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We are a real estate company that derives our income from the operation of our stores.
+Added: The risks described below are not the only risks facing us.
+Added: Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and results of operations.
There are a number of factors that may adversely affect the income that our stores generate, including the following:
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In addition, lower than expected rental rates upon re-letting could adversely affect our revenues and impede our growth.
+Added: There is significant competition among self-storage operators and from other storage alternatives.
+Added: Competition in the local markets in which many of our stores are located is significant and has affected our occupancy levels, rental rates and operating expenses.
+Added: Development of self-storage facilities has increased in recent years, which has intensified competition, and we expect it will continue to do so as newly developed facilities are opened.
+Added: Development of self-storage facilities by other operators could continue to increase in the future.
+Added: Actions by our competitors may decrease or prevent increases in our occupancy and rental rates, while increasing our operating expenses, which could adversely affect our business and results of operations.
+Added: Our property taxes could increase due to reassessment or property tax rate changes.
+Added: Real property taxes on our properties may increase as our properties are reassessed by taxing authorities or as property tax rates change.
+Added: Therefore, the amount of property taxes we are required to pay could increase substantially from the property taxes we currently pay or have paid in the past, including on a retroactive basis.
+Added: If our property taxes we pay increase, our cash flow would be adversely impacted, and our ability to pay any expected dividends to our stockholders and unit holders could be adversely affected.
+Added: State and federal regulations relating to natural disasters, public health emergencies or consumer protection could adversely affect our results of operations.
+Added: The impact of natural disasters, public health emergencies and any government responses to such emergencies, or regulations passed in an attempt to protect consumers could lead to lower demand for storage facilities, lower rental rates, inability to raise rents, reduced late fee collection and impaired ability to hold auctions resulting in higher accounts receivable and bad debt.
+Added: Although the self-storage industry has historically been resilient to ordinary market downturns, the impact of natural disasters, public health emergencies and related regulations, including those that limit our ability to raise rents, could materially and adversely affect our results of operations and will largely depend on future developments, which are highly uncertain and cannot be predicted.
Uninsured losses, losses in excess of our insurance coverage, or increasing insurance deductibles could adversely affect our financial condition and our cash flow.
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As a result, our operating results may be adversely affected.
−Removed: Legal disputes, settlement and defense costs could have an adverse effect on our operating results.
−Removed: From time to time we have to make monetary settlements or defend actions or arbitration (including class actions) to resolve tenant, employment-related or other claims and disputes.
−Removed: Settling any such liabilities could negatively impact our
−Removed: operating results and cash available for distribution to stockholders and could also adversely affect our ability to sell, lease, operate or encumber affected properties.
Our tenant reinsurance business is subject to significant governmental regulation, which may adversely affect our results.
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As a result of regulatory 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 or penalized or suffer an adverse judgment, which could adversely affect our business and results of operations.
−Removed: Environmental compliance costs and liabilities associated with operating our stores may adversely affect our results of operations.
−Removed: Under various U.S.
−Removed: federal, state and local laws, ordinances and regulations, a current or previous owner, developer or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances, which could be substantial.
−Removed: Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of such hazardous substances.
−Removed: From time to time, we may acquire properties, or interests in properties, with known adverse environmental conditions for which we believe that the environmental liabilities associated with these conditions are quantifiable and that the acquisition will yield a superior risk-adjusted return.
−Removed: Costs associated with complying with the Americans with Disabilities Act of 1990 may result in unanticipated expenses.
−Removed: Under the ADA, places of public accommodation are required to meet certain federal requirements related to access and use by disabled persons.
−Removed: A number of additional U.S.
−Removed: federal, state and local laws may also require modifications to our stores, or restrict certain further renovations of the stores, with respect to access thereto by disabled persons.
−Removed: If one or more of our stores is not in compliance with the ADA or other legislation, then we would be required to incur additional costs to bring the facility into compliance.
−Removed: There is significant competition among self-storage operators and from other storage alternatives.
−Removed: Competition in the local markets in which many of our stores are located is significant and has affected our occupancy levels, rental rates and operating expenses.
−Removed: Development of self-storage facilities has increased in recent years, which has intensified competition, and we expect it will continue to do so as newly developed facilities are opened.
−Removed: Development of self-storage facilities by other operators could continue to increase in the future.
−Removed: Actions by our competitors may decrease or prevent increases in our occupancy and rental rates, while increasing our operating expenses, which could adversely affect our business and results of operations.
−Removed: We may not be successful in identifying and consummating suitable acquisitions that meet our criteria, which may impede our growth.
−Removed: Our ability to expand through acquisitions is integral to our business strategy and requires us to identify suitable acquisition candidates or investment opportunities that meet our criteria and are compatible with our growth strategy.
−Removed: We may not be successful in identifying suitable stores or other assets that meet our acquisition criteria or in consummating acquisitions or investments on satisfactory terms or at all.
−Removed: Failure to identify or consummate acquisitions will slow our growth, which could in turn adversely affect our stock price.
−Removed: Our ability to acquire stores on favorable terms and successfully integrate and operate them may be constrained by the following significant risks:
−Removed: • competition from local investors and other real estate investors with significant capital, including other publicly-traded REITs and institutional investment funds;
−Removed: • competition from other potential acquirers may significantly increase the purchase price which could reduce our profitability;
−Removed: • the inability to achieve satisfactory completion of due diligence investigations and other customary closing conditions;
−Removed: • we may acquire stores subject to liabilities without any recourse, or with only limited recourse, with respect to unknown liabilities such as liabilities for clean-up of undisclosed environmental contamination, claims by persons dealing with the former owners of the stores and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the stores.
We and our vendors rely on information technology, and any material failure, inadequacy, interruption or security incident affecting that technology could harm our business, results of operations and financial condition.
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Our information technology systems and those of our third-party service providers, strategic partners and other contractors or consultants are vulnerable to attack and damage or interruption from computer viruses and malware (e.g.
