Form 10-Q CubeSmart For: Sep 30

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Table of Contents

�

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

�

FORM�10-Q

�

(Mark one)	�
R	Quarterly report pursuant to Section�13 or 15(d)�of the Securities Exchange Act of 1934
�	�
�	For the quarterly period ended September�30, 2014.
�	�
�	or
�	�
�	Transition report pursuant to Section�13 or 15(d)�of the Securities Exchange Act of 1934
�	�
�	For the transition period from __________________to __________________.

�

Commission file number:
001-32324 (CubeSmart)
000-54662 (CubeSmart, L.P.)

�

CUBESMART

CUBESMART, L.P.

(Exact Name of Registrant as Specified in its Charter)

�

Maryland (CubeSmart) Delaware (CubeSmart, L.P.)	�	20-1024732 34-1837021
(State or Other Jurisdiction of	�	(I.R.S. Employer
Incorporation or Organization)	�	Identification No.)
�	�	�
5 Old Lancaster Road	�	�
Malvern, Pennsylvania	�	19355
(Address of Principal Executive Offices)	�	(Zip Code)

�

(610) 535-5000

(Registrant�s Telephone Number,�Including Area Code)

�

Indicate by check mark whether the registrant (1)�has filed all reports required to be filed by Section�13 or 15(d)�of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)�has been subject to such filing requirements for the past 90 days.

�

CubeSmart	Yes R No �
CubeSmart, L.P.	Yes R No �

�

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule�405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

�

CubeSmart	Yes R No �
CubeSmart, L.P.	Yes R No �

�

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.� See the definitions of �large accelerated filer,� �accelerated filer� and �smaller reporting company� in Rule�12b-2 of the Exchange Act.

�

CubeSmart:	�	�	�
Large accelerated filer R	Accelerated filer �	Non-accelerated filer �	Smaller reporting company �
�	�	�	�
CubeSmart, L.P.:	�	�	�
Large accelerated filer �	Accelerated filer �	Non-accelerated filer R	Smaller reporting company �

�

Indicate by check mark whether the registrant is a shell company (as defined in Rule�12b-2 of the Exchange Act).

�

CubeSmart	Yes � No R
CubeSmart, L.P.	Yes � No R

�

Indicate the number of shares outstanding of each of the issuer�s classes of common stock, as of the latest practicable date:

�

Class	�	Outstanding at October�31, 2014
Common shares, $0.01 par value per share, of CubeSmart	�	162,868,057

�

Table of Contents

�

EXPLANATORY NOTE

�

This report combines the quarterly reports on Form�10-Q for the period ended September�30, 2014 of CubeSmart (the �Parent Company� or �CubeSmart�) and CubeSmart, L.P. (the �Operating Partnership�). The Parent Company is a Maryland real estate investment trust, or REIT, that owns its assets and conducts its operations through the Operating Partnership, a Delaware limited partnership, and subsidiaries of the Operating Partnership.� The Parent Company, the Operating Partnership and their consolidated subsidiaries are collectively referred to in this report as the �Company.� In addition, terms such as �we�, �us�, or �our� used in this report may refer to the Company, the Parent Company, or the Operating Partnership.

�

The Parent Company is the sole general partner of the Operating Partnership and, as of September�30, 2014, owned a 98.5% interest in the Operating Partnership. The remaining 1.5% interest consists of common units of limited partnership interest issued by the Operating Partnership to third parties in exchange for contributions of facilities to the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has full and complete authority over the Operating Partnership�s day-to-day operations and management.

�

Management operates the Parent Company and the Operating Partnership as one enterprise. The management teams of the Parent Company and the Operating Partnership are identical, and their constituents are officers of both the Parent Company and of the Operating Partnership.

�

There are few differences between the Parent Company and the Operating Partnership, which are reflected in the note disclosures in this report. The Company believes it is important to understand the differences between the Parent Company and the Operating Partnership in the context of how these entities operate as a consolidated enterprise. The Parent Company is a REIT, whose only material asset is its ownership of the partnership interests of the Operating Partnership.� As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing the debt obligations of the Operating Partnership. The Operating Partnership holds substantially all the assets of the Company and, directly or indirectly, holds the ownership interests in the Company�s real estate ventures. The Operating Partnership conducts the operations of the Company�s business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required by the Company�s business through the Operating Partnership�s operations, by the Operating Partnership�s direct or indirect incurrence of indebtedness or through the issuance of partnership units of the Operating Partnership or equity interests in subsidiaries of the Operating Partnership.

�

The substantive difference between the Parent Company�s and the Operating Partnership�s filings is the fact that the Parent Company is a REIT with public equity, while the Operating Partnership is a partnership with no publicly traded equity. In the financial statements, this difference is primarily reflected in the equity (or capital for Operating Partnership) section of the consolidated balance sheets and in the consolidated statements of equity (or capital). Apart from the different equity treatment, the consolidated financial statements of the Parent Company and the Operating Partnership are nearly identical.

�

The Company believes that combining the quarterly reports on Form�10-Q of the Parent Company and the Operating Partnership into a single report will:

�

�� facilitate a better understanding by the investors of the Parent Company and the Operating Partnership by enabling them to view the business as a whole in the same manner as management views and operates the business;

�� remove duplicative disclosures and provide a more straightforward presentation in light of the fact that a substantial portion of the disclosure applies to both the Parent Company and the Operating Partnership; and

�� create time and cost efficiencies through the preparation of one combined report instead of two separate reports.

�

In order to highlight the differences between the Parent Company and the Operating Partnership, the separate sections in this report for the Parent Company and the Operating Partnership specifically refer to the Parent Company and the Operating Partnership. In the sections that combine disclosures of the Parent Company and the Operating Partnership, this report refers to such disclosures as those of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and real estate ventures and holds assets and debt, reference to the Company is appropriate because the business is one enterprise and the Parent Company operates the business through the Operating Partnership.

�

As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have significant assets other than its investment in the Operating Partnership. Therefore, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements. The separate discussions of the Parent Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company�s operations on a consolidated basis and how management operates the Company.

�

This report also includes separate Item�4 - Controls and Procedures sections, signature pages�and Exhibit�31 and 32 certifications for each of� the Parent Company and the Operating Partnership in order to establish that the Chief Executive Officer and the Chief Financial Officer of the Parent Company and the Chief Executive Officer and the Chief Financial Officer of the Operating Partnership have made the requisite certifications and that the Parent Company and the Operating Partnership are compliant with Rule�13a-15 or Rule�15d-15 of the Securities Exchange Act of 1934 and 18�U.S.C. �1350.

�

Table of Contents

�

TABLE OF CONTENTS

�

Part�I. FINANCIAL INFORMATION	�
Item 1.�� Financial Statements	5
Item 2.�� Management�s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.�� Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.�� Controls and Procedures	46
�	�
Part�II. OTHER INFORMATION	�
Item 2.�� Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 6.�� Exhibits	49

�

Filing Format

�

This combined Form�10-Q is being filed separately by CubeSmart and CubeSmart, L.P.

�

Table of Contents

�

Forward-Looking Statements

�

This Quarterly Report on Form�10-Q, or �this Report�, together with other statements and information publicly disseminated by the Parent Company and the Operating Partnership, contain certain forward-looking statements within the meaning of Section�27A of the Securities Act of 1933, as amended, and Section�21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include statements concerning the Company�s plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information.� In some cases, forward-looking statements can be identified by terminology such as �believes,� �expects,� �estimates,� �may,� �will,� �should,� �anticipates,� or �intends� or the negative of such terms or other comparable terminology, or by discussions of strategy.� Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated.� Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, future events and actual results, performance, transactions or achievements, financial and otherwise, may differ materially from the results, performance, transactions or achievements expressed or implied by the forward-looking statements.� As a result, you should not rely on or construe any forward-looking statements in this Report, or which management may make orally or in writing from time to time, as predictions of future events or as guarantees of future performance.� We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this Report or as of the dates otherwise indicated in the statements.� All of our forward-looking statements, including those in this Report, are qualified in their entirety by this statement.

�

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this Report.� Any forward-looking statements should be considered in light of the risks and uncertainties referred to in Item 1A. �Risk Factors� in the Parent Company�s and the Operating Partnership�s combined Annual Report on Form�10-K for the year ended December�31, 2013 and in our other filings with the Securities and Exchange Commission (�SEC�).� These risks include, but are not limited to, the following:

�

�� national and local economic, business, real estate and other market conditions;

�

�� the competitive environment in which we operate, including our ability to maintain or raise occupancy and rental rates;

�

�� the execution of our business plan;

�

�� the availability of external sources of capital;

�

�� financing risks, including the risk of over-leverage and the corresponding risk of default on our mortgage and other debt and potential inability to refinance existing indebtedness;

�

�� increases in interest rates and operating costs;

�

�� counterparty non-performance related to the use of derivative financial instruments;

�

�� our ability to maintain our Parent Company�s qualification as a real estate investment trust (�REIT�) for federal income tax purposes;

�

�� acquisition and development risks;

�

�� increases in taxes, fees, and assessments from state and local jurisdictions;

�

�� changes in real estate and zoning laws or regulations;

�

�� risks related to natural disasters;

�

�� potential environmental and other liabilities;

�

�� other factors affecting the real estate industry generally or the self-storage industry in particular;�and

�

�� other risks identified in the Parent Company�s and the Operating Partnership�s Annual Report on Form�10-K, as amended, and, from time to time, in other reports that we file with the SEC or in other documents that we publicly disseminate.

�

Given these uncertainties and the other risks identified elsewhere in this Report, we caution readers not to place undue reliance on forward-looking statements.� We undertake no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise except as may be required by securities laws.� Because of the factors referred to above, the future events discussed in or incorporated by reference in this Report may not occur and actual results, performance or achievement could differ materially from that anticipated or implied in the forward-looking statements.

�

Table of Contents

�

PART�I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

�

CUBESMART�AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

�

�	�	September�30,		�	December�31,		�
�	�	2014		�	2013		�
�	�	�		�	�		�
ASSETS	�	�		�	�		�
Storage facilities	�	$	2,823,186	�	$	2,553,706	�
Less: Accumulated depreciation	�	(466,516)		�	(398,536		)
Storage facilities, net (including VIE assets of $40,726 and $34,559, respectively)	�	2,356,670		�	2,155,170		�
Cash and cash equivalents	�	31,264		�	3,176		�
Restricted cash	�	4,254		�	4,025		�
Loan procurement costs, net of amortization	�	11,194		�	12,687		�
Investment in real estate venture, at equity	�	98,321		�	156,310		�
Other assets, net	�	43,263		�	27,256		�
Total assets	�	$	2,544,966	�	$	2,358,624	�
�	�	�		�	�		�
LIABILITIES AND EQUITY	�	�		�	�		�
Unsecured senior notes	�	$	500,000	�	$	500,000	�
Revolving credit facility	�	-		�	38,600		�
Unsecured term loans	�	400,000		�	400,000		�
Mortgage loans and notes payable	�	215,849		�	200,218		�
Accounts payable, accrued expenses and other liabilities	�	63,139		�	57,599		�
Distributions payable	�	21,799		�	19,955		�
Deferred revenue	�	14,491		�	12,394		�
Security deposits	�	394		�	376		�
Total liabilities	�	1,215,672		�	1,229,142		�
�	�	�		�	�		�
Noncontrolling interests in the Operating Partnership	�	40,590		�	36,275		�
�	�	�		�	�		�
Commitments and contingencies	�	�		�	�		�
�	�	�		�	�		�
Equity	�	�		�	�		�
7.75% Series�A Preferred shares $.01 par value, 3,220,000 shares authorized, 3,100,000 shares issued and outstanding at September�30, 2014 and December�31, 2013, respectively	�	31		�	31		�
Common shares $.01 par value, 200,000,000 shares authorized, 153,233,858 and 139,328,366 shares issued and outstanding at September�30, 2014 and December�31, 2013, respectively	�	1,532		�	1,393		�
Additional paid in capital	�	1,781,518		�	1,542,703		�
Accumulated other comprehensive loss	�	(8,558)		�	(11,014		)
Accumulated deficit	�	(487,357)		�	(440,837		)
Total CubeSmart shareholders� equity	�	1,287,166		�	1,092,276		�
Noncontrolling interests in subsidiaries	�	1,538		�	931		�
Total equity	�	1,288,704		�	1,093,207		�
Total liabilities and equity	�	$	2,544,966	�	$	2,358,624	�

�

See accompanying notes to the unaudited consolidated financial statements.

�

Table of Contents

�

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

�

Three�Months�Ended�September�30,

�

Nine�Months�Ended�September�30,

�

2014

�

2013

�

2014

�

2013

�

REVENUES

�

Rental income

�

85,392

�

72,744

�

242,177

�

207,735

�

Other property related income

�

10,142

�

8,558

�

30,088

�

24,150

�

Property management fee income

�

1,558

�

1,185

�

4,431

�

3,547

�

Total revenues

�

97,092

�

82,487

�

276,696

�

235,432

�

OPERATING EXPENSES

�

Property operating expenses

�

33,622

�

30,011

�

97,992

�

87,640

�

Depreciation and amortization

�

31,622

�

28,448

�

90,224

�

85,824

�

General and administrative

�

7,464

�

7,326

�

21,092

�

22,454

�

Acquisition related costs

�

1,258

�

470

�

3,658

�

2,233

�

Total operating expenses

�

73,966

�

66,255

�

212,966

�

198,151

�

OPERATING INCOME

�

23,126

�

16,232

�

63,730

�

37,281

�

OTHER INCOME (EXPENSE)

�

Interest:

�

Interest expense on loans

�

(11,772)

�

(9,968)

�

(35,670)

�

(30,828

)

Loan procurement amortization expense

�

(566)

�

(536)

�

(1,650)

�

(1,509

)

Equity in losses of real estate venture

�

(1,860)

�

(4,958)

�

Gain from sale of real estate

�

475

�

Other

�

(337)

�

(22)

�

(1,103)

�

(282

)

Total other expense

�

(14,535)

�

(10,526)

�

(42,906)

�

(32,619

)

�

INCOME FROM CONTINUING OPERATIONS

�

8,591

�

5,706

�

20,824

�

4,662

�

DISCONTINUED OPERATIONS

�

Income from discontinued operations

�

1,585

�

336

�

4,541

�

Gain from disposition of discontinued operations

�

9,310

�

9,538

�

Total discontinued operations

�

10,895

�

336

�

14,079

�

NET INCOME

�

8,591

�

16,601

�

21,160

�

18,741

�

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

�

Noncontrolling interests in the Operating Partnership

�

(106)

�

(257)

�

(250)

�

(240

)

Noncontrolling interests in subsidiaries

�

(5)

�

(2)

�

(14)

�

)

NET INCOME ATTRIBUTABLE TO THE COMPANY

�

8,480

�

16,342

�

20,896

�

18,500

�

Distribution to preferred shareholders

�

(1,502)

�

(1,502)

�

(4,506)

�

(4,506

)

NET INCOME ATTRIBUTABLE TO THE COMPANY�S COMMON SHAREHOLDERS

�

6,978

�

14,840

�

16,390

�

13,994

�

Basic earnings per share from continuing operations attributable to common shareholders

�

0.05

�

0.03

�

0.11

�

Basic earnings per share from discontinued operations attributable to common shareholders

�

0.08

�

0.10

�

Basic earnings per share attributable to common shareholders

�

0.05

�

0.11

�

0.11

�

0.10

�

Diluted earnings per share from continuing operations attributable to common shareholders

�

0.05

�

0.03

�

0.11

�

Diluted earnings per share from discontinued operations attributable to common shareholders

�

0.08

�

0.10

�

Diluted earnings per share attributable to common shareholders

�

0.05

�

0.11

�

0.11

�

0.10

�

Weighted-average basic shares outstanding

�

149,758

�

135,365

�

144,919

�

134,007

�

Weighted-average diluted shares outstanding

�

152,006

�

138,106

�

147,082

�

136,643

�

AMOUNTS ATTRIBUTABLE TO THE COMPANY�S COMMON SHAREHOLDERS:

�

Income from continuing operations

�

6,978

�

4,130

�

16,059

�

154

�

Total discontinued operations

�

10,710

�

331

�

13,840

�

Net income

�

6,978

�

14,840

�

16,390

�

13,994

�

See accompanying notes to the unaudited consolidated financial statements.

�

Table of Contents

�

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

�

Three�Months�Ended�September�30,

�

Nine�Months�Ended�September�30,

�

2014

�

2013

�

2014

�

2013

�

NET INCOME

�

8,591

�

16,601

�

21,160

�

18,741

�

OTHER COMPREHENSIVE INCOME (LOSS)

�

Unrealized gains (losses) on interest rate swap

�

982

�

(2,700)

�

(2,249)

�

2,586

�

Reclassification of realized losses on interest rate swaps

�

1,616

�

1,582

�

4,793

�

4,667

�

Unrealized (loss) gain on foreign currency translation

�

(483)

�

297

�

(55)

�

OTHER COMPREHENSIVE INCOME (LOSS)

�

2,115

�

(821)

�

2,489

�

7,319

�

COMPREHENSIVE INCOME

�

10,706

�

15,780

�

23,649

�

26,060

�

Comprehensive income attributable to noncontrolling interests in the Operating Partnership

�

(138)

�

(243)

�

(285)

�

(366

)

Comprehensive loss (income) attributable to noncontrolling interests in subsidiaries

�

(27)

�

(12)

�

(24

)

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY

�

10,572

�

15,510

�

23,352

�

25,670

�

See accompanying notes to the unaudited consolidated financial statements.

�

Table of Contents

�

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands)

(unaudited)

�

Noncontrolling

�

Common�Shares

�

Preferred�Shares

�

Additional
Paid�in

�

Accumulated�Other
Comprehensive

�

Accumulated

�

Total
Shareholders�

�

Noncontrolling
Interests�in

�

Total

�

Interests�in�the
Operating

�

Number

�

Amount

�

Number

�

Amount

�

Capital

�

(Loss)�Income

�

Deficit

�

Equity

�

Subsidiaries

�

Equity

�

Partnership

�

Balance at December�31, 2013

�

139,328

�

��$

1,393

�

3,100

�

��$

�

�$

1,542,703

�

��$

(11,014)

�

��$

(440,837)

�

��$

1,092,276

�

��$

931

�

�$

1,093,207

�

��$

36,275

�

Contributions from noncontrolling interests in subsidiaries

�

��$

595

�

595

�

Issuance of common shares

�

13,181

�

132

�

235,829

�

235,961

�

235,961

�

Issuance of restricted shares

�

424

�

Conversion from units to shares

�

308

�

308

�

308

�

(308)

�

Exercise of stock options

�

283

�

2,263

�

2,266

�

2,266

�

Amortization of restricted shares

�

(229)

�

(229)

�

(229)

�

Share compensation expense

�

644

�

644

�

644

�

Adjustment for noncontrolling interests in the Operating Partnership

�

(5,218)

�

(5,218)

�

(5,218)

�

5,218

�

Net income

�

20,896

�

20,896

�

20,910

�

250

�

Other comprehensive gain (loss):

�

Unrealized gains on interest rate swaps

�

2,506

�

2,506

�

2,506

�

Unrealized loss on foreign currency translation

�

(50)

�

(50)

�

(2)

�

(52)

�

(3)

�

Preferred share distributions

�

(4,506)

�

(4,506)

�

(4,506)

�

Common share distributions

�

(57,692)

�

(57,692)

�

(57,692)

�

(880)

�

Balance at September�30, 2014

�

153,234

�

��$

1,532

�

3,100

�

��$

�

�$

1,781,518

�

��$

(8,558)

�

��$

(487,357)

�

��$

1,287,166

�

��$

1,538

�

�$

1,288,704

�

��$

40,590

�

Noncontrolling

�

Common�Shares

�

Preferred�Shares

�

Additional
Paid�in

�

Accumulated�Other
Comprehensive

�

Accumulated

�

Total
Shareholders�

�

Noncontrolling
Interests�in

�

Total

�

Interests�in�the
Operating

�

Number

�

Amount

�

Number

�

Amount

�

Capital

�

(Loss)�Income

�

Deficit

�

Equity

�

Subsidiaries

�

Equity

�

Partnership

�

Balance at December�31, 2012

�

131,795

�

��$

1,318

�

3,100

�

��$

�

��$

1,418,463

�

��$

(19,796)

�

��$

(410,225)

�

��$

989,791

�

��$

118

�

�$

989,909

�

��$

47,990

�

Issuance of common shares

�

3,099

�

52,467

�

52,498

�

52,498

�

Issuance of restricted shares

�

222

�

Conversion from units to shares

�

1,013

�

14,591

�

14,601

�

14,601

�

(14,601)

�

Exercise of stock options

�

357

�

2,483

�

2,487

�

2,487

�

Amortization of restricted shares

�

3,397

�

3,397

�

3,397

�

Share compensation expense

�

654

�

654

�

654

�

Adjustment for noncontrolling interests in the Operating Partnership

�

(7,686)

�

(7,686)

�

(7,686)

�

7,686

�

Net income

�

18,500

�

18,500

�

18,501

�

240

�

Other comprehensive gain:

�

Unrealized gains on interest rate swaps

�

7,128

�

7,128

�

7,128

�

125

�

Unrealized gain on foreign currency translation

�

Preferred share distributions

�

(4,506)

�

(4,506)

�

(4,506)

�

Common share distributions

�

(44,602)

�

(44,602)

�

(44,602)

�

(753)

�

Balance at September�30, 2013

�

136,486

�

��$

1,365

�

3,100

�

��$

�

��$

1,492,055

�

��$

(12,626)

�

��$

(448,519)

�

��$

1,032,306

�

��$

142

�

�$

1,032,448

�

��$

40,688

�

See accompanying notes to the unaudited consolidated financial statements.

�

Table of Contents

�

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

�

�	�	�	Nine�Months�Ended�September�30,							�
�	�	�	2014		�	�	�	2013		�
�	�	�	�		�	�	�	�		�
�	�	�	�		�	�	�	�		�
Operating Activities	�	�	�		�	�	�	�		�
Net income	�	�	$	21,160	�	�	�	$	18,741	�
Adjustments to reconcile net income to cash provided by operating activities:	�	�	�		�	�	�	�		�
Depreciation and amortization	�	�	91,874		�	�	�	89,813		�
Gain from sale of real estate	�	�	(475		)	�	�	(9,538		)
Equity compensation expense	�	�	415		�	�	�	4,051		�
Accretion of fair market value adjustment of debt	�	�	(1,247		)	�	�	(752		)
Equity in losses of real estate venture	�	�	4,958		�	�	�	-		�
Changes in other operating accounts:	�	�	�		�	�	�	�		�
Other assets	�	�	(936		)	�	�	(1,760		)
Restricted cash	�	�	(293		)	�	�	518		�
Accounts payable and accrued expenses	�	�	2,531		�	�	�	1,551		�
Other liabilities	�	�	945		�	�	�	1,267		�
Net cash provided by operating activities	�	�	$	118,932	�	�	�	$	103,891	�
�	�	�	�		�	�	�	�		�
Investing Activities	�	�	�		�	�	�	�		�
Acquisitions of storage facilities	�	�	$	(255,865	)	�	�	$	(133,043	)
Additions and improvements to storage facilities	�	�	(12,870		)	�	�	(13,697		)
Development costs	�	�	(17,027		)	�	�	(25,649		)
Cash contributed to real estate venture	�	�	(2,350		)	�	�	-		�
Cash distributed from real estate venture	�	�	55,381		�	�	�	-		�
Proceeds from sale of real estate, net	�	�	13,475		�	�	�	35,600		�
Proceeds from notes receivable	�	�	-		�	�	�	5,192		�
Change in restricted cash	�	�	283		�	�	�	1,324		�
Net cash used in investing activities	�	�	$	(218,973	)	�	�	$	(130,273	)
�	�	�	�		�	�	�	�		�
Financing Activities	�	�	�		�	�	�	�		�
Proceeds from:	�	�	�		�	�	�	�		�
Revolving credit facility	�	�	$	578,000	�	�	�	$	350,600	�
Principal payments on:	�	�	�		�	�	�	�		�
Revolving credit facility	�	�	(616,600		)	�	�	(307,300		)
Mortgage loans and notes payable	�	�	(10,589		)	�	�	(21,852		)
Loan procurement costs	�	�	(274		)	�	�	(2,141		)
Proceeds from issuance of common shares	�	�	235,965		�	�	�	52,500		�
Exercise of stock options	�	�	2,266		�	�	�	2,487		�
Contributions from noncontrolling interests in subsidiaries	�	�	595		�	�	�	-		�
Distributions paid to common shareholders	�	�	(55,844		)	�	�	(44,093		)
Distributions paid to preferred shareholders	�	�	(4,506		)	�	�	(4,506		)
Distributions paid to noncontrolling interests in Operating Partnership	�	�	(884		)	�	�	(868		)
Net cash provided by financing activities	�	�	$	128,129	�	�	�	$	24,827	�
�	�	�	�		�	�	�	�		�
Change in cash and cash equivalents	�	�	28,088		�	�	�	(1,555		)
�	�	�	�		�	�	�	�		�
Cash and cash equivalents at beginning of period	�	�	3,176		�	�	�	4,495		�
Cash and cash equivalents at end of period	�	�	$	31,264	�	�	�	$	2,940	�
�	�	�	�		�	�	�	�		�
Supplemental Cash Flow and Noncash Information	�	�	�		�	�	�	�		�
Cash paid for interest, net of interest capitalized	�	�	$	38,240	�	�	�	$	36,150	�
Supplemental disclosure of noncash activities:	�	�	�		�	�	�	�		�
Accretion of liability	�	�	$	5,357	�	�	�	$	-	�
Derivative valuation adjustment	�	�	$	2,544	�	�	�	$	7,253	�
Foreign currency translation adjustment	�	�	$	(55	)	�	�	$	66	�
Mortgage loan assumption - acquisition of storage facilities	�	�	$	27,467	�	�	�	$	-	�

�

See accompanying notes to the unaudited consolidated financial statements.

�

Table of Contents

�

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

�

�	�	�	September�30,		�	�	�	December�31,		�
�	�	�	2014		�	�	�	2013		�
�	�	�	�		�	�	�	�		�
�	�	�	�		�	�	�	�		�
ASSETS	�	�	�		�	�	�	�		�
Storage facilities	�	�	$	2,823,186	�	�	�	$	2,553,706	�
Less: �Accumulated depreciation	�	�	(466,516		)	�	�	(398,536		)
Storage facilities, net (including VIE asssets of $40,726 and $34,559, respectively)	�	�	2,356,670		�	�	�	2,155,170		�
Cash and cash equivalents	�	�	31,264		�	�	�	3,176		�
Restricted cash	�	�	4,254		�	�	�	4,025		�
Loan procurement costs, net of amortization	�	�	11,194		�	�	�	12,687		�
Investment in real estate venture, at equity	�	�	98,321		�	�	�	156,310		�
Other assets, net	�	�	43,263		�	�	�	27,256		�
Total assets	�	�	$	2,544,966	�	�	�	$	2,358,624	�
�	�	�	�		�	�	�	�		�
LIABILITIES AND CAPITAL	�	�	�		�	�	�	�		�
Unsecured senior notes	�	�	$	500,000	�	�	�	$	500,000	�
Revolving credit facility	�	�	-		�	�	�	38,600		�
Unsecured term loan	�	�	400,000		�	�	�	400,000		�
Mortgage loans and notes payable	�	�	215,849		�	�	�	200,218		�
Accounts payable, accrued expenses and other liabilities	�	�	63,139		�	�	�	57,599		�
Distributions payable	�	�	21,799		�	�	�	19,955		�
Deferred revenue	�	�	14,491		�	�	�	12,394		�
Security deposits	�	�	394		�	�	�	376		�
Total liabilities	�	�	1,215,672		�	�	�	1,229,142		�
�	�	�	�		�	�	�	�		�
Operating Partnership interests of third parties	�	�	40,590		�	�	�	36,275		�
�	�	�	�		�	�	�	�		�
Commitments and contingencies	�	�	�		�	�	�	�		�
�	�	�	�		�	�	�	�		�
Capital	�	�	�		�	�	�	�		�
Operating Partner	�	�	1,295,724		�	�	�	1,103,290		�
Accumulated other comprehensive loss	�	�	(8,558		)	�	�	(11,014		)
Total CubeSmart, L.P. capital	�	�	1,287,166		�	�	�	1,092,276		�
Noncontrolling interests in subsidiaries	�	�	1,538		�	�	�	931		�
Total capital	�	�	1,288,704		�	�	�	1,093,207		�
Total liabilities and capital	�	�	$	2,544,966	�	�	�	$	2,358,624	�

�

See accompanying notes to the unaudited consolidated financial statements.

�

Table of Contents

�

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per common unit data)

(unaudited)

�

Three�Months�Ended�September�30,

�

Nine�Months�Ended�September�30,

�

2014

�

2013

�

2014

�

2013

�

REVENUES

�

Rental income

�

85,392

�

72,744

�

242,177

�

207,735

�

Other property related income

�

10,142

�

8,558

�

30,088

�

24,150

�

Property management fee income

�

1,558

�

1,185

�

4,431

�

3,547

�

Total revenues

�

97,092

�

82,487

�

276,696

�

235,432

�

OPERATING EXPENSES

�

Property operating expenses

�

33,622

�

30,011

�

97,992

�

87,640

�

Depreciation and amortization

�

31,622

�

28,448

�

90,224

�

85,824

�

General and administrative

�

7,464

�

7,326

�

21,092

�

22,454

�

Acquisition related costs

�

1,258

�

470

�

3,658

�

2,233

�

Total operating expenses

�

73,966

�

66,255

�

212,966

�

198,151

�

OPERATING INCOME

�

23,126

�

16,232

�

63,730

�

37,281

�

OTHER INCOME (EXPENSE)

�

Interest:

�

Interest expense on loans

�

(11,772

)

�

(9,968

)

�

(35,670

)

�

(30,828

)

Loan procurement amortization expense

�

(566

)

�

(536

)

�

(1,650

)

�

(1,509

)

Equity in losses of real estate venture

�

(1,860

)

�

(4,958

)

�

Gain from sale of real estate

�

475

�

Other

�

(337

)

�

(22

)

�

(1,103

)

�

(282

)

Total other expense

�

(14,535

)

�

(10,526

)

�

(42,906

)

�

(32,619

)

�

INCOME FROM CONTINUING OPERATIONS

�

8,591

�

5,706

�

20,824

�

4,662

�

DISCONTINUED OPERATIONS

�

Income from discontinued operations

�

1,585

�

336

�

4,541

�

Gain from disposition of discontinued operations

�

9,310

�

9,538

�

Total discontinued operations

�

10,895

�

336

�

14,079

�

NET INCOME

�

8,591

�

16,601

�

21,160

�

18,741

�

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

�

Noncontrolling interests in subsidiaries

�

)

�

)

�

(14

)

�

)

NET INCOME ATTRIBUTABLE TO CUBESMART L.P.

�

8,586

�

16,599

�

21,146

�

18,740

�

Operating Partnership interests of third parties

�

(106

)

�

(257

)

�

(250

)

�

(240

)

NET INCOME ATTRIBUTABLE TO OPERATING PARTNER

�

8,480

�

16,342

�

20,896

�

18,500

�

Distribution to preferred unitholders

�

(1,502

)

�

(1,502

)

�

(4,506

)

�

(4,506

)

NET INCOME ATTRIBUTABLE TO COMMON UNITHOLDERS

�

6,978

�

14,840

�

16,390

�

13,994

�

Basic earnings per share from continuing operations attributable to common unitholders

�

0.05

�

0.03

�

0.11

�

Basic earnings per share from discontinued operations attributable to common unitholders

�

0.08

�

0.10

�

Basic earnings per share attributable to common unitholders

�

0.05

�

0.11

�

0.11

�

0.10

�

Diluted earnings per share from continuing operations attributable to common unitholders

�

0.05

�

0.03

�

0.11

�

Diluted earnings per share from discontinued operations attributable to common unitholders

�

0.08

�

0.10

�

Diluted earnings per share attributable to common unitholders

�

0.05

�

0.11

�

0.11

�

0.10

�

Weighted-average basic units outstanding

�

149,758

�

135,365

�

144,919

�

134,007

�

Weighted-average diluted units outstanding

�

152,006

�

138,106

�

147,082

�

136,643

�

AMOUNTS ATTRIBUTABLE TO COMMON UNITHOLDERS

�

Income from continuing operations

�

6,978

�

4,130

�

16,059

�

154

�

Total discontinued operations

�

10,710

�

331

�

13,840

�

Net income

�

6,978

�

14,840

�

16,390

�

13,994

�

See accompanying notes to the unaudited consolidated financial statements.

�

Table of Contents

�

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

�

Three�Months�Ended�September�30,

�

Nine�Months�Ended�September�30,

�

2014

�

2013

�

2014

�

2013

�

NET INCOME

�

��$

8,591

�

��$

16,601

�

��$

21,160

�

��$

18,741

�

OTHER COMPREHENSIVE INCOME (LOSS)

�

Unrealized gains (losses) on interest rate swap

�

982

�

(2,700)

�

(2,249)

�

2,586

�

Reclassification of realized losses on interest rate swaps

�

1,616

�

1,582

�

4,793

�

4,667

�

Unrealized (loss) gain on foreign currency translation

�

(483)

�

297

�

(55)

�

OTHER COMPREHENSIVE INCOME (LOSS)

�

2,115

�

(821)

�

2,489

�

7,319

�

COMPREHENSIVE INCOME

�

10,706

�

15,780

�

23,649

�

26,060

�

Comprehensive income attributable to Operating Partnership interests of third parties

�

(138)

�

(243)

�

(285)

�

(366

)

Comprehensive loss (income) attributable to noncontrolling interests in subsidiaries

�

(27)

�

(12)

�

(24

)

COMPREHENSIVE INCOME ATTRIBUTABLE TO OPERATING PARTNER

�

��$

10,572

�

��$

15,510

�

��$

23,352

�

��$

25,670

�

See accompanying notes to the unaudited consolidated financial statements.

�

Table of Contents

�

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CAPITAL

(in thousands)

(unaudited)

�

Operating

�

Number�of�OP�Units
Outstanding

�

Operating

�

Accumulated�Other
Comprehensive

�

CubeSmart
L.P.

�

Noncontrolling
Interests�in

�

Total

�

Partnership
Interests

�

Common

�

Preferred

�

Partner

�

(Loss)�Income

�

Capital

�

Subsidiaries

�

Capital

�

of�Third�Parties

�

Balance at December�31, 2013

�

139,328

�

3,100

�

1,103,290

�

(11,014)

�

1,092,276

�

931

�

1,093,207

�

36,275

�

Contributions from noncontrolling interests in subsidiaries

�

595

�

595

�

Issuance of common OP units

�

13,181

�

235,961

�

235,961

�

235,961

�

Issuance of restricted OP units

�

424

�

Conversion from units to shares

�

308

�

308

�

308

�

(308)

�

Exercise of OP unit options

�

283

�

2,266

�

2,266

�

2,266

�

Amortization of restricted OP units

�

(229)

�

(229)

�

(229)

�

OP unit compensation expense

�

644

�

644

�

644

�

Adjustment for Operating Partnership interests of third parties

�

(5,218)

�

(5,218)

�

(5,218)

�

5,218

�

Net income

�

20,896

�

20,896

�

20,910

�

250

�

Other comprehensive gain (loss):

�

Unrealized gains on interest rate swaps

�

2,506

�

2,506

�

2,506

�

Unrealized loss on foreign currency translation

�

(50)

�

(50)

�

(2)

�

(52)

�

(3)

�

Preferred OP unit distributions

�

(4,506)

�

(4,506)

�

(4,506)

�

Common OP unit distributions

�

(57,692)

�

(57,692)

�

(57,692)

�

(880)

�

Balance at September�30, 2014

�

153,234

�

3,100

�

1,295,724

�

(8,558)

�

1,287,166

�

1,538

�

1,288,704

�

40,590

�

Operating

�

Number�of�OP�Units
Outstanding

�

Operating

�

Accumulated�Other
Comprehensive

�

CubeSmart
L.P.

�

Noncontrolling
Interests�in

�

Total

�

Partnership
Interests

�

Common

�

Preferred

�

Partner

�

(Loss)�Income

�

Capital

�

Subsidiaries

�

Capital

�

of�Third�Parties

�

Balance at December�31, 2012

�

131,795

�

3,100

�

1,009,587

�

(19,796)

�

989,791

�

118

�

989,909

�

47,990

�

Issuance of common OP units

�

3,099

�

52,498

�

52,498

�

52,498

�

Issuance of restricted OP units

�

222

�

Conversion from units to shares

�

1,013

�

14,601

�

14,601

�

14,601

�

(14,601)

�

Exercise of OP unit options

�

357

�

2,487

�

2,487

�

2,487

�

Amortization of restricted OP units

�

3,397

�

3,397

�

3,397

�

OP unit compensation expense

�

654

�

654

�

654

�

Adjustment for Operating Partnership interests of third parties

�

(7,686)

�

(7,686)

�

(7,686)

�

7,686

�

Net income

�

18,500

�

18,500

�

18,501

�

240

�

Other comprehensive gain:

�

Unrealized gains on interest rate swaps

�

7,128

�

7,128

�

7,128

�

125

�

Unrealized gain on foreign currency translation

�

Preferred OP unit distributions

�

(4,506)

�

(4,506)

�

(4,506)

�

Common OP unit distributions

�

(44,602)

�

(44,602)

�

(44,602)

�

(753)

�

Balance at September�30, 2013

�

136,486

�

3,100

�

1,044,932

�

(12,626)

�

1,032,306

�

142

�

1,032,448

�

40,688

�

See accompanying notes to the unaudited consolidated financial statements.

�

Table of Contents

�

CUBESMART, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

�

�	�	Nine�Months�Ended�September�30,					�
�	�	2014		�	2013		�
�	�	�		�	�		�
Operating Activities	�	�		�	�		�
�	�	�		�	�		�
Net income	�	��$	21,160	�	��$	18,741	�
�	�	�		�	�		�
Adjustments to reconcile net income to cash provided by operating activities:	�	�		�	�		�
�	�	�		�	�		�
Depreciation and amortization	�	91,874		�	89,813		�
�	�	�		�	�		�
Gain from sale of real estate	�	(475)		�	(9,538)		�
�	�	�		�	�		�
Equity compensation expense	�	415		�	4,051		�
�	�	�		�	�		�
Accretion of fair market value adjustment of debt	�	(1,247)		�	(752)		�
�	�	�		�	�		�
Equity in losses of real estate venture	�	4,958		�	-		�
�	�	�		�	�		�
Changes in other operating accounts:	�	�		�	�		�
�	�	�		�	�		�
Other assets	�	(936)		�	(1,760)		�
�	�	�		�	�		�
Restricted cash	�	(293)		�	518		�
�	�	�		�	�		�
Accounts payable and accrued expenses	�	2,531		�	1,551		�
�	�	�		�	�		�
Other liabilities	�	945		�	1,267		�
�	�	�		�	�		�
Net cash provided by operating activities	�	��$	118,932	�	��$	103,891	�
�	�	�		�	�		�
�	�	�		�	�		�
Investing Activities	�	�		�	�		�
�	�	�		�	�		�
Acquisitions of storage facilities	�	��$	(255,865)	�	��$	(133,043)	�
�	�	�		�	�		�
Additions and improvements to storage facilities	�	(12,870)		�	(13,697)		�
�	�	�		�	�		�
Development costs	�	(17,027)		�	(25,649)		�
�	�	�		�	�		�
Cash contributed to real estate venture	�	(2,350)		�	-		�
�	�	�		�	�		�
Cash distributed from real estate venture	�	55,381		�	-		�
�	�	�		�	�		�
Proceeds from sale of real estate, net	�	13,475		�	35,600		�
�	�	�		�	�		�
Proceeds from notes receivable	�	-		�	5,192		�
�	�	�		�	�		�
Change in restricted cash	�	283		�	1,324		�
�	�	�		�	�		�
Net cash used in by investing activities	�	��$	(218,973)	�	��$	(130,273)	�
�	�	�		�	�		�
�	�	�		�	�		�
Financing Activities	�	�		�	�		�
�	�	�		�	�		�
Proceeds from:	�	�		�	�		�
�	�	�		�	�		�
Revolving credit facility	�	��$	578,000	�	��$	350,600	�
�	�	�		�	�		�
Principal payments on:	�	�		�	�		�
�	�	�		�	�		�
Revolving credit facility	�	(616,600)		�	(307,300)		�
�	�	�		�	�		�
Mortgage loans and notes payable	�	(10,589)		�	(21,852)		�
�	�	�		�	�		�
Loan procurement costs	�	(274)		�	(2,141)		�
�	�	�		�	�		�
Proceeds from issuance of common OP units	�	235,965		�	52,500		�
�	�	�		�	�		�
Exercise of OP unit options	�	2,266		�	2,487		�
�	�	�		�	�		�
Contributions from noncontrolling interests in subsidiaries	�	595		�	-		�
�	�	�		�	�		�
Distributions paid to common unitholders	�	(56,728)		�	(44,961)		�
�	�	�		�	�		�
Distributions paid to preferred unitholders	�	(4,506)		�	(4,506)		�
�	�	�		�	�		�
Net cash provided by financing activities	�	��$	128,129	�	��$	24,827	�
�	�	�		�	�		�
�	�	�		�	�		�
Change in cash and cash equivalents	�	28,088		�	(1,555)		�
�	�	�		�	�		�
Cash and cash equivalents at beginning of period	�	3,176		�	4,495		�
�	�	�		�	�		�
Cash and cash equivalents at end of period	�	��$	31,264	�	��$	2,940	�
�	�	�		�	�		�
Supplemental Cash Flow and Noncash Information	�	�		�	�		�
�	�	�		�	�		�
Cash paid for interest, net of interest capitalized	�	��$	38,240	�	��$	36,150	�
�	�	�		�	�		�
Supplemental disclosure of noncash activities:	�	�		�	�		�
�	�	�		�	�		�
Accretion of liability	�	��$	5,357	�	��$	-	�
�	�	�		�	�		�
Derivative valuation adjustment	�	��$	2,544	�	��$	7,253	�
�	�	�		�	�		�
Foreign currency translation adjustment	�	��$	(55)	�	��$	66	�
�	�	�		�	�		�
Mortgage loan assumption - acquisition of storage facilities	�	��$	27,467	�	��$	-	�

�

See accompanying notes to the unaudited consolidated financial statements.

�

Table of Contents

�

CUBESMART�AND CUBESMART, L.P.

NOTES�TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

�

1.��ORGANIZATION AND NATURE OF OPERATIONS

�

CubeSmart (the �Parent Company�) operates as a self-managed and self-administered real estate investment trust (�REIT�) with its operations conducted solely through CubeSmart, L.P. and its subsidiaries.� CubeSmart, L.P., a Delaware limited partnership (the �Operating Partnership�), operates through an umbrella partnership structure, with the Parent Company, a Maryland REIT, as its sole general partner.� In the notes to the consolidated financial statements, we use the terms �the Company�, �we� or �our� to refer to the Parent Company and the Operating Partnership together, unless the context indicates otherwise.�� As of September�30, 2014, the Company owned self-storage facilities located in 21 states throughout the United States and the District of Columbia which are presented under one reportable segment: the Company owns, operates, develops, manages and acquires self-storage facilities.

�

As of September�30, 2014, the Parent Company owned approximately 98.5% of the partnership interests (�OP Units�) of the Operating Partnership.� The remaining OP Units, consisting exclusively of limited partner interests, are held by persons who contributed their interests in facilities to the Operating Partnership in exchange for OP Units.� Under the partnership agreement, these persons have the right to tender their OP Units for redemption to the Operating Partnership at any time for cash equal to the fair value of an equivalent number of common shares of the Parent Company.� In lieu of delivering cash, however, the Parent Company, as the Operating Partnership�s general partner, may, at its option, choose to acquire any OP Units so tendered by issuing common shares in exchange for the tendered OP Units.� If the Parent Company so chooses, its common shares will be exchanged for OP Units on a one-for-one basis. �This one-for-one exchange ratio is subject to adjustment to prevent dilution.� With each such exchange or redemption, the Parent Company�s percentage ownership in the Operating Partnership will increase.� In addition, whenever the Parent Company issues common or other classes of its shares, it contributes the net proceeds it receives from the issuance to the Operating Partnership and the Operating Partnership issues to the Parent Company an equal number of OP Units or other partnership interests having preferences and rights that mirror the preferences and rights of the shares issued.� This structure is commonly referred to as an umbrella partnership REIT or �UPREIT.�

�

2.��SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

�

Basis of Presentation

�

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules�and regulations of the SEC regarding interim financial reporting and, in the opinion of each of the Parent Company�s and Operating Partnership�s respective management, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of financial position, results of operations and cash flows for each respective company for the interim periods presented in accordance with generally accepted accounting principles in the United States (�GAAP�).� Accordingly, readers of this Quarterly Report on Form�10-Q should refer to the Parent Company�s and the Operating Partnership�s audited financial statements prepared in accordance with GAAP, and the related notes thereto, for the year ended December�31, 2013, which are included in the Parent Company�s and the Operating Partnership�s Annual Report on Form�10-K for the fiscal year ended December�31, 2013.� The results of operations for the three and nine months ended September�30, 2014 and 2013 are not necessarily indicative of the results of operations to be expected for any future period or the full year.

�

For the three and nine months ended September�30, 2013, certain amounts have been reclassified to conform to current period presentation.

�

Recent Accounting Pronouncements

�

In April�2014, the Financial Accounting Standards Board (�FASB�) issued an update to the accounting standard for the reporting of discontinued operations.� The update redefines discontinued operations, changing the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements.

�

Table of Contents

�

This amendment becomes effective for annual periods beginning on or after December�15, 2014, and interim periods beginning on or after December�15, 2015; however, early adoption is permitted.� The Company elected to adopt this guidance in 2014 and such adoption did not have a material impact on the Company�s consolidated financial position or results of operations.� The Company disposed of one asset during the nine months ended September�30, 2014, however the disposal did not meet the criteria for discontinued operations under the new guidance.

