What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-02 compared with 2024-11-04 · 84 added, 102 removed, 216 unchanged (46% of the section changed)

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We derive substantially all of our revenues from our two segments:

storage operations and tenant reinsurance.

Primary sources of revenue for our storage operations segment include rents received from tenants under leases at each of our wholly-owned stores.

self-storage operations and tenant reinsurance.

Primary sources of revenue for our self-storage operations segment include rents received from tenants under leases at each of our wholly-owned stores.

Our operating results depend materially on our ability to lease available self-storage units, to actively manage unit rental rates, and on the ability of our tenants to make required rental payments.

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To maximize the performance of our stores, we employ industry-leading revenue management systems.

Developed by our management team, these systems enable us to analyze, set and adjust rental rates in real time across our portfolio in order to respond to changing market conditions.

Developed by our management team, these systems enable us to analyze, set and adjust rental rates daily across our portfolio in order to respond to changing market conditions.

We believe our systems and processes allow us to more pro-actively manage revenues.

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We consider a store to be stabilized once it has achieved either an 80% occupancy rate for a full year measured as of January 1 of the current year, or has been open for three years prior to January 1 of the current year.

As of September 30, 2024, we owned or had ownership interests in 2,401 operating stores.

Of these stores, 1,934 are wholly-owned, seven are in consolidated joint ventures, and 460 are in unconsolidated joint ventures.

As of March 31, 2025, we owned or had ownership interests in 2,424 operating stores.

Of these stores, 1,975 are wholly-owned, ten are in consolidated joint ventures, and 439 are in unconsolidated joint ventures.

In addition, we managed an additional 1,675 stores for third parties bringing the total number of stores which we own and/or manage to 4,099.

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Our acquisitions have given us an increased scale in many core markets as well as a foothold in many markets where we had no previous presence.

As of September 30, 2024, approximately 2,245,000 tenants were leasing storage units at the operating stores that we own and/or manage, primarily on a month-to-month basis, providing the flexibility to increase rental rates over time as market conditions permit.

As of March 31, 2025, approximately 2,350,000 tenants were leasing storage units at the operating stores that we own and/or manage, primarily on a month-to-month basis, providing the flexibility to increase rental rates over time as market conditions permit.

Existing tenants generally receive rate increases at least annually, for which no direct correlation has been drawn to our vacancy trends.

Although leases are short-term in duration, the typical tenant tends to remain at our stores for an extended period of time.

For stores that were stabilized as of September 30, 2024, the average length of stay for tenants who have vacated was approximately 17.2 months.

The average annual rent per square foot for our existing customers at stabilized stores, net of discounts and bad debt, was $20.55 for the three months ended September 30, 2024, compared to $20.73 for the three months ended September 30, 2023.

Average annual rent per square foot for new leases was $13.49 for the three months ended September 30, 2024, compared to $15.63 for the three months ended September 30, 2023.

The average discounts, as a percentage of rental revenues, at all stabilized properties during these periods were 2.2% and 2.7%, respectively.

For same-stores as of March 31, 2025, the average length of stay for tenants who have vacated was approximately 17.7 months.

Our store portfolio is made up of different types of construction and building configurations.

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The following table presents additional information regarding net rentable square feet and the number of stores by state:

September 30, 2024

March 31, 2025

REIT Owned Joint Venture Owned Managed Total

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Arizona 50 3,841,361 25 2,027,317 58 4,730,971 133 10,599,649

Arkansas — — — — 4 483,458 4 483,458

California 219 18,102,867 49 3,620,253 147 13,582,643 415 35,305,763

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Totals 1,985 149,401,907 439 34,290,083 1,675 131,271,852 4,099 314,963,842

(1) Includes seven consolidated joint ventures and excludes approximately 18,200 units related to Bargold.

(1) Includes ten consolidated joint ventures.

RESULTS OF OPERATIONS

Amounts in thousands, except store and share data

Comparison of the three and nine months ended September 30, 2024 and 2023

Results for the three and nine months ended September 30, 2024 included the operations of 2,401 stores (1,934 wholly-owned, seven in consolidated joint ventures, and 460 in joint ventures accounted for using the equity method) compared to the results for the three and nine months ended September 30, 2023, which included the operations of 2,369 stores (1,896 wholly-owned, two in a consolidated joint venture, and 471 in joint ventures accounted for using the equity method).

