2021
ANNUAL
REPORT
SUSTAINABLE
GROWTH
DEAR FELLOW SHAREHOLDERS:
2021 was a year of record-setting performance. Our total shareholder return reached 98.5% and we grew our
adjusted funds from operations per share by 27.7%. As we take time to reflect on our accomplishments - and what a
year 2021 is to reflect on - we remain laser-focused on long-term, sustainable growth. At Life Storage, we are
anchored on our core values of teamwork, respect, accountability, integrity and innovation. We believe that doing right
by our stakeholders can mean (and should mean) doing good for our world. Our guiding principles not only support our
conduct in business and operations, but also support our efforts to consistently deliver long-term value to our
employees, customers, communities and shareholders.
Life Storage was founded in 1982 and went public in 1995 with a total of 74 stores. Today, we are proud that
we own and/or operate a broadly diversified portfolio of just over 1,100 storage facilities across 36 states with a robust
pipeline to fuel future growth. In 2021, we achieved record acquisition volume of $2.3 billion, adding 144 high-quality
stores in key markets such as Sacramento, CA; Tampa, FL; and Atlanta, GA. Of this volume, $1.7 billion represented
wholly owned acquisitions that added 112 properties, growing our portfolio 20% in one year. Additionally, our
third-party management business continues to gain significant traction with the growing appeal of our operating
performance and technology platforms. On a net basis, we added 13 non-joint venture stores to our management
platform and have grown this business 57% per year since 2016.
Our performance in 2021 was buoyed by our strategic emphasis on investing in people, process and
technology. Customer self-service rentals began in 2018 with the roll-out of Rent Now, our proprietary fully digital
online rental platform. Rent Now proved to be a game changer for us in the early days of the pandemic and
contributed significantly to our ability to create a safe environment for our teammates and customers to conduct
business. We further augmented this sales channel by incorporating dynamic pricing functionality to allow customers
to select a storage unit from one of three pricing-based tiers according to their individual needs and preferences. At the
end of 2021, approximately 30% of our same store move-ins were conducted digitally through Rent Now. This platform
contributed to record same store occupancy of 93.9% (up 100 basis points year-over-year) and same-store revenue
growth of 14.1% in 2021.
We continue to invest in talent and culture as we attract and retain a best-in-class workforce. We are
strategically aligning our Diversity, Equality and Inclusion efforts with innovative and competitive compensation,
benefit, and recognition programs. In addition, we are advancing our Environmental, Social and Governance (“ESG”)
initiatives. A few highlights include:
Forbes Magazine recently named Life Storage as one of the best midsize employers for 2022.
Life Storage joined over 2,000 other CEOs in signing the Action Pledge for Diversity and Inclusion in the workplace.
We were recently recognized by Sustainalytics, a Morningstar Company, as an ESG Regional Top-Rated Company for
our ESG efforts.
We have established a five-year solar development initiative to reduce our energy consumption (like-for-like stores) by
10% and to realize a 200% increase in our renewable energy generation. We are projecting to increase installed solar
arrays roughly 50% during 2022.
Finally, for more than 36 years, we have been keenly focused on protecting our balance sheet and
maintaining our liquidity. These fundamentals served us well in 2021 and through the COVID-19 pandemic. The
Company’s financial position is excellent with a BBB/Baa2 debt rating, modest debt to EBITDA and leverage ratios,
healthy fixed charge and dividend coverage, and no significant near-term debt maturities. Our $500 million line of
credit facility is largely untapped, and our free cash flow (after dividends) provides considerable flexibility and funding
for potential growth opportunities.
We believe that we have the portfolio, the operating platforms, the financial strength, the leadership, and the personnel
to continue growing our Company and our shareholder’s value in the years to come.
As always, we thank you for your continued support and confidence in us.
Joe Saffire • CEO
Andy Gregoire • CFO
Dave Dodman • COO
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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:
1-13820 (Life Storage, Inc.)
0-24071 (Life Storage LP)
LIFE STORAGE, INC.
LIFE STORAGE LP
(Exact name of Registrant as specified in its charter)
Maryland (Life Storage, Inc.)
Delaware (Life Storage LP)
(State of incorporation
or organization)
16-1194043 (Life Storage, Inc.)
16-1481551 (Life Storage LP)
(I.R.S. Employer
Identification No.)
6467 Main Street
Williamsville, NY 14221
(Address of principal executive offices) (Zip code)
(716) 633-1850
(Registrant’s telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
Life Storage, Inc.:
Title of each class
Common Stock, $.01 Par Value
Trading Symbol(s)
LSI
Name of each exchange on which registered
New York Stock Exchange
Life Storage LP:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Securities registered pursuant to section 12(g) of the Act: None
Life Storage, Inc.
Life Storage LP
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 Exchange Act.
Life Storage, Inc.
Life Storage LP
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.
Life Storage, Inc.
Life Storage LP
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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Life Storage, Inc.
Life Storage LP
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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
Life Storage, Inc.:
Large accelerated filer
Non-accelerated filer
Emerging growth company
Life Storage LP:
Large accelerated filer
Non-accelerated filer
Emerging growth company
$
#
#
#
$
#
Accelerated filer
Smaller reporting company
Accelerated filer
Smaller reporting 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.
Life Storage, Inc.
Life Storage LP
#
#
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.
Life Storage, Inc.
Life Storage LP
$
$
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Life Storage, Inc.
Life Storage LP
Yes # No $
Yes # No $
As of June 30, 2021, the aggregate market value of the Common Stock held by non-affiliates of Life Storage, Inc. was approximately $8,377,796,999 (based on
the closing price of the Common Stock on the New York Stock Exchange on June 30, 2021). As of February 18, 2022, 83,688,924 shares of Common Stock, $.01 par
value per share, were outstanding.
As of June 30, 2021, the aggregate market value of the limited partnership units (the “OP Units”) held by non-affiliates of Life Storage LP was $35,683,033
(based on the closing price of the Common Stock of Life Storage, Inc. on the New York Stock Exchange on June 30, 2021). (For this calculation, the market value of all
OP Units beneficially owned by Life Storage, Inc. has been excluded.)
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Proxy Statement for the 2022 Annual Meeting of Shareholders are incorporated herein by reference in Part III of this Annual Report
on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrants’ fiscal
year ended December 31, 2021.
EXPLANATORY NOTE
This report combines the annual reports on Form 10-K for the year ended December 31, 2021 of Life Storage, Inc. (the “Parent
Company”) and Life Storage LP (the “Operating Partnership”). The Parent Company is a real estate investment trust, or 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.
Life Storage Holdings, Inc., a wholly-owned subsidiary of the Parent Company (“Holdings”), is the sole general partner of the Operating
Partnership; the Parent Company is a limited partner of the Operating Partnership, and through its ownership of Holdings and its limited
partnership interest, controls the operations of the Operating Partnership, holding a 98.1% ownership interest therein as of December 31, 2021,
assuming the conversion of all preferred operating partnership units at that date. The remaining ownership interests in the Operating
Partnership are held by certain former owners of assets acquired by the Operating Partnership. As the owner of 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.
There are 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
owner of 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 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.
The substantive difference between the Parent Company’s filings 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 shareholders’ equity (or partners’ 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 the owner of the 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
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.
All share and per share amounts and unit and per unit amounts for all years presented herein have been adjusted to reflect the impact of
the three-for-two distribution of common stock announced by the Company on January 4, 2021 and distributed on January 27, 2021 to
shareholders and unitholders of record on January 15, 2021.
2
This report also includes separate Item 9A - Controls and Procedures sections, signature pages and Exhibit 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 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. Mine Safety Disclosures .........................................................................................................................................................
Part II ..................................................................................................................................................................................................
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ..............
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. Directors, Executive Officers and Corporate Governance ....................................................................................................
Item 11. Executive Compensation.......................................................................................................................................................
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .............................
Item 13. Certain Relationships and Related Transactions, and Director Independence ......................................................................
Item 14. Principal Accountant Fees and Services ...............................................................................................................................
Part IV .................................................................................................................................................................................................
Item 15. Exhibits, Financial Statement Schedules ..............................................................................................................................
Item 16. Form 10-K Summary ............................................................................................................................................................
SIGNATURES .........................................................................................................................................................................................
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19
19
20
20
23
32
32
69
69
73
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4
Forward Looking Statements
Part I
When used in this discussion and elsewhere in this document, the words “intends,” “believes,” “expects,” “anticipates,” and similar
expressions are intended to identify “forward-looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933
and in Section 21E of the Securities Exchange Act of 1934.
All forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results,
performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements.
We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written
or oral, by us or on our behalf, are also expressly qualified by these cautionary statements. All forward-looking statements apply only as of the
date made. We undertake no obligation to publicly update or revise forward-looking statements which may be made to reflect events or
circumstances after the date made or to reflect the occurrence of unanticipated events.
There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements
contained in this report. Any forward-looking statements should be considered in light of the risks referenced in “Part I. Item 1A. Risk Factors”
below. Such factors include, but are not limited to:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
adverse changes in general economic conditions, the real estate industry and in the markets in which we operate;
the effect of competition from new self-storage facilities or other storage alternatives, which would cause rents and occupancy rates
to decline;
impacts from the COVID-19 pandemic or the future outbreak of other highly infectious or contagious diseases on the U.S.,
regional and global economies and our financial condition and results of operations;
potential liability for uninsured losses and environmental contamination;
the impact of the regulatory environment as well as national, state, and local laws and regulations including, without limitation,
those governing real estate investment trusts (“REITs”), tenant reinsurance and other aspects of our business, which could
adversely affect our results;
loss of key personnel;
the Company’s ability to evaluate, finance and integrate acquired self-storage facilities on expected terms into the Company’s
existing business and operations;
the Company’s ability to effectively compete in the industry in which it does business;
disruptions in credit and financial markets and resulting difficulties in raising capital or obtaining credit at reasonable rates or at all,
which could impede our ability to grow.
the Company’s existing indebtedness may mature in an unfavorable credit environment, preventing refinancing or forcing
refinancing of the indebtedness on terms that are not as favorable as the existing terms;
interest rates may increase, impacting costs associated with the Company’s outstanding floating rate debt, if any, and impacting the
Company’s ability to comply with debt covenants;
exposure to litigation or other claims;
risks associated with breaches of our data security;
the regional concentration of the Company's business may subject the Company to economic downturns in the states of Florida and
Texas;
the Company’s cash flow may be insufficient to meet required payments of operating expenses, principal, interest and dividends;
and
failure to maintain our REIT status for U.S. federal income purposes, including tax law changes that may change the taxability of
future income.
The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all
information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a
result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and
results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks
before you make an investment decision with respect to our securities.
5
Item 1. Business
The Company is a self-administered and self-managed real estate company that acquires, owns and manages self-storage properties. We
refer to the self-storage properties in which we have an ownership interest, lease, and/or are managed by us as “Properties.” We began
operations on June 26, 1995. We were formed to continue the business of our predecessor company, which had engaged in the self-storage
business since 1985. At December 31, 2021, we had an ownership interest in and/or managed 1,076 self-storage properties in 35 states. Among
our 1,076 self-storage properties are 116 properties that we manage for unconsolidated joint ventures, 251 properties that we manage and have
no ownership interest, and five properties that we lease. We believe we are the fourth largest operator of self-storage properties in the United
States based on square feet owned and managed. Our Properties in the United States conduct business under the customer-friendly name Life
Storage ®.
At December 31, 2021, the Parent Company owned a direct or indirect interest in 825 of the Properties through the Operating
Partnership, which includes 709 wholly-owned properties and 116 properties owned by unconsolidated joint ventures. In total, we own a 98.1%
economic interest in the Operating Partnership and unaffiliated third parties collectively own a 1.9% limited partnership interest at
December 31, 2021, assuming the conversion of all preferred operating partnership units at that date. We believe that this structure, commonly
known as an umbrella partnership real estate investment trust (“UPREIT”), facilitates our ability to acquire properties by using units of the
Operating Partnership as currency. By utilizing interests in the Operating Partnership as currency in self-storage facility acquisitions, we may
partially defer the seller’s income tax liability which in turn may allow us to obtain more favorable pricing.
The Parent Company was incorporated on April 19, 1995 under Maryland law. The Operating Partnership was formed on June 1, 1995 as
a Delaware limited partnership and has engaged in virtually all aspects of the self-storage business, including the development, acquisition,
management, ownership and operation of self-storage facilities. Our principal executive offices are located at 6467 Main Street, Williamsville,
New York 14221, our telephone number is (716) 633-1850, and our website is www.lifestorage.com.
We seek to enhance shareholder value through internal growth, acquisition of additional storage properties, expansion and enhancement
of existing self-storage properties, expansion of our third-party management platform, select new development, and advances in innovative
technology. Internal growth is achieved through aggressive property management: optimizing rental rates, increasing occupancy levels,
controlling costs, maximizing collections, and strategically expanding and enhancing the Properties. Should demographic and economic
conditions warrant, we may develop new properties. We believe that there continues to be opportunity for growth through acquisitions,
including acquisitions through unconsolidated joint ventures of the Company. We seek to acquire self-storage properties that are susceptible to
realization of increased economies of scale and improved performance through application of our expertise.
Industry Overview
We believe that self-storage facilities offer affordable storage space to residential and commercial users. In addition to fully enclosed and
secure storage space, many facilities also offer outside storage for automobiles, recreational vehicles and boats. Modern facilities, such as those
owned and/or managed by the Company, are usually fenced and well lighted with automated access systems and surveillance cameras, offer
temperature and humidity control features, and have a full-time manager. Our customers rent space on a month-to-month basis and typically
have access to their storage space up to 15 hours a day, with 24-hour access in certain circumstances. Individual storage spaces are secured by
the customer’s lock, and the customer has control of access to the space.
According to the 2022 Self-Storage Almanac, of the estimated 51,000 core self-storage facilities in the United States (those properties
identified as having self-storage operated as the core business at the address), approximately 21.9% are owned and/or managed by the 10
largest operators. This results in a highly fragmented industry as the remainder of the industry is characterized by numerous small, local
operators. The scarcity of capital available to small operators for acquisitions and expansions, internet marketing, call centers, and the potential
for savings through economies of scale are factors that are leading to consolidation in the industry. We believe that, as a result of this trend,
significant growth opportunities exist for operators with proven management systems and sufficient capital resources to grow through
acquisitions and/or third-party management platforms.
Property Management
We have over 35 years of experience acquiring, building, expanding and managing self-storage facilities, and the combined experience of
our key personnel makes us one of the leaders in the industry. Our primary business objectives are to maximize cash flow available for
distribution to our stockholders and to achieve sustainable long-term growth in cash flow per share in order to maximize long-term stockholder
value at acceptable levels of risk. To support our long-term growth, we employ the following strategies with respect to our property
management:
Our People:
We recognize the importance of quality people to the success of an organization. Accordingly, we hire and train to ensure that associates
can reach their full potential. We conduct annual anonymous surveys of all employees to proactively identify areas for improvement. We strive
to ensure that all associates conduct themselves in accordance with our core values: Teamwork, Respect, Accountability, Integrity, and
Innovation. In turn, we support them with state-of-the-art training tools including an online learning management system, a company intranet
and a network of certified training personnel. Every store team also has frequent, and sometimes daily, interaction with an Area Manager, a
6
Regional Vice President, an Accounting Representative, and other support personnel. As such, our store associates are held to high standards
for customer service, store appearance, financial performance, and overall operations.
Training & Development:
Our employees benefit from a wide array of training and development opportunities. New store employees undergo a comprehensive,
proprietary training program designed to drive sales and operational results while ensuring the delivery of quality customer service. To
supplement their initial training, employees enjoy continuing edification, coaching, and performance feedback, including customer satisfaction
surveying, throughout their tenure.
All learning and development activities are facilitated through our online training and development portal. This portal delivers and tracks
hundreds of computer-based training and compliance courses; it also administers tests, surveys, and the employee appraisal process. The
Company’s training and development program encompasses the tools and support we deem essential to the success of our employees and
business.
Marketing and Advertising:
The digital age has changed consumer behavior – the way people shop, their expectations, and the way we communicate with them. As
such, we utilize the following strategies to market our properties and products:
• We created, developed and implemented Rent Now, our proprietary fully-digital rental platform for customers who prefer to self-
serve and complete the rental process online. Customers can now “skip the counter” by selecting a storage unit, completing the
rental agreement and making their rental payment online. The customer receives their property access code and step-by-step
directions to their specific rental unit on a digital map sent to their mobile device. Rent Now is fully-integrated with Life Storage’s
operating, security and revenue management systems, allowing for real-time and efficient inventory and sales management.
• We employ a Customer Care Center (call center) that services an average of 52,000 rental related inquiries per month. Our Sales
Representatives answer incoming sales calls for all of our locations, 364 days a year, 24 hours a day. In addition, they respond to
email inquiries and serve as overnight customer service agents to assist customers outside of regular office hours. The team
undergoes continuous training and coaching in effective storage sales techniques and best practices in customer service, which we
believe results in higher conversions of inquiries to rentals.
• We maintain a website and involve internal and external expertise to manage our internet presence and leverage a search engine
and social media marketing strategy to attract customers and gain rentals online, through our call center and at our stores. Precise
targeting and tracking through campaign management and analysis allows us to attract the right customers, at the right time, for
reasonable costs of acquisition.
•
•
Since demand for storage is largely based on timing, the goal is to create positive brand recognition through a variety of channels,
both digital and traditional. When the time comes for a customer to select a storage company, we want the Life Storage brand to be
recognized as the most trusted and respected provider. We employ a variety of different strategies to create brand awareness; this
includes our Life Storage rental trucks, branded merchandise such as moving and packing supplies, regional marketing in the
communities in which we operate, and digital targeting using search, social media and remarketing campaigns. We strive to
introduce storage solutions early and often to gain the most exposure as possible for the longest duration.
Approximately 55.6% of our self-storage space is comprised of units with temperature and/or humidity control capabilities which
we market to corporate, retail and residential customers seeking storage solutions for valuable, sentimental, or otherwise sensitive
items.
• We also have a fleet of rental trucks that serve as an added incentive to choose our storage facilities. We believe the availability of
our trucks provides a valuable service and added incentive to choose Life Storage. Further, the prominent display of our logo turns
each truck into a moving billboard.
Third-Party Management:
We seek to add third-party managed stores to our portfolio in order to help drive fee revenue, brand awareness, cost efficiencies and
customer data to make more informed revenue management decisions with little capital investment. The portfolio also may, in certain
circumstances, serve to supplement our acquisition pipeline.
To broaden opportunities available, we have implemented a bridge lending program, under which an unconsolidated joint venture of the
Company provides financing to properties that we will manage. We anticipate that this program will help us increase our management business,
create additional future acquisition opportunities, and strengthen our relationship with partners, all while providing interest and fee income.
This joint venture generally originates mortgage loans and mezzanine loans, with the intent to sell the mortgage loans to third parties, while
retaining the joint venture's interests in these loans.
7
Corporate Customer Value Proposition:
We offer a differentiated corporate customer value proposition through Warehouse Anywhere. Warehouse Anywhere is Life Storage’s
proprietary intelligent and technologically advanced warehousing solution that provides third-party logistics (3PL) through a forward deployed,
unmanned model combining storage asset management with a proprietary inventory management application across a network of more than
12,000 Life Storage or partner facilities. Warehouse Anywhere also retrofits storage units in select Life Storage facilities to create micro-
fulfillment centers that are equipped with needed infrastructure and technology to place e-commerce customers’ inventory and fulfillment
orders from numerous online marketplaces and platforms. As a final mile delivery solution, Warehouse Anywhere gets our customers’ products
closer to their customers, reduces logistics costs, increases inventory tracking accuracy and improves delivery time.
Ancillary Income:
We know that our over 625,000 customers require more than just a storage space. Knowing this, we offer a wide range of other products
and services that fulfill their needs while providing us with ancillary income. Our Life Storage trucks are available for rent to our new and
existing customers, as well as to non-customers. We also rent moving dollies and blankets, in addition to carrying a wide assortment of moving
and packing supplies including boxes, tape, locks, and other essential items. For those customers who do not carry storage insurance, we make
available renters insurance on which we earn income by providing reinsurance through a wholly-owned subsidiary of the Company. We also
receive incidental income from billboards and cell towers.
Information Systems:
Each of our primary business functions is linked to our customized computer applications, many of which are proprietary. These systems
provide for consistent, timely and accurate flow of information throughout our critical platforms:
•
•
•
•
Our proprietary operating software (“LifeOS”) is installed at all locations and performs the functions necessary for field personnel
to efficiently and effectively run a property. This includes customer account management, automatic imposition of late fees, move-
in and move-out analysis, generation of essential legal notices, and marketing reports to aid in regional marketing efforts. Financial
reports are automatically transmitted to our Corporate Offices overnight to allow for strict accounting oversight.
LifeOS is linked with each of our primary sales channels (customer care center, internet, store) allowing for real-time access to
space type and inventory, pricing, promotions, and other pertinent store information. This robust flow of information facilitates our
commitment to capturing prospective customers from all channels.
LifeOS provides our revenue management team with raw data on historical pricing, move-in and move-out activity, specials and
occupancies, etc. This data is utilized in the various algorithms that form the foundation of our revenue management program.
Changes to pricing and specials are “pushed out” to all sales channels instantaneously.
LifeOS generates financial reports for each property that provide our accounting and audit departments with the necessary
oversight of transactions; this allows us to maintain proper control of cash receipts.
Revenue Management:
Our proprietary revenue management system is constantly evolving through the efforts of our dedicated data science and revenue
management team. We have the ability to change pricing instantaneously for any single unit type, at any single location, based on the
occupancy, competition, and forecasted changes in demand. By analyzing current customer rent tenures, we can implement rental rate increases
at optimal times to increase revenues. Advanced pricing analytics enable us to reduce the amount of concessions, attracting a more stable
customer base and discouraging short-term price shoppers. This system continues to drive revenue stability and/or growth throughout our
portfolio.
Property Maintenance:
We take great pride in the appearance and structural integrity of our Properties. All of our Properties go through a thorough annual
inspection performed by experienced project managers. These inspections provide the basis for short and long term planned projects that are all
performed under a standardized set of specifications. Routine maintenance such as landscaping, pest control, and snowplowing is contracted to
local providers to whom we clearly communicate our standards. Further, our software tracks repairs, monitors contractor performance and
measures the useful life of assets. As with many other aspects of our Company, our size has allowed us to enjoy relatively low maintenance
costs because we have the benefit of economies of scale in purchasing, travel, and overhead absorption. In addition, we continually look to
green alternatives and implement energy saving alternatives as new technology becomes available. This includes the installation of solar
panels, LED lighting, energy efficient air conditioning units, and cool roofs which are all environmentally friendly solutions that have the
potential to reduce energy consumption (thereby reducing costs) in the buildings in which they are installed. We continue to implement and
expand the Company’s solar panel initiative which has reduced energy consumption and costs at those installed locations.
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Environmental Social Governance:
Our Environmental, Social and Governance (“ESG”) Committee supports our on-going commitment to sustainability by identifying,
evaluating and monitoring ESG issues throughout the Company and overseeing the integration of strategic ESG initiatives throughout the
organization. On-going initiatives can be found within our annual Sustainability Report located on our website at
https://www.lifestorage.com/company/sustainability/.
Environmental and Other Regulations
We are subject to federal, state, and local environmental regulations that apply generally to the ownership of real property. We have not
received notice from any governmental authority or private party of any material environmental noncompliance, claim, or liability in
connection with any of the Properties, and are not aware of any environmental condition with respect to any of the Properties that could have a
material adverse effect on our financial condition or results of operations.
The Properties are also generally subject to the same types of local regulations governing other real property, including zoning
ordinances. We believe that the Properties are in substantial compliance with all such regulations.
Insurance
Each of the Properties is covered by fire and property insurance (including comprehensive liability and business interruption), and all-
risk property insurance policies, which are provided by reputable companies and on commercially reasonable terms. In addition, we maintain a
policy insuring against environmental liabilities resulting from tenant storage on terms customary for the industry, and title insurance insuring
fee title to the Company-owned Properties in an amount that we believe to be adequate.
Federal Income Tax
We operate, and we intend to continue to operate, in such a manner as to continue to qualify as a REIT under the Internal Revenue Code
of 1986, as amended (the “Code”), but no assurance can be given that we will at all times so qualify. To the extent that we continue to qualify
as a REIT, we will not be taxed, with certain limited exceptions, on the taxable income that is distributed to our shareholders. We have elected
to treat certain of our subsidiaries as taxable REIT subsidiaries. In general, our taxable REIT subsidiaries may perform additional services for
customers and generally may engage in certain real estate or non-real estate related business. Our taxable REIT subsidiaries are subject to
federal and state corporate income taxes. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of
Operations - REIT Qualification and Distribution Requirements.”
Competition
The primary factors upon which competition in the self-storage industry is based are location, appearance, rental rates, suitability of the
property’s design to prospective customers’ needs, and how the property is operated and marketed. We believe we compete successfully on
these factors. The extent of competition depends significantly on local market conditions. We seek to locate where we can increase market
share while not adversely affecting any of our existing locations in that market. However, the number of self-storage facilities in a particular
area could have a material adverse effect on the performance of any of the Properties.
Several of our competitors are larger and have substantially greater financial resources than we do. These larger operators may, among
other possible advantages, be capable of greater leverage and the payment of higher prices for acquisitions. However, we believe that we are
well positioned to compete for acquisitions.
Investment Policy
While we emphasize equity real estate investments, we may, at our discretion, invest in mortgage and other real estate interests related to
self-storage properties in a manner consistent with our qualification as a REIT. We may also retain a purchase money mortgage for a portion of
the sale price in connection with the disposition of Properties from time to time. Should investment opportunities become available, we may
look to acquire additional self-storage properties via new or existing joint-venture partnerships or similar entities. We may or may not elect to
have a significant investment in such a venture, but would use such an opportunity to expand our portfolio of branded and managed properties.
We also invest in innovative, and sometimes proprietary, new technology that we believe provides us with a competitive advantage.
Subject to the percentage of ownership limitations and gross income tests necessary for REIT qualification, we also may invest in
securities of entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over such
entities.
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Disposition Policy
Any disposition decision of our Properties is based on a variety of factors, including, but not limited to, (i) the potential to continue to
increase cash flow and value, (ii) the sale price, (iii) the strategic fit with the rest of our portfolio, (iv) the potential for, or existence of,
environmental or regulatory issues, (v) alternative uses of capital, and (vi) maintaining qualification as a REIT.
The Company did not sell any self-storage facilities in 2021 or 2020. During 2021, the Company’s unconsolidated joint ventures sold a
total of four self-storage facilities, all of which were acquired by the Company. During 2020, the Company’s unconsolidated joint ventures sold
a total of 36 self-storage facilities, 32 of which were acquired by the Company.
During 2019, the Company sold 32 non-strategic self-storage facilities in Louisiana (9), Mississippi (8), North Carolina (4), South
Carolina (5), and Texas (6) to an unrelated third-party for net proceeds of $207.6 million, resulting in a $100.2 million gain on sale. The
Company is continuing to manage these properties subsequent to sale.
Distribution Policy
We intend to pay regular quarterly distributions to our shareholders. However, future distributions by us will be at the discretion of the
Board of Directors and will depend on the actual cash available for distribution, our financial condition and capital requirements, the annual
distribution requirements under the REIT provisions of the Code and such other factors as the Board of Directors deems relevant. In order to
maintain our qualification as a REIT, we must make annual distributions to shareholders of at least 90% of our REIT taxable income (which
does not include capital gains or losses). Under certain circumstances, we may be required to make distributions in excess of cash available for
distribution in order to meet the minimum requirements.
Financing Policy
Our Board of Directors currently limits the amount of debt that may be incurred by us to less than 50% of the sum of the market value of
our issued and outstanding common and preferred stock plus our debt. We, however, may from time to time re-evaluate and modify our
borrowing policy considering current economic conditions, relative costs of debt and equity capital, market values of properties, growth and
acquisition opportunities and other factors. In addition to our Board of Directors’ debt limits, our most restrictive debt covenants limit our
leverage. However, we believe cash flow from operations, access to the capital markets and access to our credit facility, as described below, are
adequate to execute our current business plan and remain in compliance with our debt covenants.
The following sets forth certain financing activities during the year ended December 31, 2021:
On October 7, 2021, the Operating Partnership issued $600 million in aggregate principal amount of 2.400% unsecured senior notes due
October 15, 2031 (the “2031 Senior Notes”). The 2031 Senior Notes were issued at 0.917% discount to par value. Interest on the 2031 Senior
Notes is payable semi-annually in arrears on each April 15 and October 15, commencing with April 15, 2022. The 2031 Senior Notes are fully
and unconditionally guaranteed by the Parent Company.
There were no amounts outstanding on the Company’s line of credit at December 31, 2021.
During 2021, the Company issued 6,365,971 shares of common stock under the Company’s continuous equity offering programs at a
weighted average issue price of $106.51, generating net proceeds of $670.3 million. Additionally, on September 16, 2021, the Company
completed the public offering of 2,875,000 shares of common stock at $122.30 per share, generating net proceeds of $348.8 million.
To the extent that we desire to obtain additional capital to pay distributions, to provide working capital, to pay existing indebtedness or to
finance acquisitions, expansions or development of new properties, we may utilize amounts available under our line of credit, common or
preferred stock offerings, floating or fixed rate debt financing, retention of cash flow (subject to satisfying our distribution requirements under
the REIT rules) or a combination of these methods. Additional debt financing may also be obtained through mortgages on our Properties,
which may be recourse, non-recourse, or cross-collateralized and may contain cross-default provisions. We have not established any limit on
the number or amount of mortgages that may be placed on any single Property or on our portfolio as a whole, although certain of our existing
term loans contain limits on overall mortgage indebtedness. For additional information regarding borrowings and equity activities, see Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Notes 5, 6
and 12 to the Consolidated Financial Statements filed herewith.
Employees
At December 31, 2021, we employ a total of 2,241 employees, including 966 property managers, 60 area managers, and 873 associate
managers and part-time employees. At our headquarters, in addition to our three senior executive officers, we employ 339 people engaged in
various support activities, including accounting, human resources, customer care, and management information systems. None of our
employees are covered by a collective bargaining agreement. We consider our employee relations to be excellent.
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Available Information
We file with the U.S. Securities and Exchange Commission quarterly and annual reports on Forms 10-Q and 10-K, respectively, current
reports on Form 8-K, and proxy statements pursuant to the Securities Exchange Act of 1934, in addition to other information as required. We
file this information with the SEC electronically, and the SEC maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. Our annual reports on Form 10-
K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available free of charge on our web
site at http://www.lifestorage.com as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. In
addition, our Codes of Ethics and Charters of our Nominating, Governance and Corporate Responsibility Committee, Audit and Risk
Management Committee, and Compensation and Human Capital Committee are available free of charge on our website at
http://www.lifestorage.com .
Also, copies of our annual report and Charters of our committees will be made available, free of charge, upon written request to Life
Storage, Inc., Attn: Investor Relations, 6467 Main Street, Williamsville, NY 14221.
Item 1A. Risk Factors
You should carefully consider the risks described below, together with all of the other information included in or incorporated by
reference into our Form 10-K, as part of your evaluation of the Company. If any of the following risks actually occur, our business could be
harmed. In such case, the trading price of our securities could decline, and you may lose all or part of your investment.
Our Acquisitions May Not Perform as Anticipated
We have completed hundreds of acquisitions of self-storage facilities since our initial public offering of common stock in June 1995. One
of our strategies is to continue to grow by acquiring additional self-storage facilities. Acquisitions entail risks that investments will fail to
perform in accordance with our expectations. Our judgments with respect to the prices paid for acquired self-storage facilities and the costs of
any improvements required to bring an acquired property up to our standards may prove to be inaccurate. Acquisitions also involve general
investment risks associated with any new real estate investment.
We May Incur Problems with Our Real Estate Financing
Unsecured Credit Facility, Term Notes and Senior Notes. We have a line of credit and term note agreements with a syndicate of financial
institutions and other lenders, along with senior debt of $2,400 million. This indebtedness is recourse to us and the required payments are not
reduced if the economic performance of any of the properties declines. The facilities limit our ability to make distributions to our shareholders,
except in limited circumstances.
Rising Interest Rates. Indebtedness that we incur under the unsecured credit facility bears interest at a variable rate. Accordingly,
increases in interest rates could increase our interest expense, which would reduce our cash available for distribution and our ability to pay
expected distributions to our shareholders. We manage our exposure to rising interest rates by entering into fixed rate financing agreements for
a portion of our outstanding indebtedness and through other available mechanisms, including interest rate swaps, as deemed necessary. If the
amount of our indebtedness bearing interest at a variable rate increases, our unsecured credit facility may require us to enter into interest rate
swaps.
Refinancing May Not Be Available. It may be necessary for us to refinance our indebtedness through additional debt financing or equity
offerings. If we were unable to refinance this indebtedness on acceptable terms, we might be forced to dispose of some of our self-storage
facilities upon disadvantageous terms, which might result in losses to us and might adversely affect the cash available for distribution. If
prevailing interest rates or other factors at the time of refinancing result in higher interest rates on any refinancings, our interest expense would
increase, which would adversely affect our cash available for distribution and our ability to pay expected distributions to shareholders.
Covenants and Risk of Default. Our loan instruments require us to operate within certain covenants, including financial covenants with
respect to leverage, fixed charge coverage, minimum net worth, limitations on additional indebtedness and dividend limitations. If we violate
any of these covenants or otherwise default under these instruments, then our lenders could declare all indebtedness under these facilities to be
immediately due and payable which would have a material adverse effect on our business and could require us to sell self-storage facilities
under distressed conditions and seek replacement financing on substantially more expensive terms.
Reduction in or Loss of Credit Rating. Certain of our debt instruments require us to maintain an investment grade rating from at least one,
and in some cases two, debt ratings agencies. Should we receive a reduction in our credit rating from the agencies, the interest rate on our line
of credit would increase by up to 0.50% and the interest rate on any bank term notes under our revolving credit facility (no principal
outstanding at December 31, 2021) would increase by up to 0.65%. Should we fail to attain an investment grade rating from the agencies, the
interest rate on our $175 million term note due 2024 would increase by 1.750%.
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Our Debt Levels May Increase
Our Board of Directors currently has a policy of limiting the amount of our debt at the time of incurrence to less than 50% of the sum of
the market value of our issued and outstanding common stock and preferred stock plus the amount of our debt at the time that debt is incurred.
However, our organizational documents do not contain any limitation on the amount of indebtedness we might incur. Accordingly, our Board
of Directors could alter or eliminate the current policy limitation on borrowing without a vote of our shareholders. We could become highly
leveraged if this policy were changed. However, our ability to incur debt is limited by covenants in our debt instruments.
We Are Subject to the Risks Posed by Fluctuating Demand and Significant Competition in the Self-Storage Industry
Our self-storage facilities are subject to all operating risks common to the self-storage industry. These risks include but are not limited to
the following:
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Decreases in demand for rental spaces in a particular locale;
Changes in supply of similar or competing self-storage facilities in an area;
Changes in market rental rates; and
Inability to collect rents from customers.
Our current strategy is to acquire interests only in self-storage facilities. Consequently, we are subject to risks inherent in investments in a
single industry. Our self-storage facilities compete with other self-storage facilities in their geographic markets. Due to competition, the self-
storage facilities could experience a decrease in occupancy levels and rental rates, which would decrease our cash available for distribution. We
compete in operations and for acquisition opportunities with companies that have substantial financial resources. Competition may reduce the
number of suitable acquisition opportunities offered to us and increase the bargaining power of property owners seeking to sell. The self-
storage industry has at times experienced overbuilding in response to perceived increases in demand. A recurrence of overbuilding might cause
us to experience a decrease in occupancy levels, limit our ability to increase rents, and compel us to offer discounted rents.
We are Subject to Risks from Natural Disasters and Climate Change
We are subject to risks from natural disasters and climate change. Natural disasters and severe weather such as earthquakes, tornadoes,
hurricanes or floods may result in significant damage to our properties. The extent of our casualty losses and loss in operating income in
connection with such events is a function of the severity of the event and the total amount of exposure in the affected area. When we have
geographic concentration of exposures, a single catastrophe, such as a tornado affecting our properties in Texas or elsewhere, or destructive
weather event, such as a hurricane affecting our properties in Florida or elsewhere, may have a significant negative effect on our business,
financial condition and results of operations. As a result, our operating and financial results may vary significantly from one period to the next.
Our financial results may be adversely affected by our exposure to losses arising from natural disasters or severe weather. We also are exposed
to risks associated with inclement winter weather, particularly in the Northeast and Midwest regions, regions in which some of our properties
are located, including increased need for maintenance and repair of our buildings.
As a result of climate change, we may also experience extreme weather and changes in precipitation and temperature, all of which may
result in physical damage of, decreased demand for, and/or increased cost of insurance for our Properties located in the areas affected by these
conditions. Should the impact of climate change be material in nature, our financial condition or results of operations would be adversely
affected. In addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to
improve the energy efficiency of our existing properties in order to comply with such regulations.
The Extent to Which the COVID-19 Global Health Crisis Will Adversely Affect Our Business, Results of Operations and Financial
Condition is Uncertain
The COVID-19 global health crisis has affected many industries, including real estate, throughout the United States and worldwide,
creating significant uncertainty and economic disruption. We have modified, and may further modify, our business practices in response to the
COVID-19 global health crisis in an effort to protect our people and our customers. We may experience continued volatility in customer
demand, constriction on our ability to increase rental rates, and/or restrictions on our ability to evict delinquent customers or to execute
auctions related to delinquent customers. Additionally, the high unemployment and other adverse economic effects of the pandemic is having
and likely will continue to have an adverse impact on many of our customers’ ability to afford their rent obligations. We may also experience a
change in the move-out patterns of our longer-term customers resulting in reduced occupancy and/or reduced average rental rates as longer-
term customers are replaced by new customers at lower rates.
We may experience a negative impact on our operations should the ability of our store-level employees to report to work be significantly
impacted by the COVID-19 global health crisis. However, we believe that this risk is partially mitigated by the availability and capabilities of
our “Rent Now” online rental platform.
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Additionally, the COVID-19 global health crisis resulted in stay-at-home and social distancing requirements. Although such restrictions
have eased, similar future restrictions related to COVID-19 may apply.
The extent to which COVID-19 will continue to affect our business and the magnitude of the impact on our results of operation and
financial condition is difficult to predict, and will be driven primarily by the duration, spread and severity of the COVID-19 global health crisis
itself, as well as the duration of the indirect economic impacts, all of which are uncertain. As a result, we are not able at this time to estimate
the effect these factors will have on our business, but the adverse impact on our business could be material.
Our Real Estate Investments Are Illiquid and Are Subject to Uninsurable Risks and Government Regulation
General Risks. Our investments are subject to varying degrees of risk generally related to the ownership of real property. The underlying
value of our real estate investments and our income and ability to make distributions to our shareholders are dependent upon our ability to
operate the self-storage facilities in a manner sufficient to maintain or increase cash available for distribution. Income from our self-storage
facilities may be adversely affected by the following factors:
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•
•
•
•
•
•
•
•
•
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Changes in national economic conditions;
Changes in general or local economic conditions and neighborhood characteristics;
Competition from other self-storage facilities;
Changes in interest rates and in the availability, cost and terms of financing;
The impact of present or future environmental legislation and compliance with environmental laws;
The ongoing need for capital improvements, particularly in older facilities;
Changes in real estate tax rates and other operating expenses;
Adverse changes in governmental rules and fiscal policies;
Uninsured losses resulting from casualties associated with civil unrest, acts of God, including natural disasters, and acts of war;
Adverse changes in zoning laws; and
Other factors that are beyond our control.