−Removed: ransomware), misconfigurations, bugs or other vulnerabilities, malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, and sophisticated nation-state and nation-state-supported actors.
+Added: ransomware), software or hardware errors, misconfigurations, bugs or other vulnerabilities, malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, and sophisticated nation-state and nation-state-supported actors.
+Added: Additionally, any integration of artificial intelligence in our or any third party’s operations, products or services is expected to pose new or unknown cybersecurity risks and challenges.
+Added: Furthermore, remote and hybrid working arrangements at our company (and at many third-party providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
Although we have taken steps to protect the security of our information technology systems and Confidential Information, it is possible that our cybersecurity risk management program and processes, including our policies, safety and security measures, will not be fully implemented, complied with or able to prevent such systems’ improper functioning or damage, or the improper accessing or disclosure of Confidential Information, from such security breaches, disruptions, and shutdowns.
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We may also experience security breaches that may remain undetected for an extended period.
−Removed: Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
−Removed: Any failure to maintain the proper functioning, confidentiality, security and availability of our or our third-party service providers' information technology systems or our Confidential Information could interrupt our operations, damage our reputation, divert significant management attention and resources to remedy any damages that result, subject us to liability and claims or regulatory investigations and enforcement actions, which could result in, among other things, fines and penalties, and have a material adverse effect on our business, financial condition and results of operations.
+Added: Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using sophisticated tools and techniques (including artificial intelligence) that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
+Added: Any failure to maintain the proper functioning, confidentiality, integrity and availability of our or our third-party service providers’ information technology systems or our Confidential Information could interrupt our operations, damage our reputation, divert significant management attention and resources to remedy any damages that result, subject us to liability and claims (including class actions) or regulatory investigations and enforcement actions, which could result in, among other things, fines and penalties, and have a material adverse effect on our business, financial condition and results of operations.
Further, our insurance coverage may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.
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For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, requires certain businesses that process personal information of California residents to, among other things, provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information;
−Removed: receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt-out of certain disclosures of their personal information;
+Added: receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt-out of certain disclosures of their personal
and enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
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Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business, financial condition and results of operations.
−Removed: Our property taxes could increase due to reassessment or property tax rate changes.
−Removed: Real property taxes on our properties may increase as our properties are reassessed by taxing authorities or as property tax rates change.
−Removed: Therefore, the amount of property taxes we are required to pay could increase substantially from the property taxes we currently pay or have paid in the past, including on a retroactive basis.
−Removed: If our property taxes we pay increase, our cash flow would be adversely impacted, and our ability to pay any expected dividends to our stockholders and unitholders could be adversely affected.
−Removed: State and federal regulations relating to natural disasters, public health emergencies or consumer protection could adversely affect our results of operations.
−Removed: The impact of natural disasters, public health emergencies and any government responses to such emergencies, or regulations passed in an attempt to protect consumers could lower demand for storage facilities, lead to lower rental rates, inability to raise rents, reduced late fee collection and impaired ability to hold auctions resulting in higher accounts receivable and bad debt.
−Removed: Although the self-storage industry has historically been resilient to ordinary market downturns, the impact of natural disasters, public health emergencies and related regulations including those that limit our ability to raise rents could materially and adversely affect our results of operations and will largely depend on future developments, which are highly uncertain and cannot be predicted.
+Added: The use of, or inability to take advantage of the benefits of, artificial intelligence by us presents risks and challenges that may adversely impact our business and operating results or may adversely impact the demand for storage with the Company.
+Added: We have begun and may continue to use artificial intelligence and machine learning (collectively, “AI”) tools in our operations.
+Added: We use AI in assessing marketing decisions and operating our stores.
+Added: However, there can be no assurance that we will realize the desired or anticipated benefits, or any benefits, and we may fail to properly implement such technology.
+Added: While AI tools may facilitate optimization and operational efficiencies, they also have the potential for inaccuracy, bias, infringement or misappropriation of intellectual property.
+Added: The use of AI tools may introduce errors or inadequacies that are not easily detectable, including deficiencies, inaccuracies, or biases in the data used for AI training, or in the content, analyses, or recommendations generated by AI applications.
+Added: Additionally, if our peers use AI tools to optimize operations and we fail to utilize AI tools in a comparable manner, we may be competitively disadvantaged.
+Added: New laws and regulations are being adopted, and existing laws and regulations may be interpreted, in ways that could affect our business operations and the way in which we use AI.
+Added: Our ongoing efforts to comply with privacy and data protection laws, as well as initiatives to comply with new legal regulations relating to privacy, data protection and AI, impose significant costs and challenges that are likely to increase over time.
+Added: Additionally, this complex and rapidly evolving landscape around AI may expose us to claims, inquiries, demands and proceedings by private parties and global regulatory authorities and subject us to legal liability as well as reputational harm.
+Added: Uncertainty around the safety and security of new and emerging AI applications may require additional investment in the development of proprietary datasets, machine learning models and systems to test for security, accuracy, bias and other variables, which are often complex, may be costly and could impact our operating results.
+Added: Cybersecurity threat actors may also utilize AI tools to automate and enhance cybersecurity attacks against us and could lead to data breaches, loss of confidential or sensitive information, and financial or reputational harm.
+Added: These outcomes could impair our ability to compete effectively, damage our reputation, result in the loss of valuable property or information and adversely affect our business, financial condition, and results of operations.
+Added: We may not be successful in identifying and consummating suitable acquisitions that meet our criteria, which may impede our growth.
+Added: Our ability to expand through acquisitions is integral to our business strategy and requires us to identify suitable acquisition candidates or investment opportunities that meet our criteria and are compatible with our growth strategy.
+Added: We may not be successful in identifying suitable stores or other assets that meet our acquisition criteria or in consummating acquisitions or investments on satisfactory terms or at all.
+Added: Failure to identify or consummate acquisitions will slow our growth, which could in turn adversely affect our stock price.
