# CubeSmart: Form 10-Q for the period ended Sep 30, 2011

- Company: [CubeSmart](/companies/cube.md) (CIK 1298675)
- Form: 10-Q
- Filed: 2011-11-07
- Accepted by EDGAR: Nov 7, 2011, 17:14 ET
- Period: 2011-09-30
- Accession: 0001104659-11-061682
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1298675/000110465911061682/a11-25836_110q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1298675/000110465911061682/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2011-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Cost of revenue | 3 months, 2011-07-01 to 2011-09-30 | $24.9m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2011-01-01 to 2011-09-30 | $74.1m | us-gaap:CostOfRevenue |
| Operating income | 3 months, 2011-07-01 to 2011-09-30 | $14.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2011-01-01 to 2011-09-30 | $34.7m | us-gaap:OperatingIncomeLoss |
| Diluted shares (weighted) | 3 months, 2011-07-01 to 2011-09-30 | 100,284,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2011-01-01 to 2011-09-30 | 100,264,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2011-01-01 to 2011-09-30 | $64.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 9 months, 2011-01-01 to 2011-09-30 | $20.9m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2011-09-30 | $12.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2011-09-30 | $1.50bn | us-gaap:Assets |
| Total liabilities | at 2011-09-30 | $713.1m | us-gaap:Liabilities |
| Shareholders' equity | at 2011-09-30 | $708.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 52,598 characters.

*The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report. The Company makes certain statements in this section that are forward-looking statements within the meaning of the federal securities laws. For a discussion of forward-looking statements, see the section in this report entitled “Forward-Looking Statements.” Certain risk factors may cause actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see the section entitled “Risk Factors” in the Parent Company’s Annual Report on the Form 10-K for the year ended December 31, 2010 and the section entitled “Risk Factors” in the Operating Partnership’s Registration Statement on Form 10, as amended.*

### Overview

The Company is an integrated self-storage real estate company, and as such we have in-house capabilities in the operation, design, development, leasing, management and acquisition of self-storage facilities. The Parent Company’s operations are conducted solely through the Operating Partnership and its subsidiaries. Effective September 14, 2011, the Parent Company changed its name from “U-Store-It Trust” to “CubeSmart” and the Operating Partnership changed its name from “U-Store-It, L.P.” to “CubeSmart, L.P.” The Parent Company has elected to be taxed as a REIT for U.S. federal income tax purposes. As of September 30, 2011 and December 31, 2010, the Company owned 353 and 363 self-storage facilities, respectively, totaling approximately 23.3 million rentable square feet and 23.6 million rentable square feet, respectively. In addition, as of September 30, 2011, the Company managed 103 properties for third parties bringing the total number of properties which it owned and/or managed to 456.

The Company derives revenues principally from rents received from its customers who rent units at its self-storage facilities under month-to-month leases. Therefore, our operating results depend materially on our ability to retain our existing customers and lease our available self-storage units to new customers while maintaining and, where possible, increasing our pricing levels. In addition, our operating results depend on the ability of our customers to make required rental payments to us. We have a decentralized approach to the management and operation of our facilities, which places an emphasis on local, market level oversight and control. We believe this approach allows us to respond quickly and effectively to changes in local market conditions, and to maximize revenues by managing rental rates and occupancy levels.

The Company typically experiences seasonal fluctuations in the occupancy levels of our facilities, which are generally slightly higher during the summer months due to increased moving activity.

The United States recently experienced an economic downturn that resulted in higher unemployment, stagnant employment growth, shrinking demand for products, large-scale business failures and tight credit markets. Our results of operations may be sensitive to changes in overall economic conditions that impact consumer spending, including discretionary spending, as well as to increased bad debts due to recessionary pressures. A continuation of ongoing adverse economic conditions affecting disposable consumer income, such as employment levels, business conditions, interest rates, tax rates, fuel and energy costs, and other matters could reduce consumer spending or cause consumers to shift their spending to other products and services. A general reduction in the level of discretionary spending or shifts in consumer discretionary spending could adversely affect our growth and profitability.

In the future, the Company intends to focus on maximizing internal growth opportunities and selectively pursuing targeted acquisitions and developments of self-storage facilities. We intend to incur additional debt in connection with any such future acquisitions or developments.

The Company has one reportable segment: we own, operate, develop, manage and acquire self-storage facilities.

The Company’s self-storage facilities are located in major metropolitan and rural areas and have numerous tenants per facility. No single tenant represents a significant concentration of our revenues. The facilities in Florida, California, Texas and Illinois provided approximately 17%, 12%, 11% and 7%, respectively, of total revenues for the three months ended September 30, 2011. The facilities in Florida, California, Texas and Illinois provided approximately 17%, 12%, 10% and 7%, respectively, of total revenues for the nine months ended September 30, 2011.

### Summary of Critical Accounting Policies and Estimates

Set forth below is a summary of the accounting policies and estimates that management believes are critical to an understanding of the unaudited consolidated financial statements included in this report. These policies require the application of judgment and assumptions by management and, as a result, are subject to a degree of uncertainty. Due to this uncertainty, actual results could differ from estimates calculated and utilized by management.

### Self-Storage Facilities

The Company records self-storage facilities at cost less accumulated depreciation. Depreciation on the buildings and equipment is recorded on a straight-line basis over their estimated useful lives, which range from five to 40 years. Expenditures for significant renovations or improvements that extend the useful life of assets are capitalized. Repairs and maintenance costs are expensed as incurred.

When facilities are acquired, the purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on estimated fair values. When a portfolio of facilities is acquired, the purchase price is allocated to the individual facilities based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates, which take into account the relative size, age and location of the individual facility along with current and projected occupancy and rental rate levels or appraised values, if available. Allocations to the individual assets and liabilities are based upon comparable market sales information for land, buildings and improvements and estimates of depreciated replacement cost of equipment.

