

Stores sold

 

(2)

 

 —

 

 —

 

 

(1)

 

(1)

 

(1)

​

Balance - December 31

 

493

 

484

 

475

 

 

607

 

543

 

523

​

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

(1)

On May 16, 2017,March 3, 2021, we acquiredcompleted development of a store located in Sacramento, CAArlington, VA for a total cost of approximately $3.7 million, which$26.4 million. The developed store is located directly adjacent to an existing wholly-ownedconsolidated joint venture store. Given their proximity to each other, the stores have been combined in our store count, as well as for operational and reporting purposes.

​

(2)

For the quarter ended June 30, 2021, includes one store acquired by a consolidated joint venture in which we hold a 50% interest.

​

(3)

On October 2, 2017,May 24, 2019 and November 10, 2020, we acquired a storestores located in Keller, TXTempe, AZ and Merritt Island, FL for approximately $4.1$1.6 million whichand $3.9 million, respectively. In each case, the store acquired is located directly adjacentin near proximity to an existing wholly-owned store. Given their proximity to each other, the stores haveeach acquired store has been combined with the existing store in our store count, as well as for operational and reporting purposes.

​

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Table of Contents

Comparison of the Year Ended December 31, 20182021 to the Year Ended December 31, 20172020 (dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Non Same-Store

​

Other/

​

​

​

​

​

​

​

​

​

​

​

​

​

Same-Store Property Portfolio

​

Properties

​

Eliminations

​

Total Portfolio

​

​

    

​

    

    

​

    

​

    

%  

    

    

​

    

    

​

    

    

​

    

    

​

    

    

​

    

    

​

    

​

    

%  

​

​

2021

​

2020

​

Change

​

Change

​

2021

​

2020

​

2021

​

2020

​

2021

​

2020

​

Change

​

Change

​

REVENUES:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Rental income

$

631,410

​

$

557,201

​

$

74,209

 

13.3

%  

$

76,341

​

$

23,808

​

$

—

​

$

—

​

$

707,751

​

$

581,009

​

$

126,742

 

21.8

%  

Other property related income (1)

 

26,399

​

 

24,673

​

 

1,726

 

7.0

%  

 

2,906

​

 

1,280

​

 

54,300

​

 

44,770

​

 

83,605

​

 

70,723

​

 

12,882

 

18.2

%  

Property management fee income

 

—

​

 

—

​

 

—

 

0.0

%  

 

—

​

 

—

​

 

31,208

​

 

27,445

​

 

31,208

​

 

27,445

​

 

3,763

 

13.7

%  

Total revenues

 

657,809

​

 

581,874

​

 

75,935

 

13.1

%  

 

79,247

​

 

25,088

​

 

85,508

​

 

72,215

​

 

822,564

​

 

679,177

​

 

143,387

 

21.1

%  

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

OPERATING EXPENSES:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Property operating expenses (2)

 

192,650

​

 

184,939

​

 

7,711

 

4.2

%  

 

23,457

​

 

9,601

​

 

35,997

​

 

29,094

​

 

252,104

​

 

223,634

​

 

28,470

 

12.7

%  

NET OPERATING INCOME:

 

465,159

​

 

396,935

​

 

68,224

 

17.2

%  

 

55,790

​

 

15,487

​

 

49,511

​

 

43,121

​

 

570,460

​

 

455,543

​

 

114,917

 

25.2

%  

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Store count

 

506

​

 

506

​

​

​

​

​

​

 

101

​

 

37

​

​

​

​

​

​

​

 

607

​

 

543

​

​

​

​

​

​

Total square footage

 

35,490

​

 

35,490

​

​

​

​

​

​

 

8,105

​

 

3,054

​

​

​

​

​

​

​

 

43,595

​

 

38,544

​

​

​

​

​

​

Period end occupancy

 

93.3

%  

 

93.3

%  

​

​

​

​

​

 

86.2

%  

 

80.5

%  

​

​

​

​

​

​

 

92.0

%  

 

92.3

%  

​

​

​

​

​

Period average occupancy

 

94.7

%  

 

92.9

%  

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Realized annual rent per occupied sq. ft. (3)

$

18.78

​

$

16.91

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Depreciation and amortization

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

232,049

​

 

156,573

​

 

75,476

 

48.2

%  

General and administrative

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

47,809

​

 

41,423

​

 

6,386

 

15.4

%  

Subtotal

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

279,858

​

 

197,996

​

 

81,862

 

41.3

%  

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

OTHER (EXPENSE) INCOME

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense on loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

(78,448)

​

 

(75,890)

​

 

(2,558)

 

(3.4)

%  

Loan procurement amortization expense

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

(8,168)

​

 

(2,674)

​

 

(5,494)

 

(205.5)

%  

Loss on early extinguishment of debt

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

(20,328)

​

 

(18,020)

​

 

(2,308)

 

(12.8)

%  

Equity in earnings of real estate ventures

​

​

​

​

​

​

​

​

​

​

 

25,275

​

 

178

​

 

25,097

 

14,099.4

%  

Gains from sales of real estate, net

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

32,698

​

​

6,710

​

​

25,988

​

387.3

%  

Other

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

(10,818)

​

 

(240)

​

 

(10,578)

 

(4,407.5)

%  

Total other expense

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

(59,789)

​

 

(89,936)

​

 

30,147

 

33.5

%  

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

NET INCOME

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

230,813

​

 

167,611

​

 

63,202

 

37.7

%  

NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noncontrolling interests in the Operating Partnership

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

(7,873)

​

 

(1,825)

​

 

(6,048)

 

(331.4)

%  

Noncontrolling interests in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

542

​

 

(165)

​

 

707

 

428.5

%  

NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

$

223,482

​

$

165,621

​

$

57,861

 

34.9

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non Same-Store

 

Other/

 

 

 

 

 

 

 

 

 

 

 

 

 

Same-Store Property Portfolio

 

Properties

 

Eliminations

 

Total Portfolio

 

 

    

 

    

    

 

    

Increase/

    

%  

    

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

Increase/

    

%  

 

 

2018

 

2017

 

(Decrease)

 

Change

 

2018

 

2017

 

2018

 

2017

 

2018

 

2017

 

(Decrease)

 

Change

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

$

483,421

 

$

468,090

 

$

15,331

 

3.3

%  

$

34,114

 

$

20,953

 

$

 —

 

$

 —

 

$

517,535

 

$

489,043

 

$

28,492

 

5.8

%  

Other property related income

 

49,888

 

 

48,105

 

 

1,783

 

3.7

%  

 

4,105

 

 

2,669

 

 

6,163

 

 

4,227

 

 

60,156

 

 

55,001

 

 

5,155

 

9.4

%  

Property management fee income

 

 —

 

 

 —

 

 

 —

 

0.0

%  

 

 —

 

 

 —

 

 

20,253

 

 

14,899

 

 

20,253

 

 

14,899

 

 

5,354

 

35.9

%  

Total revenues

 

533,309

 

 

516,195

 

 

17,114

 

3.3

%  

 

38,219

 

 

23,622

 

 

26,416

 

 

19,126

 

 

597,944

 

 

558,943

 

 

39,001

 

7.0

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

152,442

 

 

147,334

 

 

5,108

 

3.5

%  

 

15,641

 

 

10,616

 

 

28,783

 

 

23,558

 

 

196,866

 

 

181,508

 

 

15,358

 

8.5

%  

NET OPERATING INCOME (LOSS):

 

380,867

 

 

368,861

 

 

12,006

 

3.3

%  

 

22,578

 

 

13,006

 

 

(2,367)

 

 

(4,432)

 

 

401,078

 

 

377,435

 

 

23,643

 

6.3

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Store count

 

456

 

 

456

 

 

 

 

 

 

 

37

 

 

28

 

 

 

 

 

 

 

 

493

 

 

484

 

 

 

 

 

 

Total square footage

 

31,434

 

 

31,434

 

 

 

 

 

 

 

3,185

 

 

2,326

 

 

 

 

 

 

 

 

34,619

 

 

33,760

 

 

 

 

 

 

Period End Occupancy (1)

 

91.2

%  

 

91.5

%  

 

 

 

 

 

 

67.0

%  

 

56.1

%  

 

 

 

 

 

 

 

89.0

%  

 

89.2

%  

 

 

 

 

 

Period Average Occupancy (2)

 

92.7

%  

 

92.9

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized annual rent per occupied sq. ft. (3)

$

16.60

 

$

16.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

143,350

 

 

145,681

 

 

(2,331)

 

(1.6)

%  

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37,712

 

 

34,745

 

 

2,967

 

8.5

%  

Acquisition related costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 —

 

 

1,294

 

 

(1,294)

 

(100.0)

%  

Subtotal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

181,062

 

 

181,720

 

 

(658)

 

(0.4)

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER (EXPENSE) INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense on loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(62,132)

 

 

(56,952)

 

 

(5,180)

 

(9.1)

%  

Loan procurement amortization expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,313)

 

 

(2,638)

 

 

325

 

12.3

%  

Equity in losses of real estate ventures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(865)

 

 

(1,386)

 

 

521

 

37.6

%  

Gains from sale of real estate, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,576

 

 

 —

 

 

10,576

 

100.0

%  

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

206

 

 

872

 

 

(666)

 

(76.4)

%  

Total other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(54,528)

 

 

(60,104)

 

 

5,576

 

9.3

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

165,488

 

 

135,611

 

 

29,877

 

22.0

%  

NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests in the Operating Partnership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,820)

 

 

(1,593)

 

 

(227)

 

(14.2)

%  

Noncontrolling interests in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

221

 

 

270

 

 

(49)

 

(18.1)

%  

NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS

 

 

 

 

 

 

 

 

 

 

$

163,889

 

$

134,288

 

$

29,601

 

22.0

%  

(1)

(1)

Protection plan revenue, which prior to 2021 had been included in our same-store and non same-store portfolio results, is now recorded in other/eliminations. Prior periods have been adjusted for comparability.
(2)

Represents occupancy asFor comparability purposes, current year amounts related to the expiration of certain real estate tax abatements have been excluded from the same-store portfolio results ($296k for the year ended December 31, of the respective year.

2021).

(3)

(2)

Represents the weighted average occupancy for the period.

(3)

Realized annual rent per occupied square foot is computed by dividing rental income by the weighted average occupied square feet for the period.

​

Revenues

​

Rental income increased from $489.0$581.0 million during 2017the year ended December 31, 2020 to $517.5$707.8 million during 2018,for the year ended December 31, 2021, an increase of $28.5$126.7 million, or 5.8%21.8%. The $74.2 million increase in same-store rental income was due primarily due to highera 1.8% increase in average occupancy and an increase in rental rates.  Realized annual rent per square foot on our same-store portfolio increased 3.6% as a result of higher rates for new and existing customers during 2018 ascustomers. Realized annual rent per occupied square foot increased 11.1% for 2021 compared to 2017.2020. The remaining increase iswas primarily attributable to $13.2$52.5 million of additional rental income from the stores acquired or opened in 20172020 and 20182021 included in our non same-store portfolio.

​

Other property related income increased from $55.0$70.7 million in 2017during the year ended December 31, 2020 to $60.2$83.6 million in 2018,for the year ended December 31, 2021, an increase of $5.2$12.9 million, or 9.4%18.2%. The $1.8$1.7 million increase in same-store other property related income iswas mainly attributable to increasedincreases in fee revenue and merchandise sales. The increase was also due to a $5.7 million increase in customer insurance participation. The remainder of the increase is attributable to $1.4 million of additional other property related income derived from the stores acquired or opened in 2017 and 2018 included in our non same-store portfolio and $1.9 million resulting primarily from increased customer insurancestorage protection plan participation at our owned and managed stores.

​

Property management fee income increased from $14.9$27.4 million during 2017the year ended December 31, 2020 to $20.3$31.2 million during 2018,for the year ended December 31, 2021, an increase of $5.4$3.8 million, or 35.9%13.7%. This increase iswas attributable to an increase in management fees relatedrental income at our managed stores for the year ended December 31, 2021 as compared to the third-party management business resulting from more stores under management and higher revenue at managed stores (593 stores as ofyear ended December, 31, 2018 compared to 452 stores as of December 31, 2017).2020.

​

Operating Expenses

​

Property operating expenses increased from $181.5$223.6 million in 2017during the year ended December 31, 2020 to $196.9$252.1 million in 2018,for the year ended December 31, 2021, an increase of $15.4$28.5 million, or 8.5%12.7%. This increase was primarily attributable to a $5.2 million increase in costs associated with the growth in our third-party management program as well as system enhancements, a $5.1The $7.7 million increase in property operating expenses onin the same-store portfolio was primarily due to highera $3.2 million increase in property taxes payroll, and snow removal expenses, and $5.0a $2.7 million increase in advertising. The remainder of the increase was primarily attributable to $13.9 million of increased expenses associated with newly acquired or developed stores.

​

41

Table of Contents

Depreciation and amortization decreasedincreased from $145.7$156.6 million in 2017during the year ended December 31, 2020 to $143.4$232.0 million in 2018, a decreasefor the year ended December 31, 2021, an increase of $2.3$75.5 million, or 1.6%.  This decrease is48.2%.This increase was primarily attributable to five-year assetsdepreciation and amortization associated with newly acquired as partor developed stores.

​

38

Table of the Company’s property acquisitions in 2012 that became fully depreciated during 2017.Contents

General and administrative expenses increased from $34.7$41.4 million in 2017during the year ended December 31, 2020 to $37.7$47.8 million in 2018,for the year ended December 31, 2021, an increase of $3.0$6.4 million, or 8.5%15.4%. The change iswas primarily attributable to increased professional fees, a charge associated with the settlement of a legal action, and payrollpersonnel expenses resulting in part from additional employee headcount to support our growth.

​

Acquisition related costs decreased $1.3 million from the year ended December 31, 2017 to the year ended December 31, 2018 as a result of the Company’s adoption of ASU 2017-01 on January 1, 2018 (see note 2), which now categorizes the majority of our property acquisitions as asset acquisitions, resulting in the capitalization of acquisition related costs.

Other (expense) income

​

Interest expense on loans increased from $57.0$75.9 million in 2017during the year ended December 31, 2020 to $62.1$78.4 million in 2018,for the year ended December 31, 2021, an increase of $5.2$2.6 million, or 9.1%3.4%. The increase is primarilywas attributable to a higher amount of outstanding debt during 2018 as2021 compared to 2017, and higher interest rates during 2018. The average debt balance increased to $1.7 billion during 2018 as compared to $1.6 billion during 2017 as the result of borrowings to2020. To fund a portion of our growth, the Company’s acquisition activity.  average outstanding debt balance increased by $312.6 million to $2.35 billion during 2021 as compared to $2.04 billion during 2020. The increase in the average outstanding debt balance was offset by a decrease in the weighted average effective interest rate on our outstanding debt, increased from 3.79% during 2017 to 3.93% during 2018. which was 3.36% and 3.82% for 2021 and 2020, respectively.

​

Gains from saleLoss on early extinguishment of real estate, net were $10.6debt was $20.3 million for the year ended December 31, 2018, with no comparable gains2021 compared to $18.0 million for the year ended December 31, 2020, an increase of $2.3 million. The 2021 amount was related to the early redemption of $300.0 million of outstanding 4.375% senior notes due 2023 (the “2023 Notes”). The 2020 amount was related to the early redemption of $250.0 million of outstanding 4.800% senior notes due 2022 (the “2022 Notes”) (see “Liquidity and Capital Resources” below).

​

Equity in earnings of real estate ventures increased from $0.2 million during the year ended December 31, 2017.2020 to $25.3 million for the year ended December 31, 2021, an increase of $25.1 million. The increase was mainly due to our portion of the gains associated with HHF’s sale of seven stores (see note 5 to our consolidated financial statements).

​

Gains from sales of real estate, net increased from $6.7 million for the year ended December 31, 2020 to $32.7 million for the year ended December 31, 2021, an increase of $26.0 million. These gains are determined on a transactional basis and, accordingly, are not comparable across reporting periods.

​

42

TableFor the year ended December 31, 2021, the component of Contents

other (expense) income designated as other includes $15.0 million of transaction-related expenses comprised primarily of severance costs associated with the acquisition of LAACO. There were no such expenses for the year ended December 31, 2020.

​

Comparison of the Year Ended December 31, 20172020 to the Year Ended December 31, 2016 (dollars in thousands)2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non Same-Store

 

Other/

 

 

 

 

 

 

 

 

 

 

 

 

 

Same-Store Property Portfolio

 

Properties

 

Eliminations

 

Total Portfolio

 

 

   

 

    

    

 

    

Increase/

    

%  

    

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

Increase/

    

%  

 

 

2017

 

2016

 

(Decrease)

 

Change

 

2017

 

2016

 

2017

 

2016

 

2017

 

2016

 

(Decrease)

 

Change

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

$

444,290

 

$

424,977

 

$

19,313

 

4.5

%  

$

44,753

 

$

24,624

 

$

 —

 

$

 —

 

$

489,043

 

$

449,601

 

$

39,442

 

8.8

% 

Other property related income

 

46,131

 

 

44,689

 

 

1,442

 

3.2

%  

 

4,643

 

 

2,574

 

 

4,227

 

 

2,992

 

 

55,001

 

 

50,255

 

 

4,746

 

9.4

% 

Property management fee income

 

 —

 

 

 —

 

 

 —

 

0.0

%  

 

 —

 

 

 —

 

 

14,899

 

 

10,183

 

 

14,899

 

 

10,183

 

 

4,716

 

46.3

% 

Total revenues

 

490,421

 

 

469,666

 

 

20,755

 

4.4

%  

 

49,396

 

 

27,198

 

 

19,126

 

 

13,175

 

 

558,943

 

 

510,039

 

 

48,904

 

9.6

% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

139,092

 

 

135,366

 

 

3,726

 

2.8

%  

 

18,858

 

 

11,936

 

 

23,558

 

 

18,545

 

 

181,508

 

 

165,847

 

 

15,661

 

9.4

% 

NET OPERATING INCOME (LOSS):

 

351,329

 

 

334,300

 

 

17,029

 

5.1

%  

 

30,538

 

 

15,262

 

 

(4,432)

 

 

(5,370)

 

 

377,435

 

 

344,192

 

 

33,243

 

9.7

% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Store count

 

432

 

 

432

 

 

 

 

 

 

 

52

 

 

43

 

 

 

 

 

 

 

 

484

 

 

475

 

 

 

 

 

 

Total square footage

 

29,561

 

 

29,561

 

 

 

 

 

 

 

4,199

 

 

3,297

 

 

 

 

 

 

 

 

33,760

 

 

32,858

 

 

 

 

 

 

Period End Occupancy (1)

 

91.7

%  

 

91.8

%  

 

 

 

 

 

 

71.7

%  

 

71.4

%  

 

 

 

 

 

 

 

89.2

%  

 

89.7

%  

 

 

 

 

 

Period Average Occupancy (2)

 

93.1

%  

 

92.9

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized annual rent per occupied sq. ft. (3)

$

16.15

 

$

15.48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

145,681

 

 

161,865

 

 

(16,184)

 

(10.0)

% 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

34,745

 

 

32,823

 

 

1,922

 

5.9

% 

Acquisition related costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,294

 

 

6,552

 

 

(5,258)

 

(80.3)

% 

Subtotal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

181,720

 

 

201,240

 

 

(19,520)

 

(9.7)

% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER (EXPENSE) INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense on loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(56,952)

 

 

(50,399)

 

 

(6,553)

 

(13.0)

% 

Loan procurement amortization expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,638)

 

 

(2,577)

 

 

(61)

 

(2.4)

% 

Equity in losses of real estate ventures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,386)

 

 

(2,662)

 

 

1,276

 

47.9

% 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

872

 

 

1,062

 

 

(190)

 

(17.9)

% 

Total other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(60,104)

 

 

(54,576)

 

 

(5,528)

 

(10.1)

% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

135,611

 

 

88,376

 

 

47,235

 

53.4

% 

NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests in the Operating Partnership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,593)

 

 

(941)

 

 

(652)

 

(69.3)

% 

Noncontrolling interests in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

270

 

 

470

 

 

(200)

 

(42.6)

% 

NET INCOME ATTRIBUTABLE TO THE COMPANY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

134,288

 

$

87,905

 

$

46,383

 

52.8

% 

Distribution to preferred shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 —

 

 

(5,045)

 

 

5,045

 

100.0

% 

Preferred share redemption charge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 —

 

 

(2,937)

 

 

2,937

 

100.0

% 

NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS

 

 

 

 

 

 

 

 

 

 

$

134,288

 

$

79,923

 

$

54,365

 

68.0

% 

(1)

Represents occupancy as of December 31 of the respective year.

(2)

Represents the weighted average occupancy for the period.

(3)

Realized annual rent per occupied square foot is computed by dividing rental income by the weighted average occupied square feet for the period.

​

Revenues

Rental income increased from $449.6 million during 2016 to $489.0 million during 2017, an increase of $39.4 million, or 8.8%.  The increase in same-store rental income was primarily due to an increase in average occupancy of 20 basis points and higher rental rates.  Realized annual rent per square foot on our same-store portfolio increased 4.3% as a result of higher rates for new and existing customers during 2017 as compared to 2016.  The remaining increase is primarily attributable to $20.1 million of additional income from the stores acquired in 2016 and 2017 included in our non same-store portfolio.

Other property related income increased from $50.3 million in 2016 to $55.0 million in 2017, an increase of $4.7 million, or 9.4%.  The $1.4 million increase in same-store other property related income is mainly attributable to increased customer insurance participation and higher average occupancy.  The remainder of the increase is attributable to other property related income derived from the stores acquired or opened in 2016 and 2017 included in our non same-store portfolio.

Property management fee income increased from $10.2 million during 2016 to $14.9 million during 2017, an increase of $4.7 million, or 46.3%.  This increase is attributable to an increase in management fees relatedRefer to the third-party management business resulting from more stores under managementsection entitled “Results of Operations” within Item 7. “Management’s Discussion and higher revenue at managed stores (452 stores asAnalysis of December 31, 2017 compared to 316 stores asFinancial Condition and Results of December 31, 2016).

Operating Expenses

Property operating expenses increased from $165.8 million in 2016 to $181.5 million in 2017, an increaseOperations” of $15.7 million, or 9.4%, which is primarily attributable to $7.0 million of increased expenses associated with newly acquired stores, a $3.7 million increase in property operating expensesour Annual Report on the same-store portfolio, primarily due to higher property tax expenses, and $0.9 million related to hurricane damage, net of expected insurance proceeds.

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Depreciation and amortization decreased from $161.9 million in 2016 to $145.7 million in 2017, a decrease of $16.2 million, or 10.0%.  This decrease is primarily attributable to five-year assets acquired as part of the Company’s property acquisitions in 2011 and 2012 that became fully depreciated during 2016 and 2017.

General and administrative expenses increased from $32.8 million in 2016 to $34.7 million in 2017, an increase of $1.9 million, or 5.9%. The change is primarily attributable to increased professional fees and payroll expenses resulting from additional employee headcount to support our growth.

Acquisition related costs decreased from $6.6 million during 2016 to $1.3 million during 2017, a decrease of $5.3 million, or 80.3%. Acquisition-related costs are non-recurring and fluctuate based on periodic investment activity.

Other (expense) income

Interest expense on loans increased from $50.4 million duringForm 10-K for the year ended December 31, 2016 to $57.0 million during2020 for a comparison of the year ended December 31, 2017, an increase of $6.6 million, or 13.0%.  The increase is primarily attributable2020 to a higher amount of outstanding debt during 2017 as compared to 2016, partially offset by lower interest rates during 2017. The average debt balance increased $199.4 million to $1.6 billion during 2017 as compared to $1.4 billion during 2016 as the result of borrowings to fund a portion of the Company’s acquisition activity.  The weighted average effective interest rate on our outstanding debt decreased from 3.82% during 2016 to 3.79% during 2017. 

Equity in losses of real estate ventures fluctuated from a loss of $2.7 million during the year ended December 31, 2016 to a loss of $1.4 million during the year ended December 31, 2017, a change of $1.3 million, or 47.9%.  The change is mainly driven by our share of the losses attributable to HVP III, a real estate venture in which we own a 10% interest.  The loss incurred in 2016 was primarily the result of amortization expense associated with the in-place lease intangible that was recorded in connection with HVP III’s acquisition of 68 properties during 2015 and 2016. These assets became fully amortized during 2016 and 2017.2019.

​

Non-GAAP Financial Measures

​

NOI

​

We define net operating income, which we refer to as NOI,“NOI”, as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income (loss): interest expense on loans, loan procurement amortization expense, loan procurement amortization expense —loss on early repaymentextinguishment of debt, acquisition related costs, equity in losses of real estate ventures, other expense, depreciation and amortization expense, general and administrative expense, and deducting from net income (loss): gains from saleequity in earnings of real estate net, income from discontinued operations,ventures, gains from dispositionsales of discontinued operations,real estate, net, other income, gains from remeasurement of investments in real estate ventures 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 stores, and for all of our stores 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:

​

·

●

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

​

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·

●

it is widely used in the real estate industry and the self-storage industry to measure the performance and value of real estate assets without regard to various items included in net income that do not relate to or are not indicative of operating performance, such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets; and

​

·

●

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

44

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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.

​

FFO

​

Funds from operations (“FFO”) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. The April 2002 National Policy Bulletin of the National Association of Real Estate Investment Trusts, as amended and restated, defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate and related impairment charges, plus real estate depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.

​

Management uses FFO as a key performance indicator in evaluating the operations of our stores. Given the nature of our business as a real estate owner and operator, we consider FFO a key measure of our operating performance that is not specifically defined by accounting principles generally accepted in the United States. We believe that FFO is useful to management and investors as a starting point in measuring our operational performance because FFO 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 real estate, gains from remeasurement of investments in real estate ventures, impairments of depreciable assets and depreciation, which can make periodic and peer analyses of operating performance more difficult. Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies.

​

FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to further understand our performance, FFO should be compared with our reported net income and considered in addition to cash flows computed in accordance with GAAP, as presented in our Consolidated Financial Statements.consolidated financial statements.

​

FFO, as adjusted

​

FFO, as adjusted represents FFO as defined above, excluding the effects of acquisition related costs, gains or losses from early extinguishment of debt, and non-recurring items, which we believe are not indicative of the Company’s operating results. We present FFO, as adjusted because we believe it is a helpful measure in understanding our results of operations insofar as we believe that the items noted above that are included in FFO, but excluded from FFO, as adjusted are not indicative of our ongoing operating results. We also believe that the analyst community considers our FFO, as adjusted (or similar measures using different terminology) when evaluating us. Because other REITs or real estate companies may not compute FFO, as adjusted in the same manner as we do, and may use different terminology, our computation of FFO, as adjusted may not be comparable to FFO, as adjusted reported by other REITs or real estate companies.

​

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The following table presents a reconciliation of net income to FFO and FFO, as adjusted, for the years ended December 31, 20182021 and 2017 (in thousands):2020:

​

 

 

 

 

 

 

 

 

 

For the Year Ended December 31,

 

    

2018

    

2017

 

 

 

 

 

 

 

Net income attributable to the Company’s common shareholders

 

$

163,889

 

$

134,288

 

 

 

 

 

 

 

Add (deduct):

 

 

 

 

 

 

Real estate depreciation and amortization:

 

 

 

 

 

 

Real property

 

 

140,538

 

 

142,961

Company’s share of unconsolidated real estate ventures

 

 

10,286

 

 

10,243

Gains from sale of real estate, net

 

 

(10,576)

 

 

 —

Noncontrolling interests in the Operating Partnership

 

 

1,820

 

 

1,593

FFO attributable to common shareholders and OP unitholders

 

$

305,957

 

$

289,085

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

Loan procurement amortization expense - early repayment of debt

 

 

 —

 

 

190

Acquisition related costs

 

 

 —

 

 

1,319

Loss related to settlement of legal action (1)

 

 

1,828

 

 

 —

Property damage related to hurricanes, net of expected insurance proceeds (2)

 

 

 —

 

 

874

FFO, as adjusted, attributable to common shareholders and OP unitholders

 

$

307,785

 

$

291,468

 

 

 

 

 

 

 

Weighted-average diluted shares outstanding

 

 

185,495

 

 

181,448

Weighted-average diluted units outstanding

 

 

2,021

 

 

2,150

Weighted-average diluted shares and units outstanding

 

 

187,516

 

 

183,598

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

    

2021

    

2020

​

​

​

​

​

​

​

Net income attributable to the Company’s common shareholders

​

$

223,482

​

$

165,621

​

​

​

​

​

​

​

Add (deduct):

​

​

​

​

​

​

Real estate depreciation and amortization:

​

​

​

​

​

​

Real property

​

 

226,599

​

 

152,897

Company’s share of unconsolidated real estate ventures

​

 

8,510

​

 

7,430

Gains from sales of real estate, net (1)

​

 

(56,181)

​

 

(6,710)

Noncontrolling interests in the Operating Partnership

​

 

7,873

​

 

1,825

FFO attributable to common shareholders and OP unitholders

​

$

410,283

​

$

321,063

​

​

​

​

​

​

​

Add (deduct):

​

​

​

​

​

​

Loss on early repayment of debt (2)

​

​

20,884

​

​

18,020

Transaction-related expenses (3)

​

 

14,986

​

 

—

Loan forgiveness income (4)

​

​

(1,546)

​

 

—

Bridge loan fee (5)

​

​

4,000

​

 

—

FFO, as adjusted, attributable to common shareholders and OP unitholders

​

$

448,607

​

$

339,083

​

​

​

​

​

​

​

Weighted average diluted shares outstanding

​

​

205,009

​

 

194,943

Weighted average diluted units outstanding

​

 

7,117

​

 

2,137

Weighted average diluted shares and units outstanding

​

 

212,126

​

​

197,080

​

(1)

The year ended December 31, 2021 includes $23.5 million of gains from sale of real estate, net that are included in the Company’s share of equity in earnings of real estate ventures.

​

Loss related to settlement of legal action for(2)

For the year ended December 31, 2018, represents a charge related2021, loss on early extinguishment of debt relates to a preliminary settlement agreement for$20.0 million prepayment premium and a class action alleging violations$0.3 million write-off of a state specific deceptive and unfair trade practices act.

(2)

Property damage related to hurricanes, netunamortized loan procurement costs associated with the Operating Partnership’s redemption, in full, of expected insurance proceeds for the year endedits 2023 Notes on December 31, 2017 includes $0.123, 2021, as well as $0.6 million of storm damage related costs that are included in the Company’s share of equity in lossesearnings of real estate ventures. For the year ended December 31, 2020, loss on early extinguishment of debt relates to a $17.6 million prepayment premium and a $0.4 million write-off of unamortized loan procurement costs associated with the Operating Partnership’s redemption, in full, of its 2022 Notes on October 30, 2020.

​

(3)Transaction-related expenses include severance expenses ($14.8 million) and other transaction expenses ($0.2 million). The predecessor company, LAACO, Ltd., entered into severance agreements with certain employees, including members of their executive team, prior to our acquisition of LAACO, Ltd. on December 9, 2021. These costs were known to us and the assumption of the obligation to make these payments post-closing was contemplated in our net consideration paid in the transaction. In accordance with GAAP, and based on the specific details of the arrangements with the employees prior to closing, these costs are considered post-combination compensation expenses. We expect that an additional $10.3 million in severance costs will be expensed during the six months ended June 30, 2022. Transaction-related expenses are included in the component of other income (expense) designated as other.

​

(4)The Company assumed a Paycheck Protection Program loan in conjunction with the LAACO transaction. This loan was subsequently forgiven by the Small Business Administration and the associated income is included in the component of other income (expense) designated as other.

​

(5)Relates to a nonrefundable commitment fee to obtain bridge financing in the event that the Company's November 2021 senior note offerings were delayed, or could not be executed, in advance of the LAACO transaction. Upon issuance of the senior notes, the bridge financing commitment expired and the fee was fully amortized. The amortization of this fee is included in loan procurement amortization expense.

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Table of Contents

Cash Flows

​

Comparison of the Year Ended December 31, 20182021 to the Year Ended December 31, 20172020

​

A comparison of cash flow related to operating, investing and financing activities for the years ended December 31, 20182021 and 20172020 is as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

​

 

Net cash provided by (used in):

    

2021

    

2020

    

Change

 

​

​

(in thousands)

 

​

​

​

​

​

​

​

​

​

​

​

Operating activities

​

$

449,185

​

$

351,033

​

$

98,152

​

Investing activities

​

$

(1,852,668)

​

$

(511,441)

​

$

(1,341,227)

​

Financing activities

​

$

1,410,572

​

$

108,196

​

$

1,302,376

​

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

 

 

Net cash provided by (used in):

    

2018

    

2017

    

Change

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

$

304,335

 

$

291,914

 

$

12,421

 

Investing activities

 

$

(322,259)

 

$

(150,303)

 

$

(171,956)

 

Financing activities

 

$

15,248

 

$

(143,319)

 

$

158,567

 

​

Cash provided by operating activities increased from $351.0 million for the yearsyear ended December 31, 2018 and 2017 was $304.32020 to $449.2 million and $291.9 million, respectively,for the year ended December 31, 2021, reflecting an increase of $12.4$98.2 million. Our increased cash flow from operating activities iswas primarily attributable to our 2017stores acquired and 2018 acquisitionsdeveloped during 2020 and 2021 and increased net operating income levels onin the same-store portfolio in the 20182021 period as compared to the 2017corresponding 2020 period.

​

Cash used in investing activities increased from $150.3$511.4 million for the year ended December 31, 20172020 to $322.3$1,852.7 million for the year ended December 31, 2018,2021, reflecting an increase of $172.0$1,341.2 million. The change was primarily driven by an increase inthe $1,679.0 million of cash used for the acquisition of LAACO in 2021 offset by a decrease in cash used for acquisitions of other storage properties.properties compared to the 2020 period. Excluding the storage properties acquired through the acquisition of LAACO, cash used during the year ended December 31, 2021 included the acquisition of nine stores (including the acquisition of a 50% membership interest in a consolidated joint venture that owns a single store) for an aggregate net purchase price of $152.8 million. Cash used during the year ended December 31, 2018 related to2020 included the acquisition of ten21 stores for an aggregate net purchase price of $227.5$406.4 million, inclusivenet of $7.2$154.4 million of assumed debt and $4.8$175.1 million of OP units issued, whileissued. Additionally, cash used

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Table of Contents

duringdistributed from real estate ventures increased from $6.2 million for the year ended December 31, 2017 related2020 to $66.6 million for the acquisitionyear ended December 31, 2021, an increase of seven stores for an aggregate purchase price of $80.7$60.4 million, inclusive of $6.2 million of assumed debt and $12.3 million of OP units issued. The change was also driven by an $18.9 million increase in our investment in real estate ventures primarily due to $14.1 million used to fund the acquisition of twelve properties during 2018 by HVP IV and $5.0 million to fund our preferred investment in Capital Storage (see note 2). The remainder of the increase was primarily due to a $17.2 million increase in development costs resulting from the acquisitiondistribution of the noncontrolling interest in a previously consolidated joint venture offset by a $16.4 million increase in proceeds received from the sale of two storesseven storage properties sold by our HHF real estate venture (see note 5 to the Company’s consolidated financial statements) during 2018 with no property sales in the 2017 period.2021.

​

Cash provided by financing activities was $15.2$108.2 million in 2018for the year ended December 31, 2020 compared to cash used in financing activities$1,410.6 million for the year ended December 31, 2021, reflecting an increase of $143.3$1,302.4 million. During the years ended December 31, 2021 and 2020, we received net proceeds from unsecured senior notes of $1,043.4 million in 2017, a changeand $445.8 million, respectively, reflecting an increase of $158.6$597.6 million. This changeThere was primarily the resultalso an increase of a $75.4$844.9 million net increase in revolving credit facility borrowings and a $102.2 million increase in proceeds received from the issuance of common shares during the year ended December 31, 20182021 compared to the year ended December 31, 2017.2020, primarily as a result of our underwritten offering of 15.5 million common shares to partially fund the LAACO acquisition. These cash inflows were offset by a $26.4$87.3 million increase in cash distributions paid to common shareholders and noncontrolling interests in the Operating Partnershipof principal payments made on mortgage loans during the year ended December 31, 20182021 compared to $46.1 million during the year ended December 31, 2017, resulting from2020, reflecting an increase of $41.2 million that was primarily attributable to the increase in the common dividend per share and numberrepayment of shares outstanding.LAACO’s outstanding long-term debt at closing.

​

Comparison of the Year Ended December 31, 20172020 to the Year Ended December 31, 20162019

​

A comparisonRefer to the section entitled “Cash Flows” within Item 7. “Management’s Discussion and Analysis of cash flow related to operating, investingFinancial Condition and financing activitiesResults of Operations” of our Annual Report on Form 10-K for the yearsyear ended December 31, 2017 and 2016 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

 

 

Net cash provided by (used in):

    

2017

    

2016

    

Change

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

$

291,914

 

$

263,274

 

$

28,640

 

Investing activities

 

$

(150,303)

 

$

(559,288)

 

$

408,985

 

Financing activities

 

$

(143,319)

 

$

219,411

 

$

(362,730)

 

Cash provided by operating activities2020 for a comparison of the yearsyear ended December 31, 2017 and 2016 was $291.9 million and $263.3 million, respectively, reflecting an increase of $28.6 million.  Our increased cash flow from operating activities is primarily attributable to our 2016 and 2017 acquisitions and increased net operating income levels on the same-store portfolio in the 2017 period as compared2020 to the 2016 period.year ended December 31, 2019.

​

Cash used in investing activities was $150.3 million in 2017 and $559.3 million in 2016, a decrease of $409.0 million driven by a decrease in cash used for acquisitions of self-storage properties.  Cash used during 2017 related to the acquisition of seven stores for an aggregate purchase price of $80.7 million, inclusive of $6.2 million of assumed debt and $12.3 million of OP units issued, while cash used in investing activities during 2016 related to the acquisition of 28 stores for an aggregate purchase price of $403.6 million, inclusive of $6.5 million of assumed debt. The change is also driven by a decrease in cash used for development costs resulting from the acquisition of a development property by a consolidated joint venture for $67.2 million, inclusive of $35.0 million of assumed debt, during 2016.

Cash used in financing activities was $143.3 million in 2017 compared to cash provided by financing activities of $219.4 million in 2016, a change of $362.7 million.  The change is primarily a result of $298.5 million of net proceeds from our issuance of unsecured senior notes in August 2016 compared to $103.2 million of net proceeds from our issuance of unsecured senior notes in April 2017. There was also a $106.5 million decrease in proceeds received from the issuance and sale of common shares from 2016 to 2017 and a $100.0 million term loan repayment during April 2017 with no comparable repayment in the prior year.  We also paid $77.6 million to redeem our 7.75% Series A Preferred shares in November 2016 with no similar transaction in 2017. Additionally, cash distributions paid to common shareholders, preferred shareholders, and noncontrolling interests in the Operating Partnership increased $39.6 million from 2016 to 2017, resulting primarily from the increase in the common dividend per share and number of shares outstanding.

Liquidity and Capital Resources

​

Liquidity Overview

​

Our cash flow from operations has historically been one of our primary sources of liquidity used to fund debt service, distributions and capital expenditures. We derive substantially all of our revenue from customers who lease space from us at our stores and fees earned from managing stores. Therefore, our ability to generate cash from operations is dependent on the rents that we are able to charge and collect from our customers. We believe that the properties in which we invest, self-storage properties, are less sensitive than other real

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estate product types to near-term economic downturns. However, prolonged economic downturns will adversely affect our cash flows from operations.

​

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Table of Contents

In order to qualify as a REIT for federal income tax purposes, the Parent Company is required to distribute at least 90% of its REIT taxable income, excluding capital gains, to its shareholders on an annual basis orand must pay federal income tax.tax on undistributed income to the extent it distributes less than 100% of its REIT taxable income. The nature of our business, coupled with the requirement that we distribute a substantial portion of our income on an annual basis, will cause us to have substantial liquidity needs over both the short term and the long term.

​

Our short-term liquidity needs consist primarily of funds necessary to pay operating expenses associated with our stores, refinancing of certain mortgage indebtedness, interest expense and scheduled principal payments on debt, expected distributions to limited partners and shareholders, capital expenditures and the development of new stores. These funding requirements will vary from year to year, in some cases significantly. In the 20192022 fiscal year, we expect recurring capital expenditures to be approximately $10.0$10.5 million to $15.0$15.5 million, planned capital improvements and store upgrades to be approximately $5.0$8.5 million to $10.0$13.5 million and costs associated with the development of new stores to be approximately $30.0$27.0 million to $45.0$37.0 million. After giving effect to the subsequent repayment of the $200.0 million outstanding indebtedness under the term loan portion of our Credit Facility in January 2019 (see “Recent Developments”), as of December 31, 2018, our remainingOur currently scheduled principal payments on debt are approximately $11.7$2.4 million in 2019.2022.

​

Our most restrictive financial covenants limit the amount of additional leverage we can add; however, we believe cash flows from operations, access to equity financing, including through our “at-the-market”at-the-market equity program and available borrowings under our Credit FacilityRevolver (defined below) provide adequate sources of liquidity to enable us to execute our current business plan and remain in compliance with our covenants.

​

Our liquidity needs beyond 20192022 consist primarily of contractual obligations which include repayments of indebtedness at maturity, as well as potential discretionary expenditures such as (i) non-recurring capital expenditures; (ii) redevelopment of operating stores; (iii) acquisitions of additional stores; and (iv) development of new stores. We will have to satisfy the portion of our needs not covered by cash flow from operations through additional borrowings, including borrowings under our Credit Facility,Revolver, sales of common or preferred shares of the Parent Company and common or preferred units of the Operating Partnership and/or cash generated through store dispositions and joint venture transactions.

​

We believe that, as a publicly traded REIT, we will have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional debt and the issuance of additional equity. However, we cannot provide any assurance that this will be the case. Our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. In addition, dislocation in the United States debt markets may significantly reduce the availability and increase the cost of long-term debt capital, including conventional mortgage financing and commercial mortgage-backed securities financing. There can be no assurance that such capital will be readily available in the future. Our 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.

​

As of December 31, 2018,2021, we had approximately $3.8$11.1 million in available cash and cash equivalents. In addition, we had approximately $303.8$539.5 million of availability for borrowings under our Credit Facility.Revolver.

​

Unsecured Senior Notes

​

On November 30, 2021, we issued $550.0 million in aggregate principal amount of unsecured senior notes due December 15, 2028, which bear interest at a rate of 2.250% per annum (the “2028 Notes”) and $500.0 million in aggregate principal amount of unsecured senior notes due February 15, 2032, which bear interest at a rate of 2.500% per annum (the “2032 Notes”). The 2028 Notes were priced at 99.515% of the principal amount to yield 2.325% at maturity, and the 2032 Notes were priced at 99.219% of the principal amount to yield 2.587% at maturity. Net proceeds from the offering were used to fund a portion of the purchase price for the acquisition of LAACO. The remaining proceeds from the offerings were used to repay, in full, $300.0 million of outstanding 4.375% senior notes due in December 2023 (the “2023 Notes”) as well as for working capital and other general corporate purposes.

​

43

Table of Contents

Our unsecured senior notes are summarized as follows (collectively referred to as the “Senior Notes”):

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

   December 31, 

    

Effective

 

Issuance

 

Maturity

 

Unsecured Senior Notes

    

2018

    

2017

    

Interest Rate

 

Date

 

Date

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

$250M 4.800% Guaranteed Notes due 2022

 

$

250,000

 

$

250,000

 

4.82

%  

 

Jun-12

 

Jul-22

 

$300M 4.375% Guaranteed Notes due 2023 (1)

 

 

300,000

 

 

300,000

 

4.33

%  

 

Various (1)

 

Dec-23

 

$300M 4.000% Guaranteed Notes due 2025 (2)

 

 

300,000

 

 

300,000

 

3.99

%  

 

Various (2)

 

Nov-25

 

$300M 3.125% Guaranteed Notes due 2026

 

 

300,000

 

 

300,000

 

3.18

%  

 

Aug-16

 

Sep-26

 

Principal balance outstanding

 

 

1,150,000

 

 

1,150,000

 

 

 

 

 

 

 

 

Less: Discount on issuance of unsecured senior notes, net

 

 

(568)

 

 

(617)

 

 

 

 

 

 

 

 

Less: Loan procurement costs, net

 

 

(5,908)

 

 

(6,923)

 

 

 

 

 

 

 

 

Total unsecured senior notes, net

 

$

1,143,524

 

$

1,142,460

 

 

 

 

 

 

 

 

48

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

December 31, 

    

Effective

​

Issuance

​

Maturity

 

Unsecured Senior Notes

    

2021

    

2020

    

Interest Rate

​

Date

​

Date

 

​

​

(in thousands)

​

​

​

​

​

​

​

 

$300M 4.375% Guaranteed Notes due 2023 (1) (2)

​

$

—

​

$

300,000

 

4.33

%  

​

Various (2)

​

Dec-23

​

$300M 4.000% Guaranteed Notes due 2025 (3)

​

 

300,000

​

 

300,000

 

3.99

%  

​

Various (3)

​

Nov-25

​

$300M 3.125% Guaranteed Notes due 2026

​

​

300,000

​

​

300,000

​

3.18

%  

​

Aug-16

​

Sep-26

​

$550M 2.250% Guaranteed Notes due 2028

​

​

550,000

​

​

—

​

2.33

%  

​

Nov-21

​

Dec-28

​

$350M 4.375% Guaranteed Notes due 2029

​

​

350,000

​

​

350,000

​

4.46

%  

​

Jan-19

​

Feb-29

​

$350M 3.000% Guaranteed Notes due 2030

​

​

350,000

​

​

350,000

​

3.04

%  

​

Oct-19

​

Feb-30

​

$450M 2.000% Guaranteed Notes due 2031

​

​

450,000

​

​

450,000

​

2.10

%  

​

Oct-20

​

Feb-31

​

$500M 2.500% Guaranteed Notes due 2032

​

​

500,000

​

​

—

​

2.59

%  

​

Nov-21

​

Feb-32

​

Principal balance outstanding

​

​

2,800,000

​

​

2,050,000

​

​

​

​

​

​

​

​

Less: Discount on issuance of unsecured senior notes, net

​

​

(13,455)

​

​

(7,470)

​

​

​

​

​

​

​

​

Less: Loan procurement costs, net

​

​

(18,336)

​

​

(12,158)

​

​

​

​

​

​

​

​

Total unsecured senior notes, net

​

$

2,768,209

​

$

2,030,372

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(1)

On December 23, 2021, the Operating Partnership redeemed, in full, the 2023 Notes, with a portion of the net proceeds from the 2028 Notes and 2032 Notes issued on November 30, 2021. In connection with the redemption of the 2023 Notes, we recognized a loss on early debt extinguishment of $20.3 million, of which $20.0 million represents a prepayment premium and $0.3 million represents the write-off of unamortized loan procurement costs.

​

(2)

On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.375% senior notes due 2023, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.375% senior notes due December 15, 2023 issued on December 17, 2013. The $50.0 million and $250.0 million tranches were priced at 105.040% and 98.995%, respectively, of the principal amount to yield 3.495% and 4.501%, respectively, to maturity. The combined weighted-averageweighted average effective interest rate of the 2023 notes is 4.330%.

​

(2)

(3)

On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.000% senior notes due 2025, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.000% senior notes due November 15, 2025 issued on October 26, 2015. The $50.0 million and $250.0 million tranches were priced at 101.343% and 99.735%, respectively, of the principal amount to yield 3.811% and 4.032%, respectively, to maturity. The combined weighted-averageweighted average effective interest rate of the 2025 notes is 3.994%.

​

The indenture under which the Senior Notes were issued restricts the ability of the Operating Partnership and its subsidiaries to incur debt unless the Operating Partnership and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more than 1.5:11.0 after giving effect to the incurrence of the debt. The indenture also restricts the ability of the Operating Partnership and its subsidiaries to incur secured debt unless the Operating Partnership and its consolidated subsidiaries comply with a secured debt leverage ratio not to exceed 40% after giving effect to the incurrence of the debt. The indenture also contains other financial and customary covenants, including a covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Operating Partnership and its consolidated subsidiaries. As of and for the year ended December 31, 2018,2021, the Operating Partnership was in compliance with all of the financial covenants under the Senior Notes.

​

Revolving Credit Facility and Unsecured Term Loans

​

On December 9, 2011, we entered into a credit agreement (the “Credit Facility”),. On June 19, 2019, we amended and restated, in its entirety, the Credit Facility (the “Amended and Restated Credit Facility”) which, was subsequently amended on April 5, 2012, June 18, 2013,subsequent to the amendment and April 22, 2015 to provide for, amongst other things,restatement, is comprised of a $500.0$750.0 million unsecured revolving facility (the “Revolver”) with a maturity date of April 22, 2020.  Pricingmaturing on June 19, 2024. Under the Amended and Restated Credit Facility, pricing on the Revolver is dependent onupon our unsecured debt credit ratings. At ourthe Company’s current Baa2/BBB level, amounts drawn under the Revolver are priced at 1.25%1.10% over LIBOR, inclusive of a facility fee of 0.15%.

As of December 31, 2018, $303.82021, borrowings under the Revolver had an interest rate of 1.20%. Additionally, as of December 31, 2021, $539.5 million was available for borrowing under the Revolver. The available balance under the Revolver is reduced by an outstanding letter of credit of $0.7$0.6 million.

44

Table of Contents

Under the Amended and Restated Credit Facility, our ability to borrow under the Revolver is subject to ongoing compliance with certain financial covenants which include, among other things, (1) a maximum total indebtedness to total asset value of 60.0%, and (2) a minimum fixed charge coverage ratio of 1.5:1.0. As of and for the year ended December 31, 2018, we also had a $200.0 million unsecured term loan outstanding under2021, the Credit Facility, which is includedOperating Partnership was in the table below.compliance with all of its financial covenants.

​

On June 20, 2011, we entered into an unsecured term loan agreement (the “Term Loan Facility”), which was subsequently amended on June 18, 2013 and August 5, 2014, consisting of, among other things, a $100.0 million unsecured term loan with a five-year maturity and a $100.0 million unsecured term loan with a seven-year maturity. On April 6, 2017, we used the net proceeds from the issuance of $50.0 million of our 4.375% Senior Notes due 2023 and $50.0 million of our 4.000% Senior Notes due 2025 to repay all of the outstanding indebtedness under our five-year $100.0 million unsecured term loan that was scheduled to mature in January 2020. On June 2018.

Our unsecured term loans19, 2019, we used an initial advance at closing of the Amended and Restated Credit Facility to repay all of the outstanding indebtedness under the Credit Facility and Term Loan Facility are summarized below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying Value as of:

 

Effective Interest

 

 

 

 

    

  December 31, 

    

Rate as of

 

Maturity

 

Unsecured Term Loans

    

2018

    

2017

    

December 31, 2018 (1)

 

Date

 

 

 

(in thousands)

 

 

 

 

 

 

Credit Facility

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured term loan (2)

 

$

200,000

 

$

200,000

 

3.80

%  

 

Jan-19

 

Term Loan Facility

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured term loan

 

 

100,000

 

 

100,000

 

3.65

%  

 

Jan-20

 

Principal balance outstanding

 

 

300,000

 

 

300,000

 

 

 

 

 

 

Less: Loan procurement costs, net

 

 

(201)

 

 

(604)

 

 

 

 

 

 

Total unsecured term loans, net

 

$

299,799

 

$

299,396

 

 

 

 

 

 

(1)

Pricing on the Term Loan Facility and the unsecured term loan under the Credit Facility is dependent on our unsecured debt credit ratings. At our current Baa2/BBB level, amounts drawn under the term loan that matured in January 2019 were priced at 1.30% over LIBOR, while amounts drawn under the term loan scheduled to mature in January 2020 are priced at 1.15% over LIBOR.  As of December 31, 2018, borrowings under the Credit Facility, inclusive of the Revolver, and Term Loan Facility, as amended, had an effective weighted average interest rate of 3.75%.

