UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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| | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the fiscal year ended |
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| December 31, 20052007 |
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| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the transition period from to |
Commission file number001-32324
(Exact Name of Registrant as Specified in Its Charter)
Maryland |
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Maryland | | 20-1024732 |
(State or Other Jurisdiction of
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Incorporation or Organization) | | (IRS Employer
Identification No.) |
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6745 Engle Road
50 Public Square
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Suite 300
2800 | | |
Cleveland, Ohio
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| 44113 |
(Address of Principal Executive Offices) |
| 44130-7993
(Zip Code) |
Registrant’s telephone number, including area code(440) 234-0700 (216) 274-1340
Securities registered pursuant to Section 12(b) of the Act:
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| Name of each exchange on which registered |
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Common Shares, $0.01 par value per share | | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act:
None
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES þx NO o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES o NO þx
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, and (2) has been subject to such filing requirements for the past 90 days. YES þx NO o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of thisForm 10-K or any amendment to thisForm 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a non-accelerated filer.smaller reporting company. See definitiondefinitions of “large accelerated filer,” “accelerated filer,” and large accelerated filer”“smaller reporting company” inRule 12b-2 of the Exchange Act.
Act:Large Accelerated Filer ox Accelerated Filer þo Non-Accelerated Filer o
Smaller Reporting Company oIndicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act). YES o NO þx
As of June 30, 2005,2007, the last business day of the registrant’s most recently completed second quarter, the aggregate market value of common shares held by non-affiliates of the registrant was $548,074,482.
$942,351,737.As of February 15, 2006,27, 2008, the number of common shares of the registrant outstanding was 57,010,162.
57,847,325.Documents incorporated by reference: Portions of the Proxy Statement for the 20062008 Annual Meeting of Shareholders of the Registrant to be filed subsequently with the SEC are incorporated by reference into Part III of this report.
PART I
Forward-Looking Statements
This Annual Report onForm 10-K, together with other statements and information publicly disseminated by U-Store-It Trust (“we,” “us,” “our” or the “Company”), contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to:
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| • | national and local economic, business, real estate and other market conditions; |
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| • | the competitive environment in which we operate; |
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| • | the execution of our business plan; |
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| • | financing risks; |
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| • | increases in interest rates and operating costs; |
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| • | our ability to maintain our status as a real estate investment trust (“REIT”) for federal income tax purposes; |
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| • | acquisition and development risks; |
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| • | changes in real estate and zoning laws or regulations; |
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| • | risks related to natural disasters; |
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| • | potential environmental and other liabilities; |
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| • | other factors affecting the real estate industry generally or the self-storage industry in particular; and |
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| • | other risks identified in this Annual Report onForm 10-K and, from time to time, in other reports we file with the Securities and Exchange Commission (the “SEC”) or in other documents that we publicly disseminate. |
· national and local economic, business, real estate and other market conditions;
· the competitive environment in which we operate;
· the execution of our business plan;
· financing risks including the risk of over-leverage and the corresponding risk of default on our mortgage and other debt;
· increases in interest rates and operating costs;
· our ability to maintain our status as a real estate investment trust (“REIT”) for federal income tax purposes;
· acquisition and development risks;
· changes in real estate and zoning laws or regulations;
· risks related to natural disasters;
· potential environmental and other liabilities;
· other factors affecting the real estate industry generally or the self-storage industry in particular; and
· other risks identified in Item 1A of this Annual Report on Form 10-K and, from time to time, in other reports we file with the Securities and Exchange Commission (the “SEC”) or in other documents that we publicly disseminate.
We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise except as may be required in securities laws.
ITEM 1. BUSINESS
We are a self-administered and self-managed real estate company focused primarily on the ownership, operation, acquisition and development of self-storage facilities in the United States.
As of December 31, 2005,2007, we owned 339409 self-storage facilities located in 26 states and aggregating approximately 20.826.1 million rentable square feet. As of December 31, 2005, we managed 13 additional facilities owned by Rising Tide Development, LLC (“Rising Tide Development”), a company owned and controlled by Robert J. Amsdell,2007, our Chairman and Chief Executive Officer, and Barry L. Amsdell, one of our trustees. We also have the right to manage two additional facilities that may be acquired by Rising Tide Development from unaffiliated third parties. As of December 31, 2005, our 339409 facilities were approximately 81.2%79.5% leased to a total of approximately 144,000180,000 tenants and no single customertenant accounted for more than 1% of our annual rent.
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Our self-storage facilities are designed to offer affordable, easily-accessible and secure storage space for our approximately 144,000 residential and commercial customers. Our customers rent storage units for their exclusive use, typically on amonth-to-month basis. Additionally, some of our facilities offer outside storage areas for vehicles and boats. Our facilities are specifically designed to accommodate both residential and commercial customers, with features such as security systems and wide aisles and load-bearing capabilities for large truck access. All of our facilities have anon-site manager during business hours, and 250,307, or approximately 74%75%, of our facilities have a manager who resides in an apartment at the facility. Our customers can access their storage units during business hours, and some of our facilities provide customers with24-hour access through computer controlled access systems. Our goal is to provide customers with the highest standard of facilities and service in the industry. To that end, approximately 53% of our facilities include climate controlled units, compared to the national average of 24% as cited39% reported by the 20062007 Self-Storage Almanac.
We were formed in July 2004 to succeed the self-storage operations owned directly and indirectly by Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell, our Chief Operating Officer, and their affiliated entities and related family trusts (which entities and family trusts are referred to herein as the “Amsdell Entities”). We are organized as a REIT under Maryland law, and we believe that we qualify for taxation as a REIT for federal income tax purposes beginning with our short taxable year ended December 31, 2004. From our inception until October 2004, we did not have any operations. We commenced operations as a publicly-traded REIT in October 2004 after completing the mergers of certain Amsdell Entities with and into us, our initial public offering (“IPO”), and the consummation of various other formation transactions that occurred concurrently with, or shortly after, completion of our IPO.
We conduct all of our business through our operating partnership, U-Store-It, L.P., our “operating partnership,” of which we serve as general partner, and its subsidiaries. As of December 31, 2005,2007, we held approximately 92%91.9% of the aggregate partnership interests in our operating partnership. Since its formation in 1996, our operating partnership has been engaged in virtually all aspects of the self-storage business, including the development, acquisition, ownership and operation of self-storage facilities.
Acquisition and Disposition Activity
As of December 31, 2007 and 2006, we owned 409 and 399 facilities, respectively, that contained an aggregate of 26.1 million and 25.4 million rentable square feet with occupancy rates of 79.5% and 78.2%, respectively. As of December 31, 2007 we had facilities in 26 states: Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Utah, Virginia and Wisconsin. A complete listing of, and certain information about, our facilities is included in Item 2 of this Annual Report on Form 10-K. The following acquisitions occurred during the years ended December 31, 2007 and 2006:
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| | | | Total Number of | | Purchase / Sale Price (in | |
Facility/Portfolio | | Transaction Date | | Facilities | | thousands) | |
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2007 Acquisitions | | | | | | | |
Sanford Portfolio | | January 2007 | | 1 | | $ | 6,300 | |
Grand Central Portfolio | | January 2007 | | 2 | | 13,200 | |
Rising Tide Portfolio | | September 2007 | | 14 | | 121,000 | |
| | | | 17 | | $ | 140,500 | |
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2007 Dispositions | | | | | | | |
South Carolina Assets | | May 2007 | | 3 | | $ | 12,750 | |
Arizona Assets | | December 2007 | | 2 | | 6,440 | |
| | | | 5 | | $ | 19,190 | |
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2006 Acquisitions | | | | | | | |
Nashville, TN Portfolio | | January 2006 | | 2 | | $ | 13,100 | |
Dallas, TX Portfolio | | January 2006 | | 2 | | 11,500 | |
U-Stor Self Storage Portfolio | | February 2006 | | 3 | | 10,800 | |
Sure Save Portfolio | | February 2006 | | 24 | | 164,500 | |
Texas Storage Portfolio | | March 2006 | | 4 | | 22,500 | |
Nickey Portfolio | | April 2006 | | 4 | | 13,600 | |
SecurCare Portfolio | | May 2006 | | 4 | | 35,700 | |
Texas Storage Portfolio | | June 2006 | | 1 | | 6,500 | |
Jernigan Portfolio | | July 2006 | | 9 | | 45,300 | |
U-Stor Self Storage Portfolio | | August 2006 | | 1 | | 3,500 | |
Bailes Portfolio | | August 2006 | | 3 | | 15,600 | |
In & Out Self Storage Portfolio | | August 2006 | | 1 | | 7,600 | |
Texas Storage Portfolio | | September 2006 | | 2 | | 12,200 | |
| | | | 60 | | $ | 362,400 | |
The following table summarizes the change in number of self-storage facilities from January 1, 2006 through December 31, 2007:
| | 2007 | | 2006 | |
Balance - Beginning of year | | 399 | | 339 | |
Facilities acquired | | 17 | | 60 | |
Facilities consolidated | | (2 | ) | — | |
Facilities sold | | (5 | ) | — | |
Balance - End of year | | 409 | | 399 | |
Financing Activities
We entered into the following significant financings during the years ended December 31, 2007, 2006 and 2005:
·Lehman Brothers Fixed Rate Mortgage Loan. In July 2005, Transactionsone of our subsidiaries entered into a fixed rate mortgage loan agreement with Lehman Brothers Bank, FSB in the principal amount of $80.0 million. The mortgage loan, which is secured by 24 of our self-storage facilities, bears interest at 5.13% and matures in August 2012.
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·LaSalle Bank Fixed Rate Mortgage Loan. In August 2005, one of our subsidiaries entered into a fixed rate mortgage loan agreement with LaSalle Bank National Association in the principal amount of $80.0 million. The mortgage loan, which is secured by 29 of our self-storage facilities, bears interest at 4.96% and matures in September 2012.
·AEGON USA Fixed Rate Mortgage Loan. In November 2005, one of our subsidiaries entered into a fixed rate mortgage loan with Transamerica Financial Life Insurance Company, a subsidiary of AEGON USA Realty Advisors, Inc., in the principal amount of $72.5 million. The mortgage loan, which is secured by 36 of our self-storage facilities, bears interest at 5.97% and matures in November 2015. We assumed the obligation to enter into this loan in connection with the National Self Storage acquisition.
·Repayment of Balance under Revolving CreditFacility. We used a portion of the proceeds from our October 2005 public offering to pay down the outstanding balance under our then existing $150.0 million secured revolving credit facility. The facility was scheduled to terminate on October 27, 2007, with the option for us to extend the termination date to October 27, 2008. As described below, we replaced our secured revolving credit facility with a $250.0 million unsecured revolving credit facility in February 2006. Borrowings under the facility bore interest at a variable rate based upon the prime rate or LIBOR and in each case, a spread depending on our leverage ratio. The credit facility was secured by certain of our self-storage facilities and required that we maintain a minimum “borrowing base” of properties. As of December 31, 2005, we had no outstanding balance under our revolving credit facility.
·Term Loan Agreement. In February 2006, we and our operating partnership entered into a 60-day, unsecured $30 million term loan agreement with Wachovia Bank, National Association as the lender. The term loan bore interest at a variable rate of LIBOR plus 175 basis points. The loan proceeds were used to finance a portion of the Sure Save Portfolio. The loan was paid in full from proceeds obtained upon entering into a new revolving credit facility in February 2006.
·Revolving Credit Facility. In February 2006, we and our operating partnership entered into a three-year $250.0 million unsecured revolving credit facility with Wachovia Bank, National Association, replacing our $150.0 million secured revolving facility. The revolving credit facility was scheduled to terminate in February 2009, but we replaced it with a new revolving credit facility in November 2006 as described below. The terms of the revolving credit facility allowed us to increase the amount that may be borrowed up to $350.0 million at a later date, if necessary. The facility required that we satisfy certain financial coverage ratios and operating covenants, including a maximum leverage ratio and a minimum interest coverage ratio. Borrowings under the facility bore interest, at the Company’s option, at either an alternate base rate or a Eurodollar rate, in each case plus an applicable margin. The alternative base interest rate was a fluctuating rate equal to the higher of the prime rate or the sum of the federal funds effective rate plus 50 basis points. The applicable margin for the alternative base rate varied from 0.15% to 0.60% depending on the Company’s leverage ratio. The Eurodollar rate was a periodic fixed rate equal to LIBOR. The applicable margin for the Eurodollar rate varied from 1.15% to 1.60% based on the Company’s leverage ratio.
·Term Loan Agreement. In November 2006, we and our operating partnership entered into a 30-day, unsecured $50 million term loan agreement with Wachovia Bank, National Association as the lender. The term loan bears interest at a variable rate of LIBOR plus 115 basis points. The loan proceeds, along with borrowings under our revolving credit facility, were used to finance the repayment of maturing secured loans. The loan was paid in full from proceeds obtained upon entering into a new revolving credit facility in November 2006.
·Revolving Credit Facility. In November 2006, we and our operating partnership entered into a new three-year $450.0 million unsecured credit facility with Wachovia Capital Markets, LLC and Keybanc Capital Markets, replacing our existing $250.0 million unsecured revolving facility. The facility consists of a $200 million term loan and a $250 million revolving credit facility. The new facility has a three-year term with a one-year extension option and scheduled termination in November 2009. Borrowings under the credit facility bear interest, at our option, at either an alternative base rate or a Eurodollar rate, in each case, plus an applicable margin based on our leverage ratio or our credit rating. The alternative base interest rate is a fluctuating rate equal to the higher of the prime rate or the sum of the federal funds effective rate plus 50 basis points. The applicable margin for the alternative base rate will vary from 0.00% to 0.50% depending on our leverage ratio prior to achieving an investment grade rating, and will vary from 0.00% to 0.25% depending on our credit rating after achieving an investment grade rating. The Eurodollar rate is a rate of interest that is fixed for interest periods of one, two, three or six months based on the LIBOR rate determined two business days prior to the commencement of the applicable interest period. The applicable margin for the Eurodollar rate will vary from 1.00% to 1.50% depending on our leverage ratio prior to achieving an investment grade rating, and will vary from
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0.425% to 1.00% depending on our credit rating after achieving an investment grade rating. At December 31, 2007, borrowings under the unsecured credit facility had a weighted average interest rate of 6.06%.
·Secured Term Loan. In September 2007, we and our Operating Partnership entered into a secured term loan agreement that allows for term loans in the aggregate principal amount of up to $50 million. Each term loan matures on November 20, 2009, subject to extension in the sole discretion of the lenders. Each term loan bears interest at either an alternative base rate or a Eurodollar rate, at our option, in each case plus an applicable margin at terms identical to the unsecured revolving credit facility. As of December 31, 2007, there was one term loan outstanding for $47.4 million. The outstanding term loan is secured by a pledge by our Operating Partnership of all equity interests in YSI RT LLC, the wholly-owned subsidiary of the Operating Partnership that acquired eight self-storage facilities in September 2007. At December 31, 2007, the outstanding term loan had an interest rate of 6.18%.
Capital Markets Activity
In October 2005, we completed a secondaryfollow-on public offering, pursuant to which we sold an aggregate of 19,665,000 common shares (including 2,565,000 shares pursuant to the exercise of the underwriters’ option) at an offering price of $20.35 per share, for gross proceeds of $400.2 million. The offering resulted in net proceeds to the Company, after deducting underwriting discount and commissions and expenses of the offering, of approximately $378.7 million.
Acquisition, Disposition and Consolidation Activities
In 2005, we completed the acquisitions of 146 self-storage facilities totaling approximately 7.8 million rentable square feet. The aggregate cost of these acquisitions was approximately $547.9 million. We completed the disposition of four self-storage facilities totaling approximately 170,000 rentable square feet for approximately $6.2 million. Additionally, we consolidated eight self-storage facilities into four self-storage facilities (one consolidation related to two properties that we owned at December 31, 2004). As a result of total acquisitions, dispositions and consolidations, we had a net increase of 138 properties in 2005 (See Note 3 to the Consolidated and Combined Financial Statements). These activities are discussed in further detail below.
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| • | Consolidation of Vero Beach, Florida Facilities. In January 2005, we consolidated the operations of our two self-storage facilities located in Vero Beach, Florida facilities into one facility. |
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| • | Acquisition of Option Facility. In January 2005, we purchased the San Bernardino VII, California facility from Rising Tide Development (a related party) for approximately $7.3 million, consisting of $3.8 million in cash (which cash was used to pay off mortgage indebtedness secured by the facility) and $3.5 million in units in our operating partnership. This facility contains approximately 84,000 rentable square feet. |
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| • | Acquisition of Gaithersburg, MD Facility. In January 2005, we acquired one self-storage facility in Gaithersburg, Maryland for consideration of approximately $10.7 million, consisting of $4.3 million in cash and the assumption of $6.4 million of indebtedness. The purchase price was adjusted during the second quarter of 2005 to $11.8 million, primarily as a result of the fair market value adjustment for debt. This facility contains approximately 87,000 rentable square feet. |
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| • | Acquisition of Ford Storage Portfolio. In March 2005, we acquired five self-storage facilities, located in central Connecticut, from Ford Storage for consideration of approximately $15.5 million. These facilities total approximately 258,000 rentable square feet. |
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| • | Acquisition ofA-1 Self Storage Portfolio. In March 2005, we acquired five self-storage properties, located in Connecticut, fromA-1 Self Storage for consideration of approximately $21.7 million. These facilities total approximately 201,000 rentable square feet. We now operate two of these facilities as one facility. In May 2005, we acquired an additional self-storage facility fromA-1 Self Storage for approximately $6.4 million in cash. This facility contains approximately 30,000 rentable square feet and is located in New York. |
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| • | Acquisition of Option Facilities. In March 2005, we purchased the Orlando II, Florida and the Boynton Beach II, Florida facilities from Rising Tide Development (a related party) for consideration of approximately $11.8 million, consisting of $6.8 million in cash and $5.0 million in units of our operating partnership. An adjustment to the purchase price was finalized during the second quarter of 2005, resulting in a revised purchase price of approximately $10.1 million, which consisted of $6.8 million in cash and $3.3 million in units of our operating partnership after a price reduction of $1.7 million in May 2005. These facilities total approximately 155,000 rentable square feet. |
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| • | Acquisition of Liberty Self-Stor Portfolio. In April 2005, we acquired 18 self-storage facilities from Liberty Self-Stor Ltd., a subsidiary of Liberty Self-Stor, Inc., for consideration of approximately $34.0 million. These facilities total approximately 926,000 rentable square feet and are located in Ohio and New York. In June 2005, we sold one of these facilities, containing approximately 17,000 rentable square feet, for approximately $0.6 million. In addition, in November 2005 we sold three more of these facilities, containing approximately 184,000 rentable square feet, for approximately $5.6 million. |
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| • | Acquisition of Frisco I & II, TX and Ocoee, FL Facilities. In April 2005, we acquired three self-storage facilities from two parties for consideration of approximately $14.9 million. The final purchase price was adjusted to $15.2 million primarily as a result of the fair market value adjustment of debt. These facilities total approximately 199,000 rentable square feet and are located in Texas and Florida. |
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| • | Acquisition of Extra Closet Facilities. In May 2005, we acquired two facilities from Extra Closet for consideration of approximately $6.8 million. These facilities total approximately 99,000 rentable square feet and are located in Illinois. |
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| • | Acquisition of Tempe, AZ Facility. In July 2005, we acquired one self-storage facility, located in Tempe, Arizona, for consideration of approximately $2.9 million. This facility contains approximately 54,000 rentable square feet. |
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| • | Acquisition of Clifton, NJ Facility. In July 2005, we acquired one self-storage facility, located in Clifton, New Jersey, for consideration of approximately $16.8 million. This facility contains approximately 106,000 rentable square feet. |
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| • | Acquisition of National Self Storage Portfolio. In July 2005, we completed the acquisition of 71 self-storage facilities from various partnerships and other entities affiliated with National Self Storage and the Schomac Group, Inc. (“National Self Storage”) for an aggregate consideration of approximately $212.0 million. The final purchase price was adjusted to $214.5 million during the third quarter of 2005 primarily as a result of the fair market value adjustment of debt. The final purchase price consisted of approximately $61.8 million of units in our operating partnership, the assumption of approximately $83.0 million of outstanding debt, including the fair market value adjustment of debt, by our operating partnership, and approximately $69.7 million in cash. These facilities total approximately 3.7 million |
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| | rentable square feet and include self-storage facilities located in our existing markets in Southern California, Arizona and Tennessee and in new markets in Texas, Northern California, New Mexico, Colorado and Utah. We now operate two of these facilities as one facility. |
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| • | Acquisition of Elizabeth, NJ and Hoboken, NJ Facilities. In August 2005, we acquired two self-storage facilities, one located in Elizabeth, New Jersey and one in Hoboken, New Jersey, for consideration of approximately $8.2 million. These facilities total approximately 75,000 rentable square feet. |
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| • | Acquisition of Colorado Portfolio. In September 2005, we acquired seven self-storage facilities located in Colorado for consideration of approximately $19.5 million. These facilities total approximately 322,000 rentable square feet. The purchase price was adjusted during the fourth quarter of 2005 to $19.6 million as a result of additional acquisition adjustments. |
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| • | Acquisition of Miami, FL Facilities. In September 2005, we acquired two self-storage facilities located in Miami, Florida for consideration of approximately $17.8 million. These facilities total approximately 152,000 rentable square feet. We now operate these two facilities as one facility. |
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| • | Acquisition of Pensacola, FL Facility. In September 2005, we acquired one self-storage facility located in Pensacola, Florida for consideration of approximately $7.9 million. This facility contains approximately 79,000 rentable square feet. |
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| • | Acquisition of Texas Portfolio. In September 2005, we acquired four self-storage facilities located in Texas for consideration of approximately $15.6 million. These facilities total approximately 227,000 rentable square feet. The purchase price was adjusted during the fourth quarter of 2005 to $15.5 million, as a result of additional acquisition adjustments. In November 2005, we acquired an additional self-storage facility from this seller for approximately $5.5 million in cash. This facility contains approximately 76,000 rentable square feet and is located in San Antonio, Texas. We also have agreed to acquire from this seller an additional seven self-storage facilities, for additional consideration of approximately $40.7 million. As described below under “2006 Transactions — Acquisition Activities,” we acquired four of the seven facilities, for consideration of approximately $22.5 million, in March 2006, and we expect to acquire the remaining three facilities, for aggregate consideration of approximately $18.2 million, during the first half of 2006. |
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| • | Acquisition of Dallas, TX Portfolio. In October 2005, we acquired six self-storage facilities located in Dallas, Texas for consideration of approximately $17.6 million, consisting of approximately $12.5 million in cash and the assumption of approximately $5.1 million of indebtedness. The final purchase price was adjusted during the fourth quarter of 2005 to $17.9 million primarily as a result of the fair market value adjustment of debt. The facilities total approximately 323,000 rentable square feet. We also have agreed to acquire from this seller an additional two self-storage facilities, for additional consideration of approximately $4.4 million and the assumption of $7.1 million of existing debt. As described below under “2006 Transactions — Acquisition Activities,” we acquired the two facilities, for consideration of approximately $11.5 million, in January 2006. |
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| • | Acquisition of Jacksonville, FL Facility. In November 2005, we acquired one self-storage facility located in Jacksonville, Florida for consideration of approximately $7.2 million. This facility contains approximately 79,000 rentable square feet. |
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| • | Acquisition of California Portfolio. In December 2005, we acquired six self-storage facilities located in California for consideration of approximately $57.0 million. The final purchase price was adjusted during the fourth quarter of 2005 to $57.2 million primarily as a result of the assumption of certain promissory notes. These facilities total approximately 448,000 rentable square feet. |
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| • | Acquisition of Fredericksburg, VA Facilities. In December 2005, we acquired two self-storage facilities located in Fredericksburg, Virginia for consideration of approximately $13.3 million. The purchase price was adjusted during the fourth quarter of 2005 to $13.4 million as a result of additional acquisition adjustments. These facilities total approximately 131,000 rentable square feet. |
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| • | Acquisition of Nashville, TN Portfolio. In December 2005, we acquired three self-storage facilities located in Nashville, Tennessee for consideration of approximately $14.7 million. These facilities total approximately 269,000 rentable square feet. We also agreed to acquire from this seller an additional two self-storage facilities, for additional consideration of approximately $13.1 million. As described below under “2006 Transactions — Acquisition Activities,” we acquired the two facilities, for consideration of approximately $13.1 million, in January 2006. |
Financing Activities
We entered into the following financings during the year ended December 31, 2005:
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| • | Lehman Brothers Fixed Rate Mortgage Loan. In July 2005, one of our subsidiaries entered into a fixed rate mortgage loan agreement with Lehman Brothers Bank, FSB in the principal amount of $80.0 million. The mortgage loan, which is secured by 24 of our self-storage facilities, bears interest at 5.13% and matures in August 2012. |
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| • | LaSalle Bank Fixed Rate Mortgage Loan. In August 2005, one of our subsidiaries entered into a fixed rate mortgage loan agreement with LaSalle Bank National Association in the principal amount of $80.0 million. The mortgage loan, which is secured by 29 of our self-storage facilities, bears interest at 4.96% and matures in September 2012. |
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| • | AEGON USA Fixed Rate Mortgage Loan. In November 2005, one of our subsidiaries entered into a fixed rate mortgage loan with Transamerica Financial Life Insurance Company, a subsidiary of AEGON USA Realty Advisors, Inc., in the principal amount of $72.5 million. The mortgage loan, which is secured by 37 of our self-storage facilities, bears interest at 5.97% and matures in November 2015. We assumed the obligation to enter into this loan in connection with the National Self Storage acquisition. |
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| • | Repayment of Balance under Revolving Credit Facility. We used a portion of the proceeds from our October 2005 public offering to pay down the outstanding balance under our $150.0 million secured revolving credit facility. The facility was scheduled to terminate on October 27, 2007, with the option for us to extend the termination date to October 27, 2008. Borrowings under the facility bear interest at a variable rate based upon the prime rate or LIBOR and in each case, a spread depending on our leverage ratio. The credit facility is secured by certain of our self-storage facilities and requires that we maintain a minimum “borrowing base” of properties. As of December 31, 2005, we had no outstanding balance under our revolving credit facility. As of December 31, 2005, we had approximately $131.8 million available under our revolving credit facility as a result of the then available borrowing base of properties under the facility.As described below under “2006 Transactions-Financing Activities,” we replaced our secured revolving credit facility with a $250.0 million unsecured revolving credit facility. |
2006 Transactions
Acquisition Activities
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| • | Acquisition of Nashville, TN Portfolio. In January 2006, we acquired two self-storage facilities located in Nashville, Tennessee for consideration of approximately $13.1 million. These facilities total approximately 204,000 rentable square feet and are part of five self-storage facilities located in Tennessee that we agreed to acquire pursuant to an agreement entered into in December 2005. As described above under “2005 Transactions — Acquisition, Disposition and Consolidation Activities,” we initially acquired three of these facilities, for aggregate consideration of approximately $14.7 million, in December 2005. |
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| • | Acquisition of Dallas, TX Portfolio. In January 2006, we acquired two self-storage facilities located in Dallas, Texas for consideration of approximately $11.5 million, consisting of approximately $4.4 million in cash and the assumption of approximately $7.1 million of indebtedness. These facilities total approximately 132,000 rentable square feet and are part of a portfolio of eight self-storage facilities located in Dallas, Texas that we agreed to acquire pursuant to an agreement entered into in October 2005. As described above under “2005 Transactions — Acquisition, Disposition and Consolidation |
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| | Activities,” we initially acquired six of these facilities for aggregate consideration of approximately $17.9 million in October 2005. |
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| • | Acquisition of U-Stor Self Storage Portfolio. In February 2006, we acquired three self-storage facilities located in Colorado for consideration of approximately $10.9 million. These facilities total approximately 173,000 rentable square feet. We also have agreed to acquire from this seller an additional self-storage facility, for additional consideration of approximately $3.5 million including the assumption of $2.1 million of indebtedness, during the first half of 2006. |
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| • | Acquisition of Sure Save Portfolio. In February 2006, we acquired 24 self-storage facilities from Crownridge Storage Portfolio, LLC and Williams Storage Portfolio III, LLC for consideration of approximately $164.5 million. These facilities total approximately 1.8 million rentable square feet and are located in Arizona, California, Nevada, New Mexico and Texas. |
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| • | Acquisition of Texas Portfolio. In March 2006, we acquired four self-storage facilities located in Texas for consideration of approximately $22.5 million. These facilities total approximately 273,000 rentable square feet and are part of a portfolio of 12 self-storage facilities located in Texas that we agreed to acquire pursuant to an agreement entered into in July 2005. As described above under “2005 Transactions — Acquisition, Disposition and Consolidation Activities,” we initially acquired four of these facilities, for aggregate consideration of $15.6 million, in September 2005 and one of these facilities for approximately $5.5 million, in November 2005. We expect to acquire the remaining three facilities, for aggregate consideration of approximately $18.2 million, during the first half of 2006. These three facilities total approximately 213,000 rentable square feet. |
Financing Activities
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| • | Term Loan Agreement. In February 2006, we and our operating partnership entered into a60-day, unsecured $30 million term loan agreement with Wachovia Bank, National Association as the lender. The term loan bears interest at a variable rate and bears interest at LIBOR plus 175 basis points. The loan proceeds were used to finance a portion of the Sure Save Portfolio. The loan was paid in full from proceeds obtained upon entering into a new revolving credit facility in February 2006. |
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| • | Revolving Credit Facility. In February 2006, we and our operating partnership entered into a new three-year $250.0 million unsecured revolving credit facility with Wachovia Bank, National Association, replacing our existing $150.0 million secured revolving facility. The terms of the new revolving credit facility allow us to increase the amount that may be borrowed up to $350.0 million at a later date, if necessary. The new facility requires that we satisfy certain financial coverage ratios and operating covenants, including a maximum leverage ratio and a minimum interest coverage ratio. Borrowings under the new facility bear interest, at the Company’s option, at either an alternate base rate or a Eurodollar rate, in each case plus an applicable margin. The alternative base interest rate is a fluctuating rate equal to the higher of the prime rate or the sum of the federal funds effective rate plus 50 basis points. The applicable margin for the alternative base rate will vary from 1.15% to 1.60% depending on the Company’s leverage ratio. The Eurodollar rate is a periodic fixed rate equal to LIBOR. The applicable margin for the Eurodollar rate will vary from 0.15% to 0.60% based on the Company’s leverage ratio. The new revolving credit facility is scheduled to terminate in February 2009. |
Business Strategy
Our business strategy consists of several elements:
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| • | Maximize cash flow from our facilities — We seek to maximize cash flow from our facilities by: |
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| • | Increasing rents — Our operating strategy focuses on achieving the highest sustainable rent levels at each of our facilities. |
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| • | Increasing occupancy levels — We focus on increasing occupancy levels at our newly developed, recently acquired or recently expanded facilities. |
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·Maximize cash flow from our facilities — Our operating strategy focuses on achieving the highest sustainable rent levels at each of our facilities while at the same time meeting 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.
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| • | Controlling operating expenses — Our regional managers are focused on maximizing profitability at each of our facilities by controlling operating expenses. |
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| • | Expanding and improving our facilities — Where we believe we can achieve attractive returns on investment, we expand facilities that have reached near full occupancy or upgrade our facilities by adding features such as climate-controlled units and enhanced security systems. |
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| • | Acquire facilities within our targeted markets — We believe the self-storage industry will continue to provide us with opportunities for growth through acquisitions due to the highly fragmented composition of the industry, the lack of sophistication among many operators, the economies of scale available to a large self-storage operator and the difficulties smaller operators face in obtaining capital. We intend to acquire facilities primarily in areas that we consider to be growth markets, such as Arizona, California, Colorado, Florida, Georgia, Illinois, Texas and the Northeastern United States. |
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| • | Utilize our development expertise in selective new developments — We seek to use our development expertise and access to multiple financing sources to pursue new developments in areas where we have facilities and perceive there to be unmet demand. |
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| • | Focus on expanding our commercial customer base — We seek to focus on expanding the base of commercial customers that use our facilities for their storage and distribution needs. Towards this end, we develop and acquire our facilities with features specifically designed to accommodate commercial customers. |
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| • | Continue to grow ancillary revenues — We seek to enhance the cash flow from our facilities by increasing the sales of products and services, such as packing supplies and equipment rentals, that complement our customers’ use of our self-storage facilities. These revenues are included in the Company’s taxable REIT subsidiary. |
·Acquire facilities within our targeted markets — We will continue to selectively acquire facilities in markets that we believe have high barriers to entry, strong demographic fundamentals and existing supply at or below the demand in the market. We believe the self-storage industry will continue to provide us with opportunities for growth through acquisitions due to the highly fragmented composition of the industry. We intend to acquire facilities primarily in areas that we consider to be growth markets, such as Arizona, California, Florida and the Northeastern United States.
·Utilize our expertise in selective newdevelopments — We seek to use our development expertise and access to multiple financing sources to pursue new developments in areas where we have facilities and perceive there to be unmet demand. We expect to pursue our development primarily in conjunction with joint venture partners.
Investment and Market Selection Process
We focus on targeted investmentsmaintain a disciplined and focused process in the acquisition and development of self-storage facilities. Our investment committee, which consists of certain of our executive officers and is led by Steven G. Osgood,Dean Jernigan, our President and Chief FinancialExecutive Officer, oversees our investment process. Our investment process involves five stages — identification, initial due diligence, economic assessment, investment committee approval (and when required, boardBoard approval) and final due diligence, and documentation. Through our investment committee, we intend to focus on the following criteria:
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| • | Targeted Markets — Our targeted markets include areas where we currently maintain management that can be extended to additional facilities, or where we believe that we can acquire a significant number of facilities efficiently and within a short period of time. We evaluate both the broader market and the immediate area, typically five miles around the facility, for their ability to support above-average demographic growth. We will seek to grow our presence primarily in areas that we consider to be growth markets, such as Arizona, California, Colorado, Florida, Georgia, Illinois, Texas and the Northeastern United States and to enter new markets should suitable opportunities arise. |
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| • | Quality of Facility — We focus on self-storage facilities that have good visibility and are located near retail centers, which typically provide high traffic corridors and are generally located near residential communities and commercial customers. In addition, we seek to acquire facilities with anon-site apartment for the manager, security cameras and gated access, accessibility for tractor trailers and good construction. |
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| • | Growth Potential — We target acquisitions that offer growth potential through increased operating efficiency and, in some cases, through additional leasing efforts, renovations or expansions. In addition to acquisitions of single facilities, we seek to invest in portfolio acquisitions, searching for situations where there is significant potential for increased operating efficiency and an ability to spread our fixed costs across a large base of facilities. |
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·Targeted markets — Our targeted markets include areas where we currently maintain management that can be extended to additional facilities, or where we believe that we can acquire a significant number of facilities efficiently and within a short period of time. We evaluate both the broader market and the immediate area, typically five miles around the facility, for their ability to support above-average demographic growth. We will seek to grow our presence primarily in areas that we consider to be growth markets, such as Arizona, California, Florida and the Northeastern United States and to enter new markets should suitable opportunities arise.
·Quality of facility — We focus on self-storage facilities that have good visibility and are located near retail centers, which typically provide high traffic corridors and are generally located near residential communities and commercial customers.
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·Growth potential — We target acquisitions that offer growth potential through increased operating efficiency and, in some cases, through additional leasing efforts, renovations or expansions. In addition to acquiring single facilities, we seek to invest in portfolio acquisitions, searching for situations where there is significant potential for increased operating efficiency and an ability to spread our fixed costs across a large base of facilities.
From the completion of our IPO through December 31, 2005,2007, we acquired 192269 facilities totaling approximately 10.916.9 million rentable square feet for consideration of approximately $769.7 million.$1.3 billion. We believe that the self-storage industry will continue to provide us with opportunities for future growth through consolidation due to the highly-fragmented composition of the industry, the lack of sophistication among many operators, the economies of scale available to a real estate company with a significant number of self-storage facilities, and the difficulties smaller operators face in obtaining capital. We intend to take advantage of these opportunities by utilizing our experience in identifying, evaluating and acquiring self-storage facilities. The experience of our management team and our active history of acquiring self-storage facilities give us an advantage in identifying attractive potential acquisitions, as we are well-known within the self-storage brokerage community and are often approached directly by principals interested in selling their facilities. Furthermore, we believe that our ability to offer our operating partnership units as a form of acquisition consideration has helped us, and will continue to help us, pursue acquisitions from tax-sensitive private sellers through tax-deferred transactions.
industry.Operating Segment
We have one reportable operating segment: we own, operate, develop, and acquire self-storage facilities.
Concentration
Our self-storage facilities are located in major metropolitan areas as well as rural areas and have numerous tenants per facility. All our operations are within the United States and noNo single tenant represents 1% or more of our revenues. The facilities in Florida, California, IllinoisTexas and New JerseyIllinois provided approximately 24%19%, 11%15%, 10%8% and 8%, respectively,7% of total revenues, respectively, for the year ended December 31, 2005 (See Note 2 to2007. Florida, California, Illinois and New Jersey provided total revenues of approximately 19%, 16%, 7% and 6%, respectively, for the Consolidated and Combined Financial Statements.)
year ended December 31, 2006.Seasonality
We experience minor seasonal fluctuations in the occupancy levels of our facilities, which are generally slightly higher during the summer months due to increased moving activity.
Although our organizational documents contain no limitation on the amount of debt we may incur, we maintain what we consider to be a conservative capital structure, characterized by the use of leverage in a manner that we believe is reasonable and prudent and that will enable us to have ample cash flow to cover debt service.service and make distributions to our shareholders. As of December 31, 2005,2007, our debt to total capitalization ratio, determined by dividing the carrying value of our total indebtedness by the sum of (a) the market value of our outstanding common shares and operating partnership units and (b) the carrying value of our total indebtedness, was approximately 34%64.1%. We expect to finance additional investments in self-storage facilities through the most attractive available source of capital at the time of the transaction, in a manner consistent with maintaining a strong financial position and future financial flexibility. These capital sources may include borrowings under our revolving credit facility, selling common or preferred shares or debt securities through public offerings or private placements, incurring additional secured indebtedness, issuing units in our operating partnership in exchange for contributed property, issuing preferred units in our operating partnership to institutional partners and forming joint ventures. We also may consider selling less productive self-storage facilities from time to time in order to reallocate proceeds from these sales into more productive facilities.
The continued development of new self-storage facilities has intensified the competition among self-storage operators in many market areas in which we operate. Self-storage facilities compete based on a number of factors, including location, rental rates, security, suitability of the facility’s design to prospective customers’ needs and the manner in which the facility is operated and marketed. In particular, the number of competing self-storage facilities in a particular market could have a material effect on our occupancy levels, rental rates and on the overall operating performance of our facilities. We believe that the primary competition for potential customers of any of our self-storage facilities comes from other self-storage facilities within athree-mile radius of that facility. We believe we have positioned our facilities within their respective markets as high-quality operators that emphasize customer convenience, security and professionalism.
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Our key competitors include
local and regional operators as well as the other public self-storage REITS, including Public Storage,
Shurgard Storage Centers, U-Haul International, Sovran Self Storage and Extra Space Storage Inc. These companies, some of which operate significantly more facilities than we do and have greater resources than we
do,have, and other entities may generally be able to accept more risk
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than we determine is prudent, including risks with respect to the geographic proximity of facility investments and the payment of higher facility acquisition prices. This competition may generally reduce the number of suitable acquisition opportunities available to us, increase the price required to be able to consummate the acquisition of particular facilities and reduce the demand for self-storage space in certain areas where our facilities are located. Nevertheless, we believe that our experience in operating, acquiring, developing and obtaining financing for self-storage facilities particularly our customer-oriented approach toward managing our facilities, should enable us to compete effectively.
We are subject to federal, state and local environmental regulations that apply generally to the ownership of real property and the operation of self-storage facilities.
Under various federal, state and local laws, ordinances and regulations, an owner or operator of real property may become liable for the costs of removal or remediation of hazardous substances released on or in its property. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances. The presence of hazardous substances, or the failure to properly remediate such substances, when released, may adversely affect the property owner’s ability to sell the real estate or to borrow using real estate as collateral, and may cause the property owner to incur substantial remediation costs. In addition to claims for cleanup costs, the presence of hazardous substances on a property could result in a claim by a private party for personal injury or a claim by an adjacent property owner or user for property damage. We may also become liable for the costs of removal or remediation of hazardous substances stored at the facilities by a customer even though storage of hazardous substances would be without our knowledge or approval and in violation of the customer’s storage lease agreement with us.
Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of additional facilities. Whenever the environmental assessment for one of our facilities indicates that a facility is impacted by soil or groundwater contamination from prior owners/operators or other sources, we will work with our environmental consultants and where appropriate, state governmental agencies, to ensure that the facility 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.
We are not aware of any environmental cleanup liability that we believe will have a material adverse effect on us. We cannot assure you, however, that these environmental assessments and investigations have revealed or will reveal all potential environmental liabilities, that no prior owner created any material environmental condition not known to us or the independent consultant or that future events or changes in environmental laws will not result in the imposition of environmental liability on us.
We have not received notice from any governmental authority of any material noncompliance, claim or liability in connection with any of our facilities, nor have we been notified of a claim for personal injury or property damage by a private party in connection with any of our facilities in connection withrelating to environmental conditions.
We are not aware of any environmental condition with respect to any of our facilities that could reasonably be expected to have a material adverse effect on our financial condition or results of operations, and we do not expect that the cost of compliance with environmental regulations will have a material adverse effect on our financial condition or results of operations. We cannot assure you, however, that this will continue to be the case.
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Insurance
We believe that each of our facilities is covered by adequate fire, flood and property insurance provided by reputable companies and with commercially reasonable deductibles and limits. We maintaincarry comprehensive liability, all-risk propertyfire, extended coverage and rental loss insurance coverage with respect tocovering all of the facilities within our portfolio. We believe the policy specifications and insured limits are appropriate and deductibles customarily carriedadequate 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 our industry. We believe that allsome cases, flooding, because such coverage is not available or is not available at commercially reasonable rates. Some of our current title insurance policies, adequately insure fee titlesuch as those covering losses due to the facilities.terrorist activities, 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.
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Our principal executive office is located at 6745 Engle Road,50 Public Square, Suite 300,2800, Cleveland, Ohio 44130.OH 44113. Our telephone number is(440) 234-0700. (216) 274-1340. We believe that our current facilities are adequate for our present and future operations.
As of December 31, 2005,2007, we employed approximately 865989 employees, of whom approximately 130112 were corporate executive and administrative personnel and approximately 735877 were management and administrativeproperty level personnel. We believe that our relations with our employees are good. None of our employees are unionized.
We file our annual report onForm 10-K, quarterly reports onForm 10-Q, current reports onForm 8-K, and all amendments to those reports towith the Securities and Exchange Commission (the “SEC”). You may obtain copies of these documents by visiting the SEC’s Public Reference Room at 450 Fifth100 F Street, N.W.N.E., Washington, D.C. 20549, by calling the SEC at1-800-SEC-0330 or by accessing the SEC’s website at http://www.sec.gov. Our internet website address iswww.u-store-it.com. www.ustoreit.com. You also can obtain on our website, free of charge, a copy of our annual report onForm 10-K, our quarterly reports onForm 10-Q, our current reports onForm 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file such reports or amendments with, or furnish them to, the SEC as well.SEC. Our internet website and the information contained therein or connected thereto are not intended to be incorporated by reference into this Annual Report onForm 10-K.
Also available on our website, free of charge, are copies of our Code of Business Conduct and Ethics, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Corporate Governance Guidelines, and the charters for each of the committees of our boardBoard of trusteesTrustees — the Audit Committee, the Corporate Governance and Nominating Committee, and the Compensation Committee. Copies of our Codeeach of Business Conduct and Ethics, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Corporate Governance Guidelines, and our committee chartersthese documents are also available in print free of charge, upon request by any shareholder. You can obtain such copies in printof these documents by contacting Investor Relations by mail at our corporate office.
460 E. Swedesford Road, Suite 3000, Wayne, PA 19087.ITEM 1A. RISK FACTORS
Investors should carefully consider, among other factors, the risks set forth below. We have separated the risks into three groups:
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| • | risks related to our operations; |
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| • | risks related to our organization and structure; and |
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| • | tax risks. |
These risks are not the only ones that we may face. Additional risks not presently known to us or that we currently consider immaterial may also impair our business operations and hinder our ability to make expected distributions to our shareholders.
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Our performance and the value of our self-storage facilities are subject to risks associated with our properties and with the real estate industry.
Risks Related to Our Operations
Our rental revenues are significantly influenced byand operating costs and the economies and other conditions of the markets in which we operate, particularly in Florida, California, Ohio, Illinois and Texas where we have high concentrations of self-storage facilities.
We are susceptible to adverse developments in the markets in which we operate, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors. Our facilities in Florida, California, Ohio, Illinois and Texas accounted for approximately 18%, 12%, 8%, 8% and 8%, respectively,value of our
total rentable square feet asreal estate assets, and consequently the value of
December 31, 2005. As a result of this geographic concentrationour securities, are subject to the risk that if our facilities 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 facilities
we are particularly susceptible to adverse market conditionsinclude:·downturns in these particular areas. Any adversethe national, regional and local economic climate;
·local or real estate developments in these markets,regional oversupply, increased competition or in any of the other markets in which we operate, or any decreasereduction in demand for self-storage space resultingspace;
·vacancies, changes in market rents for self-storage space;
·inability to collect rent from customers;
·increased operating costs, including maintenance, insurance premiums and real estate taxes;
·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;
·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;
·costs of complying with changes in laws and governmental regulations, including those governing usage, zoning, the local business climateenvironment and taxes; and
·the relative illiquidity of real estate investments.
In addition, prolonged periods of economic slowdown or recession, rising interest rates or declining demand for self-storage, or the public perception that any of these events may occur, could adversely affect ourresult in a general decline in rental revenues, which could impair our ability to satisfy our debt service obligations and payto make distributions to our shareholders.
Because we are primarily focused on the ownership, operation, acquisition and development of self-storage facilities, our rentalRental revenues are significantlyinfluenced by demand for self-storage space generally, and a decrease in such demandwould likely have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio.
Because our portfolio of facilities consists primarily of self-storage facilities, we are subject to risks inherent in investments in a single industry. A decrease in the demand for self-storage space would likely have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio. Demand for self-storage space has been and could be adversely affected by weakness in the national, regional and local economies, changes in supply of, or demand for, similar or competing self-storage facilities in an area and the excess amount of self-storage space in a particular market. To the extent that any of these conditions occur, they are likely to affect market rents for self-storage space, which could cause a decrease in our rental revenue. Any such decrease could impair our ability to satisfy debt service obligations and make distributions to our shareholders.
We face risks associated with actions taken by our competitors.
Actions by our competitors may decrease or prevent increases of the occupancy and rental rates of our properties. We compete with other owners and operators of self-storage, some of which own properties similar to ours in the same submarkets in which our properties are located. If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose potential tenants, and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants when our tenants’ leases expire. As a result, our financial condition, cash flow, cash available for distribution, market price of our stock and ability to satisfy our debt service obligations could be materially adversely affected.
We face risks related to balloon payments.
Approximately 50% (or approximately $573.5 million) of our mortgage and revolving indebtedness is due on or before December 31, 2009. Certain of our mortgages will have significant outstanding balances on their maturity dates, commonly known as “balloon payments.” There can be no assurance that we will be able to refinance the 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 investors.
Rising operating expenses could reduce our cash flow and funds available for futuredistributions.
Our facilities and any other facilities we acquire or develop in the future are and will be subject to operating risks common to real estate in general, any or all of which may negatively affect us. Our facilities are subject to increases in operating expenses such as real estate and other taxes, 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.
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We face risks associated with facility acquisitions that could impede our growth.
We have in the past acquired, and intend in the future to acquire, individual and portfolios of self-storage facilities that would increase our size and potentially alter our capital structure. Although we believe that the acquisitions that we expect to undertake in the future will enhance our future financial performance, the success of such transactions is subject to a number of factors, including the risk that:
·we may not be able to obtain financing for acquisitions on favorable terms;
·acquisitions may fail to perform as expected;
·the actual costs of repositioning or redeveloping acquired facilities may be higher than our estimates; and
·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.
We also face significant competition for acquisitions and development opportunities. Some of our competitors have greater financial resources than we do and a greater ability to borrow funds to acquire facilities. These competitors may also be willing and/or able to accept more risk than we can prudently manage, including risks with respect to the geographic proximity of investments and the payment of higher facility acquisition prices. This competition for investments may reduce the number of suitable investment opportunities available to us, may increase acquisition costs and may reduce demand for self-storage space in certain areas where our facilities are located and, as a result, adversely affect our operating results.
Financing our future growth plan or refinancing existing debt maturities could be impacted by negative capital market conditions.
Recently, domestic financial markets have experienced unusual volatility and uncertainty. While this condition has occurred most visibly within the “subprime” mortgage lending sector of the credit market, liquidity has tightened in overall domestic financial markets, including the investment grade debt and equity capital markets. Consequently, there is greater uncertainty regarding our ability to access the credit markets in order to attract financing on reasonable terms nor can there be any assurance we can issue common or preferred equity securities at a reasonable price. Our ability to finance new acquisitions as well as our ability to refinance debt maturities could be adversely affected by our inability to secure permanent financing on reasonable terms, if at all.
We may not be able to adapt our management and operation systems to respond to theintegration of additional facilities without disruption or expense.
From the completion of our IPO in October 2004 through December 31, 2007, we acquired 269 facilities, containing approximately 15.6 million rentable square feet for an aggregate cost of approximately $1.3 billion. In 2008 we acquired two additional self-storage facilities. In addition, we expect to acquire additional self-storage facilities in the future. We cannot assure you that we will be able to adapt our management, administrative, accounting and operational systems or hire and retain sufficient operational staff to integrate these facilities into our portfolio and manage any future acquisition or development of additional facilities without operating disruptions or unanticipated costs. As we acquire or develop additional facilities, we will be subject to risks associated with managing new facilities, including customer retention and mortgage default risks. In addition, acquisitions or developments may cause disruptions in our operations and divert management’s attention away from day-to-day operations. Furthermore, our profitability may suffer because of acquisition-related costs or amortization costs for acquired goodwill and other intangible assets. Our failure to successfully integrate any future facilities into our portfolio could have an adverse effect on our operating costs and our ability to make distributions to our shareholders.
Acquired facilities may subject us to unknown liabilities.
Facilities that we have acquired or may acquire in the future may be subject to unknown liabilities for which we would have no recourse, or only limited recourse, to the former owners of such facilities. As a result, if a liability were asserted against us based upon ownership of an acquired facility, we might be required to pay significant sums to settle it, which could adversely affect our financial results and cash flow. Unknown liabilities relating to acquired facilities could include:
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·liabilities for clean-up of undisclosed environmental contamination;
·claims by tenants, vendors or other persons arising on account of actions or omissions of the former owners of the facilities; and
·liabilities incurred in the ordinary course of business.
We face significant competition from other developers, owners and operators in the self-storage industry, which may impede our ability to retain customers or re-let space when existing customers vacate, or impede our ability to make, or increase the cost of, future acquisitions or developments.industry.
We compete with numerous developers, owners and operators in the self-storage industry, including other REITs, some of which own or may in the future own facilities similar to ours in the same markets in which our facilities are located, and some of which may have greater capital resources. In addition, due to the relatively low cost of each individual self-storage facility, other developers, owners and operators have the capability to build additional facilities that may compete with our facilities.
If our competitors build new facilities that compete with our facilities or offer space at rental rates below current market rates or below the rental rates we currently charge our customers, we may lose potential customers and we may be pressured to discount our rental rates below those we currently charge in order to retain customers. As a result, our rental revenues may decrease, which could impair our ability to satisfy our debt service obligations and to pay distributions to our shareholders. In addition, increased competition for customers may require us to make capital improvements to facilities that we would not have otherwise made. Any unbudgeted capital improvements we undertake may reduce cash available for distributions to our shareholders.
Our rental revenues and operating costs, as well as the value of our self-storage facilities, are subject to risks associated with real estate assets and with the real estate industry.
Our ability to make expected distributions to our shareholders depends onProperty ownership through joint ventures may limit our ability to
generate substantial revenues fromact exclusively in our
facilities. Events and conditions generally applicableinterest.
We may co-invest with third parties through joint ventures. In any such joint venture, we may not be in a position to owners and operatorsexercise sole decision-making authority regarding the facilities owned through joint ventures. Investments in joint ventures may, under certain circumstances, involve risks not present when a third party is not involved, including the possibility that joint venture partners might become bankrupt or fail to fund their share of
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real property required capital contributions. Joint venture partners may have business interests or goals that are beyondinconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives. Such investments also have the potential risk of impasse on strategic decisions, such as a sale, because neither we nor the joint venture partner would have full control over the joint venture. Any disputes that may decrease cash available for distributionarise between us and the value of our facilities. These events and conditions include:
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| • | changes in the national, regional and local economic climate; |
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| • | hurricanes and other natural disasters that could damage our facilities, cause service interruptions and result in uninsured damages; |
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| • | local or regional oversupply, increased competition or reduction in demand for self-storage space; |
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| • | inability to collect rent from customers; |
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| • | inability to finance facility acquisitions, capital improvements and development on favorable terms; |
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| • | increased operating costs, including maintenance, insurance premiums and real estate taxes; |
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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. |
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,joint venture partners could result in a general decline in rental revenues, whichlitigation or arbitration that could impairincrease our ability to satisfyexpenses and distract our debt service obligationsofficers and/or Trustees from focusing their time and to make distributions toeffort on our shareholders.
If we are unable to promptly re-let units within our facilities or if the rates upon such re-letting are significantly lower than expected, our rental revenues would be adversely affected and our growth may be impeded.
Virtually all of our leases are on amonth-to-month basis. Delays in re-letting units as vacancies arise would reduce our revenues and could adversely affect our operating performance. In addition, lower than expected rental rates upon re-letting could adversely affect our rental revenues and impede our growth.
We may not be successful in identifying and completing acquisitions or development projects that meet our criteria, which may impede our growth, and even if we are able to identify suitable projects, our future acquisitions and developments may not yield the returns we expect or may result in shareholder dilution.
Our business strategy involves expansion through acquisitions and development projects. These activities require us to identify acquisition or development candidates or investment opportunities that meet our criteria and are compatible with our growth strategy. We may not be successful in identifying self-storage facilities that meet our acquisition or development criteria or in completing acquisitions, developments or investments on satisfactory terms. Similarly, although we currently have the option to purchase 15 self-storage facilities, consisting of 13 facilities owned by Rising Tide Development and two facilities which Rising Tide Development has the right to acquire from unaffiliated third parties, Rising Tide Development may not acquire either or both of the option facilities it currently has under contract, which would reduce the number of facilities available to us pursuant to the option agreement. Failure to identify or complete acquisitions or developments or to purchase either or both of the option facilities could slow our growth.
We also face significant competition for acquisitions and development opportunities. Some of our competitors have greater financial resources than we do and a greater ability to borrow funds to acquire facilities. These competitors may also be willingand/or able to accept more risk than we can prudently manage, including risks with respect to the geographic proximity of investments and the payment of higher facility acquisition prices. This competition for investments may reduce the number of suitable investment opportunities available to us, may increase acquisition costs and may reduce demand for self-storage space in certain areas where our facilities are located and, as a result, adversely affect our operating results.
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In addition, even if we are successful in identifying suitable acquisitions or development projects, newly acquired facilities may fail to perform as expected and our management may underestimate the costs associated with the integration of the acquired facilities. In addition, any developments we undertake in the future are subject to a number of risks, including, but not limited to, construction delays or cost overruns that may increase project costs, financing risks, the failure to meet anticipated occupancy or rent levels, failure to receive required zoning, occupancy, land use and other governmental permits and authorizations and changes in applicable zoning and land use laws. If any of these problems occur, development costs for a project will increase, and there may be significant costs incurred for projects that are not completed. In deciding whether to acquire or develop a particular facility, we make certain assumptions regarding the expected future performance of that facility. If our acquisition or development facilities fail to perform as expected or incur significant increases in projected costs, our rental revenues could be lower, and our operating expenses higher, than we expect. In addition, the issuance of equity securities for any acquisitions could be substantially dilutive to our shareholders.
We may not be able to adapt our management and operation systems to respond to the integration of additional facilities without disruption or expense.
From the completion of our IPO in October 2004 through December 31, 2005, we have acquired 192 facilities, containing approximately 10.9 million rentable square feet for an aggregate cost of approximately $769.7 million as of December 31, 2005, and in 2006 we have acquired or entered into agreements to acquire an additional 48 self-storage facilities.business. In addition, we expect to acquire additional self-storage facilitiesmight in certain circumstances be liable for the future. We cannot assure you that we will be able to adapt our management, administrative, accounting and operational systems or hire and retain sufficient operational staff to integrate these facilities into our portfolio and manage any future acquisition or development of additional facilities without operating disruptions or unanticipated costs. As we acquire or develop additional facilities, we will be subject to risks associated with managing new facilities, including customer retention and mortgage default. In addition, acquisitions or developments may cause disruptions in our operations and divert management’s attention away fromday-to-day operations. Furthermore, our profitability may suffer because of acquisition-related costs or amortization costs for acquired goodwill and other intangible assets. Our failure to successfully integrate any future facilities into our portfolio could have an adverse effect on our operating costs and our ability to make distributions to our shareholders.
We depend on ouron-site personnel to maximize customer satisfaction at eachactions of our facilities; any difficulties we encounter in hiring, training and retaining skilled field personnel may adversely affect our rental revenues.
As of December 31, 2005, we had approximately 735 field personnel involved in the management and operation of our facilities. The customer service, marketing skills and knowledge of local market demand and competitive dynamics of our facility managers are contributing factors to our ability to maximize our rental income and to achieve the highest sustainable rent levels at each of our facilities. If we are unable to successfully recruit, train and retain qualified field personnel, our rental revenues may be adversely affected, which could impair our ability to satisfy new debt obligations and make distributions to our shareholders.
We had approximately $669.3 million of indebtedness outstanding as of December 31, 2005, and this level of indebtedness will result in significant debt service obligations, impede our ability to incur additional indebtedness to fund our growth and expose us to refinancing risk.
We had approximately $669.3 million of indebtedness outstanding as of December 31, 2005. We also intend to incur additional debt in connection with the future acquisition and development of facilities. We also may incur or increase our mortgage debt by obtaining loans secured by some or all of the real estate facilities we acquire or develop. In addition, we may borrow funds if necessary to satisfy the requirement that we distribute to shareholders at least 90% of our annual REIT taxable income, or otherwise as is necessary or advisable, to ensure that we maintain our qualification as a REIT for federal income tax purposes or otherwise avoid paying taxes that can be eliminated through distributions to our shareholders.
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Our substantial debt may harm our business and operating results by:
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| • | requiring us to use a substantial portion of our cash flow from operations to pay interest, which reduces the amount available for distributions; |
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| • | making us more vulnerable to economic and industry downturns and reducing our flexibility in responding to changing business and economic conditions; and |
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| • | limiting our ability to borrow more money for operating or capital needs or to finance acquisitions in the future. |
In addition to the risks discussed above and those normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest, we also are subject to the risk that we will not be able to refinance the existing indebtedness on our facilities (which, in most cases, will not have been fully amortized at maturity) and that the terms of any refinancing we could obtain would not be as favorable as the terms of our existing indebtedness. In particular, as of December 31, 2005, we had $104.2 million of indebtedness outstanding pursuant to two multi-facility mortgage loans with anticipated repayment dates in 2006. If we are not successful in refinancing debt when it becomes due, we may be forced to dispose of facilities on disadvantageous terms, which might adversely affect our ability to service other debt and to meet our other obligations.
Our mortgage indebtedness contains covenants that restrict our operating, acquisition and disposition activities.
Our mortgage indebtedness contains covenants, including limitations on our ability to incur secured and unsecured indebtedness, sell all or substantially all of our assets and engage in mergers and consolidations and various acquisitions. In addition, our mortgage indebtedness contains limitations on our ability to transfer or encumber the mortgaged facilities without lender consent. These provisions may restrict our ability to pursue business initiatives or acquisition transactions that may be in our best interests. They also may prevent us from selling facilities at times when, due to market conditions, it may be advantageous to do so. In addition, failure to meet any of the covenants could cause an event of default underand/or acceleration of some or all of our indebtedness, which would have an adverse effect on us.
Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a facility or group of facilities subject to mortgage debt.
Most of the facilities we own are pledged as collateral for mortgage debt. If a facility or group of facilities is mortgaged and we are unable to meet mortgage payments, the lender could foreclose on the facility or group of facilities, resulting in the loss of our investment. Any foreclosure on a mortgaged facility or group of facilities could adversely affect the overall value of our portfolio of self-storage facilities.
We could have substantial variable rate debt, and therefore increases in interest rates would likely increase our debt service obligations.
As of December 31, 2005, we did not have any variable rate debt outstanding. However, we intend to finance future acquisitions in part by borrowing under our revolving credit facility, which bears interest at a variable rate. The interest expense on our variable rate indebtedness increases when interest rates increase. Interest rates are currently low relative to historical levels and may increase significantly in the future. A significant increase in interest expense could adversely affect our results of operations.
Our organizational documents contain no limitation on the amount of debt we may incur. As a result, we may become highly leveraged in the future.
Our organizational documents contain no limitations on the amount of indebtedness that we or our operating partnership may incur. We could alter the balance between our total outstanding indebtednessjoint venture partners, and the valueactivities of our assets at any time. If we become more highly leveraged, then the resulting increase in debt servicea joint venture could adversely affect our ability to make payments on our outstanding indebtedness and to pay our anticipated distributionsand/orqualify as a REIT, even though we do not control the distributions required to maintain our REIT status, and could harm our financial condition.
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WeBecause real estate is illiquid, we may not be able to sell facilitiesproperties when appropriate or on favorable terms, which could significantly impede our ability to respond to economic or other market conditions or adverse changes in the performance of our facilities.appropriate.
Real estate property investments generally cannot be sold quickly. Also, the tax laws applicable to REITs require that we hold our facilities for investment, rather than sale in the ordinary course of business, which may cause us to forgo or defer sales of facilities that otherwise would be in our best interest. Therefore, we may not be able to dispose of facilities promptly, or on favorable terms, in response to economic or other market conditions, which may adversely affect our financial position.
We face system security risks as we depend upon automated processes and the Internet.
We are increasingly dependent upon automated information technology processes. While we attempt to mitigate this risk through offsite backup procedures and contracted data centers that include, in some cases, redundant operations, we could still be severely impacted by a catastrophic occurrence, such as a natural disaster or a terrorist attack. In addition, an increasing portion of our business operations are conducted over the Internet, increasing the risk of viruses that could cause system failures and disruptions of operations despite our deployment of anti-virus measures. Experienced computer programmers may be able to penetrate our network security and misappropriate our confidential information, create system disruptions or cause shutdowns.
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Potential losses may not be covered by insurance, which could result in the loss of our investment in a facility and the future cash flows from the facility.
We carry comprehensive liability, fire, extended coverage and rental loss insurance covering all of the facilities in our portfolio. We believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss, the cost of the coverage and industry practice. We do not carry insurance for losses such as loss from riots, war or acts of God, and, in some cases, flooding, because such coverage is not available or is not available at commercially reasonable rates. Some of our policies, such as those covering losses due to terrorism, 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 facility that is uninsured or that exceeds policy limits, we could lose the capital invested in that facility as well as the anticipated future cash flows from that facility. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it impractical or undesirable to use insurance proceeds to replace a facility after it has been damaged or destroyed. In addition, if the damaged facilities are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these facilities were irreparably damaged.
Rising operating expensesTerrorist 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 facilities, 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 facilities and increase the cost of insurance coverage for our facilities, which could reduce our profitability and cash flowflow. Furthermore, any terrorist attacks or armed conflicts could result in increased volatility in or damage to the United States and funds availableworldwide financial markets and economy.
Potential liability for future distributions.
Our facilities and any other facilities we acquire or developenvironmental contamination could result in the future are and will be subject to operating risks common to real estate in general, any or all of which may negatively affect us. The facilities will be subject to increases in real estate and other tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses. If rents are being paid in an amount that is insufficient to cover operating expenses, then we could be required to expend funds for that facility’s operating expenses.
substantial costs.We could incur significant costs related to government regulation and environmental matters.
We are subject to federal, state and local environmental regulations that apply generally to the ownership of real property and the operation of self-storage facilities. If we fail to comply with those laws, we could be subject to significant fines or other governmental sanctions.
Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at a facility and may be held liable to a governmental entity or to third parties for property damage and for investigation and clean up costs incurred by such parties in connection with contamination. Such liability may be imposed whether or not the owner or operator knew of, or was responsible for, the presence of these hazardous or toxic substances. The cost of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner’s ability to sell or rent such facility or to borrow using such facility as collateral. In addition, in connection with the ownership, operation and management of real properties, we are potentially liable for property damage or injuries to persons and property.
Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of additional facilities. We obtain or examine environmental assessments from qualified and reputable environmental consulting firms (and intend to conduct such assessments prior to the acquisition or development of additional facilities). The environmental assessments received to date have not revealed, nor
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are we aware of, any environmental liability that we believe will have a material adverse effect on us. However, we cannot assure you that any environmental assessments performed have identified or will identify all material environmental conditions, that any prior owner of any facility did not create a material environmental condition not known to us or that a material environmental condition does not otherwise exist with respect to any of our facilities.
We must comply with the Americans with Disabilities Act of 1990, whichcompliance may require unanticipated expenditures.
Under the Americans with Disabilities Act of 1990 (the “ADA”), all places of public accommodation are required to meet federal requirements related to physical access and use by disabled persons. A number of other U.S. federal, state and local laws may also impose access and other similar requirements at our facilities. A failure to comply with the ADA or similar state or local requirements could result in the governmental imposition of fines or the award of damages to private litigants affected by the noncompliance. Although we believe that our facilities comply in all material respects with these requirements (or would be eligible for applicable exemptions from material requirements because of adaptive assistance provided), a
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determination that one or more of our facilities is not in compliance with the ADA or similar state or local requirements would result in the incurrence of additional costs associated with bringing the facilities into compliance. If we are required to make substantial modifications to comply with the ADA or similar state or local requirements, we may be required to incur significant unanticipated expenditures.
We may become subject to litigation or threatened litigation which may divert management time and attention, require us to pay damages and expenses or restrict the operation of our business.
We may become subject to disputes with commercial parties with whom we maintain relationships or other parties with whom we do business. Any such dispute could result in litigation between us and the other parties. Whether or not any dispute actually proceeds to litigation, we may be required to devote significant management time and attention to its successful resolution (through litigation, settlement or otherwise), which would detract from our management’s ability to focus on our business. Any such resolution could involve the payment of damages or expenses by us, which may be significant. In addition, any such resolution could involve our agreement with terms that restrict the operation of our business.
One type of commercial dispute could involve our use of our brand name and other intellectual property (for example, logos, signage and other marks), for which we generally have common law rights but no federal trademark registration. There are other commercial parties, at both a local and national level, that may assert that our use of our brand names and other intellectual property conflict with their rights to use brand names and other intellectual property that they consider to be similar to ours. Any such commercial dispute and related resolution would involve all of the risks described above, including, in particular, our agreement to restrict the use of our brand name or other intellectual property.
If in the future we elect to make joint venture investments, we could be adversely affected by a lack of sole decision-making authority, reliance on joint venture partners’ financial conditionThe terms and any disputes that might arise between us and our joint venture partners.
Although we currently have no joint venture investments, we may in the future co-invest with third parties through joint ventures. In any such joint venture, we may not be in a position to exercise sole decision-making authority regarding the facilities owned through joint ventures. Investments in joint ventures may, under certain circumstances, involve risks not present when a third party is not involved, including the possibility that joint venture partners might become bankrupt or fail to fund their share of required capital contributions. Joint venture partners may have business interests or goals that are inconsistent with our business interests or goals and may be in a position to take actions contrarycovenants relating to our
policies or objectives. Such investments also have the potential risk of impasse on strategic decisions,indebtedness could adversely impact our economic performance.
Like other real estate companies that incur debt, we are subject to risks associated with debt financing, such as a sale, because neither we nor the joint venture partner would have full control over the joint venture. Any disputes that may arise between us and our joint venture partners could result in litigation or arbitration that could increase our expenses and distract our officersand/or trustees from focusing their time and effort on our business. In
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addition, we might in certain circumstances be liable for the actionsinsufficiency of our joint venture partners,cash flow to meet required debt service payment obligations and the activities of a joint venture could adversely affectinability to refinance existing indebtedness. If our ability to qualify as a REIT, even thoughdebt cannot be paid, refinanced or extended at maturity, we do not control the joint venture.
Risks Related to Our Organization and Structure
Our organizational documents contain provisions that may have an anti-takeover effect, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our shares or otherwise benefit our shareholders.
Our declaration of trust and bylaws contain provisions that may have the effect of delaying, deferring or preventing a change in control of our company or the removal of existing management and, as a result, could prevent our shareholders from being paid a premium for their common shares over the then-prevailing market price. These provisions include limitations on the ownership of our common shares, advance notice requirements for shareholder proposals, our board of trustees’ power to reclassify shares and issue additional common shares or preferred shares and the absence of cumulative voting rights.
Our charter prohibits any person (other than members of the Amsdell family and related family trusts and entities which, as a group, may own up to 29% of our common shares) from beneficially owning more than 5% of our common shares (or up to 9.8% in the case of certain designated investment entities, as defined in our declaration of trust).
There are ownership limits and restrictions on transferability in our declaration of trust. In order for us to qualify as a REIT, no more than 50% of the value of our outstanding shares may be owned, actually or constructively, by five or fewer individuals at any time during the last half of each taxable year. To make sure that we will not fail to satisfy this requirement and for anti-takeover reasons, subject to some exceptions, our declaration of trust generally prohibits any shareholder (other than an excepted holder or certain designated investment entities, as defined in our declaration of trust) from owning (actually, constructively or by attribution), more than 5% of the value or number of our outstanding common shares. Our declaration of trust provides an excepted holder limit that allows members of the Amsdell family, certain trusts established for the benefit of members of the Amsdell family and related entities to own up to 29% of our common shares, subject to limitations contained in our declaration of trust. Entities that are defined as designated investment entities in our declaration of trust, which generally includes pension funds, mutual funds, and certain investment management companies, are permitted to own up to 9.8% of our outstanding common shares, so long as each beneficial owner of the shares owned by such designated investment entity would satisfy the 5% ownership limit if those beneficial owners owned directly their proportionate share of the common shares owned by the designated investment entity. Our board of trustees may, but is not required to, except a shareholder who is not an individual for tax purposes from the 5% ownership limit or the 9.8% designated investment entity limit if such shareholder provides information and makes representations to the board that are satisfactory to the board in its reasonable discretion demonstrating that exceeding the 5% ownership limit or the 9.8% designated investment entity limit as to such person would not jeopardize our qualification as a REIT.
These restrictions may:
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| • | discourage a tender offer or other transactions or a change in management or control that might involve a premium price for our shares or otherwise be in the best interests of our shareholders; or |
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| • | compel a shareholder who has acquired our shares in excess of these ownership limitations to dispose of the additional shares and, as a result, to forfeit the benefits of owning the additional shares. Any acquisition of our common shares in violation of these ownership restrictions will be voidab initioand will result in automatic transfers of our common shares to a charitable trust, which will be responsible for selling the common shares to permitted transferees and distributing at least a portion of the proceeds to the prohibited transferees. |
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Our declaration of trust permits our board of trustees to issue preferred shares with terms that may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our shares or otherwise benefit our shareholders.
Our declaration of trust permits our board of trustees to issue up to 40,000,000 preferred shares, having those preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications, or terms or conditions of redemption as determined by our board. In addition, our board may reclassify any unissued common shares into one or more classes or series of preferred shares. Thus, our board could authorize, without shareholder approval, the issuance of preferred shares with terms and conditions that could have the effect of discouraging a takeover or other transaction in which holders of some or a majority of our shares might receive a premium for their shares over the then-prevailing market price of our shares. We currently do not expect that the board would require shareholder approval prior to such a preferred issuance. In addition, any preferred shares that we issue would rank senior to our common shares with respect to the payment of distributions, in which case we could not pay any distributions on our common shares until full distributions have been paid with respect to such preferred shares.
Our management has limited experience operating a REIT and a public company and therefore, may not be able to successfully operatemake distributions to shareholders at expected levels or at all and may not be able to acquire new properties. Failure to make distributions to our company as a REIT and as a public company.
We have limited history operating as a REIT and as a public company. We completedshareholders could result in our
IPO in October 2004 and believe that wefailure to qualify
for taxation as a REIT for federal income tax
purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) beginning withpurposes. Furthermore, an increase in our
short taxable year ended December 31, 2004. Our board of trusteesinterest expense could adversely affect our cash flow and
executive officersability to make distributions to shareholders. If we do not meet our debt service obligations, any facilities securing such indebtedness could be foreclosed on, which would have
overall responsibility for our management and, while certain of our officers and trustees have extensive experience in real estate marketing, development, management, finance and law, our executive officers have limited experience in operating a
business in accordance with the Internal Revenue Code requirements for maintaining qualification as a REIT and in operating a public company. In addition, we have developed control systems and procedures required to operate as a public REIT, and these systems and procedures could place a significant strainmaterial adverse effect on our
management systems, infrastructurecash flow and ability to make distributions and, depending on the number of facilities foreclosed on, could threaten our continued viability.Our unsecured credit facility and unsecured term loan each contain (and any new or amended facility will likely contain) customary restrictions, requirements and other resources. We cannot assure youlimitations on our ability to incur indebtedness, including total debt to asset ratios, secured debt to total asset ratios, debt service coverage ratios and minimum ratios of unencumbered assets to unsecured debt which we must maintain. Our ability to borrow under our credit facility is (and any new or amended facility will be) subject to compliance with such financial and other covenants. In the event that our past experience will be sufficient to enable us to successfully operate our company as a REIT and as a public company. If we fail to qualify as a REIT,satisfy these covenants, we would be in default under the credit facility and are not able to avail ourselves of certain savings provisions set forth in the Internal Revenue Code, our distributions to shareholders will not be deductible for federal income tax purposes,term loan and therefore we willmay be required to pay corporate tax at applicablerepay 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.
Increases in interest rates on variable rate indebtedness would increase our taxable income,interest expense, which will substantially reducecould adversely affect our earningscash 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. We have entered into and may, reducefrom time to time, enter into agreements such as interest rate hedges, swaps, floors, caps and other interest rate hedging contracts with respect to a portion of our variable rate debt. 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.
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 contain no limitations on the amount of indebtedness that we or our operating partnership may incur. We could alter the balance between our total outstanding indebtedness and the value of our common shares andassets at any time. If we become more highly leveraged, then the resulting increase in debt service could adversely affect our ability to raise additional capital. We would not be ablemake payments on our outstanding indebtedness and to electpay our anticipated distributions and/or the distributions required to be taxed as amaintain our REIT for four years followingstatus, and could harm our financial condition.
Our ability to make distributions is subject to various risks.
Historically, we have paid quarterly distributions to our shareholders. Our ability to make distributions in the year we first failed to qualify unless future will depend upon:
·the Internal Revenue Service (the “IRS”) were to grant us relief under certain statutory provisions.
Certain provisions of Maryland law could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our shares or otherwise benefit our shareholders.
Certain provisions of Maryland law may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holdersoperational and financial performance 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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| • | “control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares” from a party other than the issuer) have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two thirds of all the votes entitled to be cast on the matter, excluding all interested shares, and are subject to redemption in certain circumstances. |
We have opted out of these provisions of Maryland law. However, our board of trustees may opt to make these provisions applicable to us at any time.
Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities collectively own an approximate 16.8% beneficial interest in our company on a fully diluted basis and therefore have the ability to exercise significant influence on our company and any matter presented to our shareholders.
Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities collectively own approximately 15.1% of our outstanding common shares, and an approximate 16.8% beneficial interest in our company on a fully diluted basis. Consequently, these persons and entities may be able to significantly influence the outcome of matters submitted for shareholder action, including the election of our board of trustees and approval of significant corporate transactions, including business combinations, consolidations and mergers and the determination of ourday-to-day· business decisions and management policies. As a result, Robert J. Amsdell, Barry L. Amsdell and Todd C. Amsdell have substantial influence on us and could exercise their influence in a manner that conflicts with the interests of our other shareholders.
Robert J. Amsdell, our Chairman and Chief Executive Officer, and Barry L. Amsdell, one of our trustees, have interests, through their ownership of limited partner units in our operating partnership and their ownership, through Rising Tide Development, of the option facilities, that may conflict with the interests of our other shareholders.
Robert J. Amsdell, our Chairman and Chief Executive Officer, and Barry L. Amsdell, one of our trustees, own limited partner units in our operating partnership. These individuals may have personal interests that conflict with the interests of our shareholderscapital expenditures with respect to
business decisions affecting usexisting and newly acquired facilities;·general and administrative costs associated with our operation as a publicly-held REIT;
·the amount of, and the interest rates on, our debt; and
·the absence of significant expenditures relating to environmental and other regulatory matters.
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 operating partnership, such as interests in the timing and pricing of facility sales or refinancings in order to obtain favorable tax treatment. As a result, the effect of certain transactions on these unitholders may influence our decisions affecting these facilities.
In addition, Robert J. Amsdell and Barry L. Amsdell own all of the equity interests in Rising Tide Development, which currently owns 13 of the option facilities and has the right to acquire two option facilities from unaffiliated third parties. We have options to purchase these 15 option facilities from Rising Tide Development. As a result of their ownership interest in Rising Tide Development, Robert J. Amsdell and Barry L. Amsdell may have personal interests that conflict with the interests of our shareholders with respect to decisions affecting our exercise of our right to purchase any or all of the option facilities or our management of the option facilities. For example, it could be in the best interests of Rising Tide Development, at some time during the term of the option agreement, to seek our agreement to permit it to sell any or all of the option facilities to an outside third party rather than to our operating partnership. Under these circumstances, our interests would conflict with the fiduciary obligations of Robert J. Amsdell and Barry L. Amsdell as officers and directors of the entity that manages Rising Tide Development and their economic interests as the holders of the equity of Rising Tide Development. Although we expect that our decisions regarding our relationship with Rising Tide Development will be made by the independent members of our board of trustees, we cannot assure you that we will not be adversely affected by conflicts arising from Robert J. Amsdell and Barry L. Amsdell’s relationship with Rising Tide Development.
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Our Chairman and Chief Executive Officer has outside business interests that could require significant time and attention and may interfere with his ability to devote timemake distributions to our business and affairs.
Robert J. Amsdell, our Chairman and Chief Executive Officer, has outside business interests which could require significant time and attention. These interests include the ownership and operation of certain office and industrial properties and ownership of the entity that owns or in some cases has a right to purchase the option facilities. Mr. Amsdell’s employment agreement permits him to devote time to his outside business interests, so long as such activities do not materially or adversely interfere with his duties to us. In some cases, Mr. Amsdell may have fiduciary obligations associated with these business interests that interfere with his ability to devote time to our business and affairs and that could adversely affect our operations. In particular, Mr. Amsdell also serves as an officer or on the board of directors or comparable governing body of various entities owned and controlled by him and Barry L. Amsdell, which entities manage the office and industrial properties and own the option facilities referred to above. As a result of the customary requirement of a fiduciary to exercise the level of care a prudent person would exercise, Mr. Amsdell may be required, through his service as an officer and director of these various entities, to maintain significant familiarity with the businesses and operations of such entities. As well, Mr. Amsdell may be required from time to time to take action as an officer or director with respect to these entities. These activities could require significant time and attention of Mr. Amsdell.
shareholders.Our business could be harmed if any of our key personnel, Robert J. Amsdell, Steven G. Osgood, Todd C. Amsdell and Tedd D. Towsley, all of whom have long-standing business relationships in the self-storage industry, terminated his employment with us.
Our continued success depends on the continued services of our Chairman and Chief Executive Officer and our other executive officers. Four of our top executives, Robert J. Amsdell, Steven G. Osgood, Todd C. Amsdell and Tedd D. Towsley, have an average of approximately 23 years of real estate experience and have worked in the self-storage industry for an average of approximately 17 years. Although we have employment agreements with our Chairman and Chief Executive Officer and the other members of our senior management team, we cannot provide any assurance that any of them will remain in our employ. The loss of services of one or more members of our senior management team, particularly our Chairman and Chief Executive Officer, could adversely affect our operations and our future growth.
We depend on external sources of capital that are outside of our control; the unavailability of capital from external sources could adversely affect our ability to acquire or develop facilities, satisfy our debt obligationsand/or make distributions to shareholders.
To continue to qualify as a REIT, we are required to distribute to our shareholders each year at least 90% of our REIT taxable income, excluding net capital gains or pay applicable income taxes. In order to eliminate federal income tax, we will be required to distribute annually 100% of our net taxable income, including capital gains. Because of these distribution requirements, we likely will not be able to fund all future capital needs, including capital for acquisitions and facility development, with income from operations. We therefore will have to rely on third-party sources of capital, which may or may not be available on favorable terms, if at all. Our access to third-party sources of capital depends on a number of things, including the market’s perception of our growth potential and our current and potential future earnings and our ability to continue to qualify as a REIT for federal income tax purposes. If we are unable to obtain third-party sources of capital, we may not be able to acquire or develop facilities when strategic opportunities exist, satisfy our debt obligations or make distributions to shareholders that would permit us to qualify as a REIT or avoid paying tax on our REIT taxable income.
Our shareholders have limited control to prevent us from making any changes to our investment and financing policies that they believe could harm our business, prospects, operating results or share price.
Our board of trustees has adopted policies with respect to certain activities. These policies may be amended or revised from time to time at the discretion of our board of trustees without a vote of our shareholders. This means that our shareholders have limited control over changes in our policies. Such changes
21
in our policies intended to improve, expand or diversify our business may not have the anticipated effects and consequently may adversely affect our business and prospects, results of operations and share price.
Our rights and the rights of our shareholders to take action against our trustees and officers are limited, and therefore our and our shareholders’ ability to recover damages from our trustees and officers is limited.
Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our declaration of trust and bylaws require us to indemnify our trustees and officers for actions taken by them in those capacities to the extent permitted by Maryland law. Accordingly, in the event that actions taken in good faith by any trustee or officer impede our performance, our and our shareholders’ ability to recover damages from that trustee or officer will be limited.
We may have assumed unknown liabilities in connection with our formation transactions that occurred at the time of our IPO and will not have recourse to Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities for any of these liabilities.
As part of our formation transactions that occurred at the time of our IPO, we acquired certain entitiesand/or assets that are subject to existing liabilities, some of which may be unknown at the present time. Unknown liabilities might include liabilities for cleanup or remediation of undisclosed environmental conditions, claims by customers, vendors or other persons dealing with our predecessor entities (that have not been asserted or threatened to date), tax liabilities, and accrued but unpaid liabilities incurred in the ordinary course of business. While in some instances we may have the right to seek reimbursement against an insurer or another third party for certain of these liabilities, we will not have recourse to Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell or any of the Amsdell Entities for any of these liabilities.
Our share price could be volatile and could decline, resulting in a substantial or complete loss on your investment.
At times the stock markets, including the New York Stock Exchange, on which our common shares are listed, have experienced significant price and volume fluctuations. As a result, the market price of our common shares could be similarly volatile, and investors in our common shares may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects.
The price of our common shares could fluctuate in response to a number of factors, including:
| | |
| • | our operating performance and the performance of other similar companies; |
|
| • | actual or anticipated differences in our quarterly operating results; |
|
| • | changes in our revenues or earnings estimates or recommendations by securities analysts; |
|
| • | publication of research reports about us or our industry by securities analysts; |
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| • | additions and departures of key personnel; |
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| • | changes in market interest rates; |
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| • | strategic decisions by us or our competitors, such as acquisitions, divestments, spin-offs, joint ventures, strategic investments or changes in business strategy; |
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| • | the passage of legislation or other regulatory developments that adversely affect us or our industry; |
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| • | speculation in the press or investment community; |
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| • | actions by institutional shareholders or hedge funds; |
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| • | changes in accounting principles; |
22
| | |
| • | terrorist acts; and |
|
| • | general market conditions, including factors unrelated to our performance. |
In the past, securities class action litigation has been instituted against companies following periods of volatility in their stock price. If this type of litigation were to be initiated in respect of our shares, it could result in substantial costs and divert our management’s attention and resources.
If a large number of our common shares are sold in the public market, the sales could reduce the trading price of our common shares and impede our ability to raise future capital.
We cannot predict what effect, if any, future sales of our common shares, or the availability of common shares for future sale, will have on the market price of our common shares. If our shareholders sell, or the market perceives that our shareholders intend to sell, substantial amounts of our common shares in the public market, the market price of our common shares could decline significantly. These sales also might make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate.
As of December 31, 2005, we had outstanding approximately 57.0 million common shares. Of these shares, the approximately 48.4 million shares sold in our IPO and our October 2005 public offering are freely tradable, except for any shares held by our “affiliates,” as that term is defined by Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities have been granted registration rights that will enable them to sell shares received in our formation transactions or upon redemption of operating partnership units in market transactions, subject to certain limitations. Beginning in October 2005, Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities became entitled to require us to register their shares for public sale subject to certain exceptions, limitations and conditions precedent. If they exercise all of their registration rights, approximately 9.7 million shares (which number includes the shares issuable upon the redemption of units in our operating partnership) will become available for sale into the market, subject only to applicable securities rules and regulations, which could reduce the market price for our common shares. In addition, Rising Tide Development is entitled to require us to register approximately 0.2 million of our common shares that it owns for public sale and, beginning as early as March 2006, Rising Tide Development will be entitled to require us to register another approximately 0.2 million common shares for public sale, both subject to certain exceptions, limitations and conditions precedent.
Tax Risks
If we fail to qualify as a REIT, our distributions to shareholders would not bedeductible for federal income tax purposes, and therefore we would be required to paycorporate income tax at applicable rates on our taxable income, which would substantiallyreduce our earnings and may substantially reduce the value of our common shares andadversely affect our ability to raise additional capital.capital.
We have electedoperate our business to qualify to be taxed as a REIT for federal income tax purposes commencing with our first taxable year ending December 31, 2004, and we plan to continue to operate so that we can meet the requirements for qualification and taxation as a REIT.purposes. We have not requested and do not plan to request a ruling from the IRS that we qualify as a REIT, and the statements in this Annual Report onForm 10-K are not binding on the IRS or any court. As a REIT, we generally will not be subject to federal income tax on ourthe income that we distribute currently to our shareholders. Many of the REIT requirements, however, are highly technical and complex. The determination that we are a REIT requires an analysis of various factual matters and circumstances that may not be totally within our control. For example, to qualify as a REIT, at least 95% of our gross income must come from specific passive sources, such as rent, that are itemized in the REIT tax laws. In addition, to qualify as a REIT, we cannot own specified amounts of debt and equity securities of some issuers. We also are required to distribute to our shareholders with respect to each year at least 90% of our REIT taxable income (excluding net capital gains). The fact that we hold substantially all of our assets through the operating partnership and its subsidiaries further complicates the application of the REIT
23
requirements for us. Even a technical or inadvertent mistake could jeopardize our REIT status and, given the highly complex nature of the rules governing REITs and the ongoing importance of factual determinations, we cannot provide any assurance that we will continue to qualify as a REIT. Furthermore, Congress and the IRS might make changes to the tax laws and regulations, and
16
the courts might issue new rulings, that make it more difficult, or impossible, for us to remain qualified as a REIT. If we fail to qualify as a REIT for federal income tax purposes and are able to avail ourselves of one or more of the statutory savings provisions in order to maintain our REIT status, we would nevertheless be required to pay penalty taxes of $50,000 or more for each such failure.
If we fail to qualify as a REIT for federal income tax purposes, and are unable to avail ourselves of certain savings provisions set forth in the Internal Revenue Code, we would be subject to federal income tax at regular corporate rates on all of our income. As a taxable corporation, we would not be allowed to take a deduction for distributions to shareholders in computing our taxable income or pass through long term capital gains to individual shareholders at favorable rates. We also could be subject to the federal alternative minimum tax and possibly increased state and local taxes. We would not be able to elect to be taxed as a REIT for four years following the year we first failed to qualify unless the IRS were to grant us relief under certain statutory provisions. If we failed to qualify as a REIT, we would have to pay significant income taxes, which would reduce our net earnings available for investment or distribution to our shareholders. This likely would have a significant adverse effect on our earnings and likely would adversely affect the value of our securities. In addition, we would no longer be required to pay any distributions to shareholders.
As a REIT, we are subject to certain distribution requirements, including the requirement to distribute 90% of our REIT taxable income that may result in our having to make distributions at 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.
We will pay some taxes even if we qualify as a REIT.
Even if we qualify as a REIT for federal income tax purposes, we will be required to pay certain federal, state and local taxes on our income and property. For example, we will be subject to income tax to the extent we distribute less than 100% of our REIT taxable income, including capital gains. Additionally, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which dividends paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. Moreover, if we have net income from “prohibited transactions,” that income will be subject to a 100% penalty tax. In general, prohibited transactions are sales or other dispositions of property held primarily for sale to customers in the ordinary course of business. The determination as to whether a particular sale is a prohibited transaction depends on the facts and circumstances related to that sale. We cannot guarantee that sales of our properties would not be prohibited transactions unless we comply with certain statutory safe-harbor provisions. The need to avoid prohibited transactions could cause us to forego or defer sales of facilities that our predecessors otherwise would have sold or that might otherwise be in our best interest to sell.
In addition, any net taxable income earned directly by our taxable REIT subsidiaries, or through entities that are disregarded for federal income tax purposes as entities separate from our taxable REIT subsidiaries, will be subject to federal and possibly state corporate income tax. We have elected to treat U-Store-It Mini Warehouse Co. as a taxable REIT subsidiary, and we may elect to treat other subsidiaries as taxable REIT subsidiaries in the future. In this regard, several provisions of the laws applicable to REITs and their subsidiaries ensure that a taxable REIT subsidiary will be subject to an appropriate level of federal income taxation. For example, a taxable REIT subsidiary is limited in its ability to deduct certain interest payments made to an affiliated REIT. In addition, the REIT has to pay a 100% penalty tax on some payments that it receives or on some deductions taken by a taxable REIT subsidiary if the economic arrangements between the REIT, the REIT’s customers, and the taxable REIT subsidiary are not comparable to similar arrangements between unrelated parties. Finally, some state and local jurisdictions may tax some of our income even though as a REIT we are not subject to federal income tax on that income because not all states and localities follow the federal income tax treatment of REITs. To the extent that we and our affiliates are required to pay federal, state and local taxes, we will have less cash available for distributions to our shareholders.
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ITEM 1B. | UNRESOLVED STAFF COMMENTS |
None.
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We cannot assure you of our ability to pay dividends in the future.
We intend 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 qualify for the tax benefits accorded to a REIT under the Internal Revenue Code. We have not established a minimum dividends payment level and our ability to pay dividends may be adversely affected by the risk factors described in this Annual Report on Form 10-K. All distributions will be made at the discretion of our Board of Trustees and will depend on our earnings, our financial condition, maintenance of our REIT status and such other factors as our Board of Trustees may deem relevant from time to time. We cannot assure you that we will be able to pay dividends in the future.
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OverviewWe are dependent upon our key personnel whose continued service is not guaranteed.
Our top executives, Dean Jernigan, Christopher Marr, Kathleen Weigand, Stephen Nichols and Timothy Martin, have extensive self-storage, real estate and public company experience. Although we have employment agreements with all of the members of our senior management team, we cannot provide any assurance that any of them will remain in our employ. The loss of services of one or more members of our senior management team, particularly Dean Jernigan, our President and Chief Executive Officer, could adversely affect our operations and our future growth.
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.
As of December 31, 2005,2007, we had approximately 880 field personnel involved in the management and operation of our facilities. The customer service, marketing skills and knowledge of local market demand and competitive dynamics of our facility managers are contributing factors to our ability to maximize our rental income and to achieve the highest sustainable rent levels at each of our facilities. 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 harmed.
Our insurance coverage may not comply fully with certain loan requirements.
We maintain comprehensive insurance on each of our self-storage facilities in amounts sufficient to permit replacement of the property, subject to applicable deductibles. Certain of our properties serve as collateral for our mortgage-backed debt, some of which was assumed in connection with our acquisition of facilities, that requires us to maintain insurance 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 in any respect, the lender could declare a default that could affect our ability to obtain future financing and could 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 the Company’s insurance costs may increase.
Certain provisions of Maryland law could inhibit changes in control, which maydiscourage third parties from conducting a tender offer or seeking other change ofcontrol transactions that could involve a premium price for our shares or otherwisebenefit our shareholders.
Certain provisions of Maryland law may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of our common shares with the opportunity to realize a premium over the then-prevailing market price of those shares, including:
·“business combination moratorium/fair price” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested shareholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes stringent fair price and super-majority shareholder voting requirements on these combinations; and
·“control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing Trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares” from a party other than the issuer) have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two thirds of all the votes entitled to be cast on the matter, excluding all interested shares, and are subject to redemption in certain circumstances.
We have opted out of these provisions of Maryland law. However, our Board of Trustees may opt to make these provisions applicable to us at any time.