In allocating the purchase price for an acquisition, the Company determines whether the acquisition includes intangible assets or liabilities. Substantially all of the leases in place at acquired facilities are at market rates, as the majority of the leases are month-to-month contracts. Accordingly, to date no portion of the purchase price has been allocated to above- or below-market lease intangibles. To date, no intangible asset has been recorded for the value of tenant relationships, because the Company does not have any concentrations of significant tenants and the average tenant turnover is fairly frequent.

During 2010, the Company acquired 85 management contracts from United Stor-All Management, LLC (“United Stor-All”). The Company accounted for this acquisition as a business combination. The Company recorded the fair value of the assets acquired which includes the intangible value related to the management contracts as other assets, net on the Company’s consolidated balance sheet. The average estimated life of the intangible value of the management contracts is 56 months from the April 2010 closing and the related amortization expense recognized during the three and nine months ended September 30, 2011 was $0.3 million and $1.0 million, respectively. The Company recognized $0.3 million and $0.5 million of amortization during the three months and nine months ended September 30, 2010, respectively. Additionally, during 2010, the Company acquired 12 self-storage facilities and allocated approximately $3.7 million to the intangible value of the in-place leases. The related amortization expense recognized during the three and nine months ended September 30, 2011 was approximately $0.9 million and $2.8 million, respectively. The amortization expense recognized during the three and nine months ended September 30, 2010 was approximately $0.7 million.

During the nine months ended September 30, 2011, the Company acquired nine self-storage facilities for an aggregate purchase price of $78.6 million and allocated approximately $4.2 million to the intangible value of in-place leases at the time of acquisition. The Company recognized amortization expense related to these assets of $1.0 million and $1.6 million during the three and nine months ended September 30, 2011, respectively. In connection with one of the acquisitions, the Company assumed mortgage debt with an outstanding principal balance of $7.5 million and recorded a premium of $0.5 million to reflect the fair value of the debt at the time of assumption.

Long-lived assets classified as “held for use” are reviewed for impairment when events and circumstances such as declines in occupancy and operating results indicate that there may be impairment. The carrying value of these long-lived assets is compared to the undiscounted future net operating cash flows, plus a terminal value, attributable to the assets to determine if the property’s basis is recoverable. If a property’s basis is not considered recoverable, an impairment loss is recorded to the extent the net carrying value of the asset exceeds the fair value. The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset. There were no impairment losses recognized in accordance with these procedures for the periods ended September 30, 2011 and 2010.

The Company considers long-lived assets to be “held for sale” upon satisfaction of the following criteria: (a) management commits to a plan to sell a facility (or group of facilities), (b) the facility is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such facilities, (c) an active program to locate a buyer and other actions required to complete the plan to sell the facility have been initiated, (d) the sale of the facility is probable and transfer of the asset is expected to be completed within one year, (e) the facility is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Typically these criteria are all met when the relevant asset is under contract, significant non-refundable deposits have been made by the potential buyer, the assets are immediately available for transfer and there are no contingencies related to the sale that may prevent the transaction from closing. In most transactions, these contingencies are not satisfied until the actual closing of the transaction; accordingly, the facility is not identified as held for sale until the closing actually occurs. However, each potential transaction is evaluated based on its separate facts and circumstances. Properties classified as held for sale are reported at the lesser of carrying value or fair value less estimated costs to sell.

### Revenue Recognition

Management has determined that all of our leases with tenants are operating leases. Rental income is recognized in accordance with the terms of the lease agreements or contracts, which generally are month-to-month.

The Company recognizes gains on disposition of properties only upon closing in accordance with the guidance on sales of real estate. Payments received from purchasers prior to closing are recorded as deposits. Profit on real estate sold is recognized using the full accrual method upon closing when the collectability of the sales price is reasonably assured and the Company is not obligated to perform significant activities after the sale. Profit may be deferred in whole or part until the sale meets the requirements of profit recognition on sales under this guidance.

### Share-Based Payments

We apply the fair value method of accounting for contingently issued shares and share options issued under our equity incentive plans. Accordingly, share compensation expense is recorded ratably over the vesting period relating to such contingently issued shares and options. The Company has elected to recognize compensation expense on a straight-line method over the requisite service period.

### Noncontrolling Interests

Noncontrolling interests are the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. The ownership interests in the subsidiary that are held by owners other than the parent are noncontrolling interests. In accordance with authoritative guidance issued on noncontrolling interests in consolidated financial statements, such noncontrolling interests are reported on the consolidated balance sheets within equity/capital, separately from the Parent Company’s equity/capital. The guidance also requires that noncontrolling interests are adjusted each period so that the carrying value equals the greater of its carrying value based on the accumulation of historical cost or its redemption value. On the consolidated statements of operations, revenues, expenses and net income or loss from less-than-wholly-owned subsidiaries are reported at the consolidated amounts, including both the amounts attributable to the Parent Company and noncontrolling interests. Presentation of consolidated equity/capital activity is included for both quarterly and annual financial statements, including beginning balances, activity for the period and ending balances for shareholders’ equity/capital, noncontrolling interests and total equity/capital. The Parent Company has adjusted the carrying value of its noncontrolling interests subject to redemption value and limited partnership interest of third parties to the extent applicable. Disclosure of such redemption value provisions is provided in Note 11 to the unaudited condensed consolidated financial statements.

### Investments in Unconsolidated Real Estate Ventures

The Company accounts for its investments in unconsolidated real estate ventures under the equity method of accounting. Under the equity method, investments in unconsolidated joint ventures are recorded initially at cost, as investments in real estate entities, and subsequently adjusted for equity in earnings (losses), cash contributions, less distributions and impairments. On a periodic basis, management also assesses whether there are any indicators that the fair value of the Company’s investments in unconsolidated real estate entities may be other than temporarily impaired. An investment is impaired only if the fair value of the investment, as estimated by management, is less than the carrying value of the investment and the decline is other than temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the fair value of the investment, as estimated by management. The determination as to whether an impairment exists requires significant management judgment about the fair value of its ownership interest. Fair value is determined through various valuation techniques, including but not limited to, discounted cash flow models, quoted market values and third party appraisals.