Illiquidity of Real Estate May Limit its Value. Real estate investments are relatively illiquid. Our ability to vary our portfolio of self-
storage facilities in response to changes in economic and other conditions is limited. In addition, provisions of the Code may limit our ability to
profit on the sale of self-storage facilities held for fewer than two years. We may be unable to dispose of a facility when we find disposition
advantageous or necessary and the sale price of any disposition may not equal or exceed the amount of our investment.
Uninsured and Underinsured Losses Could Reduce the Value of our Self Storage Facilities. Some losses, generally of a catastrophic
nature, that we potentially face with respect to our self-storage facilities may be uninsurable or not insurable at an acceptable cost. Our
management uses its discretion in determining amounts, coverage limits and deductibility provisions of insurance, with a view to acquiring
appropriate insurance on our investments at a reasonable cost and on suitable terms. These decisions may result in insurance coverage that, in
the event of a substantial loss, would not be sufficient to pay the full current market value or current replacement cost of our lost investment.
Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it infeasible to use
insurance proceeds to replace a property after it has been damaged or destroyed. Under those circumstances, the insurance proceeds received by
us might not be adequate to restore our economic position with respect to a particular property.
Possible Liability Relating to Environmental Matters. Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be liable for the costs of removal or remediation of hazardous or toxic
substances on, under, or in that property. Those laws often impose liability even if the owner or operator did not cause or know of the presence
of hazardous or toxic substances and even if the storage of those substances was in violation of a customer’s lease. In addition, the presence of
hazardous or toxic substances, or the failure of the owner to address their presence on the property, may adversely affect the owner’s ability to
borrow using that real property as collateral. In connection with the ownership of the self-storage facilities, we may be potentially liable for any
of those costs.
Americans with Disabilities Act. The Americans with Disabilities Act of 1990, or ADA, generally requires that buildings be made
accessible to persons with disabilities. A determination that we are not in compliance with the ADA could result in imposition of fines or an
award of damages to private litigants. If we were required to make modifications to comply with the ADA, our results of operations and ability
to make expected distributions to our shareholders could be adversely affected.
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There Are Limitations on the Ability to Change Control of the Company
Limitation on Ownership and Transfer of Shares. To maintain our qualification as a REIT, not more than 50% in value of our
outstanding shares of stock may be owned, directly or indirectly, by five or fewer individuals, as defined in the Code. To limit the possibility
that we will fail to qualify as a REIT under this test, our Amended and Restated Articles of Incorporation (“Articles of Incorporation”) include
ownership limits and transfer restrictions on shares of our stock. Our Articles of Incorporation limit ownership of our issued and outstanding
stock by any single shareholder to 9.8% of the aggregate value of our outstanding stock, except that the ownership by some of our shareholders
is limited to 15%.
These ownership limits may:
•
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Have the effect of precluding an acquisition of control of the Company by a third-party without consent of our Board of Directors
even if the change in control would be in the interest of shareholders; and
Limit the opportunity for shareholders to receive a premium for shares of our common stock they hold that might otherwise exist if
an investor were attempting to assemble a block of common stock in excess of 9.8% or 15%, as the case may be, of the outstanding
shares of our stock or to otherwise effect a change in control of the Company.
Our Board of Directors may waive the ownership limits if it is satisfied that ownership by those shareholders in excess of those limits
will not jeopardize our status as a REIT under the Code or in the event it determines that it is no longer in our best interests to be a REIT.
Waivers have been granted to the former holders of our Series C preferred stock, FMR Corporation, Cohen & Steers, Inc. and Invesco
Advisers, Inc. A transfer of our common stock and/or preferred stock to a person who, as a result of the transfer, violates the ownership limits
may not be effective under some circumstances.
Other Limitations. Other limitations could have the effect of discouraging a takeover or other transaction in which holders of some, or a
majority, of our outstanding common stock might receive a premium for their shares of our common stock that exceeds the then prevailing
market price or that those holders might believe to be otherwise in their best interest. The issuance of shares of preferred stock could have the
effect of delaying or preventing a change in control of the Company even if a change in control were in the shareholders’ interest. In addition,
the Maryland General Corporation Law, or MGCL, imposes restrictions and requires specific procedures with respect to the acquisition of
stated levels of share ownership and business combinations, including combinations with interested shareholders. These provisions of the
MGCL could have the effect of delaying or preventing a change in control of the Company even if a change in control were in the
shareholders’ interest. Our bylaws contain a provision exempting from the MGCL control share acquisition statute any and all acquisitions by
any person of shares of our stock. However, this provision may be amended or eliminated at any time. In addition, under the Operating
Partnership’s agreement of limited partnership, in general, we may not merge, consolidate or engage in any combination with another person or
sell all or substantially all of our assets unless that transaction includes the merger or sale of all or substantially all of the assets of the Operating
Partnership, which requires the approval of the holders of 75% of the limited partnership interests thereof. If we were to own less than 75% of
the limited partnership interests in the Operating Partnership, this provision of the limited partnership agreement could have the effect of
delaying or preventing us from engaging in some change of control transactions.
The Ability to Attract, Train and Retain Qualified Personnel May Have an Adverse Impact on Our Operations
We have over 2,000 personnel involved in the management and operation of our stores. We compete with various other companies in
attracting and retaining qualified 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 or retain qualified personnel, our business and
operating results could be adversely affected.
Legal Disputes, Settlement and Defense Costs Could Have an Adverse Effect on our Operating Results
We may have to make monetary settlements or defend actions or arbitration (including class actions) to resolve tenant-related, employee-
related or other claims and disputes. Settling any such claims and disputes could negatively impact our operating results and cash available for
distribution to shareholders, and could also adversely affect our ability to sell, lease, operate or encumber affected self-storage facilities.
Our Tenant Reinsurance Program is Subject to Significant Governmental Regulation Which May Adversely Affect our Operating
Results
Our tenant reinsurance program, which commenced April 1, 2019, is subject to significant government regulation. The regulatory
authorities generally have broad discretion to grant, renew and revoke licenses and approvals; to promulgate, interpret, and implement
regulations; and to evaluate compliance with regulations through periodic examinations, audits and investigations of the affairs of insurance
providers. As a result of regulation or private action in any jurisdiction, we may be temporarily or permanently suspended from continuing
some or all of our reinsurance activities, or otherwise fined, penalized and/or suffer an adverse judgment, which could all adversely affect our
business and results of operations.
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Our Failure to Qualify as a REIT Would Have Adverse Consequences
We intend to continue to operate in a manner that will permit us to qualify as a REIT under the Code. We have not requested and do not
plan to request a ruling from the Internal Revenue Service (“IRS”) that we qualify as a REIT, and the statements in this Annual Report on Form
10-K are not binding on the IRS or any court. Qualification as a REIT involves the application of highly technical and complex Code
provisions for which there are only limited judicial and administrative interpretations. Continued qualification as a REIT depends upon our
continuing ability to meet various requirements concerning, among other things, the ownership of our outstanding stock, the nature of our
assets, the sources of our income and the amount of our distributions to our shareholders. The fact that we hold substantially all of our assets
through our 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.
Furthermore, Congress and the IRS might make changes to the tax laws and regulations, and the courts and the IRS might issue new rulings,
that make it more difficult, or impossible, for us to remain qualified as a REIT.
If we were to fail to qualify as a REIT in any taxable year and are unable to avail ourselves of certain savings provisions set forth in the
Code, we would not be allowed a deduction for distributions to shareholders in computing our taxable income and would be subject to federal
income tax (including possibly increased state and local taxes) on our taxable income at the regular corporate rate of 21%. Unless entitled to
relief under certain Code provisions, we also would be ineligible for qualification as a REIT for the four taxable years following the year during
which our qualification was lost. As a result, distributions to the shareholders would be reduced for each of the years involved. Although we
currently intend to continue to operate in a manner designed to qualify as a REIT, it is possible that future economic, market, legal, tax or other
considerations may cause our Board of Directors to revoke our REIT election. If we fail to qualify as a REIT for federal income tax purposes
and are able to avail ourselves of one or more of the statutory savings provisions in order to maintain our REIT status, we would nevertheless
be required to pay penalty taxes of $50,000 or more for each such failure.
We Will Pay Some Taxes Even if We Qualify as a REIT, Reducing Cash Available for Shareholders
Even if we qualify as a REIT for federal income tax purposes, we are required to pay some federal, state and local taxes on our income
and property. For example, we will be subject to income tax to the extent we distribute less than 100% of our REIT taxable income (including
capital gains). Additionally, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which dividends paid by us in any
calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income
from prior years. Moreover, if we have net income from “prohibited transactions,” that income will be subject to a 100% tax. In general,
prohibited transactions are sales or other dispositions of property held primarily for sale to customers in the ordinary course of business. The
determination as to whether a particular sale is a prohibited transaction depends on the facts and circumstances related to that sale. While we
will undertake sales of assets if those assets become inconsistent with our long-term strategic or return objectives, we do not believe that those
sales should be considered prohibited transactions, but there can be no assurance that the IRS would not contend otherwise. The need to avoid
prohibited transactions could cause us to forego or defer sales of properties that might otherwise be in our best interest to sell.
Certain of our subsidiaries have elected to be treated as “taxable REIT subsidiaries” of the Company for federal income tax purposes. A
taxable REIT subsidiary is taxed as a regular corporation and is limited in its ability to deduct interest payments made to us in excess of a
certain amount, in addition to other limitations imposed on the deductibility of interest under the applicable tax law. In addition, if we receive
or accrue certain amounts and the underlying economic arrangements between our taxable REIT subsidiaries and us are not comparable to
similar arrangements among unrelated parties, we will be subject to a 100% penalty tax on those payments in excess of amounts deemed
reasonable between unrelated parties.
Finally, some state and local jurisdictions may tax some of our income even though as a REIT we are not subject to federal income tax
on that income because not all states and localities follow the federal income tax treatment of REITs. To the extent that we are, or any taxable
REIT subsidiary is, required to pay federal, foreign, state or local taxes, we will have less cash available for distribution to shareholders.
Complying with REIT Requirements May Limit Our Ability to Hedge Effectively and May Cause Us to Incur Tax Liabilities
The REIT provisions of the Code may limit our ability to hedge our assets and operations. Under these provisions, any income that we
generate from transactions intended to hedge our interest rate risk will be excluded from gross income for purposes of the REIT 75% and 95%
gross income tests if the instrument hedges interest rate risk on liabilities used to carry or acquire real estate assets or manages the risk of
certain currency fluctuations, and such instrument is properly identified under applicable Treasury Regulations. Income from hedging
transactions that do not meet these requirements will generally constitute non-qualifying income for purposes of both the REIT 75% and 95%
gross income tests. As a result of these rules, we may have to limit our use of hedging techniques that might otherwise be advantageous or
implement those hedges through a taxable REIT subsidiary. This could increase the cost of our hedging activities because our taxable REIT
subsidiaries would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise
want to bear. In addition, any losses in the taxable REIT subsidiary will generally not provide any tax benefit, except for being carried forward
against future taxable income in the taxable REIT subsidiary.
15
Complying with the REIT Requirements May Cause Us to Forgo and/or Liquidate Otherwise Attractive Investments
To qualify as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and
diversification of our assets, the amounts that we distribute to our shareholders and the ownership of our shares. To meet these tests, we may be
required to take or forgo taking actions that we would otherwise consider advantageous. For instance, in order to satisfy the gross income or
asset tests applicable to REITs under the Code, we may be required to forgo investments that we otherwise would make. Furthermore, we may
be required to liquidate from our portfolio otherwise attractive investments. In addition, we may be required to make distributions to
shareholders at disadvantageous times or when we do not have funds readily available for distribution. These actions could reduce our income
and amounts available for distribution to our shareholders. Thus, compliance with the REIT requirements may hinder our investment
performance.
If the Operating Partnership Fails to Qualify as a Partnership for Federal Income Tax Purposes, We Could Fail to Qualify as a REIT
and Suffer Other Adverse Consequences
We believe that the Operating Partnership is organized and operated in a manner so as to be treated as a partnership and not an
association or a publicly traded partnership taxable as a corporation, for federal income tax purposes. As a partnership, the Operating
Partnership is not subject to federal income tax on its income. Instead, each of the partners is allocated its share of the Operating Partnership’s
income. No assurance can be provided, however, that the IRS will not challenge the Operating Partnership’s status as a partnership for federal
income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating the Operating Partnership as an
association or publicly traded partnership taxable as a corporation for federal income tax purposes, we would fail to meet the gross income tests
and certain of the asset tests applicable to REITs and, accordingly, would cease to qualify as a REIT. Also, the failure of the Operating
Partnership to qualify as a partnership would cause it to become subject to federal corporate income tax, which would reduce significantly the
amount of its cash available for distribution to its partners, including us.
U.S. Federal Income Tax Treatment of REITs and Investments in REITs May Change, Which May Result in the Loss of Our Tax
Benefits of Operating as a REIT
Current U.S. federal income tax treatment of a REIT and an investment in a REIT may be modified by legislative, judicial or
administrative action at any time, and we cannot predict when such action may occur. We cannot predict how changes in U.S. federal income
tax law will affect us or our investors nor can we predict the long-term impact of tax reforms on REITs.
We May Change the Dividend Policy for Our Common Stock in the Future
In 2021, our Board of Directors authorized and we declared quarterly common stock dividends of $0.74 per share in January, April, and
July, and $0.86 per share in October, for a total 2021 dividend per share annual rate of $3.08 per share. In addition, our Board of Directors
authorized and we declared a quarterly common stock dividend of $1.00 per share in January 2022. We can provide no assurance that our
Board of Directors will not reduce or eliminate entirely dividend distributions on our common stock in the future.
Our Board of Directors will continue to evaluate our distribution policy on a quarterly basis as they monitor the capital markets and the
impact of the economy on our operations. The decisions to authorize and pay dividends on our common stock in the future, as well as the
timing, amount and composition of any such future dividends, will be at the sole discretion of our Board of Directors given conditions then
existing, including our earnings, financial condition, capital requirements, debt maturities, the availability of capital, applicable REIT and legal
restrictions and the general overall economic conditions and other factors. Any change in our dividend policy could have a material adverse
effect on the market price of our common stock.
Market Interest Rates May Influence the Price of Our Common Stock
One of the factors that may influence the price of our common stock in public trading markets or in private transactions is the annual
yield on our common stock as compared to yields on other financial instruments. An increase in market interest rates will result in higher yields
on other financial instruments, which could adversely affect the price of our common stock.
Regional Concentration of Our Business May Subject Us to Economic Downturns in the States of Texas and Florida
As of December 31, 2021, 342 of our 1,076 self-storage facilities are located in the states of Texas and Florida. For the year ended
December 31, 2021, the facilities in Texas and Florida accounted for approximately 17% and 14% of store revenues, respectively. This
concentration of business in Texas and Florida exposes us to potential losses resulting from a downturn in the economies of those states. If
16
economic conditions in those states deteriorate, we may experience a reduction in existing and new business, which may have an adverse effect
on our business, financial condition and results of operations.
When We Acquire Properties in New Markets, We Will Be Subject to Increased Operational Risks
We may acquire self-storage properties in markets where we have little or no operational experience. When we enter into new markets,
we will be subject to increased risks resulting from our lack of experience and infrastructure in these markets and may need to incur additional
costs, both expected and unexpected, to develop our operating capabilities in these markets. These risks could materially and adversely affect
us, including our growth prospects, financial condition and results of operations.
Changes in Taxation of Corporate Dividends May Adversely Affect the Value of Our Common Stock
The maximum marginal rate of tax payable by domestic noncorporate taxpayers on dividends received from a regular “C” corporation
under current federal law generally is 20%, as opposed to higher ordinary income rates, plus a 3.8% Medicare tax on net investment income.
The reduced tax rate, however, does not apply to distributions paid to domestic noncorporate taxpayers by a REIT on its stock, except for
certain limited amounts. However, the TCJA allows domestic noncorporate taxpayers to deduct 20% of their dividends from REITs, excluding
capital gain dividends and qualified dividend income (which continue to be subject to the 20% rate). As a result, dividend income received by
our domestic non-corporate shareholders is subject to a maximum effective federal income tax rate of 29.6% (plus the 3.8% Medicare tax on
net investment income). The cumulative amount that a domestic noncorporate taxpayer may deduct for any taxable year with respect to
ordinary REIT dividends from all sources (together with certain other categories of income that are eligible for such 20% deduction) may not
exceed 20% of such person’s total taxable income (excluding any net capital gain). The income tax rate changes applicable to domestic
noncorporate taxpayers and the 20% deduction for ordinary REIT dividends apply for taxable years beginning after December 31, 2017 and
before January 1, 2026.
The earnings of a REIT that are distributed to its stockholders generally remain subject to less federal income taxation than earnings of a
non-REIT “C” corporation that are distributed to its stockholders net of corporate-level income tax. However, the lower rate of taxation to
dividends paid by regular “C” corporations could cause domestic noncorporate investors to view the stock of regular “C” corporations as more
attractive relative to the stock of a REIT, because the dividends from regular “C” corporations continue to be taxed at a lower rate while
distributions from REITs (other than distributions designated as capital gain dividends) are generally taxed at the same rate as other ordinary
income for domestic noncorporate taxpayers.
We Are Heavily Dependent on Computer Systems, Telecommunications and the Internet to Process Transactions, Summarize Results
and Manage our Business. Security Breaches or a Failure of such Networks, Systems or Technology Could Adversely Impact Our
Business and Customer Relationships.
We are heavily dependent upon automated information technology and Internet commerce, with many of our new customers coming
from the Internet or the telephone, and the nature of our business involves the receipt and retention of personal information about them. We
centrally manage significant components of our operations with our computer systems, including our financial information, and we also rely
extensively on third-party vendors to retain data, process transactions and provide other systems services. These systems are subject to damage
or interruption from power outages, computer and telecommunications failures, computer worms, viruses and other destructive or disruptive
security breaches and catastrophic events.
As a result, our operations could be severely impacted by a natural disaster, terrorist attack or other circumstance that resulted in a
significant outage of our systems or those of our third-party providers, despite our use of back up and redundancy measures. Further, viruses
and other related risks could negatively impact our information technology processes. We could also be subject to a “cyber-attack” or other
data security breach which would penetrate our network security, resulting in misappropriation of our confidential information, including
customer personal information. Although the Company has insurance for such events, system disruptions and shutdowns could also result in
additional costs to repair or replace such networks or information systems and possible legal liability, including government enforcement
actions and private litigation. In addition, our customers could lose confidence in our ability to protect their personal information, which could
cause them to move out of rented storage spaces. Such events could lead to lost future sales and adversely affect our results of operations.
Item 1B. Unresolved Staff Comments
None.
17
Item 2. Properties
At December 31, 2021, we held ownership interests in, leased, and/or managed a total of 1,076 Properties situated in 35 states. Among
our 1,076 self-storage properties are 116 properties that we manage for unconsolidated joint ventures of which we have varying percentage
ownership interests. For additional information regarding unconsolidated joint ventures, see Note 11 to the Consolidated Financial Statements
filed herewith.
Our Properties offer inexpensive, easily accessible, enclosed storage space to residential and commercial users on a month-to-month
basis. Most of our Properties are fenced and well lighted with automated access systems and surveillance cameras. A majority of the Properties
are single-story, thereby providing customers with the convenience of direct vehicle access to their storage spaces. Our Properties range in size
from 9,000 to 194,000 net rentable square feet, with an average of approximately 73,000 net rentable square feet. The Properties generally are
constructed of masonry or steel walls resting on concrete slabs and have standing seam metal, shingle, or tar and gravel roofs. Most Properties
have a property manager on-site during business hours. Generally, customers have access to their storage space up to 15 hours a day, with 24-
hour access in certain circumstances. Individual storage spaces are secured by a lock furnished by the customer to provide the customer with
control of access to the space.
The following table provides certain information regarding the Properties in which we have an ownership interest, lease, and/or manage
as of December 31, 2021:
Alabama
Arizona
Arkansas
California
Colorado
Connecticut
Florida
Georgia
Illinois
Indiana
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Mississippi
Missouri
Nevada
New Hampshire
New Jersey
New York
North Carolina
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
Tennessee
Texas
Virginia
Washington
Wisconsin
Total
Number of
Stores at
December 31, 2021
30
44
1
35
15
20
155
69
47
3
1
3
58
6
8
20
3
15
25
26
15
45
75
36
29
5
1
16
5
25
14
187
25
7
7
1,076
Square
Feet
2,069,888
3,248,482
84,715
3,364,462
1,033,680
1,494,278
10,586,360
4,896,852
3,658,788
183,371
126,675
197,638
5,142,115
360,648
426,597
1,191,324
203,117
1,119,177
1,811,215
1,949,197
1,108,192
3,483,969
4,817,483
2,390,112
2,049,718
353,285
35,065
1,113,314
264,438
1,672,586
1,050,301
14,083,296
1,892,979
539,239
627,431
78,629,987
Number of
Spaces
Percentage
of Store
Revenue
16,298
30,055
593
29,713
8,932
15,102
105,035
43,059
35,901
1,715
1,134
1,865
44,833
3,692
4,771
11,813
2,158
8,465
16,109
16,512
9,588
34,906
56,431
22,974
17,764
2,991
384
10,337
2,418
15,759
9,363
117,942
17,536
5,616
6,070
727,834
1.95%
5.05%
0.00%
5.81%
1.27%
1.97%
13.51%
5.00%
5.16%
0.09%
0.10%
0.20%
5.11%
0.59%
0.74%
1.74%
0.11%
1.39%
1.85%
3.18%
1.39%
6.04%
7.57%
2.37%
2.59%
0.09%
0.03%
1.50%
0.44%
1.74%
0.82%
17.03%
2.36%
0.73%
0.48%
100.00%
At December 31, 2021, the Properties had an average occupancy of 88.2%, including the Company’s wholly owned self-storage facilities
which had an average occupancy of 93.0%. For the quarter ended December 31, 2021, the Properties had an annualized rent per occupied
square foot of $16.67, including the Company’s wholly owned self-storage facilities which had an annualized rent per occupied square foot of
$16.84.
18
Item 3. Legal Proceedings
Although we are party to various legal proceedings, we believe that the likelihood of these contingencies resulting in a material loss to
the Company, either individually or in the aggregate, is remote.
Item 4. Mine Safety Disclosures
Not Applicable
19
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our Common Stock is traded on the New York Stock Exchange under the symbol “LSI”. As of February 18, 2022, there were
approximately 489 holders of record of our Common Stock. These figures do not include common shares held by brokers and other institutions
on behalf of shareholders.
We have paid quarterly dividends to our shareholders since our inception.
For federal income tax purposes, distributions to shareholders are treated as ordinary income, capital gain, return of capital or a
combination thereof. Distributions to shareholders for 2021 represent 97% ordinary income and 3% capital gain.
On August 2, 2017, the Company’s Board of Directors authorized the repurchase of up to $200 million of the Company’s common stock.
We have not made any repurchases under such program since 2017, and up to approximately $191.8 million of the Company’s common stock
may yet be purchased under such program. The program does not have an expiration date but may be suspended or discontinued at any time.
In the fourth quarter of 2021, in connection with the acquisition of a total of 19 self-storage facilities across four separate transactions, the
Company issued a total of an additional 620,677 common units of the Operating Partnership with an aggregate value of $81.5 million. The
issuance of the common units of the Operating Partnership in connection with these acquisitions were exempt from registration under Section
4(2) of the Securities Act of 1933, as amended, because it did not involve any public offering.
20
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth certain information as of December 31, 2021, with respect to equity compensation plans under which
shares of the Company’s Common Stock may be issued.
Plan Category
Equity compensation plans approved by shareholders:
2015 Award and Option Plan (1)
2009 Outside Directors’ Stock Option and Award Plan (2)
2020 Outside Directors' Stock Award Plan
Deferred Compensation Plan for Directors (3)
Equity compensation plans not approved by shareholders:
Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants
and rights
Weighted
average
exercise price
of
outstanding
options,
warrants
and rights
Number of
securities
remaining
available
for future
issuance
$
$
$
221,050
24,750
—
35,135
N/A
—
52.09
—
N/A
N/A
170,111
—
131,810
27,307
N/A
(1)
Includes the actual number of shares issued in January 2022 related to performance-based awards issued on December 18, 2018 (38,110)
and the maximum number of shares (182,940) that could be issued as part of the performance-based awards issued in 2019, 2020, and
2021. The actual number of shares to be issued as part of the performance-based awards issued in 2019, 2020 and 2021 will be
determined at the end of the three-year performance periods in 2022, 2023 and 2024, respectively. See Note 9 to our consolidated
financial statements filed herewith.
(2) The 2009 Outside Directors’ Stock Option and Award Plan expired on May 21, 2020 and was replaced by the 2020 Outside Directors’
Stock Award Plan. Therefore, no securities are available for future issuance under the 2009 Outside Directors’ Stock Option and Award
Plan at December 31, 2021.
(3) Under the Deferred Compensation Plan for Directors, non-employee Directors may defer all or part of their Directors’ fees that are
otherwise payable in cash. Directors’ fees that are deferred under the Plan will be credited to each Directors’ account under the Plan in
the form of Units. The number of Units credited is determined by dividing the amount of Directors’ fees deferred by the closing price of
the Company’s Common Stock on the New York Stock Exchange on the day immediately preceding the day upon which Directors’ fees
otherwise would be paid by the Company. A Director is credited with additional Units for dividends on the shares of Common Stock
represented by Units in such Directors’ account. A Director may elect to receive the shares in a lump sum on a date specified by the
Director or in quarterly or annual installments over a specified period and commencing on a specified date.
21
CORPORATE PERFORMANCE GRAPH
The following chart and line-graph presentation compares (i) the Company’s shareholder return on an indexed basis since December 31,
2016 with (ii) the S&P Stock Index and (iii) the National Association of Real Estate Investment Trusts (NAREIT) Equity Index.
CUMULATIVE TOTAL SHAREHOLDER RETURN
LIFE STORAGE, INC.
DECEMBER 31, 2016 - DECEMBER 31, 2021
S&P
NAREIT
LSI
Dec. 31,
2016
$ 100.00
$ 100.00
$ 100.00
Dec. 31,
2017
$ 121.83
$ 105.23
$ 109.81
Dec. 31,
2018
$ 116.49
$ 100.36
$ 119.90
Dec. 31,
2019
$ 153.17
$ 126.45
$ 145.40
Dec. 31,
2020
$ 181.35
$ 116.34
$ 167.06
Dec. 31,
2021
$ 233.41
$ 166.64
$ 331.63
The foregoing item assumes $100.00 invested on December 31, 2016, with dividends reinvested.
22
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with
the financial statements and notes thereto included elsewhere in this report. We make statements in this section that are forward-looking
statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this
Form 10-K 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 Form 10-K
entitled “Risk Factors.” Dollar amounts in thousands, except share and per share data, unless otherwise stated.
We believe we are the fourth largest operator of self-storage properties in the United States based on square feet owned and managed. All
of our stores in the United States conduct business under the customer-friendly name Life Storage ®.
Business and Overview
Operating Strategy
Our operating strategy is designed to generate growth and enhance value by:
A.
Increasing operating performance and cash flow through aggressive management of our stores:
• We seek to differentiate our self-storage facilities from our competition through innovative marketing and value-added
product offerings including:
o
o
o
o
o
o
o
Strategic and efficient Web and Mobile marketing that places Life Storage in front of customers in search engines at
the right time for conversion;
Regional marketing which creates effective brand awareness in the cities where we do business;
Our Customer Care Center answers sales inquiries and makes reservations for all of our Properties on a centralized
basis. Further, our call center and customer contact software was developed in-house and is 100% supported by our in-
house experts;
Our “Rent Now” fully-digital rental platform allows customers to “skip the counter” by selecting a specific storage
unit, completing the rental agreement and making their rental payment online;
Our truck move-in program, under which, at present, approximately 300 of our stores offer Life Storage trucks to assist
our customers moving into their spaces, and also serve as a moving billboard further supporting our branding efforts;
Our dehumidification system provides our customers with a better environment to store their goods and improves
yields on our Properties;
Our Warehouse Anywhere last mile delivery solution provides corporate customers with third-party logistics and
related services through a forward deployed, unmanned, decentralized model combining storage asset management
with proprietary inventory tracking technology;
Our customized computer applications link each of our primary sales channels (customer care center, web, and store)
allowing for real time access to space type and inventory, pricing, promotions, and other pertinent store information. This
also provides us with raw data on historical and current pricing, move-in and move-out activity, specials and occupancies,
etc. This data is then used within the advanced pricing analytics programs employed by our revenue management team;
All of our store employees receive a high level of training. New store associates are assigned a Certified Training Manager as
a mentor during their initial training period. In addition, all employees have access to our online training and development
portal for initial training as well as continuing education. Finally, we have a company intranet that acts as a communications
portal for company policy and procedures, online ordering, incentive rankings, etc.
•
•
B. Acquiring additional stores:
•
Our objective is to acquire new stores in markets in which we currently operate. This is a proven strategy we have employed
over the years as it facilitates our branding efforts, grows market share, and allows us to achieve improved economies of
scale through shared advertising, payroll, and other services.
• We also look to enter new markets that are in the top 50 Metropolitan Statistical Areas (MSA) by acquiring established
multi-property portfolios. With this strategy we are then able to seek out additional acquisition or third-party management
opportunities to continue to grow market share and branding and enhance economies of scale.
• We primarily target stores with higher average rental rates per square foot than our overall portfolio to help improve
operating margin.
23
C.
Expanding our management business:
• We see our management business as a source of future acquisitions. We hold a noncontrolling interest in multiple joint
ventures which hold a total of 116 properties that we manage. In addition, we manage 251 self-storage facilities for which we
have no ownership. We may enter into additional management agreements and develop additional joint ventures in the
future.
•
To broaden opportunities available, we have implemented a bridge lending program under which an unconsolidated joint
venture of the Company provides financing to operating properties that we manage. We anticipate that this program will help
us increase our management business, create additional future acquisition opportunities, and strengthen our relationship with
partners, all while providing interest and fee income.
D.
Expanding and enhancing our existing stores:
•
Over the past five years we have undertaken a program of expanding and enhancing our Properties. In 2017, we added or
converted to premium storage 504,000 square feet to existing Properties for a total cost of approximately $35.2 million; in
2018, we added or converted to premium storage 390,000 square feet to existing Properties for a total cost of approximately
$27.8 million; in 2019, we added or converted to premium storage 694,000 square feet to existing Properties for a total cost
of approximately $58.1 million; in 2020, we added or converted to premium storage 522,000 square feet to existing
Properties for a total cost of approximately $41.4 million; and in 2021, we added or converted to premium storage 287,000
square feet to existing Properties for a total cost of approximately $23.5 million.
Supply and Demand / Operating Trends
We believe the supply and demand model in the self-storage industry is micro-market specific in that a majority of our business comes
from within a five-mile radius of our stores. The out-performance of the sector compared to other real estate asset classes has drawn new
capital to self-storage. The Company experienced significant new competition in recent years and expects moderate growth in new supply at
least through 2022. Despite the inflow of additional properties, we have seen capitalization rates on quality stabilized acquisitions in the top 50
major metropolitan markets (expected annual return on investment) compress slightly at approximately 4.0% to 5.0%.
We have experienced annual same store sales increases each year for the past 12 years, subsequent to the economic recession of 2009.
We feel our recent performance further supports the notion that the self-storage industry holds up well regardless of the prevailing economic
landscape. Our performance in 2021 and 2020 despite the ongoing effects of the COVID-19 global health crisis further supports this notion.
We believe the decrease in same store move ins in 2021 when compared to 2020 was due to lack of available space at many of our stores
as a result of extremely high occupancy rates throughout 2021. We believe the increase in same store move outs over the same period was a
result of the COVID-19 global health crisis during 2020 as many jurisdictions implemented stay-at-home orders for a portion of that year.
Same store move ins
Same store move outs
Difference
2021
194,816
188,925
5,891
2020
204,976
187,935
17,041
Change
(10,160)
990
(11,150)
Although property tax increases were kept at moderate levels through assessment challenges in 2021, elevated property tax increases are
expected in the coming years. We expect same store expense growth resulting from increases in health costs, property insurance and property
taxes in 2022, to be partially offset by operating efficiencies gained from leveraging technology. We believe the same store expense increases
will be at manageable levels.
24
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements,
which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements
requires us to make estimates and judgments that affect the amounts reported in our financial statements and the accompanying notes. On an
ongoing basis, we evaluate our estimates and judgments, including those related to carrying values of storage facilities, bad debts, and
contingencies and litigation. We base these estimates on experience and on various other assumptions that we believe to be reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The following
estimates are considered critical because they are particularly dependent on our judgment about matters that have a significant level of
uncertainty at the tie the accounting estimates are made, and changes to those estimates could have a material impact on our financial condition
or operating results.
Assigning purchase price to assets acquired: Upon adoption of Accounting Standards Update 2017-01, most of our self-storage facility
acquisitions, including all self-storage facility acquisitions in 2021 and 2020, do not meet the definition of business combinations and are
therefore treated as asset acquisitions. As a result, the cost of acquired storage facilities is assigned primarily to land, land improvements,
building, equipment, and in-place customer leases based on the relative fair values of these assets as of the date of acquisition. We use
significant unobservable inputs in our determination of the fair values of these assets. The determination of these inputs involves judgments and
estimates that can vary for each individual property based on various factors specific to the properties and the functional, economic and other
factors affecting each property. The fair values of the acquired facilities are determined using financial projections and applicable capitalization
rates. To determine the fair value of land, we use prices per acre derived from observed transactions involving comparable land in similar
locations. To determine the fair value of buildings, equipment and improvements, we use current replacement cost estimates based on
information derived from construction industry data by geographic region as adjusted for age, condition, and turnkey factor, economic profit
and economic obsolescence considerations associated with these assets. The fair values of in-place customer leases are based on the rent that
would be lost due to the amount of time required to replace existing customers which is based on our historical experience with market demand
and turnover in our facilities.
Qualification as a REIT: We operate, and intend to continue to operate, as a REIT under the Code, but no assurance can be given that we
will at all times so qualify. To the extent that we continue to qualify as a REIT, we will not be taxed, with certain limited exceptions, on the
taxable income that is distributed to our shareholders. If we fail to qualify as a REIT, any requirement to pay federal income taxes could have a
material adverse impact on our financial condition and results of operations.
See Note 2 to the financial statements.
Recent Accounting Pronouncements
YEAR ENDED DECEMBER 31, 2021 COMPARED TO YEAR ENDED DECEMBER 31, 2020
We recorded rental revenues of $690.8 million for the year ended December 31, 2021, an increase of $151.2 million or 28.0% when
compared to 2020 rental revenues of $539.6 million. Of the change in rental revenue, $72.2 million of the increase resulted from a 14.3%
increase in rental revenues at the 531 core properties considered in same store sales (the Company will include stores in its same store pool in
the second year after the stores achieve 80% sustained occupancy using market rates and incentives; therefore the 531 core properties
considered in same store sales are those included in the consolidated results of operations since December 31, 2019, excluding stores not yet
stabilized, four stores significantly impacted by flooding, and two stores that the Company began to fully replace in 2017). The increase in
same store rental revenues was a result of a 290 basis point increase in average occupancy coupled with a 9.8% increase in rental income per
square foot. Also contributing to the overall increase in rental revenues was an increase of $79.0 million in rental revenues contributed by
stores not included in the same store pool, primarily those acquired in 2021 and 2020. We recorded tenant reinsurance revenues of $58.1
million for the year ended December 31, 2021, an increase of $13.4 million or 29.9% when compared to 2020 tenant reinsurance revenues of
$44.7 million. The increase in tenant reinsurance revenues is primarily due to the increase in stores owned or managed in 2021. Other operating
income, which includes merchandise sales, truck rentals, management fees and acquisition fees, increased by $7.2 million for the year ended
December 31, 2021 compared to 2020 primarily as the result of increased acquisition fees, increased management fees earned as a result of an
increase in managed properties and increased revenues from the Company's Warehouse Anywhere third-party logistics and warehousing
solution.
Property operations and maintenance expenses increased $21.1 million or 17.2% in 2021 compared to 2020. The 531 core properties
considered in the same store pool experienced a $3.7 million or 3.5% increase in such expenses primarily as the result of increased repairs and
maintenance expenditures and office related expenses. The net activity of the stores not included in the same store pool also contributed $17.4
million to the overall increase in property operations and maintenance expenses. Tenant reinsurance expenses increased $7.2 million or 45.5%
in 2021 compared to 2020 primarily as the result of the increase in stores owned or managed in 2021. Real estate tax expense increased $9.6
million or 13.6% in 2021 compared to 2020. The 531 core properties considered in the same store pool experienced a $2.2 million or 3.4%
25
increase in real estate taxes which is reflective of a net increase in property tax levies on those properties. In addition to the same store real
estate tax expense increase, real estate taxes increased $7.3 million from the stores not included in the same store pool.
Our 2021 same store results consist of only those Properties that have been owned by the Company and included in our consolidated
results since December 31, 2019, excluding stores not yet stabilized, four stores significantly impacted by flooding, and two stores that the
Company began to fully replace in 2017. The impact of tenant reinsurance related items is excluded from same store results. We believe that
same store results are meaningful measures to investors in evaluating our operating performance because, given the acquisitive nature of the
industry, same store results provide information about the overall business after removing the results from those properties that were not
consistent from year-to-year. Additionally, same store results are widely used in the real estate industry and the self-storage industry to measure
performance. Same store results should be considered in addition to, but not as a substitute for, consolidated results in accordance with
generally accepted accounting principles ("GAAP").
The following table sets forth operating data for our 531 same store properties. These results provide information relating to property
operating changes without the effects of acquisitions.
Same Store Summary
(dollars in thousands)
Same store rental income
Same store other operating income
Total same store operating income
Payroll and benefits
Real estate taxes
Utilities
Repairs and maintenance
Office and other operating expenses
Insurance
Advertising
Internet marketing
Total same store operating expenses
Same store net operating income
Year ended December 31,
2021
578,658 $
6,893
585,551
38,900
67,142
14,654
18,259
16,680
6,374
212
13,871
176,092
409,459
$
2020
506,469
6,519
512,988
38,995
64,918
14,273
16,098
15,397
6,151
241
14,069
170,142
342,846
$
$
Percentage
Change
14.3%
5.7%
14.1%
(0.2)%
3.4%
2.7%
13.4%
8.3%
3.6%
(12.0)%
(1.4)%
3.5%
19.4%
Net operating income increased $134.0 million or 32.8% as a result of a 19.4% increase in our same store net operating income along
with an increase of $67.4 million primarily related to the Company’s tenant insurance program, increased management fees, and the properties
not included in the same store pool.