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Robert J. Amsdell, our former Chairman and Chief Executive Officer; Barry L. Amsdell, a former Trustee; Todd C. Amsdell, our former Chief Operating Officer and former President of our development subsidiary; and the Amsdell Entities (collectively, “The Amsdell Family”)collectively own an approximate 23.3% beneficial interest in our company on a fullydiluted basis and therefore have the ability to exercise significant influence on any matter presented to our shareholders.
The Amsdell Family collectively owns approximately 21.3% of our outstanding common shares, and an approximate 23.3% beneficial interest in our company on a fully diluted basis. Consequently, the Amsdell Family may be able to significantly influence the outcome of matters submitted for shareholder action, including the election of our Board of Trustees and approval of significant corporate transactions, including business combinations, consolidations and mergers. As a result, Robert J. Amsdell, Barry L. Amsdell and Todd C. Amsdell have substantial influence on us and could exercise their influence in a manner that conflicts with the interests of our other shareholders.
Robert J. Amsdell and Barry L. Amsdell have interests, through their ownership of limited partner unitsin our operating partnership that may conflict with the interests of our othershareholders.
Robert J. Amsdell and Barry L. Amsdell own limited partner units in our operating partnership. These individuals may have personal interests that conflict with the interests of our shareholders with respect to business decisions affecting us and our operating partnership, such as interests in the timing and pricing of facility sales or refinancings in order to obtain favorable tax treatment.
Our shareholders have limited control to prevent us from making any changes to ourinvestment and financing policies.
Our Board of Trustees has adopted policies with respect to certain activities. These policies may be amended or revised from time to time at the discretion of our Board of Trustees without a vote of our shareholders. This means that our shareholders have limited control over changes in our policies. Such changes 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 andofficers 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 to the extent permitted by Maryland law. Accordingly, in the event that actions taken in good faith by any Trustee or officer impede our performance, our and our shareholders’ ability to recover damages from that Trustee or officer will be limited.
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 common shares 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;
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·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 common shares is based primarily upon the market’s perception of our growth potential and our current and potential future earnings and cash distributions. Consequently, our common shares may trade at prices that are higher or lower than our net asset value per common share. If our future earnings or cash distributions are less than expected, it is likely that the market price of our common shares will diminish.
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 developments or acquisitions or to repay indebtedness. Our Board of Trustees may authorize the issuance of additional equity securities 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 the issuance of common and preferred equity.
Our declaration of trust permits our Board of Trustees to issue preferred shares withterms that may discourage third parties from conducting a tender offer or seekingother change of control transactions that could involve a premium price for ourshares or otherwise benefit our shareholders.
Our declaration of trust permits our Board of Trustees to issue up to 40,000,000 preferred shares, having those preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications, or terms or conditions of redemption as determined by our Board. In addition, our Board may reclassify any unissued common shares into one or more classes or series of preferred shares. Thus, our Board could authorize, without shareholder approval, the issuance of preferred shares with terms and conditions that could have the effect of discouraging a takeover or other transaction in which holders of some or a majority of our shares might receive a premium for their shares over the then-prevailing market price of our shares. We currently do not expect that the Board would require shareholder approval prior to such a preferred issuance. In addition, any preferred shares that we issue would rank senior to our common shares with respect to the payment of distributions, in which case we could not pay any distributions on our common shares until full distributions have been paid with respect to such preferred shares.
The acquisition of new facilities that lack operating history with us will give rise to difficulties in predicting revenue potential.
We will continue to acquire additional facilities. These acquisitions could fail to perform in accordance with expectations. If we fail to accurately estimate occupancy levels, operating costs or costs of improvements to bring an acquired facility up to the standards established for our intended market position, the performance of the facility may be below expectations. Acquired facilities may have characteristics or deficiencies affecting their valuation or revenue potential that we have not yet discovered. We cannot assure you that the performance of facilities acquired by us will increase or be maintained under our management.
Our financial performance is dependent upon the economic and other conditions of the markets in which our facilities are located.
We are susceptible to adverse developments in the markets in which we operate, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors. Our facilities in Florida, California, Texas, Ohio, Tennessee, Illinois and Arizona accounted for approximately 16%, 16%, 10%, 8%, 7%, 6% and 5%, respectively, of our total rentable square feet as of December 31, 2007. As a result of this geographic concentration of our facilities, 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.
Our business may be sensitive to economic conditions that impact consumer spending.
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Our results of operations may be sensitive to changes in overall economic conditions that impact consumer spending, including discretionary spending. Future 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.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Overview
As of December 31, 2007, we owned 339409 self-storage facilities located in 26 states and aggregating approximately 20.826.1 million rentable square feet. The following table sets forth certain summary information regarding our facilities by state as of December 31, 2005.
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Total
| | | % of Total
| | | | |
| | | Number of
| | | Number of
| | | Rentable
| | | Rentable
| | | | |
State | | Facilities | | | Units | | | Square Feet | | | Square Feet | | | Occupancy (1) | |
| |
| Florida | | | 52 | | | | 34,506 | | | | 3,759,740 | | | | 18.0% | | | | 87.9% | |
| California | | | 43 | | | | 22,430 | | | | 2,567,399 | | | | 12.2% | | | | 77.5% | |
| Ohio | | | 30 | | | | 13,232 | | | | 1,709,650 | | | | 8.2% | | | | 80.0% | |
| Texas | | | 28 | | | | 12,610 | | | | 1,593,438 | | | | 7.7% | | | | 76.2% | |
| Illinois | | | 27 | | | | 14,157 | | | | 1,616,430 | | | | 7.8% | | | | 76.4% | |
| Arizona | | | 21 | | | | 10,086 | | | | 1,079,820 | | | | 5.2% | | | | 87.1% | |
| Tennessee | | | 18 | | | | 8,665 | | | | 1,096,615 | | | | 5.3% | | | | 82.3% | |
| Connecticut | | | 17 | | | | 7,373 | | | | 873,860 | | | | 4.2% | | | | 75.7% | |
| New Jersey | | | 14 | | | | 9,697 | | | | 940,657 | | | | 4.5% | | | | 79.7% | |
| Colorado | | | 12 | | | | 5,753 | | | | 646,415 | | | | 3.1% | | | | 78.8% | |
| New Mexico | | | 10 | | | | 3,788 | | | | 407,459 | | | | 2.0% | | | | 90.4% | |
| Indiana | | | 9 | | | | 5,419 | | | | 606,599 | | | | 2.9% | | | | 72.4% | |
| North Carolina | | | 8 | | | | 4,743 | | | | 555,779 | | | | 2.7% | | | | 87.1% | |
| Louisiana | | | 6 | | | | 2,329 | | | | 334,324 | | | | 1.6% | | | | 97.1% | |
| Mississippi | | | 6 | | | | 2,478 | | | | 318,130 | | | | 1.5% | | | | 83.9% | |
| New York | | | 6 | | | | 3,195 | | | | 335,300 | | | | 1.6% | | | | 80.7% | |
| Georgia | | | 5 | | | | 3,635 | | | | 431,387 | | | | 2.1% | | | | 76.4% | |
| Maryland | | | 5 | | | | 4,097 | | | | 505,808 | | | | 2.4% | | | | 79.3% | |
| Utah | | | 5 | | | | 2,376 | | | | 244,948 | | | | 1.2% | | | | 84.5% | |
| Michigan | | | 4 | | | | 1,787 | | | | 272,911 | | | | 1.3% | | | | 80.1% | |
| Alabama | | | 3 | | | | 1,655 | | | | 234,631 | | | | 1.1% | | | | 82.7% | |
| South Carolina | | | 3 | | | | 1,281 | | | | 214,113 | | | | 1.0% | | | | 74.2% | |
| Massachusetts | | | 2 | | | | 1,134 | | | | 115,541 | | | | 0.6% | | | | 71.2% | |
| Pennsylvania | | | 2 | | | | 1,585 | | | | 177,411 | | | | 0.9% | | | | 83.8% | |
| Virginia | | | 2 | | | | 1,091 | | | | 131,368 | | | | 0.6% | | | | 71.6% | |
| Wisconsin | | | 1 | | | | 489 | | | | 58,713 | | | | 0.3% | | | | 70.9% | |
| | | | | | | | | | | | | | | | | | | | | |
Total/Weighted Average | | | 339 | | | | 179,591 | | | | 20,828,446 | | | | 100.0% | | | | 81.2% | |
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(1) | | Represents total occupied square feet divided by total rentable square feet, as of December 31, 2005. |
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2007.
| | | | | | Total | | % of Total | | | |
| | Number of | | Number of | | Rentable | | Rentable | | Occupied | |
State | | Facilities | | Units | | Square Feet | | Square Feet | | Square Feet | |
| | | | | | | | | | | |
California | | 60 | | 37,018 | | 4,133,441 | | 15.8 | % | 69.7 | % |
Florida | | 59 | | 39,973 | | 4,173,724 | | 16.0 | % | 80.2 | % |
Texas | | 43 | | 21,003 | | 2,627,795 | | 10.1 | % | 81.1 | % |
Ohio | | 35 | | 16,364 | | 1,999,099 | | 7.7 | % | 79.9 | % |
Illinois | | 27 | | 14,020 | | 1,610,610 | | 6.2 | % | 79.9 | % |
Arizona | | 24 | | 12,526 | | 1,247,447 | | 4.8 | % | 84.0 | % |
Tennessee | | 24 | | 12,930 | | 1,686,433 | | 6.3 | % | 82.5 | % |
Colorado | | 20 | | 10,389 | | 1,200,834 | | 4.6 | % | 87.9 | % |
Connecticut | | 17 | | 7,255 | | 845,781 | | 3.2 | % | 76.5 | % |
New Jersey | | 15 | | 10,266 | | 1,003,586 | | 3.8 | % | 75.0 | % |
Georgia | | 13 | | 9,245 | | 1,060,144 | | 4.1 | % | 76.8 | % |
New Mexico | | 11 | | 4,247 | | 459,020 | | 1.8 | % | 89.6 | % |
Indiana | | 9 | | 5,302 | | 599,457 | | 2.3 | % | 80.4 | % |
North Carolina | | 8 | | 4,810 | | 557,459 | | 2.1 | % | 86.5 | % |
Mississippi | | 6 | | 2,824 | | 353,431 | | 1.4 | % | 82.5 | % |
New York | | 6 | | 3,208 | | 349,453 | | 1.3 | % | 83.8 | % |
Louisiana | | 5 | | 2,358 | | 304,555 | | 1.2 | % | 93.2 | % |
Maryland | | 5 | | 4,232 | | 517,895 | | 2.0 | % | 86.5 | % |
Utah | | 5 | | 2,336 | | 241,823 | | 0.9 | % | 93.8 | % |
Michigan | | 4 | | 1,888 | | 270,769 | | 1.0 | % | 78.6 | % |
Alabama | | 3 | | 1,632 | | 237,583 | | 0.9 | % | 81.5 | % |
Massachusetts | | 3 | | 1,776 | | 172,928 | | 0.7 | % | 74.7 | % |
Nevada | | 2 | | 940 | | 99,882 | | 0.4 | % | 83.0 | % |
Pennsylvania | | 2 | | 1,609 | | 176,577 | | 0.7 | % | 79.0 | % |
Virginia | | 2 | | 1,214 | | 130,943 | | 0.5 | % | 59.8 | % |
Wisconsin | | 1 | | 486 | | 58,515 | | 0.2 | % | 84.1 | % |
Total/Weighted Average | | 409 | | 229,851 | | 26,119,184 | | 100.0 | % | 79.5 | % |
21
Our Facilities
The following table sets forth certain additional information with respect to each of our facilities as of December 31, 2005.2007. Our ownership of each facility consists of a fee interest in the facility held by U-Store-It, L.P., our operating partnership, or one of its subsidiaries, except for our Morris Township, NJ facility, where we have a ground lease. In addition, small parcels of land at five of our other facilities are subject to ground leases.
22
| | Year Acquired/ | | Year | | Rentable | | | | | | Manager | | % Climate | |
Facility Location | | Developed (1) | | Built | | Square Feet | | Occupancy (2) | | Units | | Apartment (3) | | Controlled (4) | |
Mobile I, AL | | 1997 | | 1987 | | 65,198 | | 91.1 | % | 468 | | N | | 0.0 | % |
Mobile II, AL † | | 1997 | | 1974/90 | | 129,260 | | 73.2 | % | 801 | | Y | | 1.1 | % |
Mobile III, AL | | 1998 | | 1988/94 | | 43,125 | | 91.9 | % | 363 | | Y | | 34.5 | % |
Chandler, AZ | | 2005 | | 1985 | | 47,520 | | 93.8 | % | 466 | | Y | | 6.9 | % |
Glendale, AZ | | 1998 | | 1987 | | 56,830 | | 81.3 | % | 554 | | Y | | 0.0 | % |
Green Valley, AZ | | 2005 | | 1985 | | 25,200 | | 67.8 | % | 277 | | N | | 7.9 | % |
Mesa I, AZ | | 2006 | | 1985 | | 52,375 | | 91.1 | % | 535 | | N | | 0.0 | % |
Mesa II, AZ | | 2006 | | 1981 | | 45,295 | | 85.4 | % | 420 | | Y | | 8.4 | % |
Mesa III, AZ | | 2006 | | 1986 | | 58,264 | | 78.3 | % | 514 | | Y | | 4.1 | % |
Phoenix I, AZ | | 2006 | | 1987 | | 100,887 | | 76.5 | % | 822 | | Y | | 8.8 | % |
Phoenix II, AZ | | 2006 | | 1974 | | 45,270 | | 75.8 | % | 440 | | Y | | 0.0 | % |
Scottsdale, AZ | | 1998 | | 1995 | | 80,925 | | 90.3 | % | 692 | | Y | | 9.5 | % |
Tempe, AZ | | 2005 | | 1975 | | 54,000 | | 84.1 | % | 410 | | Y | | 14.0 | % |
Tucson I, AZ | | 1998 | | 1974 | | 59,350 | | 87.7 | % | 505 | | Y | | 0.0 | % |
Tucson II, AZ | | 1998 | | 1988 | | 43,950 | | 84.7 | % | 543 | | Y | | 100.0 | % |
Tucson III, AZ | | 2005 | | 1979 | | 49,822 | | 78.2 | % | 535 | | N | | 0.0 | % |
Tucson IV, AZ | | 2005 | | 1982 | | 47,840 | | 88.5 | % | 524 | | Y | | 3.7 | % |
Tucson IX, AZ | | 2005 | | 1984 | | 67,656 | | 81.7 | % | 653 | | Y | | 2.0 | % |
Tucson V, AZ | | 2005 | | 1982 | | 45,160 | | 82.8 | % | 452 | | Y | | 3.0 | % |
Tucson VI, AZ | | 2005 | | 1982 | | 40,778 | | 89.3 | % | 451 | | Y | | 3.5 | % |
Tucson VII, AZ | | 2005 | | 1982 | | 52,738 | | 85.4 | % | 637 | | Y | | 2.0 | % |
Tucson VIII, AZ | | 2005 | | 1979 | | 46,800 | | 83.9 | % | 504 | | Y | | 0.0 | % |
Tucson X, AZ | | 2005 | | 1981 | | 46,350 | | 84.6 | % | 491 | | N | | 0.0 | % |
Tucson XI, AZ | | 2005 | | 1974 | | 42,800 | | 82.0 | % | 465 | | Y | | 0.0 | % |
Tucson XII, AZ | | 2005 | | 1974 | | 42,375 | | 87.7 | % | 474 | | Y | | 4.8 | % |
Tucson XIII, AZ | | 2005 | | 1974 | | 45,792 | | 90.0 | % | 583 | | Y | | 0.0 | % |
Tucson XIV, AZ | | 2005 | | 1976 | | 49,470 | | 84.0 | % | 579 | | Y | | 8.8 | % |
Apple Valley I, CA | | 1997 | | 1984 | | 73,340 | | 48.3 | % | 594 | | Y | | 0.0 | % |
Apple Valley II, CA | | 1997 | | 1988 | | 62,115 | | 62.9 | % | 495 | | Y | | 7.0 | % |
Benicia, CA | | 2005 | | 1988/93/05 | | 74,920 | | 82.9 | % | 762 | | Y | | 0.0 | % |
Bloomington I, CA | | 1997 | | 1987 | | 28,550 | | 65.8 | % | 218 | | N | | 0.0 | % |
Bloomington II, CA † | | 1997 | | 1987 | | 25,860 | | 97.1 | % | 20 | | N | | 0.0 | % |
Cathedral City, CA † | | 2006 | | 1982/92 | | 129,048 | | 54.3 | % | 1029 | | Y | | 1.9 | % |
Citrus Heights, CA | | 2005 | | 1987 | | 75,620 | | 62.0 | % | 693 | | Y | | 0.0 | % |
Diamond Bar, CA | | 2005 | | 1988 | | 103,228 | | 81.7 | % | 918 | | Y | | 0.0 | % |
Escondido, CA | | 2007 | | 2002 | | 143,145 | | 77.2 | % | 1296 | | Y | | 6.7 | % |
Fallbrook, CA | | 1997 | | 1985/88 | | 46,370 | | 82.8 | % | 461 | | Y | | 0.0 | % |
Hemet, CA | | 1997 | | 1989 | | 66,040 | | 76.1 | % | 445 | | Y | | 0.0 | % |
Highland I, CA | | 1997 | | 1987 | | 76,765 | | 58.0 | % | 860 | | Y | | 0.0 | % |
Highland II, CA | | 2006 | | 1982 | | 62,257 | | 70.1 | % | 536 | | Y | | 0.0 | % |
Lancaster, CA | | 2001 | | 1987 | | 61,275 | | 53.1 | % | 414 | | Y | | 0.0 | % |
Long Beach, CA | | 2006 | | 1974 | | 125,213 | | 76.5 | % | 1424 | | Y | | 0.0 | % |
Murrieta, CA | | 2005 | | 1996 | | 49,895 | | 68.0 | % | 474 | | Y | | 3.3 | % |
North Highlands, CA | | 2005 | | 1980 | | 57,244 | | 89.6 | % | 481 | | Y | | 0.0 | % |
Orangevale, CA | | 2005 | | 1980 | | 50,492 | | 79.4 | % | 556 | | Y | | 0.0 | % |
Palm Springs I, CA | | 2006 | | 1989 | | 72,775 | | 68.0 | % | 582 | | Y | | 8.6 | % |
Palm Springs II, CA † | | 2006 | | 1982/89 | | 122,745 | | 57.8 | % | 634 | | Y | | 0.0 | % |
Pleasanton, CA | | 2005 | | 2003 | | 82,415 | | 86.0 | % | 718 | | Y | | 0.0 | % |
Rancho Cordova, CA | | 2005 | | 1979 | | 53,928 | | 79.0 | % | 484 | | Y | | 0.0 | % |
Redlands, CA | | 1997 | | 1985 | | 62,805 | | 80.0 | % | 548 | | N | | 0.0 | % |
Rialto, CA | | 1997 | | 1987 | | 57,371 | | 64.5 | % | 519 | | Y | | 0.0 | % |
Rialto II, CA | | 2006 | | 1980 | | 99,393 | | 67.2 | % | 779 | | Y | | 0.0 | % |
Riverside I, CA | | 1997 | | 1989 | | 27,485 | | 76.4 | % | 238 | | N | | 0.0 | % |
Riverside II, CA † | | 1997 | | 1989 | | 20,420 | | 91.6 | % | 18 | | N | | 0.0 | % |
Riverside III, CA | | 1998 | | 1989 | | 46,809 | | 70.9 | % | 442 | | Y | | 0.0 | % |
Riverside IV, CA | | 2006 | | 1977 | | 67,320 | | 60.5 | % | 715 | | Y | | 4.0 | % |
Riverside V, CA | | 2006 | | 1985 | | 85,521 | | 58.1 | % | 834 | | Y | | 12.7 | % |
Riverside VI, CA | | 2007 | | 2004 | | 74,900 | | 67.6 | % | 466 | | Y | | 0.0 | % |
Roseville, CA | | 2005 | | 1979 | | 59,944 | | 87.6 | % | 582 | | Y | | 0.0 | % |
Sacramento I, CA | | 2005 | | 1979 | | 50,764 | | 88.0 | % | 536 | | Y | | 0.0 | % |
Sacramento II, CA | | 2005 | | 1986 | | 61,890 | | 72.8 | % | 583 | | Y | | 4.7 | % |
San Bernardino I, CA | | 1997 | | 1985 | | 47,350 | | 63.2 | % | 460 | | Y | | 2.0 | % |
San Bernardino II, CA | | 1997 | | 1987 | | 83,278 | | 60.5 | % | 609 | | Y | | 0.0 | % |
San Bernardino III, CA | | 1997 | | 1987 | | 31,070 | | 74.8 | % | 259 | | N | | 0.0 | % |
San Bernardino IV, CA | | 1997 | | 1989 | | 57,245 | | 68.7 | % | 597 | | Y | | 0.0 | % |
San Bernardino IX, CA | | 2006 | | 1975 | | 117,928 | | 44.8 | % | 1076 | | Y | | 0.0 | % |
San Bernardino V, CA | | 1997 | | 1991 | | 41,646 | | 72.7 | % | 406 | | Y | | 0.0 | % |
San Bernardino VI, CA | | 1997 | | 1985/92 | | 35,671 | | 76.0 | % | 405 | | N | | 11.8 | % |
San Bernardino VII, CA | | 2005 | | 2002/04 | | 83,507 | | 77.9 | % | 776 | | Y | | 4.2 | % |
San Bernardino VIII, CA | | 2006 | | 1974 | | 56,820 | | 56.9 | % | 507 | | Y | | 1.3 | % |
San Bernardino X, CA | | 2006 | | 1978 | | 78,839 | | 66.1 | % | 669 | | Y | | 0.0 | % |
San Bernardino XI, CA | | 2006 | | 1977 | | 112,154 | | 58.0 | % | 1037 | | Y | | 0.0 | % |
San Marcos, CA | | 2005 | | 1979 | | 37,430 | | 91.8 | % | 247 | | Y | | 0.0 | % |
23
| | Year Acquired/ | | Year | | Rentable | | | | | | Manager | | % Climate | |
Facility Location | | Developed (1) | | Built | | Square Feet | | Occupancy (2) | | Units | | Apartment (3) | | Controlled (4) | |
Santa Ana, CA | | 2006 | | 1984 | | 65,528 | | 72.5 | % | 742 | | Y | | 2.4 | % |
South Sacramento, CA | | 2005 | | 1979 | | 52,290 | | 60.5 | % | 434 | | Y | | 0.0 | % |
South Palmetto, CA | | 1998 | | 1982 | | 80,505 | | 70.1 | % | 820 | | Y | | 0.0 | % |
Spring Valley, CA | | 2006 | | 1980 | | 55,070 | | 57.9 | % | 718 | | Y | | 0.0 | % |
Sun City, CA | | 1998 | | 1989 | | 38,435 | | 70.1 | % | 383 | | N | | 0.0 | % |
Temecula I, CA | | 1998 | | 1985/2003 | | 81,740 | | 80.0 | % | 716 | | Y | | 46.4 | % |
Temecula II, CA | | 2006 | | 2003 | | 84,580 | | 42.0 | % | 723 | | Y | | 51.3 | % |
Thousand Palms, CA | | 2006 | | 1988/01 | | 76,336 | | 52.0 | % | 896 | | Y | | 60.7 | % |
Vista I, CA | | 2001 | | 1988 | | 74,405 | | 90.4 | % | 621 | | Y | | 0.0 | % |
Vista II, CA | | 2005 | | 2001/02/03 | | 147,721 | | 78.4 | % | 1293 | | Y | | 2.3 | % |
Walnut, CA | | 2005 | | 1987 | | 50,708 | | 85.6 | % | 539 | | Y | | 9.2 | % |
West Sacramento, CA | | 2005 | | 1984 | | 39,715 | | 88.2 | % | 488 | | Y | | 0.0 | % |
Westminster, CA | | 2005 | | 1983/98 | | 68,048 | | 93.2 | % | 572 | | Y | | 0.0 | % |
Yucaipa, CA | | 1997 | | 1989 | | 77,560 | | 69.4 | % | 671 | | Y | | 0.0 | % |
Aurora I, CO | | 2005 | | 1981 | | 75,867 | | 81.5 | % | 623 | | Y | | 0.0 | % |
Aurora II, CO | | 2005 | | 1984 | | 57,753 | | 89.6 | % | 475 | | Y | | 5.3 | % |
Aurora III, CO | | 2005 | | 1977 | | 28,730 | | 91.4 | % | 311 | | Y | | 0.0 | % |
Aurora IV, CO | | 2006 | | 1998/99 | | 49,700 | | 87.3 | % | 352 | | Y | | 0.0 | % |
Avon, CO | | 2005 | | 1989 | | 28,227 | | 91.5 | % | 387 | | Y | | 22.7 | % |
Boulder I, CO | | 2006 | | 1972/75/77 | | 47,296 | | 88.8 | % | 531 | | Y | | 0.0 | % |
Boulder II, CO | | 2006 | | 1983/84 | | 101,245 | | 90.9 | % | 1093 | | Y | | 0.0 | % |
Boulder III, CO | | 2006 | | 1974/78 | | 80,174 | | 82.9 | % | 781 | | Y | | 0.0 | % |
Boulder IV, CO | | 2006 | | 1983/98 | | 95,148 | | 94.0 | % | 715 | | Y | | 7.1 | % |
Colorado Springs, CO | | 2005 | | 1986 | | 47,975 | | 87.3 | % | 474 | | Y | | 0.0 | % |
Colorado Springs II, CO | | 2006 | | 2001 | | 62,400 | | 91.5 | % | 433 | | Y | | 0.0 | % |
Denver I, CO | | 2005 | | 1987 | | 58,050 | | 79.1 | % | 431 | | Y | | 4.4 | % |
Denver II, CO | | 2006 | | 1997 | | 59,200 | | 86.7 | % | 451 | | Y | | 0.0 | % |
Denver III, CO | | 2006 | | 1999 | | 63,700 | | 81.9 | % | 454 | | Y | | 0.0 | % |
Englewood, CO | | 2005 | | 1981 | | 51,000 | | 87.9 | % | 366 | | Y | | 0.0 | % |
Federal Heights, CO | | 2005 | | 1980 | | 54,770 | | 88.2 | % | 554 | | Y | | 0.0 | % |
Golden, CO | | 2005 | | 1985 | | 87,832 | | 90.7 | % | 645 | | Y | | 1.2 | % |
Littleton I , CO | | 2005 | | 1987 | | 53,490 | | 89.0 | % | 452 | | Y | | 37.4 | % |
Littleton II, CO | | 2005 | | 1982 | | 46,175 | | 90.4 | % | 363 | | Y | | 0.0 | % |
Northglenn, CO | | 2005 | | 1980 | | 52,102 | | 87.4 | % | 498 | | Y | | 0.0 | % |
Bloomfield, CT | | 1997 | | 1987/93/94 | | 48,700 | | 63.9 | % | 450 | | Y | | 6.6 | % |
Branford, CT | | 1995 | | 1986 | | 49,079 | | 91.3 | % | 433 | | Y | | 2.2 | % |
Bristol, CT | | 2005 | | 1989/99 | | 47,825 | | 83.4 | % | 479 | | N | | 22.6 | % |
East Windsor, CT | | 2005 | | 1986/89 | | 45,900 | | 68.7 | % | 309 | | N | | 0.0 | % |
Enfield, CT | | 2001 | | 1989 | | 52,775 | | 84.5 | % | 381 | | Y | | 0.0 | % |
Gales Ferry, CT | | 1995 | | 1987/89 | | 54,230 | | 70.6 | % | 599 | | N | | 7.5 | % |
Manchester I, CT (6) | | 2002 | | 1999/00/01 | | 47,125 | | 65.1 | % | 491 | | N | | 37.6 | % |
Manchester II, CT | | 2005 | | 1984 | | 52,725 | | 72.5 | % | 411 | | N | | 0.0 | % |
Milford, CT | | 1994 | | 1975 | | 44,885 | | 76.0 | % | 384 | | Y | | 4.0 | % |
Monroe, CT | | 2005 | | 1996/03 | | 58,500 | | 87.7 | % | 405 | | N | | 0.0 | % |
Mystic, CT | | 1994 | | 1975/86 | | 50,800 | | 67.0 | % | 538 | | Y | | 2.4 | % |
Newington I, CT † | | 2005 | | 1978/97 | | 42,620 | | 75.1 | % | 258 | | N | | 0.0 | % |
Newington II, CT | | 2005 | | 1979/81 | | 35,810 | | 88.1 | % | 213 | | N | | 0.0 | % |
Old Saybrook I, CT | | 2005 | | 1982/88/00 | | 87,700 | | 76.5 | % | 723 | | N | | 6.3 | % |
Old Saybrook II, CT | | 2005 | | 1988/02 | | 26,425 | | 84.4 | % | 257 | | N | | 55.3 | % |
South Windsor, CT | | 1994 | | 1976 | | 71,725 | | 66.4 | % | 557 | | Y | | 1.1 | % |
Stamford, CT | | 2005 | | 1997 | | 28,957 | | 95.1 | % | 367 | | N | | 32.8 | % |
Boca Raton, FL | | 2001 | | 1998 | | 37,958 | | 90.9 | % | 605 | | N | | 68.2 | % |
Boynton Beach I, FL | | 2001 | | 1999 | | 62,013 | | 87.4 | % | 812 | | Y | | 54.2 | % |
Boynton Beach II, FL | | 2005 | | 2001 | | 61,841 | | 79.2 | % | 601 | | Y | | 81.3 | % |
Bradenton I, FL | | 2004 | | 1979 | | 68,502 | | 53.8 | % | 659 | | N | | 2.8 | % |
Bradenton II, FL | | 2004 | | 1996 | | 87,760 | | 80.4 | % | 881 | | Y | | 40.0 | % |
Cape Coral, FL | | 2000* | | 2000 | | 76,592 | | 83.8 | % | 883 | | Y | | 83.5 | % |
Dania, FL | | 1994 | | 1988 | | 58,270 | | 98.4 | % | 498 | | Y | | 26.9 | % |
Dania Beach, FL (6) | | 2004 | | 1984 | | 183,393 | | 82.5 | % | 2011 | | N | | 20.7 | % |
Davie, FL | | 2001* | | 2001 | | 81,035 | | 85.9 | % | 853 | | Y | | 55.7 | % |
Deerfield Beach, FL | | 1998* | | 1998 | | 57,600 | | 80.6 | % | 526 | | Y | | 39.2 | % |
DeLand, FL | | 1998 | | 1987 | | 37,552 | | 87.1 | % | 401 | | Y | | 34.5 | % |
Delray Beach, FL | | 2001 | | 1999 | | 67,809 | | 90.6 | % | 821 | | Y | | 39.3 | % |
Fernandina Beach, FL | | 1996 | | 1986 | | 111,030 | | 74.7 | % | 897 | | Y | | 35.7 | % |
Ft. Lauderdale, FL | | 1999 | | 1999 | | 70,596 | | 90.9 | % | 703 | | Y | | 46.5 | % |
Ft. Myers, FL | | 1998 | | 1998 | | 67,546 | | 78.3 | % | 610 | | Y | | 67.0 | % |
Gulf Breeze, FL | | 2005 | | 1982/04 | | 79,449 | | 91.8 | % | 700 | | N | | 62.7 | % |
Jacksonville I, FL | | 2005 | | 2005 | | 80,401 | | 60.1 | % | 753 | | N | | 100.0 | % |
Jacksonville II, FL | | 2007 | | 2004 | | 65,020 | | 86.0 | % | 688 | | N | | 100.0 | % |
Jacksonville III, FL | | 2007 | | 2003 | | 65,603 | | 82.5 | % | 723 | | N | | 100.0 | % |
Jacksonville IV, FL | | 2007 | | 2006 | | 78,604 | | 33.9 | % | 756 | | N | | 100.0 | % |
Jacksonville V, FL | | 2007 | | 2004 | | 81,860 | | 73.1 | % | 753 | | N | | 82.3 | % |
Kendall, FL | | 2007 | | 2003 | | 75,395 | | 84.7 | % | 710 | | N | | 71.0 | % |
24
| | Year Acquired/ | | Year | | Rentable | | | | | | Manager | | % Climate | |
Facility Location | | Developed (1) | | Built | | Square Feet | | Occupancy (2) | | Units | | Apartment (3) | | Controlled (4) | |
Lake Worth, FL † | | 1998 | | 1998/02 | | 163,683 | | 82.0 | % | 1408 | | Y | | 36.4 | % |
Lakeland I, FL | | 1994 | | 1988 | | 48,911 | | 82.2 | % | 484 | | Y | | 79.6 | % |
Lakeland II, FL | | 1996 | | 1984 | | 47,680 | | 81.1 | % | 351 | | Y | | 19.0 | % |
Leesburg, FL | | 1997 | | 1988 | | 59,840 | | 82.4 | % | 484 | | Y | | 17.7 | % |
Lutz I, FL | | 2004 | | 2000 | | 72,495 | | 49.7 | % | 633 | | Y | | 34.1 | % |
Lutz II, FL | | 2004 | | 1999 | | 69,292 | | 70.3 | % | 536 | | Y | | 20.6 | % |
Margate I, FL † | | 1994 | | 1979/81 | | 54,405 | | 87.5 | % | 339 | | N | | 9.8 | % |
Margate II, FL † | | 1996 | | 1985 | | 65,168 | | 87.3 | % | 437 | | Y | | 28.8 | % |
Merrit Island, FL | | 2000 | | 2000 | | 50,427 | | 86.8 | % | 465 | | Y | | 56.8 | % |
Miami I, FL | | 1995 | | 1995 | | 46,925 | | 89.7 | % | 565 | | Y | | 52.2 | % |
Miami II, FL | | 1994 | | 1987 | | 57,040 | | 73.0 | % | 612 | | Y | | 0.0 | % |
Miami III, FL | | 1994 | | 1989 | | 67,060 | | 85.2 | % | 571 | | Y | | 8.0 | % |
Miami IV, FL | | 1995 | | 1987 | | 58,315 | | 86.1 | % | 614 | | Y | | 7.3 | % |
Miami V, FL | | 1995 | | 1976 | | 78,465 | | 79.2 | % | 344 | | Y | | 4.0 | % |
Miami VI, FL | | 2005 | | 1988/03 | | 150,510 | | 70.8 | % | 1518 | | N | | 86.8 | % |
Naples I, FL | | 1996 | | 1996 | | 48,050 | | 81.1 | % | 351 | | Y | | 26.6 | % |
Naples II, FL | | 1997 | | 1985 | | 65,850 | | 81.1 | % | 671 | | Y | | 44.6 | % |
Naples III, FL | | 1997 | | 1981/83 | | 81,145 | | 67.2 | % | 876 | | Y | | 24.3 | % |
Naples IV, FL | | 1998 | | 1990 | | 40,975 | | 67.8 | % | 458 | | N | | 43.4 | % |
Ocala, FL | | 1994 | | 1988 | | 41,891 | | 86.5 | % | 375 | | Y | | 9.8 | % |
Ocoee, FL | | 2005 | | 1997 | | 76,250 | | 87.7 | % | 652 | | Y | | 15.5 | % |
Orange City, FL | | 2004 | | 2001 | | 59,636 | | 80.5 | % | 669 | | N | | 39.2 | % |
Orlando I, FL (6) | | 1997 | | 1987 | | 52,170 | | 84.9 | % | 515 | | Y | | 4.9 | % |
Orlando II, FL | | 2005 | | 2002/04 | | 62,864 | | 89.9 | % | 592 | | N | | 74.1 | % |
Orlando III, FL | | 2006 | | 1988/90/96 | | 104,165 | | 77.3 | % | 796 | | Y | | 6.9 | % |
Oviedo, FL | | 2006 | | 1988/1991 | | 49,256 | | 80.2 | % | 444 | | Y | | 3.2 | % |
Pembroke Pines, FL | | 1997 | | 1997 | | 67,337 | | 88.8 | % | 718 | | Y | | 63.2 | % |
Royal Palm Beach I, FL † | | 1994 | | 1988 | | 98,961 | | 67.7 | % | 692 | | Y | | 54.5 | % |
Royal Palm Beach II, FL † | | 2007 | | 2004 | | 81,515 | | 73.5 | % | 817 | | N | | 82.3 | % |
Sanford, FL | | 2006 | | 1988/2006 | | 61,810 | | 90.4 | % | 452 | | Y | | 28.6 | % |
Sarasota, FL | | 1998 | | 1998 | | 70,788 | | 76.0 | % | 554 | | Y | | 42.3 | % |
St. Augustine, FL | | 1996 | | 1985 | | 59,670 | | 78.7 | % | 734 | | Y | | 29.9 | % |
Stuart I, FL | | 1997 | | 1986 | | 41,324 | | 78.7 | % | 542 | | Y | | 26.9 | % |
Stuart II, FL | | 1997 | | 1995 | | 86,924 | | 77.8 | % | 1007 | | Y | | 51.4 | % |
SW Ranches, FL | | 2007 | | 2004 | | 64,955 | | 80.1 | % | 650 | | N | | 85.3 | % |
Tampa I, FL | | 1994 | | 1987 | | 60,700 | | 86.6 | % | 421 | | Y | | 0.0 | % |
Tampa II, FL | | 2001 | | 1985 | | 55,997 | | 84.1 | % | 480 | | Y | | 17.1 | % |
Tampa III, FL | | 2007 | | 2001/2002 | | 83,788 | | 77.7 | % | 807 | | N | | 28.4 | % |
Vero Beach, FL | | 1997 | | 1986/1987 | | 50,390 | | 75.6 | % | 513 | | N | | 23.7 | % |
West Palm Beach I, FL | | 2001 | | 1997 | | 67,973 | | 84.0 | % | 1025 | | Y | | 47.2 | % |
West Palm Beach II, FL | | 2004 | | 1996 | | 93,764 | | 89.4 | % | 890 | | Y | | 74.4 | % |
Alpharetta, GA | | 2001 | | 1996 | | 90,485 | | 76.5 | % | 678 | | Y | | 75.1 | % |
Austell , GA | | 2006 | | 2000 | | 83,615 | | 74.2 | % | 676 | | Y | | 65.9 | % |
Decatur, GA | | 1998 | | 1986 | | 148,480 | | 82.9 | % | 1356 | | Y | | 3.1 | % |
Norcross, GA | | 2001 | | 1997 | | 85,390 | | 80.8 | % | 607 | | Y | | 55.3 | % |
Peachtree City, GA | | 2001 | | 1997 | | 49,845 | | 83.5 | % | 453 | | N | | 75.6 | % |
Smyrna, GA | | 2001 | | 2000 | | 56,820 | | 94.9 | % | 507 | | Y | | 100.0 | % |
Snellville, GA | | 2007 | | 1996/1997 | | 79,950 | | 89.9 | % | 772 | | Y | | 27.1 | % |
Suwanee I, GA | | 2007 | | 2000/2003 | | 85,450 | | 82.8 | % | 633 | | Y | | 28.6 | % |
Suwanee II, GA | | 2007 | | 2005 | | 79,640 | | 62.8 | % | 630 | | N | | 60.8 | % |
Addison, IL | | 2004 | | 1979 | | 31,275 | | 82.4 | % | 370 | | Y | | 0.0 | % |
Aurora, IL | | 2004 | | 1996 | | 73,845 | | 67.7 | % | 563 | | Y | | 6.9 | % |
Bartlett, IL | | 2004 | | 1987 | | 51,525 | | 81.6 | % | 414 | | Y | | 33.6 | % |
Bellwood, IL | | 2001 | | 1999 | | 86,575 | | 83.3 | % | 747 | | Y | | 52.2 | % |
Des Plaines, IL (6) | | 2004 | | 1978 | | 74,600 | | 79.4 | % | 644 | | N | | 0.0 | % |
Elk Grove Village, IL | | 2004 | | 1987 | | 64,304 | | 87.8 | % | 648 | | Y | | 5.6 | % |
Glenview, IL | | 2004 | | 1998 | | 100,115 | | 84.5 | % | 743 | | Y | | 100.0 | % |
Gurnee, IL | | 2004 | | 1987 | | 80,300 | | 78.3 | % | 728 | | Y | | 34.1 | % |
Hanover, IL | | 2004 | | 1987 | | 41,174 | | 92.7 | % | 419 | | Y | | 0.4 | % |
Harvey, IL | | 2004 | | 1987 | | 60,315 | | 90.0 | % | 584 | | Y | | 2.9 | % |
Joliet, IL | | 2004 | | 1993 | | 74,350 | | 52.6 | % | 480 | | Y | | 100.0 | % |
Kildeer, IL | | 2004 | | 1988 | | 46,475 | | 85.8 | % | 429 | | Y | | 0.0 | % |
Lombard, IL | | 2004 | | 1981 | | 57,736 | | 88.6 | % | 547 | | Y | | 9.9 | % |
Mount Prospect, IL | | 2004 | | 1979 | | 65,000 | | 81.3 | % | 603 | | Y | | 12.7 | % |
Mundelein, IL | | 2004 | | 1990 | | 44,700 | | 80.1 | % | 493 | | Y | | 8.9 | % |
North Chicago, IL | | 2004 | | 1985 | | 53,300 | | 83.5 | % | 435 | | N | | 0.0 | % |
Plainfield I, IL | | 2004 | | 1998 | | 53,900 | | 80.2 | % | 403 | | N | | 3.3 | % |
Plainfield II, IL | | 2005 | | 2000 | | 52,100 | | 64.2 | % | 357 | | N | | 22.7 | % |
Schaumburg, IL | | 2004 | | 1988 | | 31,235 | | 83.5 | % | 323 | | N | | 5.6 | % |
Streamwood, IL | | 2004 | | 1982 | | 64,305 | | 74.9 | % | 572 | | N | | 4.4 | % |
Warrensville, IL | | 2005 | | 1977/89 | | 48,796 | | 84.6 | % | 385 | | N | | 0.0 | % |
Waukegan, IL | | 2004 | | 1977 | | 79,750 | | 77.7 | % | 703 | | Y | | 8.4 | % |
West Chicago, IL | | 2004 | | 1979 | | 48,475 | | 80.6 | % | 435 | | Y | | 0.0 | % |
25
| | Year Acquired/ | | Year | | Rentable | | | | | | Manager | | % Climate | |
Facility Location | | Developed (1) | | Built | | Square Feet | | Occupancy (2) | | Units | | Apartment (3) | | Controlled (4) | |
Westmont, IL | | 2004 | | 1979 | | 53,700 | | 89.0 | % | 402 | | Y | | 0.0 | % |
Wheeling I, IL | | 2004 | | 1974 | | 54,210 | | 81.5 | % | 502 | | Y | | 0.0 | % |
Wheeling II, IL | | 2004 | | 1979 | | 67,825 | | 68.2 | % | 619 | | Y | | 7.3 | % |
Woodridge, IL | | 2004 | | 1987 | | 50,725 | | 91.3 | % | 472 | | Y | | 7.6 | % |
Indianapolis I, IN | | 2004 | | 1987 | | 43,600 | | 91.5 | % | 327 | | N | | 0.0 | % |
Indianapolis II, IN | | 2004 | | 1997 | | 44,900 | | 80.3 | % | 456 | | Y | | 15.6 | % |
Indianapolis III, IN | | 2004 | | 1999 | | 60,850 | | 83.3 | % | 501 | | Y | | 32.8 | % |
Indianapolis IV, IN | | 2004 | | 1976 | | 68,250 | | 77.8 | % | 615 | | Y | | 0.0 | % |
Indianapolis IX, IN | | 2004 | | 1976 | | 61,732 | | 83.7 | % | 549 | | Y | | 0.0 | % |
Indianapolis V, IN | | 2004 | | 1999 | | 74,825 | | 91.1 | % | 587 | | Y | | 33.6 | % |
Indianapolis VI, IN | | 2004 | | 1976 | | 73,353 | | 74.1 | % | 728 | | Y | | 0.0 | % |
Indianapolis VII, IN | | 2004 | | 1992 | | 91,807 | | 77.7 | % | 818 | | Y | | 6.4 | % |
Indianapolis VIII, IN | | 2004 | | 1975 | | 80,140 | | 71.1 | % | 721 | | Y | | 0.0 | % |
Baton Rouge I, LA | | 1997 | | 1980 | | 55,474 | | 92.2 | % | 464 | | Y | | 8.3 | % |
Baton Rouge II, LA | | 1997 | | 1980/1995 | | 80,452 | | 94.1 | % | 585 | | Y | | 40.4 | % |
Baton Rouge III, LA | | 1997 | | 1982 | | 60,770 | | 95.6 | % | 445 | | Y | | 10.3 | % |
Prairieville, LA | | 1998 | | 1991 | | 28,319 | | 83.5 | % | 341 | | Y | | 6.3 | % |
Slidell, LA | | 2001 | | 1998 | | 79,540 | | 94.5 | % | 523 | | Y | | 46.6 | % |
Boston, MA | | 2002 | | 2001 | | 60,270 | | 76.7 | % | 619 | | Y | | 100.0 | % |
Leominster, MA | | 1998 | | 1987/88/00 | | 54,081 | | 74.8 | % | 504 | | Y | | 38.5 | % |
Medford, MA | | 2007 | | 2001 | | 58,577 | | 72.5 | % | 653 | | Y | | 96.0 | % |
Baltimore, MD | | 2001 | | 1999/00 | | 93,700 | | 84.1 | % | 843 | | Y | | 45.5 | % |
California, MD | | 2004 | | 1998 | | 77,678 | | 83.8 | % | 761 | | Y | | 38.9 | % |
Gaithersburg, MD | | 2005 | | 1998 | | 86,970 | | 84.0 | % | 795 | | Y | | 41.7 | % |
Laurel, MD † | | 2001 | | 1978/99/00 | | 162,297 | | 92.4 | % | 1018 | | Y | | 41.0 | % |
Temple Hills, MD | | 2001 | | 2000 | | 97,250 | | 83.3 | % | 815 | | Y | | 68.8 | % |
Grand Rapids, MI | | 1996 | | 1976 | | 87,031 | | 72.8 | % | 526 | | Y | | 0.0 | % |
Portage, MI (6) | | 1996 | | 1980 | | 50,280 | | 82.3 | % | 387 | | N | | 0.0 | % |
Romulus, MI | | 1997 | | 1997 | | 42,175 | | 81.6 | % | 340 | | Y | | 7.5 | % |
Wyoming, MI | | 1996 | | 1987 | | 91,283 | | 80.5 | % | 635 | | N | | 0.0 | % |
Biloxi, MS | | 1997 | | 1978/93 | | 66,394 | | 85.4 | % | 594 | | Y | | 12.2 | % |
Gautier, MS | | 1997 | | 1981 | | 35,925 | | 83.5 | % | 305 | | Y | | 7.4 | % |
Gulfport I, MS | | 1997 | | 1970 | | 68,320 | | 83.2 | % | 494 | | Y | | 11.0 | % |
Gulfport II, MS | | 1997 | | 1986 | | 64,445 | | 92.6 | % | 448 | | Y | | 18.7 | % |
Gulfport III, MS | | 1997 | | 1977/93 | | 61,251 | | 83.7 | % | 517 | | Y | | 33.5 | % |
Waveland, MS | | 1998 | | 1982/83/84/93 | | 57,096 | | 64.8 | % | 466 | | Y | | 37.9 | % |
Belmont, NC | | 2001 | | 1996/97/98 | | 80,512 | | 91.8 | % | 605 | | N | | 25.2 | % |
Burlington I, NC | | 2001 | | 1990/91/93/94/98 | | 109,545 | | 73.2 | % | 966 | | N | | 0.7 | % |
Burlington II, NC | | 2001 | | 1991 | | 42,280 | | 77.3 | % | 397 | | Y | | 12.1 | % |
Cary, NC | | 2001 | | 1993/94/97 | | 111,772 | | 82.3 | % | 798 | | N | | 7.3 | % |
Charlotte, NC | | 1999 | | 1999 | | 69,000 | | 95.5 | % | 738 | | Y | | 52.8 | % |
Fayetteville I, NC | | 1997 | | 1981 | | 41,450 | | 97.9 | % | 347 | | N | | 0.0 | % |
Fayetteville II, NC | | 1997 | | 1993/95 | | 54,225 | | 97.1 | % | 547 | | Y | | 11.9 | % |
Raleigh, NC | | 1998 | | 1994/95 | | 48,675 | | 91.6 | % | 412 | | Y | | 8.2 | % |
Brick, NJ | | 1994 | | 1981 | | 52,740 | | 73.5 | % | 452 | | N | | 0.0 | % |
Clifton, NJ | | 2005 | | 2001 | | 105,550 | | 85.7 | % | 1015 | | Y | | 85.5 | % |
Cranford, NJ | | 1994 | | 1987 | | 91,250 | | 82.4 | % | 846 | | Y | | 7.9 | % |
East Hanover, NJ | | 1994 | | 1983 | | 107,679 | | 62.5 | % | 1013 | | N | | 1.6 | % |
Elizabeth, NJ | | 2005 | | 1925/97 | | 38,892 | | 56.5 | % | 677 | | N | | 0.0 | % |
Fairview, NJ | | 1997 | | 1989 | | 27,676 | | 87.3 | % | 449 | | N | | 100.0 | % |
Hamilton, NJ | | 2006 | | 1990 | | 70,550 | | 58.9 | % | 622 | | Y | | 0.0 | % |
Hoboken, NJ | | 2005 | | 1945/97 | | 34,280 | | 85.0 | % | 745 | | N | | 100.0 | % |
Jersey City, NJ | | 1994 | | 1985 | | 91,361 | | 81.3 | % | 1093 | | Y | | 0.0 | % |
Linden I, NJ | | 1994 | | 1983 | | 95,575 | | 73.6 | % | 1059 | | N | | 2.9 | % |
Linden II, NJ † | | 1994 | | 1982 | | 35,800 | | 92.5 | % | 23 | | N | | 0.0 | % |
Morris Township, NJ (5) | | 1997 | | 1972 | | 75,576 | | 69.9 | % | 595 | | Y | | 1.2 | % |
Parsippany, NJ | | 1997 | | 1981 | | 66,325 | | 81.0 | % | 605 | | Y | | 6.9 | % |
Randolph, NJ | | 2002 | | 1998/99 | | 52,565 | | 76.8 | % | 593 | | Y | | 81.5 | % |
Sewell, NJ | | 2001 | | 1984/98 | | 57,767 | | 67.6 | % | 479 | | N | | 5.0 | % |
Albuquerque I, NM | | 2005 | | 1985 | | 65,927 | | 86.7 | % | 607 | | Y | | 3.2 | % |
Albuquerque II, NM | | 2005 | | 1985 | | 58,834 | | 89.2 | % | 547 | | Y | | 4.2 | % |
Albuquerque III, NM | | 2005 | | 1978 | | 41,016 | | 93.6 | % | 455 | | N | | 4.3 | % |
Albuquerque IV, NM | | 2005 | | 1986 | | 57,536 | | 87.4 | % | 535 | | Y | | 4.7 | % |
Albuquerque V, NM | | 2006 | | 1994 | | 52,217 | | 91.0 | % | 424 | | Y | | 10.2 | % |
Carlsbad, NM | | 2005 | | 1975 | | 39,999 | | 97.8 | % | 343 | | Y | | 0.0 | % |
Deming, NM | | 2005 | | 1973/83 | | 33,005 | | 81.9 | % | 246 | | Y | | 0.0 | % |
Las Cruces, NM | | 2005 | | 1984 | | 43,850 | | 85.7 | % | 401 | | Y | | 3.0 | % |
Lovington, NM | | 2005 | | 1975 | | 15,751 | | 95.2 | % | 264 | | Y | | 0.0 | % |
Silver City, NM | | 2005 | | 1972 | | 26,875 | | 91.8 | % | 255 | | Y | | 0.0 | % |
Truth or Consequences, NM | | 2005 | | 1977/99/00 | | 24,010 | | 92.3 | % | 170 | | Y | | 0.0 | % |
Las Vegas I, NV † | | 2006 | | 1986 | | 50,882 | | 80.6 | % | 402 | | Y | | 5.0 | % |
Las Vegas II, NV | | 2006 | | 1997 | | 49,000 | | 85.4 | % | 538 | | Y | | 76.5 | % |
Endicott, NY | | 2005 | | 1989 | | 35,930 | | 90.8 | % | 296 | | Y | | 0.0 | % |
26
| | Year Acquired/ | | Year | | Rentable | | | | | | Manager | | % Climate | |
Facility Location | | Developed (1) | | Built | | Square Feet | | Occupancy (2) | | Units | | Apartment (3) | | Controlled (4) | |
Jamaica, NY | | 2001 | | 2000 | | 89,455 | | 75.7 | % | 924 | | Y | | 100.0 | % |
New Rochelle, NY † | | 2005 | | 1998 | | 48,431 | | 94.2 | % | 407 | | N | | 15.0 | % |
North Babylon, NY | | 1998 | | 1988/99 | | 78,338 | | 83.5 | % | 652 | | N | | 9.2 | % |
Riverhead, NY | | 2005 | | 1985/86/99 | | 38,690 | | 91.0 | % | 341 | | N | | 0.0 | % |
Southold, NY † | | 2005 | | 1989 | | 58,609 | | 79.0 | % | 588 | | N | | 3.1 | % |
Boardman, OH | | 1980 | | 1980/89 | | 65,495 | | 70.5 | % | 532 | | Y | | 24.0 | % |
Brecksville, OH | | 1998 | | 1970/89 | | 58,452 | | 88.5 | % | 448 | | Y | | 25.2 | % |
Canton I, OH | | 2005 | | 1979/87 | | 39,750 | | 72.4 | % | 416 | | N | | 0.0 | % |
Canton II, OH | | 2005 | | 1997 | | 26,200 | | 90.3 | % | 197 | | N | | 0.0 | % |
Centerville I, OH | | 2004 | | 1976 | | 86,390 | | 73.2 | % | 640 | | Y | | 0.0 | % |
Centerville II, OH | | 2004 | | 1976 | | 43,400 | | 66.1 | % | 308 | | N | | 0.0 | % |
Cleveland I, OH | | 2005 | | 1997/99 | | 45,950 | | 86.9 | % | 341 | | Y | | 4.9 | % |
Cleveland II, OH | | 2005 | | 2000 | | 58,450 | | 64.1 | % | 582 | | Y | | 0.0 | % |
Columbus, OH | | 2006 | | 1999 | | 66,875 | | 71.9 | % | 600 | | Y | | 28.1 | % |
Dayton I, OH | | 2004 | | 1978 | | 43,100 | | 78.0 | % | 345 | | N | | 0.0 | % |
Dayton II, OH | | 2005 | | 1989/00 | | 48,149 | | 90.1 | % | 387 | | Y | | 1.7 | % |
Euclid I, OH | | 1988* | | 1988 | | 46,910 | | 83.6 | % | 438 | | Y | | 22.2 | % |
Euclid II, OH | | 1988* | | 1988 | | 47,275 | | 87.6 | % | 378 | | Y | | 0.0 | % |
Grove City, OH | | 2006 | | 1997 | | 89,290 | | 80.5 | % | 776 | | Y | | 16.9 | % |
Hilliard, OH | | 2006 | | 1995 | | 89,715 | | 67.1 | % | 780 | | Y | | 24.5 | % |
Hudson, OH † | | 1998 | | 1987 | | 65,240 | | 82.7 | % | 393 | | N | | 9.3 | % |
Lakewood, OH | | 1989* | | 1989 | | 39,267 | | 82.3 | % | 467 | | Y | | 24.5 | % |
Louisville, OH | | 2005 | | 1988/90 | | 53,960 | | 79.1 | % | 387 | | N | | 0.0 | % |
Marblehead, OH | | 2005 | | 1988/98 | | 52,300 | | 75.9 | % | 386 | | Y | | 0.0 | % |
Mason, OH | | 1998 | | 1981 | | 33,900 | | 90.0 | % | 283 | | Y | | 0.0 | % |
Mentor, OH | | 2005 | | 1983/99 | | 51,275 | | 80.7 | % | 369 | | N | | 16.1 | % |
Miamisburg, OH | | 2004 | | 1975 | | 59,930 | | 78.7 | % | 432 | | Y | | 0.0 | % |
Middleburg Heights, OH | | 1980* | | 1980 | | 93,025 | | 84.3 | % | 694 | | Y | | 3.8 | % |
North Canton I, OH | | 1979* | | 1979 | | 45,400 | | 83.5 | % | 321 | | Y | | 0.0 | % |
North Canton II, OH | | 1983* | | 1983 | | 44,180 | | 84.3 | % | 351 | | Y | | 15.8 | % |
North Olmsted I, OH | | 1979* | | 1979 | | 48,665 | | 89.1 | % | 442 | | Y | | 7.0 | % |
North Olmsted II, OH | | 1988* | | 1988 | | 47,850 | | 88.7 | % | 398 | | Y | | 14.2 | % |
North Randall, OH | | 1998* | | 1998/02 | | 80,099 | | 87.0 | % | 792 | | N | | 90.8 | % |
Perry, OH | | 2005 | | 1992/97 | | 63,850 | | 79.1 | % | 425 | | Y | | 0.0 | % |
Reynoldsburg, OH | | 2006 | | 1979 | | 67,545 | | 68.2 | % | 669 | | Y | | 0.0 | % |
Strongsville, OH | | 2007 | | 1978 | | 43,727 | | 80.8 | % | 399 | | Y | | 100.0 | % |
Warrensville Heights, OH | | 1980* | | 1980/82/98 | | 90,331 | | 80.8 | % | 734 | | Y | | 0.0 | % |
Westlake, OH | | 2005 | | 2001 | | 62,750 | | 89.8 | % | 455 | | Y | | 6.1 | % |
Willoughby, OH | | 2005 | | 1997 | | 34,454 | | 79.5 | % | 269 | | Y | | 10.0 | % |
Youngstown, OH | | 1977* | | 1977 | | 65,950 | | 83.9 | % | 530 | | Y | | 1.2 | % |
Levittown, PA | | 2001 | | 2000 | | 76,230 | | 81.0 | % | 667 | | Y | | 36.3 | % |
Philadelphia, PA | | 2001 | | 1999 | | 100,347 | | 77.5 | % | 942 | | N | | 29.8 | % |
Alcoa, TN | | 2005 | | 1986 | | 42,325 | | 86.7 | % | 364 | | Y | | 0.0 | % |
Antioch, TN | | 2005 | | 1985/98 | | 76,150 | | 91.9 | % | 602 | | Y | | 8.2 | % |
Cordova I, TN | | 2005 | | 1987 | | 54,225 | | 88.2 | % | 388 | | Y | | 0.0 | % |
Cordova II, TN | | 2006 | | 1995 | | 67,600 | | 86.7 | % | 720 | | Y | | 7.2 | % |
Knoxville I, TN | | 1997 | | 1984 | | 29,377 | | 89.3 | % | 296 | | Y | | 6.8 | % |
Knoxville II, TN | | 1997 | | 1985 | | 38,000 | | 87.7 | % | 340 | | Y | | 6.9 | % |
Knoxville III, TN | | 1998 | | 1991 | | 45,736 | | 85.3 | % | 452 | | Y | | 6.9 | % |
Knoxville IV, TN | | 1998 | | 1983 | | 58,852 | | 82.2 | % | 440 | | N | | 1.1 | % |
Knoxville V, TN | | 1998 | | 1977 | | 42,790 | | 94.8 | % | 372 | | N | | 0.0 | % |
Knoxville VI, TN | | 2005 | | 1975 | | 63,440 | | 79.5 | % | 587 | | Y | | 0.0 | % |
Knoxville VII, TN | | 2005 | | 1983 | | 54,994 | | 84.1 | % | 448 | | Y | | 0.0 | % |
Knoxville VIII, TN | | 2005 | | 1978 | | 96,518 | | 79.1 | % | 771 | | Y | | 0.0 | % |
Memphis I, TN | | 2001 | | 1999 | | 91,300 | | 92.6 | % | 700 | | N | | 51.3 | % |
Memphis II, TN | | 2001 | | 2000 | | 71,960 | | 84.7 | % | 560 | | N | | 46.3 | % |
Memphis III, TN | | 2005 | | 1983 | | 41,137 | | 87.3 | % | 356 | | Y | | 6.9 | % |
Memphis IV, TN | | 2005 | | 1986 | | 38,750 | | 86.9 | % | 326 | | Y | | 7.9 | % |
Memphis V, TN | | 2005 | | 1981 | | 60,370 | | 84.2 | % | 499 | | Y | | 0.0 | % |
Memphis VI, TN | | 2006 | | 1985/93 | | 109,317 | | 79.4 | % | 873 | | Y | | 3.2 | % |
Memphis VII, TN | | 2006 | | 1980/85 | | 115,303 | | 77.6 | % | 582 | | Y | | 0.0 | % |
Memphis VIII, TN † | | 2006 | | 1990 | | 96,060 | | 70.3 | % | 562 | | Y | | 0.0 | % |
Nashville I, TN | | 2005 | | 1984 | | 106,930 | | 65.8 | % | 700 | | Y | | 0.0 | % |
Nashville II, TN | | 2005 | | 1986/00 | | 83,274 | | 86.5 | % | 633 | | Y | | 6.5 | % |
Nashville III, TN | | 2006 | | 1985 | | 99,600 | | 75.0 | % | 638 | | Y | | 5.1 | % |
Nashville IV, TN | | 2006 | | 1986/00 | | 102,425 | | 88.6 | % | 721 | | Y | | 7.0 | % |
Austin I, TX | | 2005 | | 2001 | | 59,520 | | 70.3 | % | 547 | | Y | | 59.1 | % |
Austin II, TX | | 2006 | | 2000/03 | | 65,401 | | 94.8 | % | 594 | | Y | | 38.8 | % |
Austin III, TX | | 2006 | | 2004 | | 71,030 | | 79.7 | % | 581 | | Y | | 84.9 | % |
Baytown, TX | | 2005 | | 1981 | | 38,950 | | 92.2 | % | 365 | | Y | | 0.0 | % |
Bryan, TX | | 2005 | | 1994 | | 60,450 | | 78.9 | % | 495 | | Y | | 0.0 | % |
College Station, TX | | 2005 | | 1993 | | 26,550 | | 88.7 | % | 346 | | N | | 0.0 | % |
Dallas, TX | | 2005 | | 2000 | | 58,707 | | 79.2 | % | 552 | | Y | | 26.3 | % |
27
| | Year Acquired/ | | Year | | Rentable | | | | | | Manager | | % Climate | |
Facility Location | | Developed (1) | | Built | | Square Feet | | Occupancy (2) | | Units | | Apartment (3) | | Controlled (4) | |
Denton, TX | | 2006 | | 1996 | | 60,836 | | 83.8 | % | 514 | | Y | | 3.9 | % |
El Paso I, TX | | 2005 | | 1980 | | 59,864 | | 87.7 | % | 515 | | Y | | 0.9 | % |
El Paso II, TX | | 2005 | | 1980 | | 48,692 | | 84.8 | % | 415 | | Y | | 0.0 | % |
El Paso III, TX | | 2005 | | 1980 | | 71,276 | | 87.7 | % | 611 | | Y | | 2.0 | % |
El Paso IV, TX | | 2005 | | 1983 | | 48,962 | | 78.0 | % | 383 | | Y | | 4.6 | % |
El Paso V, TX | | 2005 | | 1982 | | 62,825 | | 85.4 | % | 395 | | Y | | 0.0 | % |
El Paso VI, TX | | 2005 | | 1985 | | 36,620 | | 81.0 | % | 264 | | Y | | 0.0 | % |
El Paso VII, TX † | | 2005 | | 1982 | | 34,545 | | 80.8 | % | 17 | | N | | 0.0 | % |
Fort Worth I, TX | | 2005 | | 2000 | | 49,778 | | 72.7 | % | 405 | | Y | | 27.0 | % |
Fort Worth II, TX | | 2006 | | 2003 | | 72,925 | | 75.7 | % | 668 | | Y | | 49.0 | % |
Frisco I, TX | | 2005 | | 1996 | | 50,854 | | 89.8 | % | 443 | | Y | | 17.5 | % |
Frisco II, TX | | 2005 | | 1998/02 | | 71,339 | | 78.1 | % | 519 | | Y | | 22.4 | % |
Frisco III, TX | | 2006 | | 2004 | | 72,275 | | 66.5 | % | 594 | | Y | | 87.5 | % |
Garland I, TX | | 2006 | | 1991 | | 70,000 | | 83.5 | % | 682 | | Y | | 4.6 | % |
Garland II, TX | | 2006 | | 2004 | | 68,475 | | 69.1 | % | 476 | | Y | | 39.7 | % |
Greenville I, TX | | 2005 | | 2001/04 | | 59,385 | | 90.7 | % | 452 | | Y | | 28.8 | % |
Greenville II, TX | | 2005 | | 2001 | | 44,900 | | 71.8 | % | 318 | | N | | 36.3 | % |
Houston I, TX | | 2005 | | 1981 | | 101,350 | | 93.9 | % | 635 | | Y | | 0.0 | % |
Houston II, TX | | 2005 | | 1977 | | 71,300 | | 88.3 | % | 389 | | Y | | 0.0 | % |
Houston III, TX | | 2005 | | 1984 | | 60,820 | | 88.0 | % | 479 | | Y | | 4.0 | % |
Houston IV, TX | | 2005 | | 1987 | | 43,775 | | 94.7 | % | 378 | | Y | | 6.2 | % |
Houston V, TX † | | 2006 | | 1980/1997 | | 127,145 | | 79.0 | % | 1016 | | Y | | 54.7 | % |
Keller, TX | | 2006 | | 2000 | | 61,885 | | 96.9 | % | 488 | | Y | | 21.1 | % |
La Porte, TX | | 2005 | | 1984 | | 45,100 | | 86.3 | % | 434 | | Y | | 18.6 | % |
Lewisville, TX | | 2006 | | 1996 | | 58,465 | | 82.8 | % | 439 | | Y | | 19.3 | % |
Mansfield, TX | | 2006 | | 2003 | | 63,025 | | 83.9 | % | 501 | | Y | | 38.4 | % |
McKinney I, TX | | 2005 | | 1996 | | 47,020 | | 96.7 | % | 370 | | Y | | 9.2 | % |
McKinney II, TX | | 2006 | | 1996 | | 70,050 | | 92.7 | % | 540 | | Y | | 46.3 | % |
North Richland Hills, TX | | 2005 | | 2002 | | 57,025 | | 78.3 | % | 451 | | Y | | 47.4 | % |
Roanoke, TX | | 2005 | | 1996/01 | | 59,400 | | 93.3 | % | 455 | | Y | | 30.1 | % |
San Antonio I, TX | | 2005 | | 2005 | | 75,270 | | 39.4 | % | 584 | | Y | | 78.8 | % |
San Antonio II, TX | | 2006 | | 2005 | | 73,205 | | 62.3 | % | 672 | | N | | 82.3 | % |
San Antonio III, TX | | 2007 | | 2006 | | 72,525 | | 49.6 | % | 579 | | N | | 87.1 | % |
Sherman I, TX | | 2005 | | 1998 | | 55,050 | | 85.5 | % | 514 | | Y | | 20.8 | % |
Sherman II, TX | | 2005 | | 1996 | | 48,425 | | 85.2 | % | 392 | | Y | | 30.9 | % |
Spring, TX | | 2006 | | 1980/86 | | 72,801 | | 88.2 | % | 536 | | Y | | 14.2 | % |
Murray I, UT | | 2005 | | 1976 | | 60,280 | | 93.1 | % | 679 | | Y | | 0.0 | % |
Murray II, UT † | | 2005 | | 1978 | | 71,421 | | 98.0 | % | 384 | | Y | | 2.6 | % |
Salt Lake City I, UT | | 2005 | | 1976 | | 56,446 | | 88.5 | % | 763 | | Y | | 0.0 | % |
Salt Lake City II, UT | | 2005 | | 1978 | | 53,676 | | 94.6 | % | 510 | | Y | | 0.0 | % |
Fredericksburg I, VA | | 2005 | | 2001/04 | | 69,450 | | 62.6 | % | 634 | | N | | 21.5 | % |
Fredericksburg II, VA | | 2005 | | 1998/01 | | 61,493 | | 56.7 | % | 580 | | N | | 100.0 | % |
Milwaukee, WI | | 2004 | | 1988 | | 58,515 | | 84.1 | % | 486 | | Y | | 0.0 | % |
| | | | | | | | | | | | | | | |
Total/Weighted Average (409 facilities) | | | | 26,119,184 | | 79.5 | % | 229,851 | | | | | |
* Denotes facilities developed by us.
† Denotes facilities that contain a significant amount of commercial rentable square footage. All of this commercial space, which was developed in conjunction with the self-storage units, is located within or adjacent to our self-storage facilities and is managed by our self-storage facility managers. As of December 31, 2007, there was an aggregate of approximately 753,000 rentable square feet of commercial space at these facilities.
(1) Represents the year acquired for those facilities acquired from a third party or the year developed for those facilities developed by us.
(2) Represents occupied square feet divided by total rentable square feet at December 31, 2007.
(3) Indicates whether a facility has an on-site apartment where a manager resides.
(4) Represents the percentage of rentable square feet in climate-controlled units.
(5) We do not own the land at this facility. We leased the land pursuant to a ground lease.