### Results of Operations

The following discussion of our results of operations should be read in conjunction with the consolidated financial statements and the accompanying notes thereto. Historical results set forth in the consolidated statements of operations reflect only the existing facilities and should not be taken as indicative of future operations. The Company considers its same-store portfolio to consist of only those facilities owned and operated on a stabilized basis at the beginning and at the end of the applicable years presented. Same-store results are considered to be useful to investors in evaluating our performance because it provides information relating to changes in facility-level operating performance without taking into account the effects of acquisitions, developments or dispositions.

### Acquisition and Development Activities

The comparability of the Company’s results of operations is affected by the timing of acquisition and disposition activities during the periods reported. At September 30, 2011 and 2010, the Company owned 353 and 370 self-storage facilities and related assets, respectively. The following table summarizes the change in number of owned self-storage facilities from January 1, 2010 through September 30, 2011:

|  | 2011 | 2010 |
| --- | ---: | ---: |
| Balance - January 1 | 363 | 367 |
| Facilities acquired | 1 | — |
| Facilities sold | — | — |
| Balance - March 31 | 364 | 367 |
| Facilities acquired | 4 | — |
| Facilities consolidated | (1) | — |
| Facilities sold | — | — |
| Balance - June 30 | 367 | 367 |
| Facilities acquired | 4 | 3 |
| Facilities sold | (18) | — |
| Balance - September 30 | 353 | 370 |
| Facilities acquired |  | 9 |
| Facilities sold |  | (16) |
| Balance - December 31 |  | 363 |

31

### Comparison of the three months ended September 30, 2011 to the three months ended September 30, 2010 (in thousands)

| REVENUES: | Same-Store Property Portfolio 2011 | 2010 | Increase/% (Decrease) | Change | Non Same-Store Properties 2011 | 2010 | Other/ Eliminations 2011 | 2010 | Total Portfolio 2011 | 2010 | Increase/ (Decrease) | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Rental income | $49,003 | $47,740 | $1,263 | 3% | $4,702 | $317 | $— | $— | $53,705 | $48,057 | $5,648 | 12% |
| Other property related income | 4,902 | 4,101 | 801 | 20% | 528 | 206 | 432 | 345 | 5,862 | 4,652 | 1,210 | 26% |
| Property management fee income | — | — | — | — | — | — | 878 | 1,048 | 878 | 1,048 | (170) | -16% |
| Total revenues | 53,905 | 51,841 | 2,064 | 4% | 5,230 | 523 | 1,310 | 1,393 | 60,445 | 53,757 | 6,688 | 12% |
| OPERATING EXPENSES: |  |  |  |  |  |  |  |  |  |  |  |  |
| Property operating expenses | 19,806 | 20,224 | (418) | -2% | 1,985 | 485 | 3,149 | 2,402 | 24,940 | 23,111 | 1,829 | 8% |
| NET OPERATING INCOME | 34,099 | 31,617 | 2,482 | 8% | 3,245 | 38 | (1,839) | (1,009) | 35,505 | 30,646 | 4,859 | 16% |
| Depreciation and amortization |  |  |  |  |  |  |  |  | 16,042 | 14,789 | 1,253 | 8% |
| General and administrative |  |  |  |  |  |  |  |  | 5,476 | 6,597 | (1,121) | -17% |
| Subtotal |  |  |  |  |  |  |  |  | 21,518 | 21,386 | 132 | 1% |
| Operating income |  |  |  |  |  |  |  |  | 13,987 | 9,260 | 4,727 | 51% |
| Other Income (Expense): |  |  |  |  |  |  |  |  |  |  |  |  |
| Interest: |  |  |  |  |  |  |  |  |  |  |  |  |
| Interest expense on loans |  |  |  |  |  |  |  |  | (8,464) | (9,648) | (1,184) | -12% |
| Loan procurement amortization expense |  |  |  |  |  |  |  |  | (1,093) | (1,559) | (466) | -30% |
| Interest income |  |  |  |  |  |  |  |  | 7 | 19 | (12) | -63% |
| Acquisition related costs |  |  |  |  |  |  |  |  | (374) | (165) | 209 | 127% |
| Equity in losses of real estate entities |  |  |  |  |  |  |  |  | (24) | — | 24 | 100% |
| Other |  |  |  |  |  |  |  |  | 1 | (67) | (68) | -101% |
| Total other expense |  |  |  |  |  |  |  |  | (9,947) | (11,420) | 1,473 | -13% |
| INCOME (LOSS) FROM CONTINUING OPERATIONS |  |  |  |  |  |  |  |  | 4,040 | (2,160) | 6,200 | 287% |
| DISCONTINUED OPERATIONS |  |  |  |  |  |  |  |  |  |  |  |  |
| Income from discontinued operations |  |  |  |  |  |  |  |  | 361 | 1,045 | (684) | -65% |
| Gain on disposition of discontinued operations |  |  |  |  |  |  |  |  | 3,527 | — | 3,527 | 100% |
| Total discontinued operations |  |  |  |  |  |  |  |  | 3,888 | 1,045 | 2,843 | 272% |
| NET INCOME (LOSS) |  |  |  |  |  |  |  |  | 7,928 | (1,115) | 9,043 | 811% |

#### Revenues

Rental income increased from $48.1 million for the three months ended September 30, 2010 to $53.7 million for the three months ended September 30, 2011, an increase of $5.6 million, or 12%. This increase is primarily attributable to $4.4 million of additional income from the properties acquired in 2010 and 2011 and increases in average occupancy and scheduled annual rent per square foot on the same-store portfolio which contributed $1.3 million to the increase in rental income during the third quarter 2011 as compared to the third quarter 2010.

