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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549




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FORM 10-K/A

|    |  |                                                                                     
|--- |  | ------------------------------------------------------------------------------------
|[X] |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

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 0-11455

SHURGARD STORAGE CENTERS, INC.

(Exact name of registrant as specified in its charter)


|                                   |  |                                             
|---------------------------------- |  | --------------------------------------------
|Washington
(State of organization) |  | 91-1603837
(IRS Employer Identification No.)

1155 Valley Street, Suite 400, Seattle, Washington 98109
(Address of principal executive offices) (Zip code)

Registrants telephone number, including area code: (206) 624-8100

Securities registered pursuant to Section 12(b) of the Act:

|                                                                                |  |                                          
|------------------------------------------------------------------------------- |  | -----------------------------------------
|Title of each class                                                             |  | Name of each exchange on which registered
|                                                                                |  |                                          
|Class A Common Stock, par value $.001 per share                                 |  | New York Stock Exchange                  
|Preferred Share Purchase Rights                                                 |  | New York Stock Exchange                  
|8.8% Series B Cumulative Redeemable Preferred Stock, par
Value $.001 per share  |  | New York Stock Exchange                  
|8.7% Series C Cumulative Redeemable Preferred Stock, par
Value $.001 per share  |  | New York Stock Exchange                  
|8.75% Series D Cumulative Redeemable Preferred Stock,
par Value $.001 per share |  | New York Stock Exchange                  

Securities registered pursuant to Section 12(g) of the Act: None

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. Yes [X]   No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrants knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]



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Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [X] No [ ]

Aggregate market value of voting stock held by nonaffiliates of the
registrant as of June 28, 2002: $1,154,734,952.

Aggregate market value of voting stock held by nonaffiliates of the
registrant as of March 6, 2003: $1,017,650,420.

Class A Common Stock outstanding as of March 6, 2003: 35,960,040 shares

Documents incorporated by reference: Part III is incorporated by reference
from the Proxy Statement filed in connection with our Annual Shareholders
Meeting to be held May 13, 2003.

There are 97 pages.

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This amendment on Form 10-K/A of Shurgard Storage Centers, Inc.
incorporates certain revisions to historical financial data and related
descriptions but is not intended to update other information presented in this
report as originally filed, except where specifically noted. This restatement
includes changes to Item 6, Item 7 and Item 8. The amendment reflects the
restatement of Form 10-K for the year ended December 31, 2002 filed on March
17, 2003, related to the accounting for derivative instruments. See Note X to
our consolidated financial statements for further discussion of this matter.
We are not required to and we have not updated any forward-looking statements
previously included in Form 10-K filed on March 17, 2003.

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|               |                                                                                                |  |  |  |  |  |  | 
|-------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I        
|               | Item 1  Business                                                                             
|               | Item 2  Properties                                                                           
|               | Item 3  Legal Proceedings                                                                    
|               | Item 4  Submission of Matters to a Vote of Security Holders                                  
|PART II       
|               | Item 5  Market for the Registrants Common Equity and Related Stockholder Matters            
|               | Item 6  Selected Financial Data                                                              
|               | Item 7  Managements Discussion and Analysis of Financial Condition and Results of Operations
|               | Item 8  Financial Statements and Supplementary Data                                          
|               | Item 9  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III      
|               | Item 10  Directors and Executive Officers of the Registrant                                  
|               | Item 11 Executive Compensation                                                                
|               | Item 12 Security Ownership of Certain Beneficial Owners and Management                        
|               | Item 13  Certain Relationships and Related Transactions                                      
|               | Item 14  Disclosure Controls                                                                 
|PART IV       
|               | Item 16  Exhibits, Financial Statement Schedules and Reports on Form 8-K                     
|SIGNATURE     
|CERTIFICATIONS
|Exhibit 23.1  
|Exhibit 99.1  
|Exhibit 99.2  



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PART I




Item 1 Business

Overview

Shurgard Storage Centers, Inc. is a real estate investment trust (REIT)
that develops, acquires, owns and manages self storage centers and related
operations. Our self storage centers offer easily accessible storage space for
personal and business uses. We are one of the four largest operators of self
storage centers in the United States and the largest operator of self storage
centers in Europe. As of December 31, 2002, we operated a network of 560
storage centers and two business parks located throughout the United States and
in Europe. Of these properties, we own or lease, directly and through our
subsidiaries and joint ventures, 534 properties containing approximately 34.0
million net rentable square feet. The 534 properties include 87 in which we
hold joint venture interests ranging from 50% to 99% and 96 stores located in
Europe in which we have a 7.57% ownership. Of the 534 properties, 438 are
located in 21 states in the U.S., and 96 are located in Europe. We also manage
for third parties 28 self storage centers containing approximately 1.6 million
net rentable square feet. For the year ended December 31, 2002, our domestic
properties had a weighted average annual net rentable square foot occupancy
rate of 80.0% and a weighted average rent per net rentable square foot of
$11.50. For the year ended December 31, 2002, our European properties had a
weighted average annual net rentable square foot occupancy rate of 53% and a
weighted average rent per net rentable square foot of $16.25.

We were incorporated in Delaware on July 23, 1993 and began operations
through the consolidation on March 1, 1994 of 17 publicly held real estate
limited partnerships that were sponsored by Shurgard Incorporated. On March 24,
1995, Shurgard Incorporated merged with and into Shurgard Storage Centers,
Inc., and we became self-administered and self-managed. In May 1997, we
reincorporated in the state of Washington.

Business Strategy

Our mission is to become the global leader in storage products and
services and to ensure satisfaction and value for our customers through
security, quality and innovation. Our strategy involves an emphasis on customer
service and satisfaction, portfolio management, development and acquisitions
and property management systems.

Customer Service and Satisfaction



| |  |  | Quality Employees.We view the quality of customers interaction with
employees as critical to our long-term success. Accordingly, we
emphasize teamwork in our employee training programs. Through our
emphasis on training, personnel development and decentralized
decision-making, we believe we attract well-qualified, highly motivated
employees who are committed to providing superior levels of customer
service.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Convenient and Secure Stores.Our stores are easily accessible, offer
a range of storage products and services for customer convenience and
emphasize security and product quality. We believe that our strategy of
offering high-quality, convenient stores strengthens the brand image of
Shurgard, attracts customers and enables us to maintain premium rents.                                                         
|

| |  | Store Location and Hours.Our stores are generally located in
major metropolitan areas along retail and high-traffic corridors for
easy customer access and usually have significant road frontage for
high visibility. Although hours vary from store to store, customers
can generally access their individual units between 6 a.m. and 9 p.m
seven days a week.                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | One-Stop Convenience.Our stores offer a range of storage
products and ancillary services, including supplies such as packing
and storage materials, locks and boxes, as well as services such as
property insurance referrals, moving company referrals and Ryder truck
rentals that we believe conveniently and efficiently address
customers storage needs. In addition, we generally offer premium
features such as computer-controlled access and electronic security
systems. Finally, a number of our stores offer climate-controlled
storage space.
|
| |  | Property Security.We use a variety of measures at our stores,
as appropriate, to enhance security. Such measures may include, among
others, on-site personnel, electronic devices such as intrusion and
fire alarms, access controls, video and intercom surveillance devices,
individual unit alarms, perimeter beams, fencing and                                                                                                                                                                                                                        

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| |   | lighting. We
assign each customer a designated personal identification number for
use in connection with a computerized gate access system. Each access
is automatically logged into a computer database. In addition, we have
developed and plan to continue to improve our package of security
controls, including software, video and interactive communication.                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Capital Expendituresand Maintenance.We budget for a level of
capital expenditures consistent with our commitment to maintaining
attractive, well-maintained and secure self storage centers, which
enable us to pursue a premium pricing strategy. In addition, capital
expenditures for consistent signage and color scheme among our
properties strengthen the brand image of Shurgard.
|

| |  |  | Marketing and Sales.We provide managers with sales skills to
elicit customer needs and turn prospects into customers. We also have
a national sales center to field telephone sales calls from
individual properties. Employees at the national sales center are
able to sell space at the store most convenient to the customer. We
have implemented additional sales and marketing programs to broaden
our distribution channels, such as a web site for our enhanced
e-commerce business and an expanded commercial accounts and direct
sales force in selected markets.               
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |   |  |    Market Research.We maintain an extensive market research
database on our primary markets and closely track occupancy levels,
rental rates and other operational data regarding self storage
properties within these markets. We have conducted focus group research
and telephone surveys, and use customer comment cards to identify the
primary considerations in customers self storage choices and
satisfaction so that we can better attract and service customers.                                                                                                             
|
| |   |  |    Market Share.We employ various means to increase our share of
the self storage market. We place prominent advertisements in the
yellow pages and seek to promote customer awareness of our stores
through highly visible store locations, site signage and architectural
features. We locate our stores along retail and high-traffic corridors,
usually with significant road frontage to increase visibility. We build
on most newly developed stores a distinctive lighthouse office to
distinguish us from competitors and to increase customer awareness of
the Shurgard brand.

Portfolio Management

Our portfolio management strategy is to increase same store cash flow by
achieving the highest rental rate structure consistent with strong occupancy
rates, cost containment, improved operating leverage, and expansion of our
existing stores.



| |  |  | Revenue Optimization.We seek to optimize our revenue by achieving
the highest rental rate structure for our stores, consistent with strong
levels of occupancy, through the use of teams of store employees and
district managers who are trained and authorized to set rental rates and
make rental rate changes based on their analysis of demand and
availability at a particular store. Market personnel regularly evaluate
their properties rental rates on a periodic basis, based on unit demand
and unit availability, and can quickly change marginal rental rates to
ensure that revenue is optimized.                                                       
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Cost Containment and Improved Operating Leverage.We seek to increase
cash flow by carefully containing operating expenses. For example, we
closely monitor our real estate tax assessments appealing such
assessments, as appropriate, and engage consultants to manage certain
utility costs. In addition, as we increase the number of properties in
our targeted markets, we achieve economies of scale and lessen the
impact of corporate overhead expense. We believe that our management and
operational procedures, which can be implemented over a large number of
properties, enable us to add new properties quickly and with little
disruption to our system.
|
| |  |  | Strategic Expansions.We seek to increase revenue by building
additional rentable storage space at suitable stores either through on
site expansion or acquisition of property adjacent to existing stores.
We typically receive high incremental returns on such build-out
investments, because resulting revenue increases are achieved with
little increase in fixed operating costs.                                                                                                                                                                                                                                                                                 

Development and Acquisitions

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Our external growth strategy is to develop new, high-quality self storage
properties and to acquire additional self storage properties that meet or can
be upgraded to meet our standards. In general, we plan to develop or acquire
new properties primarily in our existing markets and in new markets that create
economies of scale for our current network of stores. In most markets, we seek
to own at least 15 stores in order to realize operating and marketing
efficiencies and increase brand awareness. We believe that the experience of
our management team in developing and acquiring self storage properties
strengthens our ability to pursue our external growth strategy.

We favor development or acquisition of self storage properties in major
metropolitan markets, located near retail or high-traffic corridors, usually
with significant road frontage to increase visibility. We rely on our market
personnel to target areas in which to develop and acquire new stores. Our staff
of real estate professionals in various markets develops and acquires new
stores for us in the markets presenting the best opportunities. We have
developed comprehensive market expansion plans for each of our target markets,
and use these plans as the basis for selecting new store locations and
acquisition targets. The market expansion plans use a
demographic analysis of an area along with an evaluation of competitors
locations, rates and product quality to determine the optimum number and
location of new stores.



| |  |  | Development.We believe that several factors favor our development
strategy:
| | - |  | ---------------------------------------------------------------------------
|

| |  | Development Expertise.We have substantial real estate
development, construction management and architectural expertise that
has been developed over the past 30 years. Along with our
predecessors, we developed more than a third of the properties we
currently own, lease or manage, and, since 1972, we have maintained an
internal development staff, which currently employs 18 people.                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Strategic Site Selection to Maximize Revenues.To obtain the
best store locations, we target sites for development in urban areas
and up-scale retail areas that often require rezoning and other
complex development measures. We believe that the difficulties of
developing storage properties in such in-fill areas may discourage
competitors from locating nearby and, as a result, enable us to
operate in underserved areas. This in turn enables us to charge higher
rental rates.
|
| |  | Focus on Quality and Brand Image Development.We have greater
control of quality and brand image by developing our own self storage
properties. This enables us to focus on high construction quality and
standards and a consistent and inviting building design. We believe
our focus on quality and consistency will enable us to further
strengthen awareness of the Shurgard brand, obtain repeat business,
maintain premium prices and differentiate us from our competitors.        
|

| |  |  | Acquisitions.We also selectively acquire high-quality properties
that are consistent with our business plan. Additional acquisitions
allow us to spread overhead and certain management, marketing and
advertising costs over a greater number of revenue-producing assets. As
a result, we can achieve increasing economies of scale with each new
property acquired. We complete a thorough analysis of each property that
we intend to acquire, including, but not limited to, a review of capital
expenditures that will be required for the property to meet our
standards. In addition to adding high-quality properties, we look for
high-quality portfolios of properties that would establish a market
presence for us in a new market.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | European Investment.As of December 31, 2002, we had a 7.57% interest
in an entity that owns 96 storage centers operating in six countries.
We have the right to purchase an additional interest in that entity and
intend to do so in 2003. The business strategies that we employ in the
United States also apply to our European investment. During the past
eight years, that entity has introduced our product to local consumers
and built the infrastructure necessary to support an accelerated
expansion program. Because of the density of the areas where Shurgard
Europe develops and the limited availability of land, substantially all
of the European stores have multistory buildings. In general, European
customers prefer interior units in large buildings which are perceived
as being safer than the drive-up units in single story buildings. The
length of stay, customer use and customer profile of the European
customer is similar to U.S. customers. Additionally, there are fewer
acquisition opportunities in the European markets. Today, Shurgard
Europe employs over 360 employees with a senior management team made up
of seasoned managers with substantial local development, finance,
operations and marketing experience.

Property Management Systems

We have integrated property management systems and procedures for
marketing, advertising, leasing, operations, maintenance and security of
properties and the management of on-site personnel. Our computerized management

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information system links our corporate office with each store. We use
proprietary software that expedites internal auditing, financial statement and
budget preparations, allows the daily exchange of information with our
corporate office and manages detailed information with respect to the tenant
mix, demographics, occupancy levels, rental rates, revenue optimization,
payroll and other information relating to each store. Additionally, we use a
network-based accounting package that has aided in the compilation and
dissemination of information from and to our stores and we use an enterprise
wide-area network with remote access capability. This software enables our
national sales center, commercial accounts department and our corporate
employees to have remote access to current store information. We are
developing significant updates to this software that will improve management
information and increase effectiveness in information compilation and
dissemination to our stores.

Other Activities

Shurgard Storage To Go, LLC (formerly Shurgard Storage To Go, Inc.) (STG)
is a containerized storage business that brings storage directly to the
customer through weather resistant 8x 5x 8 storage containers. STG delivers
these containers to customers for packing. STG then picks up the containers and
delivers them to a warehouse for storage. Customers may access their storage
container in a showroom at the warehouse or have it redelivered to their home.
In addition to the monthly rental charge, we may charge service
fees for transportation of the container. This business venture is
currently operating in the Seattle, Portland, and San Francisco markets.

We also manage, under the Shurgard name, self storage properties owned by
others that meet our quality standards. Management of such properties enables
us to spread the cost of overhead across a greater number of properties.
Additionally, it allows us to expand our presence in the markets in which we
operate, to offer customers a broader geographic selection of self-storage
properties to suit their needs and to establish relationships with property
owners that may lead to future acquisitions. Management fees that we earn are
not qualifying income for REIT qualification purposes. Accordingly, we closely
monitor the level of these activities to ensure our continued qualification as
a REIT. As of December 31, 2002, we managed 28 self storage properties for
others.

For financial information about our significant industry segments, see our
consolidated financial statements and related notes, including Note T. For
financial information about our foreign and domestic operations, see the
consolidated financial statements and the related notes, including Note E and
Note J.

Capital Strategy

Our stated long-term capital objectives include: maintaining conservative
leverage ratios; maintaining our investment grade rating; extending our debt
maturity schedule; and increasing the percentage of our unencumbered assets. We
anticipate funding our growth primarily through a combination of our lines of
credit, unsecured debt, preferred and common equity, and alternative capital
sources. In order to continue to grow at historical rates and to execute our
internal business plan and meet our capital objectives, it will be necessary to
continue to access the equity capital markets. Additionally, we anticipate
that our dividend payout ratio will decline over time as we retain a higher
proportion of cash flow for growth.

In order to mitigate our interest rate risk, we contract with financial
institutions for derivative products that help us manage this exposure. Our
investment policy prohibits us from entering into any such contract solely to
secure profit by speculating on the direction of currency exchange or interest
rates if unrelated to capital borrowed, lent or invested by us. In order to
diversify capital sources and mitigate development risk, we have developed a
significant number of our storage centers through joint venture partners.