Net operating income or “NOI” is a non-GAAP financial measure that we define as total continuing revenues less continuing property
operating expenses. NOI also can be calculated by adding back to net income: interest expense, impairment and casualty losses, operating lease
expense, depreciation and amortization expense, any losses on sale of real estate, acquisition related costs, general and administrative expense,
and deducting from net income: income from discontinued operations, interest income, any gains on sale of real estate, and equity in income of
joint ventures. We believe that NOI is a meaningful measure to investors in evaluating our operating performance because we utilize NOI in
making decisions with respect to capital allocations, in determining current property values, and in comparing period-to-period and market-to-
market property operating results. Additionally, NOI is widely used in the real estate industry and the self-storage industry to measure the
performance and value of real estate assets without regard to various items included in net income that do not relate to or are not indicative of
operating performance, such as depreciation and amortization, which can vary depending on accounting methods and the book value of assets.
NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with
GAAP, such as total revenues, operating income and net income. There are material limitations to using a measure such as NOI, including the
difficulty associated with comparing results among more than one company and the inability to analyze certain significant items, including
depreciation and interest expense, that directly affect our net income. We compensate for these limitations by considering the economic effect
of the excluded expense items independently as well as in connection with our analysis of net income.
26
The following table reconciles our net income presented in the 2021 and 2020 consolidated financial statements to NOI generated by our
self-storage facilities during those years.
(dollars in thousands)
Net income
General and administrative
Depreciation and amortization
Gain on sale of real estate
Interest expense
Interest income
Equity in income of joint ventures
Net operating income
Net operating income
Same store
Other stores, tenant reinsurance related income
and management fee income
Total net operating income
Year ended December 31,
2020
2021
152,360
252,175 $
52,055
62,617
122,925
147,119
(302)
—
86,015
86,786
(19)
(827)
(4,838)
(5,696)
408,196
542,174 $
409,459
342,846
132,715
542,174 $
65,350
408,196
$
$
$
General and administrative expenses increased $10.6 million or 20.3% from 2020 to 2021. This increase was primarily driven by an
increase in home office personnel related costs to support the growth in stores and increased investments in technology.
Depreciation and amortization expense increased to $147.1 million in 2021 from $122.9 million in 2020 as a result of depreciation and
amortization related to self-storage facilities acquired in 2021 and 2020.
Interest expense increased from $86.0 million in 2020 to $86.8 million in 2021 primarily as a result of increased outstanding debt
balances in 2021 as compared to 2020, partially offset by a make whole payment of $4.0 million made in 2020 as part of the early repayment of
$100 million of term notes.
The Company did not sell any properties in 2021 or 2020.
YEAR ENDED DECEMBER 31, 2020 COMPARED TO YEAR ENDED DECEMBER 31, 2019
We recorded rental revenues of $539.6 million for the year ended December 31, 2020, an increase of $28.8 million or 5.6% when
compared to 2019 rental revenues of $510.8 million. Of the change in rental revenue, $8.3 million of the increase resulted from a 1.7% increase
in rental revenues at the 515 core properties considered in same store sales (the Company will include stores in its same store pool in the
second year after the stores achieve 80% sustained occupancy using market rates and incentives; therefore the 515 core properties considered in
same store sales are those included in the consolidated results of operations since December 31, 2018, excluding stores not yet stabilized, the
properties we sold in 2019, four stores significantly impacted by flooding, and two stores that the Company began to fully replace in 2017).
The increase in same store rental revenues was a result of a 130 basis point increase in average occupancy, partially offset by a 0.6% decrease
in rental income per square foot. Also contributing to the overall increase in rental revenues was an increase of $20.5 million in rental revenues
contributed by stores not included in the same store pool, primarily those acquired in 2020 and 2019, partially offset by stores sold in 2019. We
recorded tenant reinsurance revenues of $44.7 million for the year ended December 31, 2020, an increase of $9.8 million or 28.2% when
compared to 2019 tenant reinsurance revenues of $34.9 million. The increase in tenant reinsurance revenues is primarily due to the increase in
stores in 2020 along with the change in the Company's tenant reinsurance program effective April 1, 2019. Other operating income, which
includes merchandise sales, truck rentals, management fees and acquisition fees, increased by $3.4 million for the year ended December 31,
2020 compared to 2019 primarily as the result of increased management fees earned as a result of an increase in managed properties.
Property operations and maintenance expenses increased $1.0 million or 0.9% in 2020 compared to 2019. The 515 core properties
considered in the same store pool experienced a $1.4 million or 1.4% decrease in such expenses as a result of the impact of the Company’s
investments in technology such as our “Rent Now” online rental platform which has enabled the Company to operate more efficiently. Further,
same store payroll, repairs and maintenance, utilities, and other operating expenses all decreased in 2020 as compared to 2019 due to the
Company’s focus on efficiencies. These same store decreases were offset by an increase in internet marketing costs used to drive move ins
during the second and third quarters of 2020. The overall increase in property operations and maintenance expense is the result of the net
activity of the stores not included in the same store pool along with expenses incurred during 2020 due to damages resulting from the impact of
a hurricane on two of our self-storage facilities. Tenant reinsurance expenses increased $7.1 million or 82.8% in 2020 compared to 2019
primarily as the result of the change in the Company’s tenant insurance program effective April 1, 2019, along with an increase in stores in
2020 and tenant reinsurance claims resulting from the impact of a hurricane on two of our self-storage facilities in 2020. Real estate tax
expense increased $5.2 million or 8.1% in 2020 compared to 2019. The 515 core properties considered in the same store pool experienced a
$1.9 million or 3.1% increase which is reflective of a net increase in property tax levies on those properties. In addition to the same store real
estate expense increase, real estate taxes increased $3.3 million from the stores not included in the same store pool.
27
Our 2020 same store results consist of only those Properties that have been owned by the Company and included in our consolidated
results since December 31, 2018, excluding stores not yet stabilized, the properties we sold in 2019, four stores significantly impacted by
flooding, and two stores that the Company began to fully replace in 2017. The impact of tenant reinsurance related items is excluded from same
store results.
The following table sets forth operating data for our 515 same store properties. These results provide information relating to property
operating changes without the effects of acquisitions.
Same Store Summary
(dollars in thousands)
Same store rental income
Same store other operating income
Total same store operating income
Payroll and benefits
Real estate taxes
Utilities
Repairs and maintenance
Office and other operating expenses
Insurance
Advertising
Internet marketing
Total same store operating expenses
Same store net operating income
Year ended December 31,
2020
490,343 $
6,298
496,641
37,761
62,958
13,894
15,579
14,998
6,017
233
13,645
165,085
331,556 $
2019
482,006
6,617
488,623
38,864
61,054
15,199
16,582
15,529
5,909
877
10,589
164,603
324,020
$
$
Percentage
Change
1.7%
(4.8)%
1.6%
(2.8)%
3.1%
(8.6)%
(6.0)%
(3.4)%
1.8%
(73.4)%
28.9%
0.3%
2.3%
Net operating income increased $28.6 million or 7.5% as a result of a 2.3% increase in our same store net operating income along with an
increase of $21.1 million related to the Company’s tenant insurance program, increased management fees, and the properties not included in
the same store pool.
The following table reconciles NOI generated by our self-storage facilities to our net income presented in the 2020 and 2019 consolidated
financial statements.
(dollars in thousands)
Net income
General and administrative
Payments for rent
Depreciation and amortization
Gain on sale of storage facilities
Gain on sale of real estate
Interest expense
Interest income
Equity in income of joint ventures
Net operating income
Net operating income
Same store
Other stores, tenant reinsurance related income
and management fee income
Total net operating income
Year ended December 31,
2019
2020
260,077
152,360 $
46,622
52,055
358
—
107,130
122,925
(104,353 )
—
(1,781)
(302)
86,015
76,430
(19)
(342)
(4,566)
(4,838)
379,575
408,196 $
331,556
324,020
76,640
408,196 $
55,555
379,575
$
$
$
General and administrative expenses increased $5.4 million or 11.7% from 2019 to 2020. This increase was primarily driven by
increased personnel costs to support the growth in stores, a $1.7 million cost reduction in the second quarter of 2019 relating to the finalization
of a legal settlement which did not recur in 2020, and $0.8 million of costs incurred related to a legal settlement in 2020.
Depreciation and amortization expense increased to $122.9 million in 2020 from $107.1 million in 2019 as a result of depreciation and
amortization related to self-storage facilities acquired in 2020 and 2019, paired with $5.8 million of additional depreciation expense in 2020
related to self-storage facilities that were identified for replacement.
28
Interest expense increased from $76.4 million in 2019 to $86.0 million in 2020 primarily as a result of increased outstanding debt
balances in 2020 as compared to 2019 and a make whole payment of $4.0 million made in 2020 as part of the early repayment of $100 million
of term notes.
The Company did not sell any properties in 2020. On July 2, 2019, the Company sold 32 non-strategic properties to an unrelated third-
party and received net cash proceeds of $207.6 million, resulting in a gain of $100.2 million. The Company also recognized a gain of $4.1
million in 2019 related to a property that was sold during 2017 and subsequently leased by the Company through November 2019. These
dispositions were not classified as discontinued operations since they did not meet the criteria for such classification under ASU 2014-08
guidance.
FUNDS FROM OPERATIONS
We believe that Funds from Operations (“FFO”) provides relevant and meaningful information about our operating performance that is
necessary, along with net earnings and cash flows, for an understanding of our operating results. FFO adds back historical cost depreciation,
which assumes the value of real estate assets diminishes predictably in the future. In fact, real estate asset values increase or decrease with
market conditions. Consequently, we believe FFO is a useful supplemental measure in evaluating our operating performance by disregarding
(or adding back) historical cost depreciation.
FFO is defined by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) as net income available to common
shareholders computed in accordance with GAAP, excluding gains or losses on sales of properties, plus impairment of real estate assets, plus
depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. We believe that
to further understand our performance FFO should be compared with our reported net income and cash flows in accordance with GAAP, as
presented in our consolidated financial statements.
Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in
accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO does not represent cash
generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income
(determined in accordance with GAAP) as an indication of our performance, as an alternative to net cash flows from operating activities
(determined in accordance with GAAP) as a measure of our liquidity, or as an indicator of our ability to make cash distributions.
Reconciliation of Net Income to Funds From Operations
(dollars in thousands)
Net income attributable to common shareholders
Net income attributable to noncontrolling interests in the
Operating Partnership
Depreciation of real estate and amortization of intangible
assets
exclusive of debt issuance costs
Depreciation and amortization from unconsolidated joint
ventures
(Gain) loss on sale of storage facilities
Funds from operations allocable to noncontrolling interest in
the Operating Partnership
Funds from operations available to common shareholders
2021
249,317 $
$
For Year Ended December 31,
2019
258,699 $
2020
151,571 $
2018
206,590 $
2017
96,365
1,364
789
1,378
968
444
144,978
120,512
105,107
100,528
125,580
6,227
—
5,814
—
6,195
(104,353)
5,107
(56,398)
4,296
3,503
(2,177)
399,709 $
(1,443)
277,243 $
(1,417)
265,609 $
(1,197)
255,598 $
$
(1,045)
229,143
29
LIQUIDITY AND CAPITAL RESOURCES
The COVID-19 global health crisis impacted the cost of debt and equity for a period of time and may disrupt markets in the future. We
expect to be able to maintain adequate liquidity as we manage through the current environment. While significant uncertainty exists as to the
full impact of the COVID-19 global health crisis on our liquidity and capital resources, as of the date of this report we believe that the
combination of our cash on hand, the cash generated by our operations, and our line of credit will be adequate to fund our operations. We will
continue to actively monitor the potential impact of the COVID-19 global health crisis on our liquidity and capital resources.
Our line of credit and term notes require us to meet certain financial covenants measured on a quarterly basis, including prescribed
leverage, fixed charge coverage, minimum net worth, limitations on additional indebtedness, and limitations on dividend payouts. At
December 31, 2021, the Company was in compliance with all debt covenants. In the event that the Company violates its debt covenants in the
future, the amounts due under the agreements could be callable by the lenders and could adversely affect our credit rating requiring us to pay
higher interest and other debt-related costs. We believe that if operating results remain consistent with historical levels and levels of other debt
and liabilities remain consistent with amounts outstanding at December 31, 2021, the entire availability under our line of credit could be drawn
without violating our debt covenants.
Our ability to retain cash flow is limited because we operate as a REIT. To maintain our REIT status, a substantial portion of our
operating cash flow must be used to pay dividends to our shareholders. We believe that our internally generated net cash provided by operating
activities and the availability on our line of credit will be sufficient to fund ongoing operations, capital improvements, dividends and debt
service requirements.
Cash flows from operating activities were $433.9 million, $299.0 million, and $278.8 million for the years ended December 31, 2021,
2020, and 2019, respectively. The increases in operating cash flows from 2020 to 2021 and from 2019 to 2020 were primarily due to an
increase in net income as adjusted for non-cash depreciation and amortization expenses, gains on the sale of storage facilities and other non-
cash items during these periods.
Cash used in investing activities was $1,680.7 million, $576.0 million, and $302.5 million for the years ended December 31, 2021, 2020,
and 2019, respectively. The increase in cash used in investing activities from 2020 to 2021 was the result of an increase in self-storage facility
acquisition activity, increased capital spending, and an increase in the Company's investment in unconsolidated joint ventures, partially offset
by an increase in return of investment in unconsolidated joint ventures. The increase in cash used in investing activities from 2019 to 2020 was
the result of an increase in self-storage facility acquisition activity, partially offset by a $28.0 million return of investment in unconsolidated
joint ventures and decreases in both capital spending and net proceeds from the sales of storage facilities in 2020.
Cash provided by financing activities was $1,364.5 million, $314.2 million, and $31.2 million during the years ended December 31,
2021, 2020, and 2019, respectively. The increase in cash provided by financing activities from 2020 to 2021 was primarily the result of the
Company's issuance of 2,875,000 shares of common stock through a public equity offering in 2021 resulting in net proceeds of $348.8 million,
an increase in sales of shares of common stock under the Company's continuous equity offering programs during 2021, and an increase in
proceeds from term notes resulting from $600 million of senior notes issued in 2021 as compared to $400 million of senior notes issued in
2020, partially offset by an increase in dividends paid. Also contributing to this increase is a reduction in the net repayment of the Company's
line of credit in 2021 as compared to 2020. The increase in cash provided by finance activities from 2019 to 2020 was primarily the result of
$296.0 million of net proceeds from the issuance of shares of common stock under the Company’s continuous equity offering program in 2020.
For the years 2019, 2020 and 2021, see Note 5 to the consolidated financial statements for details of the Company’s unsecured line of
credit and term note activity, Note 6 to the consolidated financial statements for the Company’s mortgage activity and related details, and Note
12 to the consolidated financial statements for the Company’s equity activity. Also, see Note 11 to the consolidated financial statements for
details of the activity in debt held by unconsolidated joint ventures of the Company. The debt held by these unconsolidated joint ventures is
secured by the real estate owned by these entities and is nonrecourse to us.
Our line of credit facility and term notes have an investment grade rating from Standard and Poor’s (BBB) and Moody’s (Baa2).
We expect to fund operating expenses, future acquisitions, our expansion and enhancement program, and share repurchases, if any, and
any other cash requirements with future cash flows from operations, draws on our line of credit, issuance of common and/or preferred stock,
the issuance of unsecured term notes, sale of properties, and private placement solicitation of joint venture equity. Should the capital markets
deteriorate, we may have to curtail acquisitions, our expansion and enhancement program, and/or any share repurchases.
30
The following table summarized our pending obligations:
PENDING OBLIGATIONS
Contractual obligations
Term notes
Mortgages payable
Interest payments
Land leases
Expansion and enhancement contracts
Building leases
Retail space rent
Self-storage facility acquisitions
Total
Payments due by period (in thousands)
Total
2022
2023-2024
2025-2026
2,775,000
37,030
592,032
10,036
61,379
17,607
5,254
246,300
$ 3,744,638 $
—
515
93,304
741
61,379
2,294
5,254
246,300
409,787 $
175,000
30,316
178,151
1,484
—
4,521
—
—
389,472 $
600,000
6,199
155,645
1,488
—
4,155
—
—
767,487 $
2027 and
thereafter
2,000,000
—
164,932
6,323
—
6,637
—
—
2,177,892
Interest payments include actual interest on fixed rate debt.
ACQUISITION OF PROPERTIES
In 2021, we acquired 112 self-storage facilities comprising 7.9 million square feet in Alabama (7), Arizona (4), California (1), Colorado
(3), Connecticut (6), Florida (31), Georgia (16), Illinois (4), Kentucky (1), Maine (1), New Hampshire (4), New Jersey (5), New York (1),
North Carolina (6), Ohio (1), Oklahoma (2), South Carolina (5), Tennessee (1), Texas (10), Virginia (1), and Washington (2) for a total
purchase price of $ 1,696.3 million, which is net of the Company's equity in profit from the acquisitions of the New York store and three
Georgia stores purchased from unconsolidated joint ventures. Additionally, 27 of these facilities were managed by the Company for a third-
party prior to acquisition. Based on the trailing financial information of the entities from which the properties were acquired, the weighted
average capitalization rate for these acquisitions was 3.6%.
In 2020 we acquired 40 self-storage facilities comprising 3.1 million square feet in California (8), Florida, (6), Georgia (1), Missouri (1),
New Jersey (7), New York (1), Ohio (6), Pennsylvania (4), South Carolina (1), and Texas (5) for a total purchase price of $532.6 million. One
of these acquired properties resulted from the Company acquiring the remaining 15% of a joint venture. Additionally, two of these facilities
were managed by the Company for a third-party prior to acquisition. Based on the trailing financial information of the entities from which the
properties were acquired, the weighted average capitalization rate for these acquisitions was 5.0%.
In 2019, we acquired 30 self-storage facilities comprising 2.2 million square feet in Florida (4), Georgia (1), Maryland (5), Nevada (1),
New York (1), New Jersey (2), North Carolina (1), Ohio (3), South Carolina (2), Tennessee (1), Texas (1), Virginia (5), and Washington (3) for
a total purchase price of $429.4 million. One of these acquired properties resulted from the Company acquiring the remaining 60% of a joint
venture. Additionally, one of these self-storage facilities was previously leased by the Company prior to acquisition. Based on the trailing
financial information of the entities from which the properties were acquired, the weighted average capitalization rate for these acquisitions was
2.5%.
FUTURE ACQUISITION AND DEVELOPMENT PLANS
Our external growth strategy is to increase the number of facilities we own by acquiring suitable facilities in markets in which we already
have operations, or to expand into new markets by acquiring several facilities at once in those new markets. We are actively pursuing
acquisitions in 2022 and at December 31, 2021 we were under contract to acquire ten self-storage facilities for an aggregate purchase price of
$246.3 million. During January 2022, the Company completed the acquisition of six of these self-storage facilities for an aggregate purchase
price of $165.0 million. Also, subsequent to December 31, 2021, the Company entered into a contracts to acquire 15 self-storage facilities for
an aggregate purchase price of $236.2 million. The purchases of these 19 self-storage facilities under contract are subject to customary
conditions to closing, and there is no assurance that these facilities will be acquired.
In 2021, we added or converted to premium storage 287,000 square feet to existing Properties for a total cost of approximately $23.5
million. Although we do not expect to construct any new facilities in 2022, we do plan to complete $65 million to $75 million in expansions
and enhancements to existing facilities of which $36.6 million was paid as of December 31, 2021.
In 2021, the Company spent approximately $35.3 million for recurring capitalized expenditures including roofing, paving, and office
renovations. We expect to spend $25 million to $30 million in 2022 on similar capital expenditures.
31
DISPOSITION OF PROPERTIES
The Company did not sell or otherwise dispose of any properties during 2021 or 2020. During 2019, the Company sold 32 non-strategic
properties in Louisiana (9), Mississippi (8), North Carolina (4), South Carolina (5), and Texas (6) to an unrelated third-party for net proceeds of
$207.6 million, resulting in a gain on sale of approximately $100.2 million.
As part of our ongoing strategy to improve overall operating efficiencies and portfolio quality, we may seek to sell additional Properties
to third-parties or joint venture partners in 2022.
REIT QUALIFICATION AND DISTRIBUTION REQUIREMENTS
As a REIT, we are not required to pay federal income tax on income that we distribute to our shareholders, provided that we satisfy
certain requirements, including distributing at least 90% of our REIT taxable income for a taxable year. These distributions must be made in the
year to which they relate, or in the following year if declared before we file our federal income tax return, and if they are paid not later than the
date of the first regular dividend of the following year.
As a REIT, we must derive at least 95% of our total gross income from income related to real property, interest and dividends. In 2021,
our percentage of revenue from such sources was approximately 97%, thereby passing the 95% test, and no special measures are expected to be
required to enable us to maintain our REIT designation. Although we currently intend to operate in a manner designed to qualify as a REIT, it
is possible that future economic, market, legal, tax or other considerations may cause our Board of Directors to revoke our REIT election.
INTEREST RATE RISK
The primary market risk to which we believe we are exposed is interest rate risk, which may result from many factors, including
government monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our
control.
We do not carry any floating rate debt at December 31, 2021. Therefore, a 100 basis point increase in interest rates would not have an
effect on our annual interest expense. This analysis does not consider the effects of the reduced level of overall economic activity that could
exist in such an environment. Further, in the event of a change of such magnitude, we would consider taking actions to further mitigate our
exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity
analysis assumes no changes in our capital structure.
INFLATION
We do not believe that inflation has had or will have a direct effect on our operations. Substantially all of the leases at the facilities are on
a month-to-month basis which provides us with the opportunity to increase rental rates in a timely manner in response to any potential future
inflationary pressures.
SEASONALITY
Our revenues typically have been higher in the third and fourth quarters, primarily because self-storage facilities tend to experience
greater occupancy during the late spring, summer and early fall months due to the greater incidence of residential moves and college student
activity during these periods. However, we believe that our customer mix, diverse geographic locations, rental structure and expense structure
provide adequate protection against undue fluctuations in cash flows and net revenues during off-peak seasons. Thus, we do not expect
seasonality to materially affect distributions to shareholders.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The information required is incorporated by reference to the information appearing under the caption “Interest Rate Risk” in “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” above.
Item 8. Financial Statements and Supplementary Data
32
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Life Storage, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Life Storage, Inc. (the Parent Company) as of December 31, 2021 and 2020,
the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the
period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively
referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material
respects, the financial position of the Parent Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for
each of the three years in the 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
Parent Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report
dated February 25, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Parent Company’s management. Our responsibility is to express an opinion on the
Parent Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Parent Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits
included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the 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 financial statements
and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters 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.
33
Accounting for the Acquisition of Storage Facilities
Description of the
Matter
As described in Note 4 to the consolidated financial statements, during the year ended December 31, 2021, the Parent
Company acquired 112 storage facilities for an aggregate purchase price of $1.7 billion. The transactions were
accounted for as asset acquisitions and the purchase price was allocated to the assets acquired based on their relative
fair value.
Auditing the Parent Company’s accounting for its storage facility acquisitions in 2021 involved a high degree of
subjectivity due to the significant estimation required to determine the fair values of the acquired land and buildings.
In particular, the fair value estimates were sensitive to assumptions such as prices per acre and current replacement
cost estimates, including adjustments for the age, condition, turnkey factor, economic profit, and economic
obsolescence associated with the acquired facilities.
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Parent
Company’s storage facility acquisition process. This included testing controls over management’s evaluation of the
significant assumptions used to determine the fair values of the assets acquired.
For the 2021 acquisitions of storage facilities described above, our audit procedures included, among others,
evaluating the Parent Company’s valuation methodologies and testing the significant assumptions used to determine
the fair value of the assets acquired. We tested the completeness and accuracy of the underlying data by, among other
things, recalculating the current replacement cost of buildings and comparing the adjustments for the age, condition,
turnkey factor, economic profit, and economic obsolescence associated with the acquired assets to industry
publications on a test basis. We also compared significant assumptions, including prices per acre, to third-party
sources such as recent land sales. For certain of these asset acquisitions, we involved our valuation specialists to assist
in the assessment of the methodology utilized by the Parent Company, in addition to performing corroborative
analyses to assess whether the conclusions in the valuation were supported by observable market data. For example,
our valuation specialists used independently identified data sources to evaluate management's selected comparable
land sales, replacement cost assumptions and the fair value of individual storage facilities acquired in portfolio
acquisitions.
/s/ Ernst & Young LLP
We have served as the Parent Company’s auditor since 1994.
Buffalo, New York
February 25, 2022
34
Report of Independent Registered Public Accounting Firm
To the Partners and the Board of Directors of Life Storage LP
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Life Storage LP (the Operating Partnership) as of December 31, 2021 and
2020, the related consolidated statements of operations, comprehensive income, partners’ capital and cash flows for each of the three years in
the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively
referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material
respects, the financial position of the Operating Partnership at December 31, 2021 and 2020, and the results of its operations and its cash flows
for each of the three years in the 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
Operating Partnership’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report
dated February 25, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on the
Operating Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required
to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits
included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the 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 financial statements
and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters 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.
35
Accounting for the Acquisition of Storage Facilities
Description of the
Matter
As described in Note 4 to the consolidated financial statements, during the year ended December 31, 2021, the
Operating Partnership acquired 112 storage facilities for an aggregate purchase price of $1.7 billion. The transactions
were accounted for as asset acquisitions and the purchase price was allocated to the assets acquired based on their
relative fair value.
Auditing the Operating Partnership’s accounting for its storage facility acquisitions in 2021 involved a high degree of
subjectivity due to the significant estimation required to determine the fair values of the acquired land and buildings.
In particular, the fair value estimates were sensitive to assumptions such as prices per acre and current replacement
cost estimates, including adjustments for the age, condition, turnkey factor, economic profit, and economic
obsolescence associated with the acquired facilities.
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the
Operating Partnership’s storage facility acquisition process. This included testing controls over management’s
evaluation of the significant assumptions used to determine the fair values of the assets acquired.
For the 2021 acquisitions of storage facilities described above, our audit procedures included, among others,
evaluating the Operating Partnership’s valuation methodologies and testing the significant assumptions used to
determine the fair value of the assets acquired. We tested the completeness and accuracy of the underlying data by,
among other things, recalculating the current replacement cost of buildings and comparing the adjustments for the age,
condition, turnkey factor, economic profit, and economic obsolescence associated with the acquired assets to industry
publications on a test basis. We also compared significant assumptions, including prices per acre, to third-party
sources such as recent land sales. For certain of these asset acquisitions, we involved our valuation specialists to assist
in the assessment of the methodology utilized by the Operating Partnership, in addition to performing corroborative
analyses to assess whether the conclusions in the valuation were supported by observable market data. For example,
our valuation specialists used independently identified data sources to evaluate management's selected comparable
land sales, replacement cost assumptions and the fair value of individual storage facilities acquired in portfolio
acquisitions.
/s/ Ernst & Young LLP
We have served as the Operating Partnership’s auditor since 2016.
Buffalo, New York
February 25, 2022
36
LIFE STORAGE, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)
Assets
Investment in storage facilities:
Land
Building, equipment, and construction in progress
Less: accumulated depreciation
Investment in storage facilities, net
Cash and cash equivalents
Accounts receivable
Receivable from unconsolidated joint ventures
Investment in unconsolidated joint ventures
Prepaid expenses
Trade name
Other assets
Total Assets
Liabilities
Line of credit
Term notes, net
Accounts payable and accrued liabilities
Deferred revenue
Mortgages payable
Total Liabilities
Noncontrolling redeemable Preferred Operating Partnership Units at redemption value
Noncontrolling redeemable Common Operating Partnership Units at redemption value
Shareholders’ Equity
Common stock $.01 par value, 200,000,000 shares authorized, 83,565,710 shares outstanding
at December 31, 2021 (74,211,920 at December 31, 2020)
Additional paid-in capital
Dividends in excess of net income
Accumulated other comprehensive loss
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
See notes to consolidated financial statements.
December 31,
2021
2020
$
$
$
$
1,185,976 $
5,904,481
7,090,457
(1,007,650 )
6,082,807
171,865
17,784
333
213,003
9,918
16,500
44,387
6,556,597
$
$
—
2,747,838
131,778
27,277
37,030
2,943,923
90,783
142,892
836
3,697,000
(314,713 )
(4,124)
3,378,999
6,556,597
$
951,813
4,378,510
5,330,323
(873,178 )
4,457,145
54,400
15,464
1,064
143,042
8,326
16,500
31,907
4,727,848
—
2,155,457
112,654
17,416
37,777
2,323,304
—
26,446
495
2,671,311
(288,667 )
(5,041)
2,378,098
4,727,848
37
LIFE STORAGE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
Revenues
Rental income
Tenant reinsurance
Other operating income
Total operating revenues
Expenses
Property operations and maintenance
Tenant reinsurance
Real estate taxes
General and administrative
Payments for rent
Depreciation and amortization
Total operating expenses
Gain on sale of storage facilities
Gain on sale of real estate
Income from operations
Other income (expenses)
Interest expense
Interest income
Equity in income of joint ventures
Net income
2021
Year Ended December 31,
2020
2019
$
690,758 $
539,554 $
58,103
39,704
788,565
143,648
22,882
79,861
62,617
—
147,119
456,127
—
—
332,438
(86,786)
827
5,696
252,175
44,742
32,475
616,771
122,544
15,729
70,302
52,055
—
122,925
383,555
—
302
233,518
(86,015)
19
4,838
152,360
510,774
34,902
29,063
574,739
121,499
8,604
65,061
46,622
358
107,130
349,274
104,353
1,781
331,599
(76,430)
342
4,566
260,077
Net income attributable to noncontrolling preferred interests in the Operating
Partnership
Net income attributable to noncontrolling common interests in the Operating
Partnership
Net income attributable to common shareholders
Earnings per common share attributable to common shareholders - basic
Earnings per common share attributable to common shareholders - diluted
(1,494)
—
—
(1,364)
249,317 $
3.18 $
3.17 $
(789)
151,571 $
2.13 $
2.13 $
(1,378)
258,699
3.70
3.70
$
$
$
See notes to consolidated financial statements.
38
LIFE STORAGE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands)
Net income
Other comprehensive income:
2021
Year Ended December 31,
2020
2019
$
252,175
$
152,360
$
260,077
Effective portion of gain on derivatives net of reclassification to interest
expense
Total comprehensive income
Comprehensive income attributable to noncontrolling interests in the Operating
Partnership
Comprehensive income attributable to common shareholders
917
253,092
917
153,277
(2,863)
250,229
$
(794)
152,483
$
$
917
260,994
(1,383)
259,611
See notes to consolidated financial statements.
39
LIFE STORAGE, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Additional
Paid-in
Capital
2,372,157
376
(1)
—
4,192
(1)
—
—
—
—
2,376,723
295,935
(1)
—
4,559
(264 )
—
(5,641 )
—
—
—
2,671,311
1,019,269
(1)
6,604
(252 )
Dividends in
Excess of
Net Income
(308,011 )
—
—
—
—
—
(2,455 )
258,699
—
(186,571 )
(238,338 )
—
—
—
—
—
(2,884 )
3,341
151,571
—
(202,357 )
(288,667 )
—
—
—
—
(48 )
—
—
117
—
—
—
$ 3,697,000
(34,163)
—
249,317
—
(241,200 )
(314,713 )
$
$
Total
Shareholders’
Equity
Accumulated
Other
Comprehensive
Income (Loss) (AOCL)
(6,875 )
—
—
—
—
2,057,737
376
—
—
4,192
(1)
(2,455 )
258,699
917
(186,571 )
2,132,894
295,962
—
—
4,559
(264 )
(2,884 )
(2,300 )
151,571
917
(202,357 )
2,378,098
1,019,357
—
6,604
—
(48 )
(34,163)
117
249,317
917
(241,200 )
3,378,999
—
—
—
917
—
(5,958 )
—
—
—
—
—
—
—
—
917
—
(5,041 )
—
—
—
—
—
—
—
—
917
—
(4,124 )
$
(dollars in thousands, except share data)
Balance January 1, 2019
Exercise of stock options
Issuance of non-vested stock
Forfeiture of non-vested stock
Earned portion of non-vested stock
Carrying value less than redemption value on redeemed
noncontrolling interest
Adjustment to redemption value of noncontrolling
redeemable Operating Partnership Units
Net income attributable to common shareholders
Amortization of terminated hedge included in AOCL
Dividends
Balance December 31, 2019
Net proceeds from issuance of common stock
Issuance of non-vested stock
Forfeiture of non-vested stock
Earned portion of non-vested stock
Carrying value less than redemption value on redeemed
noncontrolling interest
Adjustment to redemption value of noncontrolling
redeemable Operating Partnership Units
Purchases of equity in consolidated subsidiary from
noncontrolling interests
Net income attributable to common shareholders
Amortization of terminated hedge included in AOCL
Dividends
Balance December 31, 2020
Net proceeds from issuance of common stock
Issuance of non-vested stock
Earned portion of non-vested stock
Stock dividend
Carrying value less than redemption value on redeemed
noncontrolling interest
Adjustment to redemption value of noncontrolling
redeemable Operating Partnership Units
Deferred compensation - Directors
Net income attributable to common shareholders
Amortization of terminated hedge included in AOCL
Dividends
Balance December 31, 2021
See notes to consolidated financial statements
Common
Stock
Shares
69,926,161
9,750
80,180
(2,192 )
—
—
—
—
—
—
70,013,899
4,091,666
113,829
(7,474 )
—
—
—
—
—
—
—
74,211,920
9,244,736
109,112
—
(58 )
—
—
—
—
—
—
83,565,710
Common
Stock
466
—
1
—
—
—
—
—
—
—
467
27
1
—
—
—
—
—
—
—
—
495
88
1
—
252
—
—
—
—
—
—
836
$
40
LIFE STORAGE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
2021
Year Ended December 31,
2020
2019
$
252,175 $
152,360 $
260,077
(dollars in thousands)
Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Amortization of debt issuance costs and bond discount
Gain on sale of storage facilities
Gain on sale of real estate
Equity in income of joint ventures
Distributions from unconsolidated joint ventures
Non-vested stock earned and deferred compensation
Deferred income taxes
Other
Changes in assets and liabilities (excluding the effects of acquisitions):
Accounts receivable
Prepaid expenses
Receipts from (advances to) joint ventures
Accounts payable and other liabilities
Deferred revenue
Net cash provided by operating activities
Investing Activities
Acquisition of storage facilities, net of cash and restricted cash acquired
Improvements, equipment additions, and construction in progress
Net proceeds from the sale of storage facilities and other real estate
Return of investment in unconsolidated joint ventures
Investment in unconsolidated joint ventures
Loans to unconsolidated joint ventures
Loan payments received from unconsolidated joint ventures
Property deposits
Net cash used in investing activities
Financing Activities
Net proceeds from sale of common stock
Proceeds from line of credit
Repayment of line of credit
Proceeds from term notes, net of discount
Repayment of term notes
Debt issuance costs
Dividends paid - common stock
Distributions to noncontrolling interest holders
Payments to acquire equity in consolidated subsidiary from noncontrolling
interests
Redemption of operating partnership units
Mortgage principal payments
Net cash provided by financing activities
Net increase in cash and restricted cash
Cash and restricted cash at beginning of period
Cash and restricted cash at end of period
Supplemental cash flow information
Cash paid for interest, net of interest capitalized
Cash paid for income taxes, net of refunds
See notes to consolidated financial statements.
$
$
$
41
147,119
4,513
—
—
(5,696)
13,866
6,604
34
(107)
(2,140)
(1,569)
731
13,888
4,483
433,901
(1,514,684 )
(85,080)
—
37,584
(113,465 )
—
—
(5,089)
(1,680,734 )
1,019,357
459,000
(459,000 )
594,498
—
(5,114)
(241,200 )
(1,751)
—
(805)
(489)
1,364,496
117,663
58,771
176,434 $
122,925
4,096
—
(302)
(4,838)
14,098
4,559
496
(210)
(2,915)
(247)
(95)
4,787
4,252
298,966
(520,943 )
(56,397)
—
28,008
(26,383)
(35,850)
35,850
(280)
(575,995 )
295,962
285,000
(350,000 )
398,096
(100,000 )
(3,490)
(202,357 )
(1,047)
(2,000)
(2,751)
(3,169)
314,244
37,215
21,556
58,771 $
81,421 $
1,727 $
79,423 $
1,294 $
107,130
3,900
(104,353 )
(1,781)
(4,566)
10,165
4,192
1,328
—
(4,534)
(356)
(81)
5,295
2,426
278,842
(393,298 )
(90,995)
207,568
—
(25,659)
—
—
(138)
(302,522 )
376
305,000
(331,000 )
348,166
(100,000 )
(3,099)
(186,571 )
(993)
—
(250)
(458)
31,171
7,491
14,065
21,556
73,378
1,625
LIFE STORAGE LP
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except unit data)
Assets
Investment in storage facilities:
Land
Building, equipment, and construction in progress
Less: accumulated depreciation
Investment in storage facilities, net
Cash and cash equivalents
Accounts receivable
Receivable from unconsolidated joint ventures
Investment in unconsolidated joint ventures
Prepaid expenses
Trade name
Other assets
Total Assets
Liabilities
Line of credit
Term notes, net
Accounts payable and accrued liabilities
Deferred revenue
Mortgages payable
Total Liabilities
Limited partners’ preferred redeemable capital interest at redemption value (3,590,603 and
0 units outstanding at December 31, 2021 and December 31, 2020, respectively)
Limited partners’ common redeemable capital interest at redemption value (960,708 and
334,149 units outstanding at December 31, 2021 and December 31, 2020, respectively)
Partners’ Capital
General partner (881,030 and 745,461 units outstanding at December 31, 2021
and December 31, 2020, respectively)
Limited partners (82,684,680 and 73,466,459 units outstanding at December 31, 2021
and December 31, 2020, respectively)
Accumulated other comprehensive loss
Total Controlling Partners’ Capital
Total Liabilities and Partners’ Capital
See notes to consolidated financial statements.
December 31,
2021
2020
1,185,976 $
5,904,481
7,090,457
(1,007,650 )
6,082,807
171,865
17,784
333
213,003
9,918
16,500
44,387
6,556,597 $
— $
2,747,838
131,778
27,277
37,030
2,943,923
90,783
142,892
951,813
4,378,510
5,330,323
(873,178 )
4,457,145
54,400
15,464
1,064
143,042
8,326
16,500
31,907
4,727,848
—
2,155,457
112,654
17,416
37,777
2,323,304
—
26,446
36,131
24,045
3,346,992
(4,124)
3,378,999
6,556,597 $
2,359,094
(5,041)
2,378,098
4,727,848
$
$
$
$
42
LIFE STORAGE LP
CONSOLIDATED STATEMENTS OF OPERATIONS
2021
Year Ended December 31,
2020
2019
$
690,758 $
539,554 $
58,103
39,704
788,565
143,648
22,882
79,861
62,617
—
147,119
456,127
—
—
332,438
(86,786)
827
5,696
252,175
(1,494)
(1,364)
249,317 $
3.18 $
3.17 $
2,522 $
246,795
44,742
32,475
616,771
122,544
15,729
70,302
52,055
—
122,925
383,555
—
302
233,518
(86,015)
19
4,838
152,360
510,774
34,902
29,063
574,739
121,499
8,604
65,061
46,622
358
107,130
349,274
104,353
1,781
331,599
(76,430)
342
4,566
260,077
—
—
(789)
151,571 $
2.13 $
2.13 $
1,524 $
150,047
(1,378)
258,699
3.70
3.70
2,601
256,098
(dollars in thousands, except per unit data)
Revenues
Rental income
Tenant reinsurance
Other operating income
Total operating revenues
Expenses
Property operations and maintenance
Tenant reinsurance
Real estate taxes
General and administrative
Payments for rent
Depreciation and amortization
Total operating expenses
Gain on sale of storage facilities
Gain on sale of real estate
Income from operations
Other income (expenses)
Interest expense
Interest income
Equity in income of joint ventures
Net income
Net income attributable to noncontrolling preferred interests in the Operating
Partnership
Net income attributable to noncontrolling common interests in the Operating
Partnership
Net income attributable to common unitholders
Earnings per common unit attributable to common unitholders - basic
Earnings per common unit attributable to common unitholders - diluted
Net income attributable to general partner
Net income attributable to limited partners
$
$
$
$
See notes to consolidated financial statements.