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year
| | | | | | | | | | | | | | | | | | |
| | | Acquired/
| | | Year
| | Rentable
| | | | | | | | | Manager
| | | % Climate
| |
Facility Location | | Developed(1) | | | Built | | Square Feet | | | Occupancy(2) | | | Units | | | Apartment(3) | | | Controlled(4) | |
| |
| Mobile I, AL † | | | 1997 | | | 1987 | | | 65,256 | | | | 89.9% | | | | 490 | | | | N | | | | 7.4% | |
| Mobile II, AL † | | | 1997 | | | 1974/90 | | | 126,050 | | | | 75.8% | | | | 794 | | | | N | | | | 1.3% | |
| Mobile III, AL | | | 1998 | | | 1988/94 | | | 43,325 | | | | 92.1% | | | | 371 | | | | Y | | | | 33.8% | |
| Chandler, AZ | | | 2005 | | | 1985 | | | 47,888 | | | | 85.9% | | | | 520 | | | | Y | | | | 0.0% | |
| Glendale, AZ | | | 1998 | | | 1987 | | | 56,580 | | | | 87.7% | | | | 575 | | | | Y | | | | 0.0% | |
| Green Valley, AZ | | | 2005 | | | 1985 | | | 25,400 | | | | 83.0% | | | | 280 | | | | N | | | | 8.0% | |
| Scottsdale, AZ | | | 1998 | | | 1995 | | | 81,300 | | | | 88.4% | | | | 608 | | | | Y | | | | 10.9% | |
| Tempe, AZ | | | 2005 | | | 1975 | | | 53,525 | | | | 84.5% | | | | 408 | | | | Y | | | | 14.0% | |
| Tucson I, AZ | | | 1998 | | | 1974 | | | 60,000 | | | | 91.4% | | | | 504 | | | | Y | | | | 0.0% | |
| Tucson II, AZ | | | 1998 | | | 1988 | | | 44,150 | | | | 84.0% | | | | 536 | | | | Y | | | | 100.0% | |
| Tucson III, AZ | | | 2005 | | | 1979 | | | 49,858 | | | | 86.3% | | | | 579 | | | | N | | | | 0.0% | |
| Tucson IV, AZ | | | 2005 | | | 1982 | | | 48,372 | | | | 89.9% | | | | 553 | | | | Y | | | | 0.0% | |
| Tucson IX, AZ | | | 2005 | | | 1984 | | | 68,866 | | | | 89.1% | | | | 662 | | | | Y | | | | 0.0% | |
| Tucson V, AZ | | | 2005 | | | 1982 | | | 45,428 | | | | 85.2% | | | | 467 | | | | Y | | | | 0.0% | |
| Tucson VI, AZ | | | 2005 | | | 1982 | | | 41,028 | | | | 91.5% | | | | 457 | | | | Y | | | | 0.0% | |
| Tucson VII, AZ | | | 2005 | | | 1982 | | | 52,838 | | | | 92.4% | | | | 640 | | | | Y | | | | 0.0% | |
| Tucson VIII, AZ | | | 2005 | | | 1979 | | | 46,850 | | | | 85.7% | | | | 525 | | | | Y | | | | 0.0% | |
| Tucson X, AZ | | | 2005 | | | 1981 | | | 46,550 | | | | 84.1% | | | | 496 | | | | N | | | | 0.0% | |
| Tucson XI, AZ | | | 2005 | | | 1974 | | | 43,100 | | | | 88.9% | | | | 471 | | | | Y | | | | 0.0% | |
| Tucson XII, AZ | | | 2005 | | | 1974 | | | 42,772 | | | | 89.1% | | | | 516 | | | | N | | | | 0.0% | |
| Tucson XIII, AZ | | | 2005 | | | 1974 | | | 46,192 | | | | 89.4% | | | | 591 | | | | Y | | | | 0.0% | |
| Tucson XIV, AZ | | | 2005 | | | 1976 | | | 49,595 | | | | 87.2% | | | | 590 | | | | Y | | | | 9.0% | |
| Tucson XV, AZ † | | | 2005 | | | 1985 | | | 66,510 | | | | 87.3% | | | | 62 | | | | N | | | | 0.0% | |
| Tucson XVI, AZ † | | | 2005 | | | 1984 | | | 63,018 | | | | 77.5% | | | | 46 | | | | N | | | | 0.0% | |
| Apple Valley I, CA | | | 1997 | | | 1984 | | | 73,580 | | | | 74.3% | | | | 620 | | | | Y | | | | 0.0% | |
| Apple Valley II, CA | | | 1997 | | | 1988 | | | 62,325 | | | | 79.2% | | | | 511 | | | | Y | | | | 5.3% | |
| Benicia, CA | | | 2005 | | | 1988/93/05 | | | 75,040 | | | | 70.4% | | | | 612 | | | | Y | | | | 0.0% | |
| Bloomington I, CA | | | 1997 | | | 1987 | | | 31,246 | | | | 75.8% | | | | 226 | | | | N | | | | 0.0% | |
| Bloomington II, CA † | | | 1997 | | | 1987 | | | 26,060 | | | | 100.0% | | | | 22 | | | | N | | | | 0.0% | |
| Citrus Heights, CA | | | 2005 | | | 1987 | | | 75,906 | | | | 71.0% | | | | 696 | | | | Y | | | | 0.0% | |
| Diamond Bar, CA | | | 2005 | | | 1988 | | | 105,685 | | | | 84.1% | | | | 919 | | | | Y | | | | 0.0% | |
| Fallbrook, CA | | | 1997 | | | 1985/88 | | | 46,534 | | | | 86.8% | | | | 430 | | | | Y | | | | 0.0% | |
| Hemet, CA | | | 1997 | | | 1989 | | | 66,260 | | | | 94.5% | | | | 454 | | | | Y | | | | 0.0% | |
| Highland, CA | | | 1997 | | | 1987 | | | 74,951 | | | | 77.7% | | | | 848 | | | | Y | | | | 0.0% | |
| Lancaster, CA | | | 2001 | | | 1987 | | | 60,875 | | | | 78.2% | | | | 416 | | | | Y | | | | 0.0% | |
| Murrieta, CA | | | 2005 | | | 1996 | | | 50,309 | | | | 82.8% | | | | 492 | | | | Y | | | | 0.0% | |
| North Highlands, CA | | | 2005 | | | 1980 | | | 57,219 | | | | 76.6% | | | | 497 | | | | Y | | | | 0.0% | |
| Ontario, CA | | | 1998 | | | 1982 | | | 80,280 | | | | 71.1% | | | | 840 | | | | Y | | | | 0.0% | |
| Orangevale, CA | | | 2005 | | | 1980 | | | 50,892 | | | | 82.0% | | | | 580 | | | | Y | | | | 0.0% | |
| Pleasanton, CA | | | 2005 | | | 2003 | | | 83,676 | | | | 58.2% | | | | 639 | | | | Y | | | | 0.0% | |
| Rancho Cordova, CA | | | 2005 | | | 1979 | | | 54,128 | | | | 78.3% | | | | 486 | | | | Y | | | | 0.0% | |
26
(6) We have ground leases for certain small parcels of land adjacent to these facilities that expire between 2008 and 2015.| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year
| | | | | | | | | | | | | | | | | | |
| | | Acquired/
| | | Year
| | Rentable
| | | | | | | | | Manager
| | | % Climate
| |
Facility Location | | Developed(1) | | | Built | | Square Feet | | | Occupancy(2) | | | Units | | | Apartment(3) | | | Controlled(4) | |
| |
| Redlands, CA | | | 1997 | | | 1985 | | | 63,005 | | | | 83.9% | | | | 563 | | | | N | | | | 0.0% | |
| Rialto, CA | | | 1997 | | | 1987 | | | 100,083 | | | | 71.5% | | | | 808 | | | | Y | | | | 0.0% | |
| Riverside I, CA | | | 1997 | | | 1989 | | | 28,860 | | | | 79.2% | | | | 249 | | | | N | | | | 0.0% | |
| Riverside II, CA † | | | 1997 | | | 1989 | | | 21,880 | | | | 100.0% | | | | 20 | | | | N | | | | 0.0% | |
| Riverside III, CA | | | 1998 | | | 1989 | | | 46,920 | | | | 88.6% | | | | 384 | | | | Y | | | | 0.0% | |
| Roseville, CA | | | 2005 | | | 1979 | | | 60,144 | | | | 84.9% | | | | 594 | | | | Y | | | | 0.0% | |
| Sacramento I, CA | | | 2005 | | | 1979 | | | 56,724 | | | | 70.4% | | | | 565 | | | | Y | | | | 0.0% | |
| Sacramento II, CA | | | 2005 | | | 1986 | | | 62,090 | | | | 67.7% | | | | 585 | | | | Y | | | | 0.0% | |
| San Bernardino I, CA | | | 1997 | | | 1985 | | | 46,600 | | | | 75.5% | | | | 453 | | | | Y | | | | 5.3% | |
| San Bernardino II, CA | | | 1997 | | | 1987 | | | 83,418 | | | | 62.7% | | | | 625 | | | | Y | | | | 2.0% | |
| San Bernardino III, CA | | | 1997 | | | 1987 | | | 32,102 | | | | 89.6% | | | | 246 | | | | N | | | | 0.0% | |
| San Bernardino IV, CA | | | 1997 | | | 1989 | | | 57,400 | | | | 73.1% | | | | 591 | | | | Y | | | | 0.0% | |
| San Bernardino V, CA | | | 1997 | | | 1991 | | | 41,781 | | | | 81.0% | | | | 408 | | | | Y | | | | 0.0% | |
| San Bernardino VI, CA | | | 1997 | | | 1985/92 | | | 35,007 | | | | 72.5% | | | | 413 | | | | N | | | | 0.0% | |
| San Bernardino VII, CA | | | 2005 | | | 2002/04 | | | 83,756 | | | | 73.5% | | | | 636 | | | | Y | | | | 11.8% | |
| San Marcos, CA | | | 2005 | | | 1979 | | | 37,620 | | | | 80.2% | | | | 252 | | | | Y | | | | 0.0% | |
| South Sacramento, CA | | | 2005 | | | 1979 | | | 51,890 | | | | 53.2% | | | | 435 | | | | Y | | | | 0.0% | |
| Sun City, CA | | | 1998 | | | 1989 | | | 38,635 | | | | 81.1% | | | | 305 | | | | N | | | | 0.0% | |
| Temecula I, CA | | | 1998 | | | 1985 | | | 39,725 | | | | 92.5% | | | | 316 | | | | N | | | | 0.0% | |
| Temecula II, CA | | | 2003 | * | | 2003 | | | 42,475 | | | | 76.8% | | | | 392 | | | | Y | | | | 89.5% | |
| Vista I, CA | | | 2001 | | | 1988 | | | 74,781 | | | | 90.2% | | | | 614 | | | | Y | | | | 0.0% | |
| Vista II, CA | | | 2005 | | | 2001/02/03 | | | 147,991 | | | | 72.2% | | | | 1330 | | | | Y | | | | 3.6% | |
| Walnut, CA | | | 2005 | | | 1987 | | | 50,934 | | | | 85.1% | | | | 541 | | | | Y | | | | 0.0% | |
| Westminster, CA | | | 2005 | | | 1983/98 | | | 70,213 | | | | 87.4% | | | | 650 | | | | Y | | | | 0.0% | |
| W. Sacramento, CA | | | 2005 | | | 1984 | | | 39,955 | | | | 88.6% | | | | 487 | | | | Y | | | | 0.0% | |
| Yucaipa, CA | | | 1997 | | | 1989 | | | 78,444 | | | | 76.7% | | | | 680 | | | | Y | | | | 0.0% | |
| Aurora I, CO | | | 2005 | | | 1981 | | | 74,817 | | | | 70.5% | | | | 641 | | | | Y | | | | 0.0% | |
| Aurora II, CO | | | 2005 | | | 1984 | | | 57,454 | | | | 73.8% | | | | 514 | | | | Y | | | | 0.0% | |
| Aurora III, CO | | | 2005 | | | 1977 | | | 33,410 | | | | 72.5% | | | | 317 | | | | Y | | | | 0.0% | |
| Avon, CO | | | 2005 | | | 1989 | | | 28,175 | | | | 96.6% | | | | 397 | | | | Y | | | | 0.0% | |
| Colorado Springs, CO | | | 2005 | | | 1986 | | | 48,005 | | | | 78.3% | | | | 513 | | | | Y | | | | 0.0% | |
| Denver, CO | | | 2005 | | | 1987 | | | 57,145 | | | | 85.5% | | | | 453 | | | | Y | | | | 0.0% | |
| Englewood, CO | | | 2005 | | | 1981 | | | 51,230 | | | | 87.7% | | | | 372 | | | | Y | | | | 0.0% | |
| Federal Heights, CO | | | 2005 | | | 1980 | | | 55,080 | | | | 69.8% | | | | 576 | | | | Y | | | | 0.0% | |
| Golden, CO | | | 2005 | | | 1985 | | | 88,792 | | | | 74.8% | | | | 648 | | | | Y | | | | 0.0% | |
| Littleton I , CO | | | 2005 | | | 1987 | | | 53,690 | | | | 85.4% | | | | 457 | | | | Y | | | | 38.0% | |
| Littleton II, CO | | | 2005 | | | 1982 | | | 46,315 | | | | 87.8% | | | | 365 | | | | Y | | | | 0.0% | |
| Northglenn, CO | | | 2005 | | | 1980 | | | 52,302 | | | | 77.0% | | | | 500 | | | | Y | | | | 0.0% | |
| Bloomfield, CT | | | 1997 | | | 1987/93/94 | | | 48,900 | | | | 61.9% | | | | 455 | | | | Y | | | | 6.6% | |
| Branford, CT | | | 1995 | | | 1986 | | | 51,079 | | | | 78.3% | | | | 438 | | | | Y | | | | 2.2% | |
| Bristol, CT | | | 2005 | | | 1989/99 | | | 53,625 | | | | 87.9% | | | | 504 | | | | N | | | | 22.4% | |
| East Windsor, CT | | | 2005 | | | 1986/89 | | | 46,100 | | | | 62.9% | | | | 326 | | | | N | | | | 0.0% | |
| Enfield, CT | | | 2001 | | | 1989 | | | 52,975 | | | | 79.0% | | | | 384 | | | | Y | | | | 0.0% | |
| Gales Ferry, CT | | | 1995 | | | 1987/89 | | | 51,780 | | | | 60.6% | | | | 592 | | | | N | | | | 4.8% | |
| Manchester I, CT (6) | | | 2002 | | | 1999/00/01 | | | 47,400 | | | | 58.5% | | | | 519 | | | | N | | | | 37.0% | |
| Manchester II, CT | | | 2005 | | | 1984 | | | 53,237 | | | | 79.2% | | | | 419 | | | | N | | | | 0.0% | |
27
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year
| | | | | | | | | | | | | | | | | | |
| | | Acquired/
| | | Year
| | Rentable
| | | | | | | | | Manager
| | | % Climate
| |
Facility Location | | Developed(1) | | | Built | | Square Feet | | | Occupancy(2) | | | Units | | | Apartment(3) | | | Controlled(4) | |
| |
| Milford, CT | | | 1994 | | | 1975 | | | 45,181 | | | | 81.0% | | | | 388 | | | | N | | | | 3.1% | |
| Monroe, CT | | | 2005 | | | 1996/03 | | | 66,909 | | | | 90.1% | | | | 411 | | | | N | | | | 0.0% | |
| Mystic, CT | | | 1994 | | | 1975/86 | | | 50,250 | | | | 72.0% | | | | 551 | | | | Y | | | | 2.4% | |
| Newington I, CT † | | | 2005 | | | 1978/97 | | | 54,920 | | | | 87.7% | | | | 264 | | | | N | | | | 0.0% | |
| Newington II, CT | | | 2005 | | | 1979/81 | | | 36,490 | | | | 86.2% | | | | 222 | | | | N | | | | 0.0% | |
| Old Saybrook I, CT | | | 2005 | | | 1982/88/00 | | | 91,288 | | | | 77.7% | | | | 725 | | | | N | | | | 6.3% | |
| Old Saybrook II, CT | | | 2005 | | | 1988/02 | | | 26,875 | | | | 74.7% | | | | 256 | | | | N | | | | 30.0% | |
| South Windsor, CT | | | 1994 | | | 1976 | | | 67,525 | | | | 64.0% | | | | 550 | | | | Y | | | | 0.8% | |
| Stamford, CT | | | 2005 | | | 1997 | | | 29,326 | | | | 86.9% | | | | 369 | | | | N | | | | 31.2% | |
| Boca Raton, FL | | | 2001 | | | 1998 | | | 38,203 | | | | 97.5% | | | | 605 | | | | N | | | | 67.9% | |
| Boynton Beach I, FL | | | 2001 | | | 1999 | | | 62,042 | | | | 96.1% | | | | 800 | | | | Y | | | | 54.0% | |
| Boynton Beach II, FL | | | 2005 | | | 2001 | | | 62,276 | | | | 91.0% | | | | 609 | | | | Y | | | | 81.5% | |
| Bradenton I, FL | | | 2004 | | | 1979 | | | 68,480 | | | | 75.2% | | | | 676 | | | | N | | | | 2.8% | |
| Bradenton II, FL | | | 2004 | | | 1996 | | | 88,103 | | | | 84.6% | | | | 904 | | | | Y | | | | 40.2% | |
| Cape Coral, FL | | | 2000 | * | | 2000 | | | 76,789 | | | | 96.4% | | | | 902 | | | | Y | | | | 83.0% | |
| Dania Beach, FL (6) | | | 2004 | | | 1984 | | | 264,375 | | | | 84.5% | | | | 1928 | | | | N | | | | 21.0% | |
| Dania, FL | | | 1994 | | | 1988 | | | 58,319 | | | | 98.5% | | | | 483 | | | | Y | | | | 26.9% | |
| Davie, FL | | | 2001 | * | | 2001 | | | 81,235 | | | | 91.9% | | | | 839 | | | | Y | | | | 55.6% | |
| Deerfield Beach, FL | | | 1998 | * | | 1998 | | | 57,770 | | | | 97.1% | | | | 527 | | | | Y | | | | 39.2% | |
| DeLand, FL | | | 1998 | | | 1987 | | | 38,577 | | | | 93.5% | | | | 412 | | | | Y | | | | 0.0% | |
| Delray Beach, FL | | | 2001 | | | 1999 | | | 68,531 | | | | 97.0% | | | | 819 | | | | Y | | | | 39.0% | |
| Fernandina Beach, FL † | | | 1996 | | | 1986 | | | 91,480 | | | | 95.8% | | | | 683 | | | | Y | | | | 21.7% | |
| Ft. Lauderdale, FL | | | 1999 | | | 1999 | | | 70,544 | | | | 97.8% | | | | 655 | | | | Y | | | | 46.0% | |
| Ft. Myers, FL | | | 1998 | | | 1998 | | | 67,256 | | | | 95.3% | | | | 611 | | | | Y | | | | 67.0% | |
| Gulf Breeze, FL | | | 2005 | | | 1982/04 | | | 79,455 | | | | 97.0% | | | | 701 | | | | N | | | | 64.0% | |
| Jacksonville, FL | | | 2005 | | | 2005 | | | 79,366 | | | | 14.9% | | | | 761 | | | | N | | | | 100.0% | |
| Lake Worth, FL † | | | 1998 | | | 1998/02 | | | 167,946 | | | | 89.3% | | | | 1293 | | | | N | | | | 44.9% | |
| Lakeland I, FL | | | 1994 | | | 1988 | | | 49,111 | | | | 96.5% | | | | 463 | | | | Y | | | | 78.1% | |
| Lakeland II, FL | | | 1996 | | | 1984 | | | 48,600 | | | | 86.6% | | | | 356 | | | | Y | | | | 19.5% | |
| Leesburg, FL | | | 1997 | | | 1988 | | | 51,995 | | | | 91.7% | | | | 447 | | | | Y | | | | 5.1% | |
| Lutz I, FL | | | 2004 | | | 2000 | | | 72,795 | | | | 85.9% | | | | 658 | | | | Y | | | | 34.0% | |
| Lutz II, FL | | | 2004 | | | 1999 | | | 69,378 | | | | 86.4% | | | | 549 | | | | Y | | | | 20.4% | |
| Margate I, FL † | | | 1994 | | | 1979/81 | | | 55,677 | | | | 91.2% | | | | 343 | | | | N | | | | 10.5% | |
| Margate II, FL † | | | 1996 | | | 1985 | | | 66,135 | | | | 93.2% | | | | 317 | | | | Y | | | | 65.0% | |
| Merrit Island, FL | | | 2000 | | | 2000 | | | 50,523 | | | | 94.1% | | | | 470 | | | | Y | | | | 56.4% | |
| Miami I, FL | | | 1995 | | | 1995 | | | 47,200 | | | | 89.0% | | | | 556 | | | | Y | | | | 52.2% | |
| Miami II, FL | | | 1994 | | | 1987 | | | 57,165 | | | | 65.3% | | | | 598 | | | | Y | | | | 0.1% | |
| Miami III, FL | | | 1994 | | | 1989 | | | 67,360 | | | | 93.8% | | | | 573 | | | | Y | | | | 7.8% | |
| Miami IV, FL | | | 1995 | | | 1987 | | | 58,298 | | | | 86.5% | | | | 610 | | | | Y | | | | 7.0% | |
| Miami V, FL | | | 1995 | | | 1976 | | | 77,825 | | | | 81.1% | | | | 369 | | | | Y | | | | 4.0% | |
| Miami VI, FL | | | 2005 | | | 1988/03 | | | 152,075 | | | | 76.8% | | | | 1504 | | | | N | | | | 93.0% | |
| Naples I, FL | | | 1996 | | | 1996 | | | 48,150 | | | | 90.4% | | | | 349 | | | | Y | | | | 26.6% | |
| Naples II, FL | | | 1997 | | | 1985 | | | 65,994 | | | | 91.7% | | | | 647 | | | | Y | | | | 43.9% | |
| Naples III, FL | | | 1997 | | | 1981/83 | | | 80,709 | | | | 83.4% | | | | 889 | | | | Y | | | | 24.0% | |
| Naples IV, FL | | | 1998 | | | 1990 | | | 40,023 | | | | 83.8% | | | | 444 | | | | N | | | | 41.4% | |
| Ocala, FL | | | 1994 | | | 1988 | | | 42,086 | | | | 93.9% | | | | 360 | | | | Y | | | | 9.7% | |
| Ocoee, FL | | | 2005 | | | 1997 | | | 76,258 | | | | 93.9% | | | | 665 | | | | Y | | | | 15.5% | |
28
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year
| | | | | | | | | | | | | | | | | | |
| | | Acquired/
| | | Year
| | Rentable
| | | | | | | | | Manager
| | | % Climate
| |
Facility Location | | Developed(1) | | | Built | | Square Feet | | | Occupancy(2) | | | Units | | | Apartment(3) | | | Controlled(4) | |
| |
| Orange City, FL | | | 2004 | | | 2001 | | | 59,781 | | | | 83.9% | | | | 680 | | | | N | | | | 39.0% | |
| Orlando I, FL (6) | | | 1997 | | | 1987 | | | 51,770 | | | | 85.2% | | | | 453 | | | | Y | | | | 4.8% | |
| Orlando II, FL | | | 2005 | | | 2002/04 | | | 92,944 | | | | 87.2% | | | | 788 | | | | N | | | | 74.1% | |
| Pembroke Pines, FL | | | 1997 | | | 1997 | | | 67,505 | | | | 95.3% | | | | 692 | | | | Y | | | | 73.1% | |
| Royal Palm Beach, FL † | | | 1994 | | | 1988 | | | 98,851 | | | | 83.5% | | | | 670 | | | | N | | | | 79.2% | |
| Sarasota, FL | | | 1998 | | | 1998 | | | 70,798 | | | | 90.5% | | | | 532 | | | | Y | | | | 43.0% | |
| St. Augustine, FL | | | 1996 | | | 1985 | | | 59,830 | | | | 86.8% | | | | 581 | | | | Y | | | | 29.6% | |
| Stuart I, FL | | | 1997 | | | 1986 | | | 41,694 | | | | 95.8% | | | | 524 | | | | Y | | | | 27.0% | |
| Stuart II, FL | | | 1997 | | | 1995 | | | 89,541 | | | | 95.9% | | | | 896 | | | | Y | | | | 34.1% | |
| Tampa I, FL | | | 1994 | | | 1987 | | | 60,150 | | | | 89.4% | | | | 416 | | | | Y | | | | 0.0% | |
| Tampa II, FL | | | 2001 | | | 1985 | | | 56,047 | | | | 88.2% | | | | 476 | | | | Y | | | | 16.8% | |
| Vero Beach, FL | | | 1997 | | | 1986/87 | | | 50,515 | | | | 95.5% | | | | 482 | | | | N | | | | 23.9% | |
| West Palm Beach I, FL | | | 2001 | | | 1997 | | | 68,295 | | | | 95.8% | | | | 1028 | | | | Y | | | | 47.3% | |
| West Palm Beach II, FL | | | 2004 | | | 1996 | | | 93,915 | | | | 95.7% | | | | 913 | | | | Y | | | | 77.0% | |
| Alpharetta, GA | | | 2001 | | | 1996 | | | 90,685 | | | | 71.1% | | | | 670 | | | | Y | | | | 74.9% | |
| Decatur, GA | | | 1998 | | | 1986 | | | 148,680 | | | | 71.7% | | | | 1409 | | | | Y | | | | 3.1% | |
| Norcross, GA | | | 2001 | | | 1997 | | | 85,460 | | | | 79.6% | | | | 598 | | | | Y | | | | 55.1% | |
| Peachtree City, GA | | | 2001 | | | 1997 | | | 50,034 | | | | 73.5% | | | | 449 | | | | N | | | | 74.6% | |
| Smyrna, GA | | | 2001 | | | 2000 | | | 56,528 | | | | 94.7% | | | | 509 | | | | Y | | | | 100.0% | |
| Addison, IL | | | 2004 | | | 1979 | | | 31,775 | | | | 92.0% | | | | 377 | | | | Y | | | | 0.0% | |
| Aurora, IL | | | 2004 | | | 1996 | | | 74,440 | | | | 61.0% | | | | 573 | | | | Y | | | | 6.9% | |
| Bartlett I, IL | | | 2004 | | | 1987 | | | 41,394 | | | | 86.3% | | | | 430 | | | | Y | | | | 0.5% | |
| Bartlett II, IL | | | 2004 | | | 1987 | | | 51,725 | | | | 78.4% | | | | 421 | | | | Y | | | | 33.5% | |
| Bellwood, IL | | | 2001 | | | 1999 | | | 86,700 | | | | 89.3% | | | | 724 | | | | Y | | | | 52.1% | |
| Des Plaines, IL (6) | | | 2004 | | | 1978 | | | 74,600 | | | | 81.2% | | | | 643 | | | | Y | | | | 0.0% | |
| Elk Grove Village, IL | | | 2004 | | | 1987 | | | 63,638 | | | | 85.7% | | | | 655 | | | | Y | | | | 0.3% | |
| Glenview, IL | | | 2004 | | | 1998 | | | 100,345 | | | | 74.6% | | | | 764 | | | | Y | | | | 100.0% | |
| Gurnee, IL | | | 2004 | | | 1987 | | | 80,500 | | | | 65.3% | | | | 741 | | | | Y | | | | 34.0% | |
| Harvey, IL | | | 2004 | | | 1987 | | | 59,816 | | | | 92.5% | | | | 587 | | | | Y | | | | 3.0% | |
| Joliet, IL | | | 2004 | | | 1993 | | | 74,750 | | | | 62.2% | | | | 481 | | | | Y | | | | 23.3% | |
| Lake Zurich, IL | | | 2004 | | | 1988 | | | 46,635 | | | | 81.1% | | | | 450 | | | | Y | | | | 0.0% | |
| Lombard, IL † | | | 2004 | | | 1981 | | | 61,242 | | | | 80.2% | | | | 520 | | | | Y | | | | 18.3% | |
| Mount Prospect, IL | | | 2004 | | | 1979 | | | 65,200 | | | | 70.9% | | | | 610 | | | | Y | | | | 12.6% | |
| Mundelein, IL | | | 2004 | | | 1990 | | | 44,900 | | | | 65.4% | | | | 509 | | | | Y | | | | 8.9% | |
| North Chicago, IL | | | 2004 | | | 1985 | | | 53,500 | | | | 85.1% | | | | 445 | | | | N | | | | 0.0% | |
| Plainfield I, IL | | | 2004 | | | 1998 | | | 54,375 | | | | 80.3% | | | | 410 | | | | N | | | | 0.0% | |
| Plainfield II, IL | | | 2005 | | | 2000 | | | 52,450 | | | | 70.5% | | | | 368 | | | | N | | | | 16.8% | |
| Schaumburg, IL | | | 2004 | | | 1988 | | | 31,157 | | | | 84.0% | | | | 325 | | | | N | | | | 0.8% | |
| Streamwood, IL | | | 2004 | | | 1982 | | | 64,565 | | | | 71.0% | | | | 578 | | | | N | | | | 0.0% | |
| Warrensville, IL | | | 2005 | | | 1977/89 | | | 46,728 | | | | 87.7% | | | | 382 | | | | N | | | | 0.0% | |
| Waukegan, IL | | | 2004 | | | 1977 | | | 79,950 | | | | 72.3% | | | | 715 | | | | Y | | | | 8.4% | |
| West Chicago, IL | | | 2004 | | | 1979 | | | 48,625 | | | | 80.0% | | | | 440 | | | | Y | | | | 0.0% | |
| Westmont, IL | | | 2004 | | | 1979 | | | 53,900 | | | | 69.2% | | | | 403 | | | | Y | | | | 0.0% | |
| Wheeling I, IL | | | 2004 | | | 1974 | | | 54,900 | | | | 74.5% | | | | 505 | | | | Y | | | | 0.0% | |
| Wheeling II, IL | | | 2004 | | | 1979 | | | 68,025 | | | | 64.7% | | | | 624 | | | | Y | | | | 7.3% | |
| Woodridge, IL | | | 2004 | | | 1987 | | | 50,595 | | | | 82.4% | | | | 477 | | | | Y | | | | 0.0% | |
29
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year
| | | | | | | | | | | | | | | | | | |
| | | Acquired/
| | | Year
| | Rentable
| | | | | | | | | Manager
| | | % Climate
| |
Facility Location | | Developed(1) | | | Built | | Square Feet | | | Occupancy(2) | | | Units | | | Apartment(3) | | | Controlled(4) | |
| |
| Indianapolis I, IN | | | 2004 | | | 1987 | | | 43,800 | | | | 79.1% | | | | 332 | | | | N | | | | 0.0% | |
| Indianapolis II, IN | | | 2004 | | | 1997 | | | 45,100 | | | | 81.2% | | | | 460 | | | | Y | | | | 15.6% | |
| Indianapolis III, IN | | | 2004 | | | 1999 | | | 61,325 | | | | 79.9% | | | | 506 | | | | Y | | | | 32.6% | |
| Indianapolis IV, IN | �� | | 2004 | | | 1976 | | | 68,494 | | | | 61.4% | | | | 616 | | | | Y | | | | 0.0% | |
| Indianapolis IX, IN | | | 2004 | | | 1976 | | | 62,196 | | | | 74.5% | | | | 557 | | | | Y | | | | 0.0% | |
| Indianapolis V, IN | | | 2004 | | | 1999 | | | 75,025 | | | | 81.2% | | | | 596 | | | | Y | | | | 33.5% | |
| Indianapolis VI, IN | | | 2004 | | | 1976 | | | 73,693 | | | | 71.7% | | | | 730 | | | | Y | | | | 0.0% | |
| Indianapolis VII, IN | | | 2004 | | | 1992 | | | 95,290 | | | | 60.8% | | | | 884 | | | | Y | | | | 0.0% | |
| Indianapolis VIII, IN | | | 2004 | | | 1975 | | | 81,676 | | | | 72.4% | | | | 738 | | | | Y | | | | 0.0% | |
| Baton Rouge I, LA | | | 1997 | | | 1980 | | | 55,984 | | | | 99.0% | | | | 464 | | | | Y | | | | 9.7% | |
| Baton Rouge II, LA | | | 1997 | | | 1980 | | | 72,082 | | | | 94.0% | | | | 499 | | | | Y | | | | 33.7% | |
| Baton Rouge III, LA | | | 1997 | | | 1982 | | | 61,078 | | | | 99.4% | | | | 451 | | | | Y | | | | 10.2% | |
| Baton Rouge IV, LA | | | 1998 | | | 1995 | | | 8,920 | | | | 99.7% | | | | 84 | | | | N | | | | 100.0% | |
| Prairieville, LA | | | 1998 | | | 1991 | | | 56,520 | | | | 93.9% | | | | 306 | | | | Y | | | | 3.0% | |
| Slidell, LA | | | 2001 | | | 1998 | | | 79,740 | | | | 98.7% | | | | 525 | | | | Y | | | | 46.5% | |
| Boston, MA | | | 2002 | | | 2001 | | | 61,360 | | | | 68.8% | | | | 630 | | | | Y | | | | 100.0% | |
| Leominster, MA | | | 1998 | | | 1987/88/00 | | | 54,181 | | | | 73.9% | | | | 504 | | | | Y | | | | 45.1% | |
| Baltimore, MD | | | 2001 | | | 1999/00 | | | 93,750 | | | | 75.0% | | | | 808 | | | | Y | | | | 45.5% | |
| California, MD | | | 2004 | | | 1998 | | | 67,528 | | | | 82.9% | | | | 722 | | | | Y | | | | 40.1% | |
| Gaithersburg, MD | | | 2005 | | | 1998 | | | 87,170 | | | | 67.8% | | | | 798 | | | | Y | | | | 100.0% | |
| Laurel, MD † | | | 2001 | | | 1978/99/00 | | | 161,530 | | | | 82.4% | | | | 956 | | | | N | | | | 63.7% | |
| Temple Hills, MD | | | 2001 | | | 2000 | | | 95,830 | | | | 86.3% | | | | 813 | | | | Y | | | | 77.6% | |
| Grand Rapids, MI | | | 1996 | | | 1976 | | | 87,295 | | | | 77.3% | | | | 508 | | | | Y | | | | 0.0% | |
| Portage, MI (6) | | | 1996 | | | 1980 | | | 50,671 | | | | 90.8% | | | | 340 | | | | N | | | | 0.0% | |
| Romulus, MI | | | 1997 | | | 1997 | | | 43,970 | | | | 65.2% | | | | 318 | | | | Y | | | | 10.7% | |
| Wyoming, MI | | | 1996 | | | 1987 | | | 90,975 | | | | 84.0% | | | | 621 | | | | N | | | | 0.0% | |
| Biloxi, MS | | | 1997 | | | 1978/93 | | | 66,188 | | | | 94.6% | | | | 620 | | | | Y | | | | 7.4% | |
| Gautier, MS | | | 1997 | | | 1981 | | | 35,775 | | | | 97.2% | | | | 306 | | | | Y | | | | 3.2% | |
| Gulfport I, MS | | | 1997 | | | 1970 | | | 73,460 | | | | 83.0% | | | | 513 | | | | Y | | | | 0.0% | |
| Gulfport II, MS | | | 1997 | | | 1986 | | | 64,745 | | | | 88.7% | | | | 436 | | | | Y | | | | 18.8% | |
| Gulfport III, MS | | | 1997 | | | 1977/93 | | | 61,451 | | | | 82.5% | | | | 486 | | | | Y | | | | 33.2% | |
| Waveland, MS | | | 1998 | | | 1982/83/84/93 | | | 16,511 | | | | 2.5% | | | | 117 | | | | Y | | | | 23.7% | |
| Belmont, NC | | | 2001 | | | 1996/97/98 | | | 81,215 | | | | 94.4% | | | | 569 | | | | N | | | | 7.8% | |
| Burlington I, NC | | | 2001 | | | 1990/91/93/94/98 | | | 110,502 | | | | 84.1% | | | | 951 | | | | N | | | | 4.0% | |
| Burlington II, NC | | | 2001 | | | 1991 | | | 39,802 | | | | 82.1% | | | | 392 | | | | Y | | | | 11.9% | |
| Cary, NC | | | 2001 | | | 1993/94/97 | | | 110,464 | | | | 78.2% | | | | 751 | | | | N | | | | 8.5% | |
| Charlotte, NC | | | 1999 | | | 1999 | | | 69,246 | | | | 92.3% | | | | 740 | | | | N | | | | 52.4% | |
| Fayetteville I, NC | | | 1997 | | | 1981 | | | 41,600 | | | | 93.2% | | | | 352 | | | | N | | | | 0.0% | |
| Fayetteville II, NC | | | 1997 | | | 1993/95 | | | 54,425 | | | | 97.4% | | | | 557 | | | | Y | | | | 11.9% | |
| Raleigh, NC | | | 1998 | | | 1994/95 | | | 48,525 | | | | 81.8% | | | | 431 | | | | Y | | | | 8.2% | |
| Brick, NJ | | | 1994 | | | 1981 | | | 51,892 | | | | 81.0% | | | | 456 | | | | Y | | | | 0.0% | |
| Clifton, NJ | | | 2005 | | | 2001 | | | 105,625 | | | | 78.9% | | | | 1014 | | | | Y | | | | 100.0% | |
| Cranford, NJ | | | 1994 | | | 1987 | | | 91,450 | | | | 83.2% | | | | 848 | | | | Y | | | | 7.9% | |
| East Hanover, NJ | | | 1994 | | | 1983 | | | 107,874 | | | | 77.2% | | | | 1019 | | | | N | | | | 1.6% | |
| Elizabeth, NJ | | | 2005 | | | 1925/97 | | | 40,202 | | | | 54.3% | | | | 686 | | | | N | | | | 45.0% | |
| Fairview, NJ | | | 1997 | | | 1989 | | | 28,021 | | | | 83.7% | | | | 452 | | | | N | | | | 100.0% | |
| Hoboken, NJ | | | 2005 | | | 1945/97 | | | 34,681 | | | | 86.7% | | | | 750 | | | | N | | | | 100.0% | |
30
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year
| | | | | | | | | | | | | | | | | | |
| | | Acquired/
| | | Year
| | Rentable
| | | | | | | | | Manager
| | | % Climate
| |
Facility Location | | Developed(1) | | | Built | | Square Feet | | | Occupancy(2) | | | Units | | | Apartment(3) | | | Controlled(4) | |
| |
| Jersey City, NJ | | | 1994 | | | 1985 | | | 91,736 | | | | 82.3% | | | | 1095 | | | | Y | | | | 0.0% | |
| Linden I, NJ | | | 1994 | | | 1983 | | | 100,625 | | | | 72.0% | | | | 1125 | | | | N | | | | 2.7% | |
| Linden II, NJ † | | | 1994 | | | 1982 | | | 36,000 | | | | 100.0% | | | | 26 | | | | N | | | | 0.0% | |
| Morris Township, NJ (5) | | | 1997 | | | 1972 | | | 76,175 | | | | 79.6% | | | | 573 | | | | Y | | | | 1.3% | |
| Parsippany, NJ | | | 1997 | | | 1981 | | | 66,375 | | | | 86.8% | | | | 613 | | | | Y | | | | 1.4% | |
| Randolph, NJ | | | 2002 | | | 1998/99 | | | 52,232 | | | | 77.1% | | | | 592 | | | | Y | | | | 82.5% | |
| Sewell, NJ | | | 2001 | | | 1984/98 | | | 57,769 | | | | 81.6% | | | | 448 | | | | N | | | | 4.4% | |
| Albuquerque I, NM | | | 2005 | | | 1985 | | | 65,876 | | | | 87.3% | | | | 633 | | | | Y | | | | 0.0% | |
| Albuquerque II, NM | | | 2005 | | | 1985 | | | 59,022 | | | | 97.6% | | | | 553 | | | | Y | | | | 0.0% | |
| Albuquerque III, NM | | | 2005 | | | 1978 | | | 41,163 | | | | 89.7% | | | | 460 | | | | Y | | | | 0.0% | |
| Albuquerque IV, NM | | | 2005 | | | 1986 | | | 56,554 | | | | 80.1% | | | | 536 | | | | Y | | | | 0.0% | |
| Carlsbad, NM | | | 2005 | | | 1975 | | | 40,159 | | | | 92.9% | | | | 348 | | | | Y | | | | 0.0% | |
| Deming, NM | | | 2005 | | | 1973/83 | | | 33,100 | | | | 82.7% | | | | 256 | | | | Y | | | | 0.0% | |
| Las Cruces, NM | | | 2005 | | | 1984 | | | 44,050 | | | | 96.8% | | | | 406 | | | | Y | | | | 0.0% | |
| Lovington, NM | | | 2005 | | | 1975 | | | 15,950 | | | | 93.1% | | | | 172 | | | | Y | | | | 0.0% | |
| Silver City, NM | | | 2005 | | | 1972 | | | 27,075 | | | | 99.3% | | | | 256 | | | | Y | | | | 0.0% | |
| Truth or Consequences, NM | | | 2005 | | | 1977/99/00 | | | 24,510 | | | | 89.7% | | | | 168 | | | | Y | | | | 0.0% | |
| Endicott, NY | | | 2005 | | | 1989 | | | 35,330 | | | | 81.5% | | | | 297 | | | | Y | | | | 0.0% | |
| Jamaica, NY | | | 2001 | | | 2000 | | | 90,156 | | | | 68.0% | | | | 928 | | | | Y | | | | 100.0% | |
| New Rochelle, NY † | | | 2005 | | | 1998 | | | 30,343 | | | | 89.1% | | | | 402 | | | | N | | | | 0.0% | |
| North Babylon, NY | | | 1998 | | | 1988/99 | | | 78,288 | | | | 78.0% | | | | 635 | | | | Y | | | | 9.1% | |
| Riverhead, NY | | | 2005 | | | 1985/86/99 | | | 41,410 | | | | 87.6% | | | | 346 | | | | N | | | | 0.0% | |
| Southold, NY † | | | 2005 | | | 1989 | | | 59,773 | | | | 93.8% | | | | 587 | | | | N | | | | 0.0% | |
| Boardman, OH | | | 1980 | | | 1980/89 | | | 66,187 | | | | 80.5% | | | | 525 | | | | Y | | | | 16.1% | |
| Brecksville, OH † | | | 1998 | | | 1970/89 | | | 64,764 | | | | 82.6% | | | | 410 | | | | Y | | | | 34.2% | |
| Canton I, OH | | | 2005 | | | 1979/87 | | | 40,545 | | | | 75.0% | | | | 414 | | | | Y | | | | 0.0% | |
| Canton II, OH | | | 2005 | | | 1997 | | | 31,700 | | | | 85.7% | | | | 201 | | | | N | | | | 0.0% | |
| Centerville I, OH | | | 2004 | | | 1976 | | | 86,590 | | | | 75.5% | | | | 654 | | | | Y | | | | 0.0% | |
| Centerville II, OH | | | 2004 | | | 1976 | | | 43,600 | | | | 76.8% | | | | 310 | | | | N | | | | 0.0% | |
| Cleveland I, OH | | | 2005 | | | 1997/99 | | | 46,400 | | | | 81.0% | | | | 353 | | | | Y | | | | 0.0% | |
| Cleveland II, OH | | | 2005 | | | 2000 | | | 58,652 | | | | 50.0% | | | | 591 | | | | Y | | | | 0.0% | |
| Dayton I, OH | | | 2004 | | | 1978 | | | 43,420 | | | | 83.7% | | | | 351 | | | | N | | | | 0.0% | |
| Dayton II, OH | | | 2005 | | | 1989/00 | | | 47,550 | | | | 67.4% | | | | 368 | | | | N | | | | 0.0% | |
| Euclid I, OH | | | 1988 | * | | 1988 | | | 47,260 | | | | 77.4% | | | | 441 | | | | Y | | | | 21.9% | |
| Euclid II, OH | | | 1988 | * | | 1988 | | | 48,058 | | | | 76.3% | | | | 381 | | | | Y | | | | 0.0% | |
| Hudson, OH † | | | 1998 | | | 1987 | | | 68,470 | | | | 88.9% | | | | 421 | | | | N | | | | 13.9% | |
| Lakewood, OH | | | 1989 | * | | 1989 | | | 39,523 | | | | 81.7% | | | | 486 | | | | Y | | | | 24.5% | |
| Louisville, OH | | | 2005 | | | 1988/90 | | | 60,402 | | | | 88.8% | | | | 390 | | | | N | | | | 0.0% | |
| Marblehead, OH | | | 2005 | | | 1988/98 | | | 76,500 | | | | 66.8% | | | | 388 | | | | N | | | | 0.0% | |
| Mason, OH | | | 1998 | | | 1981 | | | 33,700 | | | | 89.2% | | | | 282 | | | | Y | | | | 0.0% | |
| Mentor, OH | | | 2005 | | | 1983/99 | | | 61,284 | | | | 77.7% | | | | 454 | | | | N | | | | 23.1% | |
| Miamisburg, OH † | | | 2004 | | | 1975 | | | 61,050 | | | | 84.3% | | | | 432 | | | | Y | | | | 0.0% | |
| Middleburg Hts, OH | | | 1980 | * | | 1980 | | | 94,150 | | | | 76.2% | | | | 667 | | | | Y | | | | 0.0% | |
| North Canton I, OH | | | 1979 | * | | 1979 | | | 45,532 | | | | 92.0% | | | | 290 | | | | Y | | | | 0.0% | |
| North Canton II, OH | | | 1983 | * | | 1983 | | | 44,380 | | | | 90.8% | | | | 354 | | | | Y | | | | 15.8% | |
| North Olmsted I, OH | | | 1979 | * | | 1979 | | | 48,910 | | | | 86.4% | | | | 449 | | | | Y | | | | 1.2% | |
31
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year
| | | | | | | | | | | | | | | | | | |
| | | Acquired/
| | | Year
| | Rentable
| | | | | | | | | Manager
| | | % Climate
| |
Facility Location | | Developed(1) | | | Built | | Square Feet | | | Occupancy(2) | | | Units | | | Apartment(3) | | | Controlled(4) | |
| |
| North Olmsted II, OH | | | 1988 | * | | 1988 | | | 48,050 | | | | 80.2% | | | | 406 | | | | Y | | | | 14.1% | |
| North Randall, OH | | | 1998 | * | | 1998/02 | | | 80,452 | | | | 79.1% | | | | 803 | | | | N | | | | 90.3% | |
| Perry, OH | | | 2005 | | | 1992/97 | | | 68,851 | | | | 73.1% | | | | 431 | | | | Y | | | | 0.0% | |
| Warrensville Hts, OH | | | 1980 | * | | 1980/82/98 | | | 90,531 | | | | 84.9% | | | | 746 | | | | Y | | | | 0.0% | |
| Westlake, OH | | | 2005 | | | 2001 | | | 62,800 | | | | 96.3% | | | | 460 | | | | Y | | | | 0.0% | |
| Willoughby, OH | | | 2005 | | | 1997 | | | 33,639 | | | | 75.7% | | | | 274 | | | | Y | | | | 0.0% | |
| Youngstown, OH | | | 1977 | * | | 1977 | | | 66,700 | | | | 87.1% | | | | 500 | | | | Y | | | | 0.0% | |
| Levittown, PA | | | 2001 | | | 2000 | | | 78,230 | | | | 85.8% | | | | 671 | | | | Y | | | | 36.2% | |
| Philadelphia, PA | | | 2001 | | | 1999 | | | 99,181 | | | | 82.3% | | | | 914 | | | | N | | | | 91.6% | |
| Hilton Head I, SC † | | | 1997 | | | 1981/84 | | | 116,766 | | | | 70.1% | | | | 545 | | | | Y | | | | 5.4% | |
| Hilton Head II, SC † | | | 1997 | | | 1979/80 | | | 47,620 | | | | 83.6% | | | | 297 | | | | Y | | | | 0.0% | |
| Summerville, SC | | | 1998 | | | 1989 | | | 49,727 | | | | 74.7% | | | | 439 | | | | Y | | | | 10.1% | |
| Alcoa, TN | | | 2005 | | | 1986 | | | 42,550 | | | | 85.5% | | | | 351 | | | | Y | | | | 0.0% | |
| Antioch, TN | | | 2005 | | | 1985/98 | | | 76,445 | | | | 80.8% | | | | 565 | | | | Y | | | | 8.5% | |
| Cordova, TN | | | 2005 | | | 1987 | | | 54,725 | | | | 67.1% | | | | 388 | | | | Y | | | | 0.0% | |
| Knoxville I, TN | | | 1997 | | | 1984 | | | 29,452 | | | | 83.8% | | | | 297 | | | | Y | | | | 5.4% | |
| Knoxville II, TN | | | 1997 | | | 1985 | | | 38,550 | | | | 91.9% | | | | 350 | | | | Y | | | | 7.0% | |
| Knoxville III, TN | | | 1998 | | | 1991 | | | 45,864 | | | | 87.3% | | | | 425 | | | | Y | | | | 6.7% | |
| Knoxville IV, TN | | | 1998 | | | 1983 | | | 59,070 | | | | 82.3% | | | | 456 | | | | N | | | | 1.1% | |
| Knoxville V, TN | | | 1998 | | | 1977 | | | 43,050 | | | | 88.3% | | | | 376 | | | | N | | | | 0.0% | |
| Knoxville VI, TN | | | 2005 | | | 1975 | | | 64,040 | | | | 94.0% | | | | 576 | | | | Y | | | | 0.0% | |
| Knoxville VII, TN | | | 2005 | | | 1983 | | | 55,394 | | | | 92.5% | | | | 448 | | | | Y | | | | 0.0% | |
| Knoxville VIII, TN | | | 2005 | | | 1978 | | | 97,098 | | | | 81.6% | | | | 777 | | | | Y | | | | 0.0% | |
| Memphis I, TN | | | 2001 | | | 1999 | | | 86,075 | | | | 88.0% | | | | 622 | | | | N | | | | 51.3% | |
| Memphis II, TN | | | 2001 | | | 2000 | | | 72,210 | | | | 91.9% | | | | 544 | | | | N | | | | 46.2% | |
| Memphis III, TN | | | 2005 | | | 1983 | | | 39,790 | | | | 70.3% | | | | 365 | | | | Y | | | | 5.0% | |
| Memphis IV, TN | | | 2005 | | | 1986 | | | 38,950 | | | | 80.7% | | | | 330 | | | | Y | | | | 0.0% | |
| Memphis V, TN | | | 2005 | | | 1981 | | | 61,270 | | | | 50.6% | | | | 474 | | | | Y | | | | 0.0% | |
| Nashville I, TN | | | 2005 | | | 1984 | | | 109,090 | | | | 67.0% | | | | 686 | | | | Y | | | | 0.0% | |
| Nashville II, TN | | | 2005 | | | 1986/00 | | | 82,992 | | | | 82.0% | | | | 635 | | | | Y | | | | 13.2% | |
| Austin, TX | | | 2005 | | | 2001 | | | 59,758 | | | | 90.4% | | | | 549 | | | | Y | | | | 70.0% | |
| Baytown, TX | | | 2005 | | | 1981 | | | 39,150 | | | | 74.4% | | | | 380 | | | | Y | | | | 0.0% | |
| Bryan, TX | | | 2005 | | | 1994 | | | 60,650 | | | | 68.9% | | | | 498 | | | | Y | | | | 0.0% | |
| College Station, TX | | | 2005 | | | 1993 | | | 26,750 | | | | 81.6% | | | | 348 | | | | N | | | | 0.0% | |
| Dallas, TX | | | 2005 | | | 2000 | | | 59,905 | | | | 74.4% | | | | 568 | | | | Y | | | | 40.0% | |
| El Paso I, TX | | | 2005 | | | 1980 | | | 60,034 | | | | 79.9% | | | | 552 | | | | Y | | | | 0.0% | |
| El Paso II, TX | | | 2005 | | | 1980 | | | 49,296 | | | | 87.7% | | | | 428 | | | | Y | | | | 0.0% | |
| El Paso III, TX | | | 2005 | | | 1980 | | | 71,500 | | | | 83.5% | | | | 649 | | | | Y | | | | 0.0% | |
| El Paso IV, TX | | | 2005 | | | 1983 | | | 73,776 | | | | 82.0% | | | | 584 | | | | Y | | | | 0.0% | |
| El Paso V, TX | | | 2005 | | | 1982 | | | 63,050 | | | | 87.5% | | | | 402 | | | | Y | | | | 0.0% | |
| El Paso VI, TX | | | 2005 | | | 1985 | | | 36,820 | | | | 84.3% | | | | 271 | | | | Y | | | | 0.0% | |
| El Paso VII, TX † | | | 2005 | | | 1982 | | | 35,800 | | | | 81.5% | | | | 19 | | | | N | | | | 0.0% | |
| Fort Worth, TX | | | 2005 | | | 2000 | | | 50,731 | | | | 68.2% | | | | 409 | | | | Y | | | | 40.0% | |
| Frisco I, TX | | | 2005 | | | 1996 | | | 51,079 | | | | 78.0% | | | | 447 | | | | Y | | | | 17.4% | |
| Frisco II, TX | | | 2005 | | | 1998/02 | | | 71,539 | | | | 82.4% | | | | 514 | | | | Y | | | | 25.6% | |
| Greenville I , TX | | | 2005 | | | 2001/04 | | | 60,560 | | | | 76.4% | | | | 458 | | | | Y | | | | 30.6% | |
| Greenville II, TX | | | 2005 | | | 2001 | | | 45,850 | | | | 69.8% | | | | 320 | | | | N | | | | 40.5% | |
32
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year
| | | | | | | | | | | | | | | | | | |
| | | Acquired/
| | | Year
| | Rentable
| | | | | | | | | Manager
| | | % Climate
| |
Facility Location | | Developed(1) | | | Built | | Square Feet | | | Occupancy(2) | | | Units | | | Apartment(3) | | | Controlled(4) | |
| |
| Houston I, TX | | | 2005 | | | 1981 | | | 101,780 | | | | 81.7% | | | | 631 | | | | Y | | | | 0.0% | |
| Houston II, TX | | | 2005 | | | 1977 | | | 74,700 | | | | 75.0% | | | | 435 | | | | Y | | | | 0.0% | |
| Houston III, TX | | | 2005 | | | 1984 | | | 62,370 | | | | 66.7% | | | | 492 | | | | Y | | | | 0.0% | |
| Houston IV, TX | | | 2005 | | | 1987 | | | 44,175 | | | | 87.3% | | | | 401 | | | | Y | | | | 6.0% | |
| La Porte, TX | | | 2005 | | | 1984 | | | 45,050 | | | | 73.6% | | | | 440 | | | | Y | | | | 19.0% | |
| McKinney, TX | | | 2005 | | | 1996 | | | 52,970 | | | | 94.5% | | | | 373 | | | | Y | | | | 12.6% | |
| N Richland Hills, TX | | | 2005 | | | 2002 | | | 57,375 | | | | 70.1% | | | | 459 | | | | Y | | | | 62.0% | |
| Roanoke, TX | | | 2005 | | | 1996/01 | | | 59,600 | | | | 80.5% | | | | 483 | | | | Y | | | | 31.9% | |
| San Antonio, TX | | | 2005 | | | 2005 | | | 75,120 | | | | 1.2% | | | | 581 | | | | Y | | | | 79.0% | |
| Sherman I, TX | | | 2005 | | | 1998 | | | 55,425 | | | | 86.9% | | | | 525 | | | | Y | | | | 20.0% | |
| Sherman II, TX | | | 2005 | | | 1996 | | | 48,625 | | | | 90.5% | | | | 394 | | | | Y | | | | 36.0% | |
| Murray II, UT | | | 2005 | | | 1978 | | | 47,246 | | | | 86.6% | | | | 350 | | | | Y | | | | 0.0% | |
| Murray I, UT | | | 2005 | | | 1976 | | | 60,780 | | | | 87.4% | | | | 702 | | | | N | | | | 0.0% | |
| Murray III, UT † | | | 2005 | | | 1978 | | | 26,400 | | | | 80.0% | | | | 24 | | | | Y | | | | 0.0% | |
| Salt Lake City I, UT | | | 2005 | | | 1976 | | | 56,646 | | | | 78.9% | | | | 778 | | | | Y | | | | 0.0% | |
| Salt Lake City II, UT | | | 2005 | | | 1978 | | | 53,876 | | | | 87.4% | | | | 522 | | | | Y | | | | 0.0% | |
| Fredericksburg I, VA | | | 2005 | | | 2001/04 | | | 69,750 | | | | 63.1% | | | | 581 | | | | N | | | | 26.5% | |
| Fredericksburg II, VA | | | 2005 | | | 1998/01 | | | 61,618 | | | | 81.3% | | | | 510 | | | | N | | | | 100.0% | |
| Milwaukee, WI | | | 2004 | | | 1988 | | | 58,713 | | | | 70.9% | | | | 489 | | | | Y | | | | 0.0% | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total/Weighted Average (339 facilities) | | | | | | | | | 20,828,446 | | | | 81.2% | | | | 179,591 | | | | | | | | | |
| | |
* | | Denotes facilities developed by us. |
|
† | | Denotes facilities that contain a material amount of commercial rentable square footage. All of this commercial space, which was developed in conjunction with the self-storage units, is located within or adjacent to our self-storage facilities and is managed by our self-storage facility managers. As of December 31, 2005, there was a total of approximately 628,000 rentable square feet of commercial space at these facilities. |
|
(1) | | Represents the year acquired, for those facilities acquired from a third party, or the year developed, for those facilities developed by us. |
|
(2) | | Represents occupied square feet divided by total rentable square feet. |
|
(3) | | Indicates whether a facility has anon-site apartment where a manager resides. |
|
(4) | | Represents the percentage of rentable square feet in climate-controlled units. |
|
(5) | | We do not own the land at this facility. We leased the land pursuant to a ground lease that expires in 2008, but have ninefive-year renewal options. |
|
(6) | | We have ground leases for certain small parcels of land adjacent to these facilities that expire between 2007 and 2015. |
33
Our growth has been achieved by internal growth and by adding facilities to our portfolio each year through acquisitions and development. The tables set forth below show the average occupancy, and annual rent per occupied square foot, average occupied square feet and total revenues for our facilities owned as of December 31, 20052007 for each of the last fivethree years, grouped by the year end during which we first owned or operated the facility.
Our Facilities by Year Acquired —- Average OccupancyOccupied Square Feet (2)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Current
| | | Average Occupancy During the Twelve Months Ended | |
| | | Number of
| | | Rentable
| | | December 31,(2) | |
Year Acquired(1) | | Facilities | | | Square Feet | | | 2001 | | | 2002 | | | 2003 | | | 2004 | | | 2005 | |
| |
| 1996 or earlier | | | 41 | | | | 2,599,851 | | | | 83.2 | % | | | 80.9 | % | | | 81.2 | % | | | 83.5 | % | | | 83.4 | % |
| 1997 | | | 46 | | | | 2,699,212 | | | | 82.2 | % | | | 81.0 | % | | | 82.8 | % | | | 84.1 | % | | | 83.7 | % |
| 1998 | | | 24 | | | | 1,381,262 | | | | 82.1 | % | | | 81.3 | % | | | 84.2 | % | | | 85.0 | % | | | 85.4 | % |
| 1999 | | | 2 | | | | 138,054 | | | | 67.2 | % | | | 81.3 | % | | | 82.0 | % | | | 88.0 | % | | | 92.4 | % |
| 2000 | | | 6 | | | | 418,024 | | | | 76.0 | % | | | 81.7 | % | | | 85.5 | % | | | 87.6 | % | | | 87.5 | % |
| 2001 | | | 27 | | | | 2,107,610 | | | | 73.6 | % | | | 75.7 | % | | | 80.6 | % | | | 84.9 | % | | | 85.4 | % |
| 2002 | | | 7 | | | | 405,966 | | | | | | | | 83.3 | % | | | 82.9 | % | | | 83.9 | % | | | 81.9 | % |
| 2003 | | | 1 | | | | 42,475 | | | | | | | | | | | | 20.4 | % | | | 48.7 | % | | | 74.9 | % |
| 2004 | | | 46 | | | | 3,114,879 | | | | | | | | | | | | | | | | 77.6 | % | | | 77.9 | % |
| 2005 | | | 139 | | | | 7,921,113 | | | | | | | | | | | | | | | | | | | | 80.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
All Facilities Owned as of December 31, 2005 | | | 339 | | | | 20,828,446 | | | | 81.3 | % | | | 79.9 | % | | | 82.1 | % | | | 84.0 | % | | | 82.2 | % |
| | |
(1) | | For facilities developed by us, “Year Acquired” represents the year in which such facilities were acquired by our operating partnership from an affiliated entity, which in some cases is later than the year developed. |
|
(2) | | Determined by dividing the sum of the month-end occupied square feet for the group of facilities for each twelve month period by the sum of their month-end rentable square feet for the period. |
| | | | Rentable Square | | | | | | | |
Year Acquired (1) | | # of Facilities | | Feet | | 2005 | | 2006 | | 2007 | |
2004 and earlier | | 195 | | 12,606,750 | | 82.8 | % | 81.4 | % | 80.6 | % |
2005 | | 137 | | 7,614,578 | | 81.9 | % | 80.2 | % | 82.6 | % |
2006 | | 60 | | 4,578,622 | | | | 75.6 | % | 75.2 | % |
2007 | | 17 | | 1,319,234 | | | | | | 71.3 | % |
All Facilities Owned as of December 31, 2007 | | 409 | | 26,119,184 | | 82.6 | % | 80.2 | % | 80.0 | % |
Our Facilities by Year Acquired —- Annual Rent Per Occupied Square Foot (2)
Year Acquired (1) | | # of Facilities | | 2005 | | 2006 | | 2007 | |
2004 and earlier | | 195 | | $ | 10.80 | | $ | 11.38 | | $ | 11.57 | |
2005 | | 137 | | 8.34 | | 10.53 | | 10.43 | |
2006 | | 60 | | | | 10.22 | | 10.26 | |
2007 | | 17 | | | | | | 11.16 | |
All Facilities Owned as of December 31, 2007 | | 409 | | $ | 9.88 | | $ | 10.61 | | $ | 10.99 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Annual Rent Per Occupied Square Foot For the Twelve Months Ended
| |
| | | Number of
| | | December 31,(2) | |
Year Acquired(1) | | Facilities | | | 2001 | | | 2002 | | | 2003 | | | 2004 | | | 2005 | |
| |
| 1996 or earlier | | | 41 | | | $ | 10.71 | | | $ | 10.79 | | | $ | 10.59 | | | $ | 10.66 | | | $ | 10.98 | |
| 1997 | | | 46 | | | $ | 8.81 | | | $ | 9.04 | | | $ | 9.21 | | | $ | 9.52 | | | $ | 10.01 | |
| 1998 | | | 24 | | | $ | 8.73 | | | $ | 8.82 | | | $ | 8.89 | | | $ | 9.34 | | | $ | 9.72 | |
| 1999 | | | 2 | | | $ | 7.10 | | | $ | 7.66 | | | $ | 8.25 | | | $ | 9.50 | | | $ | 10.81 | |
| 2000 | | | 6 | | | $ | 13.10 | | | $ | 13.33 | | | $ | 13.26 | | | $ | 13.29 | | | $ | 14.41 | |
| 2001 | | | 27 | | | $ | 11.21 | | | $ | 10.88 | | | $ | 10.12 | | | $ | 10.56 | | | $ | 11.04 | |
| 2002 | | | 7 | | | | | | | $ | 14.41 | | | $ | 13.31 | | | $ | 13.49 | | | $ | 13.91 | |
| 2003 | | | 1 | | | | | | | | | | | $ | 8.75 | | | $ | 12.94 | | | $ | 13.21 | |
| 2004 | | | 46 | | | | | | | | | | | | | | | $ | 12.22 | | | $ | 10.73 | |
| 2005 | | | 139 | | | | | | | | | | | | | | | | | | | $ | 8.90 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
All Facilities Owned as of December 31, 2005 | | | 339 | | | $ | 9.77 | | | $ | 10.13 | | | $ | 10.04 | | | $ | 10.44 | | | $ | 10.37 | |
34
(2) Determined by dividing the aggregate rental revenue for each twelve-month period by the average of the month-end occupied square feet for the period. Rental revenue includes customer rental revenues, access, administrative and late fees and revenues from auctions, but does not include ancillary revenues generated at our facilities.
29
| | |
(1) | | For facilities developedFacilities by us, “Year Acquired” represents the year in which such facilities were acquired by our operating partnership from an affiliated entity, which in some cases is later than the year developed. |
|
| Year Acquired - Average Occupied Square Feet (2) | | Determined by dividing the aggregate rental revenue for each twelve month period by the average of the month-end occupied square feet for the period. Rental revenue includes customer rental revenues, access, administrative and late fees and revenues from auctions, but does not include ancillary revenues generated at our facilities. |
Year Acquired (1) | | # of Facilities | | 2005 | | 2006 | | 2007 | |
2004 and earlier | | 195 | | 10,575,509 | | 10,348,470 | | 10,189,296 | |
2005 | | 137 | | 6,256,685 | | 6,238,827 | | 6,299,831 | |
2006 | | 60 | | | | 3,465,677 | | 3,452,109 | |
2007 | | 17 | | | | | | 934,799 | |
All Facilities Owned as of December 31, 2007 | | 409 | | 16,832,194 | | 20,052,974 | | 20,876,035 | |
Facilities by Year Acquired - Total Revenues (3) | | | | | | | | | |
| | | | | | | | | |
Year Acquired (1) | | # of Facilities | | 2005 | | 2006 | | 2007 | |
2004 and earlier | | 195 | | 117,248 | | 122,022 | | 124,466 | |
2005 | | 137 | | 28,105 | | 63,610 | | 69,603 | |
2006 | | 60 | | | | 26,659 | | 37,837 | |
2007 | | 17 | | | | | | 4,969 | |
All Facilities Owned as of December 31, 2007 (4) | | 409 | | 145,353 | | 212,291 | | 236,875 | |
The following tables set forth a reconciliation(1) For facilities developed by us, “Year Acquired” represents the year in which such facilities were acquired by our operating partnership from an affiliated entity, which in some cases is later than the year developed.
(2) Represents the average of ourthe aggregate month-end occupied square feet for the twelve-month period for each group of facilities.
(3) Represents the result obtained by multiplying annual rent per occupied square foot data toby the average occupied square feet for the twelve-month period for each group of facilities.
(4) Represents total revenues as presented in our historical financial results for the periods presented.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Average Occupied Square Feet For the Twelve Months Ended
| |
| | | Number of
| | | December 31,(2) | |
Year Acquired(1) | | Facilities | | | 2001 | | | 2002 | | | 2003 | | | 2004 | | | 2005 | |
| |
| 1996 or earlier | | | 41 | | | | 2,162,101 | | | | 2,101,927 | | | | 2,112,101 | | | | 2,170,825 | | | | 2,167,726 | |
| 1997 | | | 46 | | | | 2,189,309 | | | | 2,162,901 | | | | 2,212,059 | | | | 2,247,471 | | | | 2,257,945 | |
| 1998 | | | 24 | | | | 1,176,562 | | | | 1,187,768 | | | | 1,244,593 | | | | 1,257,058 | | | | 1,216,370 | |
| 1999 | | | 2 | | | | 93,479 | | | | 113,112 | | | | 114,052 | | | | 121,776 | | | | 127,585 | |
| 2000 | | | 6 | | | | 277,770 | | | | 296,103 | | | | 321,549 | | | | 366,338 | | | | 365,632 | |
| 2001 | | | 27 | | | | 410,084 | | | | 1,544,456 | | | | 1,701,143 | | | | 1,790,554 | | | | 1,800,901 | |
| 2002 | | | 7 | | | | | | | | 153,790 | | | | 339,036 | | | | 340,977 | | | | 332,649 | |
| 2003 | | | 1 | | | | | | | | | | | | 3,606 | | | | 20,694 | | | | 31,801 | |
| 2004 | | | 46 | | | | | | | | | | | | | | | | 402,889 | | | | 2,425,283 | |
| 2005 | | | 139 | | | | | | | | | | | | | | | | | | | | 3,157,146 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
All Facilities Owned as of December 31, 2005 | | | 339 | | | | 6,309,305 | | | | 7,560,057 | | | | 8,048,139 | | | | 8,718,582 | | | | 13,883,038 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Number of
| | | Total Revenues for the Twelve Months Ended December 31,(3) | |
Year Acquired(1) | | Facilities | | | 2001 | | | 2002 | | | 2003 | | | 2004 | | | 2005 | |
| | | | | | (Dollars in thousands) | |
| |
| 1996 or earlier | | | 41 | | | $ | 23,408 | | | $ | 22,683 | | | $ | 22,372 | | | $ | 23,140 | | | $ | 23,800 | |
| 1997 | | | 46 | | | | 19,499 | | | | 19,561 | | | | 20,382 | | | | 21,558 | | | | 22,599 | |
| 1998 | | | 24 | | | | 10,382 | | | | 10,475 | | | | 11,061 | | | | 11,573 | | | | 11,818 | |
| 1999 | | | 2 | | | | 664 | | | | 866 | | | | 941 | | | | 1,156 | | | | 1,379 | |
| 2000 | | | 6 | | | | 3,639 | | | | 3,947 | | | | 4,265 | | | | 4,867 | | | | 5,269 | |
| 2001 | | | 27 | | | | 4,597 | | | | 16,800 | | | | 17,224 | | | | 18,914 | | | | 19,883 | |
| 2002 | | | 7 | | | | | | | | 2,216 | | | | 4,513 | | | | 4,600 | | | | 4,627 | |
| 2003 | | | 1 | | | | | | | | | | | | 32 | | | | 268 | | | | 420 | |
| 2004 | | | 46 | | | | | | | | | | | | | | | | 4,925 | | | | 26,021 | |
| 2005 | | | 139 | | | | | | | | | | | | | | | | | | | | 28,104 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
All Facilities Owned as of December 31, 2005 — Before Adjustments | | | 339 | | | $ | 62,189 | | | $ | 76,548 | | | $ | 80,790 | | | $ | 91,001 | | | $ | 143,920 | |
| Plus: | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Adjustments(4) | | | | | | | 87 | | | | 37 | | | | 24 | | | | 607 | | | | 4,201 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Revenues(5) | | | | | | $ | 62,276 | | | $ | 76,585 | | | $ | 80,814 | | | $ | 91,608 | | | $ | 148,121 | |
35
statements.
| | |
(1) | | For facilities developed by us, “Year Acquired” represents the year in which such facilities were acquired by our operating partnership from an affiliated entity, which in some cases is later than the year developed. |
|
(2) | | Represents the average of the aggregate month-end occupied square feet for the twelve-month period for each group of facilities. |
|
(3) | | Represents the result obtained by multiplying annual rent per occupied square foot by the average occupied square feet for the twelve month period for each group of facilities. |
|
(4) | | Between 2001 and 2004, amounts represents primarily ancillary revenues generated by three facilities contributed by certain Amsdell Entities to our operating partnership prior to our IPO, which are reflected in the historical financial statements but excluded from the above analysis which accounts only for rental revenues and other property related income. For 2005, amount represents ancillary revenue and Rising Tide management fees. |
|
(5) | | Represents total revenues as presented in our historical financial statements. |
Planned Renovations and Improvements
We recently undertookhave a capital improvementsimprovement and renovationsproperty renovation program involving our existing facilities. We spent a total of approximately $16.2 million between 2000 and 2005 on this program. These renovations and improvements includedthat includes office upgrades, adding climate control at selected units, construction of parking areas, safety and security enhancements, and general facility upgrades. WeFor 2008, we anticipate spending approximately an additional $12.0$7 million in 2006 in renovationsto $9 million associated with these capital expenditures and improvements for our facilities that were owned at March 1, 2006. The bulk of this cost relatesexpect to facilities acquired since our IPO. These renovationsenhance the safety and improvements will include re-signing and re-brandingimprove the facilities, adding climate control at selected facilities and implementing general facility upgrades. In connection with our pending acquisitions, we anticipate incurring additional costs for renovations and improvements.
Option Facilities
In connection with our IPO, we entered into an option agreement with Rising Tide Development to acquire 18 self-storage facilities, currently consisting of 13 facilities owned by Rising Tide Development, two facilities that Rising Tide Development has the right to acquire from unaffiliated third parties, and three facilities that we have acquired since our IPO pursuant to the exerciseaesthetic appeal of our options. Rising Tide Development may elect not to acquire either or both of the option facilities it currently has under contract, which would reduce the number of facilities available to us pursuant to the option agreement. These 15 facilities either are currently under development or not yet fully stabilized. Any purchase of an option facility by us will be at a purchase price equal to the lower of (i) a price determined by multiplying in-place net operating income at the time of purchase by 12.5 and (ii) the fair market value of the option facility as determined by an appraisal process involving third party appraisers. The option will become exercisable with respect to each particular self-storage facility when that facility achieves an occupancy of 85% at the end of the month for three consecutive months, and will expire in October 2008. None of the remaining 15 self-storage facilities that we have the option to purchase met the 85% occupancy requirement as of December 31, 2005. We expect that the purchase option will become exercisable with respect to a majority of the option facilities by October 2008. The determination to purchase any of the option facilities will be made by the independent members of our board of trustees. If the option is not exercised for any facility within the option period, Rising Tide Development will be required to move expeditiously to sell the facility to an unrelated third party. Rising Tide Development received no cash consideration for entering into the option agreement.
Since the completion of our IPO, we exercised our option to purchase three option facilities for an aggregate purchase price of approximately $17.4 million, consisting of an aggregate of $6.8 million in units in our operating partnership and $10.6 million in cash.
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ITEM 3. LEGAL PROCEEDINGS
| |
ITEM 3. | LEGAL PROCEEDINGS |
We are not presently involved in any material litigation nor, to our knowledge, is any material litigation threatened against us or our properties. We are involved in routine litigation arising in the ordinary course of business, none of which we believe to be material.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
| |
ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
No matters were submitted to a vote of our shareholders during the fourth quarter of 2005.2007.
30
| |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Our common shares began trading on the New York Stock Exchange under the symbol “YSI” on October 22, 2004. ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDERMATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
As of February 17, 2006,December 31, 2007, there were approximately 2429 registered record holders of our common shares. This figure does not include beneficial owners who hold shares in nominee name. The following table shows the high and low salesclosing prices per share for our common shares, as reported by the New York Stock Exchange, composite tape, and the cash dividends declared with respect to such shares:
| | | | | | | | | | | | | |
| | | | | | | | | Cash Dividends
| |
| | | High | | | Low | | | Declared | |
| |
2004 | | | | | | | | | | | | |
| Fourth quarter (October 22 through December 31) | | $ | 17.77 | | | $ | 16.40 | | | $ | 0.2009 | |
2005 | | | | | | | | | | | | |
| First quarter | | $ | 17.58 | | | $ | 15.90 | | | $ | 0.28 | |
| Second quarter | | $ | 19.99 | | | $ | 16.64 | | | $ | 0.28 | |
| Third quarter | | $ | 22.13 | | | $ | 18.82 | | | $ | 0.28 | |
| Fourth quarter | | $ | 21.93 | | | $ | 19.04 | | | $ | 0.29 | |
| | | | | | Cash Dividends | |
| | High | | Low | | Declared | |
2006 | | | | | | | |
First quarter | | $ | 22.28 | | $ | 19.94 | | $ | 0.29 | |
Second quarter | | 19.75 | | 16.05 | | 0.29 | |
Third quarter | | 21.94 | | 18.51 | | 0.29 | |
Fourth quarter | | 22.66 | | 20.35 | | 0.29 | |
2007 | | | | | | | |
First quarter | | 23.20 | | 19.57 | | 0.29 | |
Second quarter | | 20.11 | | 16.14 | | 0.29 | |
Third quarter | | 16.61 | | 12.15 | | 0.29 | |
Fourth quarter | | 14.31 | | 9.16 | | 0.18 | |
| | | | | | | | | | |
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 capital gain or may constitute a tax-free return of capital. Annually, we provide each of our shareholders a statement detailing distributions paid during the preceding year and their characterization as ordinary income, capital gain or return of capital. The characterization of the Company’sour dividends for 20052007 was 46%29.42% ordinary income, 6.39% capital gain distribution and 54%64.19% return of capital.
We intend to continue to declare quarterly distributions. However, we cannot provide any assurance as to the amount or timing of future distributions. Under our new revolving credit facility, beginning in the fourth quarter of 20072008 we are restricted from paying distributions on our common shares that would exceed an amount equal to the greater of (i) a certain percentage of our funds from operations, and (ii) such amount as may be necessary to maintain our REIT status.
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.
In October 2005, we completed a secondaryfollow-on public offering of our common shares, generating net proceeds of approximately $378.7 million, after deducting underwriting discount and commissions and expenses of the offering. A portion of these proceeds was used to repay certain outstanding indebtedness, including (i) $108.3 million to repay the outstanding balance under our then existing revolving credit facility, and (ii) $39.8 million to repay outstanding mortgage loans secured by 37 of our facilities. Approximately
37
$110.2Net proceeds of approximately $110.2 million
of the net proceeds waswere used to fund the acquisition of 19
self-storage facilities. The remaining
net proceeds of approximately $120.4 million
of net proceeds has beenwere used for the acquisition and development of additional
self-storage facilities, budgeted capital improvements and general corporate purposes.
AsShare Performance Graph
The SEC requires us to present a resultchart comparing the cumulative total shareholder return 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 offeringcumulative 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 and (iii) the aforementioned repayment of outstanding indebtedness, we believe that our financial flexibility has been significantly improved, particularly since additional amounts are availableNAREIT All Equity REIT Index as provided by NAREIT for borrowing to fund future acquisitions and development of facilities and other cash needs.
We completed ourthe period beginning with October 22, 2004 (the first closing share price following the initial public offering of our common
shares, generating net proceeds of approximately $425.0 million, after deducting underwriting discountshares) and
commissions and expensesending December 31, 2007.31
| | Period Ending | |
Index | | 10/22/04 | | 12/31/04 | | 06/30/05 | | 12/31/05 | | 06/30/06 | | 12/31/06 | | 06/30/07 | | 12/31/07 | |
U-Store-It Trust | | $ | 100.00 | | $ | 108.44 | | $ | 120.81 | | $ | 133.37 | | $ | 122.93 | | $ | 137.82 | | $ | 112.91 | | $ | 65.58 | |
S&P 500 | | 100.00 | | 110.97 | | 110.65 | | 116.30 | | 119.45 | | 134.67 | | 144.26 | | 142.29 | |
Russell 2000 | | 100.00 | | 115.08 | | 113.64 | | 120.32 | | 130.20 | | 142.42 | | 151.60 | | 140.19 | |
NAREIT All Equity REIT Index | | 100.00 | | 111.12 | | 118.21 | | 124.64 | | 140.74 | | 168.34 | | 158.43 | | 141.92 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
The following table provides information about repurchases of the offering. A portionCompany’s common shares during the three-month period ended December 31, 2007:
|
| Total Number of
Shares Purchased |
| 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
(1) |
|
| | | | | | | | | |
October | | N/A | | N/A | | N/A | | 3,000,000 | |
November | | N/A | | N/A | | N/A | | 3,000,000 | |
December | | N/A | | N/A | | N/A | | 3,000,000 | |
| | | | | | | | | |
Total | | N/A | | | | N/A | | 3,000,000 | |
(1) On June 27, 2007, the Company announced that the Board of these proceeds was usedTrustees approved a share repurchase program for up to repay (i) approximately $135.13.0 million of our existing term loan providedthe Company’s outstanding common shares. Unless terminated earlier by an affiliateresolution of Lehman Brothers (ii) $16.6 million, plus $0.9 million for prepayment penalties, to repay mortgage indebtedness secured by our facilities (iii) $23.0 million to repay the outstanding balanceBoard of a loanTrustees, the program will expire when the number of authorized shares has been repurchased. For the three-month period ended December 31, 2007, the Company made to us by Robert J. Amsdell and Barry L. Amsdell and (iv) $221.8 million to acquire the 46 acquisition facilities.
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32
ITEM 6. SELECTED FINANCIAL DATA | |
ITEM 6. | SELECTED FINANCIAL DATA |
The following table sets forth selected financial and operating data on a historical consolidated basis for the Company, and on a combined historical basis for Acquiport/Amsdell (the “Predecessor”). The selected historical financial information as of December 31, 20052007 and 20042006 and for each of the periods indicated in the five-year period ended December 31, 20052007 were derived from auditedthe Company’s and the Predecessor’s financial statements. Historical information for the Company has not been presented prior to October 21, 2004, the date on which the Company consummated the mergers of Amsdell Partners, Inc. and High Tide LLC with and into the Company, because during the period prior to the mergers, the Company did not have material corporate activity.
The Predecessor’s combined historical financial information includes the following entities, which are the entities referred to collectively in thisForm 10-K as Acquiport/Amsdell, for periods prior to October 21, 2004: the operating partnership (formerly known as Acquiport/Amsdell I Limited Partnership, which is sometimes referred to herein as “Acquiport I”) and its consolidated subsidiaries, Acquiport/Amsdell III, LLC (“Acquiport III”), AcquiportAcquiport/Amsdell IV, LLC, AcquiportAcquiport/Amsdell V, LLC, AcquiportAcquiport/Amsdell VI, LLC, AcquiportAcquiport/Amsdell VII, LLC, and USI II, LLC. The Predecessor also includes three additional facilities,facilities: Lakewood, OH,OH; Lake Worth, FL,FL; and Vero Beach I, FL which were contributed to U-Store-It, L.P.our operating partnership in connection with the IPO. All intercompany balances and transactions are eliminated in consolidation and combination. At October 20, 2004, the Predecessor owned 155 self-storage facilities.
The following data should be read in conjunction with the audited financial statements and notes thereto of the Company and the Predecessor and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this report.
33
| | The Company | | The Predecessor (1) | |
| | Year Ended December 31, | | Period
October 21,
through
December 31, | | Period
January 1,
through
October 20, | | Year Ended
December 31, | |
| | | | | | | | | | | | | |
| | 2007 | | 2006 | | 2005 | | 2004 | | 2004 | | 2003 | |
| | | | | | (in thousands, except per share data) | |
Statement of Operations Data: | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | |
Rental income | | $ | 211,974 | | $ | 195,331 | | $ | 135,169 | | $ | 21,410 | | $ | 65,722 | | $ | 76,898 | |
Other property related income | | 16,828 | | 14,816 | | 10,001 | | 1,452 | | 3,211 | | 3,916 | |
Other - related party | | 365 | | 457 | | 405 | | 71 | | — | | — | |
Total revenues | | 229,167 | | 210,604 | | 145,575 | | 22,933 | | 68,933 | | 80,814 | |
Operating expenses: | | | | | | | | | | | | | |
Property operating expenses | | 96,802 | | 85,415 | | 54,793 | | 9,767 | | 26,170 | | 28,089 | |
Property operating expense -related party | | 59 | | 69 | | 43 | | — | | — | | — | |
Depreciation | | 70,192 | | 64,079 | | 39,479 | | 5,800 | | 16,528 | | 19,494 | |
Asset write-off | | — | | 305 | | — | | — | | — | | — | |
Lease abandonment charge | | 1,316 | | — | | — | | — | | — | | — | |
General and administrative | | 21,966 | | 21,675 | | 17,786 | | 4,140 | | — | | — | |
General and administrative -related party | | 337 | | 613 | | 736 | | 114 | | — | | — | |
Management fees — related party (2) | | — | | — | | — | | — | | 3,689 | | 4,361 | |
Total operating expenses | | 190,672 | | 172,156 | | 112,837 | | 19,821 | | 46,387 | | 51,944 | |
Operating income | | 38,495 | | 38,448 | | 32,738 | | 3,112 | | 22,546 | | 28,870 | |
Interest: | | | | | | | | | | | | | |
Interest expense on loans | | (54,108 | ) | (45,628 | ) | (31,907 | ) | (4,428 | ) | (19,385 | ) | (15,128 | ) |
Loan procurement amortization expense | | (1,772 | ) | (1,972 | ) | (2,045 | ) | (286 | ) | (5,958 | ) | (1,296 | ) |
Early extinguishment of debt | | — | | (1,907 | ) | (93 | ) | (7,012 | ) | — | | — | |
Costs incurred to acquire management company — related party | | — | | — | | — | | (22,152 | ) | — | | — | |
Interest income | | 401 | | 1,336 | | 2,404 | | 37 | | 69 | | 12 | |
Other | | 118 | | 191 | | (47 | ) | (78 | ) | — | | — | |
Income (loss) from continuing operations before minority interest | | (16,866 | ) | (9,532 | ) | 1,050 | | (30,807 | ) | (2,728 | ) | 12,458 | |
Minority interest | | 1,385 | | 790 | | (71 | ) | 898 | | — | | — | |
Income (loss) from continuing operations | | (15,481 | ) | (8,742 | ) | 979 | | (29,909 | ) | (2,728 | ) | 12,458 | |
Discontinued operations: | | | | | | | | | | | | | |
Income from operations | | 102 | | 208 | | 452 | | — | | — | | 171 | |
Gain on sale of storage facilities | | 2,517 | | — | | 179 | | — | | — | | 3,329 | |
Minority interest attributable to discontinued operations | | (215 | ) | (17 | ) | (42 | ) | — | | — | | — | |
Income from discontinued
operations | | 2,404 | | 191 | | 589 | | — | | — | | 3,500 | |
Net income (loss) | | $ | (13,077 | ) | $ | (8,551 | ) | $ | 1,568 | | $ | (29,909 | ) | $ | (2,728 | ) | $ | 15,958 | |
Basic and diluted earnings (loss) per share from continuing operations | | $ | (0.26 | ) | $ | (0.15 | ) | $ | 0.02 | | $ | (0.80 | ) | | | | |
Basic and diluted earnings per share from discontinued operations | | $ | 0.04 | | $ | — | | $ | 0.02 | | $ | — | | | | | |
Basic and diluted earnings (loss) per share | | $ | (0.22 | ) | $ | (0.15 | ) | $ | 0.04 | | $ | (0.80 | ) | | | | |
Weighted average basic common shares outstanding (3) | | 57,497 | | 57,287 | | 42,120 | | 37,478 | | | | | |
Weighted average diluted common shares outstanding (3) | | 57,497 | | 57,287 | | 42,203 | | 37,478 | | | | | |
Distribution declared (4) | | $ | 1.05 | | $ | 1.16 | | $ | 1.13 | | $ | 0.20 | | | | | |
34
| | The Company | | The Predecessor (1) | |
| | Year Ended December 31, | | Period
October 21,
through
December 31, | | Period
January 1,
through
October 20, | | Year Ended
December 31, | |
| | | | | | | | | | | | | |
| | 2007 | | 2006 | | 2005 | | 2004 | | 2004 | | 2003 | |
| | (in thousands, except per share data) | |
Balance Sheet Data (as of end of period): | | | | | | | | | | | | | |
Storage facilities, net | | $ | 1,647,118 | | $ | 1,566,815 | | $ | 1,246,295 | | $ | 729,155 | | | | $ | 395,599 | |
Total assets | | 1,687,831 | | 1,615,339 | | 1,476,321 | | 774,272 | | | | 410,636 | |
Revolving credit facility | | 219,000 | | 90,500 | | — | | — | | | | — | |
Unsecured term loan | | 200,000 | | 200,000 | | — | | — | | | | — | |
Secured term loan | | 47,444 | | — | | — | | — | | | | — | |
Mortgage loans and notes payable | | 561,057 | | 588,930 | | 669,282 | | 380,496 | | | | 271,571 | |
Total liabilities | | 1,083,230 | | 930,948 | | 714,157 | | 406,243 | | | | 280,743 | |
Minority interest | | 48,982 | | 56,898 | | 63,695 | | 10,804 | | | | — | |
Shareholders’/owners’ equity | | 555,619 | | 627,493 | | 698,469 | | 357,225 | | | | 129,893 | |
Total liabilities and
shareholders’/owners’ equity | | 1,687,831 | | 1,615,339 | | 1,476,321 | | 774,272 | | | | 410,636 | |
| | | | | | | | | | | | | |
Other Data: | | | | | | | | | | | | | |
Number of facilities (end of period) | | 409 | | 399 | | 339 | | 201 | | 155 | | 155 | |
Total rentable square feet (end of period) | | 26,119 | | 25,436 | | 20,828 | | 12,978 | | 9,683 | | 9,863 | |
Occupancy (end of period) | | 79.5 | % | 78.2 | % | 81.2 | % | 82.2 | % | 85.2 | % | 82.6 | % |
Cash dividends declared per share (4) | | $ | 1.05 | | $ | 1.16 | | $ | 1.13 | | $ | 0.20 | | | | | |
| | | | | | | | | | | | | | | | | | |
(1) Represents historical financial data of our operating partnership, including three additional facilities acquired by our operating partnership from certain of the Amsdell Entities in connection with the IPO.
(2) Prior to the IPO, management fees to related parties were paid to U-Store-It Mini Warehouse Co., the prior manager of our self-storage facilities that was acquired at the time of our IPO.
(3) Excludes 5,198,855 operating partnership units issued at our IPO and in connection with the acquisition of facilities subsequent to our IPO. Operating partnership units have been excluded from the earnings per share calculations as there would be no effect on the earnings per share since, upon conversion, the minority interests’ share of income would also be added back to net income.
(4) The Company announced a pro rata dividend of $0.2009 per common share on November 24, 2004, full quarterly dividends of $0.28 per common share on March 2, 2005; May 31, 2005 and August 24, 2005 and dividends of $0.29 per common share on December 1, 2005; February 22, 2006; April 24, 2006; August 23, 2006; November 3, 2006; February 21, 2007; May 8, 2007; and August 14, 2007; and a dividend of $0.18 per common share on December 13, 2007.
(5) For the period from October 21, 2004 through December 31, 2004, amount includes a one-time management contract termination charge of approximately $22.2 million related to the termination of our management contracts as a result of the purchase of U-Store-It Mini Warehouse Co. and approximately $7.0 million of expenses related to the early extinguishment of debt at the time of our IPO. Additionally, for the period from October 21, 2004 through December 31, 2004, general and administrative expense includes a one-time compensation charge of approximately $2.4 million for deferred shares granted to certain members of our senior management team in connection with our IPO.
35
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS
The following discussion should be read in conjunction with the financial statementsand notes thereto appearing elsewhere in this report. The Company makes certainstatements in this section that are forward-looking statements within the meaning ofthe federal securities laws. For a complete discussion of forward-looking statements,see the section in this report entitled “Forward-Looking Statements.” Certain riskfactors may cause actual results, performance or achievements to differ materiallyfrom those expressed or implied by the following discussion. For a discussion of suchrisk factors, see the section in this report entitled “Risk Factors.”
Overview
On October 27, 2004, the Company completed its IPO, pursuant to which it sold an aggregate of 28,750,000 common shares (including 3,750,000 shares pursuant to the exercise of the underwriters’ over-allotment option) at an offering price of $16.00 per share. The IPO resulted in gross proceeds to the Company of $460.0 million. On October 7, 2005, the Company completed a follow-on public offering, pursuant to which it sold an aggregate of 19,665,000 common shares (including 2,565,000 shares pursuant to the exercise of the underwriters’ over-allotment option) at an offering price of $20.35 per share, for gross proceeds of approximately $400.2 million.
The Company is an integrated self-storage real estate company, which means that it has in-house capabilities in the operation, design, development, leasing, and acquisition of self-storage facilities. The Company has elected to be taxed as a REIT for federal tax purposes. At December 31, 2007 and 2006, the Company owned 409 and 399 self-storage facilities, respectively, totaling approximately 26.1 and 25.4 million rentable square feet, respectively.
The Company derives revenues principally from rents received from its customers who rent units at its self-storage facilities 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 units to new customers while maintaining and, where possible, increasing our pricing levels. In addition, our operating results depend on the ability of our customers to make required rental payments to us. We believe that our decentralized approach to the management and operation of our facilities, which places an emphasis on local, market level oversight and control, allows us to respond quickly and effectively to changes in local market conditions, where appropriate increasing rents while maintaining occupancy levels, or increasing occupancy levels while maintaining pricing levels.
The Company experiences minor seasonal fluctuations in the occupancy levels of our facilities, which are generally slightly higher during the summer months due to increased moving activity.
In the future, the Company intends to focus on increasing our internal growth and selectively pursuing targeted acquisitions and developments of self-storage facilities. We intend to incur additional debt in connection with any such future acquisitions or developments.
The Company has one reportable operating segment: we own, operate, develop, and acquire self-storage facilities.
The Company’s self-storage facilities are located in major metropolitan and rural areas and have numerous tenants per facility. No single tenant represents 1% or more of our revenues. The facilities in Florida, California, Texas and Illinois provided approximately 19%, 15%, 8% and 7%, respectively, of total revenues for the year ended December 31, 2007.
Summary of Critical Accounting Policies and Estimates
Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated 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 notes to our consolidated financial statements (See Note 2 to the consolidated financial statements). These policies require the application of judgment and assumptions by management and, as a result, are subject to a degree of uncertainty. Due to this uncertainty, actual results could differ materially from estimates calculated and utilized by management.
36
Basis of Presentation
The accompanying consolidated financial statements include all of the accounts of the Company, the operating partnership and the wholly-owned subsidiaries of the operating partnership. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this Annual Report on Form 10-K.
Self-Storage Facilities
The Company records self-storage facilities at cost less accumulated depreciation. Depreciation on the buildings and equipment is recorded on a straight-line basis over their estimated useful lives, which range from five to 40 years. Expenditures for significant renovations or improvements that extend the useful life of assets are capitalized. Repairs and maintenance costs are expensed as incurred.
When facilities are acquired, the purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on estimated fair values. When a portfolio of facilities is acquired, the purchase price is allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates, which take into account the relative size, age and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available. Allocations to the individual assets and liabilities are based upon comparable market sales information for land, buildings and improvements and estimates of depreciated replacement cost of equipment.
In allocating the purchase price, the Company determines whether the acquisition includes intangible assets or liabilities. Substantially all of the leases in place at acquired facilities 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. To date, no intangible asset has been recorded for the value of tenant relationships, because the Company does not have any concentrations of significant tenants and the average tenant turnover is fairly frequent. While intangible assets for in-place leases have not historically been recorded, the Company recorded a $6.8 million intangible asset to recognize the value of in-place leases related to its acquisition of 14 self-storage facilities during the third quarter of 2007.
Long-lived assets classified as “held for use” are reviewed for impairment when events and circumstances indicate that there may be an impairment. The carrying values of these long-lived assets are compared to the undiscounted future net operating cash flows attributable to the assets. An impairment loss is recorded if the net carrying value of the asset exceeds the fair value based on its undiscounted future net operating cash flows attributable to the asset and circumstances indicate that the carrying value of the real estate asset may not be recoverable. The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. The Company recorded an asset impairment charge of $2.3 million for the year ended December 31, 2005 related to hurricane damage (See Note 17 to the Consolidated and Combined Financial Statements) and impairment charges totaling $0.4 million for the year ended December 31, 2007, related to fire and flood damage.
The Company considers long-lived assets to be “held for sale” upon satisfaction of the following criteria: (a) management commits to a plan to sell a facility (or group of facilities), (b) the facility is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such facilities, (c) an active program to locate a buyer and other actions required to complete the plan to sell the facility have been initiated, (d) the sale of the facility is probable and transfer of the asset is expected to be completed within one year, (e) the facility is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Typically these criteria are all met when the relevant asset is under contract, significant non-refundable deposits have been made by the potential buyer, the assets are immediately available for transfer and there are no contingencies related to the sale that may prevent the transaction from closing. In most transactions, these contingencies are not satisfied until the actual closing of the transaction; and, accordingly, the facility is not identified as held for sale until the closing actually occurs. However, each potential transaction is evaluated based on its separate facts and circumstances.
Revenue Recognition
Management has determined that all our leases with tenants are operating leases. Rental income is recognized in accordance with the terms of the lease agreements or contracts, which generally are month-to-month. Revenues from long-term operating leases are recognized on a straight-line basis over the term of the lease. The excess of rents recognized over
37
amounts contractually due pursuant to the underlying leases is included in deferred revenue, and contractually due but unpaid rents are included in other assets.
Share Based Payments
We apply the fair value method of accounting for contingently issued shares and share options issued under our equity incentive plans. Accordingly, share compensation expense was recorded ratably over the vesting period relating to such contingently issued shares and options. The Company has elected to recognize compensation expense on a straight-line method over the requisite service period. Additionally, certain restricted share units awarded to our former Chief Executive Officer in 2005 were scheduled to vest immediately upon his retirement from the Company as he had reached the retirement age set forth in his award agreement. Accordingly, share compensation expense related to this issuance was expensed fully in 2005.
Minority Interests
As of September 30, 2005, the Company recorded the operating partnership units issued in connection with the National Self Storage transaction as conditionally redeemable as the result of a special redemption right (see Note 4 and Note 7 to the consolidated financial statements) for a discussion of the National Self Storage transaction). On October 25, 2005, the sellers in the National Self Storage transaction agreed to terminate the Special Redemption Right, effective as of July 15, 2005 (the first date on which National Self Storage facilities were acquired by the operating partnership under the purchase agreement). From the issuance date until October 25, 2005, the Company elected to accrete changes in the redemption value of the National Self Storage units issued over the period from the date of issuance to the earliest redemption date (one year from the date of initial issuance) on a pro rata basis. Upon termination of the Special Redemption Right, the Company classified these units in minority interest. The amount of accretion recorded through October 25, 2005 was approximately $3.0 million. Effective October 26, 2005, minority interest represents issued and outstanding operating partnership units.
Minority Interests include income allocated to holders of the operating partnership units. Income is allocated to the minority interests based on their ownership percentage of the operating partnership. This ownership percentage, as well as the total net assets of the operating partnership, changes when additional common shares or operating partnership units are issued. Such changes result in an allocation between shareholders’ equity and Minority Interests in the Consolidated Balance Sheets. Due to the number of such capital transactions that occur each period, we have presented a single net effect of all such allocations for the period as the “Adjustment for Minority Interest in Operating Partnership” in our Consolidated Statements of Shareholders’ Equity and Owners’ Equity (Deficit) (rather than separately allocating the minority interest for each individual capital transaction).
Recent Accounting Pronouncements
In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 141 (Revised 2007), Business Combinations (“FAS 141(R)”). FAS 141(R) establishes principles and requirements for recognizing identifiable assets acquired, liabilities assumed, noncontrolling interest in the acquiree, goodwill acquired in the combination or the gain from a bargain purchase, and disclosure requirements. Under this revised statement, all costs incurred to effect an acquisition will be recognized separately from the acquisition. Also, restructuring costs that are expected but the acquirer is not obligated to incur will be recognized separately from the acquisition. FAS 141(R) is effective for the Company beginning with its quarter ending March 31, 2009. The Company is currently assessing the potential impacts, if any, on its consolidated financial statements.
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements (“FAS 160”). FAS 160 requires that ownership interests in subsidiaries held by parties other than the parent are clearly identified. In addition, it requires that the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the income statement. FAS 160 is effective for the Company beginning with its quarter ending March 31, 2009. The Company is currently assessing the potential impacts, if any, on its consolidated financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of FASB Statement No. 115 (“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value, with unrealized gains and losses related to these financial instruments reported in earnings at each subsequent reporting date.
38
This statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The Company is in the process of evaluating the impact of SFAS No. 159 on its financial statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. This statement clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing the asset or liability. SFAS No. 157 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value. This statement is effective in fiscal years beginning after November 15, 2007. The Company believes that the adoption of this standard on January 1, 2008 will not have a material effect on our consolidated financial statements.
In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on description, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 became effective for the Company on January 1, 2007. The adoption of FIN 48 in 2007 did not have a material effect on the consolidated financial statements.
In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments — An Amendment of FASB Nos. 133 and 140. The purpose of SFAS No. 155 is to simplify the accounting for certain hybrid financial instruments by permitting fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation. SFAS No. 155 also eliminates the restriction on passive derivative instruments that a qualifying special-purpose entity may hold. SFAS No. 155 is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year beginning after September 15, 2006. The adoption of SFAS No. 155 in 2007 did not have a material effect on the consolidated financial 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 facilities and should not be taken as indicative of future operations.
Comparison of Operating Results for the Years Ended December 31, 2007 and 2006(not including discontinued operations)
Acquisition and Development Activities
The comparability of the Company’s results of operations is significantly affected by acquisition activities in 2007 and 2006 as listed below. At December 31, 2007 and 2006, the Company owned 409 and 399 self-storage facilities and related assets, respectively.
· In 2007, 17 self-storage facilities were acquired for approximately $140.5 million (the “2007 Acquisitions”).
· In 2007, 5 self-storage facilities were sold for approximately $19.2 million (the “2007 Dispositions”).
· In 2006, 60 self-storage facilities were acquired for approximately $362.4 million (the “2006 Acquisitions”).
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A comparison of net income (loss) for the years ended December 31, 2007 and 2006 is as follows: | | For the year ended December 31, | |
| | 2007 | | 2006 | |
REVENUES | | (in thousands) | |
Rental income | | $ | 211,974 | | $ | 195,331 | |
Other property related income | | 16,828 | | 14,816 | |
Other - related party | | 365 | | 457 | |
Total revenues | | 229,167 | | 210,604 | |
OPERATING EXPENSES | | | | | |
Property operating expenses | | 96,802 | | 85,415 | |
Property operating expenses - related party | | 59 | | 69 | |
Depreciation | | 70,192 | | 64,079 | |
Asset write-off | | — | | 305 | |
Lease abandonment | | 1,316 | | — | |
General and administrative | | 21,966 | | 21,675 | |
General and administrative - related party | | 337 | | 613 | |
Total operating expenses | | 190,672 | | 172,156 | |
OPERATING INCOME | | 38,495 | | 38,448 | |
OTHER INCOME (EXPENSE) | | | | | |
Interest: | | | | | |
Interest expense on loans | | (54,108 | ) | (45,628 | ) |
Loan procurement amortization expense | | (1,772 | ) | (1,972 | ) |
Write-off of loan procurement cost due to
early extinguishment of debt | | — | | (1,907 | ) |
Interest income | | 401 | | 1,336 | |
Other | | 118 | | 191 | |
Total other expense | | (55,361 | ) | (47,980 | ) |
LOSS FROM CONTINUING OPERATIONS | | $ | (16,866 | ) | $ | (9,532 | ) |
THE COMPANY AND THE PREDECESSORTotal Revenues
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | The Company | | | The Predecessor(1) | |
| | | | | | Period
| | | Period
| | | | |
| | | | | | October 21,
| | | January 1,
| | | | |
| | | Year Ended
| | | through
| | | through
| | | | |
| | | December 31, | | | December 31, | | | October 20, | | | Year Ended December 31, | |
| | | 2005 | | | 2004 | | | 2004 | | | 2003 | | | 2002 | | | 2001 | |
| | | (Dollars and shares in thousands, except per share data) | |
| |
Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
| Rental income | | $ | 138,120 | | | $ | 21,314 | | | $ | 65,631 | | | $ | 76,898 | | | $ | 72,719 | | | $ | 59,120 | |
| Other property related income | | | 10,001 | | | | 1,452 | | | | 3,211 | | | | 3,916 | | | | 3,866 | | | | 3,156 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total revenues | | | 148,121 | | | | 22,766 | | | | 68,842 | | | | 80,814 | | | | 76,585 | | | | 62,276 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Property operating expenses | | | 54,952 | | | | 9,635 | | | | 26,031 | | | | 28,096 | | | | 26,075 | | | | 20,977 | |
| Property operating expense — related party | | | 43 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Depreciation | | | 39,949 | | | | 5,800 | | | | 16,528 | | | | 19,494 | | | | 19,656 | | | | 14,168 | |
| General and administrative | | | 17,786 | | | | 4,140 | | | | — | | | | — | | | | — | | | | — | |
| General and administrative — related party | | | 736 | | | | 114 | | | | — | | | | — | | | | — | | | | — | |
| Management fees — related party(2) | | | — | | | | — | | | | 3,689 | | | | 4,361 | | | | 4,115 | | | | 3,358 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total operating expenses | | | 113,466 | | | | 19,689 | | | | 46,248 | | | | 51,951 | | | | 49,846 | | | | 38,503 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating income | | | 34,655 | | | | 3,077 | | | | 22,594 | | | | 28,863 | | | | 26,739 | | | | 23,773 | |
| Interest: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest expense on loans | | | (32,370 | ) | | | (4,428 | ) | | | (19,385 | ) | | | (15,128 | ) | | | (15,944 | ) | | | (13,430 | ) |
| Loan procurement amortization expense | | | (1,785 | ) | | | (240 | ) | | | (5,727 | ) | | | (1,015 | ) | | | (1,079 | ) | | | (1,182 | ) |
| Early extinguishment of debt | | | (93 | ) | | | (7,012 | ) | | | — | | | | — | | | | — | | | | — | |
| Costs incurred to acquire management company — related party | | | — | | | | (22,152 | ) | | | — | | | | — | | | | — | | | | — | |
| Loss on sale of storage facilities | | | — | | | | — | | | | — | | | | — | | | | — | | | | (2,459 | ) |
| Interest income | | | 2,405 | | | | 37 | | | | 69 | | | | 12 | | | | — | | | | — | |
| Other | | | (47 | ) | | | (78 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations before minority interest | | | 2,765 | | | | (30,796 | ) | | | (2,449 | ) | | | 12,732 | | | | 9,716 | | | | 6,702 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Minority interest | | | (199 | ) | | | 898 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations | | | 2,566 | | | | (29,898 | ) | | | (2,449 | ) | | | 12,732 | | | | 9,716 | | | | 6,702 | |
| Discontinued operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Income from operations | | | 32 | | | | — | | | | — | | | | 171 | | | | 312 | | | | 194 | |
| Gain on sale of storage facilities | | | 179 | | | | — | | | | — | | | | 3,329 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income from discontinued operations | | | 211 | | | | — | | | | — | | | | 3,500 | | | | 312 | | | | 194 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 2,777 | | | $ | (29,898 | ) | | $ | (2,449 | ) | | $ | 16,232 | | | $ | 10,028 | | | $ | 6,896 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Rental income increased from $195.3 million in 2006 to $211.9 million in 2007, an increase of $16.6 million, or 8%. This increase is primarily attributable to (i) additional rental income from the 2007 Acquisitions, (ii) a full year contribution from the 2006 Acquisitions, and (iii) an increase in rental income from our pool of same-store facilities of approximately $3.0 million resulting from rate increases and an increase in average occupancy from 81.2% to 81.7%.
Other property related income, including Other – related party, increased from $15.3 million in 2006 to $17.2 million in 2007, an increase of $1.9 million, or 12%. This increase is primarily attributable to the other property income from the 2007 Acquisitions and a full year contribution from the 2006 Acquisitions.
Total Operating Expenses
Property operating expenses, including property operating expenses – related party, increased from $85.5 million in 2006 to $96.9 million in 2007, an increase of $11.4 million, or 13%. This increase is primarily attributable to (i) additional operating expenses from the 2007 Acquisitions, (ii) a full year of operating expenses from the 2006 Acquisitions, and (iii) an increase in repair and maintenance expenses of $1.2 million as part of the Company’s effort to address deferred maintenance items during 2007.
General and administrative expenses, including General and administrative expenses – related party, remained unchanged at $22.3 million. The 2006 period includes approximately $2.7 million of severance costs related to a Company restructuring of certain management positions; the 2007 period includes approximately $1.2 million of non-recurring legal and professional costs associated with the litigation and related settlement with the Amsdells.
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Depreciation increased from $64.1 million in 2006 to $70.1 million in 2007, an increase of $6.0 million, or 9%. The increase is primarily attributable to additional depreciation expense related to the 2007 Acquisitions and a full year of depreciation expense related to the 2006 Acquisitions.| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | The Company | | | The Predecessor(1) | |
| | | | | | Period
| | | Period
| | | | |
| | | | | | October 21,
| | | January 1,
| | | | |
| | | Year Ended
| | | through
| | | through
| | | | |
| | | December 31, | | | December 31, | | | October 20, | | | Year Ended December 31, | |
| | | 2005 | | | 2004 | | | 2004 | | | 2003 | | | 2002 | | | 2001 | |
| | | (Dollars and shares in thousands, except per share data) | |
| |
| Basic and diluted earnings (loss) per share from continuing operations | | $ | 0.07 | | | $ | (0.80 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic and diluted earnings per share from discontinued operations | | | — | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic and diluted earnings (loss) per share | | $ | 0.07 | | | $ | (0.80 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted average basic common shares outstanding(3) | | | 42,120 | | | | 37,478 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted average diluted common shares outstanding(3) | | | 42,203 | | | | 37,478 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Distribution declared(4) | | $ | 1.13 | | | $ | 0.2009 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Balance Sheet Data (as of end of period): | | | | | | | | | | | | | | | | | | | | | | | | |
| Storage facilities, net | | $ | 1,246,295 | | | $ | 729,155 | | | | | | | $ | 395,599 | | | $ | 411,232 | | | $ | 378,179 | |
| Total assets | | | 1,481,488 | | | | 775,874 | | | | | | | | 412,219 | | | | 421,400 | | | | 392,016 | |
| Loans payable and capital lease obligations | | | 669,338 | | | | 380,652 | | | | | | | | 271,945 | | | | 270,413 | | | | 242,184 | |
| Total liabilities | | | 714,376 | | | | 405,432 | | | | | | | | 280,470 | | | | 278,987 | | | | 249,854 | |
| Minority interest | | | 64,108 | | | | 11,062 | | | | | | | | — | | | | — | | | | — | |
| Shareholders’/owners’ equity | | | 703,004 | | | | 359,380 | | | | | | | | 131,749 | | | | 142,413 | | | | 142,162 | |
| Total liabilities and shareholders’/owners’ equity | | | 1,481,488 | | | | 775,874 | | | | | | | | 412,219 | | | | 421,400 | | | | 392,016 | |
Other Data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net operating income | | | 93,126 | | | | 13,131 | | | | 42,811 | | | | 52,718 | | | | 50,510 | | | | 41,299 | |
| Funds from operations for the operating partnership | | | 42,914 | | | | (24,996 | ) | | | 14,079 | | | | 32,604 | | | | 29,885 | | | | 23,812 | |
| Number of facilities (end of period) | | | 339 | | | | 201 | | | | 155 | | | | 155 | | | | 159 | | | | 152 | |
| Total rentable square feet (end of period) | | | 20,828,446 | | | | 12,977,893 | | | | 9,683,014 | | | | 9,863,014 | | | | 10,050,274 | | | | 9,520,547 | |
| Occupancy (end of period) | | | 81.2 | % | | | 82.2 | % | | | 85.2 | % | | | 82.6 | % | | | 79.2 | % | | | 78.6 | % |
| Cash dividends declared per share(4) | | $ | 1.13 | | | $ | 0.2009 | | | | | | | | | | | | | | | | | |
Cash Flow data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net cash flow provided by (used in): | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating activities | | $ | 48,850 | | | $ | 9,415 | | | $ | 25,523 | | | $ | 34,227 | | | $ | 31,642 | | | $ | 23,570 | |
| Investing activities | | | (392,694 | ) | | | (229,075 | ) | | | (5,114 | ) | | | (2,507 | ) | | | (33,212 | ) | | | (127,683 | ) |
| Financing activities | | | 516,457 | | | | 246,078 | | | | (25,845 | ) | | | (25,729 | ) | | | (818 | ) | | | 105,049 | |
Reconciliation of Net Income (Loss) to Funds from Operations (FFO): | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income (loss)(5) | | $ | 2,777 | | | $ | (29,898 | ) | | $ | (2,449 | ) | | $ | 16,232 | | | $ | 10,028 | | | $ | 6,896 | |
| Plus: | | | | | | | | | | | | | | | | | | | | | | | | |
| Depreciation | | | 39,949 | | | | 5,800 | | | | 16,528 | | | | 19,494 | | | | 19,656 | | | | 14,168 | |
| Minority interest | | | 199 | | | | (898 | ) | | | — | | | | — | | | | — | | | | — | |
| Depreciation included in discontinued operations | | | 168 | | | | — | | | | — | | | | 207 | | | | 201 | | | | 289 | |
| Loss on sale of storage facilities | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,459 | |
In August 2007, the Company abandoned certain office space in Cleveland, OH that was previously used for its corporate offices. The related leases have expiration dates ranging from December 31, 2008 through December 31, 2014. Upon vacating the space, the Company entered into a sub-lease agreement with a sub-tenant to lease the majority of the space for the duration of the term. As a result of this exit activity, the Company recognized a “Lease abandonment charge” of $1.3 million during 2007.
Total Other Expenses
Interest expense increased from $45.6 million in 2006 to $54.1 million in 2007, an increase of $8.5 million, or 19%. The increase is attributable to a higher amount of outstanding debt in 2007 primarily resulting from the financing of the 2007 Acquisitions, which was primarily funded through the revolving credit facility and secured term loan. An additional source of the increase is a full year of interest expense related to debt assumed in conjunction with the 2006 Acquisitions.
Loan procurement amortization expense decreased from $2.0 million in 2006 to $1.8 million in 2007, a decrease of $0.2 million, or 10%. The decrease is attributable to the repayment of five mortgages during 2007.
In conjunction with the two revolving credit facility financings during 2006, the Company incurred charges of $1.9 million relating to the write-off of unamortized loan procurement costs.
Interest income decreased to $0.4 million in 2007 from $1.3 million in 2006. This decrease is primarily attributable to the Company’s investment of excess proceeds from the 2005 follow-on public offering in interest bearing accounts and in short-term marketable securities until the excess proceeds were used to fund acquisitions or pay down existing debt during the first quarter of 2006.
Comparison of Operating Results for the Years Ended December 31, 2006 and 2005(not including discontinued operations)
Acquisition and Development Activities
The comparability of the Company’s results of operations is significantly affected by acquisition activities in 2006 and 2005. At December 31, 2006 and 2005, the Company owned 399 and 339 self-storage facilities and related assets, respectively.
In 2006, 60 self-storage facilities were acquired for approximately $362.4 million (the “2006 Acquisitions”).
In 2005, 146 self-storage facilities were acquired for approximately $547.9 million. During 2005, four self-storage facilities were sold for approximately $6.2 million, and accordingly results of operations for these facilities have been accounted for as discontinued operations. The Company also reduced its reported number of facilities during 2005 by consolidating four facilities into existing adjacent facilities. Based upon total acquisitions, dispositions and consolidations, the Company had a net increase of 138 facilities in 2005 (the “2005 Acquisitions”).
41
A comparison of net income (loss) for the years ended December 31, 2006 and 2005 is as follows: | | For the year ended December 31, | |
| | 2006 | | 2005 | |
REVENUES | | (in thousands) | |
Rental income | | $ | 195,331 | | $ | 135,169 | |
Other property related income | | 14,816 | | 10,001 | |
Other - related party | | 457 | | 405 | |
Total revenues | | 210,604 | | 145,575 | |
OPERATING EXPENSES | | | | | |
Property operating expenses | | 85,415 | | 54,793 | |
Property operating expenses - related party | | 69 | | 43 | |
Depreciation | | 64,079 | | 39,479 | |
Asset write-off | | 305 | | — | |
General and administrative | | 21,675 | | 17,786 | |
General and administrative - related party | | 613 | | 736 | |
Total operating expenses | | 172,156 | | 112,837 | |
OPERATING INCOME | | 38,448 | | 32,738 | |
OTHER INCOME (EXPENSE) | | | | | |
Interest: | | | | | |
Interest expense on loans | | (45,628 | ) | (31,907 | ) |
Loan procurement amortization expense | | (1,972 | ) | (2,045 | ) |
Write-off of loan procurement cost due to
early extinguishment of debt | | (1,907 | ) | (93 | ) |
Interest income | | 1,336 | | 2,404 | |
Other | | 191 | | (47 | ) |
Total other expense | | (47,980 | ) | (31,688 | ) |
INCOME (LOSS) FROM CONTINUING OPERATIONS | | $ | (9,532 | ) | $ | 1,050 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | The Company | | | The Predecessor(1) | |
| | | | | | Period
| | | Period
| | | | |
| | | | | | October 21,
| | | January 1,
| | | | |
| | | Year Ended
| | | through
| | | through
| | | | |
| | | December 31, | | | December 31, | | | October 20, | | | Year Ended December 31, | |
| | | 2005 | | | 2004 | | | 2004 | | | 2003 | | | 2002 | | | 2001 | |
| | | (Dollars and shares in thousands, except per share data) | |
| |
| Less: | | | | | | | | | | | | | | | | | | | | | | | | |
| Gain on sale of storage facilities | | | (179 | ) | | | — | | | | — | | | | (3,329 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| FFO for the operating partnership | | $ | 42,914 | | | $ | (24,996 | ) | | $ | 14,079 | | | $ | 32,604 | | | $ | 29,885 | | | $ | 23,812 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| FFO allocable to minority interest | | $ | (2,864 | ) | | $ | (733 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| FFO attributable to common shareholders | | $ | 40,050 | | | $ | (24,263 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation of Net Income (Loss) to Net Operating Income: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income (loss)(5) | | $ | 2,777 | | | $ | (29,898 | ) | | $ | (2,449 | ) | | $ | 16,232 | | | $ | 10,028 | | | $ | 6,896 | |
| Plus: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest expense on loans | | | 32,370 | | | | 4,428 | | | | 19,385 | | | | 15,128 | | | | 15,944 | | | | 13,430 | |
| Loan procurement amortization expense | | | 1,785 | | | | 240 | | | | 5,727 | | | | 1,015 | | | | 1,079 | | | | 1,182 | |
| Minority interest | | | 199 | | | | (898 | ) | | | — | | | | — | | | | — | | | | — | |
| Early extinguishment of debt | | | 93 | | | | 7,012 | | | | — | | | | — | | | | — | | | | — | |
| Costs incurred to acquire management company — related party(5) | | | — | | | | 22,152 | | | | — | | | | — | | | | — | | | | — | |
| Loss on sale of storage facilities | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,459 | |
| Other | | | 47 | | | | 78 | | | | — | | | | — | | | | — | | | | — | |
| Less: | | | | | | | | | | | | | | | | | | | | | | | | |
| Income from discontinued operations | | | (32 | ) | | | — | | | | — | | | | (171 | ) | | | (312 | ) | | | (194 | ) |
| Gain on sale of storage facilities | | | (179 | ) | | | — | | | | — | | | | (3,329 | ) | | | — | | | | — | |
| Interest income | | | (2,405 | ) | | | (37 | ) | | | (69 | ) | | | (12 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating income | | $ | 34,655 | | | $ | 3,077 | | | $ | 22,594 | | | $ | 28,863 | | | $ | 26,739 | | | $ | 23,773 | |
| Plus: | | | | | | | | | | | | | | | | | | | | | | | | |
| General and administrative/ Management fees to related party | | | 18,522 | | | | 4,254 | | | | 3,689 | | | | 4,361 | | | | 4,115 | | | | 3,358 | |
| Depreciation | | | 39,949 | | | | 5,800 | | | | 16,528 | | | | 19,494 | | | | 19,656 | | | | 14,168 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net operating income | | $ | 93,126 | | | $ | 13,131 | | | $ | 42,811 | | | $ | 52,718 | | | $ | 50,510 | | | $ | 41,299 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
(1) | | Represents historical financial data of our operating partnership, including three additional facilities acquired by our operating partnership from certain of the Amsdell Entities in connection with the IPO. See Note 1 to the financial statements. |
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(2) | | Prior to the IPO, management fees to related party were paid to U-Store-It Mini Warehouse Co., the prior manager of our self-storage facilities that was acquired at the time of our IPO. |
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(3) | | Excludes 5,198,855 operating partnership units issued at our IPO and in connection with the acquisition of facilities subsequent to our IPO. Operating partnership units have been excluded from the earnings per share calculations as there would be no effect on the earnings per share since, upon conversion, the minority interests’ share of income would also be added back to net income. |
Total RevenuesRental income increased from $135.2 million in 2005 to $195.3 million in 2006, an increase of $60.2 million, or 45%. This increase is primarily attributable to (i) additional rental income from the 2006 Acquisitions, (ii) a full year contribution from the 2005 Acquisitions, and (iii) an increase in rental income from our pool of same-store facilities of approximately $4.6 million.