�

In May�2014, the FASB issued Accounting Standard Update (�ASU�) No.�2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January�1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

�

3.��STORAGE FACILITIES

�

The book value of the Company�s real estate assets is summarized as follows:

�

�	�	September�30,		�	December�31,		�
�	�	2014		�	2013		�
�	�	(in�thousands)					�
Land	�	��$	503,529	�	�$	465,680	�
Buildings and improvements	�	2,095,930		�	1,888,823		�
Equipment	�	185,090		�	158,000		�
Construction in progress	�	38,637		�	41,203		�
Storage facilities	�	2,823,186		�	2,553,706		�
Less: Accumulated depreciation	�	(466,516)		�	(398,536)		�
Storage facilities, net	�	��$	2,356,670	�	��$	2,155,170	�

�

Table of Contents

�

The following table summarizes the Company�s acquisition and disposition activity from the period beginning on January�1, 2013 through September�30, 2014:

�

Facility/Portfolio	�	Location	�	Transaction Date	�	Number of Facilities	�	Purchase / Sales Price (in thousands)		�
�	�	�	�	�	�	�	�	�		�
2014 Acquisitions:	�	�	�	�	�	�	�	�		�
�	�	�	�	�	�	�	�	�		�
Manchester Asset	�	Manchester, CT	�	January 2014	�	1	�	��$	4,950	�
Coconut Creek Asset	�	Coconut Creek, FL	�	January 2014	�	1	�	14,000		�
Palm Coast Assets	�	Palm Coast, FL	�	January 2014	�	2	�	14,450		�
Fremont Asset	�	Fremont, CA	�	January 2014	�	1	�	8,300		�
Temple Hills Asset	�	Temple Hills, MD	�	February 2014	�	1	�	15,800		�
Timonium Asset	�	Timonium, MD	�	February 2014	�	1	�	15,500		�
Phoenix Asset	�	Phoenix, AZ	�	March 2014	�	1	�	14,750		�
Philadelphia Asset	�	Philadelphia, PA	�	March 2014	�	1	�	7,350		�
Frisco Asset	�	Frisco, TX	�	March 2014	�	1	�	8,225		�
Austin Asset	�	Austin, TX	�	April 2014	�	1	�	6,450		�
New York Assets	�	Brooklyn, NY	�	April 2014	�	2	�	55,000		�
Lake Worth Asset	�	Lake Worth, FL	�	April 2014	�	1	�	11,406		�
Tewksbury Asset	�	Tewksbury, MA	�	April 2014	�	1	�	11,100		�
Schererville Asset	�	Schererville, IN	�	May 2014	�	1	�	8,400		�
Florida Assets	�	Multiple locations in FL	�	June 2014	�	3	�	35,000		�
Florida II Assets	�	Fort Myers, FL	�	July 2014	�	2	�	15,800		�
Boston Asset	�	Boston, MA	�	September 2014	�	1	�	23,100		�
�	�	�	�	�	�	22	�	��$	269,581	�
2013 Acquisitions:	�	�	�	�	�	�	�	�		�
�	�	�	�	�	�	�	�	�		�
Gilbert Asset	�	Gilbert, AZ	�	March 2013	�	1	�	��$	6,900	�
Evanston Asset	�	Evanston, IL	�	May 2013	�	1	�	8,300		�
Delray Beach Asset	�	Delray Beach, FL	�	May 2013	�	1	�	7,150		�
Miramar Asset	�	Miramar, FL	�	June 2013	�	1	�	9,000		�
Stoneham Asset	�	Stoneham, MA	�	June 2013	�	1	�	10,600		�
Maryland/New Jersey Assets	�	Multiple locations in MD and NJ	�	June 2013	�	5	�	52,400		�
Staten Island Asset	�	Staten Island, NY	�	July 2013	�	1	�	13,000		�
Lewisville Asset	�	Lewisville, TX	�	August 2013	�	1	�	10,975		�
Chandler Asset	�	Chandler, AZ	�	September 2013	�	1	�	10,500		�
Tempe Asset	�	Tempe, AZ	�	September 2013	�	1	�	4,300		�
Clinton Asset	�	Clinton, MD	�	November 2013	�	1	�	15,375		�
Katy Asset	�	Katy, TX	�	November 2013	�	1	�	9,700		�
Richmond Asset	�	Richmond, TX	�	December 2013	�	1	�	10,497		�
Dallas Asset	�	Dallas, TX	�	December 2013	�	1	�	6,925		�
Elkridge Asset	�	Elkridge, MD	�	December 2013	�	1	�	8,200		�
Fort Lauderdale Asset	�	Fort Lauderdale, FL	�	December 2013	�	1	�	6,000		�
�	�	�	�	�	�	20	�	��$	189,822	�

�

Table of Contents

�

Facility/Portfolio	�	Location	�	Transaction Date	�	Number of Facilities	�	Purchase / Sales Price (in thousands)		�
�	�	�	�	�	�	�	�	�		�
2013 Dispositions:	�	�	�	�	�	�	�	�		�
�	�	�	�	�	�	�	�	�		�
Texas/Indiana Assets	�	Multiple locations in TX and IN	�	March 2013	�	5	�	��$	11,400	�
Tennessee Assets	�	Multiple locations in TN	�	August 2013	�	8	�	25,000		�
California/Tennessee/Texas Assets	�	Multiple locations in CA, TN and TX	�	October/November 2013	�	22	�	90,000		�
�	�	�	�	�	�	35	�	��$	126,400	�

�

4.� INVESTMENT ACTIVITY

�

2014 Acquisitions

�

During the nine months ended September�30, 2014, the Company acquired 22 self-storage facilities located throughout the United States for an aggregate purchase price of approximately $269.6 million.� In connection with these acquisitions, the Company allocated a portion of the purchase price to the intangible value of in-place leases, which aggregated $18.8 million at the time of such acquisitions and prior to any amortization of such amounts.� The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the nine months ended September�30, 2014 was approximately $8.0 million.� In connection with four of the acquired facilities, the Company assumed mortgage debt, and recorded the debt at a fair value of $27.5 million, which included an outstanding principal balance totaling $26.0 million and a net premium of $1.5 million to reflect the estimated fair value of the debt at the time of assumption.

�

As of September�30, 2014, the Company was under contract and had made deposits of $9.0 million associated with five facilities under construction for a total purchase price of $123.2 million.� These deposits are reflected in Other assets, net on the Company�s consolidated balance sheets.� The purchase of these five properties is expected to occur by the fourth quarter of 2015 after the completion of construction and the issuance of a certificate of occupancy.� These acquisitions are subject to due diligence and other customary closing conditions and no assurance can be provided that these acquisitions will be completed on the terms described, or at all.

�

On August�25, 2014, the Operating Partnership entered into an Agreement for Purchase and Sale with certain limited liability companies controlled by HSRE REIT I and HSRE REIT II, each Maryland real estate investment trusts, to acquire (the �HSRE Acquisition�) 26 self-storage facilities for an aggregate purchase price of $223.0 million plus customary closing costs.� As of September�30, 2014, the Company had made a deposit of $5.0 million with respect to the HSRE Acquisition, which deposit is reflected in Other assets, net on the Company�s consolidated balance sheets.� The HSRE Acquisition will close in two tranches.� The Company completed its due diligence on all of the facilities and closed on the first tranche of 22 facilities for an aggregate purchase price of $195.5 million on November�3, 2014.� The Company expects to close on the remaining four facilities no later than March�31, 2015.

�

Development

�

During 2012, the Company commenced construction of 5 Old Lancaster Road located in Malvern, PA, a suburb of Philadelphia.� The mixed-use facility is comprised of rentable storage space and office space for the Company�s corporate headquarters.� During the fourth quarter of 2013, the Company relocated its corporate headquarters to 5 Old Lancaster Road.� Construction was completed on the portion of the building comprised of rentable storage space and the facility opened for operation during the first quarter of 2014.� Total costs for this mixed-use project were $25.1 million at September�30, 2014.

�

During 2013, the Company entered into contracts for the construction of a self-storage facility located in Bronx, NY.� Construction of the facility was substantially completed and the facility opened for operation during the first quarter of 2014.

�

Table of Contents

�

Total costs for this project were $17.2 million at September�30, 2014.� These costs are capitalized to building and improvements as well as equipment and are reflected in Storage facilities on the Company�s consolidated balance sheets.

�

During 2013, the Company entered into contracts under newly-formed joint ventures for the construction of three self-storage facilities located in New York and one self-storage facility located in Virginia (see note 12).� Construction for all projects is expected to be completed during 2015.� At September�30, 2014, development costs for these projects totaled $30.3 million.� These costs are capitalized to construction in progress while the projects are under development and are reflected in Storage facilities on the Company�s consolidated balance sheets.

�

2014 Disposition

�

On June�30, 2014, the Company sold one asset in London, England owned by USIFB, LLP, a consolidated real estate joint venture in which the Company owns a 97% interest, for an aggregate sales price of �4.1 million (approximately $7.0 million).� The Company received net proceeds of $7.0 million, a portion of which were used to repay the loan the Company made to the venture, and recorded a gain of $0.5 million as a result of the transaction.

�

2013 Acquisitions

�

During 2013, the Company acquired 20 self-storage facilities located throughout the United States for an aggregate purchase price of approximately $189.8 million.� In connection with these acquisitions, the Company allocated a portion of the purchase price to the intangible value of in-place leases, which aggregated $13.5 million at the time of such acquisitions and prior to any amortization of such amounts.�� The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during the nine months ended September�30, 2014 was approximately $7.4 million.� In connection with one of the acquired facilities, the Company assumed mortgage debt, and recorded the debt at a fair value of $8.9 million, which included an outstanding principal balance totaling $8.5 million and a net premium of $0.4 million in addition to the face value of the assumed debt to reflect the fair value of the debt at the time of assumption.

�

The following table summarizes the Company�s revenue and earnings associated with the 2014 and 2013 acquisitions from the respective acquisition dates in the period they were acquired, included in the consolidated statements of operations for the three and nine months ended September�30, 2014 and 2013:

�

Three�months�ended�September�30,

�

Nine�months�ended�September�30,

�

2014

�

2013

�

2014

�

2013

�

(in�thousands)

�

(in�thousands)

�

Total revenue

�

��$

5,832

�

��$

2,683

�

��$

11,032

�

��$

3,472

�

Net loss

�

(3,235)

�

(1,564)

�

(6,149)

�

(2,198)

�

5.� INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE

�

On December�10, 2013, the Company acquired a 50% ownership interest in 35 self-storage facilities located in Texas (34) and North Carolina (1)�through a newly-formed joint venture (�HHF�).� HHF paid $315.7 million for these facilities.� The Company and the unaffiliated joint venture partner, collectively the �HHF Partners,� each contributed cash equal to 50% of the capital required to fund the acquisition.� HHF was not consolidated as the entity was not determined to be a VIE and the HHF Partners have equal ownership and voting rights in the entity.� The Company accounts for its unconsolidated interest in the real estate venture using the equity method.� The Company�s investment in HHF is included in Investment in real estate venture, at equity on the Company�s consolidated balance sheets and losses attributed to HHF are presented in Equity in losses of real estate venture on the Company�s consolidated statements of operations.

�

Table of Contents

�

On May�1, 2014, HHF obtained a $100 million loan secured by the 34 self-storage facilities located in Texas that are owned by the venture. There is no recourse to the Company, subject to customary exceptions to non-recourse provisions. The loan bears interest at 3.59% per annum and matures on April�30, 2021. This financing completed the planned capital structure of HHF and proceeds (net of closing costs) of $99.2 million were distributed proportionately to the partners.

�

The amounts reflected in the following table are based on the historical financial information of the real estate venture.

�

The following is a summary of the financial position of the HHF venture as of September�30, 2014 and December�31, 2013, respectively (in thousands):

�

�	�	September�30,		�	December�31,		�
�	�	2014		�	2013		�
�	�	�		�	�		�
Assets	�	�		�	�		�
Net property	�	��$	294,329	�	��$	302,557	�
Other assets	�	7,134		�	11,688		�
Total assets	�	��$	301,463	�	��$	314,245	�
�	�	�		�	�		�
Liabilities and equity	�	�		�	�		�
Other liabilities	�	��$	4,821	�	��$	1,625	�
Debt	�	100,000		�	-		�
Equity:	�	�		�	�		�
CubeSmart	�	98,321		�	156,310		�
Joint venture partner	�	98,321		�	156,310		�
Total liabilities and equity	�	��$	301,463	�	��$	314,245	�

�

The following is a summary of results of operations of the real estate venture for the three and nine months ended September�30, 2014 (in thousands):

�

�	�	Three�months�ended September�30,		�	Nine�months�ended September�30,		�
�	�	2014		�	2014		�
�	�	�		�	�		�
Revenue	�	��$	6,874	�	��$	19,894	�
Operating expenses	�	3,108		�	8,729		�
Interest expense	�	941		�	1,552		�
Depreciation and amortization	�	6,544		�	19,529		�
Net loss	�	(3,719)		�	(9,916)		�
Company�s share of net loss	�	(1,860)		�	(4,958)		�

�

6.��UNSECURED SENIOR NOTES

�

On December�17, 2013, the Operating Partnership issued $250 million in aggregate principal amount of 4.375% unsecured senior notes due December�15, 2023 (the �2023 Senior Notes�).� On June�26, 2012, the Operating Partnership issued $250 million in aggregate principal amount of unsecured senior notes due July�15, 2022 (the �2022 Senior Notes�) which bear interest at a rate of 4.80%.� The 2023 Senior Notes along with the 2022 Senior Notes are collectively referred to as the �Senior Notes.�� The indenture under which the Senior Notes were issued restricts the ability of the Operating Partnership and its subsidiaries to incur debt unless the Operating Partnership and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more than 1.5:1 after giving effect to the incurrence of the debt.� The indenture also restricts the ability of the Operating Partnership and its subsidiaries to incur secured debt unless the Operating Partnership and its consolidated subsidiaries comply with a secured debt leverage ratio not to exceed 40% after giving effect to the incurrence of the debt.�

�

Table of Contents

�

The indenture also contains other financial and customary covenants, including a covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Operating Partnership and its consolidated subsidiaries. As of September 30, 2014, the Operating Partnership was in compliance with all of the financial covenants under the Senior Notes.

�

7.��REVOLVING CREDIT FACILITY AND UNSECURED TERM LOANS

�

On June�20, 2011, the Company entered into an unsecured term loan agreement (the �Term Loan Facility�) which consisted of a $100 million term loan with a five-year maturity (�Term Loan A�) and a $100 million term loan with a seven-year maturity (�Term Loan B�).� The Company incurred costs of $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 December�9, 2011, the Company entered into a credit facility (the �Credit Facility�) comprised of a $100 million unsecured term loan maturing in December�2014 (�Term Loan C�); a $200 million unsecured term loan maturing in March�2017 (�Term Loan D�); and a $300 million unsecured revolving facility maturing in December�2015 (�Revolver�).� The Company incurred costs of $3.4 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 June�18, 2013, the Company amended both the Term Loan Facility and Credit Facility.� With respect to the Term Loan Facility, among other things, the amendment extended the maturity and decreased the pricing of Term Loan A, while Term Loan B remained unchanged by the amendment.� On August�5, 2014, the Company further amended the Term Loan Facility (collectively with the amendment on June�18, 2013, the �Amendments�) to extend the maturity and decrease the pricing of Term Loan B.

�

Pricing on the Term Loan Facility depends on the Company�s unsecured debt credit ratings.� At the Company�s current Baa2/BBB level, amounts drawn under Term Loan A are priced at 1.30% over LIBOR, with no LIBOR floor, while amounts drawn under Term Loan B are priced at 1.15% over LIBOR, with no LIBOR floor.

�

Term�Loan�Facility�Prior�to�Amendments

�

Term�Loan�Facility�As�Amended

�

LIBOR�Spread

�

LIBOR�Spread�(1)

�

Amount

�

Maturity�Date

�

Baa3/BBB-

�

Baa2/BBB

�

Maturity�Date

�

Baa3/BBB-

�

Baa2/BBB

�

Term Loan A

�

$100 million

�

June�2016

�

1.85%

�

1.65%

�

June�2018

�

1.50%

�

1.30%

�

Term Loan B

�

$100 million

�

June�2018

�

2.00%

�

1.80%

�

January�2020

�

1.40%

�

1.15%

�

(1)�� On September�25, 2014, the Company�s unsecured debt credit rating was upgraded to Baa2 from Baa3 by Moody�s Investors Service with a stable outlook.� As a result, the LIBOR spreads were reduced, effective October�1, 2014.

�

With respect to the Credit Facility, among other things, the Amendments extended the maturities of the Revolver and Term Loan D and decreased the pricing of the Revolver, Term Loan C and Term Loan D.� Pricing on the Credit Facility depends on the Company�s unsecured debt credit ratings.� At the Company�s current Baa2/BBB level, amounts drawn under the Revolver are priced at 1.30% over LIBOR, inclusive of a facility fee of 0.20%, with no LIBOR floor, while amounts drawn under Term Loan C and Term Loan D are priced at 1.30% over LIBOR, with no LIBOR floor.

�

Credit�Facility�Prior�to�Amendments

�

Credit�Facility�As�Amended

�

LIBOR�Spread

�

LIBOR�Spread�(2)

�

Amount

�

Maturity�Date

�

Baa3/BBB-

�

Baa2/BBB

�

Maturity�Date

�

Baa3/BBB-

�

Baa2/BBB

�

Revolver

�

$300 million

�

December�2015

�

1.80%

�

1.50%

�

June�2017

�

1.60%

�

1.30%

�

Term Loan C (1)

�

$100 million

�

December�2014

�

1.75%

�

1.45%

�

December�2014

�

1.50%

�

1.30%

�

Term Loan D

�

$200 million

�

March�2017

�

1.75%

�

1.45%

�

January�2019

�

1.50%

�

1.30%

�

Table of Contents

�

(1)�� On December�17, 2013, the Company repaid the $100 million balance under Term Loan C that was scheduled to mature in December�2014.

(2)�� On September�25, 2014, the Company�s unsecured debt credit rating was upgraded to Baa2 from Baa3 by Moody�s Investors Service with a stable outlook.� As a result, the LIBOR spreads were reduced, effective October�1, 2014.

�

The Company incurred costs of $2.1 million in 2013 and $0.2 million in 2014 in connection with the Amendments and capitalized such costs as a component of loan procurement costs, net of amortization on the consolidated balance sheet.� Unamortized costs, along with costs incurred in connection with the amendments, are amortized as an adjustment to interest expense over the remaining term of the modified facilities. In connection with the repayment of Term Loan C, the Company recognized $0.4 million related to the write-off of unamortized loan procurement costs associated with the term loan.

�

As of September�30, 2014, $200 million of unsecured term loan borrowings were outstanding under the Term Loan Facility, $200 million of unsecured term loan borrowings were outstanding under the Credit Facility, and $300 million was available for borrowing on the unsecured revolving portion of the Credit Facility.� The available balance under the unsecured revolving portion of the Credit Facility is reduced by an outstanding letter of credit of $30 thousand.� In connection with a portion of the unsecured borrowings, the Company had interest rate swaps as of September�30, 2014 that fix 30-day LIBOR (see note 10).� As of September�30, 2014, borrowings under the Credit Facility and Term Loan Facility, as amended and after giving effect to the interest rate swaps, had an effective weighted average interest rate of 3.21%.

�

The Term Loan Facility and the term loan under the Credit Facility were fully drawn at September�30, 2014 and no further borrowings may be made under the term loans.� The Company�s ability to borrow under the revolving portion of the Credit Facility is subject to 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 June�30, 2010.

�

Further, under the Credit Facility and Term Loan Facility, the Company is restricted from paying distributions on the Parent Company�s common shares in excess of the greater of (i)�95% of funds from operations, and (ii)�such amount as may be necessary to maintain the Parent Company�s REIT status.

�

As of September�30, 2014, the Company was in compliance with all of its financial covenants and anticipates being in compliance with all of its financial covenants through the terms of the Credit Facility and Term Loan Facility.

�

Table of Contents

�

8.��MORTGAGE LOANS AND NOTES�PAYABLE

�

The Company�s mortgage loans and notes payable are summarized as follows:

�

�	�	Carrying�Value�as�of:					�	�	�	�	�
�	�	September�30,		�	December�31,		�	Effective	�	Maturity	�
Mortgage�Loans�and�Notes�Payable �	�	2014 �		�	2013 �		�	Interest�Rate �	�	Date �	�
�	�	(dollars�in�thousands)					�	�	�	�	�
�	�	�		�	�		�	�	�	�	�
YSI 10	�	3,770		�	3,839		�	5.87%	�	Jan-15	�
YSI 15	�	1,692		�	1,733		�	6.41%	�	Jan-15	�
YSI 52	�	4,413		�	4,548		�	5.63%	�	Jan-15	�
YSI 58	�	8,440		�	8,676		�	2.97%	�	Jan-15	�
YSI 29	�	12,691		�	12,853		�	3.69%	�	Aug-15	�
YSI 13	�	8,458		�	8,500		�	3.00%	�	Oct-15	�
YSI 20	�	54,674		�	56,373		�	5.97%	�	Nov-15	�
YSI 63	�	7,493		�	-��		�	2.82%	�	Dec-15	�
YSI 59	�	9,272		�	9,418		�	4.82%	�	Mar-16	�
YSI 60	�	3,625		�	3,670		�	5.04%	�	Aug-16	�
YSI 51	�	7,135		�	7,219		�	5.15%	�	Sep-16	�
YSI 64	�	7,952		�	-��		�	3.54%	�	Oct-16	�
YSI 62	�	7,993		�	-��		�	3.54%	�	Dec-16	�
YSI 35	�	-��		�	4,274		�	6.90%	�	Jul-19	�
YSI 33	�	10,495		�	10,688		�	6.42%	�	Jul-19	�
YSI 26	�	8,823		�	8,945		�	4.56%	�	Nov-20	�
YSI 57	�	3,097		�	3,140		�	4.61%	�	Nov-20	�
YSI 55	�	23,865		�	24,145		�	4.85%	�	Jun-21	�
YSI 24	�	28,039		�	28,523		�	4.64%	�	Jun-21	�
Unamortized fair value adjustment	�	3,922		�	3,674		�	�	�	�	�
�	�	�		�	�		�	�	�	�	�
Total mortgage loans and notes payable	�	��$	215,849	�	��$	200,218	�	�	�	�	�

�

Table of Contents

�

As of September�30, 2014 and December�31, 2013, the Company�s mortgage loans payable were secured by certain of its self-storage facilities with net book values of approximately $387 million and $371 million, respectively. The following table represents the future principal payment requirements on the outstanding mortgage loans and notes payable at September�30, 2014 (in thousands):

�

2014	�	��$	1,411	�
2015	�	103,023		�
2016	�	36,837		�
2017	�	1,784		�
2018	�	1,886		�
2019 and thereafter	�	66,986		�
Total mortgage payments	�	211,927		�
Plus: Unamortized fair value adjustment	�	3,922		�
Total mortgage indebtedness	�	��$	215,849	�

�

9.��ACCUMULATED OTHER COMPREHENSIVE LOSS

�

The following table summarizes the changes in accumulated other comprehensive loss by component for the nine months ended September�30, 2014 (dollars in thousands):

�

�	�	Unrealized�losses on�interest�rate swaps		�	Unrealized�loss�on foreign�currency translation		�	Total		�
�	�	�		�	�		�	�		�
Balance at December�31, 2013	�	��$	(10,222)	�	��$	(792)	�	��$	(11,014)	�
Other comprehensive (loss) gain before reclassifications	�	(2,214)		�	(50)		�	(2,264)		�
Amounts reclassified from accumulated other comprehensive loss	�	4,720		�(a)�	-		�	4,720		�
Net current-period other comprehensive gain (loss)	�	2,506		�	(50)		�	2,456		�
�	�	�		�	�		�	�		�
Balance at September�30, 2014	�	��$	(7,716)	�	��$	(842)	�	��$	(8,558)	�

�

(a)�� See note 10 for additional information about the effects of the amounts reclassified.

�

10.��RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

�

The Company�s use of derivative instruments is limited to the utilization of interest rate swap agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company�s operating and financial structure, as well as to hedge specific transactions. The counterparties to these arrangements are major financial institutions with which the Company and its subsidiaries may also have other financial relationships. The Company is potentially exposed to credit loss in the event of non-performance by these counterparties. However, because of the high credit ratings of the counterparties, the Company does not anticipate that any of the counterparties will fail to meet these obligations as they come due. The Company does not hedge credit or property value market risks.

�

The Company has entered into interest rate swap agreements that qualify and are designated as cash flow hedges designed to reduce the impact of interest rate changes on its variable rate debt.�� Therefore, the interest rate swaps are recorded in the consolidated balance sheet at fair value and the related gains or losses are deferred in shareholders� equity as accumulated other comprehensive loss.� These deferred gains and losses are amortized into interest expense during the period or periods in which the related interest payments affect earnings.�

�

Table of Contents

�

However, to the extent that the interest rate swaps are not perfectly effective in offsetting the change in value of the interest payments being hedged, the ineffective portion of these contracts is recognized in earnings immediately.

�

The Company formally assesses, both at inception of a hedge and on an on-going basis, whether each derivative is highly-effective in offsetting changes in cash flows of the hedged item. If management determines that a derivative is highly-effective as a hedge, then the Company accounts for the derivative using hedge accounting, pursuant to which gains or losses inherent in the derivative do not impact the Company�s results of operations.� If management determines that a derivative is not highly-effective as a hedge or if a derivative ceases to be a highly-effective hedge, the Company will discontinue hedge accounting prospectively and will reflect in its statement of operations realized and unrealized gains and losses in respect of the derivative.

�

The following table summarizes the terms and fair values of the Company�s derivative financial instruments at September�30, 2014 and December�31, 2013, respectively (dollars in thousands):

�

Fair�Value

�

Hedge

�

Notional

�

September�30,

�

December�31,

�

Product

�

Hedge�Type�(a)

�

Amount

�

Strike

�

Effective�Date

�

Maturity

�

2014

�

2013

�

Swap

�

Cash flow

�

40,000

�

1.8025%

�

6/20/2011

�

6/20/2016

�

��$

(865)

�

��$

(1,265)

�

Swap

�

Cash flow

�

40,000

�

1.8025%

�

6/20/2011

�

6/20/2016

�

(865)

�

(1,265)

�

Swap

�

Cash flow

�

20,000

�

1.8025%

�

6/20/2011

�

6/20/2016

�

(432)

�

(632)

�

Swap

�

Cash flow

�

75,000

�

1.3360%

�

12/30/2011

�

3/31/2017

�

(800)

�

(1,132)

�

Swap

�

Cash flow

�

50,000

�

1.3360%

�

12/30/2011

�

3/31/2017

�

(533)

�

(752)

�

Swap

�

Cash flow

�

50,000

�

1.3360%

�

12/30/2011

�

3/31/2017

�

(533)

�

(754)

�

Swap

�

Cash flow

�

25,000

�

1.3375%

�

12/30/2011

�

3/31/2017

�

(268)

�

(380)

�

Swap

�

Cash flow

�

40,000

�

2.4590%

�

6/20/2011

�

6/20/2018

�

(1,557)

�

(1,820)

�

Swap

�

Cash flow

�

40,000

�

2.4725%

�

6/20/2011

�

6/20/2018

�

(1,576)

�

(1,842)

�

Swap

�

Cash flow

�

20,000

�

2.4750%

�

6/20/2011

�

6/20/2018

�

(790)

�

(921)

�

400,000

�

��$

(8,219)

�

��$

(10,763)

�

(a)�Hedging unsecured variable rate debt by fixing 30-day LIBOR.

�

The Company measures its derivative instruments at fair value and records them in the balance sheet as either an asset or liability.� As of September�30, 2014 and December�31, 2013, all derivative instruments were included in accounts payable, accrued expenses and other liabilities in the accompanying consolidated balance sheets.� The effective portions of changes in the fair value of the derivatives are reported in accumulated other comprehensive income (loss).� Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company�s variable-rate debt.� The change in unrealized loss on interest rate swap reflects a reclassification of $4.8 million of unrealized losses from accumulated other comprehensive loss as an increase to interest expense during the nine months ended September�30, 2014.

�

11.��FAIR VALUE MEASUREMENTS

�

The Company applies the methods of determining fair value as described in authoritative guidance, to value its financial assets and liabilities. As defined in the guidance, fair value is based on the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

�

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

�

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

�

Table of Contents

�

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

�

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considering counterparty credit risk in its assessment of fair value.

�

Financial assets and liabilities carried at fair value as of September�30, 2014 are classified in the table below in one of the three categories described above (dollars in thousands):

�

�	�	Level�1		�	Level�2		�	Level�3		�
�	�	�		�	�		�	�		�
Interest Rate Swap Derivative Liabilities	�	� $	-	�	� $	8,219	�	� $	-	�
�	�	�		�	�		�	�		�
Total liabilities at fair value	�	� $	-	�	� $	8,219	�	� $	-	�

�

Financial assets and liabilities carried at fair value as of December�31, 2013 are classified in the table below in one of the three categories described above (dollars in thousands):

�

�	�	Level�1		�	Level�2		�	Level�3		�
�	�	�		�	�		�	�		�
Interest Rate Swap Derivative Liabilities	�	� $	-	�	� $	10,763	�	� $	-	�
�	�	�		�	�		�	�		�
Total liabilities at fair value	�	� $	-	�	� $	10,763	�	� $	-	�

�

Financial assets and liabilities carried at fair value were classified as Level 2 inputs.� For financial liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including LIBOR yield curves, bank price quotes for forward starting swaps, NYMEX futures pricing and common stock price quotes. Below is a summary of valuation techniques for Level 2 financial liabilities:

�

�� Interest rate swap derivative assets and liabilities � valued using LIBOR yield curves at the reporting date. Counterparties to these contracts are most often highly rated financial institutions, none of which experienced any significant downgrades in 2014 that would reduce the amount owed by the Company.� Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the Company�s derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the counterparties. However, as of September�30, 2014, the Company has assessed the significance of the effect of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

�

The fair values of financial instruments, including cash and cash equivalents, accounts receivable and accounts payable approximate their respective carrying values at September�30, 2014 and December�31, 2013.�� The aggregate carrying value of the Company�s debt was $1.1 billion at September�30, 2014 and December�31, 2013, while the estimated fair value of the Company�s debt was $1.1 billion at September�30, 2014 and December�31, 2013.� These estimates were based on a discounted cash flow analysis assuming market interest rates for comparable obligations at September�30, 2014 and December�31, 2013.� The Company estimates the fair value of its fixed rate debt and the credit spreads over variable market rates on its variable rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies, which is classified within level 2 of the fair value hierarchy.

�

Table of Contents

�

Rates and credit spreads take into consideration general market conditions and maturity.

�

12.� NONCONTROLLING INTERESTS

�

Interests in Consolidated Real Estate Joint Ventures

�

251 Jamaica Ave, LLC (�Jamaica Ave�) was formed to own, operate, and develop a self-storage facility in New York, NY.� The Company owns a 51% interest in Jamaica Ave and 49% is owned by another member (�Jamaica Ave Member�).� The facility is expected to commence operations during 2015.� The Jamaica Ave Member has an option to put its ownership interest in the venture to the Company for $12.5 million within the one-year period after construction of the facility is substantially complete.� Additionally, the Company has a one-year option to call the ownership interest of the Jamaica Ave Member for $12.5 million beginning on the second anniversary of the facility�s construction being substantially complete.� The Company determined that Jamaica Ave is a variable interest entity, and that the Company is the primary beneficiary.� Accordingly, the Company consolidates the assets, liabilities, and results of operations of Jamaica Ave.� At September�30, 2014, Jamaica Ave had total assets of $12.9 million and total liabilities of $6.0 million.

�

CS SNL New York Ave, LLC and 186 Jamaica Avenue, LLC, collectively known as �SNL�, were formed with a partner to own, operate and develop two self-storage facilities in the boroughs of New York, NY.� The Company owns 90% of SNL and the facilities are expected to commence operations during 2015.� The Company consolidates the assets, liabilities, and results of operations of SNL.� At September�30, 2014, SNL had total assets of $10.7 million and total liabilities of $1.1 million.� The Company has provided $0.6 million of a total $20.1 million loan commitment to SNL which is secured by a mortgage on the real estate assets of SNL.� The loan and related interest was eliminated during consolidation.

�

Shirlington Rd, LLC (�SRLLC�) was formed to own, operate, and develop a self-storage facility in Northern Virginia.� The Company owns a 90% interest in SRLLC and the facility is expected to commence operations during 2015.� The Company consolidates the assets, liabilities, and results of operations of SRLLC.� During 2013, SRLLC acquired land for development for $13.1 million. In 2014, SRLLC completed the planned subdivision of the land into two parcels and sold one parcel for $6.5 million.� No gain or loss was recorded as a result of this transaction.� SRLLC retained the second parcel of land for the development of the storage facility.� At September�30, 2014, SRLLC had total assets of $11.7 million and total liabilities of $7.6 million.� The Company has provided $6.4 million of a total $14.6 million loan commitment to SRLLC, which loan is secured by a mortgage on the real estate assets of SRLLC.� The loan and related interest was eliminated during consolidation.

�

USIFB, LLP (�USIFB�) was formed to own, operate, acquire and develop self-storage facilities in England.� The Company owns a 97% interest in the USIFB through a wholly-owned subsidiary and USIFB commenced operations at two facilities in London, England during 2008.� The Company determined that USIFB is a variable interest entity, and that the Company is the primary beneficiary.� Accordingly, the Company consolidates the assets, liabilities and results of operations of USIFB.� On December�31, 2013 the Company provided a $6.8 million (�4.1 million) loan secured by a mortgage on real estate assets of USIFB.� On June�30, 2014, one of the assets was sold and the loan was repaid with proceeds from the sale.� The loan and any related interest was eliminated during consolidation.� At September�30, 2014, USIFB had total assets of $5.9 million and total liabilities of $0.3 million.

�

Operating Partnership Ownership

�

The Company follows guidance regarding the classification and measurement of redeemable securities.� Under this guidance, securities that are redeemable for cash or other assets, at the option of the holder and not solely within the control of the issuer, must be classified outside of permanent equity/capital.� This classification results in certain outside ownership interests being included as redeemable noncontrolling interests outside of permanent equity/capital in the consolidated balance sheets.� The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions.

�

Additionally, with respect to redeemable ownership interests in the Operating Partnership held by third parties for which CubeSmart has a choice to settle the redemption by delivery of its own shares, the Operating Partnership considered the guidance regarding accounting for derivative financial instruments indexed to, and potentially settled in, a company�s own shares, to evaluate whether CubeSmart controls the actions or events necessary to presume share settlement.

�

Table of Contents

�

The guidance also requires that noncontrolling interests classified outside of permanent capital be adjusted each period to the greater of the carrying value based on the accumulation of historical cost or the redemption value.

�

Approximately 1.5% and 1.6% of the outstanding OP Units as of September�30, 2014 and December�31, 2013, respectively, were not owned by CubeSmart, the sole general partner. The interests in the Operating Partnership represented by these OP Units were a component of the consideration that the Operating Partnership paid to acquire certain self-storage facilities. The holders of the OP Units are limited partners in the Operating Partnership and have the right to require CubeSmart to redeem all or part of their OP Units for, at the general partner�s option, an equivalent number of common shares of CubeSmart or cash based upon the fair value of an equivalent number of common shares of CubeSmart. However, the partnership agreement contains certain provisions that could result in a settlement outside the control of CubeSmart and the Operating Partnership, as CubeSmart does not have the ability to settle in unregistered shares.� Accordingly, consistent with the guidance, the Operating Partnership will record the OP Units owned by third parties outside of permanent capital in the consolidated balance sheets. Net income or loss related to the OP Units owned by third parties is excluded from net income or loss attributable to Operating Partner in the consolidated statements of operations.

�

At September�30, 2014 and December�31, 2013, 2,257,486 and 2,275,730 OP units, respectively, were outstanding.� The per unit cash redemption amount of the outstanding OP units was calculated based upon the average of the closing prices of the common shares of CubeSmart on the New York Stock Exchange for the final 10 trading days of the quarter. Based on the Company�s evaluation of the redemption value of the redeemable noncontrolling interests, the Company has reflected these interests at their redemption value at September�30, 2014 and December�31, 2013, as the estimated redemption value exceeded their carrying value. The Operating Partnership recorded an increase to OP Units owned by third parties and a corresponding decrease to capital of $5.2 million and $3.3 million at September�30, 2014 and December�31, 2013, respectively.

�

13.��RELATED PARTY TRANSACTIONS

�

Affiliated Real Estate Investments

�

The Company provides management services to certain joint ventures and other related party facilities.� Management agreements provide generally for management fees of between 5-6% of cash collections at the managed facilities.� Management fees for unconsolidated joint ventures or other entities in which the Company held an ownership interest for the three and nine months ended September�30, 2014 totaled $0.2 million and $0.6 million, respectively.� The Company had no ownership interests in unconsolidated joint ventures or other entities at September�30, 2013.

�

The management agreements for certain joint ventures, other related parties and third-party facilities provide for the reimbursement to the Company for certain expenses incurred to manage the facilities.� These amounts consist of amounts due for management fees, payroll, and other expenses incurred on behalf of the facilities.� The amounts due to the Company were $1.4 million and $2.1 million as of September�30, 2014 and December�31, 2013, respectively.� Additionally, as discussed in note 12 the Company has outstanding mortgage loans receivable from consolidated joint ventures of $7.0 million and $15.8 million as of September�30, 2014 and December�31, 2013, respectively, that are eliminated for consolidation purposes.� The Company believes that all of these related-party receivables are fully collectible.

�

Corporate Office Leases

�

Subsequent to its entry into lease agreements with related parties for office space, the Operating Partnership entered into sublease agreements with various unrelated tenants for the related office space.� Each of these properties is part of Airport Executive Park, a 50-acre office and flex development located in Cleveland, Ohio, which is owned by former executives. Our independent Trustees approved the terms of, and entry into, each of the office lease agreements by the Operating Partnership.� The table below shows the office space subject to these lease agreements and certain key provisions, including the term of each lease agreement, the period for which the Operating Partnership may extend the term of each lease agreement, and the minimum and maximum rents payable per month during the term.

�

Table of Contents

�

Office�Space

�

Approximate
Square�Footage

�

Maturity�Date

�

Period�of
Extension�Option�(1)

�

Fixed�Minimum
Rent�Per�Month

�

Fixed
Maximum�Rent
Per�Month

�

The Parkview Building � 6745 Engle Road; and 6751 Engle Road

�

21,900

�

12/31/2014

�

Five-year

�

25,673

�

31,205

�

6745 Engle Road � Suite�100

�

2,212

�

12/31/2014

�

Five-year

�

3,051

�

3,709

�

6745 Engle Road � Suite�110

�

1,731

�

12/31/2014

�

Five-year

�

2,387

�

2,901

�

6751 Engle Road � Suites C and D

�

3,000

�

12/31/2014

�

Five-year

�

3,137

�

3,771

�

(1)�� Our Operating Partnership may extend the lease agreement beyond the termination date by the period set forth in this column at prevailing market rates upon the same terms and conditions contained in each of the lease agreements.

�

In addition to monthly rent, the office lease agreements provide that our Operating Partnership reimburse for certain maintenance and improvements to the leased office space.� The aggregate amount of payments incurred under these lease agreements for each of the nine months ended September�30, 2014 and 2013, was approximately $0.4 million.

�

Total future minimum rental payments due in accordance with the related party lease agreements are $0.1 million and total future cash receipts due from our subtenants are $0.1 million as of September�30, 2014.

�

14.� DISCONTINUED OPERATIONS

�

For the three and nine months ended September�30, 2014, discontinued operations relates to real estate tax refunds received as a result of appeals of previous tax assessments on six self-storage facilities that the Company sold in prior years.� For the three and nine months ended September�30, 2013, discontinued operations relates to 35 facilities sold during 2013.

�

The following table summarizes the revenue and expense information for the facilities classified as discontinued operations during the three and nine months ended September�30, 2014 and 2013 (in thousands):

�

Three�months�ended�September�30,

�

Nine�months�ended�September�30,

�

2014

�

2013

�

2014

�

2013

�

REVENUES

�

Rental income

�

-��

�

3,025

�

-��

�

10,271

Other property related income

�

-��

�

427

�

-��

�

1,445

Total revenues

�

-��

�

3,452

�

-��

�

11,716

OPERATING EXPENSES

�

Property operating expenses

�

-��

�

1,113

�

(336)

�

4,478

Depreciation and amortization

�

-��

�

727

�

-��

�

2,480

Total operating expenses

�

-��

�

1,840

�

(336)

�

6,958

OPERATING INCOME

�

-��

�

1,612

�

336

�

4,758

OTHER (EXPENSE) INCOME

�

Interest expense on loans

�

-��

�

(27)

�

-��

�

(217)

Gain on disposition of discontinued operations

�

-��

�

9,310

�

-��

�

9,538

Total discontinued operations

�

-��

�

10,895

�

336

�

14,079

�

Table of Contents

�

15.��PRO FORMA FINANCIAL INFORMATION

�

During the nine months ended September�30, 2014 and the year ended December�31, 2013, the Company acquired 22 self-storage facilities for an aggregate purchase price of approximately $269.6 million (see note 4) and 20 self-storage facilities for an aggregate purchase price of approximately $189.8 million, respectively.

�

The condensed consolidated pro forma financial information set forth below reflects adjustments to the Company�s historical financial data to give effect to each of the acquisitions and related financing activity (including the issuance of common shares) that occurred during 2014 and 2013 as if each had occurred as of January�1, 2013 and 2012, respectively.� The pro forma information presented below does not purport to represent what the Company�s actual results of operations would have been for the periods indicated, nor does it purport to represent the Company�s future results of operations.

�

The following table summarizes, on a pro forma basis, the Company�s consolidated results of operations for the nine months ended September�30, 2014 and 2013 based on the assumptions described above:

�

�	�	Nine�Months�Ended�September�30,
�	�	2014		�	2013
�	�	(in�thousands,�except�per�share�data)
�	�	�		�	�
Pro forma revenues	�	$	284,267	�	$	264,388
Pro forma net income attributable to the Company�s common shareholders	�	$	36,657	�	$	11,567
Earnings per share from continuing operations attributable to common shareholders	�	�		�	�
Basic - as reported	�	$	0.11	�	$	0.00
Diluted - as reported	�	$	0.11	�	$	0.00
Basic - as pro forma	�	$	0.25	�	$	0.09
Diluted - as pro forma	�	$	0.25	�	$	0.08

�

16.��SUBSEQUENT EVENTS

�

Subsequent to September�30, 2014, the Company acquired three self-storage facilities in Texas for an aggregate purchase price of $23.9 million.

�

On October�2, 2014, the Company amended its equity distribution agreements with various sales agents to increase the number of common shares of beneficial interest authorized for sale through its �at-the-market� equity program from 20.0 million to 30.0 million.

�

On November�3, 2014, the Company acquired the first tranche of 22 self-storage facilities as part of the HSRE Acquisition.� The facilities are located in California, Florida,�Illinois, Nevada, New York, Ohio and Rhode Island.� The aggregate purchase price for the 22 facilities was approximately $195.5 million.� The remaining four facilities are expected to close during the first quarter of 2015.

�

Table of Contents

�

ITEM�2.��MANAGEMENT�S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

�

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 and Operating Partnership�s combined Annual Report on Form 10-K for the year ended December 31, 2013.

�

Overview

�

We are 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.� The Parent Company has elected to be taxed as a REIT for U.S. federal income tax purposes.� As of September 30, 2014 and December�31, 2013, we owned 390 and 366 self-storage facilities, respectively, totaling approximately 26.4 million and 24.7 million rentable square feet, respectively.� As of September 30, 2014, we owned facilities in the District of Columbia and the following 21 states:� Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Utah and Virginia.� In addition, as of September 30, 2014, we managed 172 facilities for third parties (including 35 facilities as part of an unconsolidated real estate venture) bringing the total number of facilities which we owned and/or managed to 562.� As of September 30, 2014, the Company managed facilities in the following 22 states: Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, and Virginia.

�

We derive revenues principally from rents received from our customers who rent cubes at our 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 cubes 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.� Our approach to the management and operation of our facilities combines centralized marketing, revenue management and other operational support with local operations teams that provide 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.

�

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

�

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 slow recovery from 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.

�

We continue our focus on maximizing internal growth opportunities and selectively pursuing targeted acquisitions and developments of self-storage facilities.

�

We have one reportable segment:� we own, operate, develop, manage and acquire self-storage facilities.

�

Our self-storage facilities are located in major metropolitan and suburban areas and have numerous customers per facility.� No single customer represents a significant concentration of our revenues.� The facilities in New York, Florida, Texas and California provided approximately 17%, 17%, 10% and 8%, respectively, of total revenues for the nine months ended September 30, 2014.

�

Table of Contents

�

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.� Certain of the accounting policies used in the preparation of these consolidated financial statements are particularly important for an understanding of the financial position and results of operations presented in the historical consolidated financial statements included in this report.� A summary of significant accounting policies is also provided in the aforementioned notes to our consolidated financial statements (See note�2 to the unaudited consolidated financial statements).� 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.

�

Basis of Presentation

�

The accompanying consolidated financial statements include all of the accounts of the Company, and its majority-owned and/or controlled subsidiaries.� The portion of these entities not owned by the Company is presented as noncontrolling interests as of and during the periods presented.� All significant intercompany accounts and transactions have been eliminated in consolidation.

�

When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a variable interest entity (�VIE�), and if the Company is deemed to be the primary beneficiary, in accordance with authoritative guidance issued by the Financial Accounting Standards Board (�FASB�) on the consolidation of VIEs.� When an entity is not deemed to be a VIE, the Company considers the provisions of additional FASB guidance to determine whether a general partner, or the general partners as a group, controls a limited partnership or similar entity when the limited partners have certain rights.� The Company consolidates (i)�entities that are VIEs and of which the Company is deemed to be the primary beneficiary and (ii)�entities that are non-VIEs which the Company controls and in which the limited partners do not have substantive participating rights, or the ability to dissolve the entity or remove the Company without cause.