43
LIFE STORAGE LP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands)
Net income
Other comprehensive income:
Effective portion of gain on derivatives net of reclassification
to interest expense
Total comprehensive income
Comprehensive income attributable to noncontrolling interests
in the Operating Partnership
Comprehensive income attributable to common unitholders
See notes to consolidated financial statements.
2021
Year Ended December 31,
2020
2019
$
252,175
$
152,360
$
260,077
917
253,092
917
153,277
(2,863)
250,229
$
(794)
152,483
$
$
917
260,994
(1,383)
259,611
44
(dollars in thousands)
Balance January 1, 2019
Exercise of stock options
Issuance of non-vested stock
Forfeiture of non-vested stock
Earned portion of non-vested stock
Carrying value less than redemption value on redeemed
noncontrolling interest
Adjustment to redemption value of noncontrolling redeemable
Operating Partnership Units
Net income attributable to common unitholders
Amortization of terminated hedge included in AOCL
Distributions
Balance December 31, 2019
Net proceeds from issuance of Operating Partnership Units
Issuance of non-vested stock
Forfeiture of non-vested stock
Earned portion of non-vested stock
Carrying value less than redemption value on redeemed
noncontrolling interest
Adjustment to redemption value of noncontrolling redeemable
Operating Partnership Units
Purchases of equity in consolidated subsidiary from
noncontrolling interests
Net income attributable to common unitholders
Amortization of terminated hedge included in AOCL
Distributions
Balance December 31, 2020
Net proceeds from issuance of Operating Partnership Units
Issuance of non-vested stock
Earned portion of non-vested stock
Issuance of common Operating Partnership Units
Issuance of preferred Operating Partnership Units
Carrying value less than redemption value on redeemed
noncontrolling interest
Adjustment to redemption value of noncontrolling redeemable
Operating Partnership Units
Deferred compensation - Directors
Net income attributable to common unitholders
Amortization of terminated hedge included in AOCL
Distributions
Balance December 31, 2021
See notes to consolidated financial statements
LIFE STORAGE LP
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
Life Storage
Holdings, Inc.
General
Partner
Life Storage, Inc.
Limited
Partner
Accumulated
Other
Comprehensive
Income (Loss)
2,043,796
372
—
—
4,150
(6,875)
—
—
—
—
Total
Controlling
Partners’
Capital
2,057,737
376
—
—
4,192
20,816
4
—
—
42
(2)
—
2,601
9
(1,876)
21,594
2,960
—
—
46
(28)
—
(23)
1,521
9
(2,034)
24,045
10,194
—
66
829
898
1
—
(1)
(2,455)
256,098
(9)
(184,695 )
2,117,258
293,002
—
—
4,513
(236)
(2,884)
(2,277)
150,050
(9)
(200,323 )
2,359,094
1,009,163
—
6,538
(829)
(898)
—
—
917
—
(5,958)
—
—
—
—
—
—
—
—
917
—
(5,041)
—
—
—
—
—
(2,455)
258,699
917
(186,571 )
2,132,894
295,962
—
—
4,559
(264)
(2,884)
(2,300)
151,571
917
(202,357 )
2,378,098
1,019,357
—
6,604
—
—
(8)
(40)
—
(48)
—
1
2,522
9
(2,424)
36,132
$
(34,163)
116
246,795
(9)
(238,776 )
3,346,991
$
—
—
—
917
—
(4,124) $
(34,163)
117
249,317
917
(241,200 )
3,378,999
$
45
LIFE STORAGE LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
2021
Year Ended December 31,
2020
2019
$
252,175 $
152,360 $
260,077
(dollars in thousands)
Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Amortization of debt issuance costs and bond discount
Gain on sale of storage facilities
Gain on sale of real estate
Equity in income of joint ventures
Distributions from unconsolidated joint ventures
Non-vested stock earned
Deferred income taxes
Other
Changes in assets and liabilities (excluding the effects of acquisitions):
Accounts receivable
Prepaid expenses
Receipts from (advances to) joint ventures
Accounts payable and other liabilities
Deferred revenue
Net cash provided by operating activities
Investing Activities
Acquisition of storage facilities, net of cash and restricted cash acquired
Improvements, equipment additions, and construction in progress
Net proceeds from the sale of storage facilities and other real estate
Return of investment in unconsolidated joint ventures
Investment in unconsolidated joint ventures
Loans to unconsolidated joint ventures
Loan payments received from unconsolidated joint ventures
Property deposits
Net cash used in investing activities
Financing Activities
Net proceeds from sale of partnership units
Proceeds from line of credit
Repayment of line of credit
Proceeds from term notes, net of discount
Repayment of term notes
Debt issuance costs
Distributions to unitholders
Distributions to noncontrolling interest holders
Payments to acquire equity in consolidated subsidiary from noncontrolling
interests
Redemption of operating partnership units
Mortgage principal payments
Net cash provided by financing activities
Net increase in cash and restricted cash
Cash and restricted cash at beginning of period
Cash and restricted cash at end of period
Supplemental cash flow information
Cash paid for interest, net of interest capitalized
Cash paid for income taxes, net of refunds
See notes to consolidated financial statements.
$
$
$
46
147,119
4,513
—
—
(5,696)
13,866
6,604
34
(107)
(2,140)
(1,569)
731
13,888
4,483
433,901
(1,514,684 )
(85,080)
—
37,584
(113,465 )
—
—
(5,089)
(1,680,734 )
1,019,357
459,000
(459,000 )
594,498
—
(5,114)
(241,200 )
(1,751)
—
(805)
(489)
1,364,496
117,663
58,771
176,434 $
122,925
4,096
—
(302)
(4,838)
14,098
4,559
496
(210)
(2,915)
(247)
(95)
4,787
4,252
298,966
(520,943 )
(56,397)
—
28,008
(26,383)
(35,850)
35,850
(280)
(575,995 )
295,962
285,000
(350,000 )
398,096
(100,000 )
(3,490)
(202,357 )
(1,047)
(2,000)
(2,751)
(3,169)
314,244
37,215
21,556
58,771 $
81,421 $
1,727 $
79,423 $
1,294 $
107,130
3,900
(104,353 )
(1,781)
(4,566)
10,165
4,192
1,328
—
(4,534)
(356)
(81)
5,295
2,426
278,842
(393,298 )
(90,995)
207,568
—
(25,659)
—
—
(138)
(302,522 )
376
305,000
(331,000 )
348,166
(100,000 )
(3,099)
(186,571 )
(993)
—
(250)
(458)
31,171
7,491
14,065
21,556
73,378
1,625
LIFE STORAGE, INC. AND LIFE STORAGE LP
DECEMBER 31, 2021
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
The Parent Company, which operates as a self-administered and self-managed real estate investment trust (a “REIT”), was formed on
April 19, 1995 to own and operate self-storage facilities throughout the United States. On June 26, 1995, the Parent Company commenced
operations effective with the completion of its initial public offering. The Parent Company, the Operating Partnership and their consolidated
subsidiaries are collectively referred to in this report as the “Company.” In addition, terms such as “we,” “us,” or “our” used in this report may
refer to the Company, the Parent Company and/or the Operating Partnership.
At December 31, 2021, we had an ownership interest in, and/or managed 1,076 self-storage properties in 35 states. Among our 1,076
self-storage properties are 116 properties that we manage for unconsolidated joint ventures (See Note 11), 251 properties that we manage and
have no ownership interest, and five properties that we lease. During 2021, approximately 17% and 14% of the Company’s revenue was
derived from stores in the states of Texas and Florida, respectively.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation : All of the Company’s assets are owned by, and all of its operations are conducted through, the Operating
Partnership. Life Storage Holdings, Inc. (“Holdings”), a wholly-owned subsidiary of the Parent Company, is the sole general partner of the
Operating Partnership; the Parent Company is a limited partner of the Operating Partnership, and, through its ownership of Holdings and its
limited partnership interest, controls the operations of the Operating Partnership, holding a 98.1% ownership interest therein as of
December 31, 2021. The remaining ownership interests in the Operating Partnership (the “Units”) are held by certain former owners of assets
acquired by the Operating Partnership. Share and per share amounts and unit and per unit amounts for all years presented have been adjusted to
reflect the impact of the three-for-two distribution of common stock announced by the Company on January 4, 2021 and distributed on January
27, 2021 to shareholders and unitholders of record on January 15, 2021.
We consolidate all wholly owned subsidiaries. Partially owned subsidiaries and joint ventures are consolidated when we control the
entity. Our consolidated financial statements include the accounts of the Parent Company, the Operating Partnership, Life Storage Solutions,
LLC (one of the Parent Company’s taxable REIT subsidiaries), Warehouse Anywhere LLC, and all other wholly-owned subsidiaries. Prior to
July 2, 2020, the Company owned 60% of Warehouse Anywhere LLC. On July 2, 2020, the Company acquired the remaining ownership
interest in Warehouse Anywhere LLC for cash payment of $2.0 million along with potential for the sellers to receive additional future payment
based on the 2023 results of Warehouse Anywhere LLC. At the date of acquisition and at December 31, 2021, the Company estimates this
potential future payment to be approximately $0.3 million based on the projected 2023 results of Warehouse Anywhere LLC. All intercompany
transactions and balances have been eliminated. Investments in joint ventures that we do not control but for which we have significant
influence over are accounted for using the equity method.
Included in the Parent Company’s consolidated balance sheets are noncontrolling redeemable Operating Partnership Units and included
in the Operating Partnership’s consolidated balance sheets are limited partners’ redeemable capital interests at redemption value. These
interests are presented in the “mezzanine” section of the consolidated balance sheets because they do not meet the functional definition of a
liability or equity under current accounting literature. These represent the outside ownership interests of the limited partners in the Operating
Partnership. There were 960,708 and 334,149 common noncontrolling redeemable Operating Partnership Units outstanding at December 31,
2021 and December 31, 2020, respectively, and 3,590,603 and 0 preferred noncontrolling redeemable Operating Partnership Units outstanding
at December 31, 2021 and December 31, 2020, respectively. The preferred noncontrolling redeemable Operating Partnership Units rank senior
to all other partnership interest with respect to distributions and liquidation.
The common unitholders are entitled to receive distributions per unit equivalent to the dividends declared per share on the Parent
Company’s common stock. The preferred unitholders are entitled to receive a fixed priority return of 4.5% and the preferred noncontrolling
redeemable Operating Partnership Units are convertible at the option of the unitholders after the earlier of (i) the first anniversary of the date of
issuance, (ii) the date of death of an initial holder who is a natural person or (iii) the sale, lease or conveyance of all or substantially all of the
assets of the Operating Partnership, into common noncontrolling redeemable Operating Partnership Units. Upon any such conversion, each
preferred noncontrolling redeemable Operating Partnership Unit being converted shall be convertible into a number of common Operating
Partnership Units equal to the quotient of (i) the stated value of the preferred noncontrolling redeemable Operating Partnership Units being
converted (such stated value being $25.00 per preferred noncontrolling redeemable Operating Partnership Unit) plus any accrued and unpaid
distributions, divided by (ii) the average closing price of the Parent Company's common stock over the 90 consecutive trading days ending the
trading day preceding the date of conversion. The Operating Partnership is obligated to redeem each of the common noncontrolling redeemable
Operating Partnership Units at the request of the holder thereof for cash equal to the fair market value of a share of the Parent Company’s
common stock based on a 10-day average of the daily market price, at the time of such redemption, provided that the Company, at its option,
may elect to acquire any such Unit presented for redemption for one common share or cash.
47
The Company accounts for the noncontrolling redeemable Operating Partnership Units under the provisions of Accounting Standards
Codification (ASC) Topic 480-10-S99. The application of the ASC Topic 480-10-S99 accounting model requires the noncontrolling interest to
follow normal noncontrolling interest accounting and then be marked to redemption value at the end of each reporting period if higher (but
never adjusted below that normal noncontrolling interest accounting amount) for the common noncontrolling redeemable Operating Partnership
Units. The offset to the adjustment to the carrying amount of the common noncontrolling redeemable Operating Partnership Units is reflected
in the Parent Company’s dividends in excess of net income and in the Operating Partnership’s general partner and limited partners capital
balances. Accordingly, in the accompanying consolidated balance sheets, common noncontrolling redeemable Operating Partnership Units are
reflected at redemption value at December 31, 2021 and December 31, 2020, equal to the number of common noncontrolling interest units
outstanding multiplied by the fair market value of the Parent Company’s common stock at that date. Redemption value exceeded the value
determined under the Company’s historical basis of accounting at those dates. ASC Topic 480-10-S99 requires the preferred noncontrolling
redeemable Operating Partnership Units to be valued at fair value as of the date of issuance and to continue to be recorded at the value
determined at initial measurement plus any accrued distributions.
The following is a reconciliation of the Parent Company’s common noncontrolling redeemable Operating Partnership Units and the
Operating Partnership’s limited partners’ redeemable capital interest for the years ending December 31:
(dollars in thousands)
Beginning balance
Redemption of units
Issuance of units
Net income attributable to noncontrolling interests in the
Operating Partnership
Distributions
Adjustment to redemption value
Ending balance
2021
2020
$
26,446 $
(757)
82,951
1,364
(1,275)
34,163
$
142,892 $
26,307
(2,487)
—
789
(1,047)
2,884
26,446
In 2021, the Operating Partnership issued a total of 633,559 common noncontrolling redeemable Operating Partnership Units with an
aggregate fair value of $83.0 million as part of the consideration paid to acquire certain self-storage facilities. The fair value of these common
Units on the date of issuance was determined based upon the fair market value of the Company’s common stock on that date.
In 2021 and 2020, 7,000 and 35,550 common noncontrolling redeemable Operating Partnership Units, respectively, were redeemed for
cash.
The following is a reconciliation of the Parent Company's preferred noncontrolling redeemable Operating Partnership Units and the
Operating Partnership's limited partners' preferred redeemable capital interest for the years ending December 31:
(dollars in thousands)
Beginning balance
Issuance of units
Net income attributable to noncontrolling interests in the
Operating Partnership
Distributions
Ending balance
2021
2020
$
$
—
89,765
1,494
(476)
90,783
$
$
—
—
—
—
—
On August 19, 2021, the Company issued 3,590,603 preferred redeemable Operating Partnership Units with a fair value of $89.8 million
in connection with the acquisition of certain self-storage facilities. The fair value of these preferred Units on the date of issuance was
determined based upon the fixed priority return on these preferred Units of 4.5% as compared to the estimated market return of similar
instruments on the date of issuance.
No common or preferred noncontrolling redeemable Operating Partnership Units were issued by the Operating Partnership in 2020.
Reclassification : Due to growth in the Company's tenant reinsurance program, tenant reinsurance revenues and expenses are presented
separately on the consolidated statements of operations beginning in 2021. The 2020 and 2019 consolidated statements of operations have been
revised accordingly to comply with this presentation. Prior to 2021, such tenant reinsurance revenues and expenses were included in other
income and property operations and maintenance expense, respectively, in the Company's consolidated statements of operations.
Cash, Cash Equivalents, and Restricted Cash : The Company considers all highly liquid investments purchased with maturities of three
months or less to be cash equivalents. Restricted cash represents those amounts required to be placed in escrow by banks with whom the
Company has entered into mortgages and amounts required to be placed into escrow related the Company’s tenant reinsurance program which
became effective April 1, 2019. Restricted cash is included in other assets in the consolidated balance sheets.
48
The following table provides a reconciliation of cash and restricted cash reported within the consolidated statements of cash flows for the
years ending December 31:
(dollars in thousands)
Cash
Restricted cash
Total cash and restricted cash
2021
$ 171,865 $
4,569
$ 176,434 $
2020
54,400 $
4,371
58,771 $
2019
17,458
4,098
21,556
Accounts Receivable : Accounts receivable are composed of trade and other receivables recorded at billed amounts and do not bear
interest. The allowance for doubtful accounts on leasing receivables is the Company’s best estimate of the amount of probable uncollectible
amounts in the Company’s existing accounts receivable. The allowance for doubtful accounts on non-leasing receivables is the Company's best
estimate of the amount that will ultimately not be collected at the time that revenue is recognized. The Company determines these allowances
based on a number of factors, including experience, credit worthiness of customers, and current market and economic conditions. The
Company reviews the allowance for doubtful accounts on a regular basis. Account balances are charged against the allowance after all means
of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts is recorded as a
reduction of accounts receivable and amounted to $1.5 million and $1.7 million at December 31, 2021 and 2020, respectively.
In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326) which makes significant changes to
the accounting for credit losses on financial instruments and related disclosures about them. ASU 2016-13 is not applicable to the Company's
leasing receivables. ASU 2016-13 was effective for the Company as of January 1, 2020 and the adoption of ASU 2016-13 did not have a
material impact on the Company.
Revenue and Expense Recognition : ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” requires an entity to
recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled to in exchange for those goods or services. Payment from the Company’s revenue streams is due and
generally collected upon invoice.
Leases are specifically excluded from the scope of ASU 2014-09 and instead are accounted for following the guidance under ASU 2016-
20. Rental income is recognized when earned pursuant to the terms of month-to-month leases for storage space. Promotional discounts are
recognized as a reduction to rental income over the promotional period, which is generally during the first month of occupancy. Rental income
received prior to the start of the rental period is included in deferred revenue.
Management fee income, which relates to managing self-storage facilities for third-parties and unconsolidated joint ventures, is recorded
over time each month as the related management services are provided. The total amount of consideration under property management
contracts is variable as the Company’s management fee is based on monthly revenues. The Company has elected to apply a practical expedient
provided in ASC 606-10-55-18 which allows the Company to recognize revenue in the amount of management fees to which the Company has
a right to invoice as that amount corresponds directly with the value to the customer of the entity’s performance completed to date.
Through March 31, 2019, the Company recognized revenues related to tenant insurance based upon the amount that the Company had
the right to invoice following the practical expedient in ASC 606-10-55-18 as such amount corresponds directly with the value to the third-
party insurer of the entity’s performance completed to date. Beginning April 1, 2019, the Company recognizes tenant reinsurance revenue in
the period during which premiums are earned and tenant reinsurance is provided.
Equity in earnings of real estate joint ventures that we have significant influence over is recognized based on our ownership interest in
the earnings of these entities.
The disaggregated revenues of the Company presented in accordance with ASC Topic 606 “Revenue from Contracts with Customers”
are as follows:
(dollars in thousands)
Rental income
Management and acquisition fee income
Tenant reinsurance
Other
Total operating revenues
2019
2021
2020
$ 690,758 $ 539,554 $ 510,774
14,274
34,902
14,789
$ 788,565 $ 616,771 $ 574,739
17,407
44,742
15,068
22,127
58,103
17,577
Other revenue consists primarily of sales of storage-related merchandise (locks and packing supplies) and storage and inventory
management services provided by Warehouse Anywhere.
Cost of operations, general and administrative expense, interest expense and advertising costs are expensed as incurred. For the years
ended December 31, 2021, 2020, and 2019, advertising costs were $16.9 million, $15.3 million, and $12.4 million, respectively. The Company
accrues property taxes based on actual invoices, estimates and historical trends. If these estimates are incorrect, the timing and amount of
expense recognition would be affected. Expenses related to tenant reinsurance are comprised of actual and estimated claims, costs to administer
the Company's tenant reinsurance program, and fees related to tenant reinsurance paid to owners of self-storage facilities that the Company
manages for third-parties.
49
Investment in Storage Facilities : Storage facilities are recorded at cost. The purchase price of acquired facilities is allocated to land,
land improvements, building, equipment, and in-place customer leases based on the relative fair value of each component, or based on the fair
value of each component if accounted for as a business combination. The fair values of the acquired facilities are determined using financial
projections and applicable capitalization rates. The fair values of land are determined based upon comparable market sales information using
prices per acre derived from observed transactions involving comparable land in similar locations. The fair values of buildings are determined
using current replacement cost estimates based on information derived from construction industry data by geographic region as adjusted for
age, condition, and the turnkey factor, economic profit and economic obsolescence considerations associated with these assets.
Depreciation is computed using the straight-line method over estimated useful lives of 40 years for buildings and improvements, and five
to 20 years for furniture, fixtures and equipment. Estimated useful lives are reevaluated when facts and circumstances indicate that the
economic lives of assets do not extend to their currently assigned useful lives. Expenditures for significant renovations or improvements that
extend the useful life of assets are capitalized. Depreciation expense was $134.8 million, $117.3 million and $104.2 million for the years
ending December 31, 2021, 2020, and 2019, respectively. Interest and other costs incurred during the construction period of major expansions,
and on investments in joint ventures with properties under construction, are capitalized. Capitalized interest during the years ended
December 31, 2021, 2020, and 2019 was $0.4 million, $0.4 million and $0.9 million, respectively. Repair and maintenance costs are expensed
as incurred.
Whenever events or changes in circumstances indicate that the carrying value of the Company’s property may not be recoverable, the
Company’s policy is to complete an assessment of impairment. Impairment is evaluated based upon comparing the sum of the property’s
expected undiscounted future cash flows to the carrying value of the property. If the sum of the undiscounted cash flows is less than the
carrying amount of the property, an impairment loss is recognized for any amount by which the carrying amount of the asset exceeds the fair
value of the asset. For the years ended December 31, 2021, 2020, and 2019, no assets have been determined to be impaired under this policy.
In general, sales of real estate and related profits or losses are recognized when control of the underlying assets has transferred.
Trade Name : The Company’s trade name, which was acquired in 2016, has an indefinite life and is not amortized but is reviewed for
impairment annually or more frequently when facts and circumstances indicate that the carrying value of the Company’s trade name may not
be recoverable. We may elect to perform a qualitative assessment that considers economic, industry and company-specific factors as part of our
annual test. If, after completing this assessment, it is determined that it is more likely than not that the fair value of the trade name is less than
its carrying value, we proceed to a quantitative test. We did not elect to perform a qualitative assessment in 2021.
Quantitative testing requires a comparison of the fair value of the trade name to its carrying value. We use a discounted cash flow
analysis under the relief-from-royalty method to estimate the fair value of the trade name. This method incorporates various assumptions,
including projected revenue growth rates, the terminal growth rate, the royalty rate to be applied, and the discount rate utilized. If the carrying
value of the trade name exceeds the calculated fair value, the trade name is considered impaired to the extent that the carrying value exceeds
the fair value. We did not record any impairment in 2021.
Other Assets : Included in other assets are restricted cash balances as discussed above, property deposits and the unamortized value
placed on in-place customer leases related to self-storage facilities acquired by the Company. Property deposits at December 31, 2021 and 2020
were $5.7 million and $0.6 million, respectively.
The Company allocates a portion of the purchase price of acquisitions to in-place customer leases. The methodology used to determine
the fair value of in-place customer leases is described in Note 8. The Company amortizes in-place customer leases on a straight-line basis over
12 months (the estimated future benefit period).
Investment in Unconsolidated Joint Ventures : The Company’s investment in unconsolidated joint ventures where the Company has
significant influence but not control, and joint ventures which are variable interest entities in which the Company is not the primary
beneficiary, are recorded under the equity method of accounting in the accompanying consolidated financial statements. Under the equity
method, the Company’s investment in unconsolidated joint ventures is stated at cost, adjusted for the Company’s share of net earnings or
losses, and reduced by distributions. Equity in earnings of unconsolidated joint ventures is generally recognized based on the Company’s
ownership interest in the earnings of each of the unconsolidated joint ventures. For the purposes of presentation in the statement of cash flows,
the Company follows the “look through” approach for classification of distributions from joint ventures. Under this approach, distributions are
reported under operating cash flow unless the facts and circumstances of a specific distribution clearly indicate that it is a return of capital (e.g.,
a liquidating dividend or distribution of the proceeds from the joint venture’s sale of assets), in which case it is reported as an investing activity.
Accounts Payable and Accrued Liabilities : Accounts payable and accrued liabilities consist primarily of trade payables, accrued
interest, property tax accruals, and the Company’s lease liability related to operating leases where the Company is the lessee.
Income Taxes : The Company qualifies as a REIT under the Internal Revenue Code of 1986, as amended, and will generally not be
subject to corporate income taxes to the extent it distributes its taxable income to its shareholders and complies with certain other requirements.
50
The Company has elected to treat certain of its subsidiaries as taxable REIT subsidiaries. In general, the Company’s taxable REIT
subsidiaries may perform additional services for tenants and generally may engage in certain real estate or non-real estate related business. A
taxable REIT subsidiary is subject to federal and state corporate income taxes. Deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities.
The Company recorded federal and state income tax expense of $1.7 million, $1.6 million, and $2.2 million in 2021, 2020, and 2019,
respectively, which are included in general and administrative expenses in the consolidated statements of operations. The 2021 income tax
expense includes current tax expense of $1.6 million and deferred tax expense of $0.1 million. At December 31, 2021 and 2020, there were no
material unrecognized tax benefits and the Company had no interest or penalties related to uncertain tax provisions during the years then ended.
Interest and penalties relating to uncertain tax positions will be recognized in income tax expense when incurred. Income taxes payable by the
Company and the net deferred tax liabilities of our taxable REIT subsidiaries are classified within accounts payable and accrued liabilities in
the consolidated balance sheets, while prepaid income taxes are classified within prepaid expenses. As of December 31, 2021, the Company’s
taxable REIT subsidiaries have deferred tax assets of $0.4 million and a deferred tax liability of $1.8 million. As of December 31, 2020, the
Company’s taxable REIT subsidiaries have deferred tax assets of $0.4 million and a deferred tax liability of $1.7 million. The tax years 2018-
2021 remain open to examination by the major taxing jurisdictions to which the Company is subject.
The Tax Cuts and Jobs Act (the “TCJA”) was enacted on December 20, 2017. The TCJA significantly changed the U.S. federal income
tax laws applicable to businesses and their owners, including REITs and their shareholders. Under the TCJA, the corporate income tax rate is
reduced from a maximum rate of 35% to a flat 21% rate. The reduced corporate income tax rate, which is effective for taxable years beginning
after December 31, 2017, applies to income earned by our taxable REIT subsidiaries.
Leases : The Company leases corporate office space as well as the land and/or buildings in which certain of the Company's self-storage
facilities operate. The Company accounts for these leases under the guidance in ASU 2016-02, “Leases (Topic 842)” (ASC 842) which requires
lessees to recognize a right-of-use asset and a lease liability for virtually all leases (other than leases that meet the definition of a short-term
lease). The lease liability under this guidance is equal to the present value of lease payments and the right-of-use asset is based on the lease
liability, subject to adjustments such as for initial direct costs and prepaid or accrued lease payments. All leases where the Company is the
lessee qualify as operating leases under the guidance in ASC 842. Two of the leases for real estate at which the Company operates self-storage
facilities include unilateral options for the Company to extend the terms of these leases. However, those extension periods are not included in
the terms of the respective leases under ASC 842 due to the Company’s inability to assert that it is reasonably certain to exercise those options
based primarily on the length of time before such options would be exercised. Future lease payments which are based on changes to the
consumer price index and future common area maintenance charges related to leases of corporate office space have been excluded from the
future minimum noncancelable lease payments for the respective leases due to their variable nature.
The Company has made the following accounting policy elections and practical expedient elections provided for in ASC 842:
•
•
•
•
•
The package of practical expedients in ASC 842-10-65-1(f) which, if elected, stipulates that for all leases existing at the date of
application (1) an entity need not reassess whether any expired or existing contracts contain leases; (2) an entity need not reassess
the lease classification for any expired or existing leases; and (3) an entity need not reassess initial direct costs for any existing
leases.
The practical expedient in ASC 842-10-65-1(g) which, if elected, stipulates that an entity may use hindsight at the date of initial
application in determining the lease term and in assessing impairment of the entity’s right to use assets.
The practical expedient in ASC 842-10-65-1(gg) which, if elected, stipulates that an entity need not assess whether existing or
expired land easements that were not previously accounted for as leases under ASC 840 are or contain a lease under ASC 842.
The practical expedient in ASC 842-10-15-37 which, if elected, allows a lessee to choose not to separate nonlease components
from lease components and instead account for each separate lease component and the nonlease components associated with that
lease component as a single lease component.
The practical expedient in ASC 842-10-15-42A which, if elected, allows a lessor to choose not to separate nonlease components
from lease components and, instead, to account for each separate lease component and the nonlease components associated with
that lease component as a single lease component if the nonlease components otherwise would be accounted for under ASC 606,
“Revenue from Contracts with Customers,” and both (1) the timing and pattern of transfer for the lease component and nonlease
component(s) associated with the lease component are the same, and (2) the lease component, if accounted for separately, would be
classified as an operating lease in accordance with ASC 842-10-25 paragraphs 2 and 3.
•
The option in ASC 842-20-25-2 for a lessee to elect, as an accounting policy, not to apply the recognition requirements in ASC 842
to short-term leases and, instead, to recognize the lease payments in profit or loss on a straight-line basis over the lease term and
51
variable lease payments in the period in which the obligation for those payments is incurred. Leases are considered short-term
when they have a term of less than one year.
The Company has elected to define the term “major part,” as referenced in ASC 842-10-25-2 related to the remaining economic
life of an asset, as being 75% or more of the remaining economic life of the asset.
The Company has elected to define the term “substantially all,” as referenced in ASC 842-10-25-2 related to the fair value of an
asset, as being 90% or more of the fair value of the underlying asset.
The Company has elected to define the term “at or near the end,” as referenced in ASC 842-10-25-2 related to a lease
commencement date, as being a date that falls within the last 25% of the total economic life of the underlying asset.
•
•
•
At December 31, 2021 and December 31, 2020, the Company’s aggregate right-of-use assets totaled $19.5 million and $20.3 million,
respectively, and are included in other assets on the consolidated balance sheets. The related lease liabilities total $19.2 million and $19.9
million at December 31, 2021 and December 31, 2020, respectively, and are included in accounts payable and accrued liabilities on the
consolidated balance sheets. Expenses related to operating leases under ASC 842 totaled $2.5 million, $2.1 million, and $2.4 million in 2021,
2020, and 2019, respectively. At December 31, 2021, the weighted average remaining lease term and weighted average discount rate for the
Company’s operating leases were 10.3 years and 4.6%, respectively.
Derivative Financial Instruments : The Company accounts for derivatives in accordance with ASC Topic 815 “Derivatives and
Hedging,” which requires companies to carry all derivatives on the balance sheet at fair value. The Company determines the fair value of
derivatives using an income approach. The accounting for changes in the fair value of a derivative instrument depends on whether it has been
designated and qualifies as part of a hedging relationship and, if so, the reason for holding it. The Company’s use of derivative instruments has
been limited to cash flow hedges of certain interest rate risks.
Recent Accounting Pronouncements : In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other
Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40: Accounting for Convertible
Instruments and Contracts in an Entity’s Own Equity,” which reduced the number of accounting models for convertible debt instruments and
convertible preferred stock, thus simplifying the accounting for convertible instruments. ASU 2020-06 is effective for annual periods beginning
after December 31, 2021, and interim periods within those annual periods, and is therefore effective for the Company as of January 1, 2022.
Management has evaluated the impact of the adoption of ASU 2020-06 on the Company, including, but not limited to, the accounting for the
Company’s noncontrolling redeemable Operating Partnership Units, and has concluded that the adoption of ASU 2020-06 did not have a
material impact on the Company.
Stock-Based Compensation : The Company accounts for stock-based compensation under the provisions of ASC Topic 718,
“Compensation - Stock Compensation.” The Company recognizes compensation cost in its financial statements for all share-based payments
granted, modified, or settled during the period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over
the related vesting period. Forfeitures are recognized when incurred.
The Company recorded compensation expense (included in general and administrative expense) of $6.6 million, $4.6 million, and $4.2
million, respectively, related to amortization of non-vested stock grants for the years ended December 31, 2021, 2020, and 2019. In September
2021, the Company announced that then current Chief Operating Officer, Edward Killeen, would be retiring effective December 31, 2021. In
conjunction with this announcement, the vesting periods of certain restricted stock awards previously granted to Mr. Killeen were accelerated
to reflect his December 31, 2021 retirement date. As a result of this change, an additional $0.6 million of compensation expense was recorded
in 2021.
The Company uses the Black-Scholes Merton option pricing model to estimate the fair value of stock options granted subsequent to the
adoption of ASC Topic 718. The application of this pricing model involves assumptions that are judgmental and sensitive in the determination
of compensation expense. To determine expected volatility, the Company uses historical volatility based on daily closing prices of its Common
Stock over periods that correlate with the expected terms of the options granted. The risk-free rate is based on the United States Treasury yield
curve at the time of grant for the expected life of the options granted. Expected dividends are based on the Company’s history and expectation
of dividend payouts. The expected life of stock options is based on the midpoint between the vesting date and the end of the contractual term.
The Company recognizes the impact of any forfeitures as they occur. There were no options granted during the years ended December 31,
2021, 2020 and 2019.
52
During 2021, 2020, and 2019, the Company issued performance based non-vested stock awards to certain executives. The fair values of
the performance-based awards in 2021, 2020 and 2019 were estimated at the time the awards were granted using a Monte Carlo pricing model
applying the following weighted-average assumptions:
Expected life (years)
Risk free interest rate
Expected volatility
Fair value
2021
2020
2019
3.0
0.93%
27.75%
157.61
$
3.0
0.19%
28.15%
78.00
$
3.0
1.64%
18.22%
66.96
$
The Monte Carlo pricing model was not used to value any other non-vested shares granted in 2021, 2020, or 2019 as no market
conditions were present in these awards. The value of these other non-vested shares was equal to the stock price of the Company on the date of
grant.
Use of Estimates : The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
3. EARNINGS PER SHARE AND EARNINGS PER UNIT
The Company reports earnings per share and earnings per unit data in accordance with ASC Topic 260, “Earnings Per Share.” Under
ASC Topic 260-10, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid
or unpaid, are participating securities and shall be included in the computation of earnings-per-share pursuant to the two-class method. The
Parent Company and the Operating Partnership have calculated their basic and diluted earnings per share/unit using the two-class method.
The following table sets forth the computation of basic and diluted earnings per common share of the Parent Company utilizing the two-
class method.
(amounts in thousands, except per share data)
Numerator:
Net income attributable to common shareholders
Denominator:
Denominator for basic earnings per share - weighted average
shares
Effect of Dilutive Securities:
Stock options and non-vested stock
Denominator for diluted earnings per share - adjusted weighted
average shares and assumed conversion
Basic Earnings per common share attributable to common
shareholders
Diluted Earnings per common share attributable to common
shareholders
Year Ended December 31,
2020
2021
2019
$
249,317 $
151,571 $
258,699
78,425
71,055
69,876
183
123
104
78,608
71,178
69,980
$
$
3.18 $
2.13 $
3.17 $
2.13 $
3.70
3.70
53
The following table sets forth the computation of basic and diluted earnings per common unit of the Operating Partnership utilizing the
two-class method.
(amounts in thousands, except per unit data)
Numerator:
Net income attributable to common unitholders
Denominator:
Denominator for basic earnings per unit - weighted average units
Effect of Dilutive Securities:
Stock options and non-vested stock
Denominator for diluted earnings per unit - adjusted weighted
average units and assumed conversion
Basic Earnings per common unit attributable to common
unitholders
Diluted Earnings per common unit attributable to common
unitholders
Year Ended December 31,
2020
2021
2019
$
249,317 $
151,571 $
258,699
78,425
71,055
69,876
183
123
104
78,608
71,178
69,980
$
$
3.18 $
2.13 $
3.17 $
2.13 $
3.70
3.70
Not included in the effect of dilutive securities above are 133,660 unvested restricted shares for the year ended December 31, 2021;
159,228 unvested restricted shares for the year ended December 31, 2020; and 120,741 unvested restricted shares for the year ended December
31, 2019. The effects of including these securities would have been anti-dilutive.
4. INVESTMENT IN STORAGE FACILITIES AND INTANGIBLE ASSETS
The following summarizes activity in storage facilities during the years ended December 31, 2021 and December 31, 2020.
(dollars in thousands)
Cost:
Beginning balance
Acquisition of storage facilities
Improvements and equipment additions
Net increase (decrease) in construction in progress
Dispositions
Ending balance
Accumulated Depreciation:
Beginning balance
Additions during the year
Dispositions
Ending balance
2021
2020
$ 5,330,323 $ 4,749,473
523,922
67,069
(9,632)
(509)
$ 7,090,457 $ 5,330,323
1,675,366
59,569
25,946
(747)
$
873,178 $
134,773
(301)
$ 1,007,650 $
756,333
117,168
(323)
873,178
The Company acquired 112 self-storage facilities during 2021 and 40 self-storage facilities during 2020. The acquisitions of these
facilities were accounted for as asset acquisitions. The cost of these facilities, including closing costs, was assigned to land, buildings,
54
equipment, improvements, construction in progress and in-place customer leases based upon their relative fair values. The operating results of
the facilities acquired have been included in the Company’s operations since the respective acquisition dates.