Other property related income, including Other – related party, increased from $10.4 million in 2005 to $15.3 million in 2006, an increase of $4.9 million, or 47%. This increase is primarily attributable to the other property income from the 2006 Acquisitions and a full year contribution from the 2005 Acquisitions.
Total Operating Expenses
Property operating expenses, including Property operating expenses – related party, increased from $54.8 million in 2005 to $85.5 million in 2006, an increase of $30.6 million, or 56%. This increase is primarily attributable to (i) additional operating expenses from the 2006 Acquisitions, (ii) a full year of operating expenses from the 2005 Acquisitions, and (iii) an increase in operating expenses from our “same-store” facilities of approximately $5.7 million.
General and administrative, including General and administrative – related party, expenses increased from $18.5 million in 2005 to $22.3 million in 2006, an increase of $3.8 million, or 20.5%. The increase is primarily attributable to (i) approximately $2.7 million of severance costs during 2006, (ii) approximately $0.4 million related to the settlement of a claim made based on actions taken by the Predecessor Company prior to the initial public offering, and (iii) $0.2 million related to professional fees incurred in 2006 related to reorganization.
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Depreciation increased from $39.5 million in 2005 to $64.1 million in 2006, an increase of $24.6 million, or 62%. The increase is primarily attributable to additional depreciation expense related to the 2006 Acquisitions and a full year of depreciation expense related to the 2005 Acquisitions.Asset write-off in 2006 of $0.3 million represents the disposal of the Company’s former point of sale system, which was replaced with CentershiftTM in the fourth quarter of 2006.
Total Other Expenses
Interest expense increased from $31.9 million in 2005 to $45.6 million in 2006, an increase of $13.7 million, or 43%. The increase is attributable to a higher amount of outstanding debt in 2006 primarily resulting from the financing of certain of the 2006 Acquisitions with additional borrowings.
In conjunction with the two revolving credit facility financings during 2006, the Company incurred charges of $1.9 million relating to the write-off of unamortized loan procurement costs.
Interest income decreased to $1.3 million in 2006 from $2.4 million in 2005. This decrease is primarily attributable to the Company’s 2005 follow-on public offering. The Company invested excess proceeds from the follow-on offering in interest bearing accounts and in short-term marketable securities until the excess proceeds were used to fund acquisitions or pay down existing debt during the first quarter of 2006.
Impact of Hurricanes
As a result of hurricanes that occurred during the third quarter of 2005, the Company incurred damage at certain of its self-storage facilities located in Alabama, Louisiana and Mississippi. Under the provisions of SFAS No. 144, “Accounting for the Impairment of or Disposal of Long-Lived Assets” (“SFAS No. 144”), the Company determined that there were indicators of impairment and accordingly tested the assets for recoverability. After an assessment of the damage sustained at the Waveland, Mississippi facility, the Company determined that a charge for impairment of approximately $2.3 million was required because the estimated undiscounted future cash flows did not support the carrying value of the assets. The Company expected that insurance proceeds from its comprehensive insurance for property damage would cover the entire loss incurred, and in 2005 appropriately recorded the impairment charge and an offsetting insurance recovery of $2.3 million, of which $0.5 million was received in October 2005. The related insurance receivable was included in other assets as of December 31, 2005, and the asset impairment charge and related insurance recovery were presented net in operating expenses for the year ended December 31, 2005. During 2006, insurance proceeds were sufficient to satisfy the insurance receivable and no balance remained as of December 31, 2007.
Same-Store Facility Results
The Company considers its same-store portfolio to consist of only those facilities owned at the beginning and at the end of the applicable periods presented. The following same-store presentation is considered to be useful to investors in evaluating our performance because it provides information relating to changes in facility-level operating performance without taking into account the effects of acquisitions, developments or dispositions. The following table sets forth operating data for our same-store portfolio for the periods presented.
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| | |
(4) | | The Company’s board of trustees declared a pro rata dividend of $0.2009 per common share on November 16, 2004 and full quarterly dividends of $0.28 per common share on February 22, 2005, May 31, 2005 and August 24, 2005 and $0.29 per common share on November 30, 2005. |
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(5) | | For the period from October 21, 2004 through December 31, 2004, amount includes a one-time management contract termination charge of approximately $22.2 million related to the termination of our management contracts as a result of the purchase of U-Store-It Mini Warehouse Co. and approximately $7.0 million of expenses related to the early extinguishment of debt at the time of our IPO. Additionally, for the period from October 21, 2004 through December 31, 2004, general and administrative expense includes a one-time compensation charge of approximately $2.4 million for deferred shares granted to certain members of our senior management team in connection with our IPO. |
Comparison of the Year Ended December 31, 2007 to the Year Ended December 31,2006
The following table provides information pertaining to our Same-Store portfolio for 2007 and 2006:
| | | | | | | | | | Properties | | Other/ | | | | | | | | | |
| | Same Store Property Portfolio | | Acquired | | Eliminations | | Total Portfolio | |
| | | | | | Increase/ | | % | | | | | | | | | | | | | | Increase/ | | | |
| | 2007 | | 2006 | | (Decrease) | | Change | | 2007 | | 2006 | | 2007 | | 2006 | | 2007 | | 2006 | | (Decrease) | | Change | |
REVENUES: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Rental income | | $ | 173,409 | | $ | 170,103 | | $ | 3,306 | | 2% | | $ | 38,564 | | $ | 25,181 | | $ | 1 | | $ | 47 | | $ | 211,974 | | $ | 195,331 | | $ | 16,643 | | 9 | % |
Other property related income | | 13,301 | | 12,653 | | 648 | | 5% | | 3,299 | | 2,150 | | 228 | | 13 | | 16,828 | | 14,816 | | 2,012 | | 14 | % |
Other — related party | | — | | — | | — | | — | | — | | — | | 365 | | 457 | | 365 | | 457 | | (92 | ) | -20 | % |
Total revenues | | 186,710 | | 182,756 | | 3,954 | | 2% | | 41,863 | | 27,331 | | 594 | | 517 | | 229,167 | | 210,604 | | 18,563 | | 9 | % |
OPERATING EXPENSES: | | | | | | | | | | | | | | | | | | | | | | | | | |
Property operating expenses | | 72,010 | | 69,262 | | 2,748 | | 4% | | 17,753 | | 10,384 | | 7,039 | | 5,769 | | 96,802 | | 85,415 | | 11,387 | | 13 | % |
Property operating expenses — related party | | — | | — | | — | | — | | — | | — | | 59 | | 69 | | 59 | | 69 | | (10 | ) | -14 | % |
Subtotal | | 72,010 | | 69,262 | | 2,748 | | 4% | | 17,753 | | 10,384 | | 7,098 | | 5,838 | | 96,861 | | 85,484 | | 11,377 | | 13 | % |
NET OPERATING INCOME: | | 114,700 | | 113,494 | | 1,206 | | 1% | | 24,110 | | 16,947 | | (6,504 | ) | (5,321 | ) | 132,306 | | 125,120 | | 7,186 | | 6 | % |
Depreciation | | | | | | | | | | | | | | | | | | 70,192 | | 64,079 | | 6,113 | | 10 | % |
Asset write-off | | | | | | | | | | | | | | | | | | — | | 305 | | (305 | ) | -100 | % |
Lease bandonment charge | | | | | | | | | | | | | | | | | | 1,316 | | — | | 1,316 | | — | |
General and administrative | | | | | | | | | | | | | | | | | | 21,966 | | 21,675 | | 291 | | 1 | % |
General and administrative — related party | | | | | | | | | | | | | | | | | | 337 | | 613 | | (276 | ) | -45 | % |
Subtotal | | | | | | | | | | | | | | | | | | 93,811 | | 86,672 | | 7,139 | | 8 | % |
Operating income (loss) | | | | | | | | | | | | | | | | | | 38,495 | | 38,448 | | 47 | | 0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense on loans | | | | | | | | | | | | | | | | | | (54,108 | ) | (45,628 | ) | (8,480 | ) | 19 | % |
Loan procurement amortization expense | | | | | | | | | | | | | | | | | | (1,772 | ) | (1,972 | ) | 200 | | -10 | % |
Write-off of loan procurement due to early extinguishment of debt | | | | | | | | | | | | | | | | | | — | | (1,907 | ) | (1907) | | 100 | % |
Interest income | | | | | | | | | | | | | | | | | | 401 | | 1,336 | | (935 | ) | -70 | % |
Other | | | | | | | | | | | | | | | | | | 118 | | 191 | | (73 | ) | -38 | % |
Total other expense | | | | | | | | | | | | | | | | | | (55,361 | ) | (47,980 | ) | (7,381 | ) | 15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
LOSS BEFORE MINORITY INTERESTS | | | | | | | | | | | | | | | | | | (16,866 | ) | (9,532 | ) | (7,334 | ) | 77 | % |
MINORITY INTERESTS | | | | | | | | | | | | | | | | | | 1,385 | | 790 | | 595 | | 75 | % |
LOSS FROM CONTINUING OPERATIONS | | | | | | | | | | | | | | | | | | (15,481 | ) | (8,742 | ) | (6,739 | ) | 77 | % |
DISCONTINUED OPERATIONS | | | | | | | | | | | | | | | | | | | | | | | | | |
Income from operations | | | | | | | | | | | | | | | | | | 102 | | 208 | | (106 | ) | -51 | % |
Net gain on disposition of discontinued operations | | | | | | | | | | | | | | | | | | 2,517 | | — | | 2,517 | | — | |
Minority interest attributable to discontinued operations | | | | | | | | | | | | | | | | | | (215 | ) | (17 | ) | (198 | ) | 1165 | % |
Income from discontinued operations | | | | | | | | | | | | | | | | | | 2,404 | | 191 | | 2,213 | | 1159 | % |
NET INCOME (LOSS) | | | | | | | | | | | | | | | | | | $ | (13,077 | ) | $ | (8,551 | ) | $ | (4,526 | ) | 53 | % |
Same-store revenues increased from $182.8 million in 2006 to $186.7 million in 2007, an increase of $3.9 million, or 2%. Same-store property operating expenses increased from $69.3 million in 2006 to $72.0 million in 2007, an increase of $2.7 million, or 4%. This increase was primarily attributable to slight increases in multiple expense line items.
Non-GAAP Financial MeasuresSummary of Critical Accounting Policies and Estimates
Funds From Operations
Funds from operations, which we refer to as“FFO,”Set forth below is a widelysummary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements included in this report. Certain of the accounting policies used performance measurein 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 notes to our consolidated financial statements (See Note 2 to the consolidated financial statements). These policies require the application of judgment and assumptions by management and, as a result, are subject to a degree of uncertainty. Due to this uncertainty, actual results could differ materially from estimates calculated and utilized by management.
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Basis of Presentation
The accompanying consolidated financial statements include all of the accounts of the Company, the operating partnership and the wholly-owned subsidiaries of the operating partnership. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this Annual Report on Form 10-K.
Self-Storage Facilities
The Company records self-storage facilities at cost less accumulated depreciation. Depreciation on the buildings and equipment is recorded on a straight-line basis over their estimated useful lives, which range from five to 40 years. Expenditures for significant renovations or improvements that extend the useful life of assets are capitalized. Repairs and maintenance costs are expensed as incurred.
When facilities are acquired, the purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on estimated fair values. When a portfolio of facilities is acquired, the purchase price is allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates, which take into account the relative size, age and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available. Allocations to the individual assets and liabilities are based upon comparable market sales information for land, buildings and improvements and estimates of depreciated replacement cost of equipment.
In allocating the purchase price, the Company determines whether the acquisition includes intangible assets or liabilities. Substantially all of the leases in place at acquired facilities 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. To date, no intangible asset has been recorded for the value of tenant relationships, because the Company does not have any concentrations of significant tenants and the average tenant turnover is fairly frequent. While intangible assets for in-place leases have not historically been recorded, the Company recorded a $6.8 million intangible asset to recognize the value of in-place leases related to its acquisition of 14 self-storage facilities during the third quarter of 2007.
Long-lived assets classified as “held for use” are reviewed for impairment when events and circumstances indicate that there may be an impairment. The carrying values of these long-lived assets are compared to the undiscounted future net operating cash flows attributable to the assets. An impairment loss is recorded if the net carrying value of the asset exceeds the fair value based on its undiscounted future net operating cash flows attributable to the asset and circumstances indicate that the carrying value of the real estate companiesasset may not be recoverable. The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. The Company recorded an asset impairment charge of $2.3 million for the year ended December 31, 2005 related to hurricane damage (See Note 17 to the Consolidated and Combined Financial Statements) and impairment charges totaling $0.4 million for the year ended December 31, 2007, related to fire and flood damage.
The Company considers long-lived assets to be “held for sale” upon satisfaction of the following criteria: (a) management commits to a plan to sell a facility (or group of facilities), (b) the facility is provided hereavailable for immediate sale in its present condition subject only to terms that are usual and customary for sales of such facilities, (c) an active program to locate a buyer and other actions required to complete the plan to sell the facility have been initiated, (d) the sale of the facility is probable and transfer of the asset is expected to be completed within one year, (e) the facility is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Typically these criteria are all met when the relevant asset is under contract, significant non-refundable deposits have been made by the potential buyer, the assets are immediately available for transfer and there are no contingencies related to the sale that may prevent the transaction from closing. In most transactions, these contingencies are not satisfied until the actual closing of the transaction; and, accordingly, the facility is not identified as a supplemental measure ofheld for sale until the closing actually occurs. However, each potential transaction is evaluated based on its separate facts and circumstances.
Revenue Recognition
Management has determined that all our leases with tenants are operating performance. We calculate FFOleases. Rental income is recognized in accordance with the best practices describedterms of the lease agreements or contracts, which generally are month-to-month. Revenues from long-term operating leases are recognized on a straight-line basis over the term of the lease. The excess of rents recognized over
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amounts contractually due pursuant to the underlying leases is included in deferred revenue, and contractually due but unpaid rents are included in other assets.
Share Based Payments
We apply the fair value method of accounting for contingently issued shares and share options issued under our equity incentive plans. Accordingly, share compensation expense was recorded ratably over the vesting period relating to such contingently issued shares and options. The Company has elected to recognize compensation expense on a straight-line method over the requisite service period. Additionally, certain restricted share units awarded to our former Chief Executive Officer in 2005 were scheduled to vest immediately upon his retirement from the Company as he had reached the retirement age set forth in his award agreement. Accordingly, share compensation expense related to this issuance was expensed fully in 2005.
Minority Interests
As of September 30, 2005, the Company recorded the operating partnership units issued in connection with the National Self Storage transaction as conditionally redeemable as the result of a special redemption right (see Note 4 and Note 7 to the consolidated financial statements) for a discussion of the National Self Storage transaction). On October 25, 2005, the sellers in the White Paper.National Self Storage transaction agreed to terminate the Special Redemption Right, effective as of July 15, 2005 (the first date on which National Self Storage facilities were acquired by the operating partnership under the purchase agreement). From the issuance date until October 25, 2005, the Company elected to accrete changes in the redemption value of the National Self Storage units issued over the period from the date of issuance to the earliest redemption date (one year from the date of initial issuance) on a pro rata basis. Upon termination of the Special Redemption Right, the Company classified these units in minority interest. The White Paper defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from salesamount of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures, if any, are calculated to reflect FFO on the same basis.
Management uses FFO as a key performance indicator in evaluating the operations of our facilities. Given the nature of our business as a real estate owner and operator, we believe that FFO is helpful to management and investors as a starting point in measuring our operational performance because it excludes various items included in net income that do not relate to or are not indicative of our operating performance, such as gains (or losses) from sales of property and depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of our financial performance, is not an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, and is not indicative of funds available to fund our cash needs, including our ability to make distributions. Our computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the White Paper or that interpret the White Paper differently than we do.
NOI
We define net operating income, which we refer to as “NOI,” as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income: interest expense on loans, loan procurement amortization expense, early extinguishment of debt, the charge incurred to acquireU-Store-It Mini Warehouse Co.,accretion recorded through October 25, 2005 was approximately $3.0 million. Effective October 26, 2005, minority interest
loss on sale of storage facilities, other, depreciationrepresents issued and
general and administrative/management feesoutstanding operating partnership units.Minority Interests include income allocated to related party; and deducting from net income: income from discontinued operations, gains on sale of self-storage facilities and interest income. NOI is not a measure of performance calculated in accordance with GAAP.
We use NOI as a measure of operating performance at each of our facilities, and for all of our facilities in the aggregate. NOI should not be considered as a substitute for operating income, net income, cash flows provided by operating, investing and financing activities, or other income statement or cash flow statement data prepared in accordance with GAAP.
We believe NOI is useful to investors in evaluating our operating performance because:
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| • | It is one of the primary measures used by our management and our facility managers to evaluate the economic productivity of our facilities, including our ability to lease our facilities, increase pricing and occupancy and control our property operating expenses; |
|
| • | It is widely used in the real estate industry and the self-storage industry to measure the performance of real estate assets without regard to various items included in net income that do not relate to or are not |
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| | |
| | indicative of operating performance, such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets; and |
| | |
| • | We believe it helps our investors to meaningfully compare the results of our operating performance from period to period by removing the impact of our capital structure (primarily interest expense on our outstanding indebtedness) and depreciation of our basis in our assets from our operating results. |
There are material limitations to using a measure such as NOI, including the difficulty associated with comparing results among more than one company and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income. We compensate for these limitations by considering the economic effectholders of the
excluded expense items independentlyoperating partnership units. Income is allocated to the minority interests based on their ownership percentage of the operating partnership. This ownership percentage, as well as
the total net assets of the operating partnership, changes when additional common shares or operating partnership units are issued. Such changes result in
connectionan allocation between shareholders’ equity and Minority Interests in the Consolidated Balance Sheets. Due to the number of such capital transactions that occur each period, we have presented a single net effect of all such allocations for the period as the “Adjustment for Minority Interest in Operating Partnership” in our Consolidated Statements of Shareholders’ Equity and Owners’ Equity (Deficit) (rather than separately allocating the minority interest for each individual capital transaction).Recent Accounting Pronouncements
In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 141 (Revised 2007), Business Combinations (“FAS 141(R)”). FAS 141(R) establishes principles and requirements for recognizing identifiable assets acquired, liabilities assumed, noncontrolling interest in the acquiree, goodwill acquired in the combination or the gain from a bargain purchase, and disclosure requirements. Under this revised statement, all costs incurred to effect an acquisition will be recognized separately from the acquisition. Also, restructuring costs that are expected but the acquirer is not obligated to incur will be recognized separately from the acquisition. FAS 141(R) is effective for the Company beginning with our analysisits quarter ending March 31, 2009. The Company is currently assessing the potential impacts, if any, on its consolidated financial statements.
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements (“FAS 160”). FAS 160 requires that ownership interests in subsidiaries held by parties other than the parent are clearly identified. In addition, it requires that the amount of consolidated net income. NOIincome attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the income statement. FAS 160 is effective for the Company beginning with its quarter ending March 31, 2009. The Company is currently assessing the potential impacts, if any, on its consolidated financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of FASB Statement No. 115 (“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value, with unrealized gains and losses related to these financial instruments reported in earnings at each subsequent reporting date.
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This statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The Company is in the process of evaluating the impact of SFAS No. 159 on its financial statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. This statement clarifies the principle that fair value should be consideredbased on the assumptions that market participants would use when pricing the asset or liability. SFAS No. 157 establishes a fair value hierarchy, giving the highest priority to quoted prices in additionactive markets and the lowest priority to butunobservable data. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value. This statement is effective in fiscal years beginning after November 15, 2007. The Company believes that the adoption of this standard on January 1, 2008 will not ashave a substitutematerial effect on our consolidated financial statements.
In June 2006, the FASB issued Interpretation No. 48, Accounting for other measuresUncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial performance reportedstatements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in accordance with GAAP, such as total revenues, operating incomea tax return. FIN 48 also provides guidance on description, classification, interest and net income.
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ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
penalties, accounting in interim periods, disclosure and transition. FIN 48 became effective for the Company on January 1, 2007. The adoption of FIN 48 in 2007 did not have a material effect on the consolidated financial statements.In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments — An Amendment of FASB Nos. 133 and 140. The purpose of SFAS No. 155 is to simplify the accounting for certain hybrid financial instruments by permitting fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation. SFAS No. 155 also eliminates the restriction on passive derivative instruments that a qualifying special-purpose entity may hold. SFAS No. 155 is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year beginning after September 15, 2006. The adoption of SFAS No. 155 in 2007 did not have a material effect on the consolidated financial 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 appearing elsewherethereto. Historical results set forth in this report. the consolidated statements of operations reflect only the existing facilities and should not be taken as indicative of future operations.
Comparison of Operating Results for the Years Ended December 31, 2007 and 2006(not including discontinued operations)
Acquisition and Development Activities
The Company makes certain statements in this section that are forward-looking statements within the meaningcomparability of the federal securities laws. For a complete discussionCompany’s results of forward-looking statements, see the sectionoperations is significantly affected by acquisition activities 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
On October 27, 2004,2007 and 2006 as listed below. At December 31, 2007 and 2006, the Company
completed its IPO, pursuantowned 409 and 399 self-storage facilities and related assets, respectively.· In 2007, 17 self-storage facilities were acquired for approximately $140.5 million (the “2007 Acquisitions”).
· In 2007, 5 self-storage facilities were sold for approximately $19.2 million (the “2007 Dispositions”).
· In 2006, 60 self-storage facilities were acquired for approximately $362.4 million (the “2006 Acquisitions”).
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A comparison of net income (loss) for the years ended December 31, 2007 and 2006 is as follows:
| | For the year ended December 31, | |
| | 2007 | | 2006 | |
REVENUES | | (in thousands) | |
Rental income | | $ | 211,974 | | $ | 195,331 | |
Other property related income | | 16,828 | | 14,816 | |
Other - related party | | 365 | | 457 | |
Total revenues | | 229,167 | | 210,604 | |
OPERATING EXPENSES | | | | | |
Property operating expenses | | 96,802 | | 85,415 | |
Property operating expenses - related party | | 59 | | 69 | |
Depreciation | | 70,192 | | 64,079 | |
Asset write-off | | — | | 305 | |
Lease abandonment | | 1,316 | | — | |
General and administrative | | 21,966 | | 21,675 | |
General and administrative - related party | | 337 | | 613 | |
Total operating expenses | | 190,672 | | 172,156 | |
OPERATING INCOME | | 38,495 | | 38,448 | |
OTHER INCOME (EXPENSE) | | | | | |
Interest: | | | | | |
Interest expense on loans | | (54,108 | ) | (45,628 | ) |
Loan procurement amortization expense | | (1,772 | ) | (1,972 | ) |
Write-off of loan procurement cost due to
early extinguishment of debt | | — | | (1,907 | ) |
Interest income | | 401 | | 1,336 | |
Other | | 118 | | 191 | |
Total other expense | | (55,361 | ) | (47,980 | ) |
LOSS FROM CONTINUING OPERATIONS | | $ | (16,866 | ) | $ | (9,532 | ) |
Total Revenues
Rental income increased from $195.3 million in 2006 to which it sold$211.9 million in 2007, an aggregateincrease of 28,750,000 common shares (including 3,750,000 shares pursuant$16.6 million, or 8%. This increase is primarily attributable to (i) additional rental income from the 2007 Acquisitions, (ii) a full year contribution from the 2006 Acquisitions, and (iii) an increase in rental income from our pool of same-store facilities of approximately $3.0 million resulting from rate increases and an increase in average occupancy from 81.2% to 81.7%.
Other property related income, including Other – related party, increased from $15.3 million in 2006 to $17.2 million in 2007, an increase of $1.9 million, or 12%. This increase is primarily attributable to the exerciseother property income from the 2007 Acquisitions and a full year contribution from the 2006 Acquisitions.
Total Operating Expenses
Property operating expenses, including property operating expenses – related party, increased from $85.5 million in 2006 to $96.9 million in 2007, an increase of $11.4 million, or 13%. This increase is primarily attributable to (i) additional operating expenses from the 2007 Acquisitions, (ii) a full year of operating expenses from the 2006 Acquisitions, and (iii) an increase in repair and maintenance expenses of $1.2 million as part of the underwriters’ over-allotment option)Company’s effort to address deferred maintenance items during 2007.
General and administrative expenses, including General and administrative expenses – related party, remained unchanged at $22.3 million. The 2006 period includes approximately $2.7 million of severance costs related to a Company restructuring of certain management positions; the 2007 period includes approximately $1.2 million of non-recurring legal and professional costs associated with the litigation and related settlement with the Amsdells.
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Depreciation increased from $64.1 million in 2006 to $70.1 million in 2007, an offering priceincrease of $16.00 per share.$6.0 million, or 9%. The IPO resulted in gross proceedsincrease is primarily attributable to additional depreciation expense related to the 2007 Acquisitions and a full year of depreciation expense related to the 2006 Acquisitions.
Asset write-off of $0.3 million represents the disposal of the Company’s former point of sale system, which was replaced with CentershiftTM in the third quarter of 2006.
In August 2007, the Company abandoned certain office space in Cleveland, OH that was previously used for its corporate offices. The related leases have expiration dates ranging from December 31, 2008 through December 31, 2014. Upon vacating the space, the Company entered into a sub-lease agreement with a sub-tenant to lease the majority of $460.0 million. On October 7,the space for the duration of the term. As a result of this exit activity, the Company recognized a “Lease abandonment charge” of $1.3 million during 2007.
Total Other Expenses
Interest expense increased from $45.6 million in 2006 to $54.1 million in 2007, an increase of $8.5 million, or 19%. The increase is attributable to a higher amount of outstanding debt in 2007 primarily resulting from the financing of the 2007 Acquisitions, which was primarily funded through the revolving credit facility and secured term loan. An additional source of the increase is a full year of interest expense related to debt assumed in conjunction with the 2006 Acquisitions.
Loan procurement amortization expense decreased from $2.0 million in 2006 to $1.8 million in 2007, a decrease of $0.2 million, or 10%. The decrease is attributable to the repayment of five mortgages during 2007.
In conjunction with the two revolving credit facility financings during 2006, the Company incurred charges of $1.9 million relating to the write-off of unamortized loan procurement costs.
Interest income decreased to $0.4 million in 2007 from $1.3 million in 2006. This decrease is primarily attributable to the Company’s investment of excess proceeds from the 2005 follow-on public offering in interest bearing accounts and in short-term marketable securities until the excess proceeds were used to fund acquisitions or pay down existing debt during the first quarter of 2006.
Comparison of Operating Results for the Years Ended December 31, 2006 and 2005(not including discontinued operations)
Acquisition and Development Activities
The comparability of the Company’s results of operations is significantly affected by acquisition activities in 2006 and 2005. At December 31, 2006 and 2005, the Company completedowned 399 and 339 self-storage facilities and related assets, respectively.
In 2006, 60 self-storage facilities were acquired for approximately $362.4 million (the “2006 Acquisitions”).
In 2005, 146 self-storage facilities were acquired for approximately $547.9 million. During 2005, four self-storage facilities were sold for approximately $6.2 million, and accordingly results of operations for these facilities have been accounted for as discontinued operations. The Company also reduced its reported number of facilities during 2005 by consolidating four facilities into existing adjacent facilities. Based upon total acquisitions, dispositions and consolidations, the Company had a secondarynet increase of 138 facilities in 2005 (the “2005 Acquisitions”).
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A comparison of net income (loss) for the years ended December 31, 2006 and 2005 is as follows:
| | For the year ended December 31, | |
| | 2006 | | 2005 | |
REVENUES | | (in thousands) | |
Rental income | | $ | 195,331 | | $ | 135,169 | |
Other property related income | | 14,816 | | 10,001 | |
Other - related party | | 457 | | 405 | |
Total revenues | | 210,604 | | 145,575 | |
OPERATING EXPENSES | | | | | |
Property operating expenses | | 85,415 | | 54,793 | |
Property operating expenses - related party | | 69 | | 43 | |
Depreciation | | 64,079 | | 39,479 | |
Asset write-off | | 305 | | — | |
General and administrative | | 21,675 | | 17,786 | |
General and administrative - related party | | 613 | | 736 | |
Total operating expenses | | 172,156 | | 112,837 | |
OPERATING INCOME | | 38,448 | | 32,738 | |
OTHER INCOME (EXPENSE) | | | | | |
Interest: | | | | | |
Interest expense on loans | | (45,628 | ) | (31,907 | ) |
Loan procurement amortization expense | | (1,972 | ) | (2,045 | ) |
Write-off of loan procurement cost due to
early extinguishment of debt | | (1,907 | ) | (93 | ) |
Interest income | | 1,336 | | 2,404 | |
Other | | 191 | | (47 | ) |
Total other expense | | (47,980 | ) | (31,688 | ) |
INCOME (LOSS) FROM CONTINUING OPERATIONS | | $ | (9,532 | ) | $ | 1,050 | |
Total Revenues
Rental income increased from $135.2 million in 2005 to $195.3 million in 2006, an increase of $60.2 million, or 45%. This increase is primarily attributable to (i) additional rental income from the 2006 Acquisitions, (ii) a full year contribution from the 2005 Acquisitions, and (iii) an increase in rental income from our pool of same-store facilities of approximately $4.6 million.
Other property related income, including Other – related party, increased from $10.4 million in 2005 to $15.3 million in 2006, an increase of $4.9 million, or 47%. This increase is primarily attributable to the other property income from the 2006 Acquisitions and a full year contribution from the 2005 Acquisitions.
Total Operating Expenses
Property operating expenses, including Property operating expenses – related party, increased from $54.8 million in 2005 to $85.5 million in 2006, an increase of $30.6 million, or 56%. This increase is primarily attributable to (i) additional operating expenses from the 2006 Acquisitions, (ii) a full year of operating expenses from the 2005 Acquisitions, and (iii) an increase in operating expenses from our “same-store” facilities of approximately $5.7 million.
General and administrative, including General and administrative – related party, expenses increased from $18.5 million in 2005 to $22.3 million in 2006, an increase of $3.8 million, or 20.5%. The increase is primarily attributable to (i) approximately $2.7 million of severance costs during 2006, (ii) approximately $0.4 million related to the settlement of a claim made based on actions taken by the Predecessor Company prior to the initial public offering, pursuantand (iii) $0.2 million related to which it soldprofessional fees incurred in 2006 related to reorganization.
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Depreciation increased from $39.5 million in 2005 to $64.1 million in 2006, an aggregateincrease of 19,665,000 common shares (including 2,565,000 shares pursuant$24.6 million, or 62%. The increase is primarily attributable to additional depreciation expense related to the exercise2006 Acquisitions and a full year of depreciation expense related to the 2005 Acquisitions.
Asset write-off in 2006 of $0.3 million represents the disposal of the underwriters’ option) atCompany’s former point of sale system, which was replaced with CentershiftTM in the fourth quarter of 2006.
Total Other Expenses
Interest expense increased from $31.9 million in 2005 to $45.6 million in 2006, an offering priceincrease of $20.35 per share, for gross proceeds$13.7 million, or 43%. The increase is attributable to a higher amount of $400.2 million.
outstanding debt in 2006 primarily resulting from the financing of certain of the 2006 Acquisitions with additional borrowings.In conjunction with the two revolving credit facility financings during 2006, the Company incurred charges of $1.9 million relating to the write-off of unamortized loan procurement costs.
Interest income decreased to $1.3 million in 2006 from $2.4 million in 2005. This decrease is primarily attributable to the Company’s 2005 follow-on public offering. The Company isinvested excess proceeds from the follow-on offering in interest bearing accounts and in short-term marketable securities until the excess proceeds were used to fund acquisitions or pay down existing debt during the first quarter of 2006.
Impact of Hurricanes
As a result of hurricanes that occurred during the third quarter of 2005, the Company incurred damage at certain of its self-storage facilities located in Alabama, Louisiana and Mississippi. Under the provisions of SFAS No. 144, “Accounting for the Impairment of or Disposal of Long-Lived Assets” (“SFAS No. 144”), the Company determined that there were indicators of impairment and accordingly tested the assets for recoverability. After an integrated self-storage real estate company,assessment of the damage sustained at the Waveland, Mississippi facility, the Company determined that a charge for impairment of approximately $2.3 million was required because the estimated undiscounted future cash flows did not support the carrying value of the assets. The Company expected that insurance proceeds from its comprehensive insurance for property damage would cover the entire loss incurred, and in 2005 appropriately recorded the impairment charge and an offsetting insurance recovery of $2.3 million, of which means that it has in-house capabilities$0.5 million was received in the operation, design, development, leasing, and acquisitionOctober 2005. The related insurance receivable was included in other assets as of self-storage facilities. At December 31, 2005, and 2004, the Company owned 339asset impairment charge and 201 self-storage facilities, respectively, totaling approximately 20.8 and 13.0 million rentable square feet, respectively.
The Company derives revenues principally from rents received from its customers who rent units at its self-storage facilities undermonth-to-month leases. Therefore, ourrelated insurance recovery were presented net in operating results depend materially on our ability to retain our existing customers and lease our available self-storage units to new customers while maintaining and, where possible, increasing our pricing levels. In addition, our operating results depend on the ability of our customers to make required rental payments to us. We believe that our decentralized approach to the management and operation of our facilities, which places an emphasis on local, market level oversight and control, allows us to respond quickly and effectively to changes in local market conditions, where appropriate increasing rents while maintaining occupancy levels, or increasing occupancy levels while maintaining pricing levels.
The Company experiences minor seasonal fluctuations in the occupancy levels of our facilities, which are generally slightly higher during the summer months due to increased moving activity.
In the future, the Company intends to focus on increasing our internal growth and selectively pursuing targeted acquisitions and developments of self-storage facilities. We intend to incur additional debt in connection with any such future acquisitions or developments.
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The Company has one reportable operating segment: we own, operate, develop, and acquire self-storage facilities. The Company’s self-storage facilities are located in major metropolitan areas and have numerous tenants per facility. All our operations are within the United States and no single tenant represents 1% or more of our revenues. The facilities in Florida, California, Illinois and New Jersey provided approximately 24%, 11%, 10% and 8%, respectively, of total revenuesexpenses for the year ended December 31, 2005.
During 2006, insurance proceeds were sufficient to satisfy the insurance receivable and no balance remained as of December 31, 2007.Same-Store Facility Results
The Company considers its same-store portfolio to consist of only those facilities owned at the beginning and at the end of the applicable periods presented. The following same-store presentation is considered to be useful to investors in evaluating our performance because it provides information relating to changes in facility-level operating performance without taking into account the effects of acquisitions, developments or dispositions. The following table sets forth operating data for our same-store portfolio for the periods presented.
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Comparison of the Year Ended December 31, 2007 to the Year Ended December 31,2006
The following table provides information pertaining to our Same-Store portfolio for 2007 and 2006:
| | | | | | | | | | Properties | | Other/ | | | | | | | | | |
| | Same Store Property Portfolio | | Acquired | | Eliminations | | Total Portfolio | |
| | | | | | Increase/ | | % | | | | | | | | | | | | | | Increase/ | | | |
| | 2007 | | 2006 | | (Decrease) | | Change | | 2007 | | 2006 | | 2007 | | 2006 | | 2007 | | 2006 | | (Decrease) | | Change | |
REVENUES: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Rental income | | $ | 173,409 | | $ | 170,103 | | $ | 3,306 | | 2% | | $ | 38,564 | | $ | 25,181 | | $ | 1 | | $ | 47 | | $ | 211,974 | | $ | 195,331 | | $ | 16,643 | | 9 | % |
Other property related income | | 13,301 | | 12,653 | | 648 | | 5% | | 3,299 | | 2,150 | | 228 | | 13 | | 16,828 | | 14,816 | | 2,012 | | 14 | % |
Other — related party | | — | | — | | — | | — | | — | | — | | 365 | | 457 | | 365 | | 457 | | (92 | ) | -20 | % |
Total revenues | | 186,710 | | 182,756 | | 3,954 | | 2% | | 41,863 | | 27,331 | | 594 | | 517 | | 229,167 | | 210,604 | | 18,563 | | 9 | % |
OPERATING EXPENSES: | | | | | | | | | | | | | | | | | | | | | | | | | |
Property operating expenses | | 72,010 | | 69,262 | | 2,748 | | 4% | | 17,753 | | 10,384 | | 7,039 | | 5,769 | | 96,802 | | 85,415 | | 11,387 | | 13 | % |
Property operating expenses — related party | | — | | — | | — | | — | | — | | — | | 59 | | 69 | | 59 | | 69 | | (10 | ) | -14 | % |
Subtotal | | 72,010 | | 69,262 | | 2,748 | | 4% | | 17,753 | | 10,384 | | 7,098 | | 5,838 | | 96,861 | | 85,484 | | 11,377 | | 13 | % |
NET OPERATING INCOME: | | 114,700 | | 113,494 | | 1,206 | | 1% | | 24,110 | | 16,947 | | (6,504 | ) | (5,321 | ) | 132,306 | | 125,120 | | 7,186 | | 6 | % |
Depreciation | | | | | | | | | | | | | | | | | | 70,192 | | 64,079 | | 6,113 | | 10 | % |
Asset write-off | | | | | | | | | | | | | | | | | | — | | 305 | | (305 | ) | -100 | % |
Lease bandonment charge | | | | | | | | | | | | | | | | | | 1,316 | | — | | 1,316 | | — | |
General and administrative | | | | | | | | | | | | | | | | | | 21,966 | | 21,675 | | 291 | | 1 | % |
General and administrative — related party | | | | | | | | | | | | | | | | | | 337 | | 613 | | (276 | ) | -45 | % |
Subtotal | | | | | | | | | | | | | | | | | | 93,811 | | 86,672 | | 7,139 | | 8 | % |
Operating income (loss) | | | | | | | | | | | | | | | | | | 38,495 | | 38,448 | | 47 | | 0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense on loans | | | | | | | | | | | | | | | | | | (54,108 | ) | (45,628 | ) | (8,480 | ) | 19 | % |
Loan procurement amortization expense | | | | | | | | | | | | | | | | | | (1,772 | ) | (1,972 | ) | 200 | | -10 | % |
Write-off of loan procurement due to early extinguishment of debt | | | | | | | | | | | | | | | | | | — | | (1,907 | ) | (1907) | | 100 | % |
Interest income | | | | | | | | | | | | | | | | | | 401 | | 1,336 | | (935 | ) | -70 | % |
Other | | | | | | | | | | | | | | | | | | 118 | | 191 | | (73 | ) | -38 | % |
Total other expense | | | | | | | | | | | | | | | | | | (55,361 | ) | (47,980 | ) | (7,381 | ) | 15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
LOSS BEFORE MINORITY INTERESTS | | | | | | | | | | | | | | | | | | (16,866 | ) | (9,532 | ) | (7,334 | ) | 77 | % |
MINORITY INTERESTS | | | | | | | | | | | | | | | | | | 1,385 | | 790 | | 595 | | 75 | % |
LOSS FROM CONTINUING OPERATIONS | | | | | | | | | | | | | | | | | | (15,481 | ) | (8,742 | ) | (6,739 | ) | 77 | % |
DISCONTINUED OPERATIONS | | | | | | | | | | | | | | | | | | | | | | | | | |
Income from operations | | | | | | | | | | | | | | | | | | 102 | | 208 | | (106 | ) | -51 | % |
Net gain on disposition of discontinued operations | | | | | | | | | | | | | | | | | | 2,517 | | — | | 2,517 | | — | |
Minority interest attributable to discontinued operations | | | | | | | | | | | | | | | | | | (215 | ) | (17 | ) | (198 | ) | 1165 | % |
Income from discontinued operations | | | | | | | | | | | | | | | | | | 2,404 | | 191 | | 2,213 | | 1159 | % |
NET INCOME (LOSS) | | | | | | | | | | | | | | | | | | $ | (13,077 | ) | $ | (8,551 | ) | $ | (4,526 | ) | 53 | % |
Same-store revenues increased from $182.8 million in 2006 to $186.7 million in 2007, an increase of $3.9 million, or 2%. Same-store property operating expenses increased from $69.3 million in 2006 to $72.0 million in 2007, an increase of $2.7 million, or 4%. This increase was primarily attributable to slight increases in multiple expense line items.
Summary of Critical Accounting Policies and Estimates
Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated and combined financial statements included in this report. Certain of the accounting policies used in the preparation of these consolidated and combined financial statements are particularly important for an understanding of the financial position and results of operations presented in the historical consolidated and combined financial statements included in this report. A summary of significant accounting policies is also provided in the notes to our consolidated and combined financial statements (See Note 2 to the Consolidated and Combined Financial Statements)consolidated financial statements). These policies require the application of judgment and assumptions by management and, as a result, are subject to a degree of uncertainty. Due to this uncertainty, actual results could differ materially from estimates calculated and utilized by management.
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The accompanying consolidated and combined financial statements include all of the accounts of the Company, the operating partnership and the wholly-owned subsidiaries of the operating partnership. The mergers of Amsdell Partners, Inc. and High Tide LLC with and into the Company, and the property interests contributed to the operating partnership by the Predecessor, have been accounted for as a reorganization of entities under common control and accordingly, were recorded at the Predecessor’s historical cost basis. Prior to the combination, the Company had no significant operations; therefore, the combined operations for the period prior to October 21, 2004, represent the operations of the Predecessor.
For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this Annual Report onForm 10-K.
The Company records self-storage facilities at cost less accumulated depreciation. Depreciation on the buildings and equipment is recorded on a straight-line basis over their estimated useful lives, which range from five to 40 years. Expenditures for significant renovations or improvements that extend the useful life of assets are capitalized. Repairs and maintenance costs are expensed as incurred.
When facilities are acquired, the purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on estimated fair values. When a portfolio of facilities is acquired, the purchase price is allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates, which take into account the relative size, age and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available. Allocations to the individual assets and liabilities are based upon comparable market sales information for land, buildings and improvements and estimates of depreciated replacement cost of equipment.
In allocating the purchase price, the Company determines whether the acquisition includes intangible assets or liabilities. Substantially all of the leases in place at acquired propertiesfacilities are at market rates, as the majority of the leases aremonth-to-month contracts. Accordingly, to date no portion of the purchase price has been allocated to above-orabove- or below-market lease intangibles. The Company also considers whether the in-place, at market leases for any facility represent an intangible asset. Based upon the Company’s experience, leases of this nature generally re-let in less than 30 days andlease-up costs are minimal. Accordingly, the Company has no intangible assets recorded for in-place, at market leases as of December 31, 2005 and 2004. Additionally, toTo date, no intangible asset has been recorded for the value of tenant relationships, because the Company does not have any concentrations of significant tenants and the average tenant turnover is fairly frequent.
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Long-lived assets classified as “held for use” are reviewed for impairment when events and circumstances indicate that there may be an impairment. The carrying valuevalues of these long-lived assets are compared to the undiscounted future net operating cash flows attributable to the assets. An impairment loss is recorded if the net carrying value of the asset exceeds the fair value based on its undiscounted future net operating cash flows attributable to the asset and circumstances indicate that the carrying value of the real estate asset may not be recoverable. The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. The Company recorded an asset impairment charge of $2.3 million for the year ended December 31, 2005 related to hurricane damage (See Note 1617 to the Consolidated and Combined Financial Statements).
and impairment charges totaling $0.4 million for the year ended December 31, 2007, related to fire and flood damage.The Company considers long-lived assets to be “held for sale” upon satisfaction of the following criteria: (a) management commits to a plan to sell a facility (or group of facilities), (b) the facility is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such facilities, (c) an active program to locate a buyer and other actions required to complete the plan to sell the facility have been initiated, (d) the sale of the facility is probable and transfer of the asset is expected to be completed within one year, (e) the facility is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Typically these criteria are all met when the relevant asset is under contract, significant non-refundable deposits have been made by the potential buyer, the assets are immediately available for transfer and there are no contingencies related to the sale that may prevent the transaction from closing. In most transactions, these contingencies are not satisfied until the actual closing of the transaction; and, accordingly, the facility is not identified as held for sale until the closing actually occurs. However, each potential transaction is evaluated based on its separate facts and circumstances.
Management has determined that all our leases with tenants are operating leases. Rental income is recognized in accordance with the terms of the lease agreements or contracts, which generally aremonth-to-month. Revenues from long-term operating leases are recognized on a straight-line basis over the term of the lease. The excess of rents recognized over
37
amounts contractually due pursuant to the underlying leases is included in rents received in advance,deferred revenue, and contractually due but unpaid rents are included in other assets.
We apply the fair value method of accounting for contingently issued shares and share options issued under our equity incentive award plan.plans. Accordingly, share compensation expense was recorded ratably over the vesting period relating to such contingently issued shares and options. The Company has elected to recognize compensation expense on a straight-line method over the requisite service period. Additionally, certain restricted share units awarded to our chief executive officerformer Chief Executive Officer in 2005 were scheduled to vest immediately upon his retirement from the Company as he hashad reached the retirement age set forth in his award agreement. Accordingly, share compensation expense related to this issuance was expensed fully in 2005.
Minority InterestInterests
As of September 30, 2005, the Company recorded the operating partnership units issued in connection with the National Self Storage transaction as conditionally redeemable as the result of a special redemption right (see Note 34 and Note 67 to the consolidated financial statements) for a discussion of the National Self Storage transaction). On October 25, 2005, the sellers in the National Self Storage transaction agreed to terminate the Special Redemption Right, effective as of July 15, 2005 (the first date on which National Self Storage facilities were acquired by the operating partnership under the purchase agreement). From the issuance date until October 25, 2005, the Company elected to accrete changes in the redemption value of the National Self Storage Unitsunits issued over the period from the date of issuance to the earliest redemption date (one-year(one year from the date of initial issuance) on a pro
46
rata basis. Upon termination of the Special Redemption Right, the Company classified these units in minority interest. The amount of accretion recorded through October 25, 2005 was approximately $3.0 million. Effective October 26, 2005, minority interest represents issued and outstanding operating partnership units.
Minority Interests include income allocated to holders of the operating partnership units. Income is allocated to the holders of the operating partnership unitsminority interests based on their ownership percentage of the operating partnership. This ownership percentage, as well as the total net assets of the operating partnership, changechanges when additional common shares or operating partnership units are issued. Such changes resultsresult in an allocation between stockholders’shareholders’ equity and Minority Interests in the Consolidated Balance Sheets. Due to the number of such capital transactions that occur each period, we have presented a single net effect of all such allocations for the period as the “Adjustment for Minority Interest in operating partnership”Operating Partnership” in our Consolidated Statements of Shareholders’ Equity and Owners’ Equity (Deficit) (rather than separately allocating the minority interest for each individual capital transaction).
Recent Accounting Pronouncements
In March 2005,December 2007, the Financial Accounting Standards Board (“FASB”) issued FASB InterpretationStatement of Financial Accounting Standards No. 47, “Accounting for Conditional Asset Retirement Obligations”141 (Revised 2007), Business Combinations (“FIN 47”FAS 141(R)”). FIN 47 clarifiesFAS 141(R) establishes principles and requirements for recognizing identifiable assets acquired, liabilities assumed, noncontrolling interest in the definitionacquiree, goodwill acquired in the combination or the gain from a bargain purchase, and treatmentdisclosure requirements. Under this revised statement, all costs incurred to effect an acquisition will be recognized separately from the acquisition. Also, restructuring costs that are expected but the acquirer is not obligated to incur will be recognized separately from the acquisition. FAS 141(R) is effective for the Company beginning with its quarter ending March 31, 2009. The Company is currently assessing the potential impacts, if any, on its consolidated financial statements.
In December 2007, the FASB issued Statement of conditional asset retirement obligations as discussedFinancial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements (“FAS 160”). FAS 160 requires that ownership interests in subsidiaries held by parties other than the parent are clearly identified. In addition, it requires that the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the income statement. FAS 160 is effective for the Company beginning with its quarter ending March 31, 2009. The Company is currently assessing the potential impacts, if any, on its consolidated financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of FASB Statement No. 143, “Accounting for Asset Retirement Obligations”115 (“SFAS No. 159”). A conditional asset retirement obligationSFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value, with unrealized gains and losses related to these financial instruments reported in earnings at each subsequent reporting date.
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This statement is definedeffective as an asset retirement activity in which the timingand/or method of settlement are dependent on future events that may be outside the control of the Company. FIN 47 requiresbeginning of an entity to recognize a liabilityentity’s first fiscal year that begins after November 15, 2007. The Company is in the process of evaluating the impact of SFAS No. 159 on its financial statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 provides guidance for theusing fair value of a conditional asset retirement obligation ifto measure assets and liabilities. This statement clarifies the principle that fair value ofshould be based on the liability canassumptions that market participants would use when pricing the asset or liability. SFAS No. 157 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data. SFAS No. 157 applies whenever other standards require assets or liabilities to be reasonably estimated. FIN 47measured at fair value. This statement is intended to provide more information about long-lived assets, more information about future cash outflows for these obligations and more consistent recognition of these liabilities.effective in fiscal years beginning after November 15, 2007. The Company initially adopted FIN 47 at December 31, 2005 andbelieves that the adoption of this interpretationstandard on January 1, 2008 will not have a material effect on our consolidated financial statements.
In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on description, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 became effective for the Company on January 1, 2007. The adoption of FIN 48 in 2007 did not have a material impacteffect on the Company.
consolidated financial statements.In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments — An Amendment of FASB Nos. 133 and 140. The purpose of SFAS No. 155 is to simplify the accounting for certain hybrid financial instruments by permitting fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation. SFAS No. 155 also eliminates the restriction on passive derivative instruments that a qualifying special-purpose entity may hold. SFAS No. 155 is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year beginning after September 15, 2006. The adoption of SFAS No. 155 in 2007 did not have a material effect on the consolidated financial statements.
Results of Operations
The following discussion of our results of operations should be read in conjunction with the consolidated and combined financial statements and the accompanying notes thereto. Historical results set forth in the consolidated and combined statements of operations reflect only the existing facilities and should not be taken as indicative of future operations.
Comparison of Operating Results for the YearYears Ended December 31, 2005 to the Year Ended December 31, 20042007 and 2006
For purposes of the following comparison of operating results for the years ended December 31, 2005 and December 31, 2004, the Company has combined the results of operations for the Company for the period from October 21, 2004 through December 31, 2004 and the Predecessor for the period from January 1, 2004 through October 20, 2004. Internally, the Company uses combined reporting to evaluate its operating performance and believes that this presentation will provide investors with additional insight into our financial results.
(not including discontinued operations)Acquisition and Development Activities
The comparability of the Company’s results of operations is significantly affected by development, redevelopment and acquisition activities in 20052007 and 2004.2006 as listed below. At December 31, 20052007 and 2004,2006, the Company owned interests in 339409 and 201399 self-storage facilities and related assets, respectively.
· In 2007, 17 self-storage facilities were acquired for approximately $140.5 million (the “2007 Acquisitions”).
· In 2007, 5 self-storage facilities were sold for approximately $19.2 million (the “2007 Dispositions”).
· In 2006, 60 self-storage facilities were acquired for approximately $362.4 million (the “2006 Acquisitions”).
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A comparison of net income (loss) for the years ended December 31, 2007 and 2006 is as follows:
| | For the year ended December 31, | |
| | 2007 | | 2006 | |
REVENUES | | (in thousands) | |
Rental income | | $ | 211,974 | | $ | 195,331 | |
Other property related income | | 16,828 | | 14,816 | |
Other - related party | | 365 | | 457 | |
Total revenues | | 229,167 | | 210,604 | |
OPERATING EXPENSES | | | | | |
Property operating expenses | | 96,802 | | 85,415 | |
Property operating expenses - related party | | 59 | | 69 | |
Depreciation | | 70,192 | | 64,079 | |
Asset write-off | | — | | 305 | |
Lease abandonment | | 1,316 | | — | |
General and administrative | | 21,966 | | 21,675 | |
General and administrative - related party | | 337 | | 613 | |
Total operating expenses | | 190,672 | | 172,156 | |
OPERATING INCOME | | 38,495 | | 38,448 | |
OTHER INCOME (EXPENSE) | | | | | |
Interest: | | | | | |
Interest expense on loans | | (54,108 | ) | (45,628 | ) |
Loan procurement amortization expense | | (1,772 | ) | (1,972 | ) |
Write-off of loan procurement cost due to
early extinguishment of debt | | — | | (1,907 | ) |
Interest income | | 401 | | 1,336 | |
Other | | 118 | | 191 | |
Total other expense | | (55,361 | ) | (47,980 | ) |
LOSS FROM CONTINUING OPERATIONS | | $ | (16,866 | ) | $ | (9,532 | ) |
Total Revenues
Rental income increased from $195.3 million in 2006 to $211.9 million in 2007, an increase of $16.6 million, or 8%. This increase is primarily attributable to (i) additional rental income from the 2007 Acquisitions, (ii) a full year contribution from the 2006 Acquisitions, and (iii) an increase in rental income from our pool of same-store facilities of approximately $3.0 million resulting from rate increases and an increase in average occupancy from 81.2% to 81.7%.
Other property related income, including Other – related party, increased from $15.3 million in 2006 to $17.2 million in 2007, an increase of $1.9 million, or 12%. This increase is primarily attributable to the other property income from the 2007 Acquisitions and a full year contribution from the 2006 Acquisitions.
Total Operating Expenses
Property operating expenses, including property operating expenses – related party, increased from $85.5 million in 2006 to $96.9 million in 2007, an increase of $11.4 million, or 13%. This increase is primarily attributable to (i) additional operating expenses from the 2007 Acquisitions, (ii) a full year of operating expenses from the 2006 Acquisitions, and (iii) an increase in repair and maintenance expenses of $1.2 million as part of the Company’s effort to address deferred maintenance items during 2007.
General and administrative expenses, including General and administrative expenses – related party, remained unchanged at $22.3 million. The 2006 period includes approximately $2.7 million of severance costs related to a Company restructuring of certain management positions; the 2007 period includes approximately $1.2 million of non-recurring legal and professional costs associated with the litigation and related settlement with the Amsdells.
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Depreciation increased from $64.1 million in 2006 to $70.1 million in 2007, an increase of $6.0 million, or 9%. The increase is primarily attributable to additional depreciation expense related to the 2007 Acquisitions and a full year of depreciation expense related to the 2006 Acquisitions.
Asset write-off of $0.3 million represents the disposal of the Company’s former point of sale system, which was replaced with CentershiftTM in the third quarter of 2006.
In August 2007, the Company abandoned certain office space in Cleveland, OH that was previously used for its corporate offices. The related leases have expiration dates ranging from December 31, 2008 through December 31, 2014. Upon vacating the space, the Company entered into a sub-lease agreement with a sub-tenant to lease the majority of the space for the duration of the term. As a result of this exit activity, the Company recognized a “Lease abandonment charge” of $1.3 million during 2007.
Total Other Expenses
Interest expense increased from $45.6 million in 2006 to $54.1 million in 2007, an increase of $8.5 million, or 19%. The increase is attributable to a higher amount of outstanding debt in 2007 primarily resulting from the financing of the 2007 Acquisitions, which was primarily funded through the revolving credit facility and secured term loan. An additional source of the increase is a full year of interest expense related to debt assumed in conjunction with the 2006 Acquisitions.
Loan procurement amortization expense decreased from $2.0 million in 2006 to $1.8 million in 2007, a decrease of $0.2 million, or 10%. The decrease is attributable to the repayment of five mortgages during 2007.
In conjunction with the two revolving credit facility financings during 2006, the Company incurred charges of $1.9 million relating to the write-off of unamortized loan procurement costs.
Interest income decreased to $0.4 million in 2007 from $1.3 million in 2006. This decrease is primarily attributable to the Company’s investment of excess proceeds from the 2005 follow-on public offering in interest bearing accounts and in short-term marketable securities until the excess proceeds were used to fund acquisitions or pay down existing debt during the first quarter of 2006.
Comparison of Operating Results for the Years Ended December 31, 2006 and 2005(not including discontinued operations)
Acquisition and Development Activities
The comparability of the Company’s results of operations is significantly affected by acquisition activities in 2006 and 2005. At December 31, 2006 and 2005, the Company owned 399 and 339 self-storage facilities and related assets, respectively.
In 2006, 60 self-storage facilities were acquired for approximately $362.4 million (the “2006 Acquisitions”).
In 2005, 146 self storageself-storage facilities were acquired for approximately $547.9 million. During 2005, four self-storage facilities were sold for approximately $6.2 million, and accordingly results of operations for these facilities have been accounted for as discontinued operations. The Company also reduced its reported number of facilities during 2005 by consolidating four facilities into existing adjacent facilities. Based upon total acquisitions, dispositions and consolidations, the Company had a net increase of 138 propertiesfacilities in 2005 (See Note 3 to the Consolidated and Combined Financial Statements)(the “2005 Acquisitions”).
In 2004, 46 self-storage facilities were acquired for approximately $221.8 million. All of these facilities were acquired concurrently with, or shortly after, the completion of the IPO.
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A comparison of net income (loss) from continuing operations before minority interest for the years ended December 31, 20052006 and 20042005 is as follows:
| | | | | | | | | |
| | | Year Ended December 31, | |
| | | 2005 | | | 2004 (1) | |
| | | (Dollars in thousands) | |
| |
| REVENUES: | | | | | | | | |
| Rental income | | $ | 138,120 | | | $ | 86,945 | |
| Other property related income | | | 10,001 | | | | 4,663 | |
| | | | | | | | | |
| Total revenues | | | 148,121 | | | | 91,608 | |
| OPERATING EXPENSES: | | | | | | | | |
| Property operating expenses | | | 54,952 | | | | 35,666 | |
| Property operating expense — related party | | | 43 | | | | — | |
| Depreciation | | | 39,949 | | | | 22,328 | |
| General and administrative | | | 17,786 | | | | 4,140 | |
| General and administrative — related party | | | 736 | | | | 114 | |
| Management fees — related party | | | — | | | | 3,689 | |
| | | | | | | | | |
| Total operating expenses | | | 113,466 | | | | 65,937 | |
| OPERATING INCOME | | | 34,655 | | | | 25,671 | |
| OTHER INCOME (EXPENSE): | | | | | | | | |
| Interest: | | | | | | | | |
| Interest expense on loans | | | (32,370 | ) | | | (23,813 | ) |
| Loan procurement amortization expense | | | (1,785 | ) | | | (5,967 | ) |
| Early extinguishment of debt | | | (93 | ) | | | (7,012 | ) |
| Cost incurred to acquire management company — related party | | | — | | | | (22,152 | ) |
| Interest income | | | 2,405 | | | | 106 | |
| Other | | | (47 | ) | | | (78 | ) |
| | | | | | | | | |
| Total other expense | | | (31,890 | ) | | | (58,916 | ) |
| | | | | | | | | |
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST | | $ | 2,765 | | | $ | (33,245 | ) |
| | | | | | | | | |
| | |
(1) | | The twelve months ended December 31, 2004 represents consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from January 1, 2004 to October 20, 2004. The operating results for the year ended December 31, 2004 are not comparable to future expected operating results of the Company since they include various IPO-related charges. |
Comparison of Operating Results for the Years Ended December 31, 2005 and 2004 (Not including discontinued operations)
| | For the year ended December 31, | |
| | 2006 | | 2005 | |
REVENUES | | (in thousands) | |
Rental income | | $ | 195,331 | | $ | 135,169 | |
Other property related income | | 14,816 | | 10,001 | |
Other - related party | | 457 | | 405 | |
Total revenues | | 210,604 | | 145,575 | |
OPERATING EXPENSES | | | | | |
Property operating expenses | | 85,415 | | 54,793 | |
Property operating expenses - related party | | 69 | | 43 | |
Depreciation | | 64,079 | | 39,479 | |
Asset write-off | | 305 | | — | |
General and administrative | | 21,675 | | 17,786 | |
General and administrative - related party | | 613 | | 736 | |
Total operating expenses | | 172,156 | | 112,837 | |
OPERATING INCOME | | 38,448 | | 32,738 | |
OTHER INCOME (EXPENSE) | | | | | |
Interest: | | | | | |
Interest expense on loans | | (45,628 | ) | (31,907 | ) |
Loan procurement amortization expense | | (1,972 | ) | (2,045 | ) |
Write-off of loan procurement cost due to
early extinguishment of debt | | (1,907 | ) | (93 | ) |
Interest income | | 1,336 | | 2,404 | |
Other | | 191 | | (47 | ) |
Total other expense | | (47,980 | ) | (31,688 | ) |
INCOME (LOSS) FROM CONTINUING OPERATIONS | | $ | (9,532 | ) | $ | 1,050 | |
Total Revenues
Rental income increased from $86.9 million in 2004 to $138.1$135.2 million in 2005 to $195.3 million in 2006, an increase of $51.2$60.2 million, or 58.9%45%. This increase is primarily attributable to (i) additional rental income from the acquisition of 146 facilities in2006 Acquisitions, (ii) a full year contribution from the 2005 Acquisitions, and (ii)(iii) an increase in revenuesrental income from our pool of “same-store”same-store facilities of approximately $3.8 million (see “Same-Store Facility Results” on page 52).
$4.6 million.Other property related income, including Other – related party, increased from $4.7 million in 2004 to $10.0$10.4 million in 2005 to $15.3 million in 2006, an increase of $5.3$4.9 million, or 114.5%47%. This increase is primarily attributable to the acquisition of 146 facilities in 2005.
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Total Operating Expenses
Property operating expenses, including Property operating expenses – related party, increased from $35.7 million in 2004 to $55.0$54.8 million in 2005 to $85.5 million in 2006, an increase of $19.3$30.6 million, or 54.2%56%. This increase is primarily attributable to (i) additional operating expenses from the acquisition2006 Acquisitions, (ii) a full year of 146 facilities inoperating expenses from the 2005 offset by a decreaseAcquisitions, and (iii) an increase in operating expenses from our pool of “same-store” facilities of approximately $2.0 million (see “Same-Store Facility Results” below).
$5.7 million.General and administrative, costs began with the Company’s IPO in October 2004. As a result, generalincluding General and administrative – related party, expenses increased $14.2 million tofrom $18.5 million in 2005 from $4.3to $22.3 million in 2004,2006, an increase of $3.8 million, or 20.5%. The increase is primarily attributable to (i) approximately $2.7 million of severance costs during 2006, (ii) approximately $0.4 million related to the settlement of a claim made based on actions taken by the Predecessor Company prior to the initial public offering, and (iii) $0.2 million related to professional fees incurred in 2006 related to reorganization.
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Depreciation increased from incurring$39.5 million in 2005 to $64.1 million in 2006, an increase of $24.6 million, or 62%. The increase is primarily attributable to additional depreciation expense related to the 2006 Acquisitions and a full year of general and administrative costs. General and administrative costs included a chargedepreciation expense related to the 2005 Acquisitions.
Asset write-off in 2006 of approximately $4.7$0.3 million in 2005 and approximately $2.8 million in 2004, an increase of $1.9 million, for compensation expense to certain membersrepresents the disposal of the Company’s senior management team. The $4.7 millionformer point of general and administrative expense incurred in 2005 included approximately $2.5 million of bonuses and approximately $2.2 million of share compensation expense. The $2.8 million incurred in 2004 included approximately $0.4 million for bonuses and approximately $2.4 million for share compensation expense. During 2005, administrative costs included expenses related to being a public company, including, audit and legal fees, board of trustee fees, Sarbanes Oxley compliance costs and investor relations costssale system, which totaled approximately $3.4 million in 2005, of which $1.1 million related to Sarbanes Oxley compliance costs. The remaining general and administrative costs increased approximately $8.9 million to $10.4 million in 2005 from $1.5 million in 2004, which increase related primarily to administrative salaries and miscellaneous expenses incurred for the full year of 2005.
Management fees decreased from $3.7 million in 2004 to $0.0 million in 2005, a decrease of $3.7 million, or 100%. This decrease is attributable to the acquisition of our management company effective October 27, 2004 in connection with our IPO. Management fees from our wholly-owned subsidiaries were eliminated subsequent to October 27, 2004 and werewas replaced with management company expenses, which are recorded in general and administrative expenses. Depreciation increased from $22.3 million in 2004 to $39.9 million in 2005, an increase of $17.6 million, or 78.9%. The increase is partially attributable to the acquisition of 146 additional facilities in 2005 resulting in $8.8 million of the total increase. Additionally, the increase is partially attributable to a “step up” in the carrying amount of fixed assets due to the purchase of outside partners’ interests in the Predecessor in May 2004 and the acquisition of 46 facilitiesCentershiftTM in the fourth quarter of 2004. The above increases were partially offset by lower depreciation on fully amortized equipment with lives significantly shorter than new buildings and improvements.
2006.Total Other Expenses
Interest expense increased from $23.8 million in 2004 to $32.4$31.9 million in 2005 to $45.6 million in 2006, an increase of $8.6$13.7 million, or 35.9%43%. The increase is attributable to a higher amount of outstanding debt in 20052006 primarily resulting from the financing of certain of the Company’s acquisitions in 20052006 Acquisitions with additional borrowings.
Loan procurement amortization expense decreased from $6.0 million in 2004 to $1.8 million in 2005, a decrease of $4.2 million, or 70.1%. This decrease is primarily attributable to loan procurement costs incurred in connectionIn conjunction with the Predecessor entering into a $424.5 million term loan in May 2004, which was used to purchase the interests of outside partners in the Predecessor.
In the fourth quarter of 2004,two revolving credit facility financings during 2006, the Company incurred a chargecharges of $7.0$1.9 million for the early extinguishment of debt primarily duerelating to the incurrence of approximately $0.9 million of prepayment penalties and the write-off of $6.1 million of unamortized loan procurement costs.
Cost incurredInterest income decreased to acquire the management company as part of our IPO transactions resulted in a one-time charge of $22.2$1.3 million in 2004.
Interest income increased to2006 from $2.4 million in 2005 from $0.1 million in 2004. This increase is primarily attributable to the investment of excess proceeds received in October 2005 from the Company’s secondary public offering.
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Comparison of the Year Ended December 31, 2004 to the Year Ended December 31, 2003
For purposes of the following comparison of operating results for the years ended December 31, 2004 and December 31, 2003, we combined the results of operations for the Company for the period from October 21, 2004 through December 31, 2004 and the Predecessor for the period from January 1, 2004 through October 20, 2004. Internally, the Company uses combined reporting to evaluate its operating performance and believes that this presentation will provide investors with additional insight into our financial results.
Acquisition and Development Activities
The comparability of the Company’s results of operations is significantly affected by development, redevelopment and acquisition activities in 2004 and 2003. At December 31, 2004 and 2003 the Company owned interests in 201 and 155 self-storage facilities and related assets, respectively.
In 2004, 46 self-storage facilities were acquired for approximately $221.8 million. All of these facilities were acquired concurrently with, or shortly after, the completion of the IPO.
In 2003, one self-storage facility was acquired for approximately $3.2 million and the Company completed and placed in service one expansion of an existing self-storage facility for approximately $2.5 million. During this same period, four self-storage facilities and one commercial property were sold, which facilities and property have been accounted for as discontinued operations.
A comparison of income (loss) from continuing operations before minority interest for the years ended December 31, 2004 and 2003 is as follows:
| | | | | | | | | |
| | | Year Ended December 31, | |
| | | 2004(1) | | | 2003 | |
| | | (Dollars in thousands) | |
| |
| REVENUES: | | | | | | | | |
| Rental income | | $ | 86,945 | | | $ | 76,898 | |
| Other property related income | | | 4,663 | | | | 3,916 | |
| | | | | | | | | |
| Total revenues | | | 91,608 | | | | 80,814 | |
| OPERATING EXPENSES: | | | | | | | | |
| Property operating expenses | | | 35,666 | | | | 28,096 | |
| Property operating expense — related party | | | — | | | | — | |
| Depreciation | | | 22,328 | | | | 19,494 | |
| General and administrative | | | 4,140 | | | | — | |
| General and administrative — related party | | | 114 | | | | — | |
| Management fees — related party | | | 3,689 | | | | 4,361 | |
| | | | | | | | | |
| Total operating expenses | | | 65,937 | | | | 51,951 | |
| OPERATING INCOME | | | 25,671 | | | | 28,863 | |
| OTHER INCOME (EXPENSE): | | | | | | | | |
| Interest: | | | | | | | | |
| Interest expense on loans | | | (23,813 | ) | | | (15,128 | ) |
| Loan procurement amortization expense | | | (5,967 | ) | | | (1,015 | ) |
| Early extinguishment of debt | | | (7,012 | ) | | | — | |
| Cost incurred to acquire management company — related party | | | (22,152 | ) | | | — | |
| Interest income | | | 106 | | | | 12 | |
| Other | | | (78 | ) | | | — | |
| | | | | | | | | |
| Total other expense | | | (58,916 | ) | | | (16,131 | ) |
| | | | | | | | | |
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST | | $ | (33,245 | ) | | $ | 12,732 | |
| | | | | | | | | |
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| | |
(1) | | The twelve months ended December 31, 2004 represents consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from January 1, 2004 to October 20, 2004. The operating results for the year ended December 31, 2004 are not comparable to future expected operating results of the Company since they include various IPO-related charges. |
Comparison of Operating Results for the Years Ended December 31, 2004 and 2003 (Not including discontinued operations)
Total Revenues
Rental income increased from $76.9 million in 2003 to $86.9 million in 2004, an increase of $10.0 million, or 13.1%. This increase is primarily attributable to (i) the acquisition of 46 facilities in 2004 and (ii) an increase in revenues from our pool of “same-store” facilities of approximately $4.7 million (see “Same-Store Facility Results” on page 52).
Other property related income increased from $3.9 million in 2003 to $4.7 million in 2004, an increase of $0.8 million, or 19.1%. This increase is primarily attributable to the acquisition of 46 facilities in 2004.
Total Operating Expenses
Property operating expenses increased from $28.1 million in 2003 to $35.7 million in 2004, an increase of $7.6 million, or 26.9%. This increase is primarily attributable to (i) the acquisition of 46 facilities in 2004 and (ii) an increase in operating expenses from our pool of “same-store” facilities of approximately $3.7 million (see “Same-Store Facility Results” below).
Management fees decreased from $4.4 million in 2003 to $3.7 million in 2004, a decrease of $0.7 million, or 15.4%.2005. This decrease is primarily attributable to the acquisition of our management company effective October 27, 2004Company’s 2005 follow-on public offering. The Company invested excess proceeds from the follow-on offering in connection with our IPO. Management fees with our wholly-owned subsidiariesinterest bearing accounts and in short-term marketable securities until the excess proceeds were eliminated subsequent to October 27, 2004 and were replaced with management company expenses, which are recorded in general and administrative expenses.
General and administrative costs began with the Company’s IPO in October 2004. Therefore, general and administrative expenses increased from $0.0 in 2003 to $4.3 million in 2004. Included in these costs is a charge of $2.4 million for deferred shares granted to certain members of our senior management team and $0.4 million of cash bonuses paid to these executives. The remaining $1.5 million includes expenses for our management company and other costs incurred in connection with being a public company.
Depreciation increased from $19.5 million in 2003 to $22.3 million in 2004, an increase of $2.8 million, or 14.5%. This increase is partially attributable to a “step up” in the carrying amount of fixed assets due to the purchase of outside partners’ interests in the Predecessor in May 2004, which was partially offset by lower depreciation on fully amortized equipment with lives significantly shorter than new buildings and improvements. The increase is also attributable to the acquisition of 46 additional facilities in 2004.
Total Other Expenses
Interest expense increased from $15.1 million in 2003 to $23.8 million in 2004, an increase of $8.7 million, or 57.4%. The increase is attributable to a higher amount of outstanding debt and higher interest rates in 2004 primarily resulting from loans obtained in connection with our formation transactions.
Loan procurement amortization expense increased from $1.0 million in 2003 to $6.0 million in 2004, an increase of $5.0 million, or 487.9%. This increase is primarily attributable to deferred financing costs incurred in connection with obtaining a $424.5 million term loan in May 2004 that was used to purchase interests of outside partners infund acquisitions or pay down existing debt during the Predecessor.
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In the fourthfirst quarter of 2004, the Company incurred a charge of $7.0 million for the early extinguishment of debt primarily due to the incurrence of approximately $0.9 million of prepayment penalties and the write-off of $6.1 million of unamortized loan costs.
Cost incurred to acquire the management company as part of our IPO transactions resulted in a one-time charge of $22.2 million in 2004.
2006.Impact of Hurricanes
HurricanesAs a result of hurricanes that occurred during the three months ended September 30,third quarter of 2005, causedthe Company incurred damage at certain of the Company’sits self-storage facilities located in Alabama, Louisiana and Mississippi. Under the provisions of SFAS No. 144, “Accounting for the Impairment of or Disposal of Long-Lived Assets” (“SFAS No. 144”), the Company determined that there were indicators of impairment and accordingly tested the assets for recoverability. After an assessment of the damage sustained at the Waveland, Mississippi facility, the Company determined that a charge for impairment of approximately $2.3 million was required because the estimated undiscounted future cash flows did not support the carrying value.value of the assets. The Company hasexpected that insurance proceeds from its comprehensive insurance coverage for property damage. Although the Company currently expects the insurance proceeds todamage would cover the entire loss incurred, the Company was required to recordand in 2005 appropriately recorded the impairment charge and to record an offsetting insurance recovery balance of $2.3 million, of which $0.5 million was received in October 2005. While the Company expects the insurance proceeds will be sufficient to cover the entire replacement cost of the damaged facility, certain deductibles and limitations will apply and no assurances can be made that proceeds will be sufficient to cover the costs of the entire restoration. To the extent that insurance proceeds, which are on a replacement cost basis, ultimately exceed the net book value of the damaged facility, a gain will be recognized in the period when all contingencies related to the insurance claim have been resolved. The related insurance receivable iswas included in other assets as of December 31, 2005, and the asset impairment charge and related insurance recovery are recordedwere presented net in the same line item for operating expenses for the year ended December 31, 2005.
Hurricanes in late summer During 2006, insurance proceeds were sufficient to satisfy the insurance receivable and early fallno balance remained as of 2004 caused damage at five of the Company’s 52 facilities that are located in Florida. The Company incurred uninsured damages resulting from the hurricanes of approximately $0.4 million. These damages did not cause any material service interruption and all of the facilities are currently fully operational. The damages at these facilities did not result in an impairment of the facilities’ net carrying values at December 31, 2004.
2007.Same-Store Facility Results
The Company considers its same-store portfolio to consist of only those facilities owned at the beginning and at the end of the applicable periods presented and that had an occupancy of at least 70% as of the first day of such periods.
52
presented. The following same-store presentation is considered to be useful to investors in evaluating our performance because it provides information relating to changes in facility-level operating performance without taking into account the effects of acquisitions, developments or dispositions. The following table sets forth operating data for our same-store portfolio for the periods presented.
43
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended
| | | Year Ended
| | | | |
| | | December 31, | | | December 31, | | | | |
| | | | | | | | | Percent
| | | | | | | | | Percent
| |
| | | 2005 | | | 2004 (1) | | | Change | | | 2004 (1) | | | 2003 | | | Change | |
| | | (Dollars in thousands) | |
| |
| Same-store revenues | | $ | 89,403 | | | $ | 85,627 | | | | 4.4 | % | | $ | 79,403 | | | $ | 74,661 | | | | 6.4 | % |
| Same-store property operating expenses | | $ | 30,710 | | | $ | 32,754 | | | | (6.2 | )% | | $ | 29,085 | | | $ | 25,410 | | | | 14.5 | % |
| Non same-store revenues | | $ | 58,718 | | | $ | 5,981 | | | | | | | $ | 12,205 | | | $ | 6,153 | | | | | |
| Non same-store property operating expenses | | $ | 24,285 | | | $ | 2,912 | | | | | | | $ | 6,581 | | | $ | 2,686 | | | | | |
| Total revenues | | $ | 148,121 | | | $ | 91,608 | | | | | | | $ | 91,608 | | | $ | 80,814 | | | | | |
| Total property operating expenses | | $ | 54,995 | | | $ | 35,666 | | | | | | | $ | 35,666 | | | $ | 28,096 | | | | | |
| Number of facilities included in same-store analysis | | | 153 | | | | | | | | | | | | 142 | | | | | | | | | |
| | |
(1) | | The twelve months ended December 31, 2004 represents same store sales for the consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from January 1, 2004 to October 20, 2004. |
Comparison of the Year Ended December 31, 20052007 to the Year Ended December 31, 2004
2006The following table provides information pertaining to our Same-Store portfolio for 2007 and 2006:
| | | | | | | | | | Properties | | Other/ | | | | | | | | | |
| | Same Store Property Portfolio | | Acquired | | Eliminations | | Total Portfolio | |
| | | | | | Increase/ | | % | | | | | | | | | | | | | | Increase/ | | | |
| | 2007 | | 2006 | | (Decrease) | | Change | | 2007 | | 2006 | | 2007 | | 2006 | | 2007 | | 2006 | | (Decrease) | | Change | |
REVENUES: | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Rental income | | $ | 173,409 | | $ | 170,103 | | $ | 3,306 | | 2% | | $ | 38,564 | | $ | 25,181 | | $ | 1 | | $ | 47 | | $ | 211,974 | | $ | 195,331 | | $ | 16,643 | | 9 | % |
Other property related income | | 13,301 | | 12,653 | | 648 | | 5% | | 3,299 | | 2,150 | | 228 | | 13 | | 16,828 | | 14,816 | | 2,012 | | 14 | % |
Other — related party | | — | | — | | — | | — | | — | | — | | 365 | | 457 | | 365 | | 457 | | (92 | ) | -20 | % |
Total revenues | | 186,710 | | 182,756 | | 3,954 | | 2% | | 41,863 | | 27,331 | | 594 | | 517 | | 229,167 | | 210,604 | | 18,563 | | 9 | % |
OPERATING EXPENSES: | | | | | | | | | | | | | | | | | | | | | | | | | |
Property operating expenses | | 72,010 | | 69,262 | | 2,748 | | 4% | | 17,753 | | 10,384 | | 7,039 | | 5,769 | | 96,802 | | 85,415 | | 11,387 | | 13 | % |
Property operating expenses — related party | | — | | — | | — | | — | | — | | — | | 59 | | 69 | | 59 | | 69 | | (10 | ) | -14 | % |
Subtotal | | 72,010 | | 69,262 | | 2,748 | | 4% | | 17,753 | | 10,384 | | 7,098 | | 5,838 | | 96,861 | | 85,484 | | 11,377 | | 13 | % |
NET OPERATING INCOME: | | 114,700 | | 113,494 | | 1,206 | | 1% | | 24,110 | | 16,947 | | (6,504 | ) | (5,321 | ) | 132,306 | | 125,120 | | 7,186 | | 6 | % |
Depreciation | | | | | | | | | | | | | | | | | | 70,192 | | 64,079 | | 6,113 | | 10 | % |
Asset write-off | | | | | | | | | | | | | | | | | | — | | 305 | | (305 | ) | -100 | % |
Lease bandonment charge | | | | | | | | | | | | | | | | | | 1,316 | | — | | 1,316 | | — | |
General and administrative | | | | | | | | | | | | | | | | | | 21,966 | | 21,675 | | 291 | | 1 | % |
General and administrative — related party | | | | | | | | | | | | | | | | | | 337 | | 613 | | (276 | ) | -45 | % |
Subtotal | | | | | | | | | | | | | | | | | | 93,811 | | 86,672 | | 7,139 | | 8 | % |
Operating income (loss) | | | | | | | | | | | | | | | | | | 38,495 | | 38,448 | | 47 | | 0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense on loans | | | | | | | | | | | | | | | | | | (54,108 | ) | (45,628 | ) | (8,480 | ) | 19 | % |
Loan procurement amortization expense | | | | | | | | | | | | | | | | | | (1,772 | ) | (1,972 | ) | 200 | | -10 | % |
Write-off of loan procurement due to early extinguishment of debt | | | | | | | | | | | | | | | | | | — | | (1,907 | ) | (1907) | | 100 | % |
Interest income | | | | | | | | | | | | | | | | | | 401 | | 1,336 | | (935 | ) | -70 | % |
Other | | | | | | | | | | | | | | | | | | 118 | | 191 | | (73 | ) | -38 | % |
Total other expense | | | | | | | | | | | | | | | | | | (55,361 | ) | (47,980 | ) | (7,381 | ) | 15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
LOSS BEFORE MINORITY INTERESTS | | | | | | | | | | | | | | | | | | (16,866 | ) | (9,532 | ) | (7,334 | ) | 77 | % |
MINORITY INTERESTS | | | | | | | | | | | | | | | | | | 1,385 | | 790 | | 595 | | 75 | % |
LOSS FROM CONTINUING OPERATIONS | | | | | | | | | | | | | | | | | | (15,481 | ) | (8,742 | ) | (6,739 | ) | 77 | % |
DISCONTINUED OPERATIONS | | | | | | | | | | | | | | | | | | | | | | | | | |
Income from operations | | | | | | | | | | | | | | | | | | 102 | | 208 | | (106 | ) | -51 | % |
Net gain on disposition of discontinued operations | | | | | | | | | | | | | | | | | | 2,517 | | — | | 2,517 | | — | |
Minority interest attributable to discontinued operations | | | | | | | | | | | | | | | | | | (215 | ) | (17 | ) | (198 | ) | 1165 | % |
Income from discontinued operations | | | | | | | | | | | | | | | | | | 2,404 | | 191 | | 2,213 | | 1159 | % |
NET INCOME (LOSS) | | | | | | | | | | | | | | | | | | $ | (13,077 | ) | $ | (8,551 | ) | $ | (4,526 | ) | 53 | % |
Same-store revenues increased from $85.6$182.8 million in 20042006 to $89.4$186.7 million in 2005,2007, an increase of $3.8$3.9 million, or 4.4%2%. Approximately $0.0 million of this increase was attributable to increased occupancy and $3.8 million of this increase was attributable to increased rents.
Same-store property operating expenses decreased from $32.8 million in 2004 to $30.8 million in 2005, a decrease of $2.0 million, or 6.2%. This decrease was primarily attributable to lower marketing, insurance expense, payroll expense, repairs and maintenance and other operating expense, partially offset by increased property taxes. Other same-store operating costs also decreased due to costs incurred in connection with changes in the Company’s logo, higher computer costs and bad debt expense in 2004.
Comparison of the Year Ended December 31, 2004 to the Year Ended December 31, 2003
Same-store revenues increased from $74.7 million in 2003 to $79.4 million in 2004, an increase of $4.7 million, or 6.4%. Approximately $2.1 million of this increase was attributable to increased occupancy and $2.6 million of this increase was attributable to increased rents.
Same-store property operating expenses increased from
$25.4$69.3 million in
20032006 to
$29.1$72.0 million in
2004,2007, an increase of
$3.7$2.7 million, or
14.5%4%. This increase was primarily attributable to
increased payroll expenses causedslight increases in multiple expense line items.Non-GAAP Financial Measures
NOI
We define net operating income, which we refer to as “NOI,” as total continuing revenues less continuing property operating expenses. NOI also can be calculated by an increaseadding back to net income: interest expense on loans, loan procurement amortization expense, early extinguishment of debt, minority interest, other, depreciation, general and administrative, general and administrative-related party and lease abandonment charge; and deducting from net income: income from discontinued operations, gains on sale of self-storage facilities and interest income. NOI is not a measure of performance calculated in accordance with GAAP.
We use NOI as a measure of operating performance at each of our facilities, and for all of our facilities in the numberaggregate. 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:
44
· It is one of personnelthe primary measures used by our management and related costs includingour facility managers higher compensation costs for performance incentives, district managers hired duringto evaluate the year to fill previously vacant job positions and lengthening the operating hours of someeconomic productivity of our facilities. Other same-storefacilities, including our ability to lease our facilities, increase pricing and occupancy and control our property operating costs also increased dueexpenses;
· It is widely used in the real estate industry and the self-storage industry to costs incurredmeasure 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
· We believe it helps our investors to meaningfully compare the results of our operating performance from period to period by removing the impact of our capital structure (primarily interest expense on our outstanding indebtedness) and depreciation of our basis in our assets from our operating results.
There are material limitations to using a measure such as NOI, including the difficulty associated with comparing results among more than one company and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income. We compensate for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with changesour analysis of net income. NOI should be considered in the Company’s logo, higher computer costsaddition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues, operating income and bad debt expense.
53
Cash Flows
Comparison of the Year Ended December 31, 20052007 to the Year Ended December 31, 2004
2006A comparison of cash flow provided by operating, investing and financing activities for the years ended December 31, 2007 and 2006 is as follows:
| | Year Ended December 31, | | | |
| | 2007 | | 2006 | | Change | |
| | (in thousands) | | | |
Net cash flow provided by (used in): | | | | | | | |
Operating activities | | $ | 62.9 | | $ | 64.6 | | $ | (1.7 | ) |
Investing activities | | $ | (153.6 | ) | $ | (248.0 | ) | $ | 94.4 | |
Financing activities | | $ | 75.5 | | $ | 104.3 | | $ | (28.8 | ) |
Cash provided by operations decreased from $64.6 million in 2006 to $62.9 million in 2007, an decrease of $1.7 million, or 3%. The decrease is primarily attributable to the increase in certain prepaid assets, which is a result of the timing of certain expenditures.
Cash used in investing activities decreased from $248.0 million in 2006 to $153.6 million in 2007, a decrease of $94.4 million, or 38%. The decrease in cash used in investing activities is primarily attributable to $349.8 million used in the 2006 Acquisitions offset by the $169.8 million used in the 2007 Acquisitions. Additionally, the net proceeds from sales of marketable securities in 2006 resulted in $95.1 million while the property dispositions in 2007 provided $17.9 million.
Cash provided by financing activities decreased from $104.3 million in 2006 to $75.5 million in 2007, a decrease of $28.8 million, or 28%. This decrease is primarily attributable to the net additional borrowings during 2006 of $176.4 million as compared to the net additional borrowings during 2007 of $150.6 million. This fluctuation is a result of the 2006 Acquisition activity.
Comparison of the Year Ended December 31, 2006 to the Year Ended December 31,2005
A comparison of cash flow operating, investing and financing activities for the years ended December 31, 20052006 and 20042005 is as follows:
45
| | | | | | | | | | | | | |
| | | Year Ended December 31, | |
| | | 2005 | | | 2004 (1) | | | Increase | |
| | | (Dollars in millions) | |
| |
| Net cash flow provided by (used in): | | | | | | | | | | | | |
| Operating activities | | $ | 48.9 | | | $ | 34.9 | | | $ | 14.0 | |
| Investing activities | | $ | (392.7 | ) | | $ | (234.2 | ) | | $ | 158.5 | |
| Financing activities | | $ | 516.5 | | | $ | 220.2 | | | $ | 296.3 | |
| | |
(1) | | The twelve months ended December 31, 2004 represents cash flows for the consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from January 1, 2004 to October 20, 2004. |
| | Year Ended December 31, | | | |
| | 2006 | | 2005 | | Change | |
| | (in thousands) | | | |
Net cash flow provided by (used in): | | | | | | | |
Operating activities | | $ | 64.6 | | $ | 46.1 | | $ | 18.5 | |
Investing activities | | $ | (248.0 | ) | $ | (489.1 | ) | $ | 241.1 | |
Financing activities | | $ | 104.3 | | $ | 516.5 | | $ | (412.2 | ) |
| | | | | | | |
Cash provided by operations increased from $34.9 million in 2004 to $48.9$46.1 million in 2005 to $64.6 million in 2006, an increase of $14.0$18.5 million, or 39.8%40.1%. The increase is primarily attributable to the acquisitionincremental impact of 146 self storagethe 60 self-storage facilities acquired in 2005.
2006.Cash used in investing activities increaseddecreased from $234.2 million in 2004 to $392.7$489.1 million in 2005 an increaseto $248.0 million in 2006, a decrease of $158.5$241.1 million, or 67.7%49.3%. The increasedecrease in cash used in investing activities is primarily attributable to cash used to acquire 146 self-storage facilities acquired in 2005 of $381.1 million versus 46 self storagecash used to acquire 60 self-storage facilities acquired in 2004.
2006 of $312.3 as well as the use of $125.0 million of cash in 2005 to invest in marketable securities.Cash provided by financing activities increaseddecreased from $220.2 million in 2004 to $516.5 million in 2005 an increaseto $104.3 million in 2006, a decrease of $296.3 million.$412.2 million, or 79.8%. This increasedecrease is primarily attributable to the proceeds from the secondaryfollow-on offering ofin 2005, which generated approximately $378.7 million and completion of certain financing agreements of approximately $232.5 millionincreased distributions paid to shareholders and minority partners in 2006 as compared to proceeds from the IPO2005 of $22.1 million and new borrowings totaling approximately $695.0$3.7 million, partially offset by the repayment of certain existing loans in 2004 of approximately $585.6 million.
Comparison of the Year Ended December 31, 2004 to the Year Ended December 31, 2003
A comparison of cash flow operating, investing and financing activities for the years ended December 31, 2004 and 2003 is as follows:
| | | | | | | | | | | | | |
| | | Year Ended December 31, | | | | |
| | | 2004 (1) | | | 2003 | | | Increase | |
| | | (Dollars in millions) | |
| |
| Net cash flow provided by (used in): | | | | | | | | | | | | |
| Operating activities | | $ | 34.9 | | | $ | 34.2 | | | $ | 0.7 | |
| Investing activities | | $ | (234.2 | ) | | $ | (2.5 | ) | | $ | 231.7 | |
| Financing activities | | $ | 220.2 | | | $ | (25.7 | ) | | $ | 245.9 | |
| | |
(1) | | The twelve months ended December 31, 2004 represents cash flows for the consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from January 1, 2004 to October 20, 2004. |
Cash provided by operations increased from $34.2 million in 2003 to $34.9 million in 2004, an increase of $0.7 million, or 2.0%. The increase is primarily attributable to an increase in the income from continuing operations.
Cash used in investing activities increased from $2.5 million in 2003 to $234.2 million in 2004, an increase of $231.7 million. The increase is primarily attributable to a much larger number of self-storage facilities acquired in 2004 versus 2003.
54
Cash provided by financing activities increased from a use of $25.7 million in 2003 to $220.2 million provided in 2004, an increase of $245.9 million. This increase is primarily attributable to the proceeds from the IPO and new borrowings, partially offset by the repayment of certain existing loans in 2004.
Liquidity and Capital Resources
As of December 31, 2005,2007, we had approximately $201$4.5 million in available cash and cash equivalents. In addition, the full amountWe had approximately $31.0 million and $6.5 million of available borrowings under our new $250.0 million three-year revolving credit facility was available for draw as of March 1, 2006.
In July 2005, YSI VI LLC (“YSI VI”), an indirect subsidiary of the Company, entered into a fixed rate mortgage loan agreement with Lehman Brothers Bank, FSB, as the lender, in the principal amount of $80.0 million. The mortgage loan, which is secured by 24 of the Company’s self-storage facilities, bears interest at 5.13% and matures in August 2012. The mortgage loan will become immediately due and payable, and the lender will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. This mortgage loan requires YSI VI to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under this mortgage loan with respect to certain exceptions to the non-recourse provisions of the loan.
In July 2005, as part of the National Self Storage acquisition, the operating partnership assumed certain mortgage indebtedness totaling approximately $80.8 million, which indebtedness is secured by 69 of the Company’s self-storage facilities, bearing interest at rates ranging from 6.02% to 8.96% and matures on dates ranging from 2007 through 2014. Since a portion of the debt was assumed at above market rates, the assumed debt was adjusted as part of the purchase price allocation during the third quarter of 2005, to a fair market value of approximately $83.0 million at effective interest rates ranging from 5.00% to 5.59%. The Company refinanced approximately $39.8 million of the assumed mortgages in November 2005 with a multi-facility fixed rate mortgage with Transamerica Financial Life Insurance, a subsidiary of AEGON USA Realty Advisors, Inc., in the principal amount of $72.5 million. The mortgage loan, which is secured by 37 of the Company’s self-storage facilities, bears interest at 5.97% and matures in November 2015. The excess cash was used for acquisition and general corporate purposes. The remaining ten mortgage loans from the National Self Storage acquisition are collateralized by first mortgage liens against 32 storage facilities owned by various indirect subsidiaries of the Company. The mortgage loans will become immediately due and payable, and the lenders will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. The mortgage loans require the Company to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under these mortgage loans with respect to certain exceptions to the non-recourse provisions of the loans.
In August 2005, YASKY LLC (“YASKY”), an indirect subsidiary of the Company, entered into a fixed rate mortgage loan agreement with LaSalle Bank National Association, as the lender, in the principal amount of $80.0 million. The mortgage loan, which is secured by 29 of the Company’s self-storage facilities, bears interest at 4.96% and matures in September 2012. The mortgage loan will become immediately due and payable, and the lender will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. This mortgage loan requires YASKY to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under this mortgage loan with respect to certain exceptions to the non-recourse provisions of the loan.
In October 2005, we completed a secondary public offering of our common shares, generating net proceeds of approximately $378.7 million, after deducting underwriting discount and commissions and expenses of the offering. A portion of these proceeds was used to repay certain outstanding indebtedness, including (i) $108.3 million to repay the outstanding balance under our then existing revolving credit facility and (ii) $39.8 million to repay outstanding mortgage loans secured by 37 of our facilities. Approximately $110.2 million of the net proceeds were used to fund the acquisition of 19 self-storage facilities. The
55
remaining approximately $120.4 million of net proceeds were used for the acquisition and development of additional self-storage facilities, budgeted capital improvements and general corporate purposes. As a result of the offering and the aforementioned repayment of outstanding indebtedness, we believe that our financial flexibility has been significantly improved, particularly since additional amounts are available for borrowing to fund future acquisitions and development of facilities and other cash needs.
As a result of the pay down of debt in connection with our October 2005 offering, as of December 31, 2005, we had no outstanding balance under our then existing revolving credit facility2007 and we had total indebtedness outstanding of approximately $669.3 million. This indebtedness has maturity dates from November 2006 to November 2015. Each of the loans representing this indebtedness has customary restrictions on transfer or encumbrances of the mortgaged facilities.
February 28, 2008, respectively.In February 2006, our operating partnershipOperating Partnership entered into a new three-year, $250.0 million unsecured revolving credit facility. The credit facility allowsallowed us to increase the amount that maycould be borrowed up to $350.0 million at a later date. The facility iswas scheduled to mature in February 2009, with the option for aone-year extended maturity date. Borrowings under the facility bearbore interest, at our option, at either an alternative base rate or a Eurodollar rate, in each case, plus an applicable margin depending on our leverage ratio. The alternative base interest rate is a fluctuating rate equal to the higher of the prime rate or the sum of the federal funds effective rate plus 50 basis points. The applicable margin for the alternative base rate will varyranged from 1.15%0.15% to 1.60%0.60%. The Eurodollar rate is a periodic fixed rate equal to LIBOR. The applicable margin for the Eurodollar rate will varyranged from 0.15%1.15% to 0.60%1.60%. We intend to use this newused the credit facility principally to finance the future acquisitions, development ofself-storage facilities, debt repayments and for general working capital purposes. Upon entering into this agreement, we utilized the facility to repay a $30.0 million 60-day term loan. Amounts borrowed under this facility were repaid using proceeds from a new credit facility in November 2006.
In November 2006, we and our Operating Partnership entered into a 30-day, unsecured $50 million term loan agreement with Wachovia Bank, National Association as the lender. The term loan bore interest at a variable rate of LIBOR plus 115 basis points. The loan proceeds, along with borrowings under our revolving credit facility, were used to finance the repayment of certain maturing secured loans. The loan was paid in full from proceeds obtained upon entering into a new revolving credit facility in November 2006.
In November 2006, we and our Operating Partnership entered into a three-year, $450.0 million unsecured credit facility with Wachovia Capital Markets, LLC and Keybanc Capital Markets, replacing our existing $250.0 million unsecured revolving credit facility. The facility consists of a $200 million term loan and a $250 million revolving credit facility. The new facility has a three-year term with a one-year extension option and scheduled termination in November 2009. Borrowings under the credit facility bear interest, at our option, at either an alternative base rate or a Eurodollar rate, in each case, plus an applicable margin based on our leverage ratio or our credit rating. The alternative base interest rate is a fluctuating rate equal to the higher of the prime rate or the sum of the federal funds effective rate plus 50 basis points. The applicable margin for the alternative base rate will vary from 0.00% to 0.50% depending on our leverage ratio prior to achieving an investment grade rating, and will vary from 0.00% to 0.25% depending on our credit rating after achieving an investment grade rating. The Eurodollar rate is a rate of interest that is fixed for interest periods of one, two, three or six
46
months based on the LIBOR rate determined two business days prior to the commencement of the applicable interest period. The applicable margin for the Eurodollar rate will vary from 1.00% to 1.50% depending on our leverage ratio prior to achieving an investment grade rating, and will vary from 0.425% to 1.00% depending on our credit rating after achieving an investment grade rating.
Our ability to borrow under this new credit facility will be subject to our ongoing compliance with the following financial covenants, among others:
| | |
| • | Maximum total indebtedness to total asset value of 65%; |
|
| • | Minimum interest coverage ratio of 2.0:1.0; |
|
| • | Minimum fixed charge coverage ratio of 1.6:1.0; |
|
| • | Minimum tangible net worth of $675.0 million plus 75% of net proceeds from equity issuances after December 31, 2005. |
· maximum total indebtedness to total asset value of 65%;
· minimum interest coverage ratio of 2.0:1.0;
· minimum fixed charge coverage ratio of 1.6:1.0; and
· minimum tangible net worth of $673.2 million plus 75% of net proceeds from future equity issuances.
In September 2007, we and our Operating Partnership entered into a secured term loan agreement which allows for term loans in the aggregate principal amount of up to $50 million. Each term loan matures in November 2009, subject to extension at the sole discretion of the lenders. Each term loan bears interest at either an alternative base rate or a Eurodollar rate, at our option, in each case plus an applicable margin at terms identical to the unsecured credit facility. As of September 30, 2007, there was one term loan outstanding for $47.4 million. The outstanding term loan is secured by a pledge by our Operating Partnership of all equity interests in YSI RT LLC, the wholly-owned subsidiary of our Operating Partnership that acquired eight self-storage facilities in September 2007. At December 31, 2007, the outstanding term loan had an interest rate of 6.18%. Financial covenants for the secured term loan are identical to the financial covenants for the unsecured credit facility described above.
During August and September 2007, the Company entered into interest rate swap agreements designated as cash flow hedges that are designed to reduce the impact of interest rate changes on its variable rate debt. At December 31, 2007, the Company had an interest rate swap agreements for notional principal amounts aggregating $75 million. The swap agreements effectively fix the 30-day LIBOR interest rate on $50 million of credit facility borrowings at 4.7725% per annum and on $25 million of credit facility borrowings at 4.716% per annum, in each case until November 2009. The interest rate cap agreement effectively limits the interest rate on $40 million of credit facility borrowings at 5.50% through June 2008. The notional amount at December 31, 2007 provides an indication of the extent of the Company’s involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks.
Our cash flow from operations has historically been one of our primary sources of liquidity to fund debt service, distributions and capital expenditures. We derive substantially all of our revenue from customers who lease space from us at our facilities. Therefore, our ability to generate cash from operations is dependent on the rents that we are able to charge and collect from our customers. While we believe that the facilities in which we invest — self-storage facilities — are less sensitive to near-term economic downturns, prolonged economic downturns will adversely affect cash flow from operations.
In order to qualify as a REIT for federal income tax purposes, we are required to distribute at least 90% of our REIT taxable income, excluding capital gains, to our shareholders on an annual basis or pay federal income tax.
The nature of 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 facilities, refinancing of certain mortgage indebtedness, interest expense and scheduled principal payments on debt, expected distributions to limited partners and shareholders and recurring capital expenditures. These expenses, as well as the amount of recurring capital expenditures that we incur, will vary from year to year, in some cases significantly. For 20062008, we expect to incur approximately $12.0costs totaling $7 million of coststo $9 million for recurring capital expenditures. In addition, we anticipate spending an additionalour scheduled principal payments on debt over the balance of 2008 are approximately
56
$4.2 $11.5 million and scheduled principal payments in 2006 for renovations and improvements at our facilities that were owned as of December 31, 2005.2009 are approximately $94.4 million. We expect to meet our short-term liquidity needs through cash generated from operations and, if necessary, from borrowings under our revolving credit facility.
The Company has two fixed rate mortgage loans outstanding for an aggregate principal amount of $104.2 million, which management anticipates refinancing in 2006 with new mortgage loans. The Company anticipates refinancing the first mortgage of $65.1 million on or before November 1, 2006, and the remaining mortgage of $39.1 million on or before December 10, 2006.
In February 2006 the Company and the operating partnership entered into a60-day, unsecured $30 million term loan agreement with Wachovia Bank, National Association as the lender. The term loan bore interest at a variable rate of LIBOR plus 175 basis points. The proceeds of the loan were used to finance a portion of the acquisition of the Sure Save Portfolio. The loan was paid in full from proceeds obtained upon entering into a new revolving credit facility in February 2006.
Our long-term liquidity needs consist primarily of funds necessary to pay for development of new facilities, redevelopment of operating facilities, non-recurring capital expenditures, acquisitions of facilities and repayment of indebtedness at maturity. In particular, we intend to actively pursue the acquisition of additional facilities, which will require additional capital. WeWhile these capital investments are elective by their nature, we do not expect that we will have sufficient funds on hand to cover these long-term cash requirements.
47
investments. We will have to satisfy these needs through either additional borrowings, including borrowings under our revolving credit facility, sales of common or preferred sharesand/or cash generated through facility dispositions and joint venture transactions.
We believe that, as a publicly traded REIT, we will have access to multiple sources of capital to fund long-term liquidity requirements, including the incurrence of additional debt and the issuance of additional equity. However, as a new public company, 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. 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.
Other Material Changes in Financial Position
| | | | | | | | | | | | | |
| | | December 31, | | | | |
| | | 2005 | | | 2004 | | | Increase | |
| | | (Dollars in thousands) | |
| |
Selected Assets | | | | | | | | | | | | |
| Storage facilities — net | | $ | 1,246,295 | | | $ | 729,155 | | | $ | 517,140 | |
| Restricted cash | | | 14,672 | | | | 7,211 | | | | 7,461 | |
| Other assets | | | 8,986 | | | | 3,399 | | | | 5,587 | |
Selected Liabilities | | | | | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 18,872 | | | $ | 10,958 | | | $ | 7,914 | |
| Rents received in advance | | | 8,857 | | | | 5,835 | | | | 3,022 | |
| Distributions payable | | | 16,624 | | | | 7,532 | | | | 9,092 | |
| | December 31, | | Increase | |
| | 2007 | | 2006 | | (decrease) | |
| | (in thousands) | |
Selected Assets | | | | | | | |
Storage facilities — net | | $ | 1,647,118 | | $ | 1,566,815 | | $ | 80,303 | |
Cash and cash equivalents | | $ | 4,517 | | $ | 19,716 | | $ | (15,199 | ) |
Other assets | | $ | 14,270 | | $ | 6,475 | | $ | 7,795 | |
| | | | | | | |
Selected Liabilities | | | | | | | |
Revolving credit facility | | $ | 219,000 | | $ | 90,500 | | $ | 128,500 | |
Secured term loan | | $ | 47,444 | | $ | - | | $ | 47,444 | |
Distributions payable | | $ | 11,300 | | $ | 18,197 | | $ | (6,897 | ) |
Storage facilities increased $517.1$80.3 million, restricted cash and cash equivalents decreased $15.2 million, our revolving credit facility increased $7.5$128.5 million and other assetsthe secured term loan increased $5.6 million from December 31, 2004 to December 31, 2005, primarily due to the acquisition of 146 self-storage facilities during the year ended December 31, 2005. The increase in other assets also includes a $1.7 million insurance receivable related to damage incurred at our Waveland, Mississippi facility from Hurricane Katrina.
Accounts payable and accrued expenses increased $7.9 million and rents received in advance increased $3.0 million during the year ended December 31, 2005. These increases are primarily attributable to the acquisition of 146 self storage facilities during the same period. Distributions payable increased $9.1$47.4 million primarily as a result of the completed public secondary offering2007 Acquisitions. The change in other assets is primarily attributable to intangible assets assumed in conjunction with the 2007 acquisitions, which had a net carrying value of $4.6 million at December 31, 2007, as well as an increase in prepaid expenses, which is related to the timing of certain expenditures. The change in the revolving credit facility and secured term loan is also attributable to the repayment of multiple mortgage notes during 2007. Distributions payable decreased as a result of a board approved dividend decrease from $0.29 per share in the third quarter of 2007 to $0.18 per share in the fourth quarter of 2005 and the related
57
48
declaration of distributions prior to year end payable in January 2006 and a partial distribution for the fourth quarter 2004, paid in 2005.
Contractual Obligations
The following table summarizes our known contractual obligations as of December 31, 2005:2007 (in thousands):
| | Total | | 2008 | | 2009 | | 2010 | | 2011 | | 2012 | | 2013 and thereafter | |
Mortgage loans and notes payable (a) | | $ | 559,916 | | $ | 11,541 | | $ | 94,425 | | $ | 112,497 | | $ | 88,180 | | $ | 162,347 | | $ | 90,926 | |
Revolving credit facility, unsecured term loan and secured term loan | | 438,900 | | — | | 438,900 | | — | | — | | — | | — | |
Interest payments (b) | | 169,148 | | 59,044 | | 50,727 | | 22,620 | | 14,547 | | 10,838 | | 11,372 | |
Ground leases and third party office lease | | 2,625 | | 537 | | 434 | | 428 | | 428 | | 387 | | 411 | |
Related party office leases | | 3,322 | | 468 | | 453 | | 453 | | 475 | | 475 | | 998 | |
Software contracts | | 700 | | 350 | | 350 | | — | | — | | — | | — | |
Employment contracts | | 1,363 | | 775 | | 588 | | — | | — | | — | | — | |
| | $ | 1,175,974 | | $ | 72,715 | | $ | 585,877 | | $ | 135,998 | | $ | 103,630 | | $ | 174,047 | | $ | 103,707 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | Payments Due by Period | |
| | | | | | Less Than 1
| | | 1-3
| | | 3-5
| | | More Than 5
| |
Contractual Obligations | | Total | | | Year | | | Years | | | Years | | | Years | |
| | | (Dollars in thousands) | |
| |
| Loans and Notes Payable | | $ | 665,941 | | | $ | 111,449 | | | $ | 29,267 | | | $ | 205,783 | | | $ | 319,442 | |
| Interest Payments | | | 176,689 | | | | 35,450 | | | | 58,734 | | | | 48,372 | | | | 34,133 | |
| Contractual Capital Lease Obligations | | | 56 | | | | 39 | | | | 17 | | | | — | | | | — | |
| Ground Leases and Third Party Office Lease | | | 670 | | | | 152 | | | | 224 | | | | 94 | | | | 200 | |
| Related Party Office Lease | | | 4,188 | | | | 473 | | | | 884 | | | | 908 | | | | 1,923 | |
| Employment Contracts | | | 3,535 | | | | 1,508 | | | | 1,990 | | | | 37 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | 851,079 | | | $ | 149,071 | | | $ | 91,116 | | | $ | 255,194 | | | $ | 355,698 | |
| | | | | | | | | | | | | | | | | | | | | |
(a) Amounts do not include unamortized discounts/premiums.
(b) Interest on variable rate debt calculated using LIBOR of 5.03%.
We expect that the contractual obligations owed in 20062008 will be satisfied from the refinancing of two existing loans in 2006, outby a combination of cash generated from operations and if necessary, from draws on the revolving credit facility.
Off-Balance Sheet Arrangements
We do not currently have any off-balance sheet arrangements.
See Item 7A, Quantitative and Qualitative Disclosures About Market Risk, for a discussion of the impact of inflation on the Company.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
| |
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
The Company’s future income, cash flows and fair values relevant to financial instruments depend upon prevailing interest rates.
Market risk refersRisk
Our investment policy relating to cash and cash equivalents is to preserve principal and liquidity while maximizing the riskreturn through investment of loss from adverse changes in market prices and interest rates.
available funds. We did not hold any auction rate securities at December 31, 2006 or December 31, 2007.Effect of Changes in Interest Rates on our Outstanding Debt
The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market 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 rates chosen.
Our financial instruments consist of both fixed and variable rate debt. As of December 31, 2005, the Company had no2007, our consolidated debt consisted of $556.4 million in fixed rate loans payable and variable rate debt outstanding. The Company does not currently use derivativeloans totaling $471.1 million, consisting of $219.0 million borrowings under our variable rate revolving credit facility, $200.0 million in a variable rate unsecured term loan and $52.1 million in a variable rate secured loans. All financial instruments were entered into for other than trading purposes and the net market value of these financial instruments is referred to reduce its exposure to changesas the net financial position. Changes in interest rates.
Asrates have different impacts on the fixed and variable rate portions of
December 31, 2005, the Company had approximately $669.3 million of fixed rateour debt
outstanding (representing 100% of its total debt).portfolio. A change in
the interest rates on
the fixed
rateportion of the debt
generallyportfolio impacts the
fair value of our debtnet financial instrument position, but
it has no impact on interest incurred or cash
flow. To determineflows. A49
change in interest rates on the fair value, the fixed rate debt is discounted at a rate based on an estimate of current lending rates, assuming the debt is outstanding through maturity or projected refinancing dates. At December 31, 2005 the fair valuevariable portion of the debt is estimated to be $649.3 million. A 100 basis pointportfolio impacts the interest incurred and cash flows, but does not impact the net financial instrument position.
If market rates of interest on our variable rate debt increase by 1%, the increase in annual interest rates would result in a decrease in the fair value of this fixedexpense on our variable rate debt would decrease future earnings and cash flows by approximately $4.4 million a year. If market rates of approximately $21.3 million at December 31, 2005. A 100 basis pointinterest on our variable rate debt decrease by 1%, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by approximately $4.4 million a year.
If market rates would result in anof interest increase inby 1%, the fair value of our fixed outstanding fixed—rate mortgage debt would decrease by approximately $18.2 million. If market rates of interest decrease by 1%, the fair value of our outstanding fixed—rate mortgage debt would increase by approximately $22.5 million at December 31, 2005.
$19.1 million.InflationITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Virtually all of the Company’s customers rent units in the Company’s facilities subject to short-term, typicallymonth-to-month, leases, which provide the Company with the ability to increase rental rates as each
58
lease expires, thereby enabling us to seek to mitigate exposure to increased costs and expenses resulting from inflation. However, there is no assurance that the market will accept rental increases.
| |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
Financial statements required by this item appear with an Index to Financial Statements and Schedules, starting onpage F-1F—1 of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING ANDFINANCIAL DISCLOSURE
| |
ITEM 9. None. ITEM 9A. CONTROLS AND PROCEDURES | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
None.
| |
ITEM 9A. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
AnAs of the end of the period covered by this report, we carried out an evaluation, was performed under the supervision and with the participation of our management, including ourthe Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined inRule 13a-15(e) Rules 13a—15(e) and 15(d)—15(e) under the Securities Exchange Act of 1934, as of December 31, 2005.amended, (the “Exchange Act”)). Based on that evaluation, the Chief Executive OfficerCEO and Chief Financial Officerthe CFO have concluded that theseour disclosure controls and procedures were effective as of December 31, 2005.
are effective.Management’s Report onChanges in Internal Control Over Financial Reporting
Management’s report onDuring the fourth quarter, we completed the remediation of the material weaknesses in internal control overrelating to the requisite skills and competencies or appropriate depth of experience of our accounting department personnel to assure the preparation of accurate interim and annual financial reportingstatements on a timely basis in accordance with generally accepted accounting principles; inadequate monitoring controls and the attestationappropriate personnel with the requisite skills and competencies to execute an adequate level of oversight to accurately account for the results of our operations, which adversely affected our ability to report our financial results in a timely and accurate manner; and our lack of Deloitte & Touche LLP,robust risk assessment processes, including strategic plans, that clearly defined and communicated our independent registered public accounting firm, on management’s assessmentgoals and objectives throughout our organization identified as of internal control over financial reporting are set forth on pages F-1and F-2 of this Annual Report onForm 10-K, and are incorporated herein by reference.
Changes in Internal Controls Over Financial Reporting
December 31, 2006. There hashave been no changeother changes in our internal control over financial reportingcontrols during our lastmost recently completed fiscal quarter that hashave materially affected or isare reasonably likely to materially affect our internal control over financial reporting.
reporting or in other factors that could significantly affect internal controls subsequent to the end of the period covered by this report.Management’s Report on Internal Control over Financial Reporting
Management’s report on internal control over financial reporting is set forth on page F-2 of this Annual Report on Form 10-K, and is incorporated herein by reference.
ITEM 9B. OTHER INFORMATION
| |
ITEM 9B. | OTHER INFORMATION |
| |
ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT |
ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS
We have adopted a Code of Ethics, for Principal Executive Officer and Senior Financial Officers, which is available on our website atwww.u-store-it.com. www.u—store—it.com. We intend to disclose any amendment to, or a waiver from, a provision of our Code of Ethics for Principal Executive Officer and Senior Financial Officers on our website within four business days following the date of the amendment or waiver.
The remaining information required by this item regarding trustees, and executive officers and corporate governance is hereby incorporated by reference to the material appearing in the Proxy Statement for the Annual Shareholders Meeting to be held in 20062008 (the “Proxy Statement”) under the captions “Proposal 1: Election of Trustees,” “Executive Officers” and “Information Regarding Corporate Governance“Meetings and Committees of the Board of Trustees and its Committees.Trustees.” The information required by this item regarding compliance with Section 16(a) of the Exchange Act is hereby incorporated by reference to the material appearing in the Proxy Statement under the caption “Other Matters — Section 16(a) Beneficial Ownership Reporting Compliance.”
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ITEM 11. EXECUTIVE COMPENSATION
| |
ITEM 11. | EXECUTIVE COMPENSATION |
The information required by this item is hereby incorporated by reference to the material appearing in the Proxy Statement under the captions “Information Regarding Corporate Governance“Compensation Discussion and the Board of Trustees and its Committees — Trustee Compensation,Analysis,” “Executive Compensation and Other Information,” and “Compensation Committee Interlocks and Insider Participation.“Potential Payments Upon Termination or Change in Control,”
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED SHAREHOLDER MATTERS
| |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS |
The information regarding security ownership of certain beneficial owners and management required by this item is hereby incorporated by reference to the material appearing in the Proxy Statement under the caption “Principal Shareholders.“Security Ownership of Certain Beneficial Owners and Management.”
The following table sets forth certain information regarding our equity compensation plans as of December 31, 2005.
Plan Category | | Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights | | Weighted-average
exercise price of
outstanding options,
warrants and rights | | Number of securities remaining
available for future issuance under
equity compensation plans
(excluding securities
reflected in column(a) | |
| | (a) | | (b) | | (c) | |
Equity compensation plans approved by shareholders | | 1,916,771 | (1) | $ | 18.95 | (2) | 4,318,445 | |
Equity compensation plans not approved by shareholders | | — | | — | | — | |
Total | | 1,916,771 | | $ | 18.95 | | 4,318,445 | |
| | | | | | | | | | | | | |
| | | | | | | | | Number of securities
| |
| | | | | | | | | remaining available for
| |
| | | Number of securities to
| | | Weighted-average
| | | future issuance under equity
| |
| | | be issued upon exercise
| | | exercise price of
| | | compensation plans
| |
| | | of outstanding options,
| | | outstanding options,
| | | (excluding securities
| |
Plan Category | | warrants and rights | | | warrants and rights | | | reflected in column(a)) | |
| | | (a) | | | (b) | | | (c) | |
| |
| Equity compensation plans approved by shareholders | | | 899,000 | (1) | | $ | 16.00 | (2) | | | 1,766,257 | |
| Equity compensation plans not approved by shareholders | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | |
| Total | | | 899,000 | | | $ | 16.00 | | | | 1,766,257 | |
| | | | | | | | | | | | | |
(1) | | |
(1) | | Excludes 314,428172,814 shares subject to outstanding restricted share unit awards.awards, 5,257 shares subject to outstanding deferred share unit awards, and 13,329 shares subject to deferred shares credited to the account of our Trustees in the U- Store-It Trust Deferred Trustees Plan. |
| | |
(2) | | This number reflects the weighted-average exercise price of outstanding options and has been calculated exclusive of outstanding restricted unit awards. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
| |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS |
The information required by this item is hereby incorporated by reference to the material appearing in the Proxy Statement under the caption “Certain Relationshipscaptions “Policies and Procedures Regarding Review, Approval or Ratification of Transactions With Related Transactions.Persons,”
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
| |
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
The information required by this item is hereby incorporated by reference to the material appearing in the Proxy Statement under the caption “Othercaptions “Audit Committee Matters — Relationship withFees Paid to Our Independent Accountants.Auditor” and “Audit Committee Pre-Approval Policies and Procedures.”
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ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Documents filed as part of this report:
The response to this portion of Item 15 is submitted as a separate section of this report.
2. Financial Statement Schedules.
The response to this portion of Item 15 is submitted as a separate section of this report.
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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:
| | | | |
|
|
|
|
|
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3.1* | 2 | .1* | | Agreement for Sale and Purchase, dated as of October 3, 2005, by and between Crownridge Storage Portfolio, LLC, Williams Storage Portfolio III, LLC, and U-Store-It, L.P., incorporated by reference to Exhibit 2.1 to the Company’s Current Report onForm 8-K, filed on February 10, 2006. |
| 2 | .2* | | First Amendment to Agreement for Sale and Purchase, dated as of November 17, 2005, by and between Crownridge Storage Portfolio, LLC, Williams Storage Portfolio III, LLC, and U-Store-It, L.P., incorporated by reference to Exhibit 2.2 to the Company’s Current Report onForm 8-K, filed on February 10, 2006. |
| 2 | .3* | | Second Amendment to Agreement for Sale and Purchase, dated as of December 1, 2005, by and between Crownridge Storage Portfolio, LLC, Williams Storage Portfolio III, LLC, and U-Store-It, L.P., incorporated by reference to Exhibit 2.3 to the Company’s Current Report onForm 8-K, filed on February 10, 2006. |
| 3 | .1* | | Articles of Amendment and Restatement of Declaration of Trust of U-Store-It Trust, incorporated by reference to Exhibit 3.1 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 3 | .2* |
3.2* | | Amended and Restated Bylaws of U-Store-It Trust, incorporated by reference to Exhibit 3.2 to Amendment No. 23.1 to the Company’s Registration StatementCurrent Report onForm S-11, FileNo. 333-117848. 8-K, filed on November 5, 2007. |
| 4 | .1* |
4.1* | | Form of Common Share Certificate, incorporated by reference to Exhibit 4.1 to Amendment No. 3 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848. |
| 10 | .1* |
10.1* | | Second Amended and Restated Agreement of Limited Partnership of U-Store-It, L.P. dated as of October 27, 2004, incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .2* |
10.2* | | Credit Agreement, dated as of September 14, 2007, by and among U-Store-It, L.P., as borrower, U-Store-It Trust, as parent, Wachovia Capital Markets, LLC, as lead arranger and book manager, Wachovia Bank, National Association as administrative agent and the financial institutions initially signatory thereto and their assignees, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on September 14, 2007. |
| | |
10.3* | | Form of Term Note with respect to the Credit Agreement, dated as of September 14, 2007, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on September 14, 2007. |
| | |
10.4* | | Form of Guaranty with respect to the Credit Agreement, dated as of September 14, 2007, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on September 14, 2007. |
| | |
10.5* | | Form of Pledge Agreement, with respect to the Credit Agreement, dated as of September 14, 2007, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed on September 14, 2007. |
52
10.6 * | | First Amendment to Credit Agreement, dated as of June 12, 2007, by and among U-Store-It, L.P., as borrower, U-Store-It Trust, as parent, Wachovia Bank, National Association, as agent and each of the financial institutions party thereto, as lenders, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed on August 9, 2007. |
| | |
10.7 * | | Alternative Currency Note, dated as of June 12, 2007, executed on behalf of U-Store-It, L.P. , incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed on August 9, 2007. |
| | |
10.8 * | | Guarantor Acknowledgment, dated as of June 12, 2007, executed on behalf of U-Store-It, L.P., U-Store-It Mini Warehouse Co., and YSI Management LLC, as guarantors, incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed on August 9, 2007. |
10.9 * | | Credit Agreement, dated as of November 21, 2006, by and among U-Store-It, L.P., as borrower, U-Store-It Trust, as parent, Wachovia Capital Markets, LLC and Keybanc Capital Markets, as joint lead arrangers, Wachovia Capital Markets, LLC, as book manager, Wachovia Bank, National Association, as administrative agent, Keybank National Association, as syndication agent, Bank of America, N.A., SunTrust Bank, and Wells Fargo Bank, National Association, each as documentation agent, and the financial institutions party thereto, as lenders, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on November 28, 2006. |
| | |
10.10 * | | Guaranty, dated as of November 21, 2006, executed on behalf of U-Store-It Trust, U-Store-It Mini Warehouse Co., and YSI Management LLC, as guarantors, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on November 28, 2006. |
| | |
10.11 * | | Form of Term Note, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on November 28, 2006. |
| | |
10.12 * | | Form of Revolving Note, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on November 28, 2006. |
| | |
10.13 * | | Form of Swingline Note, incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed on November 28, 2006. |
| | |
10.14 * | | Credit Agreement, dated as of November 1, 2006, by and between U-Store-It, L.P. as borrower and Wachovia Bank, National Association as lender, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on November 7, 2006. |
| | |
10.15 * | | Note, dated as of November 1, 2006, executed on behalf of U-Store-It, L.P., incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on November 7, 2006. |
| | |
10.16 * | | Guaranty, dated as of November 1, 2006, executed on behalf of U-Store-It Trust, U- Store-It Mini Warehouse Co., and YSI Management LLC, as guarantors, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on November 7, 2006. |
| | |
10.17 * | | Form of Security Interest regarding fixed rate mortgage loan between YSI XX LP and TransAmerica Financial Life Insurance Company, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on November 4, 2005. |
53
10.18 * | | Secured Promissory Note, dated November 1, 2005 between YSI XX LP and Transamerica Financial Life Insurance Company, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on November 4, 2005. |
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10.19 * | | Loan Agreement, dated August 4, 2005 by and between YASKY LLC and LaSalle Bank National Association, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, filed on November 14, 2005. |
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10.20 * | | Loan Agreement, dated July 19, 2005 by and between YSI VI LLC and Lehman Brothers Bank, FSB, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, filed on November 14, 2005. |
| | |
10.21 * | | Loan Agreement, dated as of October 27, 2004 by and between YSI I LLC and Lehman Brothers Holdings.Holdings Inc. d/b/a Lehman Capital, a division of Lehman Brothers Holdings Inc., incorporated by reference to Exhibit 10.2 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .3* |
10.22 * | | Loan Agreement, dated as of October 27, 2004 by and between YSI II LLC and Lehman Brothers Holdings Inc. d/b/a/Lehman Capital, a division of Lehman Brothers Holdings Inc., incorporated by reference to Exhibit 10.3 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .4* |
10.23 * | | Loan Agreement, dated as of October 27, 2004 by and between YSI III LLC and Lehman Brothers Bank, FSB, incorporated by reference to Exhibit 10.4 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .5* |
10.24 * | | CreditSettlement Agreement dated as of October 27, 2004and Mutual Release, by and among U-Store-It Trust, U-Store-It, L.P., YSI Management LLC, U-Store-It Mini Warehouse Co., U-Store-It Development LLC, Dean Jernigan, Kathleen A. Weigand, Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell, Kyle V. Amsdell, Rising Tide Development LLC, and Amsdell and Amsdell, dated August 6, 2007, incorporated by reference to Exhibit 10.1 to the several lenders from timeCompany’s Current Report on Form 8-K, filed on August 7, 2007. |
| | |
10.25 * | | Purchase and Sale Agreement, by and between U-Store-It, L.P. and Rising Tide Development LLC, dated August 6, 2007, incorporated by reference to time parties thereto, Lehman Brothers Inc., Wachovia Capital Markets, LLC, SunTrust Bank, LaSalle Bank National AssociationExhibit 10.2 to the Company’s Current Report on Form 8-K, filed on August 7, 2007. |
| | |
10.26 * | | Standstill Agreement, by and Lehman Commercial Paper Inc.,among, U-Store-It Trust, Robert J. Amsdell, Barry L. Amsdell and Todd C. Amsdell, dated August 6, 2007, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on August 7, 2007. |
| | |
10.27 * | | First Amendment to Lease, by and between U-Store-It, L.P. and Amsdell and Amsdell, dated August 6, 2007, amending Lease dated March 29, 2005, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed on August 7, 2007. |
| | |
10.28 * | | First Amendment to Lease, by and between U-Store-It, L.P. and Amsdell and Amsdell, dated August 6, 2007, amending Lease dated December 5, 2005, incorporated by reference to Exhibit 10.5 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.August 7, 2007. |
| 10 | .6*† |
10.29 * | | 2004 Equity Incentive Plan ofFirst Amendment to Lease, by and between U-Store-It, Trust effective as of October 19, 2004,L.P. and Amsdell and Amsdell, dated August 6, 2007, amending Lease dated December 5, 2005, incorporated by reference to Exhibit 10.6 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. August 7, 2007. |
54
10.30 * | 10 | .7* | | Stock Purchase Agreement dated as of October 27, 2004First Amendment to Lease, by and amongbetween U-Store-It, Trust, Robert J.L.P. and Amsdell Barry L.and Amsdell, Todd C. Amsdell, the Robert J. Amsdell Family Irrevocable Trust dated June 4, 1998 and the Loretta Amsdell Family Irrevocable TrustAugust 6, 2007, amending Lease dated June 4, 1998, relating to the purchase of U-Store-It Mini Warehouse Co.,December 5, 2005, incorporated by reference to Exhibit 10.7 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. August 7, 2007. |
| 10 | .8* |
10.31 * | | First Amendment to Lease, by and between U-Store-It, L.P. and Amsdell and Amsdell, dated August 6, 2007, amending Lease dated December 5, 2005, incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K, filed on August 7, 2007. |
| | |
10.32 * | | Option Termination Agreement, by and between U-Store-It, L.P. and Rising Tide Development LLC, dated August 6, 2007, incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K, filed on August 7, 2007. |
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10.33 * | | Property Management Termination Agreement, by and among U-Store-It Trust, YSI Management LLC, and Rising Tide Development LLC, dated August 6, 2007, incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K, filed on August 7, 2007. |
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10.34 * | | Marketing and Ancillary Services Termination Agreement, by and among U-Store-It Trust, U-Store-It Mini Warehouse Co., and Rising Tide Development LLC, dated August 6, 2007, incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K, filed on August 7, 2007. |
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10.35 * | | Office Lease, dated March 29, 2005, by and between Amsdell and Amsdell and U-Store- it, L.P., incorporated by reference to Exhibit 10.41 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 31, 2005. |
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10.36 * | | Lease, dated June 29, 2005 by and between Amsdell and Amsdell and U-Store-It, L.P., incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005. |
| | |
10.37 * | | Lease, dated June 29, 2005 by and between Amsdell and Amsdell and U-Store-It, L.P., incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005. |
| | |
10.38 * | | Non-Exclusive Aircraft Lease Agreement, dated July 1, 2005 by and between Aqua Sun Investments, L.L.C. and U-Store-It, L.P., incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005. |
| | |
10.39 * | | Marketing and Ancillary Services Agreement, dated as of October 27, 2004 by and between U-Store-It Mini Warehouse Co. and Rising Tide Development, LLC incorporated by reference to Exhibit 10.8 to the Company’s Current Report onForm 8-K,8- K, filed on November 2, 2004. |
| 10 | .9* |
10.40 * | | Property Management Agreement, dated as of October 27, 2004 by and between YSI Management LLC and Rising Tide Development, LLC, incorporated by reference to Exhibit 10.9 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
61
| | | | |
Exhibit No.
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|
10.41 * | 10 | .10* | | Option Agreement, dated as of October 27, 2004 by and between U-Store-It, L.P. and Rising Tide Development, LLC, incorporated by reference to Exhibit 10.10 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
55
10.42 * | 10 | .11* | | Registration Rights Agreement for Sale and Purchase dated as of October 27, 2004April 3, 2006, by and among JPG 3595 Anderson Farm, LLC, JPG 1350 N. 1st Street, L.P., JPG 1236 Texas Street, L.P., JPG 201 N. I-35 L.P., JPG 6446 East Main, LLC, JPG 5411 West Broad, LLC, JPG 3300 Southwest LLC, JPG 5252 Nike Drive, LLC, JPG 43 Old Olden, LLC, and U-Store-It, Trust, Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell, the Robert J. Amsdell Family Irrevocable Trust dated June 4, 1998, the Loretta Amsdell Family Irrevocable Trust dated June 4, 1998, Amsdell Holdings I, Inc.L.P., Amsdell and Amsdell and Robert J. Amsdell, Trustee, incorporated by reference to Exhibit 10.1110.5 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. April 24, 2006. |
| 10 | .12*† |
10.43 *† | | Amended and Restated Employment Agreement, dated as of August 23, 2006, by and between U-Store-It Trust and Todd C. Amsdell, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on August 28, 2006. |
| | |
10.44 *† | | Amended and Restated Executive Employment Agreement, dated April 20, 2007, by and between U-Store-It Trust and Dean Jernigan, incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q, filed on May 10, 2007. |
| | |
10.45 *† | | Amended and Restated Executive Employment Agreement, dated April 20, 2007, by and between U-Store-It Trust and Christopher P. Marr, incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q, filed on May 10, 2007. |
| | |
10.46 *† | | Amended and Restated Executive Employment Agreement, dated April 20, 2007, by and between U-Store-It Trust and Timothy M. Martin, incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q, filed on May 10, 2007. |
| | |
10.47 *† | | Amended and Restated Executive Employment Agreement, dated April 20, 2007, by and between U-Store-It Trust and Stephen R. Nichols, incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q, filed on May 10, 2007. |
| | |
10.48 *† | | Amended and Restated Executive Employment Agreement, dated April 20, 2007, by and between U-Store-It Trust and Kathleen A. Weigand, incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q, filed on May 10, 2007. |
| | |
10.49 † | | Indemnification Agreement, dated as of January 25, 2008 by and among U-Store-It Trust, U-Store-It, L.P. and Daniel B. Hurwitz, filed herewith. |
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10.50 *† | | Indemnification Agreement, dated as of March 22, 2007 by and among U-Store-It Trust, U-Store-It, L.P. and Marianne M. Keler, incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q, filed on May 10, 2007. |
| | |
10.51 *† | | Indemnification Agreement, dated as of December 11, 2006, by and among U-Store-It Trust, U-Store-It, L.P. and Timothy M. Martin, incorporated by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-K, filed on March 16, 2007. |
| | |
10.52 *† | | Indemnification Agreement, dated as of July 10, 2006, by and among U-Store-It Trust, U-Store-It, L.P. and Stephen R. Nichols, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on July 10, 2006. |
| | |
10.53 *† | | Indemnification Agreement, dated June 5, 2006 by and among U-Store-It Trust, U-Store- It, L.P. and Christopher P. Marr, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed on August 8, 2006. |
10.54 *† | | Indemnification Agreement, dated as of April 24, 2006 by and among U-Store-It Trust, U-Store-It, L.P. and Dean Jernigan, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on April 24, 2006. |
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56
10.55 *† | | Indemnification Agreement, dated as of February 24, 2006 by and among U-Store-It Trust, U-Store-It, L.P. and Kathleen A. Weigand, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on March 1, 2006. |
| | |
10.56 *† | | Indemnification Agreement, dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Robert J. Amsdell, incorporated by reference to Exhibit 10.12 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .13*† | | Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Steven G. Osgood, incorporated by reference to Exhibit 10.13 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
10.57 *† | 10 | .14*† | | Indemnification Agreement, dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Barry L. Amsdell, incorporated by reference to Exhibit 10.14 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .15*† |
10.58 *† | | Indemnification Agreement, dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Todd C. Amsdell, incorporated by reference to Exhibit 10.15 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .16*† | | Indemnification Agreement dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Tedd D. Towsley, incorporated by reference to Exhibit 10.16 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
10.59 *† | 10 | .17*† | | Indemnification Agreement, dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and John C. Dannemiller, incorporated by reference to Exhibit 10.17 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .18*† |
10.60 *† | | Indemnification Agreement, dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Thomas AA. Commes, incorporated by reference to Exhibit 10.18 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .19*† |
10.61 *† | | Indemnification Agreement, dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and David J. LaRue, incorporated by reference to Exhibit 10.19 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .20*† |
10.62 *† | | Indemnification Agreement, dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and Harold S. Haller, incorporated by reference to Exhibit 10.20 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .21*† |
10.63 *† | | Indemnification Agreement, dated as of October 27, 2004 by and among U-Store-It Trust, U-Store-It, L.P. and William M. Diefenderfer III, incorporated by reference to Exhibit 10.21 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .22*† |
10.64 *† | | IndemnificationModification of Noncompetition Agreement dated asand Termination of February 22, 2006Employment Agreement, by and amongbetween U-Store-It Trust U-Store-It, L.P. and Kathleen A. Weigand,Robert J. Amsdell, dated August 6, 2007, incorporated by reference to Exhibit 10.210.12 to the Company’s Current Report onForm 8-K, filed on February 28, 2006. August 7, 2007. |
| 10 | .23*† |
10.65 *† | | Modification of Noncompetition Agreement and Termination of Employment Agreement, by and between U-Store-It Trust and Todd C. Amsdell, dated August 6, 2007, incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K, filed on August 7, 2007. |
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10.66 *† | | Modification of Noncompetition Agreement, by and between U-Store-It Trust and Barry L. Amsdell, dated August 6, 2007, incorporated by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K, filed on August 7, 2007. |
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10.67 *† | | Noncompetition Agreement, dated as of December 11, 2006, by and between U-Store-It Trust and Timothy M. Martin, incorporated by reference to Exhibit 10.62 to the Company’s Annual Report on Form 10-K, filed on March 16, 2007. |
57
10.68 *† | | Noncompetition Agreement, dated as of July 10, 2006, by and between U-Store-It Trust and Stephen R. Nichols, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed on July 10, 2006. |
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10.69 *† | | Noncompetition Agreement, dated as of June 5, 2006, by and between U-Store-It Trust and Christopher P. Marr, incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed on August 8, 2006. |
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10.70 *† | | Noncompetition Agreement, dated as of April 24, 2006 by and between U-Store-It Trust and Dean Jernigan, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on April 24, 2006. |
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10.71 *† | | Noncompetition Agreement, dated as of October 27, 2004 by and between U-Store-It Trust and Barry L. Amsdell, incorporated by reference to Exhibit 10.26 to the Company’s Current Report on Form 8-K, filed on November 2, 2004. |
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10.72 *† | | Noncompetition Agreement, dated as of October 27, 2004 by and between U-Store-It Trust and Robert J. Amsdell, incorporated by reference to Exhibit 10.22 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .24*† | | Noncompetition Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Steven G. Osgood, incorporated by reference to Exhibit 10.23 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
10.73 *† | 10 | .25*† | | Noncompetition Agreement, dated as of October 27, 2004 by and between U-Store-It Trust and Todd C. Amsdell, incorporated by reference to Exhibit 10.24 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
62
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Exhibit No.
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10.74 *† | 10 | .26*† | | Noncompetition Agreement dated asSchedule of October 27, 2004 by and betweenCompensation for Non-Employee Trustees of U-Store-It Trust, and Tedd D. Towsley,effective May 8, 2007 incorporated by reference to Exhibit 10.2510.11 to the Company’s Quarterly Report on Form 10-Q, filed on May 10, 2007. |
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10.75 *† | | Schedule of 2008 Equity Awards for Executive Officers of U-Store-It Trust, incorporated by reference to Exhibit 99.2 to the Company’s Current Report onForm 8-K, filed on November 2, 2004.January 25, 2008. |
| 10 | .27*† |
10.76 *† | | Noncompetition Agreement dated asSchedule of October 27, 2004 by2007 Annual Incentive Payouts and between2008 Base Salaries for Executive Officers of U-Store-It Trust, and Barry L. Amsdell, incorporated by reference to Exhibit 10.2699.1 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. January 25, 2008. |
| 10 | .28*† |
10.77 *† | | Employment Agreement dated asSchedule of October 27, 2004 by and between2007 Equity Awards to Executive Officers of U-Store-It Trust, and Robert J. Amsdell, incorporated by reference to Exhibit 10.2799.2 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .29*† | | Employment Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Steven G. Osgood, incorporated by reference to Exhibit 10.28 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .30*† | | Employment Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Todd C. Amsdell, incorporated by reference to Exhibit 10.29 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .31*† | | Employment Agreement dated as of October 27, 2004 by and between U-Store-It Trust and Tedd D. Towsley, incorporated by reference to Exhibit 10.30 to the Company’s Current Report onForm 8-K, filed on November 2, 2004. |
| 10 | .32*† | | Employment Agreement dated as of February 22, 2006 by and between U-Store-It Trust and Kathleen A. Weigand, incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K filed on February 28, 2006. |
| 10 | .33* | | Purchase and Sale Agreement dated as of August 13, 2004 by and between Acquiport/Amsdell I Limited Partnership and Metro Storage LLC, incorporated by reference to Exhibit 10.17 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848. |
| 10 | .34* | | Amendment to Purchase and Sale Agreement dated as of September 8, 2004 by and between Acquiport/Amsdell I Limited Partnership and Metro Storage LLC, incorporated by reference to Exhibit 10.18 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848. |
| 10 | .35* | | Contribution Agreement dated as of July 30, 2004 by and between Acquiport/Amsdell I Limited Partnership and Robert J. Amsdell, as Trustee incorporated by reference to Exhibit 10.2 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848. |
| 10 | .36* | | Contribution Agreement dated as July 30, 2004 by and between Acquiport/Amsdell I Limited Partnership and Amsdell Holdings I, Inc. incorporated by reference to Exhibit 10.3 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848 |
| 10 | .37* | | Contribution Agreement dated as of July 30, 2004 by and between Acquiport/Amsdell I Limited Partnership and Amsdell and Amsdell incorporated by reference to Exhibit 10.4 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848 |
| 10 | .38* | | Agreement and Plan of Merger and Reorganization dated as of July 30, 2004 by and between the Company and High Tide LLC incorporated by reference to Exhibit 10.5 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848 |
| 10 | .39* | | Agreement and Plan of Merger dated as of July 30, 2004 by and between the Company and Amsdell Partners, Inc. incorporated by reference to Exhibit 10.6 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848 |
| 10 | .40* | | Partnership Reorganization Agreement dated as of July 30, 2004 by and among High Tide LLC, Amsdell Partners, Inc., Amsdell Holdings I, Inc. and Acquiport/Amsdell I Limited Partnership incorporated by reference to Exhibit 10.7 to Amendment No. 1 to the Company’s Registration Statement onForm S-11, FileNo. 333-117848. |
| 10 | .41* | | Purchase and Sale Agreement, dated as of March 1, 2005, by and between U-Store-It, L.P. and various partnerships and other entities affiliated with National Self Storage and The Schomac Group, Inc. named therein incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K, filed on March 4, 2005. |
6328, 2007.
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Exhibit No.
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10.78 *† | 10 | .42*† | | Form of NonQualified Share Option Agreement (Three-Year Vesting), incorporated by reference to Exhibit 10.40 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, filed on March 31, 2005. |
| 10 | .43* | | Office Lease, dated March 29, 2005, by and between Amsdell and Amsdell and U-Store-It, L.P., incorporated by reference to Exhibit 10.41 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, filed on March 31, 2005. |
| 10 | .44*† | | Trustee Compensation Schedule, incorporated by reference to Exhibit 10.43 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, filed on March 31, 2005. |
| 10 | .45*† | | Schedule of 2004 Bonuses2007 Salaries Approved for Named Executive Officers, incorporated by reference to Exhibit 10.44 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, filed on March 31, 2005. |
| 10 | .46*† | | Schedule of 2005 Bonuses for Named Executive Officers, incorporated by reference to Exhibit 10.199.1 to the Company’s Current Report onForm 8-K, filed on December 23, 2005.February 26, 2007. |
| 10 | .47† | | Schedule of 2006 Bonus Structure for Named Executive Officers. |
10.79 *† | 10 | .48† | | Form of Deferred Share Agreement. |
| 10 | .49† | | Deferred Share Agreement, dated as of December 22, 2005, by and between U-Store-It Trust and Robert J. Amsdell. |
| 10 | .50† | | Deferred Share Agreement, dated as of December 22, 2005, by and between U-Store-It Trust and Steven G. Osgood. |
| 10 | .51† | | Deferred Share Agreement, dated as of December 22, 2005, by and between U-Store-It Trust and Todd C. Amsdell. |
| 10 | .52† | | Deferred Share Agreement, dated as of December 22, 2005, by and between U-Store-It Trust and Tedd D. Towsley. |
| 10 | .53*† | | Deferred Share Agreement, dated as of February 22,24, 2006, by and between U-Store-It Trust and Kathleen A. Weigand, incorporated by reference to Exhibit 10.3 to the Company’s Current Report onForm 8-K, filed on March 1, 2006. |
| 10 | .54*† |
10.80 *† | | Form of NonQualifiedNon-Qualified Share Option Agreement, (Deferred Three-Year Vesting),dated as of July 10, 2006, by and between U- Store-It Trust and Stephen R. Nichols, incorporated by reference to Exhibit 10.4510.5 to the Company’s Current Report on Form 8-K/A, filed on July 13, 2006. |
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10.81 *† | | Non-Qualified Share Option Agreement, dated as of June 5, 2006, by and between U- Store-It Trust and Christopher P. Marr, incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed on August 8, 2006. |
58
10.82 *† | | Non-Qualified Share Option Agreement, dated as of April 19, 2006, by and between U- Store-It Trust and Dean Jernigan, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed on April 24, 2006. |
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10.83 † | | Form of Restricted Share Agreement for Non-Employee Trustees under the U-Store-It Trust 2007 Equity Incentive Plan, filed herewith. |
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10.84 *† | | Form of Restricted Share Agreement for Non-Employee Trustees under the U-Store-It Trust 2004 Equity Incentive Plan, incorporated by reference to Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q, filed on May 10, 2007. |
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10.85 *† | | Form of Nonqualified Share Option Agreement (Three-Year Vesting) 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. |
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10.86 *† | | Form of Non-Qualified 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, filed on May 10, 2007. |
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10.87 *† | | Form of Performance-Vested Restricted Share Agreement under the U-Store-It Trust 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on January 25, 2008. |
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10.88 *† | | Form of Performance-Vested Restricted Share Agreement under the U-Store-It Trust 2004 Equity Incentive Plan, incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed on May 10, 2007. |
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10.89 *† | | 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. |
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10.90 *† | | 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, filed on May 10, 2007. |
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10.91 *† | | Restricted Share Agreement, dated as of December 11, 2006, by and between U-Store-It Trust and Timothy M. Martin, incorporated by reference to Exhibit 10.88 to the Company’s Annual Report onForm 10-K, for the year ended December 31, 2004, filed on March 31, 2005.16, 2007. |
| 10 | .55*† |
10.92 *† | | Form of Trustee Restricted Share Agreement, dated as of July 10, 2006, by and between U-Store-It Trust and Stephen R. Nichols, incorporated by reference to Exhibit 10.4610.2 to the Company’s Current Report on Form 8-K, filed July 10, 2006. |
| | |
10.93 *† | | Restricted Share Agreement, dated as of June 5, 2006, by and between U-Store-It Trust and Christopher P. Marr, incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q, filed August 8, 2006. |
| | |
10.94 *† | | U-Store-It Trust Trustees Deferred Compensation Plan, amended and restated as of January 1, 2007, incorporated by reference to Exhibit 10.91 to the Company’s Annual Report onForm 10-K, for the year ended December 31, 2004, filed on March 31, 2005.16, 2007. |
| 10 | .56* |
10.95 *† | | U-Store-It Trust Executive Deferred Compensation Plan, amended and restated as of January 1, 2007, incorporated by reference to Exhibit 10.92 to the Company’s Annual Report on Form 10-K, filed March 16, 2007. |
59
10.96 *† | | U-Store-It Trust Deferred Trustees Plan, incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K, filed on June 6, 2005. |
| 10 | .57* |
10.97 *† | | Lease, dated June 29, 2005 by and between Amsdell and Amsdell and2007 Equity Incentive Plan of U-Store-It L.P.,Trust effective as of May 8, 2007, incorporated by reference to Exhibit 10.210.1 to the Company’s Quarterly Report onForm 10-Q, for the quarter ended June 30, 2005, filed on August 12, 2005. May 10, 2007. |
| 10 | .58* | | Lease, dated June 29, 2005 by and between Amsdell and Amsdell and U-Store-It, L.P., incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005. |
10.98 *† | 10 | .59* | | Non-Exclusive Aircraft Lease Agreement dated July 1, 2005 by and between Aqua Sun Investments, L.L.C. and2004 Equity Incentive Plan of U-Store-It L.P., incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005. |
| 10 | .60* | | Amendment to Purchase and Sale Agreement, dated May 31, 2005 by and between U-Store-It, L.P. and various partnerships and other entities affiliated with National Self Storage and the Schomac Group, Inc. named therein, incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005. |
| 10 | .61* | | Second Amendment to Purchase and Sale Agreement, dated July 5, 2005 by and between U-Store-It, L.P. and various partnerships and other entities affiliated with National Self Storage and the Schomac Group, Inc. named therein,Trust effective as of October 19, 2004, incorporated by reference to Exhibit 10.6 to the Company’s QuarterlyCurrent Report onForm 10-Q for the quarter ended June 30, 2005,8- K, filed on August 12, 2005.November 2, 2004. |
| | |
21.1 | | List of Subsidiaries. |
| | |
23.1 | | Consent of Independent Registered Public Accounting Firm. |
| | |
31.1 | | Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| | |
31.2 | | Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| | |
32.1 | | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
64
| | | | | |
Exhibit No. | | |
| |
| | 10 | .62* | | Third Amendment to Purchase and Sale Agreement, dated July 20, 2005 by and between U-Store-It, L.P. and various partnerships and other entities affiliated with National Self Storage and the Schomac Group, Inc. named therein, incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2005, filed on August 12, 2005. |
| | 10 | .63* | | Loan Agreement, dated July 19, 2005 by and between YSI VI LLC and Lehman Brothers Bank, FSB, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2005, filed on November 14, 2005. |
| | 10 | .64* | | Loan Agreement, dated August 4, 2005 by and between YASKY LLC and LaSalle Bank National Association, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2005, filed on November 14, 2005. |
| | 10 | .65* | | Secured Promissory Note, dated November 1, 2005 between YSI XX LP and Transamerica Financial Life Insurance Company, incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K, filed on November 4, 2005. |
| | 10 | .66* | | Form of Security Interest regarding fixed rate mortgage loan between YSI XX LP and TransAmerica Financial Life Insurance Company, incorporated by reference to Exhibit 10.2 to the Company’s Current Report onForm 8-K, filed on November 4, 2005. |
| | 21 | .1 | | List of Subsidiaries. |
| | 23 | .1 | | Consent of Independent Registered Public Accounting Firm. |
| | 31 | .1 | | Certification of Chief Executive Officer required byRule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| | 31 | .2 | | Certification of Chief Financial Officer required byRule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| | 32 | .1 | | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| | 99 | .1* | | Acknowledgement and Agreement of Adjustment to Acquisition Consideration, dated May 14, 2005, by and between Rising Tide Development, LLC and U-Store-It, L.P., incorporated by reference to Exhibit 99.1 to the Company’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2004, filed on August 12, 2005. |
* | | |
* | | Incorporated herein by reference as above indicated. |
| | |
† | | Denotes a management contract or compensatory plan, contract or arrangement. |
65
60
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
U-STORE-IT TRUST
| U-STORE-IT TRUST | |
| | |
| By: | /s/ Christopher P. Marr |
| | Christopher P. Marr |
| | Chief Financial Officer |
| | |
| By: | /s/ Steven G. Osgood
|
Steven G. Osgood,
President and Chief Financial Officer
February 29, 2008Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
| | | | | | |
|
| |
| |
| | | | |
By: | |
Robert J. AmsdellWilliam M. Diefenderfer III | | Chairman of the Board of Trustees and Chief Executive Officer (Principal Executive Officer) | | March 1, 2006February 29, 2008 |
| | | | | | |
By: | | /s/ Steven G. Osgood
Steven G. Osgood | | President and Chief Financial Officer (Principal Financial Officer) | | March 1, 2006 |
| | | | | | |
By: | | /s/ Tedd D. Towsley
Tedd D. Towsley | | Vice President and Treasurer (Principal Accounting Officer) | | March 1, 2006 |
| | | | | | |
By: | | /s/ Barry L. Amsdell
Barry L. Amsdell | | Trustee | | March 1, 2006 |
| | | | | | |
By: | | /s/ Thomas A. Commes
Thomas A. Commes | | Trustee | | March 1, 2006 |
| | | | | | |
By: | | /s/ John C. Dannemiller
John C. Dannemiller | | Trustee | | March 1, 2006 |
| | | | | | |
By: | | /s/ William M. Diefenderfer III
William M. Diefenderfer III | | Trustee | | March 1, 2006 |
| | | | | | |
By: | | | | Chief Executive Officer | | February 29, 2008 |
Dean Jernigan | | (Principal Executive Officer) | | |
| | | | |
/s/ Christopher P. Marr | | Chief Financial Officer | | February 29, 2008 |
Christopher P. Marr | | (Principal Financial Officer) | | |
| | | | |
/s/ Timothy M. Martin | | Chief Accounting Officer | | February 29, 2008 |
Timothy M. Martin | | (Principal Accounting Officer) | | |
| | | | |
/s/ Thomas A. Commes | | Trustee | | February 29, 2008 |
Thomas A. Commes | | | | |
| | | | |
/s/ John C. Dannemiller | | Trustee | | February 29, 2008 |
John C. Dannemiller | | | | |
| | | | |
/s/ Harold S. Haller
| | Trustee | | February 29, 2008 |
Harold S. Haller | | Trustee | | March 1, 2006 |
| | | | | | |
By: | | | | Trustee | | February 29, 2008 |
Daniel B. Hurwitz | | | | |
| | | | |
/s/ Marianne M. Keler | | Trustee | | February 29, 2008 |
Marianne M. Keler | | | | |
| | | | |
/s/ David J. LaRue
| | Trustee | | February 29, 2008 |
David J. LaRue | | Trustee | | March 1, 2006 |
66
61
FINANCIAL STATEMENTS
INDEX TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
| | | | |
| | Page No. |
|
Consolidated and Combined Financial Statements of U-Store-It Trust and Subsidiaries (The “Company”) and Acquiport/Amsdell (The “Predecessor”) | | | | |
| |
Management’s Report on Internal Control Over Financial Reporting | | | F-1 | F-2 |
| |
Report of Independent Registered Public Accounting Firm | | | F-2 | F-3 |
| |
Report of Independent Registered Public Accounting Firm | | | F-3 | F-4 |
| |
Consolidated Balance Sheets for the Company as of December 31, 20052007 and 20042006 | | | F-4 | F-5 |
| |
Consolidated Statement of Operations for the Company for the year ended December 31, 2005, and for the period from October 21, 2004 through December 31, 2004, and the Consolidated and Combined Statements of Operations for the Predecessor for the period from January 1, 2004 through October 20, 2004 and for the yearyears ended December 31, 20032007, 2006, and 2005 | | | F-5 | F-6 |
| |
Consolidated StatementStatements of Shareholders’ Equity for the Company for the yearyears ended December 31, 20052007, 2006, and for the period from October 21, 2004 through December 31, 2004, and the Consolidated and Combined Statements of Owners’ Equity (Deficit) for the Predecessor for the period from January 1, 2004 through October 20, 2004 and for the year ended December 31, 20032005 | | | F-6 | F-7 |
| |
Consolidated Statement of Cash Flows for the Company for the year ended December 31, 2005 and for the period October 21, 2004 through December 31, 2004 and the Consolidated and Combined Statements of Cash Flows for the Predecessor for the period from January 1, 2004 through October 20, 2004 and for the yearyears ended December 31, 20032007, 2006, and 2005 | | | F-7 | F-8 |
| |
Notes to Consolidated and Combined Financial Statements | | | F-10 | F-9 |
F-1
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Shareholders of U-Store-It Trust
Management of U-Store-It Trust and subsidiaries (The “Company”)the Company is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under Section 404 of the Sarbanes-Oxley ActRule 13a-15(f). In evaluating of 2002, the Company’s management is required to assess the effectiveness of the Company’s internal control over financial reporting management based its evaluationas of the end of each fiscal year, and report on the frameworkbasis of that assessment whether the Company’s internal control over financial reporting is effective.
The 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 inInternal Control — Integrated Frameworkissued by accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:
· pertain to the Committeemaintenance of Sponsoring Organizationsrecords that, in reasonable detail, accurately and fairly reflect the transactions and the disposition of the Treadway Commission (“COSO”).
assets of the Company;· 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 Company are being made only in accordance with the authorization of the Company’s management and its Board of Trustees; and
· 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.
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 Company’s management, including the Chief Executive Officerprincipal executive officer and Chief Financial Officer, the Companyprincipal financial officer, we conducted ana review, evaluation and assessment of the effectiveness of the Company’s internal control over financial reporting. Based on the evaluation under the framework inInternal Control Integrated Framework,management has determined that the Company’s internal control over financial reporting was effective as of December 31, 2005.
Management’s assessment of the effectiveness of the Company’sour internal control over financial reporting as of December 31,
20052007, based upon the Committee of Sponsoring Organizations of the Treadway Commission (COSO) criteria. In performing its assessment of the effectiveness of internal control over financial reporting, management has concluded that, as of December 31, 2007, our 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, 2007, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is includedthat appears herein.
F-1
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
U-Store-It Trust
Cleveland, Ohio
We have audited management’s assessment, included within this December 31, 2005Form 10-K ofU-Store-It Trust (the “Company”) on Page F-1 under the heading of “Management’s Report on Internal Control Over Financial Reporting,” that the Company maintained effective internal control over financial reporting of U-Store-It Trust and subsidiaries (the “Company”), as of December 31, 2005,2007 based on criteria established inInternalControl — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management’s report of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment,assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.
opinion.A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005,2007, based on the criteria established inInternalControl — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2005,2007, and the related consolidated statementstatements of operations, shareholders’ equity, and cash flows for the year ended December 31, 2005,2007, and the financial statement schedule as of and for the year ended December 31, 20052007 of the Company and our report dated February 27, 200629, 2008 expressed an unqualified opinion on those financial statements and financial statement schedule.
/s/ DELOITTE & TOUCHE LLP |
|
Cleveland, Ohio |
February 29, 2008 |
F-3
/s/ DELOITTE & TOUCHE LLP
Cleveland, Ohio
February 27, 2006
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
U-Store-It Trust
Cleveland, Ohio
We have audited the accompanying consolidated balance sheets of U-Store-It Trust and subsidiaries (the “Company”) as of December 31, 20052007 and 2004,2006 and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the Company forthree years in the yearperiod ended December 31, 2005 and for the period from October 21, 2004 (commencement of operations) through December 31, 2004, and the related consolidated and combined statements of operations, owners’ equity (deficit), and cash flows of Acquiport/Amsdell (the “Predecessor”) for the period from January 1, 2004 through October 20, 2004, and for the year ended December 31, 2003.2007. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s and the Predecessor’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the CompanyU-Store-It Trust and subsidiaries as of December 31, 20052007 and 2004, the results of the Company’s operations and cash flows for the year ended December 31, 2005 and for the period from October 21, 2004 (commencement of operations) through December 31, 2004,2006 and the results of the Predecessor’stheir operations and their cash flows for each of the three years in the period from January 1, 2004 through October 20, 2004, and for the year ended December 31, 2003,2007, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth herein.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005,2007, based on the criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 200629, 2008 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
/s/ DELOITTE & TOUCHE LLP |
|
Cleveland, Ohio |
February 29, 2008 |
F-4
/s/ DELOITTE & TOUCHE LLP
Cleveland, Ohio
February 27, 2006
F-3
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”)
| | | | | | | | | |
| | | December 31, | |
| | | 2005 | | | 2004 | |
| | | (Dollars in thousands, except par value amounts) | |
| |
ASSETS |
| Storage facilities — net | | $ | 1,246,295 | | | $ | 729,155 | |
| Cash and cash equivalents | | | 201,098 | | | | 28,485 | |
| Restricted cash | | | 14,672 | | | | 7,211 | |
| Loan procurement costs — net of amortization | | | 10,437 | | | | 7,624 | |
| Other assets | | | 8,631 | | | | 3,138 | |
| Other assets due from related parties | | | 355 | | | | 261 | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 1,481,488 | | | $ | 775,874 | |
| | | | | | | | | |
| |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
| LIABILITIES | | | | | | | | |
| Loans payable | | $ | 669,282 | | | $ | 380,496 | |
| Capital lease obligations | | | 56 | | | | 156 | |
| Accounts payable and accrued expenses | | | 18,798 | | | | 10,958 | |
| Accounts payable and accrued expenses due to related party | | | 74 | | | | — | |
| Distributions payable | | | 16,624 | | | | 7,532 | |
| Rents received in advance | | | 8,857 | | | | 5,835 | |
| Security deposits | | | 685 | | | | 455 | |
| | | | | | | | | |
| Total Liabilities | | | 714,376 | | | | 405,432 | |
| COMMITMENTS AND CONTINGENCIES | | | — | | | | — | |
| MINORITY INTEREST | | | 64,108 | | | | 11,062 | |
| SHAREHOLDERS’ EQUITY | | | | | | | | |
| Common shares, $.01 par value, 200,000,000 shares authorized, 57,010,162 in 2005 and 37,345,162 in 2004 issued and outstanding | | | 570 | | | | 373 | |
| Additional paid in capital | | | 795,244 | | | | 396,662 | |
| Accumulated deficit | | | (91,253 | ) | | | (37,430 | ) |
| Unearned share grant compensation | | | (1,557 | ) | | | (225 | ) |
| | | | | | | | | |
| Total shareholders’ equity | | | 703,004 | | | | 359,380 | |
| | | | | | | | | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 1,481,488 | | | $ | 775,874 | |
| | | | | | | | | |
(in thousands, except share data)
| | December 31, | | December 31, | |
| | 2007 | | 2006 | |
| | | | | |
ASSETS | | | | | |
Storage facilities | | $ | 1,916,396 | | $ | 1,771,864 | |
Accumulated depreciation | | (269,278 | ) | (205,049 | ) |
| | 1,647,118 | | 1,566,815 | |
Cash and cash equivalents | | 4,517 | | 19,716 | |
Restricted cash | | 15,818 | | 14,126 | |
Loan procurement costs - net of amortization | | 6,108 | | 7,575 | |
Other assets | | 14,270 | | 6,475 | |
Due from related parties | | — | | 632 | |
Total assets | | $ | 1,687,831 | | $ | 1,615,339 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
| | | | | |
Revolving credit facility | | $ | 219,000 | | $ | 90,500 | |
Unsecured term loan | | 200,000 | | 200,000 | |
Secured term loan | | 47,444 | | — | |
Mortgage loans and notes payable | | 561,057 | | 588,930 | |
Accounts payable and accrued expenses | | 33,623 | | 22,590 | |
Due to related parties | | 110 | | 336 | |
Distributions payable | | 11,300 | | 18,197 | |
Deferred revenue | | 10,148 | | 9,740 | |
Security deposits | | 548 | | 655 | |
Total liabilities | | 1,083,230 | | 930,948 | |
| | | | | |
Minority interests | | 48,982 | | 56,898 | |
| | | | | |
Commitments and contingencies | | | | | |
| | | | | |
Shareholders’ Equity | | | | | |
Common shares $.01 par value, 200,000,000 shares authorized, 57,577,232 and 57,335,490 shares issued and outstanding at December 31, 2007 and December 31, 2006, respectively | | 576 | | 573 | |
Additional paid in capital | | 797,940 | | 794,632 | |
Accumulated other comprehensive loss | | (1,664 | ) | — | |
Accumulated deficit | | (241,233 | ) | (167,712 | ) |
Total shareholders’ equity | | 555,619 | | 627,493 | |
Total liabilities and shareholders’ equity | | $ | 1,687,831 | | $ | 1,615,339 | |
See accompanying notes to the consolidated and combined financial statements.
F-4
F-5
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
| | | | | | | | | | | | | | | | | |
| | | THE
| | | THE
| |
| | | COMPANY | | | PREDECESSOR | |
| | | | | | For the Period
| | | For the Period
| | | | |
| | | Year Ended
| | | October 21, 2004
| | | January 1, 2004
| | | Year Ended
| |
| | | December 31,
| | | to December 31,
| | | to October 20,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2004 | | | 2003 | |
| | | (Dollars and shares in thousands, except per share data) | |
| |
| REVENUES: | | | | | | | | | | | | | | | | |
| Rental income | | $ | 138,120 | | | $ | 21,314 | | | $ | 65,631 | | | $ | 76,898 | |
| Other property related income | | | 10,001 | | | | 1,452 | | | | 3,211 | | | | 3,916 | |
| | | | | | | | | | | | | | | | | |
| Total revenues | | | 148,121 | | | | 22,766 | | | | 68,842 | | | | 80,814 | |
| OPERATING EXPENSES: | | | | | | | | | | | | | | | | |
| Property operating expenses | | | 54,952 | | | | 9,635 | | | | 26,031 | | | | 28,096 | |
| Property operating expense — related party | | | 43 | | | | — | | | | — | | | | — | |
| Depreciation | | | 39,949 | | | | 5,800 | | | | 16,528 | | | | 19,494 | |
| General and administrative | | | 17,786 | | | | 4,140 | | | | — | | | | — | |
| General and administrative — related party | | | 736 | | | | 114 | | | | — | | | | — | |
| Management fees — related party | | | — | | | | — | | | | 3,689 | | | | 4,361 | |
| | | | | | | | | | | | | | | | | |
| Total operating expenses | | | 113,466 | | | | 19,689 | | | | 46,248 | | | | 51,951 | |
| OPERATING INCOME | | | 34,655 | | | | 3,077 | | | | 22,594 | | | | 28,863 | |
| OTHER EXPENSE: | | | | | | | | | | | | | | | | |
| Interest: | | | | | | | | | | | | | | | | |
| Interest expense on loans | | | (32,370 | ) | | | (4,428 | ) | | | (19,385 | ) | | | (15,128 | ) |
| Loan procurement amortization expense | | | (1,785 | ) | | | (240 | ) | | | (5,727 | ) | | | (1,015 | ) |
| Early extinguishment of debt | | | (93 | ) | | | (7,012 | ) | | | — | | | | — | |
| Costs incurred to acquire management company — related party | | | — | | | | (22,152 | ) | | | — | | | | — | |
| Interest income | | | 2,405 | | | | 37 | | | | 69 | | | | 12 | |
| Other | | | (47 | ) | | | (78 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Total other expense | | | (31,890 | ) | | | (33,873 | ) | | | (25,043 | ) | | | (16,131 | ) |
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST | | | 2,765 | | | | (30,796 | ) | | | (2,449 | ) | | | 12,732 | |
| MINORITY INTEREST | | | (199 | ) | | | 898 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS | | | 2,566 | | | | (29,898 | ) | | | (2,449 | ) | | | 12,732 | |
| DISCONTINUED OPERATIONS | | | | | | | | | | | | | | | | |
| Income from operations | | | 32 | | | | — | | | | — | | | | 171 | |
| Gain on sale of storage facilities | | | 179 | | | | — | | | | — | | | | 3,329 | |
| | | | | | | | | | | | | | | | | |
| Income from discontinued operations | | | 211 | | | | — | | | | — | | | | 3,500 | |
| | | | | | | | | | | | | | | | | |
| NET INCOME (LOSS) | | $ | 2,777 | | | $ | (29,898 | ) | | $ | (2,449 | ) | | $ | 16,232 | |
| | | | | | | | | | | | | | | | | |
| Basic and diluted earnings (loss) per share from continuing operations | | $ | 0.07 | | | $ | (0.80 | ) | | | | | | | | |
| Basic and diluted earnings per share from discontinued operations | | | — | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic and diluted earnings (loss) per share | | $ | 0.07 | | | $ | (0.80 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted-average common shares outstanding — basic | | | 42,120 | | | | 37,478 | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted-average common shares outstanding — diluted | | | 42,203 | | | | 37,478 | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Distributions declared per share of common stock | | $ | 1.13 | | | $ | 0.2009 | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | For the Year ended December 31, | |
| | 2007 | | 2006 | | 2005 | |
| | (Dollars and shares in thousands, except per share data) | |
REVENUES | | | | | | | |
Rental income | | $ | 211,974 | | $ | 195,331 | | $ | 135,169 | |
Other property related income | | 16,828 | | 14,816 | | 10,001 | |
Other - related party | | 365 | | 457 | | 405 | |
Total revenues | | 229,167 | | 210,604 | | 145,575 | |
OPERATING EXPENSES | | | | | | | |
Property operating expenses | | 96,802 | | 85,415 | | 54,793 | |
Property operating expenses - related party | | 59 | | 69 | | 43 | |
Depreciation | | 70,192 | | 64,079 | | 39,479 | |
Asset write-off | | — | | 305 | | — | |
Lease abandonment | | 1,316 | | — | | — | |
General and administrative | | 21,966 | | 21,675 | | 17,786 | |
General and administrative - related party | | 337 | | 613 | | 736 | |
Total operating expenses | | 190,672 | | 172,156 | | 112,837 | |
OPERATING INCOME | | 38,495 | | 38,448 | | 32,738 | |
OTHER INCOME (EXPENSE) | | | | | | | |
Interest: | | | | | | | |
Interest expense on loans | | (54,108 | ) | (45,628 | ) | (31,907 | ) |
Loan procurement amortization expense | | (1,772 | ) | (1,972 | ) | (2,045 | ) |
Write-off of loan procurement cost due to early extinguishment of debt | | — | | (1,907 | ) | (93 | ) |
Interest income | | 401 | | 1,336 | | 2,404 | |
Other | | 118 | | 191 | | (47 | ) |
Total other expense | | (55,361 | ) | (47,980 | ) | (31,688 | ) |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTERESTS | | (16,866 | ) | (9,532 | ) | 1,050 | |
MINORITY INTERESTS | | 1,385 | | 790 | | (71 | ) |
INCOME (LOSS) FROM CONTINUING OPERATIONS | | (15,481 | ) | (8,742 | ) | 979 | |
DISCONTINUED OPERATIONS | | | | | | | |
Income from operations | | 102 | | 208 | | 452 | |
Gain on disposition of discontinued operations | | 2,517 | | — | | 179 | |
Minority interest attributable to discontinued operations | | (215 | ) | (17 | ) | (42 | ) |
Income from discontinued operations | | 2,404 | | 191 | | 589 | |
NET INCOME (LOSS) | | $ | (13,077 | ) | $ | (8,551 | ) | $ | 1,568 | |
Basic and diluted earnings (loss) per share from continuing operations | | $ | (0.26 | ) | $ | (0.15 | ) | $ | 0.02 | |
Basic and diluted earnings (loss) per share from discontinued operations | | $ | 0.04 | | $ | — | | $ | 0.02 | |
Basic and diluted earnings (loss) per share | | $ | (0.22 | ) | $ | (0.15 | ) | $ | 0.04 | |
Weighted-average basic shares outstanding | | 57,497 | | 57,287 | | 42,120 | |
Weighted-average diluted shares outstanding | | 57,497 | | 57,287 | | 42,203 | |
| | | | | | | |
Distributions declared per common share and unit | | $ | 1.05 | | $ | 1.16 | | $ | 1.13 | |
See accompanying notes to the consolidated and combined financial statements.
F-5
F-6
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
AND OWNERS’ EQUITY (DEFICIT)(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Additional
| | | Unearned
| | | | | | Owners’
| | | | |
| | | Common Shares | | | Paid in
| | | Grant Shares
| | | Accumulated
| | | Equity
| | | | |
| | | Number | | | Amount | | | Capital | | | Compensation | | | Deficit | | | (Deficit) | | | Total | |
| | | (Dollars in thousands) | |
| |
| The Predecessor | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at December 31, 2002 | | | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 142,413 | | | $ | 142,413 | |
| Net income | | | — | | | | — | | | | — | | | | — | | | | — | | | | 16,232 | | | | 16,232 | |
| Cash contributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,788 | | | | 1,788 | |
| Cash distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (28,684 | ) | | | (28,684 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at December 31, 2003 | | | — | | | | — | | | | — | | | | — | | | | — | | | | 131,749 | | | | 131,749 | |
| Net loss | | | — | | | | — | | | | — | | | | — | | | | — | | | | (2,449 | ) | | | (2,449 | ) |
| Contributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | 128,724 | | | | 128,724 | |
| Cash distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (18,297 | ) | | | (18,297 | ) |
| Issuance of note receivable from owner | | | — | | | | — | | | | — | | | | — | | | | — | | | | (277,152 | ) | | | (277,152 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at October 20, 2004 | | | — | | | | — | | | | — | | | | — | | | | — | | | | (37,425 | ) | | | (37,425 | ) |
| The Company | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Reclassify Predecessor owners’ deficit | | | — | | | | — | | | | (37,961 | ) | | | — | | | | — | | | | 37,961 | | | | — | |
| Reclassify Predecessor owners’ deficit relative to contribution of facilities at historic cost for partnership units | | | — | | | | — | | | | 536 | | | | — | | | | — | | | | (536 | ) | | | — | |
| Net proceeds from sale of common shares | | | 28,750 | | | | 287 | | | | 424,702 | | | | — | | | | — | | | | — | | | | 424,989 | |
| Grant of restricted share units | | | — | | | | — | | | | 2,675 | | | | (2,675 | ) | | | — | | | | — | | | | — | |
| Amortization of restricted share units | | | — | | | | — | | | | — | | | | 2,450 | | | | — | | | | — | | | | 2,450 | |
| Issuance of restricted shares | | | 20 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Issuance of shares to former owners, property contributions | | | 7,409 | | | | 74 | | | | (74 | ) | | | — | | | | — | | | | — | | | | — | |
| Issuance of shares to former owners, management company acquisition | | | 1,166 | | | | 12 | | | | 18,648 | | | | | | | | | | | | | | | | 18,660 | |
| Share compensation expense | | | — | | | | — | | | | 96 | | | | — | | | | — | | | | — | | | | 96 | |
| Record minority interests for former owners’ continuing interests | | | — | | | | — | | | | (11,960 | ) | | | — | | | | — | | | | — | | | | (11,960 | ) |
| Net loss | | | — | | | | — | | | | — | | | | — | | | | (29,898 | ) | | | — | | | | (29,898 | ) |
| Distributions | | | — | | | | — | | | | — | | | | — | | | | (7,532 | ) | | | — | | | | (7,532 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at December 31, 2004 | | | 37,345 | | | $ | 373 | | | $ | 396,662 | | | $ | (225 | ) | | $ | (37,430 | ) | | $ | — | | | $ | 359,380 | |
| Net proceeds from sale of common shares | | | 19,665 | | | | 197 | | | | 378,550 | | | | — | | | | — | | | | — | | | | 378,747 | |
| Grant of restricted share units | | | — | | | | — | | | | 3,066 | | | | (3,066 | ) | | | — | | | | — | | | | — | |
| Issuance of restricted share units | | | — | | | | — | | | | 82 | | | | — | | | | — | | | | — | | | | 82 | |
| Amortization of restricted share units | | | — | | | | — | | | | — | | | | 1,734 | | | | — | | | | — | | | | 1,734 | |
| Share compensation expense | | | — | | | | — | | | | 510 | | | | — | | | | — | | | | — | | | | 510 | |
| Adjustment for minority interest in operating partnership | | | — | | | | — | | | | 16,374 | | | | — | | | | — | | | | — | | | | 16,374 | |
| Net income | | | — | | | | — | | | | — | | | | — | | | | 2,777 | | | | — | | | | 2,777 | |
| Accretion of operating partnership units | | | — | | | | — | | | | — | | | | — | | | | (2,976 | ) | | | — | | | | (2,976 | ) |
| Distributions | | | — | | | | — | | | | — | | | | — | | | | (53,624 | ) | | | — | | | | (53,624 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at December 31, 2005 | | | 57,010 | | | $ | 570 | | | $ | 795,244 | | | $ | (1,557 | ) | | $ | (91,253 | ) | | $ | — | | | $ | 703,004 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Additional | | Accumulated | | | | | |
| | Common Shares | | Paid in | | Other Comprehensive | | Accumulated | | | |
| | Number | | Amount | | Capital | | Loss | | Deficit | | Total | |
| | | | | | | | | | | | | |
Balance at December 31, 2004 | | 37,345 | | $ | 373 | | $ | 394,293 | | $ | — | | $ | (37,441 | ) | $ | 357,225 | |
Net proceeds from sale of common shares | | 19,665 | | 197 | | 378,550 | | | | | | 378,747 | |
Issuance of trustee deferred shares | | | | | | 82 | | | | | | 82 | |
Amortization of restricted shares | | | | | | 1,734 | | | | | | 1,734 | |
Share compensation expense | | | | | | 510 | | | | | | 510 | |
Adjustment for minority interest in operating partnership | | | | | | 15,203 | | | | | | 15,203 | |
Net income | | | | | | | | | | 1,568 | | 1,568 | |
Accretion of operating partnership units | | | | | | | | | | (2,976 | ) | (2,976 | ) |
Distributions | | | | | | | | | | (53,624 | ) | (53,624 | ) |
Balance at December 31, 2005 | | 57,010 | | $ | 570 | | $ | 790,372 | | $ | — | | $ | (92,473 | ) | $ | 698,469 | |
Issuance of restricted shares | | 139 | | 1 | | | | | | | | 1 | |
Proceeds from option exercise | | 186 | | 2 | | 2,985 | | | | | | 2,987 | |
Amortization of restricted shares | | | | | | 649 | | | | | | 649 | |
Share compensation expense | | | | | | 444 | | | | | | 444 | |
Issuance of trustee deferred shares | | | | | | 176 | | | | | | 176 | |
Adjustment for minority interest in operating partnership | | | | | | 6 | | | | | | 6 | |
Net loss | | | | | | | | | | (8,551 | ) | (8,551 | ) |
Distributions | | | | | | | | | | (66,688 | ) | (66,688 | ) |
Balance at December 31, 2006 | | 57,335 | | $ | 573 | | $ | 794,632 | | $ | — | | $ | (167,712 | ) | $ | 627,493 | |
Issuance of restricted shares | | 123 | | 2 | | | | | | | | 2 | |
Conversion from units to shares | | 119 | | 1 | | | | | | | | 1 | |
Amortization of restricted shares | | | | | | 972 | | | | | | 972 | |
Share compensation expense | | | | | | 867 | | | | | | 867 | |
Adjustment for minority interest in operating partnership | | | | | | 1,469 | | | | | | 1,469 | |
Comprehensive loss | | | | | | | | | | | | | |
Net loss | | | | | | | | | | (13,077 | ) | (13,077 | ) |
Other comprehensive loss | | | | | | | | | | | | | |
Unrealized loss on interest rate swap | | | | | | | | (1,545 | ) | | | (1,545 | ) |
Unrealized loss on foreign currency translation | | | | | | | | (119 | ) | | | (119 | ) |
Total comprehensive loss | | | | | | | | | | | | (14,741 | ) |
Distributions | | | | | | | | | | (60,444 | ) | (60,444 | ) |
Balance at December 31, 2007 | | 57,577 | | $ | 576 | | $ | 797,940 | | $ | (1,664 | ) | $ | (241,233 | ) | $ | 555,619 | |
See accompanying notes to the consolidated and combined financial statements.
F-6
F-7
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | | | | | | | |
| | | THE COMPANY | | | THE PREDECESSOR | |
| | | | | | For the Period
| | | For the Period
| | | | |
| | | Year Ended
| | | October 21, 2004 to
| | | January 1, 2004 to
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | October 20,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2004 | | | 2003 | |
| | | (Dollars in thousands) | |
| |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 2,777 | | | $ | (29,898 | ) | | $ | (2,449 | ) | | $ | 16,232 | |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 41,902 | | | | 6,040 | | | | 22,255 | | | | 20,716 | |
| Early extinguishment of debt | | | 93 | | | | 7,012 | | | | — | | | | — | |
| Equity compensation expense | | | 2,244 | | | | 2,546 | | | | — | | | | — | |
| Accretion of fair market value of debt | | | (378 | ) | | | — | | | | — | | | | — | |
| Costs incurred to acquire management company — related party | | | — | | | | 22,152 | | | | — | | | | — | |
| Minority interest | | | 199 | | | | (898 | ) | | | — | | | | — | |
| Gain on sale of storage facilities | | | (179 | ) | | | — | | | | — | | | | (3,329 | ) |
| Changes in other operating accounts: | | | | | | | | | | | | | | | | |
| Other assets | | | (3,187 | ) | | | 3,021 | | | | 118 | | | | 657 | |
| Accounts payable and accrued expenses | | | 5,421 | | | | (1,978 | ) | | | 5,664 | | | | (205 | ) |
| Other liabilities | | | (42 | ) | | | 1,418 | | | | (65 | ) | | | 156 | |
| | | | | | | | | | | | | | | | | |
| Net cash provided by operating activities | | | 48,850 | | | | 9,415 | | | | 25,523 | | | | 34,227 | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | | | | |
| Acquisitions, additions and improvements to storage facilities | | | (383,760 | ) | | | (224,525 | ) | | | (2,865 | ) | | | (8,808 | ) |
| Acquisitions, additions and improvements to storage facilities — related party | | | (10,889 | ) | | | (451 | ) | | | — | | | | — | |
| Acquisition of management company, net — related party | | | — | | | | (3,492 | ) | | | — | | | | — | |
| Net proceeds from sales of storage facilities | | | 6,203 | | | | — | | | | — | | | | 8,068 | |
| Insurance settlements | | | 500 | | | | — | | | | 583 | | | | — | |
| Increase in restricted cash | | | (4,748 | ) | | | (607 | ) | | | (2,832 | ) | | | (1,767 | ) |
| | | | | | | | | | | | | | | | | |
| Net cash used in investing activities | | | (392,694 | ) | | | (229,075 | ) | | | (5,114 | ) | | | (2,507 | ) |
F-7
(in thousands)
| | For the year ended December 31, | |
| | 2007 | | 2006 | | 2005 | |
Operating Activities | | | | | | | |
Net income (loss) | | $ | (13,077 | ) | $ | (8,551 | ) | $ | 1,568 | |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | | | | | | | |
Depreciation and amortization | | 72,218 | | 66,727 | | 42,174 | |
Asset write-off | | — | | 305 | | — | |
Lease abandonment charge | | 1,316 | | — | | — | |
Gain on disposition of discontinued operations | | (2,311 | ) | — | | — | |
Equity compensation expense | | 1,840 | | 1,272 | | 2,244 | |
Accretion of fair market value of debt | | (367 | ) | (692 | ) | (378 | ) |
Early extinguishment of debt | | — | | 1,907 | | 93 | |
Minority interests | | (995 | ) | (773 | ) | 113 | |
Gain on sale of assets | | — | | — | | (179 | ) |
Changes in other operating accounts: | | | | | | | |
Other assets | | (2,756 | ) | (350 | ) | (2,674 | ) |
Accounts payable and accrued expenses | | 6,660 | | 5,733 | | 3,187 | |
Other liabilities | | 346 | | (1,011 | ) | (42 | ) |
Net cash provided by operating activities | | $ | 62,874 | | $ | 64,567 | | $ | 46,106 | |
| | | | | | | |
Investing Activities | | | | | | | |
Acquisitions, additions and improvements to storage facilities | | (48,014 | ) | (312,352 | ) | (381,083 | ) |
Acquisitions, additions and improvements to storage facilities - related party | | (121,805 | ) | (37,414 | ) | (10,889 | ) |
Proceeds from sales of properties | | 17,935 | | 42 | | 6,203 | |
Proceeds from sales of marketable securities | | — | | 114,170 | | 29,825 | |
Investment in marketable securities | | — | | (19,000 | ) | (124,995 | ) |
Insurance settlements | | — | | 1,712 | | 500 | |
Decrease (increase) in restricted cash | | (1,692 | ) | 4,795 | | (8,624 | ) |
Net cash used in investing activities | | $ | (153,576 | ) | $ | (248,047 | ) | $ | (489,063 | ) |
| | | | | | | |
Financing Activities | | | | | | | |
Net proceeds from sale of common shares | | — | | — | | 378,747 | |
Proceeds from: | | | | | | | |
Revolving credit facility | | 156,500 | | 331,000 | | — | |
Unsecured Term Loan | | — | | 200,000 | | — | |
Secured term loan | | 47,444 | | — | | — | |
Mortgage loans and notes payable | | 4,651 | | — | | 409,257 | |
Short-term financing | | — | | 80,000 | | — | |
Principal payments on: | | | | | | | |
Revolving credit facility | | (28,000 | ) | (240,500 | ) | — | |
Mortgage loans and notes payable | | (32,157 | ) | (114,111 | ) | (219,875 | ) |
Short term financing | | — | | (80,000 | ) | — | |
Capital lease obligations | | — | | (39 | ) | (100 | ) |
Distributions paid to shareholders | | (66,816 | ) | (66,623 | ) | (44,532 | ) |
Distributions paid to minority partners | | (5,975 | ) | (6,017 | ) | (2,349 | ) |
Loan procurement costs | | (144 | ) | (2,398 | ) | (4,691 | ) |
Proceeds from exercise of stock options | | — | | 2,985 | | — | |
Net cash from (used in) financing activities | | $ | 75,503 | | $ | 104,297 | | $ | 516,547 | |
| | | | | | | |
Increase (decrease) in cash and cash equivalents | | (15,199 | ) | (79,183 | ) | 73,500 | |
| | | | | | | |
Cash and cash equivalents at beginning of year | | 19,716 | | 98,899 | | 25,399 | |
Cash and cash equivalents at end of year | | $ | 4,517 | | 19,716 | | $ | 98,899 | |
| | | | | | | |
Supplemental Cash Flow Information | | | | | | | |
Cash paid for interest, net of interest capitalized | | $ | 53,952 | | $ | 45,461 | | $ | 33,893 | |
Supplemental disclosure of noncash activities: | | | | | | | |
Acquisations of facilities: | | | | | | | |
Issuance of OP units | | — | | — | | (68,594 | ) |
Mortgage loans | | — | | (34,451 | ) | (99,782 | ) |
Other, net | | — | | (2,032 | ) | (1,660 | ) |
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS — (Continued)
| | | | | | | | | | | | | | | | | |
| | | THE COMPANY | | | THE PREDECESSOR | |
| | | | | | For the Period
| | | For the Period
| | | | |
| | | Year Ended
| | | October 21, 2004 to
| | | January 1, 2004 to
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | October 20,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2004 | | | 2003 | |
| | | (Dollars in thousands) | |
| |
| | | | | | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | | | | |
| Net proceeds from sale of common shares | | | 378,747 | | | | 424,989 | | | | — | | | | — | |
| Proceeds from: | | | | | | | | | | | | | | | | |
| Loans payable | | | 232,457 | | | | 270,000 | | | | 424,500 | | | | 3,934 | |
| Notes payable — related parties | | | — | | | | — | | | | 3,961 | | | | — | |
| Principal payments on: | | | | | | | | | | | | | | | | |
| Loans payable | | | (43,075 | ) | | | (437,849 | ) | | | (147,725 | ) | | | (2,093 | ) |
| Notes payable — related parties | | | — | | | | (1,600 | ) | | | (2,361 | ) | | | — | |
| Capital lease obligations | | | (100 | ) | | | (21 | ) | | | (197 | ) | | | (309 | ) |
| Cash contributions from owners | | | — | | | | — | | | | 108 | | | | 1,788 | |
| Loan made to owners | | | — | | | | — | | | | (277,152 | ) | | | — | |
| Cash distributions to owners | | | — | | | | — | | | | (18,297 | ) | | | (28,684 | ) |
| Minority interest distributions | | | (2,349 | ) | | | — | | | | — | | | | — | |
| Shareholder distributions | | | (44,532 | ) | | | — | | | | — | | | | — | |
| Pre-payment penalty on debt extinguishment | | | — | | | | (887 | ) | | | — | | | | — | |
| Loan procurement costs | | | (4,691 | ) | | | (8,554 | ) | | | (8,682 | ) | | | (365 | ) |
| | | | | | | | | | | | | | | | | |
| Net cash provided by (used in) financing activities | | | 516,457 | | | | 246,078 | | | | (25,845 | ) | | | (25,729 | ) |
| | | | | | | | | | | | | | | | | |
| NET INCREASE (DECREASE) IN CASH | | | 172,613 | | | | 26,418 | | | | (5,436 | ) | | | 5,991 | |
| CASH AND CASH EQUIVALENTS — Beginning of period | | | 28,485 | | | | 2,067 | | | | 7,503 | | | | 1,512 | |
| | | | | | | | | | | | | | | | | |
| CASH AND CASH EQUIVALENTS — End of period | | $ | 201,098 | | | $ | 28,485 | | | $ | 2,067 | | | $ | 7,503 | |
| | | | | | | | | | | | | | | | | |
| CASH PAID FOR INTEREST | | $ | 33,893 | | | $ | 9,032 | | | $ | 15,080 | | | $ | 15,648 | |
| | | | | | | | | | | | | | | | | |
| CASH PAID FOR TAXES | | $ | 315 | | | $ | 25 | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | |
| Supplemental disclosure of noncash activities: | | | | | | | | | | | | | | | | |
| Contribution of facilities from prior owners for operating partnership units: | | | | | | | | | | | | | | | | |
| Investment in real estate | | $ | — | | | $ | 10,762 | | | $ | — | | | $ | — | |
| Mortgage loans | | | — | | | | (10,365 | ) | | | — | | | | — | |
| Other, net | | | — | | | | 139 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Net assets acquired | | | — | | | | 536 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
F-8
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS — (Continued)
| | | | | | | | | | | | | | | | | |
| | | THE COMPANY | | | THE PREDECESSOR | |
| | | | | | For the Period
| | | For the Period
| | | | |
| | | Year Ended
| | | October 21, 2004 to
| | | January 1, 2004 to
| | | Year Ended
| |
| | | December 31,
| | | December 31,
| | | October 20,
| | | December 31,
| |
| | | 2005 | | | 2004 | | | 2004 | | | 2003 | |
| | | (Dollars in thousands) | |
| |
| | | | | | | | | | | | | | | | | |
| Acquisition of management company from prior owners: | | | | | | | | | | | | | | | | |
| Assets acquired (excluding cash of $730) | | | — | | | | 659 | | | | — | | | | — | |
| Liabilities assumed | | | — | | | | (536 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Net assets acquired | | | — | | | | 123 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Acquisition of facilities: | | | | | | | | | | | | | | | | |
| Issuance of OP units | | | (68,594 | ) | | | — | | | | — | | | | — | |
| Mortgage loans | | | (99,782 | ) | | | — | | | | — | | | | — | |
| Other, net | | | (1,660 | ) | | | (4,526 | ) | | | — | | | | — | |
| Acquisition of partnership interests: | | | | | | | | | | | | | | | | |
| Investment in real estate | | | — | | | | — | | | | 128,672 | | | | — | |
Contribution related tostep-up in basis | | | — | | | | — | | | | (128,672 | ) | | | — | |
| | | | | | | | | | | | | | | | | |
| Reclassification of owners’ deficit to additional paid in capital | | | — | | | | 37,961 | | | | — | | | | — | |
| Accrual for transfer of deferred financing fee assumed at merger date | | | — | | | | (2,547 | ) | | | 2,547 | | | | — | |
| Record minority interest for limited partnership units in the operating partnership by reclassifying from additional paid in capital | | | — | | | | 11,960 | | | | — | | | | — | |
| Items capitalized for funds yet to be disbursed | | | — | | | | (427 | ) | | | — | | | | — | |
| Accrual for offering costs (reclassified to shareholders equity) | | | — | | | | (3,668 | ) | | | 3,668 | | | | — | |
| Accrual for distributions | | | 16,624 | | | | 7,532 | | | | — | | | | — | |
| Grant of restricted share units and restricted shares to management executives and trustees | | | 3,148 | | | | 2,675 | | | | — | | | | — | |
See accompanying notes to the consolidated and combined financial statements.
F-9
F-8
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
1. ORGANIZATION AND NATURE OF OPERATIONS
U-Store-It Trust, (“we”a Maryland real estate investment trust (collectively with its subsidiaries, “we” or the “Company”), is a self-administered and self-managed real estate investment trust, or REIT, active in acquiring, developing and operating self-storage properties for business and personal use under month-to-month leases. As of December 31, 2007, the Company owned 409 self-storage facilities (collectively, the “Properties”) containing an aggregate of approximately 26.1 million rentable square feet. The Properties are located in 26 states throughout the United States. All references to building square footage, occupancy percentage, and the number of buildings are unaudited.
The Company owns substantially all of its assets through U-Store-It, L.P., a Delaware limited partnership (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership and, as of December 31, 2007, owned a 91.9% interest in the Operating Partnership. The Company manages its assets through YSI Management, LLC (the “Management Company”), a wholly owned subsidiary of the Operating Partnership. In addition to managing the Properties, the Management Company managed approximately 1.1 million rentable square feet related to facilities owned by related partiesp as of December 31, 2007. The Company owns 100% of U-Store-It Mini Warehouse Co. (the “TRS”), which it has elected to treat as a taxable REIT subsidiary. In general, a taxable REIT subsidiary may perform non-customary services for tenants, hold assets that the Company cannot hold directly and generally may engage in any real estate or non-real estate related business.
The Company was formed in July 2004 to succeed the self-storage operations owned directly and indirectly by Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and their affiliated entities and related family trusts (the “Amsdell Entities”). The Company commenced operations on October 21, 2004, after completing the mergers of Amsdell Partners, Inc. and High Tide LLC with and into the Company. The Company subsequently completed an initial public offering (“IPO”) of its common shares on October 27, 2004 concurrently with the consummation of various formation transactions. The IPO consisted of the sale of an aggregate of 28,750,000 common shares (including 3,750,000 shares pursuant to the exercise of the underwriters’ over-allotment option) at an offering price of $16.00 per share, generating gross proceeds of $460.0 million. The IPO resulted in net proceeds to the Company, after deducting underwriting discount and commissions, financial advisory fees and expenses of the IPO, of approximately $425.0 million. As a result of the mergers, the IPO and the formation transactions, the Company owns the sole general partner interest in U-Store-It, L.P., a Delaware limited partnership that was formed in July 1996 under the name Acquiport/Amsdell I Limited Partnership and was renamed U-Store-It, L.P. upon the completion of the IPO (the “operating partnership”), and owned approximately 97% of the aggregate partnership interests in the operating partnership at December 31, 2004. The Company is a real estate company engaged in the business of owning, acquiring, developing and operating self-storage properties for business and personal use undermonth-to-month leases and is operated as a real estate investment trust (“REIT”), for federal income tax purposes. All of the Company’s assets are held by, and operations are conducted through, the operating partnership and its subsidiaries.
The financial statements covered in this report represent the results of operations and financial condition of Acquiport/Amsdell (the “Predecessor”) prior to the IPO and the formation transactions (“Formation Transactions”) and of the Company after October 21, 2004. The Predecessor was not a legal entity but rather a combination of certain real estate entities and operations as described below. Concurrent with the consummation of the IPO, the Company and the operating partnership, together with the partners and members of affiliated partnerships and limited liability companies of the Predecessor and other parties which held direct or indirect ownership interests in the properties (the “Participants”), completed the Formation Transactions. The Formation Transactions were designed to (i) continue the operations of the operating partnership, (ii) acquire the management rights with respect to the Predecessor’s existing facilities and three facilities contributed to the operating partnership by entities owned by Robert J. Amsdell and Barry L. Amsdell; (iii) enable the Company to raise necessary capital for the operating partnership to repay a portion of the existing term loan provided by an affiliate of Lehman Brothers and other indebtedness related to the three facilities acquired by the operating partnership from entities owned by Robert J. Amsdell and Barry L. Amsdell and on four of the other existing facilities; (iv) enable the Company to qualify as a REIT for federal income tax purposes commencing the day prior to the closing of the IPO; and (v) permit such entities owned by Robert J. Amsdell and Barry L. Amsdell to defer the recognition of gain related to the three facilities that were contributed to the operating partnership. These Formation Transactions are described in detail in the Company’s Registration Statement onForm S-11 filed with the Securities and Exchange Commission (the “SEC”) in connection with the IPO.
In October 2005, the Company completed a secondaryfollow-on public offering, pursuant to which it sold an aggregate of 19,665,000 common shares (including 2,565,000 shares pursuant to the exercise of the underwriters’ option) at an offering price of $20.35 per share, for gross proceeds of $400.2 million. The offering resulted in net proceeds to the Company, after deducting underwriting discount and commissions and expenses of the offering, of approximately $378.7 million. As a result of the secondary offering and the National Self Storage acquisition (see Note 3) the Company owns approximately 92% of the aggregate partnership interests in the operating partnership at December 31, 2005.
F-10
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
Through the operating partnership, the Company owns and manages 339 and 201 storage facilities as of December 31, 2005 and 2004, respectively.
| |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Principles of Consolidation and Combination — The accompanying consolidated financial statements include all of the accounts of the Company, the operating partnership and wholly ownedits majority-owned and/or controlled subsidiaries. The mergersportion of Amsdell Partners, Inc. and High Tide LLC with and intothese entities not owned by the Company is presented as minority interest as of and during the property interests contributed to the operating partnership by the Predecessor have been accounted for as a reorganization of entities under common control and accordingly were recorded at the Predecessor’s historical cost basis. Prior to the combination, the Company had no significant operations; therefore, the combined operations for the period prior to October 21, 2004 represent the operations of the Predecessor. The combination did not require any material adjustments to conform the accounting policies of the separate entities.periods consolidated. All significant intercompany balancesaccounts and transactions have been eliminated in the consolidated and combinedconsolidation.
Estimates
The preparation of financial statements. The real estate entities includedstatements in conformity with accounting principles generally accepted in the accompanying consolidatedUnited States of America requires management to make estimates and combinedassumptions 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 Predecessor have been consolidated and combined on the basis that, for the periods presented, such entities were under common management.
Operating Segment — The Company has one reportable operating segment; it owns, operates, develops, and manages storage facilities. The storage facilities are located in major metropolitan areas and have numerous tenants per facility. No single tenant represents 1% or more of the Company’s revenues. The facilities in Florida, California, Illinois and New Jersey provided approximately 24%, 11%, 10% and 8%, respectively, of total revenues for the year ended December 31, 2005.
reporting period. Actual results could differ from those estimates.Storage Facilities —
Storage facilities are recordedcarried at historical cost less accumulated depreciation. Depreciation ondepreciation and impairment losses. The cost of storage facilities reflects their purchase price or development cost. Costs incurred for the buildingsacquisition and equipment is recorded onrenovation of a straight-line basisstorage facility are capitalized to the Company’s investment in that property. Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives, which range from five to 40 years. Expenditures for significant renovations or improvements that extend the useful life of assetslives.
F-9
Purchase Price Allocation
When facilities are capitalized. Repairs and maintenance costs are expensed as incurred.
Upon acquisition of a facility, we allocateacquired, the purchase price
is allocated to the tangible and intangible assets acquired and liabilities assumed based on estimated fair values.
Acquisitions of portfoliosWhen a portfolio of facilities
areis acquired, the purchase price is allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates, which take into account the relative size, age and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available. Allocations to the individual assets and liabilities are based upon comparable market sales information for land,
buildingbuildings and improvements and estimates of depreciated replacement cost of equipment.
In allocating the purchase price, the Company determines whether the acquisitions includeacquisition includes intangible assets or liabilities. Substantially all of the leases in place at acquired propertiesfacilities are at market rates, as the majority of the leases aremonth-to-month contracts. Accordingly, to date no portion of the purchase price has been allocated to aboveabove- or below marketbelow-market lease intangibles. The Company also considers whether in-place, at market leases represent an intangible asset. Based on the Company’s experience, leases of this nature generally re-let in less than 30 days andlease-up costs are minimal. Accordingly, the Company had no intangible assets recorded for in-place, at market leases as of December 31, 2005. Additionally, toTo date, no intangible asset has been recorded for the value of tenant relationships, because the Company does not have any concentrations of significant tenants and the average tenant turnover is fairly frequent.
The Company recorded a $6.8 million intangible asset to recognize the value of in-place leases related to its acquisitions in 2007.Depreciation and Amortization
The costs of self-storage facilities and improvements are depreciated using the straight-line method based on useful lives ranging from five to 40 years.
Impairment of Long-Lived Assets
We evaluate long-lived assets as “held for use” for impairment when events and circumstances indicate that there may be impairment. The carrying value of these long-lived assets areis compared to the undiscounted future net operating cash flows attributable to the assets. An impairment loss is recorded if the net carrying value of the asset exceeds the fair value based on its undiscounted future net operating cash flows attributable to the asset and circumstances indicate that the carrying value of the real estate asset may not be recoverable.
F-11
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. The Company recordedApproximately $2.3 million and $0.4 million of asset impairment charges through December 31,were recorded during 2005 (See Note 15 to the Consolidated and Combined Financial Statements).
2007, respectively.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 facility (or group of facilities), (b) the facility is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such facilities, (c) an active program to locate a buyer and other actions required to complete the plan to sell the facility have been initiated, (d) the sale of the facility is probable and transfer of the asset is expected to be completed within in one year, (e) the facility is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Typically these criteria are all met when the relevant asset is under contract, significant non-refundable deposits have been made by the potential buyer, the assets are immediately available for transfer and there are no contingencies related to the sale that may prevent the transaction from closing. In most transactions, these conditions or criteria are not satisfied until the actual closing of the transaction; and, accordingly, the facility is not identified as held for sale until the closing actually occurs. However, each potential transaction is evaluated based on its separate facts and circumstances.
During 2005,2007, the Company sold three storage facilities in South Carolina and two additional facilities in Arizona. No facilities were sold during 2006 while four of its storage facilities located in Ohio that were acquired as part of the Liberty Self-Stor Portfolio acquisition (see Note 3). During 2003, the Predecessor sold five of its storage facilities located throughout the United States.during 2005. These sales have been accounted for as discontinued operations and, accordingly, the accompanying financial statements and notes reflect the results of operations of the storage facilities sold as discontinued operations (see Note 9)10). It is our policy to allocate interest expense to facilities disposed of by sale based on the principal amount of the debt that will or could be paid off upon sale.
Cash and Cash Equivalents —
Cash and cash equivalents are highly-liquid investments with original maturities of three months or less. The Company considers all highly liquid instruments with maturitiesmaintains cash equivalents in financial institutions in excess of 90 daysinsured limits, but believes this risk is mitigated by only investing in or less as cash equivalents.
through major financial institutions.Restricted Cash —
Restricted cash consists of purchase deposits and cash deposits required for debt service requirements, capital replacement, purchase deposits, and expense reserves in connection with the requirements of our loan agreements.
F-10
Loan Procurement Costs —
Loan procurement costs related to borrowings consist of $13.0$10.3 million and $8.4$10.1 million at December 31, 20052007 and 2004, respectively. These amounts2006, respectively and are reported net of accumulated amortization of $2.6$4.2 million and $0.8$2.5 million as of December 31, 20052007 and 2004,2006, respectively. The costs are amortized over the life of the related debt using the effective interest rate method and reported as loan procurement amortization expense.
Marketable Securities
The Company accounts for its investments in debt and equity securities according to the provisions of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, which requires securities classified as “available-for-sale” to be stated at fair value. Adjustments to fair value of available-for-sale securities are recorded as a component of other comprehensive income (loss). A decline in the market value of equity securities below cost, that is deemed to be other than temporary, results in a reduction in the carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. At December 31, 2005, we had $95.2 million in auction rate securities (“ARS”) and variable rate demand notes classified as available-for-sale securities that were all sold in 2006. We had no realized or unrealized gains or losses related to these securities during the years ended December 31, 2007 and 2006. All income related to these investments was recorded as interest income.
Other Assets —
Other assets consist primarily of accounts receivable, insurance recovery receivablesprepaid expenses and prepaid expenses.intangible assets. Accounts receivable was $4.2were $2.6 million and $2.3$3.7 million as of December 31, 20052007 and 2004,2006, respectively. The Company has recorded an allowance of approximately $0.8$0.5 million and $0.3$1.0 million, respectively, related to accounts receivable as of December 31, 20052007and 2006. The net carrying value of intangible assets as of December 31, 2007 and 2004,2006 was $4.6 million and $0.0, respectively.
Environmental Costs —
Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of additional facilities. Whenever the environmental assessment for one of our facilities indicates that a facility is impacted by soil or groundwater contamination from prior owners/operators or other sources, we will work with our environmental consultants and where appropriate, state governmental agencies, to ensure that the facility 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.
F-12
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
Revenue Recognition — Management has determined that all of our leases are operating leases. Rental income is receivedrecognized in accordance with the terms of the leases, which generally aremonth-to-month. Revenues from long-term operating leases are recognized on a straight-line basis over the term of the respective lease. The excess of rents received over amounts contractually due pursuant to the underlying leases is included in rents received in advancedeferred revenue in the accompanying consolidated and combined balance sheets and contractually due but unpaid rents are included in other assets.
Costs Associated with Exit or Disposal Activities
In October 2006, the Company committed to a plan to relocate its accounting, finance and information technology functions to the Philadelphia, Pennsylvania area. As part of the relocation of these functions, the Company provided severance arrangements for certain existing employees related to those functions. At the time the severance arrangements were entered into, the Company estimated a total expense of $470,000, of which $45,000 was paid in 2006 and the remainder was paid in 2007.
In August 2007, the Company abandoned certain office space in Cleveland, OH that was previously used for its corporate offices. The related leases have expiration dates ranging from December 31, 2008 through December 31, 2014. Upon vacating the space, the Company entered into a sub-lease agreement with a sub-tenant to lease the majority of the space for the duration of the term.
As a result of this exit activity, the Company recognized a “Lease abandonment charge” of $1.3 million. The charge is comprised of approximately $0.8 million of costs that represent the present value of the net cash flows associated with leases and the sub-lease agreement (“Contract Termination Costs”) and approximately $0.5 million of costs associated with the write-off of certain assets related to the abandoned space (“Other Associated Costs”). The Contract Termination Costs of $0.8 million are presented as “Accounts payable and accrued rent” and the Other Associated Costs of $0.5 million were
F-11
accounted for as a reduction of “Storage facilities.” The Company will amortize the Contract Termination Costs against rental expense over the remaining life of the respective leases.
Advertising Costs —
The Company incurs advertising costs primarily attributable to print advertisements in telephone books. The Company recognizes the costs when the related telephone book is first published. The Company recognized $3.6$4.3 million, $2.4$4.4 million and $1.0$3.6 million in advertising expenses for the years ended 2007, 2006 and 2005, 2004 and 2003, respectively.
Equity Offering Costs —
Underwriting discount and commissions, financial advisory fees and offering costs are reflected as a reduction to additional paid-in capital.
Other Property Related Income —
Other property related income consists primarily of late fees, and administrative charges, prior to October 27, 2004. Revenues from sales of storage supplies and other ancillary revenues and related costs were earned by U-Store-It Mini Warehouse Co. (the “Property Manager”) prior to October 27, 2004 and are not included in the operations of the Predecessor. Effective October 27, 2004, upon acquisition of the Property Manager, these ancillary revenues and costs are included in our operations, and YSI Management, LLC, a wholly owned subsidiary of the operating partnership, became the new property manager of the facilities.
revenues.Capitalized Interest —
The Company capitalizes interest incurred onthat is directly associated with construction activities until the construction of material storage facilities.asset is placed into service. Interest is capitalized to the related assets using a weighted-average rate of the Company’s credit facility and loans payable.outstanding debt. The Company capitalized $0.1 million during 2007, $0.1 million during 2006 and did not capitalize any interest for the years ended December 31, 2005 and 2004.
during 2005.Derivative Financial Instruments —
We carry all derivatives on the balance sheet at fair value. We determineddetermine the fair value of derivatives by reference to quoted market prices. The accounting for changes in the fair value of a derivative instrument depends on whether the derivative has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it. Our use of derivative instruments has been limited to cash flow hedges of certain interest rate risks. At December 31, 2005 and 2004,2007 the Company had interest rate swap agreements for notional principal amounts aggregating $75 million. The Company had no outstanding derivative contracts.
contracts at December 31, 2006.Income Taxes —
The Company has elected to be taxed as a REITreal estate investment trust under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”), beginning with the period from October 21, 2004 (commencement of operations) through December 31, 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 tax basis in the Company’s assets was $1.5 billion as of December 31, 2007 and $1.4 billion as of December 31, 2006.
The Company has been organized and has operated inis subject to a manner that it believes has allowed it to qualify for taxation as a REIT under the Code commencing, with the period from October 21, 2004 (commencement of operations) through December 31, 2004. and the Company intends to continue to be organized and operate in this manner. As a REIT, the Company4% federal excise tax if sufficient taxable income is not required to pay federal corporate income taxes on its taxable income todistributed within prescribed time limits. The excise tax equals 4% of the extent it is currently distributed to our shareholders. The characterizationannual amount, if any, by which the sum of (a) 85% of the Company’s dividends for 2005 was 46% ordinary income and 54% return(b) 95% of capital.
However, qualification and taxation as a REIT depends upon the Company’s
ability to meetnet capital gain exceeds cash distributions and certain taxes paid by the
various qualification tests imposed under the Code related to annual operating results, asset diversification, distribution levels and diversity of stock ownership. Accordingly, no assurance can be given that the Company will continue to be organizedCompany. No excise tax was incurred in 2007, 2006, or
continue to operate in a manner so as to remain qualified as a REIT. If the Company fails to qualify as a REIT in any taxable year, the Company will be2005.TRS’s are subject to federal income tax (including any applicable alternative minimum tax) on the Company’s taxable income at regular corporate tax rates.
F-13
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
The Company has elected to treat U-Store-It Mini Warehouse Co. as a taxable REIT subsidiary (a “TRS”). In general, a TRS may perform non-customary services for tenants, hold assets that the Company cannot hold directly and generally may engage in any real estate or non-real estate related business. A TRS is subject to corporate federal and state income taxes on its taxable income at regular statutory tax rates.taxes. The Company has included in “other income” $0.0 and $0.1 million of income taxes for 2005 and the period from October 27, 2004 through December 31, 2004, respectively and $0.1 million is included in “other assets” asTRS recorded a net deferred tax asset atof $0.5 million and $0.3 million as of December 31, 20052007 and 2004.
Each member2006, respectively, related to expenses which are deductible for tax purposes in future periods.Minority Interests
Minority Interests include income allocated to holders of the PredecessorOperating Partnership Units (the “OP Minority Interests”). Income is treated as a partnership for federal and state income tax purposes, soallocated to the tax effectsOP Minority Interests based on their ownership percentage of the Predecessor’s operations areOperating Partnership. This ownership percentage, as well as the responsibilitytotal net assets of the partnersOperating Partnership, changes when additional shares of our common stock or Operating Partnership Units are issued. Such changes result in an allocation between shareholders’ equity and members of these entities. Accordingly, the Predecessor does not record any provision for income taxesMinority Interests in the consolidatedConsolidated Balance Sheets. Due to the number of such capital transactions that occur each period, we have presented a single net effect of all such allocations for the period as the “Adjustment for Minority Interest in
F-12
Operating Partnership” in our Consolidated Statements of Shareholders’ Equity and combined financial statements.
Owners’ Equity (Deficit) (rather than separately allocating the minority interest for each individual capital transaction). Additionally, the Company accounts for its minority interests subject to redemption provisions under the “Disclosure Only” approach and accordingly has not adjusted the carrying value of the Company’s minority interests for changes in the fair value of the related redemption provisions.Earnings per Share —
Basic earnings per share is calculated based on the weighted average number of common shares and restricted share unitsshares outstandingand/or vested during the period (prior to the dilutive impact of stock options and contingently issued shares).period. Diluted earnings per share is calculated using the weighted average number of shares outstanding during the period adjustedby 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 thatmethod. The total dilutive impact of these items totaled approximately 22,000, 121,000 and 83,000 in 2007, 2006 and 2005, respectively, and was included in the calculation of diluted earnings per share, unless the effect of such increaseinclusion would be anti-dilutive. There were no dilutive shares for the period from October 27, 2004 through December 31, 2004.
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 was recorded ratably over the vesting period relating to such contingently issued shares and options. The Company has elected to recognize compensation expense on a straight-line method over the requisite service period. Additionally, certain restricted share unitsshares awarded to Robert J. Amsdell, our chief executive officer vestformer Chairman and Chief Executive Officer, vested immediately upon his retirement from the company asCompany by their terms. Since he has reached the retirement age set forth in his award agreement. Accordingly,during 2005, share compensation expense related to this issuance was expensed fully in 2005.
Estimates — Foreign Currency
The preparation of financial statements in conformity with accounting principles generally accepted inof foreign subsidiaries are translated to U.S. Dollars using the United States of America requires management to make estimates and assumptions that affect the reported amounts ofperiod-end exchange rate for assets and liabilities and disclosure of contingent assetsan average exchange rate for each period for revenues, expenses, and liabilities atcapital expenditures. The local currency is the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Minority Interest — As of September 30, 2005, the Company recorded the operating partnership units issued in connection with the National Self Storage transaction as conditionally redeemable as the result of a special redemption right (see Note 3 and Note 6 for a discussion of the National Self Storage transaction). On October 25, 2005, the sellers in the National Self Storage transaction agreed to terminate the Special Redemption Right, effective as of July 15, 2005 (the first date on which National Self Storage facilities were acquired by the operating partnership under the purchase agreement). From the issuance date until October 25, 2005, the Company elected to accrete changes in the redemption value of the National Self Storage Units issued over the period from the date of issuance to the earliest redemption date (one-year from the date of initial issuance) on a pro rata basis. Upon termination of the Special Redemption Right, the Company classified these units in minority interest. The amount of accretion recorded through October 25, 2005 was approximately $3.0 million. Effective October 26, 2005, minority interest represents issued and outstanding operating partnership units. Income is allocated to the holders of the operating partnership units based on their ownership percentage of the operating partnership. This ownership percentage, as well as the total net assets of the operating partnership, change when additional units are issued. Such changes results in an allocation between stockholders’ transactionsfunctional currency for the periodCompany’s foreign subsidiaries. Translation adjustments for foreign subsidiaries are recorded as a component of accumulated other comprehensive loss in shareholders’ equity. The Company recognizes transaction gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other than the “Adjustment for Minority Interestfunctional currency in operating partnership” (rather than separately allocating the minority interest for each individual capital transaction).
earnings as incurred.
F-14
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
Reclassifications — Certain prior year amounts have been reclassified to conform to current year presentation.
Recent Accounting Pronouncements — In March 2005, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 47, (“FIN 47”), “Accounting for Conditional Asset Retirement Obligations”. FIN 47 clarifies the definition and treatment of conditional asset retirement obligations as discussed in FASB Statement No. 143, Accounting for Asset Retirement Obligations. A conditional asset retirement obligation is defined as an asset retirement activity in which the timingand/or method of settlement are dependent on future events that may be outside the control of the Company. FIN 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. FIN 47 is intended to provide more information about long-lived assets, more information about future cash outflows for these obligations and more consistent recognition of these liabilities. The Company adopted FIN 47 during 2005 and the adoption of this interpretation did not have a material impact on the Company.
In December
2004,2007, the FASB issued Statement of Financial Accounting Standards
(“SFAS”) No.
123141 (Revised
2004)2007),
“Share-Based Payment”Business Combinations (“FAS 141(R)”). FAS 141(R) establishes principles and requirements for recognizing identifiable assets acquired, liabilities assumed, noncontrolling interest in the acquiree, goodwill acquired in the combination or the gain from a bargain purchase, and disclosure requirements. Under this revised statement, all costs incurred to effect an acquisition will be recognized separately from the acquisition. Also, restructuring costs that are expected but the acquirer is not obligated to incur will be recognized separately from the acquisition. FAS 141(R) is effective for the Company beginning with its quarter ending March 31, 2009. The Company is currently assessing the potential impacts, if any, on its consolidated financial statements.In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements (“FAS 160”). FAS 160 requires that ownership interests in subsidiaries held by parties other than the parent are clearly identified. In addition, it requires that the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the income statement. FAS 160 is effective for the Company beginning with its quarter ending March 31, 2009. The Company is currently assessing the potential impacts, if any, on its consolidated financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115 (“SFAS No. 123-R”159”), which. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value, with unrealized gains and losses related to these financial instruments reported in earnings at each subsequent reporting date. This Statement is a revisioneffective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The Company is in the process of evaluating the impact of SFAS No. 123, “Accounting for Stock-Based Compensation.”159 on its financial statements.
In September 2006, the FASB issued SFAS No. 123-R supersedes Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and amends 157, Fair Value Measurements (“SFAS No. 95, “Statement of Cash Flows.”157”). SFAS No. 123-R requires the157 provides guidance for using fair value of all share-based payments to employeesmeasure assets and liabilities. This statement clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing the asset or liability. SFAS No. 157 establishes a
F-13
fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value. This statement is effective in fiscal years beginning after November 15, 2007. The Company believes that the adoption of this standard on January 1, 2008 will not have a material effect on our consolidated financial statements.
In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement attribute for the consolidatedfinancial statement recognition and measurement of operations. a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on description, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 became effective for the Company on January 1, 2007.
Operating Segment
The Company early adoptedhas one reportable operating segment; it owns, operates, develops, and manages storage facilities.
SFAS No. 123-RConcentration of Credit Risk
The storage facilities are located in 2004major metropolitan and included $2.2 millionrural areas and $2.5 millionhave numerous tenants per facility. No single tenant represents 1% or more of compensation expense relating to outstanding deferred shares, restricted sharesthe Company’s revenues. The facilities in Florida, California, Texas and optionsIllinois provided total revenues of approximately 19%, 15%, 8% and 7%, respectively, for the year ended December 31, 2007. The facilities in its 2005Florida, California, Illinois and 2004 statementNew Jersey provided total revenues of operations, respectively.
approximately 19%, 16%, 7% and 6%, respectively for the year ended December 31, 2006.3. STORAGE FACILITIES
The following summarizes the real estate assets of the Company as of:
| | | | | | | | | |
| | | December 31,
| | | December 31,
| |
Description | | 2005 | | | 2004 | |
| | | (Dollars in thousands) | |
| |
| Land | | $ | 301,188 | | | $ | 136,168 | |
| Buildings and improvements | | | 958,759 | | | | 635,718 | |
| Equipment | | | 125,456 | | | | 79,742 | |
| Construction in progress | | | 1,383 | | | | — | |
| | | | | | | | | |
| Total | | | 1,386,786 | | | | 851,628 | |
| Less accumulated depreciation | | | (140,491 | ) | | | (122,473 | ) |
| | | | | | | | | |
| Storage facilities — net | | $ | 1,246,295 | | | $ | 729,155 | |
| | | | | | | | | |
of December 31, 2007 and December 31, 2006: | | December 31, | | December 31, | |
| | 2007 | | 2006 | |
| | (in thousands) | |
Land | | $ | 393,715 | | $ | 370,196 | |
Buildings and improvements | | 1,324,168 | | 1,226,690 | |
Equipment | | 193,031 | | 173,496 | |
Construction in progress | | 5,482 | | 1,482 | |
Total | | 1,916,396 | | 1,771,864 | |
Less accumulated depreciation | | (269,278 | ) | (205,049 | ) |
Storage facilities — net | | $ | 1,647,118 | | $ | 1,566,815 | |
The carrying value of storage facilities has increased from December 31, 2004,2006 to December 31, 2007, primarily as a result of the net acquisition17 acquisitions in 2007. These acquisitions have been allocated to the various asset classes and intangibles disclosed in Note 4 based upon preliminary data and are expected to be finalized during the first half of 138 self storage facilities in 2005.2008 once the Company completes its analysis of tangible and intangible values.
F-14
The Company completed the following acquisitions, dispositions and consolidations duringfor the yearyears ended December 31, 2005:
| | |
| • | Consolidation of Vero Beach, Florida Facilities. In January 2005, the Company consolidated the operations of its two self-storage facilities located in Vero Beach, Florida into one facility. |
|
| • | Acquisition of Option Facility. In January 2005, the Company purchased the San Bernardino VII, California facility from Rising Tide Development (a related party) for approximately $7.3 million, consisting of $3.8 million in cash (which cash was used to pay off mortgage indebtedness secured by |
2006 and 2007:
F-15
| | | | Total Number of | | Purchase / Sale Price (in | |
Facility/Portfolio | | Transaction Date | | Facilities | | thousands) | |
| | | | | | | |
2007 Acquisitions | | | | | | | |
Sanford Portfolio | | January 2007 | | 1 | | $ | 6,300 | |
Grand Central Portfolio | | January 2007 | | 2 | | 13,200 | |
Rising Tide Portfolio | | September 2007 | | 14 | | 121,000 | |
| | | | 17 | | $ | 140,500 | |
| | | | | | | |
2007 Dispositions | | | | | | | |
South Carolina Assets | | May 2007 | | 3 | | $ | 12,750 | |
Arizona Assets | | December 2007 | | 2 | | 6,440 | |
| | | | 5 | | $ | 19,190 | |
| | | | | | | |
2006 Acquisitions | | | | | | | |
Nashville, TN Portfolio | | January 2006 | | 2 | | $ | 13,100 | |
Dallas, TX Portfolio | | January 2006 | | 2 | | 11,500 | |
U-Stor Self Storage Portfolio | | February 2006 | | 3 | | 10,800 | |
Sure Save Portfolio | | February 2006 | | 24 | | 164,500 | |
Texas Storage Portfolio | | March 2006 | | 4 | | 22,500 | |
Nickey Portfolio | | April 2006 | | 4 | | 13,600 | |
SecurCare Portfolio | | May 2006 | | 4 | | 35,700 | |
Texas Storage Portfolio | | June 2006 | | 1 | | 6,500 | |
Jernigan Portfolio | | July 2006 | | 9 | | 45,300 | |
U-Stor Self Storage Portfolio | | August 2006 | | 1 | | 3,500 | |
Bailes Portfolio | | August 2006 | | 3 | | 15,600 | |
In & Out Self Storage Portfolio | | August 2006 | | 1 | | 7,600 | |
Texas Storage Portfolio | | September 2006 | | 2 | | 12,200 | |
| | | | 60 | | $ | 362,400 | |
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
| | |
| | the facility) and $3.5 million in units in our operating partnership. This facility contains approximately 84,000 rentable square feet. |
| | |
| • | Acquisition of Gaithersburg, MD Facility. In January 2005, the Company acquired one self-storage facility in Gaithersburg, Maryland for consideration of approximately $10.7 million, consisting of $4.3 million in cash and the assumption of $6.4 million of indebtedness. The purchase price was adjusted during the second quarter of 2005 to $11.8 million, primarily as a result of the fair market value adjustment for debt. This facility contains approximately 87,000 rentable square feet. |
|
| • | Acquisition of Ford Storage Portfolio. In March 2005, the Company acquired five self-storage facilities, located in central Connecticut, from Ford Storage for consideration of approximately $15.5 million. These facilities total approximately 258,000 rentable square feet. |
|
| • | Acquisition ofA-1 Self Storage Portfolio. In March 2005, the Company acquired five self-storage properties, located in Connecticut, fromA-1 Self Storage for consideration of approximately $21.7 million. These facilities total approximately 201,000 rentable square feet. The Company now operates two of these facilities as one facility. In May 2005, the Company acquired an additional self-storage facility fromA-1 Self Storage for approximately $6.4 million in cash. This facility contains approximately 30,000 rentable square feet and is located in New York. |
|
| • | Acquisition of Option Facilities. In March 2005, the Company purchased the Orlando II, Florida and the Boynton Beach II, Florida facilities from Rising Tide Development (a related party) for consideration of approximately $11.8 million, consisting of $6.8 million in cash and $5.0 million in units of our operating partnership. An adjustment to the purchase price was finalized during the second quarter of 2005, resulting in a revised purchase price of approximately $10.1 million, which consisted of $6.8 million in cash and $3.3 million in units of our operating partnership after a price reduction of $1.7 million in May 2005. These facilities total approximately 155,000 rentable square feet. |
|
| • | Acquisition of Liberty Self-Stor Portfolio. In April 2005, the Company acquired 18 self-storage facilities from Liberty Self-Stor Ltd., a subsidiary of Liberty Self-Stor, Inc., for consideration of approximately $34.0 million. These facilities total approximately 926,000 rentable square feet and are located in Ohio and New York. In June 2005, the Company sold one of these facilities, containing approximately 17,000 rentable square feet, for approximately $0.6 million. In addition, in November 2005 the Company sold three more of these facilities, containing approximately 184,000 rentable square feet, for approximately $5.6 million. |
|
| • | Acquisition of Frisco I & II, TX and Ocoee, FL Facilities. In April 2005, the Company acquired three self-storage facilities from two parties for consideration of approximately $14.9 million. The final purchase price was adjusted to $15.2 million primarily as a result of the fair market value adjustment of debt. These facilities total approximately 199,000 rentable square feet and are located in Texas and Florida. |
|
| • | Acquisition of Extra Closet Facilities. In May 2005, the Company acquired two facilities from Extra Closet for consideration of approximately $6.8 million. These facilities total approximately 99,000 rentable square feet and are located in Illinois. |
|
| • | Acquisition of Tempe, AZ Facility. In July 2005, the Company acquired one self-storage facility, located in Tempe, Arizona, for consideration of approximately $2.9 million. This facility contains approximately 54,000 rentable square feet. |
|
| • | Acquisition of Clifton, NJ Facility. In July 2005, the Company acquired one self-storage facility, located in Clifton, New Jersey, for consideration of approximately $16.8 million. This facility contains approximately 106,000 rentable square feet. |
F-16
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
| | |
| • | Acquisition of National Self Storage Portfolio. In July 2005, the Company completed the acquisition of 71 self-storage facilities from various partnerships and other entities affiliated with National Self Storage and the Schomac Group, Inc. (“National Self Storage”) for an aggregate consideration of approximately $212.0 million. The final purchase price was adjusted to $214.5 million during the third quarter of 2005 primarily as a result of the fair market value adjustment of debt. The final purchase price consisted of approximately $61.8 million of units in our operating partnership, the assumption of approximately $83.0 million of outstanding debt, including the fair market value adjustment of debt, by our operating partnership, and approximately $69.7 million in cash. These facilities total approximately 3.7 million rentable square feet and include self-storage facilities located in our existing markets in Southern California, Arizona and Tennessee and in new markets in Texas, Northern California, New Mexico, Colorado and Utah. The Company now operates two of these facilities as one facility. |
|
| • | Acquisition of Elizabeth, NJ and Hoboken, NJ Facilities. In August 2005, the Company acquired two self-storage facilities, one located in Elizabeth, New Jersey and one in Hoboken, New Jersey, for consideration of approximately $8.2 million. These facilities total approximately 75,000 rentable square feet. |
|
| • | Acquisition of Colorado Portfolio. In September 2005, the Company acquired seven self-storage facilities located in Colorado for consideration of approximately $19.5 million. These facilities total approximately 317,000 rentable square feet. The purchase price was adjusted during the fourth quarter of 2005 to $19.6 million as a result of additional acquisition costs. |
|
| • | Acquisition of Miami, FL Facilities. In September 2005, the Company acquired two self-storage facilities located in Miami, Florida for consideration of approximately $17.8 million. These facilities total approximately 152,000 rentable square feet. The Company now operates these two facilities as one facility. |
|
| • | Acquisition of Pensacola, FL Facility. In September 2005, the Company acquired one self-storage facility located in Pensacola, Florida for consideration of approximately $7.9 million. This facility contains approximately 79,000 rentable square feet. |
|
| • | Acquisition of Texas Portfolio. In September 2005, the Company acquired four self-storage facilities located in Texas for consideration of approximately $15.6 million. These facilities total approximately 227,000 rentable square feet. The purchase price was adjusted during the fourth quarter of 2005 to $15.5 million, as a result of additional acquisition costs. In November 2005, the Company acquired an additional self-storage facility from this seller for approximately $5.5 million in cash. This facility contains approximately 76,000 rentable square feet and is located in San Antonio, Texas. The Company also has agreed to acquire from this seller an additional seven self-storage facilities, for additional consideration of approximately $40.7 million. As described below in Note 18, Subsequent Events. The Company acquired four of the seven facilities, for consideration of approximately $22.5 million in March of 2006, and the Company expects to acquire the remaining three facilities, for aggregate consideration of approximately $18.2 million, during the first half of 2006. |
|
| • | Acquisition of Dallas, TX Portfolio. In October 2005, the Company acquired six self-storage facilities located in Dallas, Texas for consideration of approximately $17.6 million, consisting of approximately $12.5 million in cash and the assumption of approximately $5.1 million of indebtedness. The final purchase price was adjusted during the fourth quarter of 2005 to $17.9 million primarily as a result of the fair market value adjustment of debt. The facilities total approximately 323,000 rentable square feet. The Company also has agreed to acquire from this seller an additional two self-storage facilities, for additional consideration of approximately $4.4 million and the assumption of $7.1 million of existing |
F-17
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
| | |
| | debt. As described below in Note 18, Subsequent Events, the Company acquired the two facilities, for consideration of approximately $11.5 million, in January 2006. |
| | |
| • | Acquisition of Jacksonville, FL Facility. In November 2005, the Company acquired one self-storage facility located in Jacksonville, Florida for consideration of approximately $7.2 million. This facility contains approximately 79,000 rentable square feet. |
|
| • | Acquisition of California Portfolio. In December 2005, the Company acquired six self-storage facilities located in California for consideration of approximately $57.0 million. The final purchase price was adjusted during the fourth quarter of 2005 to $57.2 million primarily as a result of the assumption of certain promissory notes. These facilities total approximately 448,000 rentable square feet. |
|
| • | Acquisition of Fredericksburg, VA Facilities. In December 2005, the Company acquired two self-storage facilities located in Fredericksburg, Virginia for consideration of approximately $13.3 million. The purchase price was adjusted during the fourth quarter of 2005 to $13.4 million as a result of additional acquisition costs. These facilities total approximately 131,000 rentable square feet. |
|
| • | Acquisition of Nashville, TN Portfolio. In December 2005, the Company acquired three self-storage facilities located in Nashville, Tennessee for consideration of approximately $14.7 million. These facilities total approximately 269,000 rentable square feet. The Company also agreed to acquire from this seller an additional two self-storage facilities, for additional consideration of approximately $13.1 million. As described below in Note 17, Subsequent Events, the Company acquired the two facilities, for consideration of approximately $13.1 million, in January 2006. |
The above acquisitions are included in the Company’s results of operations from and after the date of acquisition. Self-storage facility acquisitions are initially recorded at the estimated fair values of the net assets acquired at the date of acquisition. These values are based in part on preliminary third-party market valuations. Because these fair values are based on currently available information and assumptions and estimates that the Company believes are reasonable at such time, they are subject to reallocation as additional information becomes available.
The purchase price allocations were finalized during the fourth quarter of 2005 for all acquisitions completed through September 30, 2005. As a result, during the fourth quarter, the Company adjusted the allocation of certain assigned values of fixed assets of approximately $2.5 million, related to acquisitions completed in the third quarter, primarily between land and buildings. The adjustment did not have a material impact on depreciation expense for the period. During the first half of 2006 the Company anticipates finalizing purchase price allocations for acquisitions completed during the fourth quarter of 2005.
The following table summarizes the
change in number of self-storage facilities
placed into service for 2004from January 1, 2006 through December 31, 2007: | | 2007 | | 2006 | |
Balance - Beginning of year | | 399 | | 339 | |
Facilities acquired | | 17 | | 60 | |
Facilities consolidated | | (2 | ) | — | |
Facilities sold | | (5 | ) | — | |
Balance - End of year | | 409 | | 399 | |
4. INTANGIBLE ASSETS
In conjunction with the Company’s 2007 acquisitions, the Company has allocated a portion of the purchase price to finite-lived intangible assets related to the value of in-place leases, valued at approximately $6.8 million. The Company recognized approximately $2.2 million of amortization expense during 2007. The amortization period of these assets is 12 months and 2005:
| | | | | | | | | |
| | | 2005 | | | 2004 | |
| |
| Balance — Beginning of year | | | 201 | | | | 155 | |
| Facilities acquired | | | 146 | | | | 46 | |
| Facilities consolidated(1) | | | (4 | ) | | | — | |
| Facilities sold | | | (4 | ) | | | — | |
| | | | | | | | | |
| Balance — End of Year | | | 339 | | | | 201 | |
| | | | | | | | | |
| | |
(1) | | The Company operates two of the facilities owned as of December 31, 2004 as one facility and six of the facilities acquired in 2005 as three facilities. |
the estimated remaining amortization expense that will be recognized during 2008 is $4.6 million.
F-18
F-15
5. REVOLVING CREDIT FACILITY AND UNSECURED TERM LOAN
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
| |
4. | REVOLVING CREDIT FACILITY |
As of December 31,
2005,2007, the Company and its operating partnership had in place a three-year
$150$450 million
secured revolvingunsecured credit facility,
for which
there was
noentered into in November 2006, including $200 million in an unsecured term loan and $250 million in unsecured revolving loans. The outstanding balance
at December 31, 2005on the Company’s credit facility was $419 million and
December 31, 2004.was comprised of $200 million of term loan borrowings and $219 million of unsecured revolving loans. As of December 31,
2005, the Company had2007, approximately
$131.8$31 million
was available under the Company’s
revolvingcredit facility. Borrowings under the credit facility
as a result of the then available borrowing base of properties under the facility. The credit facility bearsbear interest, at
our option, at either an alternative base rate or a
variableEurodollar rate,
in each case, plus an applicable margin based
uponon our leverage ratio or our credit rating. The alternative base interest rate is a fluctuating rate equal to the higher of the prime rate or
LIBOR and in each case, a spreadthe sum of the federal funds effective rate plus 50 basis points. The applicable margin for the alternative base rate will vary from 0.00% to 0.50% depending on
the Company’sour leverage ratio
whichprior to achieving an investment grade rating, and will vary from 0.00% to 0.25% depending on our credit rating after achieving an investment grade rating. The Eurodollar rate
was 6.52% at December 31, 2005.is a rate of interest that is fixed for interest periods of one, two, three or six months based on the LIBOR rate determined two business days prior to the commencement of the applicable interest period. The applicable margin for the Eurodollar rate will vary from 1.00% to 1.50% depending on our leverage ratio prior to achieving an investment grate rating, and will vary from 0.425% to 1.00% depending on our credit rating after achieving an investment grade rating. This credit facility is scheduled to terminate on
October 27, 2007,November 20, 2009, with an option for the Company to extend the termination date to
October 27, 2008. TheNovember 20, 2010. At December 31, 2007, borrowings under the unsecured credit facility
requireshad a
commitment fee basedweighted average interest rate of 6.06%.On September 14, 2007, the Company and its Operating Partnership entered into a secured term loan agreement that allows for term loans in the aggregate principal amount of up to $50 million. Each term loan matures on November 20, 2009, subject to extension in the unused portionsole discretion of the lenders. Each term loan bears interest at either an alternative base rate or a Eurodollar rate, at our option, in each case plus an applicable margin at terms identical to the unsecured revolving credit facility, which feefacility. As of December 31, 2007, there was 0.3%one term loan outstanding for $47.4 million. The outstanding term loan is secured by a pledge by our Operating Partnership of all equity interests in YSI RT LLC, the wholly-owned subsidiary of the Operating Partnership that acquired eight self-storage facilities in September 2007, that had a net book value of approximately $62.1 million at December 31, 2005. 2007. At December 31, 2007, the outstanding term loan had an interest rate of 6.18%.
The November 2006 credit facility is secured by certaineffectively replaced the former $250 million unsecured revolving credit facility that was established in February 2006 and a $50 million term loan that was entered into and terminated during November 2006. The former credit facility had a balance of $240.5 million and was scheduled to terminate in February 2009 prior to being replaced.
The February 2006 unsecured revolving credit facility replaced the Company’s self-storage facilities and requires that the Company maintain a minimum “borrowing base” of properties. Asexisting $150.0 million facility, which had no outstanding balance as of December 31, 2005 and December 31, 2004, the Company’s credit facility was collateralized by certain of its self-storage facilities with net book values of approximately $333.7 million and $242.0 million, respectively. This facility was replaced by a new unsecured revolving credit facilityscheduled to terminate in February 2006 (see Note 18).
| |
5. | LOANS AND NOTES PAYABLE |
In July 2005, YSI VI LLC (“YSI VI”), an indirect subsidiary of the Company, entered into a fixed rate mortgage loan agreement with Lehman Brothers Bank, FSB, (“Lehman Brothers Bank”) as the lender, in the principal amount of $80.0 million. The mortgage loan, which is secured by 24 of the Company’s self-storage facilities, bears interest at 5.13% and matures in August 2012. The mortgage loan will become immediately due and payable, and the lender will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. This mortgage loan requires YSI VI to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under this mortgage loan with respect to certain exceptions to the non-recourse provisions of the loan.
In July 2005, as part of the National Self Storage acquisition, the operating partnership assumed certain mortgage indebtedness totaling approximately $80.8 million, which indebtedness was secured by 69 of the Company’s self-storage facilities, bearing interest at rates ranging from 6.02% to 8.96% and matures on dates ranging from 2007 through 2014. Since a portion of the debt was assumed at above market rates, the assumed debt was adjusted as part of the purchase price allocation during the third quarter of 2005, to a fair market value of approximately $83.0 million at effective interest rates ranging from 5.00% to 5.59%. The Company refinanced approximately $39.8 million of the assumed mortgages with a multi-facility fixed rate mortgage with Transamerica Financial Life Insurance, a subsidiary of AEGON USA Realty Advisors, Inc., in the principal amount of $72.5 million. The mortgage loan, which is secured by 37 of the Company’s self-storage facilities, bears interest at 5.97% and matures in November 2015. The excess cash can be used for operating and planned acquisition activity. The remaining ten mortgage loans from the National Self Storage acquisition are collateralized by first mortgage liens against the other 32 storage facilities owned by various indirect subsidiaries of the Company. The mortgage loans will become immediately due and payable, and the lenders will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. The mortgage loans require the Company to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under these mortgage loans with respect to certain exceptions to the non-recourse provisions of the loans.
In August 2005, YASKY LLC (“YASKY”), an indirect subsidiary of the Company, entered into a fixed rate mortgage loan agreement with LaSalle Bank National Association, as the lender, in the principal amount
October 2007.
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F-16
6. MORTGAGE LOANS AND NOTES PAYABLE
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
of $80.0 million. The mortgage loan, which is secured by 29 of the Company’s self-storage facilities, bears interest at 4.96% and matures in September 2012. The mortgage loan will become immediately due and payable, and the lender will be entitled to interest on the unpaid principal sum at an increased rate, if any required payment is not paid on or prior to the date when due or on the happening of any other event of default. This mortgage loan requires YASKY to establish reserves relating to the mortgaged facilities for replacements, repairs, real estate taxes and insurance. The operating partnership is a guarantor under this mortgage loan with respect to certain exceptions to the non-recourse provisions of the loan.
In December 2005, as part of the California portfolio acquisition (See Note 3), the Company assumed two promissory notes for approximately $0.2 million. The notes are non-interest bearing, require monthly payments and mature in 2010.
YSI I LLC, an indirect subsidiary of the Company, has a $90 million loan from Lehman Brothers Holdings, Inc. (“Lehman Capital”) which requires interest only payments until November 2005 and monthly debt service payments from November 2005 through May 2010. Interest is paid at the fixed rate of 5.19% through May 2010. The loan is collateralized by first mortgage liens against 21 storage facilities.
YSI II LLC, an indirect subsidiary of the Company, has a $90 million loan from Lehman Capital which requires interest only payments until November 2005 and monthly debt service payments from November 2005 through January 2011. Interest is paid at the fixed rate of 5.325% through January 2011. The loan is collateralized by first mortgage liens against 18 storage facilities.
YSI III LLC, an indirect subsidiary of the Company, has a $90 million loan from Lehman Brothers Bank, which requires interest only payments until November 2005 and monthly debt service payments from November 2005 through November 2009. Interest is paid at the fixed rate of 5.085% through November 2009. The loan is collateralized by first mortgage liens against 26 storage facilities.
Acquiport/Amsdell III, LLC, an indirect subsidiary of the Company, has a $70 million loan from Lehman Capital that requires principal payments which include interest payable monthly at 8.16% per annum through November 1, 2006, which is referred to in the loan agreement as the “anticipated repayment date.” The Company intends to repay the loan on or before the anticipated repayment date through refinancing. After October 31, 2006, the loan requires interest at the greater of 13.16% and a defined Treasury rate plus 5%, additional monthly principal payments based on defined net cash flow and final repayment by November 1, 2025. The loan is collateralized by first mortgage liens against 41 storage facilities. The Company maintains a defeasance reserve of approximately $1.2 million in restricted cash.
USI II, LLC, an indirect subsidiary of the Company, has a $42 million mortgage loan from Lehman Brothers Bank which requires principal payments and interest at 7.13% per annum through December 11, 2006, which is referred to in the loan agreement as the “anticipated repayment date.” The Company intends to repay the loan on or before the anticipated repayment date through refinancing. After December 10, 2006, the loan requires interest at the greater of 12.13% and a defined Treasury rate plus 5%, additional monthly principal payments based on defined net cash flow and final repayment by September 11, 2026. The loan is collateralized by first mortgage liens against all 10 storage facilities.
F-20
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
The Company’s mortgage loans and notes
payable are summarized as follows:
| | | | | | Effective Interest | | | |
| | Carrying Value as of: | | Rate on | | | |
| | December 31, | | December 31, | | December 31, | | Maturity | |
Mortgage Loan | | 2007 | | 2006 | | 2007 | | Date | |
| | (in thousands ) | | | | | |
YSI XXIII | | $ | — | | $ | 1,322 | | 5.00 | % | Jul-07 | |
YSI XVI | | — | | 14,261 | | 6.49 | % | Nov-07 | |
YSI XXII | | — | | 993 | | 5.00 | % | Nov-07 | |
YSI XXIX | | — | | 4,374 | | 5.00 | % | Jan-08 | |
YSI XXI | | — | | 1,217 | | 5.00 | % | Apr-08 | |
Acq IV | | 2,359 | | 2,425 | | 7.71 | % | Dec-08 | |
Acq VI | | 1,746 | | 1,787 | | 8.43 | % | Aug-09 | |
YSI III | | 86,712 | | 88,332 | | 5.09 | % | Nov-09 | |
YSI I | | 86,770 | | 88,362 | | 5.19 | % | May-10 | |
YSI IV | | 6,227 | | 6,299 | | 5.25 | % | Jul-10 | |
YSI XXV | | 8,201 | | 8,304 | | 5.00 | % | Oct-10 | |
YSI XXVI | | 9,956 | | 10,176 | | 5.00 | % | Oct-10 | |
Promissory Notes | | 92 | | 132 | | 5.97 | % | Nov-10 | |
YSI II | | 86,843 | | 88,400 | | 5.33 | % | Jan-11 | |
YSI XII | | 1,599 | | 1,634 | | 5.97 | % | Sep-11 | |
YSI XIII | | 1,374 | | 1,404 | | 5.97 | % | Sep-11 | |
YSI VI | | 79,645 | | 80,000 | | 5.13 | % | Aug-12 | |
YASKY | | 80,000 | | 80,000 | | 4.96 | % | Sep-12 | |
USIFB | | 4,651 | | — | | 7.10 | % | Oct-12 | |
YSI XIV | | 1,909 | | 1,952 | | 5.97 | % | Jan-13 | |
YSI VII | | 3,280 | | 3,334 | | 6.50 | % | Jun-13 | |
YSI VIII | | 1,874 | | 1,905 | | 6.50 | % | Jun-13 | |
YSI IX | | 2,062 | | 2,096 | | 6.50 | % | Jun-13 | |
YSI XVII | | 4,477 | | 4,583 | | 6.32 | % | Jul-13 | |
YSI XXVII | | 547 | | 561 | | 5.59 | % | Nov-13 | |
YSI XXX | | 8,024 | | 8,233 | | 5.59 | % | Nov-13 | |
YSI XI | | 2,605 | | 2,660 | | 5.87 | % | Dec-13 | |
YSI V | | 3,440 | | 3,513 | | 5.25 | % | Jan-14 | |
YSI XXVIII | | 1,676 | | 1,712 | | 5.59 | % | Feb-14 | |
YSI X | | 4,303 | | 4,367 | | 5.87 | % | Jan-15 | |
YSI XV | | 1,999 | | 2,035 | | 6.41 | % | Jan-15 | |
YSI XX | | 67,545 | | 71,050 | | 5.97 | % | Nov-15 | |
Unamortized premiums | | 1,141 | | 1,507 | | | | | |
| | | | | | | | | |
Total mortgage loans and notes payable | | $ | 561,057 | | $ | 588,930 | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | |
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | |
| | | (Dollars in thousands) | |
| |
| 8.16% loans due November 2006 | | $ | 65,090 | | | $ | 66,217 | |
| 7.13% loans due December 2006 | | | 39,132 | | | | 39,878 | |
| 5.085% loans due November 2009 | | | 89,870 | | | | 90,000 | |
| 5.19% loans due May 2010 | | | 89,872 | | | | 90,000 | |
| 5.325% loans due January 2011 | | | 89,875 | | | | 90,000 | |
| 5.13% loans due August 2012 | | | 80,000 | | | | — | |
| 4.96% loans due September 2012 | | | 80,000 | | | | — | |
| 5.97% loans due November 2015 | | | 72,352 | | | | — | |
| Other fixed rate mortgage loans payable with maturity dates ranging from 2007 through 2014 at stated interest rates ranging from 6.02% to 8.96% and effective interest rates ranging from 5.00% to 5.97%, reflecting 17 mortgage loans at December 31, 2005 and two mortgage loans at December 31, 2004 | | | 59,588 | | | | 4,401 | |
| Other notes | | | 162 | | | | — | |
| | | | | | | | | |
| | | | 665,941 | | | | 380,496 | |
| Fair market value adjustment on loans and notes, net | | | 3,341 | | | | — | |
| | | | | | | | | |
| Total | | $ | 669,282 | | | $ | 380,496 | |
| | | | | | | | | |
As of December 31, 2005,2007 and December 31, 2004,2006, the Company’s mortgage loans payable were collateralized by certain of its self-storage facilities with net book values of approximately $910$725 million and $487$795 million, respectively.
F-17
The following table presented below represents the future principal payment requirements on the outstanding mortgage loans and notes payable at December 31, 2005:
| | | | | |
Year | | Amount | |
| | | (Dollars in thousands) | |
| |
| 2006 | | $ | 111,449 | |
| 2007 | | | 12,704 | |
| 2008 | | | 16,563 | |
| 2009 | | | 93,877 | |
| 2010 | | | 111,906 | |
| 2011 and thereafter | | | 319,442 | |
| | | | | |
| | | $ | 665,941 | |
| | | | | |
2007:2008 | | $ | 11,541 | |
2009 | | 94,425 | |
2010 | | 112,497 | |
2011 | | 88,180 | |
2012 | | 162,347 | |
2013 and thereafter | | 90,926 | |
Total mortgage payments | | 559,916 | |
Plus: Unamortized debt premiums | | 1,141 | |
Total mortgage indebtedness | | $ | 561,057 | |
7. MINORITY INTERESTS
Operating partnership minority interests relate to the interests in the operating partnership that are not owned by the Company, which, at December 31, 20052007, 2006 and December 31, 2004,2005, amounted to approximately 8%8.1%, 8.3% and 3%8.4%, respectively.
These minority interests were issued in the form of Operating Partnership units and were a component of the consideration the Company paid to acquire certain self-storage facilities. Limited partners who acquired Operating Partnership units have the right to require the Operating Partnership to redeem part or all of their Operating Partnership units for, at the Company’s option, an equivalent number of common shares of the Company or cash based upon the fair market value of an equivalent number of common shares of the Company. The market value of the Company’s common shares for this purpose will be equal to the average of the closing trading price of the Company’s common shares on the New York Stock Exchange for the 10 trading days before the date the Company received the redemption notice. As of December 31, 2007, the calculated aggregate redemption value of outstanding Operating Partnership units based upon the Company’s stock price was approximately $49.4 million. | | Number of limited | |
| | partnership units | |
As of December 31, 2006 | | 5,198,855 | |
Units issued | | — | |
Units redeemed, May 2007 | | (15,000 | ) |
Units redeemed, June 2007 | | (60,000 | ) |
Units redeemed, August 2007 | | (43,927 | ) |
As of December 31, 2007 | | 5,079,928 | |
In conjunction with the formation of the Company, certain former owners contributed propertiesfacilities to the operating partnership and received units in the operating partnership concurrently with the closing of the IPO.
F-21
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
Limited partners who acquired Unitsoperating partnership units in the Formation Transactions have the right, beginning oneffective October 27, 2005, to require the operating partnership to redeem part or all of their operating partnership units for cash or, at the Company’s option, common shares, based upon the fair market value of an equivalent number of common shares for which the operating partnership units would have been redeemed if the Company had assumed and satisfied the operating partnership’s obligation by paying common shares. The market value of the Company’s common shares for this purpose will be equal to the average of the closing trading price of the Company’s common shares on the New York Stock Exchange for the ten10 trading days before the day on which the Company received the redemption notice. Upon consummation of the IPO, the carrying value of the net assets of the operating partnership was allocated to minority interests. Pursuant to three contribution agreements and three option exercises in 2005, entities owned by the Company’s former Chief Executive Officer and one of its trusteesformer Trustees received an aggregate of 1,524,358 operating partnership units for six propertiesfacilities with a net historical basis of $7.3 million.
In conjunction with the National Self Storage acquisition, National Self Storage received 3,674,497 operating partnership units. As provided in the partnership agreement of the operating partnership, these units are redeemable by the unitholders for cash or, at the Company’s option, common shares, beginning one year after the date of issuance (i.e., beginning ineffective July 2006), on aone-for-one basis. The National Self Storage acquisition purchase agreement beginning in July 2006 also included a provision which granted the
F-18
sellers a special redemption right permitting the sellers, under certain circumstances, beginning one year after issuance of the units, to redeem a portion of their units by requiring the Company to purchase, and simultaneously transfer to them, real estate properties to be identified by them at a price equal to the fair value of units redeemed (the “Special Redemption Right”).
The units issued to National Self Storage were considered conditionally redeemable because they were redeemable at the option of the holder with no specified or determinable redemption date. The units had no preference to the Company’s other outstanding operating partnership units. Under the provisions of the Emerging Issues Task Force (“EITF”)Classification and Measurement of Redeemable Securities,D-98R (“EITF D-98R”), the Company classified these units as a separate minority interest line item (“Conditionally Redeemable Operating Partnership Units”) and elected the accretion method under EITF D-98R to record increases or decreases in the redemption value of such units (as of September 30, 2005) as an adjustment to retained earnings over the period from the date of issuance to the earliest redemption date. On October 25, 2005, the sellers in the National Self Storage transaction agreed to terminate the Special Redemption Right, effective as of July 15, 2005 (the first date on which National Self Storage facilities were acquired by the operating partnership under the purchase agreement). Upon termination of the Special Redemption Right, the Company classified these units in minority interest. The amount of accretion recorded through October 25, 2005 was approximately $3.0 million.
| |
7. | RELATED PARTY TRANSACTIONS |
In connection with8. RELATED PARTY TRANSACTIONS
Robert J. Amsdell, former Chief Executive Officer and Chairman of the IPO,Board of Trustees, retired from the Board effective as of February 13, 2007. Barry L. Amsdell submitted his letter of resignation from the Board on February 20, 2007. Effective as of February 19, 2007, Todd C. Amsdell, President of U-Store-It Development LLC, a subsidiary of the Company, entered into option agreements withresigned.
Amsdell Settlement/Rising Tide Acquisition
On September 14, 2007, the Company settled all pending state and federal court litigation involving the Company and the interests of Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and Kyle Amsdell, son of Robert and brother of Todd Amsdell (collectively, the “Amsdells”), and Rising Tide Development LLC, a company owned and controlled by Robert J. Amsdell the Company’s Chairman and Chief Executive Officer, and Barry L. Amsdell one(“Rising Tide”). The Board of its trustees, to acquire 18Trustees of the Company, along with the Corporate Governance and Nominating Committee, approved the terms of the settlement.
In addition, on September 14, 2007, the Operating Partnership purchased 14 self-storage facilities consisting, as of December 31, 2005, of 13 facilities owned byfrom Rising Tide Development, two facilities which Rising(the “Rising Tide Development has the right to acquire from unaffiliated third parties and three facilities which have since been acquired by the Company pursuant to the exercise of its options. The options become exercisable with respect to each particular self-storage facility if and when that facility achieves a month-end occupancy level of 85% for three consecutive months. None of the remaining self-storage facilities that we have the option to purchase met the occupancy requirement as of December 31, 2005. The purchase price will be equal to the lower of (i) a price determined by multiplying in-place net operating income at the time of purchase by 12.5 and (ii) the fair market value of the option facility as determined by an appraisal process involving third party appraisers. The
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U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”Properties”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
Company’s option to acquire these facilities will expire on October 27, 2008. The determination to purchase any of the option facilities will be made by the independent members of the Company’s board of trustees. During 2005, the Company exercised its option to purchase three of these facilities for an aggregate purchase price of
approximately $17.4$121 million
consisting of an aggregate of $6.8 million in operating partnership unitspursuant to a purchase and
$10.6 million in cash after a price reduction of $1.7 million of consideration in May 2005. The price reduction resulted from a discovery thatsale agreement. In connection with the
calculationsettlement agreement and acquisition of the
March14 self storage facilities, the Company considered the provisions of EITF 04-01, Accounting for Pre-existing relationships between the Parties to a Business Combination, and determined that all consideration paid was allocable to the purchase
priceof the storage facilities.Pursuant to a Settlement Agreement and Mutual Release, dated August 6, 2007, (the “Settlement Agreement”) which was conditioned upon the acquisition of the 14 self-storage facilities from Rising Tide for $121 million, each of the parties to the agreement executed various agreements. A summary of the various agreements follows:
·Standstill Agreement. Robert J. Amsdell, Barry L. Amsdell and Todd C. Amsdell agreed that through June 30, 2008, they would not madecommence or participate in accordanceany proxy solicitation or initiate any shareholder proposal; take any action to convene a meeting of shareholders; or take any actions, including making any public or private proposal or announcement, that could result in an extraordinary corporate transaction relating to the Company.
·First Amendment to Lease. The Operating Partnership and Amsdell and Amsdell, an entity owned by Robert and Barry Amsdell, entered into a First Amendment to Lease which modified certain terms of all of the lease agreements the Operating Partnership has with Amsdell and Amsdell for office space in Cleveland, Ohio. The First Amendment provided the terms specified inOperating Partnership the option agreement, which resulted inability to assign or sublease the overpayment. On May 14, 2005,office space previously used for its corporate office and certain operations. Separately, Amsdell and Amsdell consented to the CompanyOperating Partnership’s proposed sublease to an unrelated party of approximately 22,000 square feet of office space covered by the aforementioned leases.
·Termination of Option Agreement. The Operating Partnership and Rising Tide entered into an agreement with Rising Tide Development pursuant to which 100,202 units in the operating partnership previously issued to Rising Tide Development were cancelled and $28,057 in cash (representing the distribution paid with respect to such units in April 2005) was returned to the Company.
The Predecessor’s self-storage facilities were operated by U-Store-It Mini Warehouse Co. (the “Property Manager”), which was affiliated through common ownership with Amsdell Partners, Inc., High Tide Limited Partnership, and Amsdell Holdings I, Inc. Pursuant to the relevant property management agreements, Acquiport I and Acquiport III paid the Property Manager monthly management fees of 5.35% of monthly gross rents (as defined in the related management agreements); USI II paid the Property Manager a monthly management fee of 5.35% of USI II’s monthly effective gross income (as defined in the related management agreements); and the owners of the Lake Worth, FL, Lakewood, OH, and Vero Beach I, FL facilities paid the Property Manager monthly management fees of 6% of monthly gross receipts through October 21, 2004, and 5.35% thereafter (as defined in the related management agreements). EffectiveOption Termination Agreement that terminated an Option Agreement dated October 27, 2004,
upon acquisitionby and between the Operating Partnership and Rising Tide. The Option Agreement provided the Operating Partnership with an option to acquireF-19
Rising Tide’s right, title and interest to 18 properties, including: the 14 Rising Tide Properties discussed above; three properties that the Operating Partnership acquired in 2005 pursuant to exercise of its option; and one undeveloped property that Rising Tide has the option to acquire and that was not acquired as a part of the purchase and sale agreement.
·Termination of Property Manager, the management contract with U-Store-It Mini Warehouse Co. was terminatedManagement Agreement, and a new management agreement was entered into with YSI Management, LLC. Beginning October 27, 2004 management fees relating to our wholly-owned subsidiaries are eliminated in consolidation.
Effective October 27, 2004, YSI Management LLC, a wholly-owned subsidiaryMarketing and Ancillary Services Agreement. Certain of the operating partnership,Company’s subsidiaries and Rising Tide entered into a management contract with Rising Tide Development to provideProperty Management Termination Agreement and a Marketing and Ancillary Services Termination Agreement. Under the Property Management Agreement, the Company provided property management services tofor the option facilitiesRising Tide Properties for a fee equal to the greater of 5.35% of the gross revenues of each facilityproperty or $1,500 per facilityproperty per month. Under the Marketing and Ancillary Services Agreement, the Company provided limited marketing and other miscellaneous services for the Rising Tide properties. Management fees earned by YSI Management LLC, from Rising Tide Development, were approximately $0.4 million, $0.5 million and $0.4 million for the yearyears ended December 31, 2007, 2006 and 2005, respectively, and $0.1 million for the period from October 21, 2004 through December 31, 2004.are included in other related party revenues. Accounts receivable from Rising Tide Development at December 31, 2006 and 2005 were approximately $0.6 million and 2004 was approximately $0.4 and $0.3 million, respectively, and isare included in other assets. This receivable representsdue from related parties. No amounts were outstanding as of December 31, 2007. These amounts represent expenses paid on behalf of Rising Tide Development by YSI Management LLC and proceeds from the sale of ancillary items that will bewere reimbursed under standard business terms.
In
connection with the termination of the Property Management Agreement, expenses relating to property management will be prorated.·Amendment of Employment and Non-Compete Agreements. As part of the Settlement Agreement, the Company entered into a Modification of Noncompetition Agreement and Termination of Employment Agreement (each a “Modification of Noncompetition Agreement and Termination of Employment Agreement”) with each of Robert J. Amsdell and Todd C. Amsdell, and a Modification of Noncompetition Agreement (“Modification of Noncompetition Agreement”) with Barry L. Amsdell, which terminates and modifies specific provisions of the noncompetition agreement the Company has with each of them, dated October 27, 2004 (the “Original Noncompetition Agreements”). The Original Noncompetition Agreements restrict the Predecessorability of Robert J., Barry L. and Todd C. Amsdell to compete with the Company for one year and their ability to solicit employees of the Company for two years from the date of their termination of employment or resignation from service as a Trustee. Pursuant to these modification agreements, Todd C. Amsdell will be able to compete with the Company, and Robert J. and Barry L. Amsdell will be able to (a) develop the one Rising Tide property that the Company did not acquire under the purchase and sale agreement and (b) compete with respect to any property identified as part of a Section 1031 “like-kind exchange” referenced in the purchase and sale agreement. Further, each Original Noncompetition Agreement was modified to allow each of them to hire, for any purpose, any employee or independent contractor who was terminated, has resigned or otherwise left the employment or other service of the Company or any of its affiliates on or prior to June 1, 2007.
The Modification and Noncompetition Agreement and Termination of Employment Agreement with each of Robert J. Amsdell and Todd C. Amsdell also terminates the employment agreements the Company had with each of them, effective as of February 13, 2007 with respect to Robert J. Amsdell and February 19, 2007 with respect to Todd C. Amsdell.
Additional Acquisitions of Facilities
The Company, in accordance with a contract signed on April 3, 2006, acquired nine self-storage facilities from Jernigan Property Group on July 27, 2006 for consideration of approximately $45.3 million. Our President and Chief Executive Officer, Dean Jernigan, served as President of Jernigan Property Group. Mr. Jernigan has agreed that he will not expand his interest, ownership or activity in the self-storage business. Given Mr. Jernigan’s appointment as a Trustee and the President and Chief Executive Officer of the Company on April 24, 2006, this transaction was subject to review and final approval by a majority of the independent members of the Company’s Board of Trustees.
Construction Services
Historically, the Company engaged Amsdell Construction, a company owned by Robert J. Amsdell the Company’s Chief Executive Officer, and Barry L. Amsdell, a trustee of the Company, to maintain and improve its self-storage facilities. The total payments incurred by the Company to Amsdell Construction for the yearyears ended December 31, 2006 and 2005 waswere approximately $0.3 million$42,000 and related to the rebuilding of a South Carolina facility destroyed by fire in 2004.$304,000, respectively. The total payments incurred by the Company todid not engage Amsdell Construction forduring 2007.
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Corporate Office Leases
Pursuant to lease agreements that the period from October 21, 2004 through December 31, 2004 was approximately $0.5 million. The total amount of payments incurred by the predecessor to Amsdell Construction for the period from January 1, 2004 through October 20, 2004 and the year ended 2003 were $2.2 million $2.6 million, respectively.
In March 2005, the operating partnershipOperating Partnership entered into an office lease agreement with Amsdell and Amsdell an entity owned by Robert J.during 2005 and 2006, we rented office space from Amsdell and Barry L. Amsdell forat The Parkview Building, a multi-tenant office spacebuilding of approximately 40,000 square feet located at 6745 Engle Road, an office building of approximately 18,000 square feet at The Parkview Building, an approximately 40,000 square foot multi-tenant office building located at 6745 Engle Road, plus approximately 4,000 square feet of an 18,000 square foot office building located at 6751 Engle Road, which are bothand an office building of approximately 28,000 square feet located at 6779 Engle Road. Each of these properties is part of Airport Executive Park, a50-acre office and flex development located in Cleveland, Ohio. Airport Executive ParkOhio, which is owned by Amsdell and Amsdell. This new lease, which was effective as of January 1, 2005, replaced the original office lease, entered into in October
F-23
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
2004, between a subsidiary of the operating partnership and Amsdell and Amsdell and has a ten-year term, with one five-year extension option exercisable by the operating partnership. The Company’s disinterested trusteesOur independent Trustees approved the terms of, and
the entry into,
each of the office lease
agreements by the
operating partnership.Operating Partnership. The table below shows the office space subject to these lease agreements and certain key provisions, including the term of each lease agreement, the period for which the Operating Partnership may extend the term of each lease agreement, and the minimum and maximum rents payable per month during the term.Office Space | | Approximate
Square Footage | | Term | | Period of
Extension Option (1) | | Fixed Minimum
Rent Per Month | | Fixed
Maximum Rent
Per Month | |
The Parkview Building — 6745
Engle Road; and 6751 Engle Road | | 21,900 | | 12/31/2014 | | Five-year | | $ | 25,673 | | $ | 31,205 | |
6745 Engle Road — Suite 100 | | 2,212 | | 12/31/2014 | | Five-year | | $ | 3,051 | | $ | 3,709 | |
6745 Engle Road — Suite 110 | | 1,731 | | 12/31/2014 | | Five-year | | $ | 2,387 | | $ | 2,901 | |
6751 Engle Road — Suites C and D | | 3,000 | | 12/31/2014 | | Five-year | | $ | 3,137 | | $ | 3,771 | |
6779 Engle Road — Suites G and H | | 3,500 | | 12/31/2008 | | Five-year | | $ | 3,079 | | $ | 3,347 | |
6745 Engle Road — Suite 120 | | 1,600 | | 4/30/2007 | | Three-year | | $ | 1,800 | | $ | 1,900 | |
6779 Engle Road — Suites I and J | | 3,500 | | (2) | | N/A | | $ | 3,700 | | N/A | |
In June 2005, the(1)Our operating partnership entered into another officemay extend the lease agreement with Amsdell and Amsdell for additional office space of approximately 1,588 square feet of rentable spacebeyond the termination date by the period set forth in The Parkview Building. This office lease was effective as of May 7, 2005 and has an approximately two-year term expiring on April 30, 2007. The operating partnership has the option to extend this office lease for an additional three-year periodcolumn at the then prevailing market raterates upon the same terms and conditions contained in each of the lease agreements.
(2)In June 2007, the Operating Partnership terminated this office lease. The fixed minimumlease agreement which had a month-to-month term.
In addition to monthly rent, under the terms of this office lease is $1,800 per month from June 1, 2005 to April 30, 2006, and $1,900 per month from May 1, 2006 to April 30, 2007. The Company’s disinterested trustees approved the terms of, and the entry into, the office lease by the operating partnership.
In June 2005, the operating partnership also entered into amonth-to-month office lease agreement withagreements provide that our Operating Partnership reimburse Amsdell and Amsdell for certain maintenance and improvements to the leased office space of approximately 3,500 square feet of an office building located at 6779 Engle Road. The lease was effective as of May 1, 2005. The fixed minimum rent under the terms of the lease is $3,700 per month. The Company’s disinterested trustees approved the terms of, and the entry into, themonth-to-month office lease agreement by the operating partnership.
In December 2005, the operating partnership entered into an office lease agreement with Amsdell and Amsdell for additional office space of approximately 3,000 square feet of rentable space at 6751 Engle Road. This office lease is effective as of January 1, 2006 and has a nine-year term expiring on December 31, 2014. The operating partnership has the option to extend this office lease for an additional five-year period at the then prevailing market rate upon the same terms and conditions contained in this office lease. At inception, the fixed minimum rent under the terms of this office lease is $3,137 per month and then escalates to $3,771 per month by the end of the lease term. The Company’s disinterested trustees approved the terms of, and the entry into, the office lease by the operating partnership.
In December 2005, the operating partnership entered into an office lease agreement with Amsdell and Amsdell for additional office space of approximately 3,190 square feet of rentable space in The Parkview Building. This office lease is effective as of February 1, 2006 and has an approximately nine-year term expiring on December 31, 2014. The operating partnership has the option to extend this office lease for an additional five-year period at the then prevailing market rate upon the same terms and conditions contained in this office lease. At inception, the fixed minimum rent under the terms of this office lease is $2,387 per month and then escalates to $2,901 per month by the end of the lease term. The Company’s disinterested trustees approved the terms of, and the entry into, the office lease by the operating partnership.
In December 2005, the operating partnership entered into an office lease agreement with Amsdell and Amsdell for additional office space of approximately 4,077 square feet of rentable space in The Parkview Building. This office lease is effective as of May 1, 2006 and has an approximately 104 month term expiring on December 31, 2014. The operating partnership has the option to extend this office lease for an additional five-year period at the then prevailing market rate upon the same terms and conditions contained in this office lease. The fixed minimum rent under the terms of this office lease is $3,051 per month from May 1, 2007 and then escalates to $3,709 per month by the end of the lease term. The Company’s disinterested trustees approved the terms of, and the entry into, the office lease by the operating partnership.
space. The total amountamounts of lease payments incurred under the threesix office leases effective as ofduring the years ended December 31, 2005 was2007 and December 31, 2006 were approximately $0.4 million for the year ended December 31, 2005. The total amount of lease payments incurred under former leases for the period from October 21, 2004 through December 31, 2004 was approximately $40,000.
and $0.5 million, respectively.
F-24
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
Total future minimum rental payments under the related party lease agreements entered into as of December 31, 20052007 are as follows:
| | | | | |
| | | Related Party
| |
| | | Amount | |
| | | (Dollars in thousands) | |
| |
| 2006 | | $ | 473 | |
| 2007 | | | 446 | |
| 2008 | | | 438 | |
| 2009 | | | 454 | |
| 2010 | | | 454 | |
| 2011 and Thereafter | | | 1,923 | |
| | | | | |
| Total | | $ | 4,188 | |
| | | | | |
The Company bills Amsdell and Amsdell for the cost of certain services. As of December 31, 2005, the Company recorded a receivable as of December 31, 2005 of $10,172.
| | Related Party | |
| | Amount | |
| | (in thousands) | |
| | | |
2008 | | $ | 468 | |
2009 | | 453 | |
2010 | | 453 | |
2011 | | 475 | |
2012 | | 475 | |
2013 and thereafter | | 998 | |
| | $ | 3,322 | |
Aircraft Lease
The Company chartered an aircraft from Aqua Sun Investments, L.L.C. (“Aqua Sun”), a company owned by Robert J. Amsdell and Barry L. Amsdell. The Company was under contract pursuant to a timesharing agreement to reimburse Aqua Sun at the rate of $1,250 for each hour of use of the aircraft and the payment of certain expenses associated with the use of the aircraft. As described in the paragraph below, effective June 30, 2005 the timesharing agreement was terminated by
F-21
mutual agreement of the parties thereto and was replaced on July 1, 2005 with a non-exclusive aircraft lease agreement with Aqua Sun (the “Aircraft Lease”). The Company’s disinterested trusteesTrustees approved the terms of, and the entry into, the non-exclusive aircraft lease agreement by the operating partnership.
Under the Aircraft Lease with Aqua Sun, the operating partnership mayThe Operating Partnership was able to lease for corporate use from time to time an airplane owned by Aqua Sun. Under the terms of the Aircraft Lease, the operating partnership may lease use of the airplane owned by Aqua Sun at an hourly rate of $1,450 per flight hour. Aqua Sun iswas responsible for various costs associated with operation of the airplane, including insurance, storage and maintenance and repair, but the operating partnership isOperating Partnership was responsible for fuel costs and the costs of pilots and other cabin personnel required for its use of the airplane. The Aircraft Lease, which was effective as of July 1, 2005, hashad a one-year term and is automatically renewed for additional one-year periods unlesswas terminated by either party. Either party may terminate the agreement with or without cause upon 60 days’ prior notice to the other party.on June 30, 2006. The total amountamounts incurred for such aircraft charters described above by the Company for the year ended December 31,2006 and 2005 was approximately $0.1 million and $0.4 million. The total amountmillion, respectively. No amounts were incurred for aircraft charters byafter June 30, 2006 when the lease was terminated.
Other
During 2006 and 2007, the Company engaged a consultant to assist us in establishing certain development protocols and processes. In connection with that assignment, our outside consultant utilized the services of Dean Jernigan’s son-in-law. Our payments for the period from October 21, 2004 through December 31, 2004 washis son-in-law’s services totaled approximately $0.1 million.
$149,000 in 2007 and $4,750 in 2006.The Company engagesengaged Dunlevy Building Systems Inc., a company owned by John Dunlevy, abrother-in-law of Robert J. Amsdell and Barry L. Amsdell, for construction, zoning consultant and general contractor services at certain of its self-storage facilities. The total payments incurred by the Company to Dunlevy Building Systems Inc. for the yearyears ended December 31, 2006 and 2005 waswere approximately $40,000.
$19,000 and $40,000, respectively. No amounts were incurred subsequent to June 30, 2006.The Company engagesengaged Deborah Dunlevy Designs, a company owned by Deborah Dunlevy, a sister of Robert J. Amsdell and Barry L. Amsdell, for interior design services at certain of its self-storage facilities and offices. The totalTotal payments incurred by the Company to Deborah Dunlevy Designs for the year ended December 31, 2005 was approximately $56,000.
No amounts were incurred subsequent to December 31, 2005.Registration Rights
Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the “Amsdell Entities” that acquired common shares or operating partnershipOperating Partnership units in the formation transactions which took place at the time of the IPO
F-25
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
received certain registration rights. An aggregate of approximately 9.7 million common shares acquired in the formation transactions arewere subject to a registration rights agreement (including approximately 1.1 million shares issuable upon redemption of approximately 1.1 million operating partnershipOperating Partnership units issued in the formation transactions). Beginning in October 2005, Robert J. Amsdell, Barry L. Amsdell, Todd C. Amsdell and the Amsdell Entities became entitled to require the Company to register their shares for public sale subject to certain exceptions, limitations and conditions precedent.
In addition, Rising Tide Development received registration rights with respect to the operating partnershipOperating Partnership units it received in connection with the Company’s acquisition of three option facilities. An aggregate of approximately 0.4 million common shares (which shares are issuable upon redemption of approximately 0.4 million operating partnershipOperating Partnership units issued in connection with the Company’s option exercises) arewere subject to a registration rights agreement. Beginning as early as January 2006, Rising Tide Development will be entitled to require
In March 2007, the Company filed a Registration Statement on Form S-3 to register approximately 0.2 millionsatisfy all of such common shares for public sale subject to certain exceptions, limitations and conditions precedent. Rising Tide Development will be entitled to require the Company to register the remaining approximately 0.2 million common shares for public sale, subject to certain exceptions, limitations and conditions precedent, beginning as early as March 2006.
| |
8. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
abovementioned registration rights.9. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of financial instruments, including cash and cash equivalents, marketable securities, accounts receivable and accounts payable approximates their respective book values at December 31, 20052007 and 2004.2006. The Company has fixed interest rate loans with a carrying value of $669.3$556.4 million and $588.9 million at December 31, 20052007 and 2006, respectively. The estimated fair values of these fixed rate loans were $533.2 and $569.6 million at December 31, 2007 and 2006, respectively. The Company has variable interest rate loans with a carrying value of $380.5$471.1 million and $290.5 million at December 31, 2004.2007 and 2006, respectively. The estimated fair valuevalues of these fixed andthe variable rate loans were $649.3$452.7 million and $378.6$290.5 million at December 31, 20052007 and 2004,2006, respectively. This estimate isThese estimates are based on discounted cash flow analyses assuming market interest rates for comparable obligations at December 31, 20052007 and 2004.2006.
F-22
| |
9. | DISCONTINUED OPERATIONS |
10. DISCONTINUED OPERATIONS
During 2005, the Company sold four of its storage facilities located in Ohio that were acquired as part of the Liberty Self-Stor Portfolio (See Note 3) acquisition for net proceeds of $6.2 million. DuringNo facilities were sold in 2006. In 2007 the year ended December 31, 2003, the PredecessorCompany sold five storage facilitiesthree properties in South Carolina for net proceeds of $8.1$12.8 million and two properties in Arizona for $6.4 million. In accordance with the terms of the 2003 Defeasance Agreements, approximately $1.4 million of the net proceeds related to the sale of the Indio Property storage facility was placed in a restricted cash account.
F-26
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
The results of operations of the storage facilities through the sale date have been presented in the following table. Interest expense and related amortization of loan procurement costs have been attributed to the sold storage facilities as applicable based upon the transaction and included in discontinued operations.
The results of operations of the fournine storage facilities sold induring 2005 and the five storage facilities sold in 20032007 were as follows:
| | | | | | | | | | | | | |
| | | Year Ended December 31, | |
Description | | 2005 | | | 2004 | | | 2003 | |
| | | (Dollars in thousands) | |
| |
| Revenues | | $ | 546 | | | $ | — | | | $ | 1,015 | |
| Property operating expenses | | | (246 | ) | | | — | | | | (399 | ) |
| Depreciation | | | (168 | ) | | | — | | | | (207 | ) |
| Management fees to related party | | | (28 | ) | | | — | | | | (52 | ) |
| Interest expense | | | (72 | ) | | | — | | | | (186 | ) |
| | | | | | | | | | | | | |
| Income from operations | | | 32 | | | | — | | | | 171 | |
| Gain on sale of storage facilities | | | 179 | | | | — | | | | 3,329 | |
| | | | | | | | | | | | | |
| Income from discontinued operations | | $ | 211 | | | $ | — | | | $ | 3,500 | |
| | | | | | | | | | | | | |
| |
10. | COMMITMENTS AND CONTINGENCIES |
| | For the year ended December 31, | |
| | 2007 | | 2006 | | 2005 | |
REVENUES | | | | | | | |
Rental income | | $ | 1,507 | | $ | 2,425 | | $ | 2,579 | |
Other property related income | | 58 | | 86 | | — | |
Total revenues | | 1,565 | | 2,511 | | 2,579 | |
OPERATING EXPENSES | | | | | | | |
Property operating expenses | | 835 | | 1,132 | | 943 | |
Depreciation | | 441 | | 650 | | 638 | |
Total operating expenses | | 1,276 | | 1,782 | | 1,581 | |
OPERATING INCOME | | 289 | | 729 | | 998 | |
OTHER INCOME (EXPENSE) | | | | | | | |
Interest: | | | | | | | |
Interest expense on loans | | (189 | ) | (497 | ) | (535 | ) |
Loan procurement amortization expense | | (3 | ) | (26 | ) | (12 | ) |
Interest income | | 5 | | 5 | | 1 | |
Other | | — | | (3 | ) | — | |
Total other expense | | (187 | ) | (521 | ) | (546 | ) |
Income from discontinued operations | | 102 | | 208 | | 452 | |
Net gain on disposition of discontinued operations | | 2,517 | | — | | 179 | |
Minority interest attributable to discontinued | | | | | | | |
operations | | (215 | ) | (17 | ) | (42 | ) |
Income from discontinued operations | | $ | 2,404 | | $ | 191 | | $ | 589 | |
11. COMMITMENTS AND CONTINGENCIES
The Company has capital lease obligations for security camera systems with a cost of $2.6 million. These systems are included in equipment in the accompanying balance sheet and are being depreciated over five years.
Future minimum lease payments at December 31, 2005 are:
| | | | | |
| | | Amount | |
| | | (Dollars in thousands) | |
| |
| 2006 | | $ | 49 | |
| 2007 | | | 22 | |
| | | | | |
| Total future minimum lease payments | | | 71 | |
| Less — imputed interest at 8% | | | 15 | |
| | | | | |
| Present value of lease payments | | $ | 56 | |
| | | | | |
The Company currently owns one self-storage facility subject to a ground lease and five self storageself-storage facilities having small parcels of land that are subject to ground leases. The Company recorded rent expense of approximately $0.2 million for each of the year ended 2005 and approximately $24,000 for the period from October 21, 2004 through December 31, 2004. The Predecessor recorded rent expense of approximately $76,000 for the period from January 1, 2004 through October 20, 2004. The Predecessor also recorded rent expense of approximately $46,000 related to these leases in the yearyears ended December 31, 2003, all of which related to minimum lease payments.
F-27
F-23
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
Total future minimum rental payments under non-cancelable ground leases and a related party office leaseleases in effect as of December 31, 20052007 are as follows:
| | | | | | | | | |
| | | Third Party
| | | Related Party
| |
| | | Amount | | | Amount | |
| | | (Dollars in thousands) | |
| |
| 2006 | | $ | 152 | | | $ | 473 | |
| 2007 | | | 148 | | | | 446 | |
| 2008 | | | 76 | | | | 438 | |
| 2009 | | | 50 | | | | 454 | |
| 2010 | | | 44 | | | | 454 | |
| 2011 and Thereafter | | | 200 | | | | 1,923 | |
| | | | | | | | | |
| Total | | $ | 670 | | | $ | 4,188 | |
| | | | | | | | | |
Each of the | | Third Party
Amount | | Related Party
Amount | |
| | (Dollars in thousands) | |
| | | | | |
2008 | | $ | 76 | | $ | 468 | |
2009 | | 50 | | 453 | |
2010 | | 44 | | 453 | |
2011 | | 44 | | 475 | |
2012 and thereafter | | 155 | | 1,473 | |
| | $ | 369 | | $ | 3,322 | |
| | | | | | | | | |
The Company and the Predecessor has been named as a defendant in a number of lawsuits in the ordinary course of business. In most instances, these claims are covered by the Company’s liability insurance coverage. Management believes that the ultimate settlement of the suits will not have a material adverse effect on the Company’s financial statements.
| |
11. | RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS |
In12. RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS
The Company’s use of derivative instruments is limited to the normal courseutilization of its business, the Company encounters economic risks. There are three main components of economic risk:interest rate agreements or other instruments to manage interest rate risk credit riskexposures and market risk.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 subjectpotentially 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 riskswap agreements that qualify and are designated as cash flow hedges designed to reduce the impact of interest rate changes on its interest-bearing liabilities. Credit risk isvariable rate debt. Therefore, the risk of inability or unwillingness of tenants to make required rent and other payments. Market risk is the risk of declines in the value of properties due to changes in rental rates, occupancy, interest rates or other market factors affecting the valuation of properties held by the Company.
Interest rate swaps are used to reducerecorded in the portion of total debt that is subject to variable interest rates. An interest rate swap requires the Company to pay an amount equal to a specific fixed rate of interest times a notional principal amount and entitles the Company to receive in return an amount equal to a variable rate of interest times the same notional amount. No other cash payments are made unless the contract is terminated prior to its maturity, in which case the contract would likely be settled for an amount equal to its fair value. The Company enters into contracts of this nature with major financial institutions to minimize counterparty credit risk. As of December 31, 2005, the Company had not entered into any contracts of this nature.
The Predecessor had an interest rate swap that was undesignated during 2004 and 2003 and did not qualify for hedge accounting treatment; therefore, the swap was recordedconsolidated balance sheet at fair value and the related gains or losses
were recordedare 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. Ineffectiveness was immaterial for all periods presented.The Company formally assesses, both at inception of the 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 a derivative is highly-effective as a hedge, it 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 a derivative is not highly-effective as a hedge or if a derivative ceases to be a highly-effective hedge, the Company will discontinue hedge accounting prospectively and will reflect in its statement of operations. The amount recognized as a reduction to interest expense due to changesoperations realized and unrealized gains and losses in fair value was approximately $0.1 million and $0.2 million duringrespect of the years endedderivative.
At December 31, 2004 and 2003, respectively.2007, the Company had interest rate swap agreements for notional principal amounts aggregating $75 million. The swap maturedagreements effectively fix the 30-day LIBOR interest rate on August 16, 2004.$50 million of credit facility borrowings at 4.7725% per annum and on $25 million of credit facility borrowings at 4.716% per annum, in each case until November 2009. The interest rate cap agreement effectively limits the interest rate on $40 million of credit facility borrowings at 5.50% per annum until June 2008.
The following table summarizes the terms and fair values of the Company’s derivative financial instruments at December 31, 2007 (in thousands):
F-24
| |
12. | SHARE-BASED COMPENSATION PLANS |
| | | | Notional | | | | | | Fair | |
Hedge Product | | Hedge Type | | Amount | | Strike | | Maturity | | Value | |
| | | | | | | | | | | |
Cap | | Cash flow | | $ | 40,000 | | 5.5000 | % | 6/23/2008 | | | |
Swap | | Cash flow | | $ | 50,000 | | 4.7725 | % | 11/20/2009 | | $ | (1,038 | ) |
Swap | | Cash flow | | $ | 25,000 | | 4.7160 | % | 11/20/2009 | | $ | (493 | ) |
13. SHARE-BASED COMPENSATION PLANS
On May 9, 2007, the Company’s shareholders approved an equity-based employee compensation plan, the 2007 Equity Incentive Plan (the “2007 Plan”). On October 19, 2004, the Company’s sole shareholder approved a share-based employee compensation plan, the 2004 Equity Incentive Plan (the “Plan”“2004 Plan” and collectively with the 2007 Plan, the “Plans”). The purpose of the Plan isPlans are to attract and retain highly qualified executive officers, trusteesTrustees 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
F-28
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
end, the Plan providesPlans provide for the grant of share options, share appreciation rights, restricted shares, share units, unrestricted shares, dividend equivalent rights and cash awards. Any of these awards may, but need not, be made as performance incentives to reward attainment of annual or long-term performance goals. Share options granted under the PlanPlans may be non-qualified share options or incentive share options.
The Plan isPlans are 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 PlanPlans and determines the terms and provisions of option grants and share awards. A total of 3,900,000 and 3,000,000 common shares are reserved for issuance under the Plan.2007 Plan and 2004 Plan, respectively. The maximum number of common shares subjectunderlying equity awards that may be granted to an individual participant under the 2004 Plan during any calendar year is 400,000 for options or share appreciation rights or time-vestedand 100,000 for restricted shares that can be awardedor restricted share units, and 500,000 for options or share appreciation rights and 100,000 for restricted shares or restricted share units under the Plan to any person is 500,000 per calendar year.2007 Plan. The maximum number of common shares that can be awarded under the Plan to any person, other than pursuant to an option, share appreciation rights or time-vested restricted shares, is 250,000 per calendar year.year under the 2004 Plan. In addition, under the 2007 Plan, the maximum number of performance awards that may be granted to an executive officer is 100,000 and the maximum amount of performance shares that can be settled in cash and that can be granted in any year is $1.5 million. To the extent that options expire unexercised or are terminated, surrendered or canceled, the options and share awards become available for future grants under the Plan,Plans, unless the Plan hasPlans have been terminated.
Under the Plan,Plans, the Compensation Committee determines the vesting schedule of each share award and option. At the closing of the IPO, the newly appointed non-employee members of the Board of Trustees were granted restricted share awards pursuant to the Plan as a one-time payment for joining the board and as an advance for service to be provided for the remainder of 2004 and 2005. Concurrently with the closing of the IPO, the Company also granted options under the Plan to certain of its employees and executive officers to purchase an aggregate of 950,000 common shares. The options granted to executive officers vest ratably over a three year period, one-third per year on each of the first three anniversaries of the grant date. The options granted to other employees of the Company vest evenly over a three year period, one-third per year on each of the third, fourth and fifth anniversaries of the grant date. The exercise price for options is equivalent to the fair market value of the underlying common shares at the grant date. The Compensation Committee also determines the term of each option, which shall not exceed 10 years from the grant date.
The fair valuevalues for options granted in 2004, was2006 and 2007 were estimated at the time the options were granted using the Black-Scholes option-pricing model applying the following weighted average assumptions:
| | | | | |
Assumptions: | | 2004 | |
| |
| Risk-free interest rate | | | 4.38 | % |
| Expected dividend yield | | | 7.0 | % |
| Volatility | | | 26.25 | % |
| Weighted average expected life of the options | | | 10 years | |
| Weighted average fair value of options granted | | $ | 1.90 | |
Assumptions: | | 2006 | | 2007 | |
Risk-free interest rate | | 5.0 | % | 4.7 | % |
Expected dividend yield | | 6.3 | % | 5.9 | % |
Volatility | | 20.3 | % | 21.2 | % |
Weighted average expected life of the options | | 7.5 years | | 9.4 years | |
Weighted average fair value of options granted per share | | $ | 2.10 | | $ | 2.40 | |
| | | | | | | |
The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective
F-25
assumptions, including the expected stock price volatility. The Company determinedVolatility for the volatility by comparing a 100 day period2006 and 2007 grants was based on the trading history of volatility of industry competitors in June 2004. No options were granted in 2005.
the Company’s shares.In 20052007, 2006 and 2004,2005, the Company recognized compensation expense related to options issued to employees and executives of approximately $0.5$0.9 million, $0.4 million and $0.1$0.5 million, respectively, which was recorded primarily in generalGeneral and administrative expense. As of December 31, 2005,2007, the Company had approximately $1.1$2.9 million of unrecognized compensation cost related to unvested stock options that will be recorded over the next fourfive years.
F-29
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
The table below summarizes the option activity under
the Plan for the
yearyears ended December 31,
20052007, 2006 and
the period from October 21, 2004 through2005: | | | | | | Weighted Average | |
| | Number of Shares | | Weighted Average | | Remaining | |
| | Under Option | | Exercise Price | | Contractual Term | |
Balance at December 31, 2004 | | 938,500 | | $ | 16.00 | | 9.83 | |
Options granted | | — | | — | | — | |
Options canceled | | (39,500 | ) | 16.00 | | — | |
Options exercised | | — | | — | | — | |
Balance at December 31, 2005 | | 899,000 | | $ | 16.00 | | 8.83 | |
Options granted | | 867,500 | | 18.38 | | 10.00 | |
Options canceled | | (301,333 | ) | 16.00 | | — | |
Options exercised | | (186,667 | ) | 16.00 | | 8.36 | |
Balance at December 31, 2006 | | 1,278,500 | | $ | 17.62 | | 8.92 | |
Options granted | | 960,271 | | 19.82 | | 9.24 | |
Options canceled | | (322,000 | ) | 16.21 | | — | |
Options exercised | | — | | — | | — | |
Balance at December 31, 2007 | | 1,916,771 | | $ | 18.95 | | 8.74 | |
| | | | | | | |
| | | | | | | |
Vested or expected to vest at December 31, 2007 | | 1,916,771 | | 18.95 | | 8.74 | |
Exercisable at December 31, 2007 | | 208,164 | | 17.98 | | 8.17 | |
| | | | | | | | | |
At December 31, 2004:
| | | | | | | | | | | | | | | | | |
| | | 2005 | | | 2004 | |
| | | | | | Weighted Average
| | | | | | Weighted Average
| |
| | | Common Shares
| | | Exercise Price
| | | Common Shares
| | | Exercise Price
| |
| | | Subject to Options | | | Per Option | | | Subject to Options | | | Per Option | |
| |
| Outstanding at beginning of period | | | 938,500 | | | $ | 16.00 | | | | — | | | | — | |
| Options granted | | | — | | | | — | | | | 950,000 | | | $ | 16.00 | |
| Options canceled | | | 39,500 | | | $ | 16.00 | | | | 11,500 | | | $ | 16.00 | |
| Options exercised | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Outstanding at end of period | | | 899,000 | | | $ | 16.00 | | | | 938,500 | | | $ | 16.00 | |
| | | | | | | | | | | | | | | | | |
The following table summarizes information regarding2007, the aggregate intrinsic value of options outstanding, at December 31, 2005:
| | | | | | | | | | | | | | | | | | | | | |
| | | Options Outstanding | | | Options Not Exercisable | |
| | | | | | Weighted-
| | | | | | | | | | |
| | | | | | Average
| | | Weighted
| | | | | | Weighted
| |
| | | | | | Remaining
| | | Average
| | | | | | Average
| |
| | | | | | Contractual Life
| | | Exercise
| | | | | | Exercise
| |
Exercise Prices | | Options | | | in Years | | | Price | | | Options | | | Price | |
| |
| $16.00 | | | 500,000 | | | | 1.8 | | | $ | 16.00 | | | | 333,333 | | | $ | 16.00 | |
| $16.00 | | | 399,000 | | | | 3.8 | | | $ | 16.00 | | | | 399,000 | | | $ | 16.00 | |
of options that vested or expected to vest and of options that were exercisable was $0.0 million.Restricted Shares
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 124,000 restricted shares were issued during 2007 for which the fair value of the restricted shares at their respective grant dates was approximately $1.9 million. During 2006, approximately 74,000 restricted shares were issued for which the fair value of the restricted shares at their respective grant dates was approximately $1.3 million. As of December 31, 2007 the Company had approximately $1.3 million of remaining unrecognized compensation costs related to 2007 restricted share issuances that will be recognized over the next five years.
On December 22, 2005, 163,677 restricted share units were granted to certain executives. The restricted share units were granted in the form of deferred share units, entitling the holders thereof to receive common shares at a future date. Holders of the deferred share units are not entitled to any of the rights of a shareholder with respect to the deferred share units unless and until the common shares relating to the deferred share unit award have been delivered to such holder. However, the holders of the deferred share units are entitled to receive dividend equivalent payments, upon the Company’s payment of a cash dividend on outstanding common shares.
The shares were equally divided between time-vesting shares and market-based shares with values of $20.62 and $13.82 per share, respectively (market-based shares granted to the CEO that vest immediately are valued at $20.62).respectively. The fair value of the restricted share units at grant date was approximately $3.0 million. AThe Company used a Monte Carlo simulation analyses was used in estimatinganalysis to estimate the fair value of themarket-based shares. The time-vesting
F-26
shares vest ratably over a five-year period, one-fifth per year on each of the first five anniversaries of the grant date. The market-based shares vest ratably over a five-year period, one-fifth per year on each of the first five anniversaries of the grant date if the average annual total shareholder return for the Company equals or exceeds ten percent. Additionally, anymarket-based shares that do not vest on a previous anniversary will vest on a subsequent anniversary date if the average annual total shareholder return from grant date equals or exceeds ten percent. Certain restricted share units awarded to the chief executive officerformer Chief Executive Officer vest immediately upon his retirement from the Company asand since he has reached the retirement age set forth in his award agreement. Accordingly, 72,745 shares issuedagreement prior to December 31, 2005, Robert J. Amsdell,Amsdell’s 72,745 restricted shares, valued at approximately $1.5 million, was fully recordedwere recognized as share compensation expense in 2005. During 2006, certain unvested shares vested early related to the termination of several executives under the terms of their respective employment agreements. Accordingly, the Company recognized the related compensation expense in 2006. As of December 31, 20052006 the Company had $1.6 million ofno remaining unrecognized compensation cost related to unvestedthe December 22, 2005 restricted share units that will be recorded over the next five years.
F-30
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
The fair value for restricted share units granted in 2005 wasand 2007 were estimated at the time the units were granted. Awards that contain a market feature were valued using a Monte Carlo-pricing model applying the following weighted average assumptions:
| | | | | |
Assumptions: | | 2005 | |
| |
| Risk-free interest rate | | | 4.69 | % |
| Volatility of total annual return | | | 19.0 | % |
| Weighted average expected life of the units | | | 5 years | |
| Weighted average fair value of units granted | | $ | 18.73 | |
The restricted share units granted to certain executive officers, as discussed in the previous paragraph, were granted in the form of deferred share units, entitling the holders thereof to receive common shares at a future date. Holders of the deferred share units are not entitled to any of the rights of a shareholder with respect to the deferred share units unless and until the common shares relating to the deferred share unit award has been delivered to such holder. However, the holders of the deferred share units are entitled to receive dividend equivalent payments, upon the Company’s payment of a cash dividend on outstanding common shares.
Assumptions: | | 2005 | | 2007 | |
Risk-free interest rate | | 4.69 | % | 4.50 | % |
Volatility of total annual return | | 19.0 | % | 19.0 | % |
Weighted average expected life of the units | | 5 years | | 3 years | |
Weighted average fair value of units granted | | $ | 18.73 | | $ | 11.70 | |
| | | | | | | |
In May 2005, the Company implemented the Deferred Trustees Plan, a component of the Plan, upon the approval of the Company’s boardBoard of trustees.Trustees. Pursuant to the terms of the Deferred Trustees Plan, each non-employee member of the boardBoard of trusteesTrustees may elect to receive all of his annual cash retainers and meeting fees payable for service on the boardBoard of trusteesTrustees or any committee of the boardBoard of trusteesTrustees in the form of either all common shares or all deferred share units.
Pursuant to the terms of the Deferred Trustees Plan, under the equity incentive plan, certain trusteesTrustees elected to receive their boardBoard of trusteeTrustee fees in 2005 and 2006 in the form of deferred share units. AtOn December 31, 2006 an aggregate of 8,564 deferred share units were granted to those Trustees and were valued at $20.55 per share and on December 31, 2005 anand aggregate of 3,876 deferred share units were granted to those trustees and were valued at $21.05 per share.
During 2004, there were an aggregate of 20,315 restricted shares granted to our trustees.Trustees. The restricted shares were granted on October 27, 2004 and were valued at a price of $16.00 per share. The value of the restricted shares was recognized as compensation expense over the vesting or service period during 2004 and 2005.
In 20052007, 2006 and 2004,2005, the Company recognized compensation expense related to restricted shares and restricted share units issued to employees and trusteesTrustees of approximately $1.1 million, $0.7 million and $1.7 million, and $2.4 million, respectively and wasrespectively; these amounts were recorded in generalGeneral and administrative expense. Included in compensation expense for 2005 is approximately $1.5 million which represents the vested portion of the fair value of the restricted share units granted of 163,677 at a range of $13.82 to $20.62 per restricted share units to certain members of the Company’s management team. The following table presents non-vested restricted share compensation expense in 2004 represents the fair value of the restricted share units granted of 146,875 at $16.00 per restricted share unit to certain members of the Company’s management team at consummation of the IPO. The 2004 units did not have any vesting or forfeiture requirements.
F-31
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
|
| Number of Non- |
|
|
| 13. Vested Restricted
|
|
|
| EARNINGS PER SHARE AND SHAREHOLDER’S EQUITYShares
|
|
Non-Vested at January 1, 2007 | | 104,854 | |
Granted | | 124,121 | |
Vested | | (18,820 | ) |
Forfeited | | (32,084 | ) |
Non-Vested at December 31, 2007 | | 178,071 | |
F-27
14. EARNINGS PER SHARE AND SHAREHOLDERS’ EQUITY
The following is a summary of the elements used in calculating basic and diluted earnings per share:
| | For the year ended December 31, | |
| | 2007 | | 2006 | | 2005 | |
| | (Dollars and shares in thousands, except per share amounts) | |
| | | | | | | |
Income (loss) from continuing operations | | $ | (15,481 | ) | $ | (8,742 | ) | $ | 979 | |
Income from discontinued operations | | 2,404 | | 191 | | 589 | |
Net income (loss) attributable to common | | | | | | | |
shares | | $ | (13,077 | ) | $ | (8,551 | ) | $ | 1,568 | |
| | | | | | | |
Weighted-average shares outstanding | | 57,497 | | 57,287 | | 42,120 | |
Share options and restricted share units (1) | | — | | — | | 83 | |
| | 57,497 | | 57,287 | | 42,203 | |
| | | | | | | |
Income (loss) per Common Share: | | | | | | | |
Continuing operations | | $ | (0.26 | ) | $ | (0.15 | ) | $ | 0.02 | |
Discontinued operations | | 0.04 | | — | | 0.02 | |
| | $ | (0.22 | ) | $ | (0.15 | ) | $ | 0.04 | |
| | | | | | | | | |
| | | | | | For the Period
| |
| | | | | | October 21, 2004
| |
| | | Year Ended
| | | through
| |
| | | December 31,
| | | December 31,
| |
| | | 2005 | | | 2004 | |
| | | (Dollars and shares in thousands,except per share amounts) | |
| |
| Income (loss) from continuing operations | | $ | 2,566 | | | $ | (29,898 | ) |
| Discontinued operations | | | 211 | | | | — | |
| | | | | | | | | |
| Net income (loss) attributable to common shares | | $ | 2,777 | | | $ | (29,898 | ) |
| | | | | | | | | |
| Weighted average common shares outstanding — basic | | | 42,120 | | | | 37,478 | |
| Potentially dilutive common shares(1): | | | | | | | | |
| Share options and restricted share units | | | 83 | | | | — — | |
| | | | | | | | | |
| Adjusted weighted average common shares outstanding — diluted | | | 42,203 | | | | 37,478 | |
| | | | | | | | | |
| Income (loss) from continuing operations per share — basic and diluted | | $ | 0.07 | | | $ | (0.80 | ) |
| Income (loss) from discontinued operations — basic and diluted | | | — | | | | — | |
| | | | | | | | | |
| Net income (loss) per share — basic and diluted | | $ | 0.07 | | | $ | (0.80 | ) |
| | | | | | | | | |
| | |
(1) | | For the year ended 2005, the potentially dilutive shares of 45,467 were not included in the earnings per share calculation as the shares were based on meeting market conditions that have not occurred as of December 31, 2005. For the period October 21, 2004 through December 31, 2004, the potentially dilutive shares of approximately 66,000 were not included in the earnings per share calculation as their effect is antidilutive. |
(1) For the years ended December 31, 2007 and 2006 the potentially dilutive shares of approximately 22,000 and 121,000, respectively, were not included in the earnings per share calculation as their effect is antidilutive.
The operating partnership units and common shares have essentially the same economic characteristics as they share equally in the total net income or loss and distributions of the operating partnership. An operating partnership unit may be redeemed for cash, or at the Company’s option, common shares on aone-for-one basis beginning on October 27, 2005. basis. Outstanding minority interest units in the operating partnership were 5,198,8555,079,928 as of December 31, 2005.2007. There were 57,010,16257,577,232 common shares outstanding as of December 31, 2005. The outstanding common shares as of December 31, 2005, exclude 223,496 of deferred share units granted to certain members of the Company’s management team (Note 12) which are treated as outstanding basic shares for computational purposes of earnings per share.
Concurrently with the closing of the IPO, the Company granted Steven G. Osgood, Todd C. Amsdell and Tedd D. Towsley options to purchase 200,000 shares, 200,000 shares and 100,000 shares, respectively. The options have an exercise price equal to the market value of the underlying common shares on the date of the grant ($16.00), and they become exercisable in three equal annual installments on October 27, 2005, 2006 and 2007.
Share-based compensation cost of approximately $0.5 million and $0.1 million has been recorded for options outstanding for the year ended December 31, 2005 and for the period October 21, 2004 through December 31, 2004, respectively, using the fair value of the options calculated using the Black-Scholes method.
F-32
15. INCOME TAXESU-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
| | | | | | | | | |
| | | December 31, | |
| | | 2005 | | | 2004 | |
| | | (Dollars in millions) | |
| |
| Income tax provision | | | | | | | | |
| Current | | | | | | | | |
| U.S. Federal | | $ | — | | | $ | 0.1 | |
| Deferred | | | | | | | | |
| U.S. Federal | | | — | | | | — | |
| | | | | | | | | |
| Income tax provision | | $ | — | | | $ | 0.1 | |
| | | | | | | | | |
| Effective income tax rate | | | | | | | | |
| Statutory federal income tax rate | | | 34 | % | | | 34 | % |
| State and local income taxes | | | 9 | % | | | 9 | % |
| | | | | | | | | |
| Effective income tax rate | | | 43 | % | | | 43 | % |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | December 31, | |
| | | 2005 | | | 2004 | |
| | | Assets | | | Liabilities | | | Assets | | | Liabilities | |
| |
| Deferred taxes Share based compensation | | $ | 1.6 | | | $ | 1.6 | | | $ | 0.9 | | | $ | 0.9 | |
| Other | | | 0.1 | | | | — | | | | 0.1 | | | | — | |
| | | | | | | | | | | | | | | | | |
| Deferred taxes | | $ | 1.7 | | | $ | 1.6 | | | $ | 1.0 | | | $ | 0.9 | |
| | | | | | | | | | | | | | | | | |
Deferred income taxes are established for temporary differences between financial reporting basis and tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for deferred tax assets is provided if the Company believes
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 at December 31,
2005 and 2004.2007 or 2006. The Company had
a net deferred tax
assetassets of
$0.1$0.5 million and $0.3 million, which are included in other assets,
atas of December 31,
20052007 and
2004.2006, respectively. The Company believes it is more likely than not the tax
assetassets will be realized.
F-28
| |
15. | PRO FORMA FINANCIAL INFORMATION (UNAUDITED) |
| | For the year ended December 31, | |
| | 2007 | | 2006 | | 2005 | |
Income tax provision | | | | | | | |
Current: | | | | | | | |
U.S. Federal | | $ | — | | $ | — | | $ | — | |
| | | | | | | |
Deferred: | | | | | | | |
U.S. Federal | | (0.1 | ) | (0.2 | ) | — | |
| | | | | | | |
Income tax provision | | $ | (0.1 | ) | $ | (0.2 | ) | $ | — | |
| | | | | | | |
Effective income tax rate | | | | | | | |
Statutory federal income tax rate | | 34.0 | % | 34.0 | % | 34 | % |
State and local income taxes | | 4.0 | % | 2.6 | % | 9 | % |
Effective income tax rate | | 38.0 | % | 36.6 | % | 43 | % |
| | As of December 31, | |
| | 2007 | | 2006 | | 2005 | |
| | Assets | | Liabilities | | Assets | | Liabilities | | Assets | | Liabilities | |
Deferred taxes | | | | | | | | | | | | | |
Share based compensation | | $ | 0.7 | | $ | 0.6 | | $ | 0.8 | | $ | 0.8 | | $ | 1.6 | | $ | 1.6 | |
Other | | 0.4 | | — | | 0.3 | | — | | 0.1 | | — | |
Deferred taxes | | $ | 1.1 | | $ | 0.6 | | $ | 1.1 | | $ | 0.8 | | $ | 1.7 | | $ | 1.6 | |
16. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
During the year ended December 31, 2005,2006, the Company acquired 14660 self-storage facilities for an aggregate purchase price of approximately $547.9 million as described in Note 3. The$362.4 million. During 2007, the Company also acquired 4617 self-storage facilities in 2004 subsequent to the Company’s IPO for an aggregate purchase price of approximately $221.8 million. Additionally, The Company sold four of the facilities acquired in 2005 for approximately $6.2$140.5 million and consolidated four other facilities resulting in a net additionsold three properties for an aggregate purchase price of 138 facilities in 2005.
approximately $19.1 million.The unaudited condensed consolidated pro forma financial information set forth below reflectreflects adjustments to the Company’s historical financial data to give effect to each of the followingacquisitions, dispositions and related financing activity (including the issuance of common shares) that occurred subsequent to January 1, 2006 as if each had occurred on January 1 2004 which are primarily the acquisitions and related assumed indebtedness completed from the time of the IPO through December 31, 2005.
each respective year. 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.
F-33
U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
The following table summarizes, on a pro forma basis, our consolidated results of operations for the years ended December 31,
20052007 and
20042006 based on the assumptions described above:
| | 2007 | | 2006 | |
| | (unaudited) | |
| | (in thousands, except per share data) | |
| | | | | |
Pro forma revenue | | $ | 235,642 | | $ | 229,186 | |
Pro forma loss from continuing operations | | $ | (24,915 | ) | $ | (27,054 | ) |
Loss per common share from continuing operations | | | | | |
Basic and diluted — as reported | | $ | (0.26 | ) | $ | (0.15 | ) |
Basic and diluted — as pro forma | | $ | (0.43 | ) | $ | (0.47 | ) |
F-29
| | | | | | | | | |
| | | 2005 | | | 2004 | |
| | | (unaudited) | |
| | | (Dollars in thousands, except per share data) | |
| |
| Pro forma total revenues | | $ | 180,828 | | | $ | 171,258 | |
| Pro forma net income | | $ | 6,950 | | | $ | (18,574 | ) |
| Pro forma diluted earnings per share | | $ | 0.16 | | | $ | (0.50 | ) |
16.17. ASSET IMPAIRMENT AND INSURANCE RECOVERYRECOVERIES
As a result of hurricanes that occurred during the three months ended September 30,third quarter of 2005, the Company incurred damage at certain of its self-storage facilities located in Alabama, Louisiana and Mississippi. Under the provisions of SFAS No. 144, “Accounting for the Impairment of or Disposal of Long-Lived Assets” (“SFAS No. 144”), the Company determined that there were indicators of impairment and accordingly tested the assets for recoverability. After an assessment of the damage sustained at the Waveland, Mississippi facility, the Company determined that a charge for impairment of approximately $2.3 million was required because the estimated undiscounted future cash flows did not support the carrying value of the assets. The Company hasexpected that insurance proceeds from its comprehensive insurance coverage for property damage. Although the Company currently expects it is probable the insurance proceeds will coverdamage would satisfy the entire loss incurred, the Company is required to recordand in 2005 appropriately recorded the impairment charge and to record an offsetting insurance recovery of $2.3 million, of which $0.5 million was received in October 2005. While the Company expects the insurance proceeds will be sufficient to cover the entire replacement cost of the damaged facility, certain deductibles and limitations will apply and no assurances can be made that proceeds will be sufficient to cover the costs of the entire restoration. To the extent that insurance proceeds, which are on a replacement cost basis, ultimately exceed the net book value of the damaged facility, a gain will be recognized in the period when all contingencies related to the insurance claim have been resolved. The related insurance receivable iswas included in other assets as of December 31, 2005, and the asset impairment charge and related insurance recovery are recordedwere presented net in the same line item for operating expenses for the year ended December 31, 2005.
F-34
18. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”) AND
ACQUIPORT/AMSDELL (THE “PREDECESSOR”)
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS — (Continued)
| |
17. | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) |
The following is a summary of selected quarterly financial information for the Company and the Predecessor for years ended December 31, 20052007 and 2004:
| | | | | | | | | | | | | | | | | | | | | |
| | | Consolidated and Combined Quarter Ended | |
| | | | | | | | | | | | | | | Year Ended
| |
Year | | March 31, | | | June 30, | | | September 30, | | | December 31,(1)(2) | | | December 31, | |
| | | (Dollars in thousands, except per share data) | |
| |
2005 | | | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 29,715 | | | $ | 33,784 | | | $ | 41,303 | | | $ | 43,319 | | | $ | 148,121 | |
| Income (loss) before minority interests | | | 1,677 | | | | 2,301 | | | | 1,860 | | | | (3,073 | ) | | | 2,765 | |
| Net income (loss) | | | 1,617 | | | | 2,204 | | | | 1,665 | | | | (2,709 | ) | | | 2,777 | |
| Net loss per share — basic and diluted | | | 0.04 | | | | 0.06 | | | | 0.04 | | | | (0.05 | ) | | | 0.07 | |
2004 | | | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 20,524 | | | $ | 21,207 | | | $ | 22,281 | | | $ | 27,596 | | | $ | 91,608 | |
| Income (loss) before minority interests | | | 3,084 | | | | (1,223 | ) | | | (2,271 | ) | | | (32,835 | ) | | | (33,245 | ) |
| Net income (loss) | | | 3,084 | | | | (1,223 | ) | | | (2,271 | ) | | | (31,937 | ) | | | (32,347 | ) |
| Net loss per share-basic and diluted | | | — | | | | — | | | | — | | | | (.80 | ) | | | (.80 | ) |
| | |
(1) | | The quarter ended December 31, 2004 represents consolidated operating results for the Company from October 21, 2004 to December 31, 2004 and combined operating results for the Predecessor from October 1, 2004 to October 20, 2004. The operating results for the quarter ended December 31, 2004 are not comparable to future expected operating results of the Company since they include various IPO-related charges. |
(2) | | The quarter ended December 31, 2005 includes approximately $1.5 million of compensation expense for restricted share units and approximately $2.1 million of bonuses for certain management employees. |
2006 (in thousands, except per share data): | | Three months ended | |
| | March 31, | | June 30, | | September 30, | | December 31, | |
| | 2007 | | 2007 | | 2007 | | 2007 | |
Total revenues | | $ | 54,907 | | $ | 56,077 | | $ | 58,073 | | $ | 60,110 | |
Total operating expenses | | $ | 45,597 | | $ | 44,594 | | $ | 48,621 | | $ | 51,860 | |
Net income (loss) | | $ | (3,358 | ) | $ | 295 | | $ | (4,130 | ) | $ | (5,884 | ) |
Basic and diluted earnings (loss) per share | | $ | (0.06 | ) | $ | — | | $ | (0.07 | ) | $ | (0.10 | ) |
| | Three months ended | |
| | March 31, | | June 30, | | September 30, | | December 31, | |
| | 2006 | | 2006 | | 2006 | | 2006 | |
Total revenues | | $ | 47,613 | | $ | 52,776 | | $ | 55,798 | | $ | 54,462 | |
Total operating expenses | | $ | 38,741 | | $ | 40,729 | | $ | 45,645 | | $ | 47,041 | |
Net income (loss) | | $ | (1,625 | ) | $ | 724 | | $ | (1,962 | ) | $ | (5,688 | ) |
Basic and diluted earnings (loss) per share | | $ | (0.03 | ) | $ | 0.01 | | $ | (0.03 | ) | $ | (0.10 | ) |
19. LEASE ABANDONMENT CHARGE
In August 2007, the Company abandoned certain office space in Cleveland, OH that was previously used for its corporate offices. The related leases have expiration dates ranging from December 31, 2008 through December 31, 2014. Upon vacating the space, the Company entered into a sub-lease agreement with a sub-tenant to lease the majority of the space for the duration of the term.
As a result of this exit activity, the Company recognized a “Lease abandonment charge” of $1.3 million during 2007. The charge is comprised of approximately $0.8 million of costs that represent the present value of the net cash flows associated with leases and the sub-lease agreement (“Contract Termination Costs”) and approximately $0.5 million of costs associated with the write-off of certain assets related to the abandoned space (“Other Associated Costs”). The Contract Termination Costs of $0.8 million are presented as “Accounts payable and accrued rent” and the Other Associated Costs of $0.5 million were accounted for as a reduction of “Storage facilities.” The Company completedwill amortize the following transactions subsequent to December 31, 2005:
| | |
| • | Acquisition of Nashville, TN Portfolio. In January 2006, the Company acquired two self-storage facilities located in Nashville, Tennessee for consideration of approximately $13.1 million. These facilities total approximately 204,000 rentable square feet and are part of five self-storage facilities located in Tennessee that the Company agreed to acquire pursuant to an agreement entered in December 2005. As described in Note 3, the Company initially acquired three of these facilities, for aggregate consideration of $14.7 million, in December 2005. |
|
| • | Acquisition of Dallas, TX Portfolio. In January 2006, the Company acquired two self-storage facilities located in Dallas, Texas for consideration of approximately $11.5 million, consisting of approximately $4.4 million in cash and the assumption of approximately $7.1 million of indebtedness. These facilities total approximately 132,000 rentable square feet and are part of a portfolio of eight self-storage facilities located in Dallas, Texas that the Company agreed to acquire pursuant to an agreement entered into in October 2005. As described in Note 3, the Company initially acquired six of these facilities, for aggregate consideration of $17.9 million in October 2005. |
Contract Termination Costs against rental expense over the remaining life of the respective leases.
F-35
F-30
| | |
| • | Acquisition of U-Stor Self Storage Portfolio. In February 2006, the Company acquired three self-storage facilities located in Colorado for consideration of approximately $10.9 million. These facilities total approximately 173,000 rentable square feet. The Company also has agreed to acquire from this seller an additional self-storage facility, for additional consideration of approximately $3.5 million including the assumption of $2.1 million of indebtedness, during the first half of 2006. |
|
| • | Acquisition of Sure Save Portfolio. In February 2006, the Company acquired 24 self-storage facilities from Crownridge Storage Portfolio, LLC and Williams Storage Portfolio III, LLC for consideration of approximately $164.5 million. These facilities total approximately 1.8 million rentable square feet and are located in Arizona, California, Nevada, New Mexico and Texas. |
|
| • | Term Loan Agreement. In February 2006 the Company entered into a60-day, unsecured $30 million term loan agreement with Wachovia Bank, National Association as the lender. The term loan bears interest at LIBOR plus 175 basis points. The loan proceeds were used to finance a portion of the acquisition of the Sure Save Portfolio. The loan was paid in full from proceeds obtained upon entering into a new revolving credit facility in February 2006. |
|
| • | Revolving Credit Facility. In February 2006 the Company and the operating partnership entered into a new three-year $250.0 million revolving credit facility, replacing the Company’s existing $150.0 million facility. The terms of the new agreement allows the Company to increase the credit limit up to $350.0 million if necessary, at a later date. Under terms of the agreement, the Company is required to satisfy certain financial and operating covenants including leverage ratio and interest coverage ratio. Borrowings under the new facility bear interest, at the Company’s option, at either an alternate base rate or a Eurodollar rate, in each case plus an applicable margin. The alternative base interest rate is a fluctuating rate equal to the higher of the prime rate or the sum of the federal funds effective rate plus 50 basis points. The applicable margin for the alternative base rate will vary from 1.15% to 1.60% depending on the Company’s leverage ratio. The revolving credit agreement expires in February 2009 and is unsecured. |
|
| • | Acquisition of Texas Portfolio. In March 2006, the Company acquired four self-storage facilities located in Texas, for consideration of approximately $22.5 million. These facilities total approximately 273,000 rentable square feet and are part of a portfolio of 12 self-storage facilities located in Texas that the Company agreed to acquire pursuant to an agreement entered into in July 2005. As described above in Note 3, the Company initially acquired four of these facilities, for aggregate consideration of $15.6 million, in September 2005, and one of these facilities for $5.5 million, in November 2005. The Company expects to acquire the remaining three facilities, for aggregate consideration of approximately $18.2 million, during the first half of 2006. These three facilities total approximately 213,000 rentable square feet. |
F-36
U-STORE-IT
REAL ESTATE AND RELATED DEPRECIATION
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Initial Cost | | | Gross Carrying Amount
| | | | | | | |
| | | | | | | | | Building
| | | Costs
| | | at December 31, 2005 | | | | | | | |
| | | | | | | | | and
| | | Subsequent
| | | | | | Building and
| | | | | | Accumulated
| | | Year
| |
| | | Encum-
| | | | | | Improve-
| | | to
| | | | | | Improve-
| | | | | | Depreciation
| | | Acquired/
| |
Description | | brances | | | Land | | | ments | | | Acquisition | | | Land | | | ments | | | Total | | | (O) | | | Developed | |
| | | (Dollars in thousands) | |
| |
| Mobile I, AL | | | (N | ) | | | 149 | | | | 1,429 | | | | 572 | | | | 225 | | | | 1,925 | | | | 2,150 | | | | 489 | | | | 1997 | |
| Mobile II, AL | | | (F | ) | | | 226 | | | | 2,524 | | | | 749 | | | | 301 | | | | 3,198 | | | | 3,499 | | | | 1,025 | | | | 1997 | |
| Mobile III, AL | | | (A | ) | | | 167 | | | | 1,849 | | | | 240 | | | | 237 | | | | 2,019 | | | | 2,256 | | | | 447 | | | | 1998 | |
| Chandler, AZ | | | (N | ) | | | 327 | | | | 1,257 | | | | 73 | | | | 327 | | | | 1,330 | | | | 1,657 | | | | 31 | | | | 2005 | |
| Glendale, AZ | | | (A | ) | | | 201 | | | | 2,265 | | | | 806 | | | | 418 | | | | 2,854 | | | | 3,272 | | | | 546 | | | | 1998 | |
| Green Valley, AZ | | | (H | ) | | | 298 | | | | 1,153 | | | | 18 | | | | 298 | | | | 1,171 | | | | 1,469 | | | | 26 | | | | 2005 | |
| Scottsdale, AZ | | | (A | ) | | | 443 | | | | 4,879 | | | | 1,521 | | | | 883 | | | | 5,960 | | | | 6,843 | | | | 1,132 | | | | 1998 | |
| Tempe, AZ | | | (F | ) | | | 749 | | | | 2,159 | | | | 18 | | | | 749 | | | | 2,177 | | | | 2,926 | | | | 57 | | | | 2005 | |
| Tucson I, AZ | | | (A | ) | | | 188 | | | | 2,078 | | | | 712 | | | | 384 | | | | 2,594 | | | | 2,978 | | | | 499 | | | | 1998 | |
| Tucson II, AZ | | | (A | ) | | | 188 | | | | 2,078 | | | | 786 | | | | 391 | | | | 2,661 | | | | 3,052 | | | | 497 | | | | 1998 | |
| Tucson, AZ | | | (L | ) | | | 711 | | | | 2,736 | | | | 5 | | | | 711 | | | | 2,741 | | | | 3,452 | | | | 65 | | | | 2005 | |
| Tucson, AZ | | | (L | ) | | | 532 | | | | 2,048 | | | | 44 | | | | 532 | | | | 2,092 | | | | 2,624 | | | | 48 | | | | 2005 | |
| Tucson, AZ | | | (L | ) | | | 674 | | | | 2,595 | | | | 31 | | | | 674 | | | | 2,626 | | | | 3,300 | | | | 61 | | | | 2005 | |
| Tucson, AZ | | | (L | ) | | | 515 | | | | 1,980 | | | | 28 | | | | 515 | | | | 2,008 | | | | 2,523 | | | | 47 | | | | 2005 | |
| Tucson, AZ | | | (L | ) | | | 440 | | | | 1,692 | | | | 37 | | | | 440 | | | | 1,729 | | | | 2,169 | | | | 40 | | | | 2005 | |
| Tucson, AZ | | | (L | ) | | | 670 | | | | 2,576 | | | | 34 | | | | 670 | | | | 2,610 | | | | 3,280 | | | | 61 | | | | 2005 | |
| Tucson, AZ | | | (L | ) | | | 589 | | | | 2,265 | | | | 20 | | | | 589 | | | | 2,285 | | | | 2,874 | | | | 53 | | | | 2005 | |
| Tucson, AZ | | | (L | ) | | | 724 | | | | 2,786 | | | | 23 | | | | 724 | | | | 2,809 | | | | 3,533 | | | | 65 | | | | 2005 | |
| Tucson, AZ | | | (L | ) | | | 424 | | | | 1,633 | | | | 22 | | | | 424 | | | | 1,655 | | | | 2,079 | | | | 39 | | | | 2005 | |
| Tucson, AZ | | | (L | ) | | | 439 | | | | 1,689 | | | | 41 | | | | 439 | | | | 1,730 | | | | 2,169 | | | | 40 | | | | 2005 | |
| Tucson, AZ | | | (L | ) | | | 671 | | | | 2,582 | | | | 40 | | | | 671 | | | | 2,622 | | | | 3,293 | | | | 61 | | | | 2005 | |
| Tucson, AZ | | | (L | ) | | | 587 | | | | 2,258 | | | | 11 | | | | 587 | | | | 2,269 | | | | 2,856 | | | | 54 | | | | 2005 | |
| Tucson, AZ | | | 1,264 | | | | 540 | | | | 2,076 | | | | 31 | | | | 540 | | | | 2,107 | | | | 2,647 | | | | 48 | | | | 2005 | |
| Tucson, AZ | | | 1,358 | | | | 707 | | | | 2,721 | | | | 9 | | | | 707 | | | | 2,730 | | | | 3,437 | | | | 63 | | | | 2005 | |
| Apple Valley I, CA | | | (D | ) | | | 140 | | | | 1,570 | | | | 1,386 | | | | 476 | | | | 2,620 | | | | 3,096 | | | | 470 | | | | 1997 | |
| Apple Valley II, CA | | | (G | ) | | | 160 | | | | 1,787 | | | | 1,109 | | | | 431 | | | | 2,625 | | | | 3,056 | | | | 514 | | | | 1997 | |
| Benicia, CA | | | (N | ) | | | 2,392 | | | | 7,028 | | | | 4 | | | | 2,392 | | | | 7,032 | | | | 9,424 | | | | 34 | | | | 2005 | |
| Bloomington I, CA | | | (N | ) | | | 42 | | | | 463 | | | | 365 | | | | 100 | | | | 770 | | | | 870 | | | | 166 | | | | 1997 | |
| Bloomington II, CA | | | (N | ) | | | 54 | | | | 604 | | | | 408 | | | | 144 | | | | 922 | | | | 1,066 | | | | 175 | | | | 1997 | |
| Citrus Heights, CA | | | (L | ) | | | 1,633 | | | | 4,793 | | | | 20 | | | | 1,633 | | | | 4,813 | | | | 6,446 | | | | 116 | | | | 2005 | |
| Diamond Bar, CA | | | 2,618 | | | | 2,522 | | | | 7,404 | | | | 9 | | | | 2,524 | | | | 7,411 | | | | 9,935 | | | | 174 | | | | 2005 | |
| Fallbrook, CA | | | (C | ) | | | 133 | | | | 1,492 | | | | 1,362 | | | | 433 | | | | 2,554 | | | | 2,987 | | | | 441 | | | | 1997 | |
| Hemet, CA | | | (D | ) | | | 125 | | | | 1,396 | | | | 1,236 | | | | 417 | | | | 2,340 | | | | 2,757 | | | | 417 | | | | 1997 | |
| Highland, CA | | | (D | ) | | | 215 | | | | 2,407 | | | | 1,770 | | | | 582 | | | | 3,810 | | | | 4,392 | | | | 735 | | | | 1997 | |
| Lancaster, CA | | | (G | ) | | | 390 | | | | 2,247 | | | | 813 | | | | 556 | | | | 2,894 | | | | 3,450 | | | | 512 | | | | 2001 | |
| Murrieta, CA | | | (N | ) | | | 1,883 | | | | 5,532 | | | | 3 | | | | 1,883 | | | | 5,535 | | | | 7,418 | | | | 26 | | | | 2005 | |
| North Highlands, CA | | | (L | ) | | | 868 | | | | 2,546 | | | | 9 | | | | 868 | | | | 2,555 | | | | 3,423 | | | | 61 | | | | 2005 | |
| Ontario, CA | | | (A | ) | | | 292 | | | | 3,289 | | | | 1,713 | | | | 688 | | | | 4,606 | | | | 5,294 | | | | 789 | | | | 1998 | |
| Orangevale, CA | | | (L | ) | | | 1,423 | | | | 4,175 | | | | 15 | | | | 1,423 | | | | 4,190 | | | | 5,613 | | | | 100 | | | | 2005 | |
| Pleasanton, CA | | | (N | ) | | | 2,799 | | | | 8,222 | | | | 4 | | | | 2,799 | | | | 8,226 | | | | 11,025 | | | | 39 | | | | 2005 | |
| Rancho Cordova, CA | | | (L | ) | | | 1,094 | | | | 3,212 | | | | 12 | | | | 1,094 | | | | 3,224 | | | | 4,318 | | | | 77 | | | | 2005 | |
| Redlands, CA | | | (C | ) | | | 196 | | | | 2,192 | | | | 1,032 | | | | 449 | | | | 2,971 | | | | 3,420 | | | | 652 | | | | 1997 | |
| Rialto, CA | | | (A | ) | | | 277 | | | | 3,098 | | | | 1,542 | | | | 672 | | | | 4,245 | | | | 4,917 | | | | 896 | | | | 1997 | |
| Riverside I, CA | | | (N | ) | | | 42 | | | | 465 | | | | 489 | | | | 141 | | | | 855 | | | | 996 | | | | 160 | | | | 1997 | |
F-37
(in thousands) | | | | | | | | | | Gross Carrying Amount | | | | |
| | | | | | Initial Cost | | Costs Sub- | | at December 31, 2007 | | | | |
Description | | Square Footage | | Encum-
brances | | Land | | Building and
Improvements | | sequent to
Acquisition | | Land | | Building and
Improvements | | Total | | Accumulated
Depreciation (L) | | Year Acquired /
Developed |
Mobile I, AL | | 65,198 | | | | $ | 149 | | $ | 1,429 | | $ | 636 | | $ | 225 | | $ | 1,989 | | $ | 2,214 | | $ | 636 | | 1997 |
Mobile II, AL | | 129,260 | | (A) | | 226 | | 2,524 | | 1,165 | | 301 | | 3,583 | | 3,883 | | 1,238 | | 1997 |
Mobile III, AL | | 43,125 | | | | 167 | | 1,849 | | 320 | | 237 | | 2,100 | | 2,336 | | 591 | | 1998 |
Chandler, AZ | | 47,520 | | | | 327 | | 1,257 | | 235 | | 327 | | 1,492 | | 1,819 | | 201 | | 2005 |
Glendale, AZ | | 56,830 | | | | 201 | | 2,265 | | 864 | | 418 | | 2,911 | | 3,330 | | 735 | | 1998 |
Green Valley, AZ | | 25,200 | | (B) | | 298 | | 1,153 | | 89 | | 298 | | 1,242 | | 1,540 | | 167 | | 2005 |
Mesa I, AZ | | 52,375 | | | | 920 | | 2,739 | | 103 | | 921 | | 2,841 | | 3,762 | | 324 | | 2006 |
Mesa II, AZ | | 45,295 | | | | 731 | | 2,176 | | 127 | | 731 | | 2,303 | | 3,034 | | 265 | | 2006 |
Mesa III, AZ | | 58,264 | | | | 706 | | 2,101 | | 128 | | 706 | | 2,210 | | 2,935 | | 256 | | 2006 |
Phoenix I, AZ | | 100,887 | | | | 1,134 | | 3,376 | | 188 | | 1,135 | | 3,512 | | 4,699 | | 403 | | 2006 |
Phoenix II, AZ | | 45,270 | | | | 756 | | 2,251 | | 128 | | 756 | | 2,379 | | 3,136 | | 273 | | 2006 |
Scottsdale, AZ | | 80,925 | | | | 443 | | 4,879 | | 1,558 | | 883 | | 5,998 | | 6,880 | | 1,504 | | 1998 |
Tempe, AZ | | 54,000 | | (A) | | 749 | | 2,159 | | 118 | | 749 | | 2,277 | | 3,027 | | 290 | | 2005 |
Tucson I, AZ | | 59,350 | | | | 188 | | 2,078 | | 820 | | 384 | | 2,703 | | 3,086 | | 667 | | 1998 |
Tucson II, AZ | | 43,950 | | | | 188 | | 2,078 | | 833 | | 391 | | 2,708 | | 3,099 | | 666 | | 1998 |
Tucson III, AZ | | 49,822 | | (C) | | 532 | | 2,048 | | 105 | | 533 | | 2,153 | | 2,686 | | 291 | | 2005 |
Tucson IV, AZ | | 47,840 | | (C) | | 674 | | 2,595 | | 144 | | 675 | | 2,739 | | 3,413 | | 369 | | 2005 |
Tucson V, AZ | | 45,160 | | (C) | | 515 | | 1,980 | | 160 | | 515 | | 2,140 | | 2,655 | | 286 | | 2005 |
Tucson VI, AZ | | 40,778 | | (C) | | 440 | | 1,692 | | 127 | | 440 | | 1,819 | | 2,259 | | 250 | | 2005 |
Tucson VII, AZ | | 52,738 | | (C) | | 670 | | 2,576 | | 197 | | 670 | | 2,772 | | 3,442 | | 365 | | 2005 |
Tucson VIII, AZ | | 46,800 | | (C) | | 589 | | 2,265 | | 90 | | 589 | | 2,354 | | 2,943 | | 317 | | 2005 |
Tucson IX, AZ | | 67,656 | | (C) | | 724 | | 2,786 | | 223 | | 725 | | 3,009 | | 3,734 | | 392 | | 2005 |
Tucson X, AZ | | 46,350 | | (C) | | 424 | | 1,633 | | 72 | | 425 | | 1,705 | | 2,129 | | 233 | | 2005 |
Tucson XI, AZ | | 42,800 | | (C) | | 439 | | 1,689 | | 131 | | 439 | | 1,820 | | 2,259 | | 243 | | 2005 |
Tucson XII, AZ | | 42,375 | | (C) | | 671 | | 2,582 | | 134 | | 672 | | 2,716 | | 3,387 | | 364 | | 2005 |
Tucson XIII, AZ | | 45,792 | | (C) | | 587 | | 2,258 | | 95 | | 587 | | 2,352 | | 2,940 | | 317 | | 2005 |
Tucson XIV, AZ | | 49,470 | | | | 707 | | 2,721 | | 112 | | 708 | | 2,833 | | 3,540 | | 379 | | 2005 |
Apple Valley I, CA | | 73,340 | | (D) | | 140 | | 1,570 | | 1,500 | | 476 | | 2,733 | | 3,210 | | 645 | | 1997 |
Apple Valley II, CA | | 62,115 | | (E) | | 160 | | 1,787 | | 1,165 | | 431 | | 2,681 | | 3,112 | | 678 | | 1997 |
Benicia, CA | | 74,920 | | | | 2,392 | | 7,028 | | 118 | | 2,392 | | 7,146 | | 9,538 | | 850 | | 2005 |
Bloomington I, CA | | 28,550 | | | | 42 | | 463 | | 422 | | 100 | | 827 | | 927 | | 228 | | 1997 |
Bloomington II, CA | | 25,860 | | | | 54 | | 604 | | 414 | | 144 | | 928 | | 1,072 | | 236 | | 1997 |
Cathedral City, CA | | 129,048 | | | | 2,194 | | 10,046 | | 100 | | 2,195 | | 10,145 | | 12,340 | | 1,044 | | 2006 |
Citrus Heights, CA | | 75,620 | | (C) | | 1,633 | | 4,793 | | 89 | | 1,634 | | 4,882 | | 6,516 | | 671 | | 2005 |
Diamond Bar, CA | | 103,228 | | | | 2,522 | | 7,404 | | 142 | | 2,524 | | 7,541 | | 10,068 | | 1,043 | | 2005 |
Escondido, CA | | 143,145 | | | | 3,040 | | 11,804 | | (781 | ) | 3,040 | | 10,238 | | 14,063 | | 198 | | 2007 |
Fallbrook, CA | | 46,370 | | (F) | | 133 | | 1,492 | | 1,455 | | 432 | | 2,648 | | 3,080 | | 609 | | 1997 |
Hemet, CA | | 66,040 | | (D) | | 125 | | 1,396 | | 1,262 | | 417 | | 2,367 | | 2,783 | | 567 | | 1997 |
Highland I, CA | | 76,765 | | (D) | | 215 | | 2,407 | | 1,893 | | 582 | | 3,933 | | 4,515 | | 981 | | 1997 |
Highland II, CA | | 62,257 | | | | 1,277 | | 5,847 | | 134 | | 1,277 | | 5,981 | | 7,258 | | 611 | | 2006 |
Lancaster, CA | | 61,275 | | (E) | | 390 | | 2,247 | | 890 | | 556 | | 2,971 | | 3,527 | | 726 | | 2001 |
Long Beach, CA | | 125,213 | | | | 3,138 | | 14,368 | | 189 | | 3,138 | | 14,557 | | 17,696 | | 1,500 | | 2006 |
Murrieta, CA | | 49,895 | | | | 1,883 | | 5,532 | | 151 | | 1,903 | | 5,663 | | 7,566 | | 678 | | 2005 |
North Highlands, CA | | 57,244 | | (C) | | 868 | | 2,546 | | 185 | | 868 | | 2,731 | | 3,598 | | 363 | | 2005 |
Orangevale, CA | | 50,492 | | (C) | | 1,423 | | 4,175 | | 117 | | 1,423 | | 4,291 | | 5,714 | | 587 | | 2005 |
Palm Springs I, CA | | 72,775 | | | | 1,565 | | 7,164 | | 100 | | 1,566 | | 7,263 | | 8,829 | | 750 | | 2006 |
Palm Springs II, CA | | 122,745 | | | | 2,131 | | 9,758 | | 152 | | 2,132 | | 9,909 | | 12,041 | | 1,020 | | 2006 |
Pleasanton, CA | | 82,415 | | | | 2,799 | | 8,222 | | 42 | | 2,799 | | 8,264 | | 11,063 | | 984 | | 2005 |
Rancho Cordova, CA | | 53,928 | | (C) | | 1,094 | | 3,212 | | 162 | | 1,095 | | 3,374 | | 4,469 | | 457 | | 2005 |
Redlands, CA | | 62,805 | | (F) | | 196 | | 2,192 | | 1,123 | | 449 | | 3,063 | | 3,511 | | 853 | | 1997 |
Rialto, CA | | 57,371 | | | | 899 | | 4,118 | | 86 | | 899 | | 4,204 | | 5,103 | | 434 | | 2006 |
Rialto II, CA | | 99,393 | | | | 277 | | 3,098 | | 1,589 | | 672 | | 4,293 | | 4,964 | | 1,161 | | 1997 |
Riverside I, CA | | 27,485 | | | | 42 | | 465 | | 474 | | 141 | | 841 | | 981 | | 222 | | 1997 |
Riverside II, CA | | 20,420 | | | | 42 | | 423 | | 336 | | 114 | | 687 | | 801 | | 177 | | 1997 |
Riverside III, CA | | 46,809 | | | | 91 | | 1,035 | | 964 | | 310 | | 1,780 | | 2,090 | | 402 | | 1998 |
Riverside IV, CA | | 67,320 | | | | 1,351 | | 6,183 | | 74 | | 1,351 | | 6,257 | | 7,608 | | 646 | | 2006 |
Riverside V, CA | | 85,521 | | | | 1,170 | | 5,359 | | 144 | | 1,170 | | 5,502 | | 6,673 | | 566 | | 2006 |
Riverside VI, CA | | 74,900 | | (K) | | 1,040 | | 4,119 | | (190 | ) | 1,040 | | 3,738 | | 4,969 | | 70 | | 2007 |
Roseville, CA | | 59,944 | | (C) | | 1,284 | | 3,767 | | 180 | | 1,284 | | 3,947 | | 5,231 | | 528 | | 2005 |
Sacramento I, CA | | 50,764 | | (C) | | 1,152 | | 3,380 | | 136 | | 1,152 | | 3,514 | | 4,668 | | 480 | | 2005 |
Sacramento II, CA | | 61,890 | | (C) | | 1,406 | | 4,128 | | 77 | | 1,407 | | 4,205 | | 5,612 | | 579 | | 2005 |
San Bernardino I, CA | | 47,350 | | | | 67 | | 748 | | 826 | | 217 | | 1,424 | | 1,641 | | 334 | | 1997 |
San Bernardino II, CA | | 83,278 | | (F) | | 152 | | 1,704 | | 1,298 | | 450 | | 2,703 | | 3,154 | | 688 | | 1997 |
San Bernardino III, CA | | 31,070 | | (A) | | 51 | | 572 | | 1,037 | | 182 | | 1,478 | | 1,660 | | 391 | | 1997 |
San Bernardino IV, CA | | 57,245 | | (F) | | 152 | | 1,695 | | 1,604 | | 444 | | 3,007 | | 3,451 | | 881 | | 1997 |
San Bernardino V, CA | | 41,646 | | (A) | | 112 | | 1,251 | | 1,077 | | 306 | | 2,135 | | 2,440 | | 644 | | 1997 |
San Bernardino VI, CA | | 35,671 | | (A) | | 98 | | 1,093 | | 884 | | 242 | | 1,813 | | 2,075 | | 575 | | 1997 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
F-31
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Initial Cost | | | Gross Carrying Amount
| | | | | | | |
| | | | | | | | | Building
| | | Costs
| | | at December 31, 2005 | | | | | | | |
| | | | | | | | | and
| | | Subsequent
| | | | | | Building and
| | | | | | Accumulated
| | | Year
| |
| | | Encum-
| | | | | | Improve-
| | | to
| | | | | | Improve-
| | | | | | Depreciation
| | | Acquired/
| |
Description | | brances | | | Land | | | ments | | | Acquisition | | | Land | | | ments | | | Total | | | (O) | | | Developed | |
| | | (Dollars in thousands) | |
| |
| Riverside II, CA | | | (N | ) | | | 42 | | | | 423 | | | | 330 | | | | 114 | | | | 681 | | | | 795 | | | | 135 | | | | 1997 | |
| Riverside III, CA | | | (A | ) | | | 91 | | | | 1,035 | | | | 936 | | | | 310 | | | | 1,752 | | | | 2,062 | | | | 289 | | | | 1998 | |
| Roseville, CA | | | (L | ) | | | 1,284 | | | | 3,767 | | | | 9 | | | | 1,284 | | | | 3,776 | | | | 5,060 | | | | 90 | | | | 2005 | |
| Sacramento, CA | | | (L | ) | | | 1,152 | | | | 3,380 | | | | 27 | | | | 1,152 | | | | 3,407 | | | | 4,559 | | | | 80 | | | | 2005 | |
| Sacramento, CA | | | (L | ) | | | 790 | | | | 2,319 | | | | 10 | | | | 790 | | | | 2,329 | | | | 3,119 | | | | 57 | | | | 2005 | |
| Sacramento, CA | | | (L | ) | | | 1,406 | | | | 4,128 | | | | 16 | | | | 1,406 | | | | 4,144 | | | | 5,550 | | | | 99 | | | | 2005 | |
| San Bernardino I, CA | | | (N | ) | | | 67 | | | | 748 | | | | 798 | | | | 217 | | | | 1,396 | | | | 1,613 | | | | 244 | | | | 1997 | |
| San Bernardino II, CA | | | (C | ) | | | 152 | | | | 1,704 | | | | 1,271 | | | | 451 | | | | 2,676 | | | | 3,127 | | | | 513 | | | | 1997 | |
| San Bernardino III, CA | | | (F | ) | | | 51 | | | | 572 | | | | 1,018 | | | | 182 | | | | 1,459 | | | | 1,641 | | | | 303 | | | | 1997 | |
| San Bernardino IV, CA | | | (C | ) | | | 152 | | | | 1,695 | | | | 1,558 | | | | 444 | | | | 2,961 | | | | 3,405 | | | | 682 | | | | 1997 | |
| San Bernardino V, CA | | | (F | ) | | | 112 | | | | 1,251 | | | | 970 | | | | 306 | | | | 2,027 | | | | 2,333 | | | | 520 | | | | 1997 | |
| San Bernardino VI, CA | | | (F | ) | | | 98 | | | | 1,093 | | | | 822 | | | | 242 | | | | 1,771 | | | | 2,013 | | | | 470 | | | | 1997 | |
| San Bernardino, CA | | | (G | ) | | | 1,872 | | | | 5,391 | | | | 9 | | | | 1,872 | | | | 5,400 | | | | 7,272 | | | | 277 | | | | 2005 | |
| San Marcos, CA | | | (I | ) | | | 775 | | | | 2,288 | | | | 9 | | | | 776 | | | | 2,296 | | | | 3,072 | | | | 54 | | | | 2005 | |
| Sun City, CA | | | (A | ) | | | 140 | | | | 1,579 | | | | 762 | | | | 324 | | | | 2,157 | | | | 2,481 | | | | 403 | | | | 1998 | |
| Temecula I | | | (A | ) | | | 184 | | | | 2,038 | | | | 1,033 | | | | 435 | | | | 2,820 | | | | 3,255 | | | | 510 | | | | 1998 | |
| Temecula II, CA | | | (N | ) | | | 476 | | | | 2,697 | | | | 6 | | | | 476 | | | | 2,703 | | | | 3,179 | | | | 288 | | | | 2003 | |
| Vista, CA | | | (N | ) | | | 4,629 | | | | 13,599 | | | | 3 | | | | 4,629 | | | | 13,602 | | | | 18,231 | | | | 65 | | | | 2005 | |
| Vista, CA | | | (D | ) | | | 711 | | | | 4,076 | | | | 1,972 | | | | 1,118 | | | | 5,641 | | | | 6,759 | | | | 883 | | | | 2001 | |
| Walnut, CA | | | (N | ) | | | 1,578 | | | | 4,635 | | | | 4 | | | | 1,578 | | | | 4,639 | | | | 6,217 | | | | 22 | | | | 2005 | |
| West Sacramento, CA | | | (N | ) | | | 1,222 | | | | 3,590 | | | | 3 | | | | 1,222 | | | | 3,593 | | | | 4,815 | | | | 17 | | | | 2005 | |
| Westminister, CA | | | (I | ) | | | 1,740 | | | | 5,142 | | | | 10 | | | | 1,740 | | | | 5,152 | | | | 6,892 | | | | 120 | | | | 2005 | |
| Yucaipa, CA | | | (C | ) | | | 198 | | | | 2,221 | | | | 1,381 | | | | 526 | | | | 3,274 | | | | 3,800 | | | | 645 | | | | 1997 | |
| Aurora, CO | | | (N | ) | | | 736 | | | | 1,637 | | | | 35 | | | | 736 | | | | 1,672 | | | | 2,408 | | | | 24 | | | | 2005 | |
| Aurora, CO | | | (N | ) | | | 352 | | | | 783 | | | | 8 | | | | 352 | | | | 791 | | | | 1,143 | | | | 12 | | | | 2005 | |
| Avon, OH | | | (N | ) | | | 1,012 | | | | 2,252 | | | | 6 | | | | 1,012 | | | | 2,258 | | | | 3,270 | | | | 33 | | | | 2005 | |
| Centennial, CO | | | (L | ) | | | 1,268 | | | | 2,820 | | | | 14 | | | | 1,268 | | | | 2,834 | | | | 4,102 | | | | 69 | | | | 2005 | |
| Colorado Springs, CO | | | (N | ) | | | 771 | | | | 1,717 | | | | 20 | | | | 771 | | | | 1,737 | | | | 2,508 | | | | 25 | | | | 2005 | |
| Denver, CO | | | (N | ) | | | 1,105 | | | | 2,459 | | | | 8 | | | | 1,105 | | | | 2,467 | | | | 3,572 | | | | 36 | | | | 2005 | |
| Denver, CO | | | (L | ) | | | 878 | | | | 1,953 | | | | 15 | | | | 878 | | | | 1,968 | | | | 2,846 | | | | 48 | | | | 2005 | |
| Denver, CO | | | (L | ) | | | 1,343 | | | | 2,986 | | | | 91 | | | | 1,343 | | | | 3,077 | | | | 4,420 | | | | 73 | | | | 2005 | |
| Englewood, CO | | | (N | ) | | | 981 | | | | 2,183 | | | | 13 | | | | 981 | | | | 2,196 | | | | 3,177 | | | | 32 | | | | 2005 | |
| Golden, CO | | | (L | ) | | | 1,683 | | | | 3,744 | | | | 11 | | | | 1,683 | | | | 3,755 | | | | 5,438 | | | | 91 | | | | 2005 | |
| Littleton, CO | | | (N | ) | | | 1,121 | | | | 2,495 | | | | 7 | | | | 1,121 | | | | 2,502 | | | | 3,623 | | | | 37 | | | | 2005 | |
| Northglenn, CO | | | (L | ) | | | 862 | | | | 1,917 | | | | 41 | | | | 862 | | | | 1,958 | | | | 2,820 | | | | 48 | | | | 2005 | |
| Bloomfield, CT | | | (A | ) | | | 78 | | | | 880 | | | | 2,162 | | | | 360 | | | | 2,760 | | | | 3,120 | | | | 505 | | | | 1997 | |
| Branford, CT | | | (A | ) | | | 217 | | | | 2,433 | | | | 1,072 | | | | 504 | | | | 3,218 | | | | 3,722 | | | | 819 | | | | 1995 | |
| Bristol, CT | | | (G | ) | | | 1,819 | | | | 3,161 | | | | 22 | | | | 1,821 | | | | 3,181 | | | | 5,002 | | | | 154 | | | | 2005 | |
| East Windsor, CT | | | (F | ) | | | 744 | | | | 1,294 | | | | 46 | | | | 744 | | | | 1,340 | | | | 2,084 | | | | 65 | | | | 2005 | |
| Enfield, CT | | | (D | ) | | | 424 | | | | 2,424 | | | | 267 | | | | 473 | | | | 2,642 | | | | 3,115 | | | | 773 | | | | 2001 | |
| Gales Ferry, CT | | | (A | ) | | | 240 | | | | 2,697 | | | | 1,247 | | | | 489 | | | | 3,695 | | | | 4,184 | | | | 1,052 | | | | 1995 | |
| Manchester, CT | | | (D | ) | | | 540 | | | | 3,096 | | | | 212 | | | | 563 | | | | 3,285 | | | | 3,848 | | | | 807 | | | | 2002 | |
| Manchester, CT | | | (G | ) | | | 996 | | | | 1,730 | | | | 18 | | | | 996 | | | | 1,748 | | | | 2,744 | | | | 84 | | | | 2005 | |
| Milford, CT | | | (B | ) | | | 87 | | | | 1,050 | | | | 948 | | | | 274 | | | | 1,811 | | | | 2,085 | | | | 397 | | | | 1994 | |
| Monroe, CT | | | (G | ) | | | 2,004 | | | | 3,483 | | | | 105 | | | | 2,004 | | | | 3,588 | | | | 5,592 | | | | 170 | | | | 2005 | |
| Mystic, CT | | | (B | ) | | | 136 | | | | 1,645 | | | | 1,570 | | | | 410 | | | | 2,941 | | | | 3,351 | | | | 646 | | | | 1994 | |
| Newington, CT | | | (G | ) | | | 1,059 | | | | 1,840 | | | | 11 | | | | 1,059 | | | | 1,850 | | | | 2,909 | | | | 90 | | | | 2005 | |
| Newington, CT | | | (G | ) | | | 911 | | | | 1,584 | | | | 26 | | | | 911 | | | | 1,610 | | | | 2,521 | | | | 77 | | | | 2005 | |
| Old Saybrook, CT | | | (G | ) | | | 3,092 | | | | 5,374 | | | | 160 | | | | 3,094 | | | | 5,532 | | | | 8,626 | | | | 263 | | | | 2005 | |
| | | | | | | | | | Gross Carrying Amount | | | | |
| | | | | | Initial Cost | | Costs Sub- | | at December 31, 2007 | | | | |
Description | | Square Footage | | Encum-
brances | | Land | | Building and
Improvements | | sequent to
Acquisition | | Land | | Building and
Improvements | | Total | | Accumulated
Depreciation (L) | | Year Acquired /
Developed |
San Bernardino VII, CA | | 83,507 | | (E) | | $ | 1,872 | | $ | 5,391 | | $ | 34 | | $ | 1,872 | | $ | 5,426 | | $ | 7,297 | | $ | 835 | | 2005 |
San Bernardino VIII, CA | | 56,820 | | | | 783 | | 3,583 | | 138 | | 783 | | 3,721 | | 4,504 | | 382 | | 2006 |
San Bernardino IX, CA | | 117,928 | | | | 1,205 | | 5,518 | | 119 | | 1,205 | | 5,636 | | 6,841 | | 581 | | 2006 |
San Bernardino X, CA | | 78,839 | | | | 1,475 | | 6,753 | | 185 | | 1,476 | | 6,937 | | 8,413 | | 711 | | 2006 |
San Bernardino XI, CA | | 112,154 | | | | 1,691 | | 7,741 | | 165 | | 1,692 | | 7,905 | | 9,597 | | 814 | | 2006 |
San Marcos, CA | | 37,430 | | (G | | 775 | | 2,288 | | 48 | | 776 | | 2,335 | | 3,111 | | 322 | | 2005 |
Santa Ana, CA | | 65,528 | | | | 1,223 | | 5,600 | | 144 | | 1,223 | | 5,744 | | 6,967 | | 588 | | 2006 |
South Palmetto, CA | | 80,505 | | | | 292 | | 3,289 | | 1,818 | | 688 | | 4,711 | | 5,399 | | 1,076 | | 1998 |
South Sacramento, CA | | 52,290 | | (C) | | 790 | | 2,319 | | 109 | | 791 | | 2,428 | | 3,219 | | 334 | | 2005 |
Spring Valley, CA | | 55,070 | | | | 1,178 | | 5,394 | | 285 | | 1,178 | | 5,679 | | 6,857 | | 577 | | 2006 |
Sun City, CA | | 38,435 | | | | 140 | | 1,579 | | 894 | | 324 | | 2,289 | | 2,613 | | 554 | | 1998 |
Temecula I, CA | | 81,740 | | | | 660 | | 4,735 | | 1,104 | | 911 | | 5,588 | | 6,499 | | 1,252 | | 1998 |
Temecula II, CA | | 84,580 | | (K) | | 3,080 | | 5,839 | | (103 | ) | 3,080 | | 5,626 | | 8,815 | | 104 | | 2007 |
Thousand Palms, CA | | 76,336 | | | | 1,493 | | 6,835 | | 263 | | 1,493 | | 7,098 | | 8,591 | | 728 | | 2006 |
Vista I, CA | | 74,405 | | (D) | | 711 | | 4,076 | | 2,032 | | 1,118 | | 5,701 | | 6,819 | | 1,298 | | 2001 |
Vista II, CA | | 147,721 | | | | 4,629 | | 13,599 | | 54 | | 4,629 | | 13,653 | | 18,282 | | 1,624 | | 2005 |
Walnut, CA | | 50,708 | | | | 1,578 | | 4,635 | | 173 | | 1,595 | | 4,792 | | 6,386 | | 568 | | 2005 |
West Sacramento, CA | | 39,715 | | | | 1,222 | | 3,590 | | 81 | | 1,222 | | 3,671 | | 4,893 | | 433 | | 2005 |
Westminster, CA | | 68,048 | | (G) | | 1,740 | | 5,142 | | 111 | | 1,743 | | 5,250 | | 6,993 | | 727 | | 2005 |
Yucaipa, CA | | 77,560 | | (F) | | 198 | | 2,221 | | 1,454 | | 525 | | 3,348 | | 3,873 | | 860 | | 1997 |
Aurora I, CO | | 75,867 | | (C) | | 1,343 | | 2,986 | | 181 | | 1,343 | | 3,167 | | 4,510 | | 446 | | 2005 |
Aurora II, CO | | 57,753 | | | | 736 | | 1,637 | | 254 | | 736 | | 1,891 | | 2,627 | | 244 | | 2005 |
Aurora III, CO | | 28,730 | | | | 352 | | 783 | | 159 | | 352 | | 942 | | 1,294 | | 122 | | 2005 |
Aurora IV, CO | | 49,700 | | | | 752 | | 3,066 | | 108 | | 753 | | 3,173 | | 3,927 | | 356 | | 2006 |
Boulder I, CO | | 47,296 | | | | 1,005 | | 4,095 | | 209 | | 1,005 | | 4,304 | | 5,309 | | 421 | | 2006 |
Boulder II, CO | | 101,245 | | | | 2,556 | | 10,416 | | 180 | | 2,556 | | 10,596 | | 13,152 | | 1,029 | | 2006 |
Boulder III, CO | | 80,174 | | | | 1,370 | | 5,581 | | 149 | | 1,370 | | 5,730 | | 7,100 | | 558 | | 2006 |
Boulder IV, CO | | 95,148 | | | | 2,102 | | 8,563 | | 135 | | 2,102 | | 8,699 | | 10,800 | | 845 | | 2006 |
Colorado Springs I, CO | | 47,975 | | | | 771 | | 1,717 | | 160 | | 771 | | 1,877 | | 2,648 | | 242 | | 2005 |
Colorado Springs II, CO | | 62,400 | | 1,999 | | 657 | | 2,674 | | 162 | | 656 | | 2,837 | | 3,493 | | 233 | | 2006 |
Denver I, CO | | 58,050 | | | | 1,105 | | 2,459 | | 109 | | 1,105 | | 2,568 | | 3,673 | | 334 | | 2005 |
Denver II, CO | | 59,200 | | | | 673 | | 2,741 | | 104 | | 674 | | 2,845 | | 3,518 | | 322 | | 2006 |
Denver III, CO | | 63,700 | | | | 732 | | 2,982 | | 127 | | 733 | | 3,108 | | 3,841 | | 352 | | 2006 |
Englewood, CO | | 51,000 | | | | 981 | | 2,183 | | 115 | | 981 | | 2,298 | | 3,278 | | 305 | | 2005 |
Federal Heights, CO | | 54,770 | | (C) | | 878 | | 1,953 | | 80 | | 879 | | 2,032 | | 2,911 | | 291 | | 2005 |
Golden, CO | | 87,832 | | (C) | | 1,683 | | 3,744 | | 205 | | 1,684 | | 3,948 | | 5,632 | | 551 | | 2005 |
Littleton I , CO | | 53,490 | | (C) | | 1,268 | | 2,820 | | 118 | | 1,268 | | 2,938 | | 4,206 | | 411 | | 2005 |
Littleton II, CO | | 46,175 | | | | 1,121 | | 2,495 | | 127 | | 1,121 | | 2,622 | | 3,743 | | 346 | | 2005 |
Northglenn, CO | | 52,102 | | (C) | | 862 | | 1,917 | | 103 | | 862 | | 2,020 | | 2,882 | | 288 | | 2005 |
Bloomfield, CT | | 48,700 | | | | 78 | | 880 | | 2,193 | | 360 | | 2,791 | | 3,151 | | 675 | | 1997 |
Branford, CT | | 49,079 | | | | 217 | | 2,433 | | 1,021 | | 504 | | 3,166 | | 3,671 | | 1,043 | | 1995 |
Bristol, CT | | 47,825 | | (E) | | 1,819 | | 3,161 | | 53 | | 1,819 | | 3,213 | | 5,033 | | 529 | | 2005 |
East Windsor, CT | | 45,900 | | (A) | | 744 | | 1,294 | | 239 | | 744 | | 1,519 | | 2,278 | | 236 | | 2005 |
Enfield, CT | | 52,775 | | (D) | | 424 | | 2,424 | | 282 | | 473 | | 2,657 | | 3,130 | | 923 | | 2001 |
Gales Ferry, CT | | 54,230 | | | | 240 | | 2,697 | | 1,312 | | 489 | | 3,760 | | 4,249 | | 1,247 | | 1995 |
Manchester I, CT | | 47,125 | | (D) | | 540 | | 3,096 | | 292 | | 563 | | 3,365 | | 3,928 | | 1,120 | | 2002 |
Manchester II, CT | | 52,725 | | (E) | | 996 | | 1,730 | | 83 | | 996 | | 1,811 | | 2,809 | | 293 | | 2005 |
Milford, CT | | 44,885 | | | | 87 | | 1,050 | | 1,049 | | 274 | | 1,912 | | 2,186 | | 529 | | 1994 |
Monroe, CT | | 58,500 | | (E) | | 2,004 | | 3,483 | | 439 | | 2,004 | | 3,837 | | 5,926 | | 605 | | 2005 |
Mystic, CT | | 50,800 | | | | 136 | | 1,645 | | 1,692 | | 410 | | 3,030 | | 3,473 | | 854 | | 1994 |
Newington I, CT | | 42,620 | | (E) | | 1,059 | | 1,840 | | 64 | | 1,059 | | 1,904 | | 2,962 | | 312 | | 2005 |
Newington II, CT | | 35,810 | | (E) | | 911 | | 1,584 | | 60 | | 911 | | 1,644 | | 2,555 | | 272 | | 2005 |
Old Saybrook I, CT | | 87,700 | | (E) | | 3,092 | | 5,374 | | 218 | | 3,092 | | 5,592 | | 8,684 | | 918 | | 2005 |
Old Saybrook II, CT | | 26,425 | | (E) | | 1,135 | | 1,973 | | 110 | | 1,135 | | 2,083 | | 3,218 | | 343 | | 2005 |
South Windsor, CT | | 71,725 | | | | 90 | | 1,127 | | 1,041 | | 272 | | 1,985 | | 2,258 | | 538 | | 1994 |
Stamford, CT | | 28,957 | | (E) | | 1,941 | | 3,374 | | 52 | | 1,941 | | 3,426 | | 5,367 | | 565 | | 2005 |
Boca Raton, FL | | 37,958 | | (F) | | 529 | | 3,054 | | 1,456 | | 813 | | 4,226 | | 5,039 | | 1,196 | | 2001 |
Boynton Beach I, FL | | 62,013 | | (E) | | 667 | | 3,796 | | 1,581 | | 958 | | 5,086 | | 6,044 | | 1,478 | | 2001 |
Boynton Beach II, FL | | 61,841 | | (A) | | 1,030 | | 2,968 | | 192 | | 1,030 | | 3,160 | | 4,190 | | 440 | | 2005 |
Bradenton I, FL | | 68,502 | | | | 1,180 | | 3,324 | | 115 | | 1,180 | | 3,439 | | 4,619 | | 558 | | 2004 |
Bradenton II, FL | | 87,760 | | | | 1,931 | | 5,561 | | 239 | | 1,931 | | 5,801 | | 7,731 | | 938 | | 2004 |
Cape Coral, FL | | 76,592 | | (F) | | 472 | | 2,769 | | 2,261 | | 830 | | 4,672 | | 5,502 | | 1,341 | | 2000 |
Dania Beach, FL | | 183,393 | | | | 3,584 | | 10,324 | | 369 | | 3,584 | | 10,685 | | 14,277 | | 1,747 | | 2004 |
Dania, FL | | 58,270 | | | | 205 | | 2,068 | | 1,302 | | 481 | | 3,094 | | 3,575 | | 872 | | 1994 |
Davie, FL | | 81,035 | | (D) | | 1,268 | | 7,183 | | 603 | | 1,373 | | 7,682 | | 9,054 | | 2,452 | | 2001 |
Deerfield Beach, FL | | 57,600 | | (A) | | 946 | | 2,999 | | 1,799 | | 1,311 | | 4,433 | | 5,744 | | 902 | | 1998 |
DeLand, FL | | 37,552 | | | | 113 | | 1,258 | | 734 | | 286 | | 1,819 | | 2,105 | | 427 | | 1998 |
Delray Beach, FL | | 67,809 | | (A) | | 798 | | 4,539 | | 562 | | 883 | | 5,017 | | 5,899 | | 1,644 | | 2001 |
Fernandina Beach, FL | | 111,030 | | | | 189 | | 2,111 | | 3,346 | | 523 | | 3,871 | | 5,646 | | 1,314 | | 1996 |
Ft. Lauderdale, FL | | 70,596 | | (D) | | 937 | | 3,646 | | 2,202 | | 1,384 | | 5,401 | | 6,785 | | 1,134 | | 1999 |
Ft. Myers, FL | | 67,546 | | (A) | | 303 | | 3,329 | | 334 | | 328 | | 3,637 | | 3,966 | | 1,213 | | 1998 |
Gulf Breeze, FL | | 79,449 | | | | 2,035 | | 5,863 | | 76 | | 2,035 | | 5,940 | | 7,975 | | 686 | | 2005 |
Jacksonville I, FL | | 80,401 | | | | 1,862 | | 5,362 | | 31 | | 1,862 | | 5,392 | | 7,255 | | 602 | | 2005 |
Jacksonville II, FL | | 65,020 | | | | 950 | | 7,004 | | (666 | ) | 950 | | 5,671 | | 7,288 | | 114 | | 2007 |
Jacksonville III, FL | | 65,603 | | | | 860 | | 7,409 | | (571 | ) | 860 | | 6,267 | | 7,699 | | 123 | | 2007 |
Jacksonville IV, FL | | 78,604 | | (K) | | 870 | | 8,049 | | (40 | ) | 870 | | 7,965 | | 8,878 | | 145 | | 2007 |
Jacksonville V, FL | | 81,860 | | | | 1,220 | | 8,210 | | (533 | ) | 1,220 | | 7,141 | | 8,897 | | 138 | | 2007 |
Lake Worth, FL | | 163,683 | | (F) | | 183 | | 6,597 | | 5,149 | | 183 | | 11,746 | | 11,929 | | 3,926 | | 1998 |
Lakeland I, FL | | 48,911 | | (A) | | 81 | | 896 | | 940 | | 256 | | 1,661 | | 1,917 | | 606 | | 1994 |
Lakeland II, FL | | 47,680 | | | | 49 | | 551 | | 487 | | 103 | | 983 | | 1,087 | | 307 | | 1996 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
F-32
| | | | | | | | | | Gross Carrying Amount | | | | |
| | | | | | Initial Cost | | Costs Sub- | | at December 31, 2007 | | | | |
Description | | Square Footage | | Encum-
brances | | Land | | Building and
Improvements | | sequent to
Acquisition | | Land | | Building and
Improvements | | Total | | Accumulated
Depreciation (L) | | Year Acquired /
Developed |
Leesburg, FL | | 59,840 | | | | $ | 96 | | $ | 1,079 | | $ | 786 | | $ | 214 | | $ | 1,257 | | $ | 1,961 | | $ | 542 | | 1997 |
Kendall, FL | | 75,395 | | (K) | | 2,350 | | 8,106 | | (765 | ) | 2,350 | | 6,573 | | 9,691 | | 133 | | 2007 |
Lutz I, FL | | 72,495 | | | | 901 | | 2,478 | | 78 | | 901 | | 2,556 | | 3,457 | | 419 | | 2004 |
Lutz II, FL | | 69,292 | | | | 992 | | 2,868 | | 115 | | 992 | | 2,983 | | 3,975 | | 482 | | 2004 |
Margate I, FL | | 54,405 | | (A) | | 161 | | 1,763 | | 1,551 | | 399 | | 3,076 | | 3,475 | | 869 | | 1994 |
Margate II, FL | | 65,168 | | | | 132 | | 1,473 | | 1,667 | | 383 | | 2,889 | | 3,272 | | 731 | | 1996 |
Merrit Island, FL | | 50,427 | | (A) | | 716 | | 2,983 | | 433 | | 796 | | 3,336 | | 4,132 | | 963 | | 2000 |
Miami I, FL | | 46,925 | | (D) | | 179 | | 1,999 | | 1,566 | | 484 | | 3,261 | | 3,744 | | 1,007 | | 1995 |
Miami II, FL | | 57,040 | | | | 188 | | 2,052 | | 656 | | 286 | | 2,609 | | 2,896 | | 873 | | 1994 |
Miami III, FL | | 67,060 | | (E) | | 253 | | 2,544 | | 1,339 | | 561 | | 3,575 | | 4,136 | | 1,039 | | 1994 |
Miami IV, FL | | 58,315 | | | | 193 | | 2,174 | | 1,786 | | 516 | | 3,638 | | 4,153 | | 1,107 | | 1995 |
Miami V, FL | | 78,465 | | | | 193 | | 2,165 | | 981 | | 364 | | 2,974 | | 3,339 | | 881 | | 1995 |
Miami VI, FL | | 150,510 | | | | 4,577 | | 13,185 | | 148 | | 4,577 | | 13,333 | | 17,910 | | 1,540 | | 2005 |
Naples I, FL | | 48,050 | | | | 90 | | 1,010 | | 2,238 | | 270 | | 3,067 | | 3,338 | | 848 | | 1996 |
Naples II, FL | | 65,850 | | (E) | | 148 | | 1,652 | | 4,119 | | 558 | | 5,361 | | 5,919 | | 1,292 | | 1997 |
Naples III, FL | | 81,145 | | (A) | | 139 | | 1,561 | | 3,632 | | 598 | | 4,734 | | 5,332 | | 1,608 | | 1997 |
Naples IV, FL | | 40,975 | | | | 262 | | 2,980 | | 442 | | 407 | | 3,277 | | 3,684 | | 900 | | 1998 |
Ocala, FL | | 41,891 | | | | 55 | | 558 | | 526 | | 155 | | 985 | | 1,139 | | 279 | | 1994 |
Ocoee, FL | | 76,250 | | | | 1,286 | | 3,705 | | 78 | | 1,286 | | 3,783 | | 5,069 | | 523 | | 2005 |
Orange City, FL | | 59,636 | | | | 1,191 | | 3,209 | | 60 | | 1,191 | | 3,269 | | 4,460 | | 538 | | 2004 |
Orlando I, FL | | 52,170 | | | | 187 | | 2,088 | | 450 | | 240 | | 2,485 | | 2,725 | | 943 | | 1997 |
Orlando II, FL | | 62,864 | | (E) | | 1,589 | | 4,576 | | 35 | | 1,589 | | 4,610 | | 6,199 | | 650 | | 2005 |
Orlando III, FL | | 104,165 | | | | 1,209 | | 7,768 | | 124 | | 1,209 | | 7,892 | | 9,102 | | 645 | | 2006 |
Oviedo, FL | | 49,256 | | | | 440 | | 2,824 | | 127 | | 440 | | 2,844 | | 3,391 | | 241 | | 2006 |
Pembroke Pines, FL | | 67,337 | | (D) | | 337 | | 3,772 | | 2,555 | | 953 | | 5,711 | | 6,664 | | 1,403 | | 1997 |
Royal Palm Beach I, FL | | 98,961 | | (F) | | 205 | | 2,148 | | 2,620 | | 741 | | 4,232 | | 4,973 | | 1,196 | | 1994 |
Royal Palm Beach II, FL | | 81,515 | | (K) | | 1,640 | | 8,607 | | (511 | ) | 1,640 | | 7,582 | | 9,736 | | 146 | | 2007 |
Sanford, FL | | 61,810 | | | | 453 | | 2,911 | | 77 | | 453 | | 2,989 | | 3,442 | | 245 | | 2006 |
Sarasota, FL | | 70,788 | | (A) | | 333 | | 3,656 | | 1,068 | | 529 | | 4,528 | | 5,057 | | 1,407 | | 1998 |
St. Augustine, FL | | 59,670 | | | | 135 | | 1,515 | | 3,042 | | 383 | | 4,308 | | 4,692 | | 1,114 | | 1996 |
Stuart I, FL | | 41,324 | | | | 154 | | 1,726 | | 1,154 | | 319 | | 2,704 | | 3,034 | | 893 | | 1997 |
Stuart II, FL | | 86,924 | | (E) | | 324 | | 3,625 | | 2,365 | | 685 | | 5,629 | | 6,314 | | 1,433 | | 1997 |
SW Ranches, FL | | 64,955 | | | | 1,390 | | 7,598 | | (889 | ) | 1,390 | | 5,818 | | 8,099 | | 121 | | 2007 |
Tampa I, FL | | 60,700 | | | | 124 | | 1,252 | | 453 | | 220 | | 1,610 | | 1,829 | | 513 | | 1994 |
Tampa II, FL | | 55,997 | | | | 330 | | 1,887 | | 475 | | 330 | | 2,350 | | 2,692 | | 728 | | 2001 |
Tampa III, FL | | 83,788 | | | | 2,670 | | 6,249 | | (532 | ) | 2,670 | | 5,182 | | 8,387 | | 103 | | 2007 |
Vero Beach, FL | | 50,390 | | | | 159 | | 1,783 | | 404 | | 259 | | 2,087 | | 2,346 | | 349 | | 1998/1997 |
West Palm Beach I, FL | | 67,973 | | 2,359 | | 719 | | 3,420 | | 1,436 | | 835 | | 4,740 | | 5,575 | | 1,518 | | 2001 |
West Palm Beach II, FL | | 93,764 | | | | 2,129 | | 8,671 | | 188 | | 2,129 | | 8,859 | | 10,988 | | 1,665 | | 2004 |
Alpharetta, GA | | 90,485 | | (F) | | 806 | | 4,720 | | 867 | | 967 | | 5,426 | | 6,393 | | 1,968 | | 2001 |
Austell , GA | | 83,615 | | | | 1,635 | | 4,711 | | 135 | | 1,643 | | 4,838 | | 6,481 | | 353 | | 2006 |
Decatur, GA | | 148,480 | | | | 616 | | 6,776 | | (99 | ) | 616 | | 6,677 | | 7,293 | | 1,900 | | 1998 |
Norcross, GA | | 85,390 | | (D) | | 514 | | 2,930 | | 659 | | 632 | | 3,470 | | 4,103 | | 1,019 | | 2001 |
Peachtree City, GA | | 49,845 | | 1,746 | | 435 | | 2,532 | | 519 | | 529 | | 2,957 | | 3,486 | | 885 | | 2001 |
Smyrna, GA | | 56,820 | | (F) | | 750 | | 4,271 | | 113 | | 750 | | 4,384 | | 5,134 | | 1,496 | | 2001 |
Snellville, GA | | 79,950 | | | | 1,660 | | 4,781 | | 91 | | 1,660 | | 4,872 | | 6,532 | | 251 | | 2007 |
Suwanee I, GA | | 85,450 | | | | 1,737 | | 5,010 | | 86 | | 1,737 | | 5,096 | | 6,832 | | 261 | | 2007 |
Suwanee II, GA | | 79,640 | | (K) | | 800 | | 6,942 | | (336 | ) | 800 | | 6,268 | | 7,406 | | 119 | | 2007 |
Addison, IL | | 31,275 | | (I) | | 428 | | 3,531 | | 167 | | 428 | | 3,698 | | 4,126 | | 590 | | 2004 |
Aurora, IL | | 73,845 | | | | 644 | | 3,652 | | 41 | | 644 | | 3,693 | | 4,337 | | 608 | | 2004 |
Bartlett, IL | | 51,525 | | | | 931 | | 2,493 | | 67 | | 931 | | 2,560 | | 3,491 | | 419 | | 2004 |
Hanover, IL | | 41,174 | | (E) | | 1,126 | | 2,197 | | 71 | | 1,126 | | 2,268 | | 3,394 | | 373 | | 2004 |
Bellwood, IL | | 86,575 | | (E) | | 1,012 | | 5,768 | | 519 | | 1,012 | | 6,287 | | 7,299 | | 2,087 | | 2001 |
Des Plaines, IL | | 74,600 | | (I) | | 1,564 | | 4,327 | | 157 | | 1,564 | | 4,484 | | 6,048 | | 727 | | 2004 |
Elk Grove Village, IL | | 64,304 | | (I) | | 1,446 | | 3,535 | | 201 | | 1,446 | | 3,736 | | 5,182 | | 615 | | 2004 |
Glenview, IL | | 100,115 | | (I) | | 3,740 | | 10,367 | | 100 | | 3,740 | | 10,467 | | 14,207 | | 1,713 | | 2004 |
Gurnee, IL | | 80,300 | | (I) | | 1,521 | | 5,440 | | 183 | | 1,521 | | 5,623 | | 7,144 | | 915 | | 2004 |
Harvey, IL | | 60,315 | | (I) | | 869 | | 3,635 | | 46 | | 869 | | 3,681 | | 4,550 | | 606 | | 2004 |
Joliet, IL | | 74,350 | | (I) | | 547 | | 4,704 | | 59 | | 547 | | 4,763 | | 5,310 | | 782 | | 2004 |
Kildeer, IL | | 46,475 | | (I) | | 2,102 | | 2,187 | | 82 | | 2,102 | | 2,269 | | 4,371 | | 368 | | 2004 |
Lombard, IL | | 57,736 | | (I) | | 1,305 | | 3,938 | | 488 | | 1,305 | | 4,426 | | 5,731 | | 696 | | 2004 |
Mount Prospect, IL | | 65,000 | | (I) | | 1,701 | | 3,114 | | 79 | | 1,701 | | 3,193 | | 4,894 | | 520 | | 2004 |
Mundelein, IL | | 44,700 | | (I) | | 1,498 | | 2,782 | | 74 | | 1,498 | | 2,856 | | 4,354 | | 471 | | 2004 |
North Chicago, IL | | 53,300 | | (I) | | 1,073 | | 3,006 | | 161 | | 1,073 | | 3,167 | | 4,240 | | 510 | | 2004 |
Plainfield I, IL | | 53,900 | | | | 1,770 | | 1,715 | | 133 | | 1,770 | | 1,848 | | 3,618 | | 304 | | 2004 |
Plainfield II, IL | | 52,100 | | | | 694 | | 2,000 | | 103 | | 694 | | 2,103 | | 2,797 | | 294 | | 2005 |
Schaumburg, IL | | 31,235 | | | | 538 | | 645 | | 94 | | 538 | | 739 | | 1,277 | | 127 | | 2004 |
Streamwood, IL | | 64,305 | | (A) | | 1,447 | | 1,662 | | 152 | | 1,447 | | 1,814 | | 3,261 | | 300 | | 2004 |
Warrensville, IL | | 48,796 | | (A) | | 1,066 | | 3,072 | | 89 | | 1,066 | | 3,161 | | 4,228 | | 428 | | 2005 |
Waukegan, IL | | 79,750 | | (I) | | 1,198 | | 4,363 | | 94 | | 1,198 | | 4,457 | | 5,655 | | 732 | | 2004 |
West Chicago, IL | | 48,475 | | (E) | | 1,071 | | 2,249 | | 125 | | 1,071 | | 2,374 | | 3,445 | | 385 | | 2004 |
Westmont, IL | | 53,700 | | (I | | 1,155 | | 3,873 | | 41 | | 1,155 | | 3,914 | | 5,069 | | 643 | | 2004 |
Wheeling I, IL | | 54,210 | | (A) | | 857 | | 3,213 | | 137 | | 857 | | 3,350 | | 4,207 | | 551 | | 2004 |
Wheeling II, IL | | 67,825 | | (I) | | 793 | | 3,816 | | 175 | | 793 | | 3,991 | | 4,784 | | 650 | | 2004 |
Woodridge, IL | | 50,725 | | (I) | | 943 | | 3,397 | | 50 | | 943 | | 3,447 | | 4,390 | | 568 | | 2004 |
Indianapolis I, IN | | 43,600 | | (I) | | 1,871 | | 1,230 | | 65 | | 1,871 | | 1,295 | | 3,166 | | 220 | | 2004 |
Indianapolis II, IN | | 44,900 | | (I) | | 669 | | 2,434 | | 68 | | 669 | | 2,502 | | 3,171 | | 423 | | 2004 |
Indianapolis III, IN | | 60,850 | | (I) | | 1,229 | | 2,834 | | 40 | | 1,229 | | 2,874 | | 4,103 | | 473 | | 2004 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
F-33
| | | | | | | | | | Gross Carrying Amount | | | | |
| | | | | | Initial Cost | | | | at December 31, 2007 | | | | |
Description | | Square Footage | | Encum-
brances | | Land | | Building and
Improvements | | Costs Sub-sequent
to Acquisition | | Land | | Building and
Improvements | | Total | | Accumulated
Depreciation (L) | | Year Acquired /
Developed |
Indianapolis IV, IN | | 68,250 | | | | $ | 641 | | $ | 3,154 | | $ | 4 | | $ | 552 | | $ | 3,247 | | $ | 3,799 | | $ | 533 | | 2004 |
Indianapolis V, IN | | 74,825 | | (I) | | 2,138 | | 3,633 | | 131 | | 2,138 | | 3,764 | | 5,902 | | 610 | | 2004 |
Indianapolis VI, IN | | 73,353 | | (A) | | 406 | | 3,496 | | 151 | | 406 | | 3,647 | | 4,053 | | 589 | | 2004 |
Indianapolis VII, IN | | 91,807 | | (I) | | 908 | | 4,755 | | 348 | | 908 | | 5,103 | | 6,011 | | 820 | | 2004 |
Indianapolis VIII, IN | | 80,140 | | (I) | | 887 | | 3,548 | | 101 | | 887 | | 3,649 | | 4,536 | | 599 | | 2004 |
Indianapolis IX, IN | | 61,732 | | (I) | | 1,133 | | 4,103 | | 150 | | 1,133 | | 4,253 | | 5,386 | | 689 | | 2004 |
Baton Rouge I, LA | | 55,474 | | | | 112 | | 1,248 | | 497 | | 208 | | 1,649 | | 1,857 | | 487 | | 1997 |
Baton Rouge II, LA | | 80,452 | | (A) | | 150 | | 1,558 | | 1,272 | | 331 | | 2,649 | | 2,980 | | 840 | | 1997 |
Baton Rouge III, LA | | 60,770 | | | | 133 | | 1,487 | | 625 | | 271 | | 1,974 | | 2,245 | | 561 | | 1997 |
Prairieville, LA | | 28,319 | | | | 90 | | 1,004 | | 170 | | 90 | | 1,174 | | 1,264 | | 356 | | 1998 |
Slidell, LA | | 79,540 | | (D) | | 188 | | 3,175 | | 1,581 | | 802 | | 4,142 | | 4,944 | | 1,142 | | 2001 |
Boston, MA | | 60,270 | | (F) | | 1,516 | | 8,628 | | 186 | | 1,516 | | 8,814 | | 10,330 | | 2,882 | | 2002 |
Leominster, MA | | 54,081 | | (D) | | 90 | | 1,519 | | 2,319 | | 338 | | 3,591 | | 3,928 | | 905 | | 1998 |
Medford, MA | | 58,577 | | (K) | | 1,330 | | 7,165 | | (565 | ) | 1,330 | | 6,033 | | 7,930 | | 119 | | 2007 |
Baltimore, MD | | 93,700 | | (E) | | 1,050 | | 5,997 | | 889 | | 1,173 | | 6,763 | | 7,936 | | 2,177 | | 2001 |
California, MD | | 77,678 | | | | 1,486 | | 4,280 | | 62 | | 1,486 | | 4,342 | | 5,828 | | 709 | | 2004 |
Gaithersburg, MD | | 86,970 | | 6,227 | | 3,124 | | 9,000 | | 96 | | 3,124 | | 9,096 | | 12,220 | | 1,405 | | 2005 |
Laurel, MD | | 162,297 | | (F) | | 1,409 | | 8,035 | | 3,309 | | 1,928 | | 10,825 | | 12,753 | | 2,919 | | 2001 |
Temple Hills, MD | | 97,250 | | (D) | | 1,541 | | 8,788 | | 1,975 | | 1,800 | | 10,504 | | 12,304 | | 2,955 | | 2001 |
Grand Rapids, MI | | 87,031 | | (A) | | 185 | | 1,821 | | 1,345 | | 325 | | 3,027 | | 3,351 | | 1,064 | | 1996 |
Portage, MI | | 50,280 | | | | 104 | | 1,160 | | 784 | | 237 | | 1,810 | | 2,048 | | 613 | | 1996 |
Romulus, MI | | 42,175 | | (A) | | 308 | | 1,743 | | 581 | | 418 | | 2,214 | | 2,632 | | 622 | | 1997 |
Wyoming, MI | | 91,283 | | (A) | | 191 | | 2,135 | | 956 | | 354 | | 2,928 | | 3,282 | | 1,074 | | 1996 |
Biloxi, MS | | 66,394 | | | | 148 | | 1,652 | | 719 | | 279 | | 2,240 | | 2,519 | | 600 | | 1997 |
Gautier, MS | | 35,925 | | | | 93 | | 1,040 | | 40 | | 93 | | 1,080 | | 1,173 | | 367 | | 1997 |
Gulfport I, MS | | 68,320 | | | | 128 | | 1,438 | | 851 | | 156 | | 2,261 | | 2,417 | | 676 | | 1997 |
Gulfport II, MS | | 64,445 | | | | 117 | | 1,306 | | 552 | | 179 | | 1,797 | | 1,975 | | 549 | | 1997 |
Gulfport III, MS | | 61,251 | | (E) | | 172 | | 1,928 | | 845 | | 338 | | 2,607 | | 2,945 | | 723 | | 1997 |
Waveland, MS | | 57,096 | | | | 215 | | 2,481 | | (445 | ) | 392 | | 1,859 | | 2,251 | | 155 | | 1998 |
Belmont, NC | | 80,512 | | | | 385 | | 2,196 | | 502 | | 451 | | 2,632 | | 3,083 | | 843 | | 2001 |
Burlington I, NC | | 109,545 | | (A) | | 498 | | 2,837 | | 316 | | 498 | | 3,153 | | 3,651 | | 1,015 | | 2001 |
Burlington II, NC | | 42,280 | | | | 320 | | 1,829 | | 228 | | 340 | | 2,037 | | 2,377 | | 641 | | 2001 |
Cary, NC | | 111,772 | | (A) | | 543 | | 3,097 | | 259 | | 543 | | 3,357 | | 3,899 | | 835 | | 2001 |
Charlotte, NC | | 69,000 | | (F) | | 782 | | 4,429 | | 1,354 | | 1,068 | | 5,497 | | 6,565 | | 1,466 | | 1999 |
Fayetteville I, NC | | 41,450 | | | | 156 | | 1,747 | | 744 | | 301 | | 2,346 | | 2,647 | | 730 | | 1997 |
Fayetteville II, NC | | 54,225 | | (F) | | 213 | | 2,301 | | 699 | | 399 | | 2,813 | | 3,213 | | 772 | | 1997 |
Raleigh, NC | | 48,675 | | | | 209 | | 2,398 | | 204 | | 296 | | 2,516 | | 2,811 | | 687 | | 1998 |
Brick, NJ | | 52,740 | | | | 234 | | 2,762 | | 1,273 | | 485 | | 3,784 | | 4,269 | | 1,146 | | 1994 |
Clifton, NJ | | 105,550 | | (A) | | 4,346 | | 12,520 | | 109 | | 4,346 | | 12,629 | | 16,975 | | 1,621 | | 2005 |
Cranford, NJ | | 91,250 | | | | 290 | | 3,493 | | 1,984 | | 779 | | 4,988 | | 5,767 | | 1,426 | | 1994 |
East Hanover, NJ | | 107,679 | | | | 504 | | 5,763 | | 3,447 | | 1,315 | | 8,399 | | 9,714 | | 2,396 | | 1994 |
Elizabeth, NJ | | 38,892 | | | | 751 | | 2,164 | | 202 | | 751 | | 2,366 | | 3,117 | | 289 | | 2005 |
Fairview, NJ | | 27,676 | | | | 246 | | 2,759 | | 231 | | 246 | | 2,990 | | 3,236 | | 954 | | 1997 |
Hamilton, NJ | | 70,550 | | | | 1,885 | | 5,430 | | 132 | | 1,893 | | 5,554 | | 7,446 | | 402 | | 2006 |
Hoboken, NJ | | 34,280 | | | | 1,370 | | 3,947 | | 407 | | 1,370 | | 4,354 | | 5,724 | | 530 | | 2005 |
Jersey City, NJ | | 91,361 | | | | 397 | | 4,507 | | 2,530 | | 1,010 | | 6,424 | | 7,434 | | 1,840 | | 1994 |
Linden I, NJ | | 95,575 | | | | 517 | | 6,008 | | 2,864 | | 1,170 | | 8,219 | | 9,389 | | 2,365 | | 1994 |
Linden II, NJ | | 35,800 | | | | — | | 2 | | 873 | | 189 | | 686 | | 875 | | 70 | | 1994 |
Morris Township, NJ | | 75,576 | | (D) | | 500 | | 5,602 | | 2,480 | | 1,072 | | 7,510 | | 8,582 | | 2,045 | | 1997 |
Parsippany, NJ | | 66,325 | | | | 475 | | 5,322 | | 1,903 | | 909 | | 6,790 | | 7,700 | | 1,924 | | 1997 |
Randolph, NJ | | 52,565 | | (D) | | 855 | | 4,872 | | 1,229 | | 1,108 | | 5,848 | | 6,956 | | 1,781 | | 2002 |
Sewell, NJ | | 57,767 | | (F) | | 484 | | 2,766 | | 1,135 | | 706 | | 3,678 | | 4,385 | | 1,118 | | 2001 |
Albuquerque I, NM | | 65,927 | | (C) | | 1,039 | | 3,395 | | 167 | | 1,039 | | 3,562 | | 4,601 | | 515 | | 2005 |
Albuquerque II, NM | | 58,834 | | (C) | | 1,163 | | 3,801 | | 141 | | 1,163 | | 3,942 | | 5,105 | | 565 | | 2005 |
Albuquerque III, NM | | 41,016 | | | | 519 | | 1,697 | | 174 | | 519 | | 1,870 | | 2,390 | | 267 | | 2005 |
Albuquerque IV, NM | | 57,536 | | (C) | | 664 | | 2,171 | | 156 | | 664 | | 2,327 | | 2,991 | | 335 | | 2005 |
Albuquerque V, NM | | 52,217 | | | | 915 | | 2,996 | | 144 | | 915 | | 3,141 | | 4,056 | | 357 | | 2006 |
Carlsbad, NM | | 39,999 | | (B) | | 490 | | 1,613 | | 77 | | 491 | | 1,689 | | 2,180 | | 243 | | 2005 |
Deming, NM | | 33,005 | | (B) | | 338 | | 1,114 | | 78 | | 339 | | 1,192 | | 1,531 | | 173 | | 2005 |
Las Cruces, NM | | 43,850 | | (B) | | 611 | | 2,012 | | 98 | | 612 | | 2,109 | | 2,721 | | 304 | | 2005 |
Lovington, NM | | 15,751 | | (B) | | 222 | | 740 | | (189 | ) | 169 | | 603 | | 773 | | 87 | | 2005 |
Silver City, NM | | 26,875 | | (B) | | 153 | | 504 | | 67 | | 153 | | 571 | | 724 | | 85 | | 2005 |
Truth or Consequences, NM | | 24,010 | | (B) | | 10 | | 34 | | 65 | | 11 | | 98 | | 109 | | 19 | | 2005 |
Las Vegas I, NV | | 50,882 | | | | 1,851 | | 2,986 | | 161 | | 1,851 | | 3,147 | | 4,998 | | 314 | | 2006 |
Las Vegas II, NV | | 49,000 | | | | 3,354 | | 5,411 | | 83 | | 3,355 | | 5,493 | | 8,848 | | 551 | | 2006 |
Endicott, NY | | 35,930 | | | | 779 | | 838 | | 77 | | 779 | | 915 | | 1,694 | | 151 | | 2005 |
Jamaica, NY | | 89,455 | | (D) | | 2,043 | | 11,658 | | 346 | | 2,043 | | 12,004 | | 14,047 | | 3,931 | | 2001 |
New Rochelle, NY | | 48,431 | | (A) | | 1,673 | | 4,827 | | 83 | | 1,673 | | 4,910 | | 6,583 | | 681 | | 2005 |
North Babylon, NY | | 78,338 | | (F) | | 225 | | 2,514 | | 3,921 | | 568 | | 6,092 | | 6,660 | | 1,680 | | 1998 |
Riverhead, NY | | 38,690 | | | | 1,068 | | 1,149 | | 97 | | 1,068 | | 1,246 | | 2,314 | | 207 | | 2005 |
Southold, NY | | 58,609 | | | | 2,079 | | 2,238 | | 188 | | 2,079 | | 2,426 | | 4,505 | | 391 | | 2005 |
Avon, CO | | 28,227 | | | | 1,012 | | 2,252 | | 88 | | 1,012 | | 2,340 | | 3,351 | | 308 | | 2005 |
Boardman, OH | | 65,495 | | (F) | | 64 | | 745 | | 2,095 | | 287 | | 2,617 | | 2,904 | | 1,292 | | 1980 |
Brecksville, OH | | 58,452 | | | | 228 | | 2,545 | | 954 | | 442 | | 3,286 | | 3,727 | | 878 | | 1998 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
F-34
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Initial Cost | | | Gross Carrying Amount
| | | | | | | |
| | | | | | | | | Building
| | | Costs
| | | at December 31, 2005 | | | | | | | |
| | | | | | | | | and
| | | Subsequent
| | | | | | Building and
| | | | | | Accumulated
| | | Year
| |
| | | Encum-
| | | | | | Improve-
| | | to
| | | | | | Improve-
| | | | | | Depreciation
| | | Acquired/
| |
Description | | brances | | | Land | | | ments | | | Acquisition | | | Land | | | ments | | | Total | | | (O) | | | Developed | |
| | | (Dollars in thousands) | |
| |
| Old Saybrook, CT | | | (G | ) | | | 1,135 | | | | 1,973 | | | | 55 | | | | 1,137 | | | | 2,026 | | | | 3,163 | | | | 97 | | | | 2005 | |
| South Windsor, CT | | | (B | ) | | | 90 | | | | 1,127 | | | | 933 | | | | 272 | | | | 1,878 | | | | 2,150 | | | | 408 | | | | 1994 | |
| Stamford, CT | | | (G | ) | | | 1,941 | | | | 3,374 | | | | 40 | | | | 1,943 | | | | 3,412 | | | | 5,355 | | | | 163 | | | | 2005 | |
| Boca Raton, FL | | | (C | ) | | | 529 | | | | 3,054 | | | | 1,453 | | | | 813 | | | | 4,223 | | | | 5,036 | | | | 944 | | | | 2001 | |
| Boynton Beach, FL | | | (G | ) | | | 667 | | | | 3,796 | | | | 1,491 | | | | 958 | | | | 4,996 | | | | 5,954 | | | | 1,182 | | | | 2001 | |
| Bradenton, FL | | | (N | ) | | | 1,931 | | | | 5,561 | | | | 79 | | | | 1,931 | | | | 5,640 | | | | 7,571 | | | | 338 | | | | 2004 | |
| Bradenton, FL | | | (N | ) | | | 1,180 | | | | 3,324 | | | | 38 | | | | 1,180 | | | | 3,362 | | | | 4,542 | | | | 203 | | | | 2004 | |
| Cape Coral, FL | | | (C | ) | | | 472 | | | | 2,769 | | | | 2,192 | | | | 830 | | | | 4,603 | | | | 5,433 | | | | 1,040 | | | | 2000 | |
| Dania Beach, FL | | | (N | ) | | | 3,584 | | | | 10,324 | | | | 182 | | | | 3,584 | | | | 10,506 | | | | 14,090 | | | | 630 | | | | 2004 | |
| Dania, FL | | | (N | ) | | | 205 | | | | 2,068 | | | | 1,187 | | | | 481 | | | | 2,979 | | | | 3,460 | | | | 664 | | | | 1994 | |
| Davie, FL | | | (D | ) | | | 1,268 | | | | 7,183 | | | | 591 | | | | 1,373 | | | | 7,669 | | | | 9,042 | | | | 1,551 | | | | 2001 | |
| Deerfield Beach, FL | | | (F | ) | | | 946 | | | | 2,999 | | | | 1,770 | | | | 1,311 | | | | 4,404 | | | | 5,715 | | | | 651 | | | | 1998 | |
| DeLand, FL | | | (A | ) | | | 113 | | | | 1,258 | | | | 695 | | | | 286 | | | | 1,780 | | | | 2,066 | | | | 306 | | | | 1998 | |
| Delray Beach, FL | | | (F | ) | | | 798 | | | | 4,539 | | | | 500 | | | | 883 | | | | 4,954 | | | | 5,837 | | | | 1,358 | | | | 2001 | |
| Fernandina Beach, FL | | | (A | ) | | | 189 | | | | 2,111 | | | | 3,207 | | | | 523 | | | | 4,984 | | | | 5,507 | | | | 1,006 | | | | 1996 | |
| Ft. Lauderdale, FL | | | (D | ) | | | 937 | | | | 3,646 | | | | 2,144 | | | | 1,384 | | | | 5,343 | | | | 6,727 | | | | 836 | | | | 1999 | |
| Ft. Myers, FL | | | (F | ) | | | 303 | | | | 3,329 | | | | 252 | | | | 328 | | | | 3,556 | | | | 3,884 | | | | 1,002 | | | | 1998 | |
| Gulf Breeze, FL | | | (N | ) | | | 2,035 | | | | 5,863 | | | | 5 | | | | 2,035 | | | | 5,868 | | | | 7,903 | | | | 76 | | | | 2005 | |
| Jacksonville, FL | | | (N | ) | | | 1,862 | | | | 5,362 | | | | 9 | | | | 1,862 | | | | 5,371 | | | | 7,233 | | | | 46 | | | | 2005 | |
| Lake Worth, FL | | | (C | ) | | | 183 | | | | 6,597 | | | | 4,893 | | | | 183 | | | | 11,490 | | | | 11,673 | | | | 3,063 | | | | 1998 | |
| Lakeland I, FL | | | (F | ) | | | 81 | | | | 896 | | | | 891 | | | | 256 | | | | 1,612 | | | | 1,868 | | | | 498 | | | | 1994 | |
| Lakeland II, FL | | | (N | ) | | | 49 | | | | 551 | | | | 376 | | | | 103 | | | | 873 | | | | 976 | | | | 244 | | | | 1996 | |
| Leesburg, FL | | | (A | ) | | | 96 | | | | 1,079 | | | | 691 | | | | 214 | | | | 1,652 | | | | 1,866 | | | | 439 | | | | 1997 | |
| Lutz, FL | | | (N | ) | | | 901 | | | | 2,478 | | | | 33 | | | | 901 | | | | 2,511 | | | | 3,412 | | | | 152 | | | | 2004 | |
| Lutz, FL | | | (N | ) | | | 992 | | | | 2,868 | | | | 28 | | | | 992 | | | | 2,896 | | | | 3,888 | | | | 175 | | | | 2004 | |
| Margate I, FL | | | (F | ) | | | 161 | | | | 1,763 | | | | 1,334 | | | | 399 | | | | 2,859 | | | | 3,258 | | | | 659 | | | | 1994 | |
| Margate II, FL | | | (A | ) | | | 132 | | | | 1,473 | | | | 1,552 | | | | 383 | | | | 2,774 | | | | 3,157 | | | | 537 | | | | 1996 | |
| Merrit Island, FL | | | (F | ) | | | 716 | | | | 2,983 | | | | 398 | | | | 796 | | | | 3,301 | | | | 4,097 | | | | 609 | | | | 2000 | |
| Miami I, FL | | | (D | ) | | | 179 | | | | 1,999 | | | | 1,509 | | | | 484 | | | | 3,203 | | | | 3,687 | | | | 803 | | | | 1995 | |
| Miami II, FL | | | (N | ) | | | 188 | | | | 2,052 | | | | 588 | | | | 286 | | | | 2,542 | | | | 2,828 | | | | 697 | | | | 1994 | |
| Miami III, FL | | | (G | ) | | | 253 | | | | 2,544 | | | | 1,205 | | | | 561 | | | | 3,441 | | | | 4,002 | | | | 797 | | | | 1994 | |
| Miami IV, FL | | | (N | ) | | | 193 | | | | 2,174 | | | | 1,644 | | | | 516 | | | | 3,495 | | | | 4,011 | | | | 910 | | | | 1995 | |
| Miami V, FL | | | (A | ) | | | 193 | | | | 2,165 | | | | 826 | | | | 364 | | | | 2,820 | | | | 3,184 | | | | 674 | | | | 1995 | |
| Miami, FL | | | (N | ) | | | 4,577 | | | | 13,185 | | | | 4 | | | | 4,577 | | | | 13,189 | | | | 17,766 | | | | 170 | | | | 2005 | |
| Naples I, FL | | | (N | ) | | | 90 | | | | 1,010 | | | | 2,216 | | | | 270 | | | | 3,046 | | | | 3,316 | | | | 669 | | | | 1996 | |
| Naples II, FL | | | (G | ) | | | 148 | | | | 1,652 | | | | 4,083 | | | | 558 | | | | 5,325 | | | | 5,883 | | | | 979 | | | | 1997 | |
| Naples III, FL | | | (F | ) | | | 139 | | | | 1,561 | | | | 3,517 | | | | 598 | | | | 4,619 | | | | 5,217 | | | | 1,327 | | | | 1997 | |
| Naples IV, FL | | | (A | ) | | | 262 | | | | 2,980 | | | | 374 | | | | 407 | | | | 3,209 | | | | 3,616 | | | | 691 | | | | 1998 | |
| Ocala, FL | | | (N | ) | | | 55 | | | | 558 | | | | 463 | | | | 155 | | | | 921 | | | | 1,076 | | | | 206 | | | | 1994 | |
| Ocoee, FL | | | (N | ) | | | 1,286 | | | | 3,705 | | | | 29 | | | | 1,286 | | | | 3,735 | | | | 5,021 | | | | 129 | | | | 2005 | |
| Orange City, FL | | | (N | ) | | | 1,191 | | | | 3,209 | | | | 42 | | | | 1,191 | | | | 3,251 | | | | 4,442 | | | | 196 | | | | 2004 | |
| Orlando, FL | | | (A | ) | | | 187 | | | | 2,088 | | | | 404 | | | | 240 | | | | 2,439 | | | | 2,679 | | | | 800 | | | | 1997 | |
| Orlando, FL | | | (F | ) | | | 1,030 | | | | 2,968 | | | | 32 | | | | 1,030 | | | | 3,000 | | | | 4,030 | | | | 115 | | | | 2005 | |
| Pembroke Pines, FL | | | (D | ) | | | 337 | | | | 3,772 | | | | 2,472 | | | | 953 | | | | 5,628 | | | | 6,581 | | | | 1,040 | | | | 1997 | |
| Royal Palm Beach, FL | | | (C | ) | | | 205 | | | | 2,148 | | | | 2,522 | | | | 742 | | | | 4,133 | | | | 4,875 | | | | 1,278 | | | | 1994 | |
| Sarasota, FL | | | (F | ) | | | 333 | | | | 3,656 | | | | 997 | | | | 529 | | | | 4,457 | | | | 4,986 | | | | 1,146 | | | | 1998 | |
| St. Augustine, FL | | | (A | ) | | | 135 | | | | 1,515 | | | | 2,956 | | | | 383 | | | | 4,223 | | | | 4,606 | | | | 856 | | | | 1996 | |
| Stuart I, FL | | | (A | ) | | | 154 | | | | 1,726 | | | | 1,085 | | | | 319 | | | | 2,646 | | | | 2,965 | | | | 728 | | | | 1997 | |
| Stuart II, FL | | | (G | ) | | | 324 | | | | 3,625 | | | | 2,258 | | | | 685 | | | | 5,522 | | | | 6,207 | | | | 1,074 | | | | 1997 | |
| | | | | | | | | | Gross Carrying Amount | | | | |
| | | | | | Initial Cost | | Costs Sub- | | at December 31, 2007 | | | | |
Description | | Square Footage | | Encum-
brances | | Land | | Building and
Improvements | | sequent to
Acquisition | | Land | | Building and
Improvements | | Total | | Accumulated
Depreciation (L) | | Year Acquired /
Developed |
Canton I, OH | | 39,750 | | | | $ | 138 | | $ | 679 | | $ | 178 | | $ | 137 | | $ | 857 | | $ | 995 | | $ | 122 | | 2005 |
Canton II, OH | | 26,200 | | | | 122 | | 595 | | 109 | | 120 | | 706 | | 826 | | 103 | | 2005 |
Centerville I, OH | | 86,390 | | (I) | | 471 | | 3,705 | | 110 | | 471 | | 3,815 | | 4,286 | | 617 | | 2004 |
Centerville II, OH | | 43,400 | | (E) | | 332 | | 1,757 | | 144 | | 332 | | 1,901 | | 2,233 | | 299 | | 2004 |
Cleveland I, OH | | 45,950 | | | | 525 | | 2,592 | | 114 | | 524 | | 2,707 | | 3,231 | | 403 | | 2005 |
Cleveland II, OH | | 58,450 | | | | 290 | | 1,427 | | 149 | | 289 | | 1,578 | | 1,866 | | 241 | | 2005 |
Columbus , OH | | 66,875 | | | | 1,234 | | 3,151 | | (19 | ) | 1,239 | | 3,127 | | 4,366 | | 256 | | 2006 |
Dayton I, OH | | 43,100 | | (E) | | 323 | | 2,070 | | 80 | | 323 | | 2,150 | | 2,473 | | 351 | | 2004 |
Dayton II, OH | | 48,149 | | | | 441 | | 2,176 | | 122 | | 440 | | 2,298 | | 2,739 | | 339 | | 2005 |
Euclid I, OH | | 46,910 | | | | 200 | | 1,053 | | 1,880 | | 317 | | 2,816 | | 3,133 | | 1,404 | | 1988 |
Euclid II, OH | | 47,275 | | | | 359 | | — | | 1,630 | | 461 | | 1,528 | | 1,989 | | 348 | | 1988 |
Grove City, OH | | 89,290 | | | | 1,756 | | 4,485 | | 82 | | 1,761 | | 4,562 | | 6,324 | | 358 | | 2006 |
Hilliard, OH | | 89,715 | | | | 1,361 | | 3,476 | | 88 | | 1,366 | | 3,558 | | 4,924 | | 278 | | 2006 |
Hudson, OH | | 65,240 | | | | 195 | | 2,198 | | 470 | | 274 | | 2,588 | | 2,863 | | 736 | | 1998 |
Lakewood, OH | | 39,267 | | | | 405 | | 854 | | 441 | | 405 | | 1,295 | | 1,700 | | 678 | | 1989 |
Louisville, OH | | 53,960 | | | | 257 | | 1,260 | | 110 | | 255 | | 1,372 | | 1,627 | | 204 | | 2005 |
Marblehead, OH | | 52,300 | | | | 374 | | 1,843 | | 146 | | 373 | | 1,991 | | 2,363 | | 291 | | 2005 |
Mason, OH | | 33,900 | | | | 127 | | 1,419 | | 56 | | 149 | | 1,452 | | 1,602 | | 447 | | 1998 |
Mentor, OH | | 51,275 | | | | 206 | | 1,011 | | 1,385 | | 204 | | 2,398 | | 2,602 | | 211 | | 2005 |
Miamisburg, OH | | 59,930 | | (I) | | 375 | | 2,410 | | 101 | | 375 | | 2,511 | | 2,886 | | 413 | | 2004 |
Middleburg Heights, OH | | 93,025 | | | | 63 | | 704 | | 1,864 | | 332 | | 2,299 | | 2,631 | | 601 | | 1980 |
North Canton I, OH | | 45,400 | | | | 209 | | 846 | | 500 | | 299 | | 1,255 | | 1,555 | | 807 | | 1979 |
North Canton II, OH | | 44,180 | | | | 70 | | 1,226 | | 1 | | 239 | | 1,058 | | 1,297 | | 226 | | 1983 |
North Olmsted I, OH | | 48,665 | | | | 63 | | 704 | | 1,134 | | 214 | | 1,687 | | 1,901 | | 516 | | 1979 |
North Olmsted II, OH | | 47,850 | | (F) | | 290 | | 1,129 | | 1,016 | | 469 | | 1,964 | | 2,435 | | 896 | | 1988 |
North Randall, OH | | 80,099 | | (F) | | 515 | | 2,323 | | 2,778 | | 898 | | 4,718 | | 5,616 | | 1,246 | | 1998 |
Perry, OH | | 63,850 | | | | 290 | | 1,427 | | 106 | | 288 | | 1,535 | | 1,823 | | 231 | | 2005 |
Reynoldsburg, OH | | 67,545 | | | | 1,290 | | 3,295 | | 84 | | 1,295 | | 3,375 | | 4,670 | | 264 | | 2006 |
Strongsville, OH | | 43,727 | | (K) | | 570 | | 3,486 | | (315 | ) | 570 | | 2,855 | | 3,741 | | 57 | | 2007 |
Warrensville Heights, OH | | 90,331 | | | | 525 | | 766 | | 2,839 | | 935 | | 3,195 | | 4,130 | | 722 | | 1980 |
Westlake, OH | | 62,750 | | | | 509 | | 2,508 | | 123 | | 508 | | 2,632 | | 3,140 | | 397 | | 2005 |
Willoughby, OH | | 34,454 | | | | 239 | | 1,178 | | 127 | | 238 | | 1,306 | | 1,544 | | 195 | | 2005 |
Youngstown, OH | | 65,950 | | (A) | | 67 | | — | | 1,687 | | 204 | | 1,550 | | 1,754 | | 809 | | 1977 |
Levittown, PA | | 76,230 | | (F) | | 926 | | 5,296 | | 788 | | 926 | | 6,084 | | 7,010 | | 1,907 | | 2001 |
Philadelphia, PA | | 100,347 | | (D) | | 1,461 | | 8,334 | | 718 | | 1,461 | | 9,052 | | 10,513 | | 3,642 | | 2001 |
Alcoa, TN | | 42,325 | | (J) | | 254 | | 2,113 | | 61 | | 254 | | 2,173 | | 2,428 | | 294 | | 2005 |
Antioch, TN | | 76,150 | | | | 588 | | 4,906 | | 99 | | 588 | | 5,005 | | 5,593 | | 564 | | 2005 |
Cordova I, TN | | 54,225 | | (G) | | 296 | | 2,482 | | 142 | | 297 | | 2,624 | | 2,920 | | 358 | | 2005 |
Cordova II, TN | | 67,600 | | | | 429 | | 3,580 | | 125 | | 429 | | 3,704 | | 4,134 | | 341 | | 2006 |
Knoxville I, TN | | 29,377 | | | | 99 | | 1,113 | | 99 | | 102 | | 1,209 | | 1,311 | | 382 | | 1997 |
Knoxville II, TN | | 38,000 | | | | 117 | | 1,308 | | 169 | | 129 | | 1,466 | | 1,594 | | 439 | | 1997 |
Knoxville III, TN | | 45,736 | | | | 182 | | 2,053 | | 564 | | 331 | | 2,469 | | 2,799 | | 655 | | 1998 |
Knoxville IV, TN | | 58,852 | | | | 158 | | 1,771 | | 592 | | 310 | | 2,211 | | 2,521 | | 553 | | 1998 |
Knoxville V, TN | | 42,790 | | | | 134 | | 1,493 | | 392 | | 235 | | 1,784 | | 2,019 | | 514 | | 1998 |
Knoxville VI, TN | | 63,440 | | (J) | | 439 | | 3,653 | | 79 | | 440 | | 3,731 | | 4,171 | | 503 | | 2005 |
Knoxville VII, TN | | 54,994 | | (J) | | 312 | | 2,594 | | 83 | | 312 | | 2,677 | | 2,989 | | 362 | | 2005 |
Knoxville VIII, TN | | 96,518 | | (J) | | 585 | | 4,869 | | 107 | | 586 | | 4,975 | | 5,561 | | 670 | | 2005 |
Memphis I, TN | | 91,300 | | (E) | | 677 | | 3,880 | | 1,066 | | 677 | | 4,945 | | 5,623 | | 1,506 | | 2001 |
Memphis II, TN | | 71,960 | | | | 395 | | 2,276 | | 160 | | 395 | | 2,436 | | 2,831 | | 830 | | 2001 |
Memphis III, TN | | 41,137 | | (G) | | 212 | | 1,779 | | 131 | | 213 | | 1,909 | | 2,122 | | 265 | | 2005 |
Memphis IV, TN | | 38,750 | | (G) | | 160 | | 1,342 | | 112 | | 160 | | 1,453 | | 1,614 | | 202 | | 2005 |
Memphis V, TN | | 60,370 | | (G) | | 209 | | 1,753 | | 398 | | 210 | | 2,150 | | 2,360 | | 263 | | 2005 |
Memphis VI, TN | | 109,317 | | | | 462 | | 3,851 | | 235 | | 462 | | 4,086 | | 4,548 | | 375 | | 2006 |
Memphis VII, TN | | 115,303 | | | | 215 | | 1,792 | | 289 | | 215 | | 2,081 | | 2,296 | | 188 | | 2006 |
Memphis VIII, TN | | 96,060 | | | | 355 | | 2,959 | | 222 | | 355 | | 3,181 | | 3,536 | | 290 | | 2006 |
Nashville I, TN | | 106,930 | | | | 405 | | 3,379 | | 193 | | 405 | | 3,572 | | 3,977 | | 400 | | 2005 |
Nashville II, TN | | 83,274 | | | | 593 | | 4,950 | | 190 | | 593 | | 5,140 | | 5,733 | | 564 | | 2005 |
Nashville III, TN | | 99,600 | | | | 416 | | 3,469 | | 137 | | 416 | | 3,607 | | 4,023 | | 388 | | 2006 |
Nashville IV, TN | | 102,425 | | | | 992 | | 8,274 | | 126 | | 992 | | 8,400 | | 9,392 | | 897 | | 2006 |
Austin I, TX | | 59,520 | | | | 2,239 | | 2,038 | | 62 | | 2,239 | | 2,100 | | 4,338 | | 258 | | 2005 |
Austin II, TX | | 65,401 | | | | 734 | | 3,894 | | 120 | | 738 | | 4,009 | | 4,748 | | 369 | | 2006 |
Austin III, TX | | 71,030 | | | | 1,030 | | 5,468 | | 119 | | 1,035 | | 5,582 | | 6,617 | | 418 | | 2006 |
Baytown, TX | | 38,950 | | | | 946 | | 863 | | 59 | | 948 | | 921 | | 1,868 | | 127 | | 2005 |
Bryan, TX | | 60,450 | | | | 1,394 | | 1,268 | | 77 | | 1,396 | | 1,343 | | 2,739 | | 184 | | 2005 |
College Station, TX | | 26,550 | | (H) | | 812 | | 740 | | 32 | | 813 | | 771 | | 1,584 | | 105 | | 2005 |
Dallas, TX | | 58,707 | | | | 2,475 | | 2,253 | | 115 | | 2,475 | | 2,367 | | 4,842 | | 291 | | 2005 |
Denton, TX | | 60,836 | | 2,062 | | 553 | | 2,936 | | 75 | | 569 | | 2,995 | | 3,564 | | 215 | | 2006 |
El Paso I, TX | | 59,864 | | (C) | | 1,983 | | 1,805 | | 113 | | 1,984 | | 1,918 | | 3,901 | | 255 | | 2005 |
El Paso II, TX | | 48,692 | | (C) | | 1,319 | | 1,201 | | 74 | | 1,320 | | 1,274 | | 2,594 | | 169 | | 2005 |
El Paso III, TX | | 71,276 | | (C) | | 2,408 | | 2,192 | | 98 | | 2,409 | | 2,289 | | 4,698 | | 303 | | 2005 |
El Paso IV, TX | | 48,962 | | (C) | | 2,073 | | 1,888 | | (271 | ) | 2,074 | | 1,616 | | 3,690 | | 265 | | 2005 |
El Paso V, TX | | 62,825 | | (B) | | 1,758 | | 1,617 | | 79 | | 1,761 | | 1,693 | | 3,454 | | 219 | | 2005 |
El Paso VI, TX | | 36,620 | | (B) | | 660 | | 607 | | 72 | | 662 | | 677 | | 1,339 | | 90 | | 2005 |
El Paso VII, TX | | 34,545 | | (B) | | 563 | | 517 | | 55 | | 565 | | 571 | | 1,136 | | 76 | | 2005 |
Fort Worth I, TX | | 49,778 | | | | 1,253 | | 1,141 | | 68 | | 1,253 | | 1,208 | | 2,462 | | 149 | | 2005 |
Fort Worth II, TX | | 72,925 | | | | 868 | | 4,607 | | 76 | | 874 | | 4,676 | | 5,551 | | 430 | | 2006 |
Frisco I, TX | | 50,854 | | (A) | | 1,093 | | 3,148 | | 33 | | 1,093 | | 3,181 | | 4,274 | | 439 | | 2005 |
Frisco II, TX | | 71,339 | | 3,440 | | 1,564 | | 4,507 | | 57 | | 1,564 | | 4,564 | | 6,128 | | 628 | | 2005 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
F-35
| | | | | | | | | | Gross Carrying Amount | | | | |
| | | | | | Initial Cost | | | | at December 31, 2007 | | | | |
Description | | Square Footage | | Encum-
brances | | Land | | Building and
Improvements | | Costs Sub-sequent
to Acquisition | | Land | | Building and
Improvements | | Total | | Accumulated
Depreciation (L) | | Year Acquired /
Developed |
Frisco III, TX | | 72,275 | | | | $ | 1,147 | | $ | 6,088 | | $ | 69 | | $ | 1,154 | | $ | 6,151 | | $ | 7,305 | | $ | 567 | | 2006 | |
Garland I, TX | | 70,000 | | 3,280 | | 751 | | 3,984 | | 231 | | 767 | | 4,199 | | 4,966 | | 293 | | 2006 | |
Garland II, TX | | 68,475 | | | | 862 | | 4,578 | | 41 | | 862 | | 4,619 | | 5,481 | | 290 | | 2006 | |
Greenville I, TX | | 59,385 | | | | 1,848 | | 1,682 | | 43 | | 1,848 | | 1,725 | | 3,573 | | 215 | | 2005 | |
Greenville II, TX | | 44,900 | | | | 1,337 | | 1,217 | | 45 | | 1,337 | | 1,262 | | 2,599 | | 157 | | 2005 | |
Houston I, TX | | 101,350 | | | | 1,420 | | 1,296 | | 89 | | 1,422 | | 1,383 | | 2,805 | | 191 | | 2005 | |
Houston II, TX | | 71,300 | | | | 1,510 | | 1,377 | | 76 | | 1,512 | | 1,450 | | 2,962 | | 207 | | 2005 | |
Houston III, TX | | 60,820 | | 547 | | 575 | | 524 | | 175 | | 576 | | 698 | | 1,274 | | 85 | | 2005 | |
Houston IV, TX | | 43,775 | | (H) | | 960 | | 875 | | 67 | | 961 | | 941 | | 1,902 | | 126 | | 2005 | |
Houston V, TX | | 127,145 | | 4,477 | | 1,153 | | 6,122 | | 193 | | 1,156 | | 6,312 | | 7,468 | | 421 | | 2006 | |
Keller, TX | | 61,885 | | 2,605 | | 890 | | 4,727 | | 40 | | 890 | | 4,766 | | 5,657 | | 457 | | 2006 | |
La Porte, TX | | 45,100 | | | | 842 | | 761 | | 101 | | 843 | | 861 | | 1,704 | | 119 | | 2005 | |
Lewisville, TX | | 58,465 | | 1,874 | | 476 | | 2,525 | | 99 | | 492 | | 2,608 | | 3,100 | | 186 | | 2006 | |
Mansfield, TX | | 63,025 | | | | 837 | | 4,443 | | 60 | | 843 | | 4,496 | | 5,339 | | 415 | | 2006 | |
McKinney I, TX | | 47,020 | | 1,374 | | 1,632 | | 1,486 | | 62 | | 1,634 | | 1,546 | | 3,180 | | 186 | | 2005 | |
McKinney II, TX | | 70,050 | | 4,303 | | 855 | | 5,076 | | 45 | | 857 | | 5,119 | | 5,976 | | 493 | | 2006 | |
North Richland Hills, TX | | 57,025 | | | | 2,252 | | 2,049 | | 56 | | 2,252 | | 2,105 | | 4,357 | | 259 | | 2005 | |
Roanoke, TX | | 59,400 | | | | 1,337 | | 1,217 | | 46 | | 1,337 | | 1,263 | | 2,600 | | 159 | | 2005 | |
San Antonio I, TX | | 75,270 | | | | 2,895 | | 2,635 | | 26 | | 2,895 | | 2,661 | | 5,556 | | 316 | | 2005 | |
San Antonio II, TX | | 73,205 | | | | 1,047 | | 5,558 | | 46 | | 1,052 | | 5,600 | | 6,652 | | 351 | | 2006 | |
San Antonio III, TX | | 72,525 | | | | 996 | | 5,286 | | 13 | | 996 | | 5,298 | | 6,294 | | 265 | | 2007 | |
Sherman I, TX | | 55,050 | | 1,599 | | 1,904 | | 1,733 | | 53 | | 1,906 | | 1,785 | | 3,690 | | 215 | | 2005 | |
Sherman II, TX | | 48,425 | | 1,909 | | 1,337 | | 1,217 | | 50 | | 1,337 | | 1,268 | | 2,604 | | 153 | | 2005 | |
Spring, TX | | 72,801 | | | | 580 | | 3,081 | | 38 | | 580 | | 3,119 | | 3,700 | | 299 | | 2006 | |
Murray I, UT | | 60,280 | | (C) | | 3,847 | | 1,017 | | 122 | | 3,848 | | 1,137 | | 4,985 | | 157 | | 2005 | |
Murray II, UT | | 71,421 | | (C) | | 2,147 | | 567 | | 189 | | 2,148 | | 755 | | 2,903 | | 98 | | 2005 | |
Salt Lake City I, UT | | 56,446 | | (C) | | 2,695 | | 712 | | 144 | | 2,696 | | 855 | | 3,552 | | 120 | | 2005 | |
Salt Lake City II, UT | | 53,676 | | (C) | | 2,074 | | 548 | | 119 | | 2,075 | | 666 | | 2,741 | | 93 | | 2005 | |
Fredericksburg I, VA | | 69,450 | | | | 1,680 | | 4,840 | | 224 | | 1,680 | | 5,063 | | 6,744 | | 514 | | 2005 | |
Fredericksburg II, VA | | 61,493 | | | | 1,757 | | 5,062 | | 283 | | 1,758 | | 5,344 | | 7,102 | | 532 | | 2005 | |
Milwaukee, WI | | 58,515 | | (I) | | 375 | | 4,333 | | 113 | | 375 | | 4,446 | | 4,821 | | 731 | | 2004 | |
USIFB | | 25,032 | | | | — | | 7,057 | | — | | — | | 7,057 | | 7,057 | | — | | 2007 | |
Corporate Office | | — | | | | — | | — | | — | | — | | 6,202 | | 6,316 | | 2,542 | | 1977 | |
Construction in Progress | | — | | | | — | | — | | — | | — | | 5,482 | | 5,482 | | — | | | |
| | 26,144,216 | | | | $ | 364,263 | | $ | 1,339,432 | | $ | 200,935 | | $ | 393,715 | | $ | 1,513,651 | | $ | 1,916,396 | | $ | 269,278 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Initial Cost | | | Gross Carrying Amount
| | | | | | | |
| | | | | | | | | Building
| | | Costs
| | | at December 31, 2005 | | | | | | | |
| | | | | | | | | and
| | | Subsequent
| | | | | | Building and
| | | | | | Accumulated
| | | Year
| |
| | | Encum-
| | | | | | Improve-
| | | to
| | | | | | Improve-
| | | | | | Depreciation
| | | Acquired/
| |
Description | | brances | | | Land | | | ments | | | Acquisition | | | Land | | | ments | | | Total | | | (O) | | | Developed | |
| | | (Dollars in thousands) | |
| |
| Tampa I, FL | | | (N | ) | | | 124 | | | | 1,252 | | | | 359 | | | | 220 | | | | 1,515 | | | | 1,735 | | | | 402 | | | | 1994 | |
| Tampa II, FL | | | (N | ) | | | 330 | | | | 1,887 | | | | 412 | | | | 330 | | | | 2,299 | | | | 2,629 | | | | 566 | | | | 2001 | |
| Tampa, FL | | | (G | ) | | | 1,589 | | | | 4,576 | | | | 9 | | | | 1,589 | | | | 4,584 | | | | 6,173 | | | | 177 | | | | 2005 | |
| Vero Beach, FL | | | (N | ) | | | 159 | | | | 1,783 | | | | 333 | | | | 259 | | | | 2,016 | | | | 2,275 | | | | 475 | | | | 1998/1997 | |
| West Palm Beach, FL | | | 2,542 | | | | 719 | | | | 3,420 | | | | 1,387 | | | | 835 | | | | 4,691 | | | | 5,526 | | | | 1,233 | | | | 2001 | |
| West Palm Beach, FL | | | (N | ) | | | 2,129 | | | | 8,671 | | | | 96 | | | | 2,129 | | | | 8,767 | | | | 10,896 | | | | 605 | | | | 2004 | |
| Alpharetta, GA | | | (C | ) | | | 806 | | | | 4,720 | | | | 788 | | | | 967 | | | | 5,347 | | | | 6,314 | | | | 1,458 | | | | 2001 | |
| Decatur, GA | | | (A | ) | | | 616 | | | | 6,776 | | | | (463 | ) | | | 616 | | | | 6,313 | | | | 6,929 | | | | 1,477 | | | | 1998 | |
| Norcross, GA | | | (D | ) | | | 514 | | | | 2,930 | | | | 608 | | | | 632 | | | | 3,420 | | | | 4,052 | | | | 733 | | | | 2001 | |
| Peachtree City, GA | | | 1,859 | | | | 435 | | | | 2,532 | | | | 477 | | | | 529 | | | | 2,915 | | | | 3,444 | | | | 647 | | | | 2001 | |
| Smyrna, GA | | | (C | ) | | | 750 | | | | 4,271 | | | | 56 | | | | 750 | | | | 4,327 | | | | 5,077 | | | | 1,146 | | | | 2001 | |
| Addison, IL | | | (E | ) | | | 428 | | | | 3,531 | | | | 57 | | | | 428 | | | | 3,588 | | | | 4,016 | | | | 215 | | | | 2004 | |
| Aurora, IL | | | (N | ) | | | 644 | | | | 3,652 | | | | 30 | | | | 644 | | | | 3,682 | | | | 4,326 | | | | 221 | | | | 2004 | |
| Bartlett, IL | | | (N | ) | | | 931 | | | | 2,493 | | | | 45 | | | | 931 | | | | 2,538 | | | | 3,469 | | | | 152 | | | | 2004 | |
| Bartlett, IL | | | (G | ) | | | 1,126 | | | | 2,197 | | | | 53 | | | | 1,126 | | | | 2,250 | | | | 3,376 | | | | 135 | | | | 2004 | |
| Bellwood, IL | | | (G | ) | | | 1,012 | | | | 5,768 | | | | 484 | | | | 1,012 | | | | 6,252 | | | | 7,264 | | | | 1,532 | | | | 2001 | |
| Des Plaines, IL | | | (E | ) | | | 1,564 | | | | 4,327 | | | | 28 | | | | 1,564 | | | | 4,355 | | | | 5,919 | | | | 263 | | | | 2004 | |
| Elk Grove Village, IL | | | (E | ) | | | 1,446 | | | | 3,535 | | | | 143 | | | | 1,446 | | | | 3,678 | | | | 5,124 | | | | 220 | | | | 2004 | |
| Glenview, IL | | | (E | ) | | | 3,740 | | | | 10,367 | | | | 33 | | | | 3,740 | | | | 10,400 | | | | 14,140 | | | | 624 | | | | 2004 | |
| Gurnee, IL | | | (E | ) | | | 1,521 | | | | 5,440 | | | | 128 | | | | 1,521 | | | | 5,568 | | | | 7,089 | | | | 329 | | | | 2004 | |
| Harvey, IL | | | (E | ) | | | 869 | | | | 3,635 | | | | 40 | | | | 869 | | | | 3,675 | | | | 4,544 | | | | 221 | | | | 2004 | |
| Joliet, IL | | | (E | ) | | | 547 | | | | 4,704 | | | | 39 | | | | 547 | | | | 4,743 | | | | 5,290 | | | | 286 | | | | 2004 | |
| Lake Zurich, IL | | | (E | ) | | | 2,102 | | | | 2,187 | | | | 40 | | | | 2,102 | | | | 2,227 | | | | 4,329 | | | | 134 | | | | 2004 | |
| Lombard, IL | | | (E | ) | | | 1,305 | | | | 3,938 | | | | 189 | | | | 1,305 | | | | 4,127 | | | | 5,432 | | | | 240 | | | | 2004 | |
| Mount Prospect, IL | | | (E | ) | | | 1,701 | | | | 3,114 | | | | 52 | | | | 1,701 | | | | 3,166 | | | | 4,867 | | | | 190 | | | | 2004 | |
| Mundelein, IL | | | (E | ) | | | 1,498 | | | | 2,782 | | | | 59 | | | | 1,498 | | | | 2,841 | | | | 4,339 | | | | 170 | | | | 2004 | |
| North Chicago, IL | | | (E | ) | | | 1,073 | | | | 3,006 | | | | 55 | | | | 1,073 | | | | 3,061 | | | | 4,134 | | | | 184 | | | | 2004 | |
| Plainfield, IL | | | (N | ) | | | 1,770 | | | | 1,715 | | | | 46 | | | | 1,770 | | | | 1,761 | | | | 3,531 | | | | 108 | | | | 2004 | |
| Plainfield, IL | | | (N | ) | | | 694 | | | | 2,000 | | | | 50 | | | | 694 | | | | 2,050 | | | | 2,744 | | | | 63 | | | | 2005 | |
| Schaumburg, IL | | | (N | ) | | | 538 | | | | 645 | | | | 69 | | | | 538 | | | | 714 | | | | 1,252 | | | | 43 | | | | 2004 | |
| Streamwood, IL | | | (F | ) | | | 1,447 | | | | 1,662 | | | | 80 | | | | 1,447 | | | | 1,742 | | | | 3,189 | | | | 105 | | | | 2004 | |
| Warrenville, IL | | | (F | ) | | | 1,066 | | | | 3,072 | | | | 25 | | | | 1,066 | | | | 3,097 | | | | 4,163 | | | | 93 | | | | 2005 | |
| Waukegan, IL | | | (E | ) | | | 1,198 | | | | 4,363 | | | | 56 | | | | 1,198 | | | | 4,419 | | | | 5,617 | | | | 266 | | | | 2004 | |
| West Chicago, IL | | | (G | ) | | | 1,071 | | | | 2,249 | | | | 74 | | | | 1,071 | | | | 2,323 | | | | 3,394 | | | | 138 | | | | 2004 | |
| Westmont, IL | | | (E | ) | | | 1,155 | | | | 3,873 | | | | 32 | | | | 1,155 | | | | 3,905 | | | | 5,060 | | | | 235 | | | | 2004 | |
| Wheeling, IL | | | (F | ) | | | 857 | | | | 3,213 | | | | 111 | | | | 857 | | | | 3,324 | | | | 4,181 | | | | 196 | | | | 2004 | |
| Wheeling, IL | | | (E | ) | | | 793 | | | | 3,816 | | | | 167 | | | | 793 | | | | 3,983 | | | | 4,776 | | | | 232 | | | | 2004 | |
| Woodridge, IL | | | (E | ) | | | 943 | | | | 3,397 | | | | 39 | | | | 943 | | | | 3,436 | | | | 4,379 | | | | 207 | | | | 2004 | |
| Indianapolis, IN | | | (N | ) | | | 641 | | | | 3,154 | | | | 49 | | | | 641 | | | | 3,203 | | | | 3,844 | | | | 192 | | | | 2004 | |
| Indianapolis, IN | | | (F | ) | | | 406 | | | | 3,496 | | | | 74 | | | | 406 | | | | 3,570 | | | | 3,976 | | | | 213 | | | | 2004 | |
| Indianapolis, IN | | | (E | ) | | | 1,871 | | | | 1,230 | | | | 51 | | | | 1,871 | | | | 1,281 | | | | 3,152 | | | | 77 | | | | 2004 | |
| Indianapolis, IN | | | (E | ) | | | 669 | | | | 2,434 | | | | 59 | | | | 669 | | | | 2,493 | | | | 3,162 | | | | 152 | | | | 2004 | |
| Indianapolis, IN | | | (E | ) | | | 1,229 | | | | 2,834 | | | | 33 | | | | 1,229 | | | | 2,867 | | | | 4,096 | | | | 172 | | | | 2004 | |
| Indianapolis, IN | | | (E | ) | | | 2,138 | | | | 3,633 | | | | 51 | | | | 2,138 | | | | 3,684 | | | | 5,822 | | | | 221 | | | | 2004 | |
| Indianapolis, IN | | | (E | ) | | | 908 | | | | 4,755 | | | | 183 | | | | 908 | | | | 4,938 | | | | 5,846 | | | | 290 | | | | 2004 | |
| Indianapolis, IN | | | (E | ) | | | 887 | | | | 3,548 | | | | 76 | | | | 887 | | | | 3,624 | | | | 4,511 | | | | 215 | | | | 2004 | |
| Indianapolis, IN | | | (E | ) | | | 1,133 | | | | 4,103 | | | | 80 | | | | 1,133 | | | | 4,183 | | | | 5,316 | | | | 249 | | | | 2004 | |
| Baton Rouge I, LA | | | (N | ) | | | 112 | | | | 1,248 | | | | 479 | | | | 208 | | | | 1,631 | | | | 1,839 | | | | 376 | | | | 1997 | |
| Baton Rouge II, LA | | | (F | ) | | | 118 | | | | 1,181 | | | | 1,072 | | | | 267 | | | | 2,104 | | | | 2,371 | | | | 574 | | | | 1997 | |
F-40
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Initial Cost | | | Gross Carrying Amount
| | | | | | | |
| | | | | | | | | Building
| | | Costs
| | | at December 31, 2005 | | | | | | | |
| | | | | | | | | and
| | | Subsequent
| | | | | | Building and
| | | | | | Accumulated
| | | Year
| |
| | | Encum-
| | | | | | Improve-
| | | to
| | | | | | Improve-
| | | | | | Depreciation
| | | Acquired/
| |
Description | | brances | | | Land | | | ments | | | Acquisition | | | Land | | | ments | | | Total | | | (O) | | | Developed | |
| | | (Dollars in thousands) | |
| |
| Baton Rouge III, LA | | | (N | ) | | | 133 | | | | 1,487 | | | | 568 | | | | 271 | | | | 1,917 | | | | 2,188 | | | | 429 | | | | 1997 | |
| Baton Rouge IV, LA | | | (A | ) | | | 32 | | | | 377 | | | | 115 | | | | 64 | | | | 460 | | | | 524 | | | | 100 | | | | 1998 | |
| Prairieville, LA | | | (A | ) | | | 90 | | | | 1,004 | | | | 128 | | | | 90 | | | | 1,132 | | | | 1,222 | | | | 272 | | | | 1998 | |
| Slidell, LA | | | (D | ) | | | 188 | | | | 3,175 | | | | 1,543 | | | | 802 | | | | 4,104 | | | | 4,906 | | | | 811 | | | | 2001 | |
| Boston, MA | | | (C | ) | | | 1,516 | | | | 8,628 | | | | 127 | | | | 1,516 | | | | 8,755 | | | | 10,271 | | | | 1,902 | | | | 2002 | |
| Leominster, MA | | | (D | ) | | | 90 | | | | 1,519 | | | | 2,266 | | | | 338 | | | | 3,537 | | | | 3,875 | | | | 698 | | | | 1998 | |
| Baltimore, MD | | | (G | ) | | | 1,050 | | | | 5,997 | | | | 799 | | | | 1,173 | | | | 6,673 | | | | 7,846 | | | | 1,577 | | | | 2001 | |
| California, MD | | | (N | ) | | | 1,486 | | | | 4,280 | | | | 40 | | | | 1,486 | | | | 4,320 | | | | 5,806 | | | | 259 | | | | 2004 | |
| Gaithersburg, MD | | | 6,421 | | | | 3,124 | | | | 9,000 | | | | 15 | | | | 3,124 | | | | 9,015 | | | | 12,139 | | | | 465 | | | | 2005 | |
| Laurel, MD | | | (C | ) | | | 1,409 | | | | 8,035 | | | | 3,070 | | | | 1,929 | | | | 10,585 | | | | 12,514 | | | | 2,068 | | | | 2001 | |
| Temple Hills, MD | | | (D | ) | | | 1,541 | | | | 8,788 | | | | 1,897 | | | | 1,800 | | | | 10,426 | | | | 12,226 | | | | 2,121 | | | | 2001 | |
| Grand Rapids, MI | | | (F | ) | | | 185 | | | | 1,821 | | | | 1,174 | | | | 325 | | | | 2,855 | | | | 3,180 | | | | 874 | | | | 1996 | |
| Portage, MI | | | (N | ) | | | 104 | | | | 1,160 | | | | 725 | | | | 237 | | | | 1,752 | | | | 1,989 | | | | 497 | | | | 1996 | |
| Romulus, MI | | | (F | ) | | | 308 | | | | 1,743 | | | | 529 | | | | 418 | | | | 2,162 | | | | 2,580 | | | | 383 | | | | 1997 | |
| Wyoming, MI | | | (F | ) | | | 191 | | | | 2,135 | | | | 924 | | | | 354 | | | | 2,896 | | | | 3,250 | | | | 887 | | | | 1996 | |
| Biloxi, MS | | | (N | ) | | | 148 | | | | 1,652 | | | | 588 | | | | 279 | | | | 2,109 | | | | 2,388 | | | | 444 | | | | 1997 | |
| Gautier, MS | | | (N | ) | | | 93 | | | | 1,040 | | | | 2 | | | | 93 | | | | 1,042 | | | | 1,135 | | | | 290 | | | | 1997 | |
| Gulfport I, MS | | | (N | ) | | | 128 | | | | 1,438 | | | | 513 | | | | 156 | | | | 1,923 | | | | 2,079 | | | | 514 | | | | 1997 | |
| Gulfport II, MS | | | (N | ) | | | 117 | | | | 1,306 | | | | 448 | | | | 179 | | | | 1,692 | | | | 1,871 | | | | 408 | | | | 1997 | |
| Gulfport III, MS | | | (G | ) | | | 172 | | | | 1,928 | | | | 743 | | | | 338 | | | | 2,505 | | | | 2,843 | | | | 537 | | | | 1997 | |
| Waveland, MS | | | (A | ) | | | 215 | | | | 2,481 | | | | (2,131 | ) | | | 392 | | | | 173 | | | | 565 | | | | 49 | | | | 1998 | |
| Belmont, NC | | | (N | ) | | | 385 | | | | 2,196 | | | | 436 | | | | 451 | | | | 2,566 | | | | 3,017 | | | | 649 | | | | 2001 | |
| Burlington I, NC | | | (F | ) | | | 498 | | | | 2,837 | | | | 95 | | | | 498 | | | | 2,932 | | | | 3,430 | | | | 820 | | | | 2001 | |
| Burlington II, NC | | | (N | ) | | | 320 | | | | 1,829 | | | | 163 | | | | 340 | | | | 1,972 | | | | 2,312 | | | | 478 | | | | 2001 | |
| Cary, NC | | | (F | ) | | | 543 | | | | 3,097 | | | | 133 | | | | 543 | | | | 3,230 | | | | 3,773 | | | | 611 | | | | 2001 | |
| Charlotte, NC | | | (C | ) | | | 782 | | | | 4,429 | | | | 1,297 | | | | 1,068 | | | | 5,440 | | | | 6,508 | | | | 909 | | | | 1999 | |
| Fayetteville I, NC | | | (N | ) | | | 156 | | | | 1,747 | | | | 692 | | | | 301 | | | | 2,294 | | | | 2,595 | | | | 561 | | | | 1997 | |
| Fayetteville II, NC | | | (C | ) | | | 213 | | | | 2,301 | | | | 634 | | | | 399 | | | | 2,749 | | | | 3,148 | | | | 582 | | | | 1997 | |
| Raleigh, NC | | | (A | ) | | | 209 | | | | 2,398 | | | | 176 | | | | 296 | | | | 2,487 | | | | 2,783 | | | | 521 | | | | 1998 | |
| Brick, NJ | | | (B | ) | | | 234 | | | | 2,762 | | | | 1,120 | | | | 485 | | | | 3,631 | | | | 4,116 | | | | 899 | | | | 1994 | |
| Clifton, NJ | | | (F | ) | | | 4,346 | | | | 12,520 | | | | 19 | | | | 4,346 | | | | 12,539 | | | | 16,885 | | | | 323 | | | | 2005 | |
| Cranford, NJ | | | (B | ) | | | 290 | | | | 3,493 | | | | 1,937 | | | | 779 | | | | 4,941 | | | | 5,720 | | | | 1,093 | | | | 1994 | |
| East Hanover, NJ | | | (B | ) | | | 504 | | | | 5,763 | | | | 3,301 | | | | 1,315 | | | | 8,253 | | | | 9,568 | | | | 1,834 | | | | 1994 | |
| Elizabeth, NJ | | | (N | ) | | | 751 | | | | 2,164 | | | | 47 | | | | 751 | | | | 2,211 | | | | 2,962 | | | | 47 | | | | 2005 | |
| Fairview, NJ | | | (N | ) | | | 246 | | | | 2,759 | | | | 148 | | | | 246 | | | | 2,907 | | | | 3,153 | | | | 744 | | | | 1997 | |
| Hoboken, NJ | | | (N | ) | | | 1,370 | | | | 3,947 | | | | 146 | | | | 1,370 | | | | 4,093 | | | | 5,463 | | | | 85 | | | | 2005 | |
| Jersey City, NJ | | | (B | ) | | | 397 | | | | 4,507 | | | | 2,381 | | | | 1,010 | | | | 6,275 | | | | 7,285 | | | | 1,410 | | | | 1994 | |
| Linden I, NJ | | | (B | ) | | | 517 | | | | 6,008 | | | | 2,845 | | | | 1,170 | | | | 8,200 | | | | 9,370 | | | | 1,378 | | | | 1994 | |
| Linden II, NJ | | | (B | ) | | | — | | | | 2 | | | | 854 | | | | 189 | | | | 667 | | | | 856 | | | | 32 | | | | 1994 | |
| Morris Township, NJ | | | (D | ) | | | 500 | | | | 5,602 | | | | 2,321 | | | | 1,072 | | | | 7,351 | | | | 8,423 | | | | 1,552 | | | | 1997 | |
| Parsippany, NJ | | | (A | ) | | | 475 | | | | 5,322 | | | | 1,841 | | | | 909 | | | | 6,729 | | | | 7,638 | | | | 1,465 | | | | 1997 | |
| Randolph, NJ | | | (D | ) | | | 855 | | | | 4,872 | | | | 1,180 | | | | 1,108 | | | | 5,799 | | | | 6,907 | | | | 1,272 | | | | 2002 | |
| Sewell, NJ | | | (C | ) | | | 484 | | | | 2,766 | | | | 1,074 | | | | 707 | | | | 3,617 | | | | 4,324 | | | | 898 | | | | 2001 | |
| Albuquerque, NM | | | (L | ) | | | 1,039 | | | | 3,395 | | | | 65 | | | | 1,039 | | | | 3,460 | | | | 4,499 | | | | 85 | | | | 2005 | |
| Albuquerque, NM | | | (L | ) | | | 1,163 | | | | 3,801 | | | | 59 | | | | 1,163 | | | | 3,860 | | | | 5,023 | | | | 95 | | | | 2005 | |
| Albuquerque, NM | | | (L | ) | | | 664 | | | | 2,171 | | | | 57 | | | | 664 | | | | 2,228 | | | | 2,892 | | | | 55 | | | | 2005 | |
| Albuquerque, NM | | | 1,020 | | | | 519 | | | | 1,697 | | | | 57 | | | | 519 | | | | 1,754 | | | | 2,273 | | | | 42 | | | | 2005 | |
| Carlsbad, NM | | | (H | ) | | | 490 | | | | 1,613 | | | | 17 | | | | 490 | | | | 1,630 | | | | 2,120 | | | | 38 | | | | 2005 | |
| Deming, NM | | | (H | ) | | | 338 | | | | 1,114 | | | | 13 | | | | 338 | | | | 1,127 | | | | 1,465 | | | | 27 | | | | 2005 | |
F-41
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Initial Cost | | | Gross Carrying Amount
| | | | | | | |
| | | | | | | | | Building
| | | Costs
| | | at December 31, 2005 | | | | | | | |
| | | | | | | | | and
| | | Subsequent
| | | | | | Building and
| | | | | | Accumulated
| | | Year
| |
| | | Encum-
| | | | | | Improve-
| | | to
| | | | | | Improve-
| | | | | | Depreciation
| | | Acquired/
| |
Description | | brances | | | Land | | | ments | | | Acquisition | | | Land | | | ments | | | Total | | | (O) | | | Developed | |
| | | (Dollars in thousands) | |
| |
| Las Cruces, NM | | | (H | ) | | | 611 | | | | 2,012 | | | | 29 | | | | 611 | | | | 2,041 | | | | 2,652 | | | | 48 | | | | 2005 | |
| Lovington, NM | | | (H | ) | | | 168 | | | | 554 | | | | 17 | | | | 168 | | | | 571 | | | | 739 | | | | 14 | | | | 2005 | |
| Silver City, NM | | | (H | ) | | | 153 | | | | 504 | | | | 14 | | | | 153 | | | | 518 | | | | 671 | | | | 12 | | | | 2005 | |
| Truth or Consequences, NM | | | (H | ) | | | 10 | | | | 34 | | | | 21 | | | | 10 | | | | 55 | | | | 65 | | | | 1 | | | | 2005 | |
| Endicott, NY | | | (N | ) | | | 779 | | | | 838 | | | | 14 | | | | 779 | | | | 852 | | | | 1,631 | | | | 39 | | | | 2005 | |
| Jamaica, NY | | | (D | ) | | | 2,043 | | | | 11,658 | | | | 262 | | | | 2,043 | | | | 11,920 | | | | 13,963 | | | | 2,923 | | | | 2001 | |
| New Rochelle, NY | | | (F | ) | | | 1,673 | | | | 4,827 | | | | 27 | | | | 1,674 | | | | 4,853 | | | | 6,527 | | | | 167 | | | | 2005 | |
| North Babylon, NY | | | (C | ) | | | 225 | | | | 2,514 | | | | 3,818 | | | | 569 | | | | 5,988 | | | | 6,557 | | | | 1,329 | | | | 1998 | |
| Riverhead, NY | | | (N | ) | | | 1,068 | | | | 1,149 | | | | 44 | | | | 1,068 | | | | 1,193 | | | | 2,261 | | | | 54 | | | | 2005 | |
| Southold, NY | | | (N | ) | | | 2,079 | | | | 2,238 | | | | 36 | | | | 2,079 | | | | 2,274 | | | | 4,353 | | | | 104 | | | | 2005 | |
| Boardman, OH | | | (C | ) | | | 64 | | | | 745 | | | | 2,068 | | | | 287 | | | | 2,590 | | | | 2,877 | | | | 1,092 | | | | 1980 | |
| Brecksville, OH | | | (A | ) | | | 228 | | | | 2,545 | | | | 920 | | | | 442 | | | | 3,251 | | | | 3,693 | | | | 656 | | | | 1998 | |
| Canton, OH | | | (N | ) | | | 138 | | | | 679 | | | | 55 | | | | 137 | | | | 735 | | | | 872 | | | | 31 | | | | 2005 | |
| Canton, OH | | | (N | ) | | | 122 | | | | 595 | | | | 26 | | | | 120 | | | | 623 | | | | 743 | | | | 25 | | | | 2005 | |
| Centerville, OH | | | (E | ) | | | 471 | | | | 3,705 | | | | 51 | | | | 471 | | | | 3,756 | | | | 4,227 | | | | 225 | | | | 2004 | |
| Centerville, OH | | | (G | ) | | | 332 | | | | 1,757 | | | | 34 | | | | 332 | | | | 1,791 | | | | 2,123 | | | | 107 | | | | 2004 | |
| Cleveland, OH | | | (N | ) | | | 525 | | | | 2,592 | | | | 83 | | | | 524 | | | | 2,676 | | | | 3,200 | | | | 107 | | | | 2005 | |
| Cleveland, OH | | | (N | ) | | | 290 | | | | 1,427 | | | | 113 | | | | 289 | | | | 1,541 | | | | 1,830 | | | | 63 | | | | 2005 | |
| Dayton, OH | | | (N | ) | | | 441 | | | | 2,176 | | | | 75 | | | | 440 | | | | 2,252 | | | | 2,692 | | | | 91 | | | | 2005 | |
| Dayton, OH | | | (G | ) | | | 323 | | | | 2,070 | | | | 36 | | | | 323 | | | | 2,106 | | | | 2,429 | | | | 126 | | | | 2004 | |
| Euclid I, OH | | | (A | ) | | | 200 | | | | 1,053 | | | | 1,843 | | | | 317 | | | | 2,779 | | | | 3,096 | | | | 1,193 | | | | 1988 | |
| Euclid II, OH | | | (A | ) | | | 359 | | | | — | | | | 1,544 | | | | 461 | | | | 1,442 | | | | 1,903 | | | | 250 | | | | 1988 | |
| Hudson, OH | | | (A | ) | | | 195 | | | | 2,198 | | | | 383 | | | | 274 | | | | 2,502 | | | | 2,776 | | | | 546 | | | | 1998 | |
| Lakewood, OH | | | (N | ) | | | 405 | | | | 854 | | | | 373 | | | | 405 | | | | 1,227 | | | | 1,632 | | | | 588 | | | | 1989 | |
| Louisville, OH | | | (N | ) | | | 257 | | | | 1,260 | | | | 38 | | | | 255 | | | | 1,300 | | | | 1,555 | | | | 53 | | | | 2005 | |
| Marblehead, OH | | | (N | ) | | | 374 | | | | 1,843 | | | | 65 | | | | 373 | | | | 1,909 | | | | 2,282 | | | | 75 | | | | 2005 | |
| Mason, OH | | | (A | ) | | | 127 | | | | 1,419 | | | | 17 | | | | 149 | | | | 1,414 | | | | 1,563 | | | | 347 | | | | 1998 | |
| Mentor, OH | | | (N | ) | | | 206 | | | | 1,011 | | | | 43 | | | | 204 | | | | 1,056 | | | | 1,260 | | | | 43 | | | | 2005 | |
| Miamisburg, OH | | | (E | ) | | | 375 | | | | 2,410 | | | | 59 | | | | 375 | | | | 2,469 | | | | 2,844 | | | | 148 | | | | 2004 | |
| Middleburg Heights, OH | | | (A | ) | | | 63 | | | | 704 | | | | 1,600 | | | | 332 | | | | 2,035 | | | | 2,367 | | | | 432 | | | | 1980 | |
| North Canton I, OH | | | (N | ) | | | 209 | | | | 846 | | | | 460 | | | | 304 | | | | 1,211 | | | | 1,515 | | | | 665 | | | | 1979 | |
| North Canton II, OH | | | (N | ) | | | 70 | | | | 1,226 | | | | (45 | ) | | | 239 | | | | 1,012 | | | | 1,251 | | | | 151 | | | | 1983 | |
| North Olmsted I, OH | | | (A | ) | | | 63 | | | | 704 | | | | 1,089 | | | | 214 | | | | 1,642 | | | | 1,856 | | | | 390 | | | | 1979 | |
| North Olmsted II, OH | | | (C | ) | | | 290 | | | | 1,129 | | | | 987 | | | | 469 | | | | 1,937 | | | | 2,406 | | | | 730 | | | | 1988 | |
| North Randall, OH | | | (C | ) | | | 515 | | | | 2,323 | | | | 2,744 | | | | 899 | | | | 4,683 | | | | 5,582 | | | | 876 | | | | 1998 | |
| Perry, OH | | | (N | ) | | | 290 | | | | 1,427 | | | | 60 | | | | 288 | | | | 1,489 | | | | 1,777 | | | | 60 | | | | 2005 | |
| Warrensville Heights, OH | | | (B | ) | | | 525 | | | | 766 | | | | 2,783 | | | | 935 | | | | 3,139 | | | | 4,074 | | | | 515 | | | | 1980 | |
| Westlake, OH | | | (N | ) | | | 509 | | | | 2,508 | | | | 80 | | | | 508 | | | | 2,589 | | | | 3,097 | | | | 105 | | | | 2005 | |
| Willoughby, OH | | | (N | ) | | | 239 | | | | 1,178 | | | | 70 | | | | 238 | | | | 1,249 | | | | 1,487 | | | | 51 | | | | 2005 | |
| Youngstown, OH | | | (F | ) | | | 67 | | | | — | | | | 1,596 | | | | 204 | | | | 1,459 | | | | 1,663 | | | | 733 | | | | 1977 | |
| Levittown, PA | | | (C | ) | | | 926 | | | | 5,296 | | | | 757 | | | | 926 | | | | 6,053 | | | | 6,979 | | | | 1,384 | | | | 2001 | |
| Philadelphia, PA | | | (D | ) | | | 1,461 | | | | 8,334 | | | | 460 | | | | 1,461 | | | | 8,794 | | | | 10,255 | | | | 2,753 | | | | 2001 | |
| Hilton Head I, SC | | | (A | ) | | | 129 | | | | 1,446 | | | | 6,482 | | | | 798 | | | | 7,259 | | | | 8,057 | | | | 1,628 | | | | 1997 | |
| Hilton Head II, SC | | | (A | ) | | | 150 | | | | 1,767 | | | | 977 | | | | 320 | | | | 2,574 | | | | 2,894 | | | | 707 | | | | 1997 | |
| Summerville, SC | | | (A | ) | | | 143 | | | | 1,643 | | | | 513 | | | | 313 | | | | 1,986 | | | | 2,299 | | | | 402 | | | | 1998 | |
| Alcoa, TN | | | (M | ) | | | 254 | | | | 2,113 | | | | 23 | | | | 255 | | | | 2,135 | | | | 2,390 | | | | 49 | | | | 2005 | |
| Antioch, TN | | | (N | ) | | | 588 | | | | 4,906 | | | | — | | | | 588 | | | | 4,906 | | | | 5,494 | | | | — | | | | 2005 | |
F-42
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Initial Cost | | | Gross Carrying Amount
| | | | | | | |
| | | | | | | | | Building
| | | Costs
| | | at December 31, 2005 | | | | | | | |
| | | | | | | | | and
| | | Subsequent
| | | | | | Building and
| | | | | | Accumulated
| | | Year
| |
| | | Encum-
| | | | | | Improve-
| | | to
| | | | | | Improve-
| | | | | | Depreciation
| | | Acquired/
| |
Description | | brances | | | Land | | | ments | | | Acquisition | | | Land | | | ments | | | Total | | | (O) | | | Developed | |
| | | (Dollars in thousands) | |
| |
| Cordova, TN | | | (I | ) | | | 296 | | | | 2,482 | | | | 81 | | | | 296 | | | | 2,563 | | | | 2,859 | | | | 56 | | | | 2005 | |
| Knoxville I, TN | | | (N | ) | | | 99 | | | | 1,113 | | | | 72 | | | | 102 | | | | 1,182 | | | | 1,284 | | | | 299 | | | | 1997 | |
| Knoxville II, TN | | | (N | ) | | | 117 | | | | 1,308 | | | | 131 | | | | 129 | | | | 1,427 | | | | 1,556 | | | | 343 | | | | 1997 | |
| Knoxville III, TN | | | (A | ) | | | 182 | | | | 2,053 | | | | 524 | | | | 331 | | | | 2,428 | | | | 2,759 | | | | 491 | | | | 1998 | |
| Knoxville IV, TN | | | (A | ) | | | 158 | | | | 1,771 | | | | 565 | | | | 310 | | | | 2,184 | | | | 2,494 | | | | 408 | | | | 1998 | |
| Knoxville V, TN | | | (A | ) | | | 134 | | | | 1,493 | | | | 320 | | | | 235 | | | | 1,712 | | | | 1,947 | | | | 360 | | | | 1998 | |
| Knoxville, TN | | | (M | ) | | | 439 | | | | 3,653 | | | | 31 | | | | 440 | | | | 3,683 | | | | 4,123 | | | | 84 | | | | 2005 | |
| Knoxville, TN | | | (M | ) | | | 312 | | | | 2,594 | | | | 23 | | | | 311 | | | | 2,618 | | | | 2,929 | | | | 60 | | | | 2005 | |
| Knoxville, TN | | | (M | ) | | | 585 | | | | 4,869 | | | | 47 | | | | 584 | | | | 4,917 | | | | 5,501 | | | | 112 | | | | 2005 | |
| Memphis I, TN | | | (G | ) | | | 677 | | | | 3,880 | | | | 967 | | | | 677 | | | | 4,847 | | | | 5,524 | | | | 1,089 | | | | 2001 | |
| Memphis II, TN | | | (N | ) | | | 395 | | | | 2,276 | | | | 85 | | | | 395 | | | | 2,361 | | | | 2,756 | | | | 605 | | | | 2001 | |
| Memphis, TN | | | (I | ) | | | 212 | | | | 1,779 | | | | 55 | | | | 212 | | | | 1,834 | | | | 2,046 | | | | 42 | | | | 2005 | |
| Memphis, TN | | | (I | ) | | | 160 | | | | 1,342 | | | | 46 | | | | 160 | | | | 1,388 | | | | 1,548 | | | | 32 | | | | 2005 | |
| Memphis, TN | | | (I | ) | | | 209 | | | | 1,753 | | | | 31 | | | | 209 | | | | 1,784 | | | | 1,993 | | | | 42 | | | | 2005 | |
| Nashville, TN | | | (N | ) | | | 405 | | | | 3,379 | | | | — | | | | 405 | | | | 3,379 | | | | 3,784 | | | | — | | | | 2005 | |
| Nashville, TN | | | (N | ) | | | 593 | | | | 4,950 | | | | — | | | | 593 | | | | 4,950 | | | | 5,543 | | | | — | | | | 2005 | |
| Austin, TX | | | (N | ) | | | 2,239 | | | | 2,038 | | | | 5 | | | | 2,239 | | | | 2,042 | | | | 4,281 | | | | 28 | | | | 2005 | |
| Baytown, TX | | | (K | ) | | | 946 | | | | 863 | | | | 17 | | | | 947 | | | | 879 | | | | 1,826 | | | | 24 | | | | 2005 | |
| Bryan, TX | | | (K | ) | | | 1,394 | | | | 1,268 | | | | 29 | | | | 1,395 | | | | 1,296 | | | | 2,691 | | | | 35 | | | | 2005 | |
| College Station, TX | | | (J | ) | | | 812 | | | | 740 | | | | 19 | | | | 812 | | | | 759 | | | | 1,571 | | | | 17 | | | | 2005 | |
| Dallas, TX | | | (N | ) | | | 2,475 | | | | 2,253 | | | | 5 | | | | 2,475 | | | | 2,258 | | | | 4,733 | | | | 32 | | | | 2005 | |
| El Paso, TX | | | (L | ) | | | 1,983 | | | | 1,805 | | | | 66 | | | | 1,983 | | | | 1,871 | | | | 3,854 | | | | 42 | | | | 2005 | |
| El Paso, TX | | | (L | ) | | | 1,319 | | | | 1,201 | | | | 28 | | | | 1,319 | | | | 1,229 | | | | 2,548 | | | | 28 | | | | 2005 | |
| El Paso, TX | | | (L | ) | | | 2,408 | | | | 2,192 | | | | 24 | | | | 2,408 | | | | 2,216 | | | | 4,624 | | | | 50 | | | | 2005 | |
| El Paso, TX | | | (L | ) | | | 2,073 | | | | 1,888 | | | | 43 | | | | 2,073 | | | | 1,931 | | | | 4,004 | | | | 43 | | | | 2005 | |
| El Paso, TX | | | (H | ) | | | 1,758 | | | | 1,617 | | | | 4 | | | | 1,758 | | | | 1,621 | | | | 3,379 | | | | 36 | | | | 2005 | |
| El Paso, TX | | | (H | ) | | | 660 | | | | 607 | | | | 11 | | | | 660 | | | | 618 | | | | 1,278 | | | | 14 | | | | 2005 | |
| El Paso, TX | | | (H | ) | | | 563 | | | | 517 | | | | 18 | | | | 563 | | | | 535 | | | | 1,098 | | | | 12 | | | | 2005 | |
| Fort Worth, TX | | | (N | ) | | | 1,253 | | | | 1,141 | | | | 5 | | | | 1,253 | | | | 1,146 | | | | 2,399 | | | | 16 | | | | 2005 | |
| Frisco, TX | | | (F | ) | | | 1,093 | | | | 3,148 | | | | 20 | | | | 1,093 | | | | 3,167 | | | | 4,260 | | | | 109 | | | | 2005 | |
| Frisco, TX | | | 3,618 | | | | 1,564 | | | | 4,507 | | | | 24 | | | | 1,564 | | | | 4,531 | | | | 6,095 | | | | 155 | | | | 2005 | |
| Greenville, TX | | | (N | ) | | | 1,848 | | | | 1,682 | | | | 4 | | | | 1,848 | | | | 1,686 | | | | 3,534 | | | | 23 | | | | 2005 | |
| Greenville, TX | | | (N | ) | | | 1,337 | | | | 1,217 | | | | 9 | | | | 1,337 | | | | 1,226 | | | | 2,563 | | | | 17 | | | | 2005 | |
| Houston, TX | | | (K | ) | | | 1,420 | | | | 1,296 | | | | 26 | | | | 1,421 | | | | 1,321 | | | | 2,742 | | | | 35 | | | | 2005 | |
| Houston, TX | | | (K | ) | | | 1,510 | | | | 1,377 | | | | 32 | | | | 1,511 | | | | 1,408 | | | | 2,919 | | | | 38 | | | | 2005 | |
| Houston, TX | | | 580 | | | | 575 | | | | 524 | | | | 27 | | | | 575 | | | | 551 | | | | 1,126 | | | | 12 | | | | 2005 | |
| Houston, TX | | | (J | ) | | | 960 | | | | 875 | | | | 19 | | | | 961 | | | | 893 | | | | 1,854 | | | | 20 | | | | 2005 | |
| La Porte, TX | | | (K | ) | | | 842 | | | | 761 | | | | 21 | | | | 843 | | | | 781 | | | | 1,624 | | | | 21 | | | | 2005 | |
| McKinney, TX | | | 1,437 | | | | 1,632 | | | | 1,486 | | | | 6 | | | | 1,632 | | | | 1,492 | | | | 3,124 | | | | 14 | | | | 2005 | |
| North Richland Hills, TX | | | (N | ) | | | 2,252 | | | | 2,049 | | | | 5 | | | | 2,252 | | | | 2,054 | | | | 4,306 | | | | 28 | | | | 2005 | |
| Roanoke, TX | | | (N | ) | | | 1,337 | | | | 1,217 | | | | 13 | | | | 1,337 | | | | 1,230 | | | | 2,567 | | | | 17 | | | | 2005 | |
| San Antonio, TX | | | (N | ) | | | 2,895 | | | | 2,635 | | | | 4 | | | | 2,895 | | | | 2,639 | | | | 5,534 | | | | 24 | | | | 2005 | |
| Sherman, TX | | | 1,671 | | | | 1,904 | | | | 1,733 | | | | 8 | | | | 1,904 | | | | 1,741 | | | | 3,645 | | | | 16 | | | | 2005 | |
| Sherman, TX | | | 2,000 | | | | 1,337 | | | | 1,217 | | | | — | | | | 1,337 | | | | 1,217 | | | | 2,554 | | | | 11 | | | | 2005 | |
| Murray, UT | | | (L | ) | | | 3,847 | | | | 1,017 | | | | 20 | | | | 3,847 | | | | 1,037 | | | | 4,884 | | | | 25 | | | | 2005 | |
| Murray, UT | | | (L | ) | | | 1,182 | | | | 312 | | | | 13 | | | | 1,182 | | | | 325 | | | | 1,507 | | | | 8 | | | | 2005 | |
| Murray, UT | | | (L | ) | | | 965 | | | | 255 | | | | 7 | | | | 965 | | | | 262 | | | | 1,227 | | | | 6 | | | | 2005 | |
| Salt Lake City, UT | | | (L | ) | | | 2,695 | | | | 712 | | | | 30 | | | | 2,695 | | | | 742 | | | | 3,437 | | | | 19 | | | | 2005 | |
F-43
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Initial Cost | | | Gross Carrying Amount
| | | | | | | |
| | | | | | | | | Building
| | | Costs
| | | at December 31, 2005 | | | | | | | |
| | | | | | | | | and
| | | Subsequent
| | | | | | Building and
| | | | | | Accumulated
| | | Year
| |
| | | Encum-
| | | | | | Improve-
| | | to
| | | | | | Improve-
| | | | | | Depreciation
| | | Acquired/
| |
Description | | brances | | | Land | | | ments | | | Acquisition | | | Land | | | ments | | | Total | | | (O) | | | Developed | |
| | | (Dollars in thousands) | |
| |
| Salt Lake City, UT | | | (L | ) | | | 2,074 | | | | 548 | | | | 19 | | | | 2,074 | | | | 567 | | | | 2,641 | | | | 14 | | | | 2005 | |
| Fredericksburg, VA | | | (N | ) | | | 1,680 | | | | 4,840 | | | | 2 | | | | 1,680 | | | | 4,842 | | | | 6,522 | | | | — | | | | 2005 | |
| Fredericksburg, VA | | | (N | ) | | | 1,757 | | | | 5,062 | | | | 3 | | | | 1,757 | | | | 5,065 | | | | 6,822 | | | | — | | | | 2005 | |
| Milwaukee, WI | | | (E | ) | | | 375 | | | | 4,333 | | | | 62 | | | | 375 | | | | 4,395 | | | | 4,770 | | | | 262 | | | | 2004 | |
| Corporate Office, OH | | | | | | | — | | | | — | | | | 3,359 | | | | — | | | | 3,359 | | | | 3,359 | | | | 1,182 | | | | 1977 | |
| Construction in Progress | | | — | | | | | | | | | | | | 1,383 | | | | — | | | | 1,383 | | | | 1,383 | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | 270,776 | | | | 932,709 | | | | 183,301 | | | | 301,188 | | | | 1,085,598 | | | | 1,386,786 | | | | 140,491 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(A) | | This facility is part of Yasky Loan portfolio, with a balance of $80,000 as of December 31, 2007. |
(A)(B) | | This facility is part of the 41 storage facilities pool which secures the $70,000 loan from Lehman Capital.YSI XXV Loan portfolio, with a balance of $8,201 as of December 31, 2007. |
|
(B)(C) | | This facility is part of the 10 storage facilities pool which secures the $42,000 loan from Lehman Brothers Bank.YSI XX Loan portfolio, with a balance of $67,545 as of December 31, 2007. |
|
(C)(D) | | This facility is part of the 21 storage facilities pool which secures the $90,000 loan from Lehman Brothers Bank.YSI II Loan portfolio, with a balance of $86,843 as of December 31, 2007. |
|
(D)(E) | | This facility is part of the 18 storage facilities pool which secures the $90,000 loan from Lehman Brothers Bank.YSI VI Loan portfolio, with a balance of $79,645 as of December 31, 2007. |
|
(E)(F) | | This facility is part of the 26 storage facilities pool which secures the $90,000 loan from Lehman Brothers Bank.YSI I Loan portfolio, with a balance of $86,770 as of December 31, 2007. |
|
(F)(G) | | This facility is part of the 29 storage facilities pool which secures the $80,000 loan from LaSalle Bank.YSI XXVI Loan portfolio, with a balance of $9,956 as of December 31, 2007. |
|
(G)(H) | | This facility is part of the 24 storage facilities pool which secures the $80,000 loan from Lehman Brothers Bank.YSI XXVIII Loan portfolio, with a balance of $1,676 as of December 31, 2007. |
|
(H)(I) | | This facility is part of the 10 storage facilities pool which secures the $8,437 loan from LaSalle Bank.YSI III Loan portfolio, with a balance of $86,712 as of December 31, 2007. |
|
(I)(J) | | This facility is part of the 6 storage facilities pool which secures the $10,464 loan from LaSalle Bank.YSI XXX Loan portfolio, with a balance of $8,024 as of December 31, 2007. |
|
(J)(K) | | This facility is part of the 2 storage facilities pool which secures the $1,759 loan from Wells Fargo and GMAS.YSI RT Secured Term Loan portfolio, with a balance of $47,444 as of December 31, 2007. |
|
(K)(L) | | This facility is part of the 5 storage facilities pool which secures the $4,555 loan from LaSalle Bank and Deutsche Bank. |
|
(L) | | This facility is part of the 37 storage facilities pool which secures the $72,458 loan from AEGON USA Realty Advisors. |
|
(M) | | This facility is part of the 4 storage facilities pool which secures the $8,506 loan from LaSalle Bank and Morgan Bank. |
|
(N) | | This facility participates in the $150.0 million revolving line of credit from Lehman Brothers, Inc. and Wachovia Capital Markets, LLC. |
|
(O) | | Depreciation on the buildings and improvements is recorded on a straight-line basis over their estimated useful lives, which range from five to 4039 years. |
F-44
Activity in real estate facilities during
2005, 20042007, 2006, and
20032005 was as
follows:follows (in thousands): | | 2007 | | 2006 | | 2005 | |
Storage facilities | | | | | | | |
Balance at beginning of year | | $ | 1,771,864 | | $ | 1,386,786 | | $ | 851,628 | |
Acquisitions & improvements | | 160,256 | | 384,130 | | 564,305 | |
Dispositions and other | | (21,206 | ) | (534 | ) | (30,530 | ) |
Contstruction in progress | | 5,482 | | 1,482 | | 1,383 | |
Balance at end of year | | $ | 1,916,396 | | $ | 1,771,864 | | $ | 1,386,786 | |
Accumulated depreciation | | | | | | | |
Balance at beginning of year | | $ | 205,049 | | $ | 140,491 | | $ | 122,473 | |
Depreciation expense | | 68,355 | | 64,728 | | 39,949 | |
Dispositions and other | | (4,126 | ) | (170 | ) | (21,931 | ) |
Balance at end of year | | $ | 269,278 | | $ | 205,049 | | $ | 140,491 | |
| | | | | | | |
Net Storage facility assets | | $ | 1,647,118 | | $ | 1,566,815 | | $ | 1,246,295 | |
F-36
| | | | | | | | | | | | | |
| | | 2005 | | | 2004 | | | 2003 | |
| | | (Dollars in thousands) | |
| |
| Storage facilities | | | | | | | | | | | | |
| Balance at beginning of year | | | 851,628 | | | | 495,181 | | | | 492,067 | |
| Acquisitions & improvements | | | 564,305 | | | | 228,500 | | | | 8,808 | |
| Dispositions and other | | | (30,530 | ) | | | (725 | ) | | | (5,694 | ) |
| Construction in progress | | | 1,383 | | | | — | | | | — | |
| Step up adjustment | | | — | | | | 128,672 | | | | — | |
| | | | | | | | | | | | | |
| Balance at end of year | | | 1,386,786 | | | | 851,628 | | | | 495,181 | |
| | | | | | | | | | | | | |
| Accumulated Depreciation | | | | | | | | | | | | |
| Balance at beginning of year | | | 122,473 | | | | 99,582 | | | | 80,835 | |
| Depreciation expense | | | 39,949 | | | | 22,328 | | | | 19,494 | |
| Dispositions and other | | | (21,931 | ) | | | 563 | | | | (747 | ) |
| | | | | | | | | | | | | |
| Balance at end of year | | | 140,491 | | | | 122,473 | | | | 99,582 | |
| | | | | | | | | | | | | |
| Net Storage facility assets | | | 1,246,295 | | | | 729,155 | | | | 395,599 | |
| | | | | | | | | | | | | |
The unaudited aggregate costs of storage facility assets for U.S. federal income tax purposes as of December 31, 2005 is approximately $1,242 million.
F-45