�

�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 39�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.� The Company allocates a portion of the purchase price to an intangible asset attributable to the value of in-place leases.� This intangible asset is generally amortized to expense over the expected remaining term of the in-place leases.� 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 for an acquired property has been allocated to above- or below-market lease intangibles.� To date, no intangible asset has been recorded for the value of customer relationships, because the Company does not have any concentrations of significant customers and the average customer turnover is fairly frequent.

�

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 an 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.

�

Table of Contents

�

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 during 2014 and 2013.

�

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.� However, each potential transaction is evaluated based on its separate facts and circumstances.� Facilities 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 customers 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 facilities 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.

�

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.

�

Table of Contents

�

On a periodic basis, management also assesses whether there are any indicators that the carrying 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 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.

�

Recent Accounting Pronouncements

�

In April 2014, the Financial Accounting Standards Board (�FASB�) issued an update to the accounting standard for the reporting of discontinued operations.� The update redefines discontinued operations, changing the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements.� This amendment becomes effective for annual periods beginning on or after December 15, 2014, and interim periods beginning on or after December 15, 2015; however early adoption is permitted.� The Company elected to adopt this guidance in 2014 and such adoption did not have a material impact on the Company�s consolidated financial position or results of operations.� The Company disposed of one asset during the nine months ended September 30, 2014, however the disposal did not meet the criteria for discontinued operations under the new guidance.

�

In May 2014, the FASB issued Accounting Standard Update (�ASU�) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

�

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 periods presented.�� We consider a property to be stabilized once it has achieved an occupancy rate representative of similar self-storage assets in the respective markets for a full year measured as of the most recent January 1 or has otherwise been placed in-service and has not been significantly damaged by natural disaster or undergone significant renovation.� We believe that same-store results are useful to investors in evaluating our performance because they provide information relating to changes in facility-level operating performance without taking into account the effects of acquisitions, developments or dispositions.� At September 30, 2014, there were 346 same-store facilities and 44 non-same-store facilities.� All of the non-same-store facilities were 2013 and 2014 acquisitions or developed facilities.

�

Table of Contents

�

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, 2014 and 2013, the Company owned 390 and 382 self-storage facilities and related assets, respectively.� The following table summarizes the change in number of owned self-storage facilities from January 1, 2013 through September 30, 2014:

�

�	�	2014	�	2013	�
�	�	�	�	�	�
Balance - January 1	�	366	�	381	�
Facilities acquired	�	10	�	1	�
Facilities developed	�	2	�	-	�
Facilities sold	�	-	�	(5)	�
Balance - March 31	�	378	�	377	�
Facilities acquired	�	9	�	9	�
Balance - June 30	�	387	�	386	�
Facilities acquired	�	3	�	4	�
Facilities sold	�	-	�	(8)	�
Balance - September 30	�	390	�	382	�
Facilities acquired	�	�	�	6	�
Facilities sold	�	�	�	(22)	�
Balance - December 31	�	�	�	366	�

�

Table of Contents

�

Comparison of the three months ended September 30, 2014 to the three months ended September 30, 2013 (in thousands)

�

Non Same-Store

�

Other/

�

Same-Store Property Portfolio

�

Properties

�

Eliminations

�

Total Portfolio

�

Increase/

�

Increase/

�

2014

�

2013

�

(Decrease)

�

Change

�

2014

�

2013

�

2014

�

2013

�

2014

�

2013

�

(Decrease)

�

Change

�

REVENUES

�

Rental income

�

75,101

�

69,918

�

5,183

�

7.4%

�

10,291

�

2,826

�

85,392

�

72,744

�

12,648

�

17.4%

�

Other property related income

�

8,321

�

7,562

�

759

�

10.0%

�

1,112

�

310

�

709

�

686

�

10,142

�

8,558

�

1,584

�

18.5%

�

Property management fee income

�

�-

�

1,558

�

1,185

�

1,558

�

1,185

�

373

�

31.5%

�

Total revenues

�

83,422

�

77,480

�

5,942

�

7.7%

�

11,403

�

3,136

�

2,267

�

1,871

�

97,092

�

82,487

�

14,605

�

17.7%

�

OPERATING EXPENSES

�

Property operating expenses

�

25,563

�

25,273

�

290

�

1.1%

�

3,928

�

1,200

�

4,131

�

3,538

�

33,622

�

30,011

�

3,611

�

12.0%

�

NET OPERATING INCOME

�

57,859

�

52,207

�

5,652

�

10.8%

�

7,475

�

1,936

�

(1,864)

�

(1,667)

�

63,470

�

52,476

�

10,994

�

21.0%

�

Property count

�

346

�

346

�

390

�

360

�

Total square footage

�

23,164

�

23,164

�

3,220

�

1,024

�

26,384

�

24,188

�

Period End Occupancy (1)

�

91.7%

�

90.0%

�

90.0%

�

79.5%

�

91.5%

�

89.6%

�

Period Average Occupancy (2)

�

92.3%

�

90.5%

�

Realized annual rent per occupied square foot (3)

�

14.05

�

13.35

�

Depreciation and amortization

�

31,622

�

28,448

�

3,174

�

11.2%

�

General and administrative

�

7,464

�

7,326

�

138

�

1.9%

�

Acquisition related costs

�

1,258

�

470

�

788

�

167.7%

�

Subtotal

�

40,344

�

36,244

�

4,100

�

11.3%

�

OPERATING INCOME

�

23,126

�

16,232

�

6,894

�

42.5%

�

OTHER INCOME (EXPENSE)

�

Interest:

�

Interest expense on loans

�

(11,772)

�

(9,968)

�

(1,804)

�

-18.1%

�

Loan procurement amortization expense

�

(566)

�

(536)

�

(30)

�

-5.6%

�

Equity in losses of real estate venture

�

(1,860)

�

(1,860)

�

-100.0%

�

Other

�

(337)

�

(22)

�

(315)

�

-1431.8%

�

Total other expense

�

(14,535)

�

(10,526)

�

(4,009)

�

-38.1%

�

INCOME FROM CONTINUING OPERATIONS

�

8,591

�

5,706

�

2,885

�

50.6%

�

DISCONTINUED OPERATIONS

�

Income from discontinued operations

�

1,585

�

(1,585)

�

-100.0%

�

Gain on disposition of discontinued operations

�

9,310

�

(9,310)

�

-100.0%

�

Total discontinued operations

�

10,895

�

(10,895)

�

-100.0%

�

NET INCOME

�

8,591

�

16,601

�

(8,010)

�

-48.3%

�

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

�

Noncontrolling interests in the Operating Partnership

�

(106)

�

(257)

�

151

�

58.8%

�

Noncontrolling interests in subsidiaries

�

(5)

�

(2)

�

(3)

�

-150.0%

�

NET INCOME ATTRIBUTABLE TO THE COMPANY

�

8,480

�

16,342

�

(7,862)

�

-48.1%

�

(1)�� Represents occupancy at September 30 of the respective year.

(2)�� Represents the weighted average occupancy for the period.

(3)�� Realized annual rent per occupied square foot is computed by dividing rental income by the weighted average occupied square feet for the period.

�

Revenues

�

Rental income increased from $72.7�million during the three months ended September 30, 2013 to $85.4�million during the three months ended September 30, 2014, an increase of $12.7�million, or 17.4%.� This increase is primarily attributable to $7.5 million of additional income from the facilities acquired in 2013 and 2014 and increases in net rental rates and average occupancy on the same-store portfolio which contributed to the $5.2 million increase in rental income during the three months ended September 30, 2014 as compared to the three months ended September 30, 2013.

�

Other property related income increased from $8.6 million during the three months ended September 30, 2013 to $10.1 million during the three months ended September 30, 2014, an increase of $1.5 million, or 18.5%.� This increase is primarily attributable to increased tenant insurance commissions on the same-store and non-same-store portfolios of $0.7 million and $0.4 million, respectively, during the three months ended September 30, 2014 as compared to the three months ended September 30, 2013.

�

Operating Expenses

�

Property operating expenses increased from $30.0�million during the three months ended September 30, 2013 to $33.6�million during the three months ended September 30, 2014, an increase of $3.6 million, or 12.0%.

�

Table of Contents

�

This increase is attributable to $2.7 million of increased expenses associated with newly acquired facilities, $0.3 million of increased expenses attributable to real estate taxes associated with the same-store portfolio and $0.6 million of increased expenses associated with the management of third-party facilities.

�

Acquisition-related costs increased from $0.5 million during the three months ended September 30, 2013 to $1.3 million during the three months ended September 30, 2014.� Acquisition-related costs are non-recurring and fluctuate based on quarterly investment activity.

�

Other Income (Expense)

�

Interest expense increased from $10.0�million during the three months ended September 30, 2013 to $11.8�million during the three months ended September 30, 2014, an increase of $1.8 million, or 18.1%.� The increase is attributable to a higher amount of outstanding debt in the 2014 period.� To fund a portion of the Company�s growth, the average debt balance during the three months ended September 30, 2014 increased approximately $85 million from the same period in 2013, from $1,065 million to $1,150 million.� In addition, the weighted average effective interest rate on our outstanding debt increased from 3.75% for the three months ended September 30, 2013 to 4.09% for the three months ended September 30, 2014.

�

Equity in losses of real estate venture was $1.9 million for the three months ended September 30, 2014 with no comparable amount during the 2013 period.� This expense is related to the Company�s share of the losses attributable to HHF, a partnership in which the Company acquired a 50% ownership interest during the fourth quarter of 2013.

�

Table of Contents

�

Comparison of the nine months ended September�30, 2014 to the nine months ended September�30, 2013 (in thousands)

�

Non�Same-Store

�

Other/

�

Same-Store�Property�Portfolio

�

Properties

�

Eliminations

�

Total�Portfolio

�

Increase/

�

Increase/

�

2014

�

2013

�

(Decrease)

�

Change

�

2014

�

2013

�

2014

�

2013

�

2014

�

2013

�

(Decrease)

�

Change

�

REVENUES

�

Rental income

�

217,574

�

203,288

�

14,286

�

7.0%

�

24,603

�

4,447

�

242,177

�

207,735

�

34,442

�

16.6%

�

Other property related income

�

24,177

�

21,763

�

2,414

�

11.1%

�

3,693

�

450

�

2,218

�

1,937

�

30,088

�

24,150

�

5,938

�

24.6%

�

Property management fee income

�

�-

�

4,431

�

3,547

�

4,431

�

3,547

�

884

�

24.9%

�

Total revenues

�

241,751

�

225,051

�

16,700

�

7.4%

�

28,296

�

4,897

�

6,649

�

5,484

�

276,696

�

235,432

�

41,264

�

17.5%

�

OPERATING EXPENSES

�

Property operating expenses

�

76,947

�

75,060

�

1,887

�

2.5%

�

9,993

�

1,842

�

11,052

�

10,738

�

97,992

�

87,640

�

10,352

�

11.8%

�

NET OPERATING INCOME

�

164,804

�

149,991

�

14,813

�

9.9%

�

18,303

�

3,055

�

(4,403)

�

(5,254)

�

178,704

�

147,792

�

30,912

�

20.9%

�

Property count

�

346

�

346

�

390

�

360

�

Total square footage

�

23,164

�

23,164

�

3,220

�

1,024

�

26,384

�

24,188

�

Period End Occupancy (1)

�

91.7%

�

90.0%

�

90.0%

�

79.5%

�

91.5%

�

89.6%

�

Period Average Occupancy (2)

�

90.9%

�

87.9%

�

Realized annual rent per occupied square foot (3)

�

13.78

�

13.31

�

Depreciation and amortization

�

90,224

�

85,824

�

4,400

�

5.1%

�

General and administrative

�

21,092

�

22,454

�

(1,362)

�

-6.1%

�

Acquisition related costs

�

3,658

�

2,233

�

1,425

�

63.8%

�

Subtotal

�

114,974

�

110,511

�

4,463

�

4.0%

�

OPERATING INCOME

�

63,730

�

37,281

�

26,449

�

70.9%

�

OTHER INCOME (EXPENSE)

�

Interest:

�

Interest expense on loans

�

(35,670)

�

(30,828)

�

(4,842)

�

-15.7%

�

Loan procurement amortization expense

�

(1,650)

�

(1,509)

�

(141)

�

-9.3%

�

Equity in losses of real estate venture

�

(4,958)

�

(4,958

)

-100.0%

�

Gain from sale of real estate

�

475

�

475

�

100.0%

�

Other

�

(1,103)

�

(282)

�

(821)

�

-291.1%

�

Total other expense

�

(42,906)

�

(32,619)

�

(10,287)

�

-31.5%

�

INCOME FROM CONTINUING OPERATIONS

�

20,824

�

4,662

�

16,162

�

346.7%

�

DISCONTINUED OPERATIONS

�

Income from discontinued operations

�

336

�

4,541

�

(4,205)

�

-92.6%

�

Gain on disposition of discontinued operations

�

9,538

�

(9,538)

�

-100.0%

�

Total discontinued operations

�

336

�

14,079

�

(13,743)

�

-97.6%

�

NET INCOME

�

21,160

�

18,741

�

2,419

�

12.9%

�

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

�

Noncontrolling interests in the Operating Partnership

�

(250)

�

(240)

�

(10)

�

-4.2%

�

Noncontrolling interests in subsidiaries

�

(14)

�

(1)

�

(13)

�

-1300.0%

�

NET INCOME ATTRIBUTABLE TO THE COMPANY

�

20,896

�

18,500

�

2,396

�

13.0%

�

(1)�� Represents occupancy at September�30 of the respective year.

(2)�� Represents the weighted average occupancy for the period.

(3)�� Realized annual rent per occupied square foot is computed by dividing rental income by the weighted average occupied square feet for the period.

�

Revenues

�

Rental income increased from $207.7�million during the nine months ended September�30, 2013 to $242.2�million during the nine months ended September�30, 2014, an increase of $34.5�million, or 16.6%.� This increase is primarily attributable to $20.2 million of additional income from the facilities acquired in 2013 and 2014 and increases in net rental rates and average occupancy on the same-store portfolio which contributed to the $14.3 million increase in rental income during the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013.

�

Other property related income increased from $24.2 million during the nine months ended September�30, 2013 to $30.1 million during the nine months ended September�30, 2014, an increase of $5.9 million, or 24.6%.� This increase is primarily attributable to increased tenant insurance commissions of $2.4 million on the same-store portfolio and $2.1 million on the non-same-store portfolio during the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013.

�

Table of Contents

�

Operating Expenses

�

Property operating expenses increased from $87.6�million during the nine months ended September�30, 2013 to $98.0�million during the nine months ended September�30, 2014, an increase of $10.4 million, or 11.8%.� This increase is primarily attributable to $8.2 million of increased expenses associated with newly acquired facilities as well as increased expenses on the same-store portfolio.� The increases in same-store expenses were associated with snow removal and utilities, due to a relatively colder winter in 2014 than in the prior year, as well as increases in real estate taxes.

�

General and administrative expenses decreased from $22.5 million for the nine months ended September�30, 2013 to $21.1 million for the nine months ended September�30, 2014, a decrease of $1.4 million, or 6.1%.� The decrease is primarily attributable to lower share based compensation expense and payroll expenses of $1.7 million.

�

Acquisition-related costs increased from $2.2 million during the nine months ended September�30, 2013 to $3.7 million during the nine months ended September�30, 2014.� Acquisition-related costs are non-recurring and fluctuate based on quarterly investment activity.� The increase was the result of the acquisition of 22 facilities in the 2014 period compared to only 14 facilities during the 2013 period.

�

Other Income (Expense)

�

Interest expense increased from $30.8�million during the nine months ended September�30, 2013 to $35.7�million during the nine months ended September�30, 2014, an increase of $4.9 million, or 15.7%.� The increase is attributable to a higher amount of outstanding debt in the 2014 period.� To fund a portion of the Company�s growth, the average debt balance during the nine months ended September�30, 2014 increased approximately $142 million from the same period in 2013, from $1,038 million to $1,180 million.� In addition, the weighted average effective interest rate on our outstanding debt increased from 3.99% for the nine months ended September�30, 2013 to 4.03% for the nine months ended September�30, 2014.

�

Equity in losses of real estate venture was $5.0 million for the nine months ended September�30, 2014 with no comparable amount during the 2013 period.� This expense is related to the Company�s share of the losses attributable to HHF, a partnership in which the Company acquired a 50% ownership interest during the fourth quarter of 2013.

�

Cash Flows

�

Comparison of the nine months ended September�30, 2014 to the nine months ended September�30, 2013

�

A comparison of cash flow from operating, investing and financing activities for the nine months ended September�30, 2014 and 2013 is as follows (in thousands):

�

�	�	Nine�Months�Ended�September�30,					�	�
�	�	2014		�	2013		�	Change
Net cash flow provided by (used in):	�	�		�	�		�	�
Operating activities	�	��$	118,932	�	��$	103,891	�	��$	15,041
Investing activities	�	��$	(218,973)	�	��$	(130,273)	�	��$	(88,700)
Financing activities	�	��$	128,129	�	��$	24,827	�	��$	103,302

�

Cash flows provided by operating activities for the nine months ended September�30, 2014 and 2013 were $118.9 million and $103.9 million, respectively, reflecting an increase of $15.0 million.� Our principal source of cash flow is from the operation of our facilities. During the nine months ended September�30, 2014, our increased cash flow from operating activities was primarily attributable to our 2013 acquisitions and increased net operating income levels on the same-store portfolio in the 2014 period as compared to the 2013 period.

�

Table of Contents

�

Cash flows used in investing activities increased from $130.3 million for the nine months ended September�30, 2013 to $219.0 million for the nine months ended September�30, 2014, reflecting an increase of $88.7 million.� The change was driven by more acquisition activity in 2014 as we acquired 14 facilities in the 2013 period for an aggregate purchase price of $133.1 million compared to 22 facilities in the 2014 period for an aggregate purchase price of $269.6 million, inclusive of $27.5 million of assumed debt.� This increase in cash flows used to acquire storage facilities was offset by $55.4 million in cash distributed from our unconsolidated joint venture, $50.6 million of which was the result of obtaining venture-level financing.

�

For the nine months ended September�30, 2014 and 2013, cash flows provided by financing activities were $128.1 million and $24.8 million, respectively, reflecting an increase of $103.3 million.� This change was driven by net proceeds of $236.0 million received from the issuance of common shares under our �at-the-market� equity program during the nine months ended September�30, 2014 compared to net proceeds of $52.5 million during the nine months ended September�30, 2013.� This increase in cash flows provided by the �at-the-market� equity program was offset by a $81.9 million net decrease in revolving credit facility borrowings during the nine months ended September�30, 2014, compared to the same period in 2013 as proceeds from our �at-the-market� equity program and cash distributed from our unconsolidated joint venture were used to repay a portion of the revolving credit facility borrowings and to fund acquisitions.

�

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 the majority 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 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, capital expenditures and the development of new facilities.� These funding requirements will vary from year to year, in some cases significantly.� In the 2014 fiscal year, we expect remaining capital expenditures to be approximately $3.0 million to $7.0 million and remaining costs associated with the development of new facilities to be approximately $12.0 million to $16.0 million.� Our currently scheduled principal payments on debt, including debt maturities and borrowings outstanding on the Credit Facility and Term Loan Facility, are approximately $1.4 million for the remainder of 2014.

�

Our most restrictive debt covenants limit the amount of additional leverage we can add; however, we believe cash flow from operations, access to equity financing, including through our �at the market� equity program, and available borrowings under our Credit Facility provide adequate sources of liquidity to enable us to execute our current business plan and remain in compliance with our covenants.

�

Our liquidity needs beyond 2014 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 the portion of our needs not covered by cash flow from operations through additional borrowings, including borrowings under our Credit Facility, sales of common or preferred shares of the Parent Company and common or preferred units of the Operating Partnership and/or cash generated through facility dispositions and joint venture transactions.

�

Table of Contents

�

We believe that, as a publicly traded REIT, we will have access to multiple sources of capital to fund our 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 will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders.� In addition, dislocation 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 will be dependent on a number of factors as well, including general market conditions for REITs and market perceptions about us.

�

As of September�30, 2014, we had approximately $31.3 million in available cash and cash equivalents.� In addition, we had approximately $300.0 million of availability for borrowings under our Credit Facility.

�

Unsecured Senior Notes

�

On December�17, 2013, the Operating Partnership issued $250 million in aggregate principal amount of unsecured senior notes due December�15, 2023 (the �2023 Senior Notes�) which bear interest at a rate of 4.375%.� On June�26, 2012, the Operating Partnership issued $250 million in aggregate principal amount of unsecured senior notes due July�15, 2022 (the �2022 Senior Notes�) which bear interest at a rate of 4.80%.� The 2023 Senior Notes along with the 2022 Senior Notes are collectively referred to as the �Senior Notes.�� The indenture under which the Senior Notes were issued restricts the ability of the Operating Partnership and its subsidiaries to incur debt unless the Operating Partnership and its consolidated subsidiaries comply with a leverage ratio not to exceed 60% and an interest coverage ratio of more than 1.5:1 after giving effect to the incurrence of the debt.� The indenture also restricts the ability of the Operating Partnership and its subsidiaries to incur secured debt unless the Operating Partnership and its consolidated subsidiaries comply with a secured debt leverage ratio not to exceed 40% after giving effect to the incurrence of the debt.� The indenture also contains other financial and customary covenants, including a covenant not to own unencumbered assets with a value less than 150% of the unsecured indebtedness of the Operating Partnership and its consolidated subsidiaries. As of September�30, 2014, the Operating Partnership was in compliance with all of the financial covenants under the Senior Notes.

�

Bank Credit Facilities

�

On June�20, 2011, we entered into an unsecured term loan agreement (the �Term Loan Facility�) which consisted of a $100 million term loan with a five-year maturity (�Term Loan A�) and a $100 million term loan with a seven-year maturity (�Term Loan B�).� We incurred costs of $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 December�9, 2011, we entered into a credit facility (the �Credit Facility�) comprised of a $100 million unsecured term loan maturing in December�2014 (�Term Loan C�); a $200 million unsecured term loan maturing in March�2017 (�Term Loan D�); and a $300 million unsecured revolving facility maturing in December�2015 (�Revolver�).� We incurred costs of $3.4 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 June�18, 2013, we amended both the Term Loan Facility and Credit Facility.� With respect to the Term Loan Facility, among other things, the amendment extended the maturity and decreased the pricing of Term Loan A, while Term Loan B remained unchanged by the amendment.� On August�5, 2014, we further amended the Term Loan Facility (collectively with the amendment on June�18, 2013, the �Amendments�), to extend the maturity and decrease the pricing of Term Loan B.

�

Pricing on the Term Loan Facility depends on our unsecured debt credit ratings.� At our current Baa2/BBB level, amounts drawn under Term Loan A are priced at 1.30% over LIBOR, with no LIBOR floor, while amounts drawn under Term Loan B are priced at 1.15% over LIBOR, with no LIBOR floor.

�

Table of Contents

�

Term�Loan�Facility�Prior�to�Amendments

�

Term�Loan�Facility�As�Amended

�

LIBOR�Spread

�

LIBOR�Spread�(1)

�

Amount

�

Maturity�Date

�

Baa3/BBB-

�

Baa2/BBB

�

Maturity�Date

�

Baa3/BBB-

�

Baa2/BBB

Term Loan A

�

$100 million

�

June 2016

�

1.85%

�

1.65%

�

June 2018

�

1.50%

�

1.30%

Term Loan B

�

$100 million

�

June 2018

�

2.00%

�

1.80%

�

January 2020

�

1.40%

�

1.15%

�

(1)	On September�25, 2014, our unsecured debt credit rating was upgraded to Baa2 from Baa3 by Moody�s Investors Service with a stable outlook.� As a result, the LIBOR spreads were reduced, effective October�1, 2014.

�

With respect to the Credit Facility, among other things, the Amendments extended the maturities of the Revolver and Term Loan D and decreased the pricing of the Revolver, Term Loan C and Term Loan D.� Pricing on the Credit Facility depends on our unsecured debt credit ratings.� At our current Baa2/BBB level, amounts drawn under the Revolver are priced at 1.30% over LIBOR, inclusive of a facility fee of 0.20%, with no LIBOR floor, while amounts drawn under Term Loan C and Term Loan D are priced at 1.30% over LIBOR, with no LIBOR floor.

�

Credit�Facility�Prior�to�Amendments

�

Credit�Facility�As�Amended

�

LIBOR�Spread

�

LIBOR�Spread�(2)

�

Amount

�

Maturity�Date

�

Baa3/BBB-

�

Baa2/BBB

�

Maturity�Date

�

Baa3/BBB-

�

Baa2/BBB

Revolver

�

$300 million

�

December 2015

�

1.80%

�

1.50%

�

June 2017

�

1.60%

�

1.30%

Term Loan C (1)

�

$100 million

�

December 2014

�

1.75%

�

1.45%

�

December 2014

�

1.50%

�

1.30%

Term Loan D

�

$200 million

�

March 2017

�

1.75%

�

1.45%

�

January 2019

�

1.50%

�

1.30%

�

(1)	On December�17, 2013, we repaid the $100 million balance under Term Loan C that was scheduled to mature in December�2014.
(2)	On September�25, 2014, our unsecured debt credit rating was upgraded to Baa2 from Baa3 by Moody�s Investors Service with a stable outlook. As a result, the LIBOR spreads were reduced, effective October�1, 2014.

�

We incurred costs of $2.1 million in 2013 and $0.2 million in 2014 in connection with the Amendments and capitalized such costs as a component of loan procurement costs, net of amortization on the consolidated balance sheet.� Unamortized costs, along with costs incurred in connection with the amendments, are amortized as an adjustment to interest expense over the remaining term of the modified facilities.� In connection with the repayment of Term Loan C, we recognized $0.4 million related to the write-off of unamortized loan procurement costs associated with the term loan.

�

As of September�30, 2014, $200 million of unsecured term loan borrowings were outstanding under the Term Loan Facility, $200 million of unsecured term loan borrowings were outstanding under the Credit Facility and $300 million was available for borrowing on the unsecured revolving portion of the Credit Facility.� The available balance under the unsecured revolving portion of the Credit Facility is reduced by an outstanding letter of credit of $30 thousand.� In connection with a portion of the unsecured borrowings, we maintained interest rate swaps as of September�30, 2014 that fixed 30-day LIBOR (see note 10).� As of September�30, 2014, borrowings under the Credit Facility and Term Loan Facility, as amended and after giving effect to the interest rate swaps, had an effective weighted average interest rate of 3.21%.

�

The Term Loan Facility and the term loan under our Credit Facility were fully drawn at September�30, 2014 and no further borrowings may be made under the term loans.� Our ability to borrow under the revolving portion of the Credit Facility is subject to 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

�

Table of Contents

�

�� Minimum tangible net worth of $821,211,200 plus 75% of net proceeds from equity issuances after June�30, 2010.

�

In addition, under the Credit Facility and Term Loan Facility, we are restricted from paying distributions on the Parent Company�s common shares in excess of the greater of (i)�95% of funds from operations, and (ii)�such amount as may be necessary to maintain the Parent Company�s REIT status.

�

As of September�30, 2014, we were in compliance with all of our financial covenants and we anticipate remaining in compliance with all of our financial covenants.

�

At The Market Equity Program

�

Pursuant to our previous sales agreement with Cantor Fitzgerald�& Co. (the �Previous Sales Agent�), dated April�3, 2009, as amended on January�26, 2011 and September�16, 2011 (as amended, the �Previous Sales Agreement�), we had a program to enable us to sell up to 20 million common shares in �at the market� offerings.� On May�7, 2013, we terminated the Previous Sales Agreement with the Previous Sales Agent and entered into separate Equity Distribution Agreements (the �Equity Distribution Agreements�) with each of Wells Fargo Securities LLC; BMO Capital Markets Corp.; Jefferies LLC; Merrill Lynch, Pierce, Fenner�& Smith Incorporated; and RBC Capital Markets, LLC (collectively, the �Sales Agents�) which enabled us to sell up to 12 million common shares in �at the market� offerings.� On May�5, 2014, the Company amended each of the Equity Distribution Agreements to increase the number of common shares the Company may sell through the Sales Agents to up to 20 million.

�

During the nine months ended September�30, 2014, we sold a total of 13.2 million common shares under the Equity Distribution Agreements at an average sales price of $18.19 per share, resulting in gross proceeds of $239.8 million under the program.� We incurred $3.8 million of offering costs in conjunction with the 2014 sales.� We used proceeds from the sales conducted during the nine months ended September�30, 2014 to fund acquisitions of storage facilities, repay outstanding debt and for general corporate purposes.� As of September�30, 2014, 1.2 million common shares remained available for issuance under the Equity Distribution Agreements.

�

Recent Developments

�

On August�25, 2014, the Operating Partnership entered into an Agreement for Purchase and Sale with certain limited liability companies controlled by HSRE REIT I and HSRE REIT II, each Maryland real estate investment trusts, to acquire (the �HSRE Acquisition�) 26 self-storage facilities for an aggregate purchase price of $223.0 million plus customary closing costs.� As of September�30, 2014, the Company had made a deposit of $5.0 million with respect to the HSRE Acquisition, which deposit is reflected in Other assets, net on the Company�s consolidated balance sheets.� The HSRE Acquisition will close in two tranches.� The Company completed its due diligence on all of the facilities and closed on the first tranche of 22 facilities on November�3, 2014.� The Company expects to close on the remaining four facilities no later than March�31, 2015.

�

On October�2, 2014, we amended each of the Equity Distribution Agreements to increase the number of common shares the Company may sell through the Sales Agents to up to 30 million. We intend to use the net proceeds from the offering of the common shares pursuant to the Equity Distribution Agreements for general business purposes, including, without limitation, facility acquisitions, developments, joint ventures, capital expenditures, working capital and other general corporate purposes.

�

On October�20, 2014, the Parent Company completed its public offering of 7,475,000 common shares at a public offering price of $19.33, which reflects the full exercise by the underwriters of their option to purchase 975,000 shares to cover over-allotments.� We received approximately $143.0 million in net proceeds from the offering after deducting the underwriting discount and other estimated offering expenses. We expect to use the net proceeds from the offering for general business purposes, including, without limitation, facility acquisitions, developments, joint ventures, capital expenditures, working capital and other general corporate purposes.

�

Table of Contents

�

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 from disposition of discontinued operations, other income, gains from remeasurement of investments in real estate ventures 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, which can vary depending upon accounting methods and the book value of assets;�and

�

�� we believe 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

�

Funds from operations (�FFO�) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance.� The April�2002 National Policy Bulletin of the National Association of Real Estate Investment Trusts (the �White Paper�), as amended, defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate and related impairment charges, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

�

Management uses FFO as a key performance indicator in evaluating the operations of our facilities. Given the nature of our business as a real estate owner and operator, we consider FFO a key measure of our operating performance that is not specifically defined by accounting principles generally accepted in the United States.� We believe that FFO is useful to management and investors as a starting point in measuring our operational performance because FFO excludes various items included in net income that do not relate to or are not indicative of our operating performance such as gains (or losses) from sales of real estate, gains from remeasurement of investments in real estate ventures, impairments of depreciable assets, and depreciation, which can make periodic and peer analyses of operating performance more difficult.

�

Table of Contents

�

Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies.

�

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 computed in accordance with GAAP, as presented in our Consolidated Financial Statements.

�

FFO, as adjusted

�

FFO, as adjusted represents FFO as defined above, excluding the effects of acquisition related costs, gains or losses from early extinguishment of debt, and non-recurring items, which we believe are not indicative of the Company�s operating results.� We present FFO, as adjusted because we believe it is a helpful measure in understanding our results of operations insofar as we believe that the items noted above that are included in FFO, but excluded from FFO, as adjusted are not indicative of our ongoing operating results.� We also believe that the analyst community considers our FFO, as adjusted (or similar measures using different terminology) when evaluating us.� Because other REITs or real estate companies may not compute FFO, as adjusted in the same manner as we do, and may use different terminology, our computation of FFO, as adjusted may not be comparable to FFO, as adjusted reported by other REITs or real estate companies.

�

The following table presents a reconciliation of net income to FFO and FFO, as adjusted, for the three and nine months ended September�30, 2014 and 2013 (in thousands):

�

Three�months�ended
September�30,

�

Nine�months�ended
September�30,

�

2014

�

2013

�

2014

�

2013

�

Net income attributable to the Company�s common shareholders

�

6,978

�

14,840

�

16,390

�

13,994

�

Add (deduct):

�

Real estate depreciation and amortization

�

Real property - continuing operations

�

31,196

�

28,069

�

88,973

�

84,789

�

Real property - discontinued operations

�

-��

�

727

�

-��

�

2,386

�

Company�s share of unconsolidated real estate venture

�

3,272

�

-��

�

9,765

�

-��

�

Gains from sales of real estate

�

-��

�

(9,310)

�

(475)

�

(9,538)

�

Noncontrolling interests in the Operating Partnership

�

106

�

257

�

250

�

240

�

FFO

�

41,552

�

34,583

�

114,903

�

91,871

�

Add:

�

Acquisition related costs

�

1,258

�

470

�

3,658

�

2,233

�

FFO, as adjusted

�

42,810

�

35,053

�

118,561

�

94,104

�

Weighted-average diluted shares and units outstanding

�

154,265

�

140,387

�

149,345

�

138,962

�

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�

Off-Balance Sheet Arrangements

�

We do not currently have any off-balance sheet arrangements, financings, or other relationships with other unconsolidated entities (other than our co-investment partnerships) or other persons, also known as variable interest entities not previously discussed.

�

ITEM�3.��QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

�

Our 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

�

Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we manage our exposure to fluctuations in market interest rates for a portion of our borrowings through the use of derivative financial instruments such as interest rate swaps or caps to mitigate our interest rate risk on a related financial instrument or to effectively lock the interest rate on a portion of our variable rate 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.

�

As of September�30, 2014, our consolidated debt consisted of $1.1 billion of outstanding mortgages, unsecured senior notes and unsecured term loans that are subject to fixed rates, including variable rate debt that is effectively fixed through our use of interest rate swaps.� As of September�30, 2014 there were no amounts of outstanding Credit Facility borrowings subject to floating rates. However, to the extent that we borrow on the revolving portion of the Credit Facility, we will then have debt subject to variable rates.� 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 increase by 100 basis points, the fair value of our outstanding fixed-rate mortgage debt, unsecured senior notes and unsecured term loans would decrease by approximately $57.1 million.� If market rates of interest decrease by 100 basis points, the fair value of our outstanding fixed-rate mortgage debt, unsecured senior notes and unsecured term loans would increase by approximately $62.1 million.

�

ITEM 4. CONTROLS AND PROCEDURES

�

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�)).

�

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�

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 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 Parent Company�s management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

�

Changes in Internal Control 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 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 Control 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 its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Operating Partnership�s internal control over financial reporting.

�

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�

PART�II. OTHER INFORMATION

�

ITEM 2.� UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

�

The�following�table�provides information�about repurchases�of�the�Parent Company�s�common�shares during�the�three�months ended�September�30,�2014:	�	Total Number�of Shares Purchased (1)	�	Average Price�Paid Per�Share		�	Total�Number�of Shares Purchased�as Part�of�Publicly Announced Plans�or Programs	�	Maximum�Number�of Shares�that�May�Yet Be�Purchased�Under the�Plans�or�Programs (2)	�
�	�	�	�	�		�	�	�	�	�
July�1- July�31	�	62	�	$	18.55	�	N/A	�	3,000,000	�
August�1- August�31	�	3,250	�	18.74		�	N/A	�	3,000,000	�
September�1- September�30	�	-	�	-		�	N/A	�	3,000,000	�
�	�	�	�	�		�	�	�	�	�
Total	�	3,312	�	$	18.74	�	N/A	�	3,000,000	�

�

_______________

�

(1)�� Represents common shares withheld by the Parent Company upon the vesting of restricted shares to cover employee tax obligations.

(2)�� On September�27, 2007, the Parent Company announced that the Board of Trustees approved a share repurchase program for up to 3.0 million of the Parent Company�s outstanding common shares.� Unless terminated earlier by resolution of the Board of Trustees, the program will expire when the number of authorized shares has been repurchased.� The Parent Company has made no repurchases under this program to date.

�

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�

ITEM 6.� EXHIBITS

�

Exhibit�No.	Exhibit�Description
10.1	Agreement for Purchase and Sale, dated August�25, 2014, by and among CubeSmart, L.P. and certain limited liability companies controlled by HSRE REIT I and HSRE REIT II (the �HSRE Purchase Agreement�). (filed herewith)
10.2*	Form�of Amendment No.�2 to Equity Distribution Agreement, dated October�2, 2014, by and among CubeSmart, CubeSmart, L.P. and each of the Sales Agents, incorporated by reference to Exhibit�1.1. to CubeSmart�s Current Report on Form�8-K, filed on October�2, 2014.
10.3	Amendment no. 1 to the HSRE Purchase Agreement, dated October�2, 2014, by and among CubeSmart, L.P. and certain limited liability companies controlled by HSRE REIT I and HSRE REIT II. (filed herewith)
10.4	Amendment no. 2 to the HSRE Purchase Agreement, dated October�7, 2014, by and among CubeSmart, L.P. and certain limited liability companies controlled by HSRE REIT I and HSRE REIT II. (filed herewith)
10.5	Amendment no. 3 to the HSRE Purchase Agreement, dated October�9, 2014, by and among CubeSmart, L.P. and certain limited liability companies controlled by HSRE REIT I and HSRE REIT II. (filed herewith)
10.6	Amendment no. 4 to the HSRE Purchase Agreement, dated October�13, 2014, by and among CubeSmart, L.P. and certain limited liability companies controlled by HSRE REIT I and HSRE REIT II. (filed herewith)
12.1	Statement regarding Computation of Ratios of Earnings to Fixed Charges of CubeSmart. (filed herewith)
12.2	Statement regarding Computation of Ratios of Earnings to Fixed Charges of CubeSmart L.P. (filed herewith)
31.1	Certification of Chief Executive Officer of CubeSmart as required by Rule�13a-14(a)/15d-14(a)�under the Exchange Act, as adopted pursuant to Section�302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
31.2	Certification of Chief Financial Officer of CubeSmart as required by Rule�13a-14(a)/15d-14(a)�under the Exchange Act, as adopted pursuant to Section�302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
31.3	Certification of Chief Executive Officer of CubeSmart, L.P., as required by Rule�13a-14(a)/15d-14(a)�under the Exchange Act, as adopted pursuant to Section�302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
31.4	Certification of Chief Financial Officer of CubeSmart, L.P., as required by Rule�13a-14(a)/15d-14(a)�under the Exchange Act, as adopted pursuant to Section�302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
32.1	Certification of Chief Executive Officer and Chief Financial Officer of CubeSmart pursuant to 18 U.S.C. Section�1350, as adopted pursuant to Section�906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)
32.2	Certification of Chief Executive Officer and Chief Financial Officer of CubeSmart, L.P., pursuant to 18 U.S.C. Section�1350, as adopted pursuant to Section�906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

�

Table of Contents

�

Exhibit�No.	Exhibit�Description
101	The following CubeSmart and CubeSmart, L.P. financial information for the nine months ended September�30, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i)�the Condensed Consolidated Balance Sheets, (ii)�the Condensed Consolidated Statements of Operations, (iii)�the Condensed Consolidated Statements of Cash Flows, and (iv)�the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text. (filed herewith)
�	�
*	Incorporated herein by reference as above indicated.

�

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�

SIGNATURES OF REGISTRANT

�

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

�

�	CUBESMART
�	(Registrant)
�	�	�
�	�	�
Date: November�5, 2014	By:	�/s/ Christopher P. Marr	�
�	Christopher P. Marr, Chief Executive Officer
�	(Principal Executive Officer)
�	�	�
�	�	�
�	�	�
Date: November�5, 2014	By:	�/s/ Timothy M. Martin	�
�	Timothy M. Martin, Chief Financial Officer
�	(Principal Financial Officer)

�

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�

SIGNATURES OF REGISTRANT

�

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

�

�	CUBESMART, L.P.
�	(Registrant)
�	�	�
�	�	�
Date: November�5, 2014	By:	�/s/ Christopher P. Marr	�
�	Christopher P. Marr, Chief Executive Officer
�	(Principal Executive Officer)
�	�	�
�	�	�
�	�	�
Date: November�5, 2014	By:	�/s/ Timothy M. Martin	�
�	Timothy M. Martin, Chief Financial Officer
�	(Principal Financial Officer)

�

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�

EXHIBIT�LIST

�

Exhibit�No.	Exhibit�Description
10.1	Agreement for Purchase and Sale, dated August�25, 2014, by and among CubeSmart, L.P. and certain limited liability companies controlled by HSRE REIT I and HSRE REIT II (the �HSRE Purchase Agreement�).
10.3	Amendment no. 1 to the HSRE Purchase Agreement, dated October�2, 2014, by and among CubeSmart, L.P. and certain limited liability companies controlled by HSRE REIT I and HSRE REIT II.
10.4	Amendment no. 2 to the HSRE Purchase Agreement, dated October�7, 2014, by and among CubeSmart, L.P. and certain limited liability companies controlled by HSRE REIT I and HSRE REIT II.
10.5	Amendment no. 3 to the HSRE Purchase Agreement, dated October�9, 2014, by and among CubeSmart, L.P. and certain limited liability companies controlled by HSRE REIT I and HSRE REIT II.
10.6	Amendment no. 4 to the HSRE Purchase Agreement, dated October�13, 2014, by and among CubeSmart, L.P. and certain limited liability companies controlled by HSRE REIT I and HSRE REIT II.
12.1	Statement regarding Computation of Ratios of Earnings to Fixed Charges of CubeSmart.
12.2	Statement regarding Computation of Ratios of Earnings to Fixed Charges of CubeSmart L.P.
31.1	Certification of Chief Executive Officer of CubeSmart as required by Rule�13a-14(a)/15d-14(a)�under the Exchange Act, as adopted pursuant to Section�302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer of CubeSmart as required by Rule�13a-14(a)/15d-14(a)�under the Exchange Act, as adopted pursuant to Section�302 of the Sarbanes-Oxley Act of 2002.
31.3	Certification of Chief Executive Officer of CubeSmart, L.P., as required by Rule�13a-14(a)/15d-14(a)�under the Exchange Act, as adopted pursuant to Section�302 of the Sarbanes-Oxley Act of 2002.
31.4	Certification of Chief Financial Officer of CubeSmart, L.P., as required by Rule�13a-14(a)/15d-14(a)�under the Exchange Act, as adopted pursuant to Section�302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer of CubeSmart pursuant to 18 U.S.C. Section�1350, as adopted pursuant to Section�906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Executive Officer and Chief Financial Officer of CubeSmart, L.P., pursuant to 18 U.S.C. Section�1350, as adopted pursuant to Section�906 of the Sarbanes-Oxley Act of 2002.
101	The following CubeSmart and CubeSmart, L.P. financial information for the nine months ended September�30, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i)�the Condensed Consolidated Balance Sheets, (ii)�the Condensed Consolidated Statements of Operations, (iii)�the Condensed Consolidated Statements of Cash Flows, and (iv)�the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.

�

Exhibit�10.1

�

AGREEMENT FOR PURCHASE AND SALE

�

This Agreement for Purchase�& Sale (�Contract�) is entered into on August�25, 2014 (the �Effective Date�) by and between CubeSmart, L.P., or its assigns (�Purchaser�) and the titleholding entities scheduled on the signature pages�hereto and identified as the �Group One Seller� (individually or collectively, as the text so requires, referred to herein as �Group One Seller�) and the titleholding entities scheduled on the signature pages�hereto and identified as the �Group Two Seller� (individually or collectively referred to herein as �Group Two Seller� along with the Group One Seller, referred to herein as �Seller�).

�

1.�� Purchase and Sale.

�

a.�� Purchaser agrees to purchase and take title to each Facility and Seller agrees to sell, assign, transfer and convey, at the price of Two Hundred Twenty Three Million Dollars ($223,000,000) (�Purchase Price�), all of Seller�s right, title and interest in and to the operating and real estate assets related to those certain twenty-six (26) self-service storage facilities, consisting of approximately 16,566 storage units and containing approximately 1,931,195 collective square feet of self-storage space and located at the addresses set forth on Exhibit�L (each a �Facility� and collectively, the �Facilities�).�� The real property is more particularly described on Exhibits�A-1 to A-26 attached hereto. The real property, the Facilities and the personal property are collectively referred to as the �Property�.� Each Property is identified as either a �Group One Property� or �Group Two Property� and the related classification is listed opposite its name on Exhibit�L.� The portion of the purchase price applicable to the Group One Properties is One Hundred Ninety Five Million Five Hundred Thousand Dollars ($195,500,000) (�Group One Purchase Price�) and the portion of the purchase price applicable to the Group Two Properties is Twenty Seven Million Five Hundred Thousand Dollars ($27,500,000).

�

b.�� Included in the Purchase Price is the total compensation to be paid by Purchaser to Seller for any sign easements and leases (including without limitation for storage tenants, cell towers, billboards or any other use) and all of the personal property owned by Seller and used in connection with the operation of the Facilities as well as any accounts receivable not credited to Seller pursuant to Section�12 of this Contract and any general intangibles, telephone numbers, and, to the extent assignable, guarantees, warranties, permits, and licenses similarly owned or used by Seller, all as of the Closing Date (as defined herein).

�

2.�� Purchase Price and Escrow.

�

a.�� The parties shall each execute three (3)�copies of this Contract and three (3)�copies of the Escrow Agreement, a copy of which is attached hereto as Exhibit�B, and shall deliver them to Land Service USA,�Inc Attention:� M Gordon Daniels, Principal, 1835 Market Street, Suite�420, Philadelphia, PA 19103 (the �Title Agency�).� Seller shall simultaneously send to Purchaser via facsimile or electronic mail a copy of the transmittal letter, delivering the executed agreements to the Title Agency.�� Within five (5)�days after the Title Agency has received the executed copies of this Contract and the Escrow Agreement from Seller, Purchaser shall deliver to the Title Agency a check or wire transfer of immediate federal funds in the amount of Five Million Dollars ($5,000,000) as earnest money (together with any interest earned thereon �Group One Earnest Money�).� Upon receipt of the Group One Earnest Money, the Title Agency will deliver an executed Contract and Escrow Agreement to Seller and Purchaser via electronic mail.� The Group One Earnest Money shall be allocated to Group One Property.� The Title Agency shall deposit the Group One Earnest Money in an interest-bearing account until the Group One Closing (as hereinafter defined) or as otherwise provided in this Contract, all in accordance with the terms of this Contract and the Escrow Agreement.