49

Table of Contents

(2)

On January 31, 2019, we used a portion of the net proceeds from the issuance of $350.0 million of 4.375% Senior Notes due 2029 (see “Recent Developments”) to repay all of the outstanding indebtedness under the unsecured term loan portion of the Credit Facility that was scheduled to mature in January 2019. 

The Term Loan Facility and the unsecured term loan under the Credit Facility were fully drawn as of December 31, 2018 and no further borrowings may be made under the term loans.  Our ability to borrow under the Revolver is subject to ongoing compliance with certain financial covenants which include:

·

Maximum total indebtedness to total asset value of 60.0% at any time;

·

Minimum fixed charge coverage ratio of 1.50:1.00; and

·

Minimum tangible net worth of $821,211,200 plus 75% of net proceeds from equity issuances after June 30, 2010.

Further, under the Credit Facility and Term Loan Facility, we are restricted from paying distributions on the Parent Company’s common shares in excess of the greater of (i) 95% of funds from operations, and (ii) such amount as may be necessary to maintain the Parent Company’s REIT status.

As of December 31, 2018, we were in compliance with all of our financial covenants and we anticipate being in compliance with all of our financial covenants through the terms of the Credit Facility and Term Loan Facility. Unamortized loan procurement costs of $0.1 million were written off in conjunction with the repayment.

​

Issuance of Common Shares

​

On November 19, 2021 we closed an underwritten offering of 15.5 million common shares at a public offering price of $51.00 per share, resulting in net proceeds of $765.6 million, after deducting offering costs.

​

We maintain an at-the-market equity program that enables us to offer and sell up to 50.060.0 million common shares through sales agents pursuant to equity distribution agreements (the “Equity Distribution Agreements”). Our sales activity under the program for the years ended December 31, 2018, 2017,2021, 2020 and 20162019 is summarized below:

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

​

​

2021

​

2020

​

2019

​

​

(dollars and shares in thousands, except per share amounts)

Number of shares sold

​

​

4,982

​

​

3,627

​

​

5,899

Average sales price per share

​

$

40.57

​

$

33.69

​

$

33.64

Net proceeds after deducting offering costs

​

$

199,977

​

$

120,727

​

$

196,304

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 

 

 

2018

 

2017

 

2016

 

 

(Dollars and shares in thousands, except per share amounts)

Number of shares sold

 

 

4,291

 

 

1,036

 

 

4,408

Average sales price per share

 

$

31.09

 

$

29.13

 

$

31.25

Net proceeds after deducting offering costs

 

$

131,835

 

$

29,642

 

$

136,120

​

We used proceeds from sales of common shares under the program during the years ended December 31, 2018, 2017,2021, 2020 and 20162019 to fund acquisitionsthe acquisition and development of storage properties and for general corporate purposes. As of December 31, 2018, 2017,2021, 2020 and 2016, 10.52019, 5.9 million common shares, 4.710.9 million common shares and 5.84.6 million common shares, respectively, remained available for issuance under the Equity Distribution Agreements.

​

Redemption of Preferred Shares

On November 2, 2016, we completed the redemption of all of our 3,100,000 outstanding shares of 7.75% Series A Cumulative Redeemable Preferred Shares at a cash redemption price of $25.00 per share plus accumulated and unpaid dividends. The redemption price of $77.5 million was paid by the Company from available cash balances. In connection with the redemption, we recognized a charge of $2.9 million related to excess redemption costs over the original net proceeds.

Recent Developments

​

On January 30, 2019, the Operating Partnership issued $350.0 millionSubsequent to December 31, 2021, we acquired a self-storage property located in aggregate principal amount of unsecured senior notes due February 15, 2029 which bear interest at a rate of 4.375% per annum (the “2029 Notes”). The 2029 Notes were priced at 99.356% of the principal amount to yield 4.455% to maturity. Net proceeds from the offering of $345.5 million were used to repay all of the outstanding indebtedness under our $200.0 million unsecured term loan portion of the Credit Facility that was scheduled to mature in January 2019. The remaining proceeds from the offering were used to repay a portion of the outstanding indebtedness under the Revolver.Maryland for $32.0 million.

​

50

Table of Contents

Other Material Changes in Financial Position

​

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

 

    

2018

    

2017

    

Change

 

 

 

 

 

(in thousands)

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31,

​

​

​

 

​

    

2021

    

2020

    

Change

 

​

​

​

​

​

(in thousands)

​

​

​

 

Selected Assets

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

Storage properties, net

 

$

3,600,968

 

$

3,408,790

 

$

192,178

 

​

$

6,097,670

​

$

4,505,814

​

$

1,591,856

​

Investment in real estate ventures, at equity

​

​

119,751

​

​

92,071

​

​

27,680

​

Assets held for sale

​

​

49,313

​

​

—

​

​

49,313

​

Other assets, net

 

$

48,763

 

$

34,590

 

$

14,173

 

​

​

265,705

​

​

170,753

​

​

94,952

​

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

Selected Liabilities

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

Unsecured senior notes, net

​

$

2,768,209

​

$

2,030,372

​

$

737,837

​

Revolving credit facility

 

$

195,525

 

$

81,700

 

$

113,825

 

​

​

209,900

​

​

117,800

​

​

92,100

​

Mortgage loans and notes payable, net

​

​

167,676

​

​

216,504

​

​

(48,828)

​

Accounts payable, accrued expenses and other liabilities

​

​

199,985

​

​

159,140

​

​

40,845

​

Distributions payable

​

​

97,417

​

​

68,301

​

​

29,116

​

​

​

​

​

​

​

​

​

​

​

​

Noncontrolling interests in the Operating Partnership

​

$

108,220

​

$

249,414

​

$

(141,194)

​

​

Storage properties, net of accumulated depreciation, increased $192.2 million$1.59 billion from December 31, 2020 to December 31, 2021, primarily as a result of the acquisition of ten66 storage properties, additions and improvements to storage properties, and development costs incurred during the year.

45

Table of Contents

​

Investment in real estate ventures, at equity increased $27.7 million from December 31, 2020 to December 31, 2021, primarily as the result of the acquisition of two 50% joint venture interests as part of the acquisition of LAACO.

​

Assets held for sale increased $49.3 million from December 31, 2020 to December 31, 2021 as the result of classifying the Club Operations acquired in the LAACO acquisition as held for sale at December 31, 2021.

​

Other assets, net increased $14.2$95.0 million from December 31, 2020 to December 31, 2021, primarily due to a $6.4 million net increase in ourthe value assigned to the in-place lease intangibles resulting fromleases at the acquisition of nine operating66 storage properties acquired during the year. The increase is alsoyear as well as assets related to deferred compensation for former LAACO executives.

​

Unsecured senior notes, net increased $737.8 million from December 31, 2020 to December 31, 2021 as a result of our $5.0 million investment made in exchange for 100%the issuance of the Class A Preferred Units2028 Notes and 2032 Notes on November 30, 2021 offset by the redemption of Capital Storage Partners, LLC, a newly formed venture that acquired 22 storage properties located in Florida (4), Oklahoma (5), and Texas (13) (see note 2).the 2023 Notes on December 23, 2021.

​

Revolving credit facility increased $113.8$92.1 million from December 31, 2020 to December 31, 2021 primarily as a result of borrowings used to fund the acquisition of ten66 storage properties, additions and improvements to storage properties, and development costs incurred during the year.

​

Contractual Obligations

The following table summarizes our known contractual obligations as ofMortgage loans and notes payable, net decreased $48.8 million from December 31, 2018 (in thousands):2020 to December 31, 2021 primarily due to the repayment on March 1, 2021 of two mortgage loans totaling $43.9 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payments Due by Period

 

 

    

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

2024 and

 

 

 

Total

 

2019

 

2020

 

2021

 

2022

 

2023

 

thereafter

 

Mortgage loans and notes payable (1)

 

$

106,146

 

$

11,652

 

$

12,791

 

$

45,057

 

$

923

 

$

31,019

 

$

4,704

 

Revolving credit facility and unsecured term loans (2)

 

 

495,525

 

 

200,000

 

 

295,525

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Unsecured senior notes

 

 

1,150,000

 

 

 —

 

 

 —

 

 

 —

 

 

250,000

 

 

300,000

 

 

600,000

 

Interest payments

 

 

292,175

 

 

63,387

 

 

53,845

 

 

49,437

 

 

42,719

 

 

35,017

 

 

47,770

 

Ground leases

 

 

131,242

 

 

2,814

 

 

2,887

 

 

2,956

 

 

3,116

 

 

3,090

 

 

116,379

 

Software and service contracts

 

 

164

 

 

134

 

 

30

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Development commitments

 

 

41,561

 

 

36,706

 

 

4,855

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 

$

2,216,813

 

$

314,693

 

$

369,933

 

$

97,450

 

$

296,758

 

$

369,126

 

$

768,853

 

(1)

Amounts do not include unamortized fair value adjustments for discounts/premiums and loan procurement costs.

(2)

On January 31, 2019, we used a portion of the net proceeds from the issuance of the 2029 Notes (see “Recent Developments”) to repay all of the $200.0 million of outstanding indebtedness under the unsecured term loan portion of the Credit Facility that was scheduled to mature in January 2019. We expect to satisfy all other contractual obligations owed in 2019 through a combination of cash generated from operations and from draws on the revolving portion of our Credit Facility.

​

Accounts payable, accrued expenses and other liabilities increased $40.8 million from December 31, 2020 to December 31, 2021 primarily due to severance and deferred compensation obligations owed to former employees of LAACO.

​

Distributions payable increased $29.1 million from December 31, 2020 to December 31, 2021 primarily due to an increase in common shares outstanding and an increase in the annualized dividend declared from $1.36 per share to $1.72 per share.

​

Noncontrolling interests in the Operating Partnership decreased $141.2 million from December 31, 2020 to December 31, 2021, primarily due to the redemption of 5.5 million OP Units during the year ended December 31, 2021.

​

Off-Balance Sheet Arrangements

​

We do not have off-balance sheet arrangements, financings or other relationships with other unconsolidated entities (other than our co-investment partnerships) or other persons, also known as variable interest entities not previously discussed.

​

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

​

Our future income, cash flows and fair values relevant to financial instruments depend upon prevailing market interest rates.

​

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Table of Contents

Market Risk

​

Our investment policy relating to cash and cash equivalents is to preserve principal and liquidity while maximizing the return through investment of available funds.

​

Effect of Changes in Interest Rates on our Outstanding Debt

​

Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we may choose to manage our exposure to fluctuations in market interest rates for a portion of our borrowings through the use of derivative financial instruments such as interest rate swaps or caps to mitigate our interest rate risk on a related financial instrument or to effectively lock the interest rate on a portion of our variable ratevariable-rate debt. The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market interest rates. The range of changes chosen reflects our view of changes which are reasonably possible over a one-year period. Market values are the present value of projected future cash flows based on the market interest rates chosen.

​

As of December 31, 20182021 our consolidated debt consisted of $1.3$2.96 billion of outstanding mortgagesmortgage loans and notes payable and unsecured senior notes that are subject to fixed rates. Additionally, as of December 31, 2018,2021, there were $195.5 million and $300.0$209.9 million of outstanding unsecured credit facility and unsecured term loan borrowings respectively, subject to floating rates. Changes in market interest rates have different impacts on the fixedfixed- and variable rate

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variable-rate portions of our debt portfolio. A change in market interest rates on the fixed portion of the debt portfolio impacts the net financial instrument position, but has no impact on interest incurred or cash flows. A change in market interest rates on the variable portion of the debt portfolio impacts the interest incurred and cash flows, but does not impact the net financial instrument position.

​

If market interest rates on our variable ratevariable-rate debt increase by 100 basis points, the increase in annual interest expense on our variable ratevariable-rate debt would decrease future earnings and cash flows by approximately $5.0$2.1 million a year. If market interest rates on our variable ratevariable-rate debt decrease by 100 basis points, the decrease in interest expense on our variable ratevariable-rate debt would increase future earnings and cash flows by approximately $5.0$2.1 million a year.

​

If market interest rates increase by 100 basis points, the fair value of our outstanding fixed-rate mortgage debt and unsecured senior notes and unsecured term loans would decrease by approximately $60.7$190.7 million. If market interest rates decrease by 100 basis points, the fair value of our outstanding fixed-rate mortgage debt and unsecured senior notes and unsecured term loans would increase by approximately $65.0$205.9 million.

​

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

​

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

​

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

​

None.

​

ITEM 9A.  CONTROLS AND PROCEDURES

​

Controls and Procedures (Parent Company)

​

Evaluation of Disclosure Controls and Procedures

​

As of the end of the period covered by this Report, the Parent Company carried out an evaluation, under the supervision and with the participation of its management, including its chief executive officer and chief financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act).

​

Based on that evaluation, the Parent Company’s chief executive officer and chief financial officer have concluded that the Parent Company’s disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information required to be disclosed by the Parent Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is

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accumulated and communicated to the Parent Company’s management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

​

Changes in Internal Control Over Financial Reporting

​

There has been no change in the Parent Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

​

Management’s Report on Internal Control Over Financial Reporting

​

Management’s report on internal control over financial reporting of the Parent Company is set forth on page F-2 of this Report, and is incorporated herein by reference. The effectiveness of the Parent Company’s internal control over financial reporting as of December 31, 20182021 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its report which is included herein.

​

Controls and Procedures (Operating Partnership)

​

Evaluation of Disclosure Controls and Procedures

​

As of the end of the period covered by this Report, the Operating Partnership carried out an evaluation, under the supervision and with the participation of its management, including the Operating Partnership’s chief executive officer and chief financial officer, of the

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effectiveness of the design and operation of the Operating Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act).

​

Based on that evaluation, the Operating Partnership’s chief executive officer and chief financial officer have concluded that the Operating Partnership’s disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information required to be disclosed by the Operating Partnership in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Operating Partnership’s management, including the Operating Partnership’s chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

​

Changes in Internal Control Over Financial Reporting

​

There has been no change in the Operating Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

​

Management’s Report on Internal Control Over Financial Reporting

​

Management’s report on internal control over financial reporting of the Operating Partnership is set forth on page F-3 of this Report, and is incorporated herein by reference. The effectiveness of the Operating Partnership’s internal control over financial reporting as of December 31, 20182021 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its report which is included herein.

​

ITEM 9B.  OTHER INFORMATION

​

Not applicable.

​

ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

​

Not applicable.

​

PART III

​

ITEM 10.  TRUSTEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

​

We have adopted a Code of Ethics for all of our employees, officers and trustees, including our principal executive officer and principal financial officer, which is available on our website at www.cubesmart.com. We intend to disclose any amendment to, or a waiver from, a provision of our Code of Ethics on our website within four business days following the date of the amendment or waiver.

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​

The remaining information required by this item regarding trustees, executive officers and corporate governance is hereby incorporated by reference to the material appearing in the Parent Company’s Proxy Statement for the Annual Shareholders Meeting to be held in 20192022 (the “Proxy Statement”) under the captions “Proposal 1: Election of Trustees,” “Executive Officers,” “Meetings and Committees of the Board of Trustees,” and “Shareholder Proposals and Nominations for the 20192022 Annual Meeting.” 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 Parent Company’s Proxy Statement under the caption “Section“Delinquent Section 16(a) Beneficial Ownership Reporting Compliance.Reports.”

​

ITEM 11.  EXECUTIVE COMPENSATION

​

The information required by this item is hereby incorporated by reference to the material appearing in the Parent Company’s Proxy Statement under the captions “Compensation Committee Report,” “Meetings and Committees of the Board of Trustees Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Executive Compensation,” “Severance Plan and Potential Payments Upon Termination or Change in Control,” and “Trustee Compensation.”

​

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

​

The following table sets forth certain information regarding our equity compensation plans as of December 31, 2018.2021.

​

 

 

 

 

 

 

 

 

    

 

    

 

 

    

Number of securities remaining

 

 

Number of securities to

 

Weighted-average

 

available for future issuance under

 

 

be issued upon exercise

 

exercise price of

 

equity compensation plans

 

 

of outstanding options,

 

outstanding options,

 

(excluding securities

 

​

​

​

​

​

​

​

​

​

​

    

​

    

​

​

    

Number of securities remaining

 

​

​

Number of securities to

​

Weighted average

​

available for future issuance under

 

​

​

be issued upon exercise

​

exercise price of

​

equity compensation plans

 

​

​

of outstanding options,

​

outstanding options,

​

(excluding securities

 

Plan Category

 

warrants and rights

    

warrants and rights

    

reflected in column(a))

 

​

warrants and rights

    

warrants and rights

    

reflected in column(a))

 

 

(a)

 

(b)

 

(c)

 

​

 

(a)

​

(b)

​

(c)

​

Equity compensation plans approved by shareholders

 

1,659,003

 

$

19.89

(1)

4,517,038

 

 

2,263,804

​

$

29.63

(1)​

2,448,384

​

Equity compensation plans not approved by shareholders

 

 —

 

 

 —

 

 —

 

 

—

​

​

—

​

—

​

Total

 

1,659,003

 

$

19.89

 

4,517,038

 

 

2,263,804

​

$

29.63

​

2,448,384

​

​

(1)

This number reflects the weighted-averageweighted average exercise price of outstanding options and has been calculated exclusive of outstanding restricted unit awards.

​

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 Parent Company’s Proxy Statement under the caption “Security Ownership of Management” and “Security Ownership of Beneficial Owners.”

​

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND TRUSTEE INDEPENDENCE

​

The information required by this item is hereby incorporated by reference to the material appearing in the Parent Company’s Proxy Statement under the captions “Corporate Governance - Independence of Trustees,” “Policies and Procedures Regarding Review, Approval or Ratification of Transactions With Related Persons,” and “Transactions With Related Persons.”

​

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

​

The information required by this item is hereby incorporated by reference to the material appearing in the Parent Company’s Proxy Statement under the captions “Audit Committee Matters - Fees Paid to Our Independent Registered Public Accounting Firm” and “- Audit Committee Pre-Approval Policies and Procedures.”

​

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.

​

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2. Financial Statement Schedules.

​

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

​

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:

​

​

​

​

​

3.1*

​

Articles of Amendment to the Declaration of Trust of CubeSmart, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on May 28, 2015.

​

​

​

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3.2*

​

Articles of Restatement of the Declaration of Trust of CubeSmart, incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed on May 28, 2015.

​

​

​

3.3*

​

Articles Supplementary to Declaration of Trust of CubeSmart classifying and designating CubeSmart’s 7.75% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, incorporated by reference to Exhibit 3.3 to CubeSmart’s Form 8-A, filed on October 31, 2011.

​

​

​

3.4*

​

Articles of Amendment to the Declaration of Trust of CubeSmart, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on November 3, 2016.

​

​

​

3.5*

​

Third Amended and Restated Bylaws of CubeSmart, effective September 14, 2011, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed on September 16, 2011.

3.6*

Certificate of Limited Partnership of U-Store-It, L.P., incorporated by reference to Exhibit 3.1 to CubeSmart, L.P.’s Registration Statement on Form 10, filed on July 15, 2011.

​

​

​

3.7*3.6*

​

Amendment No. 1 to Certificate of Limited Partnership of CubeSmart, L.P., dated September 14, 2011, incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K, filed on September 16, 2011.

​

​

​

3.8*3.7*

​

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.

​

​

​

3.9*3.8*

​

Amendment No. 1 to Second Amended and Restated Agreement of Limited Partnership of CubeSmart, L.P. dated as of September 14, 2011, incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K, filed on September 16, 2011.

​

​

​

3.10*3.9*

​

Amendment No. 2 to Second Amended and Restated Agreement of Limited Partnership of CubeSmart, L.P. dated as of November 2, 2011, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed on November 2, 2011.

​

​

​

3.11*3.10*

​

Class C Unit Supplement No. 1 to Second Amended and Restated Agreement of Limited Partnership of CubeSmart, L.P. dates as of April 12, 2017, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on April 18, 2017.

​

​

​

3.12*3.11*

​

Articles of Amendment to the Declaration of Trust of CubeSmart, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on June 2, 2017.

​

​

​

3.13*3.12*

​

First Amendment to ThirdFourth Amended and Restated Bylaws of CubeSmart, effective June 1, 2017,August 5, 2020, incorporated by reference to Exhibit 3.23.1 to the Company’s CurrentQuarterly Report on Form 8-K,10-Q, filed on June 2, 2017.August 7, 2020.

​

​

​

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, filed on October 20, 2004, File No. 333-117848.

​

​

​

4.2*

​

Form of Certificate for CubeSmart’s 7.75% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, incorporated by reference to Exhibit 4.1 to CubeSmart’s Form 8-A, filed on October 31, 2011.

​

​

​

4.3*

​

Indenture, dated as of September 16, 2011, among CubeSmart, L.P., CubeSmart and U.S. Bank National Association, incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-3, filed on September 16, 2011.

​

​

​

4.4*

​

First Supplemental Indenture, dated as of June 26, 2012, among the Company, the Operating Partnership and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on June 26, 2012.

​

​

​

4.5*

​

Form of $250 million aggregate principal amount of 4.80% senior note due July 15, 2022, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on June 26, 2012.

4.6*

Form of CubeSmart Notation of Guarantee, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on June 26, 2012.

4.7*

Second Supplemental Indenture, dated as of December 17, 2013, among the Company, the Operating Partnership and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on December 17, 2013.

​

​

​

4.8*4.6*

​

Form of $250 million aggregate principal amount of 4.375% senior notes due December 15, 2023, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on December 17, 2013.

4.9*

Form of CubeSmart Notation of Guarantee, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on December 17, 2013.

4.10*

Third Supplemental Indenture, dated as of October 26, 2015, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on October 26, 2015.

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​

​

​

4.11*4.7*

​

Form of $250 million aggregate principal amount of 4.000% senior note due November 15, 2025, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on October 26, 2015.

​

​

​

4.12*4.8*

​

Fourth Supplemental Indenture, dated as of August 15, 2016, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on August 15, 2016.

​

​

​

4.13*4.9*

​

Form of $300 million aggregate principal amount of 3.125% senior notes due September 1, 2026, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on August 15, 2016.

​

​

​

4.14*4.10*

​

Form of CubeSmart Notation of Guarantee, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on August 15, 2016.

​

​

​

4.15*4.11*

​

Form of $50 million aggregate principal amount of 4.375% senior notes due December 15, 2023, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on April 5, 2017.

4.16*

Form of $50 million aggregate principal amount of 4.000% senior notes due November 15, 2025, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on April 5, 2017.

​

​

​

4.17*4.12*

​

Fifth Supplemental Indenture, dated as of April 4, 2017, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K, filed on April 5, 2017.

​

​

​

4.18*4.13*

​

Form of $350 million aggregate principal amount of 4.375% senior notes due February 15, 2029, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on January 30, 2019.

​

​

​

4.19*4.14*

​

Sixth Supplemental Indenture, dated as of January 30, 2019, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on January 30, 2019.

​

​

​

10.1*†4.15*

​

Form of $350 million aggregate principal amount of 3.000% senior notes due February 15, 2030, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on October 11, 2019.

​

​

​

4.16*

​

Form of CubeSmart Notation of Guarantee, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on October 11, 2019.

​

​

​

4.17*

​

Seventh Supplemental Indenture, dated of as October 11, 2019, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on October 11, 2019.

​

​

​

4.18*

​

Form of $450 million aggregate principal amount of 2.000% senior notes due February 15, 2031, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on October 6, 2020.

​

​

​

4.19*

​

Form of CubeSmart Guarantee, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on October 6, 2020.

​

​

​

4.20*

​

Eighth Supplemental Indenture, dated of as October 6, 2020, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on October 6, 2020.

​

​

​

4.21*

​

Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, incorporated herein by reference to Exhibit 4.23 to the Company’s Annual Report on Form 10-K, filed on February 21, 2020.

​

​

​

4.22*

​

Ninth Supplemental Indenture, dated of as November 30, 2021, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K, filed on November 30, 2021.

​

​

​

4.23*

​

Form of $550 million aggregate principal amount of 2.25% senior notes due December 15, 2028, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on November 30, 2021.

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​

​

​

4.24*

​

Form of CubeSmart Guarantee, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on November 30, 2021.

​

​

​

4.25*

​

Form of $500 million aggregate principal amount of 2.50% senior notes due February 15, 2032, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on November 30, 2021.

​

​

​

4.26*

​

Form of CubeSmart Guarantee, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on November 30, 2021.

​

​

​

4.27*

​

Tenth Supplemental Indenture, dated of as November 30, 2021, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K, filed on November 30, 2021.

​

​

​

10.1*†

​

Indemnification Agreement, dated as of October 27, 2004, by and among U-Store-It Trust, U-Store-It, L.P. and David J. LaRue (substantially identical agreements have been entered into with Christopher P. Marr, Timothy M. Martin, Jeffrey P. Foster, Joel D. Keaton, Piero Bussani, Dorothy Dowling, John W. Fain, Marianne M. Keler, John F. Remondi, Jeffrey F. Rogatz and Deborah R. Salzberg), incorporated by reference to Exhibit 10.19 to the Company’s Current Report on Form 8-K, filed on November 2, 2004.

​

​

​

10.2*†

​

Form of Restricted Share Agreement for Non-Employee Trustees under the U-Store-It Trust 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.83 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, filed on February 29, 2008.

​

​

​

10.3*†

​

Form of Nonqualified Share Option Agreement under the U-Store-It Trust 2004 Equity Incentive Plan, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, filed on May 10, 2007.

​

​

​

10.4*†

​

Form of Restricted Share Agreement under the U-Store-It Trust 2004 Equity Incentive Plan, incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, filed on May 10, 2007.

​

​

​

10.5*†

​

Form of Nonqualified Share Option Agreement under the U-Store-It Trust 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on January 25, 2008.

​

​

​

10.6*†

​

Form of Restricted Share Agreement under the U-Store-It Trust 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on January 25, 2008.

​

​

​

10.7*†

​

U-Store-It Trust Trustees Deferred Compensation Plan, amended and restated effective January 1, 2009, incorporated by reference to Exhibit 10.78 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, filed on March 2, 2009.

​

​

​

10.8*†

​

U-Store-It Trust Executive Deferred Compensation Plan, amended and restated effective January 1, 2009, incorporated by reference to Exhibit 10.79 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, filed on March 2, 2009.

​

​

​

10.9*†

​

U-Store-It Trust Deferred Trustees Plan, effective as of May 31, 2005, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on June 6, 2005.

​

​

​

10.10*†

​

Term Loan Agreement dated as of June 20, 2011 by and among U-Store-It, L.P., as Borrower, U-Store-It Trust, and Wells Fargo Securities, LLC and PNC Capital Markets LLC, as joint lead arrangers and joint bookrunners, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on June 23, 2011.

10.11*

Credit Agreement dated as of December 9, 2011 by and among CubeSmart, L.P., CubeSmart, Wells Fargo Securities, LLC and Merrill Lynch, Pierce Fenner & Smith Incorporated, as Revolver and Tranche A joint lead arrangers and joint bookrunners and Wells Fargo Securities, LLC, as Tranche B sole lead arranger and sole bookrunner, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on December 14, 2011.

10.12*†

Form of Restricted Share Agreement under the CubeSmart 2007 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.42 to the Company’s Annual Report on Form 10-K, filed on February 28, 2013.

​

​

​

10.13*10.11*†

​

Form of Non-Qualified Share Option Agreement under the CubeSmart 2007 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.43 to the Company’s Annual Report on Form 10-K, filed on February 28, 2013.

​

​

​

10.14*10.12*†

​

Form of 2012 Performance-Vested Restricted Share Unit Award Agreement under the CubeSmart 2007 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on January 31, 2012.

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​

​

​

10.15*10.13*†

​

First Amendment to Credit Agreement, dated as of April 5, 2012, by and among CubeSmart, L.P., CubeSmart, Wells Fargo Bank, National Association and each of the lenders party to the credit agreement dated December 9, 2011, incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on May 7, 2012.

10.16*†

Form of Restricted Share Unit Award Agreement (2-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-K, filed on February 28, 2013.

​

​

​

10.17*10.14*†

​

Form of Performance-Vested Restricted Share Unit Award Agreement under the CubeSmart 2007 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.48 to the Company’s Annual Report on Form 10-K, filed on February 28, 2013.

​

​

​

10.18*10.15*

​

Waiver of Ownership Limitation, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed on May 6, 2013.

​

​

​

10.19*10.16*†

​

Underwriting Agreement, dated as of January 24, 2019, among CubeSmart, CubeSmart, L.P., Wells Fargo Securities, LLC, Barclays Capital Inc. and Jefferies LLC, as representatives of each of the other underwriters named in Exhibit A thereto, incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed on January 25, 2019.

10.20*

Second Amendment to Credit Agreement dated as of June 18, 2013 by and among CubeSmart, L.P., CubeSmart, Wells Fargo Bank, National Association, as Administrative Agent and each of the lenders, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on June 19, 2013.

10.21*

Second Amendment to Term Loan Agreement dated as of June 18, 2013 by and among CubeSmart, L.P., CubeSmart, Wells Fargo Bank, National Association, as Administrative Agent and each of the lenders, incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed on June 19, 2013.

10.22*†

Advisory Agreement, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, filed on November 8, 2013.

​

​

​

10.23*10.17*†

​

Executive Employment Agreement, entered into as of January 24, 2014 and effective as of January 1, 2014, by and between CubeSmart and Christopher P. Marr, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on January 28, 2014.

10.24*†

Form of Non-Qualified Share Option Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.58 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014.

​

​

​

10.25*10.18*†

​

Form of Non-Qualified Share Option Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.59 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014.

​

​

​

10.26*10.19*†

​

Form of Performance Share Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.60 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014.

​

​

​

10.27*10.20*†

​

Form of Performance Share Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.61 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014.

​

​

​

10.28*10.21*†

​

Form of Restricted Share Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.63 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014.

​

​

​

10.29*10.22*†

​

Form of Restricted Share Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.64 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014.

​

​

​

10.30*10.23*†

​

Form of Restricted Share Award Agreement (5-Year Vesting) under the CubeSmart 2004 Equity Incentive Plan, incorporated by reference to Exhibit 10.65 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014.

​

​

​

10.31*10.24*†

​

Third Amendment to Credit Agreement, dated as of April 22, 2015, by and among CubeSmart, L.P., CubeSmart, Wells Fargo Bank, National Association, as Administrative Agent and each of the lenders party thereto, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on April 27, 2015.

10.32*

Fourth Amendment to Term Loan Agreement, dated as of April 22, 2015, by and among CubeSmart, L.P., CubeSmart, Wells Fargo Bank, National Association, as Administrative Agent and each of the lenders party thereto, incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed on April 27, 2015.

10.33*†

Amended and Restated CubeSmart 2007 Equity Incentive Plan, effective June 1, 2016, incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement, filed on April 14, 2016.

​

​

​

10.34*10.25*†

​

First Amendment to Executive Employment Agreement, dated as of September 30, 2016, by and between CubeSmart and Christopher P. Marr, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on September 30, 2016.

10.35*†

CubeSmart Executive Severance Plan, effective January 1, 2017, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on November 4, 2016.

​

​

​

10.36*10.26*†

​

Form of Non-Qualified Share Option Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.42 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017.

​

​

​

10.37*10.27*†

​

Form of Non-Qualified Share Option Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.43 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017.

​

​

​

10.38*10.28*†

​

Form of Restricted Share Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.44 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017.

​

​

​

53

Table of Contents

10.39*10.29*†

​

Form of Restricted Share Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.45 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017.

​

​

​

10.40*10.30*†

​

Form of Restricted Share Award Agreement (5-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.46 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017.

​

​

​

10.41*10.31*†

​

Form of Restricted Share Unit Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017.

​

​

​

10.42*10.32*†

​

Form of Restricted Share Unit Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.48 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017.

​

​

​

10.43*10.33*†

​

Form of Performance-Vested Restricted Share Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.49 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017.

​

​

​

10.44*10.34*†

​

Form of Performance-Vested Restricted Share Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.50 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017.

​

​

​

10.45*10.35*†

​

Form of Performance-Vested Restricted Share Unit Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.51 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017.

​

​

​

10.46*10.36*†

​

Form of Performance-Vested Restricted Share Unit Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.52 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017.

​

​

​

10.47*10.37*†

​

Form of Restricted Share Agreement under the CubeSmart 2007 Equity Incentive Plan,as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on January 3, 2019.

​

​

​

10.38*†

​

Form of Non-Qualified Share Option Agreement under the CubeSmart 2007 Equity Incentive Plan,as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed on January 3, 2019.

​

​

​

10.39*†

​

Form of Performance-Vested Restricted Share Agreement under the CubeSmart 2007 Equity Incentive Plan,as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K, filed on January 3, 2019.

​

​

​

10.40*

​

Amended and Restated Credit Agreement, dated as of June 19, 2019, by and among CubeSmart, L.P., CubeSmart, the lenders referred to therein, and Wells Fargo Bank, National Association, as administrative agent for the Lenders, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on June 21, 2019.

​

​

​

10.41*

​

Second Amended and Restated Equity Distribution Agreement, dated July 27, 2018,March 4, 2020, by and among CubeSmart, CubeSmart, L.P. and Wells Fargo Securities, LLC, incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed on July 27, 2018.March 4, 2020.

​

​

​

10.48*10.42*

​

Second Amended and Restated Equity Distribution Agreement, dated July 27, 2018,March 4, 2020, by and among CubeSmart, CubeSmart, L.P. and Merrill Lynch, Pierce, Fenner & Smith Incorporated,BofA Securities, Inc., incorporated by reference to Exhibit 1.2 to the Company’s Current Report on Form 8-K, filed on July 27, 2018.March 4, 2020.

​

​

​

54

Table of Contents

10.49*10.43*

​

Second Amended and Restated Equity Distribution Agreement, dated July 27, 2018,March 4, 2020, by and among CubeSmart, CubeSmart, L.P. and BMO Capital Markets Corp., incorporated by reference to Exhibit 1.3 to the Company’s Current Report on Form 8-K, filed on July 27, 2018.March 4, 2020.

​

​

​

10.50*10.44*

​

Second Amended and Restated Equity Distribution Agreement, dated July 27, 2018,March 4, 2020, by and among CubeSmart, CubeSmart, L.P. and JeffriesJefferies LLC, incorporated by reference to Exhibit 1.4 to the Company’s Current Report on Form 8-K, filed on July 27, 2018.March 4, 2020.

​

​

​

10.51*10.45*

​

Second Amended and Restated Equity Distribution Agreement, dated July 27, 2018,March 4, 2020, by and among CubeSmart, CubeSmart, L.P. and RBCBarclays Capital Markets, LLC,Inc., incorporated by reference to Exhibit 1.5 to the Company’s Current Report on Form 8-K, filed on July 27, 2018.March 4, 2020.

​

​

​

10.52*10.46*

​

AmendedAgreement and Restated Equity Distribution Agreement, dated July 27, 2018,Plan of Merger, by and among CubeSmart,LAACO, Ltd., CubeSmart, L.P., CS West Merger Sub, L.P. and Barclays Capital Inc.,Stability LLC, dated as of November 15, 2021, incorporated by reference to Exhibit 1.62.1 to the Company’s Current Report on Form 8-K, filed on July 27, 2018.November 15, 2021.

​

​

​

10.53*†21.1

​

FormList of Restricted Share Agreement under the CubeSmart 2007 Equity Incentive Plan,as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on January 3, 2019.Subsidiaries.

​

​

​

10.54*†23.1

​

Form of Non-Qualified Share Option Agreement under the CubeSmart 2007 Equity Incentive Plan,as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed on January 3, 2019.

10.55*†

Form of Performance-Vested Restricted Share Agreement under the CubeSmart 2007 Equity Incentive Plan,as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K, filed on January 3, 2019.

21.1

List of Subsidiaries.

23.1

Consent of KPMG LLP relating to financial statements of CubeSmart.

​

​

​

23.2

​

Consent of KPMG LLP relating to financial statements of CubeSmart, L.P.

​

​

​

31.1

​

Certification of Chief Executive Officer of CubeSmart 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.

​

​

​

31.2

​

Certification of Chief Financial Officer of CubeSmart 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.

​

​

​

31.3

​

Certification of Chief Executive Officer of CubeSmart, L.P. 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.

55

Table of Contents

​

​

​

31.4

​

Certification of Chief Financial Officer of CubeSmart, L.P. 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.

​

​

​

32.1

​

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

​

​

​

32.2

​

Certification of Chief Executive Officer and Chief Financial Officer of CubeSmart, L.P. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

​

​

​

99.1

​

Material United States Federal Income Tax Considerations.

​

​

​

101

​

The following CubeSmart and CubeSmart, L.P. financial information for the year ended December 31, 2018,2021, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statement of Equity, (iv) the Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements, detailed tagged and filed herewith.

​

​

​

104

​

Cover Page Interactive Data File – embedded within the Inline XBRL document (included as Exhibit 101).

​

​

*

​

Incorporated herein by reference as above indicated.

​

​

​

†

​

Denotes a management contract or compensatory plan, contract or arrangement.

​

​

ITEM 16.  FORM 10-K SUMMARY

​

None.

​

5655

Table of Contents

SIGNATURES

SIGNATURES

​

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

​

​

​

​

CUBESMART

​

​

​

​

By:

/s/  Timothy M. Martin

​

​

Timothy M. Martin

​

​

Chief Financial Officer

​

Date: February 22, 201925, 2022

​

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, 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

Signature​

​

Title​

​

Date

​

/s/ Marianne M. Keler

​

Chair of the Board of Trustees

​

February 22, 201925, 2022

Marianne M. Keler

​

​

​

​

​

​

​

​

​

/s/ Christopher P. Marr

​

Chief Executive Officer and Trustee

​

February 22, 201925, 2022

Christopher P. Marr

​

(Principal Executive Officer)

​

​

​

​

​

​

​

/s/ Timothy M. Martin

​

Chief Financial Officer

​

February 22, 201925, 2022

Timothy M. Martin

​

(Principal Financial and Accounting Officer)

​

​

​

​

​

​

​

/s/ Piero Bussani

​

Trustee

​

February 22, 201925, 2022

Piero Bussani

​

​

​

​

​

​

​

​

​

/s/ Dorothy Dowling

​

Trustee

​

February 22, 201925, 2022

Dorothy Dowling

​

​

​

​

​

​

​

​

​

/s/ John W. Fain

​

Trustee

​

February 22, 201925, 2022

John W. Fain

​

​

​

​

​

​

​

​

​

/s/ John F. Remondi

​

Trustee

​

February 22, 201925, 2022

John F. Remondi

​

​

​

​

​

​

​

​

​

/s/ Jeffrey F. Rogatz

​

Trustee

​

February 22, 201925, 2022

Jeffrey F. Rogatz

​

​

​

​

​

​

​

​

​

/s/ Deborah Ratner Salzberg

​

Trustee

​

February 22, 201925, 2022

Deborah Ratner Salzberg

​

​

​

​

​

​

​

​

5756

​

​

FINANCIAL STATEMENTS
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

​

​

​

​

​

Page No.

Page No.

Consolidated Financial Statements of CUBESMART and CUBESMART, L.P. (the “Company”)

​

​

​

​

​

Management’s Report on CubeSmart Internal Control Over Financial Reporting

​

F-2

​

​

​

Management’s Report on CubeSmart, L.P. Internal Control Over Financial Reporting

​

F-3

​

​

​

Reports of Independent Registered Public Accounting Firm (PCAOB ID 185)

​

F-4

​

​

​

CubeSmart and Subsidiaries Consolidated Balance Sheets as of December 31, 20182021 and 20172020

​

F-8F-10

​

​

​

CubeSmart and Subsidiaries Consolidated Statements of Operations for the years ended December 31, 2018, 2017,2021, 2020 and 20162019

​

F-9F-11

​

​

​

CubeSmart and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2018, 2017,2021, 2020 and 20162019

​

F-10F-12

​

​

​

CubeSmart and Subsidiaries Consolidated Statements of Equity for the years ended December 31, 2018, 2017,2021, 2020 and 20162019

​

F-11F-13

​

​

​

CubeSmart and Subsidiaries Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017,2021, 2020 and 20162019

​

F-12F-14

​

​

​

CubeSmart, L.P. and Subsidiaries Consolidated Balance Sheets as of December 31, 20182021 and 20172020

​

F-13F-15

​

​

​

CubeSmart, L.P. and Subsidiaries Consolidated Statements of Operations for the years ended December 31, 2018, 2017,2021, 2020 and 20162019

​

F-14F-16

​

​

​

CubeSmart, L.P. and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2018, 2017,2021, 2020 and 20162019

​

F-15F-17

​

​

​

CubeSmart, L.P. and Subsidiaries Consolidated Statements of Capital for the years ended December 31, 2018, 2017,2021, 2020 and 20162019

​

F-16F-18

​

​

​

CubeSmart, L.P. and Subsidiaries Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017,2021, 2020 and 20162019

​

F-17F-19

​

​

​

Notes to Consolidated Financial Statements

​

F-18F-20

​

​

F-1

​

MANAGEMENT’S REPORT ON CUBESMART INTERNAL CONTROL OVER FINANCIAL REPORTING

​

Management of CubeSmart (the “REIT”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under Section 404 of the Sarbanes-Oxley Act of 2002, the REIT’s management is required to assess the effectiveness of the REIT’s internal control over financial reporting as of the end of each fiscal year, and report on the basis of that assessment whether the REIT’s internal control over financial reporting is effective.

​

The REIT’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The REIT’s internal control over financial reporting includes those policies and procedures that:

​

·

●

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and the disposition of the assets of the REIT;

​

·

●

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that the receipts and expenditures of the REIT are being made only in accordance with the authorization of the REIT’s management and its Board of Trustees; and

​

·

●

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the REIT’s assets that could have a material effect on the financial statements.

​

There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even an effective internal control system can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of an internal control system may vary over time.

​

Under the supervision, and with the participation, of the REIT’s management, including the principal executive officer and principal financial officer, management conducted a review, evaluation and assessment of the effectiveness of our internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In performing its assessment of the effectiveness of internal control over financial reporting, management has concluded that, as of December 31, 2018,2021, the REIT’s internal control over financial reporting was effective based on the COSO framework.

​

The effectiveness of our internal control over financial reporting as of December 31, 2018,2021, has been audited by KPMG LLP (Philadelphia, Pennsylvania; PCAOB ID #185), an independent registered public accounting firm, as stated in their report that appears herein.

​

​

​

​

February 22, 201925, 2022

​

F-2

​

MANAGEMENT’S REPORT ON CUBESMART, L.P. INTERNAL CONTROL OVER FINANCIAL REPORTING

​

Management of CubeSmart, L.P. (the “Partnership”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under Section 404 of the Sarbanes-Oxley Act of 2002, the Partnership’s management is required to assess the effectiveness of the Partnership’s internal control over financial reporting as of the end of each fiscal year, and report on the basis of that assessment whether the Partnership’s internal control over financial reporting is effective.

​

The Partnership’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Partnership’s internal control over financial reporting includes those policies and procedures that:

​

·

●

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and the disposition of the assets of the Partnership;

​

·

●

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that the receipts and expenditures of the Partnership are being made only in accordance with the authorization of the Partnership’s management and its Board of Trustees; and

​

·

●

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Partnership’s assets that could have a material effect on the financial statements.

​

There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even an effective internal control system can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of an internal control system may vary over time.

​

Under the supervision, and with the participation, of the Partnership’s management, including the principal executive officer and principal financial officer, management conducted a review, evaluation and assessment of the effectiveness of our internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In performing its assessment of the effectiveness of internal control over financial reporting, management has concluded that, as of December 31, 2018,2021, the Partnership’s internal control over financial reporting was effective based on the COSO framework.

​

The effectiveness of our internal control over financial reporting as of December 31, 2018,2021, has been audited by KPMG LLP (Philadelphia, Pennsylvania; PCAOB ID #185), an independent registered public accounting firm, as stated in their report that appears herein.

​

​

​

​

​

February 22, 201925, 2022

​

F-3

​

Report of Independent RegisteredRegistered Public Accounting Firm

​

To the Shareholders and Board of Trustees of
CubeSmart:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of CubeSmart and subsidiaries (the Company) as of December 31, 20182021 and 2017,2020, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three‑yearthree-year period ended December 31, 2018,2021, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the years in the three‑yearthree-year period ended December 31, 2018,2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 201925, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

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

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

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of storage properties for impairment

As discussed in notes 2 and 3 to the consolidated financial statements, the Company had $6.1 billion of storage properties, net of accumulated depreciation as of December 31, 2021. The Company performs an impairment assessment whenever events or changes in circumstances indicate that there may be an impairment. This involves comparing the undiscounted future net operating cash flows plus a terminal value to the carrying amount of the storage property.

We identified the evaluation of storage properties for impairment as a critical audit matter. The Company uses revenue and expense growth rates, and terminal value capitalization rate assumptions in determining estimated future cash flows as part of its impairment assessment. Changes to these assumptions could have a significant impact on the determination of recoverability of the carrying amount of a storage property and involved subjective auditor judgement.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s storage property impairment process, including controls related to the use of the revenue and expense growth rates, and terminal value capitalization rate. We assessed the Company’s forecasted growth rates against the Company’s historical growth rates and published reports of industry data. We evaluated the

F-4

​

Company’s expected terminal value capitalization rates by comparing them to published reports of industry data and historical transactions of the Company. We also identified the threshold rates at which the revenue and expense growth rates and terminal value capitalization rate assumptions would indicate the storage property may be impaired and analyzed those threshold rates against the published industry data and historical results.

​

/s/ KPMG LLP

​

We have served as the Company’s auditor since 2009.

Philadelphia, Pennsylvania

February 22, 201925, 2022

​

F-4F-5

​

Report of Independent Registered Public Accounting Firm

​

To the Partners of
CubeSmart, L.P.: and the Board of Trustees of CubeSmart:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of CubeSmart L.P. and subsidiaries (the Company)Partnership) as of December 31, 20182021 and 2017,2020, the related consolidated statements of operations, comprehensive income (loss), capital, and cash flows for each of the years in the three‑yearthree-year period ended December 31, 2018,2021, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the CompanyPartnership as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the years in the three‑yearthree-year period ended December 31, 2018,2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’sPartnership’s internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 201925, 2022 expressed an unqualified opinion on the effectiveness of the Company’sPartnership’s internal control over financial reporting.

Basis for Opinion

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

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

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of storage properties for impairment

As discussed in notes 2 and 3 to the consolidated financial statements, the Partnership had $6.1 billion of storage properties, net of accumulated depreciation as of December 31, 2021. The Partnership performs an impairment assessment whenever events or changes in circumstances indicate that there may be an impairment. This involves comparing the undiscounted future net operating cash flows plus a terminal value to the carrying amount of the storage property.

We identified the evaluation of storage properties for impairment as a critical audit matter. The Partnership uses revenue and expense growth rates, and terminal value capitalization rate assumptions in determining estimated future cash flows as part of its impairment assessment. Changes to these assumptions could have a significant impact on the determination of recoverability of the carrying amount of a storage property and involved subjective auditor judgement.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Partnership’s storage property impairment process, including controls related to the use of the revenue and expense growth rates, and terminal value capitalization rate. We assessed the Partnership’s forecasted growth rates against the Partnership’s historical growth rates and published reports of industry data. We evaluated the

F-6

​

Partnership’s expected terminal value capitalization rates by comparing them to published reports of industry data and historical transactions of the Partnership. We also identified the threshold rates at which the revenue and expense growth rates and terminal value capitalization rate assumptions would indicate the storage property may be impaired and analyzed those threshold rates against the published industry data and historical results.

/s/ KPMG LLP

​

We have served as the Company’sPartnership’s auditor since 2009.

Philadelphia, Pennsylvania

February 22, 201925, 2022

​

F-5F-7

​

Report of Independent Registered Public Accounting Firm

​

To the Shareholders and Board of Trustees of
CubeSmart:

Opinion on Internal Control Over Financial Reporting

We have audited CubeSmart and subsidiaries’subsidiaries' (the Company) internal control over financial reporting as of December 31, 2018,2021, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 20182021 and 2017,2020, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2018,2021, and the related notes and financial statement scheduleIII (collectively, the consolidated financial statements), and our report dated February 22, 201925, 2022 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

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, included in the accompanying Management’sManagement's Report on CubeSmart Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

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

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

/s/ KPMG LLP

​

Philadelphia, Pennsylvania

February 22, 201925, 2022

​

F-6F-8

​

Report of Independent Registered Public Accounting Firm

​

To the Partners of
CubeSmart, L.P.: and the Board of Trustees of CubeSmart:

Opinion on Internal Control Over Financial Reporting

We have audited CubeSmart L.P. and subsidiaries’subsidiaries' (the Company)Partnership) internal control over financial reporting as of December 31, 2018, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the CompanyPartnership as of December 31, 20182021 and 2017,2020, the related consolidated statements of operations, comprehensive income (loss), capital, and cash flows for each of the years in the three-year period ended December 31, 2018,2021, and the related notes and financial statement scheduleIII (collectively, the consolidated financial statements), and our report dated February 22, 201925, 2022 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

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

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

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

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

​

/s/ KPMG LLP

​

Philadelphia, Pennsylvania

February 22, 201925, 2022

​

F-7F-9

​

CUBESMART AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETSSHEETS

(in thousands, except share data)

​

 

 

 

 

 

 

 

 

 

 

December 31, 

 

 

    

2018

    

2017

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Storage properties

 

$

4,463,455

 

$

4,161,715

 

Less: Accumulated depreciation

 

 

(862,487)

 

 

(752,925)

 

Storage properties, net (including VIE assets of $330,986 and $291,496, respectively)

 

 

3,600,968

 

 

3,408,790

 

Cash and cash equivalents

 

 

3,764

 

 

5,268

 

Restricted cash

 

 

2,718

 

 

3,890

 

Loan procurement costs, net of amortization

 

 

963

 

 

1,592

 

Investment in real estate ventures, at equity

 

 

95,796

 

 

91,206

 

Other assets, net

 

 

48,763

 

 

34,590

 

Total assets

 

$

3,752,972

 

$

3,545,336

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Unsecured senior notes, net

 

$

1,143,524

 

$

1,142,460

 

Revolving credit facility

 

 

195,525

 

 

81,700

 

Unsecured term loans, net

 

 

299,799

 

 

299,396

 

Mortgage loans and notes payable, net

 

 

108,246

 

 

111,434

 

Accounts payable, accrued expenses and other liabilities

 

 

149,914

 

 

143,344

 

Distributions payable

 

 

60,627

 

 

55,297

 

Deferred revenue

 

 

22,595

 

 

21,529

 

Security deposits

 

 

474

 

 

486

 

Total liabilities

 

 

1,980,704

 

 

1,855,646

 

 

 

 

 

 

 

 

 

Noncontrolling interests in the Operating Partnership

 

 

55,819

 

 

54,320

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Common shares $.01 par value, 400,000,000 shares authorized, 187,145,103 and 182,215,735 shares issued and outstanding at December 31, 2018 and 2017, respectively

 

 

1,871

 

 

1,822

 

Additional paid-in capital

 

 

2,500,751

 

 

2,356,620

 

Accumulated other comprehensive (loss) income

 

 

(1,029)

 

 

 3

 

Accumulated deficit

 

 

(791,915)

 

 

(729,311)

 

Total CubeSmart shareholders’ equity

 

 

1,709,678

 

 

1,629,134

 

Noncontrolling interests in subsidiaries

 

 

6,771

 

 

6,236

 

Total equity

 

 

1,716,449

 

 

1,635,370

 

Total liabilities and equity

 

$

3,752,972

 

$

3,545,336

 

​

​

​

​

​

​

​

​

​

​

December 31, 

 

​

    

2021

    

2020

 

​

​

​

​

​

​

​

​

ASSETS

​

​

​

​

​

​

​

Storage properties

​

$

7,183,494

​

$

5,489,754

​

Less: Accumulated depreciation

​

 

(1,085,824)

​

 

(983,940)

​

Storage properties, net (including VIE assets of $149,467 and $119,345, respectively)

​

 

6,097,670

​

 

4,505,814

​

Cash and cash equivalents

​

 

11,140

​

 

3,592

​

Restricted cash

​

 

2,178

​

 

2,637

​

Loan procurement costs, net of amortization

​

 

2,322

​

 

3,275

​

Investment in real estate ventures, at equity

​

 

119,751

​

 

92,071

​

Assets held for sale

​

​

49,313

​

​

—

​

Other assets, net

​

 

265,705

​

 

170,753

​

Total assets

​

$

6,548,079

​

$

4,778,142

​

​

​

​

​

​

​

​

​

LIABILITIES AND EQUITY

​

​

​

​

​

​

​

Unsecured senior notes, net

​

$

2,768,209

​

$

2,030,372

​

Revolving credit facility

​

 

209,900

​

 

117,800

​

Mortgage loans and notes payable, net

​

 

167,676

​

 

216,504

​

Lease liabilities - finance leases

​

​

65,801

​

​

65,599

​

Accounts payable, accrued expenses and other liabilities

​

 

199,985

​

 

159,140

​

Distributions payable

​

 

97,417

​

 

68,301

​

Deferred revenue

​

 

37,144

​

 

29,087

​

Security deposits

​

 

1,065

​

 

1,077

​

Liabilities held for sale

​

​

2,502

​

​

—

​

Total liabilities

​

 

3,549,699

​

 

2,687,880

​

​

​

​

​

​

​

​

​

Noncontrolling interests in the Operating Partnership

​

 

108,220

​

 

249,414

​

​

​

​

​

​

​

​

​

Commitments and contingencies

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Equity

​

​

​

​

​

​

​

Common shares $.01 par value, 400,000,000 shares authorized, 223,917,993 and 197,405,989 shares issued and outstanding at December 31, 2021 and 2020, respectively

​

 

2,239

​

 

1,974

​

Additional paid-in capital

​

 

4,088,392

​

 

2,805,673

​

Accumulated other comprehensive loss

​

 

(570)

​

 

(632)

​

Accumulated deficit

​

 

(1,218,498)

​

 

(974,799)

​

Total CubeSmart shareholders’ equity

​

 

2,871,563

​

 

1,832,216

​

Noncontrolling interests in subsidiaries

​

 

18,597

​

 

8,632

​

Total equity

​

 

2,890,160

​

 

1,840,848

​

Total liabilities and equity

​

$

6,548,079

​

$

4,778,142

​

​

​

See accompanying notes to the consolidated financial statements.