Comparison of the three months ended March 31, 2025 and 2024

Results for the three months ended March 31, 2025 included the operations of 2,424 stores (1,975 wholly-owned, ten in consolidated joint ventures, and 439 in joint ventures accounted for using the equity method) compared to the results for the three months ended March 31, 2024, which included the operations of 2,384 stores (1,909 wholly-owned, three in a consolidated joint venture, and 472 in joint ventures accounted for using the equity method).

The following table presents information on revenues earned for the periods indicated:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 $ Change % Change 2024 2023 $ Change % Change

For the Three Months Ended March 31,

2025 2024 $ Change % Change

Property rental $ 704,380 $ 688,044 $ 16,336 2.4 %

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Total revenues $ 819,997 $ 799,539 $ 20,458 2.6 %

Property Rental— The increase in property rental revenues for the nine months ended September 30, 2024 was primarily the result of an increase of $561,324 associated with the merger of Life Storage (the “Life Storage Merger”), other acquisitions completed in 2023, and acquisitions completed in the first nine months of 2024.

We acquired 771 wholly-owned stores in 2023 and an additional 20 wholly-owned stores during the nine months ended September 30, 2024.

The Life Storage Merger occurred on July 20, 2023;

therefore the three months ended September 30, 2024 include the additional store count for the full quarter compared to the three months ended September 30, 2023 only including the significantly increased store count from the Merger date forward.

Property rental— The increase in property rental revenues for the three months ended March 31, 2025 was primarily the result of an increase of $17,542 associated with acquisitions completed in 2024 and acquisitions completed in the first three months of 2025.

We acquired 58 wholly-owned stores in 2024 and an additional 17 wholly-owned stores during the three months ended March 31, 2025.

Tenant reinsurance— The increase in tenant reinsurance revenues was due primarily to an increase in the number of stores operated.

The three and nine months ended September 30, 2024 include the larger store count from the Life Storage Merger for the entire respective periods, while the results for the three and nine months ended September 30, 2023 only include the Life Storage stores from July 20, 2023 forward.

We operated 3,862 stores at September 30, 2024 compared to 3,651 stores at September 30, 2023.

We operated 4,099 stores at March 31, 2025 compared to 3,793 stores at March 31, 2024.

Management fees and other income— Management fees and other income primarily represent the fees collected for our management of stores owned by third parties and unconsolidated joint ventures and other transaction fee income.

The increase for the nine months ended September 30, 2024 was due to both an increase in the number of stores managed and an increase in the overall revenue of stores under management when compared to the same period last year.

As of September 30, 2024, we managed 1,921 stores for unconsolidated joint ventures and third parties, compared to 1,755 stores as of September 30, 2023.

The increase for the three months ended March 31, 2025 was due to both an increase in the number of stores managed and an increase in the overall revenue of stores under management when compared to the same period last year.

As of March 31, 2025, we managed 2,124 stores for unconsolidated joint ventures and third parties, compared to 1,884 stores as of March 31, 2024.

The following table presents information on expenses for the periods indicated:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 $ Change % Change 2024 2023 $ Change % Change

For the Three Months Ended March 31,

2025 2024 $ Change % Change

Property operations $ 223,582 $ 204,518 $ 19,064 9.3 %

Tenant reinsurance 17,116 18,505 (1,389) (7.5) %

Life Storage Merger transition costs — 54,174 (54,174) (100.0) % — 54,174 (54,174) (100.0) %

General and administrative 45,974 43,722 2,252 5.2 %

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Total expenses $ 467,028 $ 463,711 $ 3,317 0.7 %

Property Operations— The increase in property operations expense during the three and nine months ended September 30, 2024 consists primarily of an increase of $174,964 related to the Life Storage Merger and acquisitions completed in the first nine months of 2024.

The Life Storage Merger occurred on July 20, 2023;

therefore the three and nine months ended September 30, 2024 include the additional store count for the full quarter, as compared to the three and nine months ended September 30, 2023 only including the significantly increased store count from acquisition date forward.

We acquired 771 wholly-owned stores in 2023 and an additional 20 wholly-owned stores during the nine months ended September 30, 2024.

Additionally, for the three and nine months ended September 30, 2024 there was an increase of $16,139 at our stabilized stores primarily due to property and casualty insurance, payroll, marketing, and property tax, partially offset by utilities.

Property operations— The increase in property operations expense during the three months ended March 31, 2025 consists primarily of an increase of $10,006 related to acquisitions completed in 2024 and acquisitions completed in the first three months of 2025.