Other property related income increased from $4.7 million for the three months ended September 30, 2010 to $5.9 million for the three months ended September 30, 2011, an increase of $1.2 million, or 26%. This increase is primarily attributable to increased fee revenue and insurance commissions of $0.9 million during the three months ended September 30, 2011 as compared to the three months ended September 30, 2010, which includes an increase of $0.3 million related to the 2010 and 2011 acquisitions.

Property management fee income decreased to $0.9 million for the three months ended September 30, 2011 from $1.1 million for the three months ended September 30, 2010, a decrease of $0.2 million. This decrease is attributable to a reduction in management fees related to the third party management business, which included 103 facilities as of September 30, 2011 and 122 facilities as of September 30, 2010.

#### Operating Expenses

Property operating expenses increased from $23.1 million for the three months ended September 30, 2010 to $24.9 million for the three months ended September 30, 2011, an increase of $1.8 million, or 8%. This increase is primarily attributable to $2.2 million of increased expenses associated with newly acquired properties and increased expenses related to the addition of 85 management contracts in April 2010, offset by a decrease in real estate tax expense of $0.2 million related to the Company’s same-store properties.

Depreciation and amortization increased from $14.8 million for the three months ended September 30, 2010 to $16.0 million for the three months ended September 30, 2011, an increase of $1.2 million or 8%. This increase is primarily attributable to depreciation expense recognized in the 2011 period related to the 2010 and 2011 acquisitions, with no such significant expense recognized in the 2010 period.

General and administrative expenses decreased from $6.6 million for the three months ended September 30, 2010 to $5.5 million for the three months ended September 30, 2011, a decrease of $1.1 million, or 17%. This decrease is primarily related to the timing of compensation related expense.

#### Other Income (Expenses)

Interest expense decreased from $9.6 million for the three months ended September 30, 2010 to $8.5 million for the three months ended September 30, 2011, a decrease of $1.1 million, or 12%. Approximately $120 million of net mortgage loan repayments during the period from July 1, 2010 through September 30, 2011 resulted in approximately $1.2 million of reduced interest expense during the 2011 period, as compared to the 2010 period.

#### Discontinued Operations

Income from discontinued operations decreased from $1.0 million for the three months ended September 30, 2010 to $0.4 million for the three months ended September 30, 2011, a decrease of $0.6 million. Income during the 2011 period relates to the sale of 18 assets during 2011. Income during the 2010 period is related to the sale of 18 assets during 2011 and 16 assets during 2010.

Gains on disposition of discontinued operations increased to $3.5 million for the three months ended September 30, 2011 with no comparable gains during the 2010 period. Gains during 2011 related to the sale of 18 assets during the three months ended September 30, 2011.

### Comparison of the nine months ended September 30, 2011 to the nine months ended September 30, 2010 (in thousands)

| REVENUES: | Same-Store Property Portfolio 2011 | 2010 | Increase/% (Decrease) | Change | Non Same-Store Properties 2011 | 2010 | Other/ Eliminations 2011 | 2010 | Total Portfolio 2011 | 2010 | Increase/ (Decrease) | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Rental income | $144,222 | $140,490 | $3,732 | 3% | $11,207 | $(23) | $— | $— | $155,429 | $140,467 | $14,962 | 11% |
| Other property related income | 13,594 | 11,679 | 1,915 | 16% | 1,217 | 1,020 | 1,083 | 345 | 15,894 | 13,044 | 2,850 | 22% |
| Property management fee income | — | — | — | — | — | — | 2,634 | 1,682 | 2,634 | 1,682 | 952 | 57% |
| Total revenues | 157,816 | 152,169 | 5,647 | 4% | 12,424 | 997 | 3,717 | 2,027 | 173,957 | 155,193 | 18,764 | 12% |
| OPERATING EXPENSES: |  |  |  |  |  |  |  |  |  |  |  |  |
| Property operating expenses | 60,579 | 60,245 | 334 | 1% | 4,703 | 998 | 8,772 | 6,268 | 74,054 | 67,511 | 6,543 | 10% |
| NET OPERATING INCOME | 97,237 | 91,924 | 5,313 | 6% | 7,721 | (1) | (5,055) | (4,241) | 99,903 | 87,682 | 12,221 | 14% |
| Depreciation and amortization |  |  |  |  |  |  |  |  | 46,862 | 45,919 | 943 | 2% |
| General and administrative |  |  |  |  |  |  |  |  | 18,350 | 19,308 | (958) | -5% |
| Subtotal |  |  |  |  |  |  |  |  | 65,212 | 65,227 | (15) | 0% |
| Operating income |  |  |  |  |  |  |  |  | 34,691 | 22,455 | 12,236 | 54% |
| Other Income (Expense): |  |  |  |  |  |  |  |  |  |  |  |  |
| Interest: |  |  |  |  |  |  |  |  |  |  |  |  |
| Interest expense on loans |  |  |  |  |  |  |  |  | (24,596) | (29,324) | (4,728) | -16% |
| Loan procurement amortization expense |  |  |  |  |  |  |  |  | (4,124) | (4,718) | (594) | -13% |
| Loan procurement amortization expense - early extingishment of debt |  |  |  |  |  |  |  |  | (2,085) | — | 2,085 | 100% |
| Interest income |  |  |  |  |  |  |  |  | 21 | 616 | (595) | -97% |
| Acquisition related costs |  |  |  |  |  |  |  |  | (629) | (465) | 164 | 35% |
| Equity in losses of real estate entities |  |  |  |  |  |  |  |  | (24) | — | 24 | 100% |
| Other |  |  |  |  |  |  |  |  | (200) | (142) | 58 | 41% |
| Total other expense |  |  |  |  |  |  |  |  | (31,637) | (34,033) | 2,396 | -7% |
| INCOME (LOSS) FROM CONTINUING OPERATIONS |  |  |  |  |  |  |  |  | 3,054 | (11,578) | 14,632 | 126% |
| DISCONTINUED OPERATIONS |  |  |  |  |  |  |  |  |  |  |  |  |
| Income from discontinued operations |  |  |  |  |  |  |  |  | 3,411 | 2,882 | 529 | 18% |
| Gain on disposition of discontinued operations |  |  |  |  |  |  |  |  | 3,527 | — | 3,527 | 100% |
| Total discontinued operations |  |  |  |  |  |  |  |  | 6,938 | 2,882 | 4,056 | 141% |
| NET INCOME (LOSS) |  |  |  |  |  |  |  |  | 9,992 | (8,696) | 18,688 | 215% |

