SmartStop Self Storage REIT, Inc.

Previous wording

The following discussion and analysis should be read in conjunction with our consolidated financial data contained elsewhere in this report. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should also be read in conjunction with our consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023. See also “Cautionary Note Regarding Forward-Looking Statements” preceding Part I.

Current wording

The following discussion and analysis should be read in conjunction with our consolidated financial data contained elsewhere in this report. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should also be read in conjunction with our consolidated financial statements and the notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024. See also “Cautionary Note Regarding Forward-Looking Statements” preceding Part I.

Previous wording

We focus on the acquisition, ownership, and operation of self storage properties located primarily within the top 100 metropolitan statistical areas, or MSAs, throughout the United States and Canada. Based on the Inside Self Storage Top-Operators List ranking for 2024, and after accounting for recent market transactions, we are the 10th largest owner and operator of self storage properties in the United States based on number of properties, units, and rentable square footage. As of September 30, 2024, our wholly-owned portfolio consisted of 157 operating self storage properties diversified across 19 states and Canada comprising approximately 106,300 units and 12.2 million net rentable square feet. Additionally, we owned a 50% equity interest in eleven unconsolidated real estate ventures located in Canada, which included ten operating self storage properties. Further, through our Managed REIT Platform (as defined below), we serve as the sponsor of Strategic Storage Trust VI, Inc., a publicly-registered non-traded REIT (“SST VI”), and Strategic Storage Growth Trust III, Inc., a private REIT (“SSGT III” and together with SST VI and any future sponsored REITs, the “Managed REITs”), and manage one additional self storage property, all of which pay us fees to manage these programs and manage their 35 operating self storage properties (as of September 30, 2024).

Current wording

We focus on the acquisition, ownership, and operation of self storage properties located primarily within the top 100 metropolitan statistical areas, or MSAs, throughout the United States and Canada. Based on the Inside Self Storage Top-Operators List ranking for 2024, and after accounting for recent market transactions, we are the 10th largest owner and operator of self storage properties in the United States based on number of properties, units, and rentable square footage. As of March 31, 2025, our wholly-owned portfolio consisted of 164 operating self storage properties diversified across 20 states, the District of Columbia, and Canada comprising approximately 112,700 units and 12.8 million net rentable square feet. Additionally, we owned a 50% equity interest in eleven unconsolidated real estate ventures located in Canada, which included ten operating self storage properties, and one other property, which we plan to convert into a self storage property. Further, through our Managed REIT Platform (as defined below), we serve as the sponsor of Strategic Storage Trust VI, Inc., a publicly-registered non-traded REIT (“SST VI”), Strategic Storage Growth Trust III, Inc., a private REIT (“SSGT III”), and Strategic Storage Trust X, a private net asset value REIT launched in January 2025, ("SST X" and together with SST VI and SSGT III, the “Managed REITs”), additionally, we manage one other self storage property for an affiliated entity, which pays us fees, as applicable, to manage such property. In total, as of March 31, 2025, we managed 44 operating self storage properties.

Previous wording

As discussed herein, we, through our subsidiaries, currently serve as the sponsor of SST VI and SSGT III. We also served as the sponsor of Strategic Storage Trust IV, Inc., a public non-traded REIT (“SST IV”), through March 17, 2021, and Strategic Storage Growth Trust II, Inc., a private REIT (“SSGT II”), through June 1, 2022. Prior to March 17, 2021 and June 1, 2022, SST IV and SSGT II, respectively, were also included in the “Managed REITs.” We operate the properties owned by the Managed REITs, which together with one other self storage property we manage consist of, as of September 30, 2024, 35 operating properties and approximately 27,500 units and approximately 3.0 million rentable square feet. In addition, we have the internal capability to originate, structure and manage additional self storage investment programs (the “Managed REIT Platform”) which would be sponsored by SmartStop REIT Advisors, LLC (“SRA”), our indirect subsidiary. We generate asset management fees, property management fees, acquisition fees, and other fees and also receive substantially all of the tenant protection program revenue earned by our Managed REITs. For the property management and advisory services that we provide, we are reimbursed for certain expenses that otherwise helps to offset our net operating expense burden.

