CubeSmart
Annual Report 2021

Plain-text annual report

2 0 2 1 A n n u a l R E P O R T CUBESMART ANNUAL REPORT | 2021 $766 M Common Share Offering 5.0 M Shares Issued Under the ATM $1.05 B $95.9 M Unsecured Senior Note Offering Development Openings 2021 HIGHLIGHTS 22.7% FFO, as adjusted per share growth $1.8 B Acquisitions 13.1% 17.2% Same-store Revenue Growth Same-store NOI Growth 138 New Management Contracts CUBESMART ANNUAL REPORT | 2021 LETTER FROM THE CEO Fellow Shareholders, 2021 was an unprecedented year for the self-storage industry and our Company. Elevated demand trends helped to push industry occupancies to record highs and drive significant rental rate growth. Strong cash flows increased investor interest in the sector which supported a robust transaction market and led to a record volume of self- storage assets trading hands. These excellent industry fundamentals provided a supportive backdrop as we executed across our core strategic growth objectives of: Delivering robust operational and financial growth Growing our portfolio of high- quality, well-positioned storage assets Maintaining a conservative, unsecured balance sheet P1 CUBESMART ANNUAL REPORT | 2021 Operational Growth Our operating platform efficiently executed its objective of maximizing property cash flows. Our sophisticated revenue management systems responded to exceptional demand levels over the spring and summer with meaningful increases to rental rates to maximize long-term revenues. We continued to push on our marketing levers to drive customers to the top of the funnel to support our elevated rate structure. Since the beginning of the pandemic, customer expectations of service have evolved and we’ve worked diligently to respond to the ever-changing environment. We’ve maintained focus on providing our industry-leading customer service through enhancements to our online rental platform SmartRental, our mobile app, and other digital platforms. Through all of these initiatives, we were able to generate record same-store performance, growing revenues by 13.1% and NOI by 17.2%. P2 CUBESMART ANNUAL REPORT | 2021 59 Stores 4.4M Square Feet Storage West In December, we closed on a key strategic transaction, acquiring the Storage West platform for $1.7 billion. This transaction accretively increased our presence in high growth, top-40 MSAs throughout the southwest, further diversifying our market exposure while enhancing our portfolio demographics. Financing this transaction showcased the strength of our balance sheet and the liquidity it provides as we successfully executed a $1.8 billion capital raise comprised of a 15.5 million common share offering that generated net proceeds of $765.6 million and a dual-tranche bond offering comprised of $550 million of 2.250% senior notes maturing in December 2028 and $500 million of 2.500% senior notes maturing in February 2032. P3 External Growth 2021 was a record year for self-storage transactions as strong cash flows attracted new investors and capital. This robust transaction market was highly competitive, but we remained disciplined as we searched for opportunities to further enhance our portfolio. We focused on finding transactions that met our investment criteria and are expected to generate attractive long-term risk- adjusted returns. In light of that backdrop, we leveraged our industry relationships to find opportunities that fit our portfolio strategy, ultimately acquiring nine stores for $152.8 million in addition to the Storage West transaction. CUBESMART ANNUAL REPORT | 2021 We also disposed of five non-core properties from our portfolio for proceeds of $43.8 million. Our development pipeline continues to deliver attractive new product in key markets, as we opened four new stores for a total cost of $95.9 million. Looking forward, the pipeline has another three stores still under construction as of year end with an anticipated total investment of $92.3 million. Our joint venture strategy continued to pay dividends, as we acquired 12 stores for a combined $252.4 million in various stages of lease-up through our HVP IV and HVP V ventures, of which we have a 20% ownership. Finally, our deep pipeline of new third-party managed stores continued to bear fruit, as we added 138 new stores to the third-party platform during the year. P4 CUBESMART ANNUAL REPORT | 2021 5.4x Net Debt to EBITDA 6.7x EBITDA Coverage Ratio 41.2% Debt to Gross Assets 19.7% Debt to Market Capitalization Metrics as of December 31, 2021 Financing We remain committed to the flexibility and low cost of capital afforded by our investment- grade balance sheet as we financed our growth in a manner consistent with our BBB/Baa2 rating. At the end of 2021, our debt to gross assets was 41.2% while our net debt to EBITDA was 5.4x. In addition to the financing associated with Storage West transaction, the $1.05 billion offering of unsecured senior notes was also used to repay $300 million of 4.375% senior notes scheduled to mature in 2023. Prior to our equity offering, we raised another $200.0 million of equity capital through our at-the-market program. We continued to strategically share our cash flow growth with our shareholders by announcing a 26.5% increase to our quarterly dividend that was paid in January 2022, which marks the 11th consecutive year announcing an increase to our dividend. P5 CUBESMART ANNUAL REPORT | 2021 Corporate Responsibility Corporate responsibility remains a key tenet of our sustainable growth strategy. In 2021, we released our inaugural sustainability report that includes information on all of our major ESG (environmental, social, & governance) initiatives. Included in our sustainability report was the establishment of sustainability targets and disclosure on key environmental metrics. Although we remain a very low-impact business, we have established a number of initiatives to further reduce our footprint, including our solar program that utilizes our existing roof space to generate renewable energy, upgrades of our HVAC equipment which reduce greenhouse gas emissions, and lighting replacements which further reduce our electricity usage. Teammate engagement remains strategically important as our teammates are the backbone of our leading customer service platform. We remain focused on offering opportunities for professional development and advancement as we look to build the next generation of CubeSmart leaders. Our commitment to sound governance practices is recognized by ISS as they scored us in the top 20 percent of peer companies for corporate governance. Diversity plays an important role within our team as our “Philosophy Regarding Respect in the Workplace” highlights the value of unique perspectives in the workplace while our Code of Business Conduct and Ethics shapes our management, operations, and governance. P6 CUBESMART ANNUAL REPORT | 2021 Long-Term Growth In closing, 2021 was an exceptional year for CubeSmart as our people and operating platform responded to strong industry fundamentals to generate record growth. We expect 2022 will be another strong year for self-storage as supportive fundamentals should provide a backdrop for further success for our industry. We are excited heading into this year as our platform is well positioned to continue to execute on all pillars of our strategy. We thank you for your continued interest and support as we remain focused on creating long-term value for all of our stakeholders. Christopher P. Marr President and Chief Executive Officer April 1, 2022 P7 CUBESMART ANNUAL REPORT | 2021 PORTFOLIO OVERVIEW 607 Owned Stores 43.6 M Square Feet 1,258 Total Stores 87.8 M Square Feet 445 K Units 848 K Units States with Owned Stores States with Managed Stores Only Data as of December 31, 2021 P8 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K ☒ ☐ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-32324 (CubeSmart) Commission file number 000-54462 (CubeSmart, L.P.) CUBESMART CUBESMART, L.P. (Exact Name of Registrant as Specified in Its Charter) Maryland (CubeSmart) Delaware (CubeSmart, L.P.) (State or Other Jurisdiction of Incorporation or Organization) 5 Old Lancaster Road Malvern, Pennsylvania (Address of Principal Executive Offices) 20-1024732 (CubeSmart) 34-1837021 (CubeSmart, L.P.) (IRS Employer Identification No.) 19355 (Zip Code) Registrant’s telephone number, including area code (610) 535-5000 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Common Shares, $0.01 par value per share, of CubeSmart Trading Symbol(s) CUBE Name of Each Exchange on Which Registered New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Units of General Partnership Interest of CubeSmart, L.P. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. CubeSmart CubeSmart, L.P. Yes ☒ No ☐ Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. CubeSmart CubeSmart, L.P. Yes  No  Yes  No  Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. CubeSmart CubeSmart, L.P. Yes ☒ No ☐ Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). CubeSmart CubeSmart, L.P. Yes  No  Yes  No  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act: CubeSmart: Large accelerated filer ☒ CubeSmart, L.P.: Large accelerated filer ☐ Accelerated filer Accelerated filer ☐ ☐ Non-accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company Smaller reporting company ☐ ☐ Emerging growth company Emerging growth company ☐ ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. CubeSmart CubeSmart, L.P.   Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. CubeSmart  CubeSmart, L.P.  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). CubeSmart CubeSmart, L.P. Yes ☐ No ☒ Yes ☐ No ☒ As of June 30, 2021, the last business day of CubeSmart’s most recently completed second fiscal quarter, the aggregate market value of common shares held by non-affiliates of CubeSmart was $9,345,935,587. As of February 23, 2022, the number of common shares of CubeSmart outstanding was 224,002,775. As of June 30, 2021, the last business day of CubeSmart, L.P.’s most recently completed second fiscal quarter, the aggregate market value of the 7,284,506 units of limited partnership (the “OP Units”) held by non-affiliates of CubeSmart, L.P. was $337,418,318 based upon the last reported sale price of $46.32 per share on the New York Stock Exchange on June 30, 2021 of the common shares of CubeSmart, the sole general partner of CubeSmart, L.P. (For this computation, the market value of all OP Units beneficially owned by CubeSmart has been excluded.) Documents incorporated by reference: Portions of the Proxy Statement for the 2022 Annual Meeting of Shareholders of CubeSmart to be filed subsequently with the SEC are incorporated by reference into Part III of this report. EXPLANATORY NOTE This report combines the annual reports on Form 10-K for the year ended December 31, 2021 of CubeSmart (the “Parent Company” or “CubeSmart”) and CubeSmart, L.P. (the “Operating Partnership”). The Parent Company is a Maryland real estate investment trust (“REIT”), that owns its assets and conducts its operations through the Operating Partnership, a Delaware limited partnership, and subsidiaries of the Operating Partnership. The Parent Company, the Operating Partnership and their consolidated subsidiaries are collectively referred to in this report as the “Company”. In addition, terms such as “we”, “us”, or “our” used in this report may refer to the Company, the Parent Company and/or the Operating Partnership. The Parent Company is the sole general partner of the Operating Partnership and, as of December 31, 2021, owned a 99.2% interest in the Operating Partnership. The remaining 0.8% interest consists of common units of limited partnership interest issued by the Operating Partnership to third parties in exchange for contributions of properties to the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has full and complete authority over the Operating Partnership’s day-to-day operations and management. Management operates the Parent Company and the Operating Partnership as one enterprise. The management teams of the Parent Company and the Operating Partnership are identical, and their constituents are officers of both the Parent Company and of the Operating Partnership. There are a few differences between the Parent Company and the Operating Partnership, which are reflected in the note disclosures in this report. The Company believes it is important to understand the differences between the Parent Company and the Operating Partnership in the context of how these entities operate as a consolidated enterprise. The Parent Company is a REIT, whose only material asset is its ownership of the partnership interests of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing the debt obligations of the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company and, directly or indirectly, holds the ownership interests in the Company’s real estate ventures. The Operating Partnership conducts the operations of the Company’s business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s direct or indirect incurrence of indebtedness or through the issuance of partnership units of the Operating Partnership or equity interests in subsidiaries of the Operating Partnership. The substantive difference between the Parent Company’s and the Operating Partnership’s filings is the fact that the Parent Company is a REIT with public equity, while the Operating Partnership is a partnership with no publicly traded equity. In the financial statements, this difference is primarily reflected in the equity (or capital for the Operating Partnership) section of the consolidated balance sheets and in the consolidated statements of equity (or capital). Apart from the different equity treatment, the consolidated financial statements of the Parent Company and the Operating Partnership are nearly identical. The Company believes that combining the annual reports on Form 10-K of the Parent Company and the Operating Partnership into a single report will:    facilitate a better understanding by the investors of the Parent Company and the Operating Partnership by enabling them to view the business as a whole in the same manner as management views and operates the business; remove duplicative disclosures and provide a more straightforward presentation in light of the fact that a substantial portion of the disclosure applies to both the Parent Company and the Operating Partnership; and create time and cost efficiencies through the preparation of one combined report instead of two separate reports. In order to highlight the differences between the Parent Company and the Operating Partnership, the separate sections in this report for the Parent Company and the Operating Partnership specifically refer to the Parent Company and the Operating Partnership. In the sections that combine disclosures of the Parent Company and the Operating Partnership, this report refers to such disclosures as those of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and real estate ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Parent Company operates the business through the Operating Partnership. As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have significant assets other than its investment in the Operating Partnership. Therefore, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial 2 statements. The separate discussions of the Parent Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company’s operations on a consolidated basis and how management operates the Company. This report also includes separate Item 9A - Controls and Procedures sections, signature pages and Exhibits 31 and 32, certifications for each of the Parent Company and the Operating Partnership, in order to establish that the Chief Executive Officer and the Chief Financial Officer of the Parent Company and the Chief Executive Officer and the Chief Financial Officer of the Operating Partnership have made the requisite certifications and that the Parent Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and 18 U.S.C. §1350. 3 TABLE OF CONTENTS PART I Item 1. Business Item 1A. Risk Factors Item 1B. Unresolved Staff Comments Item 2. Properties Item 3. Legal Proceedings Item 4. Mining Safety Disclosures PART II Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities Item 6. Selected Financial Data Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections PART III Item 10. Trustees, Executive Officers, and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters Item 13. Certain Relationships and Related Transactions, and Trustee Independence Item 14. Principal Accountant Fees and Services PART IV Item 15. Exhibits and Financial Statement Schedules Item 16. Form 10-K Summary 5 6 16 30 30 32 32 32 32 34 34 46 47 47 47 48 48 48 48 48 49 49 49 49 49 55 4 PART I Forward-Looking Statements This Annual Report on Form 10-K, or this Report, together with other statements and information publicly disseminated by the Parent Company and the Operating Partnership, contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Forward-looking statements include statements concerning the Company’s plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. In some cases, forward-looking statements can be identified by terminology such as “believes”, “expects”, “estimates”, “may”, “will”, “should”, “anticipates” or “intends” or the negative of such terms or other comparable terminology, or by discussions of strategy. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, future events and actual results, performance, transactions or achievements, financial and otherwise, may differ materially from the results, performance, transactions or achievements expressed or implied by the forward-looking statements. As a result, you should not rely on or construe any forward-looking statements in this Report, or which management or persons acting on their behalf may make orally or in writing from time to time, as predictions of future events or as guarantees of future performance. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this Report or as of the dates otherwise indicated in such forward-looking statements. All of our forward-looking statements, including those in this Report, are qualified in their entirety by this statement. There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this Report. Any forward-looking statements should be considered in light of the risks and uncertainties referred to in Item 1A. “Risk Factors” in this Report and in our other filings with the Securities and Exchange Commission (“SEC”). These risks include, but are not limited to, the following:             adverse changes in economic conditions in the real estate industry and in the markets in which we own and operate self-storage properties; the effect of competition from existing and new self-storage properties and operators on our ability to maintain or raise occupancy and rental rates; the failure to execute our business plan; adverse impacts from the COVID-19 pandemic, other pandemics, quarantines and stay at home orders, including the impact on our ability to operate our self-storage properties, the demand for self-storage, rental rates and fees and rent collection levels; reduced availability and increased costs of external sources of capital; increases in interest rates and operating costs; financing risks, including the risk of over-leverage and the corresponding risk of default on our mortgage and other debt and potential inability to refinance existing or future debt; counterparty non-performance related to the use of derivative financial instruments; risks related to our ability to maintain our Parent Company’s qualification as a REIT for federal income tax purposes; the failure of acquisitions and developments to close on expected terms, or at all, or to perform as expected; increases in taxes, fees and assessments from state and local jurisdictions; the failure of our joint venture partners to fulfill their obligations to us or their pursuit of actions that are inconsistent with our objectives;  reductions in asset valuations and related impairment charges; 5          cyber security breaches, cyber or ransomware attacks or a failure of our networks, systems or technology, which could adversely impact our business, customer and employee relationships or result in fraudulent payments; changes in real estate, zoning, use and occupancy laws or regulations; risks related to or a consequence of natural disasters or acts of violence, pandemics, active shooters, terrorism, insurrection or war that affect the markets in which we operate; potential environmental and other liabilities; governmental, administrative and executive orders and laws, which could adversely impact our business operations and customer and employee relationships; uninsured or uninsurable losses and the ability to obtain insurance coverage or recovery from insurance against risks and losses; the ability to attract and retain talent in the current labor market; other factors affecting the real estate industry generally or the self-storage industry in particular; and other risks identified in this Report and, from time to time, in other reports that we file with the SEC or in other documents that we publicly disseminate. Given these uncertainties and the other risks identified elsewhere in this Report, we caution readers not to place undue reliance on forward-looking statements. We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise except as may be required by securities laws. Because of the factors referred to above, the future events discussed in or incorporated by reference in this Report may not occur and actual results, performance or achievement could differ materially from that anticipated or implied in the forward-looking statements. ITEM 1. BUSINESS Overview We are a self-administered and self-managed real estate company focused primarily on the ownership, operation, management, acquisition and development of self-storage properties in the United States. As of December 31, 2021, we owned (or partially owned and consolidated) 607 self-storage properties located in 24 states and in the District of Columbia containing an aggregate of approximately 43.6 million rentable square feet. As of December 31, 2021, approximately 92.0% of the rentable square footage at our owned stores was leased to approximately 379,000 customers, and no single customer represented a significant concentration of our revenues. As of December 31, 2021, we owned stores in the District of Columbia and the following 24 states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah and Virginia. In addition, as of December 31, 2021, we managed 651 stores for third parties (including 90 stores containing an aggregate of approximately 6.5 million net rentable square feet as part of seven separate unconsolidated real estate ventures) bringing the total number of stores we owned and/or managed to 1,258. As of December 31, 2021, we managed stores for third parties in the District of Columbia and the following 36 states: Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington and Wisconsin. Our self-storage properties are designed to offer affordable and easily-accessible storage space for our residential and commercial customers. Our customers rent storage cubes for their exclusive use, typically on a month-to-month basis. Additionally, some of our stores offer outside storage areas for vehicles and boats. Our stores are designed to accommodate both residential and commercial customers, with features such as wide aisles and load-bearing capabilities for large truck access. All of our stores have a storage associate available to assist our customers during business hours, and 331, or approximately 54.5%, of our owned stores have a manager who resides in an apartment at the store. Our customers can access their storage cubes during business hours, and some of our stores provide customers with 24-hour access through computer-controlled access systems. Our goal is to provide customers with the highest standard of physical attributes and service in the industry. To that end, 505, or approximately 83.2%, of our owned stores include climate-controlled cubes. 6 The Parent Company was formed in July 2004 as a Maryland REIT. The Parent Company owns its assets and conducts its business through the Operating Partnership, and its subsidiaries. The Parent Company controls the Operating Partnership as its sole general partner and, as of December 31, 2021, owned a 99.2% interest in the Operating Partnership. The Operating Partnership was formed in July 2004 as a Delaware limited partnership and has been engaged in virtually all aspects of the self-storage business, including the development, acquisition, management, ownership and operation of self-storage properties. Impact of COVID-19 on the Consolidated Financial Statements and Business Operations Since the first quarter of 2020, the world has been impacted by the spread of a novel strain of coronavirus, its variants and the disease that they cause known as COVID-19. Our stores have remained open throughout the pandemic and, to date, we have not experienced any material degradation in rent collections or occupancy. However, the duration and scope of the pandemic; actions that have been and continue to be taken by governmental entities, individuals and businesses in response to the pandemic; and the continued impact on economic activity from the pandemic may, individually or in aggregate, impact our future business, financial condition, results of operations, access to capital and share price. 7 Acquisition and Disposition Activity As of December 31, 2021 and 2020, we owned 607 and 543 stores, respectively, that contained an aggregate of 43.6 million and 38.5 million rentable square feet with occupancy levels of 92.0% and 92.3%, respectively. Additional information about our stores is included in Item 2 of this Report. The following is a summary of our 2021, 2020 and 2019 acquisition and disposition activity: Asset/Portfolio 2021 Acquisitions: Minnesota Asset (1) Maryland Asset New Jersey/Pennsylvania Assets Florida Asset Georgia Asset Pennsylvania Asset Nevada Asset Storage West Assets Illinois Asset 2021 Dispositions: Colorado/Nevada Assets North Carolina Assets Texas Asset 2020 Acquisitions: Texas Asset Maryland Asset New Jersey Asset Florida Asset Texas Asset Texas Asset Nevada Asset New York Asset Florida Asset Virginia Asset Storage Deluxe Assets Florida Assets 2020 Disposition: New York Asset 2019 Acquisitions: Maryland Asset Florida Assets Arizona Asset HVP III Assets Georgia Asset South Carolina Asset Texas Asset Florida Assets California Asset 2019 Disposition: Texas Asset Metropolitan Statistical Area Transaction Date Stores Number of Purchase / Sale Price (in thousands) Minneapolis-St. Paul-Bloomington, MN-WI Baltimore-Towson, MD Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Miami-Fort Lauderdale-Pompano Beach, FL Atlanta-Sandy Springs-Marietta, GA Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Las Vegas-Paradise, NV Various (see note 4) Chicago-Naperville-Joliet, IL-IN-WI April 2021 June 2021 July 2021 November 2021 November 2021 November 2021 December 2021 December 2021 December 2021 Denver-Aurora, CO / Las Vegas-Paradise, NV Burlington, NC Houston-Sugar Land-Baytown, TX September 2021 September 2021 November 2021 San Antonio, TX Baltimore-Towson, MD New York-Northern New Jersey-Long Island, NY-NJ-PA Palm Bay-Melbourne-Titusville, FL Austin-Round Rock, TX Dallas-Fort Worth-Arlington, TX Las Vegas-Paradise, NV New York-Northern New Jersey-Long Island, NY-NJ-PA Tampa-St. Petersburg-Clearwater, FL Washington-Arlington-Alexandria, DC-VA-MD-WV New York-Northern New Jersey-Long Island, NY-NJ-PA Orlando-Kissimmee, FL / Deltona-Daytona Beach-Ormond Beach, FL February 2020 April 2020 April 2020 November 2020 November 2020 November 2020 December 2020 December 2020 December 2020 December 2020 December 2020 December 2020 New York-Northern New Jersey-Long Island, NY-NJ-PA December 2020 Baltimore-Towson, MD Cape Coral-Fort Myers, FL Phoenix-Mesa-Scottsdale, AZ Various (see note 4) Atlanta-Sandy Springs-Marietta, GA Charleston-North Charleston, SC Dallas-Fort Worth-Arlington, TX Orlando-Kissimmee, FL Los Angeles-Long Beach-Santa Ana, CA March 2019 April 2019 May 2019 June 2019 August 2019 August 2019 October 2019 November 2019 December 2019 College Station-Bryan, TX October 2019 1 1 2 1 1 1 1 57 1 66 2 2 1 5 1 1 1 1 1 1 1 1 1 1 8 3 21 1 1 1 2 1 18 1 1 1 3 1 29 1 1 $ $ $ $ $ $ $ $ $ $ $ $ 12,000 22,075 33,000 14,750 15,200 24,500 21,000 1,648,426 (2) 10,300 1,801,251 16,900 21,700 5,200 43,800 9,025 17,200 48,450 3,900 10,750 10,150 16,800 6,750 10,000 17,350 540,000 45,500 735,875 12,750 12,750 22,000 19,000 1,550 128,250 (3) 14,600 3,300 7,300 32,100 18,500 246,600 4,146 4,146 (1) Acquired by a consolidated joint venture in which we hold a 50% interest. (2) Purchase price represents the acquisition of all 167,557 outstanding partnership units of LAACO, Ltd. (“LAACO”) for $9,838 per unit. At the time of the acquisition, LAACO owned 57 storage properties (the “Storage West Assets”) and 50% ownership interests in two separate joint ventures. Through this acquisition, the Company also acquired LAACO’s wholly-owned subsidiaries, the Los Angeles Athletic Club and the California Yacht Club (the “Club Operations”), which are classified as held 8                     for sale on the Company’s consolidated balance sheets as of December 31, 2021. See note 4 to our consolidated financial statements. (3) Amount represents the purchase price for 90% of the ownership interest in 191 III CUBE LLC (“HVP III”), which at the time of the acquisition owned 18 storage properties (see note 5 to our consolidated financial statements). The comparability of our results of operations is affected by the timing of acquisition and disposition activities during the periods reported. As of December 31, 2021, 2020 and 2019, we owned (or partially owned and consolidated) 607, 543 and 523 self-storage properties and related assets, respectively. The following table summarizes the change in number of owned stores from January 1, 2019 through December 31, 2021: Balance - January 1 Stores acquired Stores developed Stores combined (1) Balance - March 31 Stores acquired (2) Stores developed Stores combined (3) Balance - June 30 Stores acquired Stores developed Stores sold Balance - September 30 Stores acquired Stores developed Stores combined (3) Stores sold Balance - December 31 2021 2020 2019 543 — 1 (1) 543 2 2 — 547 2 — (4) 545 62 1 — (1) 607 523 1 — — 524 2 1 — 527 — — — 527 18 — (1) (1) 543 493 1 — — 494 21 2 (1) 516 2 1 — 519 5 — — (1) 523 (1) On March 3, 2021, we completed development of a store located in Arlington, VA for a total cost of approximately $26.4 million. The developed store is located adjacent to an existing consolidated joint venture store. Given their proximity to each other, the stores have been combined in our store count, as well as for operational and reporting purposes. (2) For the quarter ended June 30, 2021, includes one store acquired by a consolidated joint venture in which we hold a 50% interest. (3) On May 24, 2019 and November 10, 2020, we acquired stores located in Tempe, AZ and Merritt Island, FL for approximately $1.6 million and $3.9 million, respectively. In each case, the store acquired is located in near proximity to an existing wholly- owned store. Given their proximity to each other, each acquired store has been combined with the existing store in our store count, as well as for operational and reporting purposes. Financing and Investing Activities The following summarizes certain financing and investing activities during the year ended December 31, 2021:  Store Acquisitions. We acquired LAACO, the owner of the Storage West Assets, for a purchase price of $1.69 billion, which included approximately $40.9 million of LAACO debt that we repaid at the closing. This acquisition included 57 stores in Arizona (17), California (20), Nevada (13) and Texas (7). As part of this transaction, we also acquired a 50% interest in two separate unconsolidated joint ventures, each of which own a store in California. Through our acquisition of LAACO, we also acquired the Club Operations. In addition to LAACO, we acquired eight additional stores which are located in Florida (1), Georgia (1), Illinois (1), Maryland (1), Nevada (1), New Jersey (1), and Pennsylvania (2) for an aggregate purchase price of approximately $140.8 million. Also, a consolidated joint venture in which we hold a 50% interest acquired a store in Minnesota for a purchase price of $12.0 million. 9        Development Activity. We completed construction of and opened for operation four joint venture development properties located in Massachusetts (1), New York (1), Pennsylvania (1) and Virginia (1) for a total cost of $95.9 million. As of December 31, 2021, we had three joint venture development properties under construction located in New York (2) and Virginia (1), which are expected to be completed by the first quarter of 2023. As of December 31, 2021, we had invested $37.8 million of an expected $92.3 million related to these three projects.  Consolidated Development Joint Venture Buy-outs. We acquired the noncontrolling members’ interests in two previously consolidated development joint ventures for an aggregate of $10.0 million. The stores are located in Massachusetts (1) and New York (1) and are wholly owned by the Company as of December 31, 2021.  Store Dispositions. We sold five stores in Colorado (1), Nevada (1), North Carolina (2) and Texas (1) for an aggregate sales price of $43.8 million. In conjunction with the sales, we recorded gains that totaled $32.7 million.  Unconsolidated Real Estate Venture Activity. 191 V CUBE LLC, a newly-formed unconsolidated real estate venture in which we own a 20% interest, acquired five stores for an aggregate purchase price of $143.7 million, of which we contributed $22.6 million. The acquired stores are located in Florida (2), New Jersey (2) and New York (1). 191 IV CUBE LLC, an existing unconsolidated real estate venture in which we own a 20% interest, acquired seven additional stores located in Connecticut (1), Illinois (5) and Maryland (1), for an aggregate purchase price of $108.6 million, of which we contributed $5.7 million. Cube HHF Limited Partnership (“HHF”), an existing unconsolidated real estate venture in which we own a 50% interest, sold seven stores located in Texas for an aggregate sales price of $85.0 million and recorded a gain of $46.9 million in connection with the sale.  Unsecured Senior Note Activity. On November 30, 2021, the Operating Partnership issued $550.0 million in aggregate principal amount of unsecured senior notes due December 15, 2028, which bear interest at a rate of 2.250% per annum (the “2028 Notes”) and $500.0 million in aggregate principal amount of unsecured senior notes due February 15, 2032, which bear interest at a rate of 2.500% per annum (the “2032 Notes”). On December 23, 2021, with net proceeds from our issuance of the 2028 Notes and 2032 Notes, we redeemed, in full, our $300.0 million of outstanding 4.375% senior notes due 2023.  Mortgage Loan Activity. We repaid two mortgage loans with an aggregate outstanding principal balance of $43.9 million.  Public Equity Offering. On November 19, 2021, we completed an underwritten offering of 15.5 million common shares at a public offering price of $51.00 per share, resulting in net proceeds of $765.6 million, after deducting offering costs.  At-The-Market Equity Program Activity. Under our at-the-market equity program, we sold a total of 5.0 million common shares at an average sales price of $40.57 per share, resulting in net proceeds of $200.0 million for the year, after deducting offering costs. As of December 31, 2021, 5.9 million common shares remained available for sale under the program. We used the proceeds from the 2021 sales under the program to fund the acquisition and development of self-storage properties and for general corporate purposes. Business Strategy Our business strategy consists of several elements:  Maximize cash flow from our stores — We utilize our operating systems and experienced personnel to manage the balance between rental rates, discounts and physical occupancy with an objective of maximizing our rental revenue.  Acquire stores within targeted markets — During 2022, we intend to pursue selective acquisitions in markets that we believe have high barriers to entry, strong demographic fundamentals and demand for storage in excess of storage capacity. We believe the self-storage industry will continue to afford us opportunities for growth through acquisitions due to the highly fragmented composition of the industry. In the past, we have formed joint ventures with unaffiliated third parties, and in the future we may form additional joint ventures, to facilitate the funding of future developments or acquisitions.  Dispose of stores — During 2022, we intend to continue to evaluate opportunities to dispose of assets that have unattractive risk- adjusted returns. We intend to use proceeds from these transactions to fund acquisitions within targeted markets and for general corporate purposes.  Grow our third-party management business — We intend to pursue additional third-party management opportunities and to leverage our current platform to take advantage of consolidation in the industry. We plan to utilize our relationships with third- party owners to help source future acquisitions and other investment opportunities. 10 Investment and Market Selection Process We maintain a disciplined and focused process in the acquisition and development of self-storage properties. Our investment committee is comprised of four senior officers who oversee our investment process. Our investment process involves six stages — identification, initial due diligence, economic assessment, investment committee approval (and when required, the approval of our Board of Trustees (the “Board”)), final due diligence and documentation. Through our investment committee, we intend to focus on the following criteria:  Targeted markets — Our targeted markets include areas where we currently maintain management that can be extended to additional stores, or where we believe that we can acquire a significant number of stores over time. We evaluate both the broader market and the immediate trade area, typically three miles around the store, for its ability to support above-average demographic growth. We seek to increase our presence primarily in areas with strong demographics and growth, including, but not exclusively limited to, major metropolitan regions within the United States.  Quality of store — We focus on self-storage properties that have good visibility, ease of access and are located near retail centers, which typically provide high traffic corridors and are generally located near residential communities and commercial customers.  Growth potential — We target acquisitions that offer growth potential through increased operating efficiencies and, in some cases, through additional leasing efforts, renovations or expansions. In addition to acquiring single stores, we seek to invest in portfolio acquisitions, including those offering significant potential for increased operating efficiency and the ability to spread our fixed costs across a large base of stores. Segment We have one reportable segment: we own, operate, develop, manage and acquire self-storage properties. Concentration Our self-storage properties are located in major metropolitan areas as well as suburban areas and have numerous customers per store. No single customer represented a significant concentration of our 2021 revenues. Our stores in New York, Florida, Texas and California provided approximately 19%, 15%, 9% and 8%, respectively, of our total revenues for the year ended December 31, 2021. Our stores in New York, Florida, Texas and California provided approximately 16%, 15%, 9% and 8%, respectively, of our total revenues for the year ended December 31, 2020. Our stores in Florida, New York, Texas and California provided approximately 16%, 16%, 10% and 8%, respectively, of our total revenues for the year ended December 31, 2019. Seasonality We typically experience seasonal fluctuations in occupancy levels at our stores, which are generally slightly higher during the summer months due to increased moving activity. Financing Strategy We maintain a capital structure that we believe is reasonable and prudent and that will enable us to have ample cash flow to cover debt service and make distributions to our shareholders. As of December 31, 2021, our debt to total market capitalization ratio (determined by dividing the carrying value of our total indebtedness by the sum of (a) the market value of the Parent Company’s outstanding common shares and units of the Operating Partnership held by third parties and (b) the carrying value of our total indebtedness) was approximately 19.7% compared to approximately 25.6% as of December 31, 2020. Our ratio of debt to the undepreciated cost of our total assets as of December 31, 2021 was approximately 41.2% compared to approximately 41.0% as of December 31, 2020. We expect to finance additional investments in self-storage properties through the most attractive sources of capital available at the time of the transaction, in a manner consistent with maintaining a strong financial position and future financial flexibility, subject to limitations on incurrence of indebtedness in our unsecured credit facilities and the indenture that governs our unsecured notes. These capital sources may include existing cash, borrowings under our revolving credit facility, additional secured or unsecured financings, sales of common or preferred shares of the Parent Company in public offerings or private placements, additional issuances of debt securities, issuances of common or preferred units in our Operating Partnership in exchange for contributed properties and formations of joint ventures. We also may sell stores that have unattractive risk-adjusted returns and use the sales proceeds to fund other acquisitions. 11 Competition Self-storage properties compete based on a number of factors, including location, rental rates, occupancy, security, suitability of the store’s design to prospective customers’ needs and the manner in which the store is operated and marketed. In particular, the number of competing self-storage properties in a market could have a material effect on our occupancy levels, rental rates and on the overall operating performance of our stores. We believe that the primary competition for potential customers of any of our self-storage properties comes from other self-storage providers within a three-mile radius of that store. We believe our stores are well-positioned within their respective markets, and we emphasize customer service, convenience, security, professionalism and cleanliness. Our key competitors include local and regional operators as well as the other public self-storage REITs, including Public Storage, Extra Space Storage Inc., Life Storage, Inc. and National Storage Affiliates Trust. These companies, some of which operate significantly more stores than we do and have greater resources than we have, and other entities may be able to accept more risk than we determine is prudent for us, including risks with respect to the geographic proximity of investments and the payment of higher acquisition prices. This competition may reduce the number of suitable acquisition opportunities available to us, increase the price required to acquire stores and reduce the demand for self-storage space at our stores. Nevertheless, we believe that our experience in operating, managing, acquiring, developing and obtaining financing for self-storage properties should enable us to compete effectively. Government Regulation We are subject to various laws, ordinances and regulations, including regulations relating to lien sale rights and procedures and various federal, state and local regulations that apply generally to the ownership of real property and the operation of self-storage properties. Under the Americans with Disabilities Act of 1990 and applicable state accessibility act laws (collectively, the “ADA”), all places of public accommodation are required to meet federal requirements related to physical access and use by disabled persons. A number of other federal, state and local laws may also impose access and other similar requirements at our stores. A failure to comply with the ADA or similar state or local requirements could result in the governmental imposition of fines or the award of damages to private litigants affected by the noncompliance. Although we believe that our stores comply in all material respects with these requirements (or would be eligible for applicable exemptions from material requirements because of adaptive assistance provided), a determination that one or more of our stores or websites is not in compliance with the ADA or similar state or local requirements would result in the incurrence of additional costs associated with bringing them into compliance. 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 the real estate as collateral, and may cause the property owner to incur substantial remediation costs. In addition to claims for cleanup costs, the presence of hazardous substances on a property could result in a claim by a private party for personal injury or a claim by an adjacent property owner or user for property damage. We may also become liable for the costs of removal or remediation of hazardous substances stored at our properties by a customer even though storage of hazardous substances would be without our knowledge or approval and in violation of the customer’s storage lease agreement with us. Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of properties. Whenever the environmental assessment for one of our stores indicates that a store is impacted by soil or groundwater contamination from prior owners/operators or other sources, we work with our environmental consultants and, where appropriate, state governmental agencies, to ensure that the store is either cleaned up, that no cleanup is necessary because the low level of contamination poses no significant risk to public health or the environment, or that the responsibility for cleanup rests with a third party. In certain cases, we have purchased environmental liability insurance coverage to indemnify us against claims for contamination or other adverse environmental conditions that may affect a property. We are not aware of any environmental cleanup liability that we believe will have a material adverse effect on us. We cannot provide assurance, however, that these environmental assessments and investigations have revealed or will reveal all potential environmental liabilities, that no prior owner created any material environmental condition not known to us or the independent consultant or that future events or changes in environmental laws will not result in the imposition of environmental liability on us. We have not received notice from any governmental authority of any material noncompliance, claim or liability in connection with any of our stores, nor have we been notified of a claim for personal injury or property damage by a private party in connection with any of our stores relating to environmental conditions. 12 We are not aware of any environmental condition with respect to any of our stores that could reasonably be expected to have a material adverse effect on our financial condition or results of operations, and we do not expect that the cost of compliance with environmental regulations will have a material adverse effect on our financial condition or results of operations. We cannot provide assurance, however, that this will continue to be the case. Insurance We carry comprehensive liability, fire, casualty, extended coverage and rental loss insurance covering all of the properties in our portfolio. We also carry environmental insurance coverage on certain stores in our portfolio. We believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss, the cost of the coverage and industry practice. We do not carry insurance for losses such as loss from riots, war or acts of God, and, in some cases, flood and environmental hazards, because such coverage is either not available or not available at commercially reasonable rates. Some of our policies, such as those covering losses due to 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. Additionally, we use a combination of insurance products to provide risk mitigation for potential liabilities associated with automobiles, workers’ compensation, employment practices, general contractors, directors and officers, employee health-care benefits and personal injuries that might be sustained at our stores. Offices Our principal executive offices are located at 5 Old Lancaster Road, Malvern, PA 19355. Our telephone number is (610) 535-5000. Human Capital At CubeSmart, we refer to our employees as teammates, because collaboration towards shared goals defines our workplace. We care deeply about the experience our teammates have working with us. The CubeSmart work experience takes a holistic approach to our teammates’ total wellbeing at work. Our teammate value proposition includes promoting a sense of belonging to a team; providing opportunities to make a meaningful difference at work and in their communities; supporting our teammates’ ongoing personal and professional development; and offering competitive pay and rewards. As of December 31, 2021, we employed 2,892 teammates, all within the United States. Of the total employees, approximately 90% were hourly and approximately 10% were salaried. We have no union presence or collective bargaining agreements. Our average teammate tenure as of December 31, 2021 was 3.5 years. Company Culture and Teammate Experience We measure our teammates’ experience each year through our Teammate Engagement Survey. In 2021, our annual engagement survey had a 91% participation rate. Results are communicated within individual teams to share what we learned and discuss both the positive aspects about working at CubeSmart and where we have opportunities to improve. In 2021, we identified teams whose engagement was below a certain threshold and provided coaching to the leaders and set goals to increase the attention given to the teammates. Through ongoing conversations and transparent commitment to continuous improvement, every CubeSmart teammate plays a role in building our company culture and making the experience working here the best it can be. Teammate Development and Wellbeing As part of our culture, we seek to help teammates grow with us and leverage their development both at CubeSmart and beyond. We believe in providing all teammates with training and development opportunities to succeed in their role. We plan, design and deliver training programs for all levels of the organization, from orientation and general job skills to enhancing leadership capabilities through skills trainings and mentoring. In 2021, we provided an average of 17 hours of training per teammate. When recruiting new teammates, our talent management team engages with our store management teams and corporate leaders to identify a pool of potential candidates to serve our customers and deliver best-in-class customer service. We recruited, hired and trained 1,488 teammates during the year ended December 31, 2021. Teammate referrals were our top source for the candidates we hired, accounting for 30% of our new teammates. Additionally, more than 390 teammates were promoted into new roles and/or transitioned into new positions to further their career development. 13   We believe that career growth and personal development is an important part of our teammates’ personal and professional success. To further support our teammates’ success, we offer a number of benefits aimed at supporting the wellbeing of our teammates and their families. Those benefits include: medical, dental, vision, disability and life insurance coverage. We also offer a variety of programs designed to provide teammates with the ability to rest, rejuvenate and take care of their families such as paid holidays, vacation and sick time, and parental leave. Our Employee Assistance Program is available to all teammates, providing extra support as they and their families experience life changes and challenges. Another important part of our teammates’ wellbeing is their connection to a larger sense of purpose. We empower our teammates to find this with us and provide programs and opportunities for them. Our Idea Center provides a forum where teammates can submit ideas to enhance the workplace, streamline systems and processes and identify solutions and best practices. We encourage our teammates to participate in community service and philanthropy, and provide paid time off for teammates who participate in these activities. Also, through our matching gifts program, we match qualified charitable contributions made by teammates up to $100 per teammate each year. Diversity, Equity and Inclusion Our Philosophy Regarding Respect in the Workplace defines our approach to diversity, inclusion and treatment of differences. Our Philosophy is acknowledged by teammates and states: At CubeSmart, we respect, value, and celebrate the unique attributes, characteristics and perspectives that make each teammate who they are. We believe that our business is better because of the diversity of participation, thought, and action that comes from the unique individuals who come to work here. Every teammate deserves the right to come to work as their authentic self. Our goal for CubeSmart is to be a place where people feel supported, listened to, and able to do their personal best. Our philosophy isn’t any different from our philosophy regarding Customer interactions, namely to “treat our Customers as they want to be treated.” When it comes to our teammates, we ask that every teammate “treat our teammates as they want to be treated.” As of December 31, 2021, of our total teammate population, 55% were female and 45% were male. Approximately 46% have self- identified as Black or African American, Hispanic or Latino, Asian, American Indian, or of two or more races. The average teammate age was 41; 38% of our teammates were 34 and younger while 39% of our teammates were 45 or older. COVID-19 Update The situation surrounding the COVID-19 virus in our country continued to impact our teammates and business operations. Throughout the pandemic, we have closely monitored legal requirements and the advice of experts and put actions into place as we found to be necessary. The goal of these actions was to find a way to still provide a differentiated CubeSmart customer experience while safeguarding the health of our teammates and customers and ensuring compliance with frequently-changing government mandates and/or restrictions. The actions we took in 2021 to support the wellbeing of our teammates included:  Updating and enacting policies to support the health and safety of our teammates, including related to changing mask and vaccination guidelines, travel, and office visitors;  Providing paid time off for teammates to get vaccinated;  Collecting vaccination status information from our teammates to inform policy decisions and prepare for potential mandates;  Returning corporate office and sales center teammates to in-office work in September with a new hybrid arrangement;  Supporting our teammates as the New York City vaccine mandate went into effect to help them understand the impact and guide them on steps needed to get compliant, ensuring our stores remained operational; and  Paying out appreciation bonuses to teammates who stayed with us throughout 2021. 14 Sustainability We are focused on building our company for the long-term to generate sustainable growth. To that end, we have established a cross- functional ESG (Environmental, Social, & Governance) committee responsible for establishing our sustainability priorities and objectives. Management regularly evaluates sustainability risks faced by our portfolio and believe the low obsolescence, geographic diversification, and low emissions of our portfolio help to mitigate those risks. Our Senior Management team reports annually to the Board of Trustees on the status of our ESG program, our progress against the goals we’ve set, and provides updates on the various initiatives we’ve undertaken to improve our sustainability. Our efforts to enact change are highlighted by our sustainability targets which look to track improvements across key ESG metrics and are aligned to the United Nations Sustainable Development Goals. A key area of focus from a sustainability perspective is minimizing the impact we make on the environment. Self-storage remains a low-environmental impact business as it consumes less energy and water while emitting fewer greenhouse gases than other real estate property types. We continue to look for ways to further reduce our low impact through a variety of initiatives including solar panel installations, HVAC upgrades, high-efficiency lighting retrofits, energy management systems, and paper reduction through our online rental platform. We encourage you to review our Sustainability Report (located on our internet website at www.cubesmart.com) for more detailed information regarding our sustainability programs and initiatives. Nothing on our website, including our Sustainability Report or sections thereof, shall be deemed incorporated by reference into this Annual Report. Information Security We face risks associated with security breaches through cyber-attacks, cyber intrusions, or otherwise, as well as other significant disruptions of our information technology networks and related systems. The audit committee of the Company’s Board of Trustees is responsible for overseeing management’s risk assessment and risk management processes designed to monitor and control information security risk. A cross-organizational cyber task force meets regularly and management briefs the audit committee on information security matters at least once a year. We have adopted and implemented an approach to identify and mitigate information security risks that we believe are commercially reasonable for real estate companies. We leverage the Center for Internet Security Critical Security Control Framework as the core of our governance program and include additional best practices from the Cloud Security Alliance, vendors, and other sources as necessary. Since January 1, 2019, we have not experienced any information security breaches that resulted in financial loss. We have insurance coverage designed to help us mitigate cyber risk exposure by offsetting costs involved with recovery and remediation after an information security breach or similar event. We regularly engage independent third parties to test our information security processes and systems as part of our overall enterprise risk management. We also regularly conduct information security training to ensure all employees, including those who may come into possession of confidential financial or personally identifiable information, are aware of information security risks and to enable them to take steps to mitigate such risks. Available Information We file registration statements, proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports with the SEC. You may obtain copies of these documents by accessing the SEC’s website at www.sec.gov. Our internet website address is www.cubesmart.com. You also can obtain on our website, free of charge, copies of our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and any amendments to those reports, after we electronically file such reports or amendments with, or furnish them to, the SEC. Our internet website and the information contained therein or connected thereto are not intended to be incorporated by reference into this Report. Also available on our website, free of charge, are copies of our Code of Business Conduct and Ethics, our Corporate Governance Guidelines and the charters for each of the committees of our Board — the Audit Committee, the Corporate Governance and Nominating Committee and the Compensation Committee. Copies of each of these documents are also available in print free of charge, upon request by any shareholder. You can obtain copies of these documents by contacting Investor Relations by mail at 5 Old Lancaster Road, Malvern, PA 19355. 