33

#### Revenues

Rental income increased from $140.5 million for the nine months ended September 30, 2010 to $155.4 million for the nine months ended September 30, 2011, an increase of $15.0 million, or 11%. This increase is primarily attributable to a full period impact of the 2010 and 2011 acquisitions of $11.2 million and increases in average occupancy and scheduled annual rent per square foot on the same-store portfolio resulting in a $3.7 million increase in rental income during the 2011 period as compared to the 2010 period.

Other property related income increased from $13.0 million for the nine months ended September 30, 2010 to $15.9 million for the nine months ended September 30, 2011, an increase of $2.9 million, or 22%. This increase is primarily attributable to increased fee revenue and insurance commissions of $2.7 million during the nine months ended September 30, 2011 as compared to the nine months ended September 30, 2010, which includes an increase of $1.9 million related to the same-store portfolio.

Property management fee income increased to $2.6 million for the nine months ended September 30, 2011 from $1.7 million for the nine months ended September 30, 2010, an increase of $0.9 million. This increase is attributable to nine months of management fees earned during the 2011 period related to the addition of 85 management contracts in April 2010, compared to five months of similar activity during the 2010 period.

#### Operating Expenses

Property operating expenses increased from $67.5 million for the nine months ended September 30, 2010 to $74.1 million for the nine months ended September 30, 2011, an increase of $6.5 million, or 10%. This increase is primarily attributable to $6.2 million of increased expenses associated with newly acquired properties and nine months of expenses in the 2011 period related to the addition of 85 management contracts in April 2010, compared to only five months of similar expenses in the 2010 period. In addition, we experienced a $0.3 million increase in same-store expenses primarily attributable to a $0.4 million increase in snow removal expense during the 2011 period as compared to the 2010 period.

#### Other Income (Expenses)

Interest expense decreased from $29.3 million for the nine months ended September 30, 2010 to $24.6 million for the nine months ended September 30, 2011, a decrease of $4.7 million, or 16 %. Approximately $3.7 million of the reduced interest expense related to approximately $223 million of net mortgage loan repayments during the period from January 1, 2010 through September 30, 2011. Interest expense also decreased as a result of lower interest rates on the Credit Facility during the 2011 period as compared to the 2010 period.

Loan procurement amortization expense - early repayment of debt was $2.1 million for the nine months ended September 30, 2011, with no comparable expense during the 2010 period. This expense is related to the write-off of unamortized loan procurement costs associated with $100 million of unsecured term loans that were repaid during the year.

#### Discontinued Operations

Income from discontinued operations increased from $2.9 million for the nine months ended September 30, 2010 to $3.4 million for the nine months ended September 30, 2011, an increase of $0.5 million. Income during the 2011 period relates to the sale of 18 assets during 2011and proceeds received in 2011 in conjunction with eminent domain proceedings on our North H Street asset initiated in 2009. Income during the 2010 period is related to the sale of 18 assets during 2011 and 16 assets during 2010.

Gains on disposition of discontinued operations increased to $3.5 million for the nine months ended September 30, 2011 with no comparable gains during the 2010 period. Gains during 2011 related to the sale of 18 assets during the period.

### Cash Flows

### Comparison of the nine months ended September 30, 2011 to the nine months ended September 30, 2010

A comparison of cash flow from operating, investing and financing activities for the nine months ended September 30, 2011 and 2010 is as follows (in thousands):

| Net cash flow provided by (used in): | Nine Months Ended September 30, 2011 | 2010 | Change |
| --- | ---: | ---: | ---: |
| Operating activities | $64,375 | $50,947 | $13,428 |
| Investing activities | $(54,633) | $(24,072) | $(30,561) |
| Financing activities | $(3,142) | $(106,440) | $103,298 |

Cash flows provided by operating activities for the nine months ended September 30, 2011 and 2010 were $64.4 million and $50.9 million, respectively, an increase of $13.5 million, or 27%. The increase primarily relates to increased net operating income levels of $12.2 million during the nine months ended September 30, 2011 as compared to the nine months ended September 30, 2010 and $1.9 million of proceeds received in conjunction with eminent domain proceedings on our North H Street asset during 2009.

Cash used in investing activities increased from $24.1 million for the nine months ended September 30, 2010 to $54.6 million for the nine months ended September 30, 2011, an increase of $30.5 million. The increase primarily relates to higher acquisition activity in the 2011 period (nine facilities for an aggregate cash outflow of $72.0 million) relative to three acquisitions during the 2010 period, a cash outflow of $15.4 million related to interest acquired in a joint venture during the 2011 period, and collections of notes receivable repayments of $20.1 million during the nine months ended September 30, 2010, offset by higher disposition activity in the 2011 period (18 facilities for an aggregate cash inflow of $42.8 million) relative to no dispositions during the 2010 period.