Current wording

As discussed herein, we, through our subsidiaries, currently serve as the sponsor of SST VI, SSGT III, and SST X. We operate the properties owned by the Managed REITs, which together with one other self storage property we manage consist of, as of March 31, 2025, 44 operating properties and approximately 34,000 units and approximately 3.9 million rentable square feet. In addition, we have the internal capability to originate, structure and manage additional self storage investment programs (the “Managed REIT Platform”) which would be sponsored by SmartStop REIT Advisors, LLC (“SRA”), our indirect subsidiary. We acquired the Managed REIT Platform in 2019 from Strategic Asset Management I, LLC (f/k/a SmartStop Asset Management, LLC), our former sponsor ("SAM"). We generate asset management fees, property management fees, acquisition fees, and other fees and also receive substantially all of the tenant protection program revenue earned by our Managed REITs. For the property management and advisory services that we provide, we are reimbursed for certain expenses that otherwise helps to offset our net operating expense burden.

Previous wording

Includes all rentable units, consisting of storage units and parking (approximately 3,450 units).

Current wording

Includes all rentable units, consisting of storage units and parking (approximately 3,445 units).

Previous wording

Includes all rentable square feet, consisting of storage units and parking (approximately 1,040,000 square feet).

Current wording

Includes all rentable square feet, consisting of storage units and parking (approximately 1,017,000 square feet).

Previous wording

Represents rental income (excludes administrative fees, late fees, and other ancillary income) for all facilities we owned in a state or province divided by our total rental income for the nine months ended September 30, 2024.

Current wording

Represents rental income (excludes administrative fees, late fees, and other ancillary income) for all facilities we owned in a state or province divided by our total rental income for the three months ended March 31, 2025.

Previous wording

Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible assets and other intangible assets acquired. Goodwill is allocated to various reporting units, as applicable, and is not amortized. We perform an annual qualitative impairment assessment as of December 31 for goodwill; between annual tests we evaluate the recoverability of goodwill whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be fully recoverable. If circumstances indicate the carrying amount may not be fully recoverable, we perform a quantitative impairment test of goodwill to compare the fair value of each reporting unit to its respective carrying amount. If the carrying amount of goodwill exceeds its fair value, an impairment charge will be recognized. No impairment charges were recognized during the nine months ended September 30, 2024 and 2023.

Current wording

Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible assets and other intangible assets acquired. Goodwill is allocated to various reporting units, as applicable, and is not amortized. We perform an annual qualitative impairment assessment as of December 31 for goodwill; between annual tests we evaluate the recoverability of goodwill whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be fully recoverable. If circumstances indicate the carrying amount may not be fully recoverable, we perform a quantitative impairment test of goodwill to compare the fair value of each reporting unit to its respective carrying amount. If the carrying amount of goodwill exceeds its fair value, an impairment charge will be recognized. No impairment charges to goodwill were recognized during the three months ended March 31, 2025 and 2024.

Previous wording

We made an election under Section 856(c) of the Code to be taxed as a REIT under the Code, commencing with the taxable year ended December 31, 2014. By qualifying as a REIT for federal income tax purposes, we generally will not be subject to U.S. federal income tax on income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year in which our qualification is denied. Such an event could materially and adversely affect our net income and could have a material adverse impact on our financial condition and results of operations. However, we believe that we are organized and operate in a manner that will enable us to continue to qualify for treatment as a REIT for federal income tax purposes, and we intend to continue to operate as to remain qualified as a REIT for federal income tax purposes.

Current wording

We made an election under Section 856(c) of the Internal Revenue Code of 1986 (the Code) to be taxed as a REIT under the Code, commencing with the taxable year ended December 31, 2014. By qualifying as a REIT for federal income tax purposes, we generally will not be subject to U.S. federal income tax on income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year in which our qualification is denied. Such an event could materially and adversely affect our net income and could have a material adverse impact on our financial condition and results of operations. However, we believe that we are organized and operate in a manner that will enable us to continue to qualify for treatment as a REIT for federal income tax purposes, and we intend to continue to operate as to remain qualified as a REIT for federal income tax purposes.