The Self Storage Industry

The self storage industry serves an important function in the commercial
and residential real estate markets. Self storage properties were first
developed in the early 1960s in the southwestern United States in response to
the growing need for low-cost, accessible storage. A number of factors
accelerated the demand for low-cost storage, including, among others, a more
mobile society, with individuals moving to new homes and new cities needing
short-term storage for their belongings, the increasing cost of housing
(resulting in smaller houses), the increased popularity of apartments and
condominiums, more individuals with growing discretionary income (resulting in
the purchase of items such as boats and recreational vehicles that often cannot
be stored at residences), the growing number of small businesses and the
escalating cost of other storage alternatives. As the demand for such storage
increased, and the acceptance of self storage became more widespread, self
storage properties were built throughout the United States. Generally, such
properties were constructed along major thoroughfares that provided ready
access and public visibility or in outlying areas

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where land was inexpensive.
In certain areas of the country, where new construction was impractical because
of construction costs, lack of suitable sites or other restrictions, older
structures have been converted into self storage properties.

We believe, based on our experience, that the self storage industry is
characterized by fragmented ownership, high gross margins, low levels of price
sensitivity and increasing customer demand. Typical customers of a self storage
property include individuals, ranging from homeowners to college students, and
commercial users, such as sales representatives and distributors, who require
frequent access, and business owners requiring seasonal storage. A single
customer rarely occupies more than 1% or 2% of the net rentable area in any
particular store.

Capital expenditures are generally less for self storage properties as
compared to other types of commercial real estate due to the properties
structural simplicity and durable materials and the lack of tenant improvement
demands. Capital expenditures include periodic expenditures for replacing roofs
and pavement, as well as improvements such as expansions and unit
reconfigurations. Expense items include repairing asphalt, doors, fences and
masonry walls, maintaining landscaping, and repairing damage caused by customer
vehicles. Minimal maintenance is required when a storage unit is vacated to
prepare it for the next customer.

Competition

Competition exists in every U. S. market in which our stores are located,
and to a lesser extent in continental Europe and Sweden. We compete with, among
others, national, regional and local self storage operators and developers.
Storage operators compete based on several factors including location, rental
rates, security, suitability of the propertys design to prospective tenants
needs and the
manner in which the property is operated and marketed. We believe that the
primary competition for potential customers of any of our self storage centers
come from other self storage properties within a three-to five-mile radius of
that store. We have positioned our stores within their respective markets as
high-quality operators that emphasize customer service and security. We do not
seek to be the lowest-price storage provider. During periods of recession, we
may experience a decline in demand that can increase price competition among
storage center operators.

To the extent we experience new supply in our markets, the increased
available storage space may reduce occupancy levels per storage property and
further intensify competition among storage providers for available tenants in
those markets. The extent to which we are affected by competition will depend
in significant part on market conditions within a three- to five-mile radius of
our stores.

Regulation

Environmental Regulations

We are subject to federal, state and local environmental regulations that
apply to the ownership, management and development of real property, including
regulations affecting both construction activities and the operation of self
storage properties.

In developing properties and constructing improvements, we use
environmental consultants and/or governmental data to determine whether there
are any flood plains, wetlands or environmentally sensitive areas that are part
of the property to be developed. If any such areas are identified, development
and construction are planned in conformance with federal, state, and local
environmental and land-use requirements. The principal laws that could affect
us are the Resource Conservation and Recovery Act and the Comprehensive
Environmental Response, Compensation and Liability Act; state and local
governments have also adopted separate but similar environmental laws and
regulations that vary from state to state and locality to locality.

Under various federal, state and local laws, ordinances and regulations,
an owner or operator of real property may become liable for the costs of
removal or remediation of certain hazardous substances released on or in its
property. Such laws may impose liability without regard to whether the owner or
operator knew of, or was responsible for, the release of such hazardous
substances. The presence of hazardous substances on a property may adversely
affect the owners ability to sell the property or to borrow using the property
as collateral and may cause the owner or manager of the property to incur
substantial remediation costs. In addition to claims for cleanup costs, the
presence of hazardous substances on a property could cause the owner or manager
to incur substantial liabilities as a result of a claim by a private party for
personal injury or a claim by an adjacent property owner for property damage.

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We have notified the Missouri Department of Natural Resources (MDNR) of
elevated levels of hydrocarbons found in groundwater monitoring wells on a
property in St. Louis, Missouri that we have been monitoring in accordance with
a work plan approved by the MDNR. During 1998, a quarterly monitoring report
revealed continued contamination in the groundwater samples. The source of the
contamination is still unknown. The MDNR notified us that it will continue
requiring quarterly groundwater monitoring. During 1999, at the MDNRs request,
a work plan was developed to address its question on whether on-site
contamination might be spreading to adjacent properties. The work plan
encompasses a broader scope of monitoring, including installation of four
additional monitoring wells on adjacent properties. We obtained permission from
neighboring property owners to install the four new wells on their properties.
Ground water samples were taken from the new locations on the adjacent
properties as well as the existing locations. Those samples showed
contamination on one adjacent property, however, it is not established whether
this contamination is the result of migration from the Shurgard property. Our
consultant revised the work plan to incorporate the sample results. The MDNR
approved a revised work plan that includes continued sampling and monitoring.
We receive quarterly reports on the monitoring. In the event this ongoing
monitoring indicates that significant contamination has spread to adjacent
properties, the MDNR could be more aggressive in the future, and may require
identification of the location of the groundwater contamination and
construction of a system to remediate the problem.

Except for this property in St. Louis, we have not been notified by any
governmental authority of any current, material environmental noncompliance,
claim or liability in connection with any of the properties we own or manage.
We have not been notified of any current claims for personal injury or property
damage by a private party in connection with environmental conditions at any of
the properties we own or manage. We have obtained a Phase I environmental
assessment report prepared by an independent environmental consultant for each
of the properties we own.

We are not aware of any environmental condition with respect to the
properties we own or manage that could have a material adverse effect on our
financial condition or results of operations. We cannot give assurance however,
that any environmental assessments undertaken with respect to the properties
have revealed all potential environmental liabilities, that any prior owner or
operator of the properties did not create any material environmental condition
not known to us or that an environmental condition does not otherwise exist as
to any one or more of the properties that could have a material adverse effect
on our financial condition or results of operation. In addition, we cannot give
assurance that (i) future laws, ordinances or regulations will not impose any
material
environmental liability, (ii) the current environmental condition of our
owned or managed properties will not be affected by the condition of properties
in the vicinity of such properties (such as the presence of leaking underground
storage tanks) or by third parties unrelated to us, or (iii) tenants will not
violate their leases by introducing hazardous or toxic substances into our
owned or managed properties that could expose us to liability under federal or
state environmental laws.

Americans with Disabilities Act; Fire and Safety Regulations

The Americans with Disabilities Act (ADA) requires all public
accommodations to meet certain federal standards relating to physical access
and use by disabled persons. Compliance might require, among other things,
removal of access barriers. A determination that we are not in compliance with
the ADA could result in the imposition of fines, injunctive relief, damages or
attorneys fees. If we were required to make modifications to comply with the
ADA, our ability to make expected distributions to our shareholders could be
adversely affected; however, management believes that such effect would not be
material. In addition, we are required to operate our properties in compliance
with fire and safety regulations, building codes and other land use
regulations, as they may be adopted by governmental agencies and bodies and
become applicable to our properties. Compliance with these codes and
regulations may require substantial capital expenditures, which would reduce
money otherwise available for distribution to shareholders.

Risk Factors

The following factors are risks associated with our business.

Real Estate Investment Risks

Legislation or changes in accounting regulations or interpretations
relating to such matters as variable interest entities, guarantees, stock
options and capitalization of certain development overhead costs could
substantially affect our financial reporting.We may be affected by
legislation or change in regulations or interpretations regarding certain
accounting standards applied to our operations and certain of our existing
financial and joint venture structures. Changes in accounting for
unconsolidated investments, guarantees, stock options and capitalization of
certain development overhead costs may affect the accounting treatment or net
income of certain of our investments. The Financial Accounting

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Standards Board
(FASB) has issued new rules on variable interest entities and guarantees, that
will likely materially impact the accounting treatment of certain of our
financial and joint venture structures. The new rules on variable interest
entities will likely result in the consolidation of the assets, liabilities and
operations of trusts used in connection with the tax retention operating leases
and our European entities for which we currently record a more limited minority
interest. The new rules regarding guarantees results in a change in accounting
treatment for guarantees that we utilize with the tax retention operating
leases and certain unconsolidated joint venture developments. These changes
could have a corresponding material adverse effect on various of our financial
ratios and other financial and operational indicators unless we were to
restructure those arrangements, a process that could potentially result in less
favorable terms. We are not able to predict the exact impact of the new
interpretations. Additionally, there may be other future changes in accounting
standards that we are not aware of at this time that could materially impact
our financial statements.

We have significant real estate holdings that can be difficult to sell in
unfavorable economic conditions and that can have unpredictable decreases in
value.Our primary business involves owning real estate-related assets and
operating self storage centers. Real estate investments can be difficult to
sell, especially when economic conditions are unfavorable. This makes it
difficult for us to diversify our investment portfolio and to limit our risk
when economic conditions change. Decreases in market rents, negative tax, real
estate, and zoning law changes, and changes in environmental protection laws
can also lower the value of our investments and decrease our income.

Our real estate development and acquisition activities can result in
unforeseen liabilities and increases in costs.We may develop our current
properties or acquire more properties. Real estate development involves risks
in addition to those involved in owning and operating existing properties. For
example, we must hire contractors or subcontractors to develop the properties.
Problems can develop with these relationships, including contract and labor
disputes, unforeseen property conditions that require additional work, and
construction delays. These problems can increase construction and other costs
and delay the date when tenants can occupy the property and pay us rent.
Properties that we acquire may not meet our performance expectations, including
projected occupancy and rental rates, and we may have overpaid for
acquisitions. Failure of our properties to perform as expected or unforeseen
significant capital improvements could decrease our cash flow. We may also
have underestimated the cost of improvements needed for us to market a property
effectively, requiring us to pay more to complete a project. If a number of
these events were to occur, we could have difficulty meeting our repayment
obligations and making our expected distributions to shareholders.

We focus almost exclusively on self storage businesses, which makes us
vulnerable to changes in the profitability of self storage properties.Our
investments focus on self storage and similar businesses and related real
estate interests. We do not expect to have substantial interests in other real
estate investments or businesses to hedge against the risk that national trends
might decrease the profitability of our self storage-related investments.

We would have great difficulty acquiring or developing properties without
access to financing.Fluctuations in market conditions or in our operating
results may cause us to violate the covenants of our existing credit
facilities. If we cannot access our existing financing sources, we may have to
obtain equity and/or debt financing in order to develop and acquire properties.
If we obtain financing by issuing additional capital stock, we could dilute
the ownership of the existing shareholders. Banks or other lenders might
refuse to lend us money to finance acquisitions or development, or might charge
interest rates that are too high to allow us to develop and acquire new
properties. If the cash flows generated from the properties are less than the
distributions payable to the new shareholders or the repayment obligations to
the lender, we may have difficulty meeting our overall repayment obligations
and making expected distributions to our shareholders.

We do not have experience or expertise in all types of investments that we
might make.Although we invest primarily in self storage properties, we may
also invest in other commercial ventures if our board of directors specifically
approves such investments. We have no present plans to make any such
investments. If we invest in other forms of real estate, we might lack the
experience and expertise necessary to manage and operate those properties
effectively. We might also be unfamiliar with local laws, procedures and
practices, or in the operation of such other investments, reducing income or
creating losses from such investments.

Our indirect investments may result in liability against which we cannot
protect.We have and may continue to make participating mortgages or acquire
equity interests in partnerships, joint ventures or other legal entities that
have invested in real estate. Our bylaws require that we satisfy several
conditions before we make these indirect investments, including that the joint
investment not jeopardize our eligibility to be taxed as a REIT or result in
our becoming an investment company under the Investment Company Act of 1940, as
amended. These investments carry risks that are not present when we invest
directly in real estate, including the risk that we may not control the legal
entity that has title to the real estate, the possibility that the enterprise
in which we invest has liabilities that are not disclosed at the time of the
investment, and the possibility that our investments are not easily sold or
readily accepted as collateral by our lenders.

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We have strong competitors in the self storage market that may have better
resources and other advantages over us.We must compete in every U.S. market
in which our stores are located, and to a lesser extent in Europe. Our
competitors include national, regional and many local self storage operators
and developers. Entry into the self storage business by acquiring existing
properties is relatively easy for persons or entities with the required initial
capital. Competition may increase if available funds for investment in real
estate increase. Some of our competitors may have more resources than we do,
including better access to financing, greater cash reserves, and less demanding
rules governing distributions to shareholders. Some competitors may have lower
prices or better locations than ours or other advantages. Local market
conditions will play a significant part in how competition affects us;
additional competition has lowered occupancy levels and rental revenue of our
self storage properties in specific markets from time to time. For example,
from the fourth quarter of 2001 to the fourth quarter of 2002, occupancy of our
properties in the Northern California market, where additional self storage
facilities had been opened, dropped 12% resulting in decreased revenue of
approximately $378,000.

We face possible liability for environmental cleanup costs and damages for
contamination related to our properties.Because we own and operate real
property, various federal, state and local laws might impose liability on us
for the costs of removing or remediating various hazardous substances released
on or in our property. The principal federal laws that could affect us are the
Resource Conservation and Recovery Act and the Comprehensive Environmental
Response, Compensation and Liability Act; state and local governments have also
adopted separate but similar environmental laws and regulations that vary from
state to state and locality to locality. These laws may impose liability
whether or not we knew of or caused the release. We obtain environmental
assessment reports on the properties we own or operate as we deem appropriate.
These reports have not revealed any environmental liability or compliance
concerns that we believe would materially adversely affect our financial
condition or results of operations. However, the environmental assessments
that we have undertaken might not have revealed all potential environmental
liabilities or claims for such liabilities. The presence of hazardous
substances on a property or the failure to meet environmental regulatory
requirements may materially adversely affect our ability to use or sell the
property, or to use the property as collateral for borrowing, and may cause us
to incur substantial remediation or compliance costs. In addition, if
hazardous substances are located on or released from one of our properties, we
could incur substantial liabilities through a private party personal injury
claim, a claim by an adjacent property owner for property damage or a claim by
a governmental entity for other damages. This liability may be imposed on us
under environmental laws or common-law principles. It is also possible that
future laws, ordinances or regulations will impose material environmental
liability on us, that the current environmental conditions of properties we own
or operate will be affected by other properties in the vicinity or by the
actions of third parties unrelated to us or that our tenants will violate their
leases by introducing hazardous or toxic substances into the properties we own
or manage and expose us to liability under federal or state
environmental laws. The costs of defending these claims, conducting this
environmental remediation or responding to such changed conditions could
materially adversely affect our financial condition and results of operations.

We must comply with the Americans with Disabilities Act and fire and
safety regulations, which can require significant expenditures.All our
properties must comply with the Americans with Disabilities Act and with the
related regulations, rules and orders commonly referred to as the ADA. The ADA
has separate compliance requirements for public accommodations and
commercial facilities, but generally requires that buildings be made
accessible to persons with disabilities. A failure to comply with the ADA
could result in the U.S. government imposing fines on us and awarding damages
to individuals affected by the failure. In addition, we must operate our
properties in compliance with numerous local fire and safety regulations,
building codes and other land use regulations. Compliance with these
requirements can require us to spend substantial amounts of money, which would
reduce cash otherwise available for distribution to shareholders. Failure to
comply with these requirements can also affect the marketability of the
properties.

Property taxes can increase and cause a decline in yields on investments.
Each of our properties is subject to real property taxes. These real property
taxes may increase in the future as property tax rates change and as our
properties are assessed or reassessed by tax authorities. Depending on local
market conditions, we may not be able to offset the tax increases through
increases in rents or other income, reducing the amount of funds available for
distribution to our shareholders.

We face potential underinsured losses on our investments.We maintain
title and other property-related insurance on all our properties. We exercise
discretion in determining amounts, coverage limits and deductibility provisions
of title, casualty and other insurance relating to our properties, taking into
account the appraised or estimated value of the property in each case to obtain
appropriate insurance coverage at a reasonable cost and on suitable terms. We
currently carry the following insurance coverage: (1) commercial general
liability insurance, covering up to a general aggregate of $60,000,000, with a
deductible of $50,000 (2) property insurance, covering up to an aggregate of
$50,000,000, with

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deductibles of $5,000 or $20,000 under certain circumstances,
and a $50,000 deductible in the case of flood damage; and (3) boiler &
machinery insurance, covering up to $10,000,000 of direct damages with a
$20,000 deductible. Depending on the type of insurance, and subject to
deductibles and coverage limits, Shurgard either receives direct payment of the
replacement value of losses or tenders the defense of a claim to the insurance
carrier. This might mean that, in the event of a loss, our insurance coverage
would not pay the full current market value or current replacement cost of our
lost investment. Inflation, changes in building codes and ordinances,
environmental considerations and other factors might also increase the
replacement cost of a facility after it has been damaged or destroyed. In that
case the insurance proceeds that we receive might not be enough to restore us
to our economic position with respect to the property.

Terrorist attacks and the possibility of wider armed conflict may have an
adverse effect on our business and operating results and could decrease the
value of our assets.Terrorist attacks and other acts of violence or war, such
as those that took place on September 11, 2001, could have a material adverse
effect on our business and operating results. There can be no assurance that
there will not be further terrorist attacks against the United States or its
businesses or interests. Attacks or armed conflicts that directly impact one
or more of our properties could significantly affect our ability to operate
those properties and thereby impair our ability to achieve our expected
results. Further, we may not have insurance coverage for losses caused by a
terrorist attack. Such insurance may not be available, or if it is available
and we decide, or are required by our lenders to obtain such terrorism
coverage, the cost for the insurance may be significant in relationship to the
risk covered. In addition, the adverse effects that such violent acts and
threats of future attacks could have on the U.S. economy could similarly have a
material adverse effect on our business and results of operations. Finally,
further terrorist acts could cause the United States to enter into a wider
armed conflict which could further impact our business and operating results.