15 ITEM 1A. RISK FACTORS Overview An investment in our securities involves various risks. Investors should carefully consider the risks set forth below together with other information contained in this Report. These risks are not the only ones that we may face. Additional risks not presently known to us, or that we currently consider immaterial, may also impair our business, financial condition, operating results and ability to make distributions to our shareholders. Risks Related to our Business and Operations Adverse macroeconomic and business conditions may significantly and negatively affect our rental rates, occupancy levels and therefore our results of operations. We are susceptible to the effects of adverse macro-economic events that can result in higher unemployment, shrinking demand for products, large-scale business failures and tight credit markets. Our results of operations are sensitive to changes in overall economic conditions that impact consumer spending, including discretionary spending, as well as to increased bad debts due to recessionary pressures. Adverse economic conditions affecting disposable consumer income, such as employment levels, business conditions, inflation, interest rates, tax rates and fuel and energy costs, could reduce consumer spending or cause consumers to shift their spending to other products and services. A general reduction in the level of discretionary spending or shifts in consumer discretionary spending could adversely affect our growth and profitability. It is difficult to determine the breadth and duration of economic and financial market disruptions and the many ways in which they may affect our customers and our business in general. Nonetheless, financial and macroeconomic disruptions could have a significant adverse effect on our sales, profitability and results of operations. Our financial performance is dependent upon economic and other conditions of the markets in which our stores 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 stores in New York, Florida, Texas and California accounted for approximately 19%, 15%, 9% and 8%, respectively, of our total 2021 revenues. As a result of this geographic concentration of our stores, we are particularly susceptible to adverse market conditions in these areas. Any adverse economic or real estate developments in these markets, or in any of the other markets in which we operate, or any decrease in demand for self-storage space resulting from the local business climate, could adversely affect our rental revenues, which could impair our ability to satisfy our debt service obligations and pay distributions to our shareholders. Our business, financial condition, results of operations and share price have, and may continue to be, impacted by the COVID-19 pandemic and such impact could be materially adverse. Since the first quarter of 2020, the world has been impacted by the spread of a novel strain of coronavirus and its variants and the disease that it causes known as COVID-19, which has resulted in global business disruptions and significant volatility in U.S. and international debt and equity markets. There continues to be significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. economy. The extent to which the COVID-19 pandemic ultimately impacts our business, results of operations, financial condition and share price will depend on numerous evolving factors, including, among others: the duration and scope of the pandemic; actions that have been and continue to be taken by governmental entities, individuals and businesses in response to the pandemic; the impact on economic activity from the pandemic and actions taken in response thereto; the impact on capital availability and costs of capital; the impact on our employees any other operational disruptions or difficulties we may face; and, the effect on our customers and their ability to make rental payments. Any of these events, individually or in aggregate, could have a material adverse impact on the Company’s business, financial condition, results of operations and share price. We face risks associated with property acquisitions. We intend to continue to acquire individual and portfolios of self-storage properties. The purchase agreements that we enter into in connection with acquisitions typically contain closing conditions that need to be satisfied before the acquisitions can be consummated. The satisfaction of many of these conditions is outside of our control, and we therefore cannot assure that any of our pending or future acquisitions will be consummated. These conditions include, among other things, satisfactory examination of the title, zoning and entitlements to the properties, the ability to obtain title insurance and customary closing deliverables and conditions. Moreover, in the 16 event we are unable to complete pending or future acquisitions, we may have incurred significant legal, accounting, due diligence and other transaction costs in connection with such acquisitions without realizing the expected benefits. Those acquisitions that we do consummate would increase our size and may potentially alter our capital structure. Although we believe that future acquisitions that we complete will enhance our financial performance, the success of acquisitions is subject to the risks that:   acquisitions may fail to perform as expected; the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates;  we may be unable to obtain acquisition financing on favorable terms;   acquisitions may be located in new markets where we may have limited knowledge and understanding of the local economy, an absence of business relationships in the area or an unfamiliarity with local governmental and permitting procedures; and there is only limited recourse, or no recourse, to the former owners of newly acquired properties for unknown or undisclosed liabilities such as the clean-up of undisclosed environmental contamination; claims by customers, vendors or other persons arising on account of actions or omissions of the former owners of the properties; and claims by local governments, adjoining property owners, property owner associations and easement holders for fees, assessments or taxes on other property-related changes. As a result, if a liability were asserted against us based upon ownership of an acquired property, we might be required to pay significant sums to settle it, which could adversely affect our financial results and cash flow. In addition, we often do not obtain third-party appraisals of acquired properties and instead rely on internal value determinations. We will incur costs and will face integration challenges when we acquire additional stores. As we acquire or develop additional self-storage properties and bring additional self-storage properties onto our third-party management platform, we will be subject to risks associated with integrating and managing new stores, including customer retention and mortgage default risks. In the case of a large portfolio purchase, we could experience strains in our existing systems and management capacities. In addition, acquisitions or developments may cause disruptions in our operations and divert management’s attention away from day-to-day operations. Furthermore, our income may decline because we will be required to depreciate/amortize in future periods costs for acquired real property and intangible assets. Our failure to successfully integrate any future acquisitions into our portfolio could have an adverse effect on our operating costs and our ability to make distributions to our shareholders. The acquisition of new stores that lack operating history with us will make it more difficult to predict revenue potential. We intend to continue to acquire individual and portfolios of self-storage properties. These acquisitions could fail to perform in accordance with expectations. If we fail to accurately estimate occupancy levels, rental rates, operating costs or costs of improvements to bring an acquired store up to the standards established for our intended market position, the performance of the store may be below expectations. Acquired stores may have characteristics or deficiencies affecting their valuation or revenue potential that we have not yet discovered. We cannot assure that the performance of stores acquired by us will increase or be maintained under our management. Our development activities may be more costly or difficult to complete than we anticipate. We intend to continue to develop self-storage properties where market conditions warrant such investment. Once made, these investments may not produce results in accordance with our expectations. Risks associated with development and construction activities include:    the unavailability of favorable financing sources in the debt and equity markets; construction cost overruns, including on account of rising interest rates, diminished availability of materials and labor, and increases in the costs of materials and labor; construction delays and failure to achieve target occupancy levels and rental rates, resulting in a lower than projected return on our investment; and 17  complications (including building moratoriums and anti-growth legislation) in obtaining necessary zoning, occupancy and other governmental permits. We depend on external sources of capital that are outside of our control; the unavailability of capital from external sources could adversely affect our ability to acquire or develop stores, satisfy our debt obligations and/or make distributions to shareholders. We depend on external sources of capital to fund acquisitions and development, to satisfy our debt obligations and to make distributions to our shareholders required to maintain our status as a REIT, and these sources of capital may not be available on favorable terms, if at all. Our access to external sources of capital depends on a number of factors, including the market’s perception of our growth potential, our current and potential future earnings and our ability to continue to qualify as a REIT for federal income tax purposes. If we are unable to obtain external sources of capital, we may not be able to acquire or develop properties when strategic opportunities exist, satisfy our debt obligations, make distributions to shareholders that would permit us to qualify as a REIT or avoid paying tax on our REIT taxable income. If we are unable to promptly re-let our cubes or if the rates upon such re-letting are significantly lower than expected, our business and results of operations would be adversely affected. We derive revenues principally from rents received from customers who rent cubes at our self-storage properties under month-to-month leases. Any delay in re-letting cubes as vacancies arise would reduce our revenues and harm our operating results. In addition, lower than expected rental rates upon re-letting could adversely affect our revenues and impede our growth. Store ownership through joint ventures may limit our ability to act exclusively in our interest. We co-invest with, and we may continue to co-invest with, third parties through joint ventures. In any such joint venture, we may not be in a position to exercise sole decision-making authority regarding the stores owned through joint ventures. Investments in joint ventures may, under certain circumstances, involve risks not present when a third party is not involved, including the possibility that joint venture partners might become bankrupt or fail to fund their share of required capital contributions. Joint venture partners may have business interests or goals that are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives. Such investments also have the potential risk of impasse on strategic decisions, such as a sale, in cases where neither we nor the joint venture partner would have full control over the joint venture. In other circumstances, joint venture partners may have the ability without our agreement to make certain major decisions, including decisions about sales, capital expenditures, and/or financing. Any disputes that may arise between us and our joint venture partners could result in litigation or arbitration that could increase our expenses and distract our officers and/or Trustees from focusing their time and effort on our business. In addition, we might in certain circumstances be liable for the actions of our joint venture partners, and the activities of a joint venture could adversely affect our ability to qualify as a REIT, even though we do not control the joint venture. We face significant competition for customers and acquisition and development opportunities. Actions by our competitors may decrease or prevent increases of the occupancy and rental rates of our stores. We compete with numerous developers, owners and operators of self-storage properties, including other REITs, as well as on-demand storage providers, some of which own or may in the future own stores similar to ours in the same submarkets in which our stores are located and some of which may have greater capital resources. In addition, due to the relatively low cost of each individual self-storage property, other developers, owners and operators have the capability to build additional stores that may compete with our stores. If our competitors build new stores that compete with our stores or offer space at rental rates below the rental rates we currently charge our customers, we may lose potential customers, and we may be pressured to reduce our rental rates below those we currently charge in order to retain customers when our customers’ leases expire. As a result, our financial condition, cash flow, cash available for distribution, market price of our shares and ability to satisfy our debt service obligations could be materially adversely affected. In addition, increased competition for customers may require us to make capital improvements to our stores that we would not have otherwise made. Any unbudgeted capital improvements we undertake may reduce cash available for distributions to our shareholders. We also face significant competition for acquisitions and development opportunities. Some of our competitors have greater financial resources than we do and a greater ability to borrow funds to acquire stores. These competitors may also be willing to accept more risk than we can prudently manage, including risks with respect to the geographic proximity of investments and the payment of higher acquisition prices. This competition for investments may reduce the number of suitable investment opportunities available to us, may increase acquisition costs and may reduce demand for self-storage space in certain areas where our stores are located and, as a result, adversely affect our operating results. 18 Potential losses may not be covered by insurance. We carry comprehensive liability, fire, casualty, extended coverage and rental loss insurance covering all of the properties in our portfolio. We also carry environmental insurance coverage on certain stores in our portfolio. We believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss, the cost of the coverage and industry practice. We do not carry insurance for losses such as loss from riots, war or acts of God, and, in some cases, flood and environmental hazards, because such coverage is either not available or is not available at commercially reasonable rates. Some of our policies, such as those covering losses due to terrorism, hurricanes, floods and earthquakes, are insured subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover losses. If we experience a loss at a store that is uninsured or that exceeds policy limits, we could lose the capital invested in that store as well as the anticipated future cash flows from that store. Inflation, changes in building codes and ordinances, environmental considerations and other factors also might make it impractical or undesirable to use insurance proceeds to replace a store after it has been damaged or destroyed. In addition, if the damaged stores are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these stores were irreparably damaged. Additionally, we use a combination of insurance products, some of which include deductibles and self-insured retention amounts, to provide risk mitigation for potential liabilities associated with automobiles, workers’ compensation, employment practices, general contractors, cyber risks, crime, directors and officers, employee health-care benefits and personal injuries that might be sustained at our stores. Liabilities associated with the risks that are retained by us are estimated, in part, by considering historical claims experience and actuarial assumptions. Our results of operations could be materially impacted by claims and other expenses related to such insurance plans if future occurrences and claims differ from these assumptions and historical trends. Our insurance coverage may not comply with certain loan requirements. Certain of our stores serve as collateral for our mortgage-backed debt, some of which we assumed in connection with our acquisition of stores and requires us to maintain insurance, deductibles, retentions and other policy terms at levels that are not commercially reasonable in the current insurance environment. We may be unable to obtain required insurance coverage if the cost and/or availability make it impractical or impossible to comply with debt covenants. If we cannot comply with a lender’s requirements, the lender could declare a default, which could affect our ability to obtain future financing and have a material adverse effect on our results of operations and cash flows and our ability to obtain future financing. In addition, we may be required to self-insure against certain losses or our insurance costs may increase. Potential liability for environmental contamination could result in substantial costs. We are subject to federal, state and local environmental regulations that apply generally to the ownership of real property and the operation of self-storage properties. If we fail to comply with those laws, we could be subject to significant fines or other governmental sanctions. Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at a property and may be held liable to a governmental entity or to third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with contamination. Such liability may be imposed whether or not the owner or operator knew of, or was responsible for, the presence of these hazardous or toxic substances. The cost of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect our ability to sell or rent such property or to borrow using such property as collateral. In addition, in connection with the ownership, operation and management of properties, we are potentially liable for property damage or injuries to persons and property. Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of additional stores. We carry environmental insurance coverage on certain stores in our portfolio. We obtain or examine environmental assessments from qualified and reputable environmental consulting firms (and intend to conduct such assessments prior to the acquisition or development of additional stores). The environmental assessments received to date have not revealed, nor do we have actual knowledge of, any environmental liability that we believe will have a material adverse effect on us. However, we cannot assure that our environmental assessments have identified or will identify all material environmental conditions, that any prior owner of any property did not create a material environmental condition not actually known to us, that environmental conditions on neighboring properties will not have an impact on any of our properties, or that a material environmental condition does not otherwise exist with respect to any of our properties. 19 Americans with Disabilities Act and applicable state accessibility act compliance may require unanticipated expenditures. Under the ADA, all places of public accommodation are required to meet federal requirements related to access and use by disabled persons. A number of other federal, state and local laws may also impose access and other similar requirements at our properties or websites. A failure to comply with the ADA or similar state or local requirements could result in the governmental imposition of fines or the award of damages to private litigants affected by the noncompliance. Although we believe that our properties and websites comply in all material respects with these requirements (or would be eligible for applicable exemptions from material requirements because of adaptive assistance provided), a determination that one or more of our properties or websites is not in compliance with the ADA or similar state or local requirements would result in the incurrence of additional costs associated with bringing the properties or websites into compliance. If we are required to make substantial modifications to comply with the ADA or similar state or local requirements, we may be required to incur significant unanticipated expenditures, which could have an adverse effect on our operating costs and our ability to make distributions to our shareholders. We face system security risks as we depend upon automated processes and the internet, and breaches of, or failures in the performance of, our information technology systems could damage our reputation, cause us to incur substantial additional costs and subject us to litigation. We are increasingly dependent upon automated information technology processes and internet commerce, and many of our new customers come from the telephone or over the internet. Moreover, the nature of our business involves the receipt and retention of personal information about our customers. We also rely extensively on third-party vendors to retain data, process transactions and provide other systems and services. These systems, and our systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, malware and other destructive or disruptive security breaches and catastrophic events, such as a natural disaster or a terrorist event or cyber-attack. In addition, experienced computer programmers and hackers may be able to penetrate our security systems and misappropriate our confidential information, create system disruptions or cause shutdowns. Such data security breaches as well as system disruptions and shutdowns could result in additional costs to repair or replace such networks or information systems and possible legal liability, including government enforcement actions and private litigation. In addition, our customers could lose confidence in our ability to protect their personal information, which could cause them to discontinue leasing at our stores. If we are unable to attract and retain team members or contract with third parties having the specialized skills or technologies needed to support our systems, implement improvements to our customer-facing technology in a timely manner, allow accurate visibility to product availability when customers are ready to rent, quickly and efficiently fulfill our customers rental and payment methods they demand or provide a convenient and consistent experience for our customers regardless of the ultimate sales channel, our ability to compete and our results of operations could be adversely affected. Risks Related to the Real Estate Industry Our performance and the value of our self-storage properties are subject to risks associated with our properties and with the real estate industry. Our rental revenues, operating costs and the value of our real estate assets, and consequently the value of our securities, are subject to the risk that if our stores do not generate revenues sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and ability to pay distributions to our shareholders will be adversely affected. Events or conditions beyond our control that may adversely affect our operations or the value of our properties include but are not limited to:      downturns in the national, regional and local economic climate; local or regional oversupply, increased competition or reduction in demand for self-storage space; vacancies or changes in market rents for self-storage space; inability to collect rent from customers; increased operating costs, including maintenance, personnel, insurance premiums, customer acquisition costs and real estate taxes;  changes in interest rates and availability of financing; 20    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 environment and taxes; and  the relative illiquidity of real estate investments. In addition, prolonged periods of economic slowdown or recession, rising interest rates, declining demand for self-storage or the public perception that any of these events may occur, could result in a general decline in rental revenues, which could impair our ability to satisfy our debt service obligations and to make distributions to our shareholders. Rental revenues are significantly influenced by demand for self-storage space generally, and a decrease in such demand would likely have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio. Because our real estate portfolio consists primarily of self-storage properties, we are subject to risks inherent in investments in a single industry. A decrease in the demand for self-storage space would have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio. Demand for self-storage space could be adversely affected by weakness in the national, regional and local economies, changes in supply of, or demand for, similar or competing self-storage properties in an area and the excess amount of self-storage space in a particular market. To the extent that any of these conditions occur, they are likely to affect market rents for self- storage space, which could cause a decrease in our rental revenue. Any such decrease could impair our ability to satisfy debt service obligations and make distributions to our shareholders. Because real estate is illiquid, we may not be able to sell properties when appropriate. Real estate property investments generally cannot be sold quickly. Also, the tax laws applicable to REITs require that we hold our properties for investment, rather than for sale in the ordinary course of business, which may cause us to forgo or defer sales of properties that otherwise would be in our best interest. Therefore, we may not be able to dispose of properties promptly, or on favorable terms, in response to economic or other market conditions, which may adversely affect our financial position. Risks Related to our Qualification and Operation as a REIT Failure to qualify as a REIT would subject us to U.S. federal income tax which would reduce the cash available for distribution to our shareholders. We operate our business to qualify to be taxed as a REIT for federal income tax purposes. We have not requested and do not plan to request a ruling from the Internal Revenue Service (“IRS”) that we qualify as a REIT, and the statements in this Report are not binding on the IRS or any court. As a REIT, we generally will not be subject to federal income tax on the income that we distribute currently to our shareholders. Many of the REIT requirements, however, are highly technical and complex. The determination that we are a REIT requires an analysis of various factual matters and circumstances that may not be totally within our control. For example, to qualify as a REIT, at least 95% of our gross income must come from specific passive sources, such as rent, that are itemized in the REIT tax laws. In addition, to qualify as a REIT, we cannot own specified amounts of debt and equity securities of some issuers. We also are required to distribute to our shareholders with respect to each year at least 90% of our REIT taxable income, excluding net capital gains. The fact that we hold substantially all of our assets through the Operating Partnership and its subsidiaries and joint ventures further complicates the application of the REIT requirements for us. Even a technical or inadvertent mistake could jeopardize our REIT status, and, given the highly complex nature of the rules governing REITs and the ongoing importance of factual determinations, we cannot provide any assurance that we will continue to qualify as a REIT. Congress and the IRS may make changes to the tax laws and regulations, and the courts might issue new rulings that make it more difficult, or impossible, for us to remain qualified as a REIT. If we fail to qualify as a REIT for federal income tax purposes and are able to avail ourselves of one or more of the statutory savings provisions in order to maintain our REIT status, we would nevertheless be required to pay penalty taxes of $50,000 or more for each such failure. 21 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 increased state and local taxes. We would not be able to elect to be taxed as a REIT until the fifth taxable that begins after the taxable year we first failed to qualify unless the IRS were to grant us relief under certain statutory provisions. If we failed to qualify as a REIT, we would have to pay significant income taxes, which would reduce our net earnings available for investment or distribution to our shareholders. This likely would have a significant adverse effect on our earnings and likely would adversely affect the value of our securities. In addition, we would no longer be required to pay any distributions to shareholders. Furthermore, we owned a subsidiary REIT (“PSI”) that was liquidated on December 31, 2018. Prior to liquidation, PSI was independently subject to, and was required to comply with, the same REIT requirements that we must satisfy in order to qualify as a REIT, together with all other rules applicable to REITs. If PSI failed to qualify as a REIT during our period of ownership, and certain statutory relief provisions do not apply, as a result of a protective election made jointly by PSI and CubeSmart, PSI should be taxed as a taxable REIT subsidiary. See the section entitled “Taxation of CubeSmart−Requirements for Qualification−Taxable REIT Subsidiaries” in Exhibit 99.1 for more information regarding taxable REIT subsidiaries. LAACO was a publicly traded partnership immediately prior to our acquisition of it on December 9, 2021. Failure of 90% or more of a publicly traded partnership’s gross income to be “qualifying income” under Section 7704 of the Internal Revenue Code in each of its tax years could result in such entity being taxed as a corporation rather than a partnership for U.S. federal income tax purposes. If LAACO failed to qualify as a partnership for U.S. federal income tax purposes immediately prior to our acquisition of it, and certain relief provisions do not apply, it might adversely affect our ability to satisfy the income and asset tests for REIT qualification. In addition, LAACO’s classification as a corporation for U.S. federal income tax purposes would mean that it has corporate income tax liabilities for all tax years during which it is classified as a corporation for U.S. federal income tax purposes. Failure of the Operating Partnership (or a subsidiary partnership or joint venture) to be treated as a partnership would have serious adverse consequences to our shareholders. If the IRS were to successfully challenge the tax status of the Operating Partnership or any of its subsidiary partnerships or joint ventures for federal income tax purposes, the Operating Partnership or the affected subsidiary partnership or joint venture would be taxable as a corporation. In such event, we likely would cease to qualify as a REIT and the imposition of a corporate tax on the Operating Partnership, a subsidiary partnership or joint venture would reduce the amount of cash available for distribution from the Operating Partnership to us and ultimately to our shareholders. To maintain our REIT status, we may be forced to borrow funds on a short-term basis during unfavorable market conditions. As a REIT, we are subject to certain distribution requirements, including the requirement to distribute 90% of our REIT taxable income, excluding net capital gains, which may result in our having to make distributions at a disadvantageous time or to borrow funds at unfavorable rates. Compliance with this requirement may hinder our ability to operate solely on the basis of maximizing profits. We will pay some taxes even if we qualify as a REIT, which will reduce the cash available for distribution to our shareholders. 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. In addition, any net taxable income earned directly by our taxable REIT subsidiaries, or through entities that are disregarded for federal income tax purposes as entities separate from our taxable REIT subsidiaries, will be subject to federal and possibly state corporate income tax. We have elected to treat some of our subsidiaries as taxable REIT subsidiaries, and we may elect to treat other subsidiaries as taxable REIT subsidiaries in the future. In this regard, several provisions of the laws applicable to REITs and their subsidiaries ensure that a taxable REIT subsidiary will be subject to an appropriate level of federal income taxation. For example, a taxable REIT subsidiary is 22 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. We have made taxable REIT subsidiary elections for the corporate subsidiaries of LAACO that hold the Club Operations and we intend to sell the assets in such subsidiaries to a third-party purchaser. If the purchase price for the assets of the subsidiaries exceeds our tax basis in such assets, then we may face corporate tax liability, which could have an adverse impact on our ability to make distributions. We face possible federal, state and local tax audits. Because we are organized and qualify as a REIT, we are generally not subject to federal income taxes, but are subject to certain state and local taxes. Certain entities through which we own real estate either have undergone, or are currently undergoing, tax audits. Although we believe that we have substantial arguments in favor of our positions in the ongoing audits, in some instances there is no controlling precedent or interpretive guidance on the specific point at issue. Collectively, tax deficiency notices received to date from the jurisdictions conducting the ongoing audits have not been material. However, there can be no assurance that future audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations. Legislative or regulatory tax changes related to REITs could materially and adversely affect our business. At any time, the federal income tax laws or regulations governing REITs or the administrative interpretations of those laws or regulations may be changed, possibly with retroactive effect. We cannot predict if or when any new federal income tax law, regulation or administrative interpretation, or any amendment to any existing federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective or whether any such law, regulation or interpretation may take effect retroactively. We and our shareholders could be adversely affected by any such change in, or any new, federal income tax law, regulation or administrative interpretation. Shareholders are urged to consult with their tax advisors with respect to the status of any regulatory or administrative developments and proposals and their potential effect on investment in our capital stock. Dividends paid by REITs do not qualify for the reduced tax rates provided under current law. Dividends paid by REITs are generally not eligible for the reduced 15% maximum tax rate for dividends paid to individuals (20% for those with taxable income above certain thresholds that are adjusted annually under current law). The more favorable rates applicable to regular corporate dividends could cause shareholders who are individuals to perceive investments in REITs to be relatively less attractive than investments in the stock of non-REIT corporations that pay dividends to which more favorable rates apply, which could reduce the value of REIT stocks. Legislation modifies the rules applicable to partnership tax audits. The Bipartisan Budget Act of 2015 requires our Operating Partnership and any subsidiary partnership to pay the hypothetical increase in partner-level taxes (including interest and penalties) resulting from an adjustment of partnership tax items on audit or in other tax proceedings, unless the partnership elects an alternative method under which the taxes resulting from the adjustment (and interest and penalties) are assessed at the partner level. Uncertainties remain as to the application of these rules and the impact they will have on us. It is possible that partnerships in which we invest may be subject to U.S. federal income tax, interest and penalties in the event of a U.S. federal income tax audit as a result of these law changes. Risks Related to our Debt Financings We face risks related to current debt maturities, including refinancing risk. Certain of our mortgages, bank loans and unsecured debt (including our senior notes) will have significant outstanding balances on their maturity dates, commonly known as “balloon payments.” We may not have the cash resources available to repay those amounts, and we may have to raise funds for such repayment either through the issuance of equity or debt securities, additional bank borrowings (which may include extension of maturity dates), joint ventures or asset sales. Furthermore, we are restricted from incurring certain additional 23 indebtedness and making certain other changes to our capital and debt structure under the terms of the Credit Facility (defined below) and senior notes and the indentures governing the Credit Facility and senior notes. There can be no assurance that we will be able to refinance our debt on favorable terms or at all. To the extent we cannot refinance debt on favorable terms or at all, we may be forced to dispose of properties on disadvantageous terms or pay higher interest rates, either of which would have an adverse impact on our financial performance and ability to pay dividends to our shareholders. As a result of our interest rate hedges, swap agreements and other, similar arrangements, we face counterparty risks. We may be exposed to the potential risk of counterparty default or non-payment with respect to interest rate hedges, swap agreements, floors, caps and other interest rate hedging contracts that we may enter into from time to time, in which event we could suffer a material loss on the value of those agreements. Although these agreements may lessen the impact of rising interest rates on us, they also expose us to the risk that other parties to the agreements will not perform or that we cannot enforce the agreements. There is no assurance that our potential counterparties on these agreements will perform their obligations under such agreements. Financing our future growth plan or refinancing existing debt maturities could be impacted by negative capital market conditions. From time to time, domestic financial markets experience volatility and uncertainty. At times in recent years liquidity has tightened in the domestic financial markets, including the investment grade debt and equity capital markets from which we historically sought financing. Consequently, there is greater uncertainty regarding our ability to access the credit markets in order to attract financing on reasonable terms; there can be no assurance that we will be able to continue to issue common or preferred equity securities at a reasonable price. Our ability to finance new acquisitions and refinance future debt maturities could be adversely impacted by our inability to secure permanent financing on reasonable terms, if at all. The terms and covenants relating to our 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 the insufficiency of cash flow to meet required debt service payment obligations and the inability to refinance outstanding indebtedness at maturity. If our debt cannot be paid, refinanced or extended at maturity, we may not be able to make distributions to shareholders at expected levels or at all and may not be able to acquire new stores. Failure to make distributions to our shareholders could result in our failure to qualify as a REIT for federal income tax purposes. Furthermore, an increase in our interest expense could adversely affect our cash flow and ability to make distributions to shareholders. If we do not meet our debt service obligations, any stores securing such indebtedness could be foreclosed on, which would have a material adverse effect on our cash flow and ability to make distributions and, depending on the number of stores foreclosed on, could threaten our continued viability. Our Credit Facility (defined below) contains (and any new or amended facility we may enter into from time to time will likely contain) customary affirmative and negative covenants, including financial covenants that, among other things, require us to comply with certain liquidity and other tests. Our ability to borrow under the Credit Facility is (and any new or amended facility we may enter into from time to time will be) subject to compliance with such financial and other covenants. In the event that we fail to satisfy these covenants, we would be in default under the Credit Facility and may be required to repay such debt with capital from other sources. Under such circumstances, other sources of debt or equity capital may not be available to us, or may be available only on unattractive terms. Moreover, the presence of such covenants in our credit agreements could cause us to operate our business with a view toward compliance with such covenants, which might not produce optimal returns for shareholders. Similarly, the indenture under which we have issued unsecured senior notes contains customary financial covenants, including limitations on incurrence of additional indebtedness. Increases in interest rates on variable-rate indebtedness would increase our interest expense, which could adversely affect our cash flow and ability to make distributions to shareholders. Rising interest rates could also restrict our ability to refinance existing debt when it matures. In addition, an increase in interest rates could decrease the amounts that third parties are willing to pay for our assets, thereby limiting our ability to alter our portfolio promptly in relation to economic or other conditions. 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 do not limit the amount of indebtedness that we may incur. We could alter the balance between our total outstanding indebtedness and the value of our assets at any time. If we become more highly leveraged, then the resulting increase in debt service could adversely affect our ability to make payments on our outstanding indebtedness and to pay our anticipated distributions and/or the distributions required to maintain our REIT status, and could harm our financial condition. 24 Changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect our financial results. As of December 31, 2021, we did not have any outstanding debt that was indexed to the London Interbank Offered Rate (“LIBOR”) other than borrowings under our Revolver (defined below). On July 27, 2017, the Financial Conduct Authority (“FCA”), which regulates LIBOR, announced its intention to phase out LIBOR rates by the end of 2021. On March 5, 2021, the ICE Benchmark Administration Limited (“IBA”) announced an 18-month extension (to June 30, 2023) on certain U.S. dollar LIBOR rates, including the rate that our Revolver is indexed to. It is not possible to predict the further effect of these announcements, any changes in the methods by which LIBOR is determined, or any other reforms to LIBOR that may be enacted in the United Kingdom, the European Union or elsewhere. Such developments may cause LIBOR to perform differently than in the past, or cease to exist. In addition, any other legal or regulatory changes made by the FCA, the IBA, the European Money Markets Institute (formerly Euribor-EBF), the European Commission or any other successor governance or oversight body, or future changes adopted by such body, in the method by which LIBOR is determined or the transition from LIBOR to a successor benchmark may result in, among other things, a sudden or prolonged increase or decrease in LIBOR, a delay in the publication of LIBOR, and changes in the rules or methodologies in LIBOR, which may discourage market participants from continuing to administer or to participate in LIBOR’s determination, and, in certain situations, could result in LIBOR no longer being determined and published. If a published U.S. dollar LIBOR rate becomes unavailable, the interest rates on our debt which is indexed to LIBOR will be determined using alternative methods, which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if U.S. dollar LIBOR was available in its current form. Further, the same costs and risks that may lead to the unavailability of U.S. dollar LIBOR may make one or more of the alternative methods impossible or impracticable to determine. Any of these proposals or consequences could have a material adverse effect on our financing costs, and as a result, our financial condition, operating results and cash flows. Risks Related to our Organization and Structure We are dependent upon our senior management team whose continued service is not guaranteed. Our executive team, including our named executive officers, has extensive self-storage, real estate and public company experience. Our Chief Executive Officer, Chief Financial Officer, Chief Legal Officer and Chief Operating Officer are parties to the Company’s executive severance plan, however, we cannot provide assurance that any of them will remain in our employment. The loss of services of one or more members of our senior management team could adversely affect our operations and our future growth. 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, 2021, we had 2,431 property-level personnel involved in the management and operation of our stores. The customer service, marketing skills and knowledge of local market demand and competitive dynamics of our store managers are contributing factors to our ability to maximize our rental income and to achieve the highest sustainable rent levels at each of our stores. We compete with various other companies in attracting and retaining qualified and skilled personnel. Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. If there is an increase in these costs or if we fail to attract and retain qualified and skilled personnel, our business and operating results could be adversely affected. Certain provisions of Maryland law could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our shares or otherwise benefit our shareholders. Certain provisions of Maryland law may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of our common shares with the opportunity to realize a premium over the then-prevailing market price of those shares, including:  “business combination moratorium/fair price” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested shareholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter imposes stringent fair price and super-majority shareholder voting requirements on these combinations; and 25  “control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing Trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares” from a party other than the issuer) have no voting rights except to the extent approved by our shareholders by the affirmative vote of at least two thirds of all the votes entitled to be cast on the matter, excluding all interested shares, and are subject to redemption in certain circumstances. We have opted out of these provisions of Maryland law. However, our Board may opt to make these provisions applicable to us at any time without shareholder approval. Our Trustees also have the discretion, granted in our bylaws and Maryland law, without shareholder approval to, among other things (1) create a staggered Board, (2) amend our bylaws or repeal individual bylaws in a manner that provides the Board with greater authority, and (3) issue additional equity securities. Any such action could inhibit or impede a third party from making a proposal to acquire us at a price that could be beneficial to our shareholders. Our shareholders have limited control to prevent us from making any changes to our investment and financing policies. Our Board has adopted policies with respect to certain activities. These policies may be amended or revised from time to time at the discretion of our Board without a vote of our shareholders. This means that our shareholders have limited control over changes in our policies. Such changes in our policies intended to improve, expand or diversify our business may not have the anticipated effects and consequently may adversely affect our business and prospects, results of operations and share price. Our rights and the rights of our shareholders to take action against our Trustees and officers are limited. Maryland law provides that a trustee or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our declaration of trust and bylaws require us to indemnify our Trustees and officers for actions taken by them in those capacities on our behalf, to the extent permitted by Maryland law. Accordingly, in the event that actions taken in good faith by any Trustee or officer impede our performance, our shareholders’ ability to recover damages from that Trustee or officer will be limited. Our declaration of trust permits our Board to issue preferred shares with terms that may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our shares or otherwise benefit our shareholders. Our declaration of trust permits our Board to issue up to 40,000,000 preferred shares, having those preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption as determined by our Board. In addition, our Board may reclassify any unissued common shares into one or more classes or series of preferred shares. Thus, our Board could authorize, without shareholder approval, the issuance of preferred shares with terms and conditions that could have the effect of discouraging a takeover or other transaction in which holders of some or a majority of our shares might receive a premium for their shares over the then-prevailing market price of our shares. We currently do not expect that the Board would require shareholder approval prior to such a preferred issuance. In addition, any preferred shares that we issue would rank senior to our common shares with respect to the payment of distributions, in which case we could not pay any distributions on our common shares until full distributions have been paid with respect to such preferred shares. Risks Related to our Securities Additional issuances of equity securities may be dilutive to shareholders. The interests of our shareholders could be diluted if we issue additional equity securities to finance future acquisitions or developments or to repay indebtedness. Our Board may authorize the issuance of additional equity securities, including preferred shares, without shareholder approval. Our ability to execute our business strategy depends upon our access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including common and preferred equity. 26 Many factors could have an adverse effect on the market value of our securities. A number of factors might adversely affect the price of our securities, many of which are beyond our control. These factors include:         increases in market interest rates, relative to the dividend yield on our shares. If market interest rates go up, prospective purchasers of our securities may require a higher yield. Higher market interest rates would not, however, result in more funds for us to distribute and, to the contrary, would likely increase our borrowing costs and potentially decrease funds available for distribution. Thus, higher market interest rates could cause the market price of our equity securities to go down; anticipated benefit of an investment in our securities as compared to investment in securities of companies in other industries (including benefits associated with tax treatment of dividends and distributions); perception by market professionals of REITs generally and REITs comparable to us in particular; level of institutional investor interest in our securities; relatively low trading volumes in securities of REITs; our results of operations and financial condition; investor confidence in the stock market generally; and additions and departures of key personnel. The market value of our equity securities is based primarily upon the market’s perception of our growth potential and our current and potential future earnings and cash distributions. Consequently, our equity securities may trade at prices that are higher or lower than our net asset value per equity security. If our future earnings or cash distributions are less than expected, it is likely that the market price of our equity securities will diminish. The market price of our common shares has been, and may continue to be, particularly volatile, and our shareholders may be unable to resell their shares at a profit. The market price of our common shares has been subject to fluctuation and may continue to fluctuate or decline. Between January 1, 2019 and December 31, 2021, the closing price per share of our common shares has ranged from a high of $57.02 (on December 30, 2021) to a low of $20.85 (on March 23, 2020). In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If our share price is volatile, we may become the target of securities litigation, which could result in substantial costs and divert our management’s attention and resources from our business. 27 General Risk Factors Many states and local jurisdictions are facing severe budgetary problems which may have an adverse impact on our business and financial results. Many states and jurisdictions are facing severe budgetary problems. Action that may be taken in response to these problems, such as increases in property taxes on commercial properties, changes to sales taxes or other governmental efforts, including mandating medical insurance, paid time off and severance payments for employees, could adversely impact our business and results of operations. We may incur impairment charges. We evaluate on a quarterly basis our real estate portfolio for indicators of impairment. Impairment charges reflect management’s judgment of the probability and severity of the decline in the value of real estate assets we own. These charges and provisions may be required in the future as a result of factors beyond our control, including, among other things, changes in the economic environment and market conditions affecting the value of real property assets or natural or man-made disasters. If we are required to take impairment charges, our results of operations will be adversely impacted. Inflation and rising operating expenses could reduce our cash flow and funds available for future distributions. Our stores and any other stores we acquire or develop in the future are, and will be, subject to operating risks common to real estate in general, any or all of which may negatively affect us. Our stores are subject to increases in operating expenses such as real estate, sales and other taxes, personnel costs including mandated minimum hourly wage rates and the cost of providing specific medical coverage and governmental mandated benefits to our employees, utilities, customer acquisition costs, insurance, administrative expenses and costs for repairs and maintenance. If operating expenses continue to increase without a corresponding increase in revenues, our profitability could diminish and limit our ability to make distributions to our shareholders. We cannot assure our ability to pay dividends in the future. Historically, we have paid quarterly distributions to our shareholders, and we intend to continue to pay quarterly dividends and to make distributions to our shareholders in amounts such that all or substantially all of our taxable income in each year, subject to certain adjustments, is distributed. This, along with other factors, should enable us to continue to qualify for the tax benefits accorded to a REIT under the Internal Revenue Code. We have not established a minimum dividends payment level, and all future distributions will be made at the discretion of our Board. Our ability to pay dividends will depend upon, among other factors:    the operational and financial performance of our stores; capital expenditures with respect to existing and newly acquired stores; general and administrative costs associated with our operation as a publicly-held REIT;  maintenance of our REIT status;    the amount of, and the interest rates on, our debt; the absence of significant expenditures relating to environmental and other regulatory matters; and other risk factors described in this Report. Certain of these matters are beyond our control and any significant difference between our expectations and actual results could have a material adverse effect on our cash flow and our ability to make distributions to shareholders. We may become subject to litigation or threatened litigation which may divert management’s time and attention, require us to pay damages and expenses or restrict the operation of our business. We may become subject to disputes with commercial parties with whom we maintain relationships or other parties with whom we do business. Any such dispute could result in litigation between us and the other parties. Whether or not any dispute actually proceeds to litigation, we may be required to devote significant management time and attention to its successful resolution (through litigation, 28 settlement or otherwise), which would detract from our management’s ability to focus on our business. Any such resolution could involve the payment of damages or expenses by us, which may be significant. In addition, any such resolution could involve our agreement with terms that restrict the operation of our business. There are other commercial parties, at both a local and national level, that may assert that our use of our brand names and other intellectual property conflict with their rights to use brand names, internet domains and other intellectual property that they consider to be similar to ours. Any such commercial dispute and related resolution would involve all of the risks described above, including, in particular, our agreement to restrict the use of our brand name or other intellectual property. We also could be sued for personal injuries and/or property damage occurring on our properties. We maintain liability insurance with limits that we believe are adequate to provide for the defense and/or payment of any damages arising from such lawsuits. There can be no assurance that such coverage will cover all costs and expenses from such suits. Legislative actions and changes may cause our general and administrative costs and compliance costs to increase. In order to comply with laws adopted by federal, state or local government or regulatory bodies, we may be required to increase our expenditures and hire additional personnel and additional outside legal, accounting and advisory services, all of which may cause our general and administrative and compliance costs to increase. Significant workforce-related legislative changes could increase our expenses and adversely affect our operations. Examples of possible workforce-related legislative changes include changes to an employer's obligation to recognize collective bargaining units, the process by which collective bargaining agreements are negotiated or imposed, minimum wage requirements and health care and medical and family leave mandates. In addition, changes in the regulatory environment affecting health care reimbursements, and increased compliance costs related to enforcement of federal and state wage and hour statutes and common law related to overtime, among others, could cause our expenses to increase without an ability to pass through any increased expenses through higher prices. Privacy concerns could result in regulatory changes that may harm our business. Personal privacy has become a significant issue in the jurisdictions in which we operate. Many jurisdictions in which we operate, including California and New York, have imposed restrictions and requirements on the use of personal information by those collecting such information. The regulatory framework for privacy issues is rapidly evolving and future enactment of more restrictive laws, rules or regulations and/or future enforcement actions or investigations could have a materially adverse impact on us through increased costs or restrictions on our business. Failure to comply with such laws and regulations could result in consent orders or regulatory penalties and significant legal liability, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition. Terrorist attacks, active shooter incidents and other acts of violence or war may adversely impact our performance and may affect the markets on which our securities are traded. Terrorist attacks at or against our stores, the United States or our interests, may negatively impact our operations and the value of our securities. Attacks, armed conflicts or active-shooter situations could negatively impact the demand for self-storage and increase the cost of insurance coverage for our stores, which could reduce our profitability and cash flow. Furthermore, any terrorist attacks, armed conflicts or active-shooter situations could result in increased volatility in or damage to the United States and worldwide financial markets and economy. Failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, results of operations, financial condition, and stock price. Pursuant to the Sarbanes-Oxley Act of 2002, we are required to provide a report by management on internal control over financial reporting, including management’s assessment of the effectiveness of internal control. Changes to our business will necessitate ongoing changes to our internal control systems and processes. Internal control over financial reporting may not prevent or detect misstatement because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business, results of operations, and financial condition could be materially harmed, we could fail to meet our reporting obligations, and there could be a material adverse effect on the market price of our common shares. 29 ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES As of December 31, 2021, we owned 607 self-storage properties that contain approximately 43.6 million rentable square feet and are located in 24 states and the District of Columbia. The following table sets forth summary information regarding our stores by state as of December 31, 2021. State Florida Texas California New York Arizona Illinois New Jersey Nevada Maryland Georgia Ohio Massachusetts Connecticut Virginia Pennsylvania Tennessee Colorado North Carolina South Carolina Washington D.C. Utah Rhode Island New Mexico Minnesota Indiana Total/Weighted average Number of Number of Total Rentable Stores Units Square Feet % of Total Rentable Square Feet Ending Occupancy 90 75 63 58 48 43 28 22 19 21 20 20 22 11 12 9 10 9 8 5 4 4 3 2 1 607 65,018 45,751 45,099 82,438 28,121 25,905 20,488 14,613 16,143 13,151 11,129 12,996 10,759 9,972 9,057 5,673 5,540 5,345 3,877 5,293 2,386 2,037 1,693 1,827 583 444,894 6,801,203 5,358,803 4,741,051 4,593,319 3,070,755 2,761,024 1,983,294 1,700,457 1,585,705 1,562,380 1,294,303 1,256,014 1,197,402 965,100 890,594 755,595 654,265 611,298 432,389 409,484 293,988 247,305 182,261 176,296 70,380 43,594,665 15.6 % 12.3 % 10.9 % 10.5 % 7.0 % 6.3 % 4.6 % 3.9 % 3.6 % 3.6 % 3.0 % 2.9 % 2.8 % 2.2 % 2.0 % 1.7 % 1.5 % 1.4 % 1.0 % 0.9 % 0.7 % 0.6 % 0.4 % 0.4 % 0.2 % 100.0 % 95.0 % 92.8 % 94.0 % 89.5 % 92.5 % 93.2 % 92.3 % 93.0 % 91.8 % 92.7 % 91.4 % 85.0 % 91.8 % 84.0 % 78.0 % 91.7 % 93.2 % 93.8 % 95.9 % 92.5 % 86.3 % 93.4 % 91.6 % 77.5 % 90.0 % 92.0 % We have grown by adding stores to our portfolio through acquisitions and development. The tables set forth below show the ending occupancy, annual rent per occupied square foot and total revenues for our stores owned as of December 31, 2021, and for each of the previous three years, grouped by the year during which we first owned or operated the store. Stores by Year Acquired – Ending Occupancy Year Acquired (1) 2018 and earlier 2019 2020 2021 Rentable Ending Occupancy # of Stores Square Feet 2021 2020 2019 486 34,631,955 92.9 % 93.0 % 90.2 % 2,022,899 92.6 % 87.9 % 76.6 % 1,805,317 87.6 % 83.7 % 5,134,492 87.5 % 31 21 69 — — — All stores owned as of December 31, 2021 607 43,594,663 92.0 % 92.3 % 89.5 % 30 Stores by Year Acquired - Annual Rent Per Occupied Square Foot (2) Year Acquired (1) 2018 and earlier 2019 2020 2021 All stores owned as of December 31, 2021 Stores by Year Acquired - Total Revenues (dollars in thousands) Year Acquired (1) 2018 and earlier 2019 2020 2021 All stores owned as of December 31, 2021 # of Stores Annual Rent per Occupied Square Foot 2020 2019 2021 486 $ 19.79 $ 17.89 $ 17.97 14.54 — — 607 $ 20.00 $ 18.10 $ 17.81 14.62 26.62 — 16.89 29.21 19.71 31 21 69 # of Stores 2021 2020 2019 Total Revenues 486 $ 684,058 $ 604,479 $ 593,565 11,841 — — 607 $ 773,120 $ 635,087 $ 605,406 33,572 46,822 8,668 26,271 4,337 — 31 21 69 (1) Represents the year acquired for those stores we acquired from a third party or the year placed in service for those stores we developed. (2) Determined by dividing the aggregate rental revenue for each twelve-month period by the average of the month-end occupied square feet for the period. Rental revenue includes the impact of promotional discounts, which reduce rental income over the promotional period, of $19.7 million, $15.3 million and $21.5 million for the periods ended December 31, 2021, 2020 and 2019, respectively. Unconsolidated Real Estate Ventures As of December 31, 2021, we held common ownership interests ranging from 10% to 50% in seven unconsolidated real estate ventures for an aggregate investment carrying value of $119.8 million. We hold interests in these real estate ventures with unaffiliated third parties to acquire, own and operate self-storage properties in select markets. As of December 31, 2021, these seven unconsolidated real estate ventures owned 90 self-storage properties that contained an aggregate of approximately 6.5 million net rentable square feet. The self- storage properties owned by these seven real estate ventures are managed by us and are located in Arizona (2), California (2), Connecticut (6), Florida (8), Georgia (10), Illinois (5), Maryland (2), Massachusetts (6), Minnesota (1), New Jersey (2), New York (1), North Carolina (1), Pennsylvania (1), Rhode Island (2), South Carolina (4), Texas (35) and Vermont (2). On September 5, 2018, we invested $5.0 million in exchange for 100% of the Class A preferred units of Capital Storage Partners, LLC (“Capital Storage”), a then newly formed venture that acquired 22 self-storage properties that contained an aggregate of approximately 1.7 million net rentable square feet. The stores owned by Capital Storage are located in Florida (4), Oklahoma (5) and Texas (13). The Class A preferred units earned an 11% cumulative dividend prior to any other distributions. On August 24, 2021, the Class A preferred units and all accrued and unpaid dividends were redeemed and paid, respectively. We no longer have an ownership interest in Capital Storage. Each of the seven real estate ventures has assets and liabilities that we do not consolidate in our financial statements. We account for our investments in real estate ventures using the equity method when it is determined that we have the ability to exercise significant influence over the venture. See note 5 to our consolidated financial statements for further disclosure regarding the assets, liabilities and operating results of our unconsolidated real estate ventures which we account for using the equity method of accounting. Capital Expenditures We have a capital improvement program that covers office upgrades, addition of climate control to select cubes, construction of parking areas and other store upgrades. For 2022, we anticipate spending approximately $8.5 million to $13.5 million associated with these capital 31 expenditures. For 2022, we also anticipate spending approximately $10.5 million to $15.5 million on recurring capital expenditures and approximately $27.0 million to $37.0 million on the development of new self-storage properties. ITEM 3. LEGAL PROCEEDINGS To our knowledge, no legal proceedings are pending against us, other than routine actions and administrative proceedings, and other actions not deemed material, and which, in the aggregate, are not expected to have a material adverse effect on our financial condition, results of operations or cash flows. ITEM 4. MINING SAFETY DISCLOSURES Not applicable. PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Repurchase of Parent Company Common Shares The following table provides information about repurchases of the Parent Company’s common shares during the three months ended December 31, 2021: October 1 - October 31 November 1 - November 30 December 1 - December 31 Total Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Average Price Paid Per Share Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs Total Number of Shares Purchased (1) 446 158 41 645 $ 48.96 $ 54.99 $ 54.52 $ 50.79 N/A N/A N/A N/A 3,000,000 3,000,000 3,000,000 3,000,000 (1) Represents common shares withheld by the Parent Company upon the vesting of restricted shares to cover employee tax obligations. The Parent Company adopted a share repurchase program in 2007 for up to 3.0 million of the Parent Company’s outstanding common shares. Unless terminated earlier by resolution of the Board of Trustees, the program will expire when the number of authorized shares has been repurchased. The Parent Company has made no repurchases under this program to date. Market Information for and Holders of Record of Common Shares As of December 31, 2021, there were 157 registered record holders of the Parent Company’s common shares and 24 holders (other than the Parent Company) of the Operating Partnership’s common units. These amounts do not include common shares held by brokers and other institutions on behalf of shareholders. The Parent Company’s common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol CUBE. There is no established trading market for units of the Operating Partnership. Since our initial quarter as a publicly-traded REIT, we have made regular quarterly distributions to our shareholders. Distributions to shareholders are usually taxable as ordinary income, although a portion of the distribution may be designated as a capital gain or may constitute a tax-free return of capital. Annually, we provide each of the Parent Company’s common shareholders a statement detailing the tax characterization of dividends paid during the preceding year as ordinary income, capital gain or return of capital. The characterization of the Parent Company’s dividends for 2021 consisted of a 92.6365% ordinary income distribution and a 7.3635% capital gain distribution. 