Previous wording

Current Market and Economic Conditions

Current wording

Industry Outlook, Market and Economic Conditions

Previous wording

Further, the broader economy has been experiencing elevated levels of inflation, higher interest rates, tightening monetary and fiscal policies and a slowdown in home sales and population mobility. This could result in less discretionary spending, weakening consumer balance sheets and reduced demand for self storage. Additionally, a prolonged period of elevated inflation and/or higher interest rates could result in a further contraction of self storage demand. However, demand for the self storage sector is dynamic with drivers that function in a multitude of economic environments, both cyclically and counter-cyclically. Demand for self storage tends to be needs-based, with numerous factors that lead customers to renting and maintaining storage units. Additionally, the broader interest rate and inflationary environment has moderated since the beginning of 2024. These factors could lead to increasing levels of population mobility, specifically amongst single family home buyers and sellers, which could increase demand for self storage. Certain property operating expenses have experienced elevated pressures to date, namely property insurance, property taxes and payroll have seen above average increases, primarily due to inflation and natural disasters. As a result, we have experienced a year-over-year decrease in gross margins for the year ended December 31, 2023 and the first three quarters of 2024.

Current wording

Our rental revenue and operating results depend significantly on the demand for self storage space. Demand for self storage tends to be needs-based, with numerous factors that lead customers to renting and maintaining storage units. These demand drivers function in a multitude of economic environments, both cyclically and counter-cyclically.

Previous wording

As of September 30, 2024 and 2023, we wholly-owned 157 and 153 operating self storage facilities, respectively. Our operating results for the three months ended September 30, 2024 included full quarter results for 155 self storage facilities. Our operating results for the three months ended September 30, 2023 included full quarter results for 153 self storage facilities. Operating results in future periods will depend on the results of operations of these properties and of the real estate properties that we may acquire in the future.

Current wording

As of March 31, 2025 and 2024, we wholly-owned 164 and 154 operating self storage facilities, respectively. Our operating results for the three months ended March 31, 2025 included full quarter results for 161 self storage facilities, and partial period results for 3 self storage facilities. Our operating results for the three months ended March 31, 2024 included full quarter results for 154 self storage facilities. Operating results in future periods will depend on the results of operations of these properties and of the real estate properties that we may acquire in the future.

Previous wording

Total self storage related revenues for the nine months ended September 30, 2024 and 2023 were approximately $163.0 million and $162.1 million, respectively. The increase in total self storage revenues of approximately $0.9 million, or approximately 0.6%, is primarily attributable to an increase in non same-store revenues of approximately $1.0 million, largely as a result of three property acquisitions during the nine months ended September 30, 2024.

Current wording

Total self storage related revenues for the three months ended March 31, 2025 and 2024 were approximately $59.2 million and $52.7 million, respectively. The increase in total self storage revenues of approximately $6.5 million, or approximately 12.4%, is primarily attributable to an increase in non same-store revenues of approximately $4.6 million, largely as a result of eleven property acquisitions after March 31, 2024, the operating results of which were not included during the three months ended March 31, 2024. Additionally, our same-store revenues were up approximately $1.6 million, or approximately 3.2%.

Previous wording

Managed REIT Platform revenues for the three months ended September 30, 2024 and 2023 were approximately $2.9 million and $2.5 million, respectively. The increase in Managed REIT Platform revenues of approximately $0.4 million is primarily attributable to increased property management fees of approximately $0.2 million and increased Tenant Protection Program fees at our Managed REITs' properties of approximately $0.1 million as compared to the same period in the prior year. Such increases in Managed REIT Platform revenues were partially offset as compared to the prior year by the effect of sponsor funding reductions recorded to revenue only in the current year.

Current wording

Managed REIT Platform revenues for the three months ended March 31, 2025 and 2024 were approximately $4.1 million and $2.7 million, respectively. The increase in Managed REIT Platform revenues of approximately $1.4 million is primarily attributable to increased acquisition fees of approximately $1.2 million as compared to the same period in the prior year.

Previous wording

We expect Managed REIT Platform Revenue to fluctuate commensurate with our Managed REITs' increase in operations and assets under management, as well as additional reductions recorded to such revenue in connection with the

Current wording

We expect Managed REIT Platform Revenue to fluctuate commensurate with our Managed REITs' increase in operations and assets under management, as well as additional reductions recorded to such revenue in connection with the Sponsor Funding Agreement as SST VI continues to sell shares in its public offering and such reductions increase commensurately.