Risks Relating to Qualification and Operation as a REIT

We might lose REIT status and incur significant tax liabilities.We have
elected to be taxed as a REIT under the Internal Revenue Code of 1986, as
amended (the Code), commencing with our taxable year ended December 31, 1994.
So long as we meet the requirements under the Code for qualification as a REIT
each year, we can deduct dividends paid to our shareholders when calculating
our taxable income. For us to qualify as a REIT, we must meet detailed
technical requirements, including income, asset, distribution and stock
ownership tests, under several Code provisions that have not been extensively
interpreted by judges or administrative officers. In addition, we do not
control the determination of all factual matters and circumstances that affect
our ability to qualify as a REIT. New legislation, regulations, administrative
interpretations or court decisions might significantly change the tax laws with
respect to REIT qualification or the federal income tax consequences of such
qualification. We believe that we are organized so that we qualify as a REIT
under the Code and that we have operated and will continue to operate so that
we continue to qualify. However, we cannot guarantee that we will qualify as a
REIT in any given year because:



| |  |  | the rules governing REITs are highly complex;                            
| | - |  | -------------------------------------------------------------------------
|
| |  |  | we do not control all factual determinations that affect REIT status; and
|
| |  |  | our circumstances may change in the future.                              

For any taxable year that we fail to qualify as a REIT, we would not be
entitled to deduct dividends paid to our shareholders from our taxable income.
Consequently, our net assets and distributions to shareholders would be
substantially reduced because of our increased tax liability. If we made
distributions in anticipation of our qualification as a REIT, we might be
required to borrow additional funds or to liquidate some of our investments in
order to pay the applicable tax. If our qualification as a REIT terminates, we
may not be able to elect to be treated as a REIT for the four taxable years
following the year during which we lost the qualification.

We may pay taxes even if we continue to qualify as a REIT.Even if we
qualify as a REIT, we are required to pay some federal, state, local and
foreign taxes on our income and our property. For example, Shurgard TRS and
certain of our other corporate subsidiaries have elected to be treated as
taxable REIT subsidiaries. We will be subject to a 100% penalty tax on
payments we receive from these subsidiaries if the economic arrangements
between us and the subsidiaries are not comparable to similar arrangements
between unrelated third parties. We also could be subject to tax in the event
we, among other things, (i) sell property that is considered to be inventory
for federal income tax purposes, (ii) sell, prior to March 25, 2005, certain
assets we acquired from Shurgard Incorporated or (iii) fail to satisfy certain
distribution rules, as described below.

Our REIT distribution requirements are complex and may create tax
difficulties.To maintain our status as a REIT for federal income tax
purposes, we generally must distribute to our shareholders at least 90% of our
taxable income each

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year. In addition, we are subject to a 4% nondeductible
excise tax on the amount by which our distributions for a calendar year are
less than the sum of (i) 85% of our ordinary income for the calendar year, (ii)
95% of our capital gain net income for the calendar year, and (iii) any amount
of our income that we did not distribute in prior years. For tax purposes we
may be required to treat interest, rent and other items as earned even though
we have not yet received these amounts. In addition, we may not be able to
deduct currently as expenses for tax purposes some items that we have actually
paid. We could also realize income, such as income from cancellation of
indebtedness, that is not accompanied by cash proceeds. If one or more of
these events happened, we could have taxable income in excess of cash available
for distribution. In such circumstances, we might have to borrow money or sell
investments on unfavorable terms in order to meet the distribution requirement
applicable to a REIT.

President Bushs proposed tax cut could adversely affect the price of our
stock.President Bush has proposed a tax reduction package that would, among
other things, substantially reduce or eliminate the taxation of dividends paid
by corporations other than REITs. If the double taxation of corporate
dividends were to be eliminated or reduced, certain of the relative tax
advantage of being a REIT would be eliminated or reduced, which may have an
adverse effect on the price of our stock. This adverse effect may take place
prior to the adoption of any tax cut based on the markets perception of the
likelihood of implementation of such a provision.

Other Risks

Our current and potential investments in self storage businesses that are
not real estate-related may result in losses when economic conditions change.
We have invested in self storage businesses that are not real estate-related
and we might make more of these investments. For example, we have invested in
and currently own through our ownership in Shurgard TRS, all of the outstanding
interests of STG, a business that provides customers with local delivery, pick
up and storage of individual storage containers. STG faces the same risks that
we do regarding losses resulting from competition and decreases in rent in the
self storage market. In addition, because STG does not have significant real
estate holdings or other marketable assets to borrow against, it might have
difficulty borrowing necessary operating funds or attracting additional
investments if economic conditions change, putting our investment at greater
risk of loss.

We may not be able to repay our debt financing obligations.We might not
have sufficient net cash flow from our operations to meet required payments of
principal and interest under our loans. As a result, we might not be able to
refinance the existing indebtedness on our properties or might have to enter
into credit terms that are less favorable than the terms of our existing
indebtedness.

We have an investment in international operations that carry risks in
addition to our U.S. operations.We invest in operations outside the United
States. We face risks inherent in international business operations, including
but not limited to currency risks, unexpected changes in regulatory
requirements, longer accounts receivable payment cycles, difficulties in
staffing and managing international operations, potentially adverse tax
burdens, obstacles to the repatriation of earnings and cash, local political
uncertainty and burdens of complying with different permitting standards and a
wide variety of foreign laws. Each of these risks might impact our cash flow
or impair our ability to borrow funds, which ultimately could adversely affect
our ability to repay loans and make expected distributions to shareholders. We
may be subject to these risks to a greater degree than could be expected given
the size of our current investment due to our contingent liability as a general
partner of Recom & Co. SNC, a Belgian partnership in which we, our European
operating partners and some Shurgard Europe employees have ownership interest,
to cover the partnerships debt.

Employees

As of December 31, 2002, we employed approximately 1,250 persons. None of
our employees are covered by a collective bargaining agreement. We believe that
our relations with our employees are good.

Executive Officers of the Registrant

The following table sets forth certain information regarding the executive
officers of Shurgard as of December 31, 2002.

|              |  |     |    |                                        |  |                                                                       
|------------- |  | --- | -- | -------------------------------------- |  | ----------------------------------------------------------------------
|Name          |  | Age |    | Positions and Offices with the Company
|              |  |     |    |                                       
|Charles Barbo |  |     | 61 |                                        |  | Chairman of the Board, President and Chief Executive Officer          
|Harrell Beck  |  |     | 46 |                                        |  | Director, Senior Vice President, Chief Financial Officer and Treasurer
|David Grant   |  |     | 49 |                                        |  | Executive Vice President                                              

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|                |  |     |    |                                        |  |                                                     
|--------------- |  | --- | -- | -------------------------------------- |  | ----------------------------------------------------
|Name            |  | Age |    | Positions and Offices with the Company
|                |  |     |    |                                       
|Christine McKay |  |     | 41 |                                        |  | Senior Vice President, Secretary and General Counsel
|Steve Tyler     |  |     | 50 |                                        |  | Senior Vice President, Operations                   



---

| |  |                                                                                                                                       
| |  | --------------------------------------------------------------------------------------------------------------------------------------
| |  | For Mr. Barbos and Mr. Becks biographies, see our proxy statement for
the annual meeting of shareholders to be held on May 13, 2003.

David Granthas served as our Executive Vice President and Director of
Real Estate Investment since July 1993. He became President of Shurgard Europe
(previously SSC Benelux & Co., SCA) effective January 1, 1996. Mr. Grant joined
Shurgard Incorporated in November 1985 as Director of Real Estate Investment
and continued to serve in that capacity until the Merger. He also served as an
Executive Vice President of Shurgard Incorporated. He is expected to return to
the U.S. in August of 2003 to take on the role of President and Chief Operating
Officer. Mr. Grant was previously a manager with Touche Ross & Co., where he
was employed for approximately 10 years providing financial consulting,
accounting and auditing services primarily to clients in the real estate,
construction and engineering industries. Mr. Grant has a Bachelor of Arts
degree in Business Administration and a Bachelor of Science degree in
Accounting, both from Washington State University.

Christine McKayhas served as Senior Vice President, Secretary and General
Counsel since October 1999. She joined Shurgard Incorporated in June 1993, as
an Assistant General Counsel. She has served as our Assistant Secretary since
October 1998, and as Assistant Secretary and Division Counsel for STG, since
July 1997. Ms. McKay was previously an attorney with Williams, Kastner & Gibbs,
in Seattle. She has a Bachelor of Arts degree in Business Administration from
Chadron State College, and a Juris Doctorate, with honors, from Creighton
University. She is a member of the Washington State Bar Association and the
Corporate Counsel Section of the Washington State Bar Association.

Steve Tylerjoined Shurgard in May 1996 as Vice President of Operations
covering the Midwest and East Coast markets. Since October, 1999 he has served
as Senior Vice President of Operations. Prior to joining Shurgard, he was a
Regional Operations Manager with Victorias Secret (a division of the Limited),
Casual Corner (a division of US Shoe), and a District Operating manager with
The Gap and Sears. He has a Bachelor of Arts degree in Business Administration
from the University of Minnesota-Duluth.

Other Available Information

We file our annual report on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, and all amendments to those reports with the
Securities & Exchange Commission. You may obtain copies of these documents by
visiting the SECs Public Reference Room at 450 Fifth Street, NW, Washington,
DC 20549, by calling the SEC at 1-800-SEC-0330 or by accessing the SECs
website at http://www.sec.gov. In addition, as soon as reasonably practicable,
after such materials are filed with or furnished to the SEC, we make copies of
these documents (other than exhibits) available to the public free of charge
through our web site at www.shurgard.com or by contacting our Secretary at our
principal offices, which are located at 1155 Valley Street, Suite 400, Seattle,
Washington 98109, telephone number (206) 624-8100.




Item 2 Properties

We own or lease, as of December 31, 2002, directly and through our
subsidiaries and joint ventures, 534 properties (including 532 self storage
properties), 438 of which are located in 21 states and 96 of which are located
in Europe. The 534 properties include 87 in which we hold joint venture
interests ranging from 50% to 99% and 96 located in Europe in which we have a
7.57% ownership. Our self storage properties are designed to offer accessible
storage space for personal and business use. Individuals typically rent
individual units in self storage properties for storage of personal
belongings such as furniture, appliances, boats and other household and
recreational goods. Businesses typically rent space for storage of business
property such as equipment, seasonal goods, records and fixtures. We believe
that it is desirable to have commercial customers because they tend to rent
larger units, stay for longer terms, are more reliable payers and are less
sensitive to price increases. Based on a survey of our customers conducted
during December 2002, we estimate that commercial users account for
approximately 25% to 30% of our total customer base.

Our self storage properties are divided into a number of self-enclosed
rental units that generally range in size from approximately 25 to 360 square
feet. Many properties have uncovered storage outside the buildings for parking
motor

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vehicles, boats, campers and other similar items suitable for outside
storage. Additionally, a number of our properties include climate-controlled
storage units for which we typically charge a premium.

Customers of self storage properties are generally responsible for
delivering and retrieving their goods. Many leased spaces can be accessed
directly by automobile or truck, but some properties, in particular the
multistory buildings, have separate loading docks and elevators available for
delivery and retrieval of stored goods. Customers generally have access to
their unit without additional charge during normal business hours and control
access to such space through the use of their personal padlocks. We offer
Budget truck rentals at a majority of our properties for added convenience to
our customers and to differentiate our stores from most of our competitors. In
addition to truck rentals, we sell locks, boxes and packing and storage
materials at our stores.

The leasing, maintenance and operation of our stores are the
responsibility of store managers. The propertys security is provided through a
variety of systems that may include, among others, on-site personnel,
electronic devices such as intrusion and fire alarms, access controls, video
and intercom surveillance devices, property fencing and lighting.

Although our stores range considerably in size, most properties consist of
one or more single-story buildings. The smallest store has approximately 21,000
net rentable square feet, while the largest store has approximately 280,000 net
rentable square feet. The properties generally are constructed with concrete
block or tilt-up concrete panels, with steel columns or precast concrete
columns that rest on concrete footings and slabs, and have built-up tar roofs
or pitched truss roofs with shingles or standing seam metal roofs. The interior
walls are generally constructed with metal studs and partitions or other
construction materials that are secure but readily movable. The parking areas
and driveways are generally asphalt or concrete. All stores have fencing,
floodlights, and electronic gates.

In some cases, multistory buildings have been converted into self storage
properties. In addition, similar multistory buildings for self storage have
been constructed in dense urban areas where land costs, zoning and other
development considerations make it impractical or undesirable to construct
single-story buildings.

The following table sets forth information regarding weighted average
occupancy and weighted average rent per square foot for the self storage
properties and business parks owned or leased by us for the years ended
December 31, 2002, 2001 and 2000. The occupancy and rental information in this
and the following table is affected by new stores, which, once opened, go
through a rent-up period during which occupancy is generally lower than at
later stages, which will impact the comparability from year to year.

|                 |  |               |     |             |  |                   |       |                 |  |      |    |      |  |      |    |      |  |  |    |              |  |   |       |  |  |   |       |  |  |   |       | 
|---------------- |  | ------------- | --- | ----------- |  | ----------------- | ----- | --------------- |  | ---- | -- | ---- |  | ---- | -- | ---- |  |  | -- | ------------ |  | - | ----- |  |  | - | ----- |  |  | - | ----- | 
|                 |  | No. of        |     |             |  |                   |       |                 |  |      |    |      |  |      |    |      |  |  |    | Average Rent
|                 |  | Properties    |     | Percentage  |  | Average Occupancy |       | per Square Foot
|                 |  | as of Dec. 31 |     | of 2002     |  |                   |       |                
|                 |  | 2002 (1)      |     | Revenue (2) |  | 2002              |       | 2001            |  | 2000 |    | 2002 |  | 2001 |    | 2000
|                 |  |               |     |             |  |                   |       |                 |  |      |    |      |  |      |    |     
|Arizona          |  |               | 22  |             |  |                   | 3.8   | %               |  |      | 84 | %    |  |      | 86 | %    |  |  | 82 | %            |  | $ | 9.73  |  |  | $ | 9.88  |  |  | $ | 9.69  | 
|California       |  |               | 48  |             |  |                   | 14.2  |                 |  |      | 81 |      |  |      | 89 |      |  |  | 88 |              |  |   | 14.66 |  |  |   | 13.89 |  |  |   | 12.71 | 
|Florida          |  |               | 28  |             |  |                   | 5.8   |                 |  |      | 70 |      |  |      | 73 |      |  |  | 73 |              |  |   | 11.08 |  |  |   | 10.63 |  |  |   | 10.52 | 
|Georgia          |  |               | 18  |             |  |                   | 3.5   |                 |  |      | 78 |      |  |      | 81 |      |  |  | 79 |              |  |   | 10.73 |  |  |   | 10.44 |  |  |   | 10.04 | 
|Illinois         |  |               | 20  |             |  |                   | 3.6   |                 |  |      | 76 |      |  |      | 85 |      |  |  | 84 |              |  |   | 11.56 |  |  |   | 11.21 |  |  |   | 10.51 | 
|Michigan         |  |               | 26  |             |  |                   | 4.5   |                 |  |      | 81 |      |  |      | 83 |      |  |  | 90 |              |  |   | 9.76  |  |  |   | 9.66  |  |  |   | 9.33  | 
|New York         |  |               | 11  |             |  |                   | 4.3   |                 |  |      | 77 |      |  |      | 73 |      |  |  | 80 |              |  |   | 20.94 |  |  |   | 20.57 |  |  |   | 19.59 | 
|North Carolina   |  |               | 33  |             |  |                   | 2.7   |                 |  |      | 75 |      |  |      | 84 |      |  |  | 74 |              |  |   | 6.67  |  |  |   | 9.00  |  |  |   | 12.00 | 
|Oregon           |  |               | 14  |             |  |                   | 2.6   |                 |  |      | 88 |      |  |      | 91 |      |  |  | 89 |              |  |   | 11.12 |  |  |   | 10.29 |  |  |   | 9.54  | 
|South Carolina   |  |               | 13  |             |  |                   | 0.8   |                 |  |      | 71 |      |  |      |   |      |  |  |   |              |  |   | 6.14  |  |  |   |      |  |  |   |      | 
|Texas            |  |               | 66  |             |  |                   | 11.9  |                 |  |      | 84 |      |  |      | 84 |      |  |  | 80 |              |  |   | 10.46 |  |  |   | 9.85  |  |  |   | 9.40  | 
|Virginia         |  |               | 35  |             |  |                   | 7.0   |                 |  |      | 86 |      |  |      | 85 |      |  |  | 84 |              |  |   | 13.58 |  |  |   | 13.16 |  |  |   | 11.93 | 
|Washington       |  |               | 52  |             |  |                   | 11.8  |                 |  |      | 84 |      |  |      | 86 |      |  |  | 87 |              |  |   | 11.89 |  |  |   | 11.60 |  |  |   | 10.95 | 
|Other domestic   |  |               | 52  |             |  |                   | 7.8   |                 |  |      | 76 |      |  |      | 76 |      |  |  | 78 |              |  |   | 10.54 |  |  |   | 10.52 |  |  |   | 10.17 | 
|Europe           |  |               | 96  |             |  |                   | 15.7  |                 |  |      | 53 |      |  |      | 55 |      |  |  | 46 |              |  |   | 16.25 |  |  |   | 16.91 |  |  |   | 15.69 | 
|                 |  |               |     |             |  |                   |       |                 |  |      |    |      |  |      |    |      |  |  |    |              |  |   |       |  |  |   |       |  |  |   |       | 
|Weighted Average |  |               | 534 |             |  |                   | 100.0 | %               |  |      | 76 | %    |  |      | 79 | %    |  |  | 79 | %            |  | $ | 12.05 |  |  | $ | 11.51 |  |  | $ | 10.84 | 
|                 |  |               |     |             |  |                   |       |                 |  |      |    |      |  |      |    |      |  |  |    |              |  |   |       |  |  |   |       |  |  |   |       | 

