
PART I. FINANCIAL INFORMATION Financial Statements H1 2025 financial statements show decreased assets, revenues, and net income, driven by lower property sale gains and reduced operating cash flow Condensed Consolidated Balance Sheets Total assets decreased to $5.18 billion by June 30, 2025, from $5.35 billion, primarily due to reduced property values, impacting total equity Condensed Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $5,181,285 | $5,354,462 | | Self storage properties, net | $4,695,617 | $4,812,496 | | Cash and cash equivalents | $26,121 | $50,408 | | Total Liabilities | $3,543,603 | $3,591,115 | | Debt financing | $3,402,659 | $3,449,087 | | Total Equity | $1,637,682 | $1,763,347 | Condensed Consolidated Statements of Operations Q2 2025 revenue slightly decreased, but H1 2025 saw significant declines in total revenue and net income, primarily due to lower property sale gains Q2 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $188,842 | $190,448 | -0.8% | | Net Income | $30,958 | $32,280 | -4.1% | | Net Income Attributable to Common Shareholders | $14,357 | $11,952 | +20.1% | | EPS (basic and diluted) | $0.19 | $0.16 | +18.8% | Six Months Ended June 30 Statement of Operations Highlights (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $377,196 | $386,596 | -2.4% | | Gain on sale of self storage properties | $10,996 | $63,841 | -82.8% | | Net Income | $50,477 | $127,368 | -60.4% | | Net Income Attributable to Common Shareholders | $22,237 | $65,869 | -66.2% | | EPS (basic and diluted) | $0.29 | $0.85 | -65.9% | Condensed Consolidated Statements of Cash Flows H1 2025 cash flow from operations decreased, with investing activities sharply lower due to reduced property sales, and financing activities also decreased Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $165,502 | $177,217 | | Net Cash Provided by Investing Activities | $25,549 | $544,654 | | Net Cash Used In Financing Activities | ($213,859) | ($742,525) | | Decrease in Cash, Cash Equivalents and Restricted Cash | ($22,808) | ($20,654) | Notes to Condensed Consolidated Financial Statements Notes detail the company's self-storage REIT operations, including 807 consolidated properties, $3.4 billion debt, and the internalization of its PRO management structure - As of June 30, 2025, the company owned 807 consolidated self-storage properties and managed an additional 260 properties through unconsolidated real estate ventures3132 - During the first six months of 2025, the company acquired four properties for approximately $24.9 million and sold ten properties for net proceeds of approximately $67.1 million, resulting in a net gain of $11.0 million8284 - Total debt financing stood at approximately $3.4 billion as of June 30, 2025, composed of a credit facility, various term loans, senior unsecured notes, and fixed-rate mortgages87 - Effective July 1, 2024, the company internalized its PRO (participating regional operators) structure by purchasing the PROs' management contracts, transitioning most operations in-house98 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2025 revenue decline from lower occupancy and property sales, H1 2025 net income drop, and declining non-GAAP metrics, while maintaining adequate liquidity Results of Operations Q2 2025 total revenue decreased 0.8% from lower rental revenue, partially offset by increased management fees and reduced G&A, while H1 2025 net income fell sharply - Q2 2025 rental revenue decreased by $4.5 million (2.6%) YoY, attributed to a drop in average portfolio occupancy from 86.1% to 83.6% and the sale of 11 properties135136 - Q2 2025 General and Administrative expenses decreased by $3.4 million (20.9%) YoY, primarily due to lower management fees paid following the internalization of the PRO structure140 - For the first six months of 2025, the gain on sale of self-storage properties was $11.0 million, a significant decrease from $63.8 million in the same period of 2024, heavily impacting net income161 Non-GAAP Financial Measures Key non-GAAP metrics declined, with Q2 2025 Core FFO per share at $0.55 and same-store NOI down 6.1%, reflecting decreased rental revenue and increased operating expenses Core FFO per Share and Unit | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $0.55 | $0.62 | -11.3% | | Six Months Ended June 30 | $1.09 | $1.22 | -10.7% | Same Store Portfolio Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Rental Revenue | $162,570K | $167,825K | -3.1% | | Property Operating Expenses | $52,720K | $50,407K | +4.6% | | Net Operating Income (NOI) | $116,255K | $123,777K | -6.1% | Adjusted EBITDA (in thousands) | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $123,825 | $127,751 | -3.1% | | Six Months Ended June 30 | $246,834 | $257,678 | -4.2% | Liquidity and Capital Resources Liquidity stems from operations, property sales, and a $1.355 billion credit facility, with H1 2025 cash used for debt payments, dividends, and capital expenditures - Primary sources of liquidity are cash flow from operations, proceeds from property dispositions, and access to debt and equity markets189 - As of June 30, 2025, the company had a $1.355 billion credit facility, with $544.1 million of borrowing capacity remaining under its $950.0 million revolver199200 - During H1 2025, the company paid $87.2 million in dividends to common shareholders and $10.2 million to preferred shareholders217 Quantitative and Qualitative Disclosures About Market Risk Primary market risk is interest rate fluctuations, with $403.9 million in unhedged variable-rate debt, where a 1% rate change impacts annual earnings by $4.0 million - The company's main market risk exposure is to interest rate fluctuations224 - As of June 30, 2025, the company had $403.9 million of debt subject to variable interest rates, excluding debt covered by interest rate swaps225 - A hypothetical 100 basis point (1%) change in interest rates would result in an approximate $4.0 million annual change in interest expense on the unhedged variable-rate debt225 Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period227 - No changes in internal control over financial reporting occurred during the six months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls228 PART II. OTHER INFORMATION Legal Proceedings The company reports that it is not currently subject to any legal proceedings that it considers to be material - As of the filing date, the company is not involved in any material legal proceedings231 Risk Factors No material changes to 2024 Form 10-K risk factors, except for a new risk concerning potential adverse effects of recent U.S. and international tariff actions - A new risk factor has been added regarding the potential adverse effects of U.S. and international tariffs on the company's business, financial condition, and results of operations234235 Unregistered Sales of Equity Securities and Use of Proceeds In Q2 2025, the company issued 108,506 common shares for OP unit redemptions and has $350.3 million remaining in its share repurchase program - In Q2 2025, the company issued 108,506 common shares in exchange for an equal number of OP units to satisfy redemption requests from limited partners236 - The company's share repurchase program had approximately $350.3 million of remaining capacity as of June 30, 2025240241 Exhibits This section lists exhibits filed with the Form 10-Q, including corporate governance documents and CEO/CFO certifications - The report includes standard exhibits such as Articles of Amendment, Bylaws, and CEO/CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906246248