Previous wording

Reimbursable costs from Managed REITs for the three months ended September 30, 2024 and 2023 were approximately $1.9 million and $1.4 million, respectively. Such revenues consist of costs incurred by us as we provide property management and advisory services to the Managed REITs, which are reimbursed by the Managed REITs, pursuant to our related contracts with the Managed REITs. The increase in reimbursable costs from Managed REITs is primarily related to the growth in the Managed REITs' assets under management. We expect reimbursable costs from Managed REITs to increase in future periods as a result of additional acquisitions by our Managed REITs. We further expect reimbursable costs from Managed REITs to generally fluctuate commensurate with our Managed REITs' increase in operations as we receive reimbursement for providing such services.

Current wording

Reimbursable costs from Managed REITs for the three months ended March 31, 2025 and 2024 were approximately $2.1 million and $1.6 million, respectively. Such revenues consist of costs incurred by us as we provide property management and advisory services to the Managed REITs, which are reimbursed by the Managed REITs, pursuant to our related contracts with the Managed REITs. The increase in reimbursable costs from Managed REITs is primarily related to the growth in the Managed REITs' assets under management. We expect reimbursable costs from Managed REITs to increase in future periods as a result of additional acquisitions by our Managed REITs. We further expect reimbursable costs from Managed REITs to generally fluctuate commensurate with our Managed REITs' increase in operations as we receive reimbursement for providing such services.

Previous wording

Property operating expenses for the three months ended September 30, 2024 and 2023 were approximately $18.2 million (or 33% of self storage revenue) and $16.3 million (or 30% of self storage revenue), respectively. Property operating expenses include the costs to operate our facilities including compensation related expenses, utilities, insurance, real estate taxes, and property related marketing. The increase in property operating expenses of approximately $1.9 million is largely attributable to increased property operating expenses of approximately $1.0 million related to our non same-store properties and the balance related to increased property insurance costs, payroll costs, repairs and maintenance expenses, and advertising expenses on our same-store properties. We expect property operating expenses to fluctuate commensurate with inflationary pressures and any future acquisitions.

Current wording

Property operating expenses for the three months ended March 31, 2025 and 2024 were approximately $20.1 million (or 34% of self storage revenue) and $17.4 million (or 33% of self storage revenue), respectively. Property operating expenses include the costs to operate our facilities including compensation related expenses, utilities, insurance, real estate taxes, and property related marketing. The increase in property operating expenses of approximately $2.7 million is largely attributable to increased property operating expenses of approximately $1.8 million related to our non same-store properties and the balance related to increased property insurance costs, property taxes, payroll costs, and repairs and maintenance expenses at our same-store properties. We expect property operating expenses to fluctuate commensurate with inflationary pressures and any future acquisitions.

Previous wording

Managed REIT Platform expenses for the three months ended September 30, 2024 and 2023 were approximately $1.1 million and $1.3 million, respectively. Such expenses primarily consisted of expenses related to non-reimbursable costs associated with the operation of the Managed REIT Platform incurred directly and indirectly through the Administrative Services Agreement (as discussed in Note 10 – Related Party Transactions, of the notes to consolidated financial statements contained in this report). We expect Managed REIT Platform expenses to fluctuate in future periods commensurate with our level of activity related to the Managed REITs.

Current wording

Managed REIT Platform expenses for the three months ended March 31, 2025 and 2024 were approximately $1.2 million and $0.9 million, respectively. Such expenses primarily consisted of expenses related to non-reimbursable costs associated with the operation of the Managed REIT Platform, some of which were incurred directly and indirectly through the Administrative Services Agreement (as discussed in Note 10 – Related Party Transactions, of the notes to consolidated financial statements contained in this report). We expect Managed REIT Platform expenses to fluctuate in future periods commensurate with our level of activity related to the Managed REITs.

Previous wording

Reimbursable costs from Managed REITs for the three months ended September 30, 2024 and 2023 were approximately $1.9 million and $1.4 million, respectively. Such expenses consist of costs incurred by us as we provide property management and advisory services to the Managed REITs, which are reimbursed by the Managed REITs, pursuant to our related contracts with the Managed REITs. The increase in reimbursable costs from Managed REITs is primarily related to the growth in the Managed REITs' assets under management. We expect reimbursable costs from the Managed REITs to fluctuate commensurate with our Managed REITs' increase in operations as we receive reimbursement for providing such services.