�

b.�� Within two (2)�business days after the Disapproval Date, Purchaser shall deliver to the Title Agency either a letter of credit in the amount of Five Million Dollars ($5,000,000) or a check or wire transfer of immediate federal funds in the amount of Five Million Dollars ($5,000,000) as an additional earnest money deposit (together with any interest earned thereon �Group Two Earnest Money�).� Upon receipt of the Group Two Earnest Money, the Title Agency will deliver notification of receipt of the Group Two Earnest Money to Seller and Purchaser via electronic mail.� The Group Two Earnest Money shall be allocated to Group Two Property.

�

The Title Agency shall deposit the Group Two Earnest Money in an interest-bearing account until the Group Two Closing (as hereinafter defined) or as otherwise provided in this Contract, all in accordance with the terms of this Contract and the Escrow Agreement. Earnest Money shall be defined as the sum of Group One Earnest Money and Group Two Earnest Money.

�

c.�� On the Group One Closing Date (as hereinafter defined), Purchaser shall pay the Group One Purchase Price (inclusive of all Group One Earnest Money and interest accrued thereon), adjusted in accordance with the prorations as set forth in Section�12 below, by cashier�s check or wire transfer of available federal funds.

�

d.�� On the Group Two Closing Date (as hereinafter defined), Purchaser shall pay the Group Two Purchase Price (inclusive of all Group Two Earnest Money and interest accrued thereon), adjusted in accordance with the prorations as set forth in Section�12 below, by cashier�s check or federally wired funds.

�

3.�� Items to be Furnished by Seller.

�

a.�� Within five (5)�days following the Effective Date (the �Delivery Date�), except as it relates to Subparagraph (b)�below and except to the extent heretofore provided to Purchaser, Seller shall deliver to Purchaser (or make available to Purchaser through an electronic e-room) true and correct copies of the items listed on Exhibit�C attached hereto.� Purchaser shall have the right to conduct such non-invasive inspections of the Property as Purchaser may deem necessary in its sole discretion, subject to the terms hereof and all at Purchaser�s expense.� Purchaser shall not be permitted to conduct any so-called Phase II Environmental Impact Study (a �Phase II�) or any other invasive or intrusive testing of the Property without first obtaining Seller�s written approval, which may be conditioned, withheld or delayed in Seller�s sole and absolute discretion.� Purchaser agrees to keep the subject matter of any studies or reports in conducts in connection with Purchaser�s inspections confidential.

�

b.�� Purchaser acknowledges and agrees that Purchaser�s affiliate has been the property manager (�Property Manager�) of those certain Facilities identified on Exhibit�L (each a �Managed Property�), since April�2010.� All employees of a Managed Property are employees of Purchaser and not of the Seller.� The Property Manager is an affiliate of Purchaser and through its affiliate, Purchaser represents that it has had and will have reasonable access and opportunity to examine the Managed Property, the books, records, contracts and other documentation related to the Managed Property.� For each Managed Property, Seller will not be required to deliver to Purchaser items 1,2,3,4,9,11,12,14,15, and 17 set forth on Exhibit�C.

�

c.�� Purchaser shall have until 5:00�p.m. Eastern Time on the date that is thirty-five (35) days following the Effective Date (�Disapproval Date�) to either approve or disapprove the Property for any reason or no reason in Purchaser�s sole and absolute discretion, by sending written notice by facsimile, electronic mail, or overnight courier to Seller and the Title Agency.� In the event no notice is sent approving of the purchase of the Property on or before to the Disapproval Date, Purchaser shall be deemed to have disapproved the Property and terminated this Contract effective as of the Disapproval Date, and neither party shall have further obligations or liability to the other in accordance with this Contract and the Escrow Agreement, except as otherwise expressly provided herein.� For the avoidance of doubt, Purchaser�s approval or disapproval of the Property shall apply collectively to all of the Facilities, and Purchaser shall not be permitted to approve less than all of the Facilities and disapprove the remaining Facility(ies).� If Purchaser disapproves the Property or is deemed to have disapproved the Property in accordance with this Section, then all Group One Earnest Money shall be returned to Purchaser and Purchaser shall immediately return to Seller all documents and items received from or on behalf of Seller.� If Purchaser approves the Property, the Group One Earnest Money shall not be returned to Purchaser pursuant to this Section, but Purchaser shall deposit the� Group Two Earnest Money as provided above and all said Earnest Money shall become non-refundable to Purchaser for any reason other than a Seller default hereunder or a failure of a Purchaser Condition Precedent (as hereinafter defined) and otherwise Earnest Money shall be dealt with in accordance with the other provisions of this Contract.� Even after the approval of the Property, Seller shall promptly furnish Purchaser such information as Purchaser shall reasonably request from time to time up to the Closing Date.� If Seller does not deliver any of the items listed on Exhibit�C to Purchaser by the Delivery Date, Seller shall make such late delivery immediately following discovery of the omission.

�

d.�� Purchaser�s right to enter onto the Property for purposes of investigating the condition of the Property (and not to act in its position as Property Manager) is subject to the following:� (i)�such entry shall be at Purchaser�s sole risk, cost and expense and all inspections of whatever nature shall be performed only by qualified engineers and contractors and in accordance with all applicable laws and regulations; (ii)�Purchaser shall furnish Seller with proof satisfactory to Seller that, prior to performing or causing to perform any inspection of the Property, Purchaser or Purchaser�s representatives shall obtain liability insurance coverage pursuant to a liability insurance policy satisfactory to Seller, naming Seller as a certificate holder and as an additional insured thereunder and having a single limit of not less than One Million Dollars ($1,000,000.00); and (iii)�Purchaser shall indemnify, defend and hold Seller, its subsidiaries, affiliates, and their respective officers, principals, directors and employees, harmless of, and from any claim, proceeding, suit, damage, liability, loss, cost, charge or expense or any other liability of every nature, kind and description whatsoever (including, without limitation, reasonable attorneys� fees and expenses) incurred or suffered by any of the foregoing entities or persons by reason of, or resulting from or arising out of, any activity, including, without limitation, tests, inspections, studies and/or investigations, performed or caused to be performed by Purchaser on the Property.� This indemnification obligation shall survive the termination of this Contract and the Closing.� Any claim for damages resulting from Purchaser�s due diligence activities shall not be limited to the liquidated damages set forth in Section�15.

�

e.�� If Purchaser determines, in its reasonable discretion based on a recommendation in a Phase I Environmental Impact Study, that a Phase II is necessary to resolve certain environmental issues and Seller approves such Phase II as set forth above, Purchaser shall have the right, in its sole and absolute discretion, to extend the Disapproval Date up to an additional fourteen (14) days solely for the purpose of investigating said environmental issues (the �Extension Right�) by providing notice to Seller via electronic mail or facsimile; provided, however, that any termination right exercised by Purchaser pursuant to the Extension Right shall be limited to a Material Adverse Condition (defined below) relating to an environmental matter or condition (or environmental matters or conditions) that is/are identified in the Phase II.� In furtherance of the foregoing, if Purchaser does not terminate this Contract pursuant to its rights under Section�3.c. above on or before the expiration of the original Disapproval Date (not taking into account any exercise of the Extension Rights set forth in this subparagraph e.), and Purchaser elects to extend the Disapproval Date pursuant to its rights under this subparagraph e. to perform a Phase II on certain Facilities (such Facilities being referred to herein as the �Phase II Facilities�), then Purchaser shall be deemed to have approved the condition of all other Facilities (the �Non-Phase II Facilities�) and Purchaser shall be deemed to have waived any rights to terminate this Contract pursuant to Sections 3, 5 and 6 hereof as it relates to the Non-Phase II Facilities regardless of whether or not Purchaser has delivered a notice of Purchaser�s approval pursuant to paragraph 3.c. above.� As it relates to any extension of the Disapproval Date for purposes of conducting a Phase II on the Phase II Facilities, Purchaser�s right to terminate this Contract under this subsection e. shall not be limited to the Phase II Facilities but if exercised as provided herein shall be a termination of the entire Contract.� If after conducting the Phase II assessment(s)�as contemplated herein, Purchaser determines that a Material Adverse Condition exists, then Purchaser shall have the right to deliver to Seller on or before 5:00pm Chicago time on the last day of the extended Disapproval Date written notice (�Notice of MAC�) expressing Purchaser�s election to terminate this Contract based on a Material Adverse Condition.� If requested by Seller, Purchaser shall provide to Seller a true, correct and complete copy of any such applicable Phase II assessment� and other evidence reasonably satisfactory to Seller that a Material Adverse Condition exists.� In the absence of any such written Notice of MAC as and when described above Purchaser shall be deemed to have accepted the condition of all Facilities and waived its rights pursuant to Sections 3, 5 and 6 hereof as it relates to all Facilities.� Notwithstanding anything to the contrary contained herein, if Purchaser timely provides the written Notice of MAC as provided above, then Seller shall have the right in Seller�s sole and absolute discretion (to be exercised by Seller by written notice to Purchaser not later than five (5)�Business Days after Seller�s receipt of the written Notice of MAC) to elect to convey to Purchaser the Facilities where a Material Adverse Condition does not exist (the �Non-MAC Facilities�), whereupon this Contract shall remain in full force and effect as it relates to the Non-MAC Facilities and Purchaser and Seller shall proceed to close all Non-MAC Facilities based on the Facility Factors contained in Exhibit�M hereto as it relates to the calculation of the Purchase Price under this Contract, and those Facilities where an MAC does exist shall not be conveyed to Purchaser as part of the Closing hereunder.� If Seller does not timely provide such written notice as provided in the immediately preceding sentence, then this Contract shall automatically terminate at 5:00pm Chicago time on the fifth (5th) Business Day following Seller�s receipt of the Notice of MAC, and any portion of the Earnest Money theretofore deposited by Purchaser shall be promptly refunded to Purchaser.� For purposes of this Contract, a Material Adverse Condition shall mean one or more environmental conditions identified in the Phase II that require actual remediation or abatement and which Purchaser�s environmental consultant estimates in its good faith professional judgment that the cost to perform such actual remediation or abatement in compliance with applicable environmental requirements will exceed Two Hundred Seventy-Five Thousand Dollars ($275,000) in the aggregate.

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f.�� Promptly after each entry onto the Property, Purchaser shall restore the Property to substantially the same condition as it was in prior to any such entry.

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4.�� Operations Before Closing.� Prior to Closing (as hereinafter defined), Seller shall operate, maintain, manage and lease the Property in the same manner as existed prior to the execution of this Contract.

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5.�� Title Insurance.� Promptly after receipt of a fully-executed copy of this Contract and the Escrow Agreement, Purchaser shall order from the Title Agency a title commitment for each of the Facilities (such title commitments being collectively referred to herein as the �Title Commitment�) for an owner�s extended coverage title insurance policy to be delivered to Purchaser and, on or before the date which is five (5)�days prior to the Disapproval Date, Purchaser shall notify Seller of any defects in title shown on such Title Commitment to which Purchaser objects (each, a �Title Defect�).� Purchaser will pay, at Closing, the premium for the Owner�s Title Insurance Policy as defined in Exhibit�E.� Seller shall notify Purchaser of any such defects that it does not intend to cure and shall use reasonable efforts to act promptly and diligently cure any such remaining defects at its sole cost and expense prior to Closing.� If such Title Defects consist of (1)�mortgages, deeds of trust or tax liens, (2)�other liens or charges in a fixed sum (or capable of computation as a fixed sum) caused by, through or under Seller (the �Seller Liquidated Liens�), or (3)�any other monetary liens of record in an amount not to exceed Five Hundred Thousand Dollars ($500,000.00) in the aggregate (the �Non-Seller Liquidated Liens�), then, Seller shall be obligated to pay and discharge each of them, and the Title Agency is accordingly authorized to pay and discharge such Title Defects at Closing.� Notwithstanding anything herein to the contrary, if Seller (X)�is unable to or does not cure these defects by Closing, (Y)�provides written notice to Purchaser at an earlier date that Seller is unable to or elects not to cure any such items, or (Z)�is unwilling to remove, discharge, bond or release any Non-Seller Liquidated Liens in excess of Five Hundred Thousand Dollars ($500,000.00), Purchaser shall have the right, in its sole and absolute discretion, and as its sole remedy therefor, either to:� (i)�terminate this Contract and receive a refund of its Earnest Money, in which event neither party shall have any further obligation or liability to the other in accordance with this Contract, except for such liability and obligations that expressly survive the termination of this Contract, or (ii)�waive such defects and proceed to Closing subject to such Title Defects. For the avoidance of doubt, Purchaser�s election of clause (i)�or clause (ii)�above shall apply collectively to all of the Facilities, and Purchaser shall not be permitted to terminate the Contract with respect to less than all of the Facilities and waive Title Defects with respect to the remaining Facility(ies).� Without limiting the foregoing, Purchaser acknowledges and agrees that, in the event Purchaser elects to proceed under clause (ii)�above, with the sole exception of Liquidated Liens, all matters of title listed on the Title Commitment which Seller has not agreed to cure or does not cure, shall be deemed to be permitted title exceptions which Seller shall be entitled to take exception from in the special warranty deed (�Deed�) given by Seller to Purchaser at Closing (�Permitted Exceptions�).� If Purchaser elects to terminate this Contract pursuant to clause (i)�above, Purchaser�s written notice shall be delivered no later than the first to occur of (a)�seven (7)�days after Seller�s written notice that Seller is unable to or elects not to cure any such items, and (b)�Closing.� If Purchaser fails to provide such timely written termination notice, Purchaser shall be deemed to have elected to proceed under clause (ii)�above.

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6.�� Survey.� Purchaser shall order, at its sole cost and expense, a current as-built survey for each of the Facilities of the Property depicting all easements, encroachments and other matters of record and certified to Purchaser, its general partner and the Title Agency (such surveys being collectively referred to herein as the �Survey�), and such Survey shall be in form sufficient to enable the Title Agency to delete the survey exception from the Owner�s Title Insurance Policy.� The Survey shall be certified and delivered to Purchaser, its general partner, and the Title Agency, and, on or before the Disapproval Date,� Purchaser shall notify Seller if such Survey reflects any matter adversely affecting the Property, as determined by Purchaser in its sole discretion (each a �Survey Defect�).� Any Survey Defect shall be treated in the same manner as Title Defects and Purchaser shall have the same remedies, pursuant to Section�5.

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7.�� [INTENTIONALLY OMITTED]

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8.�� [INTENTIONALLY OMITTED]

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9.�� [INTENTIONALLY OMITTED]

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10.�� Conditions Precedent To Closing.

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a.�� Purchaser�s obligations hereunder are subject to the satisfaction of the following conditions precedent and the compliance by Seller with the following covenants:

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1.�� Seller�s Deliveries.� Each Facility Seller shall have delivered to or for the benefit of the Purchaser, as the case may be, on or before the Group One Closing Date or Group Two Closing Date, as applicable, all of the documents and other information required of such Seller as set forth on Exhibit�E.

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2.�� Representations, Warranties and Covenants; Obligations of Seller; Certificate.� All of the Seller�s representations and warranties made in this Contract shall be true and correct both as of the Effective Date and as of the Group One Closing Date (as it relates to the Group One Properties) or Group Two Closing Date (as it relates to the Group Two Properties), as applicable, as if then made, Seller shall have performed all of its covenants and other obligations under this Contract and Seller shall have executed and delivered to Purchaser at the Group One Closing Date (as it relates to the Group One Properties) or Group Two Closing Date (as it relates to the Group Two Properties), as applicable, a certificate to the foregoing effect.

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3.�� Title Insurance.� Good and marketable fee simple title to the Real Property shall be insurable as such by the Title Agency.� An Owner�s 2006 ALTA Form�title insurance policy (the �Title Insurance Policy�) with extended coverage or any Title Defects other than those that have been waived by Purchaser, shall be issued to Purchaser, at Purchaser�s sole cost and expense, in the amount of the Purchase Price.

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4.�� Land Use.� The current use and occupancy of the Property as a self-storage facility shall be permitted as a matter of right as a principal use under all laws applicable thereto without the necessity of any special use permit, special exception or other special permit, permission or consent; provided however, that if Purchaser does not terminate this Contract at the Disapproval Date, this condition shall be deemed waived unless, subsequent to the Disapproval Date, there has been a material adverse change with respect to the subject matter of this condition.

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b.�� Seller�s obligations hereunder are subject to the satisfaction of the following conditions precedent and the compliance by Purchaser with the following covenants:

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1.�� Purchaser�s Deliveries.� Purchaser shall have delivered to or for the benefit of the Seller, as the case may be, on or before the Group One Closing Date or the Group Two Closing Date, as applicable, all of the documents and other information required of Purchaser as set forth on Exhibit�F.

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2.�� Representations, Warranties and Covenants; Obligations of Purchaser; Certificate.� All of the Purchaser�s representations and warranties made in this Contract shall be true and correct both as of the Effective Date and as of the Group One Closing Date (as it relates to the Group One Properties) or Group Two Closing Date (as it relates to the Group Two Properties), as applicable, as if then made, Purchaser shall have performed all of its covenants and other obligations under this Contract and Purchaser shall have executed and delivered to Seller at the Group One Closing Date (as it relates to the Group One Properties) or Group Two Closing Date (as it relates to the Group Two Properties), as applicable, a certificate to the foregoing effect.

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c.�� If any condition precedent set forth above in this Section�10 is neither satisfied nor waived by the Group One Closing Date or the Group Two Closing Date, as applicable, then the party benefited by such condition may terminate this Contract by giving a written notice of termination to the other party and the Title Agency specifying the condition which has not been satisfied, or elect to close, notwithstanding the non-satisfaction of such condition, in which event such party shall be deemed to have waived any such condition.� If this Contract is terminated as set forth in this Section�10 and the failure of the condition giving rise to the termination is not otherwise a default of a party�s obligations hereunder, then the Earnest Money shall be returned to Purchaser and neither party shall have any further liability to the other except for such liability as expressly survives the termination of this Contract.

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11.�� Damage, Casualty, Condemnation.

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a.�� If one or more Properties suffer damage as a result of any casualty or condemnation prior to the Group One Closing Date and can be restored to substantially their respective condition as of the Effective Date for Two Million Dollars ($2,000,000) or less (the �Damage Threshold�), then the applicable Facility Seller(s)�shall expeditiously commence and complete the restoration in a good and workmanlike manner.� If the cost of repair exceeds the Damage Threshold in the aggregate over all Properties, Purchaser can elect, by notice to Seller, to either:� (a)�terminate this Contract, in which event neither party shall have any further liability to the other hereunder except for such liability as expressly survives the termination of this Contract; (b)�require the applicable Facility Seller(s)�to restore the damage, provided that sufficient insurance proceeds are available to such Facility Seller(s); or (c)�proceed with Closing, in which case such Facility Seller(s)�shall assign the insurance proceeds to Purchaser, including applicable business interruption insurance proceeds applicable to the period after the applicable Closing Date.� If restoration of the damage is not completed within five (5)�days prior to the Closing Date and the insurance proceeds cannot be assigned to Purchaser, then the Closing Date will be extended until a date which is five (5)�days after substantial completion of the restoration.� All risks of loss to the Properties are borne by Seller prior to Closing.� Notwithstanding anything to the contrary contained in this Section�11, from and after the Group One Closing Date, (i)�the Damage Threshold for the Group Two Properties shall be Two Hundred Fifty Thousand Dollars ($250,000) (ii)�references to the �Group One Closing Date� shall mean the Group Two Closing Date, (iii)�references to the �Properties� shall mean the Group Two Properties and (iv)�the termination right in subparagraph (a)�above shall relate solely to the Group Two Properties and the Group Two Closing.

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b.�� Seller and Purchaser each expressly waive the provisions of California Civil Code �1662 and hereby agree that the provisions of this Section�11 hereof shall govern their obligations in the event of damage or destruction to the Property or condemnation of all or part of the Property.

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12.�� The Closing.

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a.�� The Closing of the Group One Property (�Group One Closing�) shall be coordinated through the Title Agency on a date which is fifteen (15) days following Purchaser�s delivery to Seller and Title Agency of its written approval of the purchase of the Property pursuant to Section�3 (�Group One Closing Date�) or such other earlier date as may be agreed to by Seller and Purchaser; provided, however, that Group One Closing Date shall be subject to a single fifteen (15) day extension if Purchaser exercises the Extension Right pursuant to Section�3.e. above, in which event the Closing Date shall be fifteen (15) days after the expiration of the fourteen (14) day Extension Right period.� In no event shall the Group One Closing occur later than October�31, 2014 (the �Group One Outside Closing Date�).� At the Group One Closing, Purchaser shall deliver to each Group One Seller the applicable portion of the Group One Purchase Price and those items listed on Exhibit�D attached hereto, and each Group One Seller shall provide Purchaser with the applicable items listed in Exhibit�E attached hereto, and title to the Group One Property shall be conveyed to Purchaser free and clear of any and all liens, restrictions, encroachments and other encumbrances other than those approved or deemed approved by or waived by Purchaser pursuant to Section�5 of this Contract.

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b.�� The Closing of the Group Two Property (�Group Two Closing�) shall be coordinated through the Title Agency on a date which is simultaneous with Group Two Seller�s repayment of the outstanding secured debt encumbering the Group Two Property (�Group Two Closing Date�) or such other date as may be agreed to by Seller and Purchaser; provided, however, that Group Two Closing Date shall occur no later than March�31, 2015 (the �Group Two Outside Closing Date�).� At the Group Two Closing, Purchaser shall deliver to each Group Two Facility Seller the applicable portion of the Group Two Purchase Price and those items listed on Exhibit�D attached hereto, and each Group Two Facility Seller shall provide Purchaser with the applicable items listed in Exhibit�E attached hereto, and title to the Group Two Property shall be conveyed to Purchaser free and clear of any and all liens, restrictions, encroachments and other encumbrances other than those approved or deemed approved by or waived by Purchaser pursuant to Section�5 of this Contract.

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c.�� The proration date (�Proration Date�) shall be the Group One Closing Date for the Group One Property or the Group Two Closing Date for the Group Two Property. The following items will be prorated as of�12:01�a.m.�on the Proration Date:� income and operating expense items including, but not limited to taxes, utilities, rents, and any prepaid agreements, subject to Purchaser�s reasonable approval prior to the Disapproval Date, but not capital expense items and debt service payments.� Notwithstanding the foregoing, any taxes � including penalties, fees and interest, or assessments levied against the Property with respect to any period of time prior to the Group One Closing Date or Group Two Closing Date, as applicable, shall remain and be the obligation of Seller, if not provided for in the prorations, and Seller shall promptly pay, or reimburse Purchaser, as applicable, all such taxes � including penalties, fees and interest, or assessments prior to their delinquency, such obligation of Seller�s to survive the applicable Group One Closing Date or Group Two Closing Date.� Fifty percent (50%) of the amount of all delinquent rents due and payable under any leases of space at the Property and delinquent for thirty (30) days or less shall be credited to the Seller at the applicable Group One Closing Date or Group Two Closing Date and Seller shall assign all of its right, title and interest in all delinquent rents at the applicable Group One Closing Date or Group Two Closing Date.� Delinquent rents means all rent due and payable as of the date of the Proration Date and applicable, on an accrual basis, to any period of time preceding the applicable Proration Date, including but not limited to, checks received after the Proration Date, but prior to the applicable Group One Closing Date or Group Two Closing Date.� As used herein, �Delinquent rents� shall not include any late charges or fees.��Purchaser and Seller may, at either parties� option any time within ninety (90) of the applicable Group One Closing Date or Group Two Closing Date, review the operating expenses of the Property and re-prorate expenses based upon actual invoices paid by either party which may have had a duration through the applicable Group One Closing Date or Group Two Closing Date. The provisions of this Section�12 relating to prorations shall survive the applicable Group One Closing Date or Group Two Closing Date.

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d.�� Seller shall terminate all property management agreements for the Property as of the Group One Closing Date or Group Two Closing Date.

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13.�� Closing Costs.� Seller shall pay all filing and recording fees relating to documents required to clear title to the Property that Seller is otherwise required to remove from title to the Property as provided in this Contract.� Any taxes (including, but not limited to, transfer fees, documentary and intangible taxes) relating to the transfer of title to the Property and sales tax and surtax to state or local entities with reference to the sale of the Property shall be allocated between Seller and Purchaser in accordance with local custom and practice (including, without limitation, dividing City of Chicago transfer taxes in the manner prescribed by local ordinance, which provides that Seller bears $1.50 per $500 in consideration and Purchaser bears $3.75 per $500 in consideration).� Purchaser and Seller shall each pay one-half of the fees of the Title Agency for the Escrow Agreement and for closing fees charged by the Title Agency.� Purchaser shall pay any intangible taxes, fees or other costs related to any financing which Purchaser obtains.� Purchaser shall pay for any endorsements to its Title Insurance Policy (and its lender�s title insurance policy).� Fees to record the Deed as well as for the cost of the Title Insurance Policy shall be allocated between Seller and Purchaser in accordance with local custom and practice.� Purchaser shall use commercially reasonable efforts to cause the Title Agency to engage a title insurance company (or title insurance agency) selected by Seller (and reasonably acceptable to Purchaser) (�Seller�s Title Company�) to obtain co-insurance or re-insurance of the base title insurance premium in such amount of co-insurance or re-insurance that takes into account such factors as the percentage of overall title insurance premium being paid by Seller, the level of involvement of Seller�s Title Company in underwriting the title insurance policy and clearing title objections, and facilitating the Closing.� Seller and Purchaser shall reasonably cooperate to effectuate the preceding sentence in a manner that will not unreasonably delay Purchaser�s and the Title Agency�s obligations in Section�5 and 6 of this Contract.

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14.�� Real Estate Commissions.� Purchaser warrants that it has not engaged the services of a real estate broker(s)�in connection with the transactions contemplated by this Contract and agrees to indemnify, defend, and hold harmless Seller from all claims and costs due then or otherwise incurred by Seller as a result of any claim by or through Purchaser for all fees, commission or compensation on account of this Contract.� Seller warrants that it has not engaged the services of a real estate broker(s)�other than Aaron Swerdlin at NGKF for whom Seller shall be solely responsible for payment of any fees, commissions or other compensation, in connection with the transactions contemplated by this Contract. and agrees to indemnify, defend, and hold harmless Purchaser from all claims and costs incurred by Purchaser as a result of any claim by or through Seller for any fee, commission or compensation owed on account of this Contract.

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15.�� Remedies.� In the event of a material breach of this Contract by Seller, including, but not limited to an intentional breach of Seller�s representations and warranties contained in Section�16, and if as a result thereof a Closing hereunder shall not occur, then in such case Purchaser may either (a)�terminate this Contract and receive a return of the Earnest Money plus an amount (the �Agreed Sum�) equal to the lesser or (i)�Purchaser�s actual third party costs and expenses in connection with the Contract, and (ii)�$500,000, or (b)�seek specific performance.� The foregoing remedies shall be the only remedies of Purchaser in the event of Seller�s default under this Contract, and Purchaser shall not be entitled to and hereby waives all rights to seek, any other remedy that may be available to Purchaser at law, in equity or otherwise, including, but not limited to, damages other than the return of the Deposit and the Agreed Sum, the filing of any notice of lis pendens, attachment, lien or encumbrance, or the taking of any action (other than specific performance) which impairs or could impair the ability of Seller to sell, transfer and freely deal with the Property.� In the event of a material breach of this Contract by Purchaser, Seller�s sole remedy shall be to terminate this Contract and retain the Earnest Money as liquidated damages; provided however, that if a simultaneous Closing does not occur, then Seller may seek specific performance if Purchaser fails to complete the subsequent Closing for a reason other than a breach of this Contract by Seller or the failure of a condition set forth in Section�10(a).

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THE PARTIES ACKNOWLEDGE THAT SELLER�S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY PURCHASER UNDER THIS AGREEMENT WILL BE DIFFICULT TO ASCERTAIN, AND THAT SUCH LIQUIDATED DAMAGES REPRESENT THE PARTIES� BEST ESTIMATE OF SUCH DAMAGES.� SUCH RETENTION OF THE EARNEST MONEY BY SELLER IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE, AND SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR PENALTY WITHIN THE MEANING OF SECTION�3275 OR SECTION�3369 OF THE CALIFORNIA CIVIL CODE OR ANY SIMILAR PROVISION.

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Seller�s Initials�� /s/ SG� /s/ CM

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Purchaser�s Initials /s/ JF

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16.�� Representations, Warranties, and Covenants.

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a.�� Each Facility Seller severally represents, warrants, and covenants to Purchaser that (for the purpose of this Section�16.a, each reference to Seller shall be deemed to refer to each separate Facility Seller and each reference to Property shall be deemed to refer to the Facility owned by each applicable Facility Seller :

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i.�� Each Seller is a Delaware limited liability company validly existing and in good standing under the laws of the state in which it was formed and is qualified to transact business in the states where the Facilities are located to enter into and perform its obligations hereunder and under any document or instrument required to be executed and delivered on behalf of Seller hereunder and Seller has all requisite powers and all governmental licenses, authorizations, consents and approvals to carry on its business as now conducted.

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ii.�� The execution, delivery and performance of this Contract by Seller has been duly authorized by all necessary company or other action on the part of Seller, and the party executing this Contract on behalf of Seller is acting with full authority to bind the Seller.� This Contract constitutes the valid and binding agreement of Seller and is enforceable against Seller in accordance with the terms, subject to bankruptcy, insolvency and creditor�s rights generally.� There is no other person or entity whose consent is required in connection with Seller�s performance of its obligations hereunder.

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iii.�� The execution and delivery of, and the performance by Seller of its obligations under this Contract do not and will not contravene, or constitute a default under, Seller�s by-laws or other organizational document or any agreement, judgment, injunction, order, decree or other instrument binding upon Seller, or result in the creation of any lien or other encumbrance on any asset of Seller or any provision of applicable law.� Except for this Contract, there are no outstanding agreements pursuant to which Seller has agreed to sell or has granted an option, right of first refusal or other right to purchase the Property.

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iv.�� Seller has no knowledge (as used in this Contract, �Seller�s knowledge� or words of like import mean the actual present knowledge of Elliot Pessis, representatives of Seller who have substantial knowledge about the Property, without further investigation or inquiry, without any individual liability on the part of such representatives) of, nor has it received any notice of any special taxes or assessments related to the Property or any part thereof or any planned public improvements that may result in a special tax or assessment against the Property.

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v.�� As of the Effective Date and as of the Closing Date, Seller has no knowledge there is any condemnation proceeding or litigation pending and Seller has no knowledge of any threatened, with reference to any of the Property, including but not limited to any asserted or unasserted or threatened claim by any member of Seller related to the terms and conditions of this Contract, the Purchase Price or any breach of fiduciary duty.� To Seller�s knowledge, none of the Property that is personal property is leased, including, without limitation, telephones, telephone systems, computers, copiers, facsimile machines, cameras, gates and signs advertising the Facility.

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vi.�� Seller shall not, before or after the Closing Date, release or modify any warranties or guarantees, if any, of manufacturers, suppliers and installers related to any Property or any part thereof, except with the prior written consent of Purchaser, which consent may be withheld in Purchaser�s sole and absolute discretion.

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vii.�� [Intentionally Omitted].

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viii.�� Seller is not a party to any union or other collective bargaining agreement with employees employed in connection with the ownership, operation or maintenance of the Property.� Seller will not, between the date hereof and the date of Closing, enter into any employment contracts or agreements or hire any employees.

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ix.�� [Intentionally Omitted].

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x.�� No Act of Bankruptcy has occurred with respect to Seller.� For purposes of this Contract, �Act of Bankruptcy� shall mean if a party hereto or any general partner or managing member thereof shall (a)�apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its Property, (b)�admit in writing its inability to pay its debts as they become due, (c)�make a general assignment for the benefit of its creditors, (d)�file a voluntary petition or commence a voluntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), (e)�be adjudicated a bankrupt or insolvent, (f)�file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, (g)�fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), or (h)�take any corporate or partnership action for the purpose of effecting any of the foregoing; or if a proceeding or case shall be commenced, without the application or consent of a party hereto or any member thereof, in any court of competent jurisdiction seeking (1)�the liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of debts, of such party or member, (2)�the appointment of a receiver, custodian, trustee or liquidator or such party or member or all or any substantial part of its assets, or (3)�other similar relief under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, and such proceeding or case shall continue undismissed; or an order (including an order for relief entered in an involuntary case under the Federal Bankruptcy Code, as now or hereafter in effect) judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 consecutive days.

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xi.�� Except to the extent set forth in any environmental studies provided to Purchaser, Seller has received no written notice:� (i)�of the presence of any �Hazardous Substances� (as defined below) on the Property, or any portion thereof, or, (ii)�of any spills, releases, discharges, or disposal of Hazardous Substances that have occurred or are presently occurring on or onto the Property, or any portion thereof, or (iii)�of the presence of any� transformers containing PCB�s, serving, or stored on, the Property, or any portion thereof (as used herein, �Hazardous Substances� shall mean any substance or material whose presence, nature, quantity or intensity of existence, use, manufacture, disposal, transportation, spill, release or effect, either by itself or in combination with other materials is either:� (A)�potentially injurious to the public health, safety or welfare, the environment or the Property, (B)�regulated, monitored or defined as a hazardous or toxic substance or waste by any Environmental Authority, or (C)�a basis for liability of the owner of the Property to any Environmental Authority or third party, and Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, crude oil, or any products, by-products or components thereof, and asbestos).

�

xii.�� [INTENTIONALLY OMITTED]

�

xiii.�� [INTENTIONALLY OMITTED]

�

xiv.�� Except for expenses for which Purchaser received a closing proration credit, Seller shall remain liable for any expenses incurred by Seller and/or Seller�s agents for the period prior to the Closing Date and shall indemnify Purchaser against any actions brought against Purchaser or any of the Property resulting from Seller�s failure to pay any such expenses, including, but not limited to any mechanics liens or claims that have been or may be asserted against the Purchaser or the Property with respect to any work performed on the Property prior to the Closing Date.� Purchaser shall remain liable for any expenses incurred by Purchaser and/or Purchaser�s agents or employees for the period on or after the Closing Date and shall indemnify Seller against any actions brought against Seller or any of the Property resulting from Purchaser�s failure to pay any such expenses.

�

xv.�� [INTENTIONALLY OMITTED]

�

If Seller cannot reaffirm to Purchaser the truth and correctness, as of the applicable Group One Closing Date or Group Two Closing Date, of each of said representations and warranties, and of any representations, warranties or Contracts set forth elsewhere in this Contract, as required pursuant to Section�10.a.2 above, Purchaser may, as its sole remedies, elect either to: (i)�terminate this Contract and receive a refund of its Earnest Money, in which event neither party shall have any further liability to the other in accordance with this Contract, except for such liability and obligations that expressly survive the termination of this Contract; provided, however, in the event the changes in the representations and warranties are caused by Seller�s intentional acts or omissions in violation of the express terms of this Contract, Seller shall reimburse Purchaser for its actual third party costs incurred in connection with this Contract in an amount equal to the lesser of (A)�actual, out of pocket costs, and (B)�$500,000; or (ii)�to close the transaction contemplated hereby and receive the instruments required herein from Seller irrespective of such failure.

�

All representations, warranties and covenants of Seller contained herein shall survive the Closing for a period of six (6)�months (the �Survival Period�) and shall inure to the benefit of Purchaser and its legal representatives, heirs, successors or assigns.� Seller shall be liable to Purchaser under this Contract for Purchaser�s actual damages with respect to a breach of a representation or warranty by Seller under this Contract that is discovered by Purchaser following Closing and is made the subject of a written claim to Seller within the Survival Period, provided however, that: (i)�Purchaser shall have no right to bring a claim unless the aggregate of all claim(s)�shall exceed Fifty Thousand Dollars ($50,000.00), and (ii)�in no event shall the liability of Seller with respect to any such claim(s)�by Purchaser provided for in this Contract exceed in the aggregate Five Hundred Thousand Dollars ($500,000.00).� If, prior to the Closing, Purchaser obtains actual knowledge (from whatever source whatsoever, as a result of Purchaser�s due diligence, or the inclusion of any information in any written disclosure by Seller or Seller�s agents and employees) of any inaccuracy or breach of any representation contained in this Contract (a �Purchaser Waived Breach�) and nonetheless proceeds with and consummates the Closing, then Purchaser shall be deemed to have waived and forever renounced any right to assert a claim or cause of action for damages under this Contract, or any other claim or cause of action under this Contract, at law or in equity on account of any such Purchaser Waived Breach.

�

b.�� Purchaser represents, warrants, and covenants to Seller that:

�

i.�� Purchaser is a limited partnership, validly existing and in good standing under the laws of the State of Delaware and is qualified to transact business in the states where the facilities are located and to enter into and perform its obligations hereunder and under any document or instrument required to be executed and delivered on behalf of Purchaser.

�

ii.�� The execution, delivery and performance of this Contract by Purchaser has been duly authorized by all necessary company or other action on the part of Purchaser, and the party executing this Contract on behalf of Purchaser is acting with full authority to bind the Purchaser.� This Contract constitutes the valid and binding agreement of Purchaser and is enforceable against Purchaser in accordance with the terms, subject to bankruptcy, insolvency and creditor�s rights generally.� There is no other person or entity whose consent is required in connection with Purchaser�s performance of its obligations hereunder.

�

iii.�� The execution and delivery of, and the performance by Purchaser of its obligations under this Contract do not and will not contravene, or constitute a default under, Purchaser�s by-laws or other organizational document or any agreement, judgment, injunction, order, decree or other instrument binding upon Purchaser, or result in the creation of any lien or other encumbrance on any asset of Purchaser or any provision of applicable law.� Except for this Contract, there are no outstanding agreements pursuant to which Purchaser has agreed to sell or has granted an option, right of first refusal or other right to purchase the Property.

�

iv.�� No Act of Bankruptcy has occurred with respect to Purchaser.� For purposes of this Contract, �Act of Bankruptcy� shall mean if a party hereto or any general partner or managing member thereof shall (a)�apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (b)�admit in writing its inability to pay its debts as they become due, (c)�make a general assignment for the benefit of its creditors, (d)�file a voluntary petition or commence a voluntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), (e)�be adjudicated a bankrupt or insolvent, (f)�file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, (g)�fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), or (h)�take any corporate or partnership action for the purpose of effecting any of the foregoing; or if a proceeding or case shall be commenced, without the application or consent of a party hereto or any member thereof, in any court of competent jurisdiction seeking (1)�the liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of debts, of such party or member, (2)�the appointment of a receiver, custodian, trustee or liquidator or such party or member or all or any substantial part of its assets, or (3)�other similar relief under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, and such proceeding or case shall continue undismissed; or an order (including an order for relief entered in an involuntary case under the Federal Bankruptcy Code, as now or hereafter in effect) judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 consecutive days.

�

v.�� Neither Purchaser, nor its affiliate CubeSmart Asset Management, LLC, which is the property manager of the Property has any knowledge (as used in this Contract, �Purchaser�s knowledge� or words of like import mean the actual present knowledge of Jonathan Perry and Guy Middlebrooks, representative(s)�of Purchaser who have substantial knowledge about the Property, without further investigation or inquiry, without any individual liability on the part of such representative(s)) of matters, that, if disclosed to Seller, would cause Seller�s representations and warranties set forth in clauses iv, v and xi of Sections 16.a. above to be untrue.

�

If Purchaser cannot reaffirm to Seller the truth and correctness, as of the Group One Closing Date or the Group Two Closing Date, as applicable, of each of said representations and warranties, and of any representations, warranties or Contracts set forth elsewhere in this Contract, as required pursuant to Section�10.b.2 above, Seller may, as its sole remedies, elect either to: (i)�terminate this Contract allow the return of the Earnest Money to Purchaser, in which event neither party shall have any further liability to the other in accordance with this Contract, except for such liability and obligations that expressly survive the termination of this Contract; provided, however, in the event the changes in the representations and warranties are caused by Purchaser�s intentional acts or omissions in violation of the express terms of this Contract, Seller shall retain the Earnest Money as liquidated damages; or (ii)�to close the transaction contemplated hereby and receive the instruments required herein from Purchaser irrespective of such failure.

�

All representations, warranties and covenants of Purchaser contained herein shall survive the Closing for the Survival Period and shall inure to the benefit of Seller and its legal representatives, heirs, successors or assigns.� Purchaser shall be liable to Seller under this Contract for Seller�s actual damages with respect to a breach of a representation or warranty by Purchaser under this Contract that is discovered by Seller following Closing and is made the subject of a written claim to Purchaser within the Survival Period, provided however, that: (i)�Seller shall have no right to bring a claim unless the aggregate of all claim(s)�shall exceed Fifty Thousand Dollars ($50,000.00), and (ii)�in no event shall the liability of Purchaser with respect to any such claim(s)�by Seller provided for in this Contract exceed in the aggregate Five Hundred Thousand Dollars ($500,000.00).� If, prior to the Closing, Seller obtains actual knowledge (from whatever source whatsoever, as a result of Seller�s due diligence, or the inclusion of any information in any written disclosure by Purchaser or Purchaser�s agents and employees) of any inaccuracy or breach of any representation contained in this Contract (a �Seller Waived Breach�) and nonetheless proceeds with and consummates the Closing, then Seller shall be deemed to have waived and forever renounced any right to assert a claim or cause of action for damages under this Contract, or any other claim or cause of action under this Contract, at law or in equity on account of any such Seller Waived Breach.

�

17.�� �� Indemnification.� Each Facility Seller agrees to indemnify and hold Purchaser harmless from and against any and all claims, costs, penalties, damages, losses, liabilities and expenses, including attorneys� fees, related to or arising from any claim by any member of� such Facility Seller related to the transactions contemplated herein, including but not limited to any claim involving the authority of the managing member to bind the Facility Seller, breach of any fiduciary duty, or the terms and conditions of this Contract generally, including but not limited to the Purchase Price applicable to the Facility owned by such Facility Seller.

�

18.�� Notices.� Any notice which any party may be required or may desire to give hereunder shall be by overnight courier, facsimile or electronic mail and shall be deemed to have been duly given on the next business day if sent by overnight courier or on the same day if sent by facsimile or electronic mail before 5:00�p.m. Central Time.� A duplicate copy of any notice sent by electronic mail shall be simultaneously sent by overnight courier.

�

TO SELLER: � Elliot Pessis and Michael Gershowitz Harrison Street Real Estate Capital 71 S. Wacker Drive Suite�3575 Chicago,�IL 60601 Phone (312) 920-1856 Electronic Delivery: [email protected] [email protected]	�	WITH A COPY TO: � Adam T. Berkoff DLA Piper LLP (US) 203 N. LaSalle Street Suite�1900 Chicago,�IL 60601 Phone (312) 368-7266 Electronic Delivery: [email protected] �
�	�	�
TO PURCHASER: Jonathan Perry CubeSmart 5 Old Lancaster Road Malvern, PA 19355 Phone: (610) 535-5792 Fax: (610) 535-5750 Electronic Delivery: [email protected]	�	WITH A COPY TO: Jeffrey P Foster CubeSmart 5 Old Lancaster Road Malvern, PA 19355 Phone: (610) 535-5765 Fax: (610) 535-5750 Electronic Delivery: [email protected]
�	�	�
�	�	�
WITH A COPY TO: Morgan, Lewis�& Bockius, LLP 1701 Market Street Philadelphia, PA 19103 Attn: Jeannine T. Bishop Phone: (215) 963-5204 Fax: (215) 837-1200 Electronic Delivery: [email protected]	�	TO TITLE AGENCY: M Gordon Daniels, Principal Land Services USA,�Inc. 1835 Market Street, Suite�420 Philadelphia, PA 19103 Phone: (215) 255-8999 Fax: (215) 568-8219 Electronic Delivery: [email protected]

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19.�� Time of Essence.� Time is of the essence of this Contract.

�

20.�� Arbitration and Attorney�s Fees.� Any controversy or claim between or among the parties hereto, whether arising out of this Contract or any instrument or agreement executed in connection with the transaction contemplated hereby, shall be determined by binding arbitration in Chester County, Pennsylvania in accordance with Exhibit�K.

�

21.�� [INTENTIONALLY OMITTED]

�

22.�� Disclosure.� The parties hereto agree that these negotiations, the terms and conditions hereof, the ultimate decision by Purchaser to purchase or not to purchase the Property and the terms and conditions thereof shall not be disclosed by either party, or any shareholder or member therein, or by Broker to anyone other than each party�s accountants, attorneys, advisors, shareholders or members, upon their agreement to be bound hereby.� Prior to making any press releases or other public communication regarding the Closing, each party shall obtain the written consent of the other as to the content of such release or communication, which shall not be unreasonably withheld.� The Seller acknowledges that Purchaser is a publicly registered company and is required to make certain filings (each a �Filing�) with the Securities and Exchange Commission (�SEC�), the New York Stock Exchange, and other regulatory agencies (collectively, the �Regulatory Agencies�).� Purchaser shall be permitted without the prior consent or approval of the Sellers, to make such public filings, registrations and other information disclosures to the Regulatory Agencies that are required by the applicable rules�and regulations of the Regulatory Agencies, provided that Purchaser, in consultation with its SEC legal counsel, agrees to incorporate the Sellers� reasonable comments thereto.�

�

Purchaser shall, at least one (1)�business day prior to the issuance of a Filing related to the transactions contemplated in this Agreement, deliver a copy of the proposed Filing to the Sellers for their review and reasonable comment.

�

23.�� Tax-Deferred Exchange.� Purchaser may consummate the purchase of the Property as part of a so-called like-kind exchange (the �Exchange�) pursuant to Section�1031 of the Internal Revenue Code of 1986, as amended, provided that (a)�all costs, fees and expenses attendant to the Exchange shall be sole responsibility of Purchaser; (b)�the Closing shall not be delayed or affected by reason of the Exchange nor shall the consummation or accomplishment of the Exchange be a condition precedent or condition subsequent to Purchaser�s obligations and covenants under this Contract, (c)�Seller shall not be required to take an assignment of the purchase agreement for the relinquished or replacement property or be required to acquire or hold title to any real property (other than the Property) for purposes of consummating any such exchange, and (d)�in no event shall such exchange release Purchaser any party from its obligations under this Contract.� Seller shall reasonably cooperate with Purchaser in effecting the Exchange.