We acquired 58 wholly-owned stores in 2024 and an additional 17 wholly-owned stores during the three months ended March 31, 2025.

Additionally, for the three months ended March 31, 2025 there was an increase of $10,742 at our same-store properties primarily due to increases in property tax, utilities and snow removal, offset by marketing and payroll.

Tenant reinsurance— Tenant reinsurance expense represents the costs that are incurred to provide tenant reinsurance.

The increase is largely due to the number of stores operated during each period.

We operated 3,862 stores at September 30, 2024 compared to 3,651 stores at September 30, 2023.

Life Storage Merger Transitions Costs— Represents the costs that were incurred as part of the Life Storage Merger in July 2023 that did not meet the definition of transaction costs and primarily consist of severance paid as part of employment agreements with certain employees and officers of Life Storage.

General and administrative— General and administrative expenses primarily include all expenses not directly related to our stores, including corporate payroll, office expense, office rent, travel and professional fees.

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Our overall General and Administrative expense has increased primarily as a result of our increased size through acquisitions, business combinations and growth through our joint venture partners and managed portfolio.

Depreciation and Amortization— Depreciation and amortization expense increased as a result of the acquisition of new stores.

We acquired 771 wholly-owned stores in 2023 (757 wholly-owned stores in the Life Storage Merger on July 20, 2023) and an additional 20 wholly-owned stores during the nine months ended September 30, 2024.

As a result, depreciation expense was higher for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023.

Additionally, the increase relates to the amortization of intangibles recorded as part of the Life Storage Merger.

Depreciation and amortization— The company amortizes to expense intangible assets-customer intangibles on a straight-line basis over the average period that a tenant is expected to utilize the facility (currently estimated at 18 months).

Depreciation and amortization expense decreased for the period, primarily due to the full amortization of customer intangibles associated with our merger with Life Storage which were fully expensed as of January of this year.

Other Revenues and Expenses

The following table presents information on other revenues and expenses for the periods indicated:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 $ Change % Change 2024 2023 $ Change % Change

Loss on real estate assets held for sale $ (8,961) $ — $ (8,961) 100.0 % $ (63,620) $ — $ (63,620) 100.0 %

For the Three Months Ended March 31,

2025 2024 $ Change % Change

Gain on real estate assets held for sale and sold, net $ 35,761 $ — $ 35,761 100.0 %

Interest expense (142,399) (132,887) (9,512) 7.2 %

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Equity in earnings and dividend income from unconsolidated real estate entities 19,931 15,007 4,924 32.8 %

Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest 13,730 — 13,730 100.0 % 13,730 — 13,730 100.0 %

Impairment of Life Storage trade name (51,763) — (51,763) 100.0 % (51,763) — (51,763) 100.0 %

Income tax expense (8,991) (6,742) (2,249) 33.4 %

Total other revenues & expenses, net $ (68,044) $ (111,754) $ 43,710 (39.1) %

Loss on real estate assets held for sale— As of September 30, 2024, we had 17 stores classified as held for sale.

Of the 17 stores, nine had an estimated fair value, net of selling costs, less than the carrying value of the assets.

During the three and nine months ended September 30, 2024, we recorded estimated losses of $8,961 and $63,620, respectively.

Interest Expense— The increase in interest expense during the three and nine months ended September 30, 2024 was primarily the result of higher outstanding debt and a higher weighted average interest rate compared to the same period in the prior year.

As of September 30, 2024, we had approximately $11.8 billion in total face value of debt, compared to approximately $11.3 billion as of September 30, 2023.

The total face value of debt as of September 30, 2023 reflected an additional $3.7 billion of debt issued in connection with closing the Life Storage Merger on July 20, 2023.

Gain on real estate assets held for sale and sold, net— We disposed of 11 previously held for sale stores during the three months ended March 31, 2025 resulting in a gain of $39,520.

This gain was offset by losses of $3,759 related to the sale of three land parcels and three properties listed for sale during the quarter where the estimated fair value, net of selling costs, was less than the net carrying value of the assets.

Interest expense— The increase in interest expense during the three months ended March 31, 2025 was primarily the result of higher outstanding debt.

As of March 31, 2025, we had approximately $12,809,851 in total face value of debt, compared to approximately $11,479,914 as of March 31, 2024.