Current wording

Reimbursable costs from Managed REITs for the three months ended March 31, 2025 and 2024 were approximately $2.1 million and $1.6 million, respectively. Such expenses consist of costs incurred by us as we provide property management and advisory services to the Managed REITs, which are reimbursed by the Managed REITs, pursuant to our related contracts with the Managed REITs. The increase in reimbursable costs from Managed REITs is primarily related to the growth in the Managed REITs' assets under management. We expect reimbursable costs from the Managed REITs to fluctuate commensurate with our Managed REITs' increase in operations as we receive reimbursement for providing such services.

Previous wording

General and administrative expenses for the three months ended September 30, 2024 and 2023 were approximately $7.2 million and $6.3 million, respectively. Such expenses consist primarily of compensation related costs, marketing related costs, legal expenses, accounting expenses, transfer agent fees, directors and officers’ insurance expense and board of directors related costs. The increase in general and administrative expenses was primarily attributable to increased legal expenses, marketing related expenses, and compensation related costs incurred during the three months ended September 30, 2024. We expect general and administrative expenses to decrease as a percentage of total revenues over time.

Current wording

General and administrative expenses for the three months ended March 31, 2025 and 2024 were approximately $7.9 million and $7.4 million, respectively. Such expenses consist primarily of compensation related costs, equity based compensation, marketing related costs, legal expenses, accounting expenses, transfer agent fees, directors and officers’ insurance expense and board of directors related costs. The increase in general and administrative expenses was primarily attributable to increased compensation related costs and professional services, primarily related to our calculation of an estimated net asset value incurred during the three months ended March 31, 2025. We expect general and administrative expenses to decrease as a percentage of total revenues over time.

Previous wording

Depreciation and amortization expenses for the three months ended September 30, 2024 and 2023 were approximately $14.1 million and $15.2 million, respectively. Depreciation expense consists primarily of depreciation on the buildings and site improvements at our properties. Amortization expense consists of the amortization of our in place lease intangible assets resulting from our self storage acquisitions and amortization of certain intangible assets acquired in the Self Administration Transaction. The decrease in depreciation and amortization expense is primarily attributable to the intangible amortization expense related to our in place lease intangible assets recorded in connection with the SSGT II Merger which became fully amortized in November 2023.

Current wording

Depreciation and amortization expenses for the three months ended March 31, 2025 and 2024 were approximately $16.7 million and $13.7 million, respectively. Depreciation expense consists primarily of depreciation on the buildings and site improvements at our properties. Amortization expense primarily consists of the amortization of our in place lease intangible assets resulting from our self storage acquisitions. The increase in depreciation and amortization expense is primarily attributable to the depreciation and intangible amortization expense related to eleven properties which were acquired after March 31, 2024.

Previous wording

Acquisition expenses for the three months ended September 30, 2024 and 2023 were approximately $38,000 and $76,000, respectively. These acquisition expenses were incurred prior to acquisitions becoming probable in accordance with our capitalization policy.

Current wording

Acquisition expenses for the three months ended March 31, 2025 and 2024 were approximately $0.2 million and $0.1 million, respectively. These acquisition expenses were incurred prior to acquisitions becoming probable in accordance with our capitalization policy.

Previous wording

Losses from our equity method investments in our joint ventures for the three months ended September 30, 2024 and 2023 were approximately $0.4 million and $0.3 million, respectively. Losses from our equity method investments in our joint ventures consists of our allocation of earnings and losses from our joint ventures with SmartCentres.

Current wording

Losses from our equity method investments in the JV Properties for the three months ended March 31, 2025 and 2024 were approximately $0.2 million and $0.3 million, respectively. Losses from our equity method investments in the JV Properties consists of our allocation of earnings and losses from our unconsolidated joint ventures.

Previous wording

Losses from our equity method investments in the Managed REITs for the three months ended September 30, 2024 and 2023 were approximately $0.2 million and $0.4 million, respectively. Losses from our equity method investments in the Managed REITs consists primarily of our allocation of earnings and losses from our investments in SST VI and SSGT III.

Current wording

Losses from our equity method investments in the Managed REITs for the three months ended March 31, 2025 and 2024 were approximately $0.2 million and $0.5 million, respectively. Losses from our equity method investments in the Managed REITs consists primarily of our allocation of earnings and losses from our investments in SST VI and SSGT III.