​

F-8F-10

​

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONSOPERATIONS

(in thousands, except per share data)

​

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 

 

 

    

2018

    

2017

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

517,535

 

$

489,043

 

$

449,601

 

Other property related income

 

 

60,156

 

 

55,001

 

 

50,255

 

Property management fee income

 

 

20,253

 

 

14,899

 

 

10,183

 

Total revenues

 

 

597,944

 

 

558,943

 

 

510,039

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

 

196,866

 

 

181,508

 

 

165,847

 

Depreciation and amortization

 

 

143,350

 

 

145,681

 

 

161,865

 

General and administrative

 

 

37,712

 

 

34,745

 

 

32,823

 

Acquisition related costs

 

 

 —

 

 

1,294

 

 

6,552

 

Total operating expenses

 

 

377,928

 

 

363,228

 

 

367,087

 

OTHER (EXPENSE) INCOME

 

 

 

 

 

 

 

 

 

 

Interest:

 

 

 

 

 

 

 

 

 

 

Interest expense on loans

 

 

(62,132)

 

 

(56,952)

 

 

(50,399)

 

Loan procurement amortization expense

 

 

(2,313)

 

 

(2,638)

 

 

(2,577)

 

Equity in losses of real estate ventures

 

 

(865)

 

 

(1,386)

 

 

(2,662)

 

Gains from sale of real estate, net

 

 

10,576

 

 

 —

 

 

 —

 

Other

 

 

206

 

 

872

 

 

1,062

 

Total other expense

 

 

(54,528)

 

 

(60,104)

 

 

(54,576)

 

NET INCOME

 

 

165,488

 

 

135,611

 

 

88,376

 

NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests in the Operating Partnership

 

 

(1,820)

 

 

(1,593)

 

 

(941)

 

Noncontrolling interest in subsidiaries

 

 

221

 

 

270

 

 

470

 

NET INCOME ATTRIBUTABLE TO THE COMPANY

 

 

163,889

 

 

134,288

 

 

87,905

 

Distribution to preferred shareholders

 

 

 —

 

 

 —

 

 

(5,045)

 

Preferred share redemption charge

 

 

 —

 

 

 —

 

 

(2,937)

 

NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS

 

$

163,889

 

$

134,288

 

$

79,923

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to common shareholders

 

$

0.89

 

$

0.74

 

$

0.45

 

Diluted earnings per share attributable to common shareholders

 

$

0.88

 

$

0.74

 

$

0.45

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average basic shares outstanding

 

 

184,653

 

 

180,525

 

 

178,246

 

Weighted-average diluted shares outstanding

 

 

185,495

 

 

181,448

 

 

179,533

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

 

​

2021

    

2020

    

2019

 

​

​

​

​

​

​

​

​

​

​

REVENUES

​

​

​

​

​

​

​

​

​

Rental income

$

707,751

​

$

581,009

​

$

552,404

​

Other property related income

 

83,605

​

 

70,723

​

 

67,558

​

Property management fee income

 

31,208

​

 

27,445

​

 

23,953

​

Total revenues

 

822,564

​

 

679,177

​

 

643,915

​

OPERATING EXPENSES

​

​

​

​

​

​

​

​

​

Property operating expenses

 

252,104

​

 

223,634

​

 

209,739

​

Depreciation and amortization

 

232,049

​

 

156,573

​

 

163,547

​

General and administrative

 

47,809

​

 

41,423

​

 

38,560

​

Total operating expenses

 

531,962

​

 

421,630

​

 

411,846

​

OTHER (EXPENSE) INCOME

​

​

​

​

​

​

​

​

​

Interest:

​

​

​

​

​

​

​

​

​

Interest expense on loans

 

(78,448)

​

 

(75,890)

​

 

(72,525)

​

Loan procurement amortization expense

 

(8,168)

​

 

(2,674)

​

 

(2,819)

​

Loss on early extinguishment of debt

 

(20,328)

​

 

(18,020)

​

 

—

​

Equity in earnings of real estate ventures

 

25,275

​

 

178

​

 

11,122

​

Gains from sales of real estate, net

​

32,698

​

​

6,710

​

​

1,508

​

Other

 

(10,818)

​

 

(240)

​

 

1,416

​

Total other expense

 

(59,789)

​

 

(89,936)

​

 

(61,298)

​

NET INCOME

 

230,813

​

 

167,611

​

 

170,771

​

NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

​

​

​

​

​

​

​

​

​

Noncontrolling interests in the Operating Partnership

 

(7,873)

​

 

(1,825)

​

 

(1,708)

​

Noncontrolling interest in subsidiaries

 

542

​

 

(165)

​

 

54

​

NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS

$

223,482

​

$

165,621

​

$

169,117

​

​

​

​

​

​

​

​

​

​

​

Basic earnings per share attributable to common shareholders

$

1.10

​

$

0.85

​

$

0.89

​

Diluted earnings per share attributable to common shareholders

$

1.09

​

$

0.85

​

$

0.88

​

​

​

​

​

​

​

​

​

​

​

Weighted average basic shares outstanding

 

203,832

​

 

194,147

​

 

190,874

​

Weighted average diluted shares outstanding

 

205,009

​

 

194,943

​

 

191,576

​

​

​

​

​

​

​

​

​

​

​

​

​

See accompanying notes to the consolidated financial statements.

​

F-9F-11

​

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(LOSS)

(in thousands)

​

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 

 

 

 

2018

    

2017

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

165,488

 

$

135,611

 

$

88,376

 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains on interest rate swaps

 

 

(979)

 

 

195

 

 

(1,247)

 

Reclassification of realized (gains) losses on interest rate swaps

 

 

(60)

 

 

1,680

 

 

4,412

 

OTHER COMPREHENSIVE (LOSS) INCOME

 

 

(1,039)

 

 

1,875

 

 

3,165

 

COMPREHENSIVE INCOME

 

 

164,449

 

 

137,486

 

 

91,541

 

Comprehensive income attributable to noncontrolling interests in the Operating Partnership

 

 

(1,814)

 

 

(1,615)

 

 

(978)

 

Comprehensive loss attributable to noncontrolling interest in subsidiaries

 

 

221

 

 

270

 

 

470

 

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY

 

$

162,856

 

$

136,141

 

$

91,033

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

 

​

    

2021

    

2020

    

2019

 

​

​

​

​

​

​

​

​

​

​

​

NET INCOME

​

$

230,813

​

$

167,611

​

$

170,771

​

Other comprehensive income:

​

​

​

​

​

​

​

​

​

​

Unrealized gains on interest rate swaps

​

 

—

​

 

—

​

 

232

​

Reclassification of realized losses on interest rate swaps

​

 

81

​

 

81

​

 

70

​

OTHER COMPREHENSIVE INCOME:

​

 

81

​

 

81

​

 

302

​

COMPREHENSIVE INCOME

​

 

230,894

​

 

167,692

​

 

171,073

​

Comprehensive income attributable to noncontrolling interests in the

Operating Partnership

​

 

(7,892)

​

 

(1,809)

​

 

(1,710)

​

Comprehensive loss (income) attributable to noncontrolling interest in

subsidiaries

​

 

542

​

 

(165)

​

 

54

​

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY

​

$

223,544

​

$

165,718

​

$

169,417

​

​

​

​

​

​

​

​

​

​

​

​

​

See accompanying notes to the consolidated financial statements.

​

F-10F-12

​

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITYEQUITY

(in thousands)

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interests

 

 

 

Common

 

Preferred

 

Additional

 

Accumulated Other

 

 

 

 

Total

 

Noncontrolling

 

 

 

 

in the

 

 

 

Shares

 

Shares

 

Paid-in

 

Comprehensive

 

Accumulated

 

Shareholders’

 

Interests in

 

Total

 

Operating

 

 

  

Number

    

Amount

  

Number

    

Amount

  

Capital

  

(Loss) Income

  

Deficit

  

Equity

  

Subsidiaries

  

Equity

  

Partnership

 

 Balance at December 31, 2015

 

174,668

 

$

1,747

 

3,100

 

$

31

 

$

2,231,181

 

$

(4,978)

 

$

(584,654)

 

$

1,643,327

 

$

1,526

 

$

1,644,853

 

$

66,128

 

Contributions from noncontrolling interest in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,799

 

 

4,799

 

 

 

 

Issuance of common shares, net

 

4,408

 

 

44

 

 

 

 

 

 

 

136,077

 

 

 

 

 

 

 

 

136,121

 

 

 

 

 

136,121

 

 

 

 

Issuance of restricted shares

 

123

 

 

 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 1

 

 

 

 

 

 1

 

 

 

 

Issuance of OP Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,500

 

Conversion from units to shares

 

188

 

 

 2

 

 

 

 

 

 

 

4,874

 

 

 

 

 

 

 

 

4,876

 

 

 

 

 

4,876

 

 

(4,876)

 

Exercise of stock options

 

696

 

 

 7

 

 

 

 

 

 

 

13,276

 

 

 

 

 

 

 

 

13,283

 

 

 

 

 

13,283

 

 

 

 

Amortization of restricted shares

 

 

 

 

 

 

 

 

 

 

 

 

1,952

 

 

 

 

 

 

 

 

1,952

 

 

 

 

 

1,952

 

 

 

 

Share compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

1,260

 

 

 

 

 

 

 

 

1,260

 

 

 

 

 

1,260

 

 

 

 

Adjustment for noncontrolling interests in the Operating Partnership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,388

 

 

7,388

 

 

 

 

 

7,388

 

 

(7,388)

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

87,905

 

 

87,905

 

 

(470)

 

 

87,435

 

 

941

 

Other comprehensive income, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,128

 

 

 

 

 

3,128

 

 

 

 

 

3,128

 

 

37

 

Preferred share distributions ($1.63 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,045)

 

 

(5,045)

 

 

 

 

 

(5,045)

 

 

 

 

Preferred share redemption

 

 

 

 

 

 

(3,100)

 

 

(31)

 

 

(74,606)

 

 

 

 

 

(2,937)

 

 

(77,574)

 

 

 

 

 

(77,574)

 

 

 

 

Common share distributions ($0.90 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(161,240)

 

 

(161,240)

 

 

 

 

 

(161,240)

 

 

(1,935)

 

 Balance at December 31, 2016

 

180,083

 

$

1,801

 

 —

 

$

 —

 

$

2,314,014

 

$

(1,850)

 

$

(658,583)

 

$

1,655,382

 

$

5,855

 

$

1,661,237

 

$

54,407

 

Contributions from noncontrolling interest in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,058

 

 

1,058

 

 

 

 

Acquisition of noncontrolling interest in subsidiary

 

 

 

 

 

 

 

 

 

 

 

 

(8,626)

 

 

 

 

 

 

 

 

(8,626)

 

 

(407)

 

 

(9,033)

 

 

 

 

Issuance of common shares, net

 

1,036

 

 

10

 

 

 

 

 

 

 

29,632

 

 

 

 

 

 

 

 

29,642

 

 

 

 

 

29,642

 

 

 

 

Issuance of restricted shares

 

106

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 1

 

 

 

 

 

 1

 

 

 

 

Issuance of OP Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,324

 

Conversion from units to shares

 

594

 

 

 6

 

 

 

 

 

 

 

15,700

 

 

 

 

 

 

 

 

15,706

 

 

 

 

 

15,706

 

 

(15,706)

 

Exercise of stock options

 

397

 

 

4

 

 

 

 

 

 

 

2,360

 

 

 

 

 

 

 

 

2,364

 

 

 

 

 

2,364

 

 

 

 

Amortization of restricted shares

 

 

 

 

 

 

 

 

 

 

 

 

2,009

 

 

 

 

 

 

 

 

2,009

 

 

 

 

 

2,009

 

 

 

 

Share compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

1,531

 

 

 

 

 

 

 

 

1,531

 

 

 

 

 

1,531

 

 

 

 

Adjustment for noncontrolling interests in the Operating Partnership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,965)

 

 

(3,965)

 

 

 

 

 

(3,965)

 

 

3,965

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

134,288

 

 

134,288

 

 

(270)

 

 

134,018

 

 

1,593

 

Other comprehensive income, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,853

 

 

 

 

 

1,853

 

 

 

 

 

1,853

 

 

22

 

Common share distributions ($1.11 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(201,051)

 

 

(201,051)

 

 

 

 

 

(201,051)

 

 

(2,285)

 

 Balance at December 31, 2017

 

182,216

 

$

1,822

 

 —

 

$

 —

 

$

2,356,620

 

$

 3

 

$

(729,311)

 

$

1,629,134

 

$

6,236

 

$

1,635,370

 

$

54,320

 

Contributions from noncontrolling interest in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

925

 

 

925

 

 

 

 

Distributions to noncontrolling interests in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(169)

 

 

(169)

 

 

 

 

Issuance of common shares, net

 

4,291

 

 

43

 

 

 

 

 

 

 

131,786

 

 

 

 

 

 

 

 

131,829

 

 

 

 

 

131,829

 

 

 

 

Issuance of restricted shares

 

86

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 1

 

 

 

 

 

1

 

 

 

 

Issuance of OP Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,242

 

Conversion from units to shares

 

147

 

 

1

 

 

 

 

 

 

 

4,403

 

 

 

 

 

 

 

 

4,404

 

 

 

 

 

4,404

 

 

(4,404)

 

Exercise of stock options

 

405

 

 

4

 

 

 

 

 

 

 

3,831

 

 

 

 

 

 

 

 

3,835

 

 

 

 

 

3,835

 

 

 

 

Amortization of restricted shares

 

 

 

 

 

 

 

 

 

 

 

 

2,570

 

 

 

 

 

 

 

 

2,570

 

 

 

 

 

2,570

 

 

 

 

Share compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

1,541

 

 

 

 

 

 

 

 

1,541

 

 

 

 

 

1,541

 

 

 

 

Adjustment for noncontrolling interests in the Operating Partnership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(299)

 

 

(299)

 

 

 

 

 

(299)

 

 

299

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

163,889

 

 

163,889

 

 

(221)

 

 

163,668

 

 

1,820

 

Other comprehensive (loss) income, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,032)

 

 

405

 

 

(627)

 

 

 

 

 

(627)

 

 

(6)

 

Common share distributions ($1.22 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(226,599)

 

 

(226,599)

 

 

 

 

 

(226,599)

 

 

(2,452)

 

 Balance at December 31, 2018

 

187,145

 

$

1,871

 

 —

 

$

 —

 

$

2,500,751

 

$

(1,029)

 

$

(791,915)

 

$

1,709,678

 

$

6,771

 

$

1,716,449

 

$

55,819

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noncontrolling

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interests

 

​

​

Common

​

Additional

​

Accumulated Other

​

​

​

​

Total

​

Noncontrolling

​

​

​

​

in the

​

​

​

Shares

​

Paid-in

​

Comprehensive

​

Accumulated

​

Shareholders’

​

Interests in

​

Total

​

Operating

 

​

  

Number

    

Amount

  

Capital

  

Income (Loss)

  

Deficit

  

Equity

  

Subsidiaries

  

Equity

  

Partnership

 

Balance at December 31, 2018

 

187,145

​

$

1,871

 

$

2,500,751

​

$

(1,029)

​

$

(791,915)

​

$

1,709,678

​

$

6,771

​

$

1,716,449

​

$

55,819

​

Contributions from noncontrolling interest in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

7,376

​

​

7,376

​

​

​

​

Distributions paid to noncontrolling interest in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(188)

​

​

(188)

​

​

​

​

Acquisition of noncontrolling interest in subsidiary

​

​

​

​

​

​

​

(34,690)

​

​

​

​

​

​

​

​

(34,690)

​

​

(5,915)

​

​

(40,605)

​

​

​

​

Issuance of common shares, net

 

5,899

​

​

60

​

​

196,244

​

​

​

​

​

​

​

​

196,304

​

​

​

​

​

196,304

​

​

​

​

Issuance of restricted shares

 

52

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Issuance of OP units

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

3,576

​

Conversion from units to shares

 

80

​

​

1

​

​

2,485

​

​

​

​

​

​

​

​

2,486

​

​

​

​

​

2,486

​

​

(2,486)

​

Exercise of stock options

 

381

​

​

4

​

​

3,682

​

​

​

​

​

​

​

​

3,686

​

​

​

​

​

3,686

​

​

​

​

Amortization of restricted shares

​

​

​

​

​

​

​

4,487

​

​

​

​

​

​

​

​

4,487

​

​

​

​

​

4,487

​

​

​

​

Share compensation expense

​

​

​

​

​

​

​

1,786

​

​

​

​

​

​

​

​

1,786

​

​

​

​

​

1,786

​

​

​

​

Adjustment for noncontrolling interests in the Operating

Partnership

​

​

​

​

​

​

​

​

​

​

​

​

​

(5,918)

​

​

(5,918)

​

​

​

​

​

(5,918)

​

​

5,918

​

Net income (loss)

​

​

​

​

​

​

​

​

​

​

​

​

​

169,117

​

​

169,117

​

​

(54)

​

​

169,063

​

​

1,708

​

Other comprehensive income, net

​

​

​

​

​

​

​

​

​

​

300

​

​

​

​

​

300

​

​

​

​

​

300

​

​

2

​

Common share distributions ($1.29 per share)

​

​

​

​

​

​

​

​

​

​

​

​

​

(247,890)

​

​

(247,890)

​

​

​

​

​

(247,890)

​

​

(2,449)

​

Balance at December 31, 2019

 

193,557

​

$

1,936

 

$

2,674,745

​

$

(729)

​

$

(876,606)

​

$

1,799,346

​

$

7,990

​

$

1,807,336

​

$

62,088

​

Contributions from noncontrolling interest in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

682

​

​

682

​

​

​

​

Distributions paid to noncontrolling interest in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(205)

​

​

(205)

​

​

​

​

Issuance of common shares, net

 

3,627

​

​

37

​

​

120,690

​

​

​

​

​

​

​

​

120,727

​

​

​

​

​

120,727

​

​

​

​

Issuance of restricted shares

​

60

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Issuance of OP units

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

186,933

​

Conversion from units to shares

​

100

​

​

1

​

​

2,823

​

​

​

​

​

​

​

​

2,824

​

​

​

​

​

2,824

​

​

(2,824)

​

Exercise of stock options

​

62

​

​

​

​

​

961

​

​

​

​

​

​

​

​

961

​

​

​

​

​

961

​

​

​

​

Amortization of restricted shares

​

​

​

​

​

​

​

4,502

​

​

​

​

​

​

​

​

4,502

​

​

​

​

​

4,502

​

​

​

​

Share compensation expense

​

​

​

​

​

​

​

1,952

​

​

​

​

​

​

​

​

1,952

​

​

​

​

​

1,952

​

​

​

​

Adjustment for noncontrolling interests in the Operating

Partnership

​

​

​

​

​

​

​

​

​

​

​

​

​

(4,230)

​

​

(4,230)

​

​

​

​

​

(4,230)

​

​

4,230

​

Net income

​

​

​

​

​

​

​

​

​

​

​

​

​

165,621

​

​

165,621

​

​

165

​

​

165,786

​

​

1,825

​

Other comprehensive income (loss), net

​

​

​

​

​

​

​

​

​

​

97

​

​

​

​

​

97

​

​

​

​

​

97

​

​

(16)

​

Common share distributions ($1.33 per share)

​

​

​

​

​

​

​

​

​

​

​

​

​

(259,584)

​

​

(259,584)

​

​

​

​

​

(259,584)

​

​

(2,822)

​

Balance at December 31, 2020

 

197,406

​

$

1,974

 

$

2,805,673

​

$

(632)

​

$

(974,799)

​

$

1,832,216

​

$

8,632

​

$

1,840,848

​

$

249,414

​

Contributions from noncontrolling interest in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

11,404

​

​

11,404

​

​

​

​

Distributions paid to noncontrolling interest in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(246)

​

​

(246)

​

​

​

​

Acquisition of noncontrolling interest in subsidiary

​

​

​

​

​

​

​

(2,746)

​

​

​

​

​

​

​

​

(2,746)

​

​

(651)

​

​

(3,397)

​

​

​

​

Issuance of common shares, net

​

20,508

​

​

205

​

​

965,433

​

​

​

​

​

​

​

​

965,638

​

​

​

​

​

965,638

​

​

​

​

Issuance of restricted shares

​

66

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Conversion from units to shares

​

5,519

​

​

56

​

​

304,959

​

​

​

​

​

​

​

​

305,015

​

​

​

​

​

305,015

​

​

(305,015)

​

Exercise of stock options

​

419

​

​

4

​

​

7,861

​

​

​

​

​

​

​

​

7,865

​

​

​

​

​

7,865

​

​

​

​

Amortization of restricted shares

​

​

​

​

​

​

​

4,941

​

​

​

​

​

​

​

​

4,941

​

​

​

​

​

4,941

​

​

​

​

Share compensation expense

​

​

​

​

​

​

​

2,271

​

​

​

​

​

​

​

​

2,271

​

​

​

​

​

2,271

​

​

​

​

Adjustment for noncontrolling interests in the Operating

Partnership

​

​

​

​

​

​

​

​

​

​

​

​

​

(164,109)

​

​

(164,109)

​

​

​

​

​

(164,109)

​

​

164,109

​

Net income (loss)

​

​

​

​

​

​

​

​

​

​

​

​

​

223,482

​

​

223,482

​

​

(542)

​

​

222,940

​

​

7,873

​

Other comprehensive income, net

​

​

​

​

​

​

​

​

​

​

62

​

​

​

​

​

62

​

​

​

​

​

62

​

​

19

​

Common share distributions ($1.45 per share)

​

​

​

​

​

​

​

​

​

​

​

​

​

(303,072)

​

​

(303,072)

​

​

​

​

​

(303,072)

​

​

(8,180)

​

Balance at December 31, 2021

 

223,918

​

$

2,239

 

$

4,088,392

​

$

(570)

​

$

(1,218,498)

​

$

2,871,563

​

$

18,597

​

$

2,890,160

​

$

108,220

​

​

​

​

See accompanying notes to the consolidated financial statements.

​

F-11F-13

​

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWSFLOWS

(in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

 

​

    

2021

    

2020

    

2019

 

Operating Activities

​

​

​

​

​

​

​

​

​

​

Net income

​

$

230,813

​

$

167,611

​

$

170,771

​

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

​

​

​

​

​

​

​

​

​

​

Depreciation and amortization

​

 

240,217

​

 

159,247

​

 

166,366

​

Non-cash portion of interest expense related to finance leases

​

​

202

​

​

—

​

​

—

​

Loss on early extinguishment of debt

​

 

20,328

​

 

18,020

​

 

—

​

Equity in earnings of real estate ventures

​

 

(25,275)

​

 

(178)

​

 

(11,122)

​

Gains from sales of real estate, net

​

 

(32,698)

​

 

(6,710)

​

 

(1,508)

​

Equity compensation expense

​

 

8,088

​

 

7,140

​

 

6,694

​

Accretion of fair market value adjustment of debt

​

 

(2,037)

​

 

(259)

​

 

(718)

​

Changes in other operating accounts:

​

​

​

​

​

​

​

​

​

​

Other assets

​

 

(9,247)

​

 

(9,674)

​

 

(6,578)

​

Accounts payable and accrued expenses

​

 

14,871

​

 

13,922

​

 

6,042

​

Other liabilities

​

 

3,923

​

 

1,914

​

 

1,821

​

Net cash provided by operating activities

​

$

449,185

​

$

351,033

​

$

331,768

​

Investing Activities

​

​

​

​

​

​

​

​

​

​

Acquisitions of storage properties

​

 

(151,547)

​

 

(417,988)

​

 

(117,998)

​

Acquisition of LAACO, Ltd., net of cash acquired

​

​

(1,678,984)

​

​

—

​

​

—

​

Additions and improvements to storage properties

​

 

(34,608)

​

 

(49,857)

​

 

(37,569)

​

Development costs

​

 

(69,887)

​

 

(55,286)

​

 

(102,826)

​

Cash paid for partner's interest in real estate venture, net of cash, cash equivalents and restricted cash acquired

​

 

—

​

 

—

​

 

(117,959)

​

Investment in real estate ventures

​

 

(28,261)

​

 

(7,022)

​

 

(10,264)

​

Cash distributed from real estate ventures

​

 

66,593

​

 

6,246

​

 

7,096

​

Proceeds from sale of real estate, net

​

 

44,026

​

 

12,466

​

 

3,856

​

Net cash used in investing activities

​

$

(1,852,668)

​

$

(511,441)

​

$

(375,664)

​

Financing Activities

​

​

​

​

​

​

​

​

​

​

Proceeds from:

​

​

​

​

​

​

​

​

​

​

Unsecured senior notes

​

 

1,043,427

​

 

445,833

​

 

696,426

​

Revolving credit facility

​

 

906,571

​

 

429,085

​

 

859,313

​

Principal payments on:

​

​

​

​

​

​

​

​

​

​

Unsecured senior notes

​

​

(300,000)

​

​

(250,000)

​

 

—

​

Revolving credit facility

​

 

(814,471)

​

 

(311,285)

​

 

(1,158,776)

​

Unsecured term loans

​

 

—

​

 

—

​

 

(200,000)

​

Mortgage loans and notes payable

​

 

(87,263)

​

 

(46,093)

​

 

(11,652)

​

Loan procurement costs

​

 

(12,548)

​

 

(3,764)

​

 

(6,023)

​

Debt prepayment costs

​

​

(20,023)

​

​

(17,584)

​

​

—

​

Settlement of hedge transactions

​

 

—

​

 

—

​

 

(807)

​

Acquisition of noncontrolling interest in subsidiary, net

​

​

(3,397)

​

​

—

​

​

(35,777)

​

Proceeds from issuance of common shares, net

​

 

965,638

​

 

120,727

​

 

196,304

​

Cash paid upon vesting of restricted shares

​

​

(876)

​

​

(686)

​

​

(421)

​

Exercise of stock options

​

 

7,865

​

 

961

​

 

3,686

​

Contributions from noncontrolling interests in subsidiaries

​

 

8,031

​

 

—

​

 

48

​

Distributions paid to noncontrolling interests in subsidiaries

​

​

(246)

​

​

(205)

​

​

(188)

​

Distributions paid to common shareholders

​

 

(273,839)

​

 

(256,253)

​

 

(243,859)

​

Distributions paid to noncontrolling interests in Operating Partnership

​

 

(8,297)

​

 

(2,540)

​

 

(2,419)

​

Net cash provided by financing activities

​

$

1,410,572

​

$

108,196

​

$

95,855

​

Change in cash, cash equivalents and restricted cash

​

 

7,089

​

 

(52,212)

​

 

51,959

​

Cash, cash equivalents and restricted cash at beginning of period

​

 

6,229

​

 

58,441

​

 

6,482

​

Cash, cash equivalents and restricted cash at end of period

​

$

13,318

​

$

6,229

​

$

58,441

​

Supplemental Cash Flow and Noncash Information

​

​

​

​

​

​

​

​

​

​

Cash paid for interest, net of interest capitalized

​

$

79,148

​

$

80,792

​

$

69,283

​

Supplemental disclosure of noncash activities:

​

​

​

​

​

​

​

​

​

​

Acquisitions of storage properties

​

$

—

​

$

(2,623)

​

$

—

​

Proceeds held in escrow from real estate venture's sale of real estate (see note 4)

​

$

—

​

$

—

​

$

8,288

​

Noncash consideration for acquisition of partner's interest in real estate venture (see note 4)

​

$

—

​

$

—

​

$

(8,288)

​

Right-of-use assets obtained in exchange for lease liabilities

​

$

—

​

$

61,423

​

$

—

​

Discount on issuance of unsecured senior notes

​

$

6,573

​

$

4,167

​

$

3,574

​

Noncash drawdown on revolving credit facility

​

$

—

​

$

—

​

$

103,938

​

Mortgage loan assumptions

​

$

40,880

​

$

169,056

​

$

—

​

Repayment of unsecured term loan through noncash drawdown on revolving credit facility

​

$

—

​

$

—

​

$

(100,000)

​

Accretion of put liability

​

$

9,777

​

$

7,917

​

$

5,895

​

Derivative valuation adjustment

​

$

81

​

$

81

​

$

302

​

Loan procurement costs

​

$

—

​

$

—

​

$

(3,770)

​

Issuance of OP units (see note 4)

​

$

—

​

$

186,933

​

$

3,576

​

Acquisition of noncontrolling interest in subsidiary

​

$

—

​

$

—

​

$

(4,828)

​

Contributions from noncontrolling interests in subsidiaries

​

$

3,373

​

$

682

​

$

7,328

​

​

See accompanying notes to the consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 

 

 

 

2018

    

2017

    

2016

 

Operating Activities

 

 

 

 

 

 

 

 

 

 

Net income

 

$

165,488

 

$

135,611

 

$

88,376

 

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

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

145,663

 

 

148,319

 

 

164,442

 

Equity in losses of real estate ventures

 

 

865

 

 

1,386

 

 

2,662

 

Gains from sale of real estate, net

 

 

(10,576)

 

 

 —

 

 

 —

 

Equity compensation expense

 

 

5,572

 

 

5,586

 

 

4,850

 

Accretion of fair market value adjustment of debt

 

 

(735)

 

 

(559)

 

 

(1,138)

 

Changes in other operating accounts:

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

(4,937)

 

 

(10,429)

 

 

(5,229)

 

Accounts payable and accrued expenses

 

 

2,653

 

 

10,846

 

 

7,862

 

Other liabilities

 

 

342

 

 

1,154

 

 

1,449

 

Net cash provided by operating activities

 

$

304,335

 

$

291,914

 

$

263,274

 

Investing Activities

 

 

 

 

 

 

 

 

 

 

Acquisitions of storage properties

 

 

(214,510)

 

 

(69,629)

 

 

(388,641)

 

Additions and improvements to storage properties

 

 

(27,626)

 

 

(27,378)

 

 

(29,672)

 

Development costs

 

 

(86,002)

 

 

(68,778)

 

 

(136,912)

 

Investment in real estate ventures

 

 

(19,216)

 

 

(301)

 

 

(12,176)

 

Cash distributed from real estate ventures

 

 

8,706

 

 

15,783

 

 

8,113

 

Proceeds from sale of real estate, net

 

 

16,389

 

 

 —

 

 

 —

 

Net cash used in investing activities

 

$

(322,259)

 

$

(150,303)

 

$

(559,288)

 

Financing Activities

 

 

 

 

 

 

 

 

 

 

Proceeds from:

 

 

 

 

 

 

 

 

 

 

Unsecured senior notes

 

 

 —

 

 

103,192

 

 

298,512

 

Revolving credit facility

 

 

679,535

 

 

628,400

 

 

958,200

 

Principal payments on:

 

 

 

 

 

 

 

 

 

 

Revolving credit facility

 

 

(565,710)

 

 

(590,000)

 

 

(914,900)

 

Unsecured term loans

 

 

 —

 

 

(100,000)

 

 

 —

 

Mortgage loans and notes payable

 

 

(9,816)

 

 

(8,666)

 

 

(37,260)

 

Loan procurement costs

 

 

 —

 

 

(953)

 

 

(2,467)

 

Acquisition of noncontrolling interest in subsidiary

 

 

 —

 

 

(9,033)

 

 

 —

 

Proceeds from issuance of common shares, net

 

 

131,830

 

 

29,643

 

 

136,122

 

Cash paid upon vesting of restricted shares

 

 

(1,461)

 

 

(2,046)

 

 

(1,638)

 

Redemption of preferred shares

 

 

 —

 

 

 —

 

 

(77,574)

 

Exercise of stock options

 

 

3,835

 

 

2,364

 

 

13,283

 

Contributions from noncontrolling interests in subsidiaries

 

 

925

 

 

1,058

 

 

4,799

 

Distributions paid to noncontrolling interests in subsidiaries

 

 

(169)

 

 

 —

 

 

 —

 

Distributions paid to common shareholders

 

 

(221,328)

 

 

(195,006)

 

 

(149,280)

 

Distributions paid to preferred shareholders

 

 

 —

 

 

 —

 

 

(6,545)

 

Distributions paid to noncontrolling interests in Operating Partnership

 

 

(2,393)

 

 

(2,272)

 

 

(1,841)

 

Net cash provided by (used in) financing activities

 

$

15,248

 

$

(143,319)

 

$

219,411

 

Change in cash, cash equivalents, and restricted cash

 

 

(2,676)

 

 

(1,708)

 

 

(76,603)

 

Cash, cash equivalents, and restricted cash at beginning of year

 

 

9,158

 

 

10,866

 

 

87,469

 

Cash, cash equivalents, and restricted cash at end of year

 

$

6,482

 

$

9,158

 

$

10,866

 

Supplemental Cash Flow and Noncash Information

 

 

 

 

 

 

 

 

 

 

Cash paid for interest, net of interest capitalized

 

$

66,829

 

$

63,407

 

$

53,085

 

Supplemental disclosure of noncash activities:

 

 

 

 

 

 

 

 

 

 

Restricted cash - acquisition of storage properties

 

$

 —

 

$

 —

 

$

(22,019)

 

Accretion of put liability

 

$

24,747

 

$

35,122

 

$

31,426

 

Derivative valuation adjustment

 

$

(633)

 

$

1,875

 

$

3,165

 

Discount on issuance of unsecured senior notes

 

$

 —

 

$

 —

 

$

1,488

 

Mortgage loan assumptions

 

$

7,166

 

$

6,201

 

$

41,513

 

Preferred share redemption

 

$

 —

 

$

 —

 

$

2,863

 

Issuance of OP units

 

$

6,242

 

$

12,324

 

$

 —

 

Liability for acquisition of storage property

 

$

 —

 

$

1,470

 

$

 —

 

Contribution of storage property to real estate venture

 

$

 —

 

$

9,400

 

$

 —

 

F-14

​

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

​

​

​

​

​

​

​

​

​

​

​

December 31, 

 

​

    

2021

    

2020

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

ASSETS

​

​

​

​

​

​

​

Storage properties

​

$

7,183,494

​

$

5,489,754

​

Less: Accumulated depreciation

​

 

(1,085,824)

​

 

(983,940)

​

Storage properties, net (including VIE assets of $149,467 and $119,345, respectively)

​

 

6,097,670

​

 

4,505,814

​

Cash and cash equivalents

​

 

11,140

​

 

3,592

​

Restricted cash

​

 

2,178

​

 

2,637

​

Loan procurement costs, net of amortization

​

 

2,322

​

 

3,275

​

Investment in real estate ventures, at equity

​

 

119,751

​

 

92,071

​

Assets held for sale

​

​

49,313

​

 

—

​

Other assets, net

​

 

265,705

​

 

170,753

​

Total assets

​

$

6,548,079

​

$

4,778,142

​

​

​

​

​

​

​

​

​

LIABILITIES AND CAPITAL

​

​

​

​

​

​

​

Unsecured senior notes, net

​

$

2,768,209

​

$

2,030,372

​

Revolving credit facility

​

 

209,900

​

 

117,800

​

Mortgage loans and notes payable, net

​

 

167,676

​

 

216,504

​

Lease liabilities - finance leases

​

​

65,801

​

​

65,599

​

Accounts payable, accrued expenses and other liabilities

​

 

199,985

​

 

159,140

​

Distributions payable

​

 

97,417

​

 

68,301

​

Deferred revenue

​

 

37,144

​

 

29,087

​

Security deposits

​

 

1,065

​

 

1,077

​

Liabilities held for sale

​

​

2,502

​

​

—

​

Total liabilities

​

 

3,549,699

​

 

2,687,880

​

​

​

​

​

​

​

​

​

Limited Partnership interests of third parties

​

 

108,220

​

 

249,414

​

​

​

​

​

​

​

​

​

Commitments and contingencies

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Capital

​

​

​

​

​

​

​

Operating Partner

​

 

2,872,133

​

 

1,832,848

​

Accumulated other comprehensive loss

​

 

(570)

​

 

(632)

​

Total CubeSmart, L.P. capital

​

 

2,871,563

​

 

1,832,216

​

Noncontrolling interests in subsidiaries

​

 

18,597

​

 

8,632

​

Total capital

​

 

2,890,160

​

 

1,840,848

​

Total liabilities and capital

​

$

6,548,079

​

$

4,778,142

​

​

​

See accompanying notes to the consolidated financial statements.

​

F-12F-15

​

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED BALANCE SHEETS

(in thousands)thousands, except per common unit data)

​

 

 

 

 

 

 

 

 

 

 

December 31, 

 

 

    

2018

    

2017

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Storage properties

 

$

4,463,455

 

$

4,161,715

 

Less: Accumulated depreciation

 

 

(862,487)

 

 

(752,925)

 

Storage properties, net (including VIE assets of $330,986 and $291,496, respectively)

 

 

3,600,968

 

 

3,408,790

 

Cash and cash equivalents

 

 

3,764

 

 

5,268

 

Restricted cash

 

 

2,718

 

 

3,890

 

Loan procurement costs, net of amortization

 

 

963

 

 

1,592

 

Investment in real estate ventures, at equity

 

 

95,796

 

 

91,206

 

Other assets, net

 

 

48,763

 

 

34,590

 

Total assets

 

$

3,752,972

 

$

3,545,336

 

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITAL

 

 

 

 

 

 

 

Unsecured senior notes, net

 

$

1,143,524

 

$

1,142,460

 

Revolving credit facility

 

 

195,525

 

 

81,700

 

Unsecured term loans, net

 

 

299,799

 

 

299,396

 

Mortgage loans and notes payable, net

 

 

108,246

 

 

111,434

 

Accounts payable, accrued expenses and other liabilities

 

 

149,914

 

 

143,344

 

Distributions payable

 

 

60,627

 

 

55,297

 

Deferred revenue

 

 

22,595

 

 

21,529

 

Security deposits

 

 

474

 

 

486

 

Total liabilities

 

 

1,980,704

 

 

1,855,646

 

 

 

 

 

 

 

 

 

Limited Partnership interests of third parties

 

 

55,819

 

 

54,320

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital

 

 

 

 

 

 

 

Operating Partner

 

 

1,710,707

 

 

1,629,131

 

Accumulated other comprehensive (loss) income

 

 

(1,029)

 

 

3

 

Total CubeSmart, L.P. capital

 

 

1,709,678

 

 

1,629,134

 

Noncontrolling interests in subsidiaries

 

 

6,771

 

 

6,236

 

Total capital

 

 

1,716,449

 

 

1,635,370

 

Total liabilities and capital

 

$

3,752,972

 

$

3,545,336

 

​

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

 

​

​

2021

    

2020

    

2019

 

​

​

​

​

​

​

​

​

​

​

​

REVENUES

​

​

​

​

​

​

​

​

​

​

Rental income

​

$

707,751

​

$

581,009

​

$

552,404

​

Other property related income

​

 

83,605

​

​

70,723

​

​

67,558

​

Property management fee income

​

 

31,208

​

​

27,445

​

​

23,953

​

Total revenues

​

 

822,564

​

 

679,177

​

 

643,915

​

OPERATING EXPENSES

​

​

​

​

​

​

​

​

​

​

Property operating expenses

​

 

252,104

​

​

223,634

​

​

209,739

​

Depreciation and amortization

​

 

232,049

​

​

156,573

​

​

163,547

​

General and administrative

​

 

47,809

​

​

41,423

​

​

38,560

​

Total operating expenses

​

 

531,962

​

 

421,630

​

 

411,846

​

OTHER (EXPENSE) INCOME

​

​

​

​

​

​

​

​

​

​

Interest:

​

​

​

​

​

​

​

​

​

​

Interest expense on loans

​

 

(78,448)

​

​

(75,890)

​

​

(72,525)

​

Loan procurement amortization expense

​

 

(8,168)

​

​

(2,674)

​

​

(2,819)

​

Loss on early extinguishment of debt

​

 

(20,328)

​

​

(18,020)

​

​

—

​

Equity in earnings of real estate ventures

​

 

25,275

​

 

178

​

 

11,122

​

Gains from sales of real estate, net

​

​

32,698

​

 

6,710

​

 

1,508

​

Other

​

 

(10,818)

​

 

(240)

​

 

1,416

​

Total other expense

​

 

(59,789)

​

 

(89,936)

​

 

(61,298)

​

NET INCOME

​

 

230,813

​

 

167,611

​

 

170,771

​

NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

​

​

​

​

​

​

​

​

​

​

Noncontrolling interest in subsidiaries

​

 

542

​

 

(165)

​

 

54

​

NET INCOME ATTRIBUTABLE TO CUBESMART L.P.

​

 

231,355

​

 

167,446

​

 

170,825

​

Operating Partnership interests of third parties

​

 

(7,873)

​

 

(1,825)

​

 

(1,708)

​

NET INCOME ATTRIBUTABLE TO COMMON UNITHOLDERS

​

$

223,482

​

$

165,621

​

$

169,117

​

​

    

 

    

​

 

    

    

 

    

​

Basic earnings per unit attributable to common unitholders

​

$

1.10

​

$

0.85

​

$

0.89

​

Diluted earnings per unit attributable to common unitholders

​

$

1.09

​

$

0.85

​

$

0.88

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average basic units outstanding

​

​

203,832

​

​

194,147

​

​

190,874

​

Weighted average diluted units outstanding

​

​

205,009

​

​

194,943

​

​

191,576

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

See accompanying notes to the consolidated financial statements.

​

F-13F-16

​

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONSCOMPREHENSIVE INCOME (LOSS)

(in thousands, except per common unit data)thousands)

​

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 

 

 

 

2018

    

2017

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

517,535

 

$

489,043

 

$

449,601

 

Other property related income

 

 

60,156

 

 

55,001

 

 

50,255

 

Property management fee income

 

 

20,253

 

 

14,899

 

 

10,183

 

Total revenues

 

 

597,944

 

 

558,943

 

 

510,039

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

 

196,866

 

 

181,508

 

 

165,847

 

Depreciation and amortization

 

 

143,350

 

 

145,681

 

 

161,865

 

General and administrative

 

 

37,712

 

 

34,745

 

 

32,823

 

Acquisition related costs

 

 

 —

 

 

1,294

 

 

6,552

 

Total operating expenses

 

 

377,928

 

 

363,228

 

 

367,087

 

OTHER (EXPENSE) INCOME

 

 

 

 

 

 

 

 

 

 

Interest:

 

 

 

 

 

 

 

 

 

 

Interest expense on loans

 

 

(62,132)

 

 

(56,952)

 

 

(50,399)

 

Loan procurement amortization expense

 

 

(2,313)

 

 

(2,638)

 

 

(2,577)

 

Equity in losses of real estate ventures

 

 

(865)

 

 

(1,386)

 

 

(2,662)

 

Gains from sale of real estate, net

 

 

10,576

 

 

 —

 

 

 —

 

Other

 

 

206

 

 

872

 

 

1,062

 

Total other expense

 

 

(54,528)

 

 

(60,104)

 

 

(54,576)

 

NET INCOME

 

 

165,488

 

 

135,611

 

 

88,376

 

NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

 

 

 

 

 

 

 

 

 

Noncontrolling interest in subsidiaries

 

 

221

 

 

270

 

 

470

 

NET INCOME ATTRIBUTABLE TO CUBESMART L.P.

 

 

165,709

 

 

135,881

 

 

88,846

 

Operating Partnership interests of third parties

 

 

(1,820)

 

 

(1,593)

 

 

(941)

 

NET INCOME ATTRIBUTABLE TO OPERATING PARTNER

 

 

163,889

 

 

134,288

 

 

87,905

 

Distribution to preferred unitholders

 

 

 —

 

 

 —

 

 

(5,045)

 

Preferred unit redemption charge

 

 

 —

 

 

 —

 

 

(2,937)

 

NET INCOME ATTRIBUTABLE TO COMMON UNITHOLDERS

 

$

163,889

 

$

134,288

 

$

79,923

 

 

 

 

    

 

 

    

    

 

    

 

Basic earnings per unit attributable to common unitholders

 

$

0.89

 

$

0.74

 

$

0.45

 

Diluted earnings per unit attributable to common unitholders

 

$

0.88

 

$

0.74

 

$

0.45

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average basic units outstanding

 

 

184,653

 

 

180,525

 

 

178,246

 

Weighted-average diluted units outstanding

 

 

185,495

 

 

181,448

 

 

179,533

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

 

​

    

2021

    

2020

    

2019

 

​

​

​

​

​

​

​

​

​

​

​

NET INCOME

​

$

230,813

​

$

167,611

​

$

170,771

​

Other comprehensive income:

​

​

​

​

​

​

​

​

​

​

Unrealized gains on interest rate swaps

​

 

—

​

 

—

​

 

232

​

Reclassification of realized losses on interest rate swaps

​

 

81

​

 

81

​

 

70

​

OTHER COMPREHENSIVE INCOME:

​

 

81

​

 

81

​

 

302

​

COMPREHENSIVE INCOME

​

 

230,894

​

 

167,692

​

 

171,073

​

Comprehensive income attributable to Operating Partnership interests of

third parties

​

 

(7,892)

​

 

(1,809)

​

 

(1,710)

​

Comprehensive loss (income) attributable to noncontrolling interest in

subsidiaries

​

 

542

​

 

(165)

​

 

54

​

COMPREHENSIVE INCOME ATTRIBUTABLE TO OPERATING

PARTNER

​

$

223,544

​

$

165,718

​

$

169,417

​

​

​

​

​

​

​

​

​

​

​

​

​

See accompanying notes to the consolidated financial statements.

​

​

F-14F-17

​

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)CAPITAL

(in thousands)

​

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 

 

 

 

2018

    

2017

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

165,488

 

$

135,611

 

$

88,376

 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains on interest rate swaps

 

 

(979)

 

 

195

 

 

(1,247)

 

Reclassification of realized (gains) losses on interest rate swaps

 

 

(60)

 

 

1,680

 

 

4,412

 

OTHER COMPREHENSIVE (LOSS) INCOME

 

 

(1,039)

 

 

1,875

 

 

3,165

 

COMPREHENSIVE INCOME

 

 

164,449

 

 

137,486

 

 

91,541

 

Comprehensive income attributable to Operating Partnership interests of third parties

 

 

(1,814)

 

 

(1,615)

 

 

(978)

 

Comprehensive loss attributable to noncontrolling interest in subsidiaries

 

 

221

 

 

270

 

 

470

 

COMPREHENSIVE INCOME ATTRIBUTABLE TO OPERATING PARTNER

 

$

162,856

 

$

136,141

 

$

91,033

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Number of Common OP

​

​

​

​

Accumulated Other

​

Total

​

Noncontrolling

​

​

​

​

Operating Partnership

​

​

​

Units

​

​

Operating

​

Comprehensive

​

CubeSmart L.P.