Non-cash interest expense related to amortization of discount on Life Storage unsecured senior notes— Represents the amortization of the discount assigned to the fair value of the Life Storage unsecured senior notes assumed as part of the Life Storage Merger.

Interest income— Interest income represents interest earned on variable interest rate bridge loans, debt securities and on notes receivable from Common and Preferred Operating Partnership unit holders.

The increase in interest income during the three and nine months ended September 30, 2024 was primarily the result of an increase in the amount of bridge loans outstanding combined with an increase in interest rates.

The balance of bridge loans was $1,032,244 as of September 30, 2024, compared to $533,000 as of September 30, 2023.

The increase in interest income during the three months ended March 31, 2025 was primarily the result of an increase in the amount of bridge loans outstanding.

The balance of bridge loans was $1,369,089 as of March 31, 2025, compared to $752,336 as of March 31, 2024.

Equity in earnings and dividend income from unconsolidated real estate entities— Equity in earnings of unconsolidated real estate entities represents the income earned through our ownership interests in unconsolidated joint ventures.

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To the extent that cash or profits in excess of these preferred returns are generated, we receive a higher percentage of the excess cash or profits.

We added a total of 154 stores to new and existing joint ventures (145 stores from the Life Storage Merger) during 2023.

These additional joint ventures have contributed to the increase.

Dividend income represents dividends from our investment in preferred stock of SmartStop Self Storage REIT, Inc.

and Strategic Storage Trust VI, Inc.

Equity in Earnings of Unconsolidated Real Estate Ventures - Gain on Sale of Real Estate Assets— In August 2024, the ESS Bristol Investments LLC joint venture sold five of its eight stores to another of our unconsolidated joint ventures, and we recognized a gain of $10,324 for our pro rata share of the transaction.

In September 2024, we sold our membership interest in the Alan Jathoo JV LLC unconsolidated joint venture, which held nine stores, to our partner and recognized a gain of $3,406 on the transaction.

Impairment of Life Storage Trade Name— During the three months ended September 30, 2024, we decided to operate all stores under a single brand.

As a result of that decision, we deemed the Life Storage trade name intangible asset to be impaired and recognized a loss for the full value of the asset.

Income Tax Expense —The increase in income tax expense for the three and nine months ended September 30, 2024 was primarily the result of an increase in book income and a decrease in permanent tax deductions related to stock awards.

The increase is primarily due to the transaction in November 2024 in which we acquired additional ownership interest in the HF1 Sovran HHF Storage Holdings LLC and HF2 Sovran HHF Storage Holdings II LLC from our partner in the unconsolidated joint ventures.

The transaction increased our equity ownership percentages from 20% and 15%, respectively, to 49% in each unconsolidated joint venture.

Dividend income represents dividends from our investment in preferred stock of SmartStop and its affiliates.

In addition, during February 2025, we invested $100,000 in Strategic Storage Growth Trust III, Inc.

Preferred Stock at a dividend rate of 8.85%, which represents $1,400 of the increase.

Income tax expense —The increase in income tax expense for the three months ended March 31, 2025 was primarily the result of an increase in book income and a decrease in permanent tax deductions related to stock awards.

FUNDS FROM OPERATIONS

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The following table presents the calculation of FFO for the periods indicated:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 2024 2023

For the Three Months Ended March 31,

Net income attributable to common stockholders $ 270,875 $ 213,112

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Amortization of intangibles 11,079 29,284

Loss on real estate assets held for sale 8,961 — 63,620 —

Gain on real estate assets held for sale and sold, net (35,761) —

Unconsolidated joint venture real estate depreciation and amortization 8,689 7,840

Unconsolidated joint venture gain on sale of real estate assets (13,730) — (13,730) —

Distributions paid on Series A Preferred Operating Partnership units — — — (159)

Income allocated to Operating Partnership noncontrolling interests 14,050 10,962

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We consider a store to be stabilized once it has been open for three years or has sustained average square foot occupancy of 80% or more for one calendar year.

We believe that by providing same-store results from a stabilized pool of stores, with accompanying operating metrics including, but not limited to:

occupancy, rental revenue growth, operating expense growth, net operating income growth, etc., stockholders and potential investors are able to evaluate operating performance without the effects of non-stabilized occupancy levels, rent levels, expense levels, acquisitions or completed developments.