Previous wording

Other, net for the three months ended September 30, 2024 and 2023 was approximately $2.0 million and $0.3 million of expense, respectively. Other, net consists primarily of certain state tax expenses, foreign currency fluctuations, changes in value related to our foreign currency and interest rate hedges not designated for hedge accounting, and other miscellaneous items. The unfavorable variance of approximately $1.7 million is primarily due to unfavorable fair value adjustments associated with our SOFR interest rate hedges not designated for hedge accounting during the three months ended September 30, 2024.

Current wording

Other, net for the three months ended March 31, 2025 and 2024 was approximately $0.5 million of income, and $0.2 million of expense, respectively. Other, net consists primarily of certain state tax expenses, foreign currency fluctuations, changes in value related to our foreign currency and interest rate hedges not designated for hedge accounting, and other miscellaneous items. The favorable variance is primarily attributable to favorable changes in the fair value of our FX hedges during the three months ended March 31, 2025.

Previous wording

Interest Income for the three months ended September 30, 2024 and 2023 was approximately $1.0 million and $0.7 million, respectively. Interest income includes interest income on loans to the Managed REITs, accretion of financing fee revenues associated with such loans, and interest earned on cash held at financial institutions. We expect interest income from the Managed REITs to fluctuate commensurate with their borrowings, as well as changes to benchmark interest rates on such borrowings.

Current wording

Interest Income for the three months ended March 31, 2025 and 2024 was approximately $0.7 million and $0.7 million, respectively. Interest income includes interest income on loans to the Managed REITs, accretion of financing fee revenues associated with such loans, and interest earned on cash held at financial institutions. We expect interest income from the

Previous wording

Interest expense for the nine months ended September 30, 2024 and 2023 was approximately $52.9 million and $45.5 million, respectively. Interest expense includes interest expense on our debt, accretion of fair market value adjustments of our debt, amortization of debt issuance costs, and the impact of our interest rate derivatives designated for hedge accounting. The increase of approximately $7.4 million as compared to the same period in the prior year is primarily attributable to increased borrowings, increases to our net effective interest rates, as well as increased amortization of debt issuance costs of approximately $0.9 million primarily due to increased debt issuance costs associated with the 2024 Credit Facility. The increase in net effective interest rates as compared to the same period in the prior year is attributable to two beneficial interest rate hedges which capped SOFR at 1.75% and 2.0% for $125 million of our debt, each, which expired on June 30, 2023 and June 28, 2024, respectively. We expect interest expense to fluctuate in future periods commensurate with our future debt levels and fluctuations in net effective interest rates.

Current wording

Interest expense for the three months ended March 31, 2025 and 2024 was approximately $22.0 million and $16.6 million, respectively. Interest expense includes interest expense on our debt, accretion of fair market value of debt, amortization of debt issuance costs, and the impact of our interest rate derivatives designated for hedge accounting. The increase of approximately $5.5 million as compared to the same period in the prior year is primarily attributable to increased borrowings, as well as a slightly higher effective interest rate due to the expiration of a previously existing interest rate cap on which we were applying hedge accounting. We expect interest expense to fluctuate in future periods commensurate with our future debt levels and fluctuations in interest rates.

Previous wording

Loss on debt extinguishment for the nine months ended September 30, 2024 and 2023 was approximately $0.5 million, and none, respectively. Loss on debt extinguishment for the nine months ended September 30, 2024 was related to certain unamortized debt issuance costs associated with the 2021 Credit Facility which were expensed in connection with the execution of the new 2024 Credit Facility. Please see Note 5 – Debt, of the notes to consolidated financial statements contained in this report for additional information.

Current wording

Loss on debt extinguishment for the three months ended March 31, 2025 and 2024 was approximately $0.8 million, and $0.5 million, respectively. Loss on debt extinguishment for the three months ended March 31, 2025 was related to the defeasance of our KeyBank Florida CMBS Loan completed during the three months ended March 31, 2025. Loss on debt extinguishment for the three months ended March 31, 2024 was related to unamortized debt issuance costs associated with our Former Credit Facility which were expensed in connection with its termination and the execution of the current Credit Facility, during the three months ended March 31, 2024. Please see Note 5 – Debt, of the notes to consolidated financial statements contained in this report for additional information.

Previous wording

Income tax (expense) benefit for the three months ended September 30, 2024 and 2023 was approximately $0.4 million of expense and $1.1 million of benefit, respectively. Income tax consists primarily of state, federal, and Canadian income tax. The change is primarily due to the release of a valuation allowance during the three months ended September 30, 2023 on certain of our deferred tax assets related to our non-capital losses at some of our Canadian properties, resulting in a net income tax benefit for such period. We expect our income tax expense to increase in future periods primarily related to our operations in Canada.