​

Interest in

​

Total

​

Interests

 

​

  

Outstanding

​

​

Partner

  

Income (Loss)

​

Capital

​

Subsidiaries

​

Capital

​

of Third Parties

 

Balance at December 31, 2018

​

187,145

​

$

1,710,707

​

$

(1,029)

​

$

1,709,678

​

$

6,771

​

$

1,716,449

​

$

55,819

​

Contributions from noncontrolling interest in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

7,376

​

​

7,376

​

​

​

​

Distributions paid to noncontrolling interest in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

(188)

​

​

(188)

​

​

​

​

Acquisition of noncontrolling interest in subsidiary

 

​

​

​

(34,690)

​

​

​

​

​

(34,690)

​

​

(5,915)

​

​

(40,605)

​

​

​

​

Issuance of common OP units, net

 

5,899

​

​

196,304

​

​

​

​

​

196,304

​

​

​

​

​

196,304

​

​

​

​

Issuance of restricted OP units

 

52

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Issuance of OP units

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

3,576

​

Conversion from OP units to shares

 

80

​

​

2,486

​

​

​

​

​

2,486

​

​

​

​

​

2,486

​

​

(2,486)

​

Exercise of OP unit options

 

381

​

​

3,686

​

​

​

​

​

3,686

​

​

​

​

​

3,686

​

​

​

​

Amortization of restricted OP units

​

​

​

​

4,487

​

​

​

​

​

4,487

​

​

​

​

​

4,487

​

​

​

​

OP unit compensation expense

​

​

​

​

1,786

​

​

​

​

​

1,786

​

​

​

​

​

1,786

​

​

​

​

Adjustment for Operating Partnership interests of third parties

​

​

​

​

(5,918)

​

​

​

​

​

(5,918)

​

​

​

​

​

(5,918)

​

​

5,918

​

Net income (loss)

​

​

​

​

169,117

​

​

​

​

​

169,117

​

​

(54)

​

​

169,063

​

​

1,708

​

Other comprehensive income, net

​

​

​

​

​

​

​

300

​

​

300

​

​

​

​

​

300

​

​

2

​

Common OP unit distributions ($1.29 per unit)

​

​

​

​

(247,890)

​

​

​

​

​

(247,890)

​

​

​

​

​

(247,890)

​

​

(2,449)

​

Balance at December 31, 2019

 

193,557

​

$

1,800,075

​

$

(729)

​

$

1,799,346

​

$

7,990

​

$

1,807,336

​

$

62,088

​

Contributions from noncontrolling interest in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

682

​

​

682

​

​

​

​

Distributions paid to noncontrolling interest in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

(205)

​

​

(205)

​

​

​

​

Issuance of common OP units, net

​

3,627

​

​

120,727

​

​

​

​

​

120,727

​

​

​

​

​

120,727

​

​

​

​

Issuance of restricted OP units

​

60

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Issuance of OP units

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

186,933

​

Conversion from OP units to shares

​

100

​

​

2,824

​

​

​

​

​

2,824

​

​

​

​

​

2,824

​

​

(2,824)

​

Exercise of OP unit options

​

62

​

​

961

​

​

​

​

​

961

​

​

​

​

​

961

​

​

​

​

Amortization of restricted OP units

​

​

​

​

4,502

​

​

​

​

​

4,502

​

​

​

​

​

4,502

​

​

​

​

OP unit compensation expense

​

​

​

​

1,952

​

​

​

​

​

1,952

​

​

​

​

​

1,952

​

​

​

​

Adjustment for Operating Partnership interests of third parties

​

​

​

​

(4,230)

​

​

​

​

​

(4,230)

​

​

​

​

​

(4,230)

​

​

4,230

​

Net income

​

​

​

​

165,621

​

​

​

​

​

165,621

​

​

165

​

​

165,786

​

​

1,825

​

Other comprehensive income (loss), net

​

​

​

​

​

​

​

97

​

​

97

​

​

​

​

​

97

​

​

(16)

​

Common OP unit distributions ($1.33 per unit)

​

​

​

​

(259,584)

​

​

​

​

​

(259,584)

​

​

​

​

​

(259,584)

​

​

(2,822)

​

Balance at December 31, 2020

 

197,406

​

$

1,832,848

​

$

(632)

​

$

1,832,216

​

$

8,632

​

$

1,840,848

​

$

249,414

​

Contributions from noncontrolling interest in subsidiaries

​

​

​

​

​

​

​

​

​

​

​

​

​

11,404

​

​

11,404

​

​

​

​

Distributions paid to noncontrolling interest in subsidiaries

 

​

​

​

​

​

​

​

​

​

​

​

​

(246)

​

​

(246)

​

​

​

​

Acquisition of noncontrolling interest in subsidiary

​

​

​

​

(2,746)

​

​

​

​

​

(2,746)

​

​

(651)

​

​

(3,397)

​

​

​

​

Issuance of common OP units, net

​

20,508

​

​

965,638

​

​

​

​

​

965,638

​

​

​

​

​

965,638

​

​

​

​

Issuance of restricted OP units

​

66

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Conversion from OP units to shares

​

5,519

​

​

305,015

​

​

​

​

​

305,015

​

​

​

​

​

305,015

​

​

(305,015)

​

Exercise of OP unit options

​

419

​

​

7,865

​

​

​

​

​

7,865

​

​

​

​

​

7,865

​

​

​

​

Amortization of restricted OP units

​

​

​

​

4,941

​

​

​

​

​

4,941

​

​

​

​

​

4,941

​

​

​

​

OP unit compensation expense

​

​

​

​

2,271

​

​

​

​

​

2,271

​

​

​

​

​

2,271

​

​

​

​

Adjustment for Operating Partnership interests of third parties

​

​

​

​

(164,109)

​

​

​

​

​

(164,109)

​

​

​

​

​

(164,109)

​

​

164,109

​

Net income (loss)

​

​

​

​

223,482

​

​

​

​

​

223,482

​

​

(542)

​

​

222,940

​

​

7,873

​

Other comprehensive income, net

 

​

​

​

​

​

​

62

​

​

62

​

​

​

​

​

62

​

​

19

​

Common OP unit distributions ($1.45 per unit)

​

​

​

​

(303,072)

​

​

​

​

​

(303,072)

​

​

​

​

​

(303,072)

​

​

(8,180)

​

Balance at December 31, 2021

 

223,918

​

$

2,872,133

​

$

(570)

​

$

2,871,563

​

$

18,597

​

$

2,890,160

​

$

108,220

​

​

​

​

See accompanying notes to the consolidated financial statements.

​

F-15F-18

​

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS OF CAPITAL

(in thousands)

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Common OP

 

 

Number of Preferred OP

 

 

 

 

Accumulated Other

 

Total

 

Noncontrolling

 

 

 

 

Operating Partnership

 

 

 

Units

 

 

Units

 

 

Operating

 

Comprehensive

 

CubeSmart L.P.

 

Interest in

 

Total

 

Interests

 

 

  

Outstanding

 

 

Outstanding

 

 

Partner

  

(Loss) Income

 

Capital

 

Subsidiaries

 

Capital

 

of Third Parties

 

 Balance at December 31, 2015

 

174,668

 

 

3,100

 

$

1,648,305

 

$

(4,978)

 

$

1,643,327

 

$

1,526

 

$

1,644,853

 

$

66,128

 

Contributions from noncontrolling interest in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,799

 

 

4,799

 

 

 

 

Issuance of common OP units, net

 

4,408

 

 

 

 

 

136,121

 

 

 

 

 

136,121

 

 

 

 

 

136,121

 

 

 

 

Issuance of restricted OP units

 

123

 

 

 

 

 

 1

 

 

 

 

 

 1

 

 

 

 

 

 1

 

 

 

 

Issuance of OP Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,500

 

Conversion from OP units to shares

 

188

 

 

 

 

 

4,876

 

 

 

 

 

4,876

 

 

 

 

 

4,876

 

 

(4,876)

 

Exercise of OP unit options

 

696

 

 

 

 

 

13,283

 

 

 

 

 

13,283

 

 

 

 

 

13,283

 

 

 

 

Amortization of restricted OP units

 

 

 

 

 

 

 

1,952

 

 

 

 

 

1,952

 

 

 

 

 

1,952

 

 

 

 

OP unit compensation expense

 

 

 

 

 

 

 

1,260

 

 

 

 

 

1,260

 

 

 

 

 

1,260

 

 

 

 

Adjustment for Operating Partnership interests of third parties

 

 

 

 

 

 

 

7,388

 

 

 

 

 

7,388

 

 

 

 

 

7,388

 

 

(7,388)

 

Net income (loss)

 

 

 

 

 

 

 

87,905

 

 

 

 

 

87,905

 

 

(470)

 

 

87,435

 

 

941

 

Other comprehensive income, net:

 

 

 

 

 

 

 

 

 

 

3,128

 

 

3,128

 

 

 

 

 

3,128

 

 

37

 

Preferred OP unit distributions ($1.63 per unit)

 

 

 

 

 

 

 

(5,045)

 

 

 

 

 

(5,045)

 

 

 

 

 

(5,045)

 

 

 

 

Preferred OP unit redemption

 

 

 

 

(3,100)

 

 

(77,574)

 

 

 

 

 

(77,574)

 

 

 

 

 

(77,574)

 

 

 

 

Common OP unit distributions ($0.90 per unit)

 

 

 

 

 

 

 

(161,240)

 

 

 

 

 

(161,240)

 

 

 

 

 

(161,240)

 

 

(1,935)

 

 Balance at December 31, 2016

 

180,083

 

 

 —

 

$

1,657,232

 

$

(1,850)

 

$

1,655,382

 

$

5,855

 

$

1,661,237

 

$

54,407

 

Contributions from noncontrolling interest in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,058

 

 

1,058

 

 

 

 

Acquisition of noncontrolling interest in subsidiary

 

 

 

 

 

 

 

(8,626)

 

 

 

 

 

(8,626)

 

 

(407)

 

 

(9,033)

 

 

 

 

Issuance of common OP units, net

 

1,036

 

 

 

 

 

29,642

 

 

 

 

 

29,642

 

 

 

 

 

29,642

 

 

 

 

Issuance of restricted OP units

 

106

 

 

 

 

 

1

 

 

 

 

 

1

 

 

 

 

 

 1

 

 

 

 

Issuance of OP Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,324

 

Conversion from OP units to shares

 

594

 

 

 

 

 

15,706

 

 

 

 

 

15,706

 

 

 

 

 

15,706

 

 

(15,706)

 

Exercise of OP unit options

 

397

 

 

 

 

 

2,364

 

 

 

 

 

2,364

 

 

 

 

 

2,364

 

 

 

 

Amortization of restricted OP units

 

 

 

 

 

 

 

2,009

 

 

 

 

 

2,009

 

 

 

 

 

2,009

 

 

 

 

OP unit compensation expense

 

 

 

 

 

 

 

1,531

 

 

 

 

 

1,531

 

 

 

 

 

1,531

 

 

 

 

Adjustment for Operating Partnership interests of third parties

 

 

 

 

 

 

 

(3,965)

 

 

 

 

 

(3,965)

 

 

 

 

 

(3,965)

 

 

3,965

 

Net income (loss)

 

 

 

 

 

 

 

134,288

 

 

 

 

 

134,288

 

 

(270)

 

 

134,018

 

 

1,593

 

Other comprehensive income, net:

 

 

 

 

 

 

 

 

 

 

1,853

 

 

1,853

 

 

 

 

 

1,853

 

 

22

 

Common OP unit distributions ($1.11 per unit)

 

 

 

 

 

 

 

(201,051)

 

 

 

 

 

(201,051)

 

 

 

 

 

(201,051)

 

 

(2,285)

 

 Balance at December 31, 2017

 

182,216

 

 

 —

 

$

1,629,131

 

$

 3

 

$

1,629,134

 

$

6,236

 

$

1,635,370

 

$

54,320

 

Contributions from noncontrolling interest in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

925

 

 

925

 

 

 

 

Distributions to noncontrolling interests in subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(169)

 

 

(169)

 

 

 

 

Issuance of common OP units, net

 

4,291

 

 

 

 

 

131,829

 

 

 

 

 

131,829

 

 

 

 

 

131,829

 

 

 

 

Issuance of restricted OP units

 

86

 

 

 

 

 

1

 

 

 

 

 

 1

 

 

 

 

 

 1

 

 

 

 

Issuance of OP Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,242

 

Conversion from OP units to shares

 

147

 

 

 

 

 

4,404

 

 

 

 

 

4,404

 

 

 

 

 

4,404

 

 

(4,404)

 

Exercise of OP unit options

 

405

 

 

 

 

 

3,835

 

 

 

 

 

3,835

 

 

 

 

 

3,835

 

 

 

 

Amortization of restricted OP units

 

 

 

 

 

 

 

2,570

 

 

 

 

 

2,570

 

 

 

 

 

2,570

 

 

 

 

OP unit compensation expense

 

 

 

 

 

 

 

1,541

 

 

 

 

 

1,541

 

 

 

 

 

1,541

 

 

 

 

Adjustment for Operating Partnership interests of third parties

 

 

 

 

 

 

 

(299)

 

 

 

 

 

(299)

 

 

 

 

 

(299)

 

 

299

 

Net income (loss)

 

 

 

 

 

 

 

163,889

 

 

 

 

 

163,889

 

 

(221)

 

 

163,668

 

 

1,820

 

Other comprehensive income (loss), net:

 

 

 

 

 

 

 

405

 

 

(1,032)

 

 

(627)

 

 

 

 

 

(627)

 

 

(6)

 

Common OP unit distributions ($1.22 per unit)

 

 

 

 

 

 

 

(226,599)

 

 

 

 

 

(226,599)

 

 

 

 

 

(226,599)

 

 

(2,452)

 

 Balance at December 31, 2018

 

187,145

 

 

 —

 

$

1,710,707

 

$

(1,029)

 

$

1,709,678

 

$

6,771

 

$

1,716,449

 

$

55,819

 

​

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

 

​

​

2021

    

2020

    

2019

 

Operating Activities

​

​

​

​

​

​

​

​

​

​

Net income

​

$

230,813

​

$

167,611

​

$

170,771

​

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

​

​

​

​

​

​

​

​

​

​

Depreciation and amortization

​

 

240,217

​

 

159,247

​

 

166,366

​

Non-cash portion of interest expense related to finance leases

​

​

202

​

​

—

​

​

—

​

Loss on early extinguishment of debt

​

 

20,328

​

 

18,020

​

 

—

​

Equity in earnings of real estate ventures

​

 

(25,275)

​

 

(178)

​

 

(11,122)

​

Gains from sales of real estate, net

​

 

(32,698)

​

 

(6,710)

​

 

(1,508)

​

Equity compensation expense

​

 

8,088

​

 

7,140

​

 

6,694

​

Accretion of fair market value adjustment of debt

​

 

(2,037)

​

 

(259)

​

 

(718)

​

Changes in other operating accounts:

​

​

​

​

​

​

​

​

​

​

Other assets

​

 

(9,247)

​

 

(9,674)

​

 

(6,578)

​

Accounts payable and accrued expenses

​

 

14,871

​

 

13,922

​

 

6,042

​

Other liabilities

​

 

3,923

​

 

1,914

​

 

1,821

​

Net cash provided by operating activities

​

$

449,185

​

$

351,033

​

$

331,768

​

Investing Activities

​

​

​

​

​

​

​

​

​

​

Acquisitions of storage properties

​

 

(151,547)

​

 

(417,988)

​

 

(117,998)

​

Acquisition of LAACO, Ltd., net of cash acquired

​

​

(1,678,984)

​

​

—

​

​

—

​

Additions and improvements to storage properties

​

 

(34,608)

​

 

(49,857)

​

 

(37,569)

​

Development costs

​

 

(69,887)

​

 

(55,286)

​

 

(102,826)

​

Cash paid for partner's interest in real estate venture, net of cash, cash equivalents and restricted cash acquired

​

​

—

​

​

—

​

​

(117,959)

​

Investment in real estate ventures

​

​

(28,261)

​

​

(7,022)

​

​

(10,264)

​

Cash distributed from real estate ventures

​

​

66,593

​

 

6,246

​

 

7,096

​

Proceeds from sale of real estate, net

​

​

44,026

​

​

12,466

​

​

3,856

​

Net cash used in investing activities

​

$

(1,852,668)

​

$

(511,441)

​

$

(375,664)

​

Financing Activities

​

​

​

​

​

​

​

​

​

​

Proceeds from:

​

​

​

​

​

​

​

​

​

​

Unsecured senior notes

​

​

1,043,427

​

​

445,833

​

​

696,426

​

Revolving credit facility

​

 

906,571

​

 

429,085

​

 

859,313

​

Principal payments on:

​

​

​

​

​

​

​

​

​

​

Unsecured senior notes

​

​

(300,000)

​

​

(250,000)

​

​

—

​

Revolving credit facility

​

​

(814,471)

​

​

(311,285)

​

​

(1,158,776)

​

Unsecured term loans

​

​

—

​

​

—

​

​

(200,000)

​

Mortgage loans and notes payable

​

​

(87,263)

​

​

(46,093)

​

​

(11,652)

​

Loan procurement costs

​

​

(12,548)

​

​

(3,764)

​

​

(6,023)

​

Debt prepayment costs

​

​

(20,023)

​

​

(17,584)

​

​

—

​

Settlement of hedge transactions

​

​

—

​

​

—

​

​

(807)

​

Acquisition of noncontrolling interest in subsidiary, net

​

​

(3,397)

​

​

—

​

​

(35,777)

​

Proceeds from issuance of common OP units

​

​

965,638

​

​

120,727

​

​

196,304

​

Cash paid upon vesting of restricted OP units

​

​

(876)

​

​

(686)

​

​

(421)

​

Exercise of OP unit options

​

​

7,865

​

​

961

​

​

3,686

​

Contributions from noncontrolling interests in subsidiaries

​

 

8,031

​

 

—

​

 

48

​

Distributions paid to noncontrolling interests in subsidiaries

​

 

(246)

​

 

(205)

​

 

(188)

​

Distributions paid to common OP unitholders

​

​

(282,136)

​

​

(258,793)

​

​

(246,278)

​

Net cash provided by financing activities

​

$

1,410,572

​

$

108,196

​

$

95,855

​

Change in cash, cash equivalents and restricted cash

​

 

7,089

​

 

(52,212)

​

 

51,959

​

Cash, cash equivalents and restricted cash at beginning of period

​

 

6,229

​

 

58,441

​

 

6,482

​

Cash, cash equivalents and restricted cash at end of period

​

$

13,318

​

$

6,229

​

$

58,441

​

Supplemental Cash Flow and Noncash Information

​

​

​

​

​

​

​

​

​

​

Cash paid for interest, net of interest capitalized

​

$

79,148

​

$

80,792

​

$

69,283

​

Supplemental disclosure of noncash activities:

​

​

​

​

​

​

​

​

​

​

Acquisitions of storage properties

​

$

—

​

$

(2,623)

​

$

—

​

Proceeds held in escrow from real estate venture's sale of real estate (see note 4)

​

$

—

​

$

—

​

$

8,288

​

Noncash consideration for acquisition of partner's interest in real estate venture (see note 4)

​

$

—

​

$

—

​

$

(8,288)

​

Right-of-use assets obtained in exchange for lease liabilities

​

$

—

​

$

61,423

​

$

—

​

Discount on issuance of unsecured senior notes

​

$

6,573

​

$

4,167

​

$

3,574

​

Noncash drawdown on revolving credit facility

​

$

—

​

$

—

​

$

103,938

​

Mortgage loan assumptions

​

$

40,880

​

$

169,056

​

$

—

​

Repayment of unsecured term loan through noncash drawdown on revolving credit facility

​

$

—

​

$

—

​

$

(100,000)

​

Accretion of put liability

​

$

9,777

​

$

7,917

​

$

5,895

​

Derivative valuation adjustment

​

$

81

​

$

81

​

$

302

​

Loan procurement costs

​

$

—

​

$

—

​

$

(3,770)

​

Issuance of OP units (see note 4)

​

$

—

​

$

186,933

​

$

3,576

​

Acquisition of noncontrolling interest in subsidiary

​

$

—

​

$

—

​

$

(4,828)

​

Contributions from noncontrolling interests in subsidiaries

​

$

3,373

​

$

682

​

$

7,328

​

​

​

See accompanying notes to the consolidated financial statements.

F-19

​

F-16

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 

 

 

 

2018

    

2017

    

2016

 

Operating Activities

 

 

 

 

 

 

 

 

 

 

Net income

 

$

165,488

 

$

135,611

 

$

88,376

 

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

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

145,663

 

 

148,319

 

 

164,442

 

Equity in losses of real estate ventures

 

 

865

 

 

1,386

 

 

2,662

 

Gains from sale of real estate, net

 

 

(10,576)

 

 

 —

 

 

 —

 

Equity compensation expense

 

 

5,572

 

 

5,586

 

 

4,850

 

Accretion of fair market value adjustment of debt

 

 

(735)

 

 

(559)

 

 

(1,138)

 

Changes in other operating accounts:

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

(4,937)

 

 

(10,429)

 

 

(5,229)

 

Accounts payable and accrued expenses

 

 

2,653

 

 

10,846

 

 

7,862

 

Other liabilities

 

 

342

 

 

1,154

 

 

1,449

 

Net cash provided by operating activities

 

$

304,335

 

$

291,914

 

$

263,274

 

Investing Activities

 

 

 

 

 

 

 

 

 

 

Acquisitions of storage properties

 

 

(214,510)

 

 

(69,629)

 

 

(388,641)

 

Additions and improvements to storage properties

 

 

(27,626)

 

 

(27,378)

 

 

(29,672)

 

Development costs

 

 

(86,002)

 

 

(68,778)

 

 

(136,912)

 

Investment in real estate ventures

 

 

(19,216)

 

 

(301)

 

 

(12,176)

 

Cash distributed from real estate ventures

 

 

8,706

 

 

15,783

 

 

8,113

 

Proceeds from sale of real estate, net

 

 

16,389

 

 

 —

 

 

 —

 

Net cash used in investing activities

 

$

(322,259)

 

$

(150,303)

 

$

(559,288)

 

Financing Activities

 

 

 

 

 

 

 

 

 

 

Proceeds from:

 

 

 

 

 

 

 

 

 

 

Unsecured senior notes

 

 

 —

 

 

103,192

 

 

298,512

 

Revolving credit facility

 

 

679,535

 

 

628,400

 

 

958,200

 

Principal payments on:

 

 

 

 

 

 

 

 

 

 

Revolving credit facility

 

 

(565,710)

 

 

(590,000)

 

 

(914,900)

 

Unsecured term loans

 

 

 —

 

 

(100,000)

 

 

 —

 

Mortgage loans and notes payable

 

 

(9,816)

 

 

(8,666)

 

 

(37,260)

 

Loan procurement costs

 

 

 —

 

 

(953)

 

 

(2,467)

 

Acquisition of noncontrolling interest in subsidiary

 

 

 —

 

 

(9,033)

 

 

 —

 

Proceeds from issuance of common OP units

 

 

131,830

 

 

29,643

 

 

136,122

 

Cash paid upon vesting of restricted OP units

 

 

(1,461)

 

 

(2,046)

 

 

(1,638)

 

Redemption of preferred units

 

 

 —

 

 

 —

 

 

(77,574)

 

Exercise of OP unit options

 

 

3,835

 

 

2,364

 

 

13,283

 

Contributions from noncontrolling interests in subsidiaries

 

 

925

 

 

1,058

 

 

4,799

 

Distributions paid to noncontrolling interests in subsidiaries

 

 

(169)

 

 

 —

 

 

 —

 

Distributions paid to common OP unitholders

 

 

(223,721)

 

 

(197,278)

 

 

(151,121)

 

Distributions paid to preferred OP unitholders

 

 

 —

 

 

 —

 

 

(6,545)

 

Net cash provided by (used in) financing activities

 

$

15,248

 

$

(143,319)

 

$

219,411

 

Change in cash, cash equivalents, and restricted cash

 

 

(2,676)

 

 

(1,708)

 

 

(76,603)

 

Cash, cash equivalents, and restricted cash at beginning of year

 

 

9,158

 

 

10,866

 

 

87,469

 

Cash, cash equivalents, and restricted cash at end of year

 

$

6,482

 

$

9,158

 

$

10,866

 

Supplemental Cash Flow and Noncash Information

 

 

 

 

 

 

 

 

 

 

Cash paid for interest, net of interest capitalized

 

$

66,829

 

$

63,407

 

$

53,085

 

Supplemental disclosure of noncash activities:

 

 

 

 

 

 

 

 

 

 

Restricted cash - acquisition of storage properties

 

$

 —

 

$

 —

 

$

(22,019)

 

Accretion of put liability

 

$

24,747

 

$

35,122

 

$

31,426

 

Derivative valuation adjustment

 

$

(633)

 

$

1,875

 

$

3,165

 

Discount on issuance of unsecured senior notes

 

$

 —

 

$

 —

 

$

1,488

 

Mortgage loan assumptions

 

$

7,166

 

$

6,201

 

$

41,513

 

Preferred unit redemption

 

$

 —

 

$

 —

 

$

2,863

 

Issuance of OP units

 

$

6,242

 

$

12,324

 

$

 —

 

Liability for acquisition of storage property

 

$

 —

 

$

1,470

 

$

 —

 

Contribution of storage property to real estate venture

 

$

 —

 

$

9,400

 

$

 —

 

See accompanying notes to the consolidated financial statements.

F-17

CUBESMART AND CUBESMART L.P.

NOTES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

​

1.  ORGANIZATION AND NATURE OF OPERATIONS

​

CubeSmart (the “Parent Company”) operates as a self-managed and self-administered real estate investment trust (“REIT”) with its operations conducted solely through CubeSmart, L.P. and its subsidiaries. CubeSmart, L.P., a Delaware limited partnership (the “Operating Partnership”), operates through an umbrella partnership structure, with the Parent Company, a Maryland REIT, as its sole general partner. In the notes to the consolidated financial statements, we use the terms the “Company”, “we”, or “our” to refer to the Parent Company and the Operating Partnership together, unless the context indicates otherwise. As of December 31, 2018,2021, the Company owned (or partially owned and consolidated) self-storage properties located in 23the District of Columbia and 24 states throughout the United States and in the District of Columbia which are presented under one1 reportable segment: the Company owns, operates, develops, manages and acquires self-storage properties.

​

As of December 31, 2018,2021, the Parent Company owned approximately 99.0%99.2% of the partnership interests (“OP Units”) of the Operating Partnership. The remaining OP Units, consisting exclusively of limited partner interests, are held by persons who contributed their interests in properties to usthe Operating Partnership in exchange for OP Units. Under the partnership agreement, these persons have the right to tender their OP Units for redemption to the Operating Partnership at any time following a specified restricted period for cash equal to the fair value of an equivalent number of common shares of the Parent Company. In lieu of delivering cash, however, the Parent Company, as the Operating Partnership’s general partner, may, at its option, choose to acquire any OP Units so tendered by issuing common shares in exchange for the tendered OP Units. If the Parent Company so chooses, its common shares will be exchanged for OP Units on a one-for-one1-for-one basis. This one-for-one1-for-one exchange ratio is subject to adjustment to prevent dilution. With each such exchange or redemption, the Parent Company’s percentage ownership in the Operating Partnership will increase. In addition, whenever the Parent Company issues common or other classes of its shares, it contributes the net proceeds it receives from the issuance to the Operating Partnership and the Operating Partnership issues to the Parent Company an equal number of OP Units or other partnership interests having preferences and rights that mirror the preferences and rights of the shares issued. This structure is commonly referred to as an umbrella partnership REIT or “UPREIT”.

​

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

​

Principles of Consolidation

​

The accompanying consolidated financial statements include all of the accounts of the Company and its majority-owned and/or controlled subsidiaries. The portion of these entities not owned by the Company is presented as noncontrolling interests as of and during the periods consolidated. All significant intercompany accounts and transactions have been eliminated in consolidation.

​

When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a variable interest entity (“VIE”), and if the Company is deemed to be the primary beneficiary in accordance with authoritative guidance issued on the consolidation of VIEs. To the extent that the Company (i) has the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and (ii) has the obligation or rights to absorb the VIE's losses or receive its benefits, then the Company is considered the primary beneficiary. When an entity is not deemed to be a VIE, the Company considers the provisions of additional guidance to determine whether a general partner, or the general partners as a group, controls a limited partnership or similar entity when the limited partners have certain rights. The Company consolidates (i) entities that are VIEs and of which the Company is deemed to be the primary beneficiary, and (ii) entities that are non-VIEs which the Company controls and which the limited partners do not have the ability to dissolve or remove the Company without cause nor substantive participating rights.

​

The Company adopted Accounting Standard Update (“ASU”) No. 2015-02, Consolidation – Amendments to the Consolidation Analysis, as of January 1, 2016. The Company evaluated the application of this guidance and concluded that there were no changes to any previous conclusions with respect to consolidation accounting for any of its interests in less than wholly owned joint ventures. However, the Operating Partnership now meets the criteria as a VIE. The Parent Company’s sole significant asset is its investment in the Operating Partnership. As a result, substantially all of the Parent Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Parent Company’s debt is an obligation of the Operating Partnership.

​

Noncontrolling Interests

​

The Financial Accounting Standards Board (“FASB”) issued authoritative guidance regarding noncontrolling interests in consolidated financial statements which was effective on January 1, 2009.  The guidance states that noncontrolling interests are the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. The ownership interests in the subsidiary that are held by owners other than the parent are noncontrolling interests. Under the guidance, such noncontrolling interests are reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations, revenues,

F-18

expenses and net income or loss from controlled or consolidated entities that are less than wholly owned are reported at the consolidated

F-20

​

amounts, including both the amounts attributable to the Company and noncontrolling interests. Presentation of consolidated equity activity is included for both quarterly and annual financial statements, including beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity.

​

However, per the FASB issued authoritative guidance on the classification and measurement of redeemable securities, securities that are redeemable for cash or other assets at the option of the holder, not solely within the control of the issuer, must be classified outside of permanent equity. This would result in certain outside ownership interests being included as redeemable noncontrolling interests outside of permanent equity in the consolidated balance sheets. The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions. Additionally, with respect to noncontrolling interests for which the Company has a choice to settle the contract by delivery of its own shares, the Company considered the FASB issued guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a Company’s own stock to evaluate whether the Company controls the actions or events necessary to issue the maximum number of shares that could be required to be delivered under share settlement of the contract. The guidance also requires that noncontrolling interests are adjusted each period so that the carrying value equals the greater of its carrying value based on the accumulation of historical cost or its redemption fair value.

​

The consolidated results of the Company include results attributable to units of the Operating Partnership that are not owned by the Company. These interests were issued in the form of OP units and were a component of the consideration the Company paid to acquire certain self-storage properties. Limited partners who acquired OP units have the right to require the Operating Partnership to redeem part or all of their OP units for, at the Company’s option, an equivalent number of common shares of the Company or cash based upon the fair value of an equivalent number of common shares of the Company. However, the operating agreement contains certain circumstances that could result in a net cash settlement outside the control of the Company, as the Company does not have the ability to settle in unregistered shares. Accordingly, consistent with the guidance discussed above, the Company will continue to record these noncontrolling interests outside of permanent equity in the consolidated balance sheets. Net income or loss related to these noncontrolling interests is excluded from net income or loss in the consolidated statements of operations. The Company has adjusted the carrying value of its noncontrolling interests subject to redemption value to the extent applicable. Based on the Company’s evaluation of the redemption value of the redeemable noncontrolling interests, the Operating Partnership reflected these interests at their redemption value as of December 31, 2018,2021, as the estimated redemption value exceeded their carrying value. The Operating Partnership recorded an increase to OP Units owned by third parties and a corresponding decrease to capital of $0.3$164.1 million as of December 31, 2018.2021. Disclosure of such redemption provisions is provided in note 12.

​

Estimates

​

The preparation of consolidated 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 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. Although management believes the assumptions and estimates made are reasonable and appropriate, as discussed in the applicable sections throughout these consolidated financial statements, different assumptions and estimates could materially impact the Company’s reported results. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions, and changes in market conditions could impact the Company’s future operating results.

​

Self-Storage Properties

​

Self-storage properties are carried at historical cost less accumulated depreciation and impairment losses. The cost of self-storage properties reflects their purchase price or development cost. Acquisition costs are accounted for in accordance with Accounting Standard Update (“ASU”) No. 2017-01 - Business Combinations (Topic 805): Clarifying the Definition of a Business, which was adopted on January 1, 2018, (see section entitled Recent Accounting Pronouncements”), and are generally capitalized. Costs incurred for the renovation of a store are capitalized to the Company’s investment in that store. Ordinary repairs and maintenance are expensed as incurred; majorincurred. Major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. The costs to develop self-storage properties are capitalized to construction in progress while the project isprojects are under development.

​

Purchase Price Allocation

​

When stores 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 stores is acquired, the purchase price is allocated to the individual stores based upon the fair

F-19

value determined using 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 store along with current and projected occupancy and rental rate levels or appraised values, if available.  Allocations to land, building and improvements and equipment are recorded based upon their respective fair values as estimated by management.

In allocating If appropriate, the purchase price for an acquisition, the Company determines whether the acquisition includes intangible assets or liabilities.  The Company allocates a portion of the purchase price to an intangible asset attributed to the value of in-place leases. This intangible is generally amortized to expense over the expected remaining term of the respective

F-21

​

leases. Substantially all of the storage leases in place at acquired stores are at market rates, as the majority of the leases are month-to-month contracts. Accordingly, to date, no0 portion of the purchase price has been allocated to above- or below-market lease intangibles.intangibles associated with storage leases assumed at acquisition. Above- or below- market lease intangibles associated with assumed leases in which the Company serves as lessee are recorded as an adjustment to the right-of-use asset and reflect the difference between the contractual amounts to be paid pursuant to each in-place lease and management’s estimate of fair market lease rates. These amounts are amortized over the term of the lease. To date, no intangible asset has been recorded for the value of customer relationships, because the Company does not have any concentrations of significant customers and the average customer turnover is fairly frequent.

​

Depreciation and Amortization

​

The costs of self-storage properties and improvements are depreciated using the straight-line method based on useful lives ranging from five to 39 years. Right-of-use assets associated with finance leases are amortized from the lease commencement date to the earlier of the useful life of the right-to-use asset or the end of the lease term.Fully depreciated or amortized assets and the associated accumulated depreciation or amortization are written off. The Company wrote off fully depreciated or amortized real estate assets and in-place lease intangible assets of $52.7 million and $59.9 million, respectively, for the year ended December 31, 2021, and $83.4 million and $20.5 million, respectively, for the year ended December 31, 2020.

​

Impairment of Long-Lived Assets

​

We evaluate long-lived assets for impairment when events and circumstances such as declines in occupancy and operating results indicate that there may be an impairment. The carrying value of these long-lived assets is compared to the undiscounted future net operating cash flows, plus a terminal value, attributable to the assets to determine if the store’s basis is recoverable. If a store’s basis is not considered recoverable, an impairment loss is recorded to the extent the net carrying value of the asset exceeds the fair value. The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. There were 0 impairment losses recognized during the years ended December 31, 2021, 2020 and 2019.

​

Long-Lived Assets Held for Sale

​

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 store (or group of stores), (b) the store is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such stores, (c) an active program to locate a buyer and other actions required to complete the plan to sell the store have been initiated, (d) the sale of the store is probable and transfer of the asset is expected to be completed within one year, (e) the store 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. However, each potential transaction is evaluated based on its separate facts and circumstances. Stores classified as held for sale are reported at the lesser of carrying value or fair value less estimated costs to sell.sell and are not depreciated. The Club Operations (defined below) acquired through our acquisition of LAACO (defined below) have been classified as held for sale as of December 31, 2021. There were no stores classified as held for sale as of December 31, 2021.

​

Cash and Cash Equivalents

​

Cash and cash equivalents are highly-liquid investments with original maturities of three months or less. The Company may maintain cash equivalents in financial institutions in excess of insured limits, but believes this risk is mitigated by only investing in or through major financial institutions.

​

Restricted Cash

​

Restricted cash generally consists of purchase deposits and cash deposits required for debt service, requirements, capital replacement and expense reserves in connection with the requirementsterms of our loan agreements.

​

Loan Procurement Costs

​

Loan procurement costs related to borrowings were $21.5$50.1 million and $21.4$38.1 million as of December 31, 20182021 and 2017,2020, respectively, and are reported net of accumulated amortization of $13.4$14.3 million and $11.1$13.1 million as of December 31, 20182021 and 2017,2020, respectively. In

F-22

​

accordance with ASU No. 2015-03, Loan procurement costs, net are presented as a direct deduction from the carrying amount of the related debt liability. If there is not an associated debt liability recorded on the consolidated balance sheets, the costs are recorded as an

F-20

asset net of accumulated amortization. Loan procurement costs associated with the Company’s revolving credit facility remain in Loan procurement costs, net of amortization on the Company’s consolidated balance sheets. The costs are amortized over the estimated life of the related debt using the effective interest method and are reported as Loan procurement amortization expense on the Company’s consolidated statements of operations.

​

Other Assets

​

Other assets are comprised of the following as of December 31, 20182021 and 2017 (in thousands):2020:

​

​

​

​

​

​

​

​

​

December 31, 

​

    

2021

    

2020

​

​

(in thousands)

Intangible assets, net of accumulated amortization of $12,760 and $2,123

​

$

108,794

​

$

57,820

Accounts receivable, net

​

 

8,145

​

 

5,829

Prepaid property taxes

​

 

6,938

​

 

6,334

Prepaid property and casualty insurance

​

 

3,352

​

 

2,626

Amounts due from affiliates (see note 14)

​

​

15,417

​

​

13,130

Assets related to deferred compensation arrangements

​

​

60,297

​

​

17,207

Right-of-use assets - operating leases (see note 13)

​

​

54,741

​

​

55,302

Equity investment recorded at cost (1)

​

​

—

​

​

5,000

Other

​

 

8,021

​

 

7,505

Total other assets, net

​

$

265,705

​

$

170,753

​

 

 

 

 

 

 

 

 

 

 

December 31, 

 

 

    

2018

    

2017

 

 

 

 

 

 

 

 

 

Intangible assets, net of accumulated amortization of $3,124 and $1,532

 

$

8,145

 

$

1,716

 

Accounts receivable

 

 

5,672

 

 

5,498

 

Prepaid real estate taxes

 

 

4,406

 

 

3,960

 

Prepaid insurance

 

 

1,479

 

 

2,105

 

Amounts due from affiliates (see note 13)

 

 

10,584

 

 

7,480

 

Assets held in trust related to deferred compensation arrangements

 

 

9,645

 

 

9,393

 

Equity investment recorded at cost (1)

 

 

5,000

 

 

 —

 

Other

 

 

3,832

 

 

4,438

 

Total other assets, net

 

$

48,763

 

$

34,590

 

(1)

On September 5, 2018, the Company invested $5.0 million in exchange for 100% of the Class A Preferred Unitspreferred units of Capital Storage Partners, LLC (“Capital Storage”), a then newly formed venture that acquired 22 self-storage properties located in Florida (4), Oklahoma (5), and Texas (13). The Class A Preferred Units earnpreferred units earned an 11% cumulative dividend prior to any other distributions. TheOn August 24, 2021, the Class A preferred units and all accrued and unpaid dividends were redeemed and paid, respectively. Prior to this redemption, the Company’s investment in Capital Storage and the related dividends arewere included in Other assets, net on the Company’s consolidated balance sheets and in Other income on the Company’s consolidated statements of operations, respectively.

The Company no longer has an ownership interest in Capital Storage.

​

Environmental Costs

​

Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of additional stores. Whenever the environmental assessment for one of ourthe Company’s stores indicates that a store is impacted by soil or groundwater contamination from prior owners/operators or other sources, wethe Company will work with our environmental consultants and where appropriate, state governmental agencies, to ensure that the store is either cleaned up, that no cleanup is necessary because the low level of contamination poses no significant risk to public health or the environment or that the responsibility for cleanup rests with a third party.

​

Revenue Recognition

​

Management has determined that all of ourthe Company’s leases are operating leases. Rental income is recognized in accordance with the terms of the leases, which generally are month to month.  Property management fee income is recognized monthly as services are performed and in accordance with the terms of the related management agreements.month-to-month.

​

The Company recognizes gains from sale of real estate in accordance with the guidance on transfer of nonfinancial assets. Payments received from purchasers prior to closing are recorded as deposits. Profit on real estate sold is recognized when a valid contract exists, the collectability of the sales price is reasonably assured and the control of the property has transferred.

​

Advertising and Marketing Costs

​

The Company incurs advertising and marketing costs primarily attributable to internet marketing and other media advertisements. These costs are expensed as incurred. The Company incurred $10.3$21.0 million, $9.7$16.9 million and $9.4$11.5 million in advertising and marketing expenses for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively, which are included in Property operating expenses on the Company’s consolidated statements of operations.

​

F-21F-23

​

Equity Offering Costs

​

Underwriting discounts and commissions, financial advisory fees and other offering costs are reflected as a reduction to additional paid-in capital. For the years ended December 31, 2018, 20172021, 2020 and 2016,2019, the Company recognized $1.6$28.3 million, $0.6$1.5 million and $1.6$2.1 million, respectively, of equity offering costs related to the issuance of common shares.

​

Other Property Related Income

​

Other property related income consists of late fees, administrative charges, customer insurancestorage protection plan fees, sales of storage supplies and other ancillary revenues and is recognized in the period that it is earned.

​

Capitalized Interest

​

The Company capitalizes interest incurred that is directly associated with construction activities until the asset is placed into service. Interest is capitalized to the related asset(s) using the weighted-averageweighted average rate of the Company’s outstanding debt. For the years ended December 31, 2018, 20172021, 2020 and 2016,2019, the Company capitalized $4.4$1.9 million, $5.6$2.7 million and $4.6$3.0 million, respectively, of interest incurred that is directly associated with construction activities.

​

Derivative Financial Instruments

​

The Company carries all derivatives on the balance sheet at fair value. The Company determines the fair value of derivatives by observable prices that are based on inputs not quoted on active markets, but corroborated by market data. 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. The Company’s use of derivative instruments has been limited to cash flow hedges of certain interest rate risks. The Company had interest rate swap agreements for notional principal amounts aggregating $150.0 million and $100.0 million0 outstanding derivatives as of December 31, 2018 and 2017, respectively, the fair values of which are included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets.2021 or 2020.

​

Income Taxes

​

The Company has elected to be taxed as a real estate investment trustREIT under Sections 856-860 of the Internal Revenue Code since the Company’s commencement of operations in 2004. In management’s opinion, the requirements to maintain these elections are being met. Accordingly, no provision for federal income taxes has been reflected in the consolidated financial statements other than for operations conducted through our taxable REIT subsidiaries.

​

Earnings and profits, which determine the taxability of distributions to shareholders, differ from net income reported for financial reporting purposes due to differences in cost basis, the estimated useful lives used to compute depreciation, and the allocation of net income and loss for financial versus tax reporting purposes. The net tax basis in the Company’s assets was approximately $3.6 billion$6,113.5 million and $3.4 billion$4,384.1 million as of December 31, 20182021 and 2017,2020, respectively.

​

Since the Company’s initial quarter as a publicly-traded REIT, it has made regular quarterly distributions to its shareholders. 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, the Company provides each of its shareholders a statement detailing the tax characterization of dividends paid during the preceding year as ordinary income, capital gain or return of capital. The characterization of the Company’s dividends for 20182021 consisted of a 78.190%92.6365% ordinary income distribution and a 13.653%7.3635% capital gain distribution, and an 8.157% return of capital distribution from earnings and profits.distribution.

​

The Company is subject to a 4% federal excise tax if sufficient taxable income is not distributed within prescribed time limits. The excise tax equals 4% of the annual amount, if any, by which the sum of (a) 85% of the Company’s ordinary income, (b) 95% of the Company’s net capital gains and (c) 100% of prior taxable income exceeds cash distributions and certain taxes paid by the Company. NoNaN excise tax was incurred in 2018, 2017,2021, 2020 or 2016.2019.

​

Taxable REIT subsidiaries are subject to federal and state income taxes. Our taxable REIT subsidiaries had a net deferred tax asset related to expenses which are deductible for tax purposes in future periodsliability of $1.4$0.7 million as of December 31, 20182021 and 2017.

Legislation commonly knowna net deferred tax asset of $0.4 million as the Tax Cuts and Jobs Act (“TCJA”) was signed into law on December 22, 2017.  The TCJA made significant changes to the U.S. federal income tax rules for taxation of individuals and corporations (including REITs), generally effective for taxable years beginning after December 31, 2017.2020.

F-22

​

Earnings per Share and Unit

​

Basic earnings per share and unit are calculated based on the weighted average number of common shares and restricted shares outstanding during the period. Diluted earnings per share and unit is calculated by further adjusting for the dilutive impact of share options, unvested restricted shares and contingently issuable shares outstanding during the period using the treasury stock method.

F-24

​

Potentially dilutive securities calculated under the treasury stock method were 842,000; 923,0001,176,000, 796,000 and 1,287,000 in 2018, 2017702,000 for the years ended December 31, 2021, 2020 and 2016,2019, respectively.

​

Share-Based Payments

​

We apply the fair value method of accounting for contingently issued shares and share options issued under our incentive award plan. Accordingly, share compensation expense is recorded ratably over the vesting period relating to such contingently issued shares and options. The Company has recognized compensation expense on a straight-line method over the requisite service period, which is included in general and administrative expense on the Company’s consolidated statement of operations. The Company recognizes forfeitures on share-based payments as they occur.

​

Investments in Unconsolidated Real Estate Ventures

​

The Company accounts for its investments in unconsolidated real estate ventures under the equity method of accounting when it is determined that the Company has the ability to exercise significant influence over the venture. Under the equity method, investments in unconsolidated real estate ventures are recorded initially at cost, as investments in real estate ventures, and subsequently adjusted for equity in earnings (losses), cash contributions, less distributions.distributions and impairments. On a periodic basis, management also assesses whether there are any indicators that the value of the Company’s investments in unconsolidated real estate ventures may be other than temporarily impaired. An investment is impaired only if the fair value of the investment, as estimated by management, is less than the carrying value of the investment and the decline is other than temporary. To the extent impairment that is other than temporary has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the fair value of the investment, as estimated by management.

Reclassifications

On January 1, 2018,The determination as to whether impairment exists requires significant management judgment about the Company adopted ASU No. 2016-15: Statementfair value of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments, which requires retrospective application for a number ofthe Company’s ownership interest. Fair value is determined through various valuation techniques, including but not limited to, discounted cash flow classification items for which there was diversitymodels, quoted market values and third-party appraisals. There were 0 impairment losses related to the Company’s investments in practice. See Recent Accounting Pronouncements below for the specific cash flow areas addressed by the new standard. As a result of adopting the new guidance, $1.6 million and $1.3 million of proceeds received from the settlement of insurance claimsunconsolidated real estate ventures recognized during the years ended December 31, 20172021 and 2016, respectively, have been reclassified from operating activities to investing activities within2020.

​

Differences between the Company's net investment in unconsolidated real estate ventures and its underlying equity in the net assets of the ventures are primarily a result of the Company acquiring interests in existing unconsolidated real estate ventures. As of December 31, 2021, the Company’s net investment in unconsolidated real estate ventures was greater than its underlying equity in the net assets of the unconsolidated real estate ventures by an aggregate of $33.6 million. There were no such differences as of December 31, 2020. These differences are amortized over the lives of the self-storage properties owned by the real estate ventures. This amortization is included in equity in earnings of real estate ventures on the Company’s consolidated statements of cash flows.operations.

​

On January 1, 2018, the Company also adopted ASU No. 2016-18: Statement of Cash Flows (Topic 230) – Restricted Cash, which requires restricted cash to be included with cash and cash equivalents as part of the reconciliation of beginning and end of period balances within the consolidated statements of cash flows. As a result of adopting the new guidance, $0.1 million and $4.1 million of restricted cash, which were previously included as operating cash outflows and investing cash inflows within the consolidated statements of cash flows for the year ended December 31, 2017, respectively, have been removed and are now included in the cash, cash equivalents, and restricted cash line items at the beginning and the end of the year. For the year ended December 31, 2016, $0.6 million and $16.1 million of restricted cash, which were previously included as operating cash inflows and investing cash inflows, respectively, have been removed and are now included in the cash, cash equivalents, and restricted cash line items at the beginning and the end of the year.

Recent Accounting Pronouncements

​

In August 2017,2020, the FASB issued ASU No. 2017-122020-06 – Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting– Contracts in an Entity’s Own Equity (Subtopic 815-40). The new guidance eliminates the beneficial conversion and cash conversion accounting models for Hedging Activities. The purposeconvertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The transition guidance provides companies with the option of early adopting the new standard using a modified retrospective transition method in any interim period after issuance of the update, or alternatively requires adoption for fiscal years beginning after December 15, 2018. This adoption method will require the Company to recognize the cumulative effect of initially applyingcertain settlement provisions. In addition, the new guidance as an adjustment to accumulated other comprehensive income with a corresponding adjustment tomodifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the opening balance of retaineddiluted earnings as of the beginning of the fiscal year that the Company adopts the update.per share computation. The standard was effective on January 1, 2022. The adoption of this guidance iswill not expected to have a material impact on the Company’s consolidated financial statements.


   In February 2017, as part of the new revenue standard, the FASB issued ASU No. 2017-05 – Other Income – Gains and Losses from the

F-23

Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance, which focuses on recognizing gains and losses from the transfer of nonfinancial assets in contracts with non-customers. Specifically, the new guidance defines “in substance nonfinancial asset”, unifies guidance related to partial sales of nonfinancial assets, eliminates rules specifically addressing sales of real estate, removes exceptions to the financial asset derecognition model, and clarifies the accounting for contributions of nonfinancial assets to joint ventures. The new guidance became effective on January 1, 2018 when the Company adopted the new revenue standard. Upon adoption, the majority of the Company’s sale transactions are now treated as dispositions of nonfinancial assets rather than dispositions of a business given the FASB’s recently revised definition of a business (see ASU No. 2017-01 below). Additionally, in partial sale transactions where the Company sells a controlling interest in real estate but retains a noncontrolling interest, the Company will now fully recognize a gain or loss on the fair value measurement of the retained interest as the new guidance eliminates the partial profit recognition model. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position or results of operations.​

In January 2017, the FASB issued ASU No. 2017-01 - Business Combinations (Topic 805): Clarifying the Definition of a Business, which changes the definition of a business to include an input and a substantive process that together significantly contribute to the ability to create outputs. A framework is provided to evaluate when an input and a substantive process are present.  The new guidance also narrows the definition of outputs, which are defined as the results of inputs and substantive processes that provide goods or services to customers, other revenue, or investment income. The standard became effective on January 1, 2018. Upon adoption of the new guidance, the majority of the Company’s future property acquisitions will now be considered asset acquisitions, resulting in the capitalization of acquisition related costs incurred in connection with these transactions and the allocation of purchase price and acquisition related costs to the assets acquired based on their relative fair values. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position or results of operations.

In November 2016, the FASB issued ASU No. 2016-18 - Statement of Cash Flows (Topic 230): Restricted Cash, which requires the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The new guidance also requires entities to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. The standard became effective on January 1, 2018 and requires the use of the retrospective transition method. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements as the update primarily relates to financial statement presentation and disclosures.

In August 2016, the FASB issued ASU No. 2016-15 – Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The eight items that the ASU provides classification guidance on include (1) debt prepayment and extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investments, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows and application of the predominance principle. The standard became effective on January 1, 2018 and requires the use of the retrospective transition method. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements as the update primarily relates to financial statement presentation and disclosures.

In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.  Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The Company adopted the standard on January 1, 2019, the date it became effective for public companies, using the modified retrospective approach. Upon adoption, the Company elected the package of practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classification. In addition, the Company elected the practical expedient that allows reporting entities to use hindsight to determine the lease term for existing leases. The Company expects to record lease liabilities of approximately $55.0 million and right-of-use assets of approximately $50.0 million, primarily related to the Company’s ten ground leases in which it serves as lessee (see note 14).

In May 2014, the FASB issued ASU No. 2014-09 - Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new guidance outlines a five-step process for customer contract revenue recognition that focuses on transfer of control as opposed to transfer of

F-24

risk and rewards. The new guidance also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. In May 2016, the FASB issued ASU No. 2016-12 - Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which amends ASU No. 2014-09 and is intended to address implementation issues that were raised by stakeholders. ASU No. 2016-12 provides practical expedients on collectability, noncash consideration, presentation of sales tax and contract modifications and completed contracts in transition. Both standards became effective on January 1, 2018. The Company finalized the impact of the adoption of ASU No. 2014-09 and ASU No. 2016-12 on the Company’s consolidated financial statements and related disclosures and adopted the standards using the modified retrospective transition method. The standards did not have a material impact on the Company’s consolidated statements of financial position or results of operations primarily because most of its revenue is derived from lease contracts, which are excluded from the scope of the new guidance. The Company’s insurance fee revenue, property management fee revenue, and merchandise sale revenue are included in the scope of the new guidance, however, the Company identified similar performance obligations under this standard as compared with deliverables and separate units of account identified under its previous revenue recognition methodology. Accordingly, revenue recognized under the new guidance does not differ materially from revenue recognized under previous guidance and there is no material prior year impact.

Concentration of Credit Risk

​

The Company’s stores are located in major metropolitan and rural areas and have numerous customers per store. No single customer represents a significant concentration of our revenues. The stores in Florida, New York, Florida, Texas and California provided approximately 17%19%, 15%, 9% and 8%, respectively, of the Company’s total revenues for the year ended December 31, 2021. The stores in New York, Florida, Texas and California provided approximately 16%, 15%, 9% and 8%, respectively, of the Company’s total revenues for the year ended December 31, 2020. The stores in New York, Florida, Texas and California provided approximately 16%, 16%, 10% and 8%, respectively, of ourthe Company’s total revenues for each of the yearsyear ended December 31, 2018, 2017 and 2016.2019.