+Added: Our ability to acquire stores on favorable terms and successfully integrate and operate them may be constrained by the following significant risks:
+Added: • competition from local investors and other real estate investors with significant capital, including other publicly-traded REITs and institutional investment funds;
+Added: • competition from other potential acquirers may significantly increase the purchase price which could reduce our profitability;
+Added: • the inability to achieve satisfactory completion of due diligence investigations and other customary closing conditions;
+Added: • we may acquire stores subject to liabilities without any recourse, or with only limited recourse, with respect to unknown liabilities such as liabilities for clean-up of undisclosed environmental contamination, claims by persons
+Added: dealing with the former owners of the stores and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the stores.
+Added: Legal disputes, settlement and defense costs could have an adverse effect on our operating results.
+Added: From time to time we have to make monetary settlements or defend actions or arbitration (including class actions) to resolve tenant, employment-related or other claims and disputes.
+Added: Settling any such liabilities could negatively impact our operating results and cash available for distribution to stockholders and could also adversely affect our ability to sell, lease, operate or encumber affected properties.
Climate change may adversely affect our results of operations.
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Further, the impact of climate change may increase the cost of, or make unavailable, property insurance or other hazard insurance on terms we find acceptable or necessary to adequately protect our properties.
−Removed: Risks Related to Our Organization and Structure
−Removed: Conflicts of interest could arise as a result of our relationship with our Operating Partnership.
−Removed: Conflicts of interest could arise in the future as a result of the relationships between us and our affiliates, and our Operating Partnership or any partner thereof.
−Removed: Our directors and officers have duties to our Company under applicable Maryland law in connection with their management of our Company.
−Removed: At the same time, we, through our wholly-owned subsidiary, have fiduciary duties, as a general partner, to our Operating Partnership and to the limited partners under Delaware law in connection with the management of our Operating Partnership.
−Removed: Our duties, through our wholly-owned subsidiary, as a general partner to our Operating Partnership and its partners may come into conflict with the duties of our directors and officers to our Company.
−Removed: The partnership agreement of our Operating Partnership does not require us to resolve such conflicts in favor of either our Company or the limited partners in our Operating Partnership.
−Removed: Unless otherwise provided for in the relevant partnership agreement, Delaware law generally requires a general partner of a Delaware limited partnership to adhere to fiduciary duty standards under which it owes its limited partners the highest duties of good faith, fairness, and loyalty and which generally prohibit such general partner from taking any action or engaging in any transaction as to which it has a conflict of interest.
−Removed: Additionally, the partnership agreement expressly limits our liability by providing that neither we, our direct wholly-owned Massachusetts business trust subsidiary, as the general partner of the Operating Partnership, nor any of our or their trustees, directors or officers, will be liable or accountable in damages to our Operating Partnership, the limited partners or assignees for errors in judgment, mistakes of fact or law or for any act or omission if we, or such trustee, director or officer, acted in good faith.
−Removed: In addition, our Operating Partnership is required to indemnify us, our affiliates and each of our respective trustees, officers, directors, employees and agents to the fullest extent permitted by applicable law against any and all losses, claims, damages, liabilities (whether joint or several), expenses (including, without limitation, attorneys’ fees and other legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Operating Partnership, provided that our Operating Partnership will not indemnify for (1) willful misconduct or a knowing violation of the law, (2) any transaction for which such person received an improper personal benefit in violation or breach of any provision of the partnership agreement, or (3) in the case of a criminal proceeding, the person had reasonable cause to believe the act or omission was unlawful.
−Removed: The provisions of Delaware law that allow the common law fiduciary duties of a general partner to be modified by a partnership agreement have not been resolved in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties that would be in effect under common law were it not for the partnership agreement.
−Removed: Our joint venture investments could be adversely affected by our lack of sole decision-making authority.
−Removed: As of December 31, 2024, we held interests in 469 operating stores through joint ventures.
−Removed: Some of these arrangements could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers' financial conditions and disputes between us and our co-venturers.
−Removed: We expect to continue our joint venture strategy by entering into additional joint ventures for the purpose of developing new stores and acquiring existing stores.
−Removed: In such event, we would not be in a position to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity.
−Removed: The decision-making authority regarding the stores we currently hold through joint ventures is either vested exclusively with our joint venture partners, is subject to a majority vote of the joint venture partners or is equally shared by us and the joint venture partners.
−Removed: In addition, investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their share of required capital contributions.
−Removed: Partners or co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives.
−Removed: Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the partner or co-venturer would have full control over the partnership or joint venture.
−Removed: Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and efforts on our business.
−Removed: Consequently, actions by or disputes with partners or co-venturers might result in subjecting stores owned by the partnership or joint venture to additional risk.
−Removed: In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers, which could harm our financial condition.
−Removed: We may record losses as a result of the bankruptcy, insolvency, or other credit failure of the borrowers under our bridge lending program or other companies in which we have invested.
−Removed: In that case, our revenues and results of operations may be materially and adversely impacted.
−Removed: As of December 31, 2024, the total outstanding balance under investments in debt securities and notes receivable was $1.6 billion, including $1.2 billion outstanding under our bridge loan program.
−Removed: Further, as of December 31, 2024, the total outstanding balance of our investments in unconsolidated real estate entities, net of cash distributions, was $1.3 billion, of which $350 million was invested in the preferred stock of entities affiliated with SmartStop.
−Removed: Although we conduct due diligence and aim to carefully evaluate the risks associated with these debt and other investments, we could incur losses from our lending and investing decisions, which includes subjective and complex judgments and forecasts of economic conditions and how these economic predictions might impair the ability of our borrowers and unconsolidated real estate entities to operate their business and/or make all required payments.
−Removed: For example, volatility of the capital and credit markets, increased interest rates, lower demand for storage and general economic conditions may adversely affect the solvency, creditworthiness or operations of our borrowers and entities in which we have invested.
−Removed: If our forecasts prove incorrect, or if any of our borrowers and unconsolidated real estate entities fail to perform as expected, we may incur losses from these investments which could have a material adverse effect on our operating revenue and results of operations.