�

24.�� Cooperation with S-X 3-14 Audit.� The Seller acknowledges that Purchaser is a publicly registered company (�Registered Company�).� The Seller acknowledges that Purchaser may be required to make certain filings with the Securities and Exchange Commission (the �SEC Filings�) that relate to the most recent pre-acquisition fiscal year (the �Year�) and the current fiscal year through the date of acquisition (the �stub period�) for the Property. If requested in writing by Purchaser in connection with Purchaser�s preparation of the SEC Filings, the Seller agrees to provide the Purchaser with the following: (i)�access to bank statements for the Year and stub period; (ii)�rent roll as of the end of the Year and stub period; (iii)�operating statements for the Year and stub period; (iv)�access to the general ledger for the Year and stub period; (v)�cash receipts schedule for each month in the Year and stub period; (vi)�access to invoice for expenses and capital improvements in the Year and stub period; (vii)�accounts payable ledger and accrued expense reconciliations for the Year and stub period; (viii)�check register for the 3-months following the Year and stub period; (ix)�all leases and 5-year lease schedules; (x)�copies of all insurance documentation for the Year and stub period; (xi)�copies of accounts receivable aging as of the end of the Year and stub period; (xii)�access to such other documents or agreements in the possession or control of Seller reasonably required to complete the required filings; and (xiii)�signed representation letter in the form attached hereto as�Exhibit��N�.� It is understood and agreed that Purchaser shall not be entitled to rely on the content or existence of such letter and Purchaser shall indemnify, defend and hold Seller harmless of, from and against any and all losses, claims, expenses and the like incurred by Seller in connection with such letter, excluding any of the foregoing attributable to Seller�s actual fraud or intentional misrepresentation.� The foregoing inability of Purchaser to rely on the content or existence of such letter and the foregoing indemnification obligation shall survive Closing.� The provisions of this Section�24 shall survive until the earlier of (a)�the date Purchaser next files its form 10-K with the SEC, or (b)�March�31, 2015.

�

25.�� Assignment.� Purchaser, without Seller�s consent, may assign its rights and obligations hereunder to any affiliate of Purchaser�s in which Purchaser maintains control and at least a fifty percent (50%) direct or indirect ownership interest.� This Contract shall bind and inure to the benefit of the parties hereto and their respective successors and assigns.

�

26.�� Timing.� If any date herein (except the Proration Date) shall fall on a Saturday, Sunday, Monday or national holiday (�Non-business Day�), the date shall automatically be advanced to the first Tuesday thereafter; but if that day is a Non-business Day, then the date shall be the next business day.

�

27.�� As-Is Purchase.� Except as otherwise expressly set forth in this Contract, the Property is being sold in an �AS IS� condition and �WITH ALL FAULTS� as of the Effective Date and as of Closing.� Except as expressly set forth in this Contract or any other documents delivered at Closing, no representations or warranties have been made or are made and no responsibility has been or is assumed by Seller or any Seller affiliate or manager as to the condition or repair of the Property or the value, expense of operation, or income potential thereof or as to any other fact or condition which has or might affect the Property or the condition, repair, value, expense of operation or income potential of the Property or any portion thereof.� The parties agree that all understandings and agreements heretofore made between them or their respective agents or representatives are merged in this Contract and the Exhibits hereto annexed, which alone fully and completely express their agreement, and that this Contract has been entered into after full investigation, or with the parties satisfied with the opportunity afforded for investigation, neither party relying upon any statement or representation by the other unless such statement or representation is specifically embodied in this Contract or the Exhibits annexed hereto or any document or instrument executed or delivered at Closing.�

�

Except as may be expressly provided for herein, Seller makes no representations or warranties as to whether the Property contains asbestos or harmful or toxic substances or pertaining to the extent, location or nature of same.� Purchaser acknowledges that, notwithstanding Purchaser�s affiliate being the Property Manager, Seller has requested Purchaser to inspect fully the Property and investigate all matters relevant thereto and to rely solely upon the results of Purchaser�s own inspections or other information obtained or otherwise available to Purchaser, rather than any information that may have been provided by Seller to Purchaser.

�

BUYER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION�1542 (�SECTION�1542�), WHICH IS SET FORTH BELOW:

�

�A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.�� BY INITIALING BELOW, BUYER HEREBY WAIVES THE PROVISIONS OF SECTION�1542 SOLELY IN CONNECTION WITH THE MATTERS WHICH ARE THE SUBJECT OF THE FOREGOING WAIVERS AND RELEASES.� BUYER FURTHER AGREES AND ACKNOWLEDGES THAT,�IN GIVING THE FOREGOING WAIVER AND RELEASE,�IT HAS WITH ITS LEGAL COUNSEL, CONSIDERED ANY STATUTE OR OTHER LAW THAT MIGHT APPLY TO AND LIMIT THE EFFECT OF PURCHASER�S WAIVER AND RELEASE HEREIN AND HEREBY KNOWINGLY WAIVES THE BENEFITS OF ANY SUCH LAW AND INTENDS THAT IT NOT BE APPLICABLE HERE:

�

/s/ JF

�

Buyer�s Initials

�

The foregoing waivers and releases by Purchaser shall survive the Closing and the recordation of the Deed and shall not be deemed merged into the Deed upon its recordation.

�

28.�� Merger.� The acceptance of the Deed by Purchaser shall be deemed to be a full performance by Seller of, and shall discharge Seller from, all obligations hereunder; and Seller shall have no liability hereunder thereafter to Purchaser, or to any other person, firm, corporation or public body with respect to Seller or the Property except as to the representations and covenants expressly surviving.

�

29.�� Further Assurances.� Each of the parties hereby agrees to execute, acknowledge and deliver such other documents or instruments as the other may reasonably require from time to time to carry out the purposes of this Contract.

�

30.�� Amendments.� This Contract may not be changed, modified or terminated except by a written instrument executed by the parties hereto.

�

31.�� Waiver.� No waiver by either party of any failure or refusal of the other party to comply with any of its obligations shall be deemed a waiver of any other or subsequent failure or refusal so to comply.

�

32.�� Section�Headings.� The headings of the various Sections of this Contract have been inserted only for the purpose of convenience, and are not part of this Contract and shall not be deemed in any manner to modify, explain, qualify or restrict any of the provisions of this Contract.

�

33.�� Governing Law.� This Contract shall be interpreted, and the rights and liabilities of the parties hereto shall for all purposes be governed by and construed and enforced in accordance with the laws of the State of Illinois applicable to agreements executed, delivered and performed within such state, without giving effect to the principles of conflicts of law.

�

34.�� Waiver of Jury Trial.� It is mutually agreed by and between Seller and Purchaser that the respective parties hereto shall and do hereby waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Contract.

�

35.�� No Recording.� Neither party shall record this Contract or any memorandum thereof without the prior written consent of the other party, which consent may be withheld in such other party�s sole discretion.

�

36.�� Entire Agreement.� This Contract and the Exhibits attached hereto constitute the entire agreement between the parties and supersedes all other negotiations, understandings, and representations made by and between the parties and their agents, servants, and employees.

�

37.�� Counterparts.� This Contract may be executed in multiple counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

�

38.�� Natural Hazard Disclosure.� Purchaser and Seller acknowledge that Seller may be required under California law to disclose if the Property lies within the following natural hazard areas or zones:� (a)�a special flood hazard area designated by the Federal Emergency Management Agency (California Civil Code Section�1102.17); (b)�an area of potential flooding (California Government Code Section�8589.4); (c)�a very high fire hazard severity zone (California Government Code Section�51183.5); (d)�a wild land area that may contain substantial forest fire risks and hazards (Public Resources Code Section�4136); (e)�an earthquake fault zone (Public Resources Code Section�2621.9); or (f)�a seismic hazard zone (Public Resources Code Section�2694).� Purchaser shall cause the Title Company to be engaged (which, in such capacity, is referred to herein as the �Natural Hazard Expert�) to examine the maps and other information specifically made available to the public by government agencies for the purposes of enabling Seller to fulfill Seller�s disclosure obligations, if and to the extent such obligations exist, with respect to the natural hazards referred to in California Civil Code Section�1102.6c(a)�and to report the result of the Natural Hazard Expert�s examination to Purchaser and Seller in writing.� Purchaser shall instruct the Title Company to deliver to Purchaser Natural Hazard Expert�s examination report prior to the Disapproval Date.� The written reports prepared by the Natural Hazard Expert regarding the results of the Natural Hazard Expert�s examination fully and completely discharges Seller from Seller�s disclosure obligations referred to herein, if and to the extent any such obligations exist, and, for the purpose of this Contract, the provisions of Civil Code Section�1102.4 regarding non-liability of Seller for errors or omissions not within Seller�s personal knowledge shall be deemed to apply and the Natural Hazard Expert shall be deemed to be an expert, dealing with matters within the scope of the Natural Hazard Expert�s expertise with respect to the examination and written report regarding the natural hazards referred to above.

�

39.�� Energy Disclosure Requirements.� Purchaser acknowledges that Seller may be required to disclose certain information concerning the energy performance of the Property pursuant to California Public Resources Code Section�25402.10 and the regulations adopted pursuant thereto (collectively the �Energy Disclosure Requirements�).� Purchaser hereby waives any rights under the Energy Disclosure Requirements and further waives any right to receive the Disclosure Summary Sheet, Statement of Energy Performance, Data Checklist, and Facility Summary, all as defined in the Energy Disclosure Requirements (collectively, the �Energy Disclosure Information�).� Purchaser hereby forever releases Seller of any liability under the Energy Disclosure Requirements, including, without limitation, any liability of Seller arising as a result of Seller�s failure to provide to Purchaser the Energy Disclosure Information.� Purchaser�s approval of the condition of the Property pursuant to the terms of this Agreement shall be deemed to be Purchaser�s approval of the energy performance of the Property.� The terms of this Section�39 shall survive the Closing, the recordation of the deed or earlier termination of this Agreement.� Notwithstanding the foregoing, in the event Seller delivers such Energy Disclosure Information to Purchaser prior to the Disapproval Date and Purchaser elects to proceed with the purchase of the Property pursuant to Section�3 above, such election to proceed by Purchaser shall be deemed Purchaser�s acceptance of the Energy Disclosure Information and acknowledgment of the satisfaction of the Energy Disclosure Requirements.

�

40.�� Florida Radon Disclosure.� Florida law requires the following disclosure to be given to the purchaser of property in the State of Florida.� Seller has made no independent inspection of the Properties located in the State of Florida to determine the presence of conditions which may result in radon gas; however, Seller is not aware of any such condition.� Certain building methods and materials have been proven to reduce the possibility of radon gas entering the building:

�

�RADON GAS:� Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed over time.� Levels of radon that exceed federal and state guidelines have been found in buildings in Florida.� Additional information regarding radon and radon testing may be obtained from your county public health unit.�

�

[signatures appear on the following page]

�

Executed by Purchaser on	PURCHASER:
�	�
�	�	CubeSmart, L.P.
�	�	�
�	�	By:		CubeSmart, its general partner
�	�	�
�	�	�
August�25, 2014	By: �/s/ Jeffrey P. Foster
�	�		Jeffrey P. Foster
�	�		Senior Vice President, Chief Legal Officer�& Secretary

�

Executed by Seller on

�

August�25, 2014

�

SELLER:

�

GROUP ONE SELLERS:

�

STORAGE PARTNERS OF SOUTH HARLEM, LLC
�
By:	HSREP II Holding, LLC, a Delaware limited liability company
�	�	�
�	By:	HSRE REIT II, a Maryland real estate investment trust, its sole member
�	�	�
�	�	�
�	�	By: /s/ Stephen M. Gordon
�	�	Name:	Stephen M. Gordon
�	�	Its:	Trustee

�

WWP-HSRE SDO, LLC

WWP-HSRE ONTARIO GE, LLC

WWP-HSRE ONTARIO, LLC

�

By:	HSRE-WWP I, LLC, a Delaware limited liability company
�	�
�	By:	HSRE-WWP IA, LLC, a Delaware limited liability company
�	�	�
�	�	By:	HSREP II Holding, LLC, a Delaware limited liability company
�	�	�	�
�	�	�	By:	HSRE REIT II, a Maryland real estate investment trust, its sole member
�	�	�	�	�
�	�	�	�	�
�	�	�	�	By: /s/ Stephen M. Gordon
�	�	�	�	Name:	Stephen M. Gordon
�	�	�	�	Its:	Trustee

�

HSREP II STORAGE � BOLINGBROOK, LLC

HSREP II STORAGE � CANAL, LLC

HSREP II STORAGE � CHESTNUT, LLC

HSREP II STORAGE � COLTON, LLC

HSREP II STORAGE � COUNTRYSIDE, LLC

HSREP II STORAGE � EXETER, LLC

HSREP II STORAGE � FORSYTH, LLC

HSREP II STORAGE � GEORGESVILLE, LLC

HSREP II STORAGE � HENDERSON, LLC

HSREP II STORAGE � JOHNSTON, LLC

HSREP II STORAGE � MORSE, LLC

HSREP II STORAGE � POLARIS, LLC

HSREP II STORAGE � ROBERTS, LLC

HSREP II STORAGE � SANFORD, LLC

HSREP II STORAGE � TWENTY FIFTH, LLC

HSREP II STORAGE � WAKEFIELD, LLC

HSREP II STORAGE � WAVERLY, LLC

HSREP II STORAGE � WESTERN, LLC

HSREP II STORAGE � WOONSOCKET, LLC

�

By:	HSREP II Storage I, LLC, a Delaware limited liability company
�	�
�	By:	HSREP II Storage Holding I, LLC, a Delaware limited liability company
�	�	�
�	�	By:	HSREP II Holding, LLC, a Delaware limited liability company
�	�	�	�
�	�	�	By:	HSRE REIT II, a Maryland real estate investment trust, its sole member
�	�	�	�	�
�	�	�	�	�
�	�	�	�	By: /s/ Stephen M. Gordon
�	�	�	�	Name:	Stephen M. Gordon
�	�	�	�	Its:	Trustee

�

GROUP TWO SELLERS:

�

STORAGE PARTNERS OF BLUE ISLAND, LLC

STORAGE PARTNERS OF MAYWOOD, LLC

STORAGE PARTNERS OF NORTH KEDZIE, LLC

STORAGE PARTNERS OF SOUTH CHICAGO, LLC

�

By:	HSRE Chicago Self Storage Holding I, LLC, a Delaware limited liability company
�	�	�
�	By:	HSRE REIT I, a Maryland real estate investment trust, its sole member
�	�	�
�	�	�
�	�	By: /s/ Christopher Merrill
�	�	Name:	Christopher Merrill
�	�	Its:	Trustee

�

EXHIBITS

�

A	Legal Descriptions
B	Escrow Agreement
C	Items to be furnished by Seller per Paragraph�3
D	Items to be Furnished by Purchaser at Closing
E	Items to be Furnished by Seller at Closing
F	Special Warranty Deed
G	Bill of Sale
H	Assignment of Leases,�Intangible Property, Guarantees, Warranties, Permits, Licenses and Approvals
I	Notice to Tenants
J	Non-Foreign Affidavit
K	Proration Review, Arbitration and Attorneys� Fees
L	Facilities
M	Facility Factors
N	Audit Cooperation Letter

�

EXHIBIT�A-1 TO CONTRACT

�

LEGAL DESCRIPTION

�

12400 South Western Avenue, Blue Island,�IL 60406

�

Parcel 1:

�

Lots 1 and 2 (except the East 14 feet thereof) in Block 2 in South Highlands, a subdivision of the South 1/2 of the Northeast 1/4 of the Southeast 1/4 and the North 1/2 of Lots 1 and 2 in Assessor�s Division of the Southeast 1/4 of the Southeast 1/4 of Section�25, Township 37 North, Range 13 East of the Third Principal Meridian, in Cook County,�Illinois.

�

Parcel 2:

�

Lots 3, 4 and 5 (except the East 14 feet thereof) in Block 2 in South Highlands, a subdivision of the South 1/2 of the Northeast 1/4 of the Southeast 1/4 and the North 1/2 of Lots 1 and 2 in Assessor�s Division of the Southeast 1/4 of the Southeast 1/4 of Section�25, Township 37 North, Range 13 East of the Third Principal Meridian, in Cook County,�Illinois.

�

A-1-1

�

EXHIBIT�A-2 TO CONTRACT

�

LEGAL DESCRIPTION

�

565 West Boughton Road, Bolingbrook,�IL 60440

�

THAT PART�OF THE NORTHEAST 1/4 OF SECTION�9, TOWNSHIP 37 NORTH, RANGE 10, EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED BY BEGINNING AT THE POINT OF INTERSECTION�OF A LINE DRAWN PARALLEL WITH AND 240.00 FEET WEST OF THE EAST LINE OF SAID NORTHEAST 1/4 WITH THE SOUTHERLY LINE OF BOUGHTON ROAD AS DEDICATED IN THE PLAT OF THE COURT HOMES OF INDIAN OAKS LOTS 9 THROUGH 14 (RECORDED AS DOCUMENT R71-23456) AND RUNNING THENCE SOUTH 00 DEGREES 06 MINUTES 50 SECONDS WEST ON SAID PARALLEL LINE, 445.00 FEET; THENCE NORTH 89 DEGREES 53 MINUTES 10 SECONDS WEST, 371.37 FEET TO THE EASTERLY LINE OF DUPAGE DRIVE AS SHOWN ON THE PLAT OF THE TOWNHOMES OF INDIAN OAKS UNIT FIVE (RECORDED AS DOCUMENT R73-08025); THENCE NORTHERLY ON SAID EASTERLY LINE, BEING A CURVE TO THE LEFT HAVING A RADIUS OF 92.00 FEET, AN ARC DISTANCE OF 5.47 FEET TO THE POINT OF TANGENCY; THENCE NORTH 33 DEGREES 25 MINUTES 00 SECONDS WEST ON THE TANGENT TO SAID CURVE, BEING THE EASTERLY LINE OF SAID DRIVE, 130.64 FEET TO A POINT OF CURVE; THENCE NORTHWESTERLY ON SAID EASTERLY LINE, BEING A TANGENTIAL CURVE TO THE RIGHT HAVING A RADIUS OF 460.87 FEET, AN ARC DISTANCE OF 202.34 FEET TO THE POINT OF TANGENCY; THENCE NORTH 08 DEGREES 15 MINUTES 40 SECONDS WEST ON SAID EASTERLY LINE, 67.00 FEET TO THE SOUTHERLY LINE OF BOUGHTON ROAD; THENCE NORTH 81 DEGREES 44 MINUTES 20 SECONDS EAST ON SAID SOUTHERLY LINE, 533.64 FEET TO THE PLACE OF BEGINNING,�IN WILL COUNTY,�ILLINOIS

�

STREET ADDRESS: 565 WEST BOUGHTON ROAD, BOLINGBROOK,�ILLINOIS

�

PIN: 02-09-200-040-0000

�

A-2-1

�

EXHIBIT�A-3 TO CONTRACT

�

LEGAL DESCRIPTION

�

8312 South Chicago Avenue, Chicago,�IL 60617

�

BLOCK FOUR,�IN LINCOLN ADDITION, A RESUBDIVISION OF THAT PART�OF WHITFORD�S SUBDIVISION OF THE NORTHWEST QUARTER OF THE SOUTHEAST QUARTER AND THAT PART�OF MOORE�S SUBDIVISION OF THE NORTH HALF OF THE NORTHEAST QUARTER OF THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER LYING NORTHEAST OF LAKE SHORE AND MICHIGAN SOUTHERN RAILROAD,�IN SECTION�36, TOWNSHIP 38 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO A PLAT RECORDED IN THE RECORDER�S OFFICE OF COOK COUNTY,�ILLINOIS, MARCH�18, 1913,�IN BOOK 120 OF PLATS, PAGE 8 AS DOCUMENT NUMBER 5147032; EXCEPTING FROM SAID BLOCK FOUR THOSE PARTS THEREOF DESCRIBED AS FOLLOWS: (1)�THE SOUTHEASTERLY 962 FEET THEREOF MEASURED ON NORTHEASTERLY AND SOUTHWESTERLY LINES THEREOF; (2)�COMMENCING AT THE MOST NORTHERLY CORNER OF SAID BLOCK FOUR AND RUNNING THENCE SOUTH ALONG THE WEST LINE OF SAID BLOCK A DISTANCE OF 155.10 FEET, THENCE NORTHEASTERLY IN A STRAIGHT LINE TO A POINT IN THE NORTHEASTERLY LINE OF SAID BLOCK WHICH IS 108.86 FEET SOUTHEASTERLY OF THE MOST NORTHERLY CORNER OF SAID BLOCK, THENCE NORTHWESTERLY ALONG THE NORTHEASTERLY LINE OF SAID BLOCK 108.86 FEET TO THE PLACE OF BEGINNING.

�

ALSO DESCRIBED AS FOLLOWS:

�

PART�OF BLOCK FOUR, LINCOLN ADDITION, CITY OF CHICAGO, COOK COUNTY,�ILLINOIS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

�

COMMENCING AT THE NORTHERLY MOST CORNER OF SAID BLOCK 4; THENCE SOUTH 45 DEGREES 25 MINUTES 38 SECONDS EAST, 108.86 FEET TO THE POINT OF BEGINNING; THENCE SOUTH 45 DEGREES 25 MINUTES 38 SECONDS EAST, 352.99 FEET; THENCE SOUTH 44 DEGREES 34 MINUTES 38 SECONDS WEST, 150.00 FEET; THENCE NORTH 45 DEGREES 25 MINUTES 38 SECONDS WEST, 314.06 FEET; THENCE NORTH 00 DEGREES 00 MINUTES 00 SECONDS EAST, 55.47 FEET; THENCE NORTH 44 DEGREES 34 MINUTES 38 SECONDS EAST, 110.49 FEET TO THE POINT OF BEGINNING.

�

A-3-1

�

EXHIBIT�A-4 TO CONTRACT

�

LEGAL DESCRIPTION

�

9801 West 55th Street, Countryside,�IL 60525

�

PARCEL 1:

�

THE WEST 100.00 FEET (EXCEPT THE EAST 75.00 FEET THEREOF AND EXCEPT THE NORTH 50.00 FEET THEREOF TAKEN FOR HIGHWAY) OF THE EAST 1/2 OF LOT 4, LYING NORTH OF A LINE, THAT IS 331.99 FEET NORTH OF AND PARALLEL TO THE CENTERLINE OF 56TH STREET IN VIAL�S SUBDIVISION OF THE NORTH 1/2 OF THE NORTHEAST 1/4 OF SECTION�16, TOWNSHIP 38 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN,�IN COOK COUNTY,�ILLINOIS.

�

PARCEL 2:

�

THE WEST 97.00 FEET OF THE NORTH 250.00 FEET OF THE WEST 1/2 OF LOT 4 (EXCEPT THE NORTH 50.00 FEET THEREOF TAKEN FOR HIGHWAY) IN VIAL�S SUBDIVISION OF THE NORTH 1/2 OF THE NORTHEAST 1/4 OF SECTION�16, TOWNSHIP 38 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN,�IN COOK COUNTY,�ILLINOIS.

�

PARCEL 3:

�

THE WEST 1/2 OF LOT 4 (EXCEPT THE NORTH 250.00 FEET AND EXCEPT THE WEST 94.38 FEET OF THE SOUTH 180.00 FEET AND EXCEPT THE EAST 70.00 FEET, LYING SOUTH OF A LINE 180.00 FEET NORTH OF THE NORTH LINE OF 56TH STREET AND EXCEPT THAT PART�DESCRIBED AS FOLLOWS:

�

BEGINNING AT A POINT ON THE WEST LINE OF LOT 4, A DISTANCE OF 180.00 FEET NORTH OF THE SOUTH LINE OF LOT 4, SAID SOUTH LINE BEING THE CENTERLINE OF 56TH STREET; THENCE EAST, A DISTANCE OF 94.38 FEET ON A LINE PARALLEL WITH THE SOUTH LINE OF LOT 4 TO A POINT ON A LINE 70.00 FEET WEST OF AND PARALLEL WITH THE EAST LINE OF THE WEST 1/2 OF LOT 4; THENCE NORTH, A DISTANCE OF 30.00 FEET ON AFORESAID PARALLEL LINE; THENCE WEST TO A POINT ON THE WEST LINE OF LOT 4, SAID POINT BEING 32.00 FEET NORTH OF THE PLACE OF BEGINNING; THENCE SOUTH ON THE WEST LINE OF LOT 4, A DISTANCE OF 32.00 FEET TO THE PLACE OF BEGINNING), ALL IN VIAL�S SUBDIVISION OF THE NORTH 1/2 OF THE NORTHEAST 1/4 OF SECTION�16, TOWNSHIP 38 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN,�IN COOK COUNTY,�ILLINOIS.

�

PARCEL 4:

�

THE EAST 173.0 FEET OF THE SOUTH 431.15 FEET OF THE NORTH 481.15 FEET OF LOT 5 IN VIAL�S SUBDIVISION OF THE NORTH 1/2 OF THE NORTHEAST 1/4 OF SECTION�16, TOWNSHIP 38 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN,�IN COOK COUNTY,�ILLINOIS.

�

PARCEL 5:

�

THE NORTH 250 FEET OF THE WEST 1/2 OF LOT 4 (EXCEPT THE WEST 97 FEET THEREOF AND EXCEPT THE NORTH 50 FEET THEREOF TAKEN FOR HIGHWAY PURPOSES) IN VIAL�S SUBDIVISION OF THE NORTH 1/2 OF THE NORTHEAST 1/4 OF SECTION�16, TOWNSHIP 38 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN,�IN COOK COUNTY,�ILLINOIS.

�

STREET ADDRESS: 9801 WEST 55th STREET, COUNTRYSIDE,�ILLINOIS

�

PIN: 18-16-201-022-0000; 18-16-202-016-0000; 18-16-202-022-0000 and 18-16-202-023-0000

�

A-4-1

�

EXHIBIT�A-5 TO CONTRACT

�

LEGAL DESCRIPTION

�

407 East 25th Street, Chicago,�IL 60616

�

PARCEL 1:

�

LOTS 1 TO 15 AND LOT 16 (EXCEPT THE WEST 15 FEET THEREOF) IN BLOCK 4 IN WALKER BROTHERS ADDITION TO CHICAGO, BEING A SUBDIVISION OF PART�OF THE NORTHEAST 1/4 OF SECTION�27, TOWNSHIP 39 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN,�IN COOK COUNTY,�ILLINOIS.

�

PARCEL 2:

�

THE EAST-WEST 18 FOOT PUBLIC ALLEY (EXCEPT THE WEST 65 FEET THEREOF) AND ALL OF THE NORTH-SOUTH 18 FOOT PUBLIC ALLEY LYING WITHIN BLOCK 4 IN WALKER BROTHERS ADDITION TO CHICAGO, BEING A SUBDIVISION OF PART�OF THE NORTHEAST 1/4 OF SECTION�27, TOWNSHIP 39 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN,�IN COOK COUNTY,�ILLINOIS.

�

PROPERTY ADDRESS: 407-421 East 25th Street, Chicago,�Illinois

�

PIN: 17-27-203-003-0000 and 17-27-203-007-0000

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A-5-1

�

EXHIBIT�A-6 TO CONTRACT

�

LEGAL DESCRIPTION

�

6201 South Harlem Avenue, Chicago,�IL 60638

�

Parcel A:

�

A part of the following described portion of Sections 18 and 19, Township 39 North, Range 13 East of the Third Principal Meridian:

�

Commencing at the Southeast corner of Section�13, Township 38 North, Range 12 East of the Third Principal Meridian; thence North along the East line of said Section�13, 332.96 feet; thence East on a line drawn to a point on the East line of the West 1/2 of the Southwest 1/4 of Section�18, Township 38 North, Range 13 East of the Third Principal Meridian, 314.88 feet North of the South line of Section�18 aforesaid 527.32 feet, more or less, to the Western line of the Chicago and Western Indiana Railroad right-of-way; thence Southwesterly along said Westerly right-of-way line 408.68 feet, more or less, to a point on a line drawn from the Southeast corner of Section�13, Township 38 North, Range 12 East of the Third Principal Meridian, to the South 1/4 corner of Section�18, Township 38 North, Range 13 East of the Third Principal Meridian; thence Westerly along the last mentioned line to the place of beginning (except therefrom Lot 1 in Frederick H. Bartlett1s Harlem Avenue Subdivision in the Southwest corner of Section�18, Township 38 North, Range 13 East of the Third Principal Meridian, and in the Northwest corner of Section�19, Township 38 North, Range 13 East of the Third Principal Meridian, in Cook County,�Illinois.

�

Also, except that part taken from Harlem Avenue and 63rd Street which part is described as follows:

�

Note:� For the following courses the south line of lot 9 (which is herein after described) is considered as bearing north 89 degrees 56 minutes 15 seconds east and is identical with the north line of the aforesaid described parcel of land. Commencing at a point 218.17 feet east of the southwest corner of lot 9 in Harlem Sixty Third Resubdivision in the west 1/2 of the southwest 1/4 of section 18 aforesaid; thence south 9.90 feet to a point in a line 5.0 feet north of and parallel to the north face of a one-story brick building (being a brick wall); thence north 89 degrees 55 minutes 30 seconds east on the aforesaid line a distance of 114.86 feet, more or less, to a point in a line 5.0 feet west of and parallel to the west face of a one-story brick and metal building addition (being a metal wall); thence north 0 degrees 13 minutes west on the aforesaid line a distance of 9.86 feet, more or less, to a point in the south line of lots 9 and 10 in the aforesaid subdivision; thence south 89 degrees 56 minutes 15 seconds west along said south line 114.82 feet, more or less, to the place of commencement of this part; and

�

Parcel B:

�

That part of Lots 9 and 10 in Harlem Sixty Third Resubdivision in the west 1/2 of the southwest 1/4 of section 18, township 38 north, range 13 east of the third principal meridian, described as follows:

�

Note:� for the following courses the west line of aforesaid lot 9 is considered as bearing due south. Commencing at a point on the north line of aforesaid lot 9, that is 27 feet east of the northwest corner thereof: thence south in a line a distance of 214.4 feet to a point (being a point 27 feet east and 85.90 feet north of the southwest corner of the aforesaid lot 9); thence north 89 degrees 55 minutes 30 seconds east in a line a distance of 150.0 feet to a point; thence south in a line a distance of 67.9 feet to a point in a line 32.9 feet north of and parallel to the north face of a one story brick building (being a brick wall); thence north 89 degrees 55 minutes 3 0 seconds east on the aforesaid line a distance of 41.17 feet to a point; thence south in a line a distance of 18.0 feet, to the south line of lots 9 and aforesaid; thence north 89 degrees 56 minutes 15 seconds east on the aforesaid south line of lots 9 and 10 a distance of 114.82 feet to a point in a line 5.0 feet west of and parallel to the west face of a one-story brick and metal building addition (being a metal wall); thence north 0 degrees 13 minutes west on the aforesaid line a distance of 51.0 feet to the south face of a one-story brick building (being a brick wall); thence north 89 degrees 54 minutes 30 seconds east a distance of 5.0 feet to a point being the corner of the aforesaid brick wall and the aforesaid metal wall; thence north in line a distance of 0.52 feet to the centerline of aforesaid brick wall (being 1.04 feet thick); thence north 89 degrees 54 minutes 30 seconds east in aforesaid centerline a distance of 117.46 feet to a point in the projection north of the east face of the aforesaid one-story brick and metal building addition (being a brick wall): thence south in a line a distance of 0.52 feet to the aforesaid corner; thence north 89 degrees 54 minutes 30 seconds east on the south face of the aforesaid one-story brick building (being a brick wall) a distance of 8.68 feet to the east face of a brick wall of aforesaid brick building; thence north in aforesaid east face of a brick wall a distance of 2.00 feet to an angle point in aforesaid brick building; thence north 45 degrees 10 minutes 30 seconds east in the southeasterly face of a brick wall of aforesaid building a distance of 31.22 feet to an angle point in aforesaid brick building; thence north 89 degrees 55 minutes 30 seconds east in a south face of aforesaid brick building a distance of 6.50 feet to a point; thence south in a line a distance of 20.30 feet to a point; thence south 89 degrees 55 minutes 30 seconds east in a line a distance of 16.26 feet to a point; thence south in a line a distance of 19.78 feet to a point in the southwesterly line of aforesaid lot 10; thence north 35 degrees 20 minutes 15 seconds east in the southeasterly line of aforesaid lots 9 and 10 a distance of 325.75 feet to the northeast corner of aforesaid lot 9; thence south 89 degrees 55 minutes 30 seconds west� in the north line of aforesaid lot 9 a distance of 680.27 feet to the place of beginning, in Cook County,�Illinois.

�

A-6-1

�

Also described as:

�

Part�of lots 9 and 10, Harlem Sixty-Third Resubdivision, and part of the Southwest Quarter of the Southwest Quarter of Section�18, Township 38 North, Range 13 East of the Third Principal Meridian, City of Chicago, Cook County,�Illinois, being more particularly described as follows:

�

Beginning at the Northeast corner of said lot 9, thence S 35 degrees 20� 27� West 325.75 feet; thence N 00 degrees 00� 00� E, 19.78 feet; thence N 89 degrees 55� 30� W, 16.26 feet; thence N 00 degrees 00� 00� E, 20.30 feet; thence S 89 degrees 55� 30� W, 16.50 feet; thence S 45 degrees 10� 30� W, 31.22 feet; thence S 00 degrees 00� 00� W, 2.00 feet; thence S 89 degrees 54� 30� W, 8.68 feet; thence N 00 degrees 00� 00� E, 0.52 feet; thence S 89 degrees 54� 30� W, 117.46 feet; thence S 00 degrees 00� 00� W, 0.52 feet; thence S 89 degrees 54� 30� W, 5.00 feet; thence S 00 degrees 13� 00� E, 60.91 feet; thence S 89 degrees 55� 30� W, 114.86 feet; thence N 00 degrees 00� 00� E, 27.90 feet; thence S 89 degrees 55� 30� W, 41.17 feet, thence N 00 degrees 00� 00� E, S7.90 feet, thence S 09 degrees 55� 30� W 150 feet; thence N 00�degrees 00� 00� E, 214.40 feet; thence N 89 degrees 55� 06� E, 680.27 feet to the point of beginning.

�

Parcel C:

�

Together with the rights and benefits of that certain Easement and Operating Agreement recorded May�12, 1981 as Document Number 25868424.

�

A-6-2

�

EXHIBIT�A-7 TO CONTRACT

�

LEGAL DESCRIPTION

�

2647 North Western Avenue, Chicago,�IL 60647

�

PARCEL 1:

�

LOTS 53, 54, 55 AND 56 IN BLOCK 3 IN JONES� SUBDIVISION OF LOT 6 IN THE SNOW ESTATE SUBDIVISION IN THE SOUTHWEST 1/4 OF SECTION�30, TOWNSHIP 40 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED OCTOBER 25, 1889 IN BOOK 36 OF PLATS PAGE 36, AS DOCUMENT 1176031,�IN COOK COUNTY,�ILLINOIS.

�

PARCEL 2:

�

LOTS 1 TO 7 (EXCEPT THAT PART�OF SAID LOTS 1 TO 7 LYING WEST OF A LINE 50 FEET EAST OF AND PARALLEL WITH THE WEST LINE OF SECTION�30 AND EXCEPT THE SOUTH 17 FEET OF SAID LOT 7) IN BLOCK 3 IN JONES� SUBDIVISION OF LOT 6 IN THE SNOW ESTATE SUBDIVISION IN THE SOUTHWEST 1/4 OF SECTION�30, TOWNSHIP 40 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED OCTOBER 25, 1889 IN BOOK 36 OF PLATS PAGE 36, AS DOCUMENT 1176031,�IN COOK COUNTY,�ILLINOIS.

�

PARCEL 3:

�

LOTS 12 AND 13 IN BLOCK 3 IN JONES� SUBDIVISION OF LOT 6 IN THE SNOW ESTATE SUBDIVISION IN THE SOUTHWEST 1/4 OF SECTION�30, TOWNSHIP 40 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED OCTOBER 25, 1889 IN BOOK 36 OF PLATS PAGE 36, AS DOCUMENT 1176031,�IN COOK COUNTY,�ILLINOIS.

�

PARCEL 4:

�

ALL OF THE VACATED NORTH AND SOUTH ALLEY LYING EAST OF THE EAST LINE OF LOTS 1 TO 6 AND 7 EXCEPT THE SOUTH 17 FEET THEREOF AND WEST OF AND ADJOINING THE WEST LINE OF LOTS 54, 55 AND 56 AND THE WEST LINE OF SAID LOT 54 PRODUCED SOUTH 22.34 FEET AND WEST OF AND ADJOINING THE WEST LINE OF LOT 12 IN BLOCK 3 IN JONES� SUBDIVISION AFORESAID LYING NORTHEASTERLY OF THE NORTH LINE OF THE SOUTH 17 FEET OF SAID LOT 7 PRODUCED EAST.

�

PARCEL 5:

�

ALL OF THE VACATED NORTHWESTERLY AND SOUTHEASTERLY ALLEY LYING NORTHEASTERLY OF AND ADJOINING THE NORTHEASTERLY LINE OF LOTS 12 AND 13 AND SOUTHWESTERLY OF AND ADJOINING THE SOUTHWESTERLY LINE OF LOTS 53 AND 54 AND SOUTHWESTERLY OF AND ADJOINING THE WEST LINE OF LOT 54 PRODUCED SOUTH 22.34 FEET IN BLOCK 3 IN JONES� SUBDIVISION AFORESAID AND SOUTHWESTERLY OF AND ADJOINING THE SOUTHWESTERLY LINE OF LOT 5 IN COLBERT�S SUBDIVISION AFORESAID, ALL IN COOK COUNTY,�ILLINOIS.

�

PARCEL 6:

�

LOTS 1 TO 5 IN COLBERT�S SUBDIVISION OF LOTS 39 TO 43 AND LOTS 48 TO 52 IN BLOCK 3 OF JONES� SUBDIVISION IN THE SOUTHWEST 1/4 OF SECTION�30, TOWNSHIP 40 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED OCTOBER 25, 1889 IN BOOK 36 OF PLATS PAGE 36, AS DOCUMENT 1176031,�IN COOK COUNTY,�ILLINOIS.

�

A-7-1

�

PARCEL 7:

�

THE SOUTHWESTERLY 1/2 OF VACATED HOLLY AVENUE LYING NORTHEASTERLY OF AND ADJOINING THE FOLLOWING TWO PARCELS OF LAND:

�

PARCEL A:

�

LOTS 53, 54, 55 AND 56 IN BLOCK 3 IN JONES� SUBDIVISION OF LOT 6 IN THE SNOW ESTATES SUBDIVISION IN THE SOUTHWEST 1/4 OF SECTION�30, TOWNSHIP 40 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED OCTOBER 25, 1889 IN BOOK 36 OF PLATS, PAGE 36 AS DOCUMENT 1176031,�IN COOK COUNTY,�ILLINOIS.

�

PARCEL B:

�

LOT 1 IN COLBERT�S SUBDIVISION OF LOTS 39 TO 43 AND LOTS 48 TO 52 IN BLOCK 3 OF JONES� SUBDIVISION AFORESAID, ALL IN COOK COUNTY,�ILLINOIS.

�

TOGETHER WITH APPURTENANT EASEMENTS AS CREATED BY THE PARTY WALL AGREEMENT RECORDED SEPTEMBER 7, 2001, AS DOCUMENT 0010834554.

�

PROPERTY ADDRESS: 2647 NORTH WESTERN AVENUE, CHICAGO,�ILLINOIS

�

PIN:�� 14-30-304-019-0000; 14-30-305-011-0000; 14-30-305-012-0000; 14-30-305-021-0000; 14-30-305022-0000; 14-30-305-023-0000

�

A-7-2

�

EXHIBIT�A-8 TO CONTRACT

�

LEGAL DESCRIPTION

�

101 South 1st Avenue, Maywood,�IL 60153

�

PARCEL 1:

�

THAT PART�OF LOT 3 IN ASSESSOR�S DIVISION IN THE SOUTHWEST 1/4 OF THE NORTHEAST 1/4 OF SECTION�11, TOWNSHIP 39 NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, BOUNDED AND DESCRIBED AS FOLLOWS:

�

BEGINNING AT THE POINT OF INTERSECTION�OF THE WEST LINE OF SAID LOT 3 (SAID WEST LINE OF LOT 3 BEING ALSO THE WEST LINE OF SAID SOUTHWEST 1/4 OF THE NORTHEAST 1/4 OF SECTION�11) WITH THE SOUTHERLY LINE OF THE RIGHT OF WAY OF THE CHICAGO AND NORTHWESTERN RAILROAD (FORMERLY KNOWN AS THE GALENA AND CHICAGO UNION RAILROAD COMPANY) AND RUNNING THENCE SOUTH ALONG SAID WEST LINE OF LOT 3, A DISTANCE OF 128.90 FEET TO AN INTERSECTION�WITH THE WESTWARD PROLONGATION OF THE SOUTHERLY FACE OF THE SOUTHERLY WALL OF A THREE STORY BRICK BUILDING, THENCE EASTWARDLY ALONG SAID WESTWARD PROLONGATION AND ALONG THE SOUTHERLY FACE OF SAID BRICK WALL, (SAID WESTWARD PROLONGATION BEING A LINE WHICH DEFLECTS 79 DEGREES 53 MINUTES 30 SECONDS TO THE LEFT FROM A SOUTHWARD PROLONGATION OF THE LAST DESCRIBED COURSE), A DISTANCE OF 120.07 FEET TO THE EASTERLY FACE OF THE EASTERLY WALL OF SAID BRICK BUILDING, THENCE NORTHWARDLY ALONG THE EASTERLY FACE OF SAID EASTERLY WALL, (SAID EASTERLY WALL BEING PERPENDICULAR TO THE LAST DESCRIBED COURSE), A DISTANCE OF 17.98 FEET TO AN INTERSECTION�WITH A LINE WHICH IS 108.54 FEET, (MEASURED PERPENDICULARLY), SOUTH FROM AND PARALLEL WITH SAID SOUTHERLY RIGHT OF WAY LINE OF THE CHICAGO AND NORTHWESTERN RAILROAD; THENCE EASTWARDLY ALONG SAID PARALLEL LINE, A DISTANCE OF 143.06 FEET TO THE MIDDLE OF THE DES PLAINES RIVER; THENCE NORTHWARDLY ALONG THE MIDDLE OF SAID DES PLAINES RIVER, BEING ALSO THE EASTERLY LINE OF SAID LOT 3, A DISTANCE OF 109.68 FEET TO SAID SOUTHERLY RIGHT OF WAY LINE OF THE CHICAGO AND NORTHWESTERN RAILROAD; AND THENCE WESTERLY ALONG SAID SOUTHERLY RIGHT OF WAY LINE OF THE CHICAGO AND NORTHWESTERN RAILROAD, A DISTANCE OF 301.81 FEET TO THE POINT OF BEGINNING, ALL SITUATED IN COOK COUNTY,�ILLINOIS.

�

PARCEL 2:

�

ACCESS EASEMENT FOR THE BENEFIT OF PARCEL 1 AS CREATED BY GRANT FOR PRIVATE ROADWAY DATED FEBRUARY 19, 2003 BY AND BETWEEN COMMONWEALTH EDISON COMPANY, AS GRANTOR, AND HARRY SCHIFFMAN AND LINDA DONNER SCHIFFMAN, AS GRANTEES, AND RECORDED JULY 25, 2003 AS DOCUMENT NUMBER 0320632111 AND ASSIGNMENT OF EASEMENT DATED APRIL 24, 2003 BY AND BETWEEN HARRY SCHIFFMAN AND LINDA DONNER SCHIFFMAN, AS ASSIGNOR, AND D AND D DEVELOPERS, LLC, AN ILLINOIS LIMITED LIABILITY COMPANY, AS ASSIGNEE, AND RECORDED JULY 25, 2003 AS DOCUMENT NUMBER 0320632112, EASEMENT RE-RECORDED AS DOCUMENT NUMBER _______, AND FURTHER ASSIGNED BY DOCUMENT DATED _______, 2007 AND RECORDED _______, 2007 AS DOCUMENT __________ BY AND BETWEEN D AND D DEVELOPERS, LLC, AND STORAGE PARTNERS OF MAYWOOD, LLC.