15



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|(1) |  | Includes 409 facilities owned or leased by us and entities controlled by
us. The remaining 125 facilities are owned or leased by entities in which
we have a non-controlling interest. See Schedule III in our
Form 10-K/A for
a complete list of properties for which financial information is
consolidated by us.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Revenue includes all Same Store and New Store revenue regardless of
ownership interest in the property.                                                                                                                                                                                                            

The following table sets forth information for all properties for which we
have an ownership or leasehold interest regardless of percentage ownership.
The table provides weighted average occupancy and weighted average rent per
square foot for the years ended December 31, 1998 through December 31, 2002.

|                                 |  |      |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |       |  
|-------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | - |  | - | ----- | -
|                                 |  | 2002 |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                                 |  |      |       |      |  |      |       |      |  |     
|Domestic                         |  |      |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |       |  
|Weighted average occupancy       |  |      | 80    | %    |  |      | 83    | %    |  |      | 83    | % |  |   | 82    | % |  |   | 84    | %
|Weighted average per square foot |  | $    | 11.50 |      |  | $    | 11.47 |      |  | $    | 10.82 |   |  | $ | 10.30 |   |  | $ | 9.90  |  
|Europe                           |  |      |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |       |  
|Weighted average occupancy       |  |      | 53    | %    |  |      | 55    | %    |  |      | 46    | % |  |   | 40    | % |  |   | 57    | %
|Weighted average per square foot |  | $    | 16.25 |      |  | $    | 16.91 |      |  | $    | 15.69 |   |  | $ | 14.35 |   |  | $ | 12.10 |  

Leasing of Properties.Rental units are usually rented on a month-to-month
basis. Based on our most recent evaluation of customer move-outs for the year
ended 2002, the average rental period for a tenant is approximately 12 months.
This average is comprised of the rental periods of business tenants, whose
average stay is 19 months, and those of residential customers, whose average
stay is 11 months. Rental income from leased space constitutes the primary
revenue from such properties, but additional revenue is received from
incidental services rendered at the properties, such as lock and box sales and
truck rentals. Rental rates vary substantially depending on the size of the
storage space, the property location, the quality of the property and the
proximity of competition.

Other Properties.Shurgard owns two business parks located near Tacoma,
Washington and Burke, Virginia. The business parks were built in 1979 and 1984,
respectively, and they contain an aggregate of approximately 158,000 net
rentable square feet.




Item 3 Legal Proceedings

We are a defendant in litigation filed on June 17, 2002, in the Superior
Court of California for Orange County styled as Gary Drake v. Shurgard Storage
Centers, Inc. et al (Case No. 02CC00152). The complaint alleges that we
misrepresent the size of our storage units, seeks class action status and seeks
damages, injunctive relief and declaratory relief against us under California
statutory and common law relating to consumer protection, unfair competition,
fraud and deceit and negligent misrepresentation. We do not currently believe
that the outcome of this litigation will have a material adverse effect on our
financial position or results of operations. However, we cannot presently
determine the potential total damages, if any, or the ultimate outcome of the
litigation. We intend to vigorously defend this action.

We are a defendant in litigation filed on October 30, 2002, in the United
States District Court for the Northern District of California styled as
Patricia Scura et al. v. Shurgard Storage Centers, Inc. (Case No. C
02-5246-WDB). The complaint alleges that we required our hourly store
employees to perform work before and after their scheduled work times and
failed to pay overtime compensation for work performed before and after hours
and during meal periods. The lawsuit seeks class action status and seeks
damages, injunctive relief and a declaratory judgment against us under the
federal Fair Labor Standards Act and California statutory wage and hour laws
and laws relating to unlawful and unfair business practices. We do not
currently believe that the outcome of this litigation will have a material
adverse effect on our financial position or results of operations. However, we
cannot presently determine the potential total damages, if any, or the ultimate
outcome of the litigation. We intend to vigorously defend this action.




Item 4 Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of shareholders during the fourth
quarter of 2002.




PART II




Item 5 Market for the Registrants Common Equity and Related Stockholder Matters

16



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Our common stock is traded on the NYSE under the symbol SHU. As of March
6, 2003 there were 17,755 holders of record of our common stock and the
reported NYSE closing price per share of common stock was $29.46.

The table below sets forth for the fiscal periods indicated the high and
low closing prices per share of Common Stock as reported in published financial
sources, and distributions declared.

|               |  |      |       |     |  |              |       |  |  |               |      | 
|-------------- |  | ---- | ----- | --- |  | ------------ | ----- |  |  | ------------- | ---- | 
|               |  |      |       |     |  |              |       |  |  | Distributions
|               |  | High |       | Low |  | Declared (1)
|               |  |      |       |     |  |             
|2002           |  |      |       |     |  |              |       |  |  |               |      | 
|Fourth Quarter |  | $    | 31.50 |     |  | $            | 28.36 |  |  | $             | 0.53 | 
|Third Quarter  |  |      | 34.05 |     |  |              | 29.46 |  |  |               | 0.53 | 
|Second Quarter |  |      | 35.40 |     |  |              | 32.31 |  |  |               | 0.53 | 
|First Quarter  |  |      | 33.31 |     |  |              | 29.69 |  |  |               | 0.52 | 
|2001           |  |      |       |     |  |              |       |  |  |               |      | 
|Fourth Quarter |  | $    | 32.25 |     |  | $            | 29.16 |  |  | $             | 0.52 | 
|Third Quarter  |  |      | 31.37 |     |  |              | 28.14 |  |  |               | 0.52 | 
|Second Quarter |  |      | 30.21 |     |  |              | 24.76 |  |  |               | 0.52 | 
|First Quarter  |  |      | 25.13 |     |  |              | 22.84 |  |  |               | 0.51 | 



|(1) |  | Distributions declared by the Board of Directors based on financial
results for the quarter specified, but declared and paid in the following
quarter.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

Holders of shares of common stock are entitled to receive distributions
when declared by our Board of Directors out of any assets legally available for
payment. There are covenants in our various debt agreements that may restrict
our dividends. (See Item 7 - Managements Discussion and Analysis of Financial
Condition and Results of Operations - FUNDS FROM OPERATIONS). We are required
to distribute annually to our shareholders at least 90% of our REIT taxable
income, which, as defined by the relevant tax statutes and regulations, is
generally equivalent to net taxable ordinary income.

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Item 6 Selected Financial Data

|                                                    |                   |   |                  |      |                  |   |           |      |      |   |           |      |  |   |           |      |  |   |           |      | 
|--------------------------------------------------- | ----------------- | - | ---------------- | ---- | ---------------- | - | --------- | ---- | ---- | - | --------- | ---- |  | - | --------- | ---- |  | - | --------- | ---- | 
|                                                    |                   |   | 2002             |      | 2001             |   |           |      |      |   |           |      |  |   |           |      | 
|                                                    |                   |   |                  |      |                  |   |           |      |      |   |           |      |  |   |           |      | 
|                                                    |                   |   | (as restated)(3) |      | (as restated)(3) |   | 2000      |      | 1999 |   | 1998 (1) 
|                                                    |                   |   |                  |      |                  |   |           |      |      |   |          
|OPERATING DATA:                                     |                   |   |                  |      |                  |   |           |      |      |   |           |      |  |   |           |      |  |   |           |     
|(in thousands except per share data)                |                   |   |                  |      |                  |   |           |      |      |   |           |      |  |   |           |      |  |   |           |     
|Total revenue                                       |                   | $ | 264,113          |      |                  | $ | 232,590   |      |      | $ | 201,958   |      |  | $ | 176,456   |      |  | $ | 161,960   |     
|Income before extraordinary items                   |                   | $ | 54,909           |      |                  | $ | 34,757    |      |      | $ | 32,307    |      |  | $ | 37,677    |      |  | $ | 37,394    |     
|Income before extraordinary items
per common share: |                   |   |                  |      |                  |   |           |      |      |   |           |      |  |   |           |      |  |   |           |     
|                                                    | Basic             |   | $                | 1.15 |                  |   | $         | 0.63 |      |   | $         | 0.80 |  |   | $         | 0.99 |  |   | $         | 1.14 | 
|                                                    | Diluted           |   | $                | 1.13 |                  |   | $         | 0.63 |      |   | $         | 0.79 |  |   | $         | 0.99 |  |   | $         | 1.14 | 
|Distributions per common share:                     |                   |   |                  |      |                  |   |           |      |      |   |           |      |  |   |           |      |  |   |           |     
|                                                    | Ordinary income   |   | $                | 1.92 |                  |   | $         | 1.74 |      |   | $         | 1.73 |  |   | $         | 1.91 |  |   | $         | 1.80 | 
|                                                    | Capital gain      |   |                  | 0.08 |                  |   |           | 0.07 |      |   |           |     |  |   |           | 0.05 |  |   |           | 0.01 | 
|                                                    | Return of capital |   |                  | 0.11 |                  |   |           | 0.26 |      |   |           | 0.30 |  |   |           | 0.03 |  |   |           | 0.14 | 
|                                                    |                   |   |                  |      |                  |   |           |      |      |   |           |      |  |   |           |      |  |   |           |     
|Total                                               |                   | $ | 2.11             |      |                  | $ | 2.07      |      |      | $ | 2.03      |      |  | $ | 1.99      |      |  | $ | 1.95      |     
|                                                    |                   |   |                  |      |                  |   |           |      |      |   |           |      |  |   |           |      |  |   |           |     
|BALANCE SHEET DATA:                                 |                   |   |                  |      |                  |   |           |      |      |   |           |      |  |   |           |      |  |   |           |     
|(in thousands)                                      |                   |   |                  |      |                  |   |           |      |      |   |           |      |  |   |           |      |  |   |           |     
|Total assets                                        |                   | $ | 1,420,176        |      |                  | $ | 1,238,805 |      |      | $ | 1,230,242 |      |  | $ | 1,149,860 |      |  | $ | 1,151,996 |     
|Total borrowings (2)                                |                   | $ | 607,834          |      |                  | $ | 470,747   |      |      | $ | 595,524   |      |  | $ | 488,075   |      |  | $ | 450,786   |     



|(1) |  | For the year 1998, the European operations were consolidated.
Beginning in 1999, European operations are not consolidated but are
reported under the equity method.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Total borrowing includes participation rights liability net of
discount (See Note H to our Consolidated Financial Statements).                                     
|   
|(3) |  | See Note X to the consolidated financial statements included in
Item 8 on this Form 10-K/A.                                                                        

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Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

As discussed in Note X to the consolidated financial statements included
in Item 8 of this Form 10-K/A, the Company has restated its financial statements
for the year ended December 31, 2002 and 2001. The accompanying management
discussion and analysis takes into account the effects of the restatement.

Shurgard Storage Centers, Inc. is a REIT headquartered in Seattle,
Washington, specializing in all aspects of the self storage industry. As of
December 31, 2002, we operated a network of 560 storage centers and two
business parks located throughout the United States and in Europe. Of these
properties, we own or lease, directly and through our subsidiaries, joint
ventures and European investment, 534 operating properties containing
approximately 34.0 million net rentable square feet. Of the 534 operating
properties, 438 are located in 21 states in the U.S. and 96 are located in
Europe. We also manage for third parties, 28 self storage centers containing
approximately 1.6 million net rentable square feet. Self storage properties
offer low-cost, easily accessible storage space for personal and business uses.

Our investment objective is to maximize shareholder value through internal
growth and through the acquisition and development of additional self storage
properties. We believe that the experience of our management team in acquiring,
developing and operating self storage properties, our geographic
diversification and our emphasis on quality will enhance our ability to achieve
this objective.

Our mission is to be the global leader in storage products and services.
We believe we can obtain this goal by focusing on providing exceptional
customer service and the highest quality products to our customers.

During 2002, we opened or acquired 61 domestic storage centers directly or
through joint ventures. Additionally, our European investment opened 24
developments during 2002.

As part of our focus on providing the highest quality products to our
customers, we look for locations that are in populated retail areas. When
entering a market, to create customer awareness, we seek dominant locations
within specific three to five mile trade areas that are highly visible and
accessible in retail corridors. Through multiple locations of this kind within
a metropolitan area, we establish brand recognition as well as economies of
scale in operating our stores. In most markets, we seek to own at least 15
stores in order to realize these efficiencies. To further enhance brand
recognition, we strive to achieve a uniform look to our properties through the
use of signage, color schemes, quality of the building and our trademark
lighthouse office design in new developments.

The following discussion of operations provides comparative financial
information and discussion of each of the areas of growth, including Segment
Performance, Ownership and Leasing Arrangements, European Operations and Other
Real Estate Investments. Also included is a discussion of Capital Expenditures,
Financing Transactions, Off Balance Sheet Transactions, Short- and Long-Term
Liquidity and Funds From Operations.

When used in this discussion and elsewhere in this Annual Report on Form
10-K/A, the words believes, anticipates, projects and similar expressions
are intended to identify forward-looking statements regarding financial
performance. Actual results may differ materially due to uncertainties
including the risk that changes in economic conditions in the markets in which
we operate, and/or competition from new self storage facilities or other
storage alternatives may cause rent to decline and may cause occupancy rates to
drop, or may cause delays in rent up of newly developed properties, the risk
that new developments could be delayed or reduced by zoning and permitting
requirements outside of our control, increased competition for desirable sites,
construction delays due to weather, unforeseen site conditions, labor
shortages, personnel turnover, scheduling problems with contractors,
subcontractors or suppliers, and the risk that we may experience increases in
the cost of labor, taxes, marketing and other operating and construction
expenses, and the risk that tax law changes may change the taxability of
operating and construction expenses, and the risk that tax law changes may
change the taxability of future income and increases in interest rates may
increase the cost of refinancing long term debt, and our alternatives for
funding our business plan may be impaired by the economic uncertainty due to
the impact of war or terrorism, and our interest in Shurgard Europe may be
adversely impacted if that entity is unable to complete formation and funding
of its contemplated development joint ventures. We may also be affected by
legislation or changes in regulations or interpretations regarding certain
accounting standards applied to our operations and certain existing financial
and joint venture structures of the company.Other factors that could affect
our financial results are described below and in Item 1 (Business) of this
Annual Report on Form 10-K/A. Forward-looking statements are based on estimates
as of the date of this report. We disclaim any obligation to publicly release
the results

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of any revisions to these forward-looking statements reflecting new
estimates, events or circumstances after the date of this report.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Basis of presentation:The consolidated financial statements include the
accounts of Shurgard and our subsidiaries. All inter-company balances and
transactions have been eliminated on consolidation. We consolidate the accounts
of those subsidiaries or joint ventures in which we have effective control as
evidenced by, among other factors, a majority interest in the investment and

the ability to cause a sale of assets. All investments in joint ventures that
do not qualify for consolidation, but in which we exercise significant
influence and do not have effective control, are accounted for under the equity
method and are included in other real estate investments.

Derivatives: We account for derivative instruments and hedging activities
in accordance with SFAS No. 133, as amended. SFAS No. 133, as amended,
requires that all derivatives be recognized in the balance sheet and measured
at fair value. Gains or losses resulting from changes in the fair value of
derivatives are recognized in earnings or recorded in other comprehensive
income, and recognized in the statement of earnings when the hedged item
affects earnings, depending on the purpose of the derivatives and whether they
qualify for hedge accounting treatment. Changes in the fair value of
derivative instruments not designated as hedging instruments are recognized in
earnings. Our objective in using derivatives is to add stability to interest
expense and to manage our exposure to interest rate movements or other
identified risks. To accomplish this objective, we primarily use interest rate
swaps as part of our cash flow hedging strategy. We assess the effectiveness
of each hedging relationship by comparing the changes in fair value or cash
flows of the derivative hedging instrument with the changes in fair value or
cash flows of the designated hedged item or transaction. Ineffectiveness that
meets certain criteria under SFAS No. 133 is recognized in earnings.

Financing arrangements:We accounted for sales of certain storage centers
in which we have continuing involvement, as defined in Statement of Financial
Accounting Standards (SFAS) No. 66, Accounting for Sales of Real Estate, as
financing arrangements (See Note H to our Consolidated Financial Statements).
We use the effective interest rate method using estimated future cash flows in
determining the amortization of participation rights. This estimate is
evaluated each period and is sensitive to both amount and timing of cash flows
and projected purchase price. Estimated amount and timing of distributions is
based on projected property operating cash flows. Estimated amount and timing
of purchase price is based on projected stabilized net operating income and our
estimate of when each property will reach stabilization. During 2002, we
reduced the participation rights for CCP/Shurgard by $6.4 million based on our
re-evaluation of the projected cash flows of these properties and the projected
timing of our joint venture partners exercise of their put option. This
reduction in participation rights was accounted for as a change in estimate and
will reduce amortization of participation rights in future periods.