−Removed: Certain provisions of Maryland law and our organizational documents, including the stock ownership limit imposed by our charter, may inhibit market activity in our stock and could prevent or delay a change in control transaction.
−Removed: Our charter, subject to certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT and to limit any person to actual or constructive ownership of no more than 7.0% (by value or by number of shares, whichever is more restrictive) of our outstanding common stock or 7.0% (by value or by number of shares, whichever is more restrictive) of our outstanding capital stock.
−Removed: Our board of directors, in its sole discretion, may exempt a proposed transferee from the ownership limit.
−Removed: However, our board of directors may not grant an exemption from the ownership limit to any proposed transferee whose ownership could jeopardize our qualification as a REIT.
−Removed: These restrictions on ownership will not apply if our board of directors determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT.
−Removed: The ownership limit may delay or impede a transaction or a change of control that might involve a premium price for our securities or otherwise be in the best interests of our stockholders.
−Removed: Different ownership limits apply to the family of Kenneth M.
−Removed: Woolley, certain of his affiliates, family members and estates and trusts formed for the benefit of the foregoing;
−Removed: to Spencer F.
−Removed: Kirk, certain of his affiliates, family members and estates and trusts formed for the benefit of the foregoing;
−Removed: and to certain designated investment entities as defined in our charter.
−Removed: Our board of directors has the power to issue additional shares of our stock in a manner that may not be in the best interest of our stockholders.
−Removed: Our charter authorizes our board of directors to issue additional authorized but unissued shares of common stock or preferred stock and to increase the aggregate number of authorized shares or the number of shares of any class or series without stockholder approval.
−Removed: In addition, our board of directors may classify or reclassify any unissued shares of common stock or preferred stock and set the preferences, rights and other terms of the classified or reclassified shares.
−Removed: Our board of directors could issue additional shares of our common stock or establish a series of preferred stock that could have the effect of delaying, deferring or preventing a change in control or other transaction that might involve a premium price for our securities or otherwise not be in the best interests of our stockholders.
−Removed: Our rights and the rights of our stockholders to take action against our directors and officers are limited.
−Removed: Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances.
−Removed: In addition, our charter eliminates our directors’ and officers’ liability to us and our stockholders for money damages except for liability resulting from actual receipt of an improper benefit in money, property or services or active and deliberate dishonesty established by a final judgment and which is material to the cause of action.
−Removed: Our bylaws require us to indemnify our directors and officers for liability resulting from actions taken by them in those capacities to the maximum extent permitted by Maryland law.
−Removed: As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist under common law.
−Removed: In addition, we may be obligated to fund the defense costs incurred by our directors and officers.
−Removed: Risks Related to Our Debt Financings
−Removed: Disruptions in the financial markets could affect our ability to obtain debt financing on reasonable terms and have other adverse effects on us.
−Removed: Uncertainty in the credit and financial markets may negatively impact our ability to access additional debt financing or to refinance existing debt maturities on favorable terms (or at all), which may negatively affect our ability to make acquisitions and fund development projects.
−Removed: Credit and financial markets can be volatile and may be impacted by diminished liquidity and credit availability, rising interest and inflation rates, declines in economic growth and uncertainty about economic stability as well as geopolitical events such as the ongoing conflict between Russia and Ukraine, terrorism, civil unrest and acts of war.
−Removed: A downturn in the credit and financial markets may cause us to seek alternative sources of potentially less attractive financing and may require us to adjust our business plan accordingly.
−Removed: In addition, these factors may make it more difficult for us to sell stores or may adversely affect the price we receive for stores that we do sell, as prospective buyers may experience increased costs of debt financing or difficulties in obtaining debt financing.
−Removed: Required payments of principal and interest on borrowings may leave us with insufficient cash to operate our stores or to pay the distributions currently contemplated or necessary to maintain our qualification as a REIT and may expose us to the risk of default under our debt obligations.
−Removed: As of December 31, 2024, we had approximately $12.6 billion of outstanding indebtedness.
−Removed: We may incur additional debt in connection with future acquisitions and development.
−Removed: We may borrow under our revolving lines of credit and commercial paper program or borrow new funds to finance these future stores.
−Removed: Additionally, we do not anticipate that our internally generated cash flow will be adequate to repay our existing indebtedness upon maturity and, therefore, we expect to repay our indebtedness through refinancings and equity and/or debt offerings.
−Removed: Further, we may need to borrow funds in order to make cash distributions to maintain our qualification as a REIT or to make our expected distributions.
−Removed: To qualify as a REIT, we generally must distribute to our stockholders at least 90% of our REIT taxable income each year, determined without regard to the dividends paid deduction and excluding net capital gains, and we are subject to U.S.
−Removed: federal corporate income tax to the extent that we distribute less than 100% of our REIT taxable income each year, determined without regard to the deduction for dividends paid and including net capital gains.
−Removed: If we are required to utilize our revolving lines of credit and commercial paper for purposes other than acquisition activity, this will reduce the amount available for acquisitions and could slow our growth.
−Removed: Therefore, our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following:
−Removed: • our cash flow may be insufficient to meet our required principal and interest payments;
−Removed: • we may be unable to borrow additional funds as needed or on favorable terms, including to make acquisitions or to continue to make distributions required to maintain our qualification as a REIT;
−Removed: • we may be unable to refinance our indebtedness at maturity, or the refinancing terms may be less favorable than the terms of our original indebtedness;
−Removed: • because a portion of our debt bears interest at variable rates, an increase in interest rates could materially increase our interest expense;
−Removed: • we may be forced to dispose of one or more of our stores, possibly on disadvantageous terms;
−Removed: • after debt service, the amount available for cash distributions to our stockholders is reduced;
−Removed: • we may experience increased vulnerability to economic and industry downturns, reducing our ability to respond to changing business and economic conditions;
−Removed: • we may default on our obligations, and the lenders or mortgagees may foreclose on our stores that secure their loans and receive an assignment of rents and leases and/or enforce our guarantees;
−Removed: • we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations;
−Removed: • our default under any one of our mortgage loans with cross-default or cross-collateralization provisions could result in a default on other indebtedness or result in the foreclosures of other stores.