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EXHIBIT�A-9 TO CONTRACT

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LEGAL DESCRIPTION

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3402 North Kedzie Avenue, Chicago,�IL 60618

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That part of lot 7 in Commonwealth Edison Company�s Right of Way Subdivision of part of the southeast 1/4 of section 23 and part of the southwest 1/4 of section 24, township 40 north, range 13 east of the third principal meridian, which lies east of the following line: commencing in a line which is 906.19 feet south of and parallel with the south line of West Addison Street (which line bears south 89 degrees 50 minutes 30 seconds east) at a point distant 713.97 feet east of the east line of North Kimball Avenue; thence south 26 degrees 32 minutes 13 seconds west, 59.06 feet; thence south 4 degrees 20 minutes 11 seconds east, 38.36 feet; thence southwesterly along the arc of a circle convex to the northwest having a radius of 347.06 feet a distance of 59.81 feet [the course of the chord of said arc being south 21 degrees 17 minutes 45 seconds west, 59.74 feet); thence south 16 degrees 21 minutes 31 seconds west, tangent to the last described arc, a distance of 75.20 feet; thence southwesterly along the arc of a circle, tangent to the last described course, convex to the southeast having a radius of 395.26 feet, a distance of 54.15 feet (the course of the chord of said arc being south 20 degrees 16 minutes 59 seconds west, 54.11 feet) thence south 60 degrees 30 minutes 41 seconds west, 33.75 feet; thence southwesterly along the arc of a circle convex to the southeast, having a radius of 376.26 feet, a distance of 132.28 feet (the course of the chord of said arc being south 38 degrees 25 minutes 33 seconds west, 131.58 feet) to a point in the south line of aforesaid lot 7, distance 517.64 feet east of the east line of North Kimball Avenue, (except that part lying north of the following described line: commencing at a point in the west line of North Kedzie Avenue (which line bears north 0 degrees 02 minutes 34 seconds east) 172.30 feet north of the southeast corner of said lot 7; thence north 89 degrees 31 minutes 12 seconds west, 12.14 feet; thence westerly along the arc of a circle tangent to the last described course, convex to the north, having a radius of 875.43 feet, a distance of 207.84 feet (the course of the chord of said arc being south 83 degrees 40 minutes 42 1/2 seconds west, 207.36 feet) thence south 76 degrees 52 minutes 37 seconds west, tangent to last described arc, a distance of 498.82 feet to a point in the arc of aforesaid circle having a radius of 376.26 feet, said point being 47.65 feet as measured along said arc, northerly of the point of intersection of said arc with the south line of lot 7); and (except that part of lot 7 described as follows: commencing at the southeast corner of said lot 7, being a point in a line 33 feet west of and parallel with the east line of section 23; thence west along the south line of lot 7 (which bears north 89 degrees 48 minutes 04 seconds west) and being also the south line of the northeast 1/4 of the southeast 1/4 of section 23, a distance of 445 feet; thence north 66 degrees 14 minutes 11 seconds east, 49.24 feet, thence north 79 degrees 06 minutes 34 seconds east, 254.76 feet; thence north 84 degrees 22 minutes 52 seconds east, 150.55 feet to a point in the east line of lot 7, which is 84.26 feet north of the southeast corner of lot 7; thence south along the east line of lot 7 (which line bears south 0 degrees 02 minutes 34 seconds west, 84.26 feet to the point of beginning), in Cook County,�Illinois.

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EXHIBIT�A-10 TO CONTRACT

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LEGAL DESCRIPTION

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57 East Chestnut Road, Columbus, OH 43215

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SITUATED IN THE STATE OF OHIO, COUNTY OF FRANKLIN AND CITY OF COLUMBUS AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:

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BEING ALL OF INLOT NUMBER FOUR HUNDRED NINETY-SEVEN (497) AND ALL OF INLOT NUMBER FOUR HUNDRED NINETY-EIGHT (498) IN SAID CITY OF COLUMBUS, AS THE SAME ARE NUMBERED AND DELINEATED UPON THE RECORDED PLAT THEREOF, OF RECORD IN DEED BOOK �F�, PAGE 332 AND RECORDED IN PLAT BOOK 3, PAGES 248 AND 249, RECORDER�S OFFICE, FRANKLIN COUNTY, OHIO; AND BEING THE SAME REAL ESTATE DESCRIBED IN THE FOLLOWING DEEDS, TO WIT:

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BEING THE WEST ONE-HALF OF INLOT NUMBER FOUR HUNDRED NINETY-SEVEN (497) IN SAID CITY OF COLUMBUS, AS THE SAME IS NUMBERED AND DELINEATED IN DEED BOOK �F�, PAGE 332, RECORDER�S OFFICE, FRANKLIN COUNTY, OHIO (DEED BOOK 2959, PAGE 481);

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BEING THE EAST HALF OF INLOT NO. 497, LOCATED IN THE CITY OF COLUMBUS, COUNTY OF FRANKLIN AND STATE OF OHIO, AND BEING A PARCEL OF REAL ESTATE THIRTY-ONE AND ONE-QUARTER (31 1/4) FEET BY ONE HUNDRED EIGHTY-SEVEN AND ONE-HALF (187 1/2) FEET DEEP, SAID PREMISES BEING IMPROVED WITH A FOUR-STORY AND BASEMENT BRICK BUILDING KNOWN AS 59-61 EAST CHESTNUT STREET (OFFICIAL RECORDS VOLUME 8870, PAGE J20, AND OFFICIAL RECORDS VOLUME 8871, PAGE A03);

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BEING THE WEST TWO-THIRDS (2/3) OF INLOT NUMBER FOUR HUNDRED NINETY-EIGHT (498) IN SAID CITY AS THE SAME IS NUMBERED AND DELINEATED ON THE RECORDED PLAT THEREOF, OF RECORD IN DEED BOOK �F�, PAGE 332, AND RE-RECORDED IN PLAT BOOK 3, PAGES 248 AND 249, RECORDER�S OFFICE, FRANKLIN COUNTY, OHIO (DEED BOOK 3476, PAGE 978);

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BEING THE EAST ONE-THIRD OF INLOT NUMBER FOUR HUNDRED NINETY-EIGHT (498) IN THE CITY OF COLUMBUS, AS THE SAME IS NUMBERED AND DELINEATED UPON THE RECORDED PLAT THEREOF, OF RECORD IN PLAT BOOK �F�, PAGE 332, RECORDER�S OFFICE, FRANKLIN COUNTY, OHIO (OFFICIAL RECORDS VOLUME 30519, PAGE B01).

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THE ABOVE LEGAL DESCRIPTION IS ALSO DESCRIBED AS FOLLOWS:

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SITUATED IN THE STATE OF OHIO, COUNTY OF FRANKLIN, AND CITY OF COLUMBUS, LOT NO. 497 AND LOT NO. 498 OF PLAT BOOK 3, PAGE 248, BEING 0.543 ACRES OF THAT TRACT CONVEYED TO RONALD J. ACKER (ET AL) TRUSTEES OF ELMCC,�INC., LIQUIDATING TRUST DATED AS JUNE 30, 1996 (THE TRUST) OFFICIAL RECORDS VOLUME 33697, PAGE F19 (ALL REFERENCES TO RECORD IN THE RECORDER�S OFFICE, FRANKLIN COUNTY, OHIO) AND BEING MORE FULLY DESCRIBED AS FOLLOWS:

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BEGINNING, FOR REFERENCE, AT THE NORTHWESTERLY CORNER OF LOT NO. 494, PAGE 3, PAGE 248;

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THENCE NORTH 87 DEG 52� 33� EAST, A DISTANCE OF 188.99 FEET, ALONG THE NORTHERLY PROPERTY LINE OF LOT NOS. 494, 495 AND 496 TO A DRILL HOLE SET, BEING THE POINT OF BEGINNING;

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THENCE NORTH 87 DEG 52� 33� EAST, A DISTANCE OF 125.97 FEET TO AN EXISTING DRILL HOLE;

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THENCE SOUTH 02 DEG 05� 20� EAST, A DISTANCE OF 187.79 FEET, ALONG THE WESTERLY PROPERTY LINE OF SEWARD D. SCHOOLER (ORV 12576, PAGE J05), MILDRED L. WILL (DB 3284, PAGE 642), AND MANDY�S INVESTMENT INC. (DB 3802, PAGE 509) TO A RAILROAD SPIKE FOUND;

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THENCE SOUTH 87 DEG 54� 27� WEST, A DISTANCE OF 125.93 FEET TO A MAG NAIL SET;

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THENCE NORTH 02 DEG 06� 04� WEST, A DISTANCE OF 187.72 FEET TO THE POINT OF BEGINNING, CONTAINING 0.543 ACRES, MORE OR LESS ACCORDING TO AN ACTUAL FIELD SURVEY OF THE PREMISES IN AUGUST OF 1998.

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BASIS OF BEARINGS ARE BASED UPON THE NORTHERLY LOT LINE OF LOT NOS. 494-498, ASSUMED BEARING NORTH 87 DEG 52� 33� EAST, ALL OTHER BEARINGS THEN CALCULATED FROM THIS MERIDIAN.

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EXHIBIT�A-11 TO CONTRACT

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LEGAL DESCRIPTION

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1531 Georgesville Road, Columbus, OH 43228

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SITUATED IN THE STATE OF OHIO, COUNTY OF FRANKLIN, CITY OF COLUMBUS, VIRGINIA MILITARY SURVEY NO. 1462, AND BEING A 3.362 ACRE TRACT OF LAND THE REMAINDER OF A 3.860 ACRE TRACT OF LAND BELONGING TO BUCKEYE SELF STORAGE GEORGESVILLE LLC., OF RECORD IN INSTRUMENT NUMBER 200503280056272 AT THE FRANKLIN COUNTY RECORDERS OFFICE, FRANKLIN COUNTY, OHIO, AND SAID 3.362 ACRE TRACT OF LAND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

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BEGINNING AT AN IRON PIN (FOUND), SAID IRON PIN BEING LOCATED AT THE MOST SOUTHEASTERLY PROPERTY CORNER OF A 1.780 ACRE TRACT OF LAND BELONGING TO LONG PAUL PROPERTIES INC., OF RECORD IN OFFICIAL RECORD 29982 J05 AT SAID RECORDERS OFFICE, SAID IRON PIN ALSO BEING LOCATED AT THE NORTHERLY RIGHT-OF-WAY LINE OF GEORGESVILLE ROAD OF RECORD IN PLAT BOOK 45, PAGE 68 AND 69 AT SAID RECORDERS OFFICE, SAID IRON PIN ALSO BEING LOCATED AT THE MOST SOUTHWESTERLY PROPERTY CORNER OF SAID 3.860 ACRE TRACT;

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THENCE ALONG THE EASTERLY PROPERTY LINE OF SAID 1.780 ACRE TRACT, AND ALSO ALONG THEE WESTERLY PROPERTY LINE OF SAID 3.860 ACRE TRACT, N 13� 22�04� W, A DISTANCE OF 332.00 FEET TO AN IRON PIN (FOUND), SAID IRON PIN BEING LOCATED AT THE SOUTHERLY PROPERTY LINE OF A 9.252 ACRE TRACT BELONGING TO BOLTONFIELD STREET LLC., OF RECORD IN INSTRUMENT NO. 199806260158778, SAID IRON PIN ALSO BEING LOCATED AT THE MOST NORTHWESTERLY PROPERTY CORNER OF SAID 3.860 ACRE TRACT;

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THENCE ALONG THE SAID SOUTHERLY PROPERTY LINE OF SAID 9.252 ACRE TRACT AND ALSO ALONG THE NORTHERLY PROPERTY LINE OF SAID 3.860 ACRE TRACT, N 76� 37�28� E, A DISTANCE OF 552.78 FEET TO AN IRON PIN (FOUND), SAID IRON PIN BEING LOCATED AT THE MOST NORTHEASTERLY PROPERTY CORNER OF SAID 3.860 ACRE TRACT SAID IRON PIN ALSO BEING LOCATED AT THE WESTERLY PROPERTY LINE OF A 9.990 ACRE TRACT BELONGING TO WABASH NATIONAL TRAILER CENTERS INC., OF RECORD IN INSTRUMENT NO. 200309260308244;

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THENCE ALONG THE SAID EASTERLY PROPERTY LINE OF SAID 3.860 ACRE TRACT, AND ALSO ALONG THE SAID WESTERLY PROPERTY LINE OF SAID 9.990 ACRE TRACT, S 01� 39�04� W, A DISTANCE OF 194.74 FEET TO AN IRON PIN (SET);

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THENCE ACROSS SAID 3.860 ACRE TRACT, S 85� 20�14� W, A DISTANCE OF 112.41 FEET TO AN IRON PIN (SET);

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THENCE CONTINUING ACROSS SAID 3.860 ACRE TRACT, S 76� 37�56� W, A DISTANCE OF 50.32 FEET TO AN IRON PIN (SET);

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THENCE AGAIN CONTINUING ACROSS SAID 3.860 ACRE TRACT, S 13� 22�04� E, A DISTANCE OF 161.00 FEET TO AN IRON PIN (SET), SAID IRON PIN BEING LOCATED AT THE SAID NORTHERLY RIGHT-OF-WAY LINE OF GEORGESVILLE ROAD;

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THENCE ALONG THE SAID NORTHERLY RIGHT-OF-WAY LINE, S 76� 37�56� W, A DISTANCE OF 340.88 FEET TO THE POINT OF BEGINNING AND CONTAINING 3.362 ACRES OF LAND MORE OR LESS.

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BASIS OF BEARING BEING THE NORTHERLY RIGHT-OF-WAY LINE OF GEORGESVILLE ROAD S 76� 37�56� W, OF RECORD IN PLAT BOOK 45, PAGES 68 AND 69, AT THE FRANKLIN COUNTY RECORDERS OFFICE, FRANKLIN COUNTY, OHIO.

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EXHIBIT�A-12 TO CONTRACT

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LEGAL DESCRIPTION

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707 Enterprise Drive, Lewis Center, OH 43035

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PARCEL 1:

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SITUATED IN THE STATE OF OHIO, COUNTY OF DELAWARE, AND IN THE TOWNSHIP OF ORANGE:

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BEING LOT NUMBER SEVEN HUNDRED THIRTY-NINE (739),�IN GREEN MEADOWS CORPORATE PARK PHASE II, AS THE SAME IS NUMBERED AND DELINEATED UPON THE RECORDED PLAT THEREOF, OF RECORD IN PLAT BOOK 18, PAGE 76, RECORDER�S OFFICE, DELAWARE COUNTY, OHIO.

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PARCEL 2:

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SITUATED IN THE STATE OF OHIO, COUNTY OF DELAWARE, AND IN THE TOWNSHIP OF ORANGE:

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BEING FIFTY (50) FEET OFF OF THE ENTIRE WEST SIDE OF LOT NUMBER SEVEN HUNDRED FORTY (740),�IN GREEN MEADOWS CORPORATE PARK PHASE II, AS THE SAME IS NUMBERED AND DELINEATED UPON THE RECORDED PLAT THEREOF, OF RECORD IN PLAT BOOK 18, PAGE 76, RECORDER�S OFFICE, DELAWARE COUNTY, OHIO.

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PARCEL 3:

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SITUATED IN THE STATE OF OHIO, COUNTY OF DELAWARE, AND IN THE TOWNSHIP OF ORANGE:

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BEING LOT NUMBER SEVEN HUNDRED THIRTY-EIGHT (738),�IN GREEN MEADOWS CORPORATE PARK PHASE II, AS THE SAME IS NUMBERED AND DELINEATED UPON THE RECORDED PLAT THEREOF, OF RECORD IN PLAT BOOK 18, PAGE 76, RECORDER�S OFFICE, DELAWARE COUNTY, OHIO.

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PARCEL 4:

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SITUATED IN THE STATE OF OHIO, COUNTY OF DELAWARE, AND IN THE TOWNSHIP OF ORANGE:

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BEING FIFTY (50) FEET OFF THE WEST SIDE OF LOT NUMBER SEVEN HUNDRED THIRTY-NINE (739),�IN GREEN MEADOWS CORPORATE PARK PHASE II, AS THE SAME IS NUMBERED AND DELINEATED UPON THE RECORDED PLAT THEREOF, OF RECORD IN PLAT BOOK 18, PAGE 76, RECORDER�S OFFICE, DELAWARE COUNTY, OHIO

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BEING THE SAME PROPERTY DESCRIBED IN TITLE COMMITMENT NO. 027160233 OF CHICAGO TITLE INSURANCE COMPANY, WHICH BEARS AN EFFECTIVE DATE OF APRIL 25, 2007, AT 7:00 AM.

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EXHIBIT�A-13 TO CONTRACT

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LEGAL DESCRIPTION

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3344 Morse Road, Columbus, OH 43231

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Situated in the State of Ohio, County of Franklin, City of Columbus, being in South half of Lot 9, Section�3, Township 2, Range 17, United States Military Lands, containing 4.120 acres of land, more or less, said 4.120 acres being out of that 7.633 acre tract of land described in the deed to properties of Today,�Corp., of record in Official Record 15789A01, Recorder�s Office, Franklin County, Ohio, said 4.120 acres being more particularly described as follows:

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Beginning, for reference, at the centerline intersection of Morse Road and Trindel Way; thence, with the centerline of said Morse Road N 85� 01� 54� W, a distance of 329.34 feet to the Southeasterly corner of that 0.948 acre tract of land described in the deed to the City of Columbus, Ohio, of record in Instrument No.�199708070065490, Recorder�s Office, Franklin County, Ohio; thence B 4� 58� 43� E, with the Easterly line of said 0.948 acre tract, with the Easterly line of that 1.134 acre tract of land described in the deed to Ebert�& Wolf Enterprises, LLC, of record in Instrument No.�200009270196580 and with the Westerly line of that 3.975 acre tract of land described in Exhibit�A in the deed to George J. Evans, of record in Official Record 07153103, both being of record in the Recorder�s Office, Franklin County, Ohio, a distance of 339.66 feet to a �-inch (I.D.) iron pipe found at the Northeasterly corner of said 1.134 acre tract and at the true point of beginning;

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Thence, from said true point of beginning, N 85� 01�54� W, with a Northerly line of said 1.134 acre tract, a distance of 190.12 feet to a �-inch (I.D.) iron pipe found at the Northwesterly corner of said 1.134 acre tract and in the Easterly line of that 1.529 acre tract of land described in the deed to BNY Midwest Trust Company, of record in Instrument No.�200306300197709, Recorder�s Office, Franklin County, Ohio;

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Thence N 4� 56� 34� E, with the Easterly line of said 1.529 acre tract, a distance of 40.05 feet to a 5/8-inch diameter solid iron pin found at the Northeasterly corner of said 1.529 acre tract;

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Thence N 85� 03� 04� W, with the Northerly line of said 1.529 acre tract, a distance of 221.72 feet to a 5/8-inch diameter solid iron pin found at the Northwesterly corner of said 1.529 acre tract;

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Thence S 4� 59� 40� W, with the Westerly line of said 1.529 acre tract, a distance of 299.97 feet to a P.K. nail found in the Northerly right-of-way line of said Morse Road at the Southwesterly corner of said 1.529 acre tract, said P.K. nail also being in the Northerly line of said 0.948 acre tract;

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Thence N 85� 01� 54� W, with the Northerly right-of-way line of said Morse Road and with the Northerly line of said 0.948 acre tract, a distance of 103.93 feet to a �-inch (I.D.) iron pipe found in the Easterly line of that 0.303 acre tract of land described in the deed to Robert Chapa, of record in Instrument No.�200412030276073, Recorder�s Office, Franklin County, Ohio;

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Thence N 5� 31� 26� E, with the Easterly line of said 0.303 acre tract and with the Easterly line of that 2.257 acre tract of land described in the deed to James A. and Margaret Spurgeon, of record in Instrument No.�199705190027177, a distance of 575.46 feet to a �-inch (I.D.) iron pipe found at the Northeasterly corner of said 2.257 acre tract and in the Southerly line of that 10.979 acre tract of land described in the deed to Parkridge Apartments, LTD, of record in Deed Book 3205, Page�379, all being of record in the Recorder�s Office, Franklin County, Ohio;

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Thence S 85� 05� 56� E, with the Southerly line of said 10.979 acre tract and with the Southerly line of Parkridge Village Section�4, a subdivision of record in Plat Book 62, Pages�82 and 83, Recorder�s Office, Franklin County, Ohio, a distance of 510.40 feet to a �-inch (I.D.) iron pipe found at the Northwesterly corner of said 3.975 acre tract;

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Thence S 4� 58� 43� W, with the Westerly line of said 3.975 acre tract, a distance of 316.03 feet to the true point of beginning and containing 4.120 acres of land, more or less.

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We hereby state that the above description was prepared from information obtained from an actual field survey of the premises conducted by Bauer, Davidson�& Merchant,�Inc., in August�of 2006.

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The bearings referred to in the hereinabove description are based on the bearing N 85� 04� 17� W for the centerline of Morse Road as shown on the recorded plat of Parkridge Village Section�4, of record in Plat Book 62, Pages�82 and 83, Recorder�s Office, Franklin County, Ohio.

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Together with:

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Easement agreement of record in Instrument Number 200306300197714, as appurtenant easement to the insured legal description.

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EXHIBIT�A-14 TO CONTRACT

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LEGAL DESCRIPTION

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4061 Roberts Road, Columbus, OH 43228

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SITUATED IN THE STATE OF OHIO, COUNTY OF FRANKLIN, CITY OF COLUMBUS, VIRGINIA MILITARY SURVEY NO. 544, BEING PART�OF THAT 4.000 ACRE TRACT AND PART�OF THAT 10.825 ACRE TRACT DESCRIBED IN DEEDS TO BBI REALTY,�INC. OF RECORD IN INSTRUMENT NUMBER 200009210191858 AND INSTRUMENT NUMBER 200005240101834, RESPECTIVELY (ALL REFERENCES IN THIS DESCRIPTION ARE TO THE RECORDS IN THE RECORDER�S OFFICE, FRANKLIN COUNTY, OHIO) AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

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BEGINNING, FOR REFERENCE, AT A MAG NAIL FOUND AT THE NORTHEASTERLY CORNER OF SAID 4.000 ACRE TRACT, BEING ON THE NORTH LINE OF SAID VIRGINIA MILITARY SURVEY NO. 544 AT THE INTERSECTION�OF THE WESTERLY RIGHT-OF-WAY LINE OF CONRAIL RAILROAD, WHICH IS 50 FEET SOUTHWESTERLY (AS MEASURED AT RIGHT ANGLES) FROM THE CENTERLINE OF SAID RAILROAD;

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THENCE SOUTH 50� 35� 00� WEST 376.34 FEET, ALONG SAID VIRGINIA MILITARY SURVEY LINE, THE NORTHERLY LINE OF SAID 4.000 ACRE TRACT, AND BEING 15.00 FEET NORTHERLY (AS MEASURED AT RIGHT ANGLES) FROM THE CENTERLINE OF ROBERTS ROAD (60 FOOT WIDE RIGHT-OF-WAY) TO AN IRON PIN FOUND CAPPED �HOCKADEN� AT THE NORTHWESTERLY CORNER OF SAID 4.000 ACRE TRACT, A NORTHEASTERLY CORNER OF SAID 10.825 ACRE TRACT, THE TRUE POINT OF BEGINNING;

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THENCE SOUTH 39� 00� 00� EAST 312.70 FEET, ALONG A COMMON LINE BETWEEN THE TWO TRACTS, PASSING AN IRON PIN SET AT 45.00 FEET, TO AN IRON PIN SET;

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THENCE SOUTH 58� 18� 30� EAST 252.79 FEET, CROSSING SAID TRACT WITH A NEW DIVISION LINE, TO AN IRON PIN SET;

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THENCE NORTH 50� 35� 00� EAST 292.75 FEET, CROSSING SAID 10.825 ACRE TRACT, TO AN IRON PIN FOUND CAPPED �HOCKADEN� ON THE WESTERLY RIGHT-OF-WAY LINE OF SAID CONRAIL RAILROAD;

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THENCE THE FOLLOWING SEVEN (7)�COURSES BEING ALONG LINES OF SAID 10.825 ACRE TRACT;

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1.	SOUTH 39� 00� 00� EAST 219.00 FEET, ALONG A WESTERLY RIGHT-OF-WAY OF SAID RAILROAD, TO AN IRON PIN FOUND CAPPED �HOCKADEN�;
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2.	THENCE SOUTH 24� 05� 00� EAST 192.72 FEET, ALONG A WESTERLY RIGHT-OF-WAY LINE OF SAID RAILROAD, TO AN IRON PIN FOUND CAPPED �HOCKADEN�;
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3.	THENCE NORTH 51� 15� 51� EAST 66.75 FEET, ALONG A WESTERLY RIGHT-OF-WAY LINE OF SAID RAILROAD, TO A 3/4� HOLLOW IRON PIN FOUND;
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4	THENCE SOUTH 38� 59� 33� EAST 874.57 FEET, ALONG A WESTERLY RIGHT-OF-WAY LINE OF SAID RAILROAD, TO AN IRON PIN FOUND CAPPED �HOCKADEN�;
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5.	THENCE SOUTH 63� 49� 00� WEST 46.97 FEET TO AN IRON PIN FOUND CAPPED �HOCKADEN� ON THE EASTERLY RIGHT-OF-WAY LINE OF PENN CENTRAL RAILROAD;
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6.	THENCE NORTH 58� 18� 30� WEST 1925.00 FEET, PASSING AN IRON PIN SET AT 1877.44 FEET, TO THE NORTHWESTERLY CORNER OF SAID 10.825 ACRE TRACT, ON THE NORTHERLY LINE OF VIRGINIA MILITARY SURVEY NO 544;

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7	THENCE NORTH 50� 35� 00� EAST 288.96 FEET, ALONG SAID VIRGINIA MILITARY SURVEY LINE, TO THE TRUE POINT OF BEGINNING, CONTAINING 10.210 ACRES OF LAND, MORE OR LESS.

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BEARINGS ARE USED FOR THE DETERMINATION OF ANGLES ONLY. FOR THE PURPOSE OF THIS DESCRIPTION A BEARING OF NORTH 50� 35� 00� EAST WAS USED ON THE NORTHERLY LINE OF SAID 10.825 ACRE TRACT. THE IRON PINS SET ARE 5/8� REBARS, 30� LONG WITH YELLOW PLASTIC CAPS STAMPED �SITE ENG INC�.

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EXHIBIT�A-15 TO CONTRACT

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LEGAL DESCRIPTION

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3391 South High Street, Columbus, OH 43207

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SITUATED IN THE STATE OF OHIO, COUNTY OF FRANKLIN, CITY OF COLUMBUS, BEING IN SECTION�9 TOWNSHIP 4, RANGE 22, CONGRESS LANDS, AND BEING ALL OF THOSE THREE (3)�PARCELS DESCRIBED IN A DEED TO SCIOTO TRAIL SWIMMING CLUB,�INC. OF RECORD IN DEED BOOK 2282, PAGE 557 (ALL REFERENCES IN THIS DESCRIPTION ARE TO THE RECORDS IN THE RECORDER�S OFFICE, FRANKLIN COUNTY, OHIO) AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

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BEGINNING AT A POINT IN THE CENTERLINE OF SOUTH HIGH STREET (STATE ROUTE 23) AND FORMERLY KNOWN AS COLUMBUS AND CHILLICOTHE PIKE, BEING NORTH 19� 29� 00� EAST 359.78 FEET FROM THE CENTERLINE INTERSECTION�WITH THE SOUTH LINE OF MARION TOWNSHIP ALSO BEING THE CENTERLINE OF WILLIAMS ROAD TO THE EAST;

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THENCE NORTH 83� 20� 26� WEST 626.98 FEET, ALONG THE SOUTHERLY LINE OF SAID FIRST PARCEL AND THE NORTHERLY LINE OF THE 60 FOOT WIDE TRACT EXCEPTED FROM SAID FIRST PARCEL, BEING DESCRIBED AS PARCEL 6 IN A DEED TO AUTHENA CLAPROOD IN O.R.V. 19962, PAGE B15, PASSING A 5/8� HOLLOW IRON PIN FOUND AT 41.02 FEET, TO A 5/8� HOLLOW IRON PIN FOUND IN CONCRETE AT THE NORTHWESTERLY CORNER OF SAID PARCEL 6;

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THENCE NORTH 05� 16� 13� EAST 185.30 FEET, ALONG AN EASTERLY LINE OF THAT 15.022 ACRE TRACT DESCRIBED IN A DEED TO FAIR LANE, L.P. IN INSTRUMENT NO. 199712220172728, TO A NAIL FOUND IN CONCRETE AT THE SOUTHEASTERLY CORNER OF SAID THIRD PARCEL;

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THENCE NORTH 85� 50� 37� WEST 857.54 FEET ALONG THE NORTHERLY LINE OF SAID 15.022 ACRE TRACT, TO A 5/8� HOLLOW IRON PIN FOUND IN CONCRETE AT THE SOUTHWEST CORNER OF SAID THIRD PARCEL;

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THENCE NORTH 05� 13� 44� EAST 456.50 FEET, ALONG AN EASTERLY LINE OF TAX PARCEL #010-112478 TRANSFERRED TO THE STATE OF OHIO ON APRIL 11,1920, TO A 5/8� HOLLOW IRON PIN FOUND IN CONCRETE AT THE NORTHWEST CORNER OF SAID THIRD PARCEL, BEING ON A SOUTHERLY LINE OF THAT 15.676 ACRE TRACT DESCRIBED IN A DEED TO SOUTHWAY POST NO. 144,�INC., THE AMERICAN LEGION, DEPARTMENT OF OHIO IN O.R.V. 6352, PAGE H14;

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THENCE SOUTH 85� 51� 07� EAST 855.52 FEET, ALONG A SOUTHERLY LINE OF SAID 15.676 ACRE TRACT, TO A 5/8� REBAR SET AT THE NORTHEAST CORNER OF SAID THIRD PARCEL;

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THENCE SOUTH 04� 58� 33� WEST 45.61 FEET ALONG A WESTERLY LINE OF THAT 2.210 ACRE TRACT DESCRIBED IN A DEED TO ROBERT N. SHAMANSKY IN O.R.V. 30349, PAGE B01, TO A POINT ON A CONCRETE CHANNEL AT THE MOST NORTHERLY CORNER OF SAID SECOND PARCEL;

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THENCE SOUTH 51� 55� 46� EAST 423.53 FEET, ALONG A LINE OF SAID 2.210 ACRE TRACT TO AN IRON PIN FOUND CAPPED #5963, AT A CORNER OF SAID SECOND PARCEL;

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THENCE SOUTH 38� 08� 31� WEST 57.03 FEET, ALONG A WESTERLY LINE OF MELVIN G. AND LUCINDA J. MCCLASKE, TO A 2-1/2� HOLLOW IRON PIN FOUND (1.5� ABOVE GRADE) AT A CORNER OF SAID SECOND PARCEL;

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THENCE SOUTH 58� 45� 36� EAST 354.02 FEET, ALONG THE SOUTHERLY LINE OF SAID MCCLASKE TRACTS IN O.R.V. 10919, PAGE F07 TO A P.K. NAIL SET IN THE CONCRETE GUTTER OF SAID SOUTH HIGH STREET, THE MOST EASTERLY CORNER OF SAID SECOND PARCEL;

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A-15-1

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THENCE SOUTH 70� 31� 00� EAST 30.00 FEET, ALONG A NORTHERLY LINE OF SAID FIRST PARCEL, TO A POINT ON THE CENTERLINE OF SAID SOUTH HIGH STREET;

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THENCE SOUTH 19� 29� 00� WEST 177.18 FEET, ALONG THE CENTERLINE OF SOUTH HIGH STREET, THE EASTERLY LINE OF SAID FIRST PARCEL, TO THE POINT OF BEGINNING, CONTAINING 14.559 ACRES OF LAND, MORE OR LESS, SUBJECT TO ANY EASEMENTS, RESTRICTIONS OR RIGHT-OF-WAYS OF PREVIOUS RECORD.

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NOTE:� BEARINGS ARE USED FOR THE DETERMINATION OF ANGLES ONLY. FOR THE PURPOSE OF THIS DESCRIPTION A BEARING OF NORTH 19� 29� 00� EAST WAS USED ON THE CENTERLINE OF SOUTH HIGH STREET AS CALLED FOR ON THE PLAT OF HOME ACRES ADDITION IN PLAT BOOK 16, PAGE 23 AND DEED BOOK 2282, PAGE 557.

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THE 5/8� REBARS SET ARE 30� LONG WITH YELLOW PLASTIC CAPS STAMPED SITE ENG,�INC. THE ABOVE DESCRIPTION WAS PREPARED FROM AN ACTUAL FIELD SURVEY OF THE PREMISES DURING SEPTEMBER, 2001 BY SITE ENGINEERING,�INC.

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A-15-2

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EXHIBIT�A-16 TO CONTRACT

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LEGAL DESCRIPTION

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513 and 525 South County Trail, Exeter, RI 2822

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513 South County Trail:

�

That certain lot or parcel of land, together with all the buildings and improvements thereon situated in the Town of Exeter, County of Washington, State of Rhode Island, being more particularly described as follows:

�

A certain tract or parcel of land with all the buildings and improvements thereon, beginning at an iron stake bound on the Southeasterly comer of land conveyed and running in a Northerly direction approximately one hundred fifty-nine (159) feet to an iron stake bound; thence turning and running in a Westerly direction approximately two hundred seventy-three and ninety-six (273.96) feet to an iron stake bound; thence turning and running in a southerly direction approximately two hundred eight (208) feet to an iron stake bound; thence turning and running in an Easterly direction to the first mentioned bound at the point and place of beginning.

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Said parcel of land bounding on the east by South County Trail, so-called, on the south by land now or formerly of Habel Enterprizes, LLC, and on the west and north by land now or formerly of Armand Houston.

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525 South County Trail:

�

That certain lot or parcel of land, together with all buildings and improvements thereon, located on the west side of South County Trail, so-called, in the Town of Exeter, County of Washington, State of Rhode Island, and being more particularly bounded and described as follows:

�

Beginning at a Rhode Island Highway Bound, said bound being 80.00 feet right and west of centerline station 539 + 31 of South County Trail, as delineated by Rhode Island State Board of Public Records Plat No.�344 Sheet No.�20, said point being the northeast corner of the herein described parcel;

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Thence running westerly, bounded northerly in part by land now or formerly of Herbert G. Dyer et ux and in part by Armand A. Houston, a distance of 497.31 feet to a point, said point being the northwest corner of the herein described parcel;

�

Thence proceeding N 63� 56� 05� E, bounded northerly by the said Courtois land, a distance of one hundred sixty and 00/100 (160.00) feet to other land now or formerly of R. John, Sharon A., Christopher J.�& John R. Courtois and the most northerly corner of the parcel herein-described;

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Thence turning an interior angle of 90 degrees - 00 minutes - 00 seconds and running southerly, bounded westerly by land now or formerly of Armand A. Houston, a distance of 145.00 feet to a point;

�

Thence turning an interior angle of 270 degrees - 00 minutes - 00 seconds and running southerly bounded westerly by land or formerly of Armand A. Houston, a distance of 15.00 feet to a point;

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Thence turning an interior angle of 90 degrees - 00 minutes - 00 seconds and running easterly, bounded southerly by land now or formerly of Joseph J. Geaber, Philip Geaber, and Jean-Claude St. Pierre, a distance of 338.56 feet to a point on a stone wall;

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Thence turning an interior angle of 90 degrees - 25 minutes - 56 seconds and running northerly along a stone wall, said wall being the westerly line of South County Trail, a distance of 3.09 feet to a point on a stone wall;

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Thence turning an interior angle of 182 degrees - 09 minutes -18 seconds and continuing northerly along said stone wall, a distance of 87.59 feet to a point;

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A-16-1

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Thence turning an interior angle of 184 degrees - 01 minutes - 05 seconds and continuing northerly along said stone wall, a distance of 84.98 feet to the point and place of beginning.

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A-16-2

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EXHIBIT�A-17 TO CONTRACT

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LEGAL DESCRIPTION

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61 Putnam Pike, Johnston, RI 2919

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Those four (4)�certain tracts or parcels of land, with all the buildings and improvements thereon, situated on the northeasterly side of Putnam Pike and northeasterly of Putnam Pike in the Town of Johnston, county of Providence, State of Rhode Island, bounded and described as follows:

�

Parcel One:

�

That certain tract or parcel of land with all the buildings and improvements thereon, situated on the northeasterly side of Putnam Ike in the Town of Johnston, County of Providence, State of Rhode Island, bounded and described as follows:

�

Beginning at a point in the northeasterly line of Putnam Pike at the southwest corner of the within described tract of land, said point being also the northwesterly corner of land now or formerly of Rosario R. Capraro and Anna Maria Capraro; thence running northwesterly bounded by said northeasterly line of Putnam Pike a distance of thirty and 75/100 (30.75) feet to a point; thence turning a right angle and running northeasterly bounding northwesterly on land now or formerly of Linda E. Cardente, a distance of one hundred twenty (120) feet, more or less, to a point; thence turning and running northwesterly bounding southwesterly on said other land now or formerly of Linda E. Cardente, a distance of eighty (80) feet, more or less, to a point; thence turning and running northeasterly bounding northwesterly by said last-named land a distance of one hundred seven and 48/100 (107.48) feet, more or less, to a point; thence turning and running northwesterly bounding southwesterly on said other land now or formerly of said Cardente, a distance of eighty-nine and 71/00 (89.71) feet, and continuing northwesterly bounding southwesterly on land now or formerly of Peter Derosiers a distance of twenty-five and 20/100 (25.20) feet to a granite bound; thence turning an interior angle of 93� 12� and running northeasterly bounding northwesterly on land now or formerly of Lydia F. Mathewson a distance of one hundred sixty-seven and 28/100 (167.28) feet to a granite bound; thence turning an interior angle of 260� 52� and running northwesterly bounding southwesterly on said Mathewson land a distance of ninety-seven and 2/100 (97.02) feet to a granite bound; thence turning an interior angle of 98� 2� and running northeasterly bounding northwesterly on land now or formerly of Riza A. Jenckes a distance of fifty-eight and 25/100 (58.25) feet to a granite bound; thence turning an interior angle of 268� 15� 30� and running northwesterly bounding southwesterly on said Jenckes land a distance of fifty-six and 65/100 (56.65) feet to a granite bound on the southerly side of Jenckes Street; thence turning an interior angle of 79� 8� and running northeasterly bounding by said Jenckes Street a distance of one hundred thirty-two and 37/100 (132.37) feet to a granite bound; thence continuing northeasterly bounded by still other land now or formerly of said Cardente a distance of one hundred eight (108) feet, more or less, to a point, thence turning and running southeasterly bounding northeasterly on land now or formerly of New York, New Haven and Hartford Railroad Company a distance of six hundred eighty (680) feet, more or less, to a concrete bound at the northeasterly corner of land now or formerly of Michael A. Grieco; thence turning and running westerly bounding southerly on said Grieco land a distance of thirty-six and 91/100 (36.91) feet to a granite bound; thence turning an interior angle of 190� 19� and running westerly bounding southerly on said Grieco land a distance of two hundred five and 34/100 (205.34) feet to a granite bound; thence turning an interior angle of 183� 50� and running westerly bounding southerly still by said Grieco land in part and in part by other land now or formerly of said Cardente a distance of one hundred forty-nine and 20/100 (149.20) feet to a granite bound; thence turning an interior angle of 121� 25� and running northwesterly bounding southwesterly on said other Cardente land a distance of fifty-three and 25/100 (53.25) feet to a granite bound; thence turning an interior angle of 272� 46� 30� and running southwesterly bounding southeasterly on said other Cardente land in part and in part on said Capraro land a distance of one hundred ninety-seven and 90/100 (197.90) feet to the point and place of beginning.

�

Meaning and intending to convey and hereby conveying a portion of the same premises conveyed to Salvatore J. Cardente and Linda E. Cardente by deed from Helen Rosen dated July�8, 1960 and recorded with the Land Evidence Records of the Town of Johnston in Book 93 at page�468.

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Putnam Avenue
Johnston, Rl 02919

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A-17-1

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Parcel Two:

�

That certain tract or parcel of land, with all buildings and improvements thereon, situated on Jenckes Street in the Town of Johnston, County of Providence, State of Rhode Island, laid out and designated as Lot No.�32 (thirty-two) on that certain plat entitled, �PLAT OF HOUSE LOTS IN GRANITEVILLE BELONGING TO LYDIA F. MATHEWSON AS LAID OUT BY R.S. MOWRY NO. 1895�, which said plat is recorded with the Land Evidence Records of the Town of Johnston on Plat Card 82.

�

Meaning and intending to convey and hereby conveying a portion of the same premises conveyed to Salvatore J. Cardente and Linda E. Cardente by deed from Helen Rosen dated July�8, 1960, and recorded with the Land Evidence Records of the Town of Johnston in Book 93 at Page�468.

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For indexing purposes, the property is identified as Lot No.�81 as at present shown on Johnston Tax Assessor�s Plat 39.

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Jenckes Street
Johnston, Rl 02919

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Parcel Three:

�

That certain tract or parcel of land, with all the buildings and improvements thereon, situated on the northeasterly side of Putnam Pike in the Town of Johnston, County of Providence, State of Rhode Island, bounded and described as follows:

�

Beginning at a point in the northeasterly line of Putnam Pike, said point being also the southwesterly corner of land now or formerly of Pierre D. Laboissonniere and wife; thence running southeasterly bounding southwesterly by said Putnam Pike a distance of one hundred sixty-nine and 65/100 (169.65) feet, more or less, to a point; thence turning and running northeasterly bounding southeasterly by other land now or formerly of Linda E. Cardente, a distance of one hundred twenty (120) feet, more or less, to a point; thence turning and running northwesterly bounding northeasterly still on said other land now or formerly of Linda E. Cardente, a distance of eighty (80) feet, more or less, to a point; thence turning and running northeasterly bounded southeasterly by said last named land a distance of one hundred seven and 48/100 (107.48) feet, more or less, to a point; thence turning and running northwesterly by still other land now or formerly of said Cardente, a distance of eighty-nine and 71/100 (89.71) feet to the southeasterly corner of land now or formerly of Jeannette A. Desrosiers; thence turning and running southwesterly bounding northwesterly in part by said Desrosiers land, in part by the southerly end of a gangway known as Jenckes Lane and in part by land now or formerly of said Laboissonniere a distance of two hundred twenty-seven and 48/100 (227.48) feet to Putnam Pike and the point and place of beginning.

�

Meaning and intending to convey and hereby conveying the same premises conveyed to Salvatore J. Cardente and Linda E. Cardente by deed from Jack E. Smith and Betty Smith dated August�26, 1968, and recorded with the Land Evidence Records of the Town of Johnston in Book 113 at Page�333.

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For indexing purposes, the property is identified as Lot No.�280 as at present shown on Johnston Tax Assessor�s Plat 39.

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Parcel Four:

�

That certain tract or parcel of land, with all the buildings and improvements thereon, situated northeasterly on Putnam Pike in the Town of Johnston, County of Providence, State of Rhode Island, bounded and described as follows:

�

Beginning at the northwesterly corner of the parcel herein described, which said point is the northeasterly corner of land now or formerly of Rosario R. Capraro and Anna Maria Capraro, and which said point is located one hundred fifty-six and 52/100 (156.52) feet northeasterly from the northeasterly line of Putnam Pike; thence northeasterly bounding northwesterly on other land now or formerly of Linda E. Cardente a distance of forty-one and 38/100 (41.38) feet to a corner; thence turning an interior angle of 87� 13� 30� and running southeasterly bounding northeasterly still on said last named land a distance of fifty-three and 25/100 (53.25) feet to a corner; thence turning an interior angle of 238� 35� and continuing in a southeasterly direction still bounding northeasterly on said Cardente land a distance of seventy and 91/100 (70.91) feet to land now or formerly of Michael A. Grieco; thence turning an interior angle of 35� 46� and running southwesterly bounding southeasterly on said Grieco land a distance of ninety-four and 89/100 (94.89) feet to a corner at said Capraro land; thence turning an interior angle of 90� and running northwesterly bounding southerly by said Capraro land a distance of ninety-five and 69/100 (95.69) feet to the point and place of beginning, the last mentioned course forming an interior angle of 88� 25� 30� with the first mentioned course. Be all said measurements more or less.

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A-17-2

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Meaning and intending to convey and hereby conveying the same premises conveyed to Salvatore J. Cardente and Linda E. Cardente by deed from Eugene Abbruzzese et al dated March�31, 1965, and recorded with the Land Evidence Recorded of the Town of Johnston in Book 104 at Page�964. EXCEPTING THEREFROM the portion hereof conveyed to Rosairo R. Capraro and Anna Maria Capraro by deed dated September�17, 1979, and recorded with said Land Evidence Records in Book 150 at Page�528.

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For indexing purposes, the property is identified as Lot No.�115 as at present shown on Johnston Tax Assessor�s Plat 39.

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Putnam Avenue
Johnston, Rl 02919

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Parcels One to Four also known as:

�

A certain piece or parcel of land situated on the easterly side of Putnam Pike in the Town of Johnston, County of Providence and State of Rhode Island and Providence Plantations and being further bounded and described as follows:

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Beginning at a point in the easterly state highway line of Putnam Pike (State Route 44) said point being the southwest corner of land now or formerly of Domenic F.�& Lucille Amicarelli and the most westerly northwesterly corner of herein described premises.

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Thence running northeasterly and northwesterly the following two (2)�courses and distances along land now or formerly of said Amicarelli, Jenckes Lane and land now or formerly of Patricia M. Wickham partly by each N 38� 20� 00� E 229.06 feet and N 49� 27� 09� W 25.20 feet to the southwesterly corner of land now or formerly of Albert Ranaldi;

�

Thence running northeasterly and northwesterly the following two (2)�courses and distances along land now or formerly of said Ranaldi N 38� 04� 51� E 167.28 feet to an granite monument found and N 42� 40� 09� W 94.89 feet to the southwesterly corner of land now or formerly of Nancy J. Kilcup;

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Thence running northeasterly and northwesterly the following two (2)�courses and distances along land now or formerly of said Kilcup N 38� 04� 51� E 5.50 feet and N 49� 55� 09 W 54.40 feet to the southwest corner of land now or formerly Edna E. Kilcup and Nancy J. Kilcup;

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Thence running northeasterly, northwesterly and northeasterly against the following three (3)�courses and distance along an unimproved road and land now or formerly of Champion Realty Corporation partly by each N 49� 38� 57� E 131.83, N 49� 55� 09� W 51.00 feet and N 44� 56� 05� E 96.66 feet to a point in the westerly property line of land now or formerly of Greystone,�Inc;

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Thence running southeasterly, southwesterly and southeasterly again the following four (4)�courses and distances along land now or formerly of said Greystone,�Inc. and land now or formerly of Greystone Enterprises,�Inc. partly by each S 44� 29� 52� E 59.00 feet, S 53� 50� 48� W 8.34 feet to a granite monument found, S 44� 29� 52� E 153.21 feet and southeasterly on a curve to the right having a radius of 1,200.00 feet to an arc length of 500.00 feet to a granite monument found at the northwest corner of land now or formerly of Putnam Pike East, LLC and the northeast corner of land now or formerly of Michael A. Grieco;

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Thence running westerly, southwesterly, northwesterly and southwesterly again the following six (6)�courses and distances along land now or formerly of said Michael A. Grieco and land now or formerly of Rosario R.�& Anna Maria Capraro partly by each S 86� 35� 44� W 36.69 feet, S 76� 16� 44� W 204.17 feet, S 72� 21� 04� W 76.22 feet, S 36� 46� 55� E 94.86 feet, N 53� 13� 43� W 95.69 feet and S 38� 21� 47� W 156.49 feet to a point set in the easterly state highway line of Putnam Pike;

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A-17-3

�

Thence N 51� 33� 36� W 200.36 feet along the said easterly state highway line of Putnam Pike to the point or place of beginning.