Deferred tax asset:Shurgard TRS Inc. (Shurgard TRS), a wholly owned
subsidiary, is a taxable REIT subsidiary and is subject to corporate level tax.
STG, Shurgard Preferred Partners, SS Income Plan and Storage Line Management
are wholly owned subsidiaries of Shurgard TRS. These entities have accumulated
tax losses primarily attributable to net operating loss carryforwards from STG
that will expire beginning in 2017, temporary differences in fixed assets and
operating losses (See Note L to our Consolidated Financial Statements). When
determining the necessary amount, if any, of valuation allowance on the
deferred tax asset, we estimate projected future taxable income from all
sources to determine whether it is more likely than not that we will realize
the tax asset in its entirety. No valuation allowance has been recorded for
2002.

SEGMENT PERFORMANCE

When managing our real estate assets, we evaluate performance in two
segments. The first segment, Same Stores, represents those storage centers and
business parks that are not in the rent up stage and for which historical
information is available. The second segment, New Stores, represents those
storage centers recently acquired or developed for which performance is
measured primarily based on original investment expectations. We evaluate all
stores on the same basis regardless of ownership interest in the property. The
following sections discuss the performance of these segments for domestic
properties.

Same Stores

In 2002, we continued our focus on increasing net operating income (NOI)
from our existing real estate assets. The primary way we analyze our
performance is to measure year over year improvements in Same Store operating
results. Our definition of Same Stores includes existing stores acquired prior
to January 1 of the previous year as well as

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developed properties that have
been operating for a full two years as of January 1 of the current year.
Please note that our definition of Same Stores results in the addition of stores each year
as new acquisitions and developments meet the criteria for inclusion, and that
we then include these stores in the previous years comparable data. Other
storage companies may define Same Stores differently, which will affect the
comparability of the data. The following table summarizes Same Store operating
performance as defined at December 31, 2002 and 2001.

Same Store Results (1)

|                                                   |  |                         |            |                         |  |          |            |      |  |      |      |          |  |   |            |   |  |   |            |   |  |  |      |  
|-------------------------------------------------- |  | ----------------------- | ---------- | ----------------------- |  | -------- | ---------- | ---- |  | ---- | ---- | -------- |  | - | ---------- | - |  | - | ---------- | - |  |  | ---- | -
|                                                   |  | Year Ended December 31, |            | Year Ended December 31,
|(dollars in thousands except                       |  |                         |            |                        
|average rent)                                      |  | 2002                    |            | 2001                    |  | % Change |            | 2001 |  | 2000 |      | % Change
|                                                   |  |                         |            |                         |  |          |            |      |  |      |      |         
|Real estate operations
revenue                     |  | $                       | 231,350    |                         |  | $        | 227,776    |      |  |      | 1.6  | %        |  | $ | 210,277    |   |  | $ | 197,786    |   |  |  | 6.3  | %
|Direct operating and
real estate tax expense (2)   |  |                         | 67,658     |                         |  |          | 65,627     |      |  |      | 3.1  | %        |  |   | 59,521     |   |  |   | 57,727     |   |  |  | 3.1  | %
|                                                   |  |                         |            |                         |  |          |            |      |  |      |      |          |  |   |            |   |  |   |            |   |  |  |      |  
|NOI                                                |  |                         | 163,692    |                         |  |          | 162,149    |      |  |      | 1.0  | %        |  |   | 150,756    |   |  |   | 140,059    |   |  |  | 7.6  | %
|Indirect operating and
leasehold expense (3)       |  |                         | 13,080     |                         |  |          | 14,220     |      |  |      | -8.0 | %        |  |   | 13,062     |   |  |   | 13,266     |   |  |  | -1.5 | %
|                                                   |  |                         |            |                         |  |          |            |      |  |      |      |          |  |   |            |   |  |   |            |   |  |  |      |  
|NOI after indirect operating
and leasehold expense |  | $                       | 150,612    |                         |  | $        | 147,929    |      |  |      | 1.8  | %        |  | $ | 137,694    |   |  | $ | 126,793    |   |  |  | 8.6  | %
|                                                   |  |                         |            |                         |  |          |            |      |  |      |      |          |  |   |            |   |  |   |            |   |  |  |      |  
|Avg. annual rent per sq.ft. (4)                    |  | $                       | 11.80      |                         |  | $        | 11.44      |      |  |      | 3.1  | %        |  | $ | 11.39      |   |  | $ | 10.82      |   |  |  | 5.3  | %
|Avg. sq.ft. occupancy                              |  |                         | 85         | %                       |  |          | 87         | %    |  |      |      |          |  |   | 87         | % |  |   | 87         | % |  |  |      |  
|Total net rentable sq.ft                           |  |                         | 21,346,000 |                         |  |          | 21,346,000 |      |  |      |      |          |  |   | 19,700,000 |   |  |   | 19,700,000 |   |  |  |      |  
|No. of properties                                  |  |                         | 330        |                         |  |          | 330        |      |  |      |      |          |  |   | 304        |   |  |   | 304        |   |  |  |      |  



---

|(1) |  | Table includes the total operating results of each store regardless of our
percentage ownership interest in that store.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes all direct property and real estate tax expense. Does not
include any allocation of indirect expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(3) |  | Indirect operating expense includes certain shared property costs such as
bank fees, district and corporate management, purchasing, national
contracts personnel and marketing, as well as certain overhead costs
allocated to property operations such as business information technology,
legal services, human resources and accounting. Does not include internal
real estate acquisition cost or abandoned development expense. Indirect
operating expense is allocated to stores based on number of months in
operation during the period. Indirect operating and leasehold expense
includes leasehold expense of $1.2 million, $1.1 million and $1.0 million
for the years ended December 31, 2002, 2001 and 2000, respectively.
|   
|(4) |  | Average annual rent per square foot is calculated by dividing actual rent
collected by the average number of square feet occupied during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

NOI has risen over the last three years due to increases in revenue, which
is a function of changes in rental rates and occupancy. While the storage
business is seasonal, spring and summer being peak occupancy periods, the year
over year trends from 2000 to 2002 reflect general market changes. Revenue
gains from 2001 to 2002 resulted from rate increases and were offset by
occupancy decreases while the gain from 2000 to 2001 resulted primarily from
rate increases.

During 2002, we experienced a decrease in demand evidenced by a decrease
in recorded inquiries at the stores. Occupancies dropped two and half
percentage points from January through April and, in order to stop this
erosion, we began to make rate concessions. Although the average rate for the
year is up 3%, quarterly trends show that this increase is the result of a 5.4%
increase in the first quarter followed by a slow erosion of rates from May
through December. Despite these rate adjustments, our seasonal occupancy
increase that normally occurs over late spring and summer was not as
significant as most years and we continued to lag 2001 occupancy levels.
Although we believe that the quality of our storage centers as well as our
geographic diversity helps mitigate the impact to us of competition in
individual markets, like most other businesses, we are subject to the effects
of general economic conditions. We believe that the downward pressure in both
occupancies and rates in many of our markets is due to economic conditions and
rate reductions being offered by various competitors as they attempt to
compensate for these market factors. Despite the declining trends during 2002,
we have begun to see some encouraging signs in early 2003. Average rental
rates rose in January and February for the first time in nine months.
Additionally, for the first time in more than a year, occupancy for the month
of February was higher than the previous year. While it is still too early to
conclude that these results indicate a turnaround, they are noteworthy and may
signal that we are hitting the bottom of the cycle.

21



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##### Table of Contents



In response to decreasing demand and increasing competition, we have been
examining our marketing and sales programs to identify areas for potential
improvement. During the spring and summer of 2001, we reorganized our national
sales center, and during 2002, we realigned our direct sales team to achieve
lower overhead and retain the highest performing representatives. As a result
of this, as well as additional training of store management personnel,
abandonment ratios by our sales and customer service representatives dropped
significantly during 2002 and closing ratios increased. During the fourth
quarter we began to see some recovery in our occupancy declines evidenced by a
decreasing deficit over the prior year, from 200 basis points in the first
quarter to 100 basis points in the fourth quarter of 2002. This allowed us to
increase rates in some of our markets which reduced the rate deterioration we
had been experiencing during 2002.

Direct operating expenses increased 3.1% from 2001 to 2002, consistent
with the change from 2000 to 2001. This increase in direct operating expenses
in 2002 compared to 2001 was primarily due to increases in personnel, real
estate taxes and cost of goods sold offset by decreases in utilities. Direct
operating expenses increased 3.1% from 2000 to 2001 as the expenditures for
marketing and sales campaigns implemented during 2000 annualized.

Additionally, decreased indirect operating expenses resulted in an
increase in NOI after indirect costs of 1.8% for 2002 compared to 8.6% for
2001. This decrease in indirect expenses for 2002 is the result of economies of
scale achieved by spreading certain fixed costs over a greater number of
stores, as well as holding total indirect expenses flat during 2002. The
decrease from 2000 to 2001 is the result of economies of scale realized by
operating a larger number of stores in 2001, as well as increased marketing,
sales and technology expenses incurred during 2000 that leveled off during
2001. Our definition of indirect operating expense includes certain shared
property costs such as bank fees, district and corporate management,
purchasing, national contracts personnel and marketing, as well as certain
overhead costs allocated to property operations such as business information
technology, legal services, human resources and accounting.

We believe that, given the current economic environment, revenue growth
will be in the 1% to 3% range with expense growth at approximately 5%,
resulting in NOI growth in the 0% to 2% range. These expectations regarding
growth constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act and are based on several assumptions. If any
of these assumptions are not satisfied or prove to be incorrect, actual results
could differ materially from those indicated in the forward-looking statements.
The risks and uncertainties that may cause these assumptions and this
forward-looking statement to prove to be incorrect include the risks that
implementation of the business plan, including marketing and sales initiatives,
will not be successful and that our earnings, expenses or revenues may be
affected by other factors, such as the risk that changes in economic conditions
in the markets in which we operate, competition from new self storage
facilities or other storage alternatives may cause rents to decline, and may
cause occupancy rates to drop, or may cause delays in rent- up of newly
developed properties. The risk that new developments could be delayed or
reduced, the risk that we may experience increases in the cost of labor, taxes,
marketing and other operating and construction expenses and the risk that tax
law changes may change the taxability of future income and increases in
interest rates may increase the cost of refinancing long term debt, and our
alternatives for funding our business plan may be impaired by the economic
uncertainty due to the impact of war or terrorism, and our interest in Shurgard
Europe may be adversely impacted if that entity is unable to complete formation
and funding of its contemplated development joint ventures. We may also be
affected by pending legislation or changes in regulations or interpretations
regarding certain accounting standards applied to our operations and certain of
our existing financial and joint venture structures.

New Stores

Our definition of New Stores, as shown in the table below, includes
existing domestic facilities that had not been acquired or leased as of January
1 of the previous year as well as domestic developed properties that have not
been operating a full two years as of January 1 of the current year. The
following table summarizes New Store operating performance as defined at
December 31, 2002 and 2001.

22



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##### Table of Contents



New Store Results 2002 and 2001 (1)

|                                                   |  |                         |        |                         |  |                         |       |      |  |      |        |      |  |   |        |  |  |   |        |  |  |   |        | 
|-------------------------------------------------- |  | ----------------------- | ------ | ----------------------- |  | ----------------------- | ----- | ---- |  | ---- | ------ | ---- |  | - | ------ |  |  | - | ------ |  |  | - | ------ | 
|                                                   |  | Acquisitions            |        | Developments            |  | Total New Stores       
|                                                   |  | Year Ended December 31, |        | Year Ended December 31, |  | Year Ended December 31,
|                                                   |  |                         |        |                         |  |                        
|(dollars in thousands)                             |  | 2002                    |        | 2001                    |  | 2002                    |       | 2001 |  | 2002 |        | 2001
|                                                   |  |                         |        |                         |  |                         |       |      |  |      |        |     
|Real estate operations revenue                     |  | $                       | 15,944 |                         |  | $                       | 1,847 |      |  | $    | 20,035 |      |  | $ | 11,416 |  |  | $ | 35,979 |  |  | $ | 13,263 | 
|Direct operating and
real estate tax expense (2)   |  |                         | 6,143  |                         |  |                         | 601   |      |  |      | 11,282 |      |  |   | 6,845  |  |  |   | 17,425 |  |  |   | 7,446  | 
|                                                   |  |                         |        |                         |  |                         |       |      |  |      |        |      |  |   |        |  |  |   |        |  |  |   |        | 
|NOI                                                |  |                         | 9,801  |                         |  |                         | 1,246 |      |  |      | 8,753  |      |  |   | 4,571  |  |  |   | 18,554 |  |  |   | 5,817  | 
|Indirect operating and leasehold
expense (3)       |  |                         | 2,657  |                         |  |                         | 736   |      |  |      | 2,986  |      |  |   | 1,967  |  |  |   | 5,643  |  |  |   | 2,703  | 
|                                                   |  |                         |        |                         |  |                         |       |      |  |      |        |      |  |   |        |  |  |   |        |  |  |   |        | 
|NOI after indirect operating
and leasehold expense |  | $                       | 7,144  |                         |  | $                       | 510   |      |  | $    | 5,767  |      |  | $ | 2,604  |  |  | $ | 12,911 |  |  | $ | 3,114  | 
|                                                   |  |                         |        |                         |  |                         |       |      |  |      |        |      |  |   |        |  |  |   |        |  |  |   |        | 
|No. of properties                                  |  |                         | 56     |                         |  |                         | 8     |      |  |      | 52     |      |  |   | 35     |  |  |   | 108    |  |  |   | 43     | 
|No. of property months (4)                         |  |                         | 405    |                         |  |                         | 35    |      |  |      | 515    |      |  |   | 340    |  |  |   | 920    |  |  |   | 375    | 



|(1) |  | Table includes the total operating results of each store regardless of
our percentage ownership interest in that store.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes all direct property and real estate tax expense. Does not
include any allocation of indirect expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(3) |  | Indirect operating expense includes certain shared property costs such as
bank fees, district and corporate management, purchasing, national
contracts personnel and marketing, as well as certain overhead costs
allocated to property operations such as business information technology,
legal services, human resources and accounting. Does not include internal
real estate acquisition cost or abandoned development expense. Indirect
operating expense is allocated to stores based on number of months in
operation during the period. Indirect operating and leasehold expense
includes leasehold expense for each of the categories as follows:

|                                |  |              |       |              |  |                  |     |      |  |      |       |      |  |   |       |  |  |   |       |  |  |   |       | 
|------------------------------- |  | ------------ | ----- | ------------ |  | ---------------- | --- | ---- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ----- |  |  | - | ----- | 
|                                |  | Acquisitions |       | Developments |  | Total New Stores
|(dollars in thousands)          |  |              |       |              |  |                 
|For the year ended December 31, |  | 2002         |       | 2001         |  | 2002             |     | 2001 |  | 2002 |       | 2001
|                                |  |              |       |              |  |                  |     |      |  |      |       |     
|Indirect operating expense      |  | $            | 1,420 |              |  | $                | 114 |      |  | $    | 1,802 |      |  | $ | 1,127 |  |  | $ | 3,222 |  |  | $ | 1,241 | 
|Leasehold expense               |  |              | 1,237 |              |  |                  | 622 |      |  |      | 1,184 |      |  |   | 840   |  |  |   | 2,421 |  |  |   | 1,462 | 
|                                |  |              |       |              |  |                  |     |      |  |      |       |      |  |   |       |  |  |   |       |  |  |   |       | 
|                                |  | $            | 2,657 |              |  | $                | 736 |      |  | $    | 2,986 |      |  | $ | 1,967 |  |  | $ | 5,643 |  |  | $ | 2,703 | 
|                                |  |              |       |              |  |                  |     |      |  |      |       |      |  |   |       |  |  |   |       |  |  |   |       | 



|(4) |  | Represents the sum of the number of months we operated each property during the year
|--- |  | ------------------------------------------------------------------------------------