−Removed: Increases in interest rates may increase our interest expense and adversely affect our cash flow and our ability to service our indebtedness and make cash distributions to our stockholders.
−Removed: As of December 31, 2024, we had approximately $12.6 billion of debt outstanding, of which approximately $3.0 billion or 24.2% was subject to variable interest rates (excluding debt with interest rate swaps).
−Removed: This variable rate debt had a weighted average interest rate of approximately 5.4% per annum.
−Removed: Increases in interest rates on this variable rate debt would increase our interest expense, which could harm our cash flow and our ability to pay cash distributions.
−Removed: Failure to hedge effectively against interest rate changes may adversely affect our results of operations.
−Removed: In certain cases we may seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements.
−Removed: Hedging involves risks, such as the risk that the counterparty may fail to honor its obligations under an arrangement.
−Removed: Failure to hedge effectively against interest rate changes may adversely affect our financial condition, results of operations and ability to make cash distributions to our stockholders.
−Removed: Our existing indebtedness contains covenants that limit our operating flexibility, and failure to comply with all covenants in our debt agreements could materially and adversely affect us.
−Removed: Our debt agreements, including our credit agreement governing the revolving credit facility and term loans and the indentures governing our public traded notes, contain various financial and other covenants that we and our operating partnership must comply with including total debt to asset ratios, secured debt to total asset ratios, adjusted EBITDA to fixed charged ratios and minimum ratios of unencumbered assets to unsecured debt which we must maintain.
−Removed: These covenants may limit our operating flexibility and could prevent us from taking advantage of business opportunities as they arise, growing our business or competing effectively.
−Removed: Our ability to meet these covenants may be affected by events beyond our control, and we may be unable to maintain compliance with these covenants.
−Removed: If we fail to meet these requirements, we may be unable to obtain waivers from the lenders or indenture trustee, as applicable, or amend the covenants.
−Removed: A breach of any of the covenants or other provisions in our debt agreements could result in an event of default, which if not cured or waived, could result in such debt becoming due and payable, either automatically or after an election to accelerate by the required percentage of the holders of the indebtedness or by an agent for the holders of the indebtedness.
−Removed: This, in turn, could cause our other debt, including the notes and our revolving credit facility, to become due and payable as a result of cross-default or cross-acceleration provisions contained in the agreements governing the other debt and permit certain of our lenders to foreclose on our assets, if any, that secure this debt.
−Removed: In the event that some or all of our debt is accelerated and becomes immediately due and payable, we may not have the funds to repay or the ability to refinance our debt.
−Removed: A downgrade in our credit ratings could materially adversely affect our business and financial condition and the market value of our outstanding notes.
−Removed: The credit ratings assigned to the outstanding publicly-traded notes and other debt securities of the Operating Partnership could change based upon, among other things, our results of operations and financial condition.
−Removed: These ratings are subject to ongoing evaluation by credit rating agencies, and we cannot assure you that any rating will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant.
−Removed: Moreover, these credit ratings are not recommendations to buy, sell or hold the notes or any other securities.
−Removed: If any credit rating agency that has rated the outstanding notes or other debt securities of the Operating Partnership downgrades or lowers its credit rating, or if any credit rating agency indicates that it has
−Removed: placed any such rating on a so-called “watch list” for a possible downgrading or lowering or otherwise indicates that its outlook for that rating is negative, it could have a material adverse effect on our costs and availability of capital, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows and our ability to satisfy our debt service obligations (including payments on the outstanding notes) and to make dividends and other distributions to our security holders and could also have the material adverse effect on the market value of the outstanding notes.
+Added: Environmental compliance costs and liabilities associated with operating our stores may adversely affect our results of operations.
+Added: Under various U.S.
+Added: federal, state and local laws, ordinances and regulations, a current or previous owner, developer or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances, which could be substantial.
+Added: Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of such hazardous substances.
+Added: From time to time, we may acquire properties, or interests in properties, with known adverse environmental conditions for which we believe that the environmental liabilities associated with these conditions are quantifiable and that the acquisition will yield a superior risk-adjusted return.
+Added: Costs associated with complying with the ADA may result in unanticipated expenses.
+Added: Under the ADA, places of public accommodation are required to meet certain federal requirements related to access and use by disabled persons.
+Added: A number of additional U.S.
+Added: federal, state and local laws may also require modifications to our stores, or restrict certain further renovations of the stores, with respect to access thereto by disabled persons.
+Added: If one or more of our stores is not in compliance with the ADA or other legislation, then we would be required to incur additional costs to bring the facility into compliance.
Risks Related to Qualification and Operation as a REIT
−Removed: Dividends payable by REITs may be taxed at higher rates.
−Removed: Dividends payable by REITs may be taxed at higher rates than dividends of non-REIT corporations.
−Removed: The maximum U.S.
−Removed: federal income tax rate for qualified dividends paid by domestic non-REIT corporations to U.S.
−Removed: stockholders that are individuals, trust or estates is generally 20%.
−Removed: Dividends paid by REITs to such stockholders are generally not eligible for that rate, but under current tax law, such stockholders may deduct up to 20% of ordinary dividends (i.e., dividends not designated as capital gain dividends or qualified dividend income) received from a REIT for taxable years beginning before January 1, 2026.
−Removed: Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate may still be higher than the tax rate applicable to regular corporate qualified dividends.
−Removed: This may cause investors to view REIT investments as less attractive than investments in non-REIT corporations, which in turn may adversely affect the value of stock of REITs, including our stock.
−Removed: In addition, the relative attractiveness of real estate in general may be adversely affected by the favorable tax treatment given to corporate dividends, which could negatively affect the value of our stores.
−Removed: Possible legislative or other actions affecting REITs could adversely affect our stockholders.
−Removed: The rules dealing with U.S.
−Removed: federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service (“IRS”) and the U.S.