​

F-25

​

3.  STORAGE PROPERTIES

​

The book value of the Company’s real estate assets is summarized as follows:

​

​

​

​

​

​

​

​

​

​

December 31, 

​

​

    

2021

    

2020

​

 

 

 

 

 

 

December 31, 

 

    

2018

    

2017

 

 

(in thousands)

 

​

​

(in thousands)

​

Land

 

$

806,916

 

$

711,140

 

​

$

1,565,463

​

$

1,093,503

​

Buildings and improvements

 

 

3,343,173

 

 

3,086,252

 

​

 

5,368,383

​

 

4,122,995

​

Equipment

 

 

176,583

 

 

182,958

 

​

 

129,531

​

 

123,044

​

Construction in progress

 

 

136,783

 

 

181,365

 

​

 

78,221

​

 

108,316

​

Right-of-use assets - finance leases

​

​

41,896

​

​

41,896

​

Storage properties

 

 

4,463,455

 

 

4,161,715

 

​

 

7,183,494

​

 

5,489,754

​

Less: Accumulated depreciation

 

 

(862,487)

 

 

(752,925)

 

​

 

(1,085,824)

​

 

(983,940)

​

Storage properties, net

 

$

3,600,968

 

$

3,408,790

 

​

$

6,097,670

​

$

4,505,814

​

​

F-25F-26

​

The following table summarizes the Company’s acquisition and disposition activity for the years ended December 31, 2018, 2017,2021, 2020 and 2016:2019:

​

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

Number of

    

Purchase / Sale Price

 

​

​

​

​

​

​

​

​

​

​

​

​

    

​

    

​

    

Number of

    

Purchase / Sale Price

 

Asset/Portfolio

 

Market

 

Transaction Date

 

Stores

 

(in thousands)

 

​

Metropolitan Statistical Area

​

Transaction Date

​

Stores

​

(in thousands)

​

 

 

 

 

 

 

 

 

 

 

2018 Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

2021 Acquisitions:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Minnesota Asset (1)

​

Minneapolis-St. Paul-Bloomington, MN-WI

​

April 2021

​

1

​

$

12,000

​

Maryland Asset

​

Baltimore-Towson, MD

​

June 2021

​

1

​

​

22,075

​

New Jersey/Pennsylvania Assets

​

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

​

July 2021

​

2

​

​

33,000

​

Florida Asset

​

Miami-Fort Lauderdale-Pompano Beach, FL

​

November 2021

​

1

​

​

14,750

​

Georgia Asset

​

Atlanta-Sandy Springs-Marietta, GA

​

November 2021

​

1

​

​

15,200

​

Pennsylvania Asset

​

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

​

November 2021

​

1

​

​

24,500

​

Nevada Asset

​

Las Vegas-Paradise, NV

​

December 2021

​

1

​

​

21,000

​

Storage West Assets

​

Various (see note 4)

​

December 2021

​

57

​

​

1,648,426

(2)

Illinois Asset

​

Chicago-Naperville-Joliet, IL-IN-WI

​

December 2021

​

1

​

​

10,300

​

​

​

​

​

​

​

66

​

$

1,801,251

​

​

​

​

​

​

​

​

​

​

​

​

2021 Dispositions:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Colorado/Nevada Assets

​

Denver-Aurora, CO / Las Vegas-Paradise, NV

​

September 2021

​

2

​

$

16,900

​

North Carolina Assets

​

Burlington, NC

​

September 2021

​

2

​

​

21,700

​

Texas Asset

 

Texas Markets - Major

 

January 2018

 

1

 

$

12,200

 

​

Houston-Sugar Land-Baytown, TX

​

November 2021

​

1

​

​

5,200

​

​

​

​

​

​

​

5

​

$

43,800

​

​

​

​

​

​

​

​

​

​

​

​

2020 Acquisitions:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Texas Asset

 

Texas Markets - Major

 

May 2018

 

1

 

 

19,000

 

​

San Antonio, TX

​

February 2020

​

1

​

$

9,025

​

Metro DC Asset

 

Baltimore / DC

 

July 2018

 

1

 

 

34,200

 

Nevada Asset

 

Las Vegas

 

September 2018

 

1

 

 

14,350

 

North Carolina Asset

 

Charlotte

 

September 2018

 

1

 

 

11,000

 

California Asset

 

Los Angeles

 

October 2018

 

1

 

 

53,250

 

Texas Asset

 

Texas Markets - Major

 

October 2018

 

1

 

 

23,150

 

California Asset

 

San Diego

 

November 2018

 

1

 

 

19,118

 

New York Asset

 

New York / Northern NJ

 

November 2018

 

1

 

 

37,000

 

Illinois Asset

 

Chicago

 

December 2018

 

1

 

 

4,250

 

 

 

 

 

 

10

 

$

227,518

 

 

 

 

 

 

 

 

 

 

 

2018 Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arizona Assets

 

Phoenix

 

November 2018

 

2

 

$

17,502

 

 

 

 

 

 

2

 

$

17,502

 

 

 

 

 

 

 

 

 

 

 

2017 Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Illinois Asset

 

Chicago

 

April 2017

 

1

 

$

11,200

 

Maryland Asset

 

Baltimore / DC

 

May 2017

 

1

 

 

18,200

 

​

Baltimore-Towson, MD

​

April 2020

​

1

​

​

17,200

​

California Asset

 

Sacramento

 

May 2017

 

1

 

 

3,650

 

Texas Asset

 

Texas Markets - Major

 

October 2017

 

1

 

 

4,050

 

New Jersey Asset

​

New York-Northern New Jersey-Long Island, NY-NJ-PA

​

April 2020

​

1

​

​

48,450

​

Florida Asset

 

Florida Markets - Other

 

October 2017

 

1

 

 

14,500

 

​

Palm Bay-Melbourne-Titusville, FL

​

November 2020

​

1

​

​

3,900

​

Illinois Asset

 

Chicago

 

November 2017

 

1

 

 

11,300

 

Florida Asset

 

Florida Markets - Other

 

December 2017

 

1

 

 

17,750

 

 

 

 

 

 

7

 

$

80,650

 

 

 

 

 

 

 

 

 

 

 

2016 Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metro DC Asset

 

Baltimore / DC

 

January 2016

 

1

 

$

21,000

 

Texas Assets

 

Texas Markets - Major

 

January 2016

 

2

 

 

24,800

 

New York Asset

 

New York / Northern NJ

 

January 2016

 

1

 

 

48,500

 

Texas Asset

 

Texas Markets - Major

 

January 2016

 

1

 

 

11,600

 

Connecticut Asset

 

Connecticut

 

February 2016

 

1

 

 

19,000

 

Texas Asset

 

Texas Markets - Major

 

March 2016

 

1

 

 

11,600

 

Florida Assets

 

Florida Markets - Other

 

March 2016

 

3

 

 

47,925

 

Colorado Asset

 

Denver

 

April 2016

 

1

 

 

11,350

 

Texas Asset

 

Texas Markets - Major

 

April 2016

 

1

 

 

11,600

 

Texas Asset

 

Texas Markets - Major

 

May 2016

 

1

 

 

10,100

 

Texas Asset

 

Texas Markets - Major

 

May 2016

 

1

 

 

10,800

 

Illinois Asset

 

Chicago

 

May 2016

 

1

 

 

12,350

 

Illinois Asset

 

Chicago

 

May 2016

 

1

 

 

16,000

 

Massachusetts Asset

 

Massachusetts

 

June 2016

 

1

 

 

14,300

 

Nevada Assets

 

Las Vegas

 

July 2016

 

2

 

 

23,200

 

Arizona Asset

 

Phoenix

 

August 2016

 

1

 

 

14,525

 

Minnesota Asset

 

Minneapolis

 

August 2016

 

1

 

 

15,150

 

Colorado Asset

 

Denver

 

August 2016

 

1

 

 

15,600

 

Texas Asset

 

Texas Markets - Major

 

September 2016

 

1

 

 

6,100

 

​

Austin-Round Rock, TX

​

November 2020

​

1

​

​

10,750

​

Texas Asset

 

Texas Markets - Major

 

September 2016

 

1

 

 

5,300

 

​

Dallas-Fort Worth-Arlington, TX

​

November 2020

​

1

​

​

10,150

​

Nevada Asset

 

Las Vegas

 

October 2016

 

1

 

 

13,250

 

​

Las Vegas-Paradise, NV

​

December 2020

​

1

​

​

16,800

​

North Carolina Asset

 

Charlotte

 

November 2016

 

1

 

 

10,600

 

New York Asset

​

New York-Northern New Jersey-Long Island, NY-NJ-PA

​

December 2020

​

1

​

​

6,750

​

Florida Asset

​

Tampa-St. Petersburg-Clearwater, FL

​

December 2020

​

1

​

​

10,000

​

Virginia Asset

​

Washington-Arlington-Alexandria, DC-VA-MD-WV

​

December 2020

​

1

​

​

17,350

​

Storage Deluxe Assets

​

New York-Northern New Jersey-Long Island, NY-NJ-PA

​

December 2020

​

8

​

​

540,000

​

Florida Assets

​

Orlando-Kissimmee, FL / Deltona-Daytona Beach-Ormond Beach, FL

​

December 2020

​

3

​

​

45,500

​

​

​

​

​

​

​

21

​

$

735,875

​

​

​

​

​

​

​

​

​

​

​

​

2020 Disposition:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

New York Asset

​

New York-Northern New Jersey-Long Island, NY-NJ-PA

​

December 2020

​

1

​

$

12,750

​

​

​

​

​

​

​

1

​

$

12,750

​

2019 Acquisitions:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Maryland Asset

​

Baltimore-Towson, MD

​

March 2019

​

1

​

$

22,000

​

Florida Assets

​

Cape Coral-Fort Myers, FL

​

April 2019

​

2

​

​

19,000

​

Arizona Asset

 

Phoenix

 

November 2016

 

1

 

 

14,000

 

​

Phoenix-Mesa-Scottsdale, AZ

​

May 2019

​

1

​

​

1,550

​

Nevada Asset

 

Las Vegas

 

December 2016

 

1

 

 

14,900

 

 

 

 

 

 

28

 

$

403,550

 

HVP III Assets

​

Various (see note 4)

​

June 2019

​

18

​

​

128,250

(3)

Georgia Asset

​

Atlanta-Sandy Springs-Marietta, GA

​

August 2019

​

1

​

​

14,600

​

South Carolina Asset

​

Charleston-North Charleston, SC

​

August 2019

​

1

​

​

3,300

​

Texas Asset

​

Dallas-Fort Worth-Arlington, TX

​

October 2019

​

1

​

​

7,300

​

Florida Assets

​

Orlando-Kissimmee, FL

​

November 2019

​

3

​

​

32,100

​

California Asset

​

Los Angeles-Long Beach-Santa Ana, CA

​

December 2019

​

1

​

​

18,500

​

​

​

​

​

​

​

29

​

$

246,600

​

​

​

​

​

​

​

​

​

​

​

​

2019 Disposition:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Texas Asset

​

College Station-Bryan, TX

​

October 2019

​

1

​

$

4,146

​

​

​

​

​

​

​

1

​

$

4,146

​

​

​

​

​

​

​

​

​

​

​

​

(1)Acquired by a consolidated joint venture in which the Company holds a 50% interest.

​

(2)Purchase price represents the acquisition of all 167,557 outstanding partnership units of LAACO, Ltd. (“LAACO”) for $9,838 per unit. At the time of the acquisition, LAACO owned 57 storage properties (the “Storage West Assets”) and 50% ownership interests in 2 separate joint ventures. Through this acquisition, the Company also acquired LAACO’s wholly-owned subsidiaries, the Los Angeles Athletic Club and the California Yacht Club (the “Club Operations”), which are classified as held for sale on the Company’s consolidated balance sheets as of December 31, 2021 (see note 4).

​

(3)Amount represents the purchase price for 90% of the ownership interest in 191 III CUBE LLC (“HVP III”), which at the time of the acquisition, owned 18 storage properties (see note 4).

​

F-26F-27

​

​

​

4.  INVESTMENT ACTIVITY

​

2018LAACO Acquisition

​

On December 9, 2021, the Company acquired all outstanding partnership units of LAACO, the owner of the Storage West Assets and, as a result, LAACO became a wholly-owned subsidiary of the Company. The 57 Storage West Assets are located in Arizona (17), California (20), Nevada (13) and Texas (7). Through its acquisition of LAACO, the Company also acquired a 50% interest in 2 separate unconsolidated joint ventures, each of which own 1 storage property in California (see note 5). In addition, through this acquisition, the Company also acquired the Club Operations, which included the Los Angeles Athletic Club (consisting of athletic facilities, food and beverage operations and a hotel) and the California Yacht Club (consisting of sports facilities, food and beverage operations and a marina). As of December 31, 2021, the Club Operations have been classified as held for sale on the Company’s consolidated balance sheets.

​

The following summarizes the relevant components contemplated in the acquisition of LAACO:

​

​

​

​

​

Amount

​

(in thousands)

Costs contemplated:

​

​

Capitalized costs:

​

​

LAACO partnership units (1)

$

1,648,426

Long-term debt assumed and repaid at closing

​

40,880

Payments to LAACO management (capitalized) (2)

​

16,807

Other transaction costs (3)

​

13,407

Total capitalized costs

$

1,719,520

Payments and anticipated payments to LAACO management (expensed) (2)

​

25,144

Total costs contemplated

$

1,744,664

​

​

​

Estimated fair value of Club Operations (included in total costs contemplated above)

$

46,800

​

(1)Represents the acquisition of all 167,557 outstanding partnership units for $9,838 per unit.

​

(2)Upon the acquisition of LAACO, the Company assumed severance obligations payable to certain employees pursuant to pre-existing agreements. Based on the specific details of the arrangements, $16.8 million in costs were capitalized to the basis of the acquired properties while $25.1 million were considered post-combination compensation expenses. Of this $25.1 million, $14.8 million was included in the component of other income (expense) designated as other for the year ended December 31, 2021, with the remainder expected to be expensed during the six months ended June 30, 2022.

​

(3)Includes consulting fees, legal fees, and other costs.

​

The Company accounted for the acquisition of LAACO as an asset acquisition. As a result, the capitalized costs noted above were allocated to LAACO’s real estate assets, intangible assets and real estate venture investments on a relative fair value basis. All other assets acquired and liabilities assumed were recorded at fair value. The following summarizes the accounting for the LAACO acquisition:

​

​

​

​

​

Amount

​

(in thousands)

Storage properties

$

1,517,243

Cash and cash equivalents

​

18,291

Investment in real estate ventures, at equity

​

35,737

Assets held for sale

​

50,435

Other assets, net

​

143,599

Accounts payable, accrued expenses and other liabilities

​

(38,350)

Deferred revenue

​

(3,764)

Security deposits

​

(36)

Liabilities held for sale

​

(3,635)

Total

$

1,719,520

​

F-28

​

Intangible assets (included above in Other assets, net) consisted of in-place leases, which aggregated to $109.7 million at the time of the acquisition and prior to amortization of such amounts. The estimated life of these in-place leases is 12 months and the amortization expense that was recognized during the year ended December 31, 2021 was approximately $9.1 million.

​

Other 2021 Acquisitions

​

During the year ended December 31, 2018,2021, the Company acquired ten8 additional stores located throughout the United States, including one store upon completion of constructionin Florida (1), Georgia (1), Illinois (1), Maryland (1), Nevada (1), New Jersey (1) and the issuance of a certificate of occupancy,Pennsylvania (2) for an aggregate purchase price of approximately $227.5$140.8 million. Also, a consolidated joint venture, in which the Company holds a 50% interest, acquired a store in Minnesota for a purchase price of $12.0 million (see note 12). In connection with these transactions, which were accounted for as asset acquisitions, the Company allocated a portion of the purchase price and acquisition-related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consistconsisted of in-place leases, which aggregated $11.3to $11.9 million at the time of the acquisitions and prior to any amortization of such amounts. The estimated life of these in-place leases wasis 12 months and the amortization expense that was recognized during 2018 was approximately $3.1 million. In connection with one of the acquired stores, the Company assumed a $7.2 million mortgage loan that was immediately repaid by the Company. The remainder of the purchase price was funded with $0.2 million of cash and $4.8 million through the issuance of 168,011 OP Units (see note 12). Following a 13-month lock-up period, the holder may tender the OP Units for redemption by the Operating Partnership for a cash amount per OP Unit equal to the market value of an equivalent number of common shares of the Company. The Company has the right, but not the obligation, to assume and satisfy the redemption obligation of the Operating Partnership by issuing one common share in exchange for each OP Unit tendered for redemption. 

The following table summarizes the Company’s revenue and earnings associated with the 2018 acquisitions from the respective acquisition dates, that are included in the consolidated statements of operations for the year ended December 31, 2018:2021 was approximately $3.6 million.

 

 

 

 

 

 

    

Year Ended December 31, 2018

 

 

 

(in thousands)

 

Total revenue

 

$

4,089

 

Net loss

 

 

(2,732)

 

​

2018As of December 31, 2021, the Company had made aggregate deposits of approximately $0.5 million associated with 1 store that was under contract to be acquired for an acquisition price of $32.0 million (see note 18). The deposits are reflected in Other assets, net on the Company’s consolidated balance sheets.

​

2021 Dispositions

​

On November 28, 2018,During the year ended December 31, 2021, the Company sold two5 stores in ArizonaColorado (1), Nevada (1), North Carolina (2) and Texas (1) for an aggregate sales price of approximately $17.5$43.8 million. In connectionconjunction with thesethe sales, the Company recorded gains that totaled approximately $10.6$32.7 million.

​

DevelopmentAssets Held for Sale

​

As of December 31, 2018,2021, the Company determined that the Club Operations assumed through the acquisition of LAACO met the criteria to be classified as assets held for sale. Accordingly, the assets and liabilities associated with the Club Operations have been categorized as held for sale within the Company’s December 31, 2021 consolidated balance sheets. As of December 31, 2021, the estimated fair value less selling costs of the Club Operations was greater than the carrying value of the Club Operations, and therefore 0 loss has been recorded in the current period.

​

Development Activity

​

As of December 31, 2021, the Company had invested in joint ventures to develop six3 self-storage properties located in Massachusetts (2) New Jersey (1), and New York (3)(2) and Virginia (1). Construction for all projects is expected to be completed by the secondfirst quarter of 2020.2023 (see note 12). As of December 31, 2018,2021, development costs incurred to date for these projects totaled $118.6$66.7 million. Total construction costs for these projects are expected to be $162.7$97.3 million. These costs are capitalized to construction in progress while the projects are under development and are reflected in Storage properties on the Company’s consolidated balance sheets.

​

F-29

​

The Company has completed the construction of and opened for operation the following stores since January 1, 2016.2019. The costs associated with the construction of these stores are capitalized to land, building and improvements, as well as equipment and are reflected in Storage properties on the Company’s consolidated balance sheets.

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CubeSmart

 

 

 

 

 

Number of

 

 

 

Ownership

 

Total

Store Location

    

Stores

    

Date Opened

 

Interest

 

Construction Costs

 

 

 

 

 

 

 

 

(in thousands)

Bronx, NY

 

1

 

Q3 2018

 

51%

 

$

92,100

Brooklyn, NY (1)

 

1

 

Q4 2017

 

100%

 

 

49,300

Washington, D.C.

 

1

 

Q3 2017

 

100%

 

 

27,800

New York, NY

 

1

 

Q3 2017

 

90%

 

 

81,200

North Palm Beach, FL

 

1

 

Q1 2017

 

100%

 

 

9,700

Bronx, NY (1) (2)

 

1

 

Q2 2016

 

100%

 

 

32,200

Queens, NY (1)

 

1

 

Q1 2016

 

100%

 

 

31,800

 

 

7

 

 

 

 

 

$

324,100

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

CubeSmart

​

​

​

​

​

Number of

​

​

​

Ownership

​

Total

Store Location

    

Stores

    

Date Opened

​

Interest

​

Construction Costs

​

​

​

​

​

​

​

​

(in thousands)

​

​

​

​

​

​

​

​

​

​

Newton, MA (1)

​

1

​

Q4 2021

​

100%

​

$

20,800

East Meadow, NY (2)

​

1

​

Q2 2021

​

100%

​

​

25,900

King of Prussia, PA

​

1

​

Q2 2021

​

70%

​

​

22,800

Arlington, VA (3)

​

1

​

Q1 2021

​

90%

​

​

26,400

Brooklyn, NY (2)

​

1

​

Q2 2020

​

100%

​

​

45,900

Waltham, MA (1)

​

1

​

Q3 2019

​

100%

​

​

18,000

Queens, NY (2)

​

1

​

Q2 2019

​

100%

​

​

47,500

Bayonne, NJ (2) (4)

​

1

​

Q2 2019

​

100%

​

​

25,100

​

​

8

​

​

​

​

​

$

232,400

​

(1)

During the third quarter of 2019 and fourth quarter of 2021, the Company, through 2 separate joint ventures in which it owned a 90% interest in each and that were previously consolidated, completed the construction of and opened for operation a store located in Waltham, MA and a store located in Newton, MA, respectively. On September 6, 2019, the Company acquired the 10% interest of the noncontrolling member in the venture that owned the Waltham, MA store for $2.6 million. On December 14, 2021, the Company acquired the 10% interest of the noncontrolling member in the venture that owned the Newton, MA store for $3.4 million. Prior to these transactions, the noncontrolling member’s interest in each venture was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in each venture and the stores are now wholly owned, these transactions were accounted for as equity transactions. In each case, the carrying amount of the noncontrolling interest was reduced to 0 to reflect the purchase and the difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company, with 0 gain or loss recorded. This adjustment was $2.0 million for the Waltham, MA store and $2.7 million for the Newton, MA store. The $10.5 million related party loan extended by the Company to the venture that owned the Waltham, MA store and the $13.2 million related party loan extended by the Company to the venture that owned the Newton, MA store were repaid in conjunction with the Company’s acquisitions of the noncontrolling member’s ownership interests.

​

(2)

These stores were previously owned through threeby 4 separate consolidated joint ventures, of which the Company ownedheld a 51% ownership interest in each. On April 5, 2016,June 25, 2019, the noncontrolling member in the venture that owned the Bayonne, NJ store put its 49% interest in the venture to the Company for $11.5 million. On September 17, 2019, the noncontrolling member in the venture that owned the Queens, NY store put its 49% interest in the venture to the Company for $12.5$15.2 million. On August 12, 2016, the noncontrolling member in the venture that owned the

F-27

Bronx, NY store put its 49% interest in the venture to the Company for $17.0 million. On March 28, 2018,September 29, 2020, the noncontrolling member in the venture that owned the Brooklyn, NY store put its 49% interest in the venture to the Company for $20.4$10.0 million, of which $1.0 million was paid in cash. The Company issued 276,497 OP Units that were valued at approximately $9.0 million as consideration for the remainder of the purchase price (see note 12). On June 29, 2021, the noncontrolling member in the venture that owned the East Meadow, NY store put its 49% interest in the venture to the Company for $6.6 million. These amountsThe cash payments related to these transactions are included in Development costs onin the Company’s consolidated statements of cash flows.

​

(2)

(3)		This store is located adjacent to an existing consolidated joint venture store. Given their proximity to each other, the stores have been combined in our store count, as well as for operational and reporting purposes (see note 12).

​

(4)

This store is subject to a ground lease.

​

F-30

​

2020 Acquisitions

During the fourth quarter​

The Company acquired a portfolio of 2015, the Company, through a joint venture in which the Company owned a 90% interest and that it previously consolidated, completed the construction and opened for operation a store8 stores located in Brooklyn, NY. On Junethe outer boroughs of New York City (the “Storage Deluxe Assets”), in 2 2017, the Company acquired the noncontrolling member’s 10% interest in the venture for $9.0 million.  Prior to this transaction, the noncontrolling member’s interest was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in the joint venture and the store is now wholly owned, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase, and the $8.6 million difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company.  In conjunction with the Company’s acquisition of the noncontrolling interest, the $9.8 million related party loan extended by the Company to the ventureseparate tranches during the construction period was repaid in full.

2017 Acquisitions

During the year ended December 31, 2017, the Company acquired six stores located throughout the United States, including two stores upon completion of construction and the issuance of a certificate of occupancy,2020, for an aggregate purchase price of approximately $69.5$540.0 million. In connection with these acquisitions,the acquisition of the Storage Deluxe Assets, the Company assumed 6 mortgage loans with an aggregate outstanding principal amount of $154.4 million at the time of acquisition, one of which had an outstanding principal balance of $33.2 million and was repaid immediately. The assumed mortgage debt was recorded at a fair value of $169.2 million, which includes an aggregate net premium of $14.8 million to reflect the estimated fair value of the debt at the time of assumption. The remainder of the purchase price was funded with $210.5 million of cash and $175.1 million through the issuance of 5,272,023 OP Units (see note 12). In connection with the acquisition of the Storage Deluxe Assets, which was accounted for as an asset acquisition, the Company allocated a portion of the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consistconsisted of in-place leases, which aggregated $3.2to $48.6 million at the time of the acquisition and prior to amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the year ended December 31, 2021 was approximately $48.6 million. Additionally, as part of the transaction, the Company assumed 3 existing ground leases as lessee, 2 of which have been classified as finance leases and 1 of which has been classified as an operating lease (see note 13).

​

During the year ended December 31, 2020, the Company acquired 13 additional stores located in Florida (5), Maryland (1), Nevada (1), New Jersey (1), New York (1), Texas (3) and Virginia (1) for an aggregate purchase price of approximately $195.9 million. In connection with these transactions, which were accounted for as asset acquisitions, the Company allocated the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consisted of in-place leases, which aggregated to $11.4 million at the time of the acquisitions and prior to any amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the years ended December 31, 20182021 and 20172020 was approximately $1.7$9.3 million and $1.5$2.1 million, respectively. In

​

Additionally, on July 20, 2020, the Company acquired land underlying a wholly-owned store located in the Bronx, New York for $9.5 million. The land was previously subject to a ground lease in which the Company served as lessee. As a result of the transaction, which was accounted for as an asset acquisition, the Company was released from its obligations under the ground lease, and the right-of-use asset and lease liability totaling $5.1 million and $5.0 million, respectively, were removed from the Company’s consolidated balance sheets.

​

2020 Disposition

​

On December 22, 2020, the Company sold a self-storage property located in New York for a sales price of $12.8 million. The Company recorded a $6.7 million gain in connection with one of the acquired stores, the Company assumed mortgage debt that was recorded at a fair value of $6.2 million, which fair value includes an outstanding principal balance totaling $5.9 million and a net premium of $0.3 million to reflect the estimated fair value of the debt at the time of assumption. As part of the acquisition of that same store, the Company issued OP Units that were valued at approximately $12.3 million as consideration for the remainder of the purchase price (see note 12).sale.

​

2019 Acquisitions

​

During the year ended December 31, 2017, the Company also acquired a store in Illinois upon completion of construction and the issuance of a certificate of occupancy for $11.2 million. The purchase price was satisfied with $9.7 million of cash and 58,400 newly created Class C OP Units. Each Class C OP Unit had a stated value of $25 and an annual distribution rate of 3% of the stated value. On July 23, 2018, all of the Class C OP Units were exchanged for an aggregate of 46,322 common units of the Operating Partnership. Because the Class C OP Units represented an unconditional obligation that the Company settled by issuing a variable number of its common shares with a monetary value that was known at inception, the Class C OP Units were classified as a liability in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets prior to redemption.

2016 Acquisitions

During the year ended December 31, 2016,2019, the Company acquired 2811 stores including three stores upon completion of constructionlocated in Arizona (1), California (1), Florida (5), Georgia (1), Maryland (1), South Carolina (1) and the issuance of a certificate of occupancy, located throughout the United StatesTexas (1) for an aggregate purchase price of approximately $403.6$118.3 million. In connection with these transactions, which were accounted for as asset acquisitions, the Company allocated a portion of the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consistconsisted of in-place leases, which aggregated $18.8to $6.2 million at the time of the acquisitions and prior to any amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the years ended December 31, 20172020 and 20162019 was approximately $8.3$4.3 million and $10.5$1.9 million, respectively. There was 0 amortization expense recognized during the year ended December 31, 2021 for these in-place leases. In connection with one of the acquired stores,acquisitions, the Company assumed mortgage debtpaid $14.9 million of cash and issued OP Units that were valued at approximately $3.6 million as consideration for the purchase price (see note 12).

​

Additionally, on June 6, 2019, the Company acquired its partner’s 90% ownership interest in HVP III, an unconsolidated real estate venture in which the Company previously owned a 10% noncontrolling interest and that was recorded at a fair valueaccounted for under the equity method of $6.5accounting. As of the date of acquisition, HVP III owned 18 stores located in Georgia (1), Massachusetts (7), North Carolina (1), South Carolina (7) and Tennessee (2) (the “HVP III Assets”). The purchase price for the 90% ownership interest was $128.3 million, which fair value includes an outstanding principal balance totaling $6.3was comprised of cash consideration of $120.0 million and $8.3 million of the Company’s escrowed proceeds from HVP III’s sale of 50 properties to an unaffiliated buyer on June 5, 2019 (see note 5). The HVP III Assets were recorded by the Company at $137.5 million, which consisted of the $128.3 million purchase price plus the Company’s $10.6 million carryover basis of its previously held equity interest in HVP III, offset by $1.4 million of acquired cash. As a net premiumresult of $0.2 million to reflect the estimated fairtransaction, which was accounted for as an asset acquisition, the HVP III Assets became wholly-owned by the Company and are now consolidated within its financial statements. No gain or loss was recognized as a result of the transaction. In connection with the transaction, the Company allocated the value of the debtHVP III

F-31

​

Assets and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consisted of in-place leases, which aggregated to $14.3 million at the time of assumption.the acquisition and prior to amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the years ended December 31, 2020 and 2019 was approximately $6.0 million and $8.3 million, respectively. There was no amortization expense recognized for these in-place leases during the year ended December 31, 2021.

​

2019 Disposition

​

On October 7, 2019, the Company sold a self-storage property located in Texas for a sales price of $4.1 million. The Company recorded a $1.5 million gain in connection with the sale.

​

5. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

​

191 IV CUBE LLC (“The Company’s investments in real estate ventures, consisting of common ownership interests, are summarized as follows (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

CubeSmart

​

Number of Stores as of

​

Carrying Value of Investment as of

​

​

Ownership

​

December 31, 

​

December 31, 

Unconsolidated Real Estate Ventures

    

Interest

​

2021

​

2020

    

2021

​

2020

Fontana Self Storage, LLC ("Fontana") (1)

​

50%

​

1

​

-

​

$

14,225

​

$

-

Rancho Cucamonga Self Storage, LLC ("RCSS") (1)

​

50%

​

1

​

-

​

​

21,536

​

​

-

191 V CUBE LLC ("HVP V") (2)

​

20%

​

5

​

-

​

​

16,080

​

​

-

191 IV CUBE Southeast LLC ("HVPSE") (3)

​

10%

​

14

​

14

​

​

4,541

​

​

5,015

191 IV CUBE LLC ("HVP IV") (4)

​

20%

​

28

​

21

​

​

23,223

​

​

21,760

CUBE HHF Northeast Venture LLC ("HHFNE") (5)

​

10%

​

13

​

13

​

​

1,291

​

​

1,628

CUBE HHF Limited Partnership ("HHF") (6)

​

50%

​

28

​

35

​

​

38,855

​

​

63,668

​

​

​

​

90

​

83

​

$

119,751

​

$

92,071

​

(1)On December 9, 2021, the Company completed the acquisition of LAACO, which included a 50% interest in Fontana and RCSS, each of which owns 1 self-storage property in California. As of the date of acquisition, the Company recognized differences between the Company’s equity investment in Fontana and RCSS and the underlying equity reflected at the venture level. As of December 31, 2021, this difference was $13.5 million for Fontana and $20.1 million for RCSS. These differences are being amortized over the expected useful life of the self-storage properties owned by the ventures.

​

(2)On March 17, 2021, the Company invested a 20% ownership interest in a newly-formed real estate venture that acquired its initial self-storage property located in Florida. As of December 31, 2021, HVP V owned 5 self-storage properties located in Florida (2), New Jersey (2) and New York (1). HVP V paid an aggregate of $143.7 million for these properties, of which $2.2 million was allocated to the value of the in-place leases. These acquisitions were funded initially through pro-rata contributions by the Company and its unaffiliated joint venture partner. The Company’s total contribution to HVP V related to these acquisitions was $22.6 million. During the year ended December 31, 2021, the venture closed on an $80.6 million secured term loan. The loan bears interest at SOFR plus 2.05% and matures on September 30, 2025 with an option to extend the maturity date through September 30, 2026, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement.

​

(3)The stores owned by HVPSE are located in Florida (2), Georgia (8) and South Carolina (4). HVPSE paid $135.3 million for these stores, of which $7.7 million was allocated to the value of the in-place lease intangible. The acquisition was funded primarily through the venture’s $81.6 million secured term loan. The remainder of the purchase price was contributed pro-rata by the Company and its unaffiliated joint venture partner. The Company’s total contribution to HVPSE related to this portfolio acquisition was $5.6 million. The secured loan bears interest at LIBOR plus 1.60% and matures on March 19, 2023 with options to extend the maturity date through March 19, 2025, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement.

​

(4)The stores owned by HVP IV are located in Arizona (2), Connecticut (3), Florida (4), Georgia (2), Illinois (5), Maryland (2), Minnesota (1), Pennsylvania (1) and Texas (8). The Company’s total contribution to HVP IV in connection with these store acquisitions was $32.0 million. During the year ended December 31, 2021, HVP IV entered into a new $221.6 million secured

F-32

​

loan, which bears interest at LIBOR plus 1.95% per annum, and matures on April 19, 2025. HVP IV used the proceeds from this loan to repay its existing loans (totaling $137.7 million) in full.

​

(5)The stores owned by HHFNE are located in Connecticut (3), Massachusetts (6), Rhode Island (2) and Vermont (2). The Company’s total contribution to HHFNE in connection with these store acquisitions was $3.8 million. As of December 31, 2021, HHFNE had an outstanding $45.0 million secured loan facility, which bears interest at LIBOR plus 1.20% per annum and matures on December 16, 2024.

​

(6)The stores owned by HHF are located in North Carolina (1) and Texas (27). On October 5, 2021, HHF sold 7 stores in Texas for an aggregate sales price of approximately $85.0 million. The venture recorded gains which aggregated to approximately $46.9 million in connection with the sale. On January 21, 2021, HHF entered into a new $105.0 million secured loan, which bears interest at 2.58% per annum and matures on February 5, 2028. HHF used the proceeds from the new loan to repay its existing outstanding $100.0 million loan in full.

​

On June 5, 2019, HVP IV”)

On October 16, 2017,III, a venture in which the Company acquiredheld a self-storage property located in Texas for $9.4 million, which it then contributed to a newly-formed real estate venture on November 1, 2017.In return for contributing the property to HVP IV, the Company received approximately $7.5 million in cash and a 20% ownership10% interest, in the venture. During the year ended December 31, 2018, HVP IV acquired 12 additionalsold 50 stores located in Arizona (2), Connecticut (2), Florida (3), Georgia (2)(4), Maryland (1)Michigan (17), North Carolina (3), South Carolina (15) and Texas (2)Tennessee (8), to an unaffiliated third-party buyer for an

F-28

aggregate purchasesales price of $129.4$293.5 million. As of the transaction date, HVP III had 5 mortgage loans with an aggregate outstanding balance of $22.9 million, of which the Company has contributed $14.1 million. On May 16, 2018 and August 15, 2018, HVP IV received $43.7as well as $179.5 million and $24.4 million advances, respectively,outstanding on its $107.0$185.5 million loan facility, which encumbers the first eleven stores that were acquired by the venture. The loan bears interest at LIBOR plus 1.70% and matures on May 16, 2021 with options to extend the maturity date through May 16, 2023, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement.

CUBE HHF Northeast Venture LLC (“HHFNE”)

On December 15, 2016, the Company invested a 10% ownership interest in a newly-formed real estate venture that acquired 13 self-storage properties located in Connecticut (3), Massachusetts (6), Rhode Island (2), and Vermont (2). HHFNE paid $87.5 million for these stores,all of which $6.0 million was allocated to the value of the in-place lease intangible. The acquisition was funded primarily through an advance totaling $44.5 million on the venture’s loan facility. The remainder of the purchase price was contributed pro-rata by the Company and its unaffiliated joint venture partner. The Company’s total contribution to HHFNE related to this portfolio acquisition was $3.8 million. The loan bears interest at LIBOR plus 1.90% and matures on December 15, 2019 with options to extend the maturity date through December 15, 2021, subject to satisfaction of certain conditions and payment of the extension fees as stipulatedwere defeased or repaid in the loan agreement.

191 III CUBE LLC (“HVP III”)

During the fourth quarter of 2015, the Company invested a 10% ownership interest in a newly-formed real estate venture that agreed to acquire a property portfolio comprised of 37 self-storage properties located in Michigan (17), Tennessee (10), Massachusetts (7), and Florida (3). HVP III paid $242.5 million for these 37 stores, of which $18.9 million was allocated to the value of the in-place lease intangible. HVP III acquired 30 of the stores on December 8, 2015 for $193.7 million, one of the stores on January 26, 2016 for $5.7 million, five of the stores on April 21, 2016 for $36.1 million, and one store on June 15, 2016 for $7.0 million. In connection with six of the acquired stores, HVP III assumed mortgage debt that was recorded at a fair value of $25.3 million, which includes an outstanding principal balance totaling $23.7 million and a net premium of $1.6 million to reflect the estimated fair value of the debtfull at the time of assumption.the sale. Net proceeds to the venture from the transaction totaled $82.9 million. The remainder ofventure recorded gains which aggregated to approximately $106.7 million in connection with the purchase price was funded through advances totaling $116.0 million onsale. Subsequent to the venture’s $122.0 million loan facility and amounts contributed pro-rata bysale, the Company andacquired its unaffiliated joint venture partner. The Company’s total contribution to HVP III related to this portfolio acquisition was $10.7 million. The loan facility bearspartner’s 90% ownership interest at LIBOR plus 2.00% per annum and was originally scheduled to mature on December 7, 2018 with options to extend the maturity date through December 7, 2020, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement.

During the first quarter of 2016, HVP III agreed to acquire a portfolio comprised of 31 self-storage properties located in South Carolina (22), Georgia (5), and North Carolina (4) that were previously managed by the Company. HVP III paid $115.5 million for these 31 stores, of which $10.6 million was allocated to the value of the in-place lease intangible. HVP III acquired 30 of the stores on March 30, 2016 for $112.8 million and one of the stores on November 29, 2016 for $2.7 million. In conjunction with the acquisitions, HVP III refinanced its existing loan facility by entering into an increased amended and restated loan facility not to exceed $185.5 million. The acquisitions were funded primarily through advances totaling $63.5 million on the venture’s amended and restated loan facility. The remainder of the purchase price was contributed pro-rata by the Company and its unaffiliated joint venture partner. The Company’s total contribution to HVP III related to this portfolio acquisition was $5.4 million, bringing its total investment in HVP III, to $16.1 million as of December 31, 2016. The amended and restated loan facility bears interestwhich at LIBOR plus 2.00% per annum. The initial maturity date was extended to March 30, 2019 with options to extend through March 30, 2021, subject to satisfaction of certain conditions and paymentthe time of the extension fees as stipulated inacquisition, owned the amended and restated loan agreement.remaining 18 storage properties (see note 4).

​

CUBE HHF Limited Partnership (“HHF”)

On December 10, 2013, the Company invested a 50% ownership interest in a newly-formed real estate venture that acquired 35 self-storage properties located in Texas (34) and North Carolina (1). HHF paid $315.7 million for these stores, of which $12.1 million was allocated to the value of the in-place lease intangible. The Company and the unaffiliated joint venture partner each contributed cash equal to 50% of the capital required to fund the acquisition. On May 1, 2014, HHF obtained a $100.0 million loan secured by the 34 self-storage properties located in Texas that are owned by the venture. There is no recourse to the Company, subject to customary exceptions to non-recourse provisions. The loan bears interest at 3.59% per annum and matures on April 30, 2021. This financing completed the planned capital structure of HHF and proceeds (net of closing costs) of $99.2 million were distributed proportionately to the partners. 

Based upon the facts and circumstances at acquisition of Fontana and RCSS and formation of HVP V, HVPSE, HVP IV, HHFNE, HVP III, and HHF (the “Ventures”), the Company determined that the Ventures are not VIEs in accordance with the accounting standard for the consolidation of VIEs. As a result, the Company used the voting interest model under the accounting standard for consolidation in order to determine whether to consolidate the

F-29

Ventures. Based upon each member's substantive participating rights over the activities of each entity as stipulated in the operating agreements, the Ventures are not consolidated by the Company and are accounted for under the equity method of accounting.accounting (except for HVP III, which was consolidated as of June 6, 2019). The Company’s investments in the Ventures are included in Investment in real estate ventures, at equity on the Company’s consolidated balance sheets and the Company’s earnings from its investments in the Ventures are presented in Equity in lossesearnings of real estate ventures on the Company’s consolidated statements of operations.

​

The amounts reflected in the following table are based on the historical financial information of the Ventures. The following is a summary of the financial position of the Ventures as of December 31, 20182021 and 2017 (in thousands):2020:

​

​

​

​

​

​

​

​

​

    

December 31, 

​

​

2021

 

2020

Assets

​

(in thousands)

Storage properties, net

​

$

850,250

​

$

662,833

Other assets

​

 

34,760

​

 

18,112

Total assets

​

$

885,010

​

$

680,945

​

​

​

​

​

​

​

Liabilities and equity

​

​

​

​

​

​

Debt

​

$

526,972

​

$

359,985

Other liabilities

​

​

14,500

​

​

11,588

Equity

​

​

​

​

​

​

CubeSmart

​

 

86,083

​

​

92,071

Joint venture partners

​

 

257,455

​

​

217,301

Total liabilities and equity

​

$

885,010

​

$

680,945

​

​

​

​

​

​

​

​

​

 

 

 

 

 

 

 

 

 

    

December 31, 

 

 

 

2018

 

2017

 

Assets

 

 

 

 

 

 

 

Storage properties, net

 

$

741,209

 

$

647,668

 

Other assets

 

 

16,042

 

 

8,284

 

Total assets

 

$

757,251

 

$

655,952

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

Other liabilities

 

$

7,911

 

$

6,853

 

Debt

 

 

413,848

 

 

346,475

 

Equity

 

 

 

 

 

 

 

CubeSmart

 

 

95,796

 

 

91,206

 

Joint venture partners

 

 

239,696

 

 

211,418

 

Total liabilities and equity

 

$

757,251

 

$

655,952

 

F-33

​

The following is a summary of results of operations of the Ventures for the years ended December 31, 2018, 20172021, 2020 and 2016 (in thousands):2019:

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31,

 

​

    

2021

    

2020

    

2019

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 

 

 

2018

    

2017

    

2016

 

 

 

 

 

 

 

 

 

 

 

​

​

(in thousands)

​

Total revenues

 

$

90,111

 

$

81,058

 

$

64,931

 

​

$

88,449

​

$

67,239

​

$

72,582

​

Operating expenses

 

 

37,899

 

 

33,922

 

 

26,150

 

​

 

(37,967)

​

 

(30,755)

​

 

(32,134)

​

Other expense

 

 

938

 

 

783

 

 

3,750

 

Other expenses

​

​

(1,138)

​

​

(430)

​

​

(3,227)

​

Interest expense, net

 

 

13,311

 

 

11,703

 

 

9,432

 

​

 

(12,031)

​

 

(11,585)

​

 

(14,927)

​

Depreciation and amortization

 

 

41,972

 

 

45,086

 

 

53,701

 

​

 

(37,805)

​

 

(33,086)

​

 

(30,107)

​

Net loss

 

$ 

(4,009)

 

$ 

(10,436)

 

$ 

(28,102)

 

Company’s share of net loss

 

$ 

(865)

 

$ 

(1,386)

 

$ 

(2,662)

 

Gains from sale of real estate, net

​

​

46,966

​

​

—

​

​

106,667

​

Net income (loss)

​

$

46,474

​

$

(8,617)

​

$

98,854

​

Company’s share of net income (loss)

​

$

25,275

​

$

178

​

$

11,122

​

​

The results of operations above include the periods from NovemberJanuary 1, 20172019 through June 6, 2019 (date of acquisition) through December 31, 2018consolidation) for HVP IV and December 15, 2016 (date of acquisition) through December 31, 2018 for HHFNE.III.

​

6.  UNSECURED SENIOR NOTES

​

The Company’s unsecured senior notes are summarized as follows (collectively referred to as the “Senior Notes”):

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

December 31, 

    

Effective

 

Issuance

 

Maturity

 

Unsecured Senior Notes

    

2018

    

2017

    

Interest Rate

 

Date

 

Date

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

$250M 4.800% Guaranteed Notes due 2022

 

$

250,000

 

$

250,000

 

4.82

% 

 

Jun-12

 

Jul-22

 

$300M 4.375% Guaranteed Notes due 2023 (1)

 

 

300,000

 

 

300,000

 

4.33

% 

 

Various (1)

 

Dec-23

 

$300M 4.000% Guaranteed Notes due 2025 (2)

 

 

300,000

 

 

300,000

 

3.99

% 

 

Various (2)

 

Nov-25

 

$300M 3.125% Guaranteed Notes due 2026

 

 

300,000

 

 

300,000

 

3.18

% 

 

Aug-16

 

Sep-26

 

Principal balance outstanding

 

 

1,150,000

 

 

1,150,000

 

 

 

 

 

 

 

 

Less: Discount on issuance of unsecured senior notes, net

 

 

(568)

 

 

(617)

 

 

 

 

 

 

 

 

Less: Loan procurement costs, net

 

 

(5,908)

 

 

(6,923)

 

 

 

 

 

 

 

 

Total unsecured senior notes, net

 

$

1,143,524

 

$

1,142,460

 

 

 

 

 

 

 

 

F-30

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

December 31, 

    

Effective

​

Issuance

​

Maturity

 

Unsecured Senior Notes

    

2021

    

2020

    

Interest Rate

​

Date

​

Date

 

​

​

(in thousands)

​

​

​

​

​

​

​

 

$300M 4.375% Guaranteed Notes due 2023 (1) (2)

​

$

—

​

$

300,000

 

4.33

%  

​

Various (2)

​

Dec-23

​

$300M 4.000% Guaranteed Notes due 2025 (3)

​

 

300,000

​

 

300,000

 

3.99

%  

​

Various (3)

​

Nov-25

​

$300M 3.125% Guaranteed Notes due 2026

​

​

300,000

​

​

300,000

​

3.18

%  

​

Aug-16

​

Sep-26

​

$550M 2.250% Guaranteed Notes due 2028

​

​

550,000

​

​

—

​

2.33

%  

​

Nov-21

​

Dec-28

​

$350M 4.375% Guaranteed Notes due 2029

​

​

350,000

​

​

350,000

​

4.46

%  

​

Jan-19

​

Feb-29

​

$350M 3.000% Guaranteed Notes due 2030

​

​

350,000

​

​

350,000

​

3.04

%  

​

Oct-19

​

Feb-30

​

$450M 2.000% Guaranteed Notes due 2031

​

​

450,000

​

​

450,000

​

2.10

%  

​

Oct-20

​

Feb-31

​

$500M 2.500% Guaranteed Notes due 2032

​

​

500,000

​

​

—

​

2.59

%  

​

Nov-21

​

Feb-32

​

Principal balance outstanding

​

​

2,800,000

​

​

2,050,000

​

​

​

​

​

​

​

​

Less: Discount on issuance of unsecured senior notes, net

​

​

(13,455)

​

​

(7,470)

​

​

​

​

​

​

​

​

Less: Loan procurement costs, net

​

​

(18,336)

​

​

(12,158)

​

​

​

​

​

​

​

​

Total unsecured senior notes, net

​

$

2,768,209

​

$

2,030,372

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(1)

On December 23, 2021, the Operating Partnership redeemed, in full, its $300.0 million of outstanding 4.375% senior notes due 2023 (the “2023 Notes”), with a portion of the net proceeds from its $550.0 million of 2.250% senior notes due 2028 and its $500.0 million of 2.500% senior notes due 2032 issued on November 30, 2021. In connection with the redemption of the 2023 Notes, the Operating Partnership recognized a loss on early debt extinguishment of $20.3 million, of which $20.0 million represents a prepayment premium and $0.3 represents the write-off of unamortized loan procurement costs.

​

(2)

On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.375% senior notes due 2023, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.375% senior notes due December 15, 2023 issued on December 17, 2013. The $50.0 million and $250.0 million tranches were priced at 105.040% and 98.995%, respectively, of the principal amount to yield 3.495% and 4.501%, respectively, to maturity. The combined weighted-averageweighted average effective interest rate of the 2023 notes is 4.330%.

​

(2)

(3)

On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.000% senior notes due 2025, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.000% senior notes due November 15, 2025 issued on October 26, 2015. The $50.0 million and $250.0 million tranches were priced at 101.343% and 99.735%, respectively, of the principal amount to yield 3.811% and 4.032%, respectively, to maturity. The combined weighted-averageweighted average effective interest rate of the 2025 notes is 3.994%.

​

The indenture under which the Senior Notes were issued restricts the ability of the Operating Partnership and its subsidiaries to incur debt unless the Operating Partnership and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more than 1.5:11.5:1.0 after giving effect to the incurrence of the debt. The indenture also restricts the ability of the Operating Partnership and its subsidiaries to incur secured debt unless the Operating Partnership and its consolidated subsidiaries comply with a

F-34

​

secured debt leverage ratio not to exceed 40% after giving effect to the incurrence of the debt. The indenture also contains other financial and customary covenants, including a covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Operating Partnership and its consolidated subsidiaries. As of and for the year ended December 31, 2018,2021, the Operating Partnership was in compliance with all of the financial covenants under the Senior Notes.

​

7.  REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS

​

On December 9, 2011, the Company entered into a credit agreement (the “Credit Facility”),. On June 19, 2019, the Company amended and restated, in its entirety, the Credit Facility (the “Amended and Restated Credit Facility”) which, was subsequently amended on April 5, 2012, June 18, 2013,subsequent to the amendment and April 22, 2015 to provide for, amongst other things,restatement, is comprised of a $500.0$750.0 million unsecured revolving credit facility (the “Revolver”) with a maturity date of April 22, 2020.  Pricingmaturing on June 19, 2024. Under the Amended and Restated Credit Facility, pricing on the Revolver is dependent onupon the Company’s unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under the Revolver are priced at 1.25%1.10% over LIBOR, inclusive of a facility fee of 0.15%.

​

As of December 31, 2018, $303.82021, borrowings under the Revolver had an interest rate of 1.20%. Additionally, as of December 31, 2021, $539.5 million was available for borrowing under the Revolver. The available balance under the Revolver is reduced by an outstanding letter of credit of $0.7$0.6 million.

Under the Amended and Restated Credit Facility, the Company’s ability to borrow under the Revolver is subject to ongoing compliance with certain financial covenants which include, among other things, (1) a maximum total indebtedness to total asset value of 60.0%, and (2) a minimum fixed charge coverage ratio of 1.5:1.0. As of and for the year ended December 31, 2018,2021, the Company also had a $200.0 million unsecured term loan outstanding under the Credit Facility, which is includedOperating Partnership was in the table below.compliance with all of its financial covenants.

​

On June 20, 2011, the Company entered into an unsecured term loan agreement (the “Term Loan Facility”), which was subsequently amended on June 18, 2013 and August 5, 2014, consisting of, among other things, a $100.0 million unsecured term loan with a five-year maturity and a $100.0 million unsecured term loan with a seven-year maturity. On April 6, 2017, the Company used the net proceeds from the issuance of $50.0 million of its 4.375% Senior Notes due 2023 and $50.0 million of its 4.000% Senior Notes due 2025 to repay all of the outstanding indebtedness under its five-year $100.0 million unsecured term loan that was scheduled to mature in January 2020. On June 2018.