Current wording

Income tax (expense) benefit for the three months ended March 31, 2025 and 2024 was approximately $0.6 million and $0.3 million of expense, respectively. Income tax consists primarily of state, federal, and Canadian income tax. The increase is primarily due to increasing operations at our Canadian properties. We expect our income tax expense to increase in future periods primarily related to our operations in Canada.

Previous wording

We consider the data below to be meaningful as this allows for the comparison of results without the effects of acquisition, lease up, or development activity. The following table sets forth operating data for our same-store facilities (stabilized and comparable properties that have been included in the consolidated results of operations since January 1, 2023, excluding five other properties) for the three months ended September 30, 2024 and 2023 (in thousands unless otherwise noted).

Current wording

The following table sets forth operating data for our same-store facilities (stabilized and comparable properties that have been included in the consolidated results of operations since January 1, 2024, excluding four other properties) for the three months ended March 31, 2025 and 2024. We consider the following data to be meaningful as this allows generally for the comparison of results without the effects of acquisition, dispositions, development activity, properties impacted by casualty events or lease up properties (in thousands unless otherwise noted).

Previous wording

Revenue includes rental revenue, certain ancillary revenue, administrative and late fees, and excludes Tenant Protection Program revenue.

Current wording

Revenue includes rental income, certain ancillary revenue, administrative and late fees, and excludes Tenant Protection Program revenue.

Previous wording

Of the total rentable square feet, parking represented approximately 1,040,000 square feet as of September 30, 2024 and approximately 1,017,000 square feet as 2023, respectively. On a same-store basis, parking represented approximately 960,000 square feet. Amount not in thousands.

Current wording

Of the total rentable square feet, parking represented approximately 1,017,000 square feet as of March 31, 2025 and approximately 1,013,000 square feet as of March 31, 2024, respectively. On a same-store basis, for the same periods, parking represented approximately 980,000 square feet. Amount not in thousands.

Previous wording

Determined by dividing the sum of the month-end occupied square feet for the applicable group of facilities for each applicable period by the sum of their month-end rentable square feet for the period.

Current wording

Determined by dividing the sum of the month-end occupied square feet for the applicable group of facilities for each applicable period by the sum of their month-end rentable square feet for the period. Properties are included in the respective calculations in their first full month of operations, as appropriate. In the event a property is disposed of, or becomes completely inoperable during the period, such property is excluded from the respective calculation in the first full month of non-operation.

Previous wording

Determined by dividing the aggregate realized rental income for each applicable period by the aggregate of the month-end occupied square feet for the period. Properties are included in the respective calculations in their first full month of operations, as appropriate. We have excluded the realized rental revenue and occupied square feet related to parking herein for the purpose of calculating annualized rent per occupied square foot. Amount not in thousands.

Current wording

Determined by dividing the aggregate realized rental income for each applicable period by the aggregate of the month-end occupied square feet for the period. Properties are included in the respective calculations in their first full month of operations, as appropriate. In the event a property is disposed of, or becomes completely inoperable during the period, such property is excluded from the respective calculation in the first full month of non-operation. We have excluded the realized rental revenue and occupied square feet related to parking herein for the purpose of calculating annualized rent per occupied square foot. Amount not in thousands.

Previous wording

Our same-store revenue decreased by approximately $0.2 million, or approximately 0.4%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 due to an approximately 0.7% decrease in average occupancy, partially offset by an approximately 0.5% increase in annualized rent per occupied square foot. The increase in property operating expenses is primarily attributable to increased property insurance costs, payroll costs, repairs and maintenance expenses, and advertising expenses.

Current wording

Our same-store revenue increased by approximately $1.6 million, or approximately 3.2%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 due to an approximately 0.5% increase in average occupancy, and an approximately 2.0% increase in annualized rent per occupied square foot. Property operating expenses increased by approximately 5.2%, primarily attributable to increased property insurance costs, property taxes, payroll costs, and repairs and maintenance expenses.