32 We intend to continue to declare quarterly distributions. However, we cannot provide any assurance as to the amount or timing of future distributions. To the extent that we make distributions in excess of our earnings and profits, as computed for federal income tax purposes, these distributions will represent a return of capital, rather than a dividend, for federal income tax purposes. Distributions that are treated as a return of capital for federal income tax purposes generally will not be taxable as a dividend to a U.S. shareholder, but will reduce the shareholder’s basis in its shares (but not below zero) and therefore can result in the shareholder having a higher gain upon a subsequent sale of such shares. Return of capital distributions in excess of a shareholder’s basis generally will be treated as gain from the sale of such shares for federal income tax purposes. Recent Sales of Unregistered Equity Securities and Use of Proceeds Recent Sales of Operating Partnership Unregistered Equity Securities None. Share Performance Graph The SEC requires us to present a chart comparing the cumulative total shareholder return, assuming reinvestment of dividends, on our common shares with the cumulative total shareholder return of (i) a broad equity index and (ii) a published industry or peer group index. The following chart compares the yearly cumulative total shareholder return for our common shares with the cumulative shareholder return of companies on (i) the S&P 500 Index, (ii) the Russell 2000 Index and (iii) the FTSE NAREIT All Equity REIT Index as provided by NAREIT for the period beginning December 31, 2016 and ending December 31, 2021. For the year ended December 31, Index CubeSmart S&P 500 Index Russell 2000 Index FTSE NAREIT All Equity REIT Index 2017 2016 100.00 112.74 100.00 121.83 100.00 114.65 100.00 108.67 33 2018 116.59 116.49 102.02 104.28 2019 133.05 153.17 128.06 134.17 2020 148.58 181.35 153.62 127.30 2021 259.40 233.41 176.39 179.87 ITEM 6. [Reserved] ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Report. Some of the statements we make in this section are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this Report entitled “Forward-Looking Statements”. Certain risk factors may cause actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see the section in this Report entitled “Risk Factors”. Overview We are an integrated self-storage real estate company, and as such we have in-house capabilities in the operation, design, development, leasing, management and acquisition of self-storage properties. The Parent Company’s operations are conducted solely through the Operating Partnership and its subsidiaries. The Parent Company has elected to be taxed as a REIT for U.S. federal income tax purposes. As of December 31, 2021 and 2020, we owned (or partially owned and consolidated) 607 self-storage properties totaling approximately 43.6 million rentable square feet and 543 self-storage properties totaling approximately 38.5 million rentable square feet, respectively. As of December 31, 2021, we owned stores in the District of Columbia and the following 24 states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah and Virginia. In addition, as of December 31, 2021, we managed 651 stores for third parties (including 90 stores containing an aggregate of approximately 6.5 million net rentable square feet as part of seven separate unconsolidated real estate ventures), bringing the total number of stores we owned and/or managed to 1,258. As of December 31, 2021, we managed stores for third parties in the District of Columbia and the following 36 states: Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington and Wisconsin. We derive revenues principally from rents received from customers who rent cubes at our self-storage properties under month-to-month leases. Therefore, our operating results depend materially on our ability to retain our existing customers and lease our available self- storage cubes to new customers while maintaining and, where possible, increasing our pricing levels. In addition, our operating results depend on the ability of our customers to make required rental payments to us. Our approach to the management and operation of our stores combines centralized marketing, revenue management and other operational support with local operations teams that provide market-level oversight and management. We believe this approach allows us to respond quickly and effectively to changes in local market conditions and maximize revenues by managing rental rates and occupancy levels. We typically experience seasonal fluctuations in the occupancy levels of our stores, which are generally slightly higher during the summer months due to increased moving activity. Our results of operations may be sensitive to changes in overall economic conditions that impact consumer spending, including discretionary spending and moving trends, as well as to increased bad debts due to recessionary pressures. Adverse economic conditions affecting disposable consumer income, such as employment levels, business conditions, interest rates, tax rates, fuel and energy costs, and other matters could reduce consumer spending or cause consumers to shift their spending to other products and services. A general reduction in the level of discretionary spending or shifts in consumer discretionary spending could adversely affect our growth and profitability. We continue our focus on maximizing internal growth opportunities and selectively pursuing targeted acquisitions and developments of self-storage properties. We have one reportable segment: we own, operate, develop, manage and acquire self-storage properties. Our self-storage properties are located in major metropolitan and suburban areas and have numerous customers per store. No single customer represents a significant concentration of our revenues. Our stores in New York, Florida, Texas and California provided approximately 19%, 15%, 9% and 8%, respectively, of total revenues for the year ended December 31, 2021. 34 Summary of Critical Accounting Policies and Estimates Set forth below is a summary of the accounting policies and estimates that management believes are critical to the preparation of the consolidated financial statements included in this Report. Certain of the accounting policies used in the preparation of these consolidated financial statements are particularly important for an understanding of the financial position and results of operations presented in the historical consolidated financial statements included in this Report. A summary of significant accounting policies is also provided in note 2 to our 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. Basis of Presentation The accompanying consolidated financial statements include all of the accounts of the Company, and its majority-owned and/or controlled subsidiaries. The portion of these entities not owned by the Company is presented as noncontrolling interests as of and during the periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation. When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a variable interest entity (“VIE”), and if the Company is deemed to be the primary beneficiary, in accordance with authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) on the consolidation of VIEs. To the extent that the Company (i) has the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and (ii) has the obligation or rights to absorb the VIE's losses or receive its benefits, then the Company is considered the primary beneficiary. The Company may also consider additional factors included in the authoritative guidance, such as whether or not it is the partner in the VIE that is most closely associated with the VIE. When an entity is not deemed to be a VIE, the Company considers the provisions of additional FASB guidance to determine whether a general partner, or the general partners as a group, controls a limited partnership or similar entity when the limited partners have certain rights. The Company consolidates (i) entities that are VIEs and of which the Company is deemed to be the primary beneficiary and (ii) entities that are non-VIEs which the Company controls and in which the limited partners do not have substantive participating rights, or the ability to dissolve the entity or remove the Company without cause nor substantive participating rights. Self-Storage Properties The Company records self-storage properties at cost less accumulated depreciation. Depreciation on the buildings, improvements and equipment is recorded on a straight-line basis over their estimated useful lives, which range from five to 39 years. Expenditures for significant renovations or improvements that extend the useful life of assets are capitalized. Repairs and maintenance costs are expensed as incurred. When stores are acquired, the purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on estimated fair values. Allocations to land, building and improvements and equipment are recorded based upon their respective fair values as estimated by management. If appropriate, the Company allocates a portion of the purchase price to an intangible asset attributed to the value of in-place leases. This intangible asset is generally amortized to expense over the expected remaining term of the respective leases. Substantially all of the storage leases in place at acquired stores are at market rates, as the majority of the leases are month-to-month contracts. Accordingly, to date, no portion of the purchase price has been allocated to above- or below-market lease intangibles associated with storage leases assumed at acquisition. Above- or below- market lease intangibles associated with assumed leases in which the Company serves as lessee are recorded as an adjustment to the right-of-use asset and reflect the difference between the contractual amounts to be paid pursuant to each in-place lease and management’s estimate of fair market lease rates. These amounts are amortized over the term of the lease. To date, no intangible asset has been recorded for the value of customer relationships, because the Company does not have any concentrations of significant customers and the average customer turnover is fairly frequent. Long-lived assets classified as “held for use” are reviewed for impairment when events and circumstances such as declines in occupancy and operating results indicate that there may be an impairment. The carrying value of these long-lived assets is compared to the undiscounted future net operating cash flows, plus a terminal value, attributable to the assets to determine if the store’s basis is recoverable. If a store’s basis is not considered recoverable, an impairment loss is recorded to the extent the net carrying value of the asset exceeds the fair value. The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. There were no impairment losses recognized in accordance with these procedures during the years ended December 31, 2021, 2020 and 2019. 35 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 an asset (or group of assets), (b) the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, (c) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated, (d) the sale of the asset is probable and transfer of the asset is expected to be completed within one year, (e) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Typically these criteria are all met when the relevant asset is under contract, significant non-refundable deposits have been made by the potential buyer, the assets are immediately available for transfer and there are no contingencies related to the sale that may prevent the transaction from closing. However, each potential transaction is evaluated based on its separate facts and circumstances. Assets classified as held for sale are reported at the lesser of carrying value or fair value less estimated costs to sell and are not depreciated. The Club Operations that we acquired through our acquisition of LAACO have been classified as held for sale as of December 31, 2021. There were no stores classified as held for sale as of December 31, 2021. Investments in Unconsolidated Real Estate Ventures The Company accounts for its investments in unconsolidated real estate ventures under the equity method of accounting when it is determined that the Company has the ability to exercise significant influence over the venture. Under the equity method, investments in unconsolidated real estate ventures are recorded initially at cost, as investments in real estate entities, and subsequently adjusted for equity in earnings (losses) and cash contributions, less cash distributions and impairments. On a periodic basis, management also assesses whether there are any indicators that the carrying value of the Company’s investments in unconsolidated real estate entities may be other than temporarily impaired. An investment is impaired only if the fair value of the investment, as estimated by management, is less than the carrying value of the investment and the decline is other than temporary. To the extent impairment that is other than temporary has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the fair value of the investment, as estimated by management. Fair value is determined through various valuation techniques, including but not limited to, discounted cash flow models, quoted market values and third-party appraisals. There were no impairment losses related to the Company’s investments in unconsolidated real estate ventures recognized during the years ended December 31, 2021, 2020 and 2019. Differences between the Company's net investment in unconsolidated real estate ventures and its underlying equity in the net assets of the ventures are primarily a result of the Company acquiring interests in existing unconsolidated real estate ventures. As of December 31, 2021, the Company’s net investment in unconsolidated real estate ventures was greater than its underlying equity in the net assets of the unconsolidated real estate ventures by an aggregate of $33.6 million. There were no such differences as of December 31, 2020. These differences are amortized over the lives of the self-storage properties owned by the real estate ventures. This amortization is included in equity in earnings of real estate ventures on the Company’s consolidated statements of operations. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements affecting our business, see note 2 to the Company’s 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 stores for each period presented and should not be taken as indicative of future operations. We consider our same-store portfolio to consist of only those stores owned and operated on a stabilized basis at the beginning and at the end of the applicable years presented. We consider a store to be stabilized once it has achieved an occupancy rate that we believe, based on our assessment of market-specific data, is representative of similar self-storage assets in the applicable market for a full year measured as of the most recent January 1 and has not been significantly damaged by natural disaster or undergone significant renovation. We believe that same-store results are useful to investors in evaluating our performance because they provide information relating to changes in store-level operating performance without taking into account the effects of acquisitions, developments or dispositions. As of December 31, 2021, we owned 506 same-store properties and 101 non same- store properties. All of the non same-store properties were 2020 and 2021 acquisitions, dispositions, developed stores, stores with a significant portion of net rentable square footage taken out of service or stores that have not yet reached stabilization as defined above. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this Report. 36 The comparability of our results of operations is affected by the timing of acquisition and disposition activities during the periods reported. As of December 31, 2021, 2020 and 2019, we owned (or partially owned and consolidated) 607, 543 and 523 self-storage properties and related assets, respectively. The following table summarizes the change in number of owned stores from January 1, 2019 through December 31, 2021: Balance - January 1 Stores acquired Stores developed Stores combined (1) Balance - March 31 Stores acquired (2) Stores developed Stores combined (3) Balance - June 30 Stores acquired Stores developed Stores sold Balance - September 30 Stores acquired Stores developed Stores combined (3) Stores sold Balance - December 31 2021 2020 2019 543 — 1 (1) 543 2 2 — 547 2 — (4) 545 62 1 — (1) 607 523 1 — — 524 2 1 — 527 — — — 527 18 — (1) (1) 543 493 1 — — 494 21 2 (1) 516 2 1 — 519 5 — — (1) 523 (1) On March 3, 2021, we completed development of a store located in Arlington, VA for a total cost of approximately $26.4 million. The developed store is located adjacent to an existing consolidated joint venture store. Given their proximity to each other, the stores have been combined in our store count, as well as for operational and reporting purposes. (2) For the quarter ended June 30, 2021, includes one store acquired by a consolidated joint venture in which we hold a 50% interest. (3) On May 24, 2019 and November 10, 2020, we acquired stores located in Tempe, AZ and Merritt Island, FL for approximately $1.6 million and $3.9 million, respectively. In each case, the store acquired is located in near proximity to an existing wholly- owned store. Given their proximity to each other, each acquired store has been combined with the existing store in our store count, as well as for operational and reporting purposes. 37       Comparison of the Year Ended December 31, 2021 to the Year Ended December 31, 2020 (dollars in thousands) Same-Store Property Portfolio 2021 2020 Change % Change Non Same-Store Properties Other/ Eliminations Total Portfolio % 2021 2020 2021 2020 2021 2020 Change Change REVENUES: Rental income Other property related income (1) Property management fee income Total revenues OPERATING EXPENSES: Property operating expenses (2) NET OPERATING INCOME: $ 631,410 26,399 — 657,809 $ 557,201 24,673 — 581,874 $ 74,209 1,726 — 75,935 13.3 % $ 76,341 2,906 7.0 % — 0.0 % 79,247 13.1 % $ 23,808 1,280 — 25,088 $ — $ 54,300 31,208 85,508 — $ 707,751 83,605 31,208 822,564 44,770 27,445 72,215 $ 581,009 70,723 27,445 679,177 $ 126,742 12,882 3,763 143,387 21.8 % 18.2 % 13.7 % 21.1 % 192,650 465,159 184,939 396,935 7,711 68,224 4.2 % 17.2 % 23,457 55,790 9,601 15,487 35,997 49,511 29,094 43,121 252,104 570,460 223,634 455,543 28,470 114,917 12.7 % 25.2 % Store count Total square footage Period end occupancy Period average occupancy Realized annual rent per occupied sq. ft. (3) 506 35,490 506 35,490 93.3 % 94.7 % 93.3 % 92.9 % $ 18.78 $ 16.91 101 8,105 37 3,054 86.2 % 80.5 % 607 43,595 543 38,544 92.0 % 92.3 % Depreciation and amortization General and administrative Subtotal OTHER (EXPENSE) INCOME Interest: Interest expense on loans Loan procurement amortization expense Loss on early extinguishment of debt Equity in earnings of real estate ventures Gains from sales of real estate, net Other Total other expense NET INCOME NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS Noncontrolling interests in the Operating Partnership Noncontrolling interests in subsidiaries NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS 232,049 47,809 279,858 156,573 41,423 197,996 75,476 6,386 81,862 48.2 % 15.4 % 41.3 % (78,448) (8,168) (20,328) 25,275 32,698 (10,818) (59,789) (75,890) (2,674) (18,020) 178 6,710 (240) (89,936) (2,558) (5,494) (2,308) 25,097 25,988 (10,578) 30,147 (3.4)% (205.5)% (12.8)% 14,099.4 % 387.3 % (4,407.5)% 33.5 % 230,813 167,611 63,202 37.7 % (7,873) 542 $ 223,482 (1,825) (165) $ 165,621 (6,048) 707 $ 57,861 (331.4)% 428.5 % 34.9 % (1) Protection plan revenue, which prior to 2021 had been included in our same-store and non same-store portfolio results, is now recorded in other/eliminations. Prior periods have been adjusted for comparability. (2) For comparability purposes, current year amounts related to the expiration of certain real estate tax abatements have been excluded from the same-store portfolio results ($296k for the year ended December 31, 2021). (3) Realized annual rent per occupied square foot is computed by dividing rental income by the weighted average occupied square feet for the period. Revenues Rental income increased from $581.0 million during the year ended December 31, 2020 to $707.8 million for the year ended December 31, 2021, an increase of $126.7 million, or 21.8%. The $74.2 million increase in same-store rental income was due primarily to a 1.8% increase in average occupancy and an increase in rental rates for new and existing customers. Realized annual rent per occupied square foot increased 11.1% for 2021 compared to 2020. The remaining increase was primarily attributable to $52.5 million of additional rental income from the stores acquired or opened in 2020 and 2021 included in our non same-store portfolio. Other property related income increased from $70.7 million during the year ended December 31, 2020 to $83.6 million for the year ended December 31, 2021, an increase of $12.9 million, or 18.2%. The $1.7 million increase in same-store other property related income was mainly attributable to increases in fee revenue and merchandise sales. The increase was also due to a $5.7 million increase in customer storage protection plan participation at our owned and managed stores. Property management fee income increased from $27.4 million during the year ended December 31, 2020 to $31.2 million for the year ended December 31, 2021, an increase of $3.8 million, or 13.7%. This increase was attributable to an increase in rental income at our managed stores for the year ended December 31, 2021 as compared to the year ended December, 31, 2020. Operating Expenses Property operating expenses increased from $223.6 million during the year ended December 31, 2020 to $252.1 million for the year ended December 31, 2021, an increase of $28.5 million, or 12.7%. The $7.7 million increase in property operating expenses in the same- store portfolio was primarily due to a $3.2 million increase in property taxes and a $2.7 million increase in advertising. The remainder of the increase was primarily attributable to $13.9 million of increased expenses associated with newly acquired or developed stores. Depreciation and amortization increased from $156.6 million during the year ended December 31, 2020 to $232.0 million for the year ended December 31, 2021, an increase of $75.5 million, or 48.2%.This increase was primarily attributable to depreciation and amortization associated with newly acquired or developed stores. 38 General and administrative expenses increased from $41.4 million during the year ended December 31, 2020 to $47.8 million for the year ended December 31, 2021, an increase of $6.4 million, or 15.4%. The change was primarily attributable to increased personnel expenses resulting in part from additional employee headcount to support our growth. Other (expense) income Interest expense on loans increased from $75.9 million during the year ended December 31, 2020 to $78.4 million for the year ended December 31, 2021, an increase of $2.6 million, or 3.4%. The increase was attributable to a higher amount of outstanding debt during 2021 compared to 2020. To fund a portion of our growth, the average outstanding debt balance increased by $312.6 million to $2.35 billion during 2021 as compared to $2.04 billion during 2020. The increase in the average outstanding debt balance was offset by a decrease in the weighted average effective interest rate on our outstanding debt, which was 3.36% and 3.82% for 2021 and 2020, respectively. Loss on early extinguishment of debt was $20.3 million for the year ended December 31, 2021 compared to $18.0 million for the year ended December 31, 2020, an increase of $2.3 million. The 2021 amount was related to the early redemption of $300.0 million of outstanding 4.375% senior notes due 2023 (the “2023 Notes”). The 2020 amount was related to the early redemption of $250.0 million of outstanding 4.800% senior notes due 2022 (the “2022 Notes”) (see “Liquidity and Capital Resources” below). Equity in earnings of real estate ventures increased from $0.2 million during the year ended December 31, 2020 to $25.3 million for the year ended December 31, 2021, an increase of $25.1 million. The increase was mainly due to our portion of the gains associated with HHF’s sale of seven stores (see note 5 to our consolidated financial statements). Gains from sales of real estate, net increased from $6.7 million for the year ended December 31, 2020 to $32.7 million for the year ended December 31, 2021, an increase of $26.0 million. These gains are determined on a transactional basis and, accordingly, are not comparable across reporting periods. For the year ended December 31, 2021, the component of other (expense) income designated as other includes $15.0 million of transaction-related expenses comprised primarily of severance costs associated with the acquisition of LAACO. There were no such expenses for the year ended December 31, 2020. Comparison of the Year Ended December 31, 2020 to the Year Ended December 31, 2019 Refer to the section entitled “Results of Operations” within Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2020 for a comparison of the year ended December 31, 2020 to the year ended December 31, 2019. 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 adding back to net income (loss): interest expense on loans, loan procurement amortization expense, loss on early extinguishment of debt, acquisition related costs, equity in losses of real estate ventures, other expense, depreciation and amortization expense, general and administrative expense, and deducting from net income (loss): equity in earnings of real estate ventures, gains from sales of real estate, net, other income, gains from remeasurement of investments in real estate ventures and interest income. NOI is not a measure of performance calculated in accordance with GAAP. We use NOI as a measure of operating performance at each of our stores, and for all of our stores in the aggregate. NOI should not be considered as a substitute for operating income, net income, cash flows provided by operating, investing and financing activities, or other income statement or cash flow statement data prepared in accordance with GAAP. We believe NOI is useful to investors in evaluating our operating performance because:  it is one of the primary measures used by our management and our store managers to evaluate the economic productivity of our stores, including our ability to lease our stores, increase pricing and occupancy and control our property operating expenses; 39   it is widely used in the real estate industry and the self-storage industry to measure the performance and value of real estate assets without regard to various items included in net income that do not relate to or are not indicative of operating performance, such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets; and it helps our investors to meaningfully compare the results of our operating performance from period to period by removing the impact of our capital structure (primarily interest expense on our outstanding indebtedness) and depreciation of our basis in our assets from our operating results. There are material limitations to using a measure such as NOI, including the difficulty associated with comparing results among more than one company and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income. We compensate for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with our analysis of net income. NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues, operating income and net income. FFO Funds from operations (“FFO”) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. The April 2002 National Policy Bulletin of the National Association of Real Estate Investment Trusts, as amended and restated, defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate and related impairment charges, plus real estate depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Management uses FFO as a key performance indicator in evaluating the operations of our stores. Given the nature of our business as a real estate owner and operator, we consider FFO a key measure of our operating performance that is not specifically defined by accounting principles generally accepted in the United States. We believe that FFO is useful to management and investors as a starting point in measuring our operational performance because FFO excludes various items included in net income that do not relate to or are not indicative of our operating performance such as gains (or losses) from sales of real estate, gains from remeasurement of investments in real estate ventures, impairments of depreciable assets and depreciation, which can make periodic and peer analyses of operating performance more difficult. Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to further understand our performance, FFO should be compared with our reported net income and considered in addition to cash flows computed in accordance with GAAP, as presented in our consolidated financial statements. FFO, as adjusted FFO, as adjusted represents FFO as defined above, excluding the effects of acquisition related costs, gains or losses from early extinguishment of debt, and non-recurring items, which we believe are not indicative of the Company’s operating results. We present FFO, as adjusted because we believe it is a helpful measure in understanding our results of operations insofar as we believe that the items noted above that are included in FFO, but excluded from FFO, as adjusted are not indicative of our ongoing operating results. We also believe that the analyst community considers our FFO, as adjusted (or similar measures using different terminology) when evaluating us. Because other REITs or real estate companies may not compute FFO, as adjusted in the same manner as we do, and may use different terminology, our computation of FFO, as adjusted may not be comparable to FFO, as adjusted reported by other REITs or real estate companies. 40 The following table presents a reconciliation of net income to FFO and FFO, as adjusted, for the years ended December 31, 2021 and 2020: Year Ended December 31, 2020 2021 Net income attributable to the Company’s common shareholders $ 223,482 $ 165,621 Add (deduct): Real estate depreciation and amortization: Real property Company’s share of unconsolidated real estate ventures Gains from sales of real estate, net (1) Noncontrolling interests in the Operating Partnership FFO attributable to common shareholders and OP unitholders Add (deduct): Loss on early repayment of debt (2) Transaction-related expenses (3) Loan forgiveness income (4) Bridge loan fee (5) FFO, as adjusted, attributable to common shareholders and OP unitholders Weighted average diluted shares outstanding Weighted average diluted units outstanding Weighted average diluted shares and units outstanding $ $ 226,599 8,510 (56,181) 7,873 410,283 $ 152,897 7,430 (6,710) 1,825 321,063 20,884 14,986 (1,546) 4,000 448,607 $ 205,009 7,117 212,126 18,020 — — — 339,083 194,943 2,137 197,080 (1) The year ended December 31, 2021 includes $23.5 million of gains from sale of real estate, net that are included in the Company’s share of equity in earnings of real estate ventures. (2) For the year ended December 31, 2021, loss on early extinguishment of debt relates to a $20.0 million prepayment premium and a $0.3 million write-off of unamortized loan procurement costs associated with the Operating Partnership’s redemption, in full, of its 2023 Notes on December 23, 2021, as well as $0.6 million of costs that are included in the Company’s share of equity in earnings of real estate ventures. For the year ended December 31, 2020, loss on early extinguishment of debt relates to a $17.6 million prepayment premium and a $0.4 million write-off of unamortized loan procurement costs associated with the Operating Partnership’s redemption, in full, of its 2022 Notes on October 30, 2020. (3) Transaction-related expenses include severance expenses ($14.8 million) and other transaction expenses ($0.2 million). The predecessor company, LAACO, Ltd., entered into severance agreements with certain employees, including members of their executive team, prior to our acquisition of LAACO, Ltd. on December 9, 2021. These costs were known to us and the assumption of the obligation to make these payments post-closing was contemplated in our net consideration paid in the transaction. In accordance with GAAP, and based on the specific details of the arrangements with the employees prior to closing, these costs are considered post-combination compensation expenses. We expect that an additional $10.3 million in severance costs will be expensed during the six months ended June 30, 2022. Transaction-related expenses are included in the component of other income (expense) designated as other. (4) The Company assumed a Paycheck Protection Program loan in conjunction with the LAACO transaction. This loan was subsequently forgiven by the Small Business Administration and the associated income is included in the component of other income (expense) designated as other. (5) Relates to a nonrefundable commitment fee to obtain bridge financing in the event that the Company's November 2021 senior note offerings were delayed, or could not be executed, in advance of the LAACO transaction. Upon issuance of the senior notes, the bridge financing commitment expired and the fee was fully amortized. The amortization of this fee is included in loan procurement amortization expense. 41 Cash Flows Comparison of the Year Ended December 31, 2021 to the Year Ended December 31, 2020 A comparison of cash flow related to operating, investing and financing activities for the years ended December 31, 2021 and 2020 is as follows: Net cash provided by (used in): Operating activities Investing activities Financing activities Year Ended December 31, 2021 2020 (in thousands) Change 449,185 $ 351,033 $ $ 98,152 $ (1,852,668) $ (511,441) $ (1,341,227) $ 1,410,572 $ 108,196 $ 1,302,376 Cash provided by operating activities increased from $351.0 million for the year ended December 31, 2020 to $449.2 million for the year ended December 31, 2021, reflecting an increase of $98.2 million. Our increased cash flow from operating activities was primarily attributable to stores acquired and developed during 2020 and 2021 and increased net operating income levels in the same-store portfolio in the 2021 period as compared to the corresponding 2020 period. Cash used in investing activities increased from $511.4 million for the year ended December 31, 2020 to $1,852.7 million for the year ended December 31, 2021, reflecting an increase of $1,341.2 million. The change was primarily driven by the $1,679.0 million of cash used for the acquisition of LAACO in 2021 offset by a decrease in cash used for acquisitions of other storage properties compared to the 2020 period. Excluding the storage properties acquired through the acquisition of LAACO, cash used during the year ended December 31, 2021 included the acquisition of nine stores (including the acquisition of a 50% membership interest in a consolidated joint venture that owns a single store) for an aggregate net purchase price of $152.8 million. Cash used during the year ended December 31, 2020 included the acquisition of 21 stores for an aggregate net purchase price of $406.4 million, net of $154.4 million of assumed debt and $175.1 million of OP units issued. Additionally, cash distributed from real estate ventures increased from $6.2 million for the year ended December 31, 2020 to $66.6 million for the year ended December 31, 2021, an increase of $60.4 million, primarily resulting from the distribution of proceeds received from the seven storage properties sold by our HHF real estate venture (see note 5 to the Company’s consolidated financial statements) during 2021. Cash provided by financing activities was $108.2 million for the year ended December 31, 2020 compared to $1,410.6 million for the year ended December 31, 2021, reflecting an increase of $1,302.4 million. During the years ended December 31, 2021 and 2020, we received net proceeds from unsecured senior notes of $1,043.4 million and $445.8 million, respectively, reflecting an increase of $597.6 million. There was also an increase of $844.9 million in proceeds received from the issuance of common shares during the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily as a result of our underwritten offering of 15.5 million common shares to partially fund the LAACO acquisition. These cash inflows were offset by $87.3 million of principal payments made on mortgage loans during the year ended December 31, 2021 compared to $46.1 million during the year ended December 31, 2020, reflecting an increase of $41.2 million that was primarily attributable to the repayment of LAACO’s outstanding long-term debt at closing. Comparison of the Year Ended December 31, 2020 to the Year Ended December 31, 2019 Refer to the section entitled “Cash Flows” within Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2020 for a comparison of the year ended December 31, 2020 to the year ended December 31, 2019. Liquidity and Capital Resources Liquidity Overview Our cash flow from operations has historically been one of our primary sources of liquidity used to fund debt service, distributions and capital expenditures. We derive substantially all of our revenue from customers who lease space at our stores and fees earned from managing stores. Therefore, our ability to generate cash from operations is dependent on the rents that we are able to charge and collect from our customers. We believe that the properties in which we invest, self-storage properties, are less sensitive than other real estate product types to near-term economic downturns. However, prolonged economic downturns will adversely affect our cash flows from operations. 42 In order to qualify as a REIT for federal income tax purposes, the Parent Company is required to distribute at least 90% of its REIT taxable income, excluding capital gains, to its shareholders on an annual basis and must pay federal income tax on undistributed income to the extent it distributes less than 100% of its REIT taxable income. The nature of our business, coupled with the requirement that we distribute a substantial portion of our income on an annual basis, will cause us to have substantial liquidity needs over both the short and long term. Our short-term liquidity needs consist primarily of funds necessary to pay operating expenses associated with our stores, refinancing of certain mortgage indebtedness, interest expense and scheduled principal payments on debt, expected distributions to limited partners and shareholders, capital expenditures and the development of new stores. These funding requirements will vary from year to year, in some cases significantly. In the 2022 fiscal year, we expect recurring capital expenditures to be approximately $10.5 million to $15.5 million, planned capital improvements and store upgrades to be approximately $8.5 million to $13.5 million and costs associated with the development of new stores to be approximately $27.0 million to $37.0 million. Our currently scheduled principal payments on debt are approximately $2.4 million in 2022. Our most restrictive financial covenants limit the amount of additional leverage we can add; however, we believe cash flows from operations, access to equity financing, including through our at-the-market equity program and available borrowings under our Revolver (defined below) provide adequate sources of liquidity to enable us to execute our current business plan and remain in compliance with our covenants. Our liquidity needs beyond 2022 consist primarily of contractual obligations which include repayments of indebtedness at maturity, as well as potential discretionary expenditures such as (i) non-recurring capital expenditures; (ii) redevelopment of operating stores; (iii) acquisitions of additional stores; and (iv) development of new stores. We will have to satisfy the portion of our needs not covered by cash flow from operations through additional borrowings, including borrowings under our Revolver, sales of common or preferred shares of the Parent Company and common or preferred units of the Operating Partnership and/or cash generated through store dispositions and joint venture transactions. We believe that, as a publicly traded REIT, we will have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional debt and the issuance of additional equity. However, we cannot provide any assurance that this will be the case. Our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. In addition, dislocation in the United States debt markets may significantly reduce the availability and increase the cost of long-term debt capital, including conventional mortgage financing and commercial mortgage-backed securities financing. There can be no assurance that such capital will be readily available in the future. Our ability to access the equity capital markets will be dependent on a number of factors as well, including general market conditions for REITs and market perceptions about us. As of December 31, 2021, we had approximately $11.1 million in available cash and cash equivalents. In addition, we had approximately $539.5 million of availability for borrowings under our Revolver. Unsecured Senior Notes On November 30, 2021, we issued $550.0 million in aggregate principal amount of unsecured senior notes due December 15, 2028, which bear interest at a rate of 2.250% per annum (the “2028 Notes”) and $500.0 million in aggregate principal amount of unsecured senior notes due February 15, 2032, which bear interest at a rate of 2.500% per annum (the “2032 Notes”). The 2028 Notes were priced at 99.515% of the principal amount to yield 2.325% at maturity, and the 2032 Notes were priced at 99.219% of the principal amount to yield 2.587% at maturity. Net proceeds from the offering were used to fund a portion of the purchase price for the acquisition of LAACO. The remaining proceeds from the offerings were used to repay, in full, $300.0 million of outstanding 4.375% senior notes due in December 2023 (the “2023 Notes”) as well as for working capital and other general corporate purposes. 43 Our unsecured senior notes are summarized as follows (collectively referred to as the “Senior Notes”): Unsecured Senior Notes $300M 4.375% Guaranteed Notes due 2023 (1) (2) $300M 4.000% Guaranteed Notes due 2025 (3) $300M 3.125% Guaranteed Notes due 2026 $550M 2.250% Guaranteed Notes due 2028 $350M 4.375% Guaranteed Notes due 2029 $350M 3.000% Guaranteed Notes due 2030 $450M 2.000% Guaranteed Notes due 2031 $500M 2.500% Guaranteed Notes due 2032 Principal balance outstanding Less: Discount on issuance of unsecured senior notes, net Less: Loan procurement costs, net Total unsecured senior notes, net December 31, Effective 2021 2020       Interest Rate Issuance Date Maturity Date $ (in thousands) — 300,000 300,000 550,000 350,000 350,000 450,000 500,000 2,800,000 (13,455) (18,336) $ 300,000 300,000 300,000 — 350,000 350,000 450,000 — 2,050,000 (7,470) (12,158) $ 2,768,209 $ 2,030,372 4.33 % Various (2) 3.99 % Various (3) 3.18 % Aug-16 2.33 % Nov-21 Jan-19 4.46 % Oct-19 3.04 % 2.10 % Oct-20 2.59 % Nov-21 Dec-23 Nov-25 Sep-26 Dec-28 Feb-29 Feb-30 Feb-31 Feb-32 (1) On December 23, 2021, the Operating Partnership redeemed, in full, the 2023 Notes, with a portion of the net proceeds from the 2028 Notes and 2032 Notes issued on November 30, 2021. In connection with the redemption of the 2023 Notes, we recognized a loss on early debt extinguishment of $20.3 million, of which $20.0 million represents a prepayment premium and $0.3 million represents the write-off of unamortized loan procurement costs. (2) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.375% senior notes due 2023, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.375% senior notes due December 15, 2023 issued on December 17, 2013. The $50.0 million and $250.0 million tranches were priced at 105.040% and 98.995%, respectively, of the principal amount to yield 3.495% and 4.501%, respectively, to maturity. The combined weighted average effective interest rate of the 2023 notes is 4.330%. (3) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.000% senior notes due 2025, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.000% senior notes due November 15, 2025 issued on October 26, 2015. The $50.0 million and $250.0 million tranches were priced at 101.343% and 99.735%, respectively, of the principal amount to yield 3.811% and 4.032%, respectively, to maturity. The combined weighted average effective interest rate of the 2025 notes is 3.994%. The indenture under which the Senior Notes were issued restricts the ability of the Operating Partnership and its subsidiaries to incur debt unless the Operating Partnership and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more than 1.5:1.0 after giving effect to the incurrence of the debt. The indenture also restricts the ability of the Operating Partnership and its subsidiaries to incur secured debt unless the Operating Partnership and its consolidated subsidiaries comply with a secured debt leverage ratio not to exceed 40% after giving effect to the incurrence of the debt. The indenture also contains other financial and customary covenants, including a covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Operating Partnership and its consolidated subsidiaries. As of and for the year ended December 31, 2021, the Operating Partnership was in compliance with all of the financial covenants under the Senior Notes. Revolving Credit Facility and Unsecured Term Loans On December 9, 2011, we entered into a credit agreement (the “Credit Facility”). On June 19, 2019, we amended and restated, in its entirety, the Credit Facility (the “Amended and Restated Credit Facility”) which, subsequent to the amendment and restatement, is comprised of a $750.0 million unsecured revolving facility (the “Revolver”) maturing on June 19, 2024. Under the Amended and Restated Credit Facility, pricing on the Revolver is dependent upon our unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under the Revolver are priced at 1.10% over LIBOR, inclusive of a facility fee of 0.15%. As of December 31, 2021, borrowings under the Revolver had an interest rate of 1.20%. Additionally, as of December 31, 2021, $539.5 million was available for borrowing under the Revolver. The available balance under the Revolver is reduced by an outstanding letter of credit of $0.6 million. 44                                                  Under the Amended and Restated Credit Facility, our ability to borrow under the Revolver is subject to ongoing compliance with certain financial covenants which include, among other things, (1) a maximum total indebtedness to total asset value of 60.0%, and (2) a minimum fixed charge coverage ratio of 1.5:1.0. As of and for the year ended December 31, 2021, the Operating Partnership was in compliance with all of its financial covenants. On June 20, 2011, we entered into an unsecured term loan agreement (the “Term Loan Facility”), which was subsequently amended on June 18, 2013 and August 5, 2014, consisting of, among other things, a $100.0 million unsecured term loan that was scheduled to mature in January 2020. On June 19, 2019, we used an initial advance at closing of the Amended and Restated Credit Facility to repay all of the outstanding indebtedness under the Term Loan Facility. Unamortized loan procurement costs of $0.1 million were written off in conjunction with the repayment. Issuance of Common Shares On November 19, 2021 we closed an underwritten offering of 15.5 million common shares at a public offering price of $51.00 per share, resulting in net proceeds of $765.6 million, after deducting offering costs. We maintain an at-the-market equity program that enables us to offer and sell up to 60.0 million common shares through sales agents pursuant to equity distribution agreements (the “Equity Distribution Agreements”). Our sales activity under the program for the years ended December 31, 2021, 2020 and 2019 is summarized below: Number of shares sold Average sales price per share Net proceeds after deducting offering costs   $   $ 2021 For the year ended December 31, 2020 (dollars and shares in thousands, except per share amounts) 5,899 33.64 196,304 4,982 40.57   $ 199,977   $ 3,627 33.69   $ 120,727   $ 2019 We used proceeds from sales of common shares under the program during the years ended December 31, 2021, 2020 and 2019 to fund the acquisition and development of storage properties and for general corporate purposes. As of December 31, 2021, 2020 and 2019, 5.9 million common shares, 10.9 million common shares and 4.6 million common shares, respectively, remained available for issuance under the Equity Distribution Agreements. Recent Developments Subsequent to December 31, 2021, we acquired a self-storage property located in Maryland for $32.0 million. Other Material Changes in Financial Position Selected Assets Storage properties, net Investment in real estate ventures, at equity Assets held for sale Other assets, net Selected Liabilities Unsecured senior notes, net Revolving credit facility Mortgage loans and notes payable, net Accounts payable, accrued expenses and other liabilities Distributions payable December 31, 2021 2020 (in thousands) $ $ $ $ 6,097,670 119,751 49,313 265,705 2,768,209   209,900   167,676   199,985   97,417   $ $ 4,505,814 92,071 — 170,753 2,030,372   117,800   216,504   159,140   68,301   Change 1,591,856 27,680 49,313 94,952 737,837   92,100   (48,828)   40,845   29,116   Noncontrolling interests in the Operating Partnership $ 108,220   $ 249,414   $ (141,194)   Storage properties, net increased $1.59 billion from December 31, 2020 to December 31, 2021, primarily as a result of the acquisition of 66 storage properties, additions and improvements to storage properties, and development costs incurred during the year. 45                                                       Investment in real estate ventures, at equity increased $27.7 million from December 31, 2020 to December 31, 2021, primarily as the result of the acquisition of two 50% joint venture interests as part of the acquisition of LAACO. Assets held for sale increased $49.3 million from December 31, 2020 to December 31, 2021 as the result of classifying the Club Operations acquired in the LAACO acquisition as held for sale at December 31, 2021. Other assets, net increased $95.0 million from December 31, 2020 to December 31, 2021, primarily due to the value assigned to the in- place leases at the 66 storage properties acquired during the year as well as assets related to deferred compensation for former LAACO executives. Unsecured senior notes, net increased $737.8 million from December 31, 2020 to December 31, 2021 as a result of the issuance of the 2028 Notes and 2032 Notes on November 30, 2021 offset by the redemption of the 2023 Notes on December 23, 2021. Revolving credit facility increased $92.1 million from December 31, 2020 to December 31, 2021 primarily as a result of borrowings used to fund the acquisition of 66 storage properties, additions and improvements to storage properties, and development costs incurred during the year. Mortgage loans and notes payable, net decreased $48.8 million from December 31, 2020 to December 31, 2021 primarily due to the repayment on March 1, 2021 of two mortgage loans totaling $43.9 million. Accounts payable, accrued expenses and other liabilities increased $40.8 million from December 31, 2020 to December 31, 2021 primarily due to severance and deferred compensation obligations owed to former employees of LAACO. Distributions payable increased $29.1 million from December 31, 2020 to December 31, 2021 primarily due to an increase in common shares outstanding and an increase in the annualized dividend declared from $1.36 per share to $1.72 per share. Noncontrolling interests in the Operating Partnership decreased $141.2 million from December 31, 2020 to December 31, 2021, primarily due to the redemption of 5.5 million OP Units during the year ended December 31, 2021. Off-Balance Sheet Arrangements We do not have off-balance sheet arrangements, financings or other relationships with other unconsolidated entities (other than our co- investment partnerships) or other persons, also known as variable interest entities not previously discussed. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our future income, cash flows and fair values relevant to financial instruments depend upon prevailing market interest rates. Market Risk Our investment policy relating to cash and cash equivalents is to preserve principal and liquidity while maximizing the return through investment of available funds. Effect of Changes in Interest Rates on our Outstanding Debt Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we may choose to manage our exposure to fluctuations in market interest rates for a portion of our borrowings through the use of derivative financial instruments such as interest rate swaps or caps to mitigate our interest rate risk on a related financial instrument or to effectively lock the interest rate on a portion of our variable-rate debt. The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market interest rates. The range of changes chosen reflects our view of changes which are reasonably possible over a one-year period. Market values are the present value of projected future cash flows based on the market interest rates chosen. As of December 31, 2021 our consolidated debt consisted of $2.96 billion of outstanding mortgage loans and notes payable and unsecured senior notes that are subject to fixed rates. Additionally, as of December 31, 2021, there were $209.9 million of outstanding unsecured credit facility borrowings subject to floating rates. Changes in market interest rates have different impacts on the fixed- and 46 variable-rate portions of our debt portfolio. A change in market interest rates on the fixed portion of the debt portfolio impacts the net financial instrument position, but has no impact on interest incurred or cash flows. A change in market interest rates on the variable portion of the debt portfolio impacts the interest incurred and cash flows, but does not impact the net financial instrument position. If market interest rates on our variable-rate debt increase by 100 basis points, the increase in annual interest expense on our variable-rate debt would decrease future earnings and cash flows by approximately $2.1 million a year. If market interest rates on our variable-rate debt decrease by 100 basis points, the decrease in interest expense on our variable-rate debt would increase future earnings and cash flows by approximately $2.1 million a year. If market interest rates increase by 100 basis points, the fair value of our outstanding fixed-rate mortgage debt and unsecured senior notes would decrease by approximately $190.7 million. If market interest rates decrease by 100 basis points, the fair value of our outstanding fixed-rate mortgage debt and unsecured senior notes would increase by approximately $205.9 million. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Financial statements required by this item appear with an Index to Financial Statements and Schedules, starting on page F-1 of this Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES Controls and Procedures (Parent Company) Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this Report, the Parent Company carried out an evaluation, under the supervision and with the participation of its management, including its chief executive officer and chief financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act). Based on that evaluation, the Parent Company’s chief executive officer and chief financial officer have concluded that the Parent Company’s disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information required to be disclosed by the Parent Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Parent Company’s management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Changes in Internal Control Over Financial Reporting There has been no change in the Parent Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting. Management’s Report on Internal Control Over Financial Reporting Management’s report on internal control over financial reporting of the Parent Company is set forth on page F-2 of this Report, and is incorporated herein by reference. The effectiveness of the Parent Company’s internal control over financial reporting as of December 31, 2021 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its report which is included herein. Controls and Procedures (Operating Partnership) Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this Report, the Operating Partnership carried out an evaluation, under the supervision and with the participation of its management, including the Operating Partnership’s chief executive officer and chief financial officer, of the 47 effectiveness of the design and operation of the Operating Partnership’s disclosure controls and procedures (as defined in Rules 13a- 15(e) under the Exchange Act). Based on that evaluation, the Operating Partnership’s chief executive officer and chief financial officer have concluded that the Operating Partnership’s disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information required to be disclosed by the Operating Partnership in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Operating Partnership’s management, including the Operating Partnership’s chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Changes in Internal Control Over Financial Reporting There has been no change in the Operating Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting. Management’s Report on Internal Control Over Financial Reporting Management’s report on internal control over financial reporting of the Operating Partnership is set forth on page F-3 of this Report, and is incorporated herein by reference. The effectiveness of the Operating Partnership’s internal control over financial reporting as of December 31, 2021 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its report which is included herein. ITEM 9B. OTHER INFORMATION Not applicable. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. ITEM 10. TRUSTEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE PART III We have adopted a Code of Ethics for all of our employees, officers and trustees, including our principal executive officer and principal financial officer, which is available on our website at www.cubesmart.com. We intend to disclose any amendment to, or a waiver from, a provision of our Code of Ethics on our website within four business days following the date of the amendment or waiver. The remaining information required by this item regarding trustees, executive officers and corporate governance is hereby incorporated by reference to the material appearing in the Parent Company’s Proxy Statement for the Annual Shareholders Meeting to be held in 2022 (the “Proxy Statement”) under the captions “Proposal 1: Election of Trustees,” “Executive Officers,” “Meetings and Committees of the Board of Trustees,” and “Shareholder Proposals and Nominations for the 2022 Annual Meeting.” The information required by this item regarding compliance with Section 16(a) of the Exchange Act is hereby incorporated by reference to the material appearing in the Parent Company’s Proxy Statement under the caption “Delinquent Section 16(a) Reports.” ITEM 11. EXECUTIVE COMPENSATION The information required by this item is hereby incorporated by reference to the material appearing in the Parent Company’s Proxy Statement under the captions “Compensation Committee Report,” “Meetings and Committees of the Board of Trustees Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” “Executive Compensation,” “Severance Plan and Potential Payments Upon Termination or Change in Control,” and “Trustee Compensation.” 48 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS The following table sets forth certain information regarding our equity compensation plans as of December 31, 2021. Plan Category Equity compensation plans approved by shareholders Equity compensation plans not approved by shareholders Total Number of securities to Weighted average be issued upon exercise exercise price of of outstanding options, outstanding options,      warrants and rights       warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a)) (c) (a) 2,263,804 $ — 2,263,804 $ 29.63 (1) — 29.63 2,448,384 — 2,448,384 (1) This number reflects the weighted average exercise price of outstanding options and has been calculated exclusive of outstanding restricted unit awards. The information regarding security ownership of certain beneficial owners and management required by this item is hereby incorporated by reference to the material appearing in the Parent Company’s Proxy Statement under the caption “Security Ownership of Management” and “Security Ownership of Beneficial Owners.” ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND TRUSTEE INDEPENDENCE The information required by this item is hereby incorporated by reference to the material appearing in the Parent Company’s Proxy Statement under the captions “Corporate Governance - Independence of Trustees,” “Policies and Procedures Regarding Review, Approval or Ratification of Transactions With Related Persons,” and “Transactions With Related Persons.” ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item is hereby incorporated by reference to the material appearing in the Parent Company’s Proxy Statement under the captions “Audit Committee Matters - Fees Paid to Our Independent Registered Public Accounting Firm” and “- Audit Committee Pre-Approval Policies and Procedures.” ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES PART IV (a) Documents filed as part of this report: 1. Financial Statements. The response to this portion of Item 15 is submitted as a separate section of this report. 2. Financial Statement Schedules. The response to this portion of Item 15 is submitted as a separate section of this report. 3. Exhibits. The list of exhibits filed with this Report is set forth in response to Item 15(b). The required exhibit index has been filed with the exhibits. (b) Exhibits. The following documents are filed as exhibits to this report: 3.1* Articles of Amendment to the Declaration of Trust of CubeSmart, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on May 28, 2015. 49 3.2* 3.3* 3.4* 3.5* 3.6* 3.7* 3.8* 3.9* 3.10* 3.11* 3.12* 4.1* 4.2* 4.3* 4.4* 4.5* 4.6* Articles of Restatement of the Declaration of Trust of CubeSmart, incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed on May 28, 2015. Articles Supplementary to Declaration of Trust of CubeSmart classifying and designating CubeSmart’s 7.75% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, incorporated by reference to Exhibit 3.3 to CubeSmart’s Form 8-A, filed on October 31, 2011. Articles of Amendment to the Declaration of Trust of CubeSmart, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on November 3, 2016. Certificate of Limited Partnership of U-Store-It, L.P., incorporated by reference to Exhibit 3.1 to CubeSmart, L.P.’s Registration Statement on Form 10, filed on July 15, 2011. Amendment No. 1 to Certificate of Limited Partnership of CubeSmart, L.P., dated September 14, 2011, incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K, filed on September 16, 2011. Second Amended and Restated Agreement of Limited Partnership of U-Store-It, L.P. dated as of October 27, 2004, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on November 2, 2004. Amendment No. 1 to Second Amended and Restated Agreement of Limited Partnership of CubeSmart, L.P. dated as of September 14, 2011, incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K, filed on September 16, 2011. Amendment No. 2 to Second Amended and Restated Agreement of Limited Partnership of CubeSmart, L.P. dated as of November 2, 2011, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed on November 2, 2011. Class C Unit Supplement No. 1 to Second Amended and Restated Agreement of Limited Partnership of CubeSmart, L.P. dates as of April 12, 2017, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on April 18, 2017. Articles of Amendment to the Declaration of Trust of CubeSmart, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on June 2, 2017. Fourth Amended and Restated Bylaws of CubeSmart, effective August 5, 2020, incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed on August 7, 2020. Form of Common Share Certificate, incorporated by reference to Exhibit 4.1 to Amendment No. 3 to the Company’s Registration Statement on Form S-11, filed on October 20, 2004, File No. 333-117848. Form of Certificate for CubeSmart’s 7.75% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, incorporated by reference to Exhibit 4.1 to CubeSmart’s Form 8-A, filed on October 31, 2011. Indenture, dated as of September 16, 2011, among CubeSmart, L.P., CubeSmart and U.S. Bank National Association, incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-3, filed on September 16, 2011. First Supplemental Indenture, dated as of June 26, 2012, among the Company, the Operating Partnership and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on June 26, 2012. Second Supplemental Indenture, dated as of December 17, 2013, among the Company, the Operating Partnership and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on December 17, 2013. Third Supplemental Indenture, dated as of October 26, 2015, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on October 26, 2015. 50 4.7* 4.8* 4.9* 4.10* 4.11* 4.12* 4.13* 4.14* 4.15* 4.16* 4.17* 4.18* 4.19* 4.20* 4.21* 4.22* 4.23* Form of $250 million aggregate principal amount of 4.000% senior note due November 15, 2025, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on October 26, 2015. Fourth Supplemental Indenture, dated as of August 15, 2016, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on August 15, 2016. Form of $300 million aggregate principal amount of 3.125% senior notes due September 1, 2026, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on August 15, 2016. Form of CubeSmart Notation of Guarantee, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on August 15, 2016. Form of $50 million aggregate principal amount of 4.000% senior notes due November 15, 2025, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on April 5, 2017. Fifth Supplemental Indenture, dated as of April 4, 2017, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K, filed on April 5, 2017. Form of $350 million aggregate principal amount of 4.375% senior notes due February 15, 2029, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on January 30, 2019. Sixth Supplemental Indenture, dated as of January 30, 2019, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on January 30, 2019. Form of $350 million aggregate principal amount of 3.000% senior notes due February 15, 2030, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on October 11, 2019. Form of CubeSmart Notation of Guarantee, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on October 11, 2019. Seventh Supplemental Indenture, dated of as October 11, 2019, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on October 11, 2019. Form of $450 million aggregate principal amount of 2.000% senior notes due February 15, 2031, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on October 6, 2020. Form of CubeSmart Guarantee, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8- K, filed on October 6, 2020. Eighth Supplemental Indenture, dated of as October 6, 2020, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on October 6, 2020. Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, incorporated herein by reference to Exhibit 4.23 to the Company’s Annual Report on Form 10-K, filed on February 21, 2020. Ninth Supplemental Indenture, dated of as November 30, 2021, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K, filed on November 30, 2021. Form of $550 million aggregate principal amount of 2.25% senior notes due December 15, 2028, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on November 30, 2021. 51 4.24* 4.25* 4.26* 4.27* 10.1*† 10.2*† 10.3*† Form of CubeSmart Guarantee, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8- K, filed on November 30, 2021. Form of $500 million aggregate principal amount of 2.50% senior notes due February 15, 2032, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on November 30, 2021. Form of CubeSmart Guarantee, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8- K, filed on November 30, 2021. Tenth Supplemental Indenture, dated of as November 30, 2021, among CubeSmart, CubeSmart, L.P. and U.S. Bank National Association, incorporated herein by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K, filed on November 30, 2021. Indemnification Agreement, dated as of October 27, 2004, by and among U-Store-It Trust, U-Store-It, L.P. and David J. LaRue (substantially identical agreements have been entered into with Christopher P. Marr, Timothy M. Martin, Jeffrey P. Foster, Joel D. Keaton, Piero Bussani, Dorothy Dowling, John W. Fain, Marianne M. Keler, John F. Remondi, Jeffrey F. Rogatz and Deborah R. Salzberg), incorporated by reference to Exhibit 10.19 to the Company’s Current Report on Form 8- K, filed on November 2, 2004. Form of Restricted Share Agreement for Non-Employee Trustees under the U-Store-It Trust 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.83 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, filed on February 29, 2008. Form of Nonqualified Share Option Agreement under the U-Store-It Trust 2004 Equity Incentive Plan, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, filed on May 10, 2007. 10.4*† Form of Restricted Share Agreement under the U-Store-It Trust 2004 Equity Incentive Plan, incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, filed on May 10, 2007. 10.5*† 10.6*† 10.7*† 10.8*† 10.9*† 10.10*† 10.11*† 10.12*† Form of Nonqualified Share Option Agreement under the U-Store-It Trust 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on January 25, 2008. 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. U-Store-It Trust Trustees Deferred Compensation Plan, amended and restated effective January 1, 2009, incorporated by reference to Exhibit 10.78 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, filed on March 2, 2009. U-Store-It Trust Executive Deferred Compensation Plan, amended and restated effective January 1, 2009, incorporated by reference to Exhibit 10.79 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, filed on March 2, 2009. U-Store-It Trust Deferred Trustees Plan, effective as of May 31, 2005, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on June 6, 2005. Form of Restricted Share Agreement under the CubeSmart 2007 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.42 to the Company’s Annual Report on Form 10-K, filed on February 28, 2013. Form of Non-Qualified Share Option Agreement under the CubeSmart 2007 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.43 to the Company’s Annual Report on Form 10-K, filed on February 28, 2013. Form of 2012 Performance-Vested Restricted Share Unit Award Agreement under the CubeSmart 2007 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on January 31, 2012. 52 10.13*† 10.14*† 10.15* 10.16*† 10.17*† Form of Restricted Share Unit Award Agreement (2-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-K, filed on February 28, 2013. Form of Performance-Vested Restricted Share Unit Award Agreement under the CubeSmart 2007 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.48 to the Company’s Annual Report on Form 10-K, filed on February 28, 2013. Waiver of Ownership Limitation, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10- Q for the quarter ended March 31, 2013, filed on May 6, 2013. Advisory Agreement, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, filed on November 8, 2013. Form of Non-Qualified Share Option Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.58 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014. 10.18*† Form of Non-Qualified Share Option Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.59 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014. 10.19*† Form of Performance Share Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.60 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014. 10.20*† Form of Performance Share Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.61 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014. 10.21*† Form of Restricted Share Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.63 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014. 10.22*† Form of Restricted Share Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, incorporated by reference to Exhibit 10.64 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014. 10.23*† Form of Restricted Share Award Agreement (5-Year Vesting) under the CubeSmart 2004 Equity Incentive Plan, incorporated by reference to Exhibit 10.65 to the Company’s Annual Report on Form 10-K, filed on February 28, 2014. 10.24*† 10.25*† 10.26*† 10.27*† 10.28*† Amended and Restated CubeSmart 2007 Equity Incentive Plan, effective June 1, 2016, incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement, filed on April 14, 2016. CubeSmart Executive Severance Plan, effective January 1, 2017, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on November 4, 2016. Form of Non-Qualified Share Option Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.42 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017. Form of Non-Qualified Share Option Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.43 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017. Form of Restricted Share Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.44 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017. 53 10.29*† 10.30*† 10.31*† 10.32*† 10.33*† 10.34*† 10.35*† 10.36*† 10.37*† 10.38*† 10.39*† 10.40* 10.41* 10.42* Form of Restricted Share Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.45 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017. Form of Restricted Share Award Agreement (5-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.46 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017. Form of Restricted Share Unit Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017. Form of Restricted Share Unit Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.48 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017. Form of Performance-Vested Restricted Share Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.49 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017. Form of Performance-Vested Restricted Share Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.50 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017. Form of Performance-Vested Restricted Share Unit Award Agreement for Executive Officers (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.51 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017. Form of Performance-Vested Restricted Share Unit Award Agreement (3-Year Vesting) under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 10.52 to the Company’s Annual Report on Form 10-K, filed on February 17, 2017. Form of Restricted Share Agreement under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on January 3, 2019. Form of Non-Qualified Share Option Agreement under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed on January 3, 2019. Form of Performance-Vested Restricted Share Agreement under the CubeSmart 2007 Equity Incentive Plan, as amended and restated, effective June 1, 2016, incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K, filed on January 3, 2019. Amended and Restated Credit Agreement, dated as of June 19, 2019, by and among CubeSmart, L.P., CubeSmart, the lenders referred to therein, and Wells Fargo Bank, National Association, as administrative agent for the Lenders, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on June 21, 2019. Second Amended and Restated Equity Distribution Agreement, dated March 4, 2020, by and among CubeSmart, CubeSmart, L.P. and Wells Fargo Securities, LLC, incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8- K, filed on March 4, 2020. Second Amended and Restated Equity Distribution Agreement, dated March 4, 2020, by and among CubeSmart, CubeSmart, L.P. and BofA Securities, Inc., incorporated by reference to Exhibit 1.2 to the Company’s Current Report on Form 8-K, filed on March 4, 2020. 54 10.43* 10.44* 10.45* 10.46* 21.1 23.1 23.2 31.1 31.2 31.3 31.4 32.1 32.2 99.1 101 Second Amended and Restated Equity Distribution Agreement, dated March 4, 2020, by and among CubeSmart, CubeSmart, L.P. and BMO Capital Markets Corp., incorporated by reference to Exhibit 1.3 to the Company’s Current Report on Form 8- K, filed on March 4, 2020. Second Amended and Restated Equity Distribution Agreement, dated March 4, 2020, by and among CubeSmart, CubeSmart, L.P. and Jefferies LLC, incorporated by reference to Exhibit 1.4 to the Company’s Current Report on Form 8-K, filed on March 4, 2020. Second Amended and Restated Equity Distribution Agreement, dated March 4, 2020, by and among CubeSmart, CubeSmart, L.P. and Barclays Capital Inc., incorporated by reference to Exhibit 1.5 to the Company’s Current Report on Form 8-K, filed on March 4, 2020. Agreement and Plan of Merger, by and among LAACO, Ltd., CubeSmart, L.P., CS West Merger Sub, L.P. and Stability LLC, dated as of November 15, 2021, incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8- K, filed on November 15, 2021. List of Subsidiaries. Consent of KPMG LLP relating to financial statements of CubeSmart. Consent of KPMG LLP relating to financial statements of CubeSmart, L.P. Certification of Chief Executive Officer of CubeSmart required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of Chief Financial Officer of CubeSmart required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of Chief Executive Officer of CubeSmart, L.P. required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of Chief Financial Officer of CubeSmart, L.P. required by Rule 13a-14(a)/15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of Chief Executive Officer and Chief Financial Officer of CubeSmart pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Certification of Chief Executive Officer and Chief Financial Officer of CubeSmart, L.P. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Material United States Federal Income Tax Considerations. The following CubeSmart and CubeSmart, L.P. financial information for the year ended December 31, 2021, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statement of Equity, (iv) the Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements, detailed tagged and filed herewith. 104 Cover Page Interactive Data File – embedded within the Inline XBRL document (included as Exhibit 101). * † Incorporated herein by reference as above indicated. Denotes a management contract or compensatory plan, contract or arrangement. ITEM 16. FORM 10-K SUMMARY None. 55 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. SIGNATURES CUBESMART By: /s/ Timothy M. Martin Timothy M. Martin Chief Financial Officer Date: February 25, 2022 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Signature Title Date /s/ Marianne M. Keler Marianne M. Keler /s/ Christopher P. Marr Christopher P. Marr /s/ Timothy M. Martin Timothy M. Martin /s/ Piero Bussani Piero Bussani /s/ Dorothy Dowling Dorothy Dowling /s/ John W. Fain John W. Fain /s/ John F. Remondi John F. Remondi /s/ Jeffrey F. Rogatz Jeffrey F. Rogatz /s/ Deborah Ratner Salzberg Deborah Ratner Salzberg Chair of the Board of Trustees February 25, 2022 February 25, 2022 February 25, 2022 February 25, 2022 February 25, 2022 February 25, 2022 February 25, 2022 February 25, 2022 February 25, 2022 Chief Executive Officer and Trustee (Principal Executive Officer) Chief Financial Officer (Principal Financial and Accounting Officer) Trustee Trustee Trustee Trustee Trustee Trustee 56 FINANCIAL STATEMENTS INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements of CUBESMART and CUBESMART, L.P. (the “Company”) Page No. Management’s Report on CubeSmart Internal Control Over Financial Reporting Management’s Report on CubeSmart, L.P. Internal Control Over Financial Reporting Reports of Independent Registered Public Accounting Firm (PCAOB ID 185) CubeSmart and Subsidiaries Consolidated Balance Sheets as of December 31, 2021 and 2020 CubeSmart and Subsidiaries Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 CubeSmart and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 and 2019 CubeSmart and Subsidiaries Consolidated Statements of Equity for the years ended December 31, 2021, 2020 and 2019 CubeSmart and Subsidiaries Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 CubeSmart, L.P. and Subsidiaries Consolidated Balance Sheets as of December 31, 2021 and 2020 CubeSmart, L.P. and Subsidiaries Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 CubeSmart, L.P. and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 and 2019 CubeSmart, L.P. and Subsidiaries Consolidated Statements of Capital for the years ended December 31, 2021, 2020 and 2019 CubeSmart, L.P. and Subsidiaries Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 Notes to Consolidated Financial Statements F-2 F-3 F-4 F-10 F-11 F-12 F-13 F-14 F-15 F-16 F-17 F-18 F-19 F-20 F-1 MANAGEMENT’S REPORT ON CUBESMART INTERNAL CONTROL OVER FINANCIAL REPORTING Management of CubeSmart (the “REIT”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under Section 404 of the Sarbanes-Oxley Act of 2002, the REIT’s management is required to assess the effectiveness of the REIT’s internal control over financial reporting as of the end of each fiscal year, and report on the basis of that assessment whether the REIT’s internal control over financial reporting is effective. The REIT’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The REIT’s internal control over financial reporting includes those policies and procedures that:    pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and the disposition of the assets of the REIT; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that the receipts and expenditures of the REIT are being made only in accordance with the authorization of the REIT’s management and its Board of Trustees; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the REIT’s assets that could have a material effect on the financial statements. There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even an effective internal control system can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of an internal control system may vary over time. Under the supervision, and with the participation, of the REIT’s management, including the principal executive officer and principal financial officer, management conducted a review, evaluation and assessment of the effectiveness of our internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In performing its assessment of the effectiveness of internal control over financial reporting, management has concluded that, as of December 31, 2021, the REIT’s internal control over financial reporting was effective based on the COSO framework. The effectiveness of our internal control over financial reporting as of December 31, 2021, has been audited by KPMG LLP (Philadelphia, Pennsylvania; PCAOB ID #185), an independent registered public accounting firm, as stated in their report that appears herein. February 25, 2022 F-2 MANAGEMENT’S REPORT ON CUBESMART, L.P. INTERNAL CONTROL OVER FINANCIAL REPORTING Management of CubeSmart, L.P. (the “Partnership”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under Section 404 of the Sarbanes-Oxley Act of 2002, the Partnership’s management is required to assess the effectiveness of the Partnership’s internal control over financial reporting as of the end of each fiscal year, and report on the basis of that assessment whether the Partnership’s internal control over financial reporting is effective. The Partnership’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Partnership’s internal control over financial reporting includes those policies and procedures that:    pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and the disposition of the assets of the Partnership; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that the receipts and expenditures of the Partnership are being made only in accordance with the authorization of the Partnership’s management and its Board of Trustees; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Partnership’s assets that could have a material effect on the financial statements. There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even an effective internal control system can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of an internal control system may vary over time. Under the supervision, and with the participation, of the Partnership’s management, including the principal executive officer and principal financial officer, management conducted a review, evaluation and assessment of the effectiveness of our internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In performing its assessment of the effectiveness of internal control over financial reporting, management has concluded that, as of December 31, 2021, the Partnership’s internal control over financial reporting was effective based on the COSO framework. The effectiveness of our internal control over financial reporting as of December 31, 2021, has been audited by KPMG LLP (Philadelphia, Pennsylvania; PCAOB ID #185), an independent registered public accounting firm, as stated in their report that appears herein. February 25, 2022 F-3 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Trustees of CubeSmart: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of CubeSmart and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 25, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Evaluation of storage properties for impairment As discussed in notes 2 and 3 to the consolidated financial statements, the Company had $6.1 billion of storage properties, net of accumulated depreciation as of December 31, 2021. The Company performs an impairment assessment whenever events or changes in circumstances indicate that there may be an impairment. This involves comparing the undiscounted future net operating cash flows plus a terminal value to the carrying amount of the storage property. We identified the evaluation of storage properties for impairment as a critical audit matter. The Company uses revenue and expense growth rates, and terminal value capitalization rate assumptions in determining estimated future cash flows as part of its impairment assessment. Changes to these assumptions could have a significant impact on the determination of recoverability of the carrying amount of a storage property and involved subjective auditor judgement. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s storage property impairment process, including controls related to the use of the revenue and expense growth rates, and terminal value capitalization rate. We assessed the Company’s forecasted growth rates against the Company’s historical growth rates and published reports of industry data. We evaluated the F-4 Company’s expected terminal value capitalization rates by comparing them to published reports of industry data and historical transactions of the Company. We also identified the threshold rates at which the revenue and expense growth rates and terminal value capitalization rate assumptions would indicate the storage property may be impaired and analyzed those threshold rates against the published industry data and historical results. /s/ KPMG LLP We have served as the Company’s auditor since 2009. Philadelphia, Pennsylvania February 25, 2022 F-5 Report of Independent Registered Public Accounting Firm To the Partners of CubeSmart, L.P. and the Board of Trustees of CubeSmart: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of CubeSmart L.P. and subsidiaries (the Partnership) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), capital, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 25, 2022 expressed an unqualified opinion on the effectiveness of the Partnership’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Evaluation of storage properties for impairment As discussed in notes 2 and 3 to the consolidated financial statements, the Partnership had $6.1 billion of storage properties, net of accumulated depreciation as of December 31, 2021. The Partnership performs an impairment assessment whenever events or changes in circumstances indicate that there may be an impairment. This involves comparing the undiscounted future net operating cash flows plus a terminal value to the carrying amount of the storage property. We identified the evaluation of storage properties for impairment as a critical audit matter. The Partnership uses revenue and expense growth rates, and terminal value capitalization rate assumptions in determining estimated future cash flows as part of its impairment assessment. Changes to these assumptions could have a significant impact on the determination of recoverability of the carrying amount of a storage property and involved subjective auditor judgement. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Partnership’s storage property impairment process, including controls related to the use of the revenue and expense growth rates, and terminal value capitalization rate. We assessed the Partnership’s forecasted growth rates against the Partnership’s historical growth rates and published reports of industry data. We evaluated the F-6 Partnership’s expected terminal value capitalization rates by comparing them to published reports of industry data and historical transactions of the Partnership. We also identified the threshold rates at which the revenue and expense growth rates and terminal value capitalization rate assumptions would indicate the storage property may be impaired and analyzed those threshold rates against the published industry data and historical results. /s/ KPMG LLP We have served as the Partnership’s auditor since 2009. Philadelphia, Pennsylvania February 25, 2022 F-7 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Trustees of CubeSmart: Opinion on Internal Control Over Financial Reporting We have audited CubeSmart and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III (collectively, the consolidated financial statements), and our report dated February 25, 2022 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Philadelphia, Pennsylvania February 25, 2022 F-8 Report of Independent Registered Public Accounting Firm To the Partners of CubeSmart, L.P. and the Board of Trustees of CubeSmart: Opinion on Internal Control Over Financial Reporting We have audited CubeSmart L.P. and subsidiaries' (the Partnership) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Partnership as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), capital, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III (collectively, the consolidated financial statements), and our report dated February 25, 2022 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on CubeSmart L.P. Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Philadelphia, Pennsylvania February 25, 2022 F-9 CUBESMART AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) ASSETS Storage properties Less: Accumulated depreciation Storage properties, net (including VIE assets of $149,467 and $119,345, respectively) Cash and cash equivalents Restricted cash Loan procurement costs, net of amortization Investment in real estate ventures, at equity Assets held for sale Other assets, net Total assets LIABILITIES AND EQUITY Unsecured senior notes, net Revolving credit facility Mortgage loans and notes payable, net Lease liabilities - finance leases Accounts payable, accrued expenses and other liabilities Distributions payable Deferred revenue Security deposits Liabilities held for sale Total liabilities Noncontrolling interests in the Operating Partnership Commitments and contingencies Equity Common shares $.01 par value, 400,000,000 shares authorized, 223,917,993 and 197,405,989 shares issued and outstanding at December 31, 2021 and 2020, respectively Additional paid-in capital Accumulated other comprehensive loss Accumulated deficit Total CubeSmart shareholders’ equity Noncontrolling interests in subsidiaries Total equity Total liabilities and equity See accompanying notes to the consolidated financial statements. December 31, 2021 2020 $ 7,183,494 $ 5,489,754 (983,940) 4,505,814 3,592 2,637 3,275 92,071 — 170,753 $ 6,548,079 $ 4,778,142 (1,085,824) 6,097,670 11,140 2,178 2,322 119,751 49,313 265,705 $ 2,768,209 $ 2,030,372 117,800 216,504 65,599 159,140 68,301 29,087 1,077 — 2,687,880 209,900 167,676 65,801 199,985 97,417 37,144 1,065 2,502 3,549,699 108,220 249,414 2,239 4,088,392 (570) (1,218,498) 2,871,563 18,597 2,890,160 1,974 2,805,673 (632) (974,799) 1,832,216 8,632 1,840,848 $ 6,548,079 $ 4,778,142 F-10 CUBESMART AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) REVENUES Rental income Other property related income Property management fee income Total revenues OPERATING EXPENSES Property operating expenses Depreciation and amortization General and administrative Total operating expenses OTHER (EXPENSE) INCOME Interest: Interest expense on loans Loan procurement amortization expense Loss on early extinguishment of debt Equity in earnings of real estate ventures Gains from sales of real estate, net Other Total other expense NET INCOME NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS Noncontrolling interests in the Operating Partnership Noncontrolling interest in subsidiaries NET INCOME ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS Basic earnings per share attributable to common shareholders Diluted earnings per share attributable to common shareholders Weighted average basic shares outstanding Weighted average diluted shares outstanding For the year ended December 31, 2020 2019 2021 $ 707,751 $ 83,605 31,208 822,564 581,009 $ 70,723 27,445 679,177 252,104 232,049 47,809 531,962 (78,448) (8,168) (20,328) 25,275 32,698 (10,818) (59,789) 230,813 223,634 156,573 41,423 421,630 (75,890) (2,674) (18,020) 178 6,710 (240) (89,936) 167,611 552,404 67,558 23,953 643,915 209,739 163,547 38,560 411,846 (72,525) (2,819) — 11,122 1,508 1,416 (61,298) 170,771 $ $ $ (7,873) 542 (1,825) (165) (1,708) 54 223,482 $ 165,621 $ 169,117 1.10 $ 1.09 $ 0.85 $ 0.85 $ 0.89 0.88 203,832 205,009 194,147 194,943 190,874 191,576 See accompanying notes to the consolidated financial statements. F-11                     CUBESMART AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) NET INCOME Other comprehensive income: Unrealized gains on interest rate swaps Reclassification of realized losses on interest rate swaps OTHER COMPREHENSIVE INCOME: COMPREHENSIVE INCOME Comprehensive income attributable to noncontrolling interests in the Operating Partnership Comprehensive loss (income) attributable to noncontrolling interest in subsidiaries COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY $ For the year ended December 31, 2020 2021 2019 $ 230,813 $ 167,611 $ 170,771 — 81 81 230,894 — 81 81 167,692 232 70 302 171,073 (7,892) (1,809) (1,710) 542 223,544 $ (165) 165,718 $ 54 169,417 See accompanying notes to the consolidated financial statements. F-12                       CUBESMART AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (in thousands) Common Shares Additional Accumulated Other Paid-in Number Amount Capital 187,145 Comprehensive Income (Loss) $ 1,871 $ 2,500,751 $ (1,029) $ Accumulated Shareholders’ Deficit Equity 1,709,678 $ (791,915) $ Total Noncontrolling Interests in Subsidiaries Balance at December 31, 2018 Contributions from noncontrolling interest in subsidiaries Distributions paid to noncontrolling interest in subsidiaries Acquisition of noncontrolling interest in subsidiary Issuance of common shares, net Issuance of restricted shares Issuance of OP units Conversion from units to shares Exercise of stock options Amortization of restricted shares Share compensation expense Adjustment for noncontrolling interests in the Operating Partnership Net income (loss) Other comprehensive income, net Common share distributions ($1.29 per share) Balance at December 31, 2019 Contributions from noncontrolling interest in subsidiaries Distributions paid to noncontrolling interest in subsidiaries Issuance of common shares, net Issuance of restricted shares Issuance of OP units Conversion from units to shares Exercise of stock options Amortization of restricted shares Share compensation expense Adjustment for noncontrolling interests in the Operating Partnership Net income Other comprehensive income (loss), net Common share distributions ($1.33 per share) Balance at December 31, 2020 Contributions from noncontrolling interest in subsidiaries Distributions paid to noncontrolling interest in subsidiaries Acquisition of noncontrolling interest in subsidiary Issuance of common shares, net Issuance of restricted shares Conversion from units to shares Exercise of stock options Amortization of restricted shares Share compensation expense Adjustment for noncontrolling interests in the Operating Partnership Net income (loss) Other comprehensive income, net Common share distributions ($1.45 per share) Balance at December 31, 2021 5,899 52 80 381 60 1 4 (34,690) 196,244 2,485 3,682 4,487 1,786 (34,690) 196,304 2,486 3,686 4,487 1,786 193,557 $ 1,936 $ 2,674,745 $ (729) $ 300 (5,918) 169,117 (247,890) (876,606) $ (5,918) 169,117 300 (247,890) 1,799,346 $ 3,627 60 100 62 37 120,690 1 2,823 961 4,502 1,952 120,727 2,824 961 4,502 1,952 197,406 $ 1,974 $ 2,805,673 $ (632) $ 97 (4,230) 165,621 (259,584) (974,799) $ (4,230) 165,621 97 (259,584) 1,832,216 $ 20,508 66 5,519 419 205 56 4 (2,746) 965,433 304,959 7,861 4,941 2,271 (2,746) 965,638 305,015 7,865 4,941 2,271 (164,109) 223,482 62 (303,072) 62 (164,109) 223,482 (303,072) Noncontrolling Interests in the Operating Partnership Total Equity 6,771 $ 1,716,449 $ 7,376 (188) (5,915) 7,376 (188) (40,605) 196,304 2,486 3,686 4,487 1,786 (5,918) 169,063 300 (247,890) (54) 7,990 $ 1,807,336 $ 682 (205) 682 (205) 120,727 2,824 961 4,502 1,952 (4,230) 165,786 97 (259,584) 165 8,632 $ 1,840,848 $ 11,404 (246) (651) (542) 11,404 (246) (3,397) 965,638 305,015 7,865 4,941 2,271 (164,109) 222,940 62 (303,072) 55,819 3,576 (2,486) 5,918 1,708 2 (2,449) 62,088 186,933 (2,824) 4,230 1,825 (16) (2,822) 249,414 (305,015) 164,109 7,873 19 (8,180) 108,220 223,918 $ 2,239 $ 4,088,392 $ (570) $ (1,218,498) $ 2,871,563 $ 18,597 $ 2,890,160 $ See accompanying notes to the consolidated financial statements. F-13 CUBESMART AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the year ended December 31, 2020 2019 2021 $ 230,813 $ 167,611 $ 170,771 Operating Activities Net income Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization Non-cash portion of interest expense related to finance leases Loss on early extinguishment of debt Equity in earnings of real estate ventures Gains from sales of real estate, net Equity compensation expense Accretion of fair market value adjustment of debt Changes in other operating accounts: Other assets Accounts payable and accrued expenses Other liabilities Net cash provided by operating activities Investing Activities $ Acquisitions of storage properties Acquisition of LAACO, Ltd., net of cash acquired Additions and improvements to storage properties Development costs Cash paid for partner's interest in real estate venture, net of cash, cash equivalents and restricted cash acquired Investment in real estate ventures Cash distributed from real estate ventures Proceeds from sale of real estate, net Net cash used in investing activities $ Financing Activities Proceeds from: Unsecured senior notes Revolving credit facility Principal payments on: Unsecured senior notes Revolving credit facility Unsecured term loans Mortgage loans and notes payable Loan procurement costs Debt prepayment costs Settlement of hedge transactions Acquisition of noncontrolling interest in subsidiary, net Proceeds from issuance of common shares, net Cash paid upon vesting of restricted shares Exercise of stock options Contributions from noncontrolling interests in subsidiaries Distributions paid to noncontrolling interests in subsidiaries Distributions paid to common shareholders Distributions paid to noncontrolling interests in Operating Partnership Net cash provided by financing activities Change in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at beginning of period Cash, cash equivalents and restricted cash at end of period Supplemental Cash Flow and Noncash Information Cash paid for interest, net of interest capitalized Supplemental disclosure of noncash activities: Acquisitions of storage properties Proceeds held in escrow from real estate venture's sale of real estate (see note 4) Noncash consideration for acquisition of partner's interest in real estate venture (see note 4) Right-of-use assets obtained in exchange for lease liabilities Discount on issuance of unsecured senior notes Noncash drawdown on revolving credit facility Mortgage loan assumptions Repayment of unsecured term loan through noncash drawdown on revolving credit facility Accretion of put liability Derivative valuation adjustment Loan procurement costs Issuance of OP units (see note 4) Acquisition of noncontrolling interest in subsidiary Contributions from noncontrolling interests in subsidiaries $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 240,217 202 20,328 (25,275) (32,698) 8,088 (2,037) (9,247) 14,871 3,923 449,185 $ (151,547) (1,678,984) (34,608) (69,887) — (28,261) 66,593 44,026 (1,852,668) $ 1,043,427 906,571 (300,000) (814,471) — (87,263) (12,548) (20,023) — (3,397) 965,638 (876) 7,865 8,031 (246) (273,839) (8,297) 1,410,572 $ 7,089 6,229 13,318 $ 159,247 — 18,020 (178) (6,710) 7,140 (259) (9,674) 13,922 1,914 351,033 $ (417,988) — (49,857) (55,286) — (7,022) 6,246 12,466 (511,441) $ 445,833 429,085 (250,000) (311,285) — (46,093) (3,764) (17,584) — — 120,727 (686) 961 — (205) (256,253) (2,540) 108,196 $ (52,212) 58,441 6,229 $ 166,366 — — (11,122) (1,508) 6,694 (718) (6,578) 6,042 1,821 331,768 (117,998) — (37,569) (102,826) (117,959) (10,264) 7,096 3,856 (375,664) 696,426 859,313 — (1,158,776) (200,000) (11,652) (6,023) — (807) (35,777) 196,304 (421) 3,686 48 (188) (243,859) (2,419) 95,855 51,959 6,482 58,441 79,148 $ 80,792 $ 69,283 — $ — $ — $ — $ 6,573 $ — $ 40,880 $ — $ 9,777 $ 81   $ —   $ —   $ —   $ 3,373   $ (2,623) $ — $ — $ 61,423 $ 4,167 $ — $ 169,056 $ — $ 7,917 $ 81   $ —   $ 186,933   $ —   $ 682   $ — 8,288 (8,288) — 3,574 103,938 — (100,000) 5,895 302   (3,770)  3,576   (4,828)  7,328   See accompanying notes to the consolidated financial statements. F-14 CUBESMART, L.P. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) ASSETS Storage properties Less: Accumulated depreciation Storage properties, net (including VIE assets of $149,467 and $119,345, respectively) Cash and cash equivalents Restricted cash Loan procurement costs, net of amortization Investment in real estate ventures, at equity Assets held for sale Other assets, net Total assets LIABILITIES AND CAPITAL Unsecured senior notes, net Revolving credit facility Mortgage loans and notes payable, net Lease liabilities - finance leases Accounts payable, accrued expenses and other liabilities Distributions payable Deferred revenue Security deposits Liabilities held for sale Total liabilities Limited Partnership interests of third parties Commitments and contingencies Capital Operating Partner Accumulated other comprehensive loss Total CubeSmart, L.P. capital Noncontrolling interests in subsidiaries Total capital Total liabilities and capital December 31, 2021 2020 $ $ $ 7,183,494 $ (1,085,824) 6,097,670 11,140 2,178 2,322 119,751 49,313 265,705 6,548,079 $ 5,489,754 (983,940) 4,505,814 3,592 2,637 3,275 92,071 — 170,753 4,778,142 2,768,209 $ 209,900 167,676 65,801 199,985 97,417 37,144 1,065 2,502 3,549,699 2,030,372 117,800 216,504 65,599 159,140 68,301 29,087 1,077 — 2,687,880 108,220 249,414 2,872,133 (570) 2,871,563 18,597 2,890,160 6,548,079 $ 1,832,848 (632) 1,832,216 8,632 1,840,848 4,778,142 $ See accompanying notes to the consolidated financial statements. F-15 CUBESMART, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per common unit data) For the year ended December 31, 2020 2019 2021 REVENUES Rental income Other property related income Property management fee income Total revenues OPERATING EXPENSES Property operating expenses Depreciation and amortization General and administrative Total operating expenses OTHER (EXPENSE) INCOME Interest: Interest expense on loans Loan procurement amortization expense Loss on early extinguishment of debt Equity in earnings of real estate ventures Gains from sales of real estate, net Other Total other expense $ 707,751   $ 83,605   31,208   822,564   581,009 $ 70,723 27,445 679,177 252,104   232,049   47,809   531,962   (78,448)  (8,168)  (20,328)  25,275   32,698   (10,818)  (59,789)  230,813   223,634 156,573 41,423 421,630 (75,890) (2,674) (18,020) 178 6,710 (240) (89,936) 167,611 552,404 67,558 23,953 643,915 209,739 163,547 38,560 411,846 (72,525) (2,819) — 11,122 1,508 1,416 (61,298) 170,771 NET INCOME NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS Noncontrolling interest in subsidiaries NET INCOME ATTRIBUTABLE TO CUBESMART L.P. Operating Partnership interests of third parties NET INCOME ATTRIBUTABLE TO COMMON UNITHOLDERS $ 542   231,355   (7,873)  223,482   $ (165) 167,446 (1,825) 165,621 $ 54 170,825 (1,708) 169,117 Basic earnings per unit attributable to common unitholders Diluted earnings per unit attributable to common unitholders $ $ 1.10   $ 1.09   $ 0.85 $ 0.85 $ 0.89 0.88 Weighted average basic units outstanding Weighted average diluted units outstanding 203,832 205,009 194,147 194,943 190,874 191,576 See accompanying notes to the consolidated financial statements. F-16               CUBESMART, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) NET INCOME Other comprehensive income: Unrealized gains on interest rate swaps Reclassification of realized losses on interest rate swaps OTHER COMPREHENSIVE INCOME: COMPREHENSIVE INCOME Comprehensive income attributable to Operating Partnership interests of third parties Comprehensive loss (income) attributable to noncontrolling interest in subsidiaries COMPREHENSIVE INCOME ATTRIBUTABLE TO OPERATING PARTNER For the year ended December 31, 2020 2021 2019 $ 230,813 $ 167,611 $ 170,771 — 81 81 230,894 — 81 81 167,692 232 70 302 171,073 (7,892) (1,809) (1,710) 542 (165) 54 $ 223,544 $ 165,718 $ 169,417 See accompanying notes to the consolidated financial statements. F-17                       CUBESMART, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CAPITAL (in thousands) Balance at December 31, 2018 Contributions from noncontrolling interest in subsidiaries Distributions paid to noncontrolling interest in subsidiaries Acquisition of noncontrolling interest in subsidiary Issuance of common OP units, net Issuance of restricted OP units Issuance of OP units Conversion from OP units to shares Exercise of OP unit options Amortization of restricted OP units OP unit compensation expense Adjustment for Operating Partnership interests of third parties Net income (loss) Other comprehensive income, net Common OP unit distributions ($1.29 per unit) Balance at December 31, 2019 Contributions from noncontrolling interest in subsidiaries Distributions paid to noncontrolling interest in subsidiaries Issuance of common OP units, net Issuance of restricted OP units Issuance of OP units Conversion from OP units to shares Exercise of OP unit options Amortization of restricted OP units OP unit compensation expense Adjustment for Operating Partnership interests of third parties Net income Other comprehensive income (loss), net Common OP unit distributions ($1.33 per unit) Balance at December 31, 2020 Contributions from noncontrolling interest in subsidiaries Distributions paid to noncontrolling interest in subsidiaries Acquisition of noncontrolling interest in subsidiary Issuance of common OP units, net Issuance of restricted OP units Conversion from OP units to shares Exercise of OP unit options Amortization of restricted OP units OP unit compensation expense Adjustment for Operating Partnership interests of third parties Net income (loss) Other comprehensive income, net Common OP unit distributions ($1.45 per unit) Balance at December 31, 2021 Number of Common OP Units Outstanding 187,145 Accumulated Other Operating Comprehensive Partner Income (Loss) $ 1,710,707 $ (1,029) $ Total CubeSmart L.P. Capital Noncontrolling Interest in Subsidiaries Operating Partnership Interests of Third Parties 5,899 52 80 381 (34,690) 196,304 2,486 3,686 4,487 1,786 (5,918) 169,117 193,557 (247,890) $ 1,800,075 $ 300 (729) $ 3,627 60 100 62 120,727 2,824 961 4,502 1,952 (4,230) 165,621 197,406 (259,584) $ 1,832,848 $ 97 (632) $ 20,508 66 5,519 419 (2,746) 965,638 305,015 7,865 4,941 2,271 (164,109) 223,482 (303,072) 62 223,918 $ 2,872,133 $ (570) $ 1,709,678 $ (34,690) 196,304 2,486 3,686 4,487 1,786 (5,918) 169,117 300 (247,890) 1,799,346 $ 120,727 2,824 961 4,502 1,952 (4,230) 165,621 97 (259,584) 1,832,216 $ (2,746) 965,638 305,015 7,865 4,941 2,271 (164,109) 223,482 62 (303,072) 2,871,563 $ Total Capital 6,771 $ 1,716,449 $ 7,376 (188) (5,915) 7,376 (188) (40,605) 196,304 2,486 3,686 4,487 1,786 (5,918) 169,063 300 (247,890) (54) 7,990 $ 1,807,336 $ 682 (205) 682 (205) 120,727 2,824 961 4,502 1,952 (4,230) 165,786 97 (259,584) 165 8,632 $ 1,840,848 $ 11,404 (246) (651) (542) 11,404 (246) (3,397) 965,638 305,015 7,865 4,941 2,271 (164,109) 222,940 62 (303,072) 18,597 $ 2,890,160 $ 55,819 3,576 (2,486) 5,918 1,708 2 (2,449) 62,088 186,933 (2,824) 4,230 1,825 (16) (2,822) 249,414 (305,015) 164,109 7,873 19 (8,180) 108,220 See accompanying notes to the consolidated financial statements. F-18 CUBESMART, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the year ended December 31, 2020 2019 2021 $ 230,813 $ 167,611 $ 170,771 Operating Activities Net income Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization Non-cash portion of interest expense related to finance leases Loss on early extinguishment of debt Equity in earnings of real estate ventures Gains from sales of real estate, net Equity compensation expense Accretion of fair market value adjustment of debt Changes in other operating accounts: Other assets Accounts payable and accrued expenses Other liabilities Net cash provided by operating activities Investing Activities $ Acquisitions of storage properties Acquisition of LAACO, Ltd., net of cash acquired Additions and improvements to storage properties Development costs Cash paid for partner's interest in real estate venture, net of cash, cash equivalents and restricted cash acquired Investment in real estate ventures Cash distributed from real estate ventures Proceeds from sale of real estate, net Net cash used in investing activities $ Financing Activities Proceeds from: Unsecured senior notes Revolving credit facility Principal payments on: Unsecured senior notes Revolving credit facility Unsecured term loans Mortgage loans and notes payable Loan procurement costs Debt prepayment costs Settlement of hedge transactions Acquisition of noncontrolling interest in subsidiary, net Proceeds from issuance of common OP units Cash paid upon vesting of restricted OP units Exercise of OP unit options Contributions from noncontrolling interests in subsidiaries Distributions paid to noncontrolling interests in subsidiaries Distributions paid to common OP unitholders Net cash provided by financing activities Change in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at beginning of period Cash, cash equivalents and restricted cash at end of period Supplemental Cash Flow and Noncash Information Cash paid for interest, net of interest capitalized Supplemental disclosure of noncash activities: Acquisitions of storage properties Proceeds held in escrow from real estate venture's sale of real estate (see note 4) Noncash consideration for acquisition of partner's interest in real estate venture (see note 4) Right-of-use assets obtained in exchange for lease liabilities Discount on issuance of unsecured senior notes Noncash drawdown on revolving credit facility Mortgage loan assumptions Repayment of unsecured term loan through noncash drawdown on revolving credit facility Accretion of put liability Derivative valuation adjustment Loan procurement costs Issuance of OP units (see note 4) Acquisition of noncontrolling interest in subsidiary Contributions from noncontrolling interests in subsidiaries $ $ $ $ $ $ $ $ $ $ $ $ $ $   $   $   $ 240,217 202 20,328 (25,275) (32,698) 8,088 (2,037) (9,247) 14,871 3,923 449,185 $ (151,547) (1,678,984) (34,608) (69,887) — (28,261) 66,593 44,026 (1,852,668) $ 159,247 — 18,020 (178) (6,710) 7,140 (259) (9,674) 13,922 1,914 351,033 $ (417,988) — (49,857) (55,286) — (7,022) 6,246 12,466 (511,441) $ 1,043,427 906,571 445,833 429,085 (300,000) (814,471) — (87,263) (12,548) (20,023) — (3,397) 965,638 (876) 7,865 8,031 (246) (282,136) 1,410,572 $ 7,089 6,229 13,318 $ (250,000) (311,285) — (46,093) (3,764) (17,584) — — 120,727 (686) 961 — (205) (258,793) 108,196 $ (52,212) 58,441 6,229 $ 166,366 — — (11,122) (1,508) 6,694 (718) (6,578) 6,042 1,821 331,768 (117,998) — (37,569) (102,826) (117,959) (10,264) 7,096 3,856 (375,664) 696,426 859,313 — (1,158,776) (200,000) (11,652) (6,023) — (807) (35,777) 196,304 (421) 3,686 48 (188) (246,278) 95,855 51,959 6,482 58,441 79,148 $ 80,792 $ 69,283 — $ — $ — $ — $ 6,573 $ — $ 40,880 $ — $ 9,777 $ 81 $ — $ —   $ —   $ 3,373   $ (2,623) $ — $ — $ 61,423 $ 4,167 $ — $ 169,056 $ — $ 7,917 $ 81 $ — $ 186,933   $ —   $ 682   $ — 8,288 (8,288) — 3,574 103,938 — (100,000) 5,895 302   (3,770)   3,576   (4,828)   7,328   See accompanying notes to the consolidated financial statements. F-19 CUBESMART AND CUBESMART L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND NATURE OF OPERATIONS CubeSmart (the “Parent Company”) operates as a self-managed and self-administered real estate investment trust (“REIT”) with its operations conducted solely through CubeSmart, L.P. and its subsidiaries. CubeSmart, L.P., a Delaware limited partnership (the “Operating Partnership”), operates through an umbrella partnership structure, with the Parent Company, a Maryland REIT, as its sole general partner. In the notes to the consolidated financial statements, we use the terms the “Company”, “we” or “our” to refer to the Parent Company and the Operating Partnership together, unless the context indicates otherwise. As of December 31, 2021, the Company owned (or partially owned and consolidated) self-storage properties located in the District of Columbia and 24 states throughout the United States which are presented under one reportable segment: the Company owns, operates, develops, manages and acquires self-storage properties. As of December 31, 2021, the Parent Company owned approximately 99.2% of the partnership interests (“OP Units”) of the Operating Partnership. The remaining OP Units, consisting exclusively of limited partner interests, are held by persons who contributed their interests in properties to the Operating Partnership in exchange for OP Units. Under the partnership agreement, these persons have the right to tender their OP Units for redemption to the Operating Partnership at any time following a specified restricted period for cash equal to the fair value of an equivalent number of common shares of the Parent Company. In lieu of delivering cash, however, the Parent Company, as the Operating Partnership’s general partner, may, at its option, choose to acquire any OP Units so tendered by issuing common shares in exchange for the tendered OP Units. If the Parent Company so chooses, its common shares will be exchanged for OP Units on a one-for-one basis. This one-for-one exchange ratio is subject to adjustment to prevent dilution. With each such exchange or redemption, the Parent Company’s percentage ownership in the Operating Partnership will increase. In addition, whenever the Parent Company issues common or other classes of its shares, it contributes the net proceeds it receives from the issuance to the Operating Partnership and the Operating Partnership issues to the Parent Company an equal number of OP Units or other partnership interests having preferences and rights that mirror the preferences and rights of the shares issued. This structure is commonly referred to as an umbrella partnership REIT or “UPREIT”. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include all of the accounts of the Company and its majority-owned and/or controlled subsidiaries. The portion of these entities not owned by the Company is presented as noncontrolling interests as of and during the periods consolidated. All significant intercompany accounts and transactions have been eliminated in consolidation. When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a variable interest entity (“VIE”) and if the Company is deemed to be the primary beneficiary in accordance with authoritative guidance issued on the consolidation of VIEs. To the extent that the Company (i) has the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and (ii) has the obligation or rights to absorb the VIE's losses or receive its benefits, then the Company is considered the primary beneficiary. When an entity is not deemed to be a VIE, the Company considers the provisions of additional guidance to determine whether a general partner, or the general partners as a group, controls a limited partnership or similar entity when the limited partners have certain rights. The Company consolidates (i) entities that are VIEs and of which the Company is deemed to be the primary beneficiary, and (ii) entities that are non-VIEs which the Company controls and which the limited partners do not have the ability to dissolve or remove the Company without cause nor substantive participating rights. The Operating Partnership meets the criteria as a VIE. The Parent Company’s sole significant asset is its investment in the Operating Partnership. As a result, substantially all of the Parent Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Parent Company’s debt is an obligation of the Operating Partnership. Noncontrolling Interests The Financial Accounting Standards Board (“FASB”) issued authoritative guidance regarding noncontrolling interests in consolidated financial statements which was effective on January 1, 2009. The guidance states that noncontrolling interests are the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. The ownership interests in the subsidiary that are held by owners other than the parent are noncontrolling interests. Under the guidance, such noncontrolling interests are reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations, revenues, expenses and net income or loss from controlled or consolidated entities that are less than wholly owned are reported at the consolidated F-20 amounts, including both the amounts attributable to the Company and noncontrolling interests. Presentation of consolidated equity activity is included for both quarterly and annual financial statements, including beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity. However, per the FASB issued authoritative guidance on the classification and measurement of redeemable securities, securities that are redeemable for cash or other assets at the option of the holder, not solely within the control of the issuer, must be classified outside of permanent equity. This would result in certain outside ownership interests being included as redeemable noncontrolling interests outside of permanent equity in the consolidated balance sheets. The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions. Additionally, with respect to noncontrolling interests for which the Company has a choice to settle the contract by delivery of its own shares, the Company considered the FASB issued guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a Company’s own stock to evaluate whether the Company controls the actions or events necessary to issue the maximum number of shares that could be required to be delivered under share settlement of the contract. The guidance also requires that noncontrolling interests are adjusted each period so that the carrying value equals the greater of its carrying value based on the accumulation of historical cost or its redemption fair value. The consolidated results of the Company include results attributable to units of the Operating Partnership that are not owned by the Company. These interests were issued in the form of OP units and were a component of the consideration the Company paid to acquire certain self-storage properties. Limited partners who acquired OP units have the right to require the Operating Partnership to redeem part or all of their OP units for, at the Company’s option, an equivalent number of common shares of the Company or cash based upon the fair value of an equivalent number of common shares of the Company. However, the operating agreement contains certain circumstances that could result in a net cash settlement outside the control of the Company, as the Company does not have the ability to settle in unregistered shares. Accordingly, consistent with the guidance discussed above, the Company will continue to record these noncontrolling interests outside of permanent equity in the consolidated balance sheets. Net income or loss related to these noncontrolling interests is excluded from net income or loss in the consolidated statements of operations. The Company has adjusted the carrying value of its noncontrolling interests subject to redemption value to the extent applicable. Based on the Company’s evaluation of the redemption value of the redeemable noncontrolling interests, the Operating Partnership reflected these interests at their redemption value as of December 31, 2021, as the estimated redemption value exceeded their carrying value. The Operating Partnership recorded an increase to OP Units owned by third parties and a corresponding decrease to capital of $164.1 million as of December 31, 2021. Disclosure of such redemption provisions is provided in note 12. Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Although management believes the assumptions and estimates made are reasonable and appropriate, as discussed in the applicable sections throughout these consolidated financial statements, different assumptions and estimates could materially impact the Company’s reported results. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions, and changes in market conditions could impact the Company’s future operating results. Self-Storage Properties Self-storage properties are carried at historical cost less accumulated depreciation and impairment losses. The cost of self-storage properties reflects their purchase price or development cost. Acquisition costs are accounted for in accordance with Accounting Standard Update (“ASU”) No. 2017-01 - Business Combinations (Topic 805): Clarifying the Definition of a Business, which was adopted on January 1, 2018, and are generally capitalized. Costs incurred for the renovation of a store are capitalized to the Company’s investment in that store. Ordinary repairs and maintenance are expensed as incurred. Major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. The costs to develop self-storage properties are capitalized to construction in progress while the projects are under development. Purchase Price Allocation When stores are acquired, the purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on estimated fair values. Allocations to land, building and improvements and equipment are recorded based upon their respective fair values as estimated by management. If appropriate, the Company allocates a portion of the purchase price to an intangible asset attributed to the value of in-place leases. This intangible is generally amortized to expense over the expected remaining term of the respective F-21 leases. Substantially all of the storage leases in place at acquired stores are at market rates, as the majority of the leases are month-to- month contracts. Accordingly, to date, no portion of the purchase price has been allocated to above- or below-market lease intangibles associated with storage leases assumed at acquisition. Above- or below- market lease intangibles associated with assumed leases in which the Company serves as lessee are recorded as an adjustment to the right-of-use asset and reflect the difference between the contractual amounts to be paid pursuant to each in-place lease and management’s estimate of fair market lease rates. These amounts are amortized over the term of the lease. To date, no intangible asset has been recorded for the value of customer relationships, because the Company does not have any concentrations of significant customers and the average customer turnover is fairly frequent. Depreciation and Amortization The costs of self-storage properties and improvements are depreciated using the straight-line method based on useful lives ranging from five to 39 years. Right-of-use assets associated with finance leases are amortized from the lease commencement date to the earlier of the useful life of the right-to-use asset or the end of the lease term. Fully depreciated or amortized assets and the associated accumulated depreciation or amortization are written off. The Company wrote off fully depreciated or amortized real estate assets and in-place lease intangible assets of $52.7 million and $59.9 million, respectively, for the year ended December 31, 2021, and $83.4 million and $20.5 million, respectively, for the year ended December 31, 2020. Impairment of Long-Lived Assets We evaluate long-lived assets for impairment when events and circumstances such as declines in occupancy and operating results indicate that there may be an impairment. The carrying value of these long-lived assets is compared to the undiscounted future net operating cash flows, plus a terminal value, attributable to the assets to determine if the store’s basis is recoverable. If a store’s basis is not considered recoverable, an impairment loss is recorded to the extent the net carrying value of the asset exceeds the fair value. The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. There were no impairment losses recognized during the years ended December 31, 2021, 2020 and 2019. Long-Lived Assets Held for Sale We consider long-lived assets to be “held for sale” upon satisfaction of the following criteria: (a) management commits to a plan to sell a store (or group of stores), (b) the store is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such stores, (c) an active program to locate a buyer and other actions required to complete the plan to sell the store have been initiated, (d) the sale of the store is probable and transfer of the asset is expected to be completed within one year, (e) the store is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Typically these criteria are all met when the relevant asset is under contract, significant non-refundable deposits have been made by the potential buyer, the assets are immediately available for transfer, and there are no contingencies related to the sale that may prevent the transaction from closing. However, each potential transaction is evaluated based on its separate facts and circumstances. Stores classified as held for sale are reported at the lesser of carrying value or fair value less estimated costs to sell and are not depreciated. The Club Operations (defined below) acquired through our acquisition of LAACO (defined below) have been classified as held for sale as of December 31, 2021. There were no stores classified as held for sale as of December 31, 2021. Cash and Cash Equivalents Cash and cash equivalents are highly-liquid investments with original maturities of three months or less. The Company may maintain cash equivalents in financial institutions in excess of insured limits, but believes this risk is mitigated by only investing in or through major financial institutions. Restricted Cash Restricted cash generally consists of cash deposits required for debt service, capital replacement and expense reserves in connection with the terms of our loan agreements. Loan Procurement Costs Loan procurement costs related to borrowings were $50.1 million and $38.1 million as of December 31, 2021 and 2020, respectively, and are reported net of accumulated amortization of $14.3 million and $13.1 million as of December 31, 2021 and 2020, respectively. In F-22 accordance with ASU No. 2015-03, Loan procurement costs, net are presented as a direct deduction from the carrying amount of the related debt liability. If there is not an associated debt liability recorded on the consolidated balance sheets, the costs are recorded as an asset net of accumulated amortization. Loan procurement costs associated with the Company’s revolving credit facility remain in Loan procurement costs, net of amortization on the Company’s consolidated balance sheets. The costs are amortized over the estimated life of the related debt using the effective interest method and are reported as Loan procurement amortization expense on the Company’s consolidated statements of operations. Other Assets Other assets are comprised of the following as of December 31, 2021 and 2020: Intangible assets, net of accumulated amortization of $12,760 and $2,123 Accounts receivable, net Prepaid property taxes Prepaid property and casualty insurance Amounts due from affiliates (see note 14) Assets related to deferred compensation arrangements Right-of-use assets - operating leases (see note 13) Equity investment recorded at cost (1) Other Total other assets, net December 31, 2021 2020 (in thousands) 108,794 $ 8,145 6,938 3,352 15,417 60,297 54,741 — 8,021 265,705 $ 57,820 5,829 6,334 2,626 13,130 17,207 55,302 5,000 7,505 170,753 $ $ (1) On September 5, 2018, the Company invested $5.0 million in exchange for 100% of the Class A preferred units of Capital Storage Partners, LLC (“Capital Storage”), a then newly formed venture that acquired 22 self-storage properties located in Florida (4), Oklahoma (5) and Texas (13). The Class A preferred units earned an 11% cumulative dividend prior to any other distributions. On August 24, 2021, the Class A preferred units and all accrued and unpaid dividends were redeemed and paid, respectively. Prior to this redemption, the Company’s investment in Capital Storage and the related dividends were included in Other assets, net on the Company’s consolidated balance sheets and in Other income on the Company’s consolidated statements of operations, respectively. The Company no longer has an ownership interest in Capital Storage. Environmental Costs Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of additional stores. Whenever the environmental assessment for one of the Company’s stores indicates that a store is impacted by soil or groundwater contamination from prior owners/operators or other sources, the Company will work with environmental consultants and where appropriate, state governmental agencies, to ensure that the store is either cleaned up, that no cleanup is necessary because the low level of contamination poses no significant risk to public health or the environment or that the responsibility for cleanup rests with a third party. Revenue Recognition Management has determined that all of the Company’s leases are operating leases. Rental income is recognized in accordance with the terms of the leases, which generally are month-to-month. The Company recognizes gains from sale of real estate in accordance with the guidance on transfer of nonfinancial assets. Payments received from purchasers prior to closing are recorded as deposits. Profit on real estate sold is recognized when a valid contract exists, the collectability of the sales price is reasonably assured and the control of the property has transferred. Advertising and Marketing Costs The Company incurs advertising and marketing costs primarily attributable to internet marketing and other media advertisements. These costs are expensed as incurred. The Company incurred $21.0 million, $16.9 million and $11.5 million in advertising and marketing expenses for the years ended December 31, 2021, 2020 and 2019, respectively, which are included in Property operating expenses on the Company’s consolidated statements of operations. F-23 Equity Offering Costs Underwriting discounts and commissions, financial advisory fees and other offering costs are reflected as a reduction to additional paid- in capital. For the years ended December 31, 2021, 2020 and 2019, the Company recognized $28.3 million, $1.5 million and $2.1 million, respectively, of equity offering costs related to the issuance of common shares. Other Property Related Income Other property related income consists of late fees, administrative charges, customer storage protection plan fees, sales of storage supplies and other ancillary revenues and is recognized in the period that it is earned. Capitalized Interest The Company capitalizes interest incurred that is directly associated with construction activities until the asset is placed into service. Interest is capitalized to the related asset(s) using the weighted average rate of the Company’s outstanding debt. For the years ended December 31, 2021, 2020 and 2019, the Company capitalized $1.9 million, $2.7 million and $3.0 million, respectively, of interest incurred that is directly associated with construction activities. Derivative Financial Instruments The Company carries all derivatives on the balance sheet at fair value. The Company determines the fair value of derivatives by observable prices that are based on inputs not quoted on active markets, but corroborated by market data. The accounting for changes in the fair value of a derivative instrument depends on whether the derivative has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it. The Company’s use of derivative instruments has been limited to cash flow hedges of certain interest rate risks. The Company had no outstanding derivatives as of December 31, 2021 or 2020. Income Taxes The Company has elected to be taxed as a REIT under Sections 856-860 of the Internal Revenue Code since the Company’s commencement of operations in 2004. In management’s opinion, the requirements to maintain these elections are being met. Accordingly, no provision for federal income taxes has been reflected in the consolidated financial statements other than for operations conducted through our taxable REIT subsidiaries. Earnings and profits, which determine the taxability of distributions to shareholders, differ from net income reported for financial reporting purposes due to differences in cost basis, the estimated useful lives used to compute depreciation, and the allocation of net income and loss for financial versus tax reporting purposes. The net tax basis in the Company’s assets was approximately $6,113.5 million and $4,384.1 million as of December 31, 2021 and 2020, respectively. Since the Company’s initial quarter as a publicly-traded REIT, it has made regular quarterly distributions to its shareholders. Distributions to shareholders are usually taxable as ordinary income, although a portion of the distribution may be designated as capital gain or may constitute a tax-free return of capital. Annually, the Company provides each of its shareholders a statement detailing the tax characterization of dividends paid during the preceding year as ordinary income, capital gain or return of capital. The characterization of the Company’s dividends for 2021 consisted of a 92.6365% ordinary income distribution and a 7.3635% capital gain distribution. The Company is subject to a 4% federal excise tax if sufficient taxable income is not distributed within prescribed time limits. The excise tax equals 4% of the annual amount, if any, by which the sum of (a) 85% of the Company’s ordinary income, (b) 95% of the Company’s net capital gains and (c) 100% of prior taxable income exceeds cash distributions and certain taxes paid by the Company. No excise tax was incurred in 2021, 2020 or 2019. Taxable REIT subsidiaries are subject to federal and state income taxes. Our taxable REIT subsidiaries had a net deferred tax liability of $0.7 million as of December 31, 2021 and a net deferred tax asset of $0.4 million as of December 31, 2020. Earnings per Share and Unit Basic earnings per share and unit are calculated based on the weighted average number of common shares and restricted shares outstanding during the period. Diluted earnings per share and unit is calculated by further adjusting for the dilutive impact of share options, unvested restricted shares and contingently issuable shares outstanding during the period using the treasury stock method. F-24 Potentially dilutive securities calculated under the treasury stock method were 1,176,000, 796,000 and 702,000 for the years ended December 31, 2021, 2020 and 2019, respectively. Share-Based Payments We apply the fair value method of accounting for contingently issued shares and share options issued under our incentive award plan. Accordingly, share compensation expense is recorded ratably over the vesting period relating to such contingently issued shares and options. The Company has recognized compensation expense on a straight-line method over the requisite service period, which is included in general and administrative expense on the Company’s consolidated statement of operations. The Company recognizes forfeitures on share-based payments as they occur. Investments in Unconsolidated Real Estate Ventures The Company accounts for its investments in unconsolidated real estate ventures under the equity method of accounting when it is determined that the Company has the ability to exercise significant influence over the venture. Under the equity method, investments in unconsolidated real estate ventures are recorded initially at cost, as investments in real estate ventures, and subsequently adjusted for equity in earnings (losses), cash contributions, less distributions and impairments. On a periodic basis, management assesses whether there are any indicators that the value of the Company’s investments in unconsolidated real estate ventures may be other than temporarily impaired. An investment is impaired only if the fair value of the investment, as estimated by management, is less than the carrying value of the investment and the decline is other than temporary. To the extent impairment that is other than temporary has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the fair value of the investment, as estimated by management. The determination as to whether impairment exists requires significant management judgment about the fair value of the Company’s ownership interest. Fair value is determined through various valuation techniques, including but not limited to, discounted cash flow models, quoted market values and third-party appraisals. There were no impairment losses related to the Company’s investments in unconsolidated real estate ventures recognized during the years ended December 31, 2021 and 2020. Differences between the Company's net investment in unconsolidated real estate ventures and its underlying equity in the net assets of the ventures are primarily a result of the Company acquiring interests in existing unconsolidated real estate ventures. As of December 31, 2021, the Company’s net investment in unconsolidated real estate ventures was greater than its underlying equity in the net assets of the unconsolidated real estate ventures by an aggregate of $33.6 million. There were no such differences as of December 31, 2020. These differences are amortized over the lives of the self-storage properties owned by the real estate ventures. This amortization is included in equity in earnings of real estate ventures on the Company’s consolidated statements of operations. Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06 – Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in an Entity’s Own Equity (Subtopic 815-40). The new guidance eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of certain settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted earnings per share computation. The standard was effective on January 1, 2022. The adoption of this guidance will not have a material impact on the Company’s consolidated financial statements. Concentration of Credit Risk The Company’s stores are located in major metropolitan and rural areas and have numerous customers per store. No single customer represents a significant concentration of our revenues. The stores in New York, Florida, Texas and California provided approximately 19%, 15%, 9% and 8%, respectively, of the Company’s total revenues for the year ended December 31, 2021. The stores in New York, Florida, Texas and California provided approximately 16%, 15%, 9% and 8%, respectively, of the Company’s total revenues for the year ended December 31, 2020. The stores in New York, Florida, Texas and California provided approximately 16%, 16%, 10% and 8%, respectively, of the Company’s total revenues for the year ended December 31, 2019. F-25 3. STORAGE PROPERTIES The book value of the Company’s real estate assets is summarized as follows: Land Buildings and improvements Equipment Construction in progress Right-of-use assets - finance leases Storage properties Less: Accumulated depreciation Storage properties, net December 31, 2021 2020 (in thousands) 1,565,463 $ 5,368,383 129,531 78,221 41,896 7,183,494 (1,085,824) 6,097,670 $ 1,093,503 4,122,995 123,044 108,316 41,896 5,489,754 (983,940) 4,505,814 $ $ F-26 The following table summarizes the Company’s acquisition and disposition activity for the years ended December 31, 2021, 2020 and 2019: Asset/Portfolio 2021 Acquisitions: Minnesota Asset (1) Maryland Asset New Jersey/Pennsylvania Assets Florida Asset Georgia Asset Pennsylvania Asset Nevada Asset Storage West Assets Illinois Asset 2021 Dispositions: Colorado/Nevada Assets North Carolina Assets Texas Asset 2020 Acquisitions: Texas Asset Maryland Asset New Jersey Asset Florida Asset Texas Asset Texas Asset Nevada Asset New York Asset Florida Asset Virginia Asset Storage Deluxe Assets Florida Assets 2020 Disposition: New York Asset 2019 Acquisitions: Maryland Asset Florida Assets Arizona Asset HVP III Assets Georgia Asset South Carolina Asset Texas Asset Florida Assets California Asset 2019 Disposition: Texas Asset Metropolitan Statistical Area Transaction Date Stores Number of Purchase / Sale Price (in thousands) Minneapolis-St. Paul-Bloomington, MN-WI Baltimore-Towson, MD Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Miami-Fort Lauderdale-Pompano Beach, FL Atlanta-Sandy Springs-Marietta, GA Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Las Vegas-Paradise, NV Various (see note 4) Chicago-Naperville-Joliet, IL-IN-WI April 2021 June 2021 July 2021 November 2021 November 2021 November 2021 December 2021 December 2021 December 2021 Denver-Aurora, CO / Las Vegas-Paradise, NV Burlington, NC Houston-Sugar Land-Baytown, TX September 2021 September 2021 November 2021 San Antonio, TX Baltimore-Towson, MD New York-Northern New Jersey-Long Island, NY-NJ-PA Palm Bay-Melbourne-Titusville, FL Austin-Round Rock, TX Dallas-Fort Worth-Arlington, TX Las Vegas-Paradise, NV New York-Northern New Jersey-Long Island, NY-NJ-PA Tampa-St. Petersburg-Clearwater, FL Washington-Arlington-Alexandria, DC-VA-MD-WV New York-Northern New Jersey-Long Island, NY-NJ-PA Orlando-Kissimmee, FL / Deltona-Daytona Beach-Ormond Beach, FL February 2020 April 2020 April 2020 November 2020 November 2020 November 2020 December 2020 December 2020 December 2020 December 2020 December 2020 December 2020 New York-Northern New Jersey-Long Island, NY-NJ-PA December 2020 Baltimore-Towson, MD Cape Coral-Fort Myers, FL Phoenix-Mesa-Scottsdale, AZ Various (see note 4) Atlanta-Sandy Springs-Marietta, GA Charleston-North Charleston, SC Dallas-Fort Worth-Arlington, TX Orlando-Kissimmee, FL Los Angeles-Long Beach-Santa Ana, CA March 2019 April 2019 May 2019 June 2019 August 2019 August 2019 October 2019 November 2019 December 2019 College Station-Bryan, TX October 2019 1 1 2 1 1 1 1 57 1 66 2 2 1 5 1 1 1 1 1 1 1 1 1 1 8 3 21 1 1 1 2 1 18 1 1 1 3 1 29 1 1 $ $ $ $ $ $ $ $ $ $ $ $ 12,000 22,075 33,000 14,750 15,200 24,500 21,000 1,648,426 (2) 10,300 1,801,251 16,900 21,700 5,200 43,800 9,025 17,200 48,450 3,900 10,750 10,150 16,800 6,750 10,000 17,350 540,000 45,500 735,875 12,750 12,750 22,000 19,000 1,550 128,250 (3) 14,600 3,300 7,300 32,100 18,500 246,600 4,146 4,146 (1) Acquired by a consolidated joint venture in which the Company holds a 50% interest. (2) Purchase price represents the acquisition of all 167,557 outstanding partnership units of LAACO, Ltd. (“LAACO”) for $9,838 per unit. At the time of the acquisition, LAACO owned 57 storage properties (the “Storage West Assets”) and 50% ownership interests in two separate joint ventures. Through this acquisition, the Company also acquired LAACO’s wholly-owned subsidiaries, the Los Angeles Athletic Club and the California Yacht Club (the “Club Operations”), which are classified as held for sale on the Company’s consolidated balance sheets as of December 31, 2021 (see note 4). (3) Amount represents the purchase price for 90% of the ownership interest in 191 III CUBE LLC (“HVP III”), which at the time of the acquisition, owned 18 storage properties (see note 4). F-27                     4. INVESTMENT ACTIVITY LAACO Acquisition On December 9, 2021, the Company acquired all outstanding partnership units of LAACO, the owner of the Storage West Assets and, as a result, LAACO became a wholly-owned subsidiary of the Company. The 57 Storage West Assets are located in Arizona (17), California (20), Nevada (13) and Texas (7). Through its acquisition of LAACO, the Company also acquired a 50% interest in two separate unconsolidated joint ventures, each of which own one storage property in California (see note 5). In addition, through this acquisition, the Company also acquired the Club Operations, which included the Los Angeles Athletic Club (consisting of athletic facilities, food and beverage operations and a hotel) and the California Yacht Club (consisting of sports facilities, food and beverage operations and a marina). As of December 31, 2021, the Club Operations have been classified as held for sale on the Company’s consolidated balance sheets. The following summarizes the relevant components contemplated in the acquisition of LAACO: Costs contemplated: Capitalized costs: LAACO partnership units (1) Long-term debt assumed and repaid at closing Payments to LAACO management (capitalized) (2) Other transaction costs (3) Total capitalized costs Payments and anticipated payments to LAACO management (expensed) (2) Total costs contemplated Estimated fair value of Club Operations (included in total costs contemplated above) (1) Represents the acquisition of all 167,557 outstanding partnership units for $9,838 per unit. Amount (in thousands) $ $ $ $ 1,648,426 40,880 16,807 13,407 1,719,520 25,144 1,744,664 46,800 (2) Upon the acquisition of LAACO, the Company assumed severance obligations payable to certain employees pursuant to pre- existing agreements. Based on the specific details of the arrangements, $16.8 million in costs were capitalized to the basis of the acquired properties while $25.1 million were considered post-combination compensation expenses. Of this $25.1 million, $14.8 million was included in the component of other income (expense) designated as other for the year ended December 31, 2021, with the remainder expected to be expensed during the six months ended June 30, 2022. (3) Includes consulting fees, legal fees, and other costs. The Company accounted for the acquisition of LAACO as an asset acquisition. As a result, the capitalized costs noted above were allocated to LAACO’s real estate assets, intangible assets and real estate venture investments on a relative fair value basis. All other assets acquired and liabilities assumed were recorded at fair value. The following summarizes the accounting for the LAACO acquisition: Storage properties Cash and cash equivalents Investment in real estate ventures, at equity Assets held for sale Other assets, net Accounts payable, accrued expenses and other liabilities Deferred revenue Security deposits Liabilities held for sale Total F-28 Amount (in thousands) 1,517,243 18,291 35,737 50,435 143,599 (38,350) (3,764) (36) (3,635) 1,719,520 $ $   Intangible assets (included above in Other assets, net) consisted of in-place leases, which aggregated to $109.7 million at the time of the acquisition and prior to amortization of such amounts. The estimated life of these in-place leases is 12 months and the amortization expense that was recognized during the year ended December 31, 2021 was approximately $9.1 million. Other 2021 Acquisitions During the year ended December 31, 2021, the Company acquired eight additional stores located in Florida (1), Georgia (1), Illinois (1), Maryland (1), Nevada (1), New Jersey (1) and Pennsylvania (2) for an aggregate purchase price of approximately $140.8 million. Also, a consolidated joint venture, in which the Company holds a 50% interest, acquired a store in Minnesota for a purchase price of $12.0 million (see note 12). In connection with these transactions, which were accounted for as asset acquisitions, the Company allocated the purchase price and acquisition-related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consisted of in-place leases, which aggregated to $11.9 million at the time of the acquisitions and prior to amortization of such amounts. The estimated life of these in-place leases is 12 months and the amortization expense that was recognized during the year ended December 31, 2021 was approximately $3.6 million. As of December 31, 2021, the Company had made aggregate deposits of approximately $0.5 million associated with one store that was under contract to be acquired for an acquisition price of $32.0 million (see note 18). The deposits are reflected in Other assets, net on the Company’s consolidated balance sheets. 2021 Dispositions During the year ended December 31, 2021, the Company sold five stores in Colorado (1), Nevada (1), North Carolina (2) and Texas (1) for an aggregate sales price of $43.8 million. In conjunction with the sales, the Company recorded gains that totaled $32.7 million. Assets Held for Sale As of December 31, 2021, the Company determined that the Club Operations assumed through the acquisition of LAACO met the criteria to be classified as assets held for sale. Accordingly, the assets and liabilities associated with the Club Operations have been categorized as held for sale within the Company’s December 31, 2021 consolidated balance sheets. As of December 31, 2021, the estimated fair value less selling costs of the Club Operations was greater than the carrying value of the Club Operations, and therefore no loss has been recorded in the current period. Development Activity As of December 31, 2021, the Company had invested in joint ventures to develop three self-storage properties located in New York (2) and Virginia (1). Construction for all projects is expected to be completed by the first quarter of 2023 (see note 12). As of December 31, 2021, development costs incurred to date for these projects totaled $66.7 million. Total construction costs for these projects are expected to be $97.3 million. These costs are capitalized to construction in progress while the projects are under development and are reflected in Storage properties on the Company’s consolidated balance sheets. F-29 The Company has completed the construction of and opened for operation the following stores since January 1, 2019. The costs associated with the construction of these stores are capitalized to land, building and improvements, as well as equipment and are reflected in Storage properties on the Company’s consolidated balance sheets. Store Location Number of Stores Date Opened Newton, MA (1) East Meadow, NY (2) King of Prussia, PA Arlington, VA (3) Brooklyn, NY (2) Waltham, MA (1) Queens, NY (2) Bayonne, NJ (2) (4) 1 1 1 1 1 1 1 1 8 Q4 2021 Q2 2021 Q2 2021 Q1 2021 Q2 2020 Q3 2019 Q2 2019 Q2 2019 CubeSmart Ownership Interest 100% 100% 70% 90% 100% 100% 100% 100% Total Construction Costs (in thousands) $ $ 20,800 25,900 22,800 26,400 45,900 18,000 47,500 25,100 232,400 (1) During the third quarter of 2019 and fourth quarter of 2021, the Company, through two separate joint ventures in which it owned a 90% interest in each and that were previously consolidated, completed the construction of and opened for operation a store located in Waltham, MA and a store located in Newton, MA, respectively. On September 6, 2019, the Company acquired the 10% interest of the noncontrolling member in the venture that owned the Waltham, MA store for $2.6 million. On December 14, 2021, the Company acquired the 10% interest of the noncontrolling member in the venture that owned the Newton, MA store for $3.4 million. Prior to these transactions, the noncontrolling member’s interest in each venture was reported in Noncontrolling interests in subsidiaries on the consolidated balance sheets. Since the Company retained its controlling interest in each venture and the stores are now wholly owned, these transactions were accounted for as equity transactions. In each case, the carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase and the difference between the purchase price paid by the Company and the carrying amount of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company, with no gain or loss recorded. This adjustment was $2.0 million for the Waltham, MA store and $2.7 million for the Newton, MA store. The $10.5 million related party loan extended by the Company to the venture that owned the Waltham, MA store and the $13.2 million related party loan extended by the Company to the venture that owned the Newton, MA store were repaid in conjunction with the Company’s acquisitions of the noncontrolling member’s ownership interests. (2) These stores were previously owned by four separate consolidated joint ventures, of which the Company held a 51% ownership interest in each. On June 25, 2019, the noncontrolling member in the venture that owned the Bayonne, NJ store put its 49% interest in the venture to the Company for $11.5 million. On September 17, 2019, the noncontrolling member in the venture that owned the Queens, NY store put its 49% interest in the venture to the Company for $15.2 million. On September 29, 2020, the noncontrolling member in the venture that owned the Brooklyn, NY store put its 49% interest in the venture to the Company for $10.0 million, of which $1.0 million was paid in cash. The Company issued 276,497 OP Units that were valued at approximately $9.0 million as consideration for the remainder of the purchase price (see note 12). On June 29, 2021, the noncontrolling member in the venture that owned the East Meadow, NY store put its 49% interest in the venture to the Company for $6.6 million. The cash payments related to these transactions are included in Development costs in the consolidated statements of cash flows. (3) This store is located adjacent to an existing consolidated joint venture store. Given their proximity to each other, the stores have been combined in our store count, as well as for operational and reporting purposes (see note 12). (4) This store is subject to a ground lease. F-30 2020 Acquisitions The Company acquired a portfolio of eight stores located in the outer boroughs of New York City (the “Storage Deluxe Assets”), in two separate tranches during December 2020, for an aggregate purchase price of $540.0 million. In connection with the acquisition of the Storage Deluxe Assets, the Company assumed six mortgage loans with an aggregate outstanding principal amount of $154.4 million at the time of acquisition, one of which had an outstanding principal balance of $33.2 million and was repaid immediately. The assumed mortgage debt was recorded at a fair value of $169.2 million, which includes an aggregate net premium of $14.8 million to reflect the estimated fair value of the debt at the time of assumption. The remainder of the purchase price was funded with $210.5 million of cash and $175.1 million through the issuance of 5,272,023 OP Units (see note 12). In connection with the acquisition of the Storage Deluxe Assets, which was accounted for as an asset acquisition, the Company allocated the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consisted of in-place leases, which aggregated to $48.6 million at the time of the acquisition and prior to amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the year ended December 31, 2021 was approximately $48.6 million. Additionally, as part of the transaction, the Company assumed three existing ground leases as lessee, two of which have been classified as finance leases and one of which has been classified as an operating lease (see note 13). During the year ended December 31, 2020, the Company acquired 13 additional stores located in Florida (5), Maryland (1), Nevada (1), New Jersey (1), New York (1), Texas (3) and Virginia (1) for an aggregate purchase price of approximately $195.9 million. In connection with these transactions, which were accounted for as asset acquisitions, the Company allocated the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consisted of in-place leases, which aggregated to $11.4 million at the time of the acquisitions and prior to amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the years ended December 31, 2021 and 2020 was approximately $9.3 million and $2.1 million, respectively. Additionally, on July 20, 2020, the Company acquired land underlying a wholly-owned store located in the Bronx, New York for $9.5 million. The land was previously subject to a ground lease in which the Company served as lessee. As a result of the transaction, which was accounted for as an asset acquisition, the Company was released from its obligations under the ground lease, and the right-of- use asset and lease liability totaling $5.1 million and $5.0 million, respectively, were removed from the Company’s consolidated balance sheets. 2020 Disposition On December 22, 2020, the Company sold a self-storage property located in New York for a sales price of $12.8 million. The Company recorded a $6.7 million gain in connection with the sale. 2019 Acquisitions During the year ended December 31, 2019, the Company acquired 11 stores located in Arizona (1), California (1), Florida (5), Georgia (1), Maryland (1), South Carolina (1) and Texas (1) for an aggregate purchase price of approximately $118.3 million. In connection with these transactions, which were accounted for as asset acquisitions, the Company allocated the purchase price and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consisted of in-place leases, which aggregated to $6.2 million at the time of the acquisitions and prior to amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the years ended December 31, 2020 and 2019 was approximately $4.3 million and $1.9 million, respectively. There was no amortization expense recognized during the year ended December 31, 2021 for these in-place leases. In connection with one of the acquisitions, the Company paid $14.9 million of cash and issued OP Units that were valued at approximately $3.6 million as consideration for the purchase price (see note 12). Additionally, on June 6, 2019, the Company acquired its partner’s 90% ownership interest in HVP III, an unconsolidated real estate venture in which the Company previously owned a 10% noncontrolling interest and that was accounted for under the equity method of accounting. As of the date of acquisition, HVP III owned 18 stores located in Georgia (1), Massachusetts (7), North Carolina (1), South Carolina (7) and Tennessee (2) (the “HVP III Assets”). The purchase price for the 90% ownership interest was $128.3 million, which was comprised of cash consideration of $120.0 million and $8.3 million of the Company’s escrowed proceeds from HVP III’s sale of 50 properties to an unaffiliated buyer on June 5, 2019 (see note 5). The HVP III Assets were recorded by the Company at $137.5 million, which consisted of the $128.3 million purchase price plus the Company’s $10.6 million carryover basis of its previously held equity interest in HVP III, offset by $1.4 million of acquired cash. As a result of the transaction, which was accounted for as an asset acquisition, the HVP III Assets became wholly-owned by the Company and are now consolidated within its financial statements. No gain or loss was recognized as a result of the transaction. In connection with the transaction, the Company allocated the value of the HVP III F-31 Assets and acquisition related costs to the tangible and intangible assets acquired based on fair value. Intangible assets consisted of in- place leases, which aggregated to $14.3 million at the time of the acquisition and prior to amortization of such amounts. The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the years ended December 31, 2020 and 2019 was approximately $6.0 million and $8.3 million, respectively. There was no amortization expense recognized for these in-place leases during the year ended December 31, 2021. 2019 Disposition On October 7, 2019, the Company sold a self-storage property located in Texas for a sales price of $4.1 million. The Company recorded a $1.5 million gain in connection with the sale. 5. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES The Company’s investments in real estate ventures, consisting of common ownership interests, are summarized as follows (dollars in thousands): Unconsolidated Real Estate Ventures Fontana Self Storage, LLC ("Fontana") (1) Rancho Cucamonga Self Storage, LLC ("RCSS") (1) 191 V CUBE LLC ("HVP V") (2) 191 IV CUBE Southeast LLC ("HVPSE") (3) 191 IV CUBE LLC ("HVP IV") (4) CUBE HHF Northeast Venture LLC ("HHFNE") (5) CUBE HHF Limited Partnership ("HHF") (6) CubeSmart Ownership Number of Stores as of December 31, Interest 50% 50% 20% 10% 20% 10% 50% 2021 1 1 5 14 28 13 28 90 2020 - - - 14 21 13 35 83 Carrying Value of Investment as of December 31, 2021 2020 $ $ 14,225 21,536 16,080 4,541 23,223 1,291 38,855 $ 119,751 $ - - - 5,015 21,760 1,628 63,668 92,071 (1) On December 9, 2021, the Company completed the acquisition of LAACO, which included a 50% interest in Fontana and RCSS, each of which owns one self-storage property in California. As of the date of acquisition, the Company recognized differences between the Company’s equity investment in Fontana and RCSS and the underlying equity reflected at the venture level. As of December 31, 2021, this difference was $13.5 million for Fontana and $20.1 million for RCSS. These differences are being amortized over the expected useful life of the self-storage properties owned by the ventures. (2) On March 17, 2021, the Company invested a 20% ownership interest in a newly-formed real estate venture that acquired its initial self-storage property located in Florida. As of December 31, 2021, HVP V owned five self-storage properties located in Florida (2), New Jersey (2) and New York (1). HVP V paid an aggregate of $143.7 million for these properties, of which $2.2 million was allocated to the value of the in-place leases. These acquisitions were funded initially through pro-rata contributions by the Company and its unaffiliated joint venture partner. The Company’s total contribution to HVP V related to these acquisitions was $22.6 million. During the year ended December 31, 2021, the venture closed on an $80.6 million secured term loan. The loan bears interest at SOFR plus 2.05% and matures on September 30, 2025 with an option to extend the maturity date through September 30, 2026, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. (3) The stores owned by HVPSE are located in Florida (2), Georgia (8) and South Carolina (4). HVPSE paid $135.3 million for these stores, of which $7.7 million was allocated to the value of the in-place lease intangible. The acquisition was funded primarily through the venture’s $81.6 million secured term loan. The remainder of the purchase price was contributed pro-rata by the Company and its unaffiliated joint venture partner. The Company’s total contribution to HVPSE related to this portfolio acquisition was $5.6 million. The secured loan bears interest at LIBOR plus 1.60% and matures on March 19, 2023 with options to extend the maturity date through March 19, 2025, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement. (4) The stores owned by HVP IV are located in Arizona (2), Connecticut (3), Florida (4), Georgia (2), Illinois (5), Maryland (2), Minnesota (1), Pennsylvania (1) and Texas (8). The Company’s total contribution to HVP IV in connection with these store acquisitions was $32.0 million. During the year ended December 31, 2021, HVP IV entered into a new $221.6 million secured F-32 loan, which bears interest at LIBOR plus 1.95% per annum, and matures on April 19, 2025. HVP IV used the proceeds from this loan to repay its existing loans (totaling $137.7 million) in full. (5) The stores owned by HHFNE are located in Connecticut (3), Massachusetts (6), Rhode Island (2) and Vermont (2). The Company’s total contribution to HHFNE in connection with these store acquisitions was $3.8 million. As of December 31, 2021, HHFNE had an outstanding $45.0 million secured loan facility, which bears interest at LIBOR plus 1.20% per annum and matures on December 16, 2024. (6) The stores owned by HHF are located in North Carolina (1) and Texas (27). On October 5, 2021, HHF sold seven stores in Texas for an aggregate sales price of approximately $85.0 million. The venture recorded gains which aggregated to approximately $46.9 million in connection with the sale. On January 21, 2021, HHF entered into a new $105.0 million secured loan, which bears interest at 2.58% per annum and matures on February 5, 2028. HHF used the proceeds from the new loan to repay its existing outstanding $100.0 million loan in full. On June 5, 2019, HVP III, a venture in which the Company held a 10% interest, sold 50 stores located in Florida (3), Georgia (4), Michigan (17), North Carolina (3), South Carolina (15) and Tennessee (8), to an unaffiliated third-party buyer for an aggregate sales price of $293.5 million. As of the transaction date, HVP III had five mortgage loans with an aggregate outstanding balance of $22.9 million, as well as $179.5 million outstanding on its $185.5 million loan facility, all of which were defeased or repaid in full at the time of the sale. Net proceeds to the venture from the transaction totaled $82.9 million. The venture recorded gains which aggregated to approximately $106.7 million in connection with the sale. Subsequent to the sale, the Company acquired its partner’s 90% ownership interest in HVP III, which at the time of the acquisition, owned the remaining 18 storage properties (see note 4). Based upon the facts and circumstances at acquisition of Fontana and RCSS and formation of HVP V, HVPSE, HVP IV, HHFNE, and HHF (the “Ventures”), the Company determined that the Ventures are not VIEs in accordance with the accounting standard for the consolidation of VIEs. As a result, the Company used the voting interest model under the accounting standard for consolidation in order to determine whether to consolidate the Ventures. Based upon each member's substantive participating rights over the activities of each entity as stipulated in the operating agreements, the Ventures are not consolidated by the Company and are accounted for under the equity method of accounting (except for HVP III, which was consolidated as of June 6, 2019). The Company’s investments in the Ventures are included in Investment in real estate ventures, at equity on the Company’s consolidated balance sheets and the Company’s earnings from its investments in the Ventures are presented in Equity in earnings of real estate ventures on the Company’s consolidated statements of operations. The amounts reflected in the following table are based on the historical financial information of the Ventures. The following is a summary of the financial position of the Ventures as of December 31, 2021 and 2020: Assets Storage properties, net Other assets Total assets Liabilities and equity Debt Other liabilities Equity CubeSmart Joint venture partners Total liabilities and equity December 31, 2021 2020 (in thousands) $ $ 850,250 $ 34,760 885,010 $ $ 526,972 14,500 $ 86,083 257,455 885,010 $ $ 662,833 18,112 680,945 359,985 11,588 92,071 217,301 680,945 F-33               The following is a summary of results of operations of the Ventures for the years ended December 31, 2021, 2020 and 2019: Total revenues Operating expenses Other expenses Interest expense, net Depreciation and amortization Gains from sale of real estate, net Net income (loss) Company’s share of net income (loss) For the year ended December 31, 2020 2021 2019 (in thousands) 88,449 $ (37,967) (1,138) (12,031) (37,805) 46,966 46,474 $ 25,275 $ 67,239 $ (30,755) (430) (11,585) (33,086) — (8,617) $ 178 $ 72,582 (32,134) (3,227) (14,927) (30,107) 106,667 98,854 11,122 $ $ $ The results of operations above include the periods from January 1, 2019 through June 6, 2019 (date of consolidation) for HVP III. 6. UNSECURED SENIOR NOTES The Company’s unsecured senior notes are summarized as follows (collectively referred to as the “Senior Notes”): Unsecured Senior Notes $300M 4.375% Guaranteed Notes due 2023 (1) (2) $300M 4.000% Guaranteed Notes due 2025 (3) $300M 3.125% Guaranteed Notes due 2026 $550M 2.250% Guaranteed Notes due 2028 $350M 4.375% Guaranteed Notes due 2029 $350M 3.000% Guaranteed Notes due 2030 $450M 2.000% Guaranteed Notes due 2031 $500M 2.500% Guaranteed Notes due 2032 Principal balance outstanding Less: Discount on issuance of unsecured senior notes, net Less: Loan procurement costs, net Total unsecured senior notes, net December 31, Effective 2021 2020       Interest Rate Issuance Date Maturity Date $ (in thousands) — 300,000 300,000 550,000 350,000 350,000 450,000 500,000 2,800,000 (13,455) (18,336) $ 300,000 300,000 300,000 — 350,000 350,000 450,000 — 2,050,000 (7,470) (12,158) $ 2,768,209 $ 2,030,372 4.33 % Various (2) 3.99 % Various (3) 3.18 % Aug-16 2.33 % Nov-21 Jan-19 4.46 % Oct-19 3.04 % 2.10 % Oct-20 2.59 % Nov-21 Dec-23 Nov-25 Sep-26 Dec-28 Feb-29 Feb-30 Feb-31 Feb-32 (1) On December 23, 2021, the Operating Partnership redeemed, in full, its $300.0 million of outstanding 4.375% senior notes due 2023 (the “2023 Notes”), with a portion of the net proceeds from its $550.0 million of 2.250% senior notes due 2028 and its $500.0 million of 2.500% senior notes due 2032 issued on November 30, 2021. In connection with the redemption of the 2023 Notes, the Operating Partnership recognized a loss on early debt extinguishment of $20.3 million, of which $20.0 million represents a prepayment premium and $0.3 represents the write-off of unamortized loan procurement costs. (2) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.375% senior notes due 2023, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.375% senior notes due December 15, 2023 issued on December 17, 2013. The $50.0 million and $250.0 million tranches were priced at 105.040% and 98.995%, respectively, of the principal amount to yield 3.495% and 4.501%, respectively, to maturity. The combined weighted average effective interest rate of the 2023 notes is 4.330%. (3) On April 4, 2017, the Operating Partnership issued $50.0 million of its 4.000% senior notes due 2025, which are part of the same series as the $250.0 million principal amount of the Operating Partnership’s 4.000% senior notes due November 15, 2025 issued on October 26, 2015. The $50.0 million and $250.0 million tranches were priced at 101.343% and 99.735%, respectively, of the principal amount to yield 3.811% and 4.032%, respectively, to maturity. The combined weighted average effective interest rate of the 2025 notes is 3.994%. The indenture under which the Senior Notes were issued restricts the ability of the Operating Partnership and its subsidiaries to incur debt unless the Operating Partnership and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more than 1.5:1.0 after giving effect to the incurrence of the debt. The indenture also restricts the ability of the Operating Partnership and its subsidiaries to incur secured debt unless the Operating Partnership and its consolidated subsidiaries comply with a F-34                                                  secured debt leverage ratio not to exceed 40% after giving effect to the incurrence of the debt. The indenture also contains other financial and customary covenants, including a covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Operating Partnership and its consolidated subsidiaries. As of and for the year ended December 31, 2021, the Operating Partnership was in compliance with all of the financial covenants under the Senior Notes. 7. REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS On December 9, 2011, the Company entered into a credit agreement (the “Credit Facility”). On June 19, 2019, the Company amended and restated, in its entirety, the Credit Facility (the “Amended and Restated Credit Facility”) which, subsequent to the amendment and restatement, is comprised of a $750.0 million unsecured revolving credit facility (the “Revolver”) maturing on June 19, 2024. Under the Amended and Restated Credit Facility, pricing on the Revolver is dependent upon the Company’s unsecured debt credit ratings. At the Company’s current Baa2/BBB level, amounts drawn under the Revolver are priced at 1.10% over LIBOR, inclusive of a facility fee of 0.15%. As of December 31, 2021, borrowings under the Revolver had an interest rate of 1.20%. Additionally, as of December 31, 2021, $539.5 million was available for borrowing under the Revolver. The available balance under the Revolver is reduced by an outstanding letter of credit of $0.6 million. Under the Amended and Restated Credit Facility, the Company’s ability to borrow under the Revolver is subject to ongoing compliance with certain financial covenants which include, among other things, (1) a maximum total indebtedness to total asset value of 60.0%, and (2) a minimum fixed charge coverage ratio of 1.5:1.0. As of and for the year ended December 31, 2021, the Operating Partnership was in compliance with all of its financial covenants. On June 20, 2011, the Company entered into an unsecured term loan agreement (the “Term Loan Facility”), which was subsequently amended on June 18, 2013 and August 5, 2014, consisting of, among other things, a $100.0 million unsecured term loan that was scheduled to mature in January 2020. On June 19, 2019, the Company used an initial advance at closing of the Amended and Restated Credit Facility to repay all of the outstanding indebtedness under the Term Loan Facility. Unamortized loan procurement costs of $0.1 million were written off in conjunction with the repayment. 8. MORTGAGE LOANS AND NOTES PAYABLE The Company’s mortgage loans and notes payable are summarized as follows: Mortgage Loans and Notes Payable Bronx IX, NY (1) Bronx X, NY (1) Nashville V, TN New York, NY Annapolis I, MD Brooklyn XV, NY Long Island City IV, NY Long Island City II, NY Long Island City III, NY Flushing II, NY Principal balance outstanding Plus: Unamortized fair value adjustment Less: Loan procurement costs, net Total mortgage loans and notes payable, net Carrying Value as of December 31, 2021 2020 (in thousands) — $ — 2,206 29,340 5,099 15,423 12,580 18,714 18,723 54,300 156,385 12,981 (1,690) 167,676 $ 21,030 23,148 2,261 29,981 5,283 15,713 12,852 19,094 19,106 54,300 202,768 15,879 (2,143) 216,504 $ $ Effective Interest Rate Maturity Date 4.85 % 4.64 % 3.85 % 3.51 % 3.78 % 2.15 % 2.15 % 2.25 % 2.25 % 2.15 % Jun-21 Jun-21 Jun-23 Jun-23 May-24 May-24 May-24 Jul-26 Aug-26 Jul-29 (1) These mortgage loans were repaid in full on March 1, 2021. F-35                        As of December 31, 2021 and 2020, the Company’s mortgage loans and notes payable were secured by certain of its self-storage properties with net book values of approximately $450.7 million and $539.2 million, respectively. The following table represents the future principal payment requirements on the outstanding mortgage loans and notes payable as of December 31, 2021 (in thousands): 2022 2023 2024 2025 2026 2027 and thereafter Total mortgage payments Plus: Unamortized fair value adjustment Less: Loan procurement costs, net Total mortgage loans and notes payable, net $ $ 2,426 32,591 32,329 979 33,760 54,300 156,385 12,981 (1,690) 167,676 9. ACCUMULATED OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss represents unrealized losses on interest rate swaps (see note 10). The following table summarizes the changes in accumulated other comprehensive loss for the years ended December 31, 2021 and 2020. Beginning balance Reclassification of realized losses on interest rate swaps (1) Ending balance Less: portion included in noncontrolling interests in the Operating Partnership Total accumulated other comprehensive loss included in equity $ $ (1) See note 10 for additional information about the effects of the amounts reclassified. 10. RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS December 31, 2021 2020 (in thousands) (656) 81 (575) 5 (570) $ $ (737) 81 (656) 24 (632) The Company’s use of derivative instruments is limited to the utilization of interest rate swap agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure, as well as to hedge specific transactions. The counterparties to these arrangements are major financial institutions with which the Company and its subsidiaries may also have other financial relationships. The Company is potentially exposed to credit loss in the event of non-performance by these counterparties. However, because of the high credit ratings of the counterparties, the Company does not anticipate that any of the counterparties will fail to meet these obligations as they come due. The Company does not hedge credit or property value market risks. The Company formally assesses, both at inception of a hedge and on an on-going basis, whether each derivative is highly-effective in offsetting changes in cash flows of the hedged item. If management determines that the derivative is highly-effective as a hedge, then the Company accounts for the derivative using hedge accounting, pursuant to which gains or losses inherent in the derivative do not impact the Company’s results of operations. If management determines that the derivative is not highly-effective as a hedge or if a derivative ceases to be a highly-effective hedge, the Company discontinues hedge accounting prospectively and reflects in its consolidated statement of operations realized and unrealized gains and losses with respect to the derivative. As of December 31, 2021 and 2020, all derivative instruments entered into by the Company had been settled. On December 24, 2018, the Company entered into interest rate swap agreements with notional amounts that aggregated to $150.0 million (the “Interest Rate Swaps”) to protect the Company against adverse fluctuations in interest rates by reducing exposure to variability in cash flows relating to interest payments on a forecasted issuance of long-term debt. The Interest Rate Swaps qualified and were designated as cash flow hedges. Accordingly, the Interest Rate Swaps were recorded on the consolidated balance sheet at fair value and the related gains or losses were deferred in shareholders’ equity as accumulated other comprehensive income or loss. These deferred gains and losses were amortized into interest expense during the period or periods in which the related interest payments affected earnings. On January 24, 2019, in conjunction with the issuance of $300.0 million of outstanding 4.375% senior notes due 2029 (the “2029 Notes”), F-36 the Company settled the Interest Rate Swaps for $0.8 million. The $0.8 million termination premium will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the life of the 2029 Notes, which mature on February 15, 2029. The change in unrealized losses on interest rate swaps reflects a reclassification of $0.1 million of unrealized losses from accumulated other comprehensive loss as an increase to interest expense during 2021. The Company estimates that $0.1 million will be reclassified as an increase to interest expense in 2022. 11. FAIR VALUE MEASUREMENTS The Company applies the methods of determining fair value, as described in authoritative guidance, to value its financial assets and liabilities. As defined in the guidance, fair value is based on the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible, as well as considering counterparty credit risk in its assessment of fair value. There were no financial assets or liabilities carried at fair value as of December 31, 2021 and 2020. The following table summarizes the carrying value and estimated fair value of the Company’s debt as of December 31, 2021 and 2020: Carrying value Fair value $ December 31, 2021 December 31, 2020 (in thousands) $ 3,145,785 3,256,128 2,364,676 2,571,300 The fair value of debt estimates were based on a discounted cash flow analysis assuming market interest rates for comparable obligations as of December 31, 2021 and 2020. The Company estimates the fair value of its fixed-rate debt and the credit spreads over variable market rates on its variable-rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies, which is classified within level 2 of the fair value hierarchy. Rates and credit spreads take into consideration general market conditions and maturity. 12. NONCONTROLLING INTERESTS Interests in Consolidated Joint Ventures Noncontrolling interests in subsidiaries represent the ownership interests of third parties in the Company’s consolidated joint ventures. The following table summarizes the Company’s consolidated joint ventures, each of which are accounted for as VIEs: Consolidated Joint Ventures Astoria Investors, LLC ("Astoria") (2) CS Vienna, LLC ("Vienna") (3) CS 750 W Merrick Rd, LLC ("Merrick") (4) CS Valley Forge Village Storage, LLC ("VFV") (5) CS Lock Up Anoka, LLC ("Anoka") (6) SH3, LLC ("SH3") (7) Number of Stores Location CubeSmart Date Opened / Ownership Acquired (1) Interest December 31, 2021 Total Assets Total Liabilities Queens, NY Vienna, VA Valley Stream, NY King of Prussia, PA Anoka, MN Arlington, VA Q1 2023 (est.) Q2 2022 (est.) Q1 2022 (est.) Q2 2021 Q2 2021 Q2 2015/Q1 2021 70% 72% 51% 70% 50% 90% 1 1 1 1 1 1 6 $ $ (in thousands) $ 21,020 25,667 31,050 21,128 11,739 38,922 149,526 $ 25 14,497 16,656 14,050 5,567 192 50,987 F-37 (1) Anoka was formed to acquire an existing store that had commenced operations, while all other consolidated joint ventures were formed to develop, own and operate new stores. (2) On August 17, 2021, the Company contributed $14.7 million in exchange for a 70% ownership interest in Astoria, which acquired land for future development of a self-storage property in Queens, NY for $20.0 million. The Company has a related party loan commitment to Astoria of $27.1 million to fund all or a portion of the construction costs. (3) On December 23, 2020, the Company and the noncontrolling member contributed a previously wholly-owned operating property (the “Vienna Operating Property”) and a parcel of land (the “Vienna Land”), respectively, to Vienna. The Vienna Operating Property and the Vienna Land are located in close proximity to each other in Vienna, VA. The members intend to construct a new store on the Vienna Land, which, upon completion, will be combined with the Vienna Operating Property and operated by the venture as a single store. The Company has a related party commitment to Vienna to fund all or a portion of the construction costs. As of December 31, 2021, the Company has funded $13.2 million of a total $17.0 million loan commitment to Vienna, which is included in the total liabilities amount within the table above. This loan and the related interest were eliminated for consolidation purposes. (4) The noncontrolling member of Merrick has the option to put their ownership interest in the venture to the Company for $17.1 million (the “Put Option”) within the two-year period after construction of the store is substantially complete (the “Put Option Period”). In the event the Put Option is not exercised, the Company has a one-year option to call the ownership interest of the noncontrolling member for $17.1 million, beginning twelve months after the end of the Put Option Period. The Company, at its sole discretion, may pay cash and/or issue OP Units, in exchange for the noncontrolling member’s interest. The Company is accreting this liability during the development period and, as of December 31, 2021, has accrued $14.7 million. This amount is included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets. (5) The Company has a related party commitment to VFV that was used to fund a portion of the construction costs. As of December 31, 2021, the Company has an outstanding loan of $13.7 million to VFV, which is included in the total liability amount within the table above. This loan and the related interest were eliminated for consolidation purposes. (6) On April 16, 2021, the Company contributed $3.4 million in exchange for a 50% ownership interest in Anoka, which acquired a self-storage property located in Minnesota for $12.0 million. In addition, as of December 31, 2021, the Company has funded $5.5 million of a $6.1 million related party loan commitment to Anoka, which is included in the total liability amount within the table above. This loan and the related interest were eliminated for consolidation purposes. (7) SH3 owns two stores located in close proximity to each other in Arlington, VA, the first of which was developed and opened for operation in April 2015 (“Shirlington I”) and the second of which was developed and opened for operation in March 2021 (“Shirlington II”). Given their close proximity to each other, the two stores were combined in our store count, as well as for operational and reporting purposes, upon the opening of Shirlington II in March 2021. Operating Partnership Ownership The Company follows guidance regarding the classification and measurement of redeemable securities. Under this guidance, securities that are redeemable for cash or other assets, at the option of the holder and not solely within the control of the issuer, must be classified outside of permanent equity/capital. This classification results in certain outside ownership interests being included as redeemable noncontrolling interests outside of permanent equity/capital in the consolidated balance sheets. The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions. Additionally, with respect to redeemable ownership interests in the Operating Partnership held by third parties for which CubeSmart has a choice to settle the redemption by delivery of its own shares, the Operating Partnership considered the guidance regarding accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own shares, to evaluate whether CubeSmart controls the actions or events necessary to presume share settlement. The guidance also requires that noncontrolling interests classified outside of permanent capital be adjusted each period to the greater of the carrying value based on the accumulation of historical cost or the redemption value. Approximately 0.8% and 3.6% of the outstanding OP Units as of December 31, 2021 and 2020, respectively, were not owned by CubeSmart, the sole general partner. The interests in the Operating Partnership represented by these OP Units were a component of the consideration that the Operating Partnership paid to acquire certain self-storage properties. The holders of the OP Units are limited F-38 partners in the Operating Partnership and have the right to require CubeSmart to redeem all or part of their OP Units for, at the general partner’s option, an equivalent number of common shares of CubeSmart or cash based upon the fair value of an equivalent number of common shares of CubeSmart. However, the partnership agreement contains certain provisions that could result in a cash settlement outside the control of CubeSmart and the Operating Partnership, as CubeSmart does not have the ability to settle in unregistered shares. Accordingly, consistent with the guidance, the Operating Partnership records the OP Units owned by third parties outside of permanent capital in the consolidated balance sheets. Net income or loss related to the OP Units owned by third parties is excluded from net income or loss attributable to Operating Partner in the consolidated statements of operations. In two separate tranches during December 2020, the Company acquired the Storage Deluxe Assets for an aggregate purchase price of $540.0 million. In connection with the acquisition of the Storage Deluxe Assets, the Company issued 5,272,023 OP Units valued at approximately $175.1 million to fund a portion of the purchase price. On September 29, 2020, the Company acquired the noncontrolling interest in a previously consolidated joint venture that owned a store in New York for $10.0 million. In conjunction with the closing, the Company paid $1.0 million in cash and issued 276,497 OP Units, valued at approximately $9.0 million, to pay the remaining consideration. On December 16, 2019, the Company acquired a store in California for $18.5 million. In conjunction with the closing, the Company paid $14.9 million and issued 106,738 OP Units, valued at approximately $3.6 million, to pay the remaining consideration. During the years ended December 31, 2021, 2020 and 2019, 5.5 million, 100,000 and 80,000 OP units, respectively, were redeemed for common shares of the Company. As of December 31, 2021 and 2020, 1,901,595 and 7,420,828 OP Units, respectively, were held by third parties. The per unit cash redemption amount of the outstanding OP Units was calculated based upon the closing price of the common shares of CubeSmart on the New York Stock Exchange on the final trading day of the year. Based on the Company’s evaluation of the redemption value of the redeemable noncontrolling interests, the Company has reflected these interests at the greater of the carrying value based on the accumulation of historical cost or the redemption value as of December 31, 2021 and 2020. As of December 31, 2021 and 2020, the Operating Partnership recorded an increase to OP Units owned by third parties and a corresponding decrease to capital of $164.1 million and $4.2 million, respectively. 