−Removed: Department of the Treasury.
−Removed: Changes to the tax laws, with or without retroactive application, could adversely affect our investors or us in ways we cannot predict.
−Removed: New legislation, Treasury Regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT, the U.S.
−Removed: federal income tax consequences of such qualification, or the U.S.
−Removed: federal income tax consequences of an investment in us.
−Removed: Also, the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT.
Our failure to qualify as a REIT would have significant adverse consequences to us and the value of our stock.
10 unchanged sentences
individual stockholders would be taxed on our dividends at capital gains rates, and our U.S.
−Removed: corporate stockholders would be entitled to the dividends received deduction with respect to such dividends, subject, in each case, to applicable limitations under the Internal Revenue Code.
+Added: corporate stockholders would be entitled to the dividends received deduction with respect to such dividends,
+Added: subject, in each case, to applicable limitations under the Internal Revenue Code.
If we fail to qualify as a REIT for U.S.
4 unchanged sentences
The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify as a REIT.
−Removed: In order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the composition of our assets, the sources of our gross income and the owners
−Removed: of our stock.
+Added: In order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the composition of our assets, the sources of our gross income and the owners of our stock.
Our ability to satisfy the asset tests depends upon our analysis of the fair market value of our assets, some of which are not susceptible to precise determination, and for which we will not obtain independent appraisals.
1 unchanged sentence
Also, we must make distributions to stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains, and we will be subject to U.S.
−Removed: federal corporate income tax to the extent we distribute less than 100% of our REIT taxable income, without regard to the dividends paid deduction and including net capital gains.
+Added: federal corporate income tax to the extent we distribute for any year less than 100% of our REIT taxable income, determined without regard to the dividends paid deduction and including net capital gains.
We own and may acquire direct or indirect interests in entities that have elected or will elect to be taxed as REITs under the Internal Revenue Code (each, a “Subsidiary REIT”).
7 unchanged sentences
We have not requested and do not plan to request a ruling from the IRS regarding our qualification as a REIT.
+Added: Possible legislative or other actions affecting REITs could adversely affect our stockholders.
+Added: The rules dealing with U.S.
+Added: federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service (“IRS”) and the U.S.
+Added: Department of the Treasury.
+Added: Changes to the tax laws, with or without retroactive application, could adversely affect our investors or us in ways we cannot predict.
+Added: New legislation, Treasury Regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT, the U.S.
+Added: federal income tax consequences of such qualification, or the U.S.
+Added: federal income tax consequences of an investment in us.
+Added: Also, the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT.
+Added: Dividends payable by REITs may be taxed at higher rates.
+Added: Dividends payable by REITs may be taxed at higher rates than dividends of non-REIT corporations.
+Added: The maximum U.S.
+Added: federal income tax rate for qualified dividends paid by domestic non-REIT corporations to U.S.
+Added: stockholders that are individuals, trust or estates is generally 20%.
+Added: Dividends paid by REITs to such stockholders are generally not eligible for that rate, but under current tax law, such stockholders may deduct up to 20% of ordinary dividends (i.e., dividends not designated as capital gain dividends or qualified dividend income) received from a REIT.
+Added: Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate may still be higher than the tax rate applicable to regular corporate qualified dividends.
+Added: This may cause investors to view REIT investments as less attractive than investments in non-REIT corporations, which in turn may adversely affect the value of stock of REITs, including our stock.
+Added: In addition, the relative attractiveness of real estate in general may be adversely affected by the favorable tax treatment given to corporate dividends, which could negatively affect the value of our stores.
We will pay some taxes, reducing cash available for stockholders.
15 unchanged sentences
federal, state or local taxes, we will have less cash available for distribution to stockholders.
+Added: Risks Related to Our Debt Financings
+Added: Disruptions in the financial markets could affect our ability to obtain debt financing on reasonable terms and have other adverse effects on us.
+Added: Uncertainty in the credit and financial markets may negatively impact our ability to access additional debt financing or to refinance existing debt maturities on favorable terms (or at all), which may negatively affect our ability to make acquisitions and fund development projects.
+Added: Credit and financial markets can be volatile and may be impacted by diminished liquidity and credit availability, rising interest and inflation rates, declines in economic growth and uncertainty about economic stability as well as geopolitical events such as the ongoing conflict between Russia and Ukraine, Israel and Hamas, and Israel and Iran, terrorism, civil unrest and acts of war.
+Added: A downturn in the credit and financial markets may cause us to seek alternative sources of potentially less attractive financing and may require us to adjust our business plan accordingly.
+Added: In addition, these factors may make it more difficult for us to sell stores or may adversely affect the price we receive for stores that we do sell, as prospective buyers may experience increased costs of debt financing or difficulties in obtaining debt financing.
+Added: A downgrade in our credit ratings could materially adversely affect our business and financial condition and the market value of our outstanding notes.
+Added: The credit ratings assigned to the outstanding publicly-traded notes and other debt securities of the Operating Partnership could change based upon, among other things, our results of operations and financial condition.
+Added: These ratings are subject to ongoing evaluation by credit rating agencies, and we cannot assure you that any rating will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant.
+Added: Moreover, these credit ratings are not recommendations to buy, sell or hold the notes or any other securities.
+Added: If any credit rating agency that has rated the outstanding notes or other debt securities of the Operating Partnership downgrades or lowers its credit rating, or if any credit rating agency indicates that it has placed any such rating on a so-called “watch list” for a possible downgrading or lowering or otherwise indicates that its outlook for that rating is negative, it could have a material adverse effect on our costs and availability of capital, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows and our ability to satisfy our debt service obligations (including payments on the outstanding notes) and to make dividends and other distributions to our security holders and could also have the material adverse effect on the market value of the outstanding notes.
+Added: Increases in interest rates may increase our interest expense and adversely affect our cash flow and our ability to service our indebtedness and make cash distributions to our stockholders.
+Added: As of December 31, 2025, we had approximately $13.5 billion of debt outstanding, of which approximately $2.4 billion or 17.9% was subject to variable interest rates (excluding debt with interest rate swaps).
+Added: This variable rate debt had a weighted average interest rate of approximately 4.8% per annum.
+Added: Increases in interest rates on this variable rate debt would increase our interest expense, which could harm our cash flow and our ability to pay cash distributions.
+Added: Failure to hedge effectively against interest rate changes may adversely affect our results of operations.
+Added: In certain cases we may seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements.
+Added: Hedging involves risks, such as the risk that the counterparty may fail to honor its obligations under an arrangement.
+Added: Failure to hedge effectively against interest rate changes may adversely affect our financial condition, results of operations and ability to make cash distributions to our stockholders.
+Added: Required payments of principal and interest on borrowings may leave us with insufficient cash to operate our stores or to pay the distributions currently contemplated or necessary to maintain our qualification as a REIT and may expose us to the risk of default under our debt obligations.
+Added: As of December 31, 2025, we had approximately $13.5 billion of outstanding indebtedness.
+Added: We may incur additional debt in connection with future acquisitions and development.
+Added: We may borrow under our revolving lines of credit and commercial paper program or borrow new funds to finance these future stores.
+Added: Additionally, we do not anticipate that our internally generated cash flow will be adequate to repay our existing indebtedness upon maturity and, therefore, we expect to repay our indebtedness through refinancings and equity and/or debt offerings.
+Added: Further, we may need to borrow funds in order to make cash distributions to maintain our qualification as a REIT or to make our expected distributions.
+Added: To qualify as a REIT, we generally must distribute to our stockholders annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains, and we are subject to U.S.
+Added: federal corporate income tax to the extent that we distribute for any year less than 100% of our REIT taxable income, determined without regard to the deduction for dividends paid and including net capital gains.
+Added: If we are required to utilize our revolving lines of credit and commercial paper for purposes other than acquisition activity, this will reduce the amount available for acquisitions and could slow our growth.
+Added: Therefore, our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following:
+Added: • our cash flow may be insufficient to meet our required principal and interest payments;
+Added: • we may be unable to borrow additional funds as needed or on favorable terms, including to make acquisitions or to continue to make distributions required to maintain our qualification as a REIT;
+Added: • we may be unable to refinance our indebtedness at maturity, or the refinancing terms may be less favorable than the terms of our original indebtedness;
+Added: • because a portion of our debt bears interest at variable rates, an increase in interest rates could materially increase our interest expense;
+Added: • we may be forced to dispose of one or more of our stores, possibly on disadvantageous terms;
+Added: • after debt service, the amount available for cash distributions to our stockholders is reduced;
+Added: • we may experience increased vulnerability to economic and industry downturns, reducing our ability to respond to changing business and economic conditions;
+Added: • we may default on our obligations, and the lenders or mortgagees may foreclose on our stores that secure their loans and receive an assignment of rents and leases and/or enforce our guarantees;
+Added: • we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations;
+Added: • our default under any one of our mortgage loans with cross-default or cross-collateralization provisions could result in a default on other indebtedness or result in the foreclosures of other stores.
+Added: Our existing indebtedness contains covenants that limit our operating flexibility, and failure to comply with all covenants in our debt agreements could materially and adversely affect us.
+Added: Our debt agreements, including our credit agreement governing the revolving credit facility and term loans and the indentures governing our public traded notes, contain various financial and other covenants that we and our operating partnership must comply with including total debt to asset ratios, secured debt to total asset ratios, adjusted EBITDA to fixed charged ratios and minimum ratios of unencumbered assets to unsecured debt which we must maintain.
+Added: These covenants may limit our operating flexibility and could prevent us from taking advantage of business opportunities as they arise, growing our business or competing effectively.
+Added: Our ability to meet these covenants may be affected by events beyond our control, and we may be unable to maintain compliance with these covenants.
+Added: If we fail to meet these requirements, we may be unable to obtain waivers from the lenders or indenture trustee, as applicable, or amend the covenants.
+Added: A breach of any of the covenants or other provisions in our debt agreements could result in an event of default, which if not cured or waived, could result in such debt becoming due and payable, either automatically or after an election to accelerate by the required percentage of the holders of the indebtedness or by an agent for the holders of the indebtedness.
+Added: This, in turn, could cause our other debt, including the notes and our revolving credit facility, to become due and payable as a result of cross-default or cross-acceleration provisions contained in the agreements governing the other debt and permit certain of our lenders to foreclose on our assets, if any, that secure this debt.
+Added: In the event that some or all of our debt is accelerated and becomes immediately due and payable, we may not have the funds to repay or the ability to refinance our debt.
+Added: Risks Related to Our Organization and Structure
+Added: Our unconsolidated joint venture investments could be adversely affected by our lack of sole decision-making authority.
+Added: As of December 31, 2025, we held interests in 407 operating stores through unconsolidated joint ventures.
+Added: Some of these arrangements could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers’ financial conditions and disputes between us and our co-venturers.
+Added: We expect to continue our joint venture strategy by entering into additional joint ventures for the purpose of developing new stores and acquiring existing stores.
+Added: In such event, we would not be in a position to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity.
+Added: The decision-making authority regarding the stores we currently hold through joint ventures is either vested exclusively with our joint venture partners, is subject to a majority vote of the joint venture partners or is equally shared by us and the joint venture partners.
+Added: In addition, investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their share of required capital contributions.
+Added: Partners or co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives.
+Added: Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the partner or co-venturer would have full control over the partnership or joint venture.
+Added: Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and efforts on our business.
+Added: Consequently, actions by or disputes with partners or co-venturers might result in subjecting stores owned by the partnership or joint venture to additional risk.
+Added: In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers, which could harm our financial condition.
+Added: We may record losses as a result of the bankruptcy, insolvency, or other credit failure of the borrowers under our bridge lending program or other companies in which we have invested.
+Added: In that case, our revenues and results of operations may be materially and adversely impacted.
+Added: As of December 31, 2025, the total outstanding balance under investments in debt securities and notes receivable was $1.8 billion, including $1.5 billion outstanding under our bridge loan program.
+Added: Further, as of December 31, 2025, the total outstanding balance of our investments in unconsolidated real estate entities, net of cash distributions, was $993 million, of which $250 million was invested in the preferred stock of entities affiliated with SmartStop.
+Added: Although we conduct due diligence and aim to carefully evaluate the risks associated with these debt and other investments, we could incur losses from our lending and investing decisions, which includes subjective and complex judgments and forecasts of economic conditions and how these economic predictions might impair the ability of our borrowers and unconsolidated real estate entities to operate their business and/or make all required payments.
+Added: For example, volatility of the capital and credit markets, increased interest rates, lower demand for storage and general economic conditions may adversely affect the solvency, creditworthiness or operations of our borrowers and entities in which we have invested.
+Added: If our forecasts prove incorrect, or if any of our borrowers and unconsolidated real estate entities fail to perform as expected, we may incur losses from these investments which could have a material adverse effect on our operating revenue and results of operations.
+Added: Conflicts of interest could arise as a result of our relationship with our Operating Partnership.
+Added: Conflicts of interest could arise in the future as a result of the relationships between us and our affiliates, and our Operating Partnership or any partner thereof.
+Added: Our directors and officers have duties to our Company under applicable Maryland law in connection with their management of our Company.
+Added: At the same time, we, through our wholly-owned subsidiary, have fiduciary duties, as a general partner, to our Operating Partnership and to the limited partners under Delaware law in connection with the management of our Operating Partnership.
+Added: Our duties, through our wholly-owned subsidiary, as a general partner to our Operating Partnership and its partners may come into conflict with the duties of our directors and officers to our Company.
+Added: The partnership agreement of our Operating Partnership does not require us to resolve such conflicts in favor of either our Company or the limited partners in our Operating Partnership.
+Added: Unless otherwise provided for in the relevant partnership agreement, Delaware law generally requires a general partner of a Delaware limited partnership to adhere to fiduciary duty standards under which it owes its limited partners the highest duties of good faith, fairness, and loyalty and which generally prohibit such general partner from taking any action or engaging in any transaction as to which it has a conflict of interest.
+Added: Additionally, the partnership agreement expressly limits our liability by providing that neither we, our direct wholly-owned Massachusetts business trust subsidiary, as the general partner of the Operating Partnership, nor any of our or their trustees, directors or officers, will be liable or accountable in damages to our Operating Partnership, the limited partners or assignees for errors in judgment, mistakes of fact or law or for any act or omission if we, or such trustee, director or officer, acted in good faith.
+Added: In addition, our Operating Partnership is required to indemnify us, our affiliates and each of our respective trustees, officers, directors, employees and agents to the fullest extent permitted by applicable law against any and all losses, claims, damages, liabilities (whether joint or several), expenses (including, without limitation, attorneys’ fees and other legal
+Added: fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Operating Partnership, provided that our Operating Partnership will not indemnify for (1) willful misconduct or a knowing violation of the law, (2) any transaction for which such person received an improper personal benefit in violation or breach of any provision of the partnership agreement, or (3) in the case of a criminal proceeding, the person had reasonable cause to believe the act or omission was unlawful.
+Added: The provisions of Delaware law that allow the common law fiduciary duties of a general partner to be modified by a partnership agreement have not been resolved in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties that would be in effect under common law were it not for the partnership agreement.
+Added: Certain provisions of Maryland law and our organizational documents, including the stock ownership limit imposed by our charter, may inhibit market activity in our stock and could prevent or delay a change in control transaction.
+Added: Our charter, subject to certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT and to limit any person to actual or constructive ownership of no more than 7.0% (by value or by number of shares, whichever is more restrictive) of our outstanding common stock or 7.0% (by value or by number of shares, whichever is more restrictive) of our outstanding capital stock.
+Added: Our board of directors, in its sole discretion, may exempt a proposed transferee from the ownership limit.
+Added: However, our board of directors may not grant an exemption from the ownership limit to any proposed transferee whose ownership could jeopardize our qualification as a REIT.
+Added: These restrictions on ownership will not apply if our board of directors determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT.
+Added: The ownership limit may delay or impede a transaction or a change of control that might involve a premium price for our securities or otherwise be in the best interests of our stockholders.
+Added: Different ownership limits apply to the family of Kenneth M.
+Added: Woolley, certain of his affiliates, family members and estates and trusts formed for the benefit of the foregoing;
+Added: to Spencer F.
+Added: Kirk, certain of his affiliates, family members and estates and trusts formed for the benefit of the foregoing;
+Added: and to certain designated investment entities as defined in our charter.
+Added: Our board of directors has the power to issue additional shares of our stock in a manner that may not be in the best interest of our stockholders.
+Added: Our charter authorizes our board of directors to issue additional authorized but unissued shares of common stock or preferred stock and to increase the aggregate number of authorized shares or the number of shares of any class or series without stockholder approval.
+Added: In addition, our board of directors may classify or reclassify any unissued shares of common stock or preferred stock and set the preferences, rights and other terms of the classified or reclassified shares.
+Added: Our board of directors could issue additional shares of our common stock or establish a series of preferred stock that could have the effect of delaying, deferring or preventing a change in control or other transaction that might involve a premium price for our securities or otherwise not be in the best interests of our stockholders.
+Added: Our rights and the rights of our stockholders to take action against our directors and officers are limited.
+Added: Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances.
+Added: In addition, our charter eliminates our directors’ and officers’ liability to us and our stockholders for money damages except for liability resulting from actual receipt of an improper benefit in money, property or services or active and deliberate dishonesty established by a final judgment and which is material to the cause of action.
+Added: Our bylaws require us to indemnify our directors and officers for liability resulting from actions taken by them in those capacities to the maximum extent permitted by Maryland law.
+Added: As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist under common law.
+Added: In addition, we may be obligated to fund the defense costs incurred by our directors and officers.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.