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A-17-4

�

EXHIBIT�A-18 TO CONTRACT

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LEGAL DESCRIPTION

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210 Church Street, Wakefield, RI 2879

�

That certain lot or parcel of land, with all the buildings and improvements thereon situated on the southerly side of Church Street in the Town of Rhode Island, and bounded and described as follows:

�

Beginning at the most northwesterly corner of the herein described parcel; said corner being located south 59��-47��-20� east, two hundred eighty and 99/100 (280.99) feet from a granite bound found at the intersection of Oakdell Street with Church Street; thence proceeding south 59� -47��-20� east a distance of two hundred sixty-two (262�) feet, more or less, to a point on the westerly side of Saugatucket River, so- called, bounded northerly by Church Street, so-called; thence proceeding in a southerly direction along the bank of the Saugatucket River, so called, a distance of four hundred seventy three (473�) feet, more or less, to a point; thence proceeding north 59� -43� -14� west a distance of two hundred twenty three (223�) feet, more or less, to a granite bound found at the southwesterly corner of the herein described parcel, bounded southerly by land now or formerly of Riverside Cemetery Association, thence proceeding north 23� -15� -46� east a distance of four hundred seventy five and 11/100 (475.11) feet to the point and place of beginning, bounded westerly by land now or formerly of the Town of South Kingstown.

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A-18-1

�

EXHIBIT�A-19 TO CONTRACT

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LEGAL DESCRIPTION

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1700 Diamond Hill Road, Woonsocket, RI 2895

�

That certain parcel or tract of land with all buildings and improvements thereon situated on the northerly side of Diamond Hill Road in the City of Woonsocket, County of Providence, State of Rhode Island and is bounded and described as follows:

�

Beginning at a corner in the northerly street line of Diamond Hill Road, said corner being the most southeasterly corner of the parcel herein described, said corner being the southwesterly corner of property now or formerly belonging to the Tate Family Limited Partnership;

�

Thence running westerly along the northerly street line of Diamond Hill Road for a distance of 79.93 feet to a corner and property now or formerly belonging to W Diamond Hill Road, LLC;

�

Thence turning an interior angle of 90-00�-00� and running northerly bounding westerly by said W Diamond Hill Road, LLC property for a distance of 260.74 feet to a corner;

�

Thence turning an interior angle of 270-00�-00� and running westerly bounding southerly by property now or formerly belonging to W Diamond Hill Road, LLC for a distance of 76.89 feet to a corner;

�

Thence turning an interior angle of 98-45�-56� and running northerly bounding by said RD Woonsocket Associates for a distance of 123.31 feet to a corner;

�

Thence turning an interior angle of 270-00-00� and running westerly bounding southerly by other property now or formerly belonging to this grantor for a distance of 330.24 feet to a corner;

�

Thence turning an interior angle of 81-19�-54� and running northerly bounding westerly by property now or formerly belonging to RD Woonsocket Associates Limited Partnership for a distance of 37.51 feet to an angle;

�

Thence turning an interior angle of 184-32-56� and running northerly bounding westerly by said RD Woonsocket Associates Limited Partnership for a distance of 37.51 feet to an angle;

�

Thence turning an interior angle of 187-21�-16� and running northerly bounding westerly by said RD Woonsocket Associates Limited Partnership Property for a distance of 85.00 feet to an angle;

�

Thence turning an interior angle of 228-26�-43� and running northwesterly bounding southwesterly by said RD Woonsocket Associates Limited Partnership property for a distance of 105.39 feet to a corner; Thence turning an interior angle of 128-19�-11� and running northerly bounding westerly by said RD Woonsocket Associates Limited Partnership property for a distance of 127.28 feet to a corner;

�

Thence turning an interior angle of 89-57�-48� and running easterly and bounding northerly by said Commonwealth of Massachusetts property for a distance of 901.35 feet to a corner and property now or formerly belonging to Woonsocket Shopping Center LLC;

�

Thence turning an interior angle of 68-28�-18� and running southerly bounding easterly by said Woonsocket Shopping Center LLC for a distance of 342.91 feet to an angle;

�

Thence turning an interior angle of 189-13-39� and running southerly bounding easterly by said Woonsocket Shopping Center LLC for a distance of 82.89 feet to an angle;

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A-19-1

�

Thence turning an interior angle of 169-05�-55� and running southerly bounding easterly by said Woonsocket Shopping Center LLC for a distance of 127.89 feet to a corner and property now or formerly belonging to the Tate Family Limited Partnership;

�

Thence turning an interior angle of 104-29�-00� and running westerly bounding southerly by said Tate Family Limited Partnership for a distance of 144.35 feet to a corner;

�

Thence turning an interior angle of 270-00-00� and running southerly bounding easterly by said Tate Family Limited Partnership for a distance of 259.88 feet to a corner and the point and place of beginning; Thence turning an interior angle of 89-59�-24� and running westerly along the northerly street line of Diamond Hill Road for a distance of 79.93 feet to the point and place of beginning;

�

The last described line forming an interior angle of 89-59-24� with the first described line.

�

PARCEL II

�

That certain tract or parcel of and, with all buildings and improvements thereon, situated on the northerly side of Diamond Hill Road in the City of Woonsocket, County of Providence and State of Rhode Island, being bounded and described as follows:

�

Beginning at a Rhode Island Highway Bound (R.I.H.B.) set forty-two feet north of centerline station 30 + 69.36 on Rhode Island State Highway Plat No.�1805 (Diamond Hill Road, Woonsocket, R.I.);

�

Thence easterly bounded southerly on said Diamond Hill Road, a distance of forty-eight and 51/100 (48.51) feet to a corner;

�

Thence turning an interior angle of 90� and running northerly, bounded easterly by Walnut Hill Hotel Associates,�Inc., a distance of two hundred sixty and 73/100 (260.73) feet to a corner;

�

Thence turning an interior angle of 90� and running westerly bounded northerly by said Walnut Hill Hotel Associates,�Inc., a distance of seventy-six and 97/100 (76.97) feet to a corner;

�

Thence turning an interior angle of 81� -13� - 34� and running southerly bounded westerly by The Paris Development Company, a distance of one hundred fifty-one and 69/100 (151.69) feet to an angle;

�

Thence turning an interior angle of 186� - 01� - 32� and continuing southerly bounded westerly by said The Paris Development Company, a distance of one hundred ten and 94/100 (110.94) feet to the point and place of beginning;

�

The last course and the first course form an interior angle of 92� - 44� - 54�.

�

Meaning and intending to convey the parcels designated as Lots 46-13 and 46-196 on that plan entitled �ADMINISTRATIVE SUBDIVISION MAP A7 LOTS 46-11�& 46-13 DIAMOND HILL ROAD WOONSOCKET, RHODE ISLAND FOR W DIAMOND HILL ROAD, LLC�, dated July�3, 2002, revised August�5, 2002, September�9, 2002 and October�16, 2002 and prepared by David G. Gardner�& Associates,�Inc., 200 Metro Center Boulevard, Warwick, Rhode Island 02886, which plan is recorded in the Land Evidence Records of the City of Woonsocket on October�24, 2002 at 9:38�A.M. in Book 21 at Page�192.

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A-19-2

�

EXHIBIT�A-20 TO CONTRACT

�

LEGAL DESCRIPTION

�

80 East Horizon Ridge Parkway, Henderson, NV 89002

�

Parcel One (1):

�

Being a portion of Lot Three (3)�of that certain plat of Horizon Village Square on file in Book 106 of Plats. Page�9 in the Office of the County Recorder of Clark County, Nevada, and amended by that certain Certificate of Amendment recorded September�4, 2002 in Book 20020904 as Document No.�00664, Official Records, located within the Northwest Quarter (NW �) of Section�30, Township 22 South, Range 63 East, M.D.M., being more particularly described as follows:

�

Commencing at the Southwest (SW) corner of said Lot Three (3), same being the point on the Easterly right of way of Horizon Ridge Parkway; thence North 75�19�01� East, along the Southerly boundary of said Lot Three (3), a distance of 143.51 feet to the beginning of a curve concave Southerly having a radius of 430.00 feet;; thence Easterly, 99.33 feet, along said Southerly boundary and along said curve through a central angle of 13�14�07� to the Point of Beginning; thence North 24�34�48� West, 220.04 feet; thence North 39�23�08� West, 146.77 feet; thence North 26�26�53� West, 65.28 feet; thence North 50�36�51� East, 186.62 feet; thence South 39�01�46� East, 151.75 feet; thence South 39�23�09� East, 481.72 feet; thence South 35�55�28� East, 42.54 feet to the Southerly boundary of said Lot Three (3); thence North 83�55�26� West, along said Southerly boundary, 302.01 feet to the beginning of a curve concave Southerly having a radius of 430.00 feet; thence Westerly, 56.47 feet, continuing along said Southerly boundary and along said curve through a central angle of 07�31 �26� to the Point of Beginning.

�

Said parcel is also shown as Lot Three-Two (3-2) on that certain Record of Survey of file in Book 137 of Surveys, Page�61 in the Office of the County Recorder of Clark County, Nevada.

�

Parcel Two (2):

�

Non-exclusive easements for utilities, ingress, and egress for vehicular and pedestrian traffic and vehicular parking over, upon and across Lot 3-3 of the Record of Survey on file in Book 137 of Surveys, Page�61 in the Office of the County Recorder of Clark County, Nevada, as granted by and subject to that certain �Cross Access Agreement� recorded May�12, 2004 in Book 20040512 as Document No.�01988, of Official Records.

�

Parcel Three (3):

�

Non-exclusive easements for the purposes of Roadways, walkways, ingress and egress, and parking as created and described in the Declaration of Easements with Covenants, Conditions and Restrictions affecting land recorded August�25, 2003 in Book 20030825 as Document No.�00626 of Official Records.

�

Parcel Four (4):

�

Non-exclusive easements for the purposes of roadways, walkways, ingress and egress, and parking as created and described in the Declaration of Easements with Covenants, Conditions and Restrictions affecting land recorded December�22, 2003 in Book 20031222 as Document No.�03221 and amended by an Instrument recorded December�22, 2003 in Book 20031222 as Document No.�03222 of Official Records.

�

Parcel (Five (5):

�

Non-exclusive easements for the purposes of roadways, walkways, ingress and egress and parking as created and described in the Declaration of Easements with Covenants, Conditions and Restrictions affecting land recorded July�18, 2005 in Book 20050718 as Document No.�04932 of Official Records.

�

A-20-1

�

EXHIBIT�A-21 TO CONTRACT

�

LEGAL DESCRIPTION

�

257 Waverly Avenue, Patchogue, NY 11772

�

ALL THAT CERTAIN PLOT, PIECE, OR PARCEL OF LAND, SITUATE, LYING, AND BEING IN THE VILLAGE OF PATCHOGUE, TOWN OF BROOKHAVEN, COUNTY OF SUFFOLK AND STATE OF NEW YORK, KNOWN AND DESIGNATED AS PART�OF LOTS 33 AND 34 IN BLOCK 8 AS SHOWN ON A CERTAIN MAP ENTITLED, �MAP OF PATCHOGUE LAKE PARK� FILED IN THE SUFFOLK COUNTY CLERK�S OFFICE ON 10/30/13 AS MAP NO. 303, TOGETHER WITH A PARCEL ADJOINING THE AFORESAID LOTS AND WHICH SAID PART�OF LOTS AND ADJOINING PARCEL WHEN TAKEN TOGETHER ARE MORE PARTICULARLY BOUNDED AND DESCRIBED AS FOLLOWS:

�

BEGINNING ON THE NORTHERLY SIDE OF 9TH STREET A/K/A WAVERLY PLACE DISTANT 136.00 FEET WESTERLY FROM THE CORNER FORMED BY THE INTERSECTION�OF THE NORTHERLY SIDE OF 9TH STREET A/K/A WAVERLY PLACE AND THE WESTERLY SIDE OF CENTRAL AVENUE; AND RUNNING THENCE THE FOLLOWING TWO (2)�COURSES AND DISTANCES ALONG THE NORTHERLY SIDE OF 9TH STREET A/K/A WAVERLY PLACE;

�

1)�� NORTH 80 DEGREES 45 MINUTES 10 SECONDS WEST A DISTANCE OF 181.37 FEET TO A MONUMENT;

�

2)�� SOUTH 88 DEGREES 07 MINUTES 10 SECONDS WEST A DISTANCE OF 221.08 FEET TO A MONUMENT;

�

THENCE NORTHWESTERLY ALONG THE ARC: OF A CURVE BEARING TO THE RIGHT HAVING A RADIUS OF 20.00 FEET A LENGTH OF 31.38 FEET TO THE EASTERLY SIDE OF WAVERLY AVENUE;

�

THENCE NORTH 01 DEGREE 59 MINUTES 40 SECONDS WEST ALONG THE EASTERLY SIDE OF WAVERLY AVENUE A DISTANCE OF 252.47 FEET TO A MONUMENT;

�

THENCE SOUTH 80 DEGREES 45 MINUTES 10 SECONDS EAST AND PASSING THROUGH A MONUMENT A DISTANCE OF 363.12 FEET TO A MONUMENT;

�

THENCE SOUTH 01 DEGREE 59 MINUTES 40 SECONDS EAST A DISTANCE OF 75.00 FEET;

�

THENCE SOUTH 80 DEGREES 45 MINUTES 10 SECONDS EAST ALONG LAND NOW OR FORMERLY MINARDI SARAFINO, A DISTANCE OF 64.00 FEET;

�

THENCE SOUTH 01 DEGREE 59 MINUTES 40 SECONDS EAST PARALLEL WITH THE WESTERLY SIDE OF CENTRAL AVENUE A DISTANCE OF 150.00 FEET TO THE POINT OR PLACE OF BEGINNING.

�

A-21-1

�

EXHIBIT�A-22 TO CONTRACT

�

LEGAL DESCRIPTION

�

1865 Renzulli Road, New Smyrna Beach, FL 32168

�

PARCEL 1:

�

Lot 3, LAKESIDE BUSINESS PARK SUBDIVISION, as per plat thereof recorded in Plat Book 44, Page�174, Public Records of Volusia County, Florida.

�

LESS AND EXCEPT THE FOLLOWING DESCRIBED PROPERTY:

�

A portion of U.S. Lot 2, Section�24, Township 17 South, Range 33 East, Volusia County, Florida lying Northerly of State Road No.�44 and Westerly of Wallace Road being more particularly described as follows:

�

Commence at the Southeast corner of U.S. Lot 2, Section�24, Township 17 South, Range 33 East; thence North 00� 28� 21� West along the East line of said U.S. Lot 2, a distance of 863.37 feet to the Southwesterly right of way of Wallace Road, a 50 foot right of way as previously laid out; thence South 34� 56� 11� East, along said right of way, a distance of 112.85 feet; thence South 56� 35� 35� West, a distance of 162.66 feet; thence South 67� 50� 31� West, a distance of 172.27 feet; thence South 25� 47� 47� East, a distance of 275.68 feet to the Northerly right of way of State Road No.�44; thence 111.50 feet along the arc of a curve to the right being non-tangent with the last described line, said curve having a radius of 3769.83 feet, a central angle of 01� 41� 41�, and a chord of 111.50 feet which bears South 68� 55� 45� West; thence North 25� 47� 47� West, along a line non-tangent to said curve, a distance of 273.59 feet; thence South 67� 50� 31� West, a distance of 193.37 feet for the Point of Beginning; thence continue South 67� 50� 31� West, a distance of 172.99 feet; thence North 00� 16� 54� West, a distance of 56.34 feet; thence North 22� 09� 29� West, a distance of 252.05 feet to the Southerly line of the �Center Easement� as recorded in Official Records Book 3961, Page�3149, Public Records of Volusia County, Florida; thence along said Southerly line of �Center Easement�, a distance of 56.84 feet along the arc of a curve to the left being non-tangent with the last described line, said curve having a radius of 515.00 feet, a central angle of 06� 19� 26�, and a chord of 56.81 feet which bears North 71� 00� 14� East to the point of tangency; thence North 67� 50�31� East, a distance of 93.97 feet; thence South 26� 04� 21� East, a distance of 19.01 feet; thence South 22� 09� 29� East, a distance of 282.24 feet to the Point of Beginning. Bearing refer to Florida Department of Transportation Right-of-Way Map of State Road No.�44 based on centerline as being North 88� 36�25� East.

�

AND LESS AND EXCEPT the following described property:

�

Commence at the Northeast corner of Lot 3, LAKESIDE BUSINESS PARK SUBDIVISION, according to the plat thereof as recorded in Plat Book 44, Page�174, of the Public Records of Volusia County, Florida; run thence South 00� 47� 08� West, a distance of 200.59 feet; thence South 22� 09� 29� East, a distance of 49.40 feet to the Point of Beginning; thence South 89� 41�23� West, a distance of 223.01 feet; South 00� 28� 32� East, a distance of 328.37 feet to a point on a curve concave Southerly, having a radius of 515.00 feet; thence run Westerly along said curve, through a central angle of 2� 51� 34�, an arc distance of 25.70 feet; thence North 89� 46� 23� East, a distance of 35.42 feet to a point of curvature of a curve concave Northwesterly having a radius of 485.00 feet; thence run Northeasterly along said curve, through a central angle of 21� 55� 52�, an arc distance of 185.64 feet; thence North 67� 50� 31� East, a distance of 91.95 feet; thence North 26� 04� 21� West, a distance of 25.09 feet; thence North 22� 09� 29� West, a distance of 254.44 feet to the Point of Beginning.

�

TOGETHER WITH THE FOLLOWING DESCRIBED PROPERTY:

�

PARCEL 2:

�

A portion of Lot 18, A.B. HAWLEY�S SUBDIVISION, recorded in Map Book 1, Page�75, of the Public Records of Volusia County, Florida lying Westerly of and adjacent to Lot 5, J.A. HORD�S SUBDIVISION, as recorded in Map Book 6, Page�130, of the Public Records of Volusia County, Florida and a portion of U.S. Lot 2, Section�24, Township 17 South, Range 33 East lying Westerly of and adjacent to that certain parcel of land as described in Official Records Book 3079, Page�107, all being more particularly described as follows:

�

A-22-1

�

Commence at the Southeast corner of U.S. Lot 2, Section�24, Township 17 South, Range 33 East; thence North 00� 28� 29� West, along the East line of said U.S. Lot 2, a distance of 863.37 feet to a point in the Westerly right of way of Wallace Road, a 50 foot right of way as now laid out; thence along said Westerly right of way in a Northwesterly direction North 34� 56� 11� West, a distance of 311.44 feet to the point of tangency of a curve; thence continue along said Westerly right of way by a curve to the left, having a radius of 463.21 feet, a central angle of 31 � 23� 49�, for an arc distance of 253.94 feet to the point of curvature of said curve; thence continue along said Westerly right of way, North 66� 21� 09� West, a distance of 72.67 feet; thence leaving said Westerly right of way, North 89� 12� 52� West, along an old fence line long accepted as being the North line of U.S. Government Lot 2, a distance of 573.80 feet; thence South 00� 47� 08� West, a distance of 45 feet to the Point of Beginning; thence South 00� 47�08� West, a distance of 305.00 feet; thence North 89� 12� 52� West, a distance of 209.45 feet; thence North 00� 35� 33� West, a distance of 101.60 feet; thence North 00� 34� 25� West, a distance of 247.64 feet; thence South 89� 38� 56� East, a distance of 30.02 feet; thence North 00� 36� 05� West, a distance of 146.40 feet to the Southerly right of way of Jungle Road, a 40 foot right of way as now laid out; thence North 87� 10� 30� East, along said Southerly right of way, a distance of 47.98 feet to the Northwest corner of said Lot 5, J.A. Hord�s Subdivision; thence South 00� 18� 48� West, along the Westerly line of said Lot 5, a distance of 148.76 feet to the said Northerly line of U.S. Lot 2; thence South 71� 39� 08� East, a distance of 149.14 feet to the Point of Beginning.

�

TOGETHER WITH THE FOLLOWING DESCRIBED PROPERTY:

�

PARCEL 3:

�

The non-exclusive easements contained in that certain Declaration of Covenants, Restrictions and Easements recorded in Official Records Book 3961, Page�3149, Public Records of Volusia County, Florida.

�

TOGETHER WITH THE FOLLOWING DESCRIBED EASEMENTS:

�

PARCEL 4:

�

The non-exclusive easements contained in that certain Easement Deed recorded in Official Records Book 4535, Page�3572, Public Records of Volusia County, Florida.

�

A-22-2

�

EXHIBIT�A-23 TO CONTRACT

�

LEGAL DESCRIPTION

�

3750 W. State Road 46, Sanford, FL 32771

�

PARCEL 1:

�

The South 660.00 feet of Lot 94 (less the East 15 feet for road and less right of way for State Road No.�46 on South) FLORIDA LAND�& COLONIZATION COMPANY LIMITED, W. BEARDALL�S MAP OF ST. JOSEPH�S, as recorded in Plat Book 1, Page�114, Public Records of Seminole County, Florida.

�

LESS:

�

A portion of South 660.00 feet of Lot 94 (less the East 15 feet for road and less right of way for State Road No.�46 on South) Florida Land�& Colonization Company Limited, W. Beardall�s Map of St. Joseph�s, as recorded in Plat Book 1, Page�114, Public Records of Seminole County, Florida being described as follows:

�

Commence at a 4� round concrete monument marking the intersection of the North right of way line of State Road No.�46 with the West line of the East 15 feet of said Lot 94 as the Point of Beginning; thence run North 00� 15� 38� West, along said West line, 522.88 feet to the North line of the South 660.00 feet of said Lot 94; thence run South 89� 55� 27� West, along said North line, 272.78 feet; thence run South 00� 15� 38� East, 518.15 feet to the aforesaid North right of way line of State Road No.�46; thence run North 89� 42� 26� East, along said North line, 13.69 feet to a curve concave to the South; thence continue Easterly along said North line and curve having a central angle of 2� 32� 50�, a radius of 5829.65 feet, an arc length of 259.17 feet, a chord bearing of South 89� 01� 09� East and a chord distance of 259.15 feet to the Point of Beginning.

�

TOGETHER WITH THE FOLLOWING DESCRIBED EASEMENTS:

�

PARCEL 2:

�

The non-exclusive easements in that certain Reciprocal Easement and Restrictive Covenant Agreement recorded in Official Records Book 6786, Page�665, Public Records of Seminole County, Florida.

�

A-23-1

�

EXHIBIT�A-24 TO CONTRACT

�

LEGAL DESCRIPTION

�

6875 University Blvd., Winter Park, FL 32792

�

PARCEL 1:

�

Lot 5, ACI UNIVERSITY CORNERS, according to the plat thereof as recorded in Plat Book 39, Page�130, of the Public Records of Orange County, Florida.

�

LESS AND EXCEPT: That portion of said Lot 5 included in the Stormwater Drainage Easement Area �A�; that portion of said Lot 5 South of the Stormwater Drainage Easement Area �A� and East of the Western line of the 10 foot Drainage Easement, both as shown on the plat, and that portion of said Lot 5 South the Northern boundary of the Easement �A� 25 foot Cross Access, Drainage and Utility Easement shown on the plat.

�

AND ALSO LESS AND EXCEPT: Easement Area �C� a 20 foot Drainage Easement located East of Stormwater Drainage Easement Area �A� as shown on the plat.

�

TOGETHER WITH THE FOLLOWING DESCRIBED EASEMENTS:

�

PARCEL 2:

�

Those certain non-exclusive easements set forth in Paragraphs 2.1, 2.2, 2.3, 2.4 and 2.5 of the Declaration of Easements, Covenants and Restrictions recorded in Official Records Book 5499, Page�3592, as amended by that certain First Amendment to Declaration of Easements, Covenants and Restrictions recorded in Official Records Book 6492, Page�6995, of the Public Records of Orange County, Florida.

�

A-24-1

�

EXHIBIT�A-25 TO CONTRACT

�

LEGAL DESCRIPTION

�

1372 East 5th Street, Ontario, CA 91764

�

Real property in the City of Ontario, County of San Bernardino, State of California, described as follows:

�

PARCEL 1 OF PARCEL MAP NO. 8715,�IN THE CITY OF ONTARIO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 103 OF PARCEL MAPS, PAGE(S)�4 AND 5, RECORDS OF SAID COUNTY.

�

APN: 0108-501-43-0-000

�

A-25-1

�

EXHIBIT�A-26 TO CONTRACT

�

LEGAL DESCRIPTION

�

3915 Green River Drive, Corona, CA 92880

�

Real property in the City of Corona, County of Riverside, State of California, described as follows:

�

THAT PORTION OF THAT PORTION OF THE RANCHO LA SIERRA, ALLOTTED TO MARIA JESUS DE SCULLY BY FINAL DECREE OF PARTITION,�IN CASE NO. 3110 OF THE 17TH JUDICIAL DISTRICT COURT OF THE STATE OF CALIFORNIA, A CERTIFIED COPY OF WHICH WAS RECORDED JULY 16, 1878 IN BOOK �U�, PAGE 239 OF DEEDS, RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA, SHOWN AS TRACT �F� ON THE MAP ATTACHED TO THE FINAL DECREE OF PARTITION,�IN CASE NO. 7939. OF THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, A CERTIFIED COPY OF WHICH AS RECORDED MAY�18, 1925 AS INSTRUMENT NO. 1173 IN BOOK 637, PAGE 432 OF DEEDS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.

�

BEGINNING AT THE NORTHWEST CORNER OF LOT 1 OF TRACT NO. 20872-2, AS SHOWN ON A MAP RECORDED IN MAP BOOK 161, PAGES 51 THROUGH 54, RECORDS OF SAID RIVERSIDE COUNTY;

�

THENCE NORTH 16� 32� 26� EAST 256.62 FEET TO THE TRUE POINT OF BEGINNING OF THE LAND HEREIN DESCRIBED, SAID POINT BEING ON A CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 844.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 44� 57� 56� WEST;

�

THENCE SOUTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 17� 21� 27�, A DISTANCE OF 255.68 FEET;

�

THENCE SOUTH 27� 40� 37� WEST 14.23 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHWESTERLY AND HAVING A RADIUS OF 23.00 FEET;

�

THENCE SOUTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 85� 01� 39�, A DISTANCE OF 34.13 FEET TO THE BEGINNING OF A REVERSING CURVE CONCAVE SOUTHERLY AND HAVIN.G A RADIUS OF 750.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 22� 42� 18� EAST;

�

THENCE WESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 39� 02� 37�, A DISTANCE OF 511.08 FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF THE ATCHESON, TOPEKA AND SANTA FE RAILWAY;

�

THENCE NORTH 67� 38� 14� EAST 711.98 FEET ALONG SAID SOUTHERLY LINE;

�

THENCE SOUTH 22� 17� 18� EAST 76.15 FEET TO THE TRUE POINT OF BEGINNING.

�

APN:� 102-360-043-7

�

A-26-1

�

EXHIBIT�B TO CONTRACT

�

ESCROW AGREEMENT

�

DEPOSIT ESCROW AGREEMENT

�

DATE: __________________

FILE NO.: ___________________

�

WHEREAS, _______________________ (�Seller�, collectively and individually) by Agreement for Purchase�& Sale (the �Agreement�) dated the _____ day of August, 2014, has agreed to sell to CubeSmart, L.P. or its designee (�Buyer� collectively and individually) those premises more particularly described in the Agreement for the consideration therein stated, a copy of which Agreement is made a part hereof.

�

AND WHEREAS Buyer and Seller have requested LAND SERVICES USA,�INC. (�Company�) to receive a deposit of Five Million Dollars ($5,000,000.00) and any additional and/or subsequent deposits pursuant to the Agreement to be held in escrow in an account held in a federally insured Pennsylvania or federal banking or savings institution (all such deposits being referred to collectively herein as the �Fund�). Company agrees to hold the Fund in accordance with the terms and provisions of the Agreement, subject to the following:

�

IT IS UNDERSTOOD and agreed that Company is an escrow holder only, is merely responsible for the safekeeping of the Fund and shall not be required to determine questions of fact or law.

�

IT IS FURTHER UNDERSTOOD and agreed that Company is acting as a stakeholder only with respect to the Fund.� If there is any question or dispute as to whether Company is obligated to deliver the Fund, or any portion thereof, or as to whom the Fund is to be delivered, or in the event of unilateral termination of the Agreement by either Buyer or Seller, Company may refuse to make any delivery and may continue to hold the Fund until receipt by Company of written authorization, executed by both Seller and Buyer, directing the disposition of the Fund or, in absence of such joint written authorization, until final determination of the rights of the parties in a judicial proceeding.� Seller and Buyer agree that the duties of Company in its capacity as escrow agent under this agreement are ministerial in nature and that Company shall incur no liability under this agreement except for its willful misconduct or gross negligence. In the event of a dispute, Company is authorized to pay the Fund into court.

�

Company shall not be required to deposit the Fund in an interest-bearing account until receipt of a fully-executed and completed IRS Form�W-9 signed by the party to whom the interest shall be paid and reflecting that party�s taxpayer identification number thereon. Seller and Buy agree that the Fund shall be invested in one or more separate FDIC insured interest-bearing accounts at Citizens Bank (�Bank�) located in Philadelphia, Pennsylvania upon receipt of said IRS Form�W-9.

�

In the event that the Fund has been invested in an interest-bearing account, Company will not be liable for any loss or impairment of the Fund if the loss or impairment results from the failure, insolvency or suspension of the depository institution. Company assumes no liability for interest on the Fund.

�

Company shall be indemnified fully by Buyer and Seller for all its expenses, costs and reasonable legal fees incurred in connection with any interpleader action that Company might file to resolve any dispute as to the Fund. If Company is made a party to any judicial, nonjudicial or administrative action, hearing or process based on the acts of Seller and Buyer and not on the willful misconduct and/or gross negligence of Company in performing its duties hereunder, then the losing party shall indemnify, save and hold harmless Company from the expenses, costs and reasonable attorney�s fees incurred by Company in responding to such actions, hearing or process.

�

B-1

�

THIS AGREEMENT constitutes the entire agreement between Land Services USA,�Inc. and all parties hereto concerning the Fund.

�

SELLER:					�	BUYER:
�					�	�
�					�	CubeSmart, L.P.
�					�	�
By:	�				�	By: CubeSmart, its general partner
�	Name:				�	�
�	Title:				�	�
�					�	By:	�
�					�	�	Name: Jeffrey P. Foster
�					�	�	Title: Senior Vice President, Chief Legal Officer�& Secretary
�					�	�
�					�	�
ADDRESS			�		�	ADDRESS 5 Old Lancaster Road, Malvern, PA 19355
�					�	TELEPHONE: 610-535-5000
TELEPHONE:				�	�	�
�					�	�
�					�	�
ACCEPTED ON BEHALF OF THE COMPANY:					�	�
�					�	ADDRESS:		�	1835 Market Street, Suite�420
LAND SERVICES USA,�INC.					�	�			�
�					�	�			Philadelphia, PA 19103
�					�	�
BY:		�			�	TELEPHONE: 215-563-5468

�

B-2

�

EXHIBIT�B (continued)

�

WIRE TRANSFER INSTRUCTIONS

�

B-3

�

EXHIBIT�C TO CONTRACT

�

ITEMS TO BE FURNISHED BY SELLER AS
CALLED FOR BY PARAGRAPH�3 OF THIS CONTRACT

�

1.�� Sample copies of all leases executed by all tenants and a rent roll of the existing leases including tenant�s name, unit occupied, unit size, term of lease (including beginning date), monthly rental, amount of deposit, paid-to-date, indication of aging and delinquency and late fees owed in 30, 60, and 90 day increments, if any, and all other relevant factors, certified by Seller to be true and correct as of the date thereof.� If the facility uses Centershift as its point-of-sale system: 1) a current �Facility Summary� report , 2) a Facility Summary� report covering the twelve month period ending with the most recent month end, 3) a current �Accrued A/R Aging Detail� report, and 4) a current �Walk Thru List�.

�

2.�� List of any units not being rented due to needed repairs or being rented by customers for no charge or that are occupied by Seller or its affiliates or employees at discounted or no rent, certified by Seller to be true and correct as of the date thereof.� If the facility uses Centershift as its point-of-sale system, a current �Rent Rate Variations� report.

�

3.�� Copy of a unit mix report showing unit types, price, number of units and current occupancy percentage with totals by unit type for the Property.� If the facility uses Centershift as its point-of-sale system, a current �Occupancy Statistics � Unit Mix� report.

�

4.�� Copies of the Monthly Occupancy Reports that show the number of units and square footage available, number of units and square footage rented, number of units vacant and/or �out of service�, rental income, and number of rentals and vacates by month for the past twenty-four (24) months.� If the facility uses Centershift as its point-of-sale system, a current �Management Summary � 36 Months � By Site� report.

�

5.�� The most recent existing survey of the Property in Seller�s possession, if any.

�

6.�� Written consent (in the form attached hereto) to perform physical inspections of the Property, including all of the accessible areas, by Purchaser or agents of Purchaser.

�

7.�� Copies of ad valorem tax statements covering the Property for the last twelve (12) months.

�

8.�� If debt is being assumed, copies of all loan documents and the approximate debt balance.

�

9.�� Copies of all (a)�vendor agreements and all service contracts affecting title to the Property or operation thereof or (b)�agreements relating to the Property which create or continue a monetary, compliance, reporting or filing requirement that runs with the Property or is otherwise the responsibility of Purchaser after Closing.

�

10.�� Copies of all leases for any tenant occupying over 2,500 square feet or which have a term remaining of greater than six (6)�months and all leases for cellular antennae, billboards, signs or other non-standard agreement that produces income on the Property.

�

11.�� Inventory of all personal property to be conveyed, which shall include all items of personalty currently used in the operation, maintenance, and administration of the Property.

�

12.�� Copies of all current insurance policies relating to the Property.

�

13.�� Copies of monthly and annual income and expense statements of the Property for 2012, 2013 and YTD 2014 with revenues and expenses broken out in complete specific detail, including without limitation rental income, fees, truck rental income, utility expenses, insurance expense, payroll etc.

�

14.�� Copies of all utility bills (i.e., electric, sewer, water, phone, DSL,�etc.) relating to the Property for the last six (6)�months.

�

C-1

�

15.�� Copies of all environmental reports for the Property, if any.

�

16.�� A list of all personnel employed in the operation and maintenance of the Property showing names, titles, duties, weekly schedule, hire date, rate of pay, all benefits and value of all forms of compensation.

�

17.�� To the extent within Seller�s possession or control, copies of certificates of occupancy, use permits, and/or licenses pertaining to the use and operation of the Property, including without limitation, the most recent elevator, lifts (OSHA) and sprinkler and fire detection system inspection reports and certificates, compliance letters and any correspondence to or from any regulatory agency with respect to the Property and copies of business and resale licenses (if applicable) and renewal cost of the same.

�

18.�� A letter (in the form attached) signed by Seller and Broker reflecting agreements regarding non-disclosure.

�

19.�� Copies of any building plans, specifications, drawings, or other construction documents regarding the Property in the possession or control of Seller.

�

20.�� Bank statements relating to the Property for the preceding twenty-four months.

�

C-2

�

EXHIBIT�D TO CONTRACT

�

ITEMS TO BE FURNISHED BY PURCHASER AT CLOSING

�

1.�� Bill of Sale for the personal property (in the form of Exhibit�G attached hereto).

�

2.�� Assignment of Leases,�Intangible Property, Guarantees, Warranties, Permits, Licenses and Approvals (in the form of Exhibit�H attached hereto).

�

3.�� A Notice to Tenants (in the form of Exhibit�I attached hereto).

�

4.�� Such other documents as may be reasonably requested by Purchaser or the Title Agency, in connection with the conveyance of the Property and continued effective operation thereof.

�

D-1

�

EXHIBIT�E TO CONTRACT

�

ITEMS TO BE FURNISHED BY SELLER AT CLOSING

�

1.�� An Owner�s ALTA Form�2006 Title Policy, with extended coverage (�Title Policy�), at Purchaser�s sole expense, in the amount of the purchase price, which shall insure good and marketable title to the Property and be subject to no exceptions other than the lien for taxes not yet due and payable and title exceptions approved or deemed approved by Purchaser in accordance with Section�5 of the Contract.

�

2.�� A Special Warranty Deed (in the form of Exhibit�F attached hereto) using the description contained in the survey to describe the real property.

�

3.�� Bill of Sale for the personal property (in the form of Exhibit�G attached hereto).

�

4.�� Assignment of Leases,�Intangible Property, Guarantees, Warranties, Permits, Licenses and Approvals (in the form of Exhibit�H attached hereto).

�

5.�� A Notice to Tenants (in the form of Exhibit�I attached hereto).

�

6.�� A Non-Foreign Affidavit (in the form of Exhibit�J attached hereto).

�

7.�� Possession of the Property.

�

8.�� Marked and identified key to each lock in the premises (other than locks owned by tenants), which shall be deemed delivered by Seller leaving the current property manager of the Property in possession of any such items that it possesses.

�

9.��All tenant records and the executed originals of all tenant lease agreements, service contracts, warranties, maintenance agreements, and other documents affecting the operation of the Property, which shall be deemed delivered by Seller leaving the current property manager of the Property in possession of any such documents that it possesses.

�

10.�� Such other documents as may be reasonably requested by Purchaser or the Title Agency, in connection with the conveyance of the Property and continued effective operation thereof.

�

11.�� Proof that any and all management agreements and service contracts affecting the Property have been canceled.

�

12.�� A payoff letter from all lienholders setting forth the amount due as of the Closing Date and a per diem rate thereafter (to be delivered five (5)�days before Closing).

�

E-1

�

EXHIBIT�F TO CONTRACT

�

SPECIAL WARRANTY DEED

�

To be supplied

in forms satisfactory to Purchaser and Title Agency for each applicable jurisdiction.

�

F-1

�

EXHIBIT�G TO CONTRACT

�

BILL OF SALE

�

FOR VALUE RECEIVED, the undersigned, ____________________ (�Seller�), does hereby sell, transfer and assign to CubeSmart, L.P. all personal property of Seller used by Seller in connection with the operation of the self-storage facility located� at (address, city, state)and known as (facility name), situated on the real property described on Exhibit�A attached hereto and made a part hereof, including without limitation, the items of personal property described on Exhibit�B attached hereto and made a part hereof.

�

Seller covenants and warrants that it has full legal title to the personal property and that all the personal property is free and clear of any and all security agreements, financing statements or other liens and encumbrances.

�

Dated:� ___________________, 2014

�

SELLER:	�
�	�	�
�	�	�
�	By:	�
�	�
�	�
PURCHASER:	�
�	�	�
�	�	�
�	By:	�

�

G-1

�

EXHIBIT�H TO CONTRACT

�

ASSIGNMENT AND ASSUMPTION OF LEASES,�INTANGIBLE PROPERTY,
GUARANTEES, WARRANTIES, PERMITS, LICENSES AND APPROVALS

�

FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, _______________, Assignor, hereby assigns and transfers to CubeSmart, L.P., Assignee, all of its right, title and interest in and to all of the leases and security deposits set forth on Exhibit�B attached hereto, pertaining to the use and occupancy of the self-service storage facility located at (address, city, state) and commonly known as (facility name), situated on the property described on Exhibit�A attached hereto and made a part hereof (the �Property�).

�

From and after the date hereof, Assignee hereby assumes and agrees to be bound by all of the obligations, undertakings, duties and liabilities of the landlord under said leases.

�

Assignor hereby agrees to indemnify and hold Assignee harmless from and against any claims by any tenants that Assignor failed to perform its obligations under the leases prior to the date hereof.

�

Assignee hereby agrees to indemnify and hold Assignor harmless from and against any claims by any tenant by reason of Assignee�s failure to perform its obligations under the leases from and after the date hereof.

�

Assignor hereby assigns and transfers to Assignee, all of its right, title and interest, if any, in and to the intangible property set forth below which is used in connection with the operation or occupancy of the self-service storage facility situated on the Property:

�

1.�� the name and the use of the name �___________________�, or any variation thereof;

2.�� tenant lists;

3.�� telephone exchange numbers;

4.�� utility deposits (if assignable, which will be credited to the Seller at closing); and

5.�� any and all warranties, guarantees, permits, licenses and approvals, to the extent same are assignable.

�

Dated:� _________________, 2014

�

ASSIGNOR:	�
�	�	�
�	�	�
�	By:	�
�	�
�	�
ASSIGNEE:	�
�	�	�
�	�	�
�	By:	�

�

H-1

�

EXHIBIT�I TO CONTRACT

�

NOTICE TO TENANTS

�

TO:� All Tenants of (facility name) located at (address, city, state):

�

Please be advised that (facility name) located at (address, city, state) has, on the date hereof, been sold by the undersigned Seller to CubeSmart, L.P.

�

All future rental payments, including payments for any and all statements on hand, should be made as follows:

�

If you have any questions, notify the Property Manager at the above address.

�

Dated:� _______________�, 2014

�

SELLER:	�
�	�
By:	�

�

I-1

�

EXHIBIT�J TO CONTRACT

�

NON-FOREIGN AFFIDAVIT

�

STATE OF	�	)
�	�	) �SS.
COUNTY OF	�	)

�

The undersigned, ____________________________, being first duly sworn on oath, and under penalty of perjury, hereby certifies as follows:

�

1.�� Section�1445 of the Internal Revenue Code provides that a transferee (buyer) of a United States real property interest must withhold tax if the transferor (seller) is a foreign person.

�

2.�� The undersigned is an officer, general partner, joint venturer, trustee or principal of a corporation, partnership, joint venture, trust or other entity which is the owner of the property, or the beneficial interest in a trust which owns the property located at (address, city, state), which is legally described as follows:�� SEE EXHIBIT��A� ATTACHED HERETO

�

3.�� The transferor of the property is________________________________.

�

4.�� Said property, or the beneficial interest in said trust, is being transferred to CubeSmart, L.P.

�

5.�� If the transferors are not individuals: (a)�none of the transferors is a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person, as those terms are defined in the Internal Revenue Code and the Income Tax Regulations; and (b)�the office address of the transferor is __________________________________________

�

6.�� The United States taxpayer identification number of the Transferor is ��.

�

7.�� This Affidavit is being given pursuant to Section�1445 of the Code to inform the transferee that withholding of tax is not required upon this disposition of a United States real property interest.

�

8.�� The transferors understand that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

�

Under penalties of perjury,�I declare that I have examined this Affidavit and, to the best of my knowledge and belief, it is true, correct and complete.

�

�	�	�	�
�	�	Name of Seller	�
�	�	�	�
�	�	�	�
SUBSCRIBED AND SWORN to before me this _____ day of ______________, 2014.	�	�	�
�	�	�	�
____________________________________________	�	�	�
Notary Public	�	�	�
�	�	�	�
My commission expires:_________________	�	�	�

�

J-1

�

EXHIBIT�K

�

PRORATION REVIEW, ARBITRATION AND ATTORNEYS� FEES

�

Any controversy or claim between or among the parties hereto, whether arising out of this Contract or any instrument or agreement executed in connection with the transaction contemplated hereby, shall be determined by binding arbitration in Chester County, PA in accordance with one of the following as selected by Purchaser:

�

a.�� the Rules�of Practice and Procedure for the Arbitration of Commercial Disputes of Judicial Arbitration and Mediation Services,�Inc. (J.A.M.S.) or

�

b.�� the Rules�of� Practice and Procedure of the American Arbitration Association (�AAA�), or

�

c.�� the Special Rules�of an individual mutually agreed upon by the parties.� The Special Rules�shall be those determined by an individual arbitrator agreed upon by the parties, and shall require that all arbitration hearings will be commenced within ninety (90) days of the demand for arbitration, and that the arbitrator shall only, upon a showing of cause, be permitted to extend the commencement of such hearing for an additional sixty (60) days.

�

Judgment upon any arbitration award may be entered in any court having jurisdiction.� Any party hereto may bring an action, including a summary or expedited proceeding, to compel arbitration of any controversy or claim to which this provision applies in any court having jurisdiction over such action in Chester County, Pennsylvania and the parties agree that service of process through the office of the Secretary of State of the Commonwealth of Pennsylvania and venue in Chester County, Pennsylvania are appropriate and approved by such parties.

�

In the event of a controversy or claim between the parties, either party may give written notice (�Arbitration Notice�) to the other requesting arbitration. �If Purchaser requests an individual arbitrator and the parties have not agreed upon an individual within ten (10)�days after delivery of the Arbitration Notice, then AAA shall apply.

�

The prevailing party in such arbitration or in any proceeding to compel or enforce such arbitration shall be entitled to collect from the non-prevailing party reasonable attorney�s fees and costs.

�

Within sixty (60) days after the Closing, Purchaser shall provide Seller with a review (the �Review�) of the prorations setting forth in reasonable detail any discrepancy which it has discovered in the prorations made at the Closing.� If Seller disagrees with such Review, it shall give written notice (the �Disagreement Notice�) to Purchaser within ten (10)�days after Seller�s receipt of such Review.� Such Disagreement Notice shall detail Seller�s points of disagreement.� If Seller and Purchaser do not resolve such disagreement within ten (10)�days after Purchaser�s receipt of the Disagreement Notice, the parties shall proceed to arbitration.� If Seller agrees with such review (a failure of Seller to give Purchaser a Disagreement Notice within such 10-day period shall be deemed agreement), or if there is an arbitration award, then the Escrow Agent shall disburse the Proration Escrow (as defined in the Escrow Agreement) in accordance therewith.