Cash used in financing activities decreased from $106.4 million to $3.1 million during the nine months ended September 30, 2010 and 2011, respectively, a decrease of $103.3 million. The decrease primarily relates to decreased net debt payments of $135.3 million during the 2011 period as compared to the 2010 period, offset by lower common share issuance activity in 2011 compared to 2010 (proceeds of $1.5 million and $20.4 million, respectively) and increased distributions paid to shareholders and non-controlling interests of $14.5 million during the 2011 period as compared to the 2010 period.

### Liquidity and Capital Resources

### Liquidity Overview

Our cash flow from operations has historically been one of our primary sources of liquidity used to fund debt service, distributions and capital expenditures. We derive substantially all of our revenue from customers who lease space from us at our facilities. Therefore, our ability to generate cash from operations is dependent on the rents that we are able to charge and collect from our customers. We believe that the facilities in which we invest — self-storage facilities — are less sensitive than other real estate product types to current near-term economic downturns. However, prolonged economic downturns will adversely affect our cash flows from operations.

In order to qualify as a REIT for federal income tax purposes, the Parent Company is required to distribute at least 90% of its REIT taxable income, excluding capital gains, to its shareholders on an annual basis or pay federal income tax. The nature of our business, coupled with the requirement that we distribute a substantial portion of our income on an annual basis, will cause us to have substantial liquidity needs over both the short term and the long term.

Our short term liquidity needs consist primarily of funds necessary to pay operating expenses associated with our facilities, refinancing of certain mortgage indebtedness, interest expense and scheduled principal payments on debt, expected distributions to limited partners and shareholders and recurring capital expenditures. These liquidity needs will vary from year to year, in some cases significantly. We expect recurring capital expenditures remaining in fiscal year 2011 to be approximately $2 million to $4 million. In addition, we expect capital improvements totaling approximately $10 million related to our store upgrade (“Super Store”) and rebranding initiatives, through June 30, 2012. Our currently scheduled principal payments on debt, including borrowings outstanding on the credit facility and unsecured term loans, are approximately $1.5 million during the remainder of 2011 and $159.5 million in 2012.

Our most restrictive debt covenants limit the amount of additional leverage we can add; however, we believe access to our credit facility, access to our “at the market” program and cash flow from operations are adequate to execute our current business plan and remain in compliance with our debt covenants.

Our liquidity needs beyond 2011 consist primarily of contractual obligations which include repayments of indebtedness at maturity, as well as potential discretionary expenditures such as (i) non-recurring capital expenditures; (ii) redevelopment of operating facilities; (iii) acquisitions of additional facilities; and (iv) development of new facilities. We will have to satisfy our needs through either additional borrowings, including borrowings under our revolving credit facility, sales of common or preferred shares and/or cash generated through facility dispositions and joint venture transactions.

Notwithstanding the discussion above, we believe that, as a publicly traded REIT, we will have access to multiple sources of capital to fund long term liquidity requirements, including the incurrence of additional debt and the issuance of additional equity. However, we cannot provide any assurance that this will be the case. Our ability to incur additional debt is dependent on a number of factors, including our degree of leverage, the value of our assets and borrowing restrictions that may be imposed by lenders. In addition, dislocations in the United States debt markets may significantly reduce the availability and increase the cost of long term debt capital, including conventional mortgage financing and commercial mortgage-backed securities financing. There can be no assurance that such capital will be readily available in the future. Our ability to access the equity capital markets is also dependent on a number of factors, including general market conditions for REITs and market perceptions about us.

### Current and Expected Sources of Cash

As of September 30, 2011, we had approximately $12.5 million in available cash and cash equivalents. In addition, we had approximately $250 million of availability for borrowings under our revolving credit facility.

### Bank Credit Facilities

On September 29, 2010, we amended the 2009 Credit Facility. The amended credit facility (the “Credit Facility”) consists of a $200 million unsecured term loan and a $250 million unsecured revolving credit facility. The Credit Facility has a three-year term expiring on December 7, 2013, is unsecured, and borrowings on the facility incur interest on a borrowing spread determined by our leverage levels plus LIBOR. We incurred $2.5 million of costs in connection with executing this amendment, which are included as a component of loan procurement costs, net of amortization, on the consolidated balance sheet. Borrowings under the Credit Facility bear interest ranging from 3.25% to 3.75% over LIBOR depending on our leverage ratio. If we receive two investment grade ratings, pricing on the Credit Facility will adjust to range from 1.90% to 3.00% over LIBOR.

On June 20, 2011, we entered into a Term Loan Agreement (the “Term Loan Facility”) which consisted of a $100 million term loan with a five-year maturity and a $100 million term loan with a seven-year maturity. The Term Loan Facility permits the Company to request additional advances of five-year or seven-year loans in minimum increments of $5,000,000 provided that the aggregate of such additional advances does not exceed $50,000,000. We incurred $2.1 million in connection with executing the agreement and capitalized such costs as a component of loan procurement costs, net of amortization on the consolidated balance sheet. Pricing on the Term Loan Facility ranges, depending on the Company’s leverage levels, from 1.90% to 2.75% over LIBOR for the five-year loan, and from 2.05% to 2.85% over LIBOR for the seven-year loan, and each loan has no LIBOR floor. If we receive two investment grade ratings, pricing on the Term Loan Facility will adjust to range from 1.45% to 2.10% over LIBOR for the five-year loan, and from 1.60% to 2.25% over LIBOR for the seven-year loan. We incurred $2.1 million in connection with executing the agreement and capitalized such costs as a component of loan procurement costs, net of amortization on the consolidated balance sheet.

On September 30, 2011, $200 million of unsecured term loan borrowings were outstanding under the Term Loan Facility, $100 million of unsecured term loan borrowings were outstanding under the Credit Facility, and $250 million was available for borrowing under the Credit Facility. We had an interest rate cap agreement as of September 30, 2011, that effectively limited the LIBOR component of the interest rate on $100 million of Credit Facility borrowings to 2.00% per annum through January 2012. In addition, we had interest rate swap agreements as of September 30, 2011 that fix LIBOR on both the five and seven-year term loans through their respective maturity dates. The interest rate swap agreements fix thirty day LIBOR over the terms of the five and seven-year term loans at 1.80% and 2.47%, respectively. We recognized loan procurement amortization expense - early repayment of debt of $2.1 million related to the write-off of unamortized loan procurement costs associated with $100 million of unsecured term loans that were repaid during the nine months ended September 30, 2011.