The purchase price of the 112 facilities acquired in 2021 and the 40 facilities acquired in 2020 has been assigned as follows:
(dollars in thousands)
Consideration Paid
Acquisition Date Fair Value
Number of
Properties
Date of
Acquisition
Purchase
Price
Cash Paid
Value of
Operating
Partnership
Units Issued
Net Other
Liabilities
Assumed
(Assets
Acquired)
Building,
Equipment,
and
Improvements
In-Place
Customer
Leases
Land
1
1
1
8
3
2
1
5
2
4
1
3
1
2
1
22
1
3
4
2
7
1
1
1
1
23
1
2
1
6
112
1/4/2021 $
1/21/2021
3/4/2021
3/11/2021
3/24/2021
3/25/2021
5/3/2021
5/12/2021
6/1/2021
6/10/2021
6/16/2021
6/22/2021
6/23/2021
7/29/2021
8/17/2021
8,070
18,287
47,947
85,156
67,089
39,666
16,545
90,944
26,942
44,563
14,344
59,618
14,539
22,315
14,846
8/19/2021
8/25/2021
9/1/2021
10/1/2021
10/20/2021
10/21/2021
11/16/2021
12/2/2021
12/8/2021
12/10/2021
12/13/2021
12/15/2021
12/16/2021
12/17/2021
12/28/2021
229,982
17,190
51,707
58,904
58,043
129,345
14,488
20,100
19,044
12,577
369,487
14,095
33,087
20,596
76,801
$ 1,696,317
8,042 $
18,251
47,933
84,586
66,890
39,495
16,497
90,710
26,793
43,952
14,235
59,257
14,468
22,311
14,740
137,188
17,187
51,375
25,180
57,613
125,778
14,449
20,082
18,922
12,540
367,635
14,056
14,334
20,548
49,666
1,514,713 $
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
91,265
—
—
32,841
—
3,300
—
—
—
—
—
—
18,173
—
27,137
172,716 $
$
28
36
14
570
199
171
48
234
149
611
109
361
71
4
106
1,529
3
332
883
430
267
39
18
122
37
1,852
39
580
48
(2)
8,888
$
812 $
1,322
10,591
13,381
7,129
6,166
1,658
11,557
2,209
9,163
2,601
19,101
657
6,271
2,884
23,173
1,034
5,570
9,407
13,147
13,769
341
1,669
1,705
2,746
47,189
2,989
3,726
737
10,461
7,153 $
16,830
37,020
70,538
59,320
33,037
14,739
78,116
24,395
34,746
11,526
39,752
13,695
15,743
11,789
203,682
15,974
45,447
48,641
44,281
114,338
13,963
18,204
17,136
9,661
317,719
10,924
28,940
19,623
65,269
$
233,165 $ 1,442,201 $
105
135
336
1,237
632
443
148
1,271
338
654
217
765
187
301
173
3,127
182
690
856
615
1,238
184
227
203
170
4,579
182
421
236
1,071
20,923
Number of
Properties
Date of
Acquisition
Purchase
Price
Cash Paid
Consideration Paid
Acquisition Date Fair Value
Carrying Value
of
Noncontrolling
Interest in Joint
Venture
Mortgage
Assumed
Net Other
Liabilities
Assumed
(Assets
Acquired)
Building,
Equipment,
and
Improvements
Land
Construction
in
Progress
In-Place
Customer
Leases
6
25
1
1
1
1
1
1
1
1
1
40
3/9/2020 $
124,298
$ 124,204 $
— $
— $
94
$
20,307 $
101,734 $
582 $ 1,675
9/29/2020
11/5/2020
11/25/2020
12/9/2020
12/14/2020
12/14/2020
12/22/2020
12/23/2020
12/28/2020
12/30/2020
295,310
13,874
11,492
7,499
10,776
15,523
9,583
15,857
16,868
11,545
293,726
7,521
8,162
7,453
10,744
15,483
9,548
15,807
16,873
11,515
—
—
3,404
—
—
—
—
—
—
—
—
6,353
—
—
—
—
—
—
—
—
1,584
—
(74 )
46
32
40
35
50
(5)
30
32,555
2,158
2,032
1,312
1,747
1,240
671
3,528
507
1,588
257,844
11,498
9,325
6,070
8,863
14,063
8,771
12,127
16,195
9,787
—
—
—
—
—
—
—
—
—
—
4,911
218
135
117
166
220
141
202
166
170
$
532,625
$ 521,036 $
3,404 $
6,353 $ 1,832
$
67,645 $
456,277 $
582 $ 8,121
States
2021
SC
CA
NY
FL
AZ
WA
FL
NJ
NC
TX
FL
FL, NH
NC
NH
FL
AL, CO, FL, GA, KY,
OH, OK, SC, TX
AZ
GA
TX
FL
GA, NC, SC, TN
VA
ME
IL
FL
FL, GA, IL
FL
CO
FL
CT
Total acquired 2021
(dollars in thousands)
States
2020
CA
FL, GA, NJ, OH,
PA, TX
NJ
FL
MO
FL
FL
SC
CA
NY
CA
Total acquired
2020
The facility purchased in New York in 2021 was acquired from SNL Orix Merrick ("Merrick"), an unconsolidated joint venture in which
the Company holds a 5% ownership interest. In accordance with ASC Topic 970, “Real Estate – General,” ("ASC 970") the Company
recorded its equity in the profit from the sale of this self-storage facility as a reduction in the respective purchase price allocated to land and
depreciable fixed assets. In addition to the $47.9 million cash payment for the self-storage facility acquired from Merrick, the Company also
recognized $0.8 million as a return on the Company's investment in Merrick as discussed further in Note 11.
55
The three facilities purchased in Georgia in September 2021 were acquired from Life Storage-SERS Storage LLC ("SERS"), an
unconsolidated joint venture in which the Company holds a 20% ownership interest. In accordance with ASC 970, the Company recorded its
equity in the profit from the sale of these self-storage facilities as a reduction in the respective purchase price allocated to land and depreciable
fixed assets. In addition to the $51.7 million cash payment for the self-storage facilities acquired from SERS, the Company also recognized
$8.3 million as a return on the Company's investment in SERS as discussed further in Note 11.
Twenty-seven of the facilities acquired in 2021 were managed by the Company prior to their respective acquisition. The remaining 81
facilities acquired in 2021 were all acquired from unrelated third-parties.
The six facilities purchased in California during the first quarter of 2020 were acquired from 191 III Life Storage Holdings LLC (“191
III”), an unconsolidated joint venture in which the Company holds a 20% ownership interest. Seventeen of the 25 facilities purchased in the
third quarter of 2020 were acquired from Sovran HHF Storage Holdings LLC (“Sovran HHF”) and eight of the 25 facilities purchased in the
third quarter of 2020 were acquired from Sovran HHF Storage Holdings II LLC (“Sovran HHF II”), unconsolidated joint ventures in which the
Company holds 20% and 15% ownership interests, respectively. In accordance with ASC 970, the Company recorded its equity in the profit
from the sales of these self-storage facilities as a reduction in the respective purchase price allocated to land and depreciable fixed assets. In
addition to the $124.2 million cash payment for the six self-storage facilities acquired from 191 III, the Company also recognized $8.4 million
as a return on the Company’s investment in 191 III as discussed further in Note 11. In addition to the $293.7 million combined cash payments
for the 25 self-storage facilities acquired from Sovran HHF and Sovran HHF II, the Company also recognized $32.7 million as a return on the
Company’s investments in Sovran HHF and Sovran HHF II as discussed further in Note 11.
The facility acquired in Florida in November 2020 was acquired as the result of the Company’s acquisition of the remaining 15%
ownership interest in Urban Box Coralway Storage, LLC (“Urban Box”). Prior to this acquisition, Urban Box was a joint venture between the
Company and an otherwise unrelated third-party which had been accounted for by the Company using the equity method of accounting. The
purchase price for this acquisition includes the carrying value of the Company’s equity investment in Urban Box of $3.4 million at the time of
the acquisition.
One of the facilities acquired in Florida in 2020 and the facility acquired in New York in 2020 were managed by the Company prior to
their respective acquisition. The remaining seven facilities acquired in 2020 were all acquired from unrelated third-parties.
Non-cash investing activities during 2021 include the issuance of $89.8 million of preferred Operating Partnership Units valued based
upon the terms of the preferred Operating Partnership Units as compared to market rates for similar instruments at the time of acquisition, the
issuance of $82.9 million of common Operating Partnership Units based on the average closing price of the Parent Company's common stock
for a stated number of days prior to closing on the related self-storage facility acquisitions, and the assumption of net other liabilities totaling
$8.9 million. Non-cash investing activities during 2020 include the Company’s equity investment in Urban Box at carrying value, the
assumption of a mortgage with an acquisition-date fair values of $6.4 million, and the assumption of net other liabilities totaling $1.8 million.
Non-cash investing activities during 2019 include the Company’s equity investment in Review Avenue Partners (“RAP”) at its carrying value,
the assumption of mortgages with acquisition-date fair values totaling $23.0 million, and the assumption of net other liabilities totaling $0.8
million. RAP was a joint venture between the Company and an otherwise unrelated third-party from which the Company acquired a self-
storage facility in 2019.
The Company measures the fair value of in-place customer lease intangible assets based on the Company’s experience with customer
turnover and the estimated cost to replace the in-place leases. The Company amortizes in-place customer leases on a straight-line basis over 12
months (the estimated future benefit period).
In-place customer leases are included in other assets on the Company’s consolidated balance sheets at December 31 as follows:
(dollars in thousands)
In-place customer leases
Accumulated amortization
Net carrying value at the end of period
2021
107,786 $
(93,820)
13,966 $
2020
86,863
(81,455)
5,408
$
$
Amortization expense related to in-place customer leases totaled $12.4 million, $5.6 million, and $2.9 million, during the years ended
December 31, 2021, 2020, and 2019, respectively. Amortization expense is expected to be $14.0 million in 2022 based on in-place customer
leases at December 31, 2021.
Property Dispositions
No self-storage facilities were sold during 2021 or 2020. During 2019, the Company sold 32 non-strategic properties and received net
cash proceeds of $207.6 million. The sale resulted in a gain of $100.2 million, which is reflected within gain on sale of storage facilities in the
2019 consolidated statement of operations. The Company subsequently leased a property it had sold during 2017 and continued to operate the
56
property through November 2019. Due to the Company’s continuing involvement in this property, the related gain on the sale of this property
of $4.1 million was deferred and recognized by the Company in 2019 upon termination of this lease. This gain is reflected within gain on sale
of storage facilities in the 2019 consolidated statement of operations.
Change in Useful Life Estimates
As part of the Company’s capital improvement efforts, buildings at certain self-storage facilities were identified for replacement during
2021, 2020, and 2019. As a result of the decision to replace these buildings, the Company reassessed the estimated useful lives of the then
existing buildings. This useful life reassessment resulted in increases in depreciation expense of approximately $2.5 million, $5.8 million, and
$1.1 million in 2021, 2020, and 2019, respectively. The Company estimates that the change in estimated useful lives of buildings identified for
replacement as of December 31, 2021 will not have a significant impact on depreciation expense in 2022.
The accelerated depreciation resulting from the events discussed above reduced both basic and diluted earnings per share/unit by
approximately $0.03, $0.08, and $0.02 per share/unit in 2021, 2020, and 2019, respectively.
5. UNSECURED LINE OF CREDIT AND TERM NOTES
Borrowings outstanding on our unsecured line of credit and term notes are as follows:
(dollars in thousands )
Revolving line of credit borrowings
Term note due April 8, 2024
Senior term note due July 1, 2026
Senior term note due December 15, 2027
Term note due July 21, 2028
Senior term note due June 15, 2029
Senior term note due October 15, 2030
Senior term note due October 15, 2031
Total term note principal balance outstanding
Less: unamortized debt issuance costs
Less: unamortized senior term note discount
Term notes payable
Dec. 31, 2021
Dec. 31, 2020
$
— $
—
175,000
600,000
450,000
200,000
350,000
400,000
600,000
2,775,000
(16,008)
(11,154)
175,000
600,000
450,000
200,000
350,000
400,000
—
2,175,000
(12,833)
(6,710)
$ 2,747,838 $ 2,155,457
The Company’s unsecured amended and restated credit agreement includes a revolving credit facility with a limit of $500 million and
with a maturity date of March 10, 2023, and initially included a term note in the principal amount of $100 million with a maturity date of June
4, 2020. Such credit agreement provides for interest on the revolving credit facility at a variable annual rate equal to LIBOR plus a margin
based on the Company’s credit rating (the margin was 0.95% at December 31, 2021 and December 31, 2020), interest on any term notes at a
variable annual rate equal to LIBOR plus a margin based on the Company’s credit rating (the margin was 1.00% at December 31, 2021 and
December 31, 2020), and requires an annual facility fee on the revolving credit facility which varies based on the Company’s credit rating (the
facility fee was 0.15% at December 31, 2021 and December 31, 2020). The interest rate on the Company’s revolving credit facility at
December 31, 2021 was approximately 1.05% (1.09% at December 31, 2020) and the interest rate on any term notes at December 31, 2021 was
approximately 1.10% (1.14% at December 31, 2020). At December 31, 2021, there was $499.9 million available on the unsecured line of
credit. The Company has the option under this credit facility to increase the total aggregate borrowing capacity of the facilities to $900 million.
On October 7, 2021, the Operating Partnership issued $600 million in aggregate principal amount of 2.400% unsecured senior notes due
October 15, 2031 (the "2031 Senior Notes"). The 2031 Senior Notes were issued at 0.917% discount to par value. Interest on the 2031 Senior
Notes is payable semi-annually in arrears on each April 15 and October 15, commencing with April 15, 2022. Proceeds received upon issuance,
net of discount to par of $5.5 million, and underwriting discount and other offering expenses of $5.1 million, totaled $589.4 million.
On September 23, 2020, the Operating Partnership issued $400 million in aggregate principal amount of 2.200% unsecured senior notes
due October 15, 2030 (the “2030 Senior Notes”). The 2030 Senior Notes were issued at 0.476% discount to par value. Interest on the 2030
Senior Notes is payable semi-annually in arrears on each April 15 and October 15. Proceeds received upon issuance, net of discount to par of
$1.9 million and underwriting and other offering expenses of $3.5 million, totaled $394.6 million.
On June 3, 2019, the Operating Partnership issued $350 million in aggregate principal amount of 4.000% unsecured senior notes due
June 15, 2029 (the “2029 Senior Notes”). The 2029 Senior Notes were issued at a 0.524% discount to par value. Interest on the 2029 Senior
Notes is payable semi-annually in arrears on each June 15 and December 15. Proceeds received upon issuance, net of discount to par of $1.8
million and underwriting discount and other offering expenses of $3.1 million, totaled $345.1 million.
57
On December 7, 2017, the Operating Partnership issued $450 million in aggregate principal amount of 3.875% unsecured senior notes
due December 15, 2027 (the “2027 Senior Notes”). The 2027 Senior Notes were issued at a 0.477% discount to par value. Interest on the 2027
Senior Notes is payable semi-annually in arrears on June 15 and December 15. Proceeds received upon issuance, net of discount to par of $2.1
million and underwriting discount and other offering expenses totaling $4.0 million, totaled $443.9 million.
On June 20, 2016, the Operating Partnership issued $600 million in aggregate principal amount of 3.50% unsecured senior notes due July
1, 2026 (the “2026 Senior Notes”). The 2026 Senior Notes were issued at a 0.553% discount to par value. Interest on the 2026 Senior Notes is
payable semi-annually in arrears on January 1 and July 1. Proceeds received upon issuance, net of discount to par of $3.3 million and
underwriting discount and other offering expenses of $5.5 million, totaled $591.2 million.
The 2031 Senior Notes, the 2030 Senior Notes, the 2029 Senior Notes, the 2027 Senior Notes and the 2026 Senior Notes are all fully and
unconditionally guaranteed by the Parent Company. The indenture under which the 2031 Senior Notes, the 2030 Senior Notes, the 2029 Senior
Notes, the 2027 Senior Notes and the 2026 Senior Notes were issued restricts the ability of the Company and its subsidiaries to incur debt
unless the Company and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more
than 1.5:1 on all outstanding debt, after giving effect to the incurrence of the debt. The indenture also restricts the ability of the Company and
its subsidiaries to incur secured debt unless the Company and its consolidated subsidiaries comply with a secured debt leverage ratio not to
exceed 40% after giving effect to the incurrence of the debt. The indenture also contains other financial and customary covenants, including a
covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Company and its consolidated
subsidiaries. At December 31, 2021, the Company was in compliance with such covenants.
On July 21, 2016, the Company entered into a $200 million term note maturing July 21, 2028 bearing interest at a fixed rate of 3.67%.
On April 8, 2014, the Company entered into a $175 million term note maturing April 8, 2024 bearing interest at a fixed rate of 4.533%.
The interest rate on this term note increases to 6.283% if the Company is not rated by at least one rating agency or if the Company’s credit
rating is downgraded.
In 2011, the Company entered into a $100 million term note maturing August 5, 2021 bearing interest at a fixed rate of 5.54%. On
October 9, 2020, the Company paid off this $100 million term note in addition to making a make-whole payment of $4.0 million required as a
result of paying off the term note prior to its maturity. Such make-whole payment is included in interest expense in the 2020 consolidated
statement of operations.
The line of credit and term notes require the Company to meet certain financial covenants, measured on a quarterly basis, including
prescribed leverage, fixed charge coverage, minimum net worth, limitations on additional indebtedness and limitations on dividend payouts. At
December 31, 2021, the Company was in compliance with such covenants.
We believe that if operating results remain consistent with historical levels and levels of other debt and liabilities remain consistent with
amounts outstanding at December 31, 2021, the entire availability on the line of credit could be drawn without violating our debt covenants.
The Company’s fixed rate term notes contain a provision that allows for the noteholders to call the debt upon a change of control of the
Company at an amount that includes a make whole premium based on rates in effect on the date of the change of control.
Deferred debt issuance costs and the discount on the outstanding term notes are both presented as reductions of term notes in the
accompanying consolidated balance sheets at December 31, 2021 and December 31, 2020. Amortization expense related to these deferred debt
issuance costs was $2.5 million, $2.4 million and $2.3 million for the periods ended December 31, 2021, 2020 and 2019, respectively, and is
included in interest expense in the consolidated statements of operations.
58
6. MORTGAGES PAYABLE AND DEBT MATURITIES
Mortgages payable at December 31, 2021 and 2020 consist of the following:
(dollars in thousands)
4.065% mortgage note due April 1, 2023, secured by one self-
storage facility with an aggregate net book value of $7.1 million,
principal and interest paid monthly (effective interest rate 4.31%)
5.26% mortgage note due November 1, 2023, secured by one self-
storage facility with an aggregate net book value of $7.7 million,
principal and interest paid monthly (effective interest rate 5.58%)
4.4625% mortgage notes due December 6, 2024, secured by three self-
storage facilities with an aggregate net book value of $54.3 million,
interest paid monthly with principal due at maturity (effective
interest rate 3.21%)
4.44% mortgage note due July 6, 2025, secured by one self-
storage facility with an aggregate net book value of $13.4 million,
principal and interest paid monthly (effective interest rate 4.50%)
5.99% mortgage note due May 1, 2026, secured by one self-
storage facility with an aggregate net book value of $6.3 million,
principal and interest paid monthly (effective interest rate 6.37%)
Total mortgages payable
December 31,
2021
December 31,
2020
$
3,728
$
3,832
3,650
3,728
22,427
22,684
6,228
6,343
$
997
37,030
$
1,190
37,777
The table below summarizes the Company’s debt obligations at December 31, 2021. The estimated fair value of financial instruments is
subjective in nature and is dependent on a number of important assumptions, including discount rates and relevant comparable market
information associated with each financial instrument. The fair values of the fixed rate term notes and mortgage notes were estimated by
discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for
the same remaining maturities. These assumptions are considered Level 2 inputs within the fair value hierarchy as described in Note 8. The
carrying values of our variable rate debt instruments, if any, approximate their fair values as these debt instruments bear interest at current
market rates that approximate market participant rates. This is considered a Level 2 input within the fair value hierarchy. The use of different
market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Accordingly, the
estimates presented below are not necessarily indicative of the amounts the Company would realize in a current market exchange.
(dollars in thousands)
Line of credit—variable rate LIBOR
+ 0.95% (1.05% at
December 31, 2021)
Notes Payable:
Term note—fixed rate 4.533%
Term note—fixed rate 3.50%
Term note—fixed rate 3.875%
Term note—fixed rate 3.67%
Term note—fixed rate 4.00%
Term note—fixed rate 2.20%
Term note—fixed rate 2.40%
Mortgage note—fixed rate 4.065%
Mortgage note—fixed rate 5.26%
Mortgage notes—fixed rate 4.4625%
Mortgage notes—fixed rate 4.44%
Mortgage note—fixed rate 5.99%
Total
2022
2023
2024
2025
2026
Thereafter
Total
Fair Value
Expected Maturity Date Including Discount
$ —
$ — $
— $ — $
— $
— $
—
$
—
—
—
—
—
—
—
—
108
83
—
121
203
$ 515
—
—
—
—
—
—
—
3,620
3,567
—
126
216
175,000
600,000
450,000
200,000
350,000
400,000
600,000
3,728
3,650
22,427
6,228
997
$ 7,529 $ 197,787 $ 6,093 $ 600,106 $ 2,000,000 $ 2,812,030
175,000
—
—
—
—
—
—
—
—
22,427
131
229
—
600,000
—
—
—
—
—
—
—
—
—
106
—
—
450,000
200,000
350,000
400,000
600,000
—
—
—
—
-
—
—
—
—
—
—
—
—
—
—
5,850
243
188,065
643,804
498,557
213,748
388,482
385,048
585,837
3,810
3,820
22,730
6,582
1,068
59
7. DERIVATIVE FINANCIAL INSTRUMENTS
In 2015 and 2016, the Company entered into forward starting interest rate swap agreements to hedge the risk of changes in the interest-
related cash flows associated with the potential issuance of fixed rate long-term debt. In conjunction with the issuance of the 2026 Senior Notes
(see Note 5), the Company terminated these hedges and settled the forward starting swap agreements for approximately $9.2 million. The $9.2
million has been deferred in AOCL and is being amortized as additional interest expense over the 10-year term of the 2026 Senior Notes or
until such time as interest payments on the 2026 Senior Notes are no longer probable. The Company expects to record $0.9 million of interest
expense in 2022 as a result of the amortization of the amount deferred in AOCL related to these forward starting interest rate swap agreements.
The changes in AOCL for the years ended December 31, 2021, 2020, and 2019 are summarized as follows:
(dollars in thousands)
Accumulated other comprehensive loss beginning of period
Realized loss reclassified from accumulated other
comprehensive loss to interest expense
Accumulated other comprehensive loss end of period
$
$
2021
2020
2019
(5,041) $
(5,958) $
(6,875)
917
(4,124) $
917
(5,041)
$
917
(5,958)
8. FAIR VALUE MEASUREMENTS
The Company applies the provisions of ASC Topic 820 “Fair Value Measurements and Disclosures” in determining the fair value of its
financial and nonfinancial assets and liabilities. ASC Topic 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used
to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that
are observable for the asset or liability, either directly or indirectly through market corroboration. Level 3 inputs are unobservable inputs based
on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is
determined based on the lowest level input that is significant to the fair value measurement.
Refer to Note 6 for presentation of the fair values of debt obligations which are disclosed at fair value on a recurring basis.
There are no assets or liabilities carried at fair value measured on a recurring basis on the consolidated balance sheets at December 31,
2021 and 2020.
9. STOCK BASED COMPENSATION
The Company established the 2015 Award and Option Plan (the “2015 Plan”) for the purpose of attracting and retaining the Company’s
executive officers and other key employees. There are 841,500 shares authorized for issuance under the 2015 Plan. The exercise price for
qualified incentive stock options must be at least equal to the fair market value of the common shares at the date of grant. As of December 31,
2021, there were no options outstanding under the 2015 Plan and options for 170,111 shares of common stock were available for future
issuance. The Company may also grant other stock-based awards under the 2015 Plan, including restricted stock and performance-based
awards.
The Company also established the 2009 Outside Directors’ Stock Option and Award Plan (the “2009 Directors’ Plan”) for the purpose of
attracting and retaining the services of experienced and knowledgeable outside directors. Prior to April 1, 2016, the 2009 Directors’ Plan
provided for the granting of options to purchase shares of common stock to eligible directors. The issuance of stock options to directors was
discontinued in 2016. In addition, each outside director received non-vested shares annually equal to 80% of the annual fees paid to them. As of
December 31, 2021, options for 24,750 common shares were outstanding under the 2009 Directors’ Plan.
The 2009 Directors’ Plan expired on May 21, 2020 and was replaced by the 2020 Outside Directors’ Stock Award Plan (the “2020
Directors’ Plan”) which provides for the issuance of shares of restricted stock to eligible directors. Such non-vested shares vest over a one-year
period. Dividends payable with respect to the restricted stock are accumulated during the vesting period and paid to the respective directors
only upon vesting of the restricted stock. There are 150,000 shares authorized for issuance under the 2020 Directors’ Plan. During 2021, 4,416
non-vested shares were issued to outside directors, of which certain directors elected to defer a total of 3,054 shares, and as of December 31,
2021, 131,810 shares of common stock were available for future issuance. As of December 31, 2021, 15,137 of non-vested shares were
outstanding under the 2020 Directors’ Plan.
60
A summary of the Company’s stock option activity and related information for the years ended December 31 follows:
Outstanding at beginning of year:
Granted
Exercised
Adjusted / (forfeited)
Outstanding at end of year
Exercisable at end of year
2021
2020
2019
Weighted
average
exercise
price
52.09
—
—
—
52.09
52.09
Options
24,750 $
—
—
—
24,750 $
24,750 $
Weighted
average
exercise
price
52.09
—
—
—
52.09
52.09
Options
24,750 $
—
—
—
24,750 $
24,750 $
Weighted
average
exercise
price
Options
34,500 $
—
(9,750)
—
24,750 $
24,750 $
52.58
—
53.83
—
52.09
52.09
A summary of the Company’s stock options outstanding at December 31, 2021 follows:
Exercise Price Range
$32.95 – $49.99
$50.00 – $61.05
Total
Intrinsic value of outstanding stock options at December 31, 2021
Intrinsic value of exercisable stock options at December 31, 2021
Outstanding
Exercisable
Weighted
average
exercise
price
37.91
59.17
52.09
Options
8,250 $
16,500 $
24,750 $
Weighted
average
cise
exer
price
Options
8,250 $
16,500 $
24,750 $
37.91
59.17
52.09
$ 2,502,075
$ 2,502,075
The intrinsic value of stock options exercised during the year ended December 31, 2019 was $0.1 million.
Proceeds from stock options exercised during the year ended December 31, 2019 totaled $0.5 million.
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of
the Company’s common stock at December 31, 2021, or the price on the date of exercise for those exercised during the year. The weighted
average remaining contractual life of all outstanding options, which are all exercisable, is 2.4 years.
Non-vested stock
The Company has also issued shares of non-vested stock to employees which vest over two- to eight-year periods. During the restriction
period, the non-vested shares may not be sold, transferred, or otherwise encumbered. The holder of the non-vested shares has all rights of a
holder of common shares, including the right to vote and receive dividends. For issuances of non-vested stock during the year ended
December 31, 2021, the fair market value of the non-vested stock on the date of grant ranged from $84.06 to $144.63. During 2021, 55,433
shares of non-vested stock were issued to employees and directors with an aggregate fair value of $6.4 million. The Company charges the fair
value ratably to expense over the vesting period. The Company uses the average of the high and low price of its common stock on the date the
award is granted as the fair value for non-vested stock awards that do not have a market condition.
A summary of the status of unvested shares of stock issued to employees and directors as of and during the years ended December 31
follows:
Unvested at beginning of year:
Granted
Vested
Forfeited
Unvested at end of year
2021
2020
2019
Weighted
average
grant date
fair value
$
$
66.62
114.61
67.14
—
84.21
Weighted
average
grant date
fair value
$
$
63.07
71.70
63.10
59.06
66.62
Non-vested
Shares
147,723
60,288
(45,767)
(7,474)
154,770
Weighted
average
grant date
fair value
$
$
60.19
67.33
59.89
61.84
63.07
Non-vested
Shares
145,004
57,849
(52,938)
(2,192)
147,723
Non-vested
Shares
154,770
55,433
(60,716)
—
149,487
61
Compensation expense of $6.6 million, $4.6 million, and $4.2 million was recognized for the vested portion of non-vested stock grants in
2021, 2020, and 2019, respectively. The fair value of non-vested stock that vested during 2021, 2020, and 2019 was $4.1 million, $2.9 million,
and $3.2 million, respectively. The total unrecognized compensation cost related to non-vested stock was $11.2 million at December 31, 2021,
and the remaining weighted-average period over which this expense will be recognized was 4.0 years.
Performance-based awards
During 2021, 2020 and 2019, the Company granted performance-based awards that entitle the recipients to earn up to 53,034, 70,272 and
59,634 shares, respectively, if certain performance criteria are achieved over a three-year period. The actual number of shares to be issued will
be determined at the end of the three-year period. The Company issued 53,680, 53,541, and 22,331 performance-based shares in 2021, 2020,
and 2019, respectively. The performance-based shares issued are based upon the Company’s performance over a three-year period depending
on the Company’s total shareholder return relative to a group of peer companies. Performance-based awards are recognized as compensation
expense based on the fair value of the awards on the date of grant, the number of shares ultimately expected to vest and the vesting period of
the awards. For accounting purposes, the performance shares are considered to have a market condition. The effect of the market condition is
reflected in the grant date fair value of the award and thus, compensation expense is recognized on this type of award provided that the
requisite service is rendered (regardless of whether the market condition is achieved). The Company estimated the fair value of each
performance-based award granted under the Plans on the date of grant using a Monte Carlo simulation that uses the assumptions discussed in
Note 2.
During 2021, compensation expense of $2.3 million (included in the $6.6 million discussed above) was recognized for performance
awards granted in 2021 and prior. The total unrecognized compensation cost related to non-vested performance awards was $5.5 million at
December 31, 2021 and the weighted-average period over which this expense will be recognized is 2.3 years.
Deferred compensation plan for Directors
Under the Deferred Compensation Plan for Directors, non-employee Directors may defer all or part of their Directors’ fees that are
otherwise payable in cash. Directors’ fees that are deferred under this plan are credited to each Directors’ account under the plan in the form of
Units. The number of Units credited is determined by dividing the amount of Directors’ fees deferred by the closing price of the Company’s
Common Stock on the New York Stock Exchange on the day immediately preceding the day upon which Directors’ fees otherwise would be
paid by the Company. A Director is credited with additional Units for dividends on the shares of Common Stock represented by Units in such
Directors’ account. A Director may elect to receive the shares in a lump sum on a date specified by the Director or in quarterly or annual
installments over a specified period and commencing on a specified date. The Directors may not elect to receive cash in lieu of shares. Under
this plan there were a total of 35,135 units outstanding at December 31, 2021. During 2021, non-employee directors elected to defer fees
totaling $117,000. No fees were elected to be deferred by any non-employee Directors in 2020 or 2019.
10. RETIREMENT PLAN
Employees of the Company qualifying under certain age and service requirements are eligible to be a participant in a 401(k) Plan
sponsored by the Company. The Company contributes to the Plan at the rate of 33% of the first 5% of gross wages that the employee
contributes. Total expense to the Company was approximately $1,046,000, $926,000, and $842,000 for the years ended December 31, 2021,
2020, and 2019, respectively.
62
11. INVESTMENT IN JOINT VENTURES
A summary of the Company’s unconsolidated joint ventures is as follows:
Venture
Sovran HHF Storage Holdings LLC (“Sovran HHF”)1
Sovran HHF Storage Holdings II LLC (“Sovran HHF II”)2
Life Storage-SERS Storage LLC (“SERS”)3
Life Storage-HIERS Storage LLC (“HIERS”)4
191 V Life Storage Holdings LLC ("191 V")5
GII Life Storage Holdings LLC ("GII")6
Iskalo Office Holdings, LLC (“Iskalo”)7
Life Storage Spacemax, LLC ("Spacemax")8
Life Storage Virtus, LLC ("Virtus")9
SNL Orix Merrick, LLC ("Merrick")10
Life Storage 898 McDonald LLC ("McDonald")11
Life Storage ArrowMark Venture LLC ("ArrowMark
Venture")12
Joint ventures with properties in development stage13
Other unconsolidated joint ventures (7 joint ventures)
Number of
Properties at
December 31,
2021
36
22
—
17
17
13
6
1
—
1
4
7
N/A
N/A
Company
common
ownership
interest
20%
15%
20%
20%
20%
35%
49%
40%
20%
5%
86%
50%
Various
Various
Carrying value
of investment
at December 31,
2021
$58.7 million
($2.4 million)
—
$13.9 million
$27.4 million
$51.5 million
($2.4 million)
$14.5 million
$1.3 million
—
$30.0 million
Carrying value
of investment
at December 31,
2020
$60.5 million
$27.3 million
$3.0 million
$14.3 million
—
—
($2.5 million)
$16.7 million
$1.5 million
$2.5 million
$2.7 million
$1.5 million
$8.2 million
$6.1 million
—
$7.4 million
$7.1 million
1.
2.
3.
4.
5.
6.
7.
8.
In September 2020, the Company acquired 17 self-storage facilities and related assets from Sovran HHF for total consideration of $175.2
million, which is net of the Company’s share of Sovran HHF’s gain resulting from the transaction. In connection with this transaction,
non-recourse loans with principal balances totaling $34.0 million were settled. Also in September 2020, Sovran HHF sold four self-
storage facilities to an unrelated third-party for total consideration of $42.3 million, resulting in a gain on sale of $2.1 million. As of
December 31, 2021, the carrying value of the Company’s investment in Sovran HHF exceeds its share of the underlying equity in net
assets of Sovran HHF by approximately $1.7 million as a result of the capitalization of certain acquisition related costs in 2008. This
difference is included in the carrying value of the investment.
In September 2020, the Company acquired eight self-storage facilities and related assets from Sovran HHF II for total consideration of
$120.2 million, which is net of the Company’s share of Sovran HHF II’s gain resulting from the transaction. In connection with this
transaction, $35.8 million of non-recourse loans related to these properties were settled in April 2021. Also in connection with this
transaction, the Company made a $12.7 million contribution to Sovran HHF II. On April 1, 2021, Sovran HHF II paid off $69.1 million
in existing nonrecourse mortgage debt and entered into $110 million of new nonrecourse mortgage debt which matures in 2029. As a
result of the net proceeds from these transactions, the Company received a distribution of $31.6 million from Sovran HHF II. This
distribution is included in return of investment in unconsolidated joint ventures on the 2021 consolidated statement of cash flows.
In September 2021, the Company acquired three self-storage facilities and related assets from SERS for total consideration of $51.7
million which is net of the Company's share of SERS's gain resulting from the transaction. In connection with this transaction, all non-
recourse loans held by SERS were settled. See Note 4 for additional information regarding this transaction. As SERS no longer operates
any self-storage facilities subsequent to the sale of the three self-storage facilities to the Company, the Company received a distribution
of $2.8 million in September 2021 as the Company's return of its remaining investment in SERS. SERS is expected to be dissolved in
2022.
In 2019, HIERS acquired five self-storage facilities for a total of $56.3 million. In connection with the acquisition of these self-storage
facilities, HIERS entered into $27.6 million of nonrecourse mortgage debt which is secured by the self-storage facilities acquired. During
2019, the Company contributed $5.7 million as is its share of capital to fund the acquisition of these five self-storage facilities.
In May 2021, the Company executed a joint venture agreement, 191 V Life Storage Holdings LLC, with an unrelated third-party with the
purpose of acquiring and operating self-storage facilities. In June 2021, 191 V acquired 17 self-storage facilities for a total of $320
million, at which time 191 V entered into $184 million of nonrecourse mortgage debt which matures in 2026. During 2021, the Company
contributed $28.7 million to 191 V as the Company's share of the initial capital investment in the joint venture.
In November 2021, the Company executed a joint venture agreement, GII Life Storage Holdings LLC, with an unrelated third-party with
the purpose of acquiring and operating self-storage facilities. In December 2021, GII acquired 13 self-storage facilities for a total of
$290.6 million, at which time GII entered into $145.3 million of nonrecourse mortgage debt which matures in 2029. During 2021, the
Company contributed $52.0 million to GII as the Company's share of the initial capital investment in the joint venture.
Iskalo owns the building that houses the Company’s headquarters. The Company paid rent to Iskalo of $1.5 million, $1.3 million, and
$1.2 million during 2021, 2020, and 2019, respectively.
In 2019, the Company executed a joint venture agreement, Life Storage Spacemax, LLC, with an unrelated third-party with the purpose
of acquiring and operating self-storage facilities. During 2019, Spacemax acquired six self-storage facilities for a total of $82.7 million.
63
In connection with this acquisition, Spacemax entered into $42.0 million of nonrecourse mortgage debt. During 2020, the Company
contributed $16.3 million to Spacemax as the Company's share of the initial capital investment in the joint venture.
9.
10.
11.
12.
13.
In February 2020, the Company executed a joint venture agreement, Life Storage Virtus, LLC, with an unrelated third-party with the
purpose of acquiring and operating a self-storage facility. During the first quarter of 2020, Virtus acquired a self-storage facility for a
total of $21.7 million. In connection with this acquisition, Virtus entered into $14.0 million of non-recourse mortgage debt. During 2020,
the Company contributed $1.7 million to Virtus as the Company’s share of the initial capital investment in the joint venture.
In March 2021, the Company acquired a self-storage facility and related assets from Merrick for total consideration of $47.9 million
which is net of the Company's share of Merrick's gain resulting from the transaction. In connection with this transaction, all non-recourse
loans held by Merrick were settled.
In September 2021, the Company made an additional investment of $27.3 million in McDonald (formerly SNL/Orix 1200 McDonald
Ave., LLC) which increased the Company's ownership interest in McDonald from 5% to 86%.
In October 2021, the Company executed a joint venture agreement, Life Storage ArrowMark Venture LLC with the purpose of arranging
and originating mortgage loans to owners of self-storage facilities throughout the United States. During 2021, the Company contributed
$1.6 million to ArrowMark Venture as the Company's share of the funding of two mortgage loans to third-parties in 2021.
The Company has entered into four separate joint ventures, one of which is developing a self-storage facility in Ontario, Canada, two of
which are developing self-storage facilities in the New York City market, and one of which is developing a self-storage facility in the
Tucson, AZ market. The Company has contributed an aggregate total of $8.2 million as its share of capital to these joint ventures.
In addition to the joint venture activity in the preceding table, 191 III Holdings LLC ("191 III"), an unconsolidated joint venture in which
the Company held a 20% ownership interest, owned six self-storage facilities in California. The Company acquired these six self-storage
facilities from 191 III in 2020 for total contractual consideration of $124.2 million, which is net of the Company’s share of 191 III’s gain
resulting from the transaction. In connection with this transaction, the non-recourse mortgage loan previously entered into by 191 III was
settled. See Note 4 for additional information regarding this transaction. As 191 III no longer operates any self-storage facilities subsequent to
the sale of the six self-storage facilities to the Company, the Company received a distribution of $8.4 million in 2020 as the Company’s return
of its remaining investment in 191 III. 191 III is expected to be dissolved in 2022.
Additionally, in 2020, the Company acquired the remaining 15% ownership of Urban Box Coralway Storage, LLC ("Urban Box"), a
previously unconsolidated joint venture, for cash payment of $7.8 million which included the payoff of a $7.1 million mortgage loan previously
entered into by Urban Box. The Company’s investment in Urban Box had historically been accounted for by the Company using the equity
method of accounting. As a result of this transaction, the Company now owns 100% of Urban Box and has consolidated Urban Box in
accordance with ASC 810, “Consolidation” since the date that the remaining 15% ownership interest was acquired. The allocated purchase
price of Urban Box also includes the carrying value of the Company’s investment in Urban Box which totaled $3.4 million (see Note 4 for
additional information on the accounting for this acquisition).
Based on the facts and circumstances of each of the Company’s joint ventures, the Company has determined that none of the joint
ventures at December 31, 2021 are a variable interest entity (“VIE”) in accordance with ASC 810, “Consolidation.” The Company used the
voting model under ASC 810 to determine whether or not to consolidate the joint ventures. Based upon each member’s substantive
participation rights over the activities as stipulated in the joint venture agreements, none of the joint ventures evaluated under the voting model
are consolidated by the Company. Due to the Company’s significant influence over the operations of each of the joint ventures, all above joint
ventures are accounted for under the equity method of accounting.