�

K-1

�

EXHIBIT�L

�

Facilities

�

#	Seller	Facility Name	Property Address	Property Group	Managed (M)�or Unmanaged (U)
1	STORAGE PARTNERS OF BLUE ISLAND, LLC	Blue Island	12400 South Western Avenue, Blue Island,�IL 60406	Two	M
2	HSREP II STORAGE � BOLINGBROOK, LLC	Bolingbrook	565 West Boughton Road, Bolingbrook,�IL 60440	One	M
3	STORAGE PARTNERS OF SOUTH CHICAGO, LLC	Chicago Ave	8312 South Chicago Avenue, Chicago,�IL 60617	Two	M
4	HSREP II STORAGE � COUNTRYSIDE, LLC	Countryside	9801 West 55th Street, Countryside,�IL 60525	One	M
5	HSREP II STORAGE � TWENTY FIFTH, LLC	East 25th St	407 East 25th Street, Chicago, IL�60616	One	M
6	STORAGE PARTNERS OF SOUTH HARLEM, LLC	Harlem Ave	6201 South Harlem Avenue, Chicago,�IL 60638	One	M
7	HSREP II STORAGE � WESTERN, LLC	Lincoln Park	2647 North Western Avenue, Chicago,�IL 60647	One	M
8	STORAGE PARTNERS OF MAYWOOD, LLC	Maywood	101 South 1st Avenue, Maywood,�IL 60153	Two	M
9	STORAGE PARTNERS OF NORTH KEDZIE, LLC	North Kedzie	3402 North Kedzie Avenue, Chicago,�IL 60618	Two	M
10	HSREP II STORAGE � CHESTNUT, LLC	Downtown Columbus	57 East Chestnut Road, Columbus, OH 43215	One	U
11	HSREP II STORAGE � GEORGESVILLE, LLC	Georgesville	1531 Georgesville Rd, Columbus, OH 43228	One	U
12	HSREP II STORAGE � POLARIS, LLC	Lewis Center	707 Enterprise Drive, Lewis Center, OH 43035	One	U
13	HSREP II STORAGE � MORSE, LLC	Morse Road	3344 Morse Rd, Columbus, OH 43231	One	U
14	HSREP II STORAGE � ROBERTS, LLC	Roberts Road	4061 Roberts Rd, Columbus, OH 43228	One	U
15	HSREP II STORAGE � COLTON, LLC	South High	3391 South High St, Columbus, OH 43207	One	U
16	HSREP II STORAGE � EXETER, LLC	Exeter	525 South County Trail, Exeter, RI 2822	One	M
17	HSREP II STORAGE � JOHNSTON, LLC	Putnam Pike	61 Putnam Pike, Johnston, RI 2919	One	M
18	HSREP II STORAGE � WAKEFIELD, LLC	Wakefield	210 Church Street, Wakefield, RI�2879	One	M
19	HSREP II STORAGE � WOONSOCKET, LLC	Woonsocket	1700 Diamond Hill Road, Woonsocket, RI 2895	One	M
20	HSREP II STORAGE � HENDERSON, LLC	Henderson	80 East Horizon Ridge Pkwy, Henderson, NV 89002	One	U
21	HSREP II STORAGE � WAVERLY, LLC	Waverly	257 Waverly Avenue, Patchogue,�NY 11772	One	M
22	HSREP II STORAGE � CANAL, LLC	New Smyrna	1865 Renzulli Rd, New Smyrna Beach, FL 32168	One	U

�

L-1

�

#	Seller	Facility Name	Property Address	Property Group	Managed (M)�or Unmanaged (U)
23	HSREP II STORAGE � SANFORD, LLC	Sanford	3750 W State Rd 46, Sanford, FL�32771	One	U
24	HSREP II STORAGE � FORSYTH, LLC	Winter Park	6875 University Blvd, Winter Park, FL 32792	One	U
25	WWP-HSRE ONTARIO, LLC WWP-HSRE ONTARIO, LLC	Ontario	1372 East 5th St, Ontario, CA 91764	One	U
26	WWP-HSRE SDO, LLC	Sierra Del Oro	3915 Green River Drive, Corona,�CA�92880	One	U

�

L-2

�

EXHIBIT�M

�

FACILITY FACTORS

�

�	�
�	�
Facility Name	Facility Factor
�	�
�	�
�	�
Blue Island	� 2.15247
Bolingbrook	� 5.38117
Chicago Ave	� 4.14798
Countryside	� 8.43049
East 25th St	� 8.43049
Harlem Ave	� 2.34917
Lincoln Park	� 7.76906
Maywood	� 2.62332
North Kedzie	� 3.40807
Downtown Columbus	� 2.34305
Georgesville	� 1.07623
Lewis Center	� 3.22870
Morse Road	� 1.41316
Roberts Road	� 2.58969
South High	� 2.17489
Exeter	� 1.99552
Putnam Pike	� 3.74439
Wakefield	� 2.88565
Woonsocket	� 3.72197
Henderson	� 3.99103
Waverly	� 3.76682
New Smyrna	� 4.08072
Sanford	� 3.18386
Winter Park	� 2.80269
Ontario	� 5.36996
Sierra Del Oro	� 6.93946

�

M-1

�

EXHIBIT�N

�

AUDIT COOPERATION

�

�Audit Completion Date�

�

KPMG LLP

1601 Market Street

Philadelphia, PA 19103

�

Ladies and Gentlemen:

�

We are providing this letter in connection with your audits of the Historical Summary of Gross Income and Direct Operating Expenses (�Historical Summary�) of _______________ (the �Property�) for the purpose of expressing an opinion as to whether the Historical Summary presents fairly, in all material respects, the gross income and direct operating expenses in conformity with U.S. generally accepted accounting principles for the fiscal year ending.� The representations contained herein are made exclusively to you and not to the buyer or current owner of the Property or any other third party.

�

Certain representations in this letter are described as being limited to matters that are material.� Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.

�

We confirm, to the best of our knowledge and belief, the following representations made to you during your audit:

�

1.	We have provided you with (i)�access to all information, of which we are aware, that is relevant to the preparation and fair presentation of the financial statements such as records, documentation and other matters, (i)�additional information that you have requested from us for the purpose of the audit, and (iii)�unrestricted access to persons within the Company from whom you determined it necessary to obtain audit evidence.
�	�
2.	There are no:
�	�	�
�	a.	Violations or possible violations of laws or regulations, whose effects should be considered for disclosure in the Historical Summary or as a basis for recording a loss contingency.
�	�	�
�	b.	Unasserted claims or assessments that our lawyers have advised us are probable of assertion and must be disclosed in accordance with FASB Accounting Standards Codification (ASC) 450, Contingencies.
�	�	�
�	c.	Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by FASB ASC 450, Contingencies.
�	�	�
�	d.	Material transactions that have not been properly recorded in the accounting records underlying the Historical Summary.
�	�	�
�	e.	Events that have occurred subsequent to the Historical Summary date and through the date of this letter that would require adjustment to or disclosure in the Historical Summary.
�	�	�
3.	We acknowledge our responsibility for the design and implementation of programs and controls that are suitable for our business needs and are intended to materially prevent, deter and detect fraud. We understand that the term �fraud� includes misstatements arising from fraudulent financial reporting and misstatements arising from misappropriation of assets.

�

N-1

�

4.	We have no knowledge of any fraud or suspected fraud affecting the entity involving:
�	�	�
�	a.	Management
�	�	�
�	b.	Employees who have significant roles in internal control over financial reporting, or
�	�	�
�	c.	Others where the fraud could have a material effect on the Historical Summary.
�	�	�
5.	We have no knowledge of any allegations of fraud or suspected fraud affecting the entity.
�	�
6.	We have no knowledge of any officer or director of the Property, or any other person acting under the direction thereof, having taken any action to fraudulently influence, coerce, manipulate or mislead you during your audit.
�	�
7.	The following have been properly recorded or disclosed in the Historical Summary:
�	�	�
�	a.	Related party transactions including sales, purchases, loans, transfers, leasing arrangements, guarantees, ongoing contractual commitments and amounts receivable from or payable to related parties.
�	�	�
�	b.	Significant common ownership or management control relationships requiring disclosure.
�	�	�
8.	The Property has complied with all aspects of contractual agreements that would have a material effect on the Historical Summary in the event of noncompliance.

�

Very truly yours,	�
�	�
�	�
�	�
Very truly yours,	�
�	�
�Seller�	�
�	�
�	�
�	�
�	�
�	�
Name	�
�	�
CEO	�
�	�
�	�
�	�
�	�
�	�
Name	�
�	�
CFO	�

�

N-2

Exhibit�10.3

�

FIRST AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE

�

THIS FIRST AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE (this �Amendment�) is made effective as of October�2, 2014 (the �Effective Date�), by and among the seller entities identified on the signature pages�attached hereto (collectively, �Sellers�, or each, a �Seller�) and CubeSmart, L.P. (�Purchaser�).

�

RECITALS

�

A.�� Sellers and Purchaser entered into that certain Agreement for Purchase and Sale on August�25, 2014 (the �Agreement�) in connection with the purchase and sale of twenty-six (26) self-storage facilities, as more fully described therein.

�

B.�� Sellers and Purchaser wish to amend the Agreement upon the terms and conditions contained herein.

�

AGREEMENT

�

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Sellers and Purchaser do hereby covenant and agree as follows:

�

1.�� Definitions.� Capitalized terms which are used in this Amendment, but not defined in this Amendment, shall have the meanings ascribed to such terms as set forth in the Agreement.

�

2.�� Group One Closing Date and Group One Outside Closing Date.� The Group One Closing Date and the Group One Outside Closing Date shall be November�3, 2014.

�

3.�� Disapproval Date.� Section�3(c)�of the Agreement is hereby amended to provide that the Disapproval Date shall be Tuesday, October�7, 2014.

�

4.�� Ratification.� Except as expressly provided in this Amendment, all of the terms and provisions of the Agreement shall remain unaffected, unchanged and unimpaired by reason of this Amendment.� The Agreement, as amended by this Amendment, is hereby ratified, confirmed and continued in full force and effect.� In the event of any conflict or inconsistency between this Amendment and the Agreement, the terms of this Amendment shall govern and control.

�

5.�� Counterparts.� This Amendment may be executed in counterparts, in which case all such counterparts taken together shall constitute one and the same instrument which is binding upon all parties hereto, notwithstanding that all of the parties are not signatories to the original or the same counterpart.� Facsimile and PDF/Adobe Acrobat signatures shall be treated as original signatures.

�

[signatures on following pages]

�

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the Effective Date.

�

PURCHASER:

�

CUBESMART, L.P.

�

By:�� CubeSmart, its general partner

�

By: /s/ Jeffrey P. Foster

Jeffrey P. Foster

Senior Vice President, Chief Legal Officer�& Secretary

�

SELLERS:

�

GROUP ONE SELLERS:

�

STORAGE PARTNERS OF SOUTH HARLEM, LLC

�

By:�� HSREP II Holding, LLC, a Delaware limited liability company

�

By:�� HSRE REIT II, a Maryland real estate investment trust, its
sole member

�

By: /s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

WWP-HSRE SDO, LLC

WWP-HSRE ONTARIO GE, LLC

WWP-HSRE ONTARIO, LLC

�

By:�� HSRE-WWP I, LLC, a Delaware limited liability company

�

By:�� HSRE-WWP IA, LLC, a Delaware limited liability company

�

By:�� HSREP II Holding, LLC, a Delaware limited liability
company

�

By:�� HSRE REIT II, a Maryland real estate
investment trust, its sole member

�

By: /s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

HSREP II STORAGE � BOLINGBROOK, LLC

HSREP II STORAGE � CANAL, LLC

HSREP II STORAGE � CHESTNUT, LLC

HSREP II STORAGE � COLTON, LLC

HSREP II STORAGE � COUNTRYSIDE, LLC

HSREP II STORAGE � EXETER, LLC

HSREP II STORAGE � FORSYTH, LLC

HSREP II STORAGE � GEORGESVILLE, LLC

HSREP II STORAGE � HENDERSON, LLC

HSREP II STORAGE � JOHNSTON, LLC

HSREP II STORAGE � MORSE, LLC

HSREP II STORAGE � POLARIS, LLC

HSREP II STORAGE � ROBERTS, LLC

HSREP II STORAGE � SANFORD, LLC

HSREP II STORAGE � TWENTY FIFTH, LLC

HSREP II STORAGE � WAKEFIELD, LLC

HSREP II STORAGE � WAVERLY, LLC

HSREP II STORAGE � WESTERN, LLC

HSREP II STORAGE � WOONSOCKET, LLC

�

By:�� HSREP II Storage I, LLC, a Delaware limited liability company

�

By:�� HSREP II Storage Holding I, LLC, a Delaware limited
liability company

�

By:�� HSREP II Holding, LLC, a Delaware limited
liability company

�

By:�� HSRE REIT II, a Maryland real estate
investment trust, its sole member

�

By: /s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

GROUP TWO SELLERS:

�

STORAGE PARTNERS OF BLUE ISLAND, LLC

STORAGE PARTNERS OF MAYWOOD, LLC

STORAGE PARTNERS OF NORTH KEDZIE, LLC

STORAGE PARTNERS OF SOUTH CHICAGO, LLC

�

By:�� HSRE Chicago Self Storage Holding I, LLC, a Delaware
limited liability company

�

By:�� HSRE REIT I, a Maryland real estate investment
trust, its sole member

�

By: /s/ Christopher Merrill

Name:�� Christopher Merrill

Its:�� Trustee

�

Exhibit�10.4

�

SECOND AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE

�

THIS SECOND AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE (this �Amendment�) is made effective as of October�7, 2014 (the �Effective Date�), by and among the seller entities identified on the signature pages�attached hereto (collectively, �Sellers�, or each, a �Seller�) and CubeSmart, L.P. (�Purchaser�).

�

RECITALS

�

A.�� Sellers and Purchaser entered into that certain Agreement for Purchase and Sale on August�25, 2014 (as amended by that certain First Amendment to Agreement for Purchase and Sale dated as of October�2, 2014, the �Agreement�) in connection with the purchase and sale of twenty-six (26) self-storage facilities, as more fully described therein.

�

B.�� Sellers and Purchaser wish to amend the Agreement upon the terms and conditions contained herein.

�

AGREEMENT

�

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Sellers and Purchaser do hereby covenant and agree as follows:

�

1.�� Definitions.� Capitalized terms which are used in this Amendment, but not defined in this Amendment, shall have the meanings ascribed to such terms as set forth in the Agreement.

�

2.�� Disapproval Date.� Section�3(c)�of the Agreement is hereby amended to provide that the Disapproval Date shall be Thursday, October�9, 2014.� The foregoing extension shall not affect the Group One Closing Date or the Group One Outside Closing Date, each of which shall remain as November�3, 2014.

�

3.�� Ratification.� Except as expressly provided in this Amendment, all of the terms and provisions of the Agreement shall remain unaffected, unchanged and unimpaired by reason of this Amendment.� The Agreement, as amended by this Amendment, is hereby ratified, confirmed and continued in full force and effect.� In the event of any conflict or inconsistency between this Amendment and the Agreement, the terms of this Amendment shall govern and control.

�

4.�� Counterparts.� This Amendment may be executed in counterparts, in which case all such counterparts taken together shall constitute one and the same instrument which is binding upon all parties hereto, notwithstanding that all of the parties are not signatories to the original or the same counterpart.� Facsimile and PDF/Adobe Acrobat signatures shall be treated as original signatures.

�

[signatures on following pages]

�

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the Effective Date.

�

PURCHASER:

�

CUBESMART, L.P.

�

By:�� CubeSmart, its general partner

�

By: /s/ Jeffrey P. Foster

Jeffrey P. Foster

Senior Vice President, Chief Legal Officer�& Secretary

�

SELLERS:

�

GROUP ONE SELLERS:

�

STORAGE PARTNERS OF SOUTH HARLEM, LLC

�

By:�� HSREP II Holding, LLC, a Delaware limited liability company

�

By:�� HSRE REIT II, a Maryland real estate investment trust, its
sole member

�

By: /s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

WWP-HSRE SDO, LLC

WWP-HSRE ONTARIO GE, LLC

WWP-HSRE ONTARIO, LLC

�

By:�� HSRE-WWP I, LLC, a Delaware limited liability company

�

By:�� HSRE-WWP IA, LLC, a Delaware limited liability company

�

By:�� HSREP II Holding, LLC, a Delaware limited liability
company

�

By:�� HSRE REIT II, a Maryland real estate
investment trust, its sole member

�

By: /s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

HSREP II STORAGE � BOLINGBROOK, LLC

HSREP II STORAGE � CANAL, LLC

HSREP II STORAGE � CHESTNUT, LLC

HSREP II STORAGE � COLTON, LLC

HSREP II STORAGE � COUNTRYSIDE, LLC

HSREP II STORAGE � EXETER, LLC

HSREP II STORAGE � FORSYTH, LLC

HSREP II STORAGE � GEORGESVILLE, LLC

HSREP II STORAGE � HENDERSON, LLC

HSREP II STORAGE � JOHNSTON, LLC

HSREP II STORAGE � MORSE, LLC

HSREP II STORAGE � POLARIS, LLC

HSREP II STORAGE � ROBERTS, LLC

HSREP II STORAGE � SANFORD, LLC

HSREP II STORAGE � TWENTY FIFTH, LLC

HSREP II STORAGE � WAKEFIELD, LLC

HSREP II STORAGE � WAVERLY, LLC

HSREP II STORAGE � WESTERN, LLC

HSREP II STORAGE � WOONSOCKET, LLC

�

By:�� HSREP II Storage I, LLC, a Delaware limited liability company

�

By:�� HSREP II Storage Holding I, LLC, a Delaware limited
liability company

�

By:�� HSREP II Holding, LLC, a Delaware limited
liability company

�

By:�� HSRE REIT II, a Maryland real estate
investment trust, its sole member

�

By: /s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

GROUP TWO SELLERS:

�

STORAGE PARTNERS OF BLUE ISLAND, LLC

STORAGE PARTNERS OF MAYWOOD, LLC

STORAGE PARTNERS OF NORTH KEDZIE, LLC

STORAGE PARTNERS OF SOUTH CHICAGO, LLC

�

By:�� HSRE Chicago Self Storage Holding I, LLC, a Delaware
limited liability company

�

By:�� HSRE REIT I, a Maryland real estate investment
trust, its sole member

�

By: /s/ Christopher Merill

Name:�� Christopher Merrill

Its:�� Trustee

�

Exhibit�10.5

�

THIRD AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE

�

THIS THIRD AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE (this �Amendment�) is made effective as of October�7, 2014 (the �Effective Date�), by and among the seller entities identified on the signature pages�attached hereto (collectively, �Sellers�, or each, a �Seller�) and CubeSmart, L.P. (�Purchaser�).

�

RECITALS

�

A.�� Sellers and Purchaser entered into that certain Agreement for Purchase and Sale on August�25, 2014 (as amended by that certain First Amendment to Agreement for Purchase and Sale dated as of October�2, 2014 and that certain Second Amendment to Agreement for Purchase and Sale dated as of October�7, 2014, the �Agreement�) in connection with the purchase and sale of twenty-six (26) self-storage facilities, as more fully described therein.

�

B.�� Sellers and Purchaser wish to amend the Agreement upon the terms and conditions contained herein.

�

AGREEMENT

�

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Sellers and Purchaser do hereby covenant and agree as follows:

�

1.�� Definitions.� Capitalized terms which are used in this Amendment, but not defined in this Amendment, shall have the meanings ascribed to such terms as set forth in the Agreement.

�

2.�� Disapproval Date.� Section�3(c)�of the Agreement is hereby amended to provide that the Disapproval Date shall be Monday, October�13, 2014.� The foregoing extension shall not affect the Group One Closing Date or the Group One Outside Closing Date, each of which shall remain as November�3, 2014.

�

[signatures on following pages]

�

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the Effective Date.

�

PURCHASER:

�

CUBESMART, L.P.

�

By:�� CubeSmart, its general partner

�

By: /s/ Jeffrey P. Foster

Jeffrey P. Foster

Senior Vice President, Chief Legal Officer�& Secretary

�

SELLERS:

�

GROUP ONE SELLERS:

�

STORAGE PARTNERS OF SOUTH HARLEM, LLC

�

By:�� HSREP II Holding, LLC, a Delaware limited liability company

�

By:�� HSRE REIT II, a Maryland real estate investment trust, its
sole member

�

By: /s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

WWP-HSRE SDO, LLC

WWP-HSRE ONTARIO GE, LLC

WWP-HSRE ONTARIO, LLC

�

By:�� HSRE-WWP I, LLC, a Delaware limited liability company

�

By:�� HSRE-WWP IA, LLC, a Delaware limited liability company

�

By:�� HSREP II Holding, LLC, a Delaware limited liability
company

�

By:�� HSRE REIT II, a Maryland real estate
investment trust, its sole member

�

By: /s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

HSREP II STORAGE � BOLINGBROOK, LLC

HSREP II STORAGE � CANAL, LLC

HSREP II STORAGE � CHESTNUT, LLC

HSREP II STORAGE � COLTON, LLC

HSREP II STORAGE � COUNTRYSIDE, LLC

HSREP II STORAGE � EXETER, LLC

HSREP II STORAGE � FORSYTH, LLC

HSREP II STORAGE � GEORGESVILLE, LLC

HSREP II STORAGE � HENDERSON, LLC

HSREP II STORAGE � JOHNSTON, LLC

HSREP II STORAGE � MORSE, LLC

HSREP II STORAGE � POLARIS, LLC

HSREP II STORAGE � ROBERTS, LLC

HSREP II STORAGE � SANFORD, LLC

HSREP II STORAGE � TWENTY FIFTH, LLC

HSREP II STORAGE � WAKEFIELD, LLC

HSREP II STORAGE � WAVERLY, LLC

HSREP II STORAGE � WESTERN, LLC

HSREP II STORAGE � WOONSOCKET, LLC

�

By:�� HSREP II Storage I, LLC, a Delaware limited liability company

�

By:�� HSREP II Storage Holding I, LLC, a Delaware limited
liability company

�

By:�� HSREP II Holding, LLC, a Delaware limited
liability company

�

By:�� HSRE REIT II, a Maryland real estate
investment trust, its sole member

�

By: /s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

GROUP TWO SELLERS:

�

STORAGE PARTNERS OF BLUE ISLAND, LLC

STORAGE PARTNERS OF MAYWOOD, LLC

STORAGE PARTNERS OF NORTH KEDZIE, LLC

STORAGE PARTNERS OF SOUTH CHICAGO, LLC

�

By:�� HSRE Chicago Self Storage Holding I, LLC, a Delaware
limited liability company

�

By:�� HSRE REIT I, a Maryland real estate investment
trust, its sole member

�

By: /s/ Christopher Merrill

Name:�� Christopher Merrill

Its:�� Trustee

�

Exhibit�10.6

�

FOURTH AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE

�

THIS FOURTH AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE (this �Amendment�) is made effective as of October�13, 2014 (the �Effective Date�), by and among the seller entities identified on the signature pages�attached hereto (collectively, �Sellers�, or each, a �Seller�) and CubeSmart, L.P. (�Purchaser�).

�

RECITALS

�

A.�� Sellers and Purchaser entered into that certain Agreement for Purchase and Sale on August�25, 2014 (as amended by that certain First Amendment to Agreement for Purchase and Sale dated as of October�2, 2014, that certain Second Amendment to Agreement for Purchase and Sale dated as of October�7, 2014 and that certain Third Amendment to Agreement for Purchase and Sale dated as of October�9, 2014, the �Agreement�) in connection with the purchase and sale of twenty-six (26) self-storage facilities, as more fully described therein.

�

B.�� Sellers and Purchaser wish to amend the Agreement upon the terms and conditions contained herein.

�

AGREEMENT

�

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Sellers and Purchaser do hereby covenant and agree as follows:

�

1.�� Definitions.� Capitalized terms which are used in this Amendment, but not defined in this Amendment, shall have the meanings ascribed to such terms as set forth in the Agreement.

�

2.�� Waiver of Termination Rights.� In consideration of the terms of this Amendment, Purchaser waives its rights to terminate the Agreement prior to the Disapproval Date pursuant to Sections 3(c), 5 and 6 of the Agreement and, in furtherance thereof, Purchaser shall be deemed to have delivered a written notice approving the Property in accordance with Section�3(c)�of the Agreement.� Furthermore, Purchaser has elected not to deliver a Notice of MAC with respect to the Phase II Facilities pursuant to Section�3(e)�of the Agreement and hereby waives its right to terminate the Agreement pursuant to Section�3(e)�thereof.

�

3.�� Unpermitted Occupancy of 3402 North Kedzie Avenue, Chicago,�Illinois.� Seller served a demand for possession and notice to quit to Medina Lawncare,�Inc., 3610 North Cicero Avenue, Chicago,�Illinois (attention Carlos Medina,�Jr.) in connection with the property located at 3402 North Kedzie Avenue, Chicago,�Illinois (the �Kedzie Property�).� Seller shall use diligent and commercially reasonable efforts to cause Medina Lawncare,�Inc. (�Medina�) to vacate its occupancy of a portion of the Kedzie Property on or before the Group Two Closing (provided that Seller�s inability or failure to cause Medina to vacate the Kedzie Property shall not be deemed to be a Seller default under the Agreement or a failure of a condition under the Agreement, nor shall any such inability or failure constitute an excuse for Purchaser�s failure to perform under the Agreement (including, without limitation, Purchaser�s obligation to close the purchase and sale of the Properties under the Agreement)).� For purposes of this paragraph 3, �diligent and commercially reasonable efforts� shall mean, if Medina does not voluntarily surrender possession of the applicable portion of the Kedzie Property, commencing an eviction proceeding to cause Medina to vacate from the Kedzie Property and pursuing the same with commercially reasonable diligence until the Group Two Closing, including the delivery of such notices and filings as are required in connection therewith upon advice of counsel.

�

4.�� Judgment Lien Against 80 East Horizon Ridge Parkway, Henderson, Nevada.� Seller shall use commercially reasonable efforts to cause the Title Agency to insure over the judgment lien recorded against the property located at 80 East Horizon Ridge Parkway, Henderson, Nevada by Rib Roof,�Inc. on or before the Group One Closing.� In the event the Title Agency does not agree to insure over such judgment lien and such judgment lien is not otherwise removed of record on or prior to the Group One Closing Date, such lien shall be a Non-Seller Liquidated Lien.

�

5.�� Telecom Leases at 1372 East 5th Street, Ontario, California and 3915 Green River Drive, Corona, California.� Seller shall deliver to the telecom lease tenants at the properties located at 1372 East 5th Street, Ontario, California and 3915 Green River Drive, Corona, California estoppel letters in a form reasonably acceptable to Purchaser (and Purchaser shall provide such form to Seller for Seller�s delivery to such tenants), and Seller shall use diligent and commercially reasonable efforts to obtain such executed estoppels on or before the Group One Closing (provided that Seller�s inability or failure to obtain either or both such estoppel certificates (or Seller�s inability or failure to obtain either or both such estoppel certificates in the form requested by Purchaser) shall not be deemed to be a Seller default under the Agreement or a failure of a condition under the Agreement, nor shall any such inability or failure constitute an excuse for Purchaser�s failure to perform under the Agreement (including, without limitation, Purchaser�s obligation to close the purchase and sale of the Properties under the Agreement)).� For purposes of this paragraph 5, �diligent and commercially reasonable efforts� shall mean delivering the forms of estoppel certificates provided by Purchaser to such tenants and following-up with such tenants regarding the execution and delivery of the estoppels, but shall not require Seller to pay any fee or otherwise take any extraordinary steps to obtain such estoppels.� Notwithstanding the foregoing, if Seller does not obtain such executed estoppels on or before the Group One Closing, the applicable Seller(s)�shall deliver an estoppel in favor of Purchaser at the Group One Closing stating (i)�the most recent date to which rent has been received by Seller under the applicable telecom lease and (ii)�whether, to Seller�s knowledge (as such term is defined in the Agreement), a material default then exists under such telecom lease.�� Any such estoppel delivered by Seller shall constitute a representation of Seller pursuant to the Agreement and shall be subject to all applicable provisions thereof, including, without limitation, Section�16(a).

�

6.�� Residential Tenants at 1372 East 5th Street, Ontario, California.� Seller shall use diligent and commercially reasonable efforts to cause the residential tenants currently occupying a portion of the property located at 1372 East 5th Street, Ontario, California to vacate such property on or before the Group One Closing (provided that Seller�s inability or failure to cause such tenants to vacate possession on or before the Group One Closing shall not be deemed to be a Seller default under the Agreement or a failure of a condition under the Agreement, nor shall any such inability or failure constitute an excuse for Purchaser�s failure to perform under the Agreement (including, without limitation, Purchaser�s obligation to close the purchase and sale of the Properties under the Agreement)).� For purposes of this paragraph 6, �diligent and commercially reasonable efforts� shall mean providing whatever notices that are contemplated under such tenants� occupancy agreements in an effort to cause such tenants to vacate such premises prior to the Group One Closing and to periodically follow-up with such tenants in an effort to cause such tenants to vacate such premises.� In the event such residential tenants have not vacated the property by the Group One Closing, Seller, at Seller�s expense, shall continue to use commercially reasonable efforts to cause such tenants to vacate possession of the property after the Group One Closing.� Such obligation shall expressly survive the Group One Closing.

�

7.�� Closing Credit for Matters Affecting 6201 Harlem Avenue, Chicago,�Illinois, 9801 West 55th Street, Countryside, Illinois and 407 East 25th Street, Chicago,�Illinois.� At the Group One Closing Seller shall provide a credit to Purchaser in the amount of Three Hundred Thousand Dollars ($300,000) (the �Illinois Credit�) in full and final satisfaction of any and all claims, objections or issues related to the following properties resulting from or arising out of Purchaser�s diligence inspections under Section�3(c) (including, without limitation, the physical condition of the following properties, any customer concessions and claims related to the following properties, any diminished value of the following properties resulting from zoning or other violations and any flooding or other physical or legal conditions or defects relating to the following properties ): (a)�6201 South Harlem Avenue, Chicago,�Illinois; (b)�9801 West 55th Street, Countryside,�Illinois; and (c)�407 East 25th Street, Chicago,�Illinois; and in consideration thereof, Seller shall have no obligation to cure the same.� The Illinois Credit shall be allocated amongst the properties referenced in the immediately preceding sentence as follows:

�

(a)�� 6201 South Harlem Avenue, Chicago,�Illinois: $83,019

�

(b)�� 9801 West 55th Street, Countryside,�Illinois: $188,679

�

(c)�� 407 East 25th Street, Chicago,�Illinois: $28,302

�

Seller acknowledges that such allocations shall be for the exclusive use of Seller and that Purchaser shall not be bound by such allocations for any internal purposes, including, without limitation, insurance, accounting or valuation purposes; provided, that Purchaser acknowledges that such allocations shall apply for purposes of calculating transfer taxes and other relevant closing considerations.

�

8.�� BP Amoco Letter Agreement Regarding 407 East 25th Street, Chicago,�Illinois.� With respect to the property located at 407 East 25th Street, Chicago,�Illinois Seller shall use diligent and commercially reasonable efforts to obtain from BP Amoco on or before the Group One Closing an agreement with BP Amoco whereby BP Amoco agrees to perform certain work necessary to obtain closure of the UST release and related NFR status so that such property is protective of human health and environment per IEPA standards (the �Environmental Agreement�) (provided that Seller�s inability or failure to obtain the Environmental Agreement on or before the Group One Closing shall not be deemed to be a Seller default under the Agreement or a failure of a condition under the Agreement, nor shall any such inability or failure constitute an excuse for Purchaser�s failure to perform under the Agreement (including, without limitation, Purchaser�s obligation to close the purchase and sale of the Properties under the Agreement)).� Notwithstanding the foregoing, if Seller is unable to obtain the Environmental Agreement on or before the Group One Closing, Seller agrees to withhold from its closing proceeds in a strict joint order escrow account (in a form reasonably acceptable to Seller, Purchaser and Title Agent) with Title Agent at the Group One Closing the amount of Seventy-Five Thousand Dollars ($75,000) (the �Environmental Holdback�).� If Seller is able to obtain the Environmental Agreement within six (6)�months after the Group One Closing, upon Seller�s delivery to Purchaser of the Environmental Agreement executed by BP Amoco (and concurrent notice to Title Agent), then Title Agent shall automatically release the Environmental Holdback to Seller.� If Seller is not able to obtain the Environmental Agreement prior to the expiration of such six (6)�month period, the full amount of the Environmental Holdback shall be automatically released to Purchaser in full satisfaction of any environmental or other obligations of Seller in connection with such matter.� If following the Group One Closing an environmental claim is made against Purchaser or the property referred to in this Paragraph 8 that would otherwise have been addressed by the Environmental Agreement, and Seller has theretofore been unable to obtain the Environmental Agreement, then Purchaser shall be permitted to draw down the Environmental Holdback for the purposes of defending such claim and to take actions necessary to protect human health at the property in accordance with applicable laws.� The foregoing obligations shall survive Closing.

�

9.�� Closing Credit for Zoning, Permitting and Other Matters.� Seller shall provide a Closing credit to Purchaser in the amount of Sixty Thousand Dollars ($60,000) in full and final satisfaction of any and all objections, claims or issues related to the zoning, permitting, violation, code, parking, paving, unauthorized storage and other matters identified in Schedule A to Purchaser�s September�29, 2014 notice letter to Seller (as well as the issues related to the certificates of occupancy for buildings 1-7 related to the 1700 Diamond Hill Road, Woonsocket, Rhode Island property and such other zoning, permitting, violation, code, parking and paving issues as were identified in Purchaser�s September�17, September�24 and September�25 letters to Seller and not otherwise expressly addressed in this Amendment) and in consideration thereof, Seller shall have no obligation to cure the same.� Such Closing credit shall be allocated amongst the Properties in accordance with the Facility Factors scheduled on Exhibit�M to the Agreement, and the portions of such credit allocable to each of the Group One Properties and the Group Two Properties in accordance with such Facility Factors allocation shall be paid at the Group One Closing and the Group Two Closing, respectively.� Seller acknowledges that the use of the Facility Factors as contemplated in this paragraph 9 shall be for the exclusive use of Seller and that Purchaser shall not be bound by such use for any internal purposes, including, without limitation, insurance, accounting or valuation purposes; provided, that Purchaser acknowledges that such allocations shall apply for purposes of calculating transfer taxes and other relevant closing considerations.

�

10.�� Ratification.� Except as expressly provided in this Amendment, all of the terms and provisions of the Agreement shall remain unaffected, unchanged and unimpaired by reason of this Amendment.� The Agreement, as amended by this Amendment, is hereby ratified, confirmed and continued in full force and effect.� In the event of any conflict or inconsistency between this Amendment and the Agreement, the terms of this Amendment shall govern and control.

�

11.�� Counterparts.� This Amendment may be executed in counterparts, in which case all such counterparts taken together shall constitute one and the same instrument which is binding upon all parties hereto, notwithstanding that all of the parties are not signatories to the original or the same counterpart.� Facsimile and PDF/Adobe Acrobat signatures shall be treated as original signatures.

�

[signatures on following pages]

�

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the Effective Date.

�

PURCHASER:

�

CUBESMART, L.P.

�

By:�� CubeSmart, its general partner

�

By: /s/ Jeffrey P. Foster

Jeffrey P. Foster

Senior Vice President, Chief Legal Officer�& Secretary

�

SELLERS:

�

GROUP ONE SELLERS:

�

STORAGE PARTNERS OF SOUTH HARLEM, LLC

�

By:�� HSREP II Holding, LLC, a Delaware limited liability company

�

By:�� HSRE REIT II, a Maryland real estate investment trust, its
sole member

�

By:/s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

WWP-HSRE SDO, LLC

WWP-HSRE ONTARIO GE, LLC

WWP-HSRE ONTARIO, LLC

�

By:�� HSRE-WWP I, LLC, a Delaware limited liability company

�

By:�� HSRE-WWP IA, LLC, a Delaware limited liability company

�

By:�� HSREP II Holding, LLC, a Delaware limited liability
company

�

By:�� HSRE REIT II, a Maryland real estate
investment trust, its sole member

�

By: /s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

HSREP II STORAGE � BOLINGBROOK, LLC

HSREP II STORAGE � CANAL, LLC

HSREP II STORAGE � CHESTNUT, LLC

HSREP II STORAGE � COLTON, LLC

HSREP II STORAGE � COUNTRYSIDE, LLC

HSREP II STORAGE � EXETER, LLC

HSREP II STORAGE � FORSYTH, LLC

HSREP II STORAGE � GEORGESVILLE, LLC

HSREP II STORAGE � HENDERSON, LLC

HSREP II STORAGE � JOHNSTON, LLC

HSREP II STORAGE � MORSE, LLC

HSREP II STORAGE � POLARIS, LLC

HSREP II STORAGE � ROBERTS, LLC

HSREP II STORAGE � SANFORD, LLC

HSREP II STORAGE � TWENTY FIFTH, LLC

HSREP II STORAGE � WAKEFIELD, LLC

HSREP II STORAGE � WAVERLY, LLC

HSREP II STORAGE � WESTERN, LLC

HSREP II STORAGE � WOONSOCKET, LLC

�

By:�� HSREP II Storage I, LLC, a Delaware limited liability company

�

By:�� HSREP II Storage Holding I, LLC, a Delaware limited
liability company

�

By:�� HSREP II Holding, LLC, a Delaware limited
liability company

�

By:�� HSRE REIT II, a Maryland real estate
investment trust, its sole member

�

By: /s/ Stephen M. Gordon

Name:�� Stephen M. Gordon

Its:�� Trustee

�

GROUP TWO SELLERS:

�

STORAGE PARTNERS OF BLUE ISLAND, LLC

STORAGE PARTNERS OF MAYWOOD, LLC

STORAGE PARTNERS OF NORTH KEDZIE, LLC

STORAGE PARTNERS OF SOUTH CHICAGO, LLC

�

By:�� HSRE Chicago Self Storage Holding I, LLC, a Delaware
limited liability company

�

By:�� HSRE REIT I, a Maryland real estate investment
trust, its sole member

�

By: /s/ Christopher Merrill

Name:�� Christopher Merrill

Its:�� Trustee

�

Exhibit�12.1

�

CubeSmart

Computation of Ratio of Earnings to Fixed Charges

(dollars in thousands)

�

Year�Ended�December�31,

�

Nine�Months�Ended�September�30,

�

2009

�

2010

�

2011

�

2012

�

2013

�

2013

�

2014

�

Earnings before fixed charges:

�

Add:

�

(Loss) income from continuing operations

�

(25,370)

�

(17,443)

�

(13,400)

�

(13,276)

�

10,409

�

4,662

�

20,824

�

Fixed charges - per below

�

47,831

�

44,539

�

46,626

�

44,329

�

44,109

�

33,125

�

38,399

�

Less:

�

Capitalized interest

�

(73)

�

(132)

�

(82)

�

(185)

�

(851)

�

(458)

�

(966)

�

Earnings before fixed charges

�

22,388

�

26,964

�

33,144

�

30,868

�

53,667

�

37,329

�

58,257

�

Fixed charges:

�

Interest expense (including amortization of premiums and discounts related to indebtedness) *

�

47,608

�

44,257

�

46,394

�

43,994

�

43,108

�

32,554

�

37,320

�

Capitalized interest

�

132

�

185

�

851

�

458

�

966

�

Estimate of interest within rental expense

�

150

�

150

�

150

�

150

�

150

�

113

�

113

�

Total Fixed Charges

�

47,831

�

44,539

�

46,626

�

44,329

�

44,109

�

33,125

�

38,399

�

Income allocated to preferred shareholders

�

1,218

�

6,008

�

6,008

�

4,506

�

4,506

�

Total combined fixed charges and preferred distributions

�

47,831

�

44,539

�

47,844

�

50,337

�

50,117

�

37,631

�

42,905

�

Ratio of earnings to fixed charges (a)

�

0.47

�

0.61

�

0.69

�

0.61

�

1.07

�

0.99

�

1.36

�

*� Includes amounts reported in discontinued operations

�

(a)� In fiscal 2009, 2010, 2011 and 2012 and in the nine months ended September�30, 2013, earnings were insufficient to cover combined fixed charges and preferred distributions.� The Company must generate additional earnings of $25.4 million, $17.6 million, $14.7 million, $19.5 million and $0.3 million to achieve a fixed charge coverage ratio of 1:1 in fiscal 2009, 2010, 2011 and 2012, and in the nine months ended September�30, 2013, respectively.

�

Exhibit�12.2

�

CubeSmart L.P.

Computation of Ratio of Earnings to Fixed Charges

(dollars in thousands)

�

Year�Ended�December�31,

�

Nine�Months�Ended�September�30,

�

2009

�

2010

�

2011

�

2012

�

2013

�

2013

�

2014

�

Earnings before fixed charges:

�

Add:

�

(Loss) income from continuing operations

�

(25,370)

�

(17,443)

�

(13,400)

�

(13,276)

�

10,409

�

4,662

�

20,824

�

Fixed charges - per below

�

47,831

�

44,539

�

46,626

�

44,329

�

44,109

�

33,125

�

38,399

�

Less:

�

Capitalized interest

�

(73)

�

(132)

�

(82)

�

(185)

�

(851)

�

(458)

�

(966)

�

Earnings before fixed charges

�

22,388

�

26,964

�

33,144

�

30,868

�

53,667

�

37,329

�

58,257

�

Fixed charges:

�

Interest expense (including amortization of premiums and discounts related to indebtedness) *

�

47,608

�

44,257

�

46,394

�

43,994

�

43,108

�

32,554

�

37,320

�

Capitalized interest

�

132

�

185

�

851

�

458

�

966

�

Estimate of interest within rental expense

�

150

�

150

�

150

�

150

�

150

�

113

�

113

�

Total Fixed Charges

�

47,831

�

44,539

�

46,626

�

44,329

�

44,109

�

33,125

�

38,399

�

Income allocated to preferred shareholders

�

1,218

�

6,008

�

6,008

�

4,506

�

4,506

�

Total combined fixed charges and preferred distributions

�

47,831

�

44,539

�

47,844

�

50,337

�

50,117

�

37,631

�

42,905

�

Ratio of earnings to fixed charges (a)

�

0.47

�

0.61

�

0.69

�

0.61

�

1.07

�

0.99

�

1.36

�

*� Includes amounts reported in discontinued operations

�

Exhibit�31.1

�

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION�302 OF THE SARBANES-OXLEY ACT OF 2002

�

I, Christopher P. Marr, certify that:

�

1.�I have reviewed this Quarterly Report on Form�10-Q of CubeSmart;

�

2.�Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

�

3.�Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

�

4.�The registrant�s other certifying officer(s)�and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules�13a-15(e)�and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules�13a-15(f)�and 15d-15(f)) for the registrant and have:

�

(a)�Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

�

(b)�Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

�

(c)�Evaluated the effectiveness of the registrant�s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

�

(d)�Disclosed in this report any change in the registrant�s internal control over financial reporting that occurred during the registrant�s most recent fiscal quarter (the registrant�s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant�s internal control over financial reporting; and

�

5.�The registrant�s other certifying officer(s)�and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant�s auditors and the audit committee of registrant�s Board of Trustees (or persons performing the equivalent functions):

�

(a)�All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant�s ability to record, process, summarize and report financial information; and

�

(b)�Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant�s internal control over financial reporting.

�

Date: November�5, 2014	/s/ Christopher P. Marr	�
�	Christopher P. Marr
�	Chief Executive Officer

�

Exhibit�31.2

�

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION�302 OF THE SARBANES-OXLEY ACT OF 2002

�

I, Timothy M. Martin, certify that:

�

1.�I have reviewed this Quarterly Report on Form�10-Q of CubeSmart;

�

(b)�Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant�s internal control over financial reporting.

�

Date: November�5, 2014	/s/ Timothy M. Martin	�
�	Timothy M. Martin
�	Chief Financial Officer

�

Exhibit�31.3

�

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION�302 OF THE SARBANES-OXLEY ACT OF 2002

�

I, Christopher P. Marr, certify that:

�

1.�I have reviewed this Quarterly Report on Form�10-Q of CubeSmart L.P.;

�

(b)�Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant�s internal control over financial reporting.

�

Date: November�5, 2014	/s/ Christopher P. Marr	�
�	Christopher P. Marr
�	Chief Executive Officer

�

Exhibit�31.4

�

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION�302 OF THE SARBANES-OXLEY ACT OF 2002

�

I, Timothy M. Martin, certify that:

�

1.�I have reviewed this Quarterly Report on Form�10-Q of CubeSmart L.P.;

�

(b)�Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant�s internal control over financial reporting.

�

Date: November�5, 2014	/s/ Timothy M. Martin	�
�	Timothy M. Martin
�	Chief Financial Officer

�

Exhibit�32.1

�

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C. Section�1350, As Adopted Pursuant to Section�906 of the

Sarbanes-Oxley Act of 2002

�

The undersigned, the Chief Executive Officer and Chief Financial Officer of CubeSmart (the �Company�), each hereby certifies, pursuant to 18 U.S.C. Section�1350, as adopted pursuant to Section�906 of the Sarbanes-Oxley Act of 2002, that:

�

(a)�The Quarterly Report on Form�10-Q of the Company for the period ended September�30, 2014 (the �Report�) filed on the date hereof with the Securities and Exchange Commission fully complies with the requirements of Section�13(a)�or 15(d)�of the Securities Exchange Act of 1934, as amended; and

�

(b)�The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

�

Date: November�5, 2014	/s/ Christopher P. Marr	�
�	Christopher P. Marr
�	Chief Executive Officer
�	�
�	�
Date: November�5, 2014	/s/ Timothy M. Martin	�
�	Timothy M. Martin
�	Chief Financial Officer

�

A signed original of this written statement required by Section�906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

�

Exhibit�32.2

�

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C. Section�1350, As Adopted Pursuant to Section�906 of the

Sarbanes-Oxley Act of 2002

�

The undersigned, the Chief Executive Officer and Chief Financial Officer of CubeSmart L.P. (the �Company�), each hereby certifies, pursuant to 18 U.S.C. Section�1350, as adopted pursuant to Section�906 of the Sarbanes-Oxley Act of 2002, that:

�

(b)�The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

�

Date: November�5, 2014	/s/ Christopher P. Marr	�
�	Christopher P. Marr
�	Chief Executive Officer
�	�
�	�
Date: November�5, 2014	/s/ Timothy M. Martin	�
�	Timothy M. Martin
�	Chief Financial Officer

�

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Form 10-Q CubeSmart For: Sep 30

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