The Company’s unsecured term loans19, 2019, the Company used an initial advance at closing of the Amended and Restated Credit Facility to repay all of the outstanding indebtedness under the Credit Facility and Term Loan Facility are summarized below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying Value as of:

 

Effective Interest

 

 

 

 

    

December 31, 

    

Rate as of

 

Maturity

 

Unsecured Term Loans

    

2018

    

2017

    

December 31, 2018 (1)

 

Date

 

 

 

(in thousands)

 

 

 

 

 

 

Credit Facility

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured term loan (2)

 

$

200,000

 

$

200,000

 

3.80

%  

 

Jan-19

 

Term Loan Facility

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured term loan

 

 

100,000

 

 

100,000

 

3.65

%  

 

Jan-20

 

Principal balance outstanding

 

 

300,000

 

 

300,000

 

 

 

 

 

 

Less: Loan procurement costs, net

 

 

(201)

 

 

(604)

 

 

 

 

 

 

Total unsecured term loans, net

 

$

299,799

 

$

299,396

 

 

 

 

 

 

(1)

Pricing on the Term Loan Facility and the unsecured term loan under the Credit Facility is dependent on the Company’s unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under the term loan that matured in January 2019 were priced at 1.30% over LIBOR, while amounts drawn under the term loan that is scheduled to mature in January 2020 are priced at 1.15% over LIBOR.  As of December 31, 2018, borrowings under the Credit Facility, inclusive of the Revolver, and Term Loan Facility, as amended, had an effective weighted average interest rate of 3.75%.

F-31

(2)

On January 31, 2019, the Company used a portion of the net proceeds from the issuance of $350.0 million of 4.375% Senior Notes due 2029 (the “2029 Notes” - see note 18) to repay all of the outstanding indebtedness under the unsecured term loan portion of the Credit Facility that was scheduled to mature in January 2019. 

The Term Loan Facility and the unsecured term loan under the Credit Facility were fully drawn as of December 31, 2018 and no further borrowings may be made under the term loans.  The Company’s ability to borrow under the Revolver is subject to ongoing compliance with certain financial covenants which include:

·

Maximum total indebtedness to total asset value of 60.0% at any time;

·

Minimum fixed charge coverage ratio of 1.50:1.00; and

·

Minimum tangible net worth of $821,211,200 plus 75% of net proceeds from equity issuances after June 30, 2010.

Further, under the Credit Facility and Term Loan Facility, the Company is restricted from paying distributions on the Parent Company’s common shares in excess of the greater of (i) 95% of funds from operations, and (ii) such amount as may be necessary to maintain the Parent Company’s REIT status.

As of December 31, 2018, the Company was in compliance with all of its financial covenants and it anticipates being in compliance with all of its financial covenants through the terms of the Credit Facility and Term Loan Facility. Unamortized loan procurement costs of $0.1 million were written off in conjunction with the repayment.

​

8.  MORTGAGE LOANS AND NOTES PAYABLE

​

The Company’s mortgage loans and notes payable are summarized as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

    

Carrying Value as of December 31, 

    

Effective

​

Maturity

 

Mortgage Loans and Notes Payable

    

2021

    

2020

    

Interest Rate

​

Date

 

​

​

(in thousands)

​

​

​

​

​

 

Bronx IX, NY (1)

​

$

—

​

$

21,030

 

4.85

%  

​

Jun-21

​

Bronx X, NY (1)

​

 

—

​

 

23,148

 

4.64

%  

​

Jun-21

​

Nashville V, TN

​

​

2,206

​

​

2,261

​

3.85

%  

​

Jun-23

​

New York, NY

​

​

29,340

​

​

29,981

​

3.51

%  

​

Jun-23

​

Annapolis I, MD

​

​

5,099

​

​

5,283

​

3.78

%  

​

May-24

​

Brooklyn XV, NY

​

​

15,423

​

​

15,713

​

2.15

%  

​

May-24

​

Long Island City IV, NY

​

​

12,580

​

​

12,852

​

2.15

%  

​

May-24

​

Long Island City II, NY

​

​

18,714

​

​

19,094

​

2.25

%  

​

Jul-26

​

Long Island City III, NY

​

​

18,723

​

​

19,106

​

2.25

%  

​

Aug-26

​

Flushing II, NY

​

​

54,300

​

​

54,300

​

2.15

%  

​

Jul-29

​

Principal balance outstanding

​

​

156,385

​

​

202,768

​

​

​

​

​

​

Plus: Unamortized fair value adjustment

​

​

12,981

​

 

15,879

​

​

​

​

​

​

Less: Loan procurement costs, net

​

​

(1,690)

​

​

(2,143)

​

​

​

​

​

​

Total mortgage loans and notes payable, net

​

$

167,676

​

$

216,504

​

​

​

​

​

​

​

(1)These mortgage loans were repaid in full on March 1, 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying Value as of:

 

 

 

 

 

 

 

    

December 31, 

    

Effective

 

Maturity

 

Mortgage Loans and Notes Payable

    

2018

    

2017

    

Interest Rate

 

Date

 

 

 

(in thousands)

 

 

 

 

 

 

YSI 33

 

$

9,214

 

$

9,547

 

6.42

%  

 

Jul-19

 

YSI 26

 

 

8,022

 

 

8,228

 

4.56

%  

 

Nov-20

 

YSI 57

 

 

2,816

 

 

2,889

 

4.61

%  

 

Nov-20

 

YSI 55

 

 

22,041

 

 

22,508

 

4.85

%  

 

Jun-21

 

YSI 24

 

 

24,893

 

 

25,700

 

4.64

%  

 

Jun-21

 

YSI 65

 

 

2,363

 

 

2,411

 

3.85

%  

 

Jun-23

 

YSI 66

 

 

31,171

 

 

31,727

 

3.51

%  

 

Jun-23

 

YSI 68

 

 

5,626

 

 

5,786

 

3.78

%  

 

May-24

 

Principal balance outstanding

 

 

106,146

 

 

108,796

 

 

 

 

 

 

Plus: Unamortized fair value adjustment

 

 

2,551

 

 

3,286

 

 

 

 

 

 

Less: Loan procurement costs, net

 

 

(451)

 

 

(648)

 

 

 

 

 

 

Total mortgage loans and notes payable, net

 

$

108,246

 

$

111,434

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F-35

​

​

As of December 31, 20182021 and 2017,2020, the Company’s mortgage loans and notes payable were secured by certain of its self-storage properties with net book values of approximately $231.0$450.7 million and $236.9$539.2 million, respectively. The following table represents the future principal payment requirements on the outstanding mortgage loans and notes payable as of December 31, 20182021 (in thousands):

​

 

 

2019

    

$

11,652

2020

 

 

12,791

2021

 

 

45,057

​

​

​

2022

 

 

923

    

$

2,426

2023

 

 

31,019

​

 

32,591

2024 and thereafter

 

 

4,704

2024

​

 

32,329

2025

​

 

979

2026

​

 

33,760

2027 and thereafter

​

 

54,300

Total mortgage payments

 

 

106,146

​

 

156,385

Plus: Unamortized fair value adjustment

 

 

2,551

​

 

12,981

Less: Loan procurement costs, net

 

 

(451)

​

​

(1,690)

Total mortgage loans and notes payable, net

 

$

108,246

​

$

167,676

F-32

​

​

9.  ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)LOSS

​

Accumulated other comprehensive loss represents unrealized losses on interest rate swaps (see note 10). The following table summarizes the changes in accumulated other comprehensive income (loss) by componentloss for the yearyears ended December 31, 2018 (in thousands):2021 and 2020.

​

 

 

 

 

 

 

    

Unrealized Gains (Losses)

 

 

 

on Interest Rate Swaps

 

 

 

 

 

 

Other comprehensive loss before reclassifications

 

$

(970)

 

Amounts reclassified from accumulated other comprehensive income

 

 

(62)

(1)

Net current-period other comprehensive loss

 

 

(1,032)

 

Balance at December 31, 2017

 

 

 3

 

Balance at December 31, 2018

 

$

(1,029)

 

​

​

​

​

​

​

​

December 31, 

​

2021

​

2020

​

​

(in thousands)

Beginning balance

$

(656)

​

$

(737)

Reclassification of realized losses on interest rate swaps (1)

​

81

​

​

81

Ending balance

​

(575)

​

​

(656)

Less: portion included in noncontrolling interests in the Operating Partnership

​

5

​

​

24

Total accumulated other comprehensive loss included in equity

$

(570)

​

$

(632)

​

(1)

See note 10 for additional information about the effects of the amounts reclassified.

​

10.  RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

​

The Company’s use of derivative instruments is limited to the utilization of interest rate swap agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure, as well as to hedge specific transactions. The counterparties to these arrangements are major financial institutions with which the Company and its subsidiaries may also have other financial relationships. The Company is potentially exposed to credit loss in the event of non-performance by these counterparties. However, because of the high credit ratings of the counterparties, the Company does not anticipate that any of the counterparties will fail to meet these obligations as they come due. The Company does not hedge credit or property value market risks.

The Company has entered into interest rate swap agreements that qualify and are designated as cash flow hedges designed to reduce the impact of interest rate changes on its variable rate debt.  Therefore, the interest rate swaps are recorded in the consolidated balance sheets at fair value, and the related gains or losses are deferred in shareholders’ equity as accumulated other comprehensive loss.  These deferred gains and losses are amortized into interest expense during the period or periods in which the related interest payments affect earnings.  However, to the extent that the interest rate swaps are not perfectly effective in offsetting the change in value of the interest payments being hedged, the ineffective portion of these contracts is recognized in earnings immediately.

​

The Company formally assesses, both at inception of a hedge and on an on-going basis, whether each derivative is highly-effective in offsetting changes in cash flows of the hedged item. If management determines that athe derivative is highly-effective as a hedge, then the Company accounts for the derivative using hedge accounting, pursuant to which gains or losses inherent in the derivative do not impact the Company’s results of operations. If management determines that athe derivative is not highly-effective as a hedge or if a derivative ceases to be a highly-effective hedge, the Company discontinues hedge accounting prospectively and will reflectreflects in its consolidated statement of operations realized and unrealized gains and losses with respect to the derivative.

The following table summarizes the terms and fair values of the Company’s derivative financial instruments as As of December 31, 2021 and 2020, all derivative instruments entered into by the Company had been settled.

​

On December 24, 2018, the Company entered into interest rate swap agreements with notional amounts that aggregated to $150.0 million (the “Interest Rate Swaps”) to protect the Company against adverse fluctuations in interest rates by reducing exposure to variability in cash flows relating to interest payments on a forecasted issuance of long-term debt. The Interest Rate Swaps qualified and 2017 (in thousands):were designated as cash flow hedges. Accordingly, the Interest Rate Swaps were recorded on the consolidated balance sheet at fair value and the related gains or losses were deferred in shareholders’ equity as accumulated other comprehensive income or loss. These deferred gains and losses were amortized into interest expense during the period or periods in which the related interest payments affected earnings. On January 24, 2019, in conjunction with the issuance of $300.0 million of outstanding 4.375% senior notes due 2029 (the “2029 Notes”),

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hedge

 

Hedge

 

Notional Amount

 

 

 

 

Effective

 

 

 

Fair Value

 

Product

    

Type

 

December 31, 2018

    

December 31, 2017

    

Strike

 

Date

    

Maturity

    

December 31, 2018

    

December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Swap

 

Cash flow (1)

 

$

75,000

 

$

 —

 

2.8015

%  

 

6/28/2019

 

6/28/2029

 

$

(516)

 

$

 —

 

Swap

 

Cash flow (1)

 

 

50,000

 

 

 —

 

2.8030

%  

 

6/28/2019

 

6/28/2029

 

 

(350)

 

 

 —

 

Swap

 

Cash flow (1)

 

 

25,000

 

 

 —

 

2.8020

%  

 

6/28/2019

 

6/28/2029

 

 

(173)

 

 

 —

 

Swap

 

Cash flow (2)

 

 

 —

 

 

40,000

 

2.4590

%  

 

6/20/2011

 

6/20/2018

 

 

 —

 

 

(161)

 

Swap

 

Cash flow (2)

 

 

 —

 

 

40,000

 

2.4725

%  

 

6/20/2011

 

6/20/2018

 

 

 —

 

 

(163)

 

Swap

 

Cash flow (2)

 

 

 —

 

 

20,000

 

2.4750

%  

 

6/20/2011

 

6/20/2018

 

 

 —

 

 

(82)

 

 

 

 

 

$

150,000

 

$

100,000

 

 

 

 

 

 

 

 

$

(1,039)

 

$

(406)

 

(1)

These interest rate swaps were entered into on December 24, 2018 to protect the Company against adverse fluctuations in interest rates by reducing exposure to variability in cash flows relating to interest payments on a forecasted issuance of long-term debt. On January 24, 2019, in conjunction with the issuance of the 2029 Notes (see note 18), the Company settled these interest rate swaps

F-33F-36

​

for $0.8 million. The termination premium will be reclassified from accumulated other comprehensive income (loss)

the Company settled the Interest Rate Swaps for $0.8 million. The $0.8 million termination premium will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the life of the 2029 Notes, which mature on February 15, 2029.

(2)

Hedged unsecured variable rate debt by fixing 30-day LIBOR.

The Company measures its derivative instruments at fair value and records them in the balance sheet as either an asset or liability.  As of December 31, 2018 and 2017, all derivative instruments were included in Accounts payable, accrued expenses, and other liabilities in the accompanying consolidated balance sheets.  The effective portions of changes in the fair value of the derivatives are reported in accumulated other comprehensive loss.  Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The change in unrealized losses on interest rate swaps reflects a reclassification of $0.1 million of unrealized gainslosses from accumulated other comprehensive loss as a decreasean increase to interest expense during 2018.2021. The Company estimates that $0.1 million will be reclassified as an increase to interest expense in 2019.2022.

​

11.  FAIR VALUE MEASUREMENTS

​

The Company applies the methods of determining fair value, as described in authoritative guidance, to value its financial assets and liabilities. As defined in the guidance, fair value is based on the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

​

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

​

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

​

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

​

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible, as well as considering counterparty credit risk in its assessment of fair value.

​

FinancialThere were 0 financial assets andor liabilities carried at fair value as of December 31, 2018 are classified in the table below in one of the three categories described above (dollars in thousands):2021 and 2020.

 

 

 

 

 

 

 

 

 

 

 

 

    

Level 1

    

Level 2

    

Level 3

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap derivative liabilities

 

$

 —

 

$

1,039

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities at fair value

 

$

 —

 

$

1,039

 

$

 —

 

Financial assets and liabilities carried at fair value as of December 31, 2017 are classified in the table below in one of the three categories described above (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

    

Level 1

    

Level 2

    

Level 3

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap derivative liabilities

 

$

—

 

$

406

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities at fair value

 

$

 —

 

$

406

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets and liabilities carried at fair value were classified as Level 2 inputs.  For financial liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including LIBOR yield curves, bank price quotes for forward starting swaps, NYMEX futures pricing, and common stock price quotes. Below is a summary of valuation techniques for Level 2 financial liabilities:

·

Interest rate swap derivative assets and liabilities — valued using LIBOR yield curves at the reporting date. Counterparties to these contracts are most often highly rated financial institutions, none of which experienced any significant downgrades that

F-34

would reduce the amount owed by the Company.  Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the Company’s derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the counterparties. However, as of the reporting dates, the Company has assessed the significance of the effect of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

​

The fair values of financial instruments, including cash and cash equivalents, accounts receivable and accounts payable approximate their respective carrying values as of December 31, 2018 and 2017.  The aggregatefollowing table summarizes the carrying value of the Company’s debt was $1.7 billion and $1.6 billion as of December 31, 2018 and 2017, respectively. The estimated fair value of the Company’s debt was $1.7 billion as of December 31, 20182021 and 2017. These2020:

​

​

​

​

​

​

​

​

December 31, 2021

​

December 31, 2020

​

​

(in thousands)

Carrying value

$

3,145,785

​

$

2,364,676

Fair value

​

3,256,128

​

​

2,571,300

​

The fair value of debt estimates were based on a discounted cash flow analysis assuming market interest rates for comparable obligations as of December 31, 20182021 and 2017.2020. The Company estimates the fair value of its fixed ratefixed-rate debt and the credit spreads over variable market rates on its variable ratevariable-rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies, which is classified within level 2 of the fair value hierarchy. Rates and credit spreads take into consideration general market conditions and maturity.

​

12.  NONCONTROLLING INTERESTS

​

Interests in Consolidated Joint Ventures

​

Noncontrolling interests in subsidiaries represent the ownership interests of third parties in the Company’s consolidated joint ventures. The Company has determined that these ventures are variable interest entities, and thatfollowing table summarizes the Company is the primary beneficiary. Accordingly, the Company consolidates the assets, liabilities, and results of operations of theCompany’s consolidated joint ventures, in the table below (dollars in thousands):each of which are accounted for as VIEs:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

CubeSmart

​

​

​

​

​

​

​

​

​

Number

​

​

​

Date Opened /

​

Ownership

​

December 31, 2021

​

Consolidated Joint Ventures

    

of Stores

    

Location

    

Acquired (1)

​

Interest

​

Total Assets

​

Total Liabilities

   

​

​

​

​

​

​

​

​

​

​

(in thousands)

​

Astoria Investors, LLC ("Astoria") (2)

​

1

​

Queens, NY

 

Q1 2023 (est.)

​

70%

​

$

21,020

​

$

25

​

CS Vienna, LLC ("Vienna") (3)

​

1

​

Vienna, VA

​

Q2 2022 (est.)

​

72%

​

​

25,667

​

​

14,497

​

CS 750 W Merrick Rd, LLC ("Merrick") (4)

​

1

​

Valley Stream, NY

​

Q1 2022 (est.)

​

51%

​

​

31,050

​

​

16,656

​

CS Valley Forge Village Storage, LLC ("VFV") (5)

​

1

​

King of Prussia, PA

​

Q2 2021

​

70%

​

​

21,128

​

​

14,050

​

CS Lock Up Anoka, LLC ("Anoka") (6)

​

1

​

Anoka, MN

​

Q2 2021

​

50%

​

​

11,739

​

​

5,567

​

SH3, LLC ("SH3") (7)

​

1

​

Arlington, VA

 

Q2 2015/Q1 2021

​

90%

​

​

38,922

​

​

192

​

​

​

6

​

​

​

​

​

​

​

$

149,526

​

$

50,987

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date Opened /

 

CubeSmart

 

 

 

 

 

 

 

 

 

Number

 

 

 

Estimated

 

Ownership

 

December 31, 2018

 

Consolidated Joint Ventures

    

of Stores

    

Location

    

Opening

 

Interest

 

Total Assets

 

Total Liabilities

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CS SJM E 92nd Street, LLC ("92nd St") (3)

 

1

 

New York, NY

 

Q2 2020 (est.)

 

90%

 

$

3,829

 

$

2,424

 

CS SDP Newtonville, LLC ("Newton") (3)

 

1

 

Newton, MA

 

Q1 2020 (est.)

 

90%

 

 

7,077

 

 

549

 

CS 1158 McDonald Ave, LLC ("McDonald Ave") (1)

 

1

 

Brooklyn, NY

 

Q3 2019 (est.)

 

51%

 

 

30,291

 

 

8,341

 

CS 160 East 22nd St, LLC ("22nd St") (1)

 

1

 

Bayonne, NJ

 

Q1 2019 (est.)

 

51%

 

 

20,947

 

 

12,023

 

CS SDP Waltham, LLC ("Waltham") (3)

 

1

 

Waltham, MA

 

Q1 2019 (est.)

 

90%

 

 

14,764

 

 

9,025

 

2225 46th St, LLC ("46th St") (1)

 

1

 

Queens, NY

 

Q1 2019 (est.)

 

51%

 

 

42,840

 

 

14,876

 

2880 Exterior St, LLC ("Exterior St") (1)

 

1

 

Bronx, NY

 

Q3 2018

 

51%

 

 

88,207

 

 

39,097

 

444 55th Street Holdings, LLC ("55th St") (2)

 

1

 

New York, NY

 

Q3 2017

 

90%

 

 

78,837

 

 

32,998

 

186 Jamaica Avenue, LLC ("Jamaica Ave") (3)

 

1

 

Queens, NY

 

Q4 2015

 

90%

 

 

17,588

 

 

12,497

 

Shirlington Rd, LLC ("SRLLC") (3)

 

1

 

Arlington, VA

 

Q2 2015

 

90%

 

 

15,521

 

 

12,497

 

 

 

10

 

 

 

 

 

 

 

$

319,901

 

$

144,327

 

F-37

​

​

(1)

Anoka was formed to acquire an existing store that had commenced operations, while all other consolidated joint ventures were formed to develop, own and operate new stores.

​

(2)On August 17, 2021, the Company contributed $14.7 million in exchange for a 70% ownership interest in Astoria, which acquired land for future development of a self-storage property in Queens, NY for $20.0 million. The Company has a related party loan commitment to Astoria of $27.1 million to fund all or a portion of the construction costs.

​

(3)On December 23, 2020, the Company and the noncontrolling member contributed a previously wholly-owned operating property (the “Vienna Operating Property”) and a parcel of land (the “Vienna Land”), respectively, to Vienna. The Vienna Operating Property and the Vienna Land are located in close proximity to each other in Vienna, VA. The members intend to construct a new store on the Vienna Land, which, upon completion, will be combined with the Vienna Operating Property and operated by the venture as a single store. The Company has a related party commitment to Vienna to fund all or a portion of the construction costs. As of December 31, 2021, the Company has funded $13.2 million of a total $17.0 million loan commitment to Vienna, which is included in the total liabilities amount within the table above. This loan and the related interest were eliminated for consolidation purposes.

​

(4)The noncontrolling membersmember of McDonald Ave, 22nd St, 46th St, and Exterior St haveMerrick has the option to put their ownership interest in the venturesventure to the Company for $10.0$17.1 million $11.5 million, $14.2 million, and $37.8 million, respectively,(the “Put Option”) within the one-yeartwo-year period after construction of eachthe store is substantially complete. Additionally,complete (the “Put Option Period”). In the event the Put Option is not exercised, the Company has a one-year option to call the ownership interest of the noncontrolling members of McDonald Ave, 22nd St, 46th St, and Exterior Stmember for $10.0$17.1 million, $11.5 million, $14.2 million, and $37.8 million, respectively, beginning ontwelve months after the second anniversaryend of the respective store’s construction being substantially complete.Put Option Period. The Company, at its sole discretion, may pay cash and/or issue OP Units, in exchange for the noncontrolling member’s interest. The Company is accreting the respective liabilitiesthis liability during the development periodsperiod and, as of December 31, 2018,2021, has accrued $6.7  million, $9.8 million, $13.1 million,$14.7 million. This amount is included in Accounts payable, accrued expenses and $37.8 million related to McDonald Ave, 22nd St, 46th St, and Exterior St, respectively.

other liabilities on the Company’s consolidated balance sheets.

​

(2)

(5)

In connection with the acquired property, 55th St assumed mortgage debt that was recorded at a fair value of $35.0 million, which fair value includes an outstanding principal balance totaling $32.5 million and a net premium of $2.5 million to reflect the estimated fair value of the debt at the time of assumption. The loan accrues interest at a fixed rate of 4.68%, matures on June 7, 2023, and is fully guaranteed by the Company.

(3)

The Company has a related party commitment to these venturesVFV that was used to fund all or a portion of the construction costs. As of December 31, 2018,2021, the Company has funded $1.1an outstanding loan of $13.7 million of a total $6.9 million loan commitment to 92nd St, $0.5 million of a total $12.1 million loan commitment to Newton, $6.8 million of a total $10.8 million loan commitment to Waltham, $12.4 million of a total $12.8 million loan commitment to Jamaica Ave, and $12.4 million of a total $14.6 million loan commitment to SRLLC,VFV, which

F-35

are is included in the total liability amountsamount within the table above. These loansThis loan and the related interest were eliminated during consolidation.

for consolidation purposes.

​

(6)On April 16, 2021, the Company contributed $3.4 million in exchange for a 50% ownership interest in Anoka, which acquired a self-storage property located in Minnesota for $12.0 million. In addition, as of December 31, 2021, the Company has funded $5.5 million of a $6.1 million related party loan commitment to Anoka, which is included in the total liability amount within the table above. This loan and the related interest were eliminated for consolidation purposes.

​

(7)SH3 owns 2 stores located in close proximity to each other in Arlington, VA, the first of which was developed and opened for operation in April 2015 (“Shirlington I”) and the second of which was developed and opened for operation in March 2021 (“Shirlington II”). Given their close proximity to each other, the 2 stores were combined in our store count, as well as for operational and reporting purposes, upon the opening of Shirlington II in March 2021.

​

Operating Partnership Ownership

​

The Company follows guidance regarding the classification and measurement of redeemable securities. Under this guidance, securities that are redeemable for cash or other assets, at the option of the holder and not solely within the control of the issuer, must be classified outside of permanent equity/capital. This classification results in certain outside ownership interests being included as redeemable noncontrolling interests outside of permanent equity/capital in the consolidated balance sheets. The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions.

​

Additionally, with respect to redeemable ownership interests in the Operating Partnership held by third parties for which CubeSmart has a choice to settle the redemption by delivery of its own shares, the Operating Partnership considered the guidance regarding accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own shares, to evaluate whether CubeSmart controls the actions or events necessary to presume share settlement. The guidance also requires that noncontrolling interests classified outside of permanent capital be adjusted each period to the greater of the carrying value based on the accumulation of historical cost or the redemption value.

​

Approximately 1.0%0.8% and 3.6% of the outstanding OP Units as of December 31, 20182021 and December 31, 20172020, respectively, were not owned by CubeSmart, the sole general partner. The interests in the Operating Partnership represented by these OP Units were a component of the consideration that the Operating Partnership paid to acquire certain self-storage properties. The holders of the OP Units are limited

F-38

​

partners in the Operating Partnership and have the right to require CubeSmart to redeem all or part of their OP Units for, at the general partner’s option, an equivalent number of common shares of CubeSmart or cash based upon the fair value of an equivalent number of common shares of CubeSmart. However, the partnership agreement contains certain provisions that could result in a cash settlement outside the control of CubeSmart and the Operating Partnership, as CubeSmart does not have the ability to settle in unregistered shares. Accordingly, consistent with the guidance, the Operating Partnership records the OP Units owned by third parties outside of permanent capital in the consolidated balance sheets. Net income or loss related to the OP Units owned by third parties is excluded from net income or loss attributable to Operating Partner in the consolidated statements of operations.

​

On January 31, 2018,In 2 separate tranches during December 2020, the Company acquired a store in Texasthe Storage Deluxe Assets for $12.2 million and assumed an existing mortgage loan with an outstanding balanceaggregate purchase price of approximately $7.2 million and immediately repaid the loan.$540.0 million. In conjunctionconnection with the closing,acquisition of the Storage Deluxe Assets, the Company paid $0.2 million in cash and issued 168,0115,272,023 OP Units valued at approximately $4.8$175.1 million to payfund a portion of the remaining consideration.purchase price.

​

On April 12, 2017,September 29, 2020, the Company acquired the noncontrolling interest in a previously consolidated joint venture that owned a store in IllinoisNew York for $11.2$10.0 million. In conjunction with the closing, the Company paid $9.7$1.0 million in cash and issued 58,400 Class C276,497 OP Units, valued at approximately $9.0 million, to pay the remaining consideration. On July 23, 2018, all of the 58,400 Class C OP Units were exchanged for an aggregate of 46,322 common units of the Operating Partnership.

​

On May 9, 2017,December 16, 2019, the Company acquired a store in MarylandCalifornia for $18.2 million and assumed an existing mortgage loan with an outstanding balance of approximately $5.9$18.5 million. In conjunction with the closing, the Company paid $14.9 million and issued 440,160106,738 OP Units, valued at approximately $12.3$3.6 million, to pay the remaining consideration.

​

On May 14, 2015,During the Company closed on the acquisition of real property that has been developed into a self-storage property in Washington, D.C. In conjunction with the closing, the Company issued 20,408years ended December 31, 2021, 2020 and 2019, 5.5 million, 100,000 and 80,000 OP Units, valued at approximately $0.5 million to pay a portionunits, respectively, were redeemed for common shares of the consideration. On April 18, 2016, upon completion of certain milestones, the Company issued 61,224 additional OP Units, valued at approximately $1.5 million, to pay the remaining consideration. The store commenced operations during the third quarter of 2017.Company.

​

As of December 31, 20182021 and 2017, 1,945,5702020, 1,901,595 and 1,878,2537,420,828 OP Units, respectively, were held by third parties. The per unit cash redemption amount of the outstanding OP Units was calculated based upon the average of the closing pricesprice of the common shares of CubeSmart on the New York Stock Exchange foron the final 10 trading daysday of the year. Based on the Company’s evaluation of the redemption value of the redeemable noncontrolling interests, the Company has reflected these interests at theirthe greater of the carrying value based on the accumulation of historical cost or the redemption value as of December 31, 20182021 and 2017.2020. As of December 31, 2018,2021 and 2020, the Operating Partnership recorded an increase to OP Units owned by third parties and a corresponding decrease to capital of $0.3 million. $164.1 million and $4.2 million, respectively.

​

13. LEASES

​

CubeSmart as Lessor

​

The Company derives revenue primarily from rents received from customers who rent cubes at its self-storage properties under month-to-month leases for personal or business use. The self-storage lease agreements utilized by the Company vary slightly to comply with state-specific laws and regulations, but, subject to such laws and regulations, generally provide for automatic monthly renewals, flexibility to increase rental rates over time as market conditions permit and the collection of contingent fees such as administrative and late fees. None of the self-storage lease agreements contain options that allow the customer to purchase the leased space at any time during, or at the expiration of, the lease term. All self-storage leases in which the Company serves as lessor have been classified as operating leases. Accordingly, storage cubes are carried at historical cost less accumulated depreciation and impairment, if any, and are included in Storage properties on the Company’s consolidated balance sheets. Operating lease income for amounts received under the Company’s self-storage lease agreements is recognized on a straight-line basis which, due to the month-to-month nature of the leases, results in the recognition of income during the initial term and each subsequent monthly renewal using the then-in-place rent amount. Operating lease income is included in Rental income within the Company’s consolidated statements of operations. Variable lease income related to the Company’s self-storage lease agreements consists of administrative and late fees charged to customers. For the years ended December 31, 2021 and 2020, administrative and late fees totaled $21.3 million and $20.0 million, respectively, and are included in Other property related income within the Company’s consolidated statements of operations.

​

CubeSmart as Lessee

​

The Company serves as lessee in lease agreements for land, office space, automobiles and certain equipment, which have remaining lease terms of up to 43 years. Certain of the Company’s leases (1) provide for one or more options to renew, with renewal options that can extend the lease up to 69 years, (2) allow for early termination at certain points during the lease term and/or (3) give the Company the option to purchase the leased property. In all cases, the exercise of the lease renewal, termination and purchase options, if provided for in the lease, are at the Company’s sole discretion. Certain of the Company’s lease agreements, particularly its land leases, require rental payments that are periodically adjusted for inflation using a defined index. None of the Company’s lease agreements contain any material

F-39

​

residual value guarantees or material restrictive covenants. Lease expense for payments related to the Company’s finance leases is recognized as interest expense using the interest method over the related lease term. Lease expense for payments related to the Company’s operating leases is recognized on a straight-line basis over the related lease term, which includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

​

Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments as specified in the lease. Right-of-use assets and lease liabilities related to the Company’s operating leases are recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available surrounding the Company’s unsecured borrowing rates and implied secured spread at the lease commencement date in determining the present value of lease payments. The right-of-use asset also includes any lease payments made at or before lease commencement less any lease incentives.

​

For the years ended December 31, 2021 and 2020, the Company’s lease cost consists of the following components:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

    

​

​

2021

 

2020

​

​

​

​

​

​

​

​

​

Finance lease cost:

​

​

​

​

​

​

​

​

Amortization of finance lease right-of-use assets

​

​

​

$

964

​

$

49

Interest expense related to finance lease liabilities

​

​

​

​

2,139

​

​

64

Operating lease cost

​

​

​

​

3,278

​

​

2,856

Short-term lease cost (1)

​

​

​

 

1,173

​

​

1,114

Total lease costs

​

​

​

$

7,554

​

$

4,083

​

​

​

​

​

​

​

​

​

Cash paid for amounts included in measurement of lease liabilities:

​

​

​

​

​

​

​

​

Operating cash outflows for finance leases

​

​

​

$

1,938

​

$

—

Operating cash outflows for operating leases

​

​

​

​

2,513

​

​

2,186

Total cash outflows for lease liability measurement

​

​

​

$

4,451

​

$

2,186

​

(1)Represents automobile leases that have a lease term of 12 months. The Company has made an accounting policy election not to apply the recognition requirements of ASC 842 to this asset class. The lease cost associated with these leases is recognized on a straight-line basis over the related lease term.

​

The following table represents supplemental balance sheet information related to leases as of December 31, 2021 and 2020:

​

​

​

​

​

​

​

​

​

​

​

December 31, 

​

​

    

2021

​

2020

​

​

​

(dollars in thousands)

​

Finance Leases

​

​

​

​

​

​

​

Right-of-use assets included in Storage properties, net

​

$

40,932

​

$

41,896

​

Lease liabilities included in Lease liabilities - finance leases

​

$

65,801

​

$

65,599

​

​

​

​

​

​

​

​

​

Operating Leases

​

​

​

​

​

​

​

Right-of-use assets included in Other assets, net

​

$

54,741

​

$

55,302

​

Lease liabilities included in Accounts payable, accrued expenses and other liabilities

​

$

54,018

​

$

53,595

​

​

​

​

​

​

​

​

​

Weighted Average Lease Term (in years)

​

​

​

​

​

​

​

Finance leases

​

​

42.5

​

​

43.5

​

Operating leases

​

​

34.0

​

​

34.8

​

​

​

​

​

​

​

​

​

Weighted Average Discount Rate

​

​

​

​

​

​

​

Finance leases

​

​

3.25

%

​

3.25

%

Operating leases

​

​

4.46

%

​

4.46

%

​

F-40

​

The following table represents the future lease liability maturities as of December 31, 2021 (in thousands):

​

​

​

​

​

​

​

​

​

​

Finance

​

Operating

2022

    

$

2,182

    

$

2,667

2023

​

 

2,183

​

 

2,719

2024

​

 

2,183

​

 

2,569

2025

​

 

2,224

​

 

2,568

2026

​

 

2,334

​

 

2,644

2027 and thereafter

​

 

120,598

​

 

97,655

Total lease payments

​

 

131,704

​

 

110,822

Less: Imputed interest

​

​

(65,903)

​

​

(56,804)

Present value of lease liabilities

​

$

65,801

​

$

54,018

​

​

​

​

​

​

​

​

As of December 31, 2017,2021, the Operating Partnership recorded an increaseCompany has not entered into any lease agreements that are set to OP Units owned by third parties and a corresponding decrease to capital of $4.0. million. commence in the future.

​

F-36

13.14.  RELATED PARTY TRANSACTIONS

Affiliated Real Estate Investments

​

The Company provides management services to certain joint ventures and other related parties. Management agreements provide for fee income to the Company based on a percentage of revenues at the managed stores. Total management fees for unconsolidated real estate ventures or other entities in which the Company held an ownership interest for the years ending December 31, 2018, 20172021, 2020 and 20162019 were $4.5$4.9 million, $3.8 million and $2.9$4.0 million, respectively.

​

The management agreements for certain joint ventures, other related parties and third-party stores provide for the reimbursement to the Company for certain expenses incurred to manage the stores. These amountsreimbursements consist of amounts due for management fees, payroll and other store expenses. The amounts due to the Company were $10.6$15.4 million and $7.5$13.1 million as of December 31, 20182021 and 2017,2020, respectively, and are included in Other Assets, net on the Company’s consolidated balance sheets. Additionally, as discussed in note 12, the Company had outstanding mortgage loans receivable from consolidated joint ventures of $33.2$32.4 million and $25.5$21.4 million as of December 31, 20182021 and 2017,2020, respectively, which are eliminated for consolidation purposes. The Company believes that all of these related-party receivables are fully collectible.

​

The HVP III, V, HVPSE, HVP IV and HHFNE operating agreements provide for acquisition, disposition and other fees payable from HVP III, V, HVPSE, HVP IV and HHFNE to the Company in an amount equal to 0.5% of the purchase price upon the closing of an acquisitiona property transaction by HVP III,HVPSE, HVP IV and HHFNE, or any of their subsidiaries and completion of certain measures as defined in the operating agreements. The Company recognized $0.6 million, $0.5 million, and $1.8 million in acquisition fees duringDuring the years ended December 31, 2018, 2017,2021, 2020 and 2016,2019, the Company recognized $1.3 million, $0.7 million and $2.1 million, respectively, whichin fees associated with property transactions (including fees associated with HVP III). Property transaction fees are included in Other income on the consolidated statements of operations.

​

14.15.  COMMITMENTS AND CONTINGENCIES

​

Ground Leases

The Company currently owns eight operating self-storage properties and two self-storage properties currently under development that are subject to ground leases, and two other operating self-storage properties that have portions of land that are subject to ground leases. The Company recorded ground rent expense of approximately $3.7 million, $3.4 million, and $2.7 million for the years ended December 31, 2018, 2017 and 2016, respectively.  Total future minimum rental payments under non-cancelable ground leases are as follows:

 

 

 

 

 

 

    

Ground Lease

 

 

 

Amount

 

 

 

(in thousands)

 

 

 

 

 

 

2019

 

$

2,814

 

2020

 

 

2,887

 

2021

 

 

2,956

 

2022

 

 

3,116

 

2023

 

 

3,090

 

2024 and thereafter

 

 

116,379

 

 

 

$

131,242

 

Development Commitments

​

The Company has development agreements with developers for the construction of six3 new self-storage properties (see note 4), which will require payments of approximately $41.6$37.3 million, due in installments upon completion of certain construction milestones, during 20192022 and 2020.2023.

​

Litigation

​

TheFrom time to time, the Company is involved in claims from time to time, which arise in the ordinary course of business. In accordance with applicable accounting guidance, management establishes an accrued liability for claim expenses, insurance retention and litigation costs when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be exposure to loss in excess of those amounts accrued. The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions and known and unknown uncertainties. In the opinion of management, the Company has made adequate provisions for potential liabilities, arising from any such matters, which are included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets.

​

F-37F-41

​

On January 11, 2019, a preliminary settlement agreement was entered into for a class action alleging violation of a state specific deceptive and unfair trade practices act. During the year ended December 31, 2018, the Company recorded a $1.8 million charge related to this legal action, which is included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets and in General and administrative on the Company’s consolidated statements of operations.

15.16.  SHARE-BASED COMPENSATION PLANS

​

On June 1, 2016 the Company’s shareholders approved an amendment and restatement of the Company’s 2007 Equity Incentive Plan,The Company has a share-based employee compensation plan originally approved by shareholders on May 8, 2007(the “Plan”) which it utilizes to compensate certain employees and subsequently amended with shareholder approval on June 2, 2010 (asnon-employee trustees. The Plan was last amended and restated the “2007 Plan”).in 2016. The purpose of the 2007 Plan is to attract and retain highly qualified executive officers, Trustees and key employees and other persons and to motivate such officers, Trustees, key 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 end, the 2007 Plan provides for the grant of share options, share appreciation rights, restricted shares, restricted shareperformance units, performance awards, which may be denominated in cash or shares, includedincluding restricted shares and restricted share units, and other share-based awards, including unrestricted common shares or awards denominated or payable in, or valued in whole or part by reference to, common shares. 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 2007 Plan may be non-qualified share options or incentive share options.

​

Upon shareholder approval of the amendment and restatement of the 2007 Plan inon June 1, 2016, 4,500,000 additional common shares were made available for award under the 2007 Plan. As a result, these 4,500,000 additional shares, together with the 991,117 shares that remained available for future awards under the 2007 Plan at the time of the shareholder approval, plus any common shares that are restored to availability upon expiration or forfeiture of outstanding options or restricted share awards, would constitute the “Aggregate Share Reserve”. As of December 31, 2018:2021: (i) 4,517,0382,448,384 common shares remained available for future awards under the 2007 Plan; (ii) 449,948387,701 unvested restricted share awards were outstanding under the 2007 Plan; and (iii) 1,659,0032,263,804 common shares were subject to outstanding options under the 2007 Plan (with the outstanding options having a weighted average exercise price of $19.89 per share and a weighted average term to maturity of 5.52 years).

Prior to the June 2016 amendments, the 2007 Plan used a “Fungible Units” methodology for computing the maximum number of common shares available for issuance under the 2007 Plan.  The Fungible Units methodology assigned weighted values to different types of awards under the 2007 Plan without assigning specific numerical limits for different types of awards. As amended in June 2016, the 2007 Plan provides that any common shares made the subject of awards under the 2007 Plan will count against the Aggregate Share Reserve as one (1) unit. The Aggregate Share Reserve and the computation of the number of common shares available for issuance is subject to adjustment upon certain corporate transactions or events, including share splits, reverse share splits and recapitalizations.  The number of shares counted against the Aggregate Share Reserve includes the full number of shares subject to the award, and is not reduced in the event shares are withheld to fund withholding tax obligations, or, in the case of options and share appreciation rights, where shares are applied to pay the exercise price.  If an option or other award granted under the 2007 Plan expires, is forfeited or otherwise terminates, the common shares subject to any portion of the award that expires, is forfeited or that otherwise terminates, as the case may be, again becomes available for issuance under the 2007 Plan.

​

The 2007 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 2007 Plan and, subject to its right to delegate authority to grant awards, determines the terms and provisions of option grants and share awards.

​

Subject to adjustment upon certain corporate transactions or events, a participant (other than a non-employee trustee) may not receive awards under the 2007 Plan in any one calendar year covering more than 1,000,000 shares.  Subject to adjustment upon certain corporate transactions or events, a non-employee trustee may not receive awards under the 2007 Plan in any one calendar year covering more than 250,000 shares.

Under the 2007 Plan, the Compensation Committee determines the vesting schedule of each share award and option, subject to a one-year minimum vesting requirement, but with permitted acceleration of vesting in the event of a participant’s death or disability, or in the event of a change in control or certain changes in our capital structure. Notwithstanding the foregoing one-year minimum vesting limitation, up to five5 percent of the shares subject to the Aggregate Share Reserve may be subject to awards that are not subject to such limitation. The exercise price for options is equivalent to the fair 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.

​

F-38

On October 19, 2004, the Company’s sole shareholder approved a share-based employee compensation plan, the 2004 Equity Incentive Plan (the “2004 Plan”).  The 2004 Plan expired in October 2014.  Prior to its expiration, a total of 3.0 million common shares were reserved for issuance under the 2004 Plan. Subsequent to its expiration, no new equity awards may be granted under the 2004 Plan, and to the extent that options expire unexercised or are terminated, surrendered or canceled, the options and share awards no longer become available for future grants under the 2004 Plan.

Share Options

​

The fair values for options granted in 2018, 2017,2021, 2020 and 20162019 were estimated at the time the options were granted using the Black-Scholes option-pricing model applying the following weighted average assumptions:

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

Assumptions:

    

2018

    

2017

    

2016

 

    

2021

    

2020

    

2019

 

Risk-free interest rate

 

 

2.5

%  

 

2.2

%  

 

1.8

% 

 

​

0.6

%  

​

1.9

%  

​

2.7

%  

Expected dividend yield

 

 

3.7

%  

 

3.5

%  

 

2.7

% 

 

​

3.8

%  

​

3.9

%  

​

3.9

%  

Volatility (1)

 

 

32.00

%  

 

33.00

%  

 

33.00

% 

 

​

25.00

%  

​

20.00

%  

​

32.00

%  

Weighted average expected life of the options (2)

 

 

6.0

years

 

6.0

years

 

6.0

years

 

​

6.0

years

​

6.0

years

​

6.0

years

Weighted average grant date fair value of options granted per share

 

$

6.24

 

$

6.12

 

$

7.61

 

​

$

4.62

​

$

3.66

​

$

6.35

​

Term

​

​

10.0

years

​

10.0

years

​

10.0

years

​

(1)

Expected volatility is based upon the level of volatility historically experienced.

Company’s historical daily share prices.

​

(2)

ExpectedThe expected life is based upon our expectationson the contractual term of share option recipients’ expected exercise and termination patterns.

the options as well as the vesting period.

​

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options. In addition, option-pricing models require the input of highly subjective assumptions, including the expected share price volatility. Volatility for the 2018, 20172021, 2020 and 2016 grants was based on the trading history of the Company’s shares.

In 2018, 2017, and 2016,2019 the Company recognized compensation expense related to options issued to employees and executives of approximately $1.5$2.3 million, $1.5$2.0 million and $1.3$1.8 million, respectively, which is included in General and administrative expense on the Company’s consolidated statements of operations. During 2018, 305,805 share options were issued for which the fair value of the options at their respective grant dates was approximately $1.7 million. The share options vest ratably over three years. As of December 31, 2018,2021, the Company had approximately $1.7$2.5 million of unrecognized option compensation cost related to all grants that will be recordedrecognized over the next threea weighted average period of 1.7 years.

​

F-39F-42

​

The table below summarizes the option activity under the 2004 Plan and the 2007 Plan for the yearsyear ended December 31, 2018, 2017 and 2016:2021:

​

 

 

 

 

 

 

 

    

    

    

 

    

Weighted Average

 

 

Number of Shares

 

Weighted Average

 

Remaining

 

 

Under Option

 

Strike Price

 

Contractual Term

 

Balance at December 31, 2015

 

2,421,944

 

$

13.07

 

4.08

 

Options granted

 

213,008

 

 

30.32

 

9.07

 

Options exercised

 

(695,262)

 

 

18.69

 

0.29

 

Balance at December 31, 2016

 

1,939,690

 

$

12.94

 

4.85

 

Options granted

 

289,104

 

 

26.30

 

9.07

 

Options exercised

 

(395,621)

 

 

5.98

 

1.14

 

Balance at December 31, 2017

 

1,833,173

 

$

16.55

 

5.26

 

​

​

​

​

​

​

​

​

​

​

Options

​

Weighted Average

Strike Price

​

Weighted Average Remaining Contractual Term (Years)

 

Balance at December 31, 2020

 

2,118,090

​

$

26.37

​

6.39

​

Options granted

 

305,805

 

 

27.85

 

9.08

 

 

592,456

​

​

33.70

​

9.01

​

Options canceled

 

(74,748)

 

 

26.95

 

 —

 

 

(27,743)

​

​

32.33

​

—

​

Options exercised

 

(405,227)

 

 

9.47

 

1.98

 

 

(418,999)

​

​

18.77

​

3.08

​

Balance at December 31, 2018

 

1,659,003

 

$

19.89

 

5.52

 

 

 

 

 

 

 

 

 

Vested or expected to vest at December 31, 2018

 

1,659,003

 

$

19.89

 

5.52

 

Exercisable at December 31, 2018

 

1,161,209

 

$

16.58

 

4.25

 

Balance at December 31, 2021

 

2,263,804

​

$

29.63

​

6.82

​

​

​

​

​

​

​

​

​

​

Vested or expected to vest at December 31, 2021

 

2,263,804

​

$

29.63

 

6.82

​

Exercisable at December 31, 2021

 

1,202,882

​

$

27.17

 

5.37

​

​

As of December 31, 2018,2021, the aggregate intrinsic value of options outstanding, of options that vested or expected to vest, and of options that were exercisable was approximately $14.9$35.8 million. As of that date, the aggregate intrinsic value of options that had vested or were expected to vest was approximately $61.8 million. The aggregate intrinsic value of options exercised was approximately $8.4$10.6 million, $0.9 million and $9.1 million for the yearyears ended December 31, 2018.2021, 2020 and 2019, respectively.

​

Restricted Shares & Performance Units

​

The Company applies the fair value method of accounting for contingently issued shares.  As such, each grant is recognized ratably over the related vesting period.  Approximately 166,000 restricted sharesDuring 2021, 2020 and share units were issued during 2018 for which the fair value of the restricted shares and share units at their respective grant dates was approximately $4.9 million, which vest over three to five years.  During 2017, approximately 166,000 restricted shares and share units were issued for which the fair value of the restricted shares and share units at their respective grant dates was approximately $4.7 million. As of December 31, 20182019 the Company had approximately $5.0 million of remaining unrecognizedgranted restricted share and share unit compensation costs that will be recognized over the next five years. Restricted share awards are considered to be performance awards and are valued using the share price on the grant date. The compensation expense recognized related to these awards and remaining unrecognized compensation costs are included in the amounts disclosed above.

In 2018, 2017 and 2016, the Company recognized compensation expense related to restricted shares and share units issued to employees and Trustees of approximately $4.0 million, $4.1 million,trustees and $3.6 million, respectively; these amounts were recorded in general and administrative expense. also granted performance units to certain executives.

​

The following table presents non-vestedfair values for restricted share and share unit activity during 2018:awards made under the Plan were valued at the grant date fair value, which is the market price of the underlying common shares. The shares vest over either a 3-year or 5-year period beginning with the first anniversary of the grant.

Number of Non-

Vested Restricted

Shares and Share Units

Non-Vested at January 1, 2018

352,462

Granted

165,551

Vested

(95,553)

Forfeited

(39,860)

Non-Vested at December 31, 2018

382,600

​

On January 23, 2018, 66,872 restricted sharePerformance units were grantedrepresent the right to certain executives.earn common shares. The restricted shareperformance units were granted in the form of deferred share units with a market condition, entitling the holders thereof to receive common shares at a future date. The deferred shareperformance units will beare awarded based on the Company’s total return to shareholders with respect to a specified peer group consisting of publicly traded REITs over a three-year period. The fair valueperformance units cliff vest upon the third anniversary of the restricted share units on the grant date was approximately $1.9 million.effective date. The Company used a Monte Carlo simulation analysis to estimate the fair value of the awards.  The restricted share units will cliff vest uponawards, the third anniversarykey assumptions of which are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

Assumptions:

    

2021

    

2020

    

2019

 

Risk-free interest rate

 

​

0.2

%  

​

1.7

%  

​

2.6

%  

Volatility (1)

 

​

28.00

%  

​

19.00

%  

​

23.00

%  

​

(1)Expected volatility is based upon the Company’s historical daily share prices.

​

During the effective date, oryears ended December 31, 2020.  The2021, 2020 and 2019, the Company recognized compensation expense recognized related to these awardsrestricted shares and remaining unrecognized compensation costs areperformance units of approximately $5.8 million, $5.2 million and $4.9 million, respectively, which is included in the amounts disclosed above.

F-40

On January 23, 2017, 52,426 restricted share units were granted to certain executives.  The restricted share units were granted in the form of deferred share units with a market condition, entitling the holders thereof to receive common shares at a future date.  The deferred share units will be awarded basedGeneral and administrative expense on the Company’s total return to shareholders with respect to a specified peer group consistingconsolidated statements of publicly traded REITs over a three-year period.operations. The following table presents non-vested restricted share and performance unit activity under the Plan for the year ended December 31, 2021:

​

​

​

​

​

​

Number of Non-

​

​

Vested Restricted

​

​

Shares and Performance Units

Non-Vested at January 1, 2021

382,901

​

Granted

176,825

​

Vested

(160,549)

​

Forfeited

(11,476)

​

Non-Vested at December 31, 2021

387,701

​

​

The weighted average fair value of restricted shares and performance units granted during the restricted share units on the grant dateyears ended December 31, 2021, 2020 and 2019 was approximately $1.8 million.$39.37, $32.39 and $32.22, respectively. The Company used a Monte Carlo simulation analysis to estimate thetotal fair value of restricted shares and performance units vested during the awards.  Theyears ended December 31, 2021, 2020 and 2019 was $7.0 million, $6.1 million and $5.8 million, respectively. As of December 31, 2021 the Company had approximately $6.7 million of remaining unrecognized restricted share units will cliff vest upon the third anniversary of the effective date, or December 31, 2019.  The compensation expense recognized related to these awards and remaining unrecognizedperformance unit compensation costs that are included in the amounts disclosed above.