New Store Results 2001 and 2000 (1)

|                                                   |  |                         |       |                         |  |                         |       |      |  |      |        |      |  |   |        |  |  |   |        |  |  |   |        | 
|-------------------------------------------------- |  | ----------------------- | ----- | ----------------------- |  | ----------------------- | ----- | ---- |  | ---- | ------ | ---- |  | - | ------ |  |  | - | ------ |  |  | - | ------ | 
|                                                   |  | Acquisitions            |       | Developments            |  | Total New Stores       
|                                                   |  | Year Ended December 31, |       | Year Ended December 31, |  | Year Ended December 31,
|                                                   |  |                         |       |                         |  |                        
|(dollars in thousands)                             |  | 2001                    |       | 2000                    |  | 2001                    |       | 2000 |  | 2001 |        | 2000
|                                                   |  |                         |       |                         |  |                         |       |      |  |      |        |     
|Real estate operations revenue                     |  | $                       | 5,949 |                         |  | $                       | 2,197 |      |  | $    | 25,299 |      |  | $ | 13,226 |  |  | $ | 31,248 |  |  | $ | 15,423 | 
|Direct operating and
real estate tax expense (2)   |  |                         | 2,111 |                         |  |                         | 805   |      |  |      | 11,654 |      |  |   | 7,103  |  |  |   | 13,765 |  |  |   | 7,908  | 
|                                                   |  |                         |       |                         |  |                         |       |      |  |      |        |      |  |   |        |  |  |   |        |  |  |   |        | 
|NOI                                                |  |                         | 3,838 |                         |  |                         | 1,392 |      |  |      | 13,645 |      |  |   | 6,123  |  |  |   | 17,483 |  |  |   | 7,515  | 
|Indirect operating and leasehold
expense (3)       |  |                         | 1,059 |                         |  |                         | 175   |      |  |      | 2,802  |      |  |   | 1,769  |  |  |   | 3,861  |  |  |   | 1,944  | 
|                                                   |  |                         |       |                         |  |                         |       |      |  |      |        |      |  |   |        |  |  |   |        |  |  |   |        | 
|NOI after indirect operating
and leasehold expense |  | $                       | 2,779 |                         |  | $                       | 1,217 |      |  | $    | 10,843 |      |  | $ | 4,354  |  |  | $ | 13,622 |  |  | $ | 5,571  | 
|                                                   |  |                         |       |                         |  |                         |       |      |  |      |        |      |  |   |        |  |  |   |        |  |  |   |        | 
|No. of properties                                  |  |                         | 16    |                         |  |                         | 8     |      |  |      | 58     |      |  |   | 40     |  |  |   | 74     |  |  |   | 48     | 
|No. of property months (4)                         |  |                         | 133   |                         |  |                         | 52    |      |  |      | 582    |      |  |   | 366    |  |  |   | 715    |  |  |   | 418    | 



|(1) |  | Table includes the total operating results of each store regardless of
our percentage ownership interest in that store.                                                                                                                                                                                                                                                                                                                                                                                  
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes all direct property and real estate tax expense. Does not
include any allocation of indirect expense.                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(3) |  | Indirect operating expense includes certain shared property costs
such as bank fees, district and corporate management, purchasing,
national contracts personnel and marketing, as well as certain overhead
costs allocated to property operations such as business information
technology, legal services, human resources and accounting. Does not
include internal real estate acquisition cost or abandoned development
expense. Indirect operating expense is allocated to stores based on
number of

23



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##### Table of Contents





| |  | months in operation during the period. Indirect operating and
leasehold expense includes leasehold expense for each of the categories
as follows:
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------

|                                |  |              |       |              |  |                  |     |      |  |      |       |      |  |   |       |  |  |   |       |  |  |   |       | 
|------------------------------- |  | ------------ | ----- | ------------ |  | ---------------- | --- | ---- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ----- |  |  | - | ----- | 
|                                |  | Acquisitions |       | Developments |  | Total New Stores
|(in thousands)                  |  |              |       |              |  |                 
|For the year ended December 31, |  | 2001         |       | 2000         |  | 2001             |     | 2000 |  | 2001 |       | 2000
|                                |  |              |       |              |  |                  |     |      |  |      |       |     
|Indirect operating expense      |  | $            | 622   |              |  | $                |    |      |  | $    | 889   |      |  | $ | 544   |  |  | $ | 1,511 |  |  | $ | 544   | 
|Leasehold expense               |  |              | 437   |              |  |                  | 175 |      |  |      | 1,913 |      |  |   | 1,225 |  |  |   | 2,350 |  |  |   | 1,400 | 
|                                |  |              |       |              |  |                  |     |      |  |      |       |      |  |   |       |  |  |   |       |  |  |   |       | 
|                                |  | $            | 1,059 |              |  | $                | 175 |      |  | $    | 2,802 |      |  | $ | 1,769 |  |  | $ | 3,861 |  |  | $ | 1,944 | 
|                                |  |              |       |              |  |                  |     |      |  |      |       |      |  |   |       |  |  |   |       |  |  |   |       | 



|(4) |  | Represents the sum of the number of months we operated each property
during the year.
|--- |  | -------------------------------------------------------------------------------------

Increases from year to year in NOI for the new store portfolio reflect the
greater number of properties and, correspondingly, property months for the
periods presented. Although this increase gives some indication of how much of
our overall NOI growth results from new stores, we do not regard it as a good
method of evaluating the performance of assets within this segment. Rather, we
use other methods, including primarily comparisons of actual results to
targeted NOI for the appropriate period from opening or at maturity. The
performance of our domestic acquisitions and developments are discussed in the
sections that follow.

Domestic Acquisitions

We continue to seek acquisition opportunities for high quality storage
centers that meet our investment standards. We typically target our
acquisitions to generate a yield of 9% to 11% once they have reached
stabilization. We have limited our efforts to pursue only those storage
centers that enhance our existing network of stores or allow us to establish
significant market presence in new markets (i.e. establish greater market
presence or expand an established market to create greater economies of scale).
The operating results of our acquisitions are discussed below.

The following table summarizes our acquisition activity from 2000 to 2002.

|                        |  |      |           |      |  |      |         |   |  |  |         |  
|----------------------- |  | ---- | --------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|Acquisitions            |  | 2002 |           | 2001 |  | 2000
|                        |  |      |           |      |  |     
|No. of properties       |  |      | 48        |      |  |      | 8       |   |  |  | 7       |  
|Square feet available   |  |      | 3,554,000 |      |  |      | 537,000 |   |  |  | 368,000 |  
|December 2002 Occupancy |  |      | 70        | %    |  |      | 79      | % |  |  | 96      | %

During 2002, we purchased four individual storage centers totaling 197,500
net rentable square feet for $9.0 million. These properties are in the
following locations: two in Indiana, one in Maryland and one in Florida. The
average occupancy of these stores is 80%. The December 2002 yield on these
four storage centers is 12% (calculated as December 2002 NOI annualized divided
by the purchase price).

Additionally, we began leasing an additional four storage centers through
the tax retention operating lease facility totaling 283,500 net rentable square
feet (see OFF BALANCE SHEET TRANSACTIONS). These properties are in the
following locations: one in Indiana, one in California, one in Illinois and one
in Florida. The average occupancy of these stores is 35%, which is below our
projected stabilized occupancy as all of these stores were newly built and are
still in rent-up. Although renting up slower than expected, we believe that
general economic conditions are contributing to this and we still expect them
to reach projected returns.

On June 26, 2002, we purchased for $62 million a 74% interest in
Morningstar Storage Centers, LLC (Morningstar), which owns and operates 40
storage centers in North Carolina and South Carolina that consist of 3,073,000
net rentable square feet. The 40 existing storage centers include seven sites
with pre-identified expansion opportunities and nine sites with continued
development potential. We have also entered into an agreement with certain
members of Morningstar to form one or more joint ventures for the purpose of
developing and operating high quality self storage properties in North and
South Carolina. The properties owned by the entity and the properties to be
developed in the joint ventures will be managed by the members of Morningstar
through an affiliated entity. Of the 40 stores, 16 stores are still in
rent-up.
Occupancy for these 40 stores is 72%.(See Note D to our Consolidated
Financial Statements). We have a preferential return on this portfolio that is
currently yielding us 8.4% (calculated as our preferred return divided by the
purchase price).

During 2001, we purchased four storage centers totaling 234,000 net
rentable square feet for $19.3 million. Two of these properties are located in
California and two are in Michigan. The December 2002 yield on the four
properties we purchased is 10% (calculated as December 2002 NOI divided by the
purchase price).

24



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##### Table of Contents



Additionally, in 2001 we began leasing an additional four storage centers
totaling 303,000 net rentable square feet located in Florida, California,
Illinois and Michigan. Three of the four properties leased were leased through
the tax retention operating lease and one of these properties was acquired
through a long-term lease of the land and building. The three properties
leased through the tax retention operating lease averaged 60% occupied at
December 31, 2002. One of these stores is facing stronger than expected
competition and, as a result, is renting up significantly slower than expected.

During 2000, we purchased 7 stores for $24.9 million one of which is
located in California and six of which are located in Texas. We sold one of
these stores in 2002. As of December 31, 2002, occupancy in the remaining six
stores averaged 96% and rates averaged $11.07. These properties have a
December 2002 yield of 12% (calculated as December 2002 NOI annualized divided
by the purchase price), which is greater than projected at the time of
purchase. The operating results of the 2000 acquisitions are included in Same
Store Results for 2002 and in New Store Results for 2001.

We can give no assurance that the projections noted above regarding the
acquisitions will occur. Actual occupancy levels and rates could be lower if we
experience competition from other self storage properties and other storage
alternatives in close proximity to our storage centers. Actual yields may also
be lower if major expenses such as property taxes, labor and marketing, among
others, increase more than projected. See Risk Factorsin (Item 1) Business
of this Annual Report on Form 10-K/A.

Domestic Development

Our long-term growth plan includes development of new storage centers in
markets in which we currently operate. This is primarily due to our focus on
maintaining high quality standards and consistent building design to develop
brand awareness. Implementation of this development strategy through early 2001
focused on internally financed projects developed primarily through development
financing joint ventures. During 2001, we changed to a new method of
implementing this growth strategy through build-to-suit, tax retention
operating leases under which we have an option to purchase the related
properties (see Tax Retention Operating Leasesunder OFF BALANCE SHEET
TRANSACTIONS).

The following table summarizes our domestic development activity from 2000 to
2002.

|                                                               |  |      |               |      |  |      |              |  |  |   |              | 
|-------------------------------------------------------------- |  | ---- | ------------- | ---- |  | ---- | ------------ |  |  | - | ------------ | 
|Developments                                                   |  | 2002 |               | 2001 |  | 2000
|                                                               |  |      |               |      |  |     
|No. of properties                                              |  |      | 13            |      |  |      | 13           |  |  |   | 21           | 
|Property cost                                                  |  |      | $73.6 million |      |  | $    | 57.9 million |  |  | $ | 98.3 million | 
|Square feet available                                          |  |      | 810,000       |      |  |      | 802,000      |  |  |   | 1.3 million  | 
|December 2002 Occupancy                                        |  |      | 32%           |      |  |      | 60%          |  |  |   | 70%          | 
|December 2002 NOI as a percentage of projected NOI at maturity |  |      |               |      |  |      | 27%          |  |  |   | 52%          | 

We typically target yields for developments at 11% to 12%. Yield is
calculated as projected annualized NOI divided by the total invested cost. We
can give no assurance that the projections noted above regarding the
development projects will occur. Actual occupancy levels and rates could be
lower if we experience competition from other self storage properties and other
storage alternatives in close proximity to our developments. Actual yields may
also be lower if major expenses such as property taxes, labor and marketing,
among others, increase more than projected. See Risk Factorsin (Item 1)
Businessof this Annual Report on Form 10-K/A. As a result of the addition of
new joint venture development partners, and the business trends and economic
conditions that we are experiencing in some of our markets, during 2002 we
reduced our internal development staff by fourteen.

We opened thirteen domestic storage centers during 2002, and, when all
phases are complete, these projects will total approximately 810,000 net
rentable square feet with an estimated total cost of $73.6 million. All but
one of these stores was developed through the tax retention operating leases
(see OFF BALANCE SHEET TRANSACTIONS).

Of the thirteen stores opened in 2001, four of these were developed
through the tax retention operating leases (See Tax Retention Operating Leases
under OFF BALANCE SHEET TRANSACTIONS), one was developed through our Florida
joint venture, one was developed through our Oklahoma joint venture and the
remaining seven were developed by Shurgard directly. The 2001 developments
together generated $1.9 million in NOI for the 12 months of 2002. For the month
of December 2002, these developments had NOI of $154,000, which represents 27%
of projected monthly NOI at maturity, and averaged 60% occupancy after an
average of 15 months of operations.

25



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##### Table of Contents



Three of the storage centers opened in 2000 were developed through our
Tennessee and Florida joint ventures. Additionally, 18 were developed by
Shurgard and contributed to CCP/Shurgard Venture, LLC (CCP/Shurgard). The 2000
developments together generated $6.3 million in NOI for the 12 months of 2002.
Of these 21 stores, nine opened in the fourth quarter of 2000. For the month
of December 2002, these developments had NOI of $522,000, which represents 52%
of projected monthly NOI at maturity, and averaged 70% occupancy after an
average of 28 months of operations. These stores are facing strong competition
in their markets and are leasing up slower than expected, resulting in revenues
for 2002 that were approximately $1.2 million below budget. Additionally, many
of these stores have experienced higher than anticipated expenses primarily in
the category of real estate taxes. We are aggressively contesting these
through appeals. Although we expect to be able to reach our revenue goals for
these properties in the long run, our stabilized yield will be below the
targeted yield if we are unsuccessful in our real estate tax appeals.

OWNERSHIP AND LEASING ARRANGEMENTS

We have various ownership and leasing arrangements with respect to
properties included in our Same Store and New Store portfolios. The table
below includes information as of and for the year ended December 31, 2002 that
identifies the proportion of Same Store and New Store results attributable to
each of these various arrangements. The following tables include 100% of the
cost, operating results and other information presented regardless of our
percentage ownership interest in that property. Each of the categories
presented is discussed in greater detail in sections following the table.

Same Store

|                                        |  |            |     |        |  |            |        |         |  |     |           |         |  |   |         |       |  |   |         |  |  |   |       | 
|--------------------------------------- |  | ---------- | --- | ------ |  | ---------- | ------ | ------- |  | --- | --------- | ------- |  | - | ------- | ----- |  | - | ------- |  |  | - | ----- | 
|                                        |  |            |     |        |  | Net        |        |         |  |     |           |         |  |   |         |       |  |   |         |  |  |  
|                                        |  |            |     |        |  | Rentable   |        |         |  |     |           |         |  |   |         |       |  |   |         |  |  |  
|(in thousands except for                |  | No. of     |     | Square |  | Gross Book |        |         |  |     |           |         |  |   |         | Lease
|number of properties)                   |  | Properties |     | Feet   |  | Value      |        | Revenue |  | NOI |           | Expense
|                                        |  |            |     |        |  |            |        |         |  |     |           |        
|Wholly owned or leased (1)              |  |            | 290 |        |  |            | 18,887 |         |  | $   | 1,036,653 |         |  | $ | 204,987 |       |  | $ | 145,259 |  |  | $ | 1,170 | 
|Development financing
joint venture (2) |  |            | 3   |        |  |            | 204    |         |  |     | 16,497    |         |  |   | 2,177   |       |  |   | 1,459   |  |  |   | 51    | 
|Consolidated joint
ventures (3)         |  |            | 16  |        |  |            | 957    |         |  |     | 61,264    |         |  |   | 12,973  |       |  |   | 9,703   |  |  |   |      | 
|Unconsolidated joint
ventures (4)       |  |            | 21  |        |  |            | 1,298  |         |  |     | 73,399    |         |  |   | 11,213  |       |  |   | 7,271   |  |  |   | 3     | 
|                                        |  |            |     |        |  |            |        |         |  |     |           |         |  |   |         |       |  |   |         |  |  |   |       | 
|Total Same Store                        |  |            | 330 |        |  |            | 21,346 |         |  | $   | 1,187,813 |         |  | $ | 231,350 |       |  | $ | 163,692 |  |  | $ | 1,224 | 
|                                        |  |            |     |        |  |            |        |         |  |     |           |         |  |   |         |       |  |   |         |  |  |   |       | 

New Store

|                                        |  |            |     |        |  |            |       |         |  |     |         |         |  |   |        |       |  |   |        |   |  |   |       | 
|--------------------------------------- |  | ---------- | --- | ------ |  | ---------- | ----- | ------- |  | --- | ------- | ------- |  | - | ------ | ----- |  | - | ------ | - |  | - | ----- | 
|                                        |  |            |     |        |  | Net        |       |         |  |     |         |         |  |   |        |       |  |   |        |   |  |  
|                                        |  |            |     |        |  | Rentable   |       |         |  |     |         |         |  |   |        |       |  |   |        |   |  |  
|(in thousands except for                |  | No. of     |     | Square |  | Gross Book |       |         |  |     |         |         |  |   |        | Lease
|number of properties)                   |  | Properties |     | Feet   |  | Value      |       | Revenue |  | NOI |         | Expense
|                                        |  |            |     |        |  |            |       |         |  |     |         |        
|Wholly owned or leased (1)              |  |            | 20  |        |  |            | 1,309 |         |  | $   | 87,709  |         |  | $ | 9,443  |       |  | $ | 4,946  |   |  | $ | 1,311 | 
|Development financing
joint venture (2) |  |            | 18  |        |  |            | 1,136 |         |  |     | 89,642  |         |  |   | 10,131 |       |  |   | 5,282  |   |  |   | 600   | 
|Consolidated joint
ventures (3)         |  |            | 42  |        |  |            | 3,214 |         |  |     | 111,025 |         |  |   | 10,761 |       |  |   | 7,052  |   |  |   |      | 
|Unconsolidated joint
ventures (4)       |  |            | 8   |        |  |            | 445   |         |  |     | 31,051  |         |  |   | 3,133  |       |  |   | 1,709  |   |  |   | 126   | 
|Tax retention operating
leases (5)      |  |            | 20  |        |  |            | 1,268 |         |  |     |        |         |  |   | 2,511  |       |  |   | (435   | ) |  |   | 384   | 
|                                        |  |            |     |        |  |            |       |         |  |     |         |         |  |   |        |       |  |   |        |   |  |   |       | 
|Total New Store                         |  |            | 108 |        |  |            | 7,372 |         |  | $   | 319,427 |         |  | $ | 35,979 |       |  | $ | 18,554 |   |  | $ | 2,421 | 
|                                        |  |            |     |        |  |            |       |         |  |     |         |         |  |   |        |       |  |   |        |   |  |   |       | 



|(1) |  | Includes owned and leased properties in which we have a 100% interest
other than those included under Tax Retention Operating Leases.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes properties developed by CCP/Shurgard.                                                                                       
|   
|(3) |  | Includes properties in which we own an interest less than 100% but that
are consolidated in our financial statements.                