As of September 30, 2011, borrowings under the Credit Facility and Term Loan Facility had a weighted average interest rate of 3.90% and the effective interest rates on the five and seven-year term loans were 3.70% and 4.52%, respectively, after giving consideration to the interest rate swaps described in Note 8.

Our ability to borrow under the Credit Facility and Term Loan Facility is subject to our ongoing compliance with certain financial covenants which include:

- Maximum total indebtedness to total asset value of 60.0% at any time;
- Minimum fixed charge coverage ratio of 1.50:1.00; and
- Minimum tangible net worth of $821,211,200 plus 75% of net proceeds from equity issuances after September 30, 2010.

Further, under the Credit Facility and Term Loan Facility, we are restricted from paying distributions on our common shares that would exceed an amount equal to the greater of (i) 95% of our funds from operations, and (ii) such amount as may be necessary to maintain our REIT status.

We are currently in compliance with all of our financial covenants and anticipate being in compliance with all of our financial covenants through the terms of the Credit Facility and Term Loan Facility.

### At The Market Program

On September 16, 2011, we amended our sales agreement with Cantor Fitzgerald & Co. (the “Sales Agent”) dated April 3, 2009 and as amended on January 26, 2011 (as amended, the “Sales Agreement”) to increase the number of common shares that the Sales Agent may sell under the Sales Agreement from 15,000,000 to 20,000,000. During the three and nine months ended September 30, 2011 we sold 140,000 shares under the program at an average sales price of $10.75 per share resulting in net proceeds of $1.5 million ($60.1 million of net proceeds and 8.2 million shares sold with an average sales price of $7.30 since program inception in 2009). The Company used the net proceeds to fund the acquisition of storage facilities and for general corporate purposes.

Future sales of common shares, if any, under the Sales Agreement will depend upon market conditions and other factors to be determined by the Company and may be made in negotiated transactions or transactions that are deemed to be “at the market offerings”. We have no obligation to sell any common shares under the Sales Agreement, and may at any time suspend solicitation and offers under the Sales Agreement or terminate the Sales Agreement.

### Recent Developments

On October 24, 2011, the Company entered into an agreement to acquire a portfolio of 22 self-storage facilities from Storage Deluxe that contain an aggregate of approximately 1.6 million rentable square feet in properties located in New York, Pennsylvania and Connecticut. The aggregate purchase price for the properties is approximately $560 million. Storage Deluxe is unaffiliated with the Company and terms of the transaction were determined through arm’s-length negotiation.

In connection with the Storage Deluxe acquisition, on October 24, 2011, we received $300.0 million of combined bridge financing facilities from affiliates of Wells Fargo Securities, LLC (“Wells”). Under these facilities, an affiliate of Wells has agreed to provide us with a new $100.0 million unsecured term loan facility, subject to certain conditions, including the absence of material adverse change, satisfactory due diligence, and the receipt of at least $175.0 million in equity capital. This term loan facility will mature within six months, but we will have the ability to extend the term for an additional five years. Our obligations under this term loan facility will be guaranteed by all our existing and future material subsidiaries. The other covenants, indemnification provisions and conditions precedent to borrowings under this term loan facility are substantially the same as those under our existing unsecured Credit Facility described above. The commitments under this term loan facility are available until April 30, 2012 and are subject to certain conditions. Also under these facilities, another affiliate of Wells has agreed to purchase, upon our request and subject to certain conditions, up to 8,000,000 shares (which number of shares will be reduced in connection with certain capital raising activities of CubeSmart and the Operating Partnership) of a new class of preferred shares of CubeSmart that, if issued, would be designated as Series B Cumulative Redeemable Preferred Shares and would have a liquidation preference of $25.00 per share and be issued at a price per share equal to $24.08. If CubeSmart elects to sell any such shares, the closing will occur no later than March 31, 2012. Proceeds from the sale, if any, of such shares will be used to fund directly or indirectly a portion of the purchase price for the Storage Deluxe acquisition. The obligation of the Wells affiliate to purchase such shares is subject to customary closing conditions.

On October 28, 2011, the Company completed its public offering of 23,000,000 common shares at a public offering price of $9.20, which reflects the full exercise by the underwriters of their option to purchase 3,000,000 shares to cover over-allotments. The Company received approximately $202.4 million in net proceeds from the offering after deducting the underwriting discount and other estimated offering expenses.

On November 2, 2011, the Company closed an underwritten public offering of 2,800,000 of the Company’s Series A preferred shares at a price to the public of $25.00 per share for gross proceeds of $70 million. The financing provided approximately $67.5 million to the Company after deducting the underwriting discount and offering expenses.

On November 3, 2011, the Company closed on the purchase of 16 of the Storage Deluxe facilities. In connection with the closing, the Company borrowed $93 million from its revolving credit facility. The remaining properties are expected to close during the first quarter of 2012.

### Non-GAAP Financial Measures

### NOI

We define net operating income, which we refer to as “NOI,” as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income (loss): interest expense on loans, loan procurement amortization expense, loan procurement amortization expense — early repayment of debt, acquisition related costs, equity in losses of real estate ventures, amounts attributable to noncontrolling interests, other expense, depreciation and amortization expense, general and administrative expense, and deducting from net income: income from discontinued operations, gains on disposition of discontinued operations, other income, and interest income. NOI is not a measure of performance calculated in accordance with GAAP.