On January 22, 2016, 37,008 restricted share units were grantedexpected to certain executives.  The restricted share units were granted in the form of deferred share units with a market condition, entitling the holders thereof to receive common shares at a future date.  The deferred share units were awarded based on the Company’s total return to shareholders with respect to a specified peer group consisting of publicly traded REITsbe recognized over a three-year period.  The fair valueweighted average period of the restricted share units on the grant date was approximately $1.6 million.  The Company used a Monte Carlo simulation analysis to estimate the fair value of the awards.  The restricted share units cliff vested upon the third anniversary of the effective date, or December 31, 2018.  The compensation expense recognized related to these awards and remaining unrecognized compensation costs are included in the amounts disclosed above.2.0 years.

F-43

​

​

​

16.17.  EARNINGS PER SHARE AND UNIT AND SHAREHOLDERS’ EQUITY AND CAPITAL

​

Earnings per common share and shareholders’ equity

​

The following is a summary of the elements used in calculating basic and diluted earnings per common share:

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

​

​

​

2021

​

2020

​

2019

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 

 

 

2018

 

2017

 

2016

 

 

(Dollars and shares in thousands, except per share amounts)

 

    

 

    

    

 

    

    

 

    

    

 

​

​

​

(dollars and shares in thousands, except per share amounts)

Net income

 

$

165,488

 

$

135,611

 

$

88,376

 

 

​

​

$

230,813

​

​

$

167,611

​

​

$

170,771

Noncontrolling interests in the Operating Partnership

 

 

(1,820)

 

 

(1,593)

 

 

(941)

 

 

​

​

 

(7,873)

​

​

 

(1,825)

​

​

 

(1,708)

Noncontrolling interest in subsidiaries

 

 

221

 

 

270

 

 

470

 

 

​

​

 

542

​

​

 

(165)

​

​

 

54

Distributions to preferred shareholders (1)

 

 

 —

 

 

 —

 

 

(5,045)

 

 

Preferred share redemption charge

 

 

 —

 

 

 —

 

 

(2,937)

 

 

Net income attributable to the Company’s common shareholders

 

$

163,889

 

$

134,288

 

$

79,923

 

 

​

​

$

223,482

​

​

$

165,621

​

​

$

169,117

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding

 

 

184,653

 

 

180,525

 

 

178,246

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average basic shares outstanding

​

​

 

203,832

​

​

 

194,147

​

​

 

190,874

Share options and restricted share units

 

 

842

 

 

923

 

 

1,287

 

 

​

​

 

1,177

​

​

 

796

​

​

 

702

Weighted-average diluted shares outstanding (2)

 

 

185,495

 

 

181,448

 

 

179,533

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted shares outstanding (1)

​

​

 

205,009

​

​

 

194,943

​

​

 

191,576

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic earnings per share attributable to common shareholders

 

$

0.89

 

$

0.74

 

$

0.45

 

 

​

​

$

1.10

​

​

$

0.85

​

​

$

0.89

Diluted earnings per share attributable to common shareholders

 

$

0.88

 

$

0.74

 

$

0.45

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to common shareholders (2)

​

​

$

1.09

​

​

$

0.85

​

​

$

0.88

​

​

​

​

​

​

​

​

F-41

Earnings per common unit and capital

​

The following is a summary of the elements used in calculating basic and diluted earnings per common unit:

​

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

​

​

​

2021

​

2020

​

2019

 

 

 

 

 

 

 

 

For the year ended December 31, 

 

 

2018

 

2017

 

2016

 

 

(Dollars and units in thousands, except per unit amounts)

 

    

 

    

    

 

    

    

 

    

    

 

​

​

​

(dollars and units in thousands, except per unit amounts)

Net income

 

$

165,488

 

$

135,611

 

$

88,376

 

 

​

​

$

230,813

​

​

$

167,611

​

​

$

170,771

Operating Partnership interests of third parties

 

 

(1,820)

 

 

(1,593)

 

 

(941)

 

 

​

​

 

(7,873)

​

​

 

(1,825)

​

​

 

(1,708)

Noncontrolling interest in subsidiaries

 

 

221

 

 

270

 

 

470

 

 

​

​

 

542

​

​

 

(165)

​

​

 

54

Distribution to preferred unitholders (1)

 

 

 —

 

 

 —

 

 

(5,045)

 

 

Preferred unit redemption charge

 

 

 —

 

 

 —

 

 

(2,937)

 

 

Net income attributable to common unitholders

 

$

163,889

 

$

134,288

 

$

79,923

 

 

​

​

$

223,482

​

​

$

165,621

​

​

$

169,117

 

 

 

 

 

 

 

 

 

 

 

Weighted-average units outstanding

 

 

184,653

 

 

180,525

 

 

178,246

 

 

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average basic units outstanding

​

​

 

203,832

​

​

 

194,147

​

​

 

190,874

Unit options and restricted share units

 

 

842

 

 

923

 

 

1,287

 

 

​

​

 

1,177

​

​

 

796

​

​

 

702

Weighted-average diluted units outstanding (2)

 

 

185,495

 

 

181,448

 

 

179,533

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted units outstanding (1)

​

​

 

205,009

​

​

 

194,943

​

​

 

191,576

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic earnings per unit attributable to common unitholders

 

$

0.89

 

$

0.74

 

$

0.45

 

 

​

​

$

1.10

​

​

$

0.85

​

​

$

0.89

Diluted earnings per unit attributable to common unitholders

 

$

0.88

 

$

0.74

 

$

0.45

 

Diluted earnings per unit attributable to common unitholders (2)

​

​

$

1.09

​

​

$

0.85

​

​

$

0.88

​

(1)

For the year ended December 31, 2016, the Company declared cash dividends per preferred share/unit of $1.626 prior to redemption of the preferred shares on November 2, 2016.

(2)

For the years ended December 31, 2018, 20172021, 2020 and 2016,2019, the Company declared cash dividends per common share/unit of $1.22, $1.11,$1.45, $1.33 and $0.90,$1.29, respectively.

​

(2)The amounts of anti-dilutive options that were excluded from the computation of diluted earnings per share/unit as the exercise price was higher than the average share price of the Company for the years ended December 31, 2020 were 0.8 million. There were 0 anti-dilutive options for the years ended December 31, 2021 or 2019.

​

The OP units and common units have essentially the same economic characteristics as they share equally in the total net income or loss and distributions of the Operating Partnership. An Operating Partnership unit may be redeemed for cash, or at the Company’s option, common units on a one-for-one basis. Outstanding noncontrolling interest units in the Operating Partnership were 1,945,570; 1,878,2531,901,595; 7,420,828 and 2,032,3941,972,308 as of December 31, 2018, 20172021, 2020 and 2016,2019, respectively. There were 187,145,103; 182,215,735223,917,993; 197,405,989 and 180,083,111193,557,024 common units outstanding as of December 31, 2018, 20172021, 2020 and 2016,2019, respectively.

​

F-44

​

Common Shares

Common and Preferred Shares​

On November 2, 2016, the Company redeemed all 3.119, 2021, we closed an underwritten offering of 15.5 million outstandingcommon shares of 7.75% Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Shares”) at a cash redemptionpublic offering price of $25.00$51.00 per share, plus accumulated and unpaid dividends up to and including the dateresulting in net proceeds of redemption of $0.17374 per share. The redemption price of $77.5$765.6 million, for the redemption of the Series A Preferred Shares was paid by the Company from available cash balances. In connection with the redemption, the Company recognized a charge of $2.9 million related to excess redemption costs over the original net proceeds.after deducting offering costs.

​

The Company maintains an at-the-market equity program that enables it to offer and sell up to 50.060.0 million common shares through sales agents pursuant to equity distribution agreements (the “Equity Distribution Agreements”). The Company’s sales activity under the program for the years ended December 31, 2018, 2017,2021, 2020 and 20162019 is summarized below:

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

​

​

2021

​

2020

​

2019

 

 

 

 

 

 

 

For the year ended December 31, 

 

2018

 

2017

 

2016

 

(Dollars and shares in thousands, except per share amounts)

​

​

(dollars and shares in thousands, except per share amounts)

Number of shares sold

 

4,291

 

1,036

 

4,408

​

4,982

​

3,627

​

5,899

Average sales price per share

 

$

31.09

 

$

29.13

 

$

31.25

​

$

40.57

​

$

33.69

​

$

33.64

Net proceeds after deducting offering costs

 

$

131,835

 

$

29,642

 

$

136,120

​

$

199,977

​

$

120,727

​

$

196,304

​

The proceeds from the sales conductedof common shares under the program during the years ended December 31, 2018, 2017,2021, 2020 and 20162019 were used to fund acquisitionsthe acquisition and development of storageself-storage properties and for general corporate purposes. As of December 31, 2018, 2017,2021, 2020 and 2016, 10.52019, 5.9 million common shares, 4.710.9 million common shares and 5.84.6 million common shares, respectively, remained available for issuance under the Equity Distribution Agreements.

​

F-42

18.  SUBSEQUENT EVENTS

17.  INCOME TAXES​

Deferred income taxes are established for temporary differences between financial reporting basis and tax basis of assets and liabilities at the enacted tax rates expectedSubsequent to be in effect when the temporary differences reverse.  A valuation allowance for deferred tax assets is provided if the Company believes that it is more likely than not that all or some portion of the deferred tax asset will not be realized.  No valuation allowance was recorded as of December 31, 2018 or 2017.  As of December 31, 2018 and 2017, the Company had net deferred tax assets of $1.4 million, which are included in Other assets, net on the Company’s consolidated balance sheets.  The Company believes it is more likely than not the deferred tax assets will be realized.

18.  SUBSEQUENT EVENTS

On January 30, 2019, the Operating Partnership issued $350.0 million in aggregate principal amount of unsecured senior notes due February 15, 2029 which bear interest at a rate of 4.375% per annum (the “2029 Notes”). The 2029 Notes were priced at 99.356% of the principal amount to yield 4.455% to maturity. Net proceeds from the offering of $345.5 million were used to repay all of the outstanding indebtedness under the Company’s $200.0 million unsecured term loan portion of the Credit Facility that was scheduled to mature in January 2019. The remaining proceeds from the offering were used to repay a portion of the outstanding indebtedness under the Revolver.

19.  PRO FORMA FINANCIAL INFORMATION (UNAUDITED)

During the years ended December 31, 2018 and 2017,2021, the Company acquired tena self-storage propertiesproperty located in Maryland for an aggregate purchase price of approximately $227.5 million (see note 3) and seven stores for an aggregate purchase price of approximately $80.7 million, respectively.$32.0 million.

​

The condensed consolidated pro forma financial information set forth below reflects adjustments to the Company’s historical financial data to give effect to each of the acquisitions and related financing activity (including the issuance of common shares) that occurred during 2018 and 2017 as if each had occurred as of January 1, 2017 and 2016, respectively.  The unaudited pro forma information presented below does not purport to represent what the Company’s actual results of operations would have been for the periods indicated, nor does it purport to represent the Company’s future results of operations.​

​

The following table summarizes, on a pro forma basis, the Company’s consolidated results of operations for the year ended December 31, 2018 and 2017 based on the assumptions described above:

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 

 

 

 

2018

    

2017

 

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Pro forma revenues

 

$

607,181

 

$

561,244

 

Pro forma net income

 

$

173,510

 

$

129,740

 

Earnings per share attributable to common shareholders:

 

 

 

 

 

 

 

Basic - as reported

 

$

0.89

 

$

0.74

 

Diluted - as reported

 

$

0.88

 

$

0.74

 

Basic - as pro forma

 

$

0.93

 

$

0.71

 

Diluted - as pro forma

 

$

0.93

 

$

0.71

 

​

​

​

​

​

20.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of quarterly financial information for the years ended December 31, 2018 and 2017 (in thousands, except per share data):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

 

    

March 31, 

    

June 30, 

    

September 30, 

    

December 31, 

 

 

 

2018

 

2018

 

2018

 

2018

 

Total revenues

 

$

142,877

 

$

147,815

 

$

153,370

 

$

153,882

 

Total operating expenses

 

 

92,464

 

 

92,915

 

 

93,774

 

 

98,775

 

Net income

 

 

34,799

 

 

38,751

 

 

43,302

 

 

48,636

 

Net income attributable to the Company's common shareholders

 

 

34,423

 

 

38,410

 

 

42,900

 

 

48,156

 

Basic earnings per share attributable to the Company's common shareholders

 

 

0.19

 

 

0.21

 

 

0.23

 

 

0.26

 

Diluted earnings per share attributable to the Company's common shareholders

 

 

0.19

 

 

0.21

 

 

0.23

 

 

0.26

 

​

F-43F-45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

 

    

March 31, 

    

June 30, 

    

September 30, 

    

December 31, 

 

 

 

2017

 

2017

 

2017

 

2017

 

Total revenues

 

$

133,037

 

$

138,559

 

$

143,865

 

$

143,482

 

Total operating expenses

 

 

92,646

 

 

91,025

 

 

91,586

 

 

87,971

 

Net income

 

 

25,206

 

 

32,838

 

 

37,709

 

 

39,858

 

Net income attributable to the Company's common shareholders

 

 

24,986

 

 

32,458

 

 

37,297

 

 

39,547

 

Basic earnings per share attributable to the Company's common shareholders

 

 

0.14

 

 

0.18

 

 

0.21

 

 

0.22

 

Diluted earnings per share attributable to the Company's common shareholders

 

 

0.14

 

 

0.18

 

 

0.21

 

 

0.22

 

The sum of quarterly earnings per share amounts do not necessarily equal the full year amounts.

F-44

Table of Contents

CUBESMART

CUBESMART

SCHEDULE III

REAL ESTATE AND RELATED DEPRECIATION

December 31, 20182021

(Dollarsdollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Carrying Amount at

 

 

 

 

 

 

 

 

 

 

 

Initial Cost

 

Costs

 

December 31, 2018

 

 

 

 

 

 

 

 

  

 

  

 

  

Buildings

  

Subsequent

  

 

  

Buildings

  

 

  

Accumulated

  

Year

 

 

 

Square

 

 

 

 

 

&

 

to

 

 

 

&

 

 

 

Depreciation

 

Acquired/

 

Description

 

Footage

 

Encumbrances

 

Land

 

Improvements

 

Acquisition

 

Land

 

Improvements

 

Total

 

(B)

 

Developed

 

Chandler I, AZ

 

47,880

 

 

 

327

 

1,257

 

545

 

327

 

1,625

 

1,952

 

678

 

2005

 

Chandler II, AZ

 

82,915

 

 

 

1,518

 

7,485

 

137

 

1,518

 

7,621

 

9,139

 

1,292

 

2013

 

Gilbert I, AZ

 

57,100

 

 

 

951

 

4,688

 

102

 

951

 

4,791

 

5,742

 

886

 

2013

 

Gilbert II, AZ

 

114,080

 

 

 

1,199

 

11,846

 

167

 

1,199

 

12,013

 

13,212

 

740

 

2016

 

Glendale, AZ

 

56,807

 

 

 

201

 

2,265

 

1,295

 

418

 

2,998

 

3,416

 

1,454

 

1998

 

Green Valley, AZ

 

25,050

 

 

 

298

 

1,153

 

211

 

298

 

1,153

 

1,451

 

477

 

2005

 

Mesa I, AZ

 

52,575

 

 

 

920

 

2,739

 

381

 

921

 

2,674

 

3,595

 

1,136

 

2006

 

Mesa II, AZ

 

45,511

 

 

 

731

 

2,176

 

299

 

731

 

2,145

 

2,876

 

937

 

2006

 

Mesa III, AZ

 

59,524

 

 

 

706

 

2,101

 

454

 

706

 

2,171

 

2,877

 

889

 

2006

 

Peoria, AZ

 

110,810

 

 

 

1,436

 

7,082

 

250

 

1,436

 

7,331

 

8,767

 

841

 

2015

 

Phoenix III, AZ

 

121,880

 

 

 

2,115

 

10,429

 

277

 

2,115

 

10,706

 

12,821

 

1,644

 

2014

 

Phoenix IV, AZ

 

69,710

 

 

 

930

 

12,277

 

102

 

930

 

12,380

 

13,310

 

797

 

2016

 

Queen Creek, AZ

 

94,462

 

 

 

1,159

 

5,716

 

90

 

1,159

 

5,806

 

6,965

 

702

 

2015

 

Scottsdale, AZ

 

79,925

 

 

 

443

 

4,879

 

1,766

 

883

 

5,528

 

6,411

 

2,793

 

1998

 

Surprise , AZ

 

72,475

 

 

 

584

 

3,761

 

122

 

584

 

3,883

 

4,467

 

383

 

2015

 

Tempe I, AZ

 

53,910

 

 

 

749

 

2,159

 

657

 

749

 

2,505

 

3,254

 

941

 

2005

 

Tempe II, AZ

 

68,409

 

 

 

588

 

2,898

 

2,157

 

588

 

5,055

 

5,643

 

999

 

2013

 

Tucson I, AZ

 

59,800

 

 

 

188

 

2,078

 

1,149

 

384

 

2,723

 

3,107

 

1,345

 

1998

 

Tucson II, AZ

 

43,950

 

 

 

188

 

2,078

 

1,136

 

391

 

2,729

 

3,120

 

1,324

 

1998

 

Tucson III, AZ

 

49,820

 

 

 

532

 

2,048

 

307

 

533

 

1,995

 

2,528

 

840

 

2005

 

Tucson IV, AZ

 

48,040

 

 

 

674

 

2,595

 

401

 

675

 

2,575

 

3,250

 

1,075

 

2005

 

Tucson V, AZ

 

45,134

 

 

 

515

 

1,980

 

413

 

515

 

2,037

 

2,552

 

860

 

2005

 

Tucson VI, AZ

 

40,766

 

 

 

440

 

1,692

 

264

 

430

 

1,658

 

2,088

 

707

 

2005

 

Tucson VII, AZ

 

52,663

 

 

 

670

 

2,576

 

394

 

670

 

2,556

 

3,226

 

1,084

 

2005

 

Tucson VIII, AZ

 

46,700

 

 

 

589

 

2,265

 

382

 

589

 

2,296

 

2,885

 

974

 

2005

 

Tucson IX, AZ

 

67,496

 

 

 

724

 

2,786

 

478

 

725

 

2,743

 

3,468

 

1,172

 

2005

 

Tucson X, AZ

 

46,350

 

 

 

424

 

1,633

 

336

 

425

 

1,659

 

2,084

 

691

 

2005

 

Tucson XI, AZ

 

42,700

 

 

 

439

 

1,689

 

427

 

439

 

1,825

 

2,264

 

838

 

2005

 

Tucson XII, AZ

 

42,275

 

 

 

671

 

2,582

 

401

 

672

 

2,554

 

3,226

 

1,055

 

2005

 

Tucson XIII, AZ

 

45,800

 

 

 

587

 

2,258

 

357

 

587

 

2,245

 

2,832

 

971

 

2005

 

Tucson XIV, AZ

 

48,995

 

 

 

707

 

2,721

 

496

 

708

 

2,668

 

3,376

 

1,153

 

2005

 

Benicia, CA

 

74,770

 

 

 

2,392

 

7,028

 

412

 

2,392

 

6,346

 

8,738

 

2,633

 

2005

 

Citrus Heights, CA

 

75,620

 

 

 

1,633

 

4,793

 

245

 

1,634

 

4,261

 

5,895

 

1,862

 

2005

 

Corona, CA

 

95,043

 

 

 

2,107

 

10,385

 

182

 

2,107

 

10,567

 

12,674

 

1,393

 

2014

 

Diamond Bar, CA

 

103,558

 

 

 

2,522

 

7,404

 

328

 

2,524

 

6,621

 

9,145

 

2,850

 

2005

 

Escondido, CA

 

143,645

 

 

 

3,040

 

11,804

 

301

 

3,040

 

9,746

 

12,786

 

3,451

 

2007

 

Fallbrook, CA

 

45,926

 

 

 

133

 

1,492

 

1,881

 

432

 

2,830

 

3,262

 

1,400

 

1997

 

Fremont, CA

 

51,189

 

 

 

1,158

 

5,711

 

172

 

1,158

 

5,884

 

7,042

 

938

 

2014

 

Lancaster, CA

 

60,475

 

 

 

390

 

2,247

 

1,123

 

556

 

2,635

 

3,191

 

1,111

 

2001

 

Long Beach, CA

 

124,541

 

 

 

3,138

 

14,368

 

1,005

 

3,138

 

13,438

 

16,576

 

5,453

 

2006

 

Los Angeles, CA

 

76,178

 

 

 

23,289

 

25,867

 

 8

 

23,289

 

25,876

 

49,165

 

171

 

2018

 

Murrieta, CA

 

49,775

 

 

 

1,883

 

5,532

 

307

 

1,903

 

4,972

 

6,875

 

2,081

 

2005

 

North Highlands, CA

 

57,094

 

 

 

868

 

2,546

 

476

 

868

 

2,561

 

3,429

 

1,114

 

2005

 

Ontario, CA

 

93,540

 

 

 

1,705

 

8,401

 

353

 

1,705

 

8,753

 

10,458

 

1,190

 

2014

 

Orangevale, CA

 

50,542

 

 

 

1,423

 

4,175

 

363

 

1,423

 

3,860

 

5,283

 

1,676

 

2005

 

Pleasanton, CA

 

83,600

 

 

 

2,799

 

8,222

 

360

 

2,799

 

7,339

 

10,138

 

3,034

 

2005

 

Rancho Cordova, CA

 

53,978

 

 

 

1,094

 

3,212

 

406

 

1,095

 

3,073

 

4,168

 

1,309

 

2005

 

Rialto I, CA

 

57,391

 

 

 

899

 

4,118

 

299

 

899

 

3,844

 

4,743

 

1,559

 

2006

 

Rialto II, CA

 

99,783

 

 

 

277

 

3,098

 

1,844

 

672

 

4,145

 

4,817

 

2,152

 

1997

 

Riverside I, CA

 

67,320

 

 

 

1,351

 

6,183

 

640

 

1,351

 

5,991

 

7,342

 

2,443

 

2006

 

Riverside II, CA

 

85,131

 

 

 

1,170

 

5,359

 

492

 

1,170

 

5,047

 

6,217

 

2,059

 

2006

 

Roseville, CA

 

59,944

 

 

 

1,284

 

3,767

 

428

 

1,284

 

3,597

 

4,881

 

1,590

 

2005

 

Sacramento I, CA

 

50,664

 

 

 

1,152

 

3,380

 

405

 

1,152

 

3,223

 

4,375

 

1,377

 

2005

 

Sacramento II, CA

 

111,736

 

 

 

2,085

 

6,750

 

509

 

2,086

 

6,592

 

8,678

 

1,767

 

2005/2017

 

San Bernardino I, CA

 

31,070

 

 

 

51

 

572

 

1,193

 

182

 

1,434

 

1,616

 

703

 

1997

 

San Bernardino II, CA

 

41,546

 

 

 

112

 

1,251

 

1,381

 

306

 

2,088

 

2,394

 

1,021

 

1997

 

San Bernardino III, CA

 

35,416

 

 

 

98

 

1,093

 

1,336

 

242

 

1,931

 

2,173

 

959

 

1997

 

San Bernardino IV, CA

 

83,427

 

 

 

1,872

 

5,391

 

228

 

1,872

 

4,903

 

6,775

 

2,037

 

2005

 

San Bernardino V, CA

 

56,803

 

 

 

783

 

3,583

 

628

 

783

 

3,685

 

4,468

 

1,526

 

2006

 

San Bernardino VII, CA

 

78,704

 

 

 

1,475

 

6,753

 

418

 

1,290

 

6,423

 

7,713

 

2,665

 

2006

 

San Bernardino VIII, CA

 

111,583

 

 

 

1,691

 

7,741

 

615

 

1,692

 

6,404

 

8,096

 

2,725

 

2006

 

San Diego, CA

 

87,483

 

 

 

1,185

 

16,740

 

13

 

1,186

 

16,752

 

17,938

 

85

 

2018

 

San Marcos, CA

 

37,425

 

 

 

775

 

2,288

 

179

 

776

 

2,096

 

2,872

 

907

 

2005

 

Santa Ana, CA

 

63,916

 

 

 

1,223

 

5,600

 

464

 

1,223

 

5,286

 

6,509

 

2,169

 

2006

 

South Sacramento, CA

 

52,390

 

 

 

790

 

2,319

 

425

 

791

 

2,325

 

3,116

 

973

 

2005

 

Spring Valley, CA

 

55,035

 

 

 

1,178

 

5,394

 

879

 

1,178

 

5,529

 

6,707

 

2,277

 

2006

 

Temecula I, CA

 

81,340

 

 

 

660

 

4,735

 

1,025

 

899

 

4,919

 

5,818

 

2,190

 

1998

 

Temecula II, CA

 

84,520

 

 

 

3,080

 

5,839

 

730

 

3,080

 

5,633

 

8,713

 

1,936

 

2007

 

Vista I, CA

 

74,238

 

 

 

711

 

4,076

 

2,353

 

1,118

 

5,094

 

6,212

 

2,197

 

2001

 

Vista II, CA

 

147,723

 

 

 

4,629

 

13,599

 

198

 

4,629

 

11,736

 

16,365

 

4,977

 

2005

 

Walnut, CA

 

50,688

 

 

 

1,578

 

4,635

 

475

 

1,595

 

4,371

 

5,966

 

1,798

 

2005

 

West Sacramento, CA

 

39,765

 

(A)

 

1,222

 

3,590

 

221

 

1,222

 

3,244

 

4,466

 

1,391

 

2005

 

Westminster, CA

 

68,393

 

 

 

1,740

 

5,142

 

382

 

1,743

 

4,637

 

6,380

 

2,042

 

2005

 

Aurora, CO

 

75,717

 

 

 

1,343

 

2,986

 

587

 

1,343

 

3,025

 

4,368

 

1,212

 

2005

 

Centennial, CO

 

62,400

 

 

 

1,281

 

8,958

 

96

 

1,281

 

9,053

 

10,334

 

715

 

2016

 

Colorado Springs I, CO

 

47,975

 

 

 

771

 

1,717

 

412

 

771

 

1,786

 

2,557

 

749

 

2005

 

Colorado Springs II, CO

 

62,400

 

 

 

657

 

2,674

 

272

 

656

 

2,438

 

3,094

 

1,021

 

2006

 

Denver I, CO

 

59,200

 

 

 

673

 

2,741

 

237

 

646

 

2,500

 

3,146

 

1,101

 

2006

 

Denver II, CO

 

74,420

 

 

 

1,430

 

7,053

 

179

 

1,430

 

7,231

 

8,661

 

1,450

 

2012

 

Denver III, CO

 

76,025

 

 

 

1,828

 

12,109

 

74

 

1,828

 

12,183

 

14,011

 

870

 

2016

 

Federal Heights, CO

 

54,770

 

 

 

878

 

1,953

 

342

 

879

 

1,896

 

2,775

 

768

 

2005

 

Golden, CO

 

87,800

 

 

 

1,683

 

3,744

 

572

 

1,684

 

3,644

 

5,328

 

1,495

 

2005

 

Littleton, CO

 

53,490

 

 

 

1,268

 

2,820

 

393

 

1,268

 

2,705

 

3,973

 

1,076

 

2005

 

Northglenn, CO

 

43,102

 

 

 

862

 

1,917

 

513

 

662

 

2,216

 

2,878

 

835

 

2005

 

Bloomfield, CT

 

48,700

 

 

 

78

 

880

 

2,411

 

360

 

2,682

 

3,042

 

1,263

 

1997

 

F-45

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Carrying Amount at

 

 

 

 

 

 

 

 

 

 

 

Initial Cost

 

Costs

 

December 31, 2018

 

 

 

 

 

 

  

 

  

 

  

 

  

Buildings

  

Subsequent

  

 

  

Buildings

  

 

  

Accumulated

  

Year

 

 

 

Square

 

 

 

 

 

&

 

to

 

 

 

&

 

 

 

Depreciation

 

Acquired/

 

Description 

 

Footage

 

Encumbrances

 

Land

 

Improvements

 

Acquisition

 

Land

 

Improvements

 

Total

 

(B)

 

Developed

 

Branford, CT

 

50,629

 

 

 

217

 

2,433

 

1,627

 

504

 

3,347

 

3,851

 

1,707

 

1995

 

Bristol, CT

 

47,725

 

 

 

1,819

 

3,161

 

186

 

1,819

 

2,882

 

4,701

 

1,311

 

2005

 

East Windsor, CT

 

45,966

 

 

 

744

 

1,294

 

525

 

744

 

1,548

 

2,292

 

744

 

2005

 

Enfield, CT

 

52,875

 

 

 

424

 

2,424

 

463

 

473

 

2,106

 

2,579

 

947

 

2001

 

Gales Ferry, CT

 

54,905

 

 

 

240

 

2,697

 

1,604

 

489

 

3,580

 

4,069

 

1,958

 

1995

 

Manchester I, CT

 

46,925

 

 

 

540

 

3,096

 

515

 

563

 

2,614

 

3,177

 

1,095

 

2002

 

Manchester II, CT

 

52,725

 

 

 

996

 

1,730

 

376

 

996

 

1,798

 

2,794

 

807

 

2005

 

Manchester III, CT

 

60,113

 

 

 

671

 

3,308

 

161

 

671

 

3,469

 

4,140

 

560

 

2014

 

Milford, CT

 

44,885

 

 

 

87

 

1,050

 

1,336

 

274

 

1,892

 

2,166

 

908

 

1996

 

Monroe, CT

 

58,500

 

 

 

2,004

 

3,483

 

709

 

2,004

 

3,507

 

5,511

 

1,691

 

2005

 

Mystic, CT

 

50,850

 

 

 

136

 

1,645

 

2,085

 

410

 

2,965

 

3,375

 

1,500

 

1996

 

Newington I, CT

 

42,420

 

 

 

1,059

 

1,840

 

277

 

1,059

 

1,821

 

2,880

 

832

 

2005

 

Newington II, CT

 

36,140

 

 

 

911

 

1,584

 

294

 

911

 

1,604

 

2,515

 

748

 

2005

 

Norwalk I, CT

 

30,160

 

 

 

646

 

3,187

 

61

 

646

 

3,248

 

3,894

 

675

 

2012

 

Norwalk II, CT

 

77,825

 

 

 

1,171

 

15,422

 

132

 

1,171

 

15,554

 

16,725

 

1,215

 

2016

 

Old Saybrook I, CT

 

87,000

 

 

 

3,092

 

5,374

 

709

 

3,092

 

5,229

 

8,321

 

2,444

 

2005

 

Old Saybrook II, CT

 

26,425

 

 

 

1,135

 

1,973

 

257

 

1,135

 

1,903

 

3,038

 

921

 

2005

 

Shelton, CT

 

78,405

 

 

 

1,613

 

9,032

 

535

 

1,613

 

8,483

 

10,096

 

1,885

 

2011

 

South Windsor, CT

 

72,025

 

 

 

90

 

1,127

 

1,512

 

272

 

2,247

 

2,519

 

1,102

 

1996

 

Stamford, CT

 

28,907

 

 

 

1,941

 

3,374

 

191

 

1,941

 

3,025

 

4,966

 

1,380

 

2005

 

Wilton, CT

 

84,515

 

 

 

2,409

 

12,261

 

747

 

2,421

 

13,069

 

15,490

 

2,777

 

2012

 

Washington I, DC

 

62,685

 

(A)

 

871

 

12,759

 

617

 

894

 

10,653

 

11,547

 

3,680

 

2008

 

Washington II, DC

 

82,552

 

 

 

3,152

 

13,612

 

292

 

3,154

 

12,129

 

15,283

 

2,693

 

2011

 

Washington III, DC

 

78,315

 

 

 

4,469

 

15,438

 

97

 

4,469

 

15,536

 

20,005

 

1,344

 

2016

 

Washington IV, DC

 

72,323

 

 

 

6,359

 

20,417

 

107

 

6,359

 

20,524

 

26,883

 

669

 

2017

 

Washington V, DC

 

114,200

 

 

 

13,908

 

18,770

 

90

 

13,917

 

18,852

 

32,769

 

279

 

2018

 

Boca Raton, FL

 

37,968

 

 

 

529

 

3,054

 

1,651

 

813

 

3,597

 

4,410

 

1,562

 

2001

 

Boynton Beach I, FL

 

61,695

 

 

 

667

 

3,796

 

1,946

 

958

 

4,410

 

5,368

 

1,926

 

2001

 

Boynton Beach II, FL

 

61,514

 

 

 

1,030

 

2,968

 

452

 

1,030

 

2,982

 

4,012

 

1,251

 

2005

 

Boynton Beach III, FL

 

67,393

 

 

 

1,225

 

6,037

 

255

 

1,225

 

6,293

 

7,518

 

929

 

2014

 

Boynton Beach IV, FL

 

76,414

 

 

 

1,455

 

7,171

 

85

 

1,455

 

7,257

 

8,712

 

809

 

2015

 

Bradenton I, FL

 

68,389

 

 

 

1,180

 

3,324

 

280

 

1,180

 

3,082

 

4,262

 

1,313

 

2004

 

Bradenton II, FL

 

88,063

 

 

 

1,931

 

5,561

 

1,148

 

1,931

 

5,597

 

7,528

 

2,403

 

2004

 

Cape Coral I, FL

 

76,857

 

 

 

472

 

2,769

 

2,587

 

830

 

4,033

 

4,863

 

2,111

 

2000

 

Cape Coral II, FL

 

67,955

 

 

 

1,093

 

5,387

 

104

 

1,093

 

5,490

 

6,583

 

725

 

2014

 

Coconut Creek I, FL

 

78,846

 

 

 

1,189

 

5,863

 

188

 

1,189

 

6,050

 

7,239

 

1,231

 

2012

 

Coconut Creek II, FL

 

90,147

 

 

 

1,937

 

9,549

 

192

 

1,937

 

9,741

 

11,678

 

1,538

 

2014

 

Dania Beach, FL

 

180,588

 

 

 

3,584

 

10,324

 

1,709

 

3,584

 

10,495

 

14,079

 

4,460

 

2004

 

Dania, FL

 

58,165

 

 

 

205

 

2,068

 

1,755

 

481

 

3,125

 

3,606

 

1,538

 

1996

 

Davie, FL

 

80,985

 

 

 

1,268

 

7,183

 

1,345

 

1,373

 

6,255

 

7,628

 

2,561

 

2001

 

Deerfield Beach, FL

 

57,230

 

 

 

946

 

2,999

 

2,013

 

1,311

 

4,503

 

5,814

 

2,182

 

1998

 

Delray Beach I, FL

 

67,843

 

 

 

798

 

4,539

 

832

 

883

 

4,085

 

4,968

 

1,824

 

2001

 

Delray Beach II, FL

 

75,710

 

 

 

957

 

4,718

 

267

 

957

 

4,985

 

5,942

 

905

 

2013

 

Delray Beach III, FL

 

94,277

 

 

 

2,086

 

10,286

 

166

 

2,086

 

10,453

 

12,539

 

1,514

 

2014

 

Delray Beach IV, FL

 

97,370

 

 

 

2,208

 

14,384

 

19

 

2,208

 

14,403

 

16,611

 

472

 

2017

 

Ft. Lauderdale I, FL

 

70,043

 

 

 

937

 

3,646

 

2,508

 

1,384

 

5,470

 

6,854

 

2,644

 

1999

 

Ft. Lauderdale II, FL

 

49,662

 

 

 

862

 

4,250

 

89

 

862

 

4,340

 

5,202

 

699

 

2013

 

Ft. Myers I, FL

 

67,534

 

 

 

303

 

3,329

 

983

 

328

 

3,309

 

3,637

 

1,613

 

1999

 

Ft. Myers II, FL

 

83,375

 

 

 

1,030

 

5,080

 

151

 

1,030

 

5,231

 

6,261

 

766

 

2014

 

Ft. Myers III, FL

 

81,554

 

 

 

1,148

 

5,658

 

165

 

1,148

 

5,824

 

6,972

 

849

 

2014

 

Jacksonville I, FL

 

79,735

 

 

 

1,862

 

5,362

 

162

 

1,862

 

4,842

 

6,704

 

1,893

 

2005

 

Jacksonville II, FL

 

64,970

 

 

 

950

 

7,004

 

212

 

950

 

5,668

 

6,618

 

2,007

 

2007

 

Jacksonville III, FL

 

65,830

 

 

 

860

 

7,409

 

1,050

 

1,670

 

6,049

 

7,719

 

2,147

 

2007

 

Jacksonville IV, FL

 

95,525

 

 

 

870

 

8,049

 

1,179

 

1,651

 

7,147

 

8,798

 

2,525

 

2007

 

Jacksonville V, FL

 

82,573

 

 

 

1,220

 

8,210

 

399

 

1,220

 

6,866

 

8,086

 

2,448

 

2007

 

Jacksonville VI, FL

 

67,375

 

 

 

755

 

3,725

 

145

 

755

 

3,869

 

4,624

 

514

 

2014

 

Kendall, FL

 

75,495

 

(A)

 

2,350

 

8,106

 

482

 

2,350

 

6,814

 

9,164

 

2,387

 

2007

 

Lake Worth I, FL

 

158,842

 

 

 

183

 

6,597

 

7,589

 

354

 

10,957

 

11,311

 

5,283

 

1998

 

Lake Worth II, FL

 

86,920

 

 

 

1,552

 

7,654

 

184

 

1,552

 

7,838

 

9,390

 

1,178

 

2014

 

Lake Worth III, FL

 

92,510

 

 

 

957

 

4,716

 

232

 

957

 

4,949

 

5,906

 

589

 

2015

 

Lakeland, FL

 

49,079

 

 

 

81

 

896

 

1,287

 

256

 

1,593

 

1,849

 

794

 

1994

 

Leisure City, FL

 

56,185

 

 

 

409

 

2,018

 

188

 

409

 

2,205

 

2,614

 

461

 

2012

 

Lutz I, FL

 

66,795

 

 

 

901

 

2,478

 

349

 

901

 

2,439

 

3,340

 

1,007

 

2004

 

Lutz II, FL

 

69,232

 

 

 

992

 

2,868

 

403

 

992

 

2,776

 

3,768

 

1,170

 

2004

 

Margate I, FL

 

53,660

 

 

 

161

 

1,763

 

2,318

 

399

 

3,400

 

3,799

 

1,729

 

1996

 

Margate II, FL

 

65,380

 

 

 

132

 

1,473

 

1,979

 

383

 

2,824

 

3,207

 

1,370

 

1996

 

Merritt Island, FL

 

50,201

 

 

 

716

 

2,983

 

700

 

796

 

2,770

 

3,566

 

1,118

 

2002

 

Miami I, FL

 

46,500

 

 

 

179

 

1,999

 

1,862

 

484

 

2,862

 

3,346

 

1,462

 

1996

 

Miami II, FL

 

67,160

 

 

 

253

 

2,544

 

1,677

 

561

 

3,382

 

3,943

 

1,750

 

1996

 

Miami III, FL

 

151,620

 

 

 

4,577

 

13,185

 

888

 

4,577

 

12,248

 

16,825

 

4,931

 

2005

 

Miami IV, FL

 

76,695

 

 

 

1,852

 

10,494

 

948

 

1,963

 

9,881

 

11,844

 

2,447

 

2011

 

Miramar, FL

 

80,130

 

 

 

1,206

 

5,944

 

133

 

1,206

 

6,078

 

7,284

 

1,078

 

2013

 

Naples I, FL

 

48,100

 

 

 

90

 

1,010

 

2,745

 

270

 

3,212

 

3,482

 

1,569

 

1996

 

Naples II, FL

 

65,850

 

 

 

148

 

1,652

 

4,301

 

558

 

5,255

 

5,813

 

2,687

 

1997

 

Naples III, FL

 

80,005

 

 

 

139

 

1,561

 

4,204

 

598

 

4,132

 

4,730

 

2,123

 

1997

 

Naples IV, FL

 

40,625

 

 

 

262

 

2,980

 

667

 

407

 

3,049

 

3,456

 

1,563

 

1998

 

New Smyrna Beach, FL

 

81,454

 

 

 

1,261

 

6,215

 

197

 

1,261

 

6,411

 

7,672

 

860

 

2014

 

North Palm Beach, FL

 

45,825

 

 

 

1,374

 

7,649

 

32

 

1,374

 

7,682

 

9,056

 

492

 

2017

 

Oakland Park, FL

 

63,806

 

 

 

3,007

 

10,145

 

36

 

3,007

 

10,181

 

13,188

 

331

 

2017

 

Ocoee, FL

 

76,150

 

 

 

1,286

 

3,705

 

228

 

1,286

 

3,415

 

4,701

 

1,388

 

2005

 

Orange City, FL

 

59,580

 

 

 

1,191

 

3,209

 

307

 

1,191

 

3,029

 

4,220

 

1,280

 

2004

 

Orlando II, FL

 

63,184

 

 

 

1,589

 

4,576

 

215

 

1,589

 

4,151

 

5,740

 

1,696

 

2005

 

Orlando III, FL

 

101,490

 

 

 

1,209

 

7,768

 

757

 

1,209

 

7,137

 

8,346

 

2,643

 

2006

 

Orlando IV, FL

 

76,601

 

 

 

633

 

3,587

 

190

 

633

 

3,274

 

3,907

 

843

 

2010

 

Orlando V, FL

 

75,377

 

 

 

950

 

4,685

 

139

 

950

 

4,823

 

5,773

 

965

 

2012

 

Orlando VI, FL

 

67,275

 

 

 

640

 

3,154

 

150

 

640

 

3,304

 

3,944

 

447

 

2014

 

Oviedo, FL

 

49,276

 

 

 

440

 

2,824

 

626

 

440

 

2,778

 

3,218

 

1,058

 

2006

 

Palm Coast I, FL

 

47,400

 

 

 

555

 

2,735

 

117

 

555

 

2,852

 

3,407

 

463

 

2014

 

Palm Coast II, FL

 

122,490

 

 

 

1,511

 

7,450

 

419

 

1,511

 

7,870

 

9,381

 

1,262

 

2014

 

Palm Harbor, FL

 

82,685

 

 

 

2,457

 

16,178

 

132

 

2,457

 

16,311

 

18,768

 

1,234

 

2016

 

Pembroke Pines, FL

 

67,321

 

 

 

337

 

3,772

 

2,817

 

953

 

5,442

 

6,395

 

2,797

 

1997

 

Royal Palm Beach II, FL

 

81,178

 

 

 

1,640

 

8,607

 

331

 

1,640

 

7,277

 

8,917

 

2,597

 

2007

 

Sanford I, FL

 

61,810

 

 

 

453

 

2,911

 

237

 

453

 

2,580

 

3,033

 

928

 

2006

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross Carrying Amount at

​

​

​

​

​

​

​

​

Total

​

​

​

​

​

Initial Cost

​

Costs

​

December 31, 2021

​

​

​

​

​

 

​

  

Rentable

  

​

​

  

​

​

  

Buildings

  

Subsequent

  

​

​

  

Buildings

  

​

​

  

Accumulated

  

​

​

Number of

​

Square Feet

​

​

​

​

​

​

​

&

​

to

​

​

​

​

&

​

​

​

​

Depreciation

​

State

​

Stores

​

(unaudited)

​

Encumbrances

​

Land

​

Improvements

​

Acquisition

​

Land

​

Improvements

​

Total

​

(A)

​

Arizona

​

48

​

3,070,755

​

$

—

​

$

98,442

​

$

389,514

​

$

23,213

​

$

99,495

​

$

397,612

​

$

497,107

​

$

38,951

​

California

​

63

​

4,741,051

​

​

—

​

​

371,460

​

​

683,683

​

​

33,337

​

​

373,302

​

​

663,731

​

​

1,037,033

​

​

83,657

​

Colorado

​

10

​

654,265

​

​

—

​

​

11,812

​

​

46,755

​

​

4,131

​

​

11,787

​

​

44,903

​

​

56,690

​

​

12,426

​

Connecticut

​

22

​

1,197,402

​

​

—

​

​

22,023

​

​

82,375

​

​

19,620

​

​

23,568

​

​

86,979

​

​

110,547

​

​

32,682

​

Florida

​

90

​

6,801,203

​

​

—

​

​

104,987

​

​

531,360

​

​

88,420

​

​

112,652

​

​

553,950

​

​

666,602

​

​

167,579

​

Georgia

​

21

​

1,562,380

​

​

—

​

​

18,394

​

​

100,856

​

​

9,933

​

​

18,518

​

​

99,513

​

​

118,031

​

​

28,392

​

Illinois

​

43

​

2,761,024

​

​

—

​

​

54,493

​

​

221,022

​

​

27,543

​

​

54,358

​

​

224,665

​

​

279,023

​

​

64,522

​

Indiana

​

1

​

70,380

​

​

—

​

​

1,134

​

​

5,589

​

​

199

​

​

1,134

​

​

5,783

​

​

6,917

​

​

1,374

​

Maryland

​

19

​

1,585,705

​

​

5,099

​

​

37,055

​

​

188,989

​

​

13,098

​

​

37,912

​

​

189,926

​

​

227,838

​

​

44,095

​

Massachusetts

​

20

​

1,256,014

​

​

—

​

​

31,948

​

​

159,000

​

​

9,476

​

​

32,197

​

​

163,387

​

​

195,584

​

​

27,862

​

Minnesota

​

2

​

176,296

​

​

—

​

​

2,621

​

​

21,655

​

​

379

​

​

2,621

​

​

22,034

​

​

24,655

​

​

2,084

​

Nevada

​

22

​

1,700,457

​

​

—

​

​

71,702

​

​

394,023

​

​

4,536

​

​

71,703

​

​

396,643

​

​

468,346

​

​

11,695

​

New Jersey

​

28

​

1,983,294

​

​

—

​

​

45,864

​

​

188,139

​

​

36,373

​

​

49,372

​

​

205,843

​

​

255,215

​

​

59,133

​

New Mexico

​

3

​

182,261

​

​

—

​

​

2,866

​

​

9,367

​

​

1,615

​

​

2,867

​

​

7,804

​

​

10,671

​

​

3,212

​

New York

​

58

​

4,593,319

​

​

149,080

​

​

416,337

​

​

1,300,288

​

​

45,488

​

​

428,549

​

​

1,317,425

​

​

1,745,974

​

​

247,167

​

North Carolina

​

9

​

611,298

​

​

—

​

​

10,349

​

​

44,680

​

​

6,242

​

​

10,788

​

​

47,409

​

​

58,197

​

​

12,034

​

Ohio

​

20

​

1,294,303

​

​

—

​

​

13,529

​

​

51,265

​

​

17,460

​

​

14,938

​

​

54,746

​

​

69,684

​

​

20,461

​

Pennsylvania

​

12

​

890,594

​

​

—

​

​

18,769

​

​

99,196

​

​

10,424

​

​

18,723

​

​

104,434

​

​

123,157

​

​

18,784

​

Rhode Island

​

4

​

247,305

​

​

—

​

​

3,480

​

​

17,156

​

​

1,574

​

​

3,480

​

​

18,729

​

​

22,209

​

​

4,241

​

South Carolina

​

8

​

432,389

​

​

—

​

​

6,117

​

​

31,039

​

​

1,159

​

​

6,117

​

​

32,199

​

​

38,316

​

​

2,387

​

Tennessee

​

9

​

755,595

​

​

2,206

​

​

9,117

​

​

54,403

​

​

4,897

​

​

9,117

​

​

52,047

​

​

61,164

​

​

12,905

​

Texas

​

75

​

5,358,803

​

​

—

​

​

108,310

​

​

458,473

​

​

31,746

​

​

108,628

​

​

465,154

​

​

573,782

​

​

89,494

​

Utah

​

4

​

293,988

​

​

—

​

​

10,763

​

​

2,844

​

​

2,676

​

​

10,622

​

​

4,102

​

​

14,724

​

​

1,800

​

Virginia

​

11

​

965,100

​

​

—

​

​

32,731

​

​

122,391

​

​

4,498

​

​

32,732

​

​

119,686

​

​

152,418

​

​

28,717

​

Washington D.C.