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|(4) |  | Includes properties that are not consolidated in our financial statements
because we own less than 100% and do not exercise control.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------
|   
|(5) |  | Includes properties operated, acquired or developed through the tax
retention operating lease arrangements.                         

The tables below include our pro rata portion of cost, operating results
and other information for our consolidated and unconsolidated joint venture
properties.

|                              |  |           |       |        |  |            |       |         |  |     |        |         |  |   |        |       |  |   |       |  |  |   |     | 
|----------------------------- |  | --------- | ----- | ------ |  | ---------- | ----- | ------- |  | --- | ------ | ------- |  | - | ------ | ----- |  | - | ----- |  |  | - | --- | 
|                              |  |           |       |        |  | Net        |       |         |  |     |        |         |  |   |        |       |  |   |       |  |  |  
|                              |  |           |       |        |  | Rentable   |       |         |  |     |        |         |  |   |        |       |  |   |       |  |  |  
|(in thousands except          |  | Range of  |       | Square |  | Gross Book |       |         |  |     |        |         |  |   |        | Lease
|percentages)                  |  | Ownership |       | Feet   |  | Value      |       | Revenue |  | NOI |        | Expense
|                              |  |           |       |        |  |            |       |         |  |     |        |        
|Same Store                    |  |           |       |        |  |            |       |         |  |     |        |         |  |   |        |       |  |   |       |  |  |   |     | 
|Consolidated joint ventures   |  |           | 79-99 | %      |  |            | 884   |         |  | $   | 55,359 |         |  | $ | 11,854 |       |  | $ | 8,844 |  |  | $ |    | 
|Unconsolidated joint
ventures |  |           | 50-90 | %      |  |            | 1,073 |         |  | $   | 61,135 |         |  | $ | 9,190  |       |  | $ | 5,935 |  |  | $ | 3   | 
|New Store                     |  |           |       |        |  |            |       |         |  |     |        |         |  |   |        |       |  |   |       |  |  |   |     | 
|Consolidated joint ventures   |  |           | 38-99 | %      |  |            | 2,235 |         |  | $   | 78,328 |         |  | $ | 7,849  |       |  | $ | 5,216 |  |  | $ |    | 
|Unconsolidated joint
ventures |  |           | 50-90 | %      |  |            | 350   |         |  | $   | 24,667 |         |  | $ | 2,506  |       |  | $ | 1,388 |  |  | $ | 101 | 

Wholly Owned or Leased

Substantially all of our storage centers are owned directly or through
wholly owned subsidiaries. Additionally, as of December 31, 2002, we operate
15 properties that are subject to land or building leases requiring
non-contingent rent payments.

Development Financing Joint Ventures

In order to expand our development capacity, broaden our access to capital
and minimize the effect of the rent-up deficit on funds from operations (FFO,
see FUNDS FROM OPERATIONS), we have pursued alternative financing options. In
connection with this initiative, we formed four joint ventures, SFPI in May
1998 with Fremont Storage Partners I, SFPII in March 1999 with Fremont Storage
Partners II, Shurgard/K&S I, LLC in October 1999 with K&S Storage, LLC and
CCP/Shurgard, as referenced above, in May 2000 with an affiliate of JP Morgan
Partners. Under these joint venture agreements, we constructed storage centers
financed through the use of cash flows provided by operations and our line of
credit and, on completion, contributed those storage centers to the joint
ventures. At the time of contribution, we were reimbursed to the extent our
historical cost plus negative cash flow prior to the transfer exceeded our pro
rata portion of required equity (calculated as total required funding less
amounts provided from financial institutions multiplied by our ownership
percentage). We either retain an option to purchase the storage centers from
the joint venture or the joint venture has a right to put those storage centers
to us at a future date. The purchase price is calculated as the greater of (a)
that amount necessary to provide a specified return on the partners
contributed capital (12% in the case of CCP/Shurgard) or (b) annualized NOI
divided by 9.25%. As a result of this option or put, we have continuing
involvement with these joint ventures and do not recognize the contribution of
the storage centers as a transfer in ownership for
financial reporting purposes. We account for these joint ventures as
financing arrangements and, as such, recognize all activities related to those
properties in our financial statements. Additionally we recognize a
participation rights liability and a related discount on the underlying
liability for the estimated fair value of our partners share of the estimated
option purchase price. The discount is amortized over the term of the related
agreement. During 2001, we exercised our option to acquire our joint venture
partners interest in three of the four joint ventures for a total of $69.4
million. These were accounted for as a reduction in participation rights
liability.

As of December 31, 2002, we include the operations of 21 storage centers
owned through CCP/Shurgard, a joint venture in which we own a 20% legal
interest. Due to the details of the property contribution and purchase option
related to this joint venture described above, we account for this joint
venture as a financing arrangement and include all of the operating results of
the properties in our financial statements. These properties are subject to
$66.3 million in mortgage debt. During 2002, we re-evaluated our estimate of
the option price, the projected timing of our joint venture partners exercise
of their put option and the related expected cash flows. These changes were
accounted for as a change in

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estimate, reduced gross participation rights, and
subsequent amortization of participation rights. The effect of this change in
estimate decreased gross participation rights by $6.4 million and increased
income before extraordinary items and net income by $3.4 million in 2002 by
reducing amortization from the comparable 2001 amount.

The following is a summary of the participation rights balances for the
years ended December 31, 2002 and 2001:

|                                      |  |                   |        |                   |  |   |         |  
|------------------------------------- |  | ----------------- | ------ | ----------------- |  | - | ------- | -
|(in thousands)                        |  | December 31, 2002 |        | December 31, 2001
|                                      |  |                   |        |                  
|Gross participation rights            |  | $                 | 49,842 |                   |  | $ | 65,431  |  
|Participation rights discount         |  |                   | (2,370 | )                 |  |   | (17,777 | )
|                                      |  |                   |        |                   |  |   |         |  
|Participation rights, net of discount |  | $                 | 47,472 |                   |  | $ | 47,654  |  
|                                      |  |                   |        |                   |  |   |         |  

Consolidated Joint Ventures

We operate four storage centers owned through a joint venture with a
California developer. Under our agreement with this developer, it purchases
sites in southern California and constructs storage centers on them according
to our specifications. On completion of the rent-up period, the storage centers
are purchased by a joint venture. Prior to such purchase, we have no ownership
in the properties and accordingly, they are not included in any discussions in
our operating results. The developers interest in the joint venture is based
on a predetermined formula and the fair value of the property at contribution.
During 1999, the joint venture purchased one of the completed storage centers
for $3.1 million; during 2000 the joint venture purchased an additional
completed storage center for $11.0 million; and during 2001, the joint venture
purchased two of the completed storage centers for $13.4 million. At December
31, 2002, we had guaranteed $20.4 million in outstanding debt for three
properties related to this agreement.

Additionally, we have two partnerships with institutional investors that
own 12 storage centers and two joint ventures that own two storage centers.
Our ownership in these joint ventures ranges from 79% to 99%.

Included in our consolidated financial statements is our purchase of a 74%
interest in Morningstar, which owns 40 storage centers in North and South
Carolina. This acquisition was made on June 26, 2002, and the results of
operations of these storage centers are included in our consolidated financial
statements commencing on that date. We have entered into an agreement with
Morningstar members to form one or more joint ventures for the purpose of
developing and operating high quality self storage properties in North and
South Carolina. The properties owned by the entity and the properties to be
developed in the joint ventures will be managed by the members of Morningstar
through an affiliated entity using Shurgard management systems and standards.

At the time of the purchase of Morningstar, we entered into a management
services agreement with Morningstar Property Management, LLC. They will manage
the properties in North Carolina and South Carolina for a property management
fee equal to the greater of $1,000 per property or 4.25% of the gross revenues
of each property.

Unconsolidated Joint Ventures

The 29 properties in unconsolidated joint ventures have been developed
primarily through our Florida and Tennessee joint ventures. Our ownership
interests range from 50% to 90%, and we do not exercise effective control
because all
major decisions require the agreement of both parties. These joint
ventures have assets with a gross book value of $104.5 million and debt of
$66.1 million secured by the storage centers. Our pro rata ownership in the
assets is $85.8 million and our pro rata interest in the debt of these joint
ventures is $53.8 million, $15.1 million of which debt we have guaranteed.

Tax Retention Operating Leases

The following table summarizes the properties and obligations under these
Tax Retention Operating Leases as of December 31, 2002.

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|                                        |  |          |  |                   |         |                       |        |              |  |           |          |  |        |         | 
|--------------------------------------- |  | -------- |  | ----------------- | ------- | --------------------- | ------ | ------------ |  | --------- | -------- |  | ------ | ------- | 
|                                        |  | Number   |  | Estimated         |         | Total Cost to Date as |        |              |  |           |         
|                                        |  | of       |  | Completed Cost of |         | of December 31,       |        |              |  |           | Residual
|                                        |  | Projects |  | Projects (1)      |         | 2002 (2)              |        | Option Price |  | Guarantee
|                                        |  |          |  |                   |         |                       |        |              |  |          
|TROL Developments:                      |  |          |  |                   |         |                       |        |              |  |           |          |  |        |        
|Operating Properties (3)                |  | 21       |  | $129.9            | million |                       | $117.7 | million      |  | $117.7    | million  |  | $102.4 | million
|Construction in progress (4)            |  | 8        |  | 61.9              | million |                       | 27.3   | million      |  | 24.9      | million  |  | 21.6   | million
|Land purchased pending construction (5) |  | 7        |  | 47.0              | million |                       | 13.1   | million      |  | 11.9      | million  |  | 10.3   | million
|                                        |  |          |  |                   |         |                       |        |              |  |           |          |  |        |        
|Total                                   |  | 36       |  | $238.8            | million |                       | $158.1 | million      |  | $154.5    | million  |  | $134.3 | million
|                                        |  |          |  |                   |         |                       |        |              |  |           |          |  |        |        



|(1) |  | The actual completed cost of these projects could vary due to delays
during construction caused by weather, unforeseen site conditions, labor
shortages, personnel turnover, scheduling problems with contractors,
subcontractors or suppliers, or resource constraints.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes amounts for which we have not yet been reimbursed as
construction agent.                                                                                                                                                                                       
|   
|(3) |  | We have subleased the operations of one property to a third party in
which we have no ownership. Therefore, the operating results of this
property are not included in our discussion of operating properties.                                                          
|   
|(4) |  | We have subcontracted out the construction agent responsibilities for
2 of these properties to an affiliate.                                                                                                                                                            
|   
|(5) |  | We have subcontracted out the construction agent responsibilities for
1 of these properties to an affiliate.                                                                                                                                                            

As of December 31, 2002 we leased 36 properties under a leasing
arrangement (see Tax Retention Operating Leasesunder OFF BALANCE SHEET
TRANSACTIONS) that terminates in February 2005. Each lease includes a purchase
option and a residual lease guarantee. As of December 31, 2002, we are
operating 20 of these storage centers and have subleased the operations of one
additional storage center to a third party. We are engaged as construction
agent on 12 properties that are under construction with an additional three
properties under construction for which we have subcontracted the construction
management to an affiliate.

As of December 31, 2002, the 21 operating properties under the tax
retention operating leases had total net rentable square feet of 1.3 million.
Excluding the one property subleased to a third party, these properties
generated $2.5 million in revenue in 2002 and NOI of ($435,000), which is
approximately 24% and 36% ahead of pro forma for these stores for 2002,
respectively. These properties had an average of 28% occupancy, with a rate of
$9.37 per square foot after an average of seven months of operations.

In December 2002, we exercised our purchase option on three of the leased
properties. During December 2002, these three properties generated $35,000 in
NOI which represents 28% of projected monthly NOI at maturity. The yield on
these three properties is projected to average 6.3% during 2003, as two of
these properties are still in rent-up.

During 2001 we entered into three interest rate swaps to mitigate the risk
of interest rate fluctuations related to our various options at the end of the
Tax Retention Operating Lease transaction. Although these derivative
instruments meet our economic objectives, they do not qualify for hedge
accounting under SFAS No. 133. These financial instruments are recorded on the
Balance Sheet at estimated fair value and adjusted each period through
earnings. As of December 31, 2002, our liability under the swaps is $12.6
million. We recorded $11.0 million and $1.6 million in unrealized loss for
these financial instruments for the years ended December 31, 2002 and 2001,
respectively. (See Note X to our Consolidated Financial Statements).

European Operations

European Business Summary

European operations are conducted through Shurgard Self Storage, SCA
(Shurgard Europe), a joint venture in which we have a combined 7.57% direct and
indirect equity interest. At December 31, 2002, Shurgard Europe was operating
in Belgium, Sweden, France, the Netherlands, the United Kingdom and Denmark.

Since 1992, Shurgard Europe has tested the self storage product on local
consumers and has tailored its product to meet the needs of European consumers.
European consumers tend to live in more crowded population densities and
smaller living spaces that make self storage an attractive option.

The self storage industry is not well established in much of Europe, and
we believe this presents Shurgard Europe with the opportunity to become a
dominant player throughout Western Europe. Although we are seeing other
industry

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players entering the European markets, we believe that the supply
being added to the market still leaves significant opportunity when compared to
the overall size of the market. Shurgard Europe and its subsidiaries have
established expansion plans that focus now in five markets: the Benelux region
(which includes Belgium, Luxembourg and the Netherlands), France, Scandinavia
(including Sweden and Denmark), the UK, and more recently Germany.

In order to take advantage of the market opportunity, Shurgard Europe
continues to expand in Europe. Although the operations of existing stores are
improving, this expansion will produce losses for the next two to three years
as financing costs, start up losses from the additional stores and overhead
costs necessary to carry out current expansion plans will continue to exceed
operating income. The results of European operations are not consolidated in
our financial statements, but rather our interest is accounted for under the
equity method of accounting as we exercise significant influence over its
operations through our control of 50% of the board of managers. The data
included in the following discussion and tables reflect total European
operations, not our pro rata percentage.

Our net loss from European operations, including our interest in Recom &
Co. (see OFF BALANCE SHEET TRANSACTIONS),was $2.1 million, $2.0 million and
$1.6 million for the years ended December 31, 2002, 2001 and 2000,
respectively. These results are reported under Expenses as Loss from Other
Real Estate Investments in our Consolidated Statements of Income. Our portion
of FFO losses (See FUNDS FROM OPERATIONS), including our interest in Recom &
Co., was $1.1 million, $1.3 million and $1.0 million for the years ended
December 31, 2002, 2001 and 2000, respectively. During 2003, we expect to
increase our ownership interest to just over 50% (See OFF BALANCE SHEET
TRANSACTIONS). The following tables include certain financial and operating
information that illustrate the performance of Shurgard Europe. The data
included in the following discussion and tables reflect total European
operations, not our pro rata percentage.

Summary of European Properties:

|               |  |            |    |             |  |                 |           |  |  |                 |  | 
|-------------- |  | ---------- | -- | ----------- |  | --------------- | --------- |  |  | --------------- |  | 
|               |  |            |    |             |  | Total Net       |           |  |  |                
|               |  | Operating  |    | Rentable    |  | Estimated Total
|               |  | Properties |    | Sq. Ft. (1) |  | Cost (1)       
|               |  |            |    |             |  |                
|Country:       |  |            |    |             |  |                 |           |  |  |                 |  | 
|Belgium        |  |            | 17 |             |  |                 | 1,007,000 |  |  | $  63.6 million
|France         |  |            | 23 |             |  |                 | 1,241,000 |  |  | 108.8 million  
|Netherlands    |  |            | 22 |             |  |                 | 1,197,000 |  |  | 106.5 million  
|Sweden         |  |            | 20 |             |  |                 | 1,127,000 |  |  | 93.8  million  
|Denmark        |  |            | 4  |             |  |                 | 215,000   |  |  | 22.8  million  
|United Kingdom |  |            | 10 |             |  |                 | 539,000   |  |  | 87.8  million  
|               |  |            |    |             |  |                 |           |  |  |                 |  | 
|               |  |            | 96 |             |  |                 | 5,326,000 |  |  | $483.3million  
|               |  |            |    |             |  |                 |           |  |  |                 |  | 



|(1) |  | Total net rentable square feet and estimated total cost
when all phases are complete.
|--- |  | -------------------------------------------------------------------------------------

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Condensed Financial Information of Shurgard Europe

|                                              |                              |                                           |                       |                   |         |         |         |         |         |         | 
|--------------------------------------------- | ---------------------------- | ----------------------------------------- | --------------------- | ----------------- | ------- | ------- | ------- | ------- | ------- | ------- | 
|(in thousands)                                |                              | December 31, 2002                         |                       | December 31, 2001
|                                              |                              |                                           |                       |                   |         |         |        
|Assets                                        |                              |                                           |                       |                   |         |         |         |        
|Storage centers                               |                              |                                           |                       |                   |         |         |         |        
|                                              | Land                         |                                           | $                     | 80,124            |         |         | $       | 53,623  |        
|                                              | Buildings and equipment, net |                                           |                       | 279,195           |         |         |         | 170,279 |        
|                                              | Construction in progress     |                                           |                       | 90,772            |         |         |         | 68,050  |        
|                                              |                              |                                           |                       |                   |         |         |         |         |        
|                                              |                              |                                           | Total storage centers |                   |         | 450,091 |         |         |         | 291,952 | 
|Cash and cash equivalents                     |                              |                                           | 24,978                |                   |         |         | 15,324  |        
|Other assets                                  |                              |                                           | 68,425                |                   |         |         | 48,261  |        
|                                              |                              |                                           |                       |                   |         |         |         |         |        
|                                              |                              | Total assets                              |                       | $                 | 543,494 |         |         | $       | 355,537 |        
|                                              |                              |                                           |                       |                   |         |         |         |         |        
|Liabilities and Equity                        |                              |                                           |                       |                   |         |         |         |        
|Accounts payable and other liabilities        |                              | $                                         | 46,434                |                   |         | $       | 42,524  |        
|Notes payable to SSCI                         |                              |                                           | 49,317                |                   |         |         |        |        
|Lines of credit                               |                              |                                           | 270,936               |                   |         |         | 174,506 |        
|Subordinated notes payable to related parties |                              |                                           | 127,620               |                   |         |         | 91,870  |        
|                                              |                              |                                           |                       |                   |         |         |         |         |        
|                                              |                              |                                           | Total liabilities     |                   |         | 494,307 |         |         |         | 308,900 | 
|Shareholders equity                           |                              |                                           | 49,187                |                   |         |         | 46,637  |        
|                                              |                              |                                           |                       |                   |         |         |         |         |        
|                                              |                              | Total liabilities and shareholders equity |                       | $                 | 543,494 |         |         | $       | 355,537 |        
|                                              |                              |                                           |                       |                   |         |         |         |         |        

|                       |                                                    |                                      |                |                  |            |        |            |         |         |        | 
|---------------------- | -------------------------------------------------- | ------------------------------------ | -------------- | ---------------- | ---------- | ------ | ---------- | ------- | ------- | ------ | 
|                       |                                                    |                                      |                |                  | Year Ended |        | Year Ended
|(in thousands)         |                                                    | December 31 2002                     |                | December 31 2001
|                       |                                                    |                                      |                |                  |            |        |           
|Revenue                |                                                    |                                      |                |                  |            |        |            |        
|                       | Real estate operations                             |                                      | $              | 43,512           |            |        | $          | 26,526  |        
|                       | Other                                              |                                      |                | 257              |            |        |            | 20      |        
|                       |                                                    |                                      |                |                  |            |        |            |         |        
|                       |                                                    | Total revenue                        |                |                  | 43,769     |        |            |         | 26,546  |       
|                       |                                                    |                                      |                |                  |            |        |            |         |        
|Expenses               |                                                    |                                      |                |                  |            |        |            |        
|                       | Operating                                          |                                      |                | 39,144           |            |        |            | 29,498  |        
|                       | Depreciation and amortization                      |                                      |                | 12,959           |            |        |            | 9,045   |        
|                       |                                                    |                                      |                |                  |            |        |            |         |        
|                       |                                                    |                                      | Total expenses |                  |            | 52,103 |            |         |         | 38,543 | 
|                       |                                                    |                                      |                |                  |            |        |            |         |        
|Loss from operations   |                                                    |                                      | (8,334         | )                |            |        | (11,997    | )      
|                       |                                                    |                                      |                |                  |            |        |            |         |        
|Other Income (Expense) |                                                    |                                      |                |                  |            |        |            |        
|                       | Interest:                                          |                                      |                |                  |            |        |            |         |        
|                       |                                                    | Interest on notes to related parties |                |                  | (10,190    | )      |            |         | (7,745  | )     
|                       |                                                    | Interest on loans                    |                |                  | (13,903    | )      |            |         | (8,749  | )     
|                       |                                                    |                                      |                |                  |            |        |            |         |        
|                       | Loss before income tax benefit                     |                                      |                | (32,427          | )          |        |            | (28,491 | )      
|                       | Income tax benefit                                 |                                      |                | 8,155            |            |        |            | 8,305   |        
|                       |                                                    |                                      |                |                  |            |        |            |         |        
|                       | Loss before cumulative effect of accounting change |                                      |                | (24,272          | )          |        |            | (20,186 | )      
|                       | Cumulative effect of accounting change             |                                      |                |                 |            |        |            | (1,106  | )      
|                       |                                                    |                                      |                |                  |            |        |            |         |        
|                       |                                                    | Net Loss                             |                | $                | (24,272    | )      |            | $       | (21,292 | )     
|                       |                                                    |                                      |                |                  |            |        |            |         |        

European Same Store Operations

The definition for European Same Stores includes existing stores acquired
prior to January 1 of the previous year as well as developed properties that
have been operating for a full two years as of January 1 of the current year.
The following table summarizes Same Store operating performance as defined for
the year ended December 31, 2002 and 2001.

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|                                                   |  |                         |           |                         |  |     |           |      |  |          |       |              |  |   |         |   |  |   |         |   |  |  |       |  
|-------------------------------------------------- |  | ----------------------- | --------- | ----------------------- |  | --- | --------- | ---- |  | -------- | ----- | ------------ |  | - | ------- | - |  | - | ------- | - |  |  | ----- | -
|                                                   |  | Year Ended December 31, |           | Year Ended December 31,
|                                                   |  |                         |           |                        
|                                                   |  |                         |           |                         |  |     |           |      |  | % Change |       |              |  |   |         |   |  |   |         |   |  | 
|(dollars in thousands except average rent)         |  | 2002                    |           | 2001                    |  | (1) |           | 2001 |  | 2000     |       | % Change (1)
|                                                   |  |                         |           |                         |  |     |           |      |  |          |       |             
|Real estate operations revenue                     |  | $                       | 23,153    |                         |  | $   | 19,918    |      |  |          | 16.2  | %            |  | $ | 10,694  |   |  | $ | 9,140   |   |  |  | 17.0  | %
|Direct operating and real estate
tax expense (2)   |  |                         | 6,880     |                         |  |     | 7,063     |      |  |          | -2.6  | %            |  |   | 3,116   |   |  |   | 3,240   |   |  |  | -3.8  | %
|                                                   |  |                         |           |                         |  |     |           |      |  |          |       |              |  |   |         |   |  |   |         |   |  |  |       |  
|NOI                                                |  |                         | 16,273    |                         |  |     | 12,855    |      |  |          | 26.6  | %            |  |   | 7,578   |   |  |   | 5,900   |   |  |  | 28.4  | %
|Indirect operating and
leasehold expense (3)       |  |                         | 3,846     |                         |  |     | 4,791     |      |  |          | -19.7 | %            |  |   | 2,750   |   |  |   | 3,327   |   |  |  | -17.3 | %
|                                                   |  |                         |           |                         |  |     |           |      |  |          |       |              |  |   |         |   |  |   |         |   |  |  |       |  
|NOI after indirect operating and
leasehold expense |  | $                       | 12,427    |                         |  | $   | 8,064     |      |  |          | 54.1  | %            |  | $ | 4,828   |   |  | $ | 2,573   |   |  |  | 87.6  | %
|                                                   |  |                         |           |                         |  |     |           |      |  |          |       |              |  |   |         |   |  |   |         |   |  |  |       |  
|Avg. annual rent per sq.ft. (4)                    |  | $                       | 16.60     |                         |  | $   | 15.40     |      |  |          | 7.8   | %            |  | $ | 13.10   |   |  | $ | 12.70   |   |  |  | 3.1   | %
|Avg. sq.ft. occupancy                              |  |                         | 81        | %                       |  |     | 76        | %    |  |          |       |              |  |   | 84      | % |  |   | 75      | % |  |  |       |  
|Total net rentable sq.ft.                          |  |                         | 1,612,000 |                         |  |     | 1,612,000 |      |  |          |       |              |  |   | 934,000 |   |  |   | 934,000 |   |  |  |       |  
|No. of properties                                  |  |                         | 28        |                         |  |     | 28        |      |  |          |       |              |  |   | 16      |   |  |   | 16      |   |  |  |       |  



| | (1) |  | Amounts have been translated from local currencies using the average
exchange rate for 2002 for the 2002 to 2001 comparison and using the
average exchange rate for 2001 for the 2001 to 2000 comparison.                                                                                                                                                                                                                                                                                               
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | Includes all direct property and real estate tax expense. Does not
include any allocation of indirect operating expense.                                                                                                                                                                                                                                                                                                                                                                                
|
| | (3) |  | Indirect operating expense includes certain shared property costs
such as district and regional management, national contracts personnel
and marketing, as well as certain overhead costs allocated to property
operations such as business information technology, human resources and
accounting. Does not include internal real estate acquisition cost or
abandoned development expense. Indirect operating expense is allocated
to stores based on number of months in operation during the period.
|
| | (4) |  | Average annual rent per square foot is calculated by dividing actual
rent collected by the average number of square feet occupied during the
period.                                                                                                                                                                                                                                                                                                                                                    

Revenue increased 16.2% from 2001 to 2002 when translated at constant
exchange rates. The increase in rental revenue for these stores is a result of
a 7.8% increase in rates and a 6.6% increase in occupancy. Revenue growth in US
dollars, when translated at the applicable average period rates, increased by
23% due to a change in currency exchange rates from the fourth quarter of 2001
to the same period in 2002. Decreases in indirect operating expense are the
result of spreading certain fixed costs over more stores as our European
network expands. The December 2002 yield for these stores was 12.7%
(calculated as December 2002 NOI annualized divided by the cost).

In 2001, Shurgard Europe increased rental rates of Same Stores by an
average of 3.1% while occupancy rose nine percentage points. These rate
increases, as well as increases in occupancy, resulted in the 17% revenue
increase from 2000 to 2001. Direct property expenses decreased 3.8% due to
decreases in marketing expenses and certain real estate taxes. The decrease in
indirect operating expenses is the result of spreading certain fixed costs over
more stores as our European network expands.

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European Development

The following table summarizes European developments by country during the
past three years:

|               |                |  |            |    |                      |  |            |          |  |  |         |  |  |           |                    |  | 
|-------------- | -------------- |  | ---------- | -- | -------------------- |  | ---------- | -------- |  |  | ------- |  |  | --------- | ------------------ |  | 
|               |                |  |            |    |                      |  |            |          |  |  |         |  |  |           | Total net Rentable
|               |                |  |            |    |                      |  |            |          |  |  |         |  |  |           | Sq. Ft. when all  
|               |                |  | Number of  |    | Estimated Total Cost |  | phases are
|               |                |  | Properties |    | (1)                  |  |            | complete
|               |                |  |            |    |                      |  |            |         
|Opened in 2002 |                |  |            |    |                      |  |            |          |  |  |         |  |  |           |                    | 
|               | Belgium        |  |            | 2  |                      |  | $          | 5.9      |  |  | million |  |  | 101,000   |                   
|               | France         |  |            | 7  |                      |  |            | 36.3     |  |  | million |  |  | 376,000   |                   
|               | United Kingdom |  |            | 3  |                      |  |            | 30.0     |  |  | million |  |  | 163,000   |                   
|               | Netherlands    |  |            | 7  |                      |  |            | 34.6     |  |  | million |  |  | 368,000   |                   
|               | Sweden         |  |            | 3  |                      |  |            | 15.6     |  |  | million |  |  | 151,000   |                   
|               | Denmark        |  |            | 2  |                      |  |            | 11.9     |  |  | million |  |  | 106,000   |                   
|               |                |  |            |    |                      |  |            |          |  |  |         |  |  |           |                    | 
|               | Opened in 2002 |  |            | 24 |                      |  | $          | 134.3    |  |  | million |  |  | 1,265,000 |                   
|               |                |  |            |    |                      |  |            |          |  |  |         |  |  |           |                    | 
|Opened in 2001 |                |  |            |    |                      |  |            |          |  |  |         |  |  |           |                    | 
|               | Belgium        |  |            | 1  |                      |  | $          | 3.1      |  |  | million |  |  | 51,000    |                   
|               | France         |  |            | 5  |                      |  |            | 27.5     |  |  | million |  |  | 280,000   |                   
|               | United Kingdom |  |            | 2  |                      |  |            | 18.5     |  |  | million |  |  | 102,000   |                   
|               | Netherlands    |  |            | 9  |                      |  |            | 40.9     |  |  | million |  |  | 485,000   |                   
|               | Sweden         |  |            | 6  |                      |  |            | 26.8     |  |  | million |  |  | 315,000   |                   
|               | Denmark        |  |            | 2  |                      |  |            | 10.9     |  |  | million |  |  | 110,000   |                   
|               |                |  |            |    |                      |  |            |          |  |  |         |  |  |           |                    | 
|               | Opened in 2001 |  |            | 25 |                      |  | $          | 127.7    |  |  | million |  |  | 1,343,000 |                   
|               |                |  |            |    |                      |  |            |          |  |  |         |  |  |           |                    | 
|Opened in 2000 |                |  |            |    |                      |  |            |          |  |  |         |  |  |           |                    | 
|               | France         |  |            | 7  |                      |  | $          | 33.7     |  |  | million |  |  | 407,000   |                   
|               | United Kingdom |  |            | 2  |                      |  |            | 17.2     |  |  | million |  |  | 95,000    |                   
|               | Netherlands    |  |            | 5  |                      |  |            | 24.5     |  |  | million |  |  | 284,000   |                   
|               | Belgium        |  |            | 3  |                      |  |            | 12.0     |  |  | million |  |  | 186,000   |                   
|               | Sweden         |  |            | 2  |                      |  |            | 9.8      |  |  | million |  |  | 123,000   |                   
|               |                |  |            |    |                      |  |            |          |  |  |         |  |  |           |                    | 
|               | Opened in 2000 |  |            | 19 |                      |  | $          | 97.2     |  |  | million |  |  | 1,095,000 |                   
|               |                |  |            |    |                      |  |            |          |  |  |         |  |  |           |                    | 



|(1) |  | The actual completed cost of these projects are reported in U.S. dollars
and could vary due to delays during construction caused by weather,
unforeseen site conditions, labor shortages, personnel turnover,
scheduling problems with contractors, subcontractors or suppliers, or
resource constraints. (See Item 1 Business Risk Factors.)
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During 2002, Shurgard Europe opened 24 storage centers with an estimated
total cost of $134.3 million and net rentable square feet of 1.3 million when
all phases are complete. The average occupancy at the end of December 2002 was
13.8% after an average of 3.1 months of operations. These storage centers
generated $1.6 million of negative NOI for the year ended December 31, 2002.

The 25 storage centers that Shurgard Europe opened in 2001 have an
estimated total cost of $127.7 million and will have net rentable square feet
of 1.3 million when all phases are complete. The average occupancy at the end
of December 2002 was 47.5% after an average of 16 months of operations. These
storage centers generated $1.4 million of NOI for the year ended December 31,
2002.

The 19 storage centers that Shurgard Europe opened in 2000 have an
estimated total cost of $97.2 million and will have net rentable square feet of
1.1 million when all phases are complete. The average occupancy at the end of
December 2002 was 67.9% after an average of 27 months of operations. These
storage centers generated $7.2 million of NOI for the year ended December 31,
2002. For the month of December 2002 theses stores generated $783,000 in NOI
which represents 71.4% of their stabilized NOI.

In addition to the above completed developments, Shurgard Europe currently
has another three storage centers under construction. The following table
summarizes European development projects in progress at December 31, 2002.

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|                 |                |  |           |   |                      |  |   |     |                          |  |  |  |                |  |  |  | 
|---------------- | -------------- |  | --------- | - | -------------------- |  | - | --- | ------------------------ |  |  |  | -------------- |  |  |  | 
|                 |                |  | Number of |   | Estimated Completed  |  |   |     | Total Cost to Date as of
|                 |                |  | Projects  |   | Cost of Projects (1) |  |   |     | December 31, 2002       
|                 |                |  |           |   |                      |  |   |     |                         
|New Developments |                |  |           |   |                      |  |   |     |                          |  |  |  |                |  |  | 
|                 | France         |  |           | 1 |                      |  | $ | 5.5 | million                  |  |  |  | $5.5   million
|                 | Sweden         |  |           | 1 |                      |  | $ | 4.4 | million                  |  |  |  | $1.3   million
|                 | United Kingdom |  |           | 1 |                      |  | $ | 8.9 | million                  |  |  |  | $6.2   million



|(1) |  | The actual completed cost of projects could vary due to delays during
construction caused by weather, unforeseen site conditions, labor
shortages, personnel turnover, scheduling problems with contractors,
subcontractors or suppliers, or resource constraints. (See Item 1
Business Risk Factors)
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

RELATED PARTY TRANSACTIONS

On May 27, 2002, we entered into a subscription agreement to purchase up
to $50 million of three year 9.75% payment-in-kind cumulative preferred bonds
to be issued at the option of Shurgard Europe redeemable on
December 31, 2004. Pursuant to the subscription
agreement, Shurgard Europe may issue up to $50 million of these preferred bonds
to us during the first two years of the three-year commitment term. If
Shurgard Europe issues more than $40 million in bonds