Previous wording

(1) Included within ancillary operating revenue within our consolidated statements of operations, approximately $2.0 million and $1.9 million of Tenant Protection Program revenue was earned at same store facilities during the three months ended September 30, 2024 and 2023, respectively, with the remaining approximately $0.1 million and $0.1 million earned at non same-store facilities during the three months ended September 30, 2024 and 2023, respectively.

Current wording

(1) Included within ancillary operating revenue within our consolidated statements of operations, approximately $2.0 million and $1.9 million of Tenant Protection Program revenue was earned at same-store facilities during the three months ended March 31, 2025 and 2024, respectively, with the remaining approximately $0.3 million and $0.1 million earned at non same-store facilities during the three months ended March 31, 2025 and 2024, respectively.

Previous wording

(4) This represents the mark-to-market adjustment for our derivative instruments not designated for hedge accounting and the ineffective portion of the change in fair value of derivatives recognized in earnings, as well as changes in foreign currency related to our foreign equity investments not classified as long term.

Current wording

(4) This represents the non-cash mark-to-market adjustment for our derivative instruments not designated for hedge accounting and the ineffective portion of the change in fair value of derivatives recognized in earnings, as well as changes in foreign currency related to our foreign equity investments not classified as long term.

Previous wording

(5)Such costs relate to our filing of a registration statement on Form S-11 and our pursuit of a potential offering of our common stock. As this item is non-recurring and not a primary driver in our decision-making process, FFO is adjusted for its effect to arrive at FFO, as adjusted, as a means of determining a comparable sustainable operating performance metric.

Current wording

(5)Such costs incurred in 2025 included approximately $61,000 related to our Underwritten Public Offering, but were not directly attributable thereto, and were therefore included in general and administrative expenses in our consolidated statements of operations. Additionally, the 2025 costs also included approximately $0.6 million of professional fees related to the calculation of our estimated net asset value, which we will no longer incur, given the listing of our common stock. Such costs in 2024 relate to our filing of a registration statement on Form S-11 and our pursuit of a potential offering of our common stock. As these items are non-recurring and not a primary driver in our decision-making process, FFO is adjusted for its effect to arrive at FFO, as adjusted, as a means of determining a comparable sustainable operating performance metric.

Previous wording

A comparison of cash flows for operating, investing and financing activities for the nine months ended September 30, 2024 and 2023 is as follows (in thousands):

Current wording

A comparison of cash flows for operating, investing and financing activities for the three months ended March 31, 2025 and 2024 are as follows (in thousands):

Previous wording

Cash flows provided by operating activities for the nine months ended September 30, 2024 and 2023 were approximately $53.4 million and $68.7 million, respectively, a decrease of approximately $15.3 million. The decrease in cash provided by our operating activities is primarily the result of a decrease of approximately $9.7 million in net income when excluding the impact of non-cash items and unfavorable changes in working capital of approximately $5.6 million as compared to the same period in the prior year. The change in net income was primarily as a result of increased property operating expenses and interest expense. The change in working capital was primarily a result of an increase in Managed REIT receivables, and an increase in accounts payable and accrued liabilities.

Current wording

Cash flows provided by operating activities for the three months ended March 31, 2025 and 2024 were approximately $10.6 million and $14.4 million, respectively, a decrease of approximately $3.9 million. The decrease in cash provided by our operating activities is primarily the result of unfavorable changes in working capital in the current year as compared to the same period in the prior year. The change in working capital was primarily a result of an increase in Managed REIT receivables.

Previous wording

Cash flows used in investing activities for the nine months ended September 30, 2024 were approximately $80.3 million and cash flows provided by investing activities for the nine months ended September 30, 2023 were approximately $3.5 million, respectively, a change of approximately $83.8 million. The net increase in cash used in investing activities primarily relates to a net change of approximately $41.5 million in cash flows related to our debt investments in the Managed REITs and a net change of approximately $38.7 million in cash flows related to acquisitions and additions to real estate during the nine months ended September 30, 2024 as compared to the same period in the prior year.

Current wording

Cash flows used in investing activities for the three months ended March 31, 2025 and March 31, 2024 were approximately $70.3 million and $0.6 million, respectively, a change of approximately $69.7 million. The net increase in cash used in investing activities primarily relates to a net change of approximately $79.9 million in cash flows related to acquisitions and additions to real estate during the three months ended March 31, 2025 as compared to the same period in the prior year, partially offset by an increase in the current year related to debt repayments from the Managed REITs.