​

5

​

409,484

​

​

—

​

​

28,759

​

​

80,996

​

​

2,232

​

​

28,803

​

​

78,709

​

​

107,512

​

​

15,704

​

Other Corporate Assets

​

—

​

—

​

​

—

​

​

—

​

​

—

​

​

12,450

​

​

1,480

​

​

10,970

​

​

12,450

​

​

2,511

​

​

​

607

​

43,594,665

​

$

156,385

​

$

1,533,062

​

$

5,285,058

​

$

412,719

​

$

1,565,463

​

$

5,368,383

​

$

6,933,846

​

$

1,033,869

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

F-46

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Carrying Amount at

 

 

 

 

 

 

 

 

 

 

 

Initial Cost

 

Costs

 

December 31, 2018

 

 

 

 

 

 

  

 

  

 

  

 

  

Buildings

  

Subsequent

  

 

  

Buildings

  

 

  

Accumulated

  

Year

 

 

 

Square

 

 

 

 

 

&

 

to

 

 

 

&

 

 

 

Depreciation

 

Acquired/

 

Description 

 

Footage

 

Encumbrances

 

Land

 

Improvements

 

Acquisition

 

Land

 

Improvements

 

Total

 

(B)

 

Developed

 

Sanford II, FL

 

69,875

 

 

 

1,003

 

4,944

 

234

 

1,003

 

5,177

 

6,180

 

701

 

2014

 

Sarasota, FL

 

71,142

 

 

 

333

 

3,656

 

1,510

 

529

 

3,949

 

4,478

 

1,856

 

1999

 

St. Augustine, FL

 

59,725

 

 

 

135

 

1,515

 

3,447

 

383

 

4,358

 

4,741

 

2,260

 

1996

 

St. Petersburg, FL

 

66,025

 

 

 

2,721

 

10,173

 

425

 

2,721

 

10,598

 

13,319

 

810

 

2016

 

Stuart, FL

 

86,736

 

 

 

324

 

3,625

 

3,214

 

685

 

5,852

 

6,537

 

2,977

 

1997

 

SW Ranches, FL

 

64,990

 

 

 

1,390

 

7,598

 

296

 

1,390

 

6,032

 

7,422

 

2,136

 

2007

 

Tampa I, FL

 

83,938

 

 

 

2,670

 

6,249

 

267

 

2,670

 

5,163

 

7,833

 

1,830

 

2007

 

Tampa II, FL

 

74,790

 

 

 

2,291

 

10,262

 

133

 

2,291

 

10,396

 

12,687

 

781

 

2016

 

West Palm Beach I, FL

 

66,831

 

 

 

719

 

3,420

 

1,826

 

835

 

3,998

 

4,833

 

1,715

 

2001

 

West Palm Beach II, FL

 

94,113

 

 

 

2,129

 

8,671

 

488

 

2,129

 

7,854

 

9,983

 

3,393

 

2004

 

West Palm Beach III, FL

 

77,410

 

 

 

804

 

3,962

 

89

 

804

 

4,051

 

4,855

 

788

 

2012

 

West Palm Beach IV, FL

 

102,719

 

 

 

1,499

 

7,392

 

328

 

1,499

 

7,719

 

9,218

 

1,142

 

2014

 

Winter Park, FL

 

54,416

 

 

 

866

 

4,268

 

116

 

866

 

4,384

 

5,250

 

592

 

2014

 

Alpharetta, GA

 

90,501

 

 

 

806

 

4,720

 

1,024

 

917

 

4,046

 

4,963

 

1,737

 

2001

 

Atlanta, GA

 

66,825

 

 

 

822

 

4,053

 

82

 

822

 

4,136

 

4,958

 

841

 

2012

 

Austell, GA

 

83,655

 

 

 

1,635

 

4,711

 

441

 

1,643

 

4,497

 

6,140

 

1,635

 

2006

 

Decatur, GA

 

145,320

 

 

 

616

 

6,776

 

449

 

616

 

6,230

 

6,846

 

3,314

 

1998

 

Duluth, GA

 

70,885

 

 

 

373

 

2,044

 

233

 

373

 

1,952

 

2,325

 

466

 

2011

 

Lawrenceville, GA

 

73,890

 

 

 

546

 

2,903

 

434

 

546

 

2,920

 

3,466

 

717

 

2011

 

Lithia Springs, GA

 

66,750

 

 

 

748

 

5,552

 

133

 

748

 

5,684

 

6,432

 

567

 

2015

 

Norcross I, GA

 

85,320

 

 

 

514

 

2,930

 

986

 

632

 

2,999

 

3,631

 

1,264

 

2001

 

Norcross II, GA

 

52,595

 

 

 

366

 

2,025

 

233

 

366

 

1,973

 

2,339

 

483

 

2011

 

Norcross III, GA

 

46,955

 

 

 

938

 

4,625

 

83

 

938

 

4,709

 

5,647

 

1,028

 

2012

 

Norcross IV, GA

 

57,505

 

 

 

576

 

2,839

 

129

 

576

 

2,968

 

3,544

 

603

 

2012

 

Peachtree City I, GA

 

49,875

 

 

 

435

 

2,532

 

805

 

529

 

2,552

 

3,081

 

1,071

 

2001

 

Peachtree City II, GA

 

59,950

 

 

 

398

 

1,963

 

141

 

398

 

2,104

 

2,502

 

425

 

2012

 

Smyrna, GA

 

57,015

 

 

 

750

 

4,271

 

325

 

750

 

3,478

 

4,228

 

1,511

 

2001

 

Snellville, GA

 

79,950

 

 

 

1,660

 

4,781

 

381

 

1,660

 

4,499

 

6,159

 

1,624

 

2007

 

Suwanee I, GA

 

85,125

 

 

 

1,737

 

5,010

 

349

 

1,737

 

4,657

 

6,394

 

1,684

 

2007

 

Suwanee II, GA

 

80,340

 

 

 

800

 

6,942

 

110

 

622

 

5,847

 

6,469

 

2,087

 

2007

 

Villa Rica, GA

 

65,281

 

 

 

757

 

5,616

 

161

 

757

 

5,776

 

6,533

 

576

 

2015

 

Addison, IL

 

31,575

 

 

 

428

 

3,531

 

503

 

428

 

3,533

 

3,961

 

1,490

 

2004

 

Aurora, IL

 

73,985

 

 

 

644

 

3,652

 

259

 

644

 

3,391

 

4,035

 

1,420

 

2004

 

Bartlett, IL

 

51,395

 

 

 

931

 

2,493

 

313

 

931

 

2,402

 

3,333

 

1,025

 

2004

 

Bellwood, IL

 

86,500

 

 

 

1,012

 

5,768

 

1,148

 

1,012

 

5,178

 

6,190

 

2,156

 

2001

 

Blue Island, IL

 

55,125

 

 

 

633

 

3,120

 

66

 

633

 

3,186

 

3,819

 

386

 

2015

 

Bolingbrook, IL

 

82,575

 

 

 

1,675

 

8,254

 

193

 

1,675

 

8,448

 

10,123

 

1,137

 

2014

 

Chicago I, IL

 

95,795

 

 

 

2,667

 

13,118

 

994

 

2,667

 

14,111

 

16,778

 

1,940

 

2014

 

Chicago II, IL

 

78,835

 

 

 

833

 

4,035

 

81

 

833

 

4,116

 

4,949

 

550

 

2014

 

Chicago III, IL

 

84,990

 

 

 

2,427

 

11,962

 

825

 

2,427

 

12,787

 

15,214

 

1,766

 

2014

 

Chicago IV, IL

 

60,420

 

 

 

1,296

 

6,385

 

120

 

1,296

 

6,506

 

7,802

 

775

 

2015

 

Chicago V, IL

 

51,775

 

 

 

1,044

 

5,144

 

73

 

1,044

 

5,217

 

6,261

 

624

 

2015

 

Chicago VI, IL

 

71,748

 

 

 

1,596

 

9,535

 

55

 

1,596

 

9,590

 

11,186

 

775

 

2016

 

Chicago VII, IL

 

90,947

 

 

 

 —

 

11,191

 

321

 

 —

 

11,512

 

11,512

 

405

 

2017

 

Countryside, IL

 

97,633

 

 

 

2,607

 

12,684

 

214

 

2,607

 

12,899

 

15,506

 

1,724

 

2014

 

Des Plaines, IL

 

69,450

 

 

 

1,564

 

4,327

 

867

 

1,564

 

4,555

 

6,119

 

1,865

 

2004

 

Downers Grove, IL

 

71,625

 

 

 

1,498

 

13,153

 

45

 

1,498

 

13,197

 

14,695

 

1,087

 

2016

 

Elk Grove Village, IL

 

64,104

 

 

 

1,446

 

3,535

 

314

 

1,446

 

3,319

 

4,765

 

1,455

 

2004

 

Evanston, IL

 

57,715

 

 

 

1,103

 

5,440

 

248

 

1,103

 

5,687

 

6,790

 

1,039

 

2013

 

Glenview I, IL

 

100,085

 

 

 

3,740

 

10,367

 

587

 

3,740

 

9,487

 

13,227

 

4,019

 

2004

 

Glenview II, IL

 

30,843

 

 

 

725

 

3,144

 

 1

 

725

 

3,145

 

3,870

 

 9

 

2018

 

Gurnee, IL

 

80,300

 

 

 

1,521

 

5,440

 

411

 

1,521

 

5,081

 

6,602

 

2,162

 

2004

 

Hanover, IL

 

41,190

 

 

 

1,126

 

2,197

 

353

 

1,126

 

2,212

 

3,338

 

939

 

2004

 

Harvey, IL

 

60,090

 

 

 

869

 

3,635

 

494

 

869

 

3,587

 

4,456

 

1,446

 

2004

 

Joliet, IL

 

72,865

 

 

 

547

 

4,704

 

269

 

547

 

4,313

 

4,860

 

1,840

 

2004

 

Kildeer, IL

 

74,463

 

 

 

2,102

 

2,187

 

4,599

 

1,997

 

6,583

 

8,580

 

1,218

 

2004

 

Lombard, IL

 

58,728

 

 

 

1,305

 

3,938

 

992

 

1,305

 

4,325

 

5,630

 

1,833

 

2004

 

Maywood, IL

 

60,225

 

 

 

749

 

3,689

 

49

 

749

 

3,738

 

4,487

 

446

 

2015

 

Mount Prospect, IL

 

65,000

 

 

 

1,701

 

3,114

 

659

 

1,701

 

3,320

 

5,021

 

1,370

 

2004

 

Mundelein, IL

 

44,700

 

 

 

1,498

 

2,782

 

461

 

1,498

 

2,827

 

4,325

 

1,148

 

2004

 

North Chicago, IL

 

53,400

 

 

 

1,073

 

3,006

 

513

 

1,073

 

3,034

 

4,107

 

1,289

 

2004

 

Plainfield I, IL

 

53,900

 

 

 

1,770

 

1,715

 

360

 

1,740

 

1,782

 

3,522

 

728

 

2004

 

Plainfield II, IL

 

51,900

 

 

 

694

 

2,000

 

290

 

694

 

1,958

 

2,652

 

768

 

2005

 

Riverwoods, IL

 

73,915

 

 

 

1,585

 

7,826

 

81

 

1,585

 

7,907

 

9,492

 

473

 

2017

 

Schaumburg, IL

 

31,160

 

 

 

538

 

645

 

266

 

538

 

774

 

1,312

 

317

 

2004

 

Streamwood, IL

 

64,505

 

 

 

1,447

 

1,662

 

547

 

1,447

 

1,898

 

3,345

 

774

 

2004

 

Warrenville, IL

 

48,796

 

 

 

1,066

 

3,072

 

508

 

1,066

 

3,148

 

4,214

 

1,223

 

2005

 

Waukegan, IL

 

79,500

 

 

 

1,198

 

4,363

 

668

 

1,198

 

4,378

 

5,576

 

1,820

 

2004

 

West Chicago, IL

 

48,175

 

 

 

1,071

 

2,249

 

500

 

1,071

 

2,390

 

3,461

 

996

 

2004

 

Westmont, IL

 

53,400

 

 

 

1,155

 

3,873

 

332

 

1,155

 

3,664

 

4,819

 

1,528

 

2004

 

Wheeling I, IL

 

54,210

 

 

 

857

 

3,213

 

508

 

857

 

3,249

 

4,106

 

1,367

 

2004

 

Wheeling II, IL

 

67,825

 

 

 

793

 

3,816

 

559

 

793

 

3,823

 

4,616

 

1,641

 

2004

 

Woodridge, IL

 

50,232

 

 

 

943

 

3,397

 

309

 

943

 

3,231

 

4,174

 

1,354

 

2004

 

Schererville, IN

 

67,604

 

 

 

1,134

 

5,589

 

58

 

1,134

 

5,647

 

6,781

 

827

 

2014

 

Boston I, MA

 

33,286

 

 

 

538

 

3,048

 

282

 

538

 

2,899

 

3,437

 

745

 

2010

 

Boston II, MA

 

60,470

 

 

 

1,516

 

8,628

 

825

 

1,516

 

6,997

 

8,513

 

2,798

 

2002

 

Boston III, MA

 

108,205

 

 

 

3,211

 

15,829

 

706

 

3,211

 

16,535

 

19,746

 

2,234

 

2014

 

Brockton, MA

 

59,446

 

 

 

577

 

4,394

 

1,165

 

577

 

5,559

 

6,136

 

500

 

2015

 

Haverhill, MA

 

60,589

 

 

 

669

 

6,610

 

193

 

669

 

6,803

 

7,472

 

664

 

2015

 

Lawrence, MA

 

34,672

 

 

 

585

 

4,737

 

268

 

585

 

5,005

 

5,590

 

501

 

2015

 

Leominster, MA

 

54,048

 

 

 

90

 

1,519

 

2,664

 

338

 

3,541

 

3,879

 

1,674

 

1998

 

Medford, MA

 

58,685

 

 

 

1,330

 

7,165

 

329

 

1,330

 

6,001

 

7,331

 

1,988

 

2007

 

Stoneham, MA

 

62,200

 

 

 

1,558

 

7,679

 

303

 

1,558

 

7,982

 

9,540

 

1,417

 

2013

 

Tewksbury, MA

 

62,402

 

 

 

1,537

 

7,579

 

279

 

1,537

 

7,857

 

9,394

 

1,163

 

2014

 

Walpole, MA

 

74,880

 

 

 

634

 

13,069

 

336

 

634

 

13,405

 

14,039

 

976

 

2016

 

Annapolis, MD

 

92,332

 

5,626

 

2,643

 

13,938

 

68

 

2,643

 

14,007

 

16,650

 

680

 

2017

 

Baltimore, MD

 

93,750

 

 

 

1,050

 

5,997

 

1,483

 

1,173

 

5,321

 

6,494

 

2,262

 

2001

 

Beltsville, MD

 

63,657

 

 

 

1,277

 

6,295

 

75

 

1,268

 

6,379

 

7,647

 

1,144

 

2013

 

California, MD

 

77,840

 

 

 

1,486

 

4,280

 

353

 

1,486

 

4,018

 

5,504

 

1,668

 

2004

 

Capitol Heights, MD

 

79,500

 

 

 

2,704

 

13,332

 

50

 

2,704

 

13,383

 

16,087

 

1,455

 

2015

 

Clinton, MD

 

84,225

 

 

 

2,182

 

10,757

 

140

 

2,182

 

10,897

 

13,079

 

1,769

 

2013

 

District Heights, MD

 

78,265

 

 

 

1,527

 

8,313

 

557

 

1,527

 

7,744

 

9,271

 

1,836

 

2011

 

Elkridge, MD

 

63,475

 

 

 

1,155

 

5,695

 

209

 

1,120

 

5,939

 

7,059

 

990

 

2013

 

F-47

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Carrying Amount at

 

 

 

 

 

 

 

 

 

 

 

Initial Cost

 

Costs

 

December 31, 2018

 

 

 

 

 

 

  

 

  

 

  

 

  

Buildings

  

Subsequent

  

 

  

Buildings

  

 

  

Accumulated

  

Year

 

 

 

Square

 

 

 

 

 

&

 

to

 

 

 

&

 

 

 

Depreciation

 

Acquired/

 

Description 

 

Footage

 

Encumbrances

 

Land

 

Improvements

 

Acquisition

 

Land

 

Improvements

 

Total

 

(B)

 

Developed

 

Gaithersburg I, MD

 

87,045

 

 

 

3,124

 

9,000

 

488

 

3,124

 

8,225

 

11,349

 

3,475

 

2005

 

Gaithersburg II, MD

 

74,100

 

 

 

2,383

 

11,750

 

80

 

2,383

 

11,829

 

14,212

 

1,294

 

2015

 

Hyattsville, MD

 

52,830

 

 

 

1,113

 

5,485

 

108

 

1,113

 

5,593

 

6,706

 

1,002

 

2013

 

Laurel, MD

 

162,896

 

 

 

1,409

 

8,035

 

3,919

 

1,928

 

9,091

 

11,019

 

3,893

 

2001

 

Temple Hills I, MD

 

97,270

 

 

 

1,541

 

8,788

 

2,643

 

1,800

 

8,929

 

10,729

 

3,827

 

2001

 

Temple Hills II, MD

 

84,175

 

 

 

2,229

 

10,988

 

64

 

2,229

 

11,052

 

13,281

 

1,732

 

2014

 

Timonium, MD

 

66,717

 

 

 

2,269

 

11,184

 

209

 

2,269

 

11,393

 

13,662

 

1,796

 

2014

 

Upper Marlboro, MD

 

62,290

 

 

 

1,309

 

6,455

 

104

 

1,309

 

6,557

 

7,866

 

1,182

 

2013

 

Bloomington, MN

 

100,928

 

 

 

1,598

 

12,298

 

210

 

1,598

 

12,510

 

14,108

 

808

 

2016

 

Belmont, NC

 

81,850

 

 

 

385

 

2,196

 

963

 

451

 

2,341

 

2,792

 

1,015

 

2001

 

Burlington I, NC

 

109,300

 

 

 

498

 

2,837

 

897

 

498

 

2,917

 

3,415

 

1,325

 

2001

 

Burlington II, NC

 

42,165

 

 

 

320

 

1,829

 

473

 

340

 

1,761

 

2,101

 

765

 

2001

 

Cary, NC

 

111,750

 

 

 

543

 

3,097

 

917

 

543

 

3,316

 

3,859

 

1,464

 

2001

 

Charlotte I, NC

 

69,000

 

 

 

782

 

4,429

 

1,589

 

1,068

 

4,562

 

5,630

 

1,849

 

2002

 

Charlotte II, NC

 

53,706

 

 

 

821

 

8,764

 

58

 

821

 

8,821

 

9,642

 

528

 

2016

 

Charlotte III, NC

 

69,037

 

 

 

1,974

 

8,211

 

83

 

1,974

 

8,293

 

10,267

 

84

 

2018

 

Cornelius, NC

 

59,270

 

 

 

2,424

 

4,991

 

980

 

2,424

 

5,971

 

8,395

 

577

 

2015

 

Pineville, NC

 

77,747

 

 

 

2,490

 

9,169

 

151

 

2,490

 

9,320

 

11,810

 

926

 

2015

 

Raleigh, NC

 

48,675

 

 

 

209

 

2,398

 

464

 

296

 

2,386

 

2,682

 

1,180

 

1998

 

Bordentown, NJ

 

50,550

 

 

 

457

 

2,255

 

173

 

457

 

2,427

 

2,884

 

483

 

2012

 

Brick, NJ

 

51,710

 

 

 

234

 

2,762

 

1,553

 

485

 

3,465

 

3,950

 

1,826

 

1996

 

Cherry Hill I, NJ

 

51,500

 

 

 

222

 

1,260

 

204

 

222

 

1,249

 

1,471

 

316

 

2010

 

Cherry Hill II, NJ

 

65,425

 

 

 

471

 

2,323

 

320

 

471

 

2,643

 

3,114

 

518

 

2012

 

Clifton, NJ

 

105,550

 

 

 

4,346

 

12,520

 

331

 

4,340

 

11,171

 

15,511

 

4,521

 

2005

 

Cranford, NJ

 

91,280

 

 

 

290

 

3,493

 

2,792

 

779

 

5,090

 

5,869

 

2,546

 

1996

 

East Hanover, NJ

 

107,704

 

 

 

504

 

5,763

 

4395

 

1,315

 

8,177

 

9,492

 

4,194

 

1996

 

Egg Harbor I, NJ

 

36,025

 

 

 

104

 

510

 

81

 

104

 

581

 

685

 

145

 

2010

 

Egg Harbor II, NJ

 

70,400

 

 

 

284

 

1,608

 

309

 

284

 

1,695

 

1,979

 

459

 

2010

 

Elizabeth, NJ

 

38,770

 

 

 

751

 

2,164

 

719

 

751

 

2,560

 

3,311

 

1,018

 

2005

 

Fairview, NJ

 

27,876

 

 

 

246

 

2,759

 

617

 

246

 

2,767

 

3,013

 

1,420

 

1997

 

Freehold, NJ

 

81,420

 

 

 

1,086

 

5,355

 

211

 

1,086

 

5,566

 

6,652

 

1,133

 

2012

 

Hamilton, NJ

 

70,550

 

 

 

1,885

 

5,430

 

511

 

1,893

 

5,173

 

7,066

 

1,891

 

2006

 

Hoboken, NJ

 

34,194

 

 

 

1,370

 

3,947

 

972

 

1,370

 

4,285

 

5,655

 

1,776

 

2005

 

Linden, NJ

 

100,425

 

 

 

517

 

6,008

 

2,669

 

1,043

 

7,139

 

8,182

 

3,579

 

1996

 

Lumberton, NJ

 

96,025

 

 

 

987

 

4,864

 

316

 

987

 

5,180

 

6,167

 

1,052

 

2012

 

Morris Township, NJ

 

72,226

 

 

 

500

 

5,602

 

3,100

 

1,072

 

7,054

 

8,126

 

3,499

 

1997

 

Parsippany, NJ

 

84,655

 

 

 

475

 

5,322

 

5,820

 

844

 

9,798

 

10,642

 

3,430

 

1997

 

Rahway, NJ

 

83,121

 

 

 

1,486

 

7,326

 

680

 

1,486

 

8,007

 

9,493

 

1,400

 

2013

 

Randolph, NJ

 

52,565

 

 

 

855

 

4,872

 

1,574

 

1,108

 

4,757

 

5,865

 

1,940

 

2002

 

Ridgefield, NJ

 

67,803

 

 

 

1,810

 

8,925

 

318

 

1,810

 

9,243

 

11,053

 

1,008

 

2015

 

Roseland, NJ

 

53,569

 

 

 

1,844

 

9,759

 

189

 

1,844

 

9,948

 

11,792

 

989

 

2015

 

Sewell, NJ

 

57,826

 

 

 

484

 

2,766

 

1,441

 

706

 

3,129

 

3,835

 

1,362

 

2001

 

Somerset, NJ

 

57,485

 

 

 

1,243

 

6,129

 

587

 

1,243

 

6,716

 

7,959

 

1,286

 

2012

 

Whippany, NJ

 

92,070

 

 

 

2,153

 

10,615

 

653

 

2,153

 

11,268

 

13,421

 

1,945

 

2013

 

Albuquerque I, NM

 

65,927

 

 

 

1,039

 

3,395

 

367

 

1,039

 

3,178

 

4,217

 

1,403

 

2005

 

Albuquerque II, NM

 

58,798

 

 

 

1,163

 

3,801

 

284

 

1,163

 

3,462

 

4,625

 

1,554

 

2005

 

Albuquerque III, NM

 

57,536

 

 

 

664

 

2,171

 

371

 

664

 

2,151

 

2,815

 

967

 

2005

 

Henderson, NV

 

75,150

 

 

 

1,246

 

6,143

 

105

 

1,246

 

6,246

 

7,492

 

839

 

2014

 

Las Vegas I, NV

 

48,732

 

 

 

1,851

 

2,986

 

593

 

1,851

 

3,167

 

5,018

 

1,484

 

2006

 

Las Vegas II, NV

 

48,850

 

 

 

3,354

 

5,411

 

615

 

3,355

 

5,444

 

8,799

 

2,477

 

2006

 

Las Vegas III, NV

 

84,600

 

 

 

1,171

 

10,034

 

113

 

1,171

 

10,148

 

11,319

 

679

 

2016

 

Las Vegas IV, NV

 

90,527

 

 

 

1,116

 

8,575

 

365

 

1,116

 

8,939

 

10,055

 

626

 

2016

 

Las Vegas V, NV

 

107,226

 

 

 

1,460

 

9,560

 

183

 

1,460

 

9,744

 

11,204

 

613

 

2016

 

Las Vegas VI, NV

 

92,732

 

 

 

1,386

 

12,299

 

123

 

1,386

 

12,422

 

13,808

 

699

 

2016

 

Las Vegas VII, NV

 

94,525

 

 

 

1,575

 

11,483

 

146

 

1,575

 

11,630

 

13,205

 

105

 

2018

 

Baldwin, NY

 

61,380

 

 

 

1,559

 

7,685

 

646

 

1,559

 

8,331

 

9,890

 

915

 

2015

 

Bronx I, NY

 

67,864

 

 

 

2,014

 

11,411

 

1,118

 

2,014

 

10,937

 

12,951

 

2,917

 

2010

 

Bronx II, NY

 

99,028

 

 

 

 —

 

28,289

 

1,721

 

 —

 

29,475

 

29,475

 

6,654

 

2011

 

Bronx III, NY

 

105,900

 

 

 

6,459

 

36,180

 

219

 

6,460

 

32,052

 

38,512

 

7,285

 

2011

 

Bronx IV, NY

 

74,580

 

 

 

 —

 

22,074

 

130

 

 —

 

19,549

 

19,549

 

4,461

 

2011

 

Bronx V, NY

 

54,704

 

 

 

 —

 

17,556

 

226

 

 —

 

15,671

 

15,671

 

3,580

 

2011

 

Bronx VI, NY

 

45,970

 

 

 

 —

 

16,803

 

364

 

 —

 

15,136

 

15,136

 

3,452

 

2011

 

Bronx VII, NY

 

78,700

 

8,022

 

 —

 

22,512

 

189

 

 —

 

22,810

 

22,810

 

4,959

 

2012

 

Bronx VIII, NY

 

30,550

 

2,816

 

1,245

 

6,137

 

308

 

1,251

 

6,475

 

7,726

 

1,389

 

2012

 

Bronx IX, NY

 

147,915

 

22,041

 

7,967

 

39,279

 

1,452

 

7,967

 

40,730

 

48,697

 

8,714

 

2012

 

Bronx X, NY

 

159,805

 

24,893

 

9,090

 

44,816

 

537

 

9,090

 

45,353

 

54,443

 

9,298

 

2012

 

Bronx XI, NY

 

46,425

 

 

 

 —

 

17,130

 

344

 

 —

 

17,476

 

17,476

 

2,212

 

2014

 

Bronx XII, NY

 

101,268

 

 

 

 —

 

31,603

 

80

 

 —

 

31,681

 

31,681

 

2,614

 

2016

 

Bronx XIII, NY

 

201,195

 

 

 

19,622

 

68,290

 

 —

 

19,621

 

68,379

 

88,000

 

516

 

2018

 

Brooklyn I, NY

 

57,456

 

 

 

1,795

 

10,172

 

410

 

1,795

 

9,166

 

10,961

 

2,397

 

2010

 

Brooklyn II, NY

 

60,920

 

 

 

1,601

 

9,073

 

497

 

1,601

 

8,251

 

9,852

 

2,198

 

2010

 

Brooklyn III, NY

 

41,610

 

 

 

2,772

 

13,570

 

146

 

2,772

 

13,798

 

16,570

 

3,155

 

2011

 

Brooklyn IV, NY

 

37,560

 

 

 

2,283

 

11,184

 

198

 

2,284

 

11,444

 

13,728

 

2,620

 

2011

 

Brooklyn V, NY

 

47,045

 

 

 

2,374

 

11,636

 

120

 

2,374

 

11,809

 

14,183

 

2,686

 

2011

 

Brooklyn VI, NY

 

74,820

 

 

 

4,210

 

20,638

 

124

 

4,211

 

20,869

 

25,080

 

4,742

 

2011

 

Brooklyn VII, NY

 

72,725

 

 

 

5,604

 

27,452

 

200

 

5,604

 

27,817

 

33,421

 

6,338

 

2011

 

Brooklyn VIII, NY

 

61,525

 

 

 

4,982

 

24,561

 

118

 

4,982

 

24,678

 

29,660

 

3,671

 

2014

 

Brooklyn IX, NY

 

46,980

 

 

 

2,966

 

14,620

 

154

 

2,966

 

14,774

 

17,740

 

2,195

 

2014

 

Brooklyn X, NY

 

55,938

 

 

 

3,739

 

7,703

 

3,118

 

4,885

 

9,674

 

14,559

 

978

 

2015

 

Brooklyn XI, NY

 

110,215

 

 

 

10,093

 

35,385

 

229

 

10,093

 

35,613

 

45,706

 

3,116

 

2016

 

Brooklyn XII, NY

 

131,913

 

 

 

7,249

 

40,230

 

 9

 

7,250

 

40,243

 

47,493

 

1,246

 

2017

 

Flushing, NY

 

64,993

 

 

 

17,177

 

17,356

 

18

 

17,177

 

17,373

 

34,550

 

40

 

2018

 

Holbrook, NY

 

60,377

 

 

 

2,029

 

10,737

 

77

 

2,029

 

10,814

 

12,843

 

1,066

 

2015

 

Jamaica I, NY

 

88,385

 

 

 

2,043

 

11,658

 

2,374

 

2,043

 

11,299

 

13,342

 

4,755

 

2001

 

Jamaica II, NY

 

92,805

 

 

 

5,391

 

26,413

 

397

 

5,391

 

26,953

 

32,344

 

6,132

 

2011

 

Long Island City, NY

 

88,775

 

 

 

5,700

 

28,101

 

46

 

5,700

 

28,147

 

33,847

 

3,655

 

2014

 

New Rochelle I, NY

 

43,596

 

 

 

1,673

 

4,827

 

1,223

 

1,673

 

5,391

 

7,064

 

2,080

 

2005

 

New Rochelle II, NY

 

63,425

 

 

 

3,167

 

2,713

 

452

 

3,762

 

18,999

 

22,761

 

4,146

 

2012

 

New York, NY

 

94,912

 

31,171

 

42,022

 

38,753

 

23

 

42,022

 

38,777

 

80,799

 

1,531

 

2017

 

North Babylon, NY

 

78,350

 

 

 

225

 

2,514

 

4,233

 

568

 

5,595

 

6,163

 

2,775

 

1998

 

Patchogue, NY

 

47,759

 

 

 

1,141

 

5,624

 

61

 

1,141

 

5,685

 

6,826

 

757

 

2014

 

Queens I, NY

 

82,875

 

 

 

5,158

 

12,339

 

1,156

 

5,160

 

13,493

 

18,653

 

1,415

 

2015

 

Queens II, NY

 

90,728

 

 

 

6,208

 

25,815

 

484

 

6,208

 

26,300

 

32,508

 

2,598

 

2016

 

F-48

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Carrying Amount at

 

 

 

 

 

 

 

 

 

 

 

Initial Cost

 

Costs

 

December 31, 2018

 

 

 

 

 

 

  

 

  

 

  

 

  

Buildings

  

Subsequent

  

 

  

Buildings

  

 

  

Accumulated

  

Year

 

 

 

Square

 

 

 

 

 

&

 

to

 

 

 

&

 

 

 

Depreciation

 

Acquired/

 

Description 

 

Footage

 

Encumbrances

 

Land

 

Improvements

 

Acquisition

 

Land

 

Improvements

 

Total

 

(B)

 

Developed

 

Riverhead, NY

 

38,490

 

 

 

1,068

 

1,149

 

216

 

1,068

 

1,086

 

2,154

 

527

 

2005

 

Southold, NY

 

59,945

 

 

 

2,079

 

2,238

 

350

 

2,079

 

2,184

 

4,263

 

1,035

 

2005

 

Staten Island, NY

 

96,573

 

 

 

1,919

 

9,463

 

870

 

1,919

 

10,334

 

12,253

 

1,790

 

2013

 

Tuckahoe, NY

 

51,358

 

 

 

2,363

 

17,411

 

311

 

2,363

 

11,951

 

14,314

 

2,711

 

2011

 

West Hempstead, NY

 

83,395

 

 

 

2,237

 

11,030

 

245

 

2,237

 

11,273

 

13,510

 

2,254

 

2012

 

White Plains, NY

 

85,874

 

 

 

3,295

 

18,049

 

1,030

 

3,295

 

16,582

 

19,877

 

4,055

 

2011

 

Woodhaven, NY

 

50,665

 

 

 

2,015

 

11,219

 

158

 

2,015

 

10,080

 

12,095

 

2,283

 

2011

 

Wyckoff, NY

 

60,440

 

 

 

1,961

 

11,113

 

351

 

1,961

 

9,980

 

11,941

 

2,546

 

2010

 

Yorktown, NY

 

78,879

 

 

 

2,382

 

11,720

 

216

 

2,382

 

11,949

 

14,331

 

2,728

 

2011

 

Cleveland I, OH

 

46,000

 

 

 

525

 

2,592

 

273

 

524

 

2,515

 

3,039

 

1,097

 

2005

 

Cleveland II, OH

 

58,325

 

 

 

290

 

1,427

 

239

 

289

 

1,413

 

1,702

 

622

 

2005

 

Columbus I, OH

 

71,905

 

 

 

1,234

 

3,151

 

153

 

1,239

 

2,828

 

4,067

 

1,187

 

2006

 

Columbus II, OH

 

36,659

 

 

 

769

 

3,788

 

293

 

769

 

4,081

 

4,850

 

547

 

2014

 

Columbus III, OH

 

51,200

 

 

 

326

 

1,607

 

124

 

326

 

1,732

 

2,058

 

240

 

2014

 

Columbus IV, OH

 

60,950

 

 

 

443

 

2,182

 

106

 

443

 

2,288

 

2,731

 

314

 

2014

 

Columbus V, OH

 

73,325

 

 

 

838

 

4,128

 

139

 

838

 

4,267

 

5,105

 

571

 

2014

 

Columbus VI, OH

 

63,525

 

 

 

701

 

3,454

 

120

 

701

 

3,575

 

4,276

 

480

 

2014

 

Grove City, OH

 

89,290

 

 

 

1,756

 

4,485

 

290

 

1,761

 

4,157

 

5,918

 

1,700

 

2006

 

Hilliard, OH

 

89,290

 

 

 

1,361

 

3,476

 

285

 

1,366

 

3,273

 

4,639

 

1,349

 

2006

 

Lakewood, OH

 

39,332

 

 

 

405

 

854

 

690

 

405

 

1,385

 

1,790

 

1,046

 

1989

 

Lewis Center, OH

 

76,224

 

 

 

1,056

 

5,206

 

146

 

1,056

 

5,351

 

6,407

 

721

 

2014

 

Middleburg Heights, OH

 

93,200

 

 

 

63

 

704

 

2,402

 

332

 

2,436

 

2,768

 

1,151

 

1980

 

North Olmsted I, OH

 

48,672

 

 

 

63

 

704

 

1,591

 

214

 

1,802

 

2,016

 

884

 

1979

 

North Olmsted II, OH

 

47,850

 

 

 

290

 

1,129

 

1,232

 

469

 

2,034

 

2,503

 

1,724

 

1988

 

North Randall, OH

 

80,297

 

 

 

515

 

2,323

 

3,274

 

898

 

3,997

 

4,895

 

1,821

 

1998

 

Reynoldsburg, OH

 

67,245

 

 

 

1,290

 

3,295

 

388

 

1,295

 

3,229

 

4,524

 

1,331

 

2006

 

Strongsville, OH

 

43,683

 

 

 

570

 

3,486

 

430

 

570

 

3,082

 

3,652

 

1,126

 

2007

 

Warrensville Heights, OH

 

90,281

 

 

 

525

 

766

 

3,292

 

935

 

3,443

 

4,378

 

1,612

 

1980

 

Westlake, OH

 

62,750

 

 

 

509

 

2,508

 

264

 

508

 

2,383

 

2,891

 

1,068

 

2005

 

Conshohocken, PA

 

81,285

 

 

 

1,726

 

8,508

 

182

 

1,726

 

8,689

 

10,415

 

1,765

 

2012

 

Exton, PA

 

57,750

 

 

 

541

 

2,668

 

127

 

519

 

2,817

 

3,336

 

573

 

2012

 

Langhorne, PA

 

64,838

 

 

 

1,019

 

5,023

 

360

 

1,019

 

5,383

 

6,402

 

1,083

 

2012

 

Levittown, PA

 

76,130

 

 

 

926

 

5,296

 

1,306

 

926

 

4,881

 

5,807

 

2,100

 

2001

 

Malvern, PA

 

18,820

 

 

 

2,959

 

18,198

 

1,727

 

2,959

 

19,923

 

22,882

 

2,734

 

2013

 

Montgomeryville, PA

 

84,145

 

 

 

975

 

4,809

 

261

 

975

 

5,069

 

6,044

 

1,044

 

2012

 

Norristown, PA

 

61,520

 

 

 

662

 

3,142

 

789

 

638

 

4,061

 

4,699

 

1,007

 

2011

 

Philadelphia I, PA

 

96,099

 

 

 

1,461

 

8,334

 

1,931

 

1,461

 

6,921

 

8,382

 

3,047

 

2001

 

Philadelphia II, PA

 

68,279

 

 

 

1,012

 

4,990

 

167

 

1,012

 

5,157

 

6,169

 

810

 

2014

 

Exeter, RI

 

41,275

 

 

 

547

 

2,697

 

148

 

547

 

2,845

 

3,392

 

387

 

2014

 

Johnston, RI

 

77,275

 

 

 

1,061

 

5,229

 

106

 

1,061

 

5,336

 

6,397

 

715

 

2014

 

Wakefield, RI

 

45,745

 

 

 

823

 

4,058

 

85

 

823

 

4,143

 

4,966

 

546

 

2014

 

Woonsocket, RI

 

72,900

 

 

 

1,049

 

5,172

 

174

 

1,049

 

5,346

 

6,395

 

718

 

2014

 

Antioch, TN

 

75,985

 

 

 

588

 

4,906

 

372

 

588

 

4,510

 

5,098

 

1,887

 

2005

 

Nashville I, TN

 

107,950

 

 

 

405

 

3,379

 

1,056

 

405

 

3,846

 

4,251

 

1,495

 

2005

 

Nashville II, TN

 

83,174

 

 

 

593

 

4,950

 

272

 

593

 

4,527

 

5,120

 

1,910

 

2005

 

Nashville III, TN

 

101,525

 

 

 

416

 

3,469

 

347

 

416

 

3,482

 

3,898

 

1,461

 

2006

 

Nashville IV, TN

 

102,450

 

 

 

992

 

8,274

 

396

 

992

 

7,428

 

8,420

 

3,106

 

2006

 

Nashville V, TN

 

74,560

 

2,363

 

895

 

4,311

 

854

 

895

 

5,165

 

6,060

 

657

 

2015

 

Nashville VI, TN

 

72,416

 

 

 

2,749

 

8,443

 

124

 

2,749

 

8,566

 

11,315

 

847

 

2015

 

Allen, TX

 

62,170

 

 

 

714

 

3,519

 

134

 

714

 

3,653

 

4,367

 

754

 

2012

 

Austin I, TX

 

59,645

 

 

 

2,239

 

2,038

 

278

 

2,239

 

1,967

 

4,206

 

807

 

2005

 

Austin II, TX

 

64,360

 

(A)

 

734

 

3,894

 

419

 

738

 

3,751

 

4,489

 

1,445

 

2006

 

Austin III, TX

 

70,735

 

 

 

1,030

 

5,468

 

358

 

1,035

 

5,167

 

6,202

 

1,962

 

2006

 

Austin IV, TX

 

65,258

 

 

 

862

 

4,250

 

381

 

862

 

4,632

 

5,494

 

716

 

2014

 

Austin V, TX

 

67,850

 

 

 

1,050

 

5,175

 

294

 

1,050

 

5,469

 

6,519

 

757

 

2014

 

Austin VI, TX

 

62,850

 

 

 

1,150

 

5,669

 

327

 

1,150

 

5,996

 

7,146

 

808

 

2014

 

Austin VII, TX

 

71,023

 

 

 

1,429

 

6,263

 

256

 

1,429

 

6,519

 

7,948

 

637

 

2015

 

Austin VIII, TX

 

62,288

 

 

 

2,935

 

7,007

 

63

 

2,935

 

7,071

 

10,006

 

685

 

2016

 

Austin IX, TX

 

78,547

 

 

 

1,321

 

9,643

 

34

 

1,321

 

9,677

 

10,998

 

308

 

2018

 

Bryan, TX

 

60,650

 

 

 

1,394

 

1,268

 

575

 

1,396

 

1,605

 

3,001

 

576

 

2005

 

Carrollton, TX

 

77,780

 

 

 

661

 

3,261

 

140

 

661

 

3,401

 

4,062

 

660

 

2012

 

Cedar Park, TX

 

86,725

 

 

 

3,350

 

7,950

 

380

 

3,350

 

8,331

 

11,681

 

765

 

2016

 

College Station, TX

 

26,550

 

 

 

812

 

740

 

216

 

813

 

769

 

1,582

 

303

 

2005

 

Cypress, TX

 

58,161

 

 

 

360

 

1,773

 

154

 

360

 

1,928

 

2,288

 

409

 

2012

 

Dallas I, TX

 

58,582

 

 

 

2,475

 

2,253

 

489

 

2,475

 

2,264

 

4,739

 

922

 

2005

 

Dallas II, TX

 

77,073

 

 

 

940

 

4,635

 

234

 

940

 

4,869

 

5,809

 

813

 

2013

 

Dallas III, TX

 

83,479

 

 

 

2,608

 

12,857

 

306

 

2,608

 

13,163

 

15,771

 

1,714

 

2014

 

Dallas IV, TX

 

114,750

 

 

 

2,369

 

11,850

 

75

 

2,369

 

11,924

 

14,293

 

1,449

 

2015

 

Dallas V, TX

 

54,510

 

 

 

 —

 

11,604

 

87

 

 —

 

11,692

 

11,692

 

1,285

 

2015

 

Denton, TX

 

60,846

 

 

 

553

 

2,936

 

445

 

569

 

2,886

 

3,455

 

1,017

 

2006

 

Fort Worth I, TX

 

50,416

 

 

 

1,253

 

1,141

 

356

 

1,253

 

1,259

 

2,512

 

495

 

2005

 

Fort Worth II, TX

 

72,900

 

 

 

868

 

4,607

 

399

 

874

 

4,338

 

5,212

 

1,689

 

2006

 

Fort Worth III, TX

 

81,145

 

 

 

1,000

 

4,928

 

186

 

1,000

 

5,115

 

6,115

 

626

 

2015

 

Fort Worth IV, TX

 

78,579

 

 

 

1,274

 

7,693

 

34

 

1,274

 

7,728

 

9,002

 

679

 

2016

 

Frisco I, TX

 

50,904

 

 

 

1,093

 

3,148

 

205

 

1,093

 

2,895

 

3,988

 

1,174

 

2005

 

Frisco II, TX

 

71,839

 

 

 

1,564

 

4,507

 

244

 

1,564

 

4,135

 

5,699

 

1,664

 

2005

 

Frisco III, TX

 

74,665

 

 

 

1,147

 

6,088

 

682

 

1,154

 

5,961

 

7,115

 

2,250

 

2006

 

Frisco IV, TX

 

75,175

 

 

 

719

 

4,072

 

293

 

719

 

3,769

 

4,488

 

985

 

2010

 

Frisco V, TX

 

74,415

 

 

 

1,159

 

5,714

 

145

 

1,159

 

5,858

 

7,017

 

903

 

2014

 

Frisco VI, TX

 

69,176

 

 

 

1,064

 

5,247

 

174

 

1,064

 

5,421

 

6,485

 

738

 

2014

 

Garland I, TX

 

70,100

 

 

 

751

 

3,984

 

628

 

767

 

4,018

 

4,785

 

1,541

 

2006

 

Garland II, TX

 

68,425

 

 

 

862

 

4,578

 

310

 

862

 

4,291

 

5,153

 

1,587

 

2006

 

Grapevine, TX

 

78,769

 

 

 

1,211

 

8,559

 

117

 

1,211

 

8,676

 

9,887

 

755

 

2016

 

Houston III, TX

 

61,590

 

 

 

575

 

524

 

486

 

576

 

898

 

1,474

 

357

 

2005

 

Houston IV, TX

 

43,750

 

 

 

960

 

875

 

704

 

961

 

1,379

 

2,340

 

503

 

2005

 

Houston V, TX

 

124,279

 

 

 

1,153

 

6,122

 

1,804

 

991

 

7,176

 

8,167

 

2,418

 

2006

 

Houston VI, TX

 

54,690

 

 

 

575

 

524

 

5,857

 

983

 

5,060

 

6,043

 

1,212

 

2011

 

Houston VII, TX

 

46,991

 

 

 

681

 

3,355

 

185

 

681

 

3,540

 

4,221

 

785

 

2012

 

Houston VIII, TX

 

54,215

 

 

 

1,294

 

6,377

 

383

 

1,294

 

6,761

 

8,055

 

1,400

 

2012

 

Houston IX, TX

 

51,208

 

 

 

296

 

1,459

 

149

 

296

 

1,608

 

1,904

 

336

 

2012

 

Houston X, TX

 

96,061

 

 

 

5,267

 

12,667

 

10

 

5,267

 

12,677

 

17,944

 

223

 

2018

 

Houston XI, TX

 

80,930

 

 

 

5,618

 

15,330

 

 5

 

5,618

 

15,334

 

20,952

 

104

 

2018

 

Humble, TX

 

70,700

 

 

 

706

 

5,727

 

113

 

706

 

5,840

 

6,546

 

579

 

2015

 

F-49

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Carrying Amount at

 

 

 

 

 

 

 

 

 

 

 

Initial Cost

 

Costs

 

December 31, 2018

 

 

 

 

 

 

  

 

  

 

  

 

  

Buildings

  

Subsequent

  

 

  

Buildings

  

 

  

Accumulated

  

Year

 

 

 

Square

 

 

 

 

 

&

 

to

 

 

 

&

 

 

 

Depreciation

 

Acquired/

 

Description 

 

Footage

 

Encumbrances

 

Land

 

Improvements

 

Acquisition

 

Land

 

Improvements

 

Total

 

(B)

 

Developed

 

Katy, TX

 

71,308

 

 

 

1,329

 

6,552

 

87

 

1,329

 

6,640

 

7,969

 

1,075

 

2013

 

Keller, TX

 

88,585

 

 

 

1,330

 

7,960

 

329

 

1,331

 

7,673

 

9,004

 

1,831

 

2006/2017

 

Lewisville I, TX

 

67,340

 

 

 

476

 

2,525

 

539

 

492

 

2,627

 

3,119

 

957

 

2006

 

Lewisville II, TX

 

127,659

 

 

 

1,464

 

7,217

 

508

 

1,464

 

7,725

 

9,189

 

1,313

 

2013

 

Lewisville III, TX

 

93,855

 

 

 

1,307

 

15,025

 

204

 

1,307

 

15,229

 

16,536

 

1,242

 

2016

 

Little Elm I, TX

 

60,115

 

 

 

892

 

5,529

 

138

 

892

 

5,668

 

6,560

 

483

 

2016

 

Little Elm II, TX

 

97,136

 

 

 

1,219

 

9,864

 

121

 

1,219

 

9,986

 

11,205

 

830

 

2016

 

Mansfield I, TX

 

63,000

 

 

 

837

 

4,443

 

292

 

843

 

4,152

 

4,995

 

1,614

 

2006

 

Mansfield II, TX

 

57,375

 

 

 

662

 

3,261

 

165

 

662

 

3,426

 

4,088

 

725

 

2012

 

Mansfield III, TX

 

71,000

 

 

 

947

 

4,703

 

183

 

947

 

4,887

 

5,834

 

343

 

2016

 

McKinney I, TX

 

47,020

 

 

 

1,632

 

1,486

 

286

 

1,634

 

1,532

 

3,166

 

604

 

2005

 

McKinney II, TX

 

70,050

 

 

 

855

 

5,076

 

287

 

857

 

4,738

 

5,595

 

1,834

 

2006

 

McKinney III, TX

 

53,650

 

 

 

652

 

3,213

 

73

 

652

 

3,285

 

3,937

 

424

 

2014

 

North Richland Hills, TX

 

57,200

 

 

 

2,252

 

2,049

 

258

 

2,252

 

1,928

 

4,180

 

784

 

2005

 

Pearland, TX

 

72,050

 

 

 

450

 

2,216

 

418

 

450

 

2,635

 

3,085

 

525

 

2012

 

Richmond, TX

 

102,295

 

 

 

1,437

 

7,083

 

171

 

1,437

 

7,254

 

8,691

 

1,174

 

2013

 

Roanoke, TX

 

59,300

 

 

 

1,337

 

1,217

 

238

 

1,337

 

1,229

 

2,566

 

477

 

2005

 

San Antonio I, TX

 

73,579

 

 

 

2,895

 

2,635

 

376

 

2,895

 

2,478

 

5,373

 

1,007

 

2005

 

San Antonio II, TX

 

73,955

 

 

 

1,047

 

5,558

 

288

 

1,052

 

5,153

 

6,205

 

1,890

 

2006

 

San Antonio III, TX

 

71,825

 

 

 

996

 

5,286

 

332

 

996

 

4,896

 

5,892

 

1,779

 

2007

 

San Antonio IV, TX

 

61,500

 

 

 

829

 

3,891

 

156

 

829

 

4,048

 

4,877

 

271

 

2016

 

Spring, TX

 

72,745

 

 

 

580

 

3,081

 

309

 

580

 

2,898

 

3,478

 

1,123

 

2006

 

Murray I, UT

 

60,280

 

 

 

3,847

 

1,017

 

546

 

3,848

 

1,346

 

5,194

 

602

 

2005

 

Murray II, UT

 

70,996

 

 

 

2,147

 

567

 

674

 

2,147

 

1,069

 

3,216

 

416

 

2005

 

Salt Lake City I, UT

 

56,446

 

 

 

2,695

 

712

 

544

 

2,696

 

1,070

 

3,766

 

479

 

2005

 

Salt Lake City II, UT

 

51,676

 

 

 

2,074

 

548

 

416

 

1,937

 

798

 

2,735

 

371

 

2005

 

Alexandria, VA

 

114,100

 

 

 

2,812

 

13,865

 

251

 

2,812

 

14,116

 

16,928

 

2,935

 

2012

 

Arlington, VA

 

96,143

 

 

 

6,836

 

9,843

 

99

 

6,836

 

9,943

 

16,779

 

1,341

 

2015

 

Burke Lake, VA

 

91,467

 

 

 

2,093

 

10,940

 

1,194

 

2,093

 

10,536

 

12,629

 

2,652

 

2011

 

Fairfax, VA

 

73,265

 

 

 

2,276

 

11,220

 

316

 

2,276

 

11,537

 

13,813

 

2,327

 

2012

 

Fredericksburg I, VA

 

69,475

 

 

 

1,680

 

4,840

 

370

 

1,680

 

4,537

 

6,217

 

1,740

 

2005

 

Fredericksburg II, VA

 

61,057

 

 

 

1,757

 

5,062

 

438

 

1,757

 

4,808

 

6,565

 

1,859

 

2005

 

Leesburg, VA

 

85,503

 

 

 

1,746

 

9,894

 

189

 

1,746

 

8,794

 

10,540

 

1,986

 

2011

 

Manassas, VA

 

72,745

 

 

 

860

 

4,872

 

274

 

860

 

4,480

 

5,340

 

1,162

 

2010

 

McLearen, VA

 

69,385

 

 

 

1,482

 

8,400

 

257

 

1,482

 

7,502

 

8,984

 

1,905

 

2010

 

Vienna, VA

 

55,120

 

 

 

2,300

 

11,340

 

173

 

2,300

 

11,513

 

13,813

 

2,320

 

2012

 

Divisional Offices

 

 

 

 

 

 

 

 

 

398

 

 

 

398

 

398

 

114

 

 

 

 

 

34,619,208

 

 

 

785,736

 

3,267,473

 

310,175

 

806,916

 

3,343,173

 

4,150,089

 

752,750

 

 

 

(A)

(A)

This store is part of the YSI 33 Loan portfolio, with a balance of $9,214 as of December 31, 2018.

(B)

Depreciation on the buildings and improvements is recorded on a straight-line basis over their estimated useful lives, which range from five to 39 years.

​

F-46

Table of Contents

Activity in storage properties during 2018 and 2017the period from January 1, 2019 through December 31, 2021 was as follows (in thousands):

​

 

 

 

 

 

 

 

    

2018

    

2017

 

2016

 

​

​

​

​

​

​

​

​

​

    

2021

    

2020

 

2019

​

Storage properties*

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

Balance at beginning of year

 

$

4,161,715

 

$

3,998,180

 

$

3,467,032

 

​

$

5,489,754

​

$

4,699,844

​

$

4,463,455

​

Acquisitions & improvements

 

 

381,182

 

 

247,546

 

 

490,980

 

​

 

1,795,965

​

 

825,247

​

 

364,324

​

Fully depreciated assets

 

 

(26,125)

 

 

(53,903)

 

 

(61,232)

 

​

 

(52,722)

​

 

(83,418)

​

 

(81,717)

​

Dispositions and other

 

 

(8,735)

 

 

(9,179)

 

 

 —

 

​

 

(19,408)

​

 

(8,533)

​

 

(3,033)

​

Construction in progress, net

 

 

(44,582)

 

 

(20,929)

 

 

101,400

 

​

 

(30,095)

​

 

14,718

​

 

(43,185)

​

Right-of-use assets - finance leases

​

​

—

​

​

41,896

​

​

—

​

Balance at end of year

 

$

4,463,455

 

$

4,161,715

 

$

3,998,180

 

​

$

7,183,494

​

$

5,489,754

​

$

4,699,844

​

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

​

Accumulated depreciation*

 

 

 

 

 

 

 

 

 

 

​

​

​

​

​

​

​

​

​

​

Balance at beginning of year

 

$

752,925

 

$

671,364

 

$

594,049

 

​

$

983,940

​

$

925,359

​

$

862,487

​

Depreciation expense

 

 

138,510

 

 

135,732

 

 

138,547

 

​

 

160,933

​

 

143,952

​

 

145,233

​

Fully depreciated assets

 

 

(26,125)

 

 

(53,903)

 

 

(61,232)

 

​

 

(52,722)

​

 

(83,418)

​

 

(81,717)

​

Dispositions and other

 

 

(2,823)

 

 

(268)

 

 

 —

 

​

 

(6,327)

​

 

(1,953)

​

 

(644)

​

Balance at end of year

 

$

862,487

 

$

752,925

 

$

671,364

 

​

$

1,085,824

​

$

983,940

​

$

925,359

​

Storage properties, net

 

$

3,600,968

 

$

3,408,790

 

$

3,326,816

 

​

$

6,097,670

​

$

4,505,814

​

$

3,774,485

​

​

*These amounts include equipment that is housed at the Company’s stores which is excluded from Schedule III above.

​

As of December 31, 2018,2021, the aggregate cost of Storage properties for federal income tax purposes was approximately $4.6 billion.$7,452.8 million.

​

​

F-50F-47