We believe that by providing same-store results from a stabilized pool of stores, with accompanying operating metrics including but not limited to occupancy, rental revenue growth, operating expense growth, net operating income growth, etc., stockholders and potential investors are able to evaluate operating performance without the effects of non-stabilized occupancy levels, rent levels, expense levels, acquisitions or completed developments.

Same-store results should not be used as a basis for future same-store performance or for the performance of our stores as a whole.

The following table presents operating data for our same-store portfolio.

For the Three Months Ended September 30, Percent For the Nine Months Ended September 30, Percent

2024 2023 Change 2024 2023 Change

For the Three Months Ended March 31, Percent

2025 2024 Change

Same-store rental revenues

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Same-store net operating income $ 467,309 $ 472,886 (1.2) %

Same-store square foot occupancy as of year end 94.3% 93.7% 94.3% 93.7%

Same-store square foot occupancy as of period end 93.4% 92.4%

Average same-store square foot occupancy 93.3% 92.1%

Properties included in same-store 1,829 1,829

The following table presents additional information for our same-store portfolio:

For the Three Months Ended March 31,

Same-store portfolio 2025 2024

Average annual rent per occupied square foot, net of discounts and bad debt $ 19.75 $ 19.94

New leases average annual rent per square foot $ 12.18 $ 12.15

Average discounts as a percentage of rental revenues 1.7% 1.9%

The following table presents a reconciliation of same-store net operating income to net income as presented on our condensed consolidated statements of operations for the periods indicated:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 2024 2023

For the Three Months Ended March 31,

Net Income $ 284,925 $ 224,074

Adjusted to exclude:

Loss on real estate assets held for sale 8,961 — 63,620 —

Gain on real estate assets held for sale and sold, net (35,761) —

Equity in earnings and dividend income from unconsolidated real estate entities (19,931) (15,007)

Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest (13,730) — (13,730) —

Interest expense 142,399 132,887

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Income tax expense 8,991 6,742

Life Storage Merger transition costs — 54,174 — 54,174

General and administrative 45,974 43,722

Impairment of Life Storage trade name 51,763 — 51,763 —

Management fees, other income and interest income (69,872) (53,721)

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Same-store net operating income $ 467,309 $ 472,886

Cash flows from operating activities for the nine months ended September 30, 2024 increased when compared to the same period in the prior year.

Cash flows used in investing activities relate primarily to our acquisition and development of new stores, sales of stores, investments in unconsolidated real estate entities notes receivable from bridge loans, and fluctuate depending on our actions in those areas.

Cash flows from operating activities for the three months ended March 31, 2025 increased when compared to the same period in the prior year.

Cash flows used in investing activities relate primarily to our acquisition and development of new stores, sales of stores, investments in unconsolidated real estate entities, and notes receivable from bridge loans and fluctuate depending on our actions in those areas.

Cash flows from financing activities depend primarily on our debt and equity financing activities.

A summary of cash flows along with significant components are as follows:

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Net cash provided by operating activities $ 481,404 $ 465,556

Net cash used in investing activities (342,038) (282,071)

Net cash (used in) provided by financing activities (612,406) 723,479

Net cash used in financing activities (159,621) (233,182)

Significant components of net cash flow included:

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Depreciation and amortization 180,356 196,966

Loss on real estate assets held for sale 63,620 —

Impairment of Life Storage trade name 51,763 —

Accounts payable, accrued expenses and other liabilities 63,726 117,940

Acquisition and development of real estate assets (243,861) (126,875)

Life Storage Merger, net of cash acquired — (1,182,411)

Proceeds from sale of real estate assets 124,730 —

Investment in unconsolidated real estate entities (102,397) (2,412)

Issuance and purchase of notes receivable, net of principal payments (585,731) (137,198)

Proceeds from sale of notes receivable 175,335 134,064

Proceeds from unsecured term loans and senior notes and revolving lines of credit 5,542,362 5,194,665

Principal payments on unsecured term loans and senior notes and revolving lines of credit (6,062,896) (4,617,755)

Issuance and repurchase of notes receivable, net of sales and principal payments (116,241) (146,182)

Proceeds from unsecured term loans, senior notes, revolving lines of credit and commercial paper 3,979,431 1,679,470

Principal payments on unsecured term loans, senior notes, revolving lines of credit and commercial paper (4,615,810) (2,147,191)

Proceeds from issuance of public bonds, net 850,000 600,000

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LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2024, we had $88,931 available in cash and cash equivalents.

As of March 31, 2025, we had $119,559 available in cash and cash equivalents.