The carrying values of the Company’s investments in joint ventures are assessed for other-than-temporary impairment on a periodic basis
and no such impairments have been recorded on any of the Company’s investments in joint ventures.
As property manager of the self-storage facilities owned by each of the operational joint ventures, the Company earns management
and/or call center fees based on a percentage of joint venture gross revenues. These fees earned from joint ventures, which are included in other
operating income in the consolidated statements of operations, totaled $8.2 million, $8.5 million and $8.9 million in 2021, 2020 and 2019,
respectively.
The Company’s share of the unconsolidated joint ventures’ income (loss) is as follows:
(dollars in thousands)
Venture
Sovran HHF
Sovran HHF II
Other unconsolidated joint ventures
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Year Ended
December 31,
2019
$
$
3,270
1,627
799
5,696
$
$
3,743
1,884
(789)
4,838
$
$
3,747
1,870
(1,051)
4,566
64
A summary of the combined unconsolidated joint ventures’ financial statements as of and for the year ended December 31, 2021 is as
follows:
(dollars in thousands)
Balance Sheet Data:
Investment in storage facilities, net
Investment in office building, net
Other assets
Total Assets
Due to the Company
Mortgages payable
Other liabilities
Total Liabilities
Unaffiliated partners’ equity
Company equity
Total Partners’ Equity
Total Liabilities and Partners’ Equity
Income Statement Data:
Total revenues
Property operating expenses
Administrative, management and call center fees
Gain on sale of self-storage facilities
Depreciation and amortization of customer list
Amortization of financing fees
Income tax expense
Interest expense
Net income
$
$
$
$
$
$
$
1,650,866
4,172
29,153
1,684,191
333
872,574
15,432
888,339
587,619
208,233
795,852
1,684,191
126,426
(39,180)
(9,531)
53,391
(29,914)
(976)
(217)
(21,279)
78,720
The Company does not guarantee the debt of any of its equity method investees.
We do not expect to have material future cash outlays relating to these joint ventures outside our share of capital for future acquisitions of
self-storage facilities, our share of capital for the origination of nonrecourse loans by the ArrowMark Venture joint venture, our share of capital
required for the development of properties under construction, and our share of the payoff of secured debt held by these joint ventures.
A summary of our revenues, expenses and cash flows arising from the off-balance sheet arrangements with unconsolidated joint ventures
for the three years ended December 31, 2021 are as follows:
(dollars in thousands)
Operating activities
Other operating income (management fees and acquisition fee income)
General and administrative expenses (corporate office rent)
Equity in income of joint ventures
Distributions from unconsolidated joint ventures
Receipts from (advances to) joint ventures, net
Investing activities
Investment in unconsolidated joint ventures
Return of investment in unconsolidated joint ventures
2021
Year ended December 31,
2020
2019
$
10,017 $
1,494
5,696
13,866
731
8,694 $
1,269
4,838
14,098
(95)
(113,465 )
37,584
(26,383 )
28,008
9,298
1,198
4,566
10,165
(81)
(25,659)
—
12. SHAREHOLDERS’ EQUITY
On June 14, 2018, the Company entered into a continuous equity offering program ("2018 Equity Program") with multiple sales agents,
pursuant to which the Company was permitted to sell up to $300 million in aggregate offering price of shares of the Company’s common stock.
The 2018 Equity Program was replaced on December 29, 2020, when the Company entered into a continuous equity offering program ("2020
Equity Program") with multiple sales agents, pursuant to which the Company was permitted to sell up to $500 million in aggregate offering
price of shares of the Company’s common stock. The 2020 Equity Program was replaced on June 15, 2021 when the Company entered into a
new continuous equity offering program ("2021 Equity Program") with multiple sales agents pursuant to which the Company is permitted to
sell up to $500 million in aggregate offering price of shares of the Company's stock. Actual sales under this continuous equity offering program
will depend on a variety of factors and conditions, including, but not limited to, market conditions, the trading price of the Company’s common
stock, and determinations of the appropriate sources of funding for the Company. The Company expects to offer, sell and issue shares of
65
common stock under this equity program from time to time based on various factors and conditions, although the Company is under no
obligation to sell any shares under this equity program.
During 2021, the Company issued 6,365,971 shares of common stock under the 2020 Equity Program and the 2021 Equity Program at a
weighted average issue price of $106.51, generating net proceeds of $670.3 million after deducting $6.8 million of sales commissions paid to
the sales agents, as well as other expenses of $0.9 million. The Company used such proceeds primarily to fund a portion of the 112 self-storage
facilities acquired in 2021.
During 2020, the Company issued 4,091,666 shares of common stock under the 2018 Equity Program and the 2020 Equity Program at a
weighted average issue price of $73.16, generating net proceeds of $296.0 million after deducting $3.0 million of sales commissions paid to the
sales agents, as well as other expenses of $0.3 million. The Company used such proceeds primarily to fund a portion of the 40 self-storage
facilities acquired in 2020.
During 2019, the Company did not issue any shares of common stock under these equity programs.
On September 16, 2021, the Company completed the public offering of 2,875,000 shares of the Company's common stock at $122.30 per
share. Net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses were approximately
$348.8 million. The Company used the net proceeds from the offering to repay amounts outstanding under the Company's revolving credit
facility, to fund acquisitions, and for general corporate purposes.
On August 2, 2017, the Company’s Board of Directors authorized the repurchase of up to $200 million of the Company’s outstanding
common shares (“Buyback Program”). The Buyback Program allows the Company to purchase shares of its common stock in accordance with
applicable securities laws on the open market, through privately negotiated transactions, or through other methods of acquiring shares. The
Buyback Program may be suspended or discontinued at any time. The Company did not repurchase any outstanding common shares under the
Buyback Program in 2021, 2020, or 2019.
In 2013, the Company implemented a Dividend Reinvestment Plan which was suspended by the Company's Board of Directors in 2017.
As a result, the Company did not issue any shares under the Dividend Reinvestment Plan during 2021, 2020, or 2019.
13. SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)
The following is a summary of quarterly results of Life Storage, Inc. operations for the years ended December 31, 2021 and 2020 (dollars
in thousands, except per share data):
Operating revenue
Net income
Net income attributable to common shareholders
Net income per share attributable to common shareholders
Basic
Diluted
Operating revenue
Net income
Net income attributable to common shareholders
Net income per share attributable to common shareholders
Basic
Diluted
2021 Quarter Ended
Mar. 31
Jun. 30
Sept. 30
Dec. 31
171,887 $
47,592
47,383
187,262 $
57,765
57,516
208,256 $
71,051
70,274
221,159
75,767
74,145
0.63 $
0.63 $
0.75 $
0.74 $
0.89 $
0.89 $
0.90
0.90
2020 Quarter Ended
Mar. 31
Jun. 30
Sept. 30
Dec. 31
146,943 $
36,625
36,433
147,013 $
36,648
36,457
$
156,310
37,288
37,095
166,505
41,799
41,586
0.52 $
0.52 $
0.52 $
0.52 $
$
0.52
0.52 $
0.57
0.57
$
$
$
$
$
$
66
The following is a summary of quarterly results of Life Storage LP operations for the years ended December 31, 2021 and 2020 (dollars
in thousands, except per unit data):
Operating revenue
Net income
Net income attributable to common unitholders
Net income per unit attributable to common unitholders
Basic
Diluted
Operating revenue
Net income
Net income attributable to common unitholders
Net income per unit attributable to common unitholders
Basic
Diluted
2021 Quarter Ended
Mar. 31
Jun. 30
Sept. 30
Dec. 31
171,887 $
47,592
47,383
187,262 $
57,765
57,516
208,256 $
71,051
70,274
221,159
75,767
74,145
0.63 $
0.63 $
0.75 $
0.74 $
0.89 $
0.89 $
0.90
0.90
2020 Quarter Ended
Mar. 31
Jun. 30
Sept. 30
Dec. 31
146,943 $
36,625
36,433
147,013 $
36,648
36,457
156,310 $
37,288
37,095
166,505
41,799
41,586
0.52 $
0.52 $
0.52 $
0.52 $
0.52 $
0.52 $
0.57
0.57
$
$
$
$
$
$
See Note 2 for discussion of the Company’s three-for-two distribution of common stock announced by the Company on January 4, 2021.
See Note 4 for a discussion of the depreciation resulting from the change in estimated useful lives of buildings identified for replacement at
certain of the Company’s self-storage facilities. See note 5 for financing transactions entered into in 2021 and 2020.
14. COMMITMENTS AND CONTINGENCIES
The Company’s current practice is to conduct environmental investigations in connection with property acquisitions. At this time, the
Company is not aware of any environmental contamination of any of its facilities that individually or in the aggregate would be material to the
Company’s overall business, financial condition, or results of operations.
At December 31, 2021 the Company has approximately $24.5 million of operating lease commitments, excluding variable consideration.
Future minimum lease payments on land and building leases related to self-storage facilities and the lease of the Company’s headquarters are as
follows (dollars in thousands):
Year ending December 31:
2022
2023
2024
2025
2026
Thereafter
Total
$
$
2,657
2,663
2,584
2,402
2,483
11,697
24,486
At December 31, 2021, the Company was under contract to acquire ten self-storage facilities for an aggregate purchase price of $246.3
million. During January 2022, the Company completed the acquisition of six of these self-storage facilities for an aggregate purchase price of
$165.0 million. The purchases of the remaining four self-storage facilities are subject to customary conditions to closing, and there is no
assurance that these facilities will be acquired.
At December 31, 2021, the Company has signed contracts in place with third-party contractors for expansion and enhancements at its
existing facilities. The Company expects to pay $61.4 million under these contracts in 2022.
15. SUBSEQUENT EVENTS
On January 3, 2022, the Company declared a quarterly dividend of $1.00 per common share. The dividend was paid on January 26, 2022
to shareholders of record on January 14, 2022. The total dividend paid amounted to $83.6 million.
As discussed in Note 14, in January 2022, the Company acquired six self-storage facilities for an aggregate purchase price of $165.0
million.
67
During January 2022, the Company issued 74,127 shares of common stock under the Company’s continuous equity offering program at a
weighted average issuance price of $151.58 per share, generating net proceeds of $11.1 million.
Subsequent to December 31, 2021, the Company entered into contracts to acquire 15 self-storage facilities for an aggregate purchase
price of $236.2 million. The purchases of these 15 self-storage facilities are subject to customary conditions to closing, and there is no
assurance that these facilities will be acquired.
68
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Controls and Procedures (Parent Company)
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
The Parent Company’s management conducted an evaluation of the effectiveness of the design and operation of the Parent Company’s
disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as
amended (Exchange Act), under the supervision of and with the participation of the Parent Company’s management, including the Chief
Executive Officer and Chief Financial Officer. Based on that evaluation, the Parent Company’s management, including the Chief Executive
Officer and Chief Financial Officer, concluded that the Parent Company’s disclosure controls and procedures were effective at December 31,
2021. There have not been changes in the Parent Company’s internal controls or in other factors that could significantly affect these controls
during the quarter ended December 31, 2021.
Management’s Report on Life Storage, Inc. Internal Control Over Financial Reporting
Management of Life Storage, Inc. (the “Parent Company”) is responsible for establishing and maintaining adequate internal control over
financial reporting, and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2021.
The Parent Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. The Parent Company’s system of internal control over financial reporting includes those policies and procedures that (i) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Parent
Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the Parent Company are being made only in
accordance with authorizations of management and directors of the Parent Company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the Parent Company’s assets that could have a material effect
on the financial statements.
The Parent Company’s management performed an assessment of the effectiveness of the Parent Company’s internal control over
financial reporting as of December 31, 2021 based upon criteria in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 Framework) (“COSO”). Based on our assessment, management determined that
the Parent Company’s internal control over financial reporting was effective as of December 31, 2021 based on the criteria in Internal Control-
Integrated Framework issued by COSO.
The effectiveness of the Parent Company’s internal control over financial reporting as of December 31, 2021 has been audited by Ernst &
Young LLP (PCAOB ID: 42), an independent registered public accounting firm, as stated in their report which is included in Item 9A herein.
/S/ Joseph V. Saffire
Chief Executive Officer
/S/ Andrew J. Gregoire
Chief Financial Officer
69
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Life Storage, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Life Storage, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in
the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework) (the COSO criteria). In our opinion, Life Storage, Inc. (the Parent Company) maintained, in all material respects, effective internal
control over financial reporting at December 31, 2021, based on the COSO criteria.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the consolidated balance sheets of the Parent Company as of December 31, 2021 and 2020, the related consolidated statements of operations,
comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and the related
notes and financial statement schedule listed in the index at Item 15(a)(2) and our report dated February 25, 2022 expressed an unqualified
opinion thereon.
Basis for Opinion
The Parent Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Life
Storage, Inc. Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Parent Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent
with respect to the Parent Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Buffalo, New York
February 25, 2022
70
Controls and Procedures (Operating Partnership)
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
The Operating Partnership’s management conducted an evaluation of the effectiveness of the design and operation of the Operating
Partnership’s disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act
of 1934, as amended (Exchange Act), under the supervision of and with the participation of the Operating Partnership’s management, including
the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Operating Partnership’s management, including the
Chief Executive Officer and Chief Financial Officer, concluded that the Operating Partnership’s disclosure controls and procedures were
effective at December 31, 2021. There have not been changes in the Operating Partnership’s internal controls or in other factors that could
significantly affect these controls during the quarter ended December 31, 2021.
Management’s Report on Life Storage LP Internal Control Over Financial Reporting
Management of Life Storage LP (the “Operating Partnership”) is responsible for establishing and maintaining adequate internal control
over financial reporting, and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31,
2021. The Operating Partnership’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. The Operating Partnership’s system of internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the Operating Partnership; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Operating
Partnership are being made only in accordance with authorizations of management and directors of the Operating Partnership; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Operating Partnership’s
assets that could have a material effect on the financial statements.
The Operating Partnership’s management performed an assessment of the effectiveness of the Operating Partnership’s internal control
over financial reporting as of December 31, 2021 based upon criteria in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 Framework) (“COSO”). Based on our assessment, management determined that
the Operating Partnership’s internal control over financial reporting was effective as of December 31, 2021 based on the criteria in Internal
Control-Integrated Framework issued by COSO.
The effectiveness of the Operating Partnership’s internal control over financial reporting as of December 31, 2021 has been audited by
Ernst & Young LLP (PCAOB ID: 42), an independent registered public accounting firm, as stated in their report which is included in Item 9A
herein.
/S/ Joseph V. Saffire
Chief Executive Officer
/S/ Andrew J. Gregoire
Chief Financial Officer
71
Report of Independent Registered Public Accounting Firm
To the Partners and the Board of Directors of Life Storage LP
Opinion on Internal Control Over Financial Reporting
We have audited Life Storage LP’s internal control over financial reporting as of December 31, 2021, based on criteria established in the
Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework) (the COSO criteria). In our opinion, Life Storage LP (the Operating Partnership) maintained, in all material respects, effective
internal control over financial reporting at December 31, 2021, based on the COSO criteria.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the consolidated balance sheets of the Operating Partnership as of December 31, 2021 and 2020, the related consolidated statements of
operations, comprehensive income, partners’ capital and cash flows for each of the three years in the period ended December 31, 2021, and the
related notes and financial statement schedule listed in the index at Item 15(a)(2) and our report dated February 25, 2022 expressed an
unqualified opinion thereon.
Basis for Opinion
The Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Life Storage
LP Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership’s internal control over
financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Buffalo, New York
February 25, 2022
72
Item 9B. Other Information
None
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
73
Item 10. Directors, Executive Officers and Corporate Governance
Part III
The information contained in the Parent Company’s Proxy Statement for the 2022 Annual Meeting of Shareholders to be filed with the
SEC within 120 days of the fiscal year ended December 31, 2021 (“2022 Proxy Statement”), with respect to directors, executive officers, audit
committee, and audit committee financial experts of the Company and Section 16(a) beneficial ownership reporting compliance, is
incorporated herein by reference in response to this item.
The Company has adopted a code of ethics that applies to all of its directors, officers, and employees. The Company has made the Code
of Ethics available on its website at http://www.lifestorage.com.
Item 11. Executive Compensation
The information required is incorporated by reference to “Executive Compensation” and “Director Compensation” in the 2022 Proxy
Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required herein is incorporated by reference to “Stock Ownership By Directors and Executive Officers” and “Security
Ownership of Certain Beneficial Owners” in the 2022 Proxy Statement and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required herein is incorporated by reference to “Certain Transactions” and “Election of Directors—Director
Independence” in the 2022 Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The information required herein is incorporated by reference to “Appointment of Independent Registered Public Accounting Firm” in the
2022 Proxy Statement and is incorporated herein by reference.
74
Item 15. Exhibits, Financial Statement Schedules
(a) Documents filed as part of this Annual Report on Form 10-K:
1.
The following consolidated financial statements of Life Storage, Inc. are included in Item 8.
Part IV
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Consolidated Balance Sheets as of December 31, 2021 and 2020;
Consolidated Statements of Operations for Years Ended December 31, 2021, 2020 and 2019;
Consolidated Statements of Comprehensive Income for Years Ended December 31, 2021, 2020 and 2019;
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2021, 2020 and 2019;
Consolidated Statements of Cash Flows for Years Ended December 31, 2021, 2020 and 2019; and
Notes to Consolidated Financial Statements.
The following consolidated financial statements of Life Storage LP are included in Item 8.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Consolidated Balance Sheets as of December 31, 2021 and 2020;
Consolidated Statements of Operations for Years Ended December 31, 2021, 2020 and 2019;
Consolidated Statements of Comprehensive Income for Years Ended December 31, 2021, 2020 and 2019;
Consolidated Statements of Partners’ Capital for the Years Ended December 31, 2021, 2020 and 2019;
Consolidated Statements of Cash Flows for Years Ended December 31, 2021, 2020 and 2019; and
Notes to Consolidated Financial Statements.
2.
The following financial statement Schedule as of the period ended December 31, 2021 is included in this Annual Report on Form 10-K.
Schedule III Real Estate and Accumulated Depreciation at December 31, 2021.
All other Consolidated financial schedules are omitted because they are inapplicable, not required, or the information is included
elsewhere in the consolidated financial statements or the notes thereto.
75
3.
Exhibits
The exhibits required to be filed as part of this Annual Report on Form 10-K have been included as follows:
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
4.1
4.2
4.3
4.4
4.5
4.6
4.7
Amended and Restated Articles of Incorporation of the Parent Company (incorporated by reference to Exhibit 3.1 to the Parent
Company and the Operating Partnership’s Annual Report on Form 10-K filed February 27, 2018).
Articles Supplementary to the Amended and Restated Articles of Incorporation of the Parent Company classifying and designating
the Series A Junior Participating Cumulative Preferred Stock (incorporated by reference to Exhibit 3.1 to the Parent Company’s
Form 8-A filed December 3, 1996).
Articles Supplementary to the Amended and Restated Articles of Incorporation of the Parent Company classifying and designating
the 9.85% Series B Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit 1.6 to the Parent Company’s Form
8-A filed July 29, 1999).
Articles Supplementary to the Amended and Restated Articles of Incorporation of the Parent Company classifying and designating
the 8.375% Series C Convertible Cumulative Preferred Stock (incorporated by reference to Exhibit 4.1 to the Parent Company’s
Current Report on Form 8-K filed July 12, 2002).
Articles Supplementary to the Amended and Restated Articles of Incorporation of the Parent Company reclassifying shares of Series
B Cumulative Redeemable Preferred Stock into Preferred Stock. (incorporated by reference to Exhibit 3.1 to the Parent Company’s
Current Report on Form 8-K filed May 31, 2011).
Articles of Amendment of the Parent Company (incorporated by reference to Exhibit 3.1 to the Parent Company and the Operating
Partnership’s Current Report on Form 8-K filed August 11, 2016).
Articles of Amendment of the Parent Company (incorporated by reference to Exhibit 3.1 to the Parent Company and the Operating
Partnership’s Current Report on Form 8-K filed June 1, 2021)
Bylaws, as amended, of the Parent Company (incorporated by reference to Exhibit 3.2 to the Parent Company and the Operating
Partnership’s Current Report on Form 8-K filed August 11, 2016).
Amendment to Bylaws (incorporated by reference to Exhibit 3.1 to the Parent Company and the Operating Partnership’s Current
Report on Form 8-K filed May 19, 2017).
Amendment to Bylaws (incorporated by reference to Exhibit 3.1 to the Parent Company and Operating Partnership’s Current Report
on Form 8-K filed May 31, 2019).
Amended and Restated Certificate of Limited Partnership (incorporated by reference to Exhibit 3.3 to the Parent Company and the
Operating Partnership’s Current Report on Form 8-K filed August 11, 2016).
Amended and Restated Agreement of Limited Partnership of Life Storage LP (incorporated by reference to Exhibit 3.1 to the Parent
Company and the Operating Partnership's Current Report on Form 8-K filed June 8, 2021).
Certificate of Designation of 4.5% Series A Preferred Limited Partnership Units (incorporated by reference to Exhibit 3.1 to the Parent
Company and the Operating Partnership's Current Report on Form 8-K filed August 23, 2021).
Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Parent Company’s Registration Statement on
Form S-11 (File No. 33-91422) filed June 19, 1995). P
Base Indenture, dated as of June 20, 2016, among the Company, the Operating Partnership and Wells Fargo Bank, National
Association (incorporated by reference to Exhibit 4.1 to the Parent Company and the Operating Partnership’s Current Report on
Form 8-K filed June 20, 2016).
First Supplemental Indenture, dated as of June 20, 2016, among the Parent Company, the Operating Partnership and Wells Fargo
Bank, National Association (incorporated by reference to Exhibit 4.2 to the Parent Company and the Operating Partnership’s Current
Report on Form 8-K filed June 20, 2016).
Form of Note representing the Notes (incorporated by reference to Exhibit 4.3 to the Parent Company and the Operating
Partnership’s Current Report on Form 8-K filed June 20, 2016).
Form of Guarantee (included in Exhibit 4.4).
Second Supplemental Indenture, dated as of December 7, 2017, among the Parent Company, the Operating Partnership and Wells
Fargo Bank, National Association (incorporated by reference to Exhibit 4.1 to the Parent Company and the Operating Partnership’s
Current Report on Form 8-K filed December 7, 2017).
Form of Note representing the Notes (incorporated by reference to Exhibit 4.2 to the Parent Company and the Operating
Partnership’s Current Report on Form 8-K filed December 7, 2017).
4.8
Form of Guarantee (included in Exhibit 4.7).
76
4.9
Third Supplemental Indenture, dated as of June 3, 2019, among the Parent Company, the Operating Partnership and Wells Fargo
Bank, National Association (incorporated by reference to Exhibit 4.1 to the Parent Company and the Operating Partnership’s Current
Report on Form 8-K filed June 3, 2019).
4.10
Form of Note representing the Notes (incorporated by reference to Exhibit 4.2 to the Parent Company and the Operating
Partnership’s Current Report on Form 8-K filed June 3, 2019).
4.11
Form of Guarantee (included in Exhibit 4.10).
4.12
Fourth Supplemental Indenture, dated as of September 23, 2020, among the Company, the Operating Partnership and Wells Fargo
Bank, National Association (incorporated by reference to Exhibit 4.1 to the Parent Company and Operating Partnership’s Current
Report on Form 8-K filed September 23, 2020).
4.13
Form of Note representing the Notes (incorporated by reference to Exhibit 4.2 to the Parent Company and Operating Partnership’s
Current Report on Form 8-K filed September 23, 2020).
4.14
Form of Guarantee (included in Exhibit 4.13).
4.16
Form of Note representing the Notes (incorporated by reference to Exhibit 4.2 to the Parent Company and Operating Partnership’s
Current Report on Form 8-K filed October 8, 2021).
4.17
Form of Guarantee (included in Exhibit 4.16).
4.18* Description of Securities Registered Under Section 12 of the Exchange Act of 1934
10.1+
10.2+
10.3+
10.4
10.5
10.6
10.7
10.8
10.9
2015 Award and Option Plan, as amended (incorporated by reference to Exhibit 10.1 to the Parent Company and the Operating
Partnership’s Annual Report on Form 10-K filed February 27, 2017).
Deferred Compensation Plan for Directors (incorporated by reference to the Parent Company’s Schedule 14A Proxy Statement filed
April 8, 2015).
Form of Indemnification Agreements with members of the Board of Directors (incorporated by reference to Exhibit 10.1 to the
Parent Company and Operating Partnership’s Current Report on Form 8-K filed February 16, 2021).
Seventh Amended and Restated Revolving Credit and Term Loan Agreement dated as of October 30, 2018 among the Parent
Company, the Operating Partnership, Wells Fargo Bank, National Association, Manufacturers and Traders Trust Company and
certain other lending institutions a party thereto or which may become a party thereto (collectively, the “Lenders”), Manufacturers
and Traders Trust Company, as administrative agent for itself and the other Lenders, Wells Fargo Bank, National Association and
Citibank, N.A., as syndication agents, and U.S. Bank National Association, HSBC Bank USA, National Association, PNC Bank,
National Association and SunTrust Bank as co-documentation agents (incorporated by reference to Exhibit 10.2 to the Parent
Company and the Operating Partnership’s Quarterly Report on Form 10-Q filed November 1, 2018).
Note Purchase Agreement dated as of April 8, 2014 among the Parent Company, the Operating Partnership and the institutions
named in Schedule A thereto as purchasers of $175 million, 4.533% Senior Guaranteed Notes, Series E due April 8, 2024
(incorporated by reference to Exhibit 10.1 to the Parent Company’s Current Report on Form 8-K filed April 9, 2014).
Amendment No. 2 to Note Purchase Agreement (2014) dated June 29, 2016 by and among the Parent Company and the Operating
Partnership and the Required Holders (incorporated by reference to Exhibit 10.2 to the Parent Company and the Operating
Partnership’s Current Report on Form 8-K filed July 6, 2016).
Amendments to Note Purchase Agreement (2014) (incorporated by reference to Exhibit 10.25 to the Parent Company and the
Operating Partnership’s Annual Report on Form 10-K filed February 27, 2018).
Note Purchase Agreement dated as of July 21, 2016 among the Parent Company and the Operating Partnership and the institutions
named in Schedule A thereto as purchasers (incorporated by reference to Exhibit 10.1 to the Parent Company and the Operating
Partnership’s Current Report on Form 8-K filed July 26, 2016).
Amendment to Note Purchase Agreement (2016) (incorporated by reference to Exhibit 10.27 to the Parent Company and the
Operating Partnership’s Annual Report on Form 10-K filed February 27, 2018).
10.10+ Amended and Restated 2009 Outside Directors Stock Option and Award Plan (incorporated by reference to the Parent Company’s
Schedule 14A Proxy Statement filed April 16, 2019).
10.11+ Outside Directors’ Stock Award Plan (incorporated by reference to the Parent Company’s Schedule 14A Proxy Statement filed April
17, 2020).
10.12*+ Outside Director Fee Schedule.
77
10.13+ Annual Incentive Compensation Plan for Executive Officers, as amended (incorporated by reference to Exhibit 10.1 to the Parent
Company and the Operating Partnership’s Quarterly Report on Form 10-Q filed May 3, 2018).
10.14+ Amended and Restated Employment Agreement between the Parent Company, the Operating Partnership and Andrew J. Gregoire
dated November 1, 2017 (incorporated by reference to Exhibit 10.5 to the Parent Company and the Operating Partnership’s Quarterly
Report on Form 10-Q filed November 3, 2017).
10.15+ Amended and Restated Employment Agreement between the Parent Company, the Operating Partnership and Edward F. Killeen
dated November 1, 2017 (incorporated by reference to Exhibit 10.6 to the Parent Company and the Operating Partnership’s Quarterly
Report on Form 10-Q filed November 3, 2017).
10.16+ Separation Agreement by and among the Parent Company, the Operating Partnership and Edward F. Killeen, dated September 2,
2021 (incorporated by reference to Exhibit 10.1 to the Parent Company and the Operating Partnership's Current Report on Form 8-K
filed September 2, 2021).
10.17+ Employment Agreement between the Parent Company, the Operating Partnership and Joseph Saffire dated November 1, 2017
(incorporated by reference to Exhibit 10.1 to the Parent Company and the Operating Partnership’s Quarterly Report on Form 10-Q
filed November 3, 2017).
10.18+ Form of Long Term Incentive Restricted Stock Award Notice (incorporated by reference to Exhibit 10.2 to the Parent Company and
the Operating Partnership’s Quarterly Report on Form 10-Q filed November 3, 2017).
10.19+ Letter Agreement between the Parent Company and Joseph V. Saffire (incorporated by reference to Exhibit 10.1 to the Parent
Company and the Operating Partnership’s Current Report on Form 8-K filed March 1, 2019.
10.20+ Amended and Restated Employment Agreement by and among the Parent Company, the Operating Partnership and David Dodman
dated January 1, 2022 (incorporated by reference to Exhibit 10.1 to the Parent Company and the Operating Partnership’s Current
Report on Form 8-K filed January 3, 2022).
10.21+ Form of Long Term Incentive Restricted Stock Award Notice (incorporated by reference to Exhibit 10.1 to the Parent Company and
the Operating Partnership’s Current Report on Form 8-K filed February 27, 2017).
10.22+ Form of Long Term Incentive Stock Award Notice (incorporated by reference to Exhibit 10.1 to the Parent Company and the
Operating Partnership’s Current Report on Form 8-K filed December 21, 2018).
10.23+ Form of Performance-Based Award Notice (incorporated by reference to Exhibit 10.2 to the Parent Company and the Operating
Partnership’s Current Report on Form 8-K filed December 21, 2018).
10.24+ Form of Long Term Incentive Restricted Stock Award Notice (incorporated by reference to Exhibit 10.1 to the Parent Company and
the Operating Partnership’s Current Report on Form 8-K filed December 19, 2019).
10.25+ Form of Performance-Based Award Notice (incorporated by reference to Exhibit 10.2 to the Parent Company and the Operating
Partnership’s Current Report on Form 8-K filed December 19, 2019).
10.26+ Form of Long Term Restricted Stock Award Notice (incorporated by reference to Exhibit 10.1 to the Parent Company and Operating
Partnership’s Current Report on Form 8-K filed December 18, 2020).
10.27+ Form of Performance-Based Award Notice (incorporated by reference to Exhibit 10.2 to the Parent Company and Operating
Partnership’s Current Report on Form 8-K filed December 18, 2020).
10.28+ Form of Long Term Restricted Stock Award Notice (incorporated by reference to Exhibit 10.1 to the Parent Company and Operating
Partnership’s Current Report on Form 8-K filed December 20, 2021).
10.29+ Form of Performance-Based Award Notice (incorporated by reference to Exhibit 10.2 to the Parent Company and Operating
Partnership’s Current Report on Form 8-K filed December 20, 2021).
10.30
Form of Equity Distribution Agreement, dated June 16, 2021, by and among the Parent Company, the Operating Partnership, Life
Storage Holdings, Inc., the Sales Agents, the Forward Sellers and the Forward Partners (incorporated by reference to Exhibit 1.1 of
the Parent Company and Operating Partnership’s Current Report on Form 8-K filed June 16, 2021).
21.1*
Subsidiaries of the Company.
23.1*
Consent of Independent Registered Public Accounting Firm
23.2*
Consent of Independent Registered Public Accounting Firm
24.1*
Powers of Attorney (included on signature pages).
31.1*
Certification of Chief Executive Officer of Life Storage, Inc. pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities
Exchange Act, as amended.
78
31.2*
31.3*
31.4*
32.1*
32.2*
101*
Certification of Chief Financial Officer of Life Storage, Inc. pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities
Exchange Act, as amended.
Certification of Chief Executive Officer of Life Storage LP pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities
Exchange Act, as amended.
Certification of Chief Financial Officer of Life Storage LP pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange
Act, as amended.
Certification of Chief Executive Officer and Chief Financial Officer of Life Storage, Inc. Pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Executive Officer and Chief Financial Officer of Life Storage LP Pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
The following financial statements from Life Storage, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021,
formatted in inline XBRL, as follows:
(i) Consolidated Balance Sheets at December 31, 2021 and 2020;
(ii) Consolidated Statements of Operations for Years Ended December 31, 2021, 2020 and 2019;
(iii) Consolidated Statements of Comprehensive Income for Years Ended December 31, 2021, 2020 and 2019;
(iv) Consolidated Statements of Shareholders’ Equity for Years Ended December 31, 2021, 2020 and 2019;
(v) Consolidated Statements of Cash Flows for Years Ended December 31, 2021, 2020 and 2019; and
(vi) Notes to Consolidated Financial Statements.
The following financial statements from Life Storage LP’s Annual Report on Form 10-K for the year ended December 31, 2021,
formatted in inline XBRL, as follows:
(i) Consolidated Balance Sheets at December 31, 2021 and 2020;
(ii) Consolidated Statements of Operations for Years Ended December 31, 2021, 2020 and 2019;
(iii) Consolidated Statements of Comprehensive Income for Years Ended December 31, 2021, 2020 and 2019;
(iv) Consolidated Statements of Partners’ Capital for Years Ended December 31, 2021, 2020 and 2019;
(v) Consolidated Statements of Cash Flows for Years Ended December 31, 2021, 2020 and 2019; and
(vi) Notes to Consolidated Financial Statements.
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
*
+
Filed herewith.
Management contract or compensatory plan or arrangement.
Item 16. Form 10-K Summary
Not applicable.
79
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
February 25, 2022
February 25, 2022
LIFE STORAGE, INC.
By:
/s/ Andrew J. Gregoire
Andrew J. Gregoire
Chief Financial Officer
(Principal Accounting Officer)
LIFE STORAGE LP
By:
/s/ Andrew J. Gregoire
Andrew J. Gregoire
Chief Financial Officer
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.
Signature
/s/ Mark G. Barberio
Mark G. Barberio
/s/ Joseph V. Saffire
Joseph V. Saffire
/s/ Andrew J. Gregoire
Andrew J. Gregoire
/s/ Stephen R. Rusmisel
Stephen R. Rusmisel
/s/ Arthur L. Havener, Jr.
Arthur L. Havener, Jr.
/s/ Dana Hamilton
Dana Hamilton
/s/ Edward J. Pettinella
Edward J. Pettinella
/s/ David L. Rogers
David L. Rogers
/s/ Susan S. Harnett
Susan S. Harnett
Chair of Board and Director of Life Storage, Inc.
February 25, 2022
Title
Date
Chief Executive Officer (Principal Executive Officer) and
Director of Life Storage, Inc. and Life Storage Holdings, Inc.,
general partner of Life Storage LP
Chief Financial Officer (Principal Financial and Accounting
Officer) of Life Storage, Inc. and Life Storage Holdings, Inc.,
general partner of Life Storage LP
February 25, 2022
February 25, 2022
Director of Life Storage, Inc.
February 25, 2022
Director of Life Storage, Inc.
February 25, 2022
Director of Life Storage, Inc.
February 25, 2022
Director of Life Storage, Inc.
February 25, 2022
Director of Life Storage, Inc.
February 25, 2022
Director of Life Storage, Inc.