13. LEASES CubeSmart as Lessor The Company derives revenue primarily from rents received from customers who rent cubes at its self-storage properties under month- to-month leases for personal or business use. The self-storage lease agreements utilized by the Company vary slightly to comply with state-specific laws and regulations, but, subject to such laws and regulations, generally provide for automatic monthly renewals, flexibility to increase rental rates over time as market conditions permit and the collection of contingent fees such as administrative and late fees. None of the self-storage lease agreements contain options that allow the customer to purchase the leased space at any time during, or at the expiration of, the lease term. All self-storage leases in which the Company serves as lessor have been classified as operating leases. Accordingly, storage cubes are carried at historical cost less accumulated depreciation and impairment, if any, and are included in Storage properties on the Company’s consolidated balance sheets. Operating lease income for amounts received under the Company’s self-storage lease agreements is recognized on a straight-line basis which, due to the month-to-month nature of the leases, results in the recognition of income during the initial term and each subsequent monthly renewal using the then-in-place rent amount. Operating lease income is included in Rental income within the Company’s consolidated statements of operations. Variable lease income related to the Company’s self-storage lease agreements consists of administrative and late fees charged to customers. For the years ended December 31, 2021 and 2020, administrative and late fees totaled $21.3 million and $20.0 million, respectively, and are included in Other property related income within the Company’s consolidated statements of operations. CubeSmart as Lessee The Company serves as lessee in lease agreements for land, office space, automobiles and certain equipment, which have remaining lease terms of up to 43 years. Certain of the Company’s leases (1) provide for one or more options to renew, with renewal options that can extend the lease up to 69 years, (2) allow for early termination at certain points during the lease term and/or (3) give the Company the option to purchase the leased property. In all cases, the exercise of the lease renewal, termination and purchase options, if provided for in the lease, are at the Company’s sole discretion. Certain of the Company’s lease agreements, particularly its land leases, require rental payments that are periodically adjusted for inflation using a defined index. None of the Company’s lease agreements contain any material F-39 residual value guarantees or material restrictive covenants. Lease expense for payments related to the Company’s finance leases is recognized as interest expense using the interest method over the related lease term. Lease expense for payments related to the Company’s operating leases is recognized on a straight-line basis over the related lease term, which includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments as specified in the lease. Right-of-use assets and lease liabilities related to the Company’s operating leases are recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available surrounding the Company’s unsecured borrowing rates and implied secured spread at the lease commencement date in determining the present value of lease payments. The right-of-use asset also includes any lease payments made at or before lease commencement less any lease incentives. For the years ended December 31, 2021 and 2020, the Company’s lease cost consists of the following components: Finance lease cost: Amortization of finance lease right-of-use assets Interest expense related to finance lease liabilities Operating lease cost Short-term lease cost (1) Total lease costs Cash paid for amounts included in measurement of lease liabilities: Operating cash outflows for finance leases Operating cash outflows for operating leases Total cash outflows for lease liability measurement Year Ended December 31, 2021 2020 $ $ $ $ 964 2,139 3,278 1,173 7,554 $ $ 1,938 2,513 4,451 $ $ 49 64 2,856 1,114 4,083 — 2,186 2,186 (1) Represents automobile leases that have a lease term of 12 months. The Company has made an accounting policy election not to apply the recognition requirements of ASC 842 to this asset class. The lease cost associated with these leases is recognized on a straight-line basis over the related lease term. The following table represents supplemental balance sheet information related to leases as of December 31, 2021 and 2020: Finance Leases Right-of-use assets included in Storage properties, net Lease liabilities included in Lease liabilities - finance leases Operating Leases Right-of-use assets included in Other assets, net Lease liabilities included in Accounts payable, accrued expenses and other liabilities Weighted Average Lease Term (in years) Finance leases Operating leases Weighted Average Discount Rate Finance leases Operating leases December 31, 2021 2020 (dollars in thousands) 40,932 65,801 $ $ 41,896 65,599 54,741 54,018 $ $ 55,302 53,595 $ $ $ $ 42.5 34.0 43.5 34.8 3.25 % 4.46 % 3.25 % 4.46 % F-40                                                                The following table represents the future lease liability maturities as of December 31, 2021 (in thousands): 2022 2023 2024 2025 2026 2027 and thereafter Total lease payments Less: Imputed interest Present value of lease liabilities Finance Operating $ $ 2,182 $ 2,183 2,183 2,224 2,334 120,598 131,704 (65,903) 65,801 $ 2,667 2,719 2,569 2,568 2,644 97,655 110,822 (56,804) 54,018 As of December 31, 2021, the Company has not entered into any lease agreements that are set to commence in the future. 14. RELATED PARTY TRANSACTIONS The Company provides management services to certain joint ventures and other related parties. Management agreements provide for fee income to the Company based on a percentage of revenues at the managed stores. Total management fees for unconsolidated real estate ventures or other entities in which the Company held an ownership interest for the years ending December 31, 2021, 2020 and 2019 were $4.9 million, $3.8 million and $4.0 million, respectively. The management agreements for certain joint ventures, other related parties and third-party stores provide for the reimbursement to the Company for certain expenses incurred to manage the stores. These reimbursements consist of amounts due for management fees, payroll and other store expenses. The amounts due to the Company were $15.4 million and $13.1 million as of December 31, 2021 and 2020, respectively, and are included in Other Assets, net on the Company’s consolidated balance sheets. Additionally, as discussed in note 12, the Company had outstanding mortgage loans receivable from consolidated joint ventures of $32.4 million and $21.4 million as of December 31, 2021 and 2020, respectively, which are eliminated for consolidation purposes. The Company believes that all of these related-party receivables are fully collectible. The HVP V, HVPSE, HVP IV and HHFNE operating agreements provide for acquisition, disposition and other fees payable from HVP V, HVPSE, HVP IV and HHFNE to the Company upon the closing of a property transaction by HVPSE, HVP IV and HHFNE, or any of their subsidiaries and completion of certain measures as defined in the operating agreements. During the years ended December 31, 2021, 2020 and 2019, the Company recognized $1.3 million, $0.7 million and $2.1 million, respectively, in fees associated with property transactions (including fees associated with HVP III). Property transaction fees are included in Other income on the consolidated statements of operations. 15. COMMITMENTS AND CONTINGENCIES Development Commitments The Company has agreements with developers for the construction of three new self-storage properties (see note 4), which will require payments of approximately $37.3 million, due in installments upon completion of certain construction milestones, during 2022 and 2023. Litigation From time to time, the Company is involved in claims which arise in the ordinary course of business. In accordance with applicable accounting guidance, management establishes an accrued liability for claim expenses, insurance retention and litigation costs when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be exposure to loss in excess of those amounts accrued. The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions and known and unknown uncertainties. In the opinion of management, the Company has made adequate provisions for potential liabilities, arising from any such matters, which are included in Accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets. F-41                     16. SHARE-BASED COMPENSATION PLANS The Company has a share-based compensation plan (the “Plan”) which it utilizes to compensate certain employees and non-employee trustees. The Plan was last amended and restated in 2016. The Plan provides for the grant of share options, share appreciation rights, restricted shares, performance units, which may be denominated in cash or shares, including restricted shares and restricted share units, and other share-based awards, including unrestricted common shares or awards denominated or payable in, or valued in whole or part by reference to, common shares. Share options granted under the Plan may be non-qualified share options or incentive share options. Upon shareholder approval of the amendment and restatement of the Plan on June 1, 2016, 4,500,000 additional common shares were made available for award under the Plan. As a result, these 4,500,000 additional shares, together with the 991,117 shares that remained available for future awards under the Plan at the time of the shareholder approval, plus any common shares that are restored to availability upon expiration or forfeiture of outstanding options or restricted share awards, would constitute the “Aggregate Share Reserve”. As of December 31, 2021: (i) 2,448,384 common shares remained available for future awards under the Plan; (ii) 387,701 unvested restricted share awards were outstanding under the Plan; and (iii) 2,263,804 common shares were subject to outstanding options under the Plan. The Plan is administered by the Compensation Committee of the Company’s Board of Trustees (the “Compensation Committee”), which is appointed by the Board of Trustees. The Compensation Committee interprets the Plan and, subject to its right to delegate authority to grant awards, determines the terms and provisions of option grants and share awards. Under the Plan, the Compensation Committee determines the vesting schedule of each share award and option, subject to a one-year minimum vesting requirement, but with permitted acceleration of vesting in the event of a participant’s death or disability, or in the event of a change in control or certain changes in our capital structure. Notwithstanding the foregoing one-year minimum vesting limitation, up to five percent of the shares subject to the Aggregate Share Reserve may be subject to awards that are not subject to such limitation. The exercise price for options is equivalent to the fair value of the underlying common shares at the grant date. The Compensation Committee also determines the term of each option, which shall not exceed 10 years from the grant date. Share Options The fair values for options granted in 2021, 2020 and 2019 were estimated at the time the options were granted using the Black-Scholes option-pricing model applying the following weighted average assumptions: Assumptions: 2021 2020 2019 Risk-free interest rate Expected dividend yield Volatility (1) Weighted average expected life of the options (2) Weighted average grant date fair value of options granted per share Term 0.6 % 3.8 % 25.00 % 6.0 years 1.9 % 3.9 % 20.00 % 6.0 years 2.7 % 3.9 % 32.00 % 6.0 years $ 4.62 10.0 years $ 3.66 10.0 years $ 6.35 10.0 years (1) Expected volatility is based upon the Company’s historical daily share prices. (2) The expected life is based on the contractual term of the options as well as the vesting period. In 2021, 2020 and 2019 the Company recognized compensation expense related to options issued to employees and executives of approximately $2.3 million, $2.0 million and $1.8 million, respectively, which is included in General and administrative expense on the Company’s consolidated statements of operations. The share options vest ratably over three years. As of December 31, 2021, the Company had approximately $2.5 million of unrecognized option compensation cost related to all grants that will be recognized over a weighted average period of 1.7 years. F-42 The table below summarizes the option activity under the Plan for the year ended December 31, 2021: Balance at December 31, 2020 Options granted Options canceled Options exercised Balance at December 31, 2021 Vested or expected to vest at December 31, 2021 Exercisable at December 31, 2021 Weighted Average Strike Price Weighted Average Remaining Contractual Term (Years) 26.37 33.70 32.33 18.77 29.63 29.63 27.17 6.39 9.01 — 3.08 6.82 6.82 5.37 Options 2,118,090 $ 592,456 (27,743) (418,999) 2,263,804 $ 2,263,804 $ 1,202,882 $ As of December 31, 2021, the aggregate intrinsic value of options that were exercisable was approximately $35.8 million. As of that date, the aggregate intrinsic value of options that had vested or were expected to vest was approximately $61.8 million. The aggregate intrinsic value of options exercised was approximately $10.6 million, $0.9 million and $9.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. Restricted Shares & Performance Units During 2021, 2020 and 2019 the Company granted restricted shares to employees and trustees and also granted performance units to certain executives. The fair values for restricted share awards made under the Plan were valued at the grant date fair value, which is the market price of the underlying common shares. The shares vest over either a 3-year or 5-year period beginning with the first anniversary of the grant. Performance units represent the right to earn common shares. The performance units were granted in the form of deferred share units with a market condition, entitling the holders thereof to receive common shares at a future date. The performance units are awarded based on the Company’s total return to shareholders with respect to a specified peer group consisting of publicly traded REITs over a three-year period. The performance units cliff vest upon the third anniversary of the effective date. The Company used a Monte Carlo simulation analysis to estimate the fair value of the awards, the key assumptions of which are as follows: Assumptions: Risk-free interest rate Volatility (1) 2021 0.2 % 28.00 % 2020 1.7 % 19.00 % 2019 2.6 % 23.00 % (1) Expected volatility is based upon the Company’s historical daily share prices. During the years ended December 31, 2021, 2020 and 2019, the Company recognized compensation expense related to restricted shares and performance units of approximately $5.8 million, $5.2 million and $4.9 million, respectively, which is included in General and administrative expense on the Company’s consolidated statements of operations. The following table presents non-vested restricted share and performance unit activity under the Plan for the year ended December 31, 2021: Non-Vested at January 1, 2021 Granted Vested Forfeited Non-Vested at December 31, 2021 Number of Non- Vested Restricted Shares and Performance Units 382,901 176,825 (160,549) (11,476) 387,701 The weighted average fair value of restricted shares and performance units granted during the years ended December 31, 2021, 2020 and 2019 was $39.37, $32.39 and $32.22, respectively. The total fair value of restricted shares and performance units vested during the years ended December 31, 2021, 2020 and 2019 was $7.0 million, $6.1 million and $5.8 million, respectively. As of December 31, 2021 the Company had approximately $6.7 million of remaining unrecognized restricted share and performance unit compensation costs that are expected to be recognized over a weighted average period of 2.0 years. F-43 17. EARNINGS PER SHARE AND UNIT AND SHAREHOLDERS’ EQUITY AND CAPITAL Earnings per common share and shareholders’ equity The following is a summary of the elements used in calculating basic and diluted earnings per common share: Net income Noncontrolling interests in the Operating Partnership Noncontrolling interest in subsidiaries $ Net income attributable to the Company’s common shareholders $ Weighted average basic shares outstanding Share options and restricted share units Weighted average diluted shares outstanding (1) For the year ended December 31, 2021 2020 2019 (dollars and shares in thousands, except per share amounts) 230,813 (7,873) 542 223,482 $ $ 167,611 (1,825) (165) 165,621 $ $ 203,832 1,177 205,009 194,147 796 194,943 170,771 (1,708) 54 169,117 190,874 702 191,576 Basic earnings per share attributable to common shareholders Diluted earnings per share attributable to common shareholders (2) $ $ 1.10 1.09 $ $ 0.85 0.85 $ $ 0.89 0.88 Earnings per common unit and capital The following is a summary of the elements used in calculating basic and diluted earnings per common unit: For the year ended December 31, 2021 2019 (dollars and units in thousands, except per unit amounts) 2020 Net income Operating Partnership interests of third parties Noncontrolling interest in subsidiaries Net income attributable to common unitholders Weighted average basic units outstanding Unit options and restricted share units Weighted average diluted units outstanding (1) Basic earnings per unit attributable to common unitholders Diluted earnings per unit attributable to common unitholders (2) $ $ $ $ 230,813 (7,873) 542 223,482 $ $ 167,611 (1,825) (165) 165,621 $ $ 203,832 1,177 205,009 194,147 796 194,943 170,771 (1,708) 54 169,117 190,874 702 191,576 1.10 1.09 $ $ 0.85 0.85 $ $ 0.89 0.88 (1) For the years ended December 31, 2021, 2020 and 2019, the Company declared cash dividends per common share/unit of $1.45, $1.33 and $1.29, respectively. (2) The amounts of anti-dilutive options that were excluded from the computation of diluted earnings per share/unit as the exercise price was higher than the average share price of the Company for the years ended December 31, 2020 were 0.8 million. There were no anti-dilutive options for the years ended December 31, 2021 or 2019. The OP units and common units have essentially the same economic characteristics as they share equally in the total net income or loss and distributions of the Operating Partnership. An Operating Partnership unit may be redeemed for cash, or at the Company’s option, common units on a one-for-one basis. Outstanding noncontrolling interest units in the Operating Partnership were 1,901,595; 7,420,828 and 1,972,308 as of December 31, 2021, 2020 and 2019, respectively. There were 223,917,993; 197,405,989 and 193,557,024 common units outstanding as of December 31, 2021, 2020 and 2019, respectively. F-44                           Common Shares On November 19, 2021, we closed an underwritten offering of 15.5 million common shares at a public offering price of $51.00 per share, resulting in net proceeds of $765.6 million, after deducting offering costs. The Company maintains an at-the-market equity program that enables it to offer and sell up to 60.0 million common shares through sales agents pursuant to equity distribution agreements (the “Equity Distribution Agreements”). The Company’s sales activity under the program for the years ended December 31, 2021, 2020 and 2019 is summarized below: Number of shares sold Average sales price per share Net proceeds after deducting offering costs   $   $ 2021 For the year ended December 31, 2020 (dollars and shares in thousands, except per share amounts) 5,899 33.64 196,304 4,982 40.57   $ 199,977   $ 3,627 33.69   $ 120,727   $ 2019 The proceeds from the sales of common shares under the program during the years ended December 31, 2021, 2020 and 2019 were used to fund the acquisition and development of self-storage properties and for general corporate purposes. As of December 31, 2021, 2020 and 2019, 5.9 million common shares, 10.9 million common shares and 4.6 million common shares, respectively, remained available for issuance under the Equity Distribution Agreements. 18. SUBSEQUENT EVENTS Subsequent to December 31, 2021, the Company acquired a self-storage property located in Maryland for $32.0 million. F-45 CUBESMART SCHEDULE III REAL ESTATE AND RELATED DEPRECIATION December 31, 2021 (dollars in thousands) State Arizona California Colorado Connecticut Florida Georgia Illinois Indiana Maryland Massachusetts Minnesota Nevada New Jersey New Mexico New York North Carolina Ohio Pennsylvania Rhode Island South Carolina Tennessee Texas Utah Virginia Washington D.C. Other Corporate Assets Number of Stores Total Rentable Square Feet (unaudited) 48 63 10 22 90 21 43 1 19 20 2 22 28 3 58 9 20 12 4 8 9 75 4 11 5 — 607 3,070,755 4,741,051 654,265 1,197,402 6,801,203 1,562,380 2,761,024 70,380 1,585,705 1,256,014 176,296 1,700,457 1,983,294 182,261 4,593,319 611,298 1,294,303 890,594 247,305 432,389 755,595 5,358,803 293,988 965,100 409,484 — 43,594,665 $ Encumbrances — — — — — — — — 5,099 — — — — — 149,080 — — — — — 2,206 — — — — — 156,385 $ Initial Cost Land 98,442 371,460 11,812 22,023 104,987 18,394 54,493 1,134 37,055 31,948 2,621 71,702 45,864 2,866 416,337 10,349 13,529 18,769 3,480 6,117 9,117 108,310 10,763 32,731 28,759 — 1,533,062 $ $ $ Buildings & Improvements 389,514 683,683 46,755 82,375 531,360 100,856 221,022 5,589 188,989 159,000 21,655 394,023 188,139 9,367 1,300,288 44,680 51,265 99,196 17,156 31,039 54,403 458,473 2,844 122,391 80,996 — 5,285,058 $ Costs Subsequent to $ Acquisition 23,213 33,337 4,131 19,620 88,420 9,933 27,543 199 13,098 9,476 379 4,536 36,373 1,615 45,488 6,242 17,460 10,424 1,574 1,159 4,897 31,746 2,676 4,498 2,232 12,450 412,719 $ $ $ $ $ Land Gross Carrying Amount at December 31, 2021 Buildings & Improvements 397,612 663,731 44,903 86,979 553,950 99,513 224,665 5,783 189,926 163,387 22,034 396,643 205,843 7,804 1,317,425 47,409 54,746 104,434 18,729 32,199 52,047 465,154 4,102 119,686 78,709 10,970 5,368,383 99,495 373,302 11,787 23,568 112,652 18,518 54,358 1,134 37,912 32,197 2,621 71,703 49,372 2,867 428,549 10,788 14,938 18,723 3,480 6,117 9,117 108,628 10,622 32,732 28,803 1,480 1,565,463 $ $ Accumulated Depreciation Total 497,107 1,037,033 56,690 110,547 666,602 118,031 279,023 6,917 227,838 195,584 24,655 468,346 255,215 10,671 1,745,974 58,197 69,684 123,157 22,209 38,316 61,164 573,782 14,724 152,418 107,512 12,450 6,933,846 $ $ (A) 38,951 83,657 12,426 32,682 167,579 28,392 64,522 1,374 44,095 27,862 2,084 11,695 59,133 3,212 247,167 12,034 20,461 18,784 4,241 2,387 12,905 89,494 1,800 28,717 15,704 2,511 1,033,869 (A) Depreciation on the buildings and improvements is recorded on a straight-line basis over their estimated useful lives, which range from five to 39 years. F-46 Activity in storage properties during the period from January 1, 2019 through December 31, 2021 was as follows (in thousands): Storage properties* Balance at beginning of year Acquisitions & improvements Fully depreciated assets Dispositions and other Construction in progress, net Right-of-use assets - finance leases Balance at end of year Accumulated depreciation* Balance at beginning of year Depreciation expense Fully depreciated assets Dispositions and other Balance at end of year Storage properties, net 2021 2020 2019 5,489,754 $ 1,795,965 (52,722) (19,408) (30,095) — 7,183,494 $ 4,699,844 $ 825,247 (83,418) (8,533) 14,718 41,896 5,489,754 $ 4,463,455 364,324 (81,717) (3,033) (43,185) — 4,699,844 983,940 $ 160,933 (52,722) (6,327) 1,085,824 $ 6,097,670 $ 925,359 $ 143,952 (83,418) (1,953) 983,940 $ 4,505,814 $ 862,487 145,233 (81,717) (644) 925,359 3,774,485 $ $ $ $ $ * These amounts include equipment that is housed at the Company’s stores which is excluded from Schedule III above. As of December 31, 2021, the aggregate cost of Storage properties for federal income tax purposes was approximately $7,452.8 million. F-47 Subsidiary 1 Ellis St, LLC 101 OLD WINDSOR ROAD, LLC 1038 W 35TH ST., LLC 10400 Riverside Drive, LLC 1053 CROMWELL AVENUE, LLC 12250 El Dorado Parkway, LLC 12902 South 301 Highway, LLC 1518 S Washington Ave, LLC 1575 NORTH BLAIRS BRIDGE ROAD, LLC 1830 E ROOSEVELT RD., LLC 186 JAMAICA AVE, LLC 191 CUBE SOUTHEAST FL, LLC 191 CUBE SOUTHEAST GA, LLC 191 CUBE SOUTHEAST SC, LLC 191 III CUBE 2 LLC 191 III CUBE BORDEAUX SUB, LLC 191 III CUBE CHATTANOOGA SUB, LLC 191 III CUBE GA SUB LLC 191 III CUBE GOODLETTSVILLE I SUB, G.P. 191 III CUBE GOODLETTSVILLE II SUB, G.P. 191 III CUBE KNOXVILLE I SUB, G.P. 191 III CUBE KNOXVILLE II SUB, G.P. 191 III CUBE KNOXVILLE III SUB, G.P. 191 III Cube LLC 191 III CUBE MA SUB LLC 191 III CUBE MURFREESBORO SUB, LLC 191 III CUBE NC SUB LLC 191 III CUBE NEW BEDFORD SUB, LLC 191 III CUBE OLD HICKORY SUB, LLC 191 III CUBE SC SUB LLC 191 III CUBE SUB HOLDINGS 1 LLC 191 III CUBE SUB HOLDINGS 2 LLC 191 III CUBE SUB HOLDINGS 3 LLC 191 III CUBE SUB HOLDINGS 4 LLC 191 III CUBE SUB HOLDINGS 5 LLC 191 III CUBE SUB HOLDINGS 6 LLC 191 III CUBE SUB HOLDINGS 7 LLC 191 III CUBE SUB HOLDINGS 8 LLC 191 III CUBE TN SUB LLC 191 III CUBE TRINITY SUB, LLC 191 IV 225 LORDSHIP BLVD, LLC 191 IV 9199 RED BRANCH ROAD, LLC 191 IV CUBE LLC 191 IV CUBE SOUTHEAST LLC 191 V 1500 NORTHPARK DRIVE, LLC 191 V CUBE LLC 2225 46TH ST, LLC 2301 TILLOTSON AVE, LLC 251 JAMAICA AVE, LLC 2701 S. CONGRESS AVENUE, LLC 2880 Exterior St, LLC 2880 EXTERIOR STREET TRS, LLC 295 E. Ocotillo Road, LLC 300 E IL ROUTE 22, LLC 3068 CROPSEY AVENUE, LLC 3103 N. Decatur Road, LLC 33-24 Woodside Avenue, LLC 3437 Astoria LLC 1 Exhibit 21.1 Jurisdiction of Organization Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Subsidiary 3526 OAKTON ST., LLC 38-01 47TH Avenue, LLC 38300 North Gantzel Road, LLC 41-06 Delong Street - Retail, LLC 41-06 Delong Street, LLC 4211 BELLAIRE BLVD., LLC 430 1ST AVENUE SOUTH, LLC 4370 Fountain Hills Drive NE, LLC 444 55TH STREET HOLDINGS, LLC 444 55TH STREET VENTURE, LLC 444 55TH STREET, LLC 4441 Alma Road, LLC 5 Old Lancaster Associates, LLC 500 MILDRED AVENUE PRIMOS, LLC 5505 Maple Ave, LLC 5700 WASHINGTON AVENUE, LLC 5715 BURNET ROAD, LLC 610 SAWDUST ROAD, LLC 619 Somerset St, LLC 7205 Vanderbilt Way, LLC 7605-7645 QUINCY AVE, LLC 8 Breiderhoft Rd, LLC 8552 BAYMEADOWS ROAD, LLC 9641 Annapolis Road, LLC Astoria Investors, LLC California Yacht Club, Inc. CONSHOHOCKEN GP II, LLC CS 1031 Acquisition, LLC CS 1158 MCDONALD AVE, LLC CS 160 EAST 22ND ST, LLC CS 2087 HEMPSTEAD TPK, LLC CS 750 W MERRICK RD, LLC CS ANNAPOLIS HOLDINGS, LLC CS ANNAPOLIS, LLC CS CAPITAL INVESTORS, LLC CS FLORIDA AVENUE, LLC CS LOCK UP ANOKA TRS, LLC CS LOCK UP ANOKA, LLC CS SDP EVERETT BORROWER, LLC CS SDP Everett, LLC CS SDP Newtonville, LLC CS SDP WALTHAM BORROWER, LLC CS SDP WALTHAM, LLC CS SHIRLINGTON, LLC CS SNL NEW YORK AVE, LLC CS SNL OPERATING COMPANY, LLC CS VALLEY FORGE VILLAGE STORAGE TRS, LLC CS VALLEY FORGE VILLAGE STORAGE, LLC CS VENTURE I, LLC CS Vienna, LLC CUBE HHF Limited Partnership CUBE HHF NORTHEAST CT, LLC CUBE HHF NORTHEAST MA, LLC CUBE HHF NORTHEAST RI, LLC CUBE HHF NORTHEAST SUB HOLDINGS LLC CUBE HHF NORTHEAST TRS, LLC CUBE HHF NORTHEAST VENTURE LLC CUBE HHF NORTHEAST VT, LLC CUBE HHF TRS, LLC CUBE III TN ASSET MANAGEMENT, LLC 2 Jurisdiction of Organization Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Pennsylvania Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware California Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Subsidiary CUBE III TRS 2 LLC CUBE III TRS LLC CUBE IV SOUTHEAST TRS LLC CUBE IV TRS LLC CUBE V TRS LLC CUBE VENTURE GP, LLC CubeSmart CUBESMART 338 3RD AVENUE, LLC CUBESMART 39-25 21ST STREET, LLC CubeSmart Asset Management, LLC CUBESMART BARTOW, LLC CUBESMART BOSTON ROAD, LLC CUBESMART CLINTON, LLC CUBESMART CYPRESS, LLC CUBESMART EAST 135TH, LLC CubeSmart Management, LLC CUBESMART SOUTHERN BLVD, LLC CUBESMART SWISS AVE, LLC CUBESMART TEMPLE HILLS, LLC CUBESMART TIMONIUM BORROWER, LLC CubeSmart Timonium, LLC CubeSmart TRS, Inc. CubeSmart, L.P. EAST COAST GP, LLC EAST COAST STORAGE PARTNERS, L.P. Fontana Self Storage, LLC FREEHOLD MT, LLC LAACO, Ltd. LANGHORNE GP II, LLC Lantana Property Owner's Association, Inc. MONTGOMERYVILLE GP II, LLC Old Lancaster Venture, L.P. PSI Atlantic Austin TX, LLC PSI Atlantic Brockton MA, LLC PSI Atlantic Cornelius NC, LLC PSI Atlantic Haverhill MA, LLC PSI Atlantic Holbrook NY, LLC PSI Atlantic Humble TX, LLC PSI Atlantic Lawrence MA, LLC PSI Atlantic Lithia Springs GA, LLC PSI Atlantic Nashville TN, LLC PSI Atlantic NPB FL, LLC PSI Atlantic Pineville NC, LLC PSI Atlantic Surprise AZ, LLC PSI Atlantic Villa Rica GA, LLC PSI Atlantic Villa Rica Parcel Owner, LLC PSI Atlantic, LLC R STREET STORAGE ASSOCIATES, LLC Rancho Cucamonga Self Storage, LLC SHIRLINGTON RD II, LLC SHIRLINGTON RD TRS, LLC SHIRLINGTON RD, LLC SOMERSET MT, LLC STORAGE PARTNERS OF CONSHOHOCKEN, L.P. Storage Partners of Freehold II, LLC Storage Partners of Langhorne II, LP STORAGE PARTNERS OF MONTGOMERYVILLE, L.P. STORAGE PARTNERS OF SOMERSET, LLC The LAAC Corp. UNITED-HSRE I, L.P. 3 Jurisdiction of Organization Delaware Delaware Delaware Delaware Delaware Delaware Maryland Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Ohio Delaware Delaware Delaware Delaware Delaware California Delaware Florida Delaware Pennsylvania Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Maryland Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware California Delaware Subsidiary U-Store-It Development LLC U-Store-It Trust Luxembourg S.ar.l. Valley Forge Storage Venture, LLC Wider Reach, LLC YSI HART TRS, INC YSI I LLC YSI II LLC YSI X GP LLC YSI X LP YSI X LP LLC YSI XV LLC YSI XX GP LLC YSI XX LP YSI XX LP LLC YSI XXX LLC YSI XXXI, LLC YSI XXXIII, LLC YSI XXXIIIA, LLC YSI XXXVII, LLC Jurisdiction of Organization Delaware Luxembourg Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware 4 Consent of Independent Registered Public Accounting Firm Exhibit 23.1 The Board of Trustees CubeSmart: We consent to the incorporation by reference in the registration statement (No. 333-236886) on Form S-3 of CubeSmart and CubeSmart, L.P. and (Nos. 333-211787, 333-167623, 333-143126, 333-143125, 333-143124, 333-119987 and 333-216768) on Form S-8 of CubeSmart of our reports dated February 25, 2022, with respect to the consolidated balance sheets of CubeSmart as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III (collectively, the Consolidated Financial Statements), and the effectiveness of internal control over financial reporting incorporated by reference herein and to the reference to our firm under the heading “Experts” in the prospectus. /s/ KPMG LLP Philadelphia, Pennsylvania February 25, 2022 Consent of Independent Registered Public Accounting Firm Exhibit 23.2 The Partners of CubeSmart, L.P. and the Board of Trustees of CubeSmart: We consent to the incorporation by reference in the registration statement (No. 333‑236886) on Form S-3 of CubeSmart and CubeSmart, L.P. and (Nos. 333-211787, 333-167623, 333-143126, 333-143125, 333-143124, 333-119987 and 333-216768) on Form S-8 of CubeSmart of our reports dated February 25, 2022, with respect to the consolidated balance sheets of CubeSmart, L.P. as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), capital, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III (collectively, the Consolidated Financial Statements), and the effectiveness of internal control over financial reporting incorporated by reference herein and to the reference to our firm under the heading “Experts” in the prospectus. 6/s/ KPMG LLP Philadelphia, Pennsylvania February 25, 2022 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 31.1 I, Christopher P. Marr, certify that: 1. I have reviewed this Annual Report on Form 10-K of CubeSmart; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: February 25, 2022 /s/ Christopher P. Marr Christopher P. Marr Chief Executive Officer CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 31.2 I, Timothy M. Martin, certify that: 1. I have reviewed this Annual Report on Form 10-K of CubeSmart; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 6 Date: February 25, 2022 /s/ Timothy M. Martin Timothy M. Martin Chief Financial Officer CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 31.3 I, Christopher P. Marr, certify that: 1. I have reviewed this Annual Report on Form 10-K of CubeSmart L.P.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: February 25, 2022 /s/ Christopher P. Marr Christopher P. Marr Chief Executive Officer CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 31.4 I, Timothy M. Martin, certify that: 1. I have reviewed this Annual Report on Form 10-K of CubeSmart L.P.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: February 25, 2022 /s/ Timothy M. Martin Timothy M. Martin Chief Financial Officer 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 Exhibit 32.1 The undersigned, the Chief Executive Officer and Chief Financial Officer of CubeSmart (the “Company”), each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (a) The Annual Report on Form 10-K of the Company for the year ended December 31, 2021 (the “Report”) filed on the date hereof with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 6 Date: February 25, 2022 Date: February 25, 2022 /s/ Christopher P. Marr Christopher P. Marr Chief Executive Officer /s/ Timothy M. Martin Timothy M. Martin Chief Financial Officer A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. 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 Exhibit 32.2 The undersigned, the Chief Executive Officer and Chief Financial Officer of CubeSmart L.P. (the “Company”), each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (a) The Annual Report on Form 10-K of the Company for the year ended December 31, 2021 (the “Report”) filed on the date hereof with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 6 Date: February 25, 2022 Date: February 25, 2022 /s/ Christopher P. Marr Christopher P. Marr Chief Executive Officer /s/ Timothy M. Martin Timothy M. Martin Chief Financial Officer A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. Exhibit 99.1 MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS The following discussion describes the material U.S. federal income tax considerations relating to the purchase, ownership and disposition of common shares and preferred shares of CubeSmart and debt securities of CubeSmart, L.P. (the “Operating Partnership”), and the qualification and taxation of CubeSmart as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). This discussion reflects changes to the U.S. federal income tax laws made by legislation commonly referred to as the Tax Cuts and Jobs Act (the “TCJA”), which was signed into law on December 22, 2017, and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020. This discussion is not exhaustive of all possible tax considerations and does not provide a detailed discussion of any state, local or foreign tax considerations. The discussion does not address all aspects of taxation that may be relevant to particular investors in light of their personal investment or tax circumstances, or to certain types of investors that are subject to special treatment under the U.S. federal income tax laws, such as insurance companies, regulated investment companies, REITs, tax-exempt organizations (except to the limited extent discussed below under “Taxation of Tax-Exempt Shareholders”), financial institutions or broker-dealers, non-U.S. individuals and foreign corporations (except to the limited extent discussed below under “Taxation of Non- U.S. Shareholders”), an entity treated as a U.S. corporation on account of the inversion rules, persons holding our securities as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated investment, persons subject to the alternative minimum tax provisions of the Code, persons holding our securities through a partnership or similar pass-through entity and other persons subject to special tax rules. This summary deals only with investors who hold common shares or preferred shares of CubeSmart or debt securities of the Operating Partnership as “capital assets” within the meaning of Section 1221 of the Code. This discussion is not intended to be, and should not be construed as, tax advice. The information in this summary is based on the Code, current, temporary and proposed Treasury regulations, the legislative history of the Code, current administrative interpretations and practices of the Internal Revenue Service (the “IRS”), including its practices and policies as endorsed in private letter rulings, which are not binding on the IRS, and existing court decisions. Future legislation, regulations, administrative interpretations and court decisions could change current law or adversely affect existing interpretations of current law. Any change could apply retroactively. We have not obtained any rulings from the IRS concerning the tax treatment of the matters discussed in this summary. Therefore, it is possible that the IRS could challenge the statements in this summary, which do not bind the IRS or the courts, and that a court could agree with the IRS. We urge you to consult your own tax advisor regarding the specific tax consequences to you of ownership of common shares or preferred shares of CubeSmart and debt securities of the Operating Partnership, and of CubeSmart’s election to be taxed as a REIT. Specifically, you should consult your own tax advisor regarding the federal, state, local, foreign, and other tax consequences of such ownership and election, and regarding potential changes in applicable tax laws. Taxation of CubeSmart Qualification of CubeSmart as a REIT CubeSmart elected to be taxed as a REIT under the U.S. federal income tax laws beginning with its short taxable year ended December 31, 2004. CubeSmart believes that, beginning with such short taxable year, it has been organized and has operated in such a manner as to qualify for taxation as a REIT under the Code and intends to continue to operate in such a manner. However, there can be no assurance that CubeSmart has qualified or will remain qualified as a REIT. CubeSmart’s continued qualification and taxation as a REIT depends upon its ability to meet on a continuing basis, through actual annual operating results, certain qualification tests set forth in the U.S. federal income tax laws. Those qualification tests involve the percentage of income that CubeSmart earns from specified sources, the percentage of its assets that fall within specified categories, the diversity of its share ownership, and the percentage of its earnings that CubeSmart distributes. Accordingly, no assurance can be given that the actual results of CubeSmart’s operations for any particular taxable year will satisfy such requirements. For a discussion of the tax consequences of its failure to qualify as a REIT, see “Requirements for Qualification — Failure to Qualify” below. Pursuant to CubeSmart’s declaration of trust, CubeSmart’s board of trustees has the authority to make any tax elections on its behalf that, in its sole judgment, are in CubeSmart’s best interest. This authority includes the ability to revoke or otherwise terminate CubeSmart’s status as a REIT. CubeSmart’s board of trustees has the authority under its declaration of trust to make these elections without the necessity of obtaining the approval of CubeSmart’s shareholders. In addition, CubeSmart’s board of trustees has the authority to waive any restrictions and limitations contained in its declaration of trust that are intended to preserve CubeSmart’s status as a REIT during any period in which its board of trustees has determined not to pursue or preserve CubeSmart’s status as a REIT. 1 Taxation of CubeSmart as a REIT The sections of the Code relating to qualification and operation as a REIT, and the U.S. federal income taxation of a REIT, are highly technical and complex. The following discussion sets forth only the material aspects of those sections. This summary is qualified in its entirety by the applicable Code provisions and the related rules and regulations. If CubeSmart qualifies as a REIT, it generally will not be subject to federal income tax on the taxable income that it distributes to its shareholders. The benefit of that tax treatment is that it avoids the “double taxation,” or taxation at both the corporate and shareholder levels, that generally results from owning shares in a corporation. However, CubeSmart will be subject to federal tax in the following circumstances:  CubeSmart is subject to the corporate federal income tax on any taxable income, including net capital gain that it does not distribute to shareholders during, or within a specified time period after, the calendar year in which the income is earned.  For tax years beginning before January 1, 2018, CubeSmart may be subject to the corporate “alternative minimum tax” on any items of tax preference, including any deductions of net operating losses.  CubeSmart is subject to tax, at the highest corporate rate (currently, 21%), on net income from the sale or other disposition of property acquired through foreclosure (“foreclosure property”) that it holds primarily for sale to customers in the ordinary course of business, and other non-qualifying income from foreclosure property.  CubeSmart is subject to a 100% tax on net income from sales or other dispositions of property, other than foreclosure property, that it holds primarily for sale to customers in the ordinary course of business.    If CubeSmart fails to satisfy one or both of the 75% gross income test or the 95% gross income test, as described below under “Requirements for Qualification — Gross Income Tests,” but nonetheless continues to qualify as a REIT because it meets other requirements, CubeSmart will be subject to a 100% tax on: the greater of the amount by which it fails the 75% gross income test or the 95% gross income test multiplied, in either case, by a fraction intended to reflect its profitability. If CubeSmart fails to distribute during a calendar year at least the sum of: (1) 85% of its REIT ordinary income for the year, (2) 95% of its REIT capital gain net income for the year, and (3) any undistributed taxable income required to be distributed from earlier periods, then CubeSmart will be subject to a 4% nondeductible excise tax on the excess of the required distribution over the amount it actually distributed. If CubeSmart fails any of the asset tests, as described below under “Requirements for Qualification — Asset Tests,” other than certain de minimis failures, but its failure was due to reasonable cause and not to willful neglect, and it nonetheless maintains its REIT qualification because of specified cure provisions, CubeSmart will pay a tax equal to the greater of $50,000 or the highest federal income tax rate (currently 21%) then applicable to U.S. corporations on the net income from the nonqualifying assets during the period in which it failed to satisfy the asset tests. The amount of gain on which CubeSmart will pay tax generally is the lesser of the amount of gain that it recognizes at the time of the sale or disposition, and the amount of gain that it would have recognized if it had sold the asset at the time CubeSmart acquired it.  If CubeSmart fails to satisfy one or more requirements for REIT qualification, other than the gross income tests and the asset tests, and such failure is due to reasonable cause and not to willful neglect, it will be required to pay a penalty of $50,000 for each such failure.  CubeSmart may elect to retain its net long-term capital gain and pay income tax on such gain.  CubeSmart will be subject to a 100% excise tax on transactions with a taxable REIT subsidiary that are not conducted on an arm’s-length basis.  If CubeSmart acquires any asset from a C corporation (a corporation that generally is subject to full corporate-level tax) in a transaction in which the adjusted basis of the assets in CubeSmart’s hands is determined by reference to the adjusted tax basis of the asset in the hands of the C corporation, CubeSmart will pay tax at the highest regular corporate rate then applicable (currently, 21%) if it recognizes gain on the sale or disposition of the asset during the 2 5-year period after it acquires the asset, unless the C corporation elects to treat the assets as if they were sold for their fair market value at the time of CubeSmart’s acquisition.  CubeSmart may be required to pay monetary penalties to the IRS in certain circumstances, including if it fails to meet record-keeping requirements intended to monitor its compliance with rules relating to the composition of a REIT’s shareholders, as described below in “Requirements for Qualification – Organizational Requirements - Recordkeeping Requirements.”  The earnings of CubeSmart’s lower-tier entities, if any, that are subchapter C corporations, including taxable REIT subsidiaries, are subject to federal corporate income tax. In addition, we may be subject to a variety of taxes, including payroll taxes and state, local and foreign income, property and other taxes on our assets and operations. We could also be subject to tax in situations and on transactions not presently contemplated. Requirements for Qualification organizational requirements, gross income tests, asset tests and annual distribution requirements. To qualify as a REIT, CubeSmart must elect to be treated as a REIT, and CubeSmart must meet various requirements: Organizational Requirements. A REIT is a corporation, trust or association that meets each of the following 1) It is managed by one or more trustees or directors; 2) Its beneficial ownership is evidenced by transferable shares, or by transferable certificates of beneficial interest; 3) It would be taxable as a domestic corporation, but for Sections 856 through 860 of the Code; income tax laws; 4) It is neither a financial institution nor an insurance company subject to special provisions of the U.S. federal any rules of attribution); 5) At least 100 persons are beneficial owners of its shares or ownership certificates (determined without reference to 6) Not more than 50% in value of its outstanding shares or ownership certificates is owned, directly or indirectly, by five or fewer individuals, which the U.S. federal income tax laws define to include certain entities, during the last half of any taxable year; 7) It elects to be a REIT, or has made such election for a previous taxable year which has not been revoked or terminated, and satisfies all relevant filing and other administrative requirements established by the IRS that must be met to elect and maintain REIT status; the U.S. federal income tax laws; and 8) It uses a calendar year for U.S. federal income tax purposes and complies with the recordkeeping requirements of its income. 9) It meets certain other tests, described below, regarding the nature of its income and assets and the distribution of CubeSmart must meet requirements 1 through 4, 8 and 9 during its entire taxable year and must meet requirement 5 during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. CubeSmart’s declaration of trust provides for restrictions regarding the ownership and transfer of its shares of beneficial interest that are intended to assist CubeSmart in continuing to satisfy requirements 5 and 6. However, these restrictions may not ensure that CubeSmart will, in all cases, be able to satisfy these requirements. For purposes of determining share ownership under requirement 6, an “individual” generally includes a supplemental unemployment compensation benefits plan, a private foundation, or a portion of a trust permanently set aside or used exclusively for charitable purposes. An “individual,” however, generally does not include a trust that is a qualified employee pension or profit sharing trust under the U.S. federal income tax laws, and beneficiaries of such a trust will be treated as holding CubeSmart’s shares in proportion to their actuarial interests in the trust for purposes of requirement 6. CubeSmart believes it has issued sufficient shares of beneficial interest with enough diversity of ownership to satisfy requirements 5 and 6 set forth above. 3 Recordkeeping Requirements. To monitor compliance with the share ownership requirements, CubeSmart is required to maintain records regarding the actual ownership of its shares. To do so, CubeSmart must demand written statements each year from the record holders of certain percentages of its shares in which the record holders are to disclose the actual owners of the shares (the persons required to include in gross income the dividends paid by us). A list of those persons failing or refusing to comply with this demand must be maintained as part of CubeSmart’s records. Failure by CubeSmart to comply with these recordkeeping requirements could subject CubeSmart to monetary penalties. If CubeSmart satisfies these requirements and has no reason to know that requirement 6 is not satisfied, CubeSmart will be deemed to have satisfied such requirement. A shareholder that fails or refuses to comply with the demand is required by Treasury Regulations to submit a statement with its tax return disclosing the actual ownership of the shares and other information. Qualified REIT Subsidiaries. A corporation that is a “qualified REIT subsidiary” is not treated as a corporation separate from its parent REIT. A “qualified REIT subsidiary” is a corporation, all of the capital stock of which is owned by its parent REIT and that has not elected to be a taxable REIT subsidiary. All assets, liabilities, and items of income, deduction, and credit of a “qualified REIT subsidiary” are treated as assets, liabilities, and items of income, deduction, and credit of the parent REIT. Thus, in applying the requirements described herein, any “qualified REIT subsidiary” that CubeSmart owns will be ignored, and all assets, liabilities, and items of income, deduction, and credit of such subsidiary will be treated as its assets, liabilities, and items of income, deduction, and credit. Partnership Subsidiaries and other Pass-Through Subsidiaries. An unincorporated domestic entity, such as a partnership or limited liability company that has a single owner, generally is not treated as an entity separate from its parent for U.S. federal income tax purposes so that its income and assets are treated as income and assets of its regarded owner, including for purposes of the REIT gross income and asset tests. An unincorporated domestic entity with two or more owners is generally treated as a partnership for U.S. federal income tax purposes. In the case of a REIT that is a partner in a partnership, the REIT is treated as owning its proportionate share of the assets of the partnership and as earning its allocable share of the gross income of the partnership for purposes of the applicable REIT qualification tests. Thus, CubeSmart’s proportionate share of the assets, liabilities and items of income of the Operating Partnership and any other partnership, joint venture, or limited liability company that is treated as a partnership for U.S. federal income tax purposes in which CubeSmart acquires an interest, directly or indirectly (“Partnership Subsidiary”), is treated as CubeSmart’s assets and gross income for purposes of applying the various REIT qualification requirements. Taxable REIT Subsidiaries. A REIT is permitted to own up to 100% of the stock of one or more “taxable REIT subsidiaries.” A taxable REIT subsidiary is a corporation subject to U.S. federal income tax, and state and local income tax where applicable, as a regular “C” corporation. The subsidiary and the REIT must jointly elect to treat the subsidiary as a taxable REIT subsidiary. In addition, if a taxable REIT subsidiary owns, directly or indirectly, securities representing 35% or more of the vote or value of a subsidiary corporation, that subsidiary will also be treated as a taxable REIT subsidiary if the applicable election is made. Several provisions regarding the arrangements between a REIT and its taxable REIT subsidiaries ensure that a taxable REIT subsidiary will be subject to an appropriate level of U.S. federal income taxation. For example, the taxable REIT subsidiary rules limit the deductibility of interest paid or accrued by a taxable REIT subsidiary to its parent REIT. Further, the rules impose a 100% excise tax on transactions between a taxable REIT subsidiary and its parent REIT or the REIT’s tenants that are not conducted on an arm’s- length basis, and, effective for taxable years beginning after December 31, 2015, on income imputed to a taxable REIT subsidiary for services rendered to or on behalf of CubeSmart, the Operating Partnership, any qualified REIT subsidiary, or a Partnership Subsidiary. CubeSmart may engage in activities indirectly through a taxable REIT subsidiary that would jeopardize its REIT status if CubeSmart engaged in the activities directly. For example, a taxable REIT subsidiary of CubeSmart may provide services to unrelated parties which might produce income that does not qualify under the gross income tests described below. A taxable REIT subsidiary may also engage in other activities that, if conducted by CubeSmart directly, could result in the receipt of non-qualified income or the ownership of non-qualified assets or the imposition of the 100% tax on income from prohibited transactions. See description below under “Requirements for Qualification – Gross Income Tests - Prohibited Transactions.” Overall, no more than 20% (25% for taxable years beginning before January 1, 2018) of the value of a REIT’s assets may constitute stock or securities of one or more taxable REIT subsidiaries. Under the TCJA, for taxable years beginning after December 31, 2017, taxpayers are subject to a limitation on their ability to deduct net business interest generally equal to 30% of adjusted taxable income, subject to certain exceptions. The CARES Act (i) increased the 30% limitation to 50% (A) for all entities for their 2020 taxable years and (B) for all entities other than partnerships for their 2019 taxable years and (ii) permitted an entity to elect to use its 2019 adjusted taxable income to calculate the applicable limitation for its 2020 taxable year. These provisions may limit the ability of our taxable REIT subsidiaries to deduct interest in the future, which could increase their taxable income. Gross Income Tests. CubeSmart must satisfy two gross income tests annually to maintain its qualification as a REIT. First, at least 75% of its gross income for each taxable year must consist of defined types of income that CubeSmart derives, directly or indirectly, from investments relating to real property or mortgages on real property or qualified temporary investment income. Qualifying income for purposes of that 75% gross income test generally includes:  rents from real property; 4       interest on debt secured by mortgages on real property or on interests in real property (including certain types of mortgage-backed securities); for taxable years beginning after December 31, 2015, interest on mortgage loans secured by both real and personal property if the fair market value of such personal property does not exceed 15% of the total fair market value of all property securing the loans; dividends or other distributions on, and gain from the sale of, shares in other REITs (excluding dividends from its taxable REIT subsidiaries); gain from the sale of real estate assets (other than gain from property held primarily for sale to customers), except, effective for taxable years beginning after December 31, 2015, for gain from a nonqualified publicly offered REIT debt instrument (as defined below); income and gain derived from foreclosure property; and income derived from the temporary investment of new capital that is attributable to the issuance of CubeSmart’s shares of beneficial interest or a public offering of its debt with a maturity date of at least five years and that CubeSmart receives during the one-year period beginning on the date on which it receives such new capital. Second, in general, at least 95% of CubeSmart’s gross income for each taxable year must consist of income that is qualifying income for purposes of the 75% gross income test, other types of interest and dividends (including dividends from its taxable REIT subsidiaries), gain from the sale or disposition of stock or securities, or any combination of these. Gross income from the sale of property that CubeSmart holds primarily for sale to customers in the ordinary course of business is excluded from both the numerator and the denominator in both income tests. See “Prohibited Transactions.” In addition, certain gains from hedging transactions and certain foreign currency gains will be excluded from both the numerator and the denominator for purposes of one or both of the income tests. See “Hedging Transactions” and “Foreign Currency Gain.” property,” which is qualifying income for purposes of the 75% and 95% gross income tests, only if the following conditions are met: Rents from Real Property. Rent that CubeSmart receives from its real property will qualify as “rents from real First, the rent must not be based in whole or in part on the income or profits of any person. Such rent, however, will qualify as “rents from real property” if it is based on percentages of receipts or sales and the percentages are fixed at the time the leases are entered into, are not renegotiated during the term of the leases in a manner that has the effect of basing percentage rent on income or profits, and conform with normal business practice. Second, CubeSmart must not own, actually or constructively, 10% or more of the stock of any corporate tenant or the assets or net profits of any tenant, referred to as a related party tenant, other than a taxable REIT subsidiary. The constructive ownership rules generally provide that, if 10% or more in value of its shares is owned, directly or indirectly, by or for any person, CubeSmart is considered as owning the stock owned, directly or indirectly, by or for such person. CubeSmart does not own any stock or any assets or net profits of any tenant directly. However, because the constructive ownership rules are broad and it is not possible to monitor continually direct and indirect transfers of its shares, no absolute assurance can be given that such transfers or other events of which CubeSmart has no knowledge will not cause CubeSmart to own constructively 10% or more of a tenant (or a subtenant, in which case only rent attributable to the subtenant is disqualified) other than a taxable REIT subsidiary at some future date. Under an exception to the related-party tenant rule described in the preceding paragraph, rent that CubeSmart receives from a taxable REIT subsidiary will qualify as “rents from real property” as long as (1) at least 90% of the leased space in the property is leased to persons other than taxable REIT subsidiaries and related-party tenants, and (2) the amount paid by the taxable REIT subsidiary to rent space at the property is substantially comparable to rents paid by other tenants of the property for comparable space. The “substantially comparable” requirement must be satisfied when the lease is entered into, when it is extended, and when the lease is modified, if the modification increases the rent paid by the taxable REIT subsidiary. If the requirement that at least 90% of the leased space in the related property is rented to unrelated tenants is met when a lease is entered into, extended, or modified, such requirement will continue to be met as long as there is no increase in the space leased to any taxable REIT subsidiary or related party tenant. Any increased rent attributable to a modification of a lease with a taxable REIT subsidiary in which CubeSmart owns directly or indirectly more than 50% of the voting power or value of the stock (a “controlled taxable REIT subsidiary”) will not be treated as “rents from real property.” Third, the rent attributable to the personal property leased in connection with a lease of real property must not be greater than 15% of the total rent received under the lease. The rent attributable to personal property under a lease is the amount that bears the same ratio to total rent under the lease for the taxable year as the average of the fair market values of the leased personal 5 property at the beginning and at the end of the taxable year bears to the average of the aggregate fair market values of both the real and personal property covered by the lease at the beginning and at the end of such taxable year (the “personal property ratio”). With respect to each of its leases, CubeSmart believes that the personal property ratio generally is less than 15%. Where that is not, or may in the future not be, the case, CubeSmart believes that any income attributable to personal property will not jeopardize its ability to qualify as a REIT. There can be no assurance, however, that the IRS would not challenge CubeSmart’s calculation of a personal property ratio, or that a court would not uphold such assertion. If such a challenge were successfully asserted, CubeSmart could fail to satisfy the 75% or 95% gross income test and thus lose its REIT status. Fourth, CubeSmart cannot furnish or render non-customary services to the tenants of its properties, or manage or operate its properties, other than through an independent contractor who is adequately compensated and from whom CubeSmart does not derive or receive any income. However, CubeSmart need not provide services through an “independent contractor,” but instead may provide services directly to its tenants, if the services are “usually or customarily rendered” in connection with the rental of space for occupancy only and are not considered to be provided for the tenants’ convenience. In addition, CubeSmart may provide a minimal amount of “non-customary” services to the tenants of a property, other than through an independent contractor, as long as its income from the services does not exceed 1% of its income from the related property. Finally, CubeSmart may own up to 100% of the stock of one or more taxable REIT subsidiaries, which may provide non-customary services to CubeSmart’s tenants without tainting CubeSmart’s rents from the related properties. CubeSmart has not performed, and does not intend to perform, any services other than customary ones for its tenants, other than services provided through independent contractors or taxable REIT subsidiaries. Tenants may be required to pay, in addition to base rent, reimbursements for certain amounts CubeSmart is obligated to pay to third parties (such as a lessee’s proportionate share of a property’s operational or capital expenses), penalties for nonpayment or late payment of rent or additions to rent. These and other similar payments should qualify as “rents from real property.” To the extent they do not, they should be treated as interest that qualifies for the 95% gross income test. If a portion of the rent CubeSmart receives from a property does not qualify as “rents from real property” because the rent attributable to personal property exceeds 15% of the total rent for a taxable year, the portion of the rent attributable to personal property will not be qualifying income for purposes of either the 75% or 95% gross income test. Thus, if rent attributable to personal property, plus any other income that is nonqualifying income for purposes of the 95% gross income test, during a taxable year exceeds 5% of its gross income during the year, CubeSmart would lose its REIT status, unless CubeSmart qualified for certain statutory relief provisions. By contrast, in the following circumstances, none of the rent from a lease of property would qualify as “rents from real property”: (1) the rent is considered based on the income or profits of the tenant; (2) the lessee is a related party tenant or fails to qualify for the exception to the related-party tenant rule for qualifying taxable REIT subsidiaries; or (3) CubeSmart furnishes non- customary services to the tenants of the property, or manages or operates the property, other than through a qualifying independent contractor or a taxable REIT subsidiary. In any of these circumstances, CubeSmart could lose its REIT status, unless CubeSmart qualified for certain statutory relief provisions, because it would be unable to satisfy either the 75% or 95% gross income test. Interest. The term “interest” generally does not include any amount received or accrued, directly or indirectly, if the determination of the amount depends in whole or in part on the income or profits of any person. However, an amount received or accrued generally will not be excluded from the term “interest” solely because it is based on a fixed percentage or percentages of receipts or sales. Furthermore, to the extent that interest from a loan that is based on the profit or net cash proceeds from the sale of the property securing the loan constitutes a “shared appreciation provision,” income attributable to such participation feature will be treated as gain from the sale of the secured property, which generally is qualifying income for purposes of both gross income tests. Prohibited Transactions. A REIT will incur a 100% tax on the net income derived from any sale or other disposition of property, other than foreclosure property, that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. Whether a REIT holds an asset “primarily for sale to customers in the ordinary course of a trade or business” depends, however, on the facts and circumstances in effect from time to time, including those related to a particular asset. A safe harbor to the characterization of the sale of property by a REIT as a prohibited transaction and the 100% prohibited transaction tax is available if the following requirements are met:    the REIT has held the property for not less than two years; the aggregate expenditures made by the REIT, or any partner of the REIT, during the two-year period preceding the date of the sale that are includable in the basis of the property do not exceed 30% of the net selling price of the property; either (1) during the year in question, the REIT did not make more than seven sales of property other than foreclosure property or sales to which Section 1033 of the Code applied, (2) the aggregate adjusted bases of all such properties sold by the REIT during the year did not exceed 10% of the aggregate bases of all of the assets of the REIT at the beginning of the year, (3) the aggregate fair market value of all such properties sold by the REIT during 6 the year did not exceed 10% of the aggregate fair market value of all of the assets of the REIT at the beginning of the year, (4) (i) for taxable years beginning after December 31, 2015, the aggregate adjusted bases of all such properties sold by the REIT during the year did not exceed 20% of the aggregate bases of all of the assets of the REIT at the beginning of the year and (ii) the average annual percentage of such properties sold by the REIT compared to all the REIT’s assets (measured by adjusted tax bases) in the current and two prior years did not exceed 10%, or (5) (i) the aggregate fair market value of all such properties sold by the REIT during the year did not exceed 20% of the aggregate fair market value of all assets of the REIT at the beginning of the year and (ii) the average annual percentage of such properties sold by the REIT compared to all the REIT’s assets (measured by fair market value) in the current and two prior years did not exceed 10%;   in the case of property not acquired through foreclosure or lease termination, the REIT has held the property for at least two years for the production of rental income; and if the REIT has made more than seven sales of non-foreclosure property during the taxable year, substantially all of the marketing and development expenditures with respect to the property were made through an independent contractor (or, for taxable years beginning after December 31, 2015, a taxable REIT subsidiary) from whom the REIT derives no income. CubeSmart intends to hold properties for investment with a view to long-term appreciation, to engage in the business of acquiring, developing, owning and operating properties, and to make occasional sales of properties as are consistent with its investment objective. CubeSmart cannot assure you, however, that it can comply with the safe-harbor provisions that would prevent the imposition of the 100% tax or that it will avoid owning property that may be characterized as property held “primarily for sale to customers in the ordinary course of a trade or business.” The 100% tax does not apply to gains from the sale of property that is held through a taxable REIT subsidiary or other taxable corporation, although such income will be subject to tax in the hands of that corporation at regular corporate tax rates. CubeSmart may, therefore, form or acquire a taxable REIT subsidiary to hold and dispose of those properties it concludes may not fall within the safe-harbor provisions. Foreclosure Property. CubeSmart will be subject to tax at the maximum corporate rate (currently, 21%) on any net income from foreclosure property, other than income that otherwise would be qualifying income for purposes of the 75% gross income test. “Foreclosure property” is any real property, including interests in real property, and any personal property incident to such real property:   that is acquired by a REIT as the result of the REIT having bid on such property at foreclosure, or having otherwise reduced such property to ownership or possession by agreement or process of law, after there was a default or default was imminent on a lease of such property or on indebtedness that such property secured; for which the related loan or leased property was acquired by the REIT at a time when the default was not imminent or anticipated; and  for which the REIT makes a proper election to treat the property as foreclosure property. A REIT will not be considered to have foreclosed on a property where the REIT takes control of the property as a mortgagee-in-possession and cannot receive any profit or sustain any loss except as a creditor of the mortgagor. Property generally ceases to be foreclosure property at the end of the third taxable year following the taxable year in which the REIT acquired the property (or longer if an extension is granted by the Secretary of the Treasury). This period (as extended, if applicable) terminates, and foreclosure property ceases to be foreclosure property, on the first day:  on which a lease is entered into for the property that, by its terms, will give rise to income that does not qualify for purposes of the 75% gross income test, or any amount is received or accrued, directly or indirectly, pursuant to a lease entered into on or after such day that will give rise to income that does not qualify for purposes of the 75% gross income test;  on which any construction takes place on the property, other than completion of a building or, any other improvement, where more than 10% of the construction was completed before default became imminent; or  which is more than 90 days after the day on which the REIT acquired the property and the property is used in a trade or business which is conducted by the REIT, other than through an independent contractor from whom the REIT itself does not derive or receive any income. 