We use NOI as a measure of operating performance at each of our facilities, and for all of our facilities in the aggregate. NOI should not be considered as a substitute for operating income, net income, cash flows provided by operating, investing and financing activities, or other income statement or cash flow statement data prepared in accordance with GAAP.

We believe NOI is useful to investors in evaluating our operating performance because:

- It is one of the primary measures used by our management and our facility managers to evaluate the economic productivity of our facilities, including our ability to lease our facilities, increase pricing and occupancy, and control our property operating expenses;
- It is widely used in the real estate industry and the self-storage industry to measure the performance and value of real estate assets without regard to various items included in net income that do not relate to or are not indicative of operating performance, such as depreciation and amortization expense, which can vary depending upon accounting methods and the book value of assets; and
- It helps our investors to meaningfully compare the results of our operating performance from period to period by removing the impact of our capital structure (primarily interest expense on our outstanding indebtedness) and depreciation of our basis in our assets from our operating results.

There are material limitations to using a measure such as NOI, including the difficulty associated with comparing results among more than one Company and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income. We compensate for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with our analysis of net income. NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues, operating income and net income.

### FFO

Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), we calculate Funds from Operations, or “FFO,” by adjusting net income (computed in accordance with GAAP, including non-recurring items) for gains (or losses) from sales of properties, real estate related depreciation and amortization, and after adjustment for unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure. The use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Management generally considers FFO to be a useful measure for reviewing our comparative operating and financial performance because, by excluding gains and losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help one compare the operating performance of a company’s real estate between periods or as compared to different companies. Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently.

FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to further understand our performance, FFO should be compared with our reported net income and considered in addition to cash flows in accordance with GAAP, as presented in our Consolidated Financial Statements.

The following table presents a reconciliation of net income to FFO for the three and nine months ended September 30, 2011 and 2010 (in thousands):

|  | Three months ended September 30, 2011 | 2010 | Nine months ended September 30, 2011 | 2010 |
| --- | ---: | ---: | ---: | ---: |
| **Net income (loss)** | $7,928 | $(1,115) | $9,992 | $(8,696) |
| Add (deduct): |  |  |  |  |
| Real estate depreciation and amortization | 15,639 | 15,239 | 46,426 | 47,159 |
| Gains on sale of real estate | (3,527) | — | (3,527) | — |
| Noncontrolling interests in subsidiaries’ share of FFO | (1,198) | (1,003) | (3,353) | (2,958) |
| **FFO** | $18,842 | $13,121 | $49,538 | $35,505 |
| Weighted-average diluted shares and units outstanding | 105,013 | 99,620 | 104,997 | 99,005 |

### Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements.

## Market risk

As filed, 2,321 characters.

The Company’s future income, cash flows and fair values relevant to financial instruments depend upon prevailing interest rates.

### Market Risk

Our investment policy relating to cash and cash equivalents is to preserve principal and liquidity while maximizing the return through investment of available funds.

### Effect of Changes in Interest Rates on our Outstanding Debt

The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market rates. The range of changes chosen reflects our view of changes which are reasonably possible over a one-year period. Market values are the present value of projected future cash flows based on the market rates chosen.

Our financial instruments consist of both fixed and variable rate debt. As of September 30, 2011, our consolidated debt consisted of $346.0 million in fixed rate loans payable and $300 million in variable rate unsecured term loans. All financial instruments were entered into for other than trading purposes and the net market value of these financial instruments is referred to as the net financial position. Changes in interest rates have different impacts on the fixed and variable rate portions of our debt portfolio. A change in interest rates on the fixed portion of the debt portfolio impacts the net financial instrument position, but has no impact on interest incurred or cash flows. A change in interest rates on the variable portion of the debt portfolio impacts the interest incurred and cash flows, but does not impact the net financial instrument position.

If market rates of interest on our variable rate debt increase by 1%, the increase in annual interest expense on our variable rate debt would decrease future earnings and cash flows by approximately $3.0 million a year. If market rates of interest on our variable rate debt decrease by 1%, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by approximately $3.0 million a year.

If market rates of interest increase by 1%, the fair value of our outstanding fixed-rate mortgage debt would decrease by approximately $7.0 million. If market rates of interest decrease by 1%, the fair value of our outstanding fixed-rate mortgage debt would increase by approximately $7.2 million.

## Controls and procedures

As filed, 3,738 characters.

### Controls and Procedures (Parent Company)

### Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Parent Company carried out an evaluation, under the supervision and with the participation of its management, including its chief executive officer and chief financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, the Parent Company’s chief executive officer and chief financial officer have concluded that the Parent Company’s disclosure controls and procedures are effective.

Based on that evaluation, the Parent Company’s chief executive officer and chief financial officer have concluded that the Parent Company’s disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information required to be disclosed by the Parent Company in reports that it files or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Parent Company’s management, including its chief executive officer and chide financial officer, as appropriate, to allow timely decisions regarding required disclosure.

### Changes in Internal Controls Over Financial Reporting

There has been no change in the Parent Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

### Controls and Procedures (Operating Partnership)

### Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Operating Partnership carried out an evaluation, under the supervision and with the participation of its management, including the Operating Partnership’s chief executive officer and chief financial officer, of the effectiveness of the design and operation of the Operating Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act). Based on that evaluation, the Operating Partnership’s chief executive officer and chief financial officer have concluded that the Operating Partnership’s disclosure controls and procedures are effective.

Based on that evaluation, the Operating Partnership’s chief executive officer and chief financial officer have concluded that the Operating Partnership’s disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information required to be disclosed by the Operating Partnership in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Operating Partnership’s management, including the Operating Partnership’s chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

### Changes in Internal Controls Over Financial Reporting

There has been no change in the Operating Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

Filed Nov 7, 2011.
Source: SEC EDGAR, the filing index for accession 0001104659-11-061682. Last ingested by Listed: Nov 7, 2026, 12:41 ET. No prices; not investment advice.