February 25, 2022
80
Life Storage, Inc. and Life Storage LP
Schedule III
Combined Real Estate and Accumulated Depreciation
(in thousands)
December 31, 2021
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
$
$
$
416
397
308
239
701
395
483
224
423
395
152
363
230
680
463
649
387
844
302
315
321
189
430
513
194
1,503
398
423
483
308
170
413
154
479
883
316
632
715
304
1,375
244
834
234
256
313
307
1,516
1,424
1,102
1,110
1,659
1,501
1,752
808
1,531
1,404
728
1,679
847
1,616
1,684
2,329
1,402
2,021
1,103
745
1,150
719
1,579
1,930
912
3,619
1,035
1,015
1,166
1,116
786
999
555
1,742
2,104
1,471
2,962
1,695
1,118
3,220
901
2,066
861
1,244
1,462
1,415
$
2,488
1,770
3,744
2,641
3,855
3,554
2,473
4,552
4,274
3,460
3,957
984
2,359
1,008
5,034
1,708
4,051
1,144
792
4,154
3,535
4,593
2,481
958
730
1,757
717
3,463
1,417
1,113
997
989
1,590
3,298
5,511
1,216
2,061
1,447
3,071
3,300
794
3,599
3,652
2,597
2,901
1,985
$
4,004
3,194
4,407
3,751
5,179
4,671
4,225
5,360
5,731
4,864
4,150
2,663
3,202
2,624
5,736
4,037
5,453
3,165
1,894
4,697
4,685
5,312
3,888
2,888
1,642
5,376
1,752
4,477
2,583
2,229
1,779
1,988
1,993
5,040
7,615
2,687
5,004
3,142
3,874
6,519
1,695
4,908
4,135
3,841
4,363
3,322
4,420
3,591
5,154
3,990
6,215
5,450
4,708
5,584
6,228
5,259
4,837
3,026
3,436
3,304
7,181
4,686
5,840
4,009
2,197
5,214
5,006
5,501
4,490
3,401
1,836
6,879
2,150
4,901
3,066
2,537
1,953
2,401
2,299
5,519
8,498
3,003
5,655
3,857
4,493
7,895
1,939
6,499
4,747
4,097
4,676
3,707
$
2,098
1,710
1,824
1,775
2,071
1,657
2,351
1,542
2,651
1,185
1,594
1,619
1,284
1,541
3,155
2,296
2,163
1,906
1,148
1,928
1,608
953
2,016
1,841
990
2,957
1,037
1,167
1,407
1,290
1,043
1,299
1,090
2,487
2,510
1,613
3,091
1,886
2,024
3,779
1,010
2,120
1,767
1,984
2,019
1,827
$
416
397
747
239
1,036
779
483
224
497
395
687
363
234
680
1,445
649
387
844
303
517
321
189
602
513
194
1,503
398
424
483
308
174
413
306
479
883
316
651
715
619
1,376
244
1,591
612
256
313
385
81
New
Description
Charleston
Lakeland
Charlotte
Youngstown
Cleveland
Pt. St. Lucie
Orlando - Deltona
NY Metro-Middletown
Buffalo
Rochester
Jacksonville
Boston
Rochester
Boston
Savannah
Raleigh-Durham
Hartford-New Haven
Atlanta
Atlanta
Buffalo
Raleigh-Durham
Columbia
Atlanta
Orlando
Sharon
Ft. Lauderdale
West Palm
Atlanta
Atlanta
Atlanta
Atlanta
Atlanta
Baltimore
Baltimore
Melbourne
Newport News
Pensacola
Hartford
Atlanta
Alexandria
Pensacola
Melbourne
Hartford
Atlanta
Norfolk
Birmingham
ST
SC
FL
NC
OH
OH
FL
FL
NY
NY
NY
FL
MA
NY
MA
GA
NC
CT
GA
GA
NY
NC
SC
GA
FL
PA
FL
FL
GA
GA
GA
GA
GA
MD
MD
FL
VA
FL
CT
GA
VA
FL
FL
CT
GA
VA
AL
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
1985
1985
1986
1980
1987/15
1985/2019
1984
1988/17
1981
1981
1985
1980
1980
1986
1981
1985
1985
1988
1988
1984
1985
1989/2020
1988
1988
1975
1985
1985
1989
1988
1986
1981
1975
1984
1988
1986/2019
1988
1983
1988
1988
1984
1986
1986/15
1992
1988
1984
1990
New
Description
Birmingham
Montgomery
Jacksonville
Pensacola
Pensacola
Pensacola
Tampa
Clearwater
Clearwater-Largo
Providence
Norfolk - Virginia Beach
Richmond
Orlando
Syracuse
Ft. Myers
Ft. Myers
Harrisburg
Harrisburg
Newport News
Montgomery
Charleston
Tampa
Dallas-Ft.Worth
Dallas-Ft.Worth
Dallas-Ft.Worth
San Antonio
San Antonio
Montgomery
West Palm
Ft. Myers
Syracuse
Lakeland
Boston - Springfield
Ft. Myers
Cincinnati
Baltimore
Jacksonville
Jacksonville
Jacksonville
Charlotte
Charlotte
Orlando
Rochester
Youngstown
Cleveland
Cleveland
ST
AL
AL
FL
FL
FL
FL
FL
FL
FL
RI
VA
VA
FL
NY
FL
FL
PA
PA
VA
AL
SC
FL
TX
TX
TX
TX
TX
AL
FL
FL
NY
FL
MA
FL
OH
MD
FL
FL
FL
NC
NC
FL
NY
OH
OH
OH
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
730
863
326
369
244
226
1,088
526
672
345
1,142
443
1,161
470
205
412
360
627
442
353
237
766
442
408
328
436
289
279
345
229
481
359
251
344
557
777
568
436
535
487
315
314
704
600
751
725
1,725
2,041
1,515
1,358
1,128
1,046
2,597
1,958
2,439
1,268
4,998
1,602
2,755
1,712
912
1,703
1,641
2,224
1,592
1,299
858
1,800
1,767
1,662
1,324
1,759
1,161
1,014
1,262
884
1,559
1,287
917
1,254
1,988
2,770
2,028
1,635
2,033
1,754
1,131
1,113
2,496
2,142
2,676
2,586
3,090
1,613
1,473
3,617
2,965
998
1,735
1,635
1,252
2,167
3,726
1,316
3,153
1,832
858
979
3,425
5,359
1,593
1,276
1,094
1,171
477
1,603
4,826
1,760
2,526
1,593
694
2,923
2,752
1,455
2,616
768
1,044
1,071
1,945
1,253
775
786
653
1,573
3,254
2,843
4,612
2,723
4,815
3,654
2,988
4,975
3,617
2,044
4,332
3,593
3,691
3,294
8,724
2,918
5,907
3,542
1,769
2,681
5,066
7,518
3,185
2,575
1,944
2,971
2,244
3,265
6,150
3,519
3,687
2,453
1,956
3,653
4,121
2,742
3,487
2,056
2,901
3,841
3,973
2,888
2,805
2,540
1,784
2,686
5,747
4,892
7,288
5,309
5,545
4,517
3,314
5,344
4,337
2,270
5,420
4,119
4,363
3,780
9,866
3,361
7,069
4,014
1,975
3,094
5,426
8,210
3,627
2,928
2,189
3,737
2,686
3,673
6,478
3,955
3,976
2,886
2,301
4,036
4,792
3,101
3,784
2,366
3,589
4,618
4,541
3,324
3,343
3,027
2,099
3,000
6,454
5,585
8,039
6,034
2,158
2,094
1,574
2,535
1,658
1,218
2,568
2,091
2,197
1,607
4,294
1,737
2,853
1,991
1,015
1,706
1,507
2,912
1,938
1,369
1,176
1,709
1,449
1,850
466
1,977
844
1,343
1,157
1,312
2,327
1,682
1,975
1,230
1,317
2,252
2,224
1,649
1,759
1,508
1,081
1,507
2,718
2,415
3,350
2,851
730
863
326
369
720
226
1,088
526
672
486
1,142
443
1,162
472
206
413
360
692
442
353
245
766
442
408
328
436
289
433
345
383
671
359
297
310
688
777
568
436
538
487
315
314
707
693
751
725
82
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
6/26/1995
8/25/1995
9/29/1995
12/27/1995
12/28/1995
12/28/1995
12/29/1995
12/29/1995
1/5/1996
1/23/1996
3/1/1996
3/28/1996
3/29/1996
3/29/1996
3/29/1996
3/29/1996
3/29/1996
5/21/1996
5/29/1996
5/29/1996
6/5/1996
6/26/1996
6/28/1996
6/28/1996
7/23/1996
7/26/1996
8/23/1996
8/26/1996
8/30/1996
9/16/1996
9/16/1996
10/30/1996
12/20/1996
1/10/1997
1/10/1997
1/10/1997
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
1990
1982
1987
1986
1990
1990
1989
1985
1988
1984
1989/93/95/16
1987
1986/15
1987
1988
1991/94
1983
1985
1988/93
1984
1985
1985
1987
1986
2018
1986
2012
1988
1986
1986
1983
1988
1986
1987
1988
1990
1987
1985
1987/92
1995
1995
1975
1990
1988
1986
1978
New
Description
Cleveland
Cleveland
Cleveland
Cleveland
Cleveland
San Antonio
San Antonio
Houston-Beaumont
Houston-Beaumont
Houston-Beaumont
Chesapeake
Orlando-W 25th St
Savannah
Delray
Cleveland-Avon
Atlanta-Alpharetta
Atlanta-Marietta
Atlanta-Doraville
Baton Rouge-Airline
Baton Rouge-Airline2
Harrisburg-Peiffers
Tampa-E. Hillsborough
NY Metro-Middletown
Chesapeake-Military
Chesapeake-Volvo
Norfolk-Naval Base
Boston-Northbridge
Titusville
Boston-Salem
Providence
Chattanooga-Lee Hwy
Chattanooga-Hwy 58
Ft. Oglethorpe
Birmingham-Walt
Salem-Policy
Raleigh-Durham
Youngstown-Warren
Youngstown-Warren
Houston-Katy
Melbourne
Vero Beach
Houston-Humble
Houston-Webster
San Marcos
Hollywood-Sheridan
Pompano Beach-Atlantic
ST
OH
OH
OH
OH
OH
TX
TX
TX
TX
TX
VA
FL
GA
FL
OH
GA
GA
GA
LA
LA
PA
FL
NY
VA
VA
VA
MA
FL
MA
RI
TN
TN
GA
AL
NH
NC
OH
OH
TX
FL
FL
TX
TX
TX
FL
FL
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
637
495
761
418
606
346
432
634
566
293
260
289
296
921
301
1,033
769
735
396
282
635
709
843
542
620
1,243
441
492
733
702
384
296
349
544
742
775
522
512
419
662
489
447
635
324
1,208
944
2,918
1,781
2,714
1,921
2,164
1,236
1,560
2,565
2,279
1,357
1,043
1,160
1,196
3,282
1,214
3,753
2,788
3,429
1,831
1,303
2,550
3,235
3,394
2,210
2,532
5,019
1,788
1,990
2,941
2,821
1,371
1,198
1,250
1,942
2,977
3,103
1,864
1,829
1,524
2,654
1,813
1,790
2,302
1,493
4,854
3,803
2,310
4,243
2,024
3,095
1,681
704
2,290
4,840
625
736
4,944
2,666
754
1,316
2,456
940
866
814
1,331
711
907
1,202
4,796
3,323
1,666
1,226
1,272
6,061
2,002
4,432
728
2,408
1,923
1,394
756
4,122
1,670
2,982
4,214
3,747
1,953
3,066
841
2,449
1,059
929
5,164
6,024
4,738
5,016
3,845
1,940
3,850
7,405
2,904
2,093
5,987
3,499
1,950
4,598
3,667
4,693
3,598
4,243
3,137
2,014
3,455
4,437
8,190
5,533
4,198
6,245
2,807
7,855
4,943
7,253
2,099
3,488
3,058
3,336
3,733
7,225
3,487
4,690
5,738
6,401
3,671
4,563
3,143
3,942
5,913
4,732
5,865
6,519
5,499
5,434
4,451
2,286
4,282
8,039
3,470
2,386
6,247
4,115
2,246
5,519
3,971
5,726
4,423
4,978
3,558
2,296
4,092
5,146
9,033
6,075
4,818
7,488
3,501
8,543
5,676
7,955
2,483
3,902
3,522
3,880
4,475
8,000
4,056
5,323
6,157
7,063
4,255
5,303
3,778
4,266
7,121
5,676
3,389
2,225
2,871
2,581
2,098
1,157
2,179
2,905
1,755
1,189
2,315
1,411
1,101
2,621
1,916
2,787
2,113
2,480
1,778
1,155
2,194
2,621
2,989
2,166
2,297
3,644
1,219
1,595
4,943
3,222
1,303
1,754
1,489
1,980
2,144
2,030
1,908
2,153
2,370
2,338
1,579
2,068
1,614
1,867
3,353
3,199
701
495
761
418
606
346
432
634
566
293
260
616
296
921
304
1,033
825
735
421
282
637
709
843
542
620
1,243
694
688
733
702
384
414
464
544
742
775
569
633
419
662
584
740
635
324
1,208
944
83
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
1/10/1997
1/10/1997
1/10/1997
1/10/1997
1/10/1997
1/30/1997
1/30/1997
3/26/1997
3/26/1997
3/26/1997
3/31/1997
3/31/1997
5/8/1997
5/21/1997
6/4/1997
7/24/1997
7/24/1997
8/21/1997
10/9/1997
11/21/1997
12/3/1997
2/4/1998
2/4/1998
2/5/1998
2/5/1998
2/5/1998
2/9/1998
2/25/1998
3/3/1998
3/26/1998
3/27/1998
3/27/1998
3/27/1998
3/27/1998
4/7/1998
4/9/1998
4/22/1998
4/22/1998
5/20/1998
6/2/1998
6/12/1998
6/16/1998
6/19/1998
6/30/1998
7/1/1998
7/1/1998
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
1979
1979/17
1977
1970
1982
1985
1995
1993/95/16
1995
1995
1988/95
1984
1988
1980
1989
1994
1996
1995
1982
1985
1984
1985
1989/95
1996/2019
1995
1975
1988
1986/90/2020
1979
1984/88
1987
1985
1989
1984
1980
1988/91/2019
1986
1986/16
1994
1985/07/15
1997
1986
1997
1994
1988
1985
New
Description
Pompano Beach-Sample
Boca Raton-18th St
Hollywood-N.21st
Dallas-Fort Worth
Dallas-Fort Worth
Cincinnati-Batavia
Providence
Lafayette-Ambassador
Phoenix-Glendale
Phoenix-Mesa
Phoenix-Mesa
Phoenix-Mesa
Phoenix-Mesa
Phoenix-Bell
Phoenix-35th Ave
Portland
Space Coast-Cocoa
Dallas-Fort Worth
NY Metro-Middletown
Boston-N. Andover
Houston-Seabrook
Ft. Lauderdale
Birmingham-Bessemer
NY Metro-Brewster
Austin-Lamar
Houston
Ft.Myers
Boston-Dracut
Boston-Methuen
Myrtle Beach
Maine-Saco
Boston-Plymouth
Boston-Sandwich
Syracuse
Dallas-Fort Worth
San Antonio-Hunt
Houston-Humble
Houston-Pasadena
Houston-Montgomery
Houston-S. Hwy 6
Houston-Beaumont
The Hamptons
The Hamptons
The Hamptons
The Hamptons
Dallas-Fort Worth
ST
FL
FL
FL
TX
TX
OH
RI
LA
AZ
AZ
AZ
AZ
AZ
AZ
AZ
ME
FL
TX
NY
MA
TX
FL
AL
NY
TX
TX
FL
MA
MA
SC
ME
MA
MA
NY
TX
TX
TX
TX
TX
TX
TX
NY
NY
NY
NY
TX
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
903
1,503
840
550
670
390
447
314
565
330
339
291
354
872
849
410
667
335
276
633
633
384
254
1,716
837
733
787
1,035
1,024
552
534
1,004
670
294
734
381
919
612
817
407
817
2,207
1,131
635
1,251
1,039
3,643
6,059
3,373
1,998
2,407
1,570
1,776
1,095
2,596
1,309
1,346
1,026
1,405
3,476
3,401
1,626
2,373
1,521
1,312
2,573
2,617
1,422
1,059
6,920
2,977
3,392
3,249
3,737
3,649
1,970
1,914
4,584
3,060
1,203
2,956
1,545
3,696
2,468
3,286
1,650
3,287
8,866
4,564
2,918
5,744
4,201
884
(1,537 )
681
974
1,947
4,191
1,122
5,951
870
2,777
1,127
1,515
934
3,833
1,196
2,183
1,245
1,011
4,638
1,169
5,883
1,106
3,507
1,986
3,865
1,407
859
6,069
983
3,318
5,015
2,556
691
1,303
1,130
6,757
1,183
514
2,350
903
3,732
4,878
690
510
1,062
528
4,527
5,174
4,054
2,972
4,354
5,775
2,898
7,046
3,466
3,683
2,473
2,541
2,339
7,309
4,597
3,809
3,618
2,532
5,950
3,742
8,550
2,528
4,488
8,641
6,713
4,691
3,993
9,737
4,565
5,251
6,525
7,140
3,707
2,473
4,036
8,065
4,946
2,982
5,334
2,553
7,019
13,744
5,254
3,428
6,805
4,729
5,430
6,025
4,894
3,522
5,024
6,151
3,345
7,360
4,031
4,416
2,812
2,832
2,693
8,181
5,446
4,219
4,285
2,867
6,226
4,375
9,133
2,912
4,820
10,622
7,679
5,532
4,895
10,841
5,656
5,840
7,463
8,144
4,421
2,800
4,820
8,683
5,798
3,594
6,453
2,960
7,836
15,951
6,385
4,063
8,057
5,768
2,548
2,938
2,412
1,599
2,325
1,629
1,609
461
1,962
1,632
1,220
1,163
1,182
3,283
2,585
1,884
2,269
1,263
1,604
1,933
1,535
1,255
1,489
3,356
2,194
1,974
1,847
1,937
2,246
1,608
1,508
3,197
1,825
1,095
1,914
2,284
2,175
1,467
2,391
1,094
2,213
5,721
2,503
1,629
3,072
2,125
903
851
840
550
670
376
447
314
565
733
339
291
354
872
849
410
667
335
276
633
583
384
332
1,981
966
841
902
1,104
1,091
589
938
1,004
714
327
784
618
852
612
1,119
407
817
2,207
1,131
635
1,252
1,039
84
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
7/1/1998
7/1/1998
8/3/1998
9/29/1998
10/9/1998
11/19/1998
2/2/1999
2/17/1999
5/18/1999
5/18/1999
5/18/1999
5/18/1999
5/18/1999
5/18/1999
5/21/1999
8/2/1999
9/29/1999
11/9/1999
2/2/2000
2/15/2000
3/1/2000
5/2/2000
11/15/2000
12/27/2000
2/22/2001
3/2/2001
3/13/2001
12/1/2001
12/1/2001
12/1/2001
12/3/2001
12/19/2001
12/19/2001
2/5/2002
2/13/2002
2/13/2002
6/19/2002
6/19/2002
6/19/2002
6/19/2002
6/19/2002
12/16/2002
12/16/2002
12/16/2002
12/16/2002
8/26/2003
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
1988
1991
1987
1996
1996
1988/2020
1986/94
2019
1997
1986
1986
1976
1986
1984
1996
1988
1982
1985
1998/2019
1989
1996/2020
1994
1998
1991/97
1996/99
1993/97
1997
1986/2020
1984
1984/2019
1988/2019
1996
1984
1987
1984
1980/17
1998/02
1999
1998
1997
1996/17
1989/95/2021
1998
1997
1994/98
1995/99
New
Description
Dallas-Fort Worth
Stamford
Houston-Tomball
Houston-Conroe
Houston-Spring
Houston-Bissonnet
Houston-Alvin
Clearwater
Houston-Missouri City
Chattanooga-Hixson
Austin-Round Rock
Long Island-Bayshore
Syracuse - Cicero
Boston-Springfield
Stamford
Montgomery-Richard
Houston-Jones
Boston-Oxford
Austin-290E
San Antonio-Marbach
Austin-South 1st
Atlanta-Marietta
Baton Rouge
San Marcos-Hwy 35S
Houston-Baytown
Houston-Cypress
Rochester
Houston-Jones Rd 2
Manchester
Clearwater-Largo
Clearwater-Pinellas Park
Clearwater-Tarpon Spring
New Orleans
St Louis-Meramec
St Louis-Charles Rock
St Louis-Shackelford
St Louis-W.Washington
St Louis-Howdershell
St Louis-Lemay Ferry
St Louis-Manchester
Dallas-Fort Worth
Dallas-Fort Worth
Dallas-Fort Worth
Dallas-Fort Worth
Dallas-Fort Worth
Dallas-Fort Worth
ST
TX
CT
TX
TX
TX
TX
TX
FL
TX
TN
TX
NY
NY
MA
CT
AL
TX
MA
TX
TX
TX
GA
LA
TX
TX
TX
NY
TX
NH
FL
FL
FL
LA
MO
MO
MO
MO
MO
MO
MO
TX
TX
TX
TX
TX
TX
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
827
2,713
773
1,195
1,103
1,061
388
1,720
1,167
1,365
2,047
1,131
527
612
1,612
1,906
1,214
470
537
556
754
811
719
628
596
721
937
707
832
1,270
929
696
1,220
1,113
766
828
734
899
890
697
1,256
605
607
1,073
549
644
3,776
11,013
3,170
4,877
4,550
4,427
1,640
6,986
4,744
5,569
5,857
4,609
2,121
2,501
6,585
7,726
4,949
1,902
2,183
2,265
3,065
3,397
2,927
2,532
2,411
2,994
3,779
2,933
3,268
5,037
3,676
2,739
4,805
4,359
3,040
3,290
2,867
3,596
3,552
2,711
4,946
2,434
2,428
4,276
2,180
2,542
744
933
1,997
521
1,286
3,249
1,144
571
3,943
2,273
1,064
321
3,401
998
436
600
1,238
4,605
6,183
879
513
696
2,755
3,526
736
2,547
364
3,043
281
801
654
290
463
2,763
1,548
319
2,734
400
586
277
849
451
423
235
1,243
446
4,520
11,946
5,167
5,398
5,836
7,676
2,784
7,557
8,288
7,842
6,992
4,930
5,522
3,499
7,021
8,326
6,186
6,507
8,412
3,144
3,578
4,093
5,682
5,704
3,147
5,541
4,143
5,976
3,549
5,838
4,330
3,029
5,268
7,122
4,588
3,609
5,601
3,996
4,138
2,988
5,795
2,885
2,851
4,511
3,423
2,988
5,347
14,659
5,940
6,593
6,939
8,737
3,172
9,277
9,854
9,207
8,968
6,061
6,049
4,111
8,633
10,232
7,401
6,977
8,903
3,700
4,332
4,904
6,401
6,686
3,743
6,262
5,080
6,683
4,381
7,108
5,259
3,725
6,488
8,235
5,354
4,437
6,335
4,895
5,028
3,685
7,051
3,490
3,458
5,584
3,972
3,632
2,006
5,474
2,264
2,408
2,434
3,172
1,187
3,366
3,230
3,366
3,094
2,093
1,751
1,307
3,044
3,512
2,377
1,656
1,639
1,317
1,513
1,721
1,982
1,530
1,163
2,056
1,672
2,317
1,422
2,234
1,612
1,230
2,084
1,943
1,589
1,448
1,864
1,587
1,628
1,195
2,248
1,076
1,100
1,760
1,260
1,110
827
2,713
773
1,195
1,103
1,061
388
1,720
1,566
1,365
1,976
1,131
527
612
1,612
1,906
1,215
470
491
556
754
811
719
982
596
721
937
707
832
1,270
929
696
1,220
1,113
766
828
734
899
890
697
1,256
605
607
1,073
549
644
85
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
10/1/2003
3/17/2004
5/19/2004
5/19/2004
5/19/2004
5/19/2004
5/19/2004
6/3/2004
6/23/2004
8/4/2004
8/5/2004
3/15/2005
3/16/2005
4/12/2005
4/14/2005
6/1/2005
6/6/2005
6/23/2005
7/12/2005
7/12/2005
7/12/2005
9/15/2005
11/15/2005
1/10/2006
1/10/2006
1/13/2006
2/1/2006
3/9/2006
4/26/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
6/22/2006
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
1998/01
1998
2000
2001
2001
2003
2003
2001
1998
1998/02
2000
2003
1988/02/16
1965/75
2002
1997
1997/99
2002
2003/17
2003
2003
2003
1984/94
2001/16
2002
2003
2002/06
2000
2000
1998
2000
1999
2000
1999/2019
1999
1999
1980/01/15
2000
1999
2000
1998/03
2004
2004
2003
1998
1999
New
Description
San Antonio-Blanco
San Antonio-Broadway
San Antonio-Huebner
Nashua
Chattanooga-Lee Hwy II
Montgomery-E.S.Blvd
Auburn-Pepperell Pkwy
Auburn-Gatewood Dr
Columbus-Williams Rd
Columbus-Miller Rd
Columbus-Armour Rd
Columbus-Amber Dr
Concord
Houston-Beaumont
Houston-Beaumont
Buffalo-Langner Rd
Buffalo-Transit Rd
Buffalo-Lake Ave
Buffalo-Union Rd
Buffalo-NF Blvd
Buffalo-Young St
Buffalo-Sheridan Dr
Bufrfalo-Transit Rd
Rochester-Phillips Rd
San Antonio-Foster
Huntsville-Memorial Pkwy
Huntsville-Madison 1
Bilox-Gulfport
Huntsville-Hwy 72
Mobile-Airport Blvd
Bilox-Gulfport
Huntsville-Madison 2
Foley-Hwy 59
Pensacola 6-Nine Mile
Auburn-College St
Biloxi-Gulfport
Pensacola 7-Hwy 98
Montgomery-Arrowhead
Montgomery-McLemore
Houston-Beaumont
Biloxi-Ginger
Foley-7905 St Hwy 59
Cincinnati-Robertson
Richmond-Bridge Rd
Raleigh-Durham
Charlotte-Wallace
ST
TX
TX
TX
NH
TN
AL
AL
AL
GA
GA
GA
GA
NH
TX
TX
NY
NY
NY
NY
NY
NY
NY
NY
NY
TX
AL
AL
MS
AL
AL
MS
AL
AL
FL
AL
MS
FL
AL
AL
TX
MS
AL
OH
VA
NC
NC
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
963
773
1,175
617
619
1,158
590
694
736
975
—
439
813
929
1,537
532
437
638
348
323
315
961
375
1,003
676
1,607
1,016
1,423
1,206
1,216
1,345
1,164
1,346
1,029
686
1,811
732
1,075
885
742
384
437
852
1,047
846
961
3,836
3,060
4,624
2,422
2,471
4,639
2,361
2,758
2,905
3,854
3,680
1,745
3,213
3,647
6,018
2,119
1,794
2,531
1,344
1,331
2,185
3,827
1,498
4,002
2,685
6,338
4,013
5,624
4,775
4,819
5,325
4,624
5,474
4,180
2,732
7,152
3,015
4,333
3,586
3,024
1,548
1,757
3,409
5,981
4,095
3,702
348
2,371
566
789
310
1,426
749
501
539
1,529
416
472
2,121
513
1,112
3,818
3,251
3,046
3,818
276
4,485
2,763
953
230
553
1,215
519
383
552
505
217
408
5,086
3,307
368
260
3,407
485
352
399
236
205
409
2,787
371
1,414
4,184
5,431
5,190
3,211
2,781
6,065
3,110
3,259
3,444
5,383
4,096
2,217
5,334
4,159
7,130
5,937
5,045
5,577
5,162
1,607
6,104
6,590
2,451
4,232
3,238
7,483
4,531
6,007
5,327
5,324
5,586
5,032
10,559
7,487
3,100
7,412
6,422
4,817
3,938
3,423
1,784
1,962
3,818
8,768
4,466
5,116
5,147
6,204
6,365
3,828
3,400
7,223
3,700
3,953
4,180
6,358
4,096
2,656
6,147
5,089
8,667
6,469
5,482
6,215
5,510
1,930
6,985
7,551
2,826
5,235
3,914
9,160
5,548
7,430
6,533
6,540
6,887
6,196
11,906
8,516
3,786
9,223
7,154
5,893
4,823
4,165
2,168
2,399
4,670
9,815
5,312
6,077
1,697
2,341
2,017
1,235
1,112
2,361
1,220
1,241
1,347
1,808
1,610
912
1,959
1,545
2,610
1,693
949
1,612
968
650
1,370
2,186
847
1,582
1,294
2,783
1,752
2,232
2,021
2,093
2,086
1,895
2,629
1,906
1,192
2,720
1,355
1,786
1,470
1,246
621
706
1,263
2,539
1,316
1,359
963
773
1,175
617
619
1,158
590
694
736
975
—
439
813
930
1,537
532
437
638
348
323
881
961
375
1,003
676
1,677
1,017
1,423
1,206
1,216
1,301
1,164
1,347
1,029
686
1,811
732
1,076
885
742
384
437
852
1,047
846
961
86
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
6/22/2006
6/22/2006
6/22/2006
6/29/2006
8/7/2006
9/28/2006
9/28/2006
9/28/2006
9/28/2006
9/28/2006
9/28/2006
9/28/2006
10/31/2006
3/8/2007
3/8/2007
3/30/2007
3/30/2007
3/30/2007
3/30/2007
3/30/2007
3/30/2007
3/30/2007
3/30/2007
3/30/2007
5/21/2007
6/1/2007
6/1/2007
6/1/2007
6/1/2007
6/1/2007
6/1/2007
6/1/2007
6/1/2007
6/1/2007
6/1/2007
6/1/2007
6/1/2007
6/1/2007
6/1/2007
11/14/2007
12/19/2007
12/19/2007
12/31/2008
10/1/2009
12/28/2010
12/29/2010
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
2004
2000
1998
1989
2002
1996/97
1998
2002/03
2002/04/06
1995
2004/05
1998
2000
2002/04
2003/06
1993/07/15
1998/2021
1997/06
1998/2019
1998
1999/00/20
1999
1990/95
1999
2003/06
1989/06
1993/07
1998/05
1998/06
2000/07
2002/04
2002/06
2003/06/15
2003/06/19
2003/20
2004/06
2006/20
2006
2006
2002/05
2000
2000
2003/04
2009/16
2000
2008/16
New
Description
Raleigh-Durham
Charlotte-Westmoreland
Charlotte-Matthews
Raleigh-Durham
Charlotte-Zeb Morris
Fair Lawn
Elizabeth
Saint Louis-High Ridge
Atlanta-Decatur
Houston-Humble
Dallas-Fort Worth
Houston-Hwy 6N
Houston-Katy
Houston-Deer Park
Houston-W.Little York
Houston-Friendswood
Houston-Spring
Houston-W.Sam Houston
Austin-Pond Springs Rd
Austin-Round Rock
Houston-Silverado Dr
Houston-Sugarland
Houston-Wilcrest Dr
Houston-Woodlands
Houston-Woodlands
Houston-Katy Freeway
Houston-Webster
Newport News-Brick Kiln
Penasacola-Palafox
Miami
Chicago - Lake Forest
Chicago - Schaumburg
Norfolk - E. Little Creek
Atlanta-14th St.
Jacksonville - Middleburg
Jacksonville - Orange Park
Jacksonville - St. Augustine
Atlanta - NE Expressway
Atlanta - Kennesaw
Atlanta - Lawrenceville
Atlanta - Woodstock
Raleigh-Durham
Chicago - Lindenhurst
Chicago - Orland Park
Phoenix-83rd
Chicago-North Austin
ST
NC
NC
NC
NC
NC
NJ
NJ
MO
GA
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
TX
VA
FL
FL
IL
IL
VA
GA
FL
FL
FL
GA
GA
GA
GA
NC
IL
IL
AZ
IL
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
574
513
1,129
381
965
796
885
197
1,043
825
693
1,243
691
1,012
575
1,168
2,152
402
1,653
177
1,438
272
1,478
1,315
3,189
1,049
2,054
2,848
197
2,960
1,932
1,940
911
1,560
644
772
739
1,384
856
855
1,342
2,337
1,213
1,050
910
2,593
3,975
5,317
4,767
3,575
3,355
9,467
3,073
2,132
8,252
4,201
3,552
3,106
4,435
3,312
3,557
2,315
3,027
3,602
4,947
3,223
4,583
3,236
4,145
6,142
3,974
5,175
2,138
5,892
4,281
12,077
11,606
4,880
5,862
6,766
5,719
3,882
3,858
9,266
4,315
3,838
4,692
4,901
3,129
5,894
3,656
5,029
381
155
250
199
247
547
938
129
236
640
506
262
2,539
323
502
1,061
508
380
625
350
344
279
337
362
255
650
3,230
180
800
537
318
534
187
140
194
375
278
109
211
163
210
352
331
265
442
3,084
998
4,355
5,472
5,017
3,774
3,602
10,014
4,011
2,261
8,488
4,841
4,058
3,368
6,974
3,635
4,059
3,376
3,535
3,982
5,572
3,573
4,927
3,515
4,482
6,504
4,229
5,825
5,368
6,072
5,081
12,614
11,924
5,414
6,049
6,906
5,913
4,257
4,136
9,375
4,526
4,001
4,902
5,253
3,460
6,159
4,098
8,113
4,930
5,985
6,146
4,155
4,567
10,810
4,896
2,458
9,531
5,666
4,751
4,611
7,665
4,647
4,634
4,544
5,687
4,384
7,225
3,750
6,365
3,787
5,960
7,819
7,418
6,874
7,422
8,920
5,278
15,574
13,856
7,354
6,960
8,466
6,557
5,029
4,875
10,759
5,382
4,856
6,244
7,590
4,673
7,209
5,008
10,706
1,241
1,535
1,460
1,085
1,028
2,727
1,037
745
2,262
1,351
1,110
1,020
1,794
1,030
1,164
791
1,064
1,124
1,576
1,012
1,395
1,045
1,248
1,747
1,177
1,636
1,100
1,699
5,074
3,120
2,922
1,359
1,512
1,728
1,434
998
1,043
2,286
1,092
986
1,215
1,319
888
1,518
1,008
1,330
575
513
1,129
381
965
796
885
197
1,043
825
693
1,243
691
1,012
575
1,168
2,152
402
1,653
177
1,438
272
1,478
1,315
3,189
1,049
2,054
2,848
197
2,960
1,932
1,940
911
1,560
644
772
739
1,384
856
855
1,342
2,337
1,213
1,050
910
2,593
87
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
12/29/2010
12/29/2010
12/29/2010
12/29/2010
12/29/2010
7/14/2011
7/14/2011
7/28/2011
8/17/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/22/2011
9/29/2011
11/15/2011
5/16/2012
6/6/2012
6/6/2012
6/20/2012
7/18/2012
9/18/2012
9/18/2012
9/18/2012
9/18/2012
9/18/2012
9/18/2012
9/18/2012
9/19/2012
9/27/2012
12/10/2012
12/18/2012
12/20/2012
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
2008
2009
2009
2008
2007
1999
1988
2007
2006
1993
2001
2000
2000/15
1998
1998
1994/2021
1993
1999
1984
1999
2000
2001
1999
1997
2000
1999
1982/17
2004
1996
2005
1996/04
1998
2007
2009
2008
2007
2007
2009
2008
2007
2009
2002
1999/06
2007
2008
2005/20/21
New
Description
Chicago-North Western
Chicago-West Pershing
Chicago - North Broadway
Brandenton
Ft. Myers-Cleveland
Clearwater-Drew St.
Clearwater-N. Myrtle
Austin-Round Rock
Austin-Round Rock
Chicago-Aurora
San Antonio - Marbach
Long Island - Lindenhurst
Boston - Somerville
Long Island - Deer Park
Long Island - Amityville
Colorado Springs - Scarlet
Toms River - Route 37 W
Lake Worth - S Military
Austin-Round Rock
Hartford-Bristol
Piscataway - New Brunswick
Fort Lauderdale - 3rd Ave
West Palm - Mercer
Austin - Manchaca
San Antonio
Portland
Portland-Topsham
Chicago - St. Charles
Chicago - Ashland
San Antonio - Walzem
St. Louis - Woodson
St. Louis - Mexico
St. Louis - Vogel
St. Louis - Manchester
St. Louis - North Highway
St. Louis - Dunn
Trenton-Hamilton Twnship
NY Metro-Fishkill
Atlanta-Peachtree City
Wayne - Willowbrook
Asbury Park - 1st Ave
Farmingdale - Tinton Falls
Lakewood - Route 70
Matawan - Highway 34
St. Petersburg - Gandy
Chesapeake - Campostella
ST
IL
IL
IL
FL
FL
FL
FL
TX
TX
IL
TX
NY
MA
NY
NY
CO
NJ
FL
TX
CT
NJ
FL
FL
TX
TX
ME
ME
IL
IL
TX
MO
MO
MO
MO
MO
MO
NJ
NY
GA
NJ
NJ
NJ
NJ
NJ
FL
VA
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
1,718
395
2,373
1,501
515
1,234
1,555
774
632
269
337
2,122
1,553
1,096
2,224
629
1,843
868
1,547
1,174
1,639
7,629
15,680
3,999
2,235
2,146
493
1,837
598
2,000
2,444
638
2,010
508
1,989
1,538
5,161
1,741
2,263
—
819
1,097
626
1,512
2,958
2,349
6,466
3,226
9,869
3,775
2,280
4,018
5,978
3,327
1,985
3,126
2,005
8,735
7,186
8,276
10,102
5,201
6,544
5,306
5,226
8,816
10,946
11,918
17,520
4,297
6,269
6,418
5,234
6,301
4,789
3,749
5,966
3,518
3,544
2,042
4,045
4,510
7,063
6,006
4,931
2,292
4,734
5,618
4,549
9,707
6,904
3,875
830
412
286
280
179
376
196
329
342
607
367
615
229
193
179
254
419
868
421
148
196
1,018
1,430
822
442
344
636
2,542
503
3,755
1,680
1,894
2,063
460
2,523
2,919
1,271
463
608
319
1,042
719
389
1,187
409
382
7,216
3,638
10,155
4,055
2,459
4,394
6,174
3,656
2,327
3,733
2,372
9,350
7,462
8,469
10,281
5,455
6,963
6,174
5,647
8,964
11,142
12,936
18,950
5,119
6,711
6,762
5,378
8,843
5,292
7,504
7,646
5,412
5,607
2,502
6,568
7,429
8,334
6,469
5,539
2,611
5,776
6,337
4,938
10,894
7,313
4,257
9,014
4,033
12,528
5,556
2,974
5,628
7,729
4,430
2,959
4,002
2,709
11,472
8,968
9,565
12,505
6,084
8,806
7,042
7,194
10,138
12,781
20,565
34,630
9,118
8,946
8,908
6,363
10,680
5,890
9,504
10,090
6,050
7,617
3,010
8,557
8,967
13,495
8,210
7,802
2,611
6,595
7,434
5,564
12,406
10,271
6,606
1,631
813
2,307
1,002
621
1,069
1,487
903
607
829
581
2,074
1,656
1,851
2,220
1,157
1,438
1,304
1,276
1,823
2,248
2,647
3,924
1,166
1,412
1,380
1,087
1,532
1,065
1,141
1,564
1,062
962
546
1,213
1,321
1,643
1,304
1,183
1,242
1,135
1,236
985
2,143
1,434
833
1,798
395
2,373
1,501
515
1,234
1,555
774
632
269
337
2,122
1,506
1,096
2,224
629
1,843
868
1,547
1,174
1,639
7,629
15,680
3,999
2,235
2,146
985
1,837
598
2,000
2,444
638
2,010
508
1,989
1,538
5,161
1,741
2,263
—
819
1,097
626
1,512
2,958
2,349
88
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
12/20/2012
12/20/2012
12/20/2012
12/21/2012
12/21/2012
12/21/2012
12/21/2012
12/27/2012
12/27/2012
12/31/2012
2/11/2013
3/22/2013
3/22/2013
8/29/2013
8/29/2013
9/30/2013
11/26/2013
12/4/2013
12/27/2013
12/30/2013
12/30/2013
1/9/2014
1/9/2014
1/17/2014
2/10/2014
2/11/2014
2/11/2014
3/31/2014
5/5/2014
5/13/2014
5/22/2014
5/22/2014
5/22/2014
5/22/2014
5/22/2014
5/22/2014
6/5/2014
6/11/2014
6/12/2014
6/12/2014
6/18/2014
6/18/2014
6/18/2014
7/10/2014
8/28/2014
9/5/2014
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
2005
2008
2011
1997
1998
2000
2000
2004
2007
2010
2005
2002
2008
2009
2009
2006
2007
2000
2008
2004
2006
1998
2000
1998/02
2012
2000
2006
2004/13/20
2014
1997/2019
1998
1998/16
2000
1996
1997
2000
1980
2005
2007
2000
2003
2004
2003
2005
2007
2000
New
Description
San Antonio-Castle Hills
Chattanooga - Broad St
New Orleans-Kenner
Orlando-Celebration
Austin-Cedar Park
Chicago - Pulaski
Houston - Gessner
New England - Danbury
New England - Milford
Long Island - Hicksville
Long Island - Farmingdale
Chicago - Alsip
Chicago - N. Pulaski
Fort Myers - Tamiami Trail
Dallas - Allen
Jacksonville - Beach Blvd.
Space Coast - Vero Beach
Port St. Lucie - Federal Hwy.
West Palm - N. Military
Ft. Myers - Bonita Springs
Phoenix - Tatum Blvd.
Boston - Lynn
Syracuse - Ainsely Dr.
Syracuse - Cicero
Syracuse - Camillus
Syracuse - Manlius
Charlotte - Brookshire Blvd.
Charleston III
Myrtle Beach II
Hilton Head - Bluffton
Philadelphia - Eagleville
Orlando - University
Orlando - N. Powers
Sarasota - North Port
Los Angeles - E. Commercial
Los Angeles - E. Slauson
Los Angeles - Westminster
Los Angeles - Calabasas
Portsmouth - Kingston
Portsmouth - Danville
Portsmouth - Hampton Falls
Portsmouth - Lee
Portsmouth - Heritage
Boston - Salisbury
Dallas - Frisco
Dallas - McKinney
ST
TX
TN
LA
FL
TX
IL
TX
CT
CT
NY
NY
IL
IL
FL
TX
FL
FL
FL
FL
FL
AZ
MA
NY
NY
NY
NY
NC
SC
SC
SC
PA
FL
FL
FL
CA
CA
CA
CA
NH
NH
NH
NH
NH
MA
TX
TX
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
Land
and
Impvmts.
Total
Accum.
Deprec.
2,658
759
5,771
6,091
4,196
889
1,599
9,747
9,642
5,153
4,931
2,579
1,719
1,793
3,864
2,118
1,169
4,957
3,372
2,687
852
2,110
2,711
668
473
834
718
7,604
2,511
3,084
1,926
882
2,567
4,884
6,512
3,998
4,636
13,274
1,713
1,615
2,445
3,078
4,430
4,880
6,191
8,097
8,190
5,608
10,375
4,641
8,374
4,700
5,813
18,374
23,352
27,401
20,415
4,066
6,971
4,382
4,777
6,501
4,409
6,045
4,206
5,012
7,052
8,182
3,795
1,957
5,368
1,705
2,977
9,086
6,147
3,192
4,498
5,756
2,838
10,014
12,352
13,547
14,826
10,419
2,709
3,333
6,295
2,861
26,040
6,342
5,088
7,047
580
322
558
483
1,035
1,923
3,578
265
167
204
370
3,600
919
284
420
90
422
306
325
334
320
457
2,259
205
127
2,942
992
532
3,834
254
1,633
333
246
(246 )
577
322
427
751
127
2,061
174
1,389
647
231
336
228
6,884
5,930
10,933
5,124
9,409
6,623
9,391
18,639
23,519
27,605
20,785
7,666
7,890
4,666
5,197
6,591
4,831
6,351
4,531
5,346
7,372
8,639
6,054
2,162
5,495
4,647
3,969
9,618
9,981
3,446
6,131
6,089
3,084
10,374
12,929
13,869
15,253
11,170
2,836
5,394
6,469
4,250
26,687
6,573
5,424
7,275
11,428
6,689
16,704
11,215
13,605
7,512
10,990
28,386
33,161
32,758
25,716
10,245
9,609
6,459
9,061
8,709
6,000
11,308
7,903
8,033
8,224
10,749
8,765
2,830
5,968
5,481
4,687
17,222
12,492
6,530
8,057
6,971
5,651
14,652
19,441
17,867
19,889
24,444
4,549
7,009
8,914
7,328
31,117
11,453
11,615
15,372
1,349
1,120
2,089
998
1,761
1,118
1,540
3,284
4,131
4,840
3,638
1,145
1,342
861
974
1,145
848
1,136
814
954
1,335
1,468
841
383
908
422
706
1,621
1,350
619
914
954
519
1,509
2,115
2,114
2,301
1,792
445
535
979
520
4,013
1,009
856
1,155
4,544
759
5,771
6,091
4,196
889
1,599
9,747
9,642
5,153
4,931
2,579
1,719
1,793
3,864
2,118
1,169
4,957
3,372
2,687
852
2,110
2,711
668
473
834
718
7,604
2,511
3,084
1,926
882
2,567
4,278
6,512
3,998
4,636
13,274
1,713
1,615
2,445
3,078
4,430
4,880
6,191
8,097
89
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
9/10/2014
9/18/2014
10/10/2014
10/21/2014
10/28/2014
11/14/2014
12/18/2014
2/2/2015
2/2/2015
2/2/2015
2/2/2015
2/5/2015
3/9/2015
4/1/2015
4/16/2015
4/21/2015
5/1/2015
5/1/2015
5/1/2015
5/1/2015
6/16/2015
6/16/2015
8/25/2015
8/25/2015
8/25/2015
8/25/2015
9/1/2015
9/1/2015
9/1/2015
9/1/2015
12/30/2015
1/6/2016
1/6/2016
1/6/2016
1/21/2016
1/21/2016
1/21/2016
1/21/2016
1/21/2016
1/21/2016
1/21/2016
1/21/2016
1/21/2016
1/21/2016
1/21/2016
1/21/2016
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
2002
2014
2008
2006
2003
2014
2006/17
1999
1999
2002
2000
1986/17
2015
2004
2002
2013
1997
2001
1985
2000
2015
2015
2000/19
2002
2005/11
2000/17/21
2000
2005
1999/2019
1998
2010
2001
1997
2001/06
2004
2012
2006
2004/14
2003
2003/21
2005
2000/20
1985/99
2003
2003
2003
New
Description
Dallas - McKinney
Phoenix - 48th
Miami
Philadelphia - Glenolden
Denver - Thornton
Los Angeles - Costa Mesa
Los Angeles - Irving
Los Angeles - Durante
Los Angeles - Wildomar
Los Angeles - Torrance
New Haven - Wallingford
New Haven - Waterbury
New York - Mahopac
New York - Mount Vernon
Pt. St. Lucie
Dallas - Lewisville
Buffalo - Cayuga
Buffalo - Lackawanna
Austin - W Braker
Austin - Highway 290
Austin - Killeen
Austin - Round Rock
Austin - Georgetown
Austin - Pflugerville
Chicago - Algonquin
Chicago - Carpentersville
Chicago - W. Addison
Chicago - State St.
Chicago -W. Grand
Chicago - Libertyville
Chicago - Aurora
Chicago - Morton Grove
Chicago - Bridgeview
Chicago - Addison
Chicago - W Diversey
Chicago - Elmhurst
Chicago - Elgin
Chicago - N. Paulina St.,
Chicago - Matteson
Chicago - S. Heights
Chicago - W. Grand
Chicago - W 30th St
Chicago - Mokena
Chicago - Barrington
Chicago - Naperville
Chicago - Forest Park
ST
TX
AZ
FL
PA
CO
CA
CA
CA
CA
CA
CT
CT
NY
NY
FL
TX
NY
NY
TX
TX
TX
TX
TX
TX
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
IL
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
3,728
3,649
5,508
988
2,294
1,768
4,528
17,976
—
4,671
6,728
17,445
3,618
2,524
2,373
3,337
4,140
2,333
499
215
1,210
930
3,070
830
1,530
750
1,430
350
2,770
1,190
1,720
3,670
1,090
1,610
3,770
1,340
1,670
670
1,130
5,600
1,590
1,050
1,780
600
3,230
1,890
2,620
1,100
6,462
8,224
8,980
3,879
7,915
25,145
6,318
13,908
10,340
18,839
5,286
5,618
5,089
13,112
7,176
8,302
5,198
2,323
14,833
12,269
20,782
6,129
10,647
9,238
14,958
4,710
25,112
19,159
10,628
26,660
20,033
14,914
19,990
11,881
10,811
18,729
12,584
12,721
12,053
4,960
8,928
15,574
18,623
9,395
11,933
10,087
278
91
217
447
166
956
1,180
157
7,370
511
324
215
422
291
690
554
2,481
452
328
402
456
263
644
391
137
41
281
304
252
338
1,337
825
682
518
167
168
327
233
267
175
219
738
2,142
773
229
830
6,740
8,315
9,197
4,326
8,081
26,101
7,498
14,065
17,710
19,350
5,610
5,833
5,511
13,403
7,701
8,856
7,679
2,775
15,161
12,671
21,238
6,392
11,291
9,629
15,095
4,751
25,393
19,463
10,880
26,998
20,346
15,739
20,672
12,399
10,978
18,897
12,911
12,954
12,320
5,135
9,147
16,312
20,765
10,168
12,162
10,917
12,248
9,303
11,491
6,094
12,609
44,077
7,498
18,736
24,438
36,795
9,228
8,357
7,884
16,740
12,006
11,189
8,178
2,990
16,371
13,601
24,308
7,222
12,821
10,379
16,525
5,101
28,163
20,653
12,600
30,668
22,460
17,349
24,442
13,739
12,648
19,567
14,041
18,554
13,910
6,185
10,927
16,912
23,995
12,058
14,782
12,017
1,032
1,314
1,450
682
1,257
3,891
2,242
2,081
2,101
2,947
852
893
808
1,953
1,290
1,323
913
409
2,131
1,785
3,242
944
1,664
1,365
2,136
672
3,576
2,696
1,515
3,756
2,867
2,183
2,983
1,743
1,517
2,623
1,826
1,837
1,808
764
1,294
2,226
2,733
1,440
1,795
1,531
5,508
988
2,294
1,768
4,528
17,976
—
4,671
6,728
17,445
3,618
2,524
2,373
3,337
4,305
2,333
499
215
1,210
930
3,070
830
1,530
750
1,430
350
2,770
1,190
1,720
3,670
2,114
1,610
3,770
1,340
1,670
670
1,130
5,600
1,590
1,050
1,780
600
3,230
1,890
2,620
1,100
90
Life
on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
1/21/2016
2/1/2016
2/12/2016
2/17/2016
2/29/2016
3/16/2016
3/16/2016
3/16/2016
3/17/2016
4/11/2016
4/14/2016
4/14/2016
4/26/2016
4/26/2016
5/2/2016
5/5/2016
5/19/2016
5/19/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
2002
2015
2016
1970
2011
2005
1985
2015
2005/19
2003
2000
2001
1991/94
2013
2002
2007
2006
2006
2003
1999
2005
1986
2001/15
2005
2006
2004
2007
2009
2007
2009
2009
2009
2008
2008
2010
2008
2003
2006
2007
2006
2007
2008
2008/21
2015
2015
2015
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
960
3,210
630
790
1,370
620
4,030
3,690
2,650
11,540
2,670
2,760
8,080
1,960
680
1,260
1,020
2,510
590
350
1,470
390
1,340
1,420
1,080
790
1,470
3,050
980
330
570
520
1,510
5,250
2,520
2,660
750
640
1,230
1,080
2,280
1,200
540
2,010
860
1,450
13,019
8,519
10,282
12,785
10,166
8,771
8,029
12,074
15,304
15,571
5,623
8,288
10,114
9,585
3,951
2,382
25,152
11,822
16,838
6,977
11,047
7,042
5,141
10,295
16,436
5,233
17,366
23,333
13,451
15,651
12,676
10,105
9,388
32,363
18,402
16,589
14,720
6,688
9,586
3,713
17,069
22,150
8,874
8,944
10,569
12,239
549
160
213
392
393
307
178
829
312
291
308
422
2,948
454
163
269
391
(951 )
170
442
332
232
108
303
206
755
399
229
241
230
324
216
122
359
301
357
189
107
162
340
151
130
593
6,428
108
188
New
Description
Chicago - La Grange
Chicago - Glenview
Dallas - Richardson
Dallas - Arlington
Dallas - Plano
Dallas - Mesquite
Dallas - S Good Latimer
Boulder - Arapahoe
Boulder - Odell
Boulder - Arapahoe
Boulder - Broadway
Houston - Westpark
Houston - C. Jester
Houston - Bay Pointe
Houston - FM 529
Houston - Jones
Las Vegas - Spencer
Las Vegas - Maule
Las Vegas - Wigwam
Las Vegas - Stufflebeam
Las Vegas - Ft. Apache
Las Vegas - North
Las Vegas - Warm Springs
Las Vegas - Conestoga
Las Vegas - Warm Springs
Las Vegas - Nellis
Las Vegas - Cheyenne
Las Vegas - Dean Martin
Las Vegas - Flamingo
Las Vegas - North
Las Vegas - Henderson
Las Vegas - North
Las Vegas - Farm
Los Angeles - Torrance
Los Angeles - Irvine
Los Angeles - Palm Desert
Milwaukee - Green Bay
Orlando - Winter Garden
Orlando - Longwood
Orlando - Overland
Sacramento - Calvine
Sacramento - Folsom
Sacremento - Pell
Sacremento - Goldenland
Sacremento - Woodland
Sacramento - El Camino
ST
IL
IL
TX
TX
TX
TX
TX
CO
CO
CO
CO
TX
TX
TX
TX
TX
NV
NV
NV
NV
NV
NV
NV
NV
NV
NV
NV
NV
NV
NV
NV
NV
NV
CA
CA
CA
WI
FL
FL
FL
CA
CA
CA
CA
CA
CA
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
13,568
8,679
10,495
13,177
10,559
9,078
8,207
12,903
15,616
15,862
5,931
8,710
13,062
10,039
4,114
2,651
25,543
12,071
17,008
7,419
11,379
7,274
5,249
10,598
16,642
5,988
17,765
23,562
13,692
15,881
13,000
10,321
9,510
32,722
18,703
16,946
14,909
6,795
9,748
4,053
17,220
22,280
9,075
15,372
10,677
12,427
Total
14,528
11,889
11,125
13,967
11,929
9,698
12,237
16,593
18,266
27,402
8,601
11,470
21,142
11,999
4,794
3,911
26,563
13,381
17,598
7,769
12,849
7,664
6,589
12,018
17,722
6,778
19,235
26,612
14,672
16,211
13,570
10,841
11,020
37,972
21,223
19,606
15,659
7,435
10,978
5,133
19,500
23,480
10,007
17,382
11,537
13,877
Accum.
Deprec.
1,900
1,269
1,522
1,859
1,467
1,256
1,187
1,778
2,251
2,296
862
1,300
1,592
1,426
621
424
3,601
1,700
2,379
1,067
1,636
1,046
1,248
1,572
2,343
907
2,589
3,637
1,945
2,238
1,897
1,486
1,351
4,591
2,689
2,440
2,103
977
1,384
577
2,442
3,093
1,342
1,431
1,499
1,776
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
2015
2014/15
2001
2007
1998
2016
2016
1992
1998
1984
1992
1996
2008/20
1972
2005
1994
2000
2005
2008
1996
2004
2005
2004
2007
2007
1995
2004
2005
2007
2007
2005
2002
2008
2004
2002
2002
2005
2006
2000
2000
2004
2005
2004
2005/21
2003
2002
Land
960
3,210
630
790
1,370
620
4,030
3,690
2,650
11,540
2,670
2,760
8,080
1,960
680
1,260
1,020
1,310
590
350
1,470
390
1,340
1,420
1,080
790
1,470
3,050
980
330
570
520
1,510
5,250
2,520
2,660
750
640
1,230
1,080
2,280
1,200
932
2,010
860
1,450
91
New
Description
Sacramento - Bayou
Sacramento - Calvine
Sacramento - El Dorado Hills
Sacramento - Fruitridge
San Antonio - US 281
Austin - San Marcos
Charleston
Denver - Westminster
Chicago - Arlington Hgts.
Orlando - Curry Ford
Chicago - Lombard
Austin - Mary St.
Charlotte - Morehead St..
Londonderry - Smith Ln.
Sacramento - Main Ave.
Carmel - Old Rt. 6
Chamblee - Peachtree Blvd.
West Sacramento - Jefferson
Orlando - Semoran Blvd.
Riverhead - Flanders Rd.
Saint Louis - Manchester Ave.
Long Island City
Tampa - MLK Jr. Blvd.
Cleveland - Wickliffe
Cleveland - Highland Heights
Cleveland - Westlake
Jacksonville
Wake Forest
Chantilly
Chattanooga
Tampa - Lutz
Summerville
Charleston - Summerville
Dumfries
Greenville
Cumming
Glen Allen
Tampa - Trout Creek Drive
Midlothian
Las Vegas - Boulder Hwy
Seattle - Auburn
Seattle - Yancy Street
Seattle - 114th Street
Baltimore - Pulaski Hwy
Baltimore - North Point Road
Baltimore - Fontana Lane
ST
CA
CA
CA
CA
TX
TX
SC
CO
IL
FL
IL
TX
NC
NH
CA
NY
GA
CA
FL
NY
MO
NY
FL
OH
OH
OH
FL
NC
VA
TN
FL
SC
SC
VA
SC
GA
VA
FL
VA
NV
WA
WA
WA
MD
MD
MD
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
1,640
2,120
1,610
1,480
1,380
990
920
5,062
370
3,268
771
1,358
1,110
1,257
2,089
3,358
1,665
1,331
2,014
3,969
1,633
30,094
1,817
690
1,036
379
662
803
2,723
1,266
663
2,250
2,824
891
1,421
753
4,296
1,083
1,726
4,586
3,261
10,629
6,995
4,070
1,995
2,097
21,603
24,650
24,829
15,695
8,457
7,323
7,700
3,679
8,513
6,378
9,318
13,041
11,439
4,276
11,551
4,536
12,479
8,131
7,534
3,138
7,620
26,927
7,377
6,784
9,518
14,354
9,208
10,954
12,298
8,250
9,665
5,344
10,634
7,700
10,303
9,804
11,029
10,691
6,695
7,853
16,051
8,570
10,257
6,878
7,634
7,658
214
197
138
347
242
127
67
474
163
289
27
43
86
77
2,324
105
58
51
565
3,186
72
65
90
161
138
117
82
76
84
123
114
87
118
101
68
81
68
64
89
819
244
152
150
85
116
110
8,676
7,802
5,949
21,817
24,847
24,967
16,042
8,699
7,450
7,767
4,153
8,676
6,667
9,345
13,084
11,525
4,353
13,875
4,641
12,536
8,182
8,099
6,323
7,692
26,992
7,467
6,945
9,656
14,471
9,290
11,030
12,382
8,373
9,779
5,431
10,752
7,801
10,371
9,885
11,097
10,755
6,784
8,672
16,295
8,722
10,407
6,963
7,750
7,768
23,457
26,967
26,577
17,522
10,079
8,440
8,687
9,215
9,046
9,935
10,116
14,442
12,635
5,610
15,964
7,999
14,202
9,513
10,113
10,293
9,325
57,086
9,284
7,635
10,692
14,850
9,952
11,833
15,105
9,639
10,442
7,681
13,576
8,692
11,792
10,638
15,393
11,838
8,510
13,258
19,556
19,351
17,402
11,033
9,745
9,865
3,081
3,529
3,534
2,369
1,236
1,080
1,133
581
1,150
881
1,161
758
1,210
405
1,108
386
1,046
661
636
339
591
2,002
571
491
683
983
639
721
798
562
667
376
703
523
694
650
730
708
459
501
922
495
593
403
457
455
1,640
2,120
1,610
1,480
1,380
990
920
5,062
370
3,268
771
1,358
1,110
1,257
2,089
3,358
1,666
1,331
2,014
3,970
1,633
30,094
1,817
690
1,036
379
662
803
2,723
1,266
663
2,250
2,824
891
1,421
753
4,296
1,083
1,726
4,586
3,261
10,629
6,995
4,070
1,995
2,097
92
Life
on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/15/2016
7/29/2016
8/4/2016
11/17/2016
12/20/2016
2/23/2017
4/3/2017
12/14/2017
9/4/2018
9/18/2018
10/2/2018
11/1/2018
12/7/2018
12/11/2018
12/20/2018
12/27/2018
1/16/2019
3/8/2019
4/30/2019
4/30/2019
4/30/2019
6/11/2019
7/12/2019
7/12/2019
7/12/2019
7/12/2019
7/12/2019
7/12/2019
7/12/2019
7/12/2019
7/12/2019
7/12/2019
7/12/2019
7/12/2019
8/29/2019
9/24/2019
9/24/2019
9/24/2019
9/26/2019
9/26/2019
9/26/2019
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
2005
2003
2007
2007
2003
2016
2016
2000
2016
2016
2017
2017
2017
2016
2016/18/19
1998/2000
2018
2013/2018
2015
1995/2020
2017
2017
2017
1997
2000
2008
2018
2017
2018
2017
2018
2017
2018
2017
2017
2018
2018
2017
2018
1979/1993
1986/2000
1994
1995
1984
1990
1989
New
Description
Baltimore - Jessup
Baltimore - Windsor Mill Road
Norwood
Ocean Township
Elk Grove
Norco
Rohnert Park
San Jose
Palmdale
Lancaster
Tampa - E Fletcher Ave
Tampa - W Hillsborough Ave
San Antonio - Culebra Rd
Columbus - Cleveland Ave
Columbus - Evanswood Dr
San Antonio - Jackson Keller
Rd
Whitehall
Dallas - S Buckner Blvd
Garland
Dallas - N Buckner Blvd
Columbus - W Henderson Rd
Miami - SW 28th Ln
Decatur
Columbus - E Broad St
Dublin
North Brunswick
Hillsborough
Lodi
Flemington
East Windsor
Ottsville
East Stroudsburg
Doylestown
Monmouth Junction
King of Prussia
Trenton
Miami - Coral Way
Dardenne Prairie
Brandon
Sarasota - South Tamiami Trail
Murrells Inlet
Loomis
Buffalo - Kenmore Ave
Palm Desert
Myrtle Beach
Woodland
ST
MD
MD
NJ
NJ
CA
CA
CA
CA
CA
CA
FL
FL
TX
OH
OH
TX
OH
TX
TX
TX
OH
FL
GA
OH
OH
NJ
NJ
NJ
NJ
NJ
PA
PA
PA
NJ
PA
NJ
FL
MO
FL
FL
SC
CA
NY
CA
SC
CA
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
13,411
2,195
1,875
4,058
2,873
3,532
2,546
7,887
1,939
1,529
2,576
1,389
888
962
1,342
1,482
807
2,040
1,565
1,782
1,304
2,568
2,110
975
1,061
1,280
1,077
2,108
855
929
1,032
676
741
1,005
—
2,158
2,032
1,312
1,747
1,240
671
3,528
507
1,588
812
1,322
9,622
6,646
16,910
14,014
14,977
19,613
13,242
20,042
16,039
17,822
7,101
6,280
4,391
5,218
6,932
9,148
4,380
4,902
5,465
4,990
11,847
16,912
8,486
7,804
9,710
13,637
10,560
17,758
15,942
16,063
14,481
9,593
11,560
20,947
13,736
11,497
9,325
6,070
8,863
14,063
8,771
12,127
16,195
9,787
7,153
16,830
105
35
177
665
27
15
12
55
3,438
83
4
3
15
41
26
1
5
—
34
10
79
9
43
60
34
74
35
472
132
97
36
107
83
75
40
108
104
36
94
60
30
78
—
33
26
40
6,228
9,727
6,681
17,087
14,679
15,004
19,628
13,254
20,097
19,477
17,905
7,105
6,283
4,406
5,259
6,958
9,149
4,385
4,902
5,499
5,000
11,926
16,921
8,529
7,864
9,768
13,711
10,595
18,230
16,074
16,160
14,517
9,700
11,643
21,022
13,776
11,605
9,429
6,106
8,957
14,123
8,801
12,205
16,195
9,820
7,179
16,870
23,138
8,876
18,962
18,737
17,877
23,160
15,800
27,984
21,416
19,434
9,681
7,672
5,294
6,221
8,300
10,631
5,192
6,942
7,064
6,782
13,230
19,489
10,639
8,839
10,805
14,991
11,672
20,338
16,929
17,089
15,549
10,376
12,384
22,027
13,776
13,763
11,461
7,418
10,704
15,363
9,472
15,733
16,702
11,408
7,991
18,192
13,411
2,195
1,875
4,058
2,873
3,532
2,546
7,887
1,939
1,529
2,576
1,389
888
962
1,342
1,482
807
2,040
1,565
1,782
1,304
2,568
2,110
975
1,037
1,280
1,077
2,108
855
929
1,032
676
741
1,005
—
2,158
2,032
1,312
1,747
1,240
671
3,528
507
1,588
812
1,322
93
Life on
which
depreciation
in latest
income
statement
is computed
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date
Acquired
9/26/2019
9/26/2019
10/23/2019
12/12/2019
3/9/2020
3/9/2020
3/9/2020
3/9/2020
3/9/2020
3/9/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
9/29/2020
11/5/2020
11/25/2020
12/9/2020
12/14/2020
12/14/2020
12/22/2020
12/23/2020
12/28/2020
12/30/2020
1/4/2021
1/21/2021
Date of
Const.
1987
1989
2006
1994/2019
2000
2011
1984
1999
2005/2021
2001
1980/83/96
1985/86/2000
2008
2000
2000
1984
2000
1985
1984
1985
2000
1999
1972/1998
2000
2000
1986
1993
1998
1993
1993
2001
2000
2001
2006
2005
2008
2018
2017
2014
2007
2019
1998
2016
2000
2018
2019
566
391
936
766
704
916
614
926
771
837
240
206
146
169
222
295
141
161
178
163
380
534
274
252
312
437
337
585
516
512
472
309
371
662
439
347
274
173
258
389
232
311
418
250
191
411
New
Description
Jamaica - Merrick
Sarasota - Fruitville
Ruskin
North Port
Venice - Center Rd
Sarasota - Apex
Venice - Englewood
Venice - S Tamiami
Wimauma
Tucson - Orange Grove
Oro Valley
Queen Creek
Covington
Auburn
Saint Augustine
Wall
Jackson
Farmingdale
South Robbinsville
Hillsborough
Charlotte - West Mallard Creek
Winston-Salem - Robinhood
Plano - Jupiter Rd
Austin - E Parmer Lane
Round Rock - N Red Bud Land
Lewisville
Saint Petersburg - Tyrone Blvd
Gastonia
Oakland Park
Salem
Derry - Linlew Dr
Derry - Rockingham Dr
Goffstown
Orlando - Eastmar Commons
Huntsville - Blake Bottom
Madison - County Line
Huntsville - Oakwood Ave
Huntsville - Martin
Madison - Slaughter Rd
Huntsville - Leeman Ferry
Huntsville - Highway 72
Brighton - Baseline Place
Tampa - N Rome Ave
Tampa - S West Shore Blvd
Cumming
Dunwoody
ST
NY
FL
FL
FL
FL
FL
FL
FL
FL
AZ
AZ
AZ
WA
WA
FL
NJ
NJ
NJ
NJ
NJ
NC
NC
TX
TX
TX
TX
FL
NC
FL
NH
NH
NH
NH
FL
AL
AL
AL
AL
AL
AL
AL
CO
FL
FL
GA
GA
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
10,591
1,461
709
1,329
3,239
1,012
2,324
2,205
1,101
1,894
1,200
4,034
3,499
2,667
1,658
3,112
885
1,788
3,418
2,354
1,312
898
1,815
3,250
2,890
1,207
2,601
15,384
2,830
887
656
5,422
849
2,884
517
879
409
415
801
487
806
640
1,467
1,796
1,573
1,984
37,020
15,830
3,219
11,103
19,038
4,350
5,316
5,789
5,893
20,846
21,192
17,282
15,784
17,253
14,739
16,738
18,344
14,737
10,691
17,607
10,700
13,694
9,673
6,129
10,590
8,354
11,525
20,523
14,157
5,071
13,695
4,657
11,086
11,790
6,960
8,065
5,084
6,080
7,666
9,103
11,868
6,057
9,787
14,034
7,859
12,949
4
84
131
119
102
98
179
111
136
20
31
46
78
109
67
103
168
266
353
222
62
42
42
50
51
43
50
158
66
90
46
26
31
50
18
19
19
31
47
26
49
61
36
20
5
40
37,024
15,914
3,350
11,222
19,140
4,448
5,495
5,900
6,029
20,866
21,223
17,328
15,862
17,362
14,806
16,841
18,512
15,003
11,044
17,829
10,762
13,736
9,715
6,179
10,641
8,397
11,575
20,681
14,223
5,161
13,741
4,683
11,117
11,840
6,978
8,084
5,103
6,111
7,713
9,129
11,917
6,118
9,823
14,054
7,864
12,989
47,615
17,375
4,059
12,551
22,379
5,460
7,819
8,105
7,130
22,760
22,423
21,362
19,361
20,029
16,464
19,953
19,397
16,791
14,462
20,183
12,074
14,634
11,530
9,429
13,531
9,604
14,176
36,065
17,053
6,048
14,397
10,105
11,966
14,724
7,495
8,963
5,512
6,526
8,514
9,616
12,723
6,758
11,290
15,850
9,437
14,973
10,591
1,461
709
1,329
3,239
1,012
2,324
2,205
1,101
1,894
1,200
4,034
3,499
2,667
1,658
3,112
885
1,788
3,418
2,354
1,312
898
1,815
3,250
2,890
1,207
2,601
15,384
2,830
887
656
5,422
849
2,884
517
879
409
415
801
487
806
640
1,467
1,796
1,573
1,984
94
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
3/4/2021
3/11/2021
3/11/2021
3/11/2021
3/11/2021
3/11/2021
3/11/2021
3/11/2021
3/11/2021
3/24/2021
3/24/2021
3/24/2021
3/25/2021
3/25/2021
5/3/2021
5/12/2021
5/12/2021
5/12/2021
5/12/2021
5/12/2021
6/1/2021
6/1/2021
6/10/2021
6/10/2021
6/10/2021
6/10/2021
6/16/2021
6/22/2021
6/22/2021
6/22/2021
6/23/2021
7/29/2021
7/29/2021
8/17/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
2018
2006
1990/2016
2006
2013/15/16/17
1976
1991/2017
1996
1999
2017
2019
2015
2018
2017
2019
1987/1989
2003/2018
2003
1998
1999
2017
2018
2018
2017
2017
2017
2017
2001
2002 / 2013
2012
2019
2014
2012
2018
2001/2006
2006/2013
1986
2002
1996
1999/2016
2018
2001
2017
2018
2003
2015
788
343
82
242
408
101
129
131
136
407
413
338
308
336
266
284
315
253
193
309
168
212
157
107
174
138
160
267
181
69
182
53
119
101
60
69
44
52
66
78
102
53
84
120
67
120
New
Description
Alpharetta
Jonesboro
Louisville - E Market St
Columbus - West Broad St
Oklahoma City - NW 122nd
Edmond
Greenville - Dunbar
Mount Pleasant
Austin - Airport Blvd
Round Rock - University Blvd
Gilbert
Atlanta - Decatur St
Marietta - Johnson Ferry
Cumming - Atlanta Hwy
Round Rock - Double Creek
San Antonio - Wurzbach
San Antonio - Nacogdoches
Leander
Miami - SW 81st Terrace
Miami - NW 37th Ave
Charlotte - E 7th Street
Durham - Petty
Greenville - Laurens
Greenville - Pleasantburg
Nashville - 26th Avenue
Savannah - E Victory
Stanley
Henrico - Cox Rd
Portland - Riverside
New Lenox - West Haven
Orlando - E Colonial
Largo - Belcher
Tampa - Gunn Highway
Tampa - E Fletcher Ave
Lakeland - Robin Rd
Lutz - State Rd 54
Tampa - Bruce D Downs Blvd
Riverview - Boyete
Seffner
Spring Hill
Largo - Starkey
Wesley Chapel
Tampa - W Fletcher Ave
Decatur - Covington
Lithia Springs
Lithonia
ST
GA
GA
KY
OH
OK
OK
SC
SC
TX
TX
AZ
GA
GA
GA
TX
TX
TX
TX
FL
FL
NC
NC
SC
SC
TN
GA
NC
VA
ME
IL
FL
FL
FL
FL
FL
FL
FL
FL
FL
FL
FL
FL
FL
GA
GA
GA
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
Total
Accum.
Deprec.
1,785
1,724
1,336
879
734
732
817
794
1,440
1,160
1,034
3,407
600
1,563
2,746
1,557
2,338
2,766
9,831
3,316
2,737
516
1,666
1,506
4,425
1,127
1,792
341
1,669
1,705
2,746
1,715
2,113
2,076
1,103
1,597
1,276
1,154
1,377
954
1,692
1,664
2,277
2,452
2,057
3,006
12,051
8,195
7,655
6,589
5,054
4,268
12,949
11,579
18,543
11,288
15,974
19,086
14,408
11,954
10,690
9,747
12,939
15,265
17,891
26,389
26,328
19,358
7,512
10,605
16,979
21,213
12,343
13,963
18,203
17,136
9,661
16,833
15,166
13,699
11,522
12,502
13,061
11,202
16,929
12,895
16,864
17,377
12,550
13,126
8,978
19,232
18
5
18
10
8
14
45
(185)
17
136
35
1
-
-
21
48
53
40
5
6
6
5
6
7
5
10
6
-
35
30
2
4
4
5
4
4
5
5
5
5
4
4
4
4
4
4
12,069
8,200
7,673
6,599
5,062
4,282
12,994
11,394
18,560
11,424
16,009
19,087
14,408
11,954
10,711
9,795
12,992
15,305
17,896
26,395
26,334
19,363
7,518
10,612
16,984
21,223
12,349
13,963
18,238
17,166
9,663
16,837
15,170
13,704
11,526
12,506
13,066
11,207
16,934
12,900
16,868
17,381
12,554
13,130
8,982
19,236
13,854
9,924
9,009
7,478
5,796
5,014
13,811
12,188
20,000
12,584
17,043
22,494
15,008
13,517
13,457
11,352
15,330
18,071
27,727
29,711
29,071
19,879
9,184
12,118
21,409
22,350
14,141
14,304
19,907
18,871
12,409
18,552
17,283
15,780
12,629
14,103
14,342
12,361
18,311
13,854
18,560
19,045
14,831
15,582
11,039
22,242
1,785
1,724
1,336
879
734
732
817
794
1,440
1,160
1,034
3,407
600
1,563
2,746
1,557
2,338
2,766
9,831
3,316
2,737
516
1,666
1,506
4,425
1,127
1,792
341
1,669
1,705
2,746
1,715
2,113
2,076
1,103
1,597
1,276
1,154
1,377
954
1,692
1,664
2,277
2,452
2,057
3,006
95
Life on
which
depreciation
in latest
income
statement
is computed
Date
Acquired
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/19/2021
8/25/2021
9/1/2021
9/1/2021
9/1/2021
10/1/2021
10/1/2021
10/1/2021
10/1/2021
10/20/2021
10/20/2021
10/21/2021
10/21/2021
10/21/2021
10/21/2021
10/21/2021
10/21/2021
10/21/2021
11/16/2021
12/2/2021
12/8/2021
12/10/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date of
Const.
1997
2012
1915 / 2016
2000
2017
2017
2015
2016
2020
2018
2020
2013
2014
2015
2006
2007
2007
2014
2019
2018
2018
2017
2015
2017
2018
2018
2017
2016
2020
2020
2002 / 2016
2001
2001
2001
2007
2001
2007
2002
2000
2004
1990
2008
2003
1999
1996 / 2014
1999
102
70
67
57
48
42
115
110
160
104
141
161
122
103
77
73
94
108
76
112
112
82
33
46
73
89
54
30
42
41
21
36
32
29
24
27
27
24
36
27
35
37
26
28
19
40
New
Description
Norcross
Roswell
Shady Springs
Stockbridge
Stone Mountain
Batavia
Chicago - N Des Plaines
Lake Zurich
Sanford - W SR 46
Broomfield
Loveland
Palmetto
Southington
Milford
Meriden
Glastonbury
Plainville
West Hartford
Construction in Progress
Corporate Office
- 96th St E
- New Park Ave
Initial Cost to Company
Encum
brance
Land
Building,
Equipment
and
Impvmts.
1,572
2,134
2,688
3,275
2,961
1,881
5,276
887
2,989
2,652
1,074
737
1,111
2,613
1,123
1,556
2,166
1,892
—
—
$ 37,030
$
1,171,403 $
8,064
6,447
11,397
17,738
12,119
17,160
19,420
13,438
10,924
13,159
15,781
19,623
7,913
16,328
9,205
9,575
10,137
12,111
—
68
5,109,220
ST
GA
GA
GA
GA
GA
IL
IL
IL
FL
CO
CO
FL
CT
CT
CT
CT
CT
CT
NY
Cost
Capitalized
Subsequent
to
Acquisition
Building,
Equipment
and
Impvmts.
4
4
4
5
5
4
4
4
4
54
4
30
3
4
4
4
4
4
44,592
54,808
809,834
$
Gross Amount at Which
Carried at Close of Period
Building,
Equipment
and
Impvmts.
Land
1,572
2,134
2,688
3,275
2,961
1,881
5,276
887
2,989
2,652
1,074
737
1,111
2,613
1,123
1,556
2,166
1,892
—
1,633
1,185,976
$
8,068
6,451
11,401
17,743
12,124
17,164
19,424
13,442
10,928
13,213
15,785
19,653
7,916
16,332
9,209
9,579
10,141
12,115
44,592
53,243
5,904,481
$
$
Total
9,640
8,585
14,089
21,018
15,085
19,045
24,700
14,329
13,917
15,865
16,859
20,390
9,027
18,945
10,332
11,135
12,307
14,007
44,592
54,876
7,090,457
Accum.
Deprec.
17
14
24
37
26
36
41
28
24
—
—
3
—
—
—
—
—
—
—
34,440
1,007,650
$
Date of
Const.
1994
1998
1999
1998
2001
1990
2003
2002
2015
2017
2017
2020
2019
2018
2008
2006
2006
2008
2021
2000
Life on
which
depreciation
in latest
income
statement
is computed
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
5 to 40 years
Date
Acquired
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/13/2021
12/15/2021
12/16/2021
12/16/2021
12/20/2021
12/28/2021
12/28/2021
12/28/2021
12/28/2021
12/28/2021
12/28/2021
5/1/2000
5 to 40 years
96
(dollars in thousands)
Cost:
Balance at beginning of period
Additions during period:
Acquisitions through foreclosure
Other acquisitions
Improvements, etc.
Deductions during period:
Cost of assets disposed
Impairment write-down
Casualty loss
Balance at close of period
Accumulated Depreciation:
Balance at beginning of period
Additions during period:
Depreciation expense
Deductions during period:
Accumulated depreciation of assets disposed
Accumulated depreciation on impaired asset
Accumulated depreciation on casualty loss
Balance at close of period
December 31,
2021
December 31,
2020
December 31,
20109
$
5,330,323
$
4,749,473
$
4,398,939
—
1,675,366
85,515
1,760,881
(747)
—
—
(747 )
7,090,457
873,178
134,773
134,773
(301 )
—
—
(301)
1,007,650
$
$
$
—
523,922
57,437
581,359
(509)
—
—
(509 )
5,330,323
756,333
117,168
117,168
(323 )
—
—
(323)
873,178
$
$
$
—
424,578
92,262
516,840
(166,306)
—
—
(166,306 )
4,749,473
704,681
104,218
104,218
(52,566 )
—
—
(52,566)
756,333
$
$
$
The aggregate cost of real estate for U.S. federal income tax purposes is $6,947,483 at December 31, 2021.
97
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OFFICERS AND DIRECTORS
CORPORATE INFORMATION
Stephen R. Rusmisel
Director
Principal - V1 Funding LP
Arthur L. Havener, Jr.
Director
Principal - Stampede Capital LLC
Mark G. Barberio
Director
Principal - Markapital, LLC
Dana Hamilton
Director
Senior Managing Director -
Pretium Partners, LLC
Edward Pettinella
Director
CEO (Retired) - Home Properties, Inc.
David Rogers
Director
CEO (Retired) - Life Storage, Inc
Susan Harnett
Director
COO (Retired) - QBE North America
Joseph V. Saffire
Director
Chief Executive Officer
Andrew J. Gregoire
Chief Financial Officer
and Corporate Secretary
David Dodman
Chief Operating Officer
Investor Relations
Alex Gress
(716) 295-6833 • agress@lifestorage.com
invest.lifestorage.com
Independent Auditors
Ernst & Young LLP
Suite 2900 • 1 W. Seneca Street • Buffalo, New York 14203
Corporate Counsel
Phillips Lytle LLP
One Canalside
125 Main Street • Buffalo, New York 14203
Registrar and Transfer Agent
American Stock Transfer & Trust Company LLC
6201 15th Avenue • Brooklyn, New York 11219
(800) 937 5449
-
Annual Meeting
May 26, 2022
www.virtualshareholdermeeting.com/LSI2022
9:00 a.m. (e.d.t.)
Exchange
New York Stock Exchange Listing Symbol: LSI
Average Daily Volume in 2021: 557,379
The Chief Executive Officer has previously
filed with the New York Stock Exchange
(NYSE) the annual CEO certification for 2021
as required by section 303A.12(a) of the
NYSE listed company manual.
As of December 31, 2021, there were
approximately 491 shareholders of record of
the common stock.
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2021
ANNUAL
REPORT
SUSTAINABLE
GROWTH