100% tax on gains from prohibited transactions described above, even if the property is held primarily for sale to customers in the Any gain from the sale of property for which a foreclosure property election has been made will not be subject to the 7 ordinary course of a trade or business. Income and gain from foreclosure property are qualifying income for the 75% and 95% gross income tests. Hedging Transactions. From time to time, CubeSmart enters into hedging transactions with respect to its assets or liabilities. CubeSmart’s hedging activities may include entering into interest rate swaps, caps, and floors, options to purchase such items, and futures and forward contracts. Income and gain from “hedging transactions” will be excluded from gross income for purposes of both the 75% and 95% gross income tests. A “hedging transaction” means either (1) any transaction entered into in the normal course of its trade or business primarily to manage the risk of interest rate, price changes, or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, to acquire or carry real estate assets or (2) any transaction entered into primarily to manage the risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the 75% or 95% gross income test (or any property which generates such income or gain). CubeSmart will be required to clearly identify any such hedging transaction before the close of the day on which it was acquired, originated, or entered into and to satisfy other identification requirements. No assurance can be given that its hedging activities will not give rise to income that does not qualify for purposes of either or both of the gross income tests, and will not adversely affect CubeSmart’s ability to satisfy the REIT qualification requirements. Effective for taxable years beginning after December 31, 2015, if CubeSmart has entered into a hedging transaction described in (1) or (2), and a portion of the hedged indebtedness or property is extinguished or disposed of and, in connection with such extinguishment or disposition, CubeSmart enters into a new clearly identified hedging transaction (a “New Hedge”), income from the applicable hedge and income from the New Hedge (including gain from the disposition of such New Hedge) will not be treated as gross income for purposes of the 95% and 75% gross income tests. Foreign Currency Gain. Certain foreign currency gains will be excluded from gross income for purposes of one or both of the gross income tests. “Real estate foreign exchange gain” will be excluded from gross income for purposes of the 75% gross income test. Real estate foreign exchange gain generally includes foreign currency gain attributable to any item of income or gain that is qualifying income for purposes of the 75% gross income test, foreign currency gain attributable to the acquisition or ownership of (or becoming or being the obligor under) obligations secured by mortgages on real property or on interests in real property and certain foreign currency gain attributable to certain “qualified business units” of a REIT. “Passive foreign exchange gain” will be excluded from gross income for purposes of the 95% gross income test. Passive foreign exchange gain generally includes real estate foreign exchange gain as described above, and also includes foreign currency gain attributable to any item of income or gain that is qualifying income for purposes of the 95% gross income test and foreign currency gain attributable to the acquisition or ownership of (or becoming or being the obligor under) debt obligations. Because passive foreign exchange gain includes real estate foreign exchange gain, real estate foreign exchange gain is excluded from gross income for purposes of both the 75% and 95% gross income test. These exclusions for real estate foreign exchange gain and passive foreign exchange gain do not apply to foreign currency gain derived from dealing, or engaging in substantial and regular trading, in securities. Such gain is treated as nonqualifying income for purposes of both the 75% and 95% gross income tests. Failure to Satisfy Gross Income Tests. If CubeSmart fails to satisfy one or both of the gross income tests for any taxable year, CubeSmart nevertheless may qualify as a REIT for that year if it qualifies for relief under certain provisions of the U.S. federal income tax laws. Those relief provisions will be available if:  CubeSmart’s failure to meet those tests is due to reasonable cause and not to willful neglect; and  following such failure for any taxable year, a schedule of the sources of its income is filed with the IRS in accordance with regulations prescribed by the Secretary of the Treasury. CubeSmart cannot predict, however, whether any failure to meet these tests will qualify for the relief provisions. As discussed above in “Taxation of CubeSmart as a REIT,” even if the relief provisions apply, CubeSmart would incur a 100% tax on the gross income attributable to the greater of (1) the amount by which it fails the 75% gross income test, or (2) the excess of 95% of its gross income over the amount of gross income qualifying under the 95% gross income test, multiplied, in either case, by a fraction intended to reflect its profitability. of each quarter of each taxable year. Asset Tests. To maintain its qualification as a REIT, CubeSmart also must satisfy the following asset tests at the end First, at least 75% of the value of CubeSmart’s total assets must consist of:   cash or cash items, including certain receivables; government securities; 8      interests in real property, including leaseholds and options to acquire real property and leaseholds; effective for taxable years beginning after December 31, 2015,: (i) personal property leased in connection with real property to the extent that the rents from personal property are treated as “rent from real property” for purposes of the 75% income test, and (ii) debt instruments issued by publicly offered REITs; interests in mortgages on real property (including certain mortgage-backed securities) and, for taxable years beginning after December 31, 2015, interests in mortgage loans secured by both real and personal property if the fair market value of such personal property does not exceed 15% of the total fair market value of all property securing the loans; stock in other REITs; and investments in stock or debt instruments during the one-year period following its receipt of new capital that CubeSmart raises through equity offerings or public offerings of debt with at least a five-year term. securities may not exceed 5% of the value of its total assets, or the “5% asset test.” Second, of CubeSmart’s investments not included in the 75% asset class, the value of its interest in any one issuer’s the voting power or value of any one issuer’s outstanding securities, or the “10% vote test” and “10% value test,” respectively. Third, of CubeSmart’s investments not included in the 75% asset class, CubeSmart may not own more than 10% of assets may be represented by securities of one or more taxable REIT subsidiaries. Fourth, not more than 20% (25% for taxable years beginning before January 1, 2018) of the value of CubeSmart’s Fifth, effective for taxable years beginning after December 31, 2015, not more than 25% of the value of CubeSmart’s total assets may be represented by “nonqualified publicly offered REIT debt instruments.” “Nonqualified publicly offered REIT debt instruments” are debt instruments issued by publicly offered REITs that are not secured by a mortgage on real property. for purposes of the 75% test. Sixth, not more than 25% of the value of our total assets may consist of securities other than securities that qualify For purposes of the 5% asset test, the 10% vote test and 10% value test, the term “securities” does not include stock in another REIT, equity or debt securities of a qualified REIT subsidiary or taxable REIT subsidiary, mortgage loans that constitute real estate assets, or equity interests in a partnership. The term “securities,” however, generally includes debt securities issued by a partnership or another REIT, except that for purposes of the 10% value test, the term “securities” does not include:  Any “straight debt” security, which is defined as a written unconditional promise to pay on demand or on a specified date a sum certain in money if (i) the debt is not convertible, directly or indirectly, into stock, and (ii) the interest rate and interest payment dates are not contingent on profits, the borrower’s discretion, or similar factors. “Straight debt” securities do not include any securities issued by a partnership or a corporation in which CubeSmart or any controlled taxable REIT subsidiary hold non-“straight debt” securities that have an aggregate value of more than 1% of the issuer’s outstanding securities. However, “straight debt” securities include debt subject to the following contingencies: (1) a contingency relating to the time of payment of interest or principal, as long as either (i) there is no change to the effective yield of the debt obligation, other than a change to the annual yield that does not exceed the greater of 0.25% or 5% of the annual yield, or (ii) neither the aggregate issue price nor the aggregate face amount of the issuer’s debt obligations held by CubeSmart exceeds $1 million and no more than 12 months of unaccrued interest on the debt obligations can be required to be prepaid; and (2) a contingency relating to the time or amount of payment upon a default or prepayment of a debt obligation, as long as the contingency is consistent with customary commercial practice.  Any loan to an individual or an estate.  Any “section 467 rental agreement,” other than an agreement with a related party tenant.  Any obligation to pay “rents from real property.”  Certain securities issued by governmental entities.  Any security issued by a REIT. 9  Any debt instrument issued by an entity treated as a partnership for U.S. federal income tax purposes in which CubeSmart is a partner to the extent of CubeSmart’s proportionate interest in the debt and equity securities of the partnership.  Any debt instrument issued by an entity treated as a partnership for U.S. federal income tax purposes not described in the preceding bullet points if at least 75% of the partnership’s gross income, excluding income from prohibited transactions, is qualifying income for purposes of the 75% gross income test described above in “Requirements for Qualification — Gross Income Tests.” in any securities issued by the partnership, without regard to the securities described in the last two bullet points above. For purposes of the 10% value test, its proportionate share of the assets of a partnership is its proportionate interest Failure to Satisfy Asset Tests. CubeSmart will monitor the status of its assets for purposes of the various asset tests and will manage its portfolio in order to comply at all times with such tests. If CubeSmart fails to satisfy the asset tests at the end of a calendar quarter, it would not lose its REIT status if:  CubeSmart satisfied the asset tests at the end of the preceding calendar quarter; and  the discrepancy between the value of its assets and the asset test requirements arose from changes in the market values of its assets and was not wholly or partly caused by the acquisition of one or more non-qualifying assets. If the failure to satisfy the asset tests results from an acquisition of securities or other property during a quarter, the failure can be cured by disposition of sufficient nonqualifying assets within 30 days after the close of that quarter. CubeSmart intends to maintain adequate records of the value of its assets to ensure compliance with the asset tests, and to take such other action within 30 days after the close of any quarter as may be required to cure any noncompliance. However, there can be no assurance that such other action will always be successful. If CubeSmart fails to cure any noncompliance with the asset tests within such time period, its status as a REIT would be lost. In the event that, at the end of any calendar quarter, CubeSmart violates the 5% asset test, the 10% vote test or the 10% value test described above, CubeSmart will not lose its REIT status if (i) the failure is de minimis (up to the lesser of 1% of its assets or $10 million) and (ii) CubeSmart disposes of assets or otherwise complies with the asset tests within six months after the last day of the quarter in which it identifies such failure. In the event the failure to meet the asset test is more than de minimis, CubeSmart will not lose its REIT status if (i) the failure was due to reasonable cause and not to willful neglect, (ii) CubeSmart files a description of each asset causing the failure with the IRS, (iii) CubeSmart disposes of assets or otherwise complies with the asset tests within six months after the last day of the quarter in which CubeSmart identifies the failure, and (iv) CubeSmart pays a tax equal to the greater of $50,000 or 21% of the net income from the nonqualifying assets during the period in which it failed to satisfy the asset tests. Annual Distribution Requirements. Each taxable year, CubeSmart must distribute dividends, other than capital gain dividends and deemed distributions of retained capital gain, to its shareholders in an aggregate amount not less than the sum of:    90% of its “REIT taxable income,” computed without regard to the dividends paid deduction and its net capital gain or loss, and 90% of its after-tax net income, if any, from foreclosure property, minus the sum of certain items of non-cash income. Under the TCJA, for taxable years beginning after December 31, 2017, CubeSmart’s deduction for net business interest expense generally will be limited to 30% of its adjusted taxable income. Adjusted taxable income does not include items of income or expense not allocable to a trade or business, business interest or expense, the deduction for qualified business income, NOLs, and for years prior to 2022, deductions for depreciation, amortization, or depletion. The CARES Act (i) increased the 30% limitation to 50% (A) for all entities for their 2020 taxable years and (B) for all entities other than partnerships for their 2019 taxable years and (ii) permitted an entity to elect to use its 2019 adjusted taxable income to calculate the applicable limitation for its 2020 taxable year. Any business interest deduction that is disallowed due to this limitation may be carried forward to future taxable years. CubeSmart’s deduction for net business interest expense has not yet been limited by the above described rules. If CubeSmart’s deduction for net business interest expense is limited in the future, its REIT taxable income for a taxable year may be increased. Taxpayers that conduct certain real estate businesses may elect not to have this interest expense limitation apply to them, provided that they use an alternative depreciation system to depreciate certain property. CubeSmart may be eligible to make this election. If CubeSmart makes this election, although it would not be subject to the interest expense limitation described above, its depreciation deductions may be reduced and, as a result, its REIT taxable income for a taxable year may be increased. 10 Generally, CubeSmart must pay such distributions in the taxable year to which they relate, or in the following taxable year if either (a) CubeSmart declares the distribution before it timely files its U.S. federal income tax return for the year and pays the distribution on or before the first regular dividend payment date after such declaration or (b) CubeSmart declares the distribution in October, November, or December of the taxable year, payable to shareholders of record on a specified day in any such month, and CubeSmart actually pays the dividend before the end of January of the following year. In both instances, these distributions relate to its prior taxable year for purposes of the 90% distribution requirement. In order for distributions to be counted towards CubeSmart’s distribution requirement, and to provide a tax deduction to CubeSmart, for taxable years ending on or before December 31, 2014, they must not be “preferential dividends.” A dividend is not a preferential dividend if it is pro rata among all outstanding shares within a particular class, and is in accordance with the preferences among the different classes of shares as set forth in CubeSmart’s organizational documents. For all subsequent taxable years, so long as CubeSmart continues to be a “publicly offered REIT,” the preferential dividend rule will not apply. To the extent that CubeSmart distributes at least 90%, but less than 100%, of its net taxable income, CubeSmart will be subject to tax at ordinary corporate tax rates on the retained portion. In addition, CubeSmart may elect to retain, rather than distribute, its net long-term capital gains and pay tax on such gains. In this case, CubeSmart would elect to have its shareholders include their proportionate share of such undistributed long-term capital gains in their income and receive a corresponding credit for their proportionate share of the tax paid by us. CubeSmart’s shareholders would then increase their adjusted basis in their CubeSmart shares by the difference between the amount included in their long-term capital gains and the tax deemed paid with respect to their shares. case of distributions with declaration and record dates falling in the last three months of the calendar year, at least the sum of: If CubeSmart fails to distribute during a calendar year, or by the end of January of the following calendar year in the    85% of its REIT ordinary income for the year, 95% of its REIT capital gain income for the year, and any undistributed taxable income from prior periods, CubeSmart will incur a 4% nondeductible excise tax on the excess of such required distribution over the amounts CubeSmart actually distributed. In calculating the required distribution for taxable years beginning after December 31, 2015, the amount that CubeSmart is treated as having distributed is not reduced by any amounts not allowable in computing its taxable income for the taxable year and which were not allowable in computing its taxable income for any prior years. If CubeSmart so elects, it will be treated as having distributed any such retained amount for purposes of the 4% nondeductible excise tax described above. It is possible that, from time to time, CubeSmart may experience timing differences between the actual receipt of income and actual payment of deductible expenses and the inclusion of that income and deduction of such expenses in arriving at its REIT taxable income. For example, because CubeSmart may deduct capital losses only to the extent of its capital gains, its REIT taxable income may exceed its economic income. Further, it is possible that, from time to time, CubeSmart may be allocated a share of net capital gain from a partnership in which CubeSmart owns an interest attributable to the sale of depreciated property that exceeds its allocable share of cash attributable to that sale. Although several types of non-cash income are excluded in determining the annual distribution requirement, CubeSmart will incur corporate income tax and the 4% nondeductible excise tax with respect to those non- cash income items if CubeSmart does not distribute those items on a current basis. As a result of the foregoing, CubeSmart may have less cash than is necessary to distribute all of its taxable income and thereby avoid corporate income tax and the 4% nondeductible excise tax imposed on certain undistributed income. In such a situation, CubeSmart may issue additional common or preferred shares, CubeSmart may borrow or may cause the Operating Partnership to arrange for short-term or possibly long-term borrowing to permit the payment of required distributions, or CubeSmart may pay dividends in the form of taxable in-kind distributions of property, including potentially, its shares. Under certain circumstances, CubeSmart may be able to correct a failure to meet the distribution requirement for a year by paying “deficiency dividends” to its shareholders in a later year. CubeSmart may include such deficiency dividends in its deduction for dividends paid for the earlier year. Although CubeSmart may be able to avoid income tax on amounts distributed as deficiency dividends, CubeSmart will be required to pay interest to the IRS based upon the amount of any deduction it takes for deficiency dividends. Failure to Qualify If CubeSmart were to fail to qualify as a REIT in any taxable year and no relief provision applied, CubeSmart would have the following consequences: CubeSmart would be subject to U.S. federal income tax and, for tax years beginning before January 1, 2018, any applicable alternative minimum tax at regular corporate rates applicable to regular C corporations on its taxable income, 11 determined without reduction for amounts distributed to shareholders. This REIT-level tax liability would reduce cash available for distributions. All distributions to shareholders (to the extent of our current and accumulated earnings and profits) would be taxable as dividends. This “double taxation” would result from our failure to qualify as a REIT. In addition, if we fail to qualify as a REIT, we will not be required to distribute any amounts to our shareholders and all distributions to shareholders will be taxable as regular corporate dividends to the extent of our current and accumulated earnings and profits. In such event, corporate distributees may be eligible for the dividends-received deduction. In addition, non-corporate shareholders, including individuals, may be eligible for the preferential tax rates on qualified dividend income. Non-corporate shareholders, including individuals, generally may deduct up to 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified dividend income, for taxable years beginning after December 31, 2017 and before January 1, 2026 for purposes of determining their U.S. federal income tax (but not for purposes of the 3.8% Medicare tax), subject to certain limitations. If we fail to qualify as a REIT, such shareholders may not claim this deduction with respect to dividends paid by us. Unless CubeSmart qualified for relief under specific statutory provisions, it would not be permitted to elect taxation as a REIT for the four taxable years following the year during which CubeSmart ceased to qualify as a REIT. If CubeSmart fails to satisfy one or more requirements for REIT qualification, other than the gross income tests and the asset tests, CubeSmart could avoid disqualification if its failure is due to reasonable cause and not to willful neglect and CubeSmart pays a penalty of $50,000 for each such failure. In addition, there are relief provisions for a failure of the gross income tests and asset tests, as described in “Requirements for Qualification — Gross Income Tests” and “Requirements for Qualification — Asset Tests.” It is not possible to state whether in all circumstances CubeSmart would be entitled to such statutory relief. State and Local Taxes We may be subject to taxation by various states and localities, including those in which we transact business or own property. The state and local tax treatment in such jurisdictions may differ from the U.S. federal income tax treatment described above. Tax Aspects of Investments in the Operating Partnership and Subsidiary Partnerships The following discussion summarizes certain U.S. federal income tax considerations applicable to CubeSmart’s direct or indirect investment in its Operating Partnership and any subsidiary partnerships or limited liability companies we form or acquire that are treated as partnerships for U.S. federal income tax purposes, each individually referred to as a “Partnership” and, collectively, as “Partnerships” below. The following discussion does not address state or local tax laws or any federal tax laws other than income tax laws. Classification as Partnerships. CubeSmart is required to include in its income its distributive share of each Partnership’s income and to deduct its distributive share of each Partnership’s losses but only if such Partnership is classified for U.S. federal income tax purposes as a partnership (or an entity that is disregarded for U.S. federal income tax purposes if the entity has only one owner or member), rather than as a corporation or an association taxable as a corporation. for U.S. federal income tax purposes if it: An organization with at least two owners or members will be classified as a partnership, rather than as a corporation,  is treated as a partnership under the Treasury regulations relating to entity classification (the “check-the-box regulations”); and  is not a “publicly traded partnership.” Under the check-the-box regulations, an unincorporated domestic entity with at least two owners or members may elect to be classified either as an association taxable as a corporation or as a partnership. If such an entity does not make an election, it generally will be treated as a partnership for U.S. federal income tax purposes. We intend that each Partnership will be classified as a partnership for U.S. federal income tax purposes (or else a disregarded entity where there are not at least two separate beneficial owners). A publicly traded partnership is a partnership whose interests are traded on an established securities market or are readily tradable on a secondary market (or a substantial equivalent). A publicly traded partnership is generally treated as a corporation for U.S. federal income tax purposes, but will not be so treated if, for each taxable year beginning after December 31, 1987 in which it was classified as a publicly traded partnership, at least 90% of the partnership’s gross income consisted of specified passive income, including real property rents (which includes rents that would be qualifying income for purposes of the 75% gross income test, with certain modifications that make it easier for the rents to qualify for the 90% passive income exception), gains from the sale or other disposition of real property, interest, and dividends (the “90% passive income exception”). 12 Treasury regulations provide limited safe harbors from treatment as a publicly traded partnership. Pursuant to one of those safe harbors (the “private placement exclusion”), interests in a partnership will not be treated as readily tradable on a secondary market or the substantial equivalent thereof if (1) all interests in the partnership were issued in a transaction or transactions that were not required to be registered under the Securities Act of 1933, as amended, and (2) the partnership does not have more than 100 partners at any time during the partnership’s taxable year. For the determination of the number of partners in a partnership, a person owning an interest in a partnership, grantor trust, or S corporation that owns an interest in the partnership is treated as a partner in the partnership only if (1) substantially all of the value of the owner’s interest in the entity is attributable to the entity’s direct or indirect interest in the partnership and (2) a principal purpose of the use of the entity is to permit the partnership to satisfy the 100-partner limitation. CubeSmart believes that each Partnership should qualify for the private placement exclusion. We have not requested, and do not intend to request, a ruling from the IRS that the Partnerships will be classified as partnerships (or disregarded entities, if the entity has only one owner or member) for U.S. federal income tax purposes. If for any reason a Partnership were taxable as a corporation, rather than as a partnership, for U.S. federal income tax purposes, CubeSmart may not be able to qualify as a REIT, unless it qualifies for certain relief provisions. See “Requirements for Qualification — Gross Income Tests” and “Requirements for Qualification — Asset Tests.” In addition, any change in a Partnership’s status for tax purposes might be treated as a taxable event, in which case CubeSmart might incur tax liability without any related cash distribution. See “Requirements for Qualification — Annual Distribution Requirements.” Further, items of income and deduction of such Partnership would not pass through to its partners, and its partners would be treated as shareholders for tax purposes. Consequently, such Partnership would be required to pay income tax at corporate rates on its net income, and distributions to its partners would constitute dividends that would not be deductible in computing such Partnership’s taxable income. Partners, Not the Partnerships, Subject to Tax. A partnership is not a taxable entity for U.S. federal income tax purposes, except that, for tax years beginning after December 31, 2017, a partnership is liable for paying tax assessed pursuant to an audit adjustment unless the partnership elects to “push out” such audit adjustments to its partners. CubeSmart will therefore take into account its allocable share of each Partnership’s income, gains, losses, deductions, and credits for each taxable year of the Partnerships ending with or within CubeSmart’s taxable year, even if CubeSmart receives no distribution from the Partnerships for that year or a distribution less than CubeSmart’s share of taxable income. Similarly, even if CubeSmart receives a distribution, CubeSmart may not be taxed on such distribution if the distribution does not exceed its adjusted tax basis in its interest in the distributing Partnership. Among the deductions that would flow to CubeSmart are the interest deductions of the Operating Partnership and its subsidiary Partnerships. The TCJA limits a taxpayer’s business interest expense deduction to the sum of business interest income, 30% of adjusted taxable income and certain other amounts. The CARES Act provision that increased the 30% limitation to 50% only applied to the Operating Partnership’s 2020 taxable year. However, under the CARES Act, the Operating Partnership may elect to use its 2019 adjusted taxable income to calculate the applicable limitation for its taxable year beginning in 2020. The Operating Partnership has not made the election to use its 2019 adjusted taxable income. Adjusted taxable income does not include items of income or expense not allocable to a trade or business, business interest or expense, the deduction for qualified business income, NOLs, and for years prior to 2022, deductions for depreciation, amortization, or depletion. For partnerships, the interest deduction limitation is applied at the partnership level, subject to certain adjustments to the partners for unused deduction limitation at the partnership level. The Operating Partnership did not have “excess business interest” for the 2021 taxable year or prior taxable years. The TCJA allows a real property trade or business to elect out of this interest limitation so long as it uses a 40-year recovery period for nonresidential real property, a 30-year recovery period for residential rental property, and a 20-year recovery period for related improvements. Disallowed interest expense is carried forward indefinitely (subject to special rules for partnerships). The interest deduction limitation applies to taxable years beginning after December 31, 2017. For taxpayers that do not use the TCJA’s real property trade or business exception to the business interest deduction limitations, the TCJA maintains the current 39-year and 27.5-year straight line recovery periods for nonresidential real property and residential rental property, respectively, and provides that tenant improvements for such taxpayers are subject to a general 15-year recovery period. Also, the TCJA temporarily allows 100% expensing of certain new or used tangible property through 2022, phasing out at 20% for each following year (with an election available for 50% expensing of such property if placed in service during the first taxable year ending after September 27, 2017). The changes apply, generally, to property acquired after September 27, 2017 and placed in service after September 27, 2017. Partnership Allocations. Although a partnership agreement generally will determine the allocation of income and losses among partners, allocations will be disregarded for tax purposes if they do not comply with the provisions of the U.S. federal income tax laws governing partnership allocations. If an allocation is not recognized for U.S. federal income tax purposes, the item subject to the allocation will be reallocated in accordance with the partners’ interests in the partnership, which will be determined by taking into account all of the facts and circumstances relating to the economic arrangement of the partners with respect to such item. 13 Tax Allocations With Respect to Contributed Properties. Income, gain, loss, and deduction attributable to (a) appreciated or depreciated property that is contributed to a partnership in exchange for an interest in the partnership or (b) property revalued on the books of a partnership must be allocated in a manner such that each of a contributing partner or the partners at the time of a book revaluation, as applicable, are charged with, or benefit from, respectively, the unrealized gain or unrealized loss associated with the property at the time of the contribution. The amount of such unrealized gain or unrealized loss, referred to as “built-in gain” or “built-in loss,” is generally equal to the difference between the fair market value of the contributed or revalued property at the time of contribution or revaluation and the adjusted tax basis of such property at that time, referred to as a book-tax difference. Such allocations are solely for U.S. federal income tax purposes and do not affect the book capital accounts or other economic or legal arrangements among the partners. The U.S. Treasury Department has issued regulations requiring partnerships to use a “reasonable method” for allocating items with respect to which there is a book-tax difference and outlining several reasonable allocation methods. Unless we, as general partner, select a different method, the Operating Partnership will use the traditional method for allocating items with respect to which there is a book-tax difference. Depending upon the method chosen, (1) CubeSmart’s tax depreciation deductions attributable to those properties may be lower than they would have been if the partnership had acquired those properties for cash and (2) in the event of a sale of such properties, CubeSmart could be allocated gain in excess of its corresponding economic or book gain. These allocations may cause CubeSmart to recognize taxable income in excess of cash proceeds received by us, which might adversely affect CubeSmart’s ability to comply with the REIT distribution requirements or result in CubeSmart’s shareholders recognizing additional dividend income without an increase in distributions. Depreciation. Some assets in our Partnerships include appreciated property contributed by its partners. Assets contributed to a Partnership in a tax-free transaction generally retain the same depreciation method and recovery period as they had in the hands of the partner who contributed them to the partnership. Accordingly, the Partnership’s depreciation deductions for such contributed real property are based on the historic tax depreciation schedules for the properties prior to their contribution to the Operating Partnership.    Basis in Partnership Interest. CubeSmart’s adjusted tax basis in any partnership interest it owns generally will be: the amount of cash and the basis of any other property it contributes to the partnership; increased by its allocable share of the partnership’s income (including tax-exempt income) and its allocable share of indebtedness of the partnership; and reduced, but not below zero, by its allocable share of the partnership’s loss (excluding any non-deductible items), the amount of cash and the basis of property distributed to CubeSmart, and constructive distributions resulting from a reduction in its share of indebtedness of the partnership. Loss allocated to CubeSmart in excess of its basis in a partnership interest will not be taken into account until CubeSmart again has basis sufficient to absorb the loss. A reduction of CubeSmart’s share of partnership indebtedness will be treated as a constructive cash distribution to CubeSmart, and will reduce its adjusted tax basis in the partnership. Distributions, including constructive distributions, in excess of the basis of CubeSmart’s partnership interest will constitute taxable income to CubeSmart. Such distributions and constructive distributions normally will be characterized as long-term capital gain. Sale of a Partnership’s Property. Generally, any gain realized by a Partnership on the sale of property that is a capital asset held for more than one year will be long-term capital gain, except for any portion of the gain treated as depreciation or cost recovery recapture. Any gain or loss recognized by a Partnership on the disposition of contributed or revalued properties will be allocated first to the partners who contributed the properties or who were partners at the time of revaluation, to the extent of their built- in gain or loss on those properties for U.S. federal income tax purposes. The partners’ built-in gain or loss on contributed or revalued properties is the difference between the partners’ proportionate share of the book value of those properties and the partners’ tax basis allocable to those properties at the time of the contribution or revaluation. Any remaining gain or loss recognized by the Partnership on the disposition of contributed or revalued properties, and any gain or loss recognized by the Partnership on the disposition of other properties, will be allocated among the partners in accordance with their percentage interests in the Partnership. CubeSmart’s share of any Partnership gain from the sale of inventory or other property held primarily for sale to customers in the ordinary course of the Partnership’s trade or business will be treated as income from a prohibited transaction subject to a 100% tax. Income from a prohibited transaction may have an adverse effect on CubeSmart’s ability to satisfy the gross income tests for REIT status. See “Requirements for Qualification — Gross Income Tests.” CubeSmart does not presently intend to acquire or hold, or to allow any Partnership to acquire or hold, any property that is likely to be treated as inventory or property held primarily for sale to customers in the ordinary course of CubeSmart’s, or the Partnership’s, trade or business. 14  Partnership Audit Rules. Under the Bipartisan Budget Act of 2015 (the “BBA”), a partnership itself may be liable for a tax computed by reference to the hypothetical increase in partner-level taxes (including interest and penalties) resulting from an adjustment of partnership tax items on audit, regardless of changes in the composition of the partners (or their relative ownership) between the year under audit and the year of the adjustment. These rules also include an elective alternative method under which the additional taxes resulting from the adjustment are assessed against the affected partners, subject to a higher rate of interest than otherwise would apply. Although it is uncertain how certain aspects of the BBA’s partnership audit rules will be implemented, they could result in partnerships in which we directly or indirectly invest being required to pay additional taxes, interest and penalties as a result of an audit adjustment, and we, as a direct or indirect partner of those partnerships could be required to bear the economic burden of those taxes, interest and penalties even though we, as a REIT, may not otherwise have been required to pay additional corporate-level taxes as a result of the related audit adjustment. The changes created by the BBA’s partnership audit rules are sweeping and, in some respects, dependent on the promulgation of future regulations or other guidance by the U.S. Treasury. Investors are urged to consult with their tax advisors with respect to those changes and their potential impact on their investment in our shares. Taxation of Shareholders Taxation of Taxable U.S. Shareholders income tax purposes, is: The term “U.S. shareholder” means a holder of CubeSmart common shares or preferred shares that, for U.S. federal     a citizen or individual resident of the United States; a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any of its states or the District of Columbia; an estate the income of which is subject to U.S. federal income taxation regardless of its source; or any trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person. If a partnership, entity or arrangement treated as a partnership for U.S. federal income tax purposes holds CubeSmart common shares or preferred shares, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. If you are a partner in a partnership holding CubeSmart common shares or preferred shares, you should consult your tax advisor regarding the consequences of the ownership and disposition of CubeSmart common shares or preferred shares by the partnership. Taxation of U.S. Shareholders on Distributions. As long as CubeSmart qualifies as a REIT, a taxable U.S. shareholder will be required to take into account as ordinary income distributions made out of CubeSmart’s current or accumulated earnings and profits that CubeSmart does not designate as capital gain dividends or retained long-term capital gain. However, for taxable years beginning after December 31, 2017 and before January 1, 2026, generally individual shareholders are allowed to deduct 20% of the aggregate amount of ordinary dividends distributed by us, subject to certain limitations. A U.S. shareholder will not qualify for the dividends-received deduction generally available to corporations. Dividends paid to a U.S. shareholder generally will not qualify for the preferential tax rate for “qualified dividend income” (currently, a 20% maximum rate, also see the discussion below, “Taxation of Shareholders— Tax Rates Applicable to Individual Shareholders under the TCJA”). Qualified dividend income generally includes dividends paid by domestic C corporations and certain qualified foreign corporations to most noncorporate U.S. shareholders. Because a REIT is not generally subject to U.S. federal income tax on the portion of its REIT taxable income distributed to its shareholders, CubeSmart’s dividends generally will not be eligible for the preferential tax rate on qualified dividend income. As a result, CubeSmart’s ordinary REIT dividends will be taxed at the higher rate applicable to ordinary income. The highest marginal individual income tax rate on ordinary income is 39.6% for tax years beginning on or before December 31, 2017 and 37% for tax years beginning after that date (but see the discussion below “Taxation of Shareholders — Tax Rates Applicable to Individual Shareholders under the TCJA” regarding the sunset of the 37% rate). However, the preferential tax rate for qualified dividend income will apply to CubeSmart’s ordinary REIT dividends, if any, that are (i) attributable to dividends received by CubeSmart from non-REIT corporations, such as our taxable REIT subsidiaries, and (ii) attributable to income upon which CubeSmart has paid corporate income tax (e.g., to the extent that CubeSmart distributes less than 100% of CubeSmart’s taxable income). In general, to qualify for the preferential tax rate on qualified dividend income, a U.S. shareholder must hold CubeSmart common shares or preferred shares for more than 60 days during the 121-day period beginning on the date that is 60 days before the date on which the common shares or preferred shares become ex-dividend. 15 With respect to common shares, CubeSmart may distribute taxable dividends that are payable partly in cash and partly in CubeSmart common shares. Taxable U.S. shareholders receiving such dividends will be required to include the full amount of the dividends as ordinary income to the extent of CubeSmart’s current and accumulated earnings and profits. However, for taxable years beginning after December 31, 2017 and before January 1, 2026, generally individual shareholders are allowed to deduct 20% of the aggregate amount of ordinary dividends distributed by us that are “qualified REIT dividends”, subject to certain limitations. Pursuant to the Treasury regulations, in order for a dividend paid by a REIT to be eligible to be treated as a “qualified REIT dividend,” the shareholder must meet two holding period-related requirements. First, the shareholder must hold the REIT shares for a minimum of 46 days during the 91-day period that begins 45 days before the date on which the REIT share becomes ex-dividend with respect to the dividend. Second, the qualifying portion of the REIT dividend is reduced to the extent that the shareholder is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. The 20% deduction does not apply to REIT capital gain dividends or to REIT dividends that we designate as “qualified dividend income.” Like most of the other changes made by the TCJA applicable to non-corporate taxpayers, the 20% deduction will expire on December 31, 2025 unless Congress acts to extend it. Prospective investors should consult their tax advisors concerning these limitations on the ability to deduct all or a portion of dividends received on shares of our common shares or preferred shares. Any distribution CubeSmart declares in October, November, or December of any year that is payable to a U.S. shareholder of record on a specified date in any of those months will be treated as paid by CubeSmart and received by the U.S. shareholder on December 31 of the year, provided CubeSmart actually pays the distribution during January of the following calendar year. Distributions to a U.S. shareholder which CubeSmart designates as capital gain dividends will generally be treated as long-term capital gain, without regard to the period for which the U.S. shareholder has held its common shares or preferred shares. In general, U.S. shareholders will be taxable on long-term capital gains at a current maximum rate of 20% (see the discussion below “Taxation of Shareholders—Tax Rates Applicable to Individual Shareholders under the TCJA”), except that the portion of such gain that is attributable to depreciation recapture will be taxable at the maximum rate of 25%. A corporate U.S. shareholder, however, may be required to treat up to 20% of certain capital gain dividends as ordinary income. Effective for distributions paid or treated as being paid in taxable years beginning after December 31, 2015, the aggregate amount of dividends that CubeSmart may designate as “capital gain dividends” or “qualified dividend income” with respect to any taxable year may not exceed the dividends paid by CubeSmart with respect to such taxable year, including dividends that are paid in the following taxable year and treated as having been paid with respect to such taxable year by being (1) declared before CubeSmart timely files its tax return for such taxable year and (2) paid with or before the first regular dividend payment after such declaration. CubeSmart may elect to retain and pay income tax on the net long-term capital gain that CubeSmart receives in a taxable year. In that case, a U.S. shareholder would be taxed on its proportionate share of CubeSmart’s undistributed long-term capital gain. The U.S. shareholder would receive a credit or refund for its proportionate share of the tax CubeSmart paid. The U.S. shareholder would increase the basis in its common shares or preferred shares by the amount of its proportionate share of CubeSmart’s undistributed long-term capital gain, minus its share of the tax CubeSmart paid. A U.S. shareholder will not incur tax on a distribution in excess of CubeSmart’s current and accumulated earnings and profits if the distribution does not exceed the adjusted basis of the U.S. shareholder’s common shares or preferred shares. Instead, the distribution will reduce the adjusted basis of the shares, and any amount in excess of both CubeSmart’s current and accumulated earnings and profits and the adjusted basis will be treated as capital gain, long-term capital gain if the shares have been held for more than one year, provided the shares are a capital asset in the hands of the U.S. shareholder. Shareholders may not include in their individual income tax returns any of CubeSmart’s net operating losses or capital losses. Instead, these losses are generally carried over by CubeSmart for potential offset against CubeSmart’s future income (subject to certain limitation for net operating losses arising in tax years beginning after December 31, 2017, as modified by the CARES Act). Taxable distributions from CubeSmart and gain from the disposition of common shares or preferred shares will not be treated as passive activity income; and, therefore, shareholders generally will not be able to apply any “passive activity losses,” such as losses from certain types of limited partnerships in which the shareholder is a limited partner, against such income. In addition, taxable distributions from CubeSmart and gain from the disposition of common shares or preferred shares generally will be treated as investment income for purposes of the investment interest limitations. Net capital gain from the disposition of our stock or capital gain dividends generally will be excluded from investment income unless the shareholder elects to have the gain taxed at ordinary income rates. CubeSmart will notify shareholders after the close of its taxable year as to the portions of the distributions attributable to that year that constitute ordinary income, return of capital, and capital gain. 16 Taxation of U.S. Shareholders on the Disposition of Common and Preferred Shares In general, a U.S. shareholder who is not a dealer in securities must treat any gain or loss recognized upon a taxable disposition of CubeSmart’s common or preferred shares as long-term capital gain or loss if the U.S. shareholder has held the shares for more than one year, and otherwise as short-term capital gain or loss. In general, a U.S. shareholder will recognize gain or loss in an amount equal to the difference between the sum of the fair market value of any property and the amount of cash received in such disposition and the U.S. shareholder’s adjusted tax basis. A U.S. shareholder’s adjusted tax basis generally will equal the U.S. shareholder’s acquisition cost, increased by the excess of the U.S. shareholder’s allocable share of any retained capital gains, less the U.S. shareholder’s allocable share of the tax paid by us on such retained capital gains and reduced by any returns of capital. However, a U.S. shareholder must treat any loss upon a sale or exchange of common or preferred shares held by such shareholder for six months or less as a long-term capital loss to the extent of capital gain dividends and any actual or deemed distributions from CubeSmart that such U.S. shareholder treats as long-term capital gain. All or a portion of any loss that a U.S. shareholder realizes upon a taxable disposition of common or preferred shares may be disallowed if the U.S. shareholder purchases other common shares or preferred shares within 30 days before or after the disposition. If a U.S. shareholder recognizes a loss upon a subsequent disposition of CubeSmart shares in an amount that exceeds a prescribed threshold, it is possible that the provisions of Treasury regulations involving “reportable transactions” could apply, with a resulting requirement to separately disclose the loss generating transactions to the IRS. While these regulations are directed towards “tax shelters,” they are written broadly, and apply to transactions that would not typically be considered tax shelters. Significant penalties apply for failure to comply with these requirements. You should consult your tax advisor concerning any possible disclosure obligation with respect to the receipt or disposition of CubeSmart shares, or transactions that might be undertaken directly or indirectly by us. Moreover, you should be aware that CubeSmart and other participants in transactions involving CubeSmart (including our advisors) might be subject to disclosure or other requirements pursuant to these regulations. The tax-rate differential between capital gain and ordinary income for non-corporate taxpayers may be significant. A taxpayer generally must hold a capital asset for more than one year for gain or loss derived from its sale or exchange to be treated as long-term capital gain or loss. The highest marginal individual income tax rate is currently 39.6% for tax years beginning on or before December 31, 2017 and 37% for tax years beginning after that date (but see the discussion below “Taxation of Shareholders—Tax Rates Applicable to Individual Shareholders under the TCJA” regarding the sunset of the 37% rate). The maximum tax rate on long- term capital gain applicable to U.S. shareholders taxed at individual rates is currently 20%. For additional information, see the discussion below “Taxation of Shareholders—Tax Rates Applicable to Individual Shareholders under the TCJA.” The maximum tax rate on long-term capital gain from the sale or exchange of “section 1250 property” (i.e., generally, depreciable real property) is 25% to the extent the gain would have been treated as ordinary income if the property were “section 1245 property” (i.e., generally, depreciable personal property). CubeSmart generally may designate whether a distribution CubeSmart designates as capital gain dividends (and any retained capital gain that CubeSmart is deemed to distribute) is taxable to non-corporate shareholders at the current 20% or 25% rate. The characterization of income as capital gain or ordinary income may affect the deductibility of capital losses. A non-corporate taxpayer may deduct capital losses not offset by capital gains against its ordinary income only up to a maximum of $3,000 annually. A non-corporate taxpayer may carry unused capital losses forward indefinitely. A corporate taxpayer must pay tax on its net capital gain at corporate ordinary-income rates. A corporate taxpayer may deduct capital losses only to the extent of capital gains, with unused losses carried back three years and forward five years. Redemption of Preferred Shares Whenever we redeem any preferred shares, the treatment accorded to any redemption by us for cash (as distinguished from a sale, exchange or other disposition) of our preferred shares to a U.S. shareholder of such preferred shares can only be determined on the basis of the particular facts as to each holder at the time of redemption. In general, a U.S. shareholder of our preferred shares will recognize capital gain or loss measured by the difference between the amount received by the holder of such shares upon the redemption and such holder’s adjusted tax basis in the preferred shares redeemed (provided the preferred shares are held as a capital asset) if such redemption (i) results in a “complete termination” of the holder’s interest in all classes of our shares under Section 302(b)(3) of the Code, or (ii) is “not essentially equivalent to a dividend” with respect to the holder of the preferred shares under Section 302(b)(1) of the Code. In applying these tests, there must be taken into account not only the preferred shares being redeemed, but also such holder’s ownership of other classes and series of our shares and any options (including stock purchase rights) to acquire any of the foregoing. The U.S. shareholder of our preferred shares also must take into account any such securities (including options) which are considered to be owned by such holder by reason of the constructive ownership rules set forth in Sections 318 and 302(c) of the Code. If the U.S. shareholder of preferred shares owns (actually or constructively) none of our voting shares, or owns an insubstantial amount of our voting shares, based upon current law, it is probable that the redemption of preferred shares from such a holder would be considered to be “not essentially equivalent to a dividend.” However, whether a distribution is “not essentially equivalent to a dividend” depends on all of the facts and circumstances, and a U.S. shareholder of our preferred shares intending to rely on any of the tests in this or the preceding paragraph at the time of redemption should consult its tax advisor to determine their application to its particular situation. If the redemption does not meet any of the tests under Section 302 of the Code, then the redemption proceeds received from our preferred shares will be treated as a distribution on our shares as described under “Taxation of 17 U.S. Shareholders — Taxation of Taxable U.S. Shareholders — Taxation of U.S. Shareholders on Distributions.” If the redemption of a holder’s preferred shares is taxed as a dividend, the adjusted basis of such holder’s redeemed preferred shares will be transferred to any other shares held by the holder. If the holder owns no other shares, under certain circumstances, such basis may be transferred to a related person, or it may be lost entirely. Conversion of Our Preferred Shares into Common Shares. Except as provided below, a U.S. shareholder generally will not recognize gain or loss upon the conversion of our preferred shares into our common shares. Except as provided below, a U.S. shareholder’s basis and holding period in the common shares received upon conversion generally will be the same as those of the converted preferred shares (but the basis will be reduced by the portion of adjusted tax basis allocated to any fractional common share exchanged for cash). Any common shares received in a conversion that is attributable to accumulated and unpaid dividends on the converted preferred shares will be treated as a distribution on our shares as described above in “Taxation of U.S. Shareholders — Taxation of Taxable U.S. Shareholders — Taxation of U.S. Shareholders on Distributions.” Cash received upon conversion in lieu of a fractional common share generally will be treated as a payment in a taxable exchange for such fractional common share, and gain or loss will be recognized on the receipt of cash in an amount equal to the difference between the amount of cash received and the adjusted tax basis allocable to the fractional common share deemed exchanged. This gain or loss will be long-term capital gain or loss if the U.S. shareholder has held the preferred shares for more than one year. See “— Taxation of U.S. Shareholders — Taxation of Taxable U.S. Shareholders — Taxation of U.S. Shareholders on the Disposition of Common and Preferred Shares.” U.S. shareholders should consult with their tax advisors regarding the U.S. federal income tax consequences of any transaction by which such holder exchanges common shares received on a conversion of preferred shares for cash or other property. Tax Rates Applicable to Individual Shareholders under the TCJA Long-term capital gains (i.e., capital gains with respect to assets held for more than one year) and “qualified dividends” received by an individual generally are subject to federal income tax at a maximum rate of 20%. Short-term capital gains (i.e., capital gains with respect to assets held for one year or less) generally are subject to federal income tax at ordinary income rates. Because we are not generally subject to federal income tax on the portion of our REIT taxable income or capital gains distributed to our shareholders, our dividends generally are not eligible for the 20% maximum tax rate on qualified dividends. Instead, our ordinary dividends generally are taxed at the higher tax rates applicable to ordinary income, the maximum rate of which is 37% for tax years beginning after December 31, 2017 (the rate was 39.6% for tax years beginning before that date) and before January 1, 2026. However, for taxable years prior to 2026, individual shareholders are generally allowed to deduct 20% of the aggregate amount of ordinary dividends distributed by us, subject to certain limitations, which would reduce the maximum marginal effective tax rate for individuals on the receipt of such ordinary dividends to 29.6%. The 20% maximum tax rate for long-term capital gains and qualified dividends generally applies to:     your long-term capital gains, if any, recognized on the disposition of our shares; our distributions designated as long-term capital gain dividends (except to the extent attributable to real estate depreciation, in which case such distributions are subject to a 25% tax rate to such extent); our dividends attributable to dividends received by us from non-REIT corporations, such as taxable REIT subsidiaries; and our dividends to the extent attributable to income upon which we have paid corporate income tax (e.g., to the extent that we distribute less than 100% of our taxable income). Medicare Tax on Investment Income Certain U.S. shareholders and U.S. Holders (as defined below) of debt securities who are individuals, estates or trusts and whose income exceeds certain thresholds may be required to pay a 3.8% Medicare tax on “net investment income” which includes, among other things, dividends on shares, interest on debt securities and capital gains from the sale or other disposition of shares or debt securities, subject to certain exceptions. The current 20% deduction allowed by Section 199A of the Code, as added by the TCJA, with respect to ordinary REIT dividends received by non-corporate taxpayers is allowed only for purposes of Chapter 1 of the Code and thus is apparently not allowed as a deduction allocable to such dividends for purposes of determining the amount of net investment income subject to the 3.8% Medicare tax, which is imposed under Chapter 2A of the Code. Prospective investors should consult their tax advisors regarding the effect, if any, of this legislation on their ownership and disposition of our common shares, preferred shares or debt securities. 18 Information Reporting Requirements and Backup Withholding. CubeSmart will report to its shareholders and to the IRS the amount of distributions CubeSmart pays during each calendar year and the amount of tax it withholds, if any. A shareholder may be subject to backup withholding at a rate of up to 24% with respect to distributions unless the holder:   is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact; or provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding, and otherwise complies with the applicable requirements of the backup withholding rules. A shareholder who does not provide CubeSmart with its correct taxpayer identification number also may be subject to penalties imposed by the IRS. In addition, CubeSmart may be required to withhold a portion of capital gain distributions to any shareholders who fail to certify their non-foreign status to CubeSmart. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against the shareholder’s income tax liability, provided the required information is timely furnished to the IRS. Taxation of Tax-Exempt Shareholders Tax-exempt entities, including qualified employee pension and profit sharing trusts and individual retirement accounts and annuities, generally are exempt from U.S. federal income taxation. However, they are subject to taxation on their “unrelated business taxable income.” While many investments in real estate generate unrelated business taxable income, the IRS has issued a ruling that dividend distributions from a REIT to an exempt employee pension trust do not constitute unrelated business taxable income so long as the exempt employee pension trust does not otherwise use the shares of the REIT in an unrelated trade or business of the pension trust. Based on that ruling, amounts CubeSmart distributes to tax-exempt shareholders generally should not constitute unrelated business taxable income. However, if a tax-exempt shareholder were to finance its acquisition of common shares or preferred shares with debt, a portion of the income it received from CubeSmart would constitute unrelated business taxable income pursuant to the “debt-financed property” rules. Furthermore, social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts, and qualified group legal services plans that are exempt from taxation under special provisions of the U.S. federal income tax laws are subject to different unrelated business taxable income rules, which generally will require them to characterize distributions they receive from CubeSmart as unrelated business taxable income. In certain circumstances, a qualified employee pension or profit-sharing trust that owns more than 10% of CubeSmart’s shares of beneficial interest (by value) must treat a percentage of the dividends it receives from CubeSmart as unrelated business taxable income. Such percentage is equal to the gross income CubeSmart derives from an unrelated trade or business, determined as if CubeSmart were a pension trust, divided by its total gross income for the year in which it pays the dividends. This rule applies to a pension trust holding more than 10% of CubeSmart shares only if:  the percentage of CubeSmart’s dividends which the tax-exempt trust must treat as unrelated business taxable income is at least 5%;  CubeSmart is a “pension-held REIT,” that is, CubeSmart qualifies as a REIT by reason of the modification of the rule requiring that no more than 50% of CubeSmart’s shares of beneficial interest be owned by five or fewer individuals that allows the beneficiaries of the pension trust to be treated as holding CubeSmart’s shares in proportion to their actuarial interests in the pension trust; and  either: (i) one pension trust owns more than 25% of the value of CubeSmart’s shares of beneficial interest; or (ii) one or more pension trusts each individually holding more than 10% of the value of CubeSmart’s shares of beneficial interest collectively owns more than 50% of the value of CubeSmart’s shares of beneficial interest. from owning more than 10% of the value of its shares, or CubeSmart from becoming a pension-held REIT. Certain restrictions on ownership and transfer of CubeSmart’s shares should generally prevent a tax-exempt entity foreign tax consequences of the acquisition, ownership and disposition of CubeSmart shares. Tax-exempt U.S. shareholders are urged to consult their tax advisor regarding the U.S. federal, state, local and Taxation of Non-U.S. Shareholders shareholder or a partnership (or an entity treated as a partnership for U.S. federal income tax purposes). The rules governing U.S. The term “non-U.S. shareholder” means a holder of CubeSmart common shares or preferred shares that is not a U.S. 19 federal income taxation of non-U.S. shareholders are complex. This section is only a summary of such rules. We urge non-U.S. shareholders to consult their own tax advisors to determine the impact of federal, state, local and foreign income tax laws on ownership of common shares or preferred shares, including any reporting requirements. Taxation of Distributions. A non-U.S. shareholder that receives a distribution which is not attributable to gain from CubeSmart’s sale or exchange of a “United States real property interest” (“USRPI”) (discussed below) and that CubeSmart does not designate a capital gain dividend or retained capital gain will be treated as receiving dividends to the extent that CubeSmart pays such distribution out of CubeSmart’s current or accumulated earnings and profits. A withholding tax equal to 30% of the gross amount of the distribution ordinarily will apply unless an applicable tax treaty reduces or eliminates the tax. However, a non-U.S. shareholder generally will be subject to U.S. federal income tax at graduated rates on any distribution treated as effectively connected with the non-U.S. shareholder’s conduct of a U.S. trade or business, in the same manner as U.S. shareholders are taxed on distributions. A corporate non-U.S. shareholder may, in addition, be subject to the 30% branch profits tax with respect to that distribution. CubeSmart plans to withhold U.S. income tax at the rate of 30% on the gross amount of any distribution paid to a non-U.S. shareholder unless either:   a lower treaty rate applies and the non-U.S. shareholder files a properly completed IRS Form W-8BEN or W-8BEN- E (or other applicable form) evidencing eligibility for that reduced rate with us; or the non-U.S. shareholder files an IRS Form W-8ECI (or other applicable form) with CubeSmart claiming that the distribution is effectively connected income. A non-U.S. shareholder will not incur tax on a distribution in excess of CubeSmart’s current and accumulated earnings and profits if the excess portion of such distribution does not exceed the adjusted basis of its common shares or preferred shares. Instead, the excess portion of the distribution will reduce the adjusted basis of such shares. A non-U.S. shareholder will be subject to tax on a distribution that exceeds both CubeSmart’s current and accumulated earnings and profits and the adjusted basis of its shares, if the non-U.S. shareholder otherwise would be subject to tax on gain from the sale or disposition of common shares or preferred shares, as described below. Because CubeSmart generally cannot determine at the time CubeSmart makes a distribution whether the distribution will exceed CubeSmart’s current and accumulated earnings and profits, CubeSmart normally will withhold tax on the entire amount of any distribution at the same rate as CubeSmart would withhold on a dividend. However, a non-U.S. shareholder may obtain a refund of amounts CubeSmart withholds if CubeSmart later determines that a distribution in fact exceeded CubeSmart’s current and accumulated earnings and profits. CubeSmart may be required to withhold 15% (increased from 10%, effective February 17, 2016) of any distribution that exceeds CubeSmart’s current and accumulated earnings and profits. Consequently, although CubeSmart intends to withhold at a rate of 30% on the entire amount of any distribution, to the extent CubeSmart does not do so, CubeSmart may withhold at a rate of 15% on any portion of a distribution not subject to withholding at a rate of 30%. For any year in which CubeSmart qualifies as a REIT, except as discussed below (in “Taxation of Non-U.S. Shareholders—Taxation of Disposition of Shares”) with respect to certain holders owning 10% or less of regularly traded classes of shares, a non-U.S. shareholder will incur tax on distributions attributable to gain from CubeSmart’s sale or exchange of a United States real property interest (a “USRPI”) under the Foreign Investment in Real Property Tax Act of 1980, or “FIRPTA.” A USRPI includes certain interests in real property and shares in United States corporations at least 50% of whose assets consist of interests in real property. Under FIRPTA, a non-U.S. shareholder is taxed on distributions attributable to gain from sales of USRPIs as if the gain were effectively connected with the conduct of a U.S. business of the non-U.S. shareholder. A non-U.S. shareholder would be taxed on such a distribution at the normal capital gain rates applicable to U.S. shareholders, subject to applicable alternative minimum tax and a special alternative minimum tax in the case of a nonresident alien individual. A non-U.S. corporate shareholder not entitled to treaty relief or exemption also may be subject to the 30% branch profits tax on such a distribution. CubeSmart must withhold 21% of any distribution that CubeSmart could designate as a capital gain dividend. A non-U.S. shareholder may receive a credit against its tax liability for the amount CubeSmart withholds. Effective December 18, 2015, our shares will not be treated as a USRPI when held, directly or indirectly, by a qualified shareholder and, therefore, FIRPTA will not apply to such shares. However, certain investors in a qualified shareholder that owns more than 10% of our shares (directly or indirectly) that are not themselves qualified shareholders may be subject to FIRPTA withholding. A “qualified shareholder” is a foreign entity that (1)(i) is eligible for the benefits of a comprehensive income tax treaty with the United States that includes an exchange of information program and the principal class of interests of which is listed and regularly traded on one or more recognized stock exchanges (as defined in such comprehensive income tax treaty), or (ii) is a foreign partnership that is created or organized under foreign law as a limited partnership in a jurisdiction that has an agreement for the exchange of information with respect to taxes with the United States and has a class of limited partnership units which is regularly traded on the New York Stock Exchange or Nasdaq Stock Market and the value of such class of limited partnership units is greater than 50% of the value of all of the partnership units of the foreign partnership, (2) is a qualified collective investment vehicle, and (3) maintains records on the identity of each person who, at any time during the foreign person’s taxable year, holds directly 5% or more of the class of interests described in (1)(i) or (ii). A “qualified collective investment vehicle” is a foreign person that (x) under the 20 comprehensive income tax treaty described in (1)(i) or (ii) would be eligible for a reduced rate of withholding with respect to dividends paid by a REIT even if such person owned more than 10% of the REIT, (y) is a publicly traded partnership that is a withholding foreign partnership, and would be treated as a United States real property holding corporation if it were a United States corporation, or (z) which is designated as a qualified collective investment vehicle by the Secretary of the Treasury and is either (1) fiscally transparent or (2) required to include dividends in its gross income, but is entitled to a deduction for distributions to its equity investors. Additionally, effective December 18, 2015, qualified foreign pension funds will not be subject to FIRPTA withholding. The rules concerning qualified shareholders and qualified foreign pension funds are complex and investors who believe they may be qualified shareholders or qualified foreign pension funds should consult with their own tax advisors to find out if these rules are applicable to them. Distributions attributable to gain from sales or exchanges by CubeSmart of USRPIs are treated as ordinary dividends (not subject to the 21% withholding tax under FIRPTA) if the distribution is made to a non-U.S. shareholder with respect to any class of shares which is “regularly traded” on an established securities market located in the United States and if the non-U.S. shareholder did not own more than 5% of such class of shares at any time during the taxable year. Such distributions will generally be subject to a 30% U.S. withholding tax (subject to reduction under applicable treaty) but a non-U.S. shareholder will not be required to report the distribution on a U.S. tax return. In addition, the branch profits tax will not apply to such distributions. Taxation of Disposition of Shares. A non-U.S. shareholder generally will not incur tax under FIRPTA with respect to gain on a sale of common shares or preferred shares as long as CubeSmart is a “domestically-controlled REIT,” which means that at all times non-U.S. persons hold, directly or indirectly, less than 50% in value of all outstanding CubeSmart shares. CubeSmart cannot assure you that this test will be met. Further, even if CubeSmart is a domestically controlled REIT, pursuant to “wash sale” rules under FIRPTA, a non-U.S. shareholder may incur tax under FIRPTA. The “wash sale” rule applies to the extent such non-U.S. shareholder disposes of CubeSmart shares during the 30-day period preceding a dividend payment, and such non-U.S. shareholder (or a person related to such non-U.S. shareholder) acquires or enters into a contract or option to acquire CubeSmart common shares or preferred shares within 61 days of the 1st day of the 30-day period described above, and any portion of such dividend payment would, but for the disposition, be treated as a USRPI capital gain to such non-U.S. shareholder, then such non-U.S. shareholder shall be treated as having USRPI capital gain in an amount that, but for the disposition, would have been treated as USRPI capital gain. In addition, a non-U.S. shareholder that owns, actually or constructively, 10% or less of the outstanding common shares or preferred shares at all times during a specified testing period will not incur tax under FIRPTA on gain from a sale of such common shares or preferred shares if such shares are “regularly traded” on an established securities market. Because CubeSmart’s common shares and preferred shares are “regularly traded” on an established securities market, CubeSmart expects that a non-U.S. shareholder generally will not incur tax under FIRPTA on gain from a sale of common shares or preferred shares unless it owns or has owned more than 10% of such common shares or preferred shares at any time during the five year period to such sale. Any gain subject to tax under FIRPTA will be treated in the same manner as it would be in the hands of U.S. shareholders, subject to alternative minimum tax, but under a special alternative minimum tax in the case of nonresident alien individuals, and the purchaser of the shares could be required to withhold 10% of the purchase price and remit such amount to the IRS. A non-U.S. shareholder generally will incur tax on gain not subject to FIRPTA if:   the gain is effectively connected with the conduct of the non-U.S. shareholder’s U.S. trade or business, in which case the non-U.S. shareholder will be subject to the same treatment as U.S. shareholders with respect to the gain; or the non-U.S. shareholder is a nonresident alien individual who was present in the U.S. for 183 days or more during the taxable year and has a “tax home” in the United States, in which case the non-U.S. shareholder will incur a 30% tax on capital gains. Redemptions of Our Preferred Shares. Whenever we redeem any preferred shares, the treatment accorded to any redemption by us for cash (as distinguished from a sale, exchange or other disposition) of our preferred shares to a non-U.S. shareholder of such preferred shares can only be determined on the basis of the particular facts as to each holder at the time of redemption. In general, a non-U.S. shareholder of our preferred shares will recognize capital gain or loss measured by the difference between the amount received by the holder of such shares upon the redemption and such holder’s adjusted tax basis in the preferred shares redeemed (provided the preferred shares are held as a capital asset) if such redemption (i) results in a “complete termination” of the holder’s interest in all classes of our shares under Section 302(b)(3) of the Code, or (ii) is “not essentially equivalent to a dividend” with respect to the holder of the preferred shares under Section 302(b)(1) of the Code. In applying these tests, there must be taken into account not only the preferred shares being redeemed, but also such holder’s ownership of other classes and series of our shares and any options (including stock purchase rights) to acquire any of the foregoing. The non-U.S. shareholder of our preferred shares also must take into account any such securities (including options) which are considered to be owned by such holder by reason of the constructive ownership rules set forth in Sections 318 and 302(c) of the Code. 21 If the non-U.S. shareholder of preferred shares owns (actually or constructively) none of our voting shares, or owns an insubstantial amount of our voting shares, based upon current law, it is probable that the redemption of preferred shares from such a holder would be considered to be “not essentially equivalent to a dividend.” However, whether a distribution is “not essentially equivalent to a dividend” depends on all of the facts and circumstances, and a non-U.S. shareholder of our preferred shares intending to rely on any of the tests in this or the preceding paragraph at the time of redemption should consult its tax advisor to determine their application to its particular situation. If the redemption does not meet any of the tests under Section 302 of the Code, then the redemption proceeds received from our preferred shares will be treated as a distribution on our shares as described under “Taxation of Shareholders — Taxation of Non-U.S. Shareholders — Taxation of Distributions.” If the redemption of a holder’s preferred shares is taxed as a dividend, the adjusted basis of such holder’s redeemed preferred shares will be transferred to any other shares held by the holder. If the holder owns no other shares, under certain circumstances, such basis may be transferred to a related person, or it may be lost entirely. Conversion of Our Preferred Shares into Common Shares. Except as provided below, a non-U.S. shareholder generally will not recognize gain or loss upon the conversion of our preferred shares into our common shares, provided our preferred shares do not constitute a USRPI. Even if our preferred shares do constitute a USRPI, provided our common shares also constitute a USRPI, a non-U.S. shareholder generally will not recognize gain or loss upon a conversion of our preferred shares into our common shares provided certain reporting requirements are satisfied. Except as provided below, a non-U.S. shareholder’s basis and holding period in the common shares received upon conversion will be the same as those of the converted preferred shares (but the basis will be reduced by the portion of adjusted tax basis allocated to any fractional common share exchanged for cash). Any common shares received in a conversion that are attributable to accumulated and unpaid dividends on the converted preferred shares will be treated as a distribution on our shares as described under “— Taxation of Shareholders — Taxation of Non-U.S. Shareholders — Taxation of Distributions.” Cash received upon conversion in lieu of a fractional common share generally will be treated as a payment in a taxable exchange for such fractional common share as described under “— Taxation of Shareholders — Taxation of Non-U.S. Shareholders — Taxation of Disposition of Shares.” Non-U.S. shareholders should consult with their tax advisor regarding the U.S. federal income tax consequences of any transaction by which such holder exchanges common shares received on a conversion of preferred shares for cash or other property. Information Reporting and Backup Withholding Applicable to non-U.S. Shareholders CubeSmart must report annually to the IRS and to each non-U.S. shareholder the amount of dividends paid to such holder and the tax withheld with respect to such dividends, regardless of whether withholding was required. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the non- U.S. shareholder resides under the provisions of an applicable income tax treaty. Payments of dividends or of proceeds from the disposition of shares made to a non-U.S. shareholder may be subject to information reporting and backup withholding unless such holder establishes an exemption, for example, by properly certifying its non-United States status on a properly completed IRS Form W-8 BEN or W-8BEN-E or another appropriate version of IRS Form W- 8. Notwithstanding the foregoing, backup withholding may apply if either CubeSmart or its paying agent has actual knowledge, or reason to know, that a non-U.S. shareholder is a United States person. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against the shareholder’s income tax liability, provided the required information is timely furnished to the IRS. Additional Withholding Requirements under “FATCA” Under Sections 1471 through 1474 of the Code (such Sections commonly referred to as “FATCA”), payments of dividends to a non-U.S. shareholder will be subject to 30% withholding tax if the non-U.S. shareholder fails to provide the withholding agent with documentation sufficient to show that it is compliant with the FATCA or otherwise exempt from withholding under FATCA. Generally, such documentation is provided on an executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. If a dividend payment is both subject to withholding under FATCA and subject to withholding tax discussed above, the withholding under FATCA may be credited against, and therefore reduce, such other withholding tax. Based upon proposed Treasury regulations, which may be relied upon by taxpayers until the final Treasury regulations are issued, the FATCA withholding that was to be effective on January 1, 2019 with respect to payments of gross proceeds no longer applies. Non-U.S. shareholders should consult their tax advisors to determine the applicability of this legislation in light of their individual circumstances. 22 Legislative or Other Actions Affecting REITs The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department. No assurance can be given as to whether, when, or in what form, the U.S. federal income tax laws applicable to CubeSmart and its shareholders may be enacted. Changes to the federal tax laws and interpretations of U.S. federal tax laws could adversely affect an investment in CubeSmart shares. Taxation of Holders of Debt Securities Offered by the Operating Partnership This section describes the material U.S. federal income tax consequences of owning the debt securities that the Operating Partnership may offer. This summary is for general information only and is not tax advice. The tax consequences of owning any particular issue of debt securities will be discussed in the applicable prospectus. U.S. federal income tax purposes: As used herein, a “U.S. Holder” means a beneficial owner of debt securities of the Operating Partnership, who is, for     a citizen or individual resident of the United States, a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, or any of its states, or the District of Columbia, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or any trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person. If a partnership holds debt securities, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding debt securities of the Operating Partnership, you should consult your tax advisor regarding the consequences of the ownership and disposition of debt securities by the partnership. Pursuant to the TCJA, for taxable years beginning after December 31, 2017 (and for taxable years beginning after December 31, 2018 for instruments issued with original issue discount (“OID”)), an accrual method taxpayer that reports revenues on an applicable financial statement generally must recognize income for U.S. federal income tax purposes no later than the taxable year in which such income is taken into account as revenue in an applicable financial statement of the taxpayer. To the extent this rule is inconsistent with the rules described in the subsequent discussion, this rule supersedes such discussion. Thus, this rule could potentially require such a taxpayer to recognize income for U.S. federal income tax purposes with respect to the debt securities prior to the time such income would be recognized pursuant to the rules described in the subsequent discussion. The Treasury Department released final Treasury regulations that exclude from this rule any item of gross income for which a taxpayer uses a special method of accounting required by certain sections of the Code, including income subject to the timing rules for OID and de minimis OID, income under the contingent payment debt instrument rules, income under the variable rate debt instrument rules, and market discount (including de minimis market discount). The final Treasury regulations are generally applicable for tax years beginning on or after January 1, 2021. Taxpayers may choose to apply the final regulations, in their entirety and in a consistent manner, to tax years beginning after December 31, 2017, and before January 1, 2021. You should consult your tax advisors regarding the potential applicability of these rules to your investment in the debt securities. Taxation of Taxable U.S. Holders time that it is paid or accrued, in accordance with the U.S. Holder’s method of accounting for U.S. federal income tax purposes. Interest. The stated interest on debt securities generally will be taxable to a U.S. Holder as ordinary income at the Original Issue Discount. If you own debt securities issued with OID, you will be subject to special tax accounting rules, as described in greater detail below. In that case, you should be aware that you generally must include OID in gross income in advance of the receipt of cash attributable to that income. However, you generally will not be required to include separately in income cash payments received on the debt securities, even if denominated as interest, to the extent those payments do not constitute “qualified stated interest,” as defined below. If we determine that a particular debt security will be an OID debt security, we will disclose that determination in the prospectus relating to those debt securities. A debt security with an “issue price” that is less than the “stated redemption price at maturity” (the sum of all payments to be made on the debt security other than “qualified stated interest”) generally will be issued with OID if that difference is at least 0.25% of the stated redemption price at maturity multiplied by the number of complete years to maturity. The “issue price” of 23 each debt security in a particular offering will be the first price at which a substantial amount of that particular offering is sold to the public. The term “qualified stated interest” means stated interest that is unconditionally payable in cash or in property, other than debt instruments of the issuer, and the interest to be paid meets all of the following conditions:    it is payable at least once per year; it is payable over the entire term of the debt security; and it is payable at a single fixed rate or, subject to certain conditions, based on one or more interest indices. disclose that determination in the prospectus relating to those debt securities. If we determine that particular debt securities of a series will bear interest that is not qualified stated interest, we will If you own a debt security issued with “de minimis” OID, which is discount that is not OID because it is less than 0.25% of the stated redemption price at maturity multiplied by the number of complete years to maturity, you generally must include the de minimis OID in income at the time principal payments on the debt securities are made in proportion to the amount paid. Any amount of de minimis OID that you have included in income will be treated as capital gain. Certain of the debt securities may contain provisions permitting them to be redeemed prior to their stated maturity at our option and/or at your option. OID debt securities containing those features may be subject to rules that differ from the general rules discussed herein. If you are considering the purchase of OID debt securities with those features, you should carefully examine the applicable prospectus and should consult your own tax advisor with respect to those features since the tax consequences to you with respect to OID will depend, in part, on the particular terms and features of the debt securities. If you own OID debt securities with a maturity upon issuance of more than one year you generally must include OID in income in advance of the receipt of some or all of the related cash payments using the “constant yield method” described in the following paragraphs. This method takes into account the compounding of interest. The amount of OID that you must include in income if you are the initial United States holder of an OID debt security is the sum of the “daily portions” of OID with respect to the debt security for each day during the taxable year or portion of the taxable year in which you held that debt security (“accrued OID”). The daily portion is determined by allocating to each day in any “accrual period” a pro rata portion of the OID allocable to that accrual period. The “accrual period” for an OID debt security may be of any length and may vary in length over the term of the debt security, provided that each accrual period is no longer than one year and each scheduled payment of principal or interest occurs on the first day or the final day of an accrual period. The amount of OID allocable to any accrual period is an amount equal to the excess, if any, of:  the debt security’s “adjusted issue price” at the beginning of the accrual period multiplied by its yield to maturity, determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period, over  the aggregate of all qualified stated interest allocable to the accrual period. OID allocable to a final accrual period is the difference between the amount payable at maturity, other than a payment of qualified stated interest, and the adjusted issue price at the beginning of the final accrual period. Special rules will apply for calculating OID for an initial short accrual period. The “adjusted issue price” of a debt security at the beginning of any accrual period is equal to its issue price increased by the accrued OID for each prior accrual period, determined without regard to the amortization of any acquisition or bond premium, as described below, and reduced by any payments made on the debt security (other than qualified stated interest) on or before the first day of the accrual period. Under these rules, you will generally have to include in income increasingly greater amounts of OID in successive accrual periods. We are required to provide information returns stating the amount of OID accrued on debt securities held of record by persons other than corporations and other exempt holders. Floating rate debt securities are subject to special OID rules. In the case of an OID debt security that is a floating rate debt security, both the “yield to maturity” and “qualified stated interest” will be determined solely for purposes of calculating the accrual of OID as though the debt security will bear interest in all periods at a fixed rate generally equal to the rate that would be applicable to interest payments on the debt security on its date of issue or, in the case of certain floating rate debt securities, the rate that reflects the yield to maturity that is reasonably expected for the debt security. Additional rules may apply if either:   the interest on a floating rate debt security is based on more than one interest index; or the principal amount of the debt security is indexed in any manner. 24 This discussion does not address the tax rules applicable to debt securities with an indexed principal amount. If you are considering the purchase of floating rate OID debt securities or securities with indexed principal amounts, you should carefully examine the prospectus relating to those debt securities, and should consult your own tax advisor regarding the U.S. federal income tax consequences to you of holding and disposing of those debt securities. You may elect to treat all interest on any debt securities as OID and calculate the amount includible in gross income under the constant yield method described above. For purposes of this election, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market discount and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. You must make this election for the taxable year in which you acquired the debt security, and you may not revoke the election without the consent of the IRS. You should consult with your own tax advisor about this election. Market Discount. If you purchase debt securities, other than OID debt securities, after original issuance for an amount that is less than their stated redemption price at maturity, or, in the case of OID debt securities, their adjusted issue price, the amount of the difference will be treated as “market discount” for U.S. federal income tax purposes, unless that difference is less than a specified de minimis amount. Under the market discount rules, you will be required to treat any principal payment on, or any gain on the sale, exchange, retirement or other disposition of, the debt securities as ordinary income to the extent of the market discount that you have not previously included in income and are treated as having accrued on the debt securities at the time of their payment or disposition. In addition, you may be required to defer, until the maturity of the debt securities or their earlier disposition in a taxable transaction, the deduction of all or a portion of the interest expense on any indebtedness attributable to the debt securities. You may elect, on a debt security-by-debt security basis, to deduct the deferred interest expense in a tax year prior to the year of disposition. You should consult your own tax advisor before making this election. Any market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the debt securities, unless you elect to accrue on a constant interest method. You may elect to include market discount in income currently as it accrues, on either a ratable or constant interest method, in which case the rule described above regarding deferral of interest deductions will not apply. Your election to include market discount in income currently, once made, applies to all market discount obligations acquired by you on or after the first taxable year to which your election applies and may not be revoked without the consent of the IRS. You should consult your own tax advisor before making this election. Acquisition Premium and Amortizable Bond Premium. If you purchase OID debt securities for an amount that is greater than their adjusted issue price but equal to or less than the sum of all amounts payable on the debt securities after the purchase date other than payments of qualified stated interest, you will be considered to have purchased those debt securities at an “acquisition premium.” Under the acquisition premium rules, the amount of OID that you must include in gross income with respect to those debt securities for any taxable year will be reduced by the portion of the acquisition premium properly allocable to that year. If you purchase debt securities (including OID debt securities) for an amount in excess of the sum of all amounts payable on those debt securities after the purchase date other than qualified stated interest, you will be considered to have purchased those debt securities at a “premium” and, if they are OID debt securities, you will not be required to include any OID in income. You generally may elect to amortize the premium over the remaining term of those debt securities on a constant yield method as an offset to interest when includible in income under your regular accounting method. In the case of debt securities that provide for alternative payment schedules, bond premium is calculated by generally assuming that (a) you will exercise or not exercise options in a manner that maximizes your yield, and (b) we will exercise or not exercise options in a manner that minimizes your yield (except that we will be assumed to exercise call options in a manner that maximizes your yield). If you do not elect to amortize bond premium, that premium will decrease the gain or increase the loss you would otherwise recognize on disposition of the debt security. Your election to amortize premium on a constant yield method will also apply to all debt obligations held or subsequently acquired by you on or after the first day of the first taxable year to which the election applies. You may not revoke the election without the consent of the IRS. You should consult your own tax advisor before making this election. Sale, Exchange and Retirement of Debt Securities. A U.S. Holder of debt securities will recognize gain or loss upon the sale, exchange, retirement, redemption or other taxable disposition of such debt securities in an amount equal to the difference between:  the amount of cash and the fair market value of other property received in exchange for such debt securities, other than amounts attributable to accrued but unpaid qualified stated interest, which will be subject to tax as ordinary income to the extent not previously included in income; and  the U.S. Holder’s adjusted tax basis in such debt securities. A U.S. Holder’s adjusted tax basis in a debt security generally will equal the cost of the debt security to such holder (A) increased by the amount of OID or accrued market discount (if any) previously included in income by such holder and (B) decreased by the amount of (1) any payments other than qualified stated interest payments and (2) any amortizable bond premium taken by the holder. 25 Any gain or loss recognized will generally be capital gain or loss, and such capital gain or loss will generally be long-term capital gain or loss if the debt security has been held by the U.S. Holder for more than one year. Long-term capital gain for non-corporate taxpayers is subject to reduced rates of U.S. federal income taxation (currently, a 20% maximum federal rate, also see the discussion above in “Taxation of Shareholders—Tax Rates Applicable to Individual Shareholders under the TCJA” for a more detailed discussion on tax rates for individuals). The deductibility of capital losses is subject to certain limitations. If a U.S. Holder recognizes a loss upon a subsequent disposition of debt securities in an amount that exceeds a prescribed threshold, it is possible that the provisions of Treasury regulations involving “reportable transactions” could apply, with a resulting requirement to separately disclose the loss generating transactions to the IRS. While these regulations are directed towards “tax shelters,” they are written broadly, and apply to transactions that would not typically be considered tax shelters. Significant penalties apply for failure to comply with these requirements. You should consult your tax advisor concerning any possible disclosure obligation with respect to the receipt or disposition of debt securities, or transactions that might be undertaken directly or indirectly by us. Moreover, you should be aware that we and other participants in transactions involving us (including our advisors) might be subject to disclosure or other requirements pursuant to these regulations. Medicare Tax on Investment Income Certain U.S. Shareholders and U.S. Holders who are individuals, estates or trusts and whose income exceeds certain thresholds may be required to pay a 3.8% Medicare tax on “net investment income” which includes, among other things, dividends on shares, interest on debt securities and capital gains from the sale or other disposition of shares or debt securities, subject to certain exceptions. Prospective investors should consult their tax advisors regarding the effect, if any, of this legislation on their ownership and disposition of our common shares, preferred shares or debt securities. Taxation of Tax-Exempt Holders of Debt Securities Assuming the debt security is debt for tax purposes, interest income accrued on the debt security should not constitute unrelated business taxable income to a tax-exempt holder. As a result, a tax-exempt holder generally should not be subject to U.S. federal income tax on the interest income accruing on debt securities of the Operating Partnership. Similarly, any gain recognized by the tax-exempt holder in connection with a sale of the debt security generally should not be unrelated business taxable income. However, if a tax-exempt holder were to finance its acquisition of the debt security with debt, a portion of the interest income and gain attributable to the debt security would constitute unrelated business taxable income pursuant to the “debt-financed property” rules. Tax-exempt holders should consult their own tax advisors to determine the potential tax consequences of an investment in debt securities of the Operating Partnership. Taxation of Non-U.S. Holders of Debt Securities The term “non-U.S. Holder” means a holder of debt securities of the Operating Partnership that is not a U.S. Holder or a partnership (or an entity treated as a partnership for U.S. federal income tax purposes). The rules governing U.S. federal income taxation of non-U.S. Holders are complex. This section is only a summary of such rules. We urge non-U.S. Holders to consult their own tax advisors to determine the impact of federal, state, local and foreign income tax laws on ownership of debt securities, including any reporting requirements. Interest. Subject to the discussions of backup withholding and “FATCA” below, interest (including OID) paid to a non-U.S. Holder of debt securities will not be subject to U.S. federal income or withholding tax under the “portfolio interest exemption,” provided that:   interest paid on debt securities is not effectively connected with a non-U.S. Holder’s conduct of a trade or business in the United States; the non-U.S. Holder does not actually or constructively own 10% or more of the capital or profits interest in the Operating Partnership;  the non-U.S. Holder is not   a controlled foreign corporation with respect to which the Operating Partnership is a “related person” within the meaning of Section 864(d) of the Code; or a bank that receives such interest on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business; 26   the beneficial owner of debt securities provides a certification, which is generally made on an IRS Form W- 8BEN of W-8BEN-E or other applicable form or a suitable substitute form and signed under penalties of perjury, that it is not a United States person; and the applicable withholding agent does not have actual knowledge or reason to know that the beneficial owner of the debt securities is a United States person. A payment of interest (including OID) to a non-U.S. Holder that does not qualify for the portfolio interest exemption and that is not effectively connected to a United States trade or business will be subject to United States federal withholding tax at a rate of 30%, unless a United States income tax treaty applies to reduce or eliminate withholding. A non-U.S. Holder will generally be subject to tax in the same manner as a U.S. Holder with respect to payments of interest (including OID) if such payments are effectively connected with the conduct of a trade or business by the non-U.S. Holder in the United States and, if an applicable tax treaty provides, such gain is attributable to a United States permanent establishment maintained by the non-U.S. Holder. In some circumstances, such effectively connected income received by a non-U.S. Holder which is a corporation may be subject to an additional “branch profits tax” at a 30% base rate or, if applicable, a lower treaty rate. To claim the benefit of a lower treaty rate or to claim exemption from withholding because the income is effectively connected with a United States trade or business, the non-U.S. Holder must provide a properly executed IRS Form W-8BEN or W- 8BEN-E or IRS Form W-8ECI or other applicable form, or a suitable substitute form, as applicable, prior to the payment of interest. Such certificate must contain, among other information, the name and address of the non-U.S. Holder as well as applicable U.S. and foreign tax identification numbers. provide different rules. Non-U.S. Holders are urged to consult their own tax advisors regarding applicable income tax treaties, which may Sale or Retirement of Debt Securities. Subject to the discussions of backup withholding and “FATCA” below, a non-U.S. Holder generally will not be subject to U.S. federal income tax or withholding tax on gain recognized on the sale, exchange or redemption of debt securities unless:   the non-U.S. shareholder is a nonresident alien individual who was present in the U.S. for 183 days or more during the taxable year and has a “tax home” in the United States, in which case the non-U.S. shareholder will incur a 30% tax on capital gains; or the gain is effectively connected with the conduct of a trade or business of the non-U.S. Holder in the United States and, if an applicable tax treaty so provides, such gain is attributable to a United States permanent establishment maintained by such holder. Except to the extent that an applicable tax treaty provides otherwise, a non-U.S. Holder will generally be subject to tax in the same manner as a U.S. Holder with respect to gain realized on the sale, exchange or redemption of debt securities if such gain is effectively connected with the conduct of a trade or business of the non-U.S. Holder in the United States and, if an applicable tax treaty so provides, such gain is attributable to a United States permanent establishment maintained by the non-U.S. Holder. In certain circumstances, a non-U.S. Holder that is a corporation will be subject to an additional “branch profits tax” at a 30% rate or, if applicable, a lower treaty rate on such income. U.S. Federal Estate Tax. If you are an individual, your estate will not be subject to U.S. federal estate tax on the debt securities beneficially owned by you at the time of your death, provided that any payment to you on the debt securities, including OID, would be eligible for exemption from the 30% U.S. federal withholding tax under the “portfolio interest exemption” described above, without regard to the certification requirement. Information Reporting and Backup Withholding Applicable to Holders of Debt Securities U.S. Holders Certain U.S. Holders may be subject to information reporting requirements on payments of principal and interest (including OID) on debt securities and payments of the proceeds of the sale, exchange, or redemption of debt securities, and backup withholding, currently imposed at a rate of 24%, may apply to such payment if the U.S. Holder:  fails to furnish an accurate taxpayer identification number, or TIN, to the payor in the manner required; 27   is notified by the IRS that it has failed to properly report payments of interest or dividends; or under certain circumstances, fails to certify, under penalties of perjury, that it has furnished a correct TIN and that it has not been notified by the IRS that it is subject to backup withholding. Non-U.S. Holders A non-U.S. Holder is generally not subject to backup withholding with respect to payments of interest (including OID) on debt securities if it certifies as to its status as a non-U.S. Holder under penalties of perjury or if it otherwise establishes an exemption, provided that neither we nor our paying agent has actual knowledge or reason to know that the non-U.S. Holder is a United States person or that the conditions of any other exemptions are not, in fact, satisfied. Information reporting requirements, however, will apply to payments of interest (including OID) to non-U.S. Holders where such interest is subject to withholding or exempt from United States withholding tax pursuant to a tax treaty. Copies of these information returns may also be made available under the provisions of a specific treaty or agreement to the tax authorities of the country in which the non-U.S. Holder resides. The payment of the proceeds from the disposition of debt securities to or through the United States office of any broker, United States or foreign, will be subject to information reporting and possible backup withholding unless the owner certifies as to its non-United States status under penalties of perjury or otherwise establishes an exemption, provided that the broker does not have actual knowledge or reason to know that the non-U.S. Holder is a United States person or that the conditions of any other exemption are not, in fact, satisfied. The payment of the proceeds from the disposition of debt securities to or through a non-United States office of a non-United States broker that is not a “United States related person” generally will not be subject to information reporting or backup withholding. For this purpose, a “United States related person” is:    a controlled foreign corporation for U.S. federal income tax purposes; a foreign person 50% or more of whose gross income from all sources for the three-year period ending with the close of its taxable year preceding the payment, or for such part of the period that the broker has been in existence, is derived from activities that are effectively connected with the conduct of a United States trade or business; or a foreign partnership that at any time during the partnership’s taxable year is either engaged in the conduct of a trade or business in the United States or of which 50% or more of its income or capital interests are held by United States persons. In the case of the payment of proceeds from the disposition of debt securities to or through a non-United States office of a broker that is either a United States person or a United States related person, the payment may be subject to information reporting unless the broker has documentary evidence in its files that the owner is a non-U.S. Holder and the broker has no knowledge or reason to know to the contrary. Backup withholding will not apply to payments made through foreign offices of a broker that is a United States person or a United States related person, absent actual knowledge that the payee is a United States person. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a Holder will be allowed as a refund or a credit against such Holder’s U.S. federal income tax liability, provided that the requisite procedures are followed. backup withholding and the procedure for obtaining such an exemption, if applicable. Holders of debt securities are urged to consult their tax advisors regarding their qualification for exemption from FATCA Withholding Under Sections 1471 through 1474 of the Code (such Sections commonly referred to as “FATCA”), payments of interest to a non-U.S. Holder will be subject to a 30% withholding tax if the non-U.S. Holder fails to provide the withholding agent with documentation sufficient to show that it is compliant with FATCA. Generally such documentation is provided on an executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. If interest is subject to the 30% tax under FATCA, it will not be subject to the 30% tax described above under “Taxation of Non-U.S. Shareholders” and “Taxation of Non-U.S. Holders of Debt Securities.” Based upon proposed Treasury regulations, which may be relied upon by taxpayers until the final Treasury regulations are issued, the FATCA withholding that was to be effective on January 1, 2019 with respect to payments of gross proceeds no longer applies. Prospective investors should consult their tax advisors regarding the possible implications of this legislation on their investment in common shares or preferred shares of CubeSmart or debt securities of the Operating Partnership. 28  CORPORATE INFORMATION Transfer Agent American Stock Transfer & Trust Co., LLC Operations Center 6201 15th Avenue Brooklyn, NY 11219 800.937.5449 Stock Listing CubeSmart trades on the New York Stock Exchange under the symbol CUBE Annual Meeting The annual meeting of shareholders will be held at 5 Old Lancaster Road Malvern, PA 19355 on May 17, 2022 at 8:00 A.M. Eastern Time Corporate Headquarters 5 Old Lancaster Road Malvern, PA 19355 Investor Relations 5 Old Lancaster Road Malvern, PA 19355 610.535.5000 Form 10-K The Annual Report on Form 10-K filed with the Securities and Exchange Commission is available to shareholders without charge upon written request to: Investor Relations 5 Old Lancaster Road Malvern, PA 19355 610.535.5000 Internet Financial statements and other information are available electronically on CubeSmart's website at www.cubesmart.com BOARD OF TRUSTEES Marianne M. Keler Chair of the Board Partner, Keler & Kershow, PLLC CORPORATE OFFICERS Christopher P. Marr President & Chief Executive Officer Timothy M. Martin Chief Financial Officer & Treasurer Christopher P. Marr President & Chief Executive Officer, CubeSmart Jeffrey P. Foster Chief Legal Officer & Secretary Joel D. Keaton Chief Operating Officer Piero Bussani Chief Legal Officer & Global Head – Legal & Risk, ReVantage Corporate Services Dorothy Dowling Chief Marketing Officer & Senior Vice President of Sales, BWH Hotel Group John W. Fain Senior Vice President, Sales and Marketing (retired), UPS Freight John F. Remondi President, Chief Executive Officer & Director, Navient Jeffrey F. Rogatz Managing Director, Robert W. Baird & Co. Deborah R. Salzberg Principal, Uplands Real Estate Partners CubeSmart submitted to the New York Stock Exchange the certification of the Chief Executive Officer certifying that he is not aware of any violation of the New York Stock Exchange corporate governance listing standards in effect at the time of the submission of such certificate. In addition, the Company has filed, as exhibits 31.1, 31.2, 31.3 and 31.4 to the Annual Report on Form 10-K for the year ended December 31, 2021, the certifications of the Chief Executive Officer and Chief Financial Officer, respectively, required by Section 302 of the Sarbanes-Oxley Act of 2002 regarding the quality of CubeSmart and CubeSmart L.P.’s public disclosure. Forward-looking Statements This Annual Report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 the Company believes 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. Risk, uncertainties and other factors that might cause such differences, some of which could be material, include but are not limited to: adverse changes in economic conditions in the real estate industry and in the markets in which the Company owns and operate self-storage properties; the effect of competition from existing and new self-storage properties and operators on the Company’s ability to maintain or raise occupancy and rental rates; the failure to execute the Company’s business plan; adverse impacts from the COVID-19 pandemic, other pandemics, quarantines and stay at home orders, including the impact on the Company’s ability to operate our self-storage properties, the demand for self-storage, rental rates and fees and rent collection levels; reduced availability and increased costs of external sources of capital; increases in interest rates and operating costs; financing risks, including the risk of over-leverage and the corresponding risk of default on our mortgage and other debt and potential inability to refinance existing or future debt; counterparty non-performance related to the use of derivative financial instruments; risks related to the Company’s ability to maintain its qualification as a REIT for federal income tax purposes; the failure of acquisitions and developments to close on expected terms, or at all, or to perform as expected; increases in taxes, fees and assessments from state and local jurisdictions; the failure of Company’s joint venture partners to fulfill their obligations to the Company or their pursuit of actions that are inconsistent with the Company’s objectives; reductions in asset valuations and related impairment charges; cyber security breaches, cyber or ransomware attacks or a failure of the Company’s networks, systems or technology, which could adversely impact the Company’s business, customer and employee relationships or result in fraudulent payments; changes in real estate, zoning, use and occupancy laws or regulations; risks related to or a consequence of natural disasters or acts of violence, pandemics, active shooters, terrorism, insurrection or war that affect the markets in which the Company operates; potential environmental and other liabilities; governmental, administrative and executive orders and laws, which could adversely impact the Company’s business operations and customer and employee relationships; uninsured or uninsurable losses and the ability to obtain insurance coverage or recovery from insurance against risks and losses; the ability to attract and retain talent in the current labor market; other factors affecting the real estate industry generally or the self-storage industry in particular; and other risks identified in this Annual Report and, from time to time, in other reports that the Company files with the SEC or in other documents that the Company publicly disseminates. The Company undertakes no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise except as may be required by securities laws. 5 Old Lancaster Road Malvern, PA 19355 www.cubesmart.com 

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