Our cash and cash equivalents are held in accounts managed by third party financial institutions and consist of invested cash and cash in our operating accounts.

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however, there can be no assurance that access to our cash and cash equivalents will not be impacted by adverse conditions in the financial markets.

As of September 30, 2024, we had $11,827,208 face value of debt, resulting in a debt to total enterprise value ratio of 22.8%.

As of September 30, 2024, the ratio of total fixed-rate debt and other instruments to total debt was 78.3% ($9,256,376 total fixed-rate debt including $1,382,568 on which we have interest rate swaps that have been included as fixed-rate debt).

The weighted average interest rate of the total of fixed- and variable-rate debt at September 30, 2024 was 4.5%.

Certain real estate assets are pledged as collateral for our debt.

We are subject to certain restrictive covenants relating to our outstanding debt.

We were in compliance with all financial covenants at September 30, 2024.

We expect to fund our short-term liquidity requirements, including operating expenses, recurring capital expenditures, dividends to stockholders, distributions to holders of Operating Partnership units and interest on our outstanding indebtedness, out of our operating cash flow, cash on hand and borrowings under our revolving lines of credit.

The following table presents information relating to our debt:

March 31, 2025

Total face value of debt $ 12,809,851

Total enterprise value ratio 28.0 %

Total fixed-rate debt and other instruments to total debt 78.8% (1)

Weighted average interest rate of total debt 4.4 %

(1) $10,095,495 total fixed-rate debt including $1,079,466 on which we have interest rate swaps that have been included as fixed-rate debt.

In addition, we are pursuing additional sources of financing based on anticipated funding needs and growth assumptions.

In November 2024, we established our commercial paper program, under which we may issue, repay and re-issue short-term unsecured commercial paper notes.

The aggregate principal amount outstanding under the program at any time cannot exceed $1,000,000, and the net proceeds of the commercial paper notes are expected to be used for general corporate purposes.

The maturities of the notes generally range from overnight to three months, with a maximum of up to 13 months.

The commercial paper notes are issued under customary terms in the commercial paper market and are issued at a discount from par or, alternatively, can be issued at par and bear varying interest rates on a fixed or floating basis.

At any point in time, we expect to maintain available commitments under our Credit Facilities in an amount at least equal to the amount of commercial paper notes outstanding.

At March 31, 2025, we had $580,000 in issuances outstanding under the commercial paper program.

We hold a BBB+/Stable rating from S&P, which was upgraded from BBB/Stable in July 2023 in connection with the Life Storage Merger, and a Baa2 rating from Moody's Investors Service.

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Certain of our real estate assets are pledged as collateral for our debt.

As of September 30, 2024, we had a total of 1,705 unencumbered stores as defined by our public bonds.

As of March 31, 2025, we had a total of 1,754 unencumbered stores as defined by our public bonds.

Our unencumbered asset value was calculated as $30,065,371 and our total asset value was calculated as $36,034,628 according to the calculations as defined by our public bonds.

We are subject to certain restrictive covenants relating to our outstanding debt.

We were in compliance with all financial covenants at March 31, 2025.

Our liquidity needs consist primarily of operating expenses, monthly debt service payments, recurring capital expenditures, dividends to stockholders and distributions to unit holders necessary to maintain our REIT qualification.

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On April 15, 2024, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with certain sales agents and forward purchasers named therein.

Under the terms of the Equity Distribution Agreement, we may issue and sell, and the forward purchasers may sell, from time to time through or to the sales agents, shares of our common stock having an aggregate offering price of up to $800 million.

The shares of common stock will be offered pursuant to our effective registration statement on Form S-3 (Registration Statement No.

333-278690) previously filed with and declared effective by the Securities and Exchange Commission (the “SEC”) and a prospectus supplement and accompanying prospectus, filed with the SEC.

As of September 30, 2024, no shares have been sold under the Equity Distribution Agreement, which we refer to as our "at the market" equity program.

As of March 31, 2025, no shares have been sold under the Equity Distribution Agreement, which we refer to as our “at the market” equity program.

OFF-BALANCE SHEET ARRANGEMENTS

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The self-storage business is subject to seasonal fluctuations.

A greater portion of revenues and profits are realized from May through September.

A greater portion of revenues and profits is typically realized from May through September.

Historically, our highest level of occupancy has been at the end of July, while our lowest level of occupancy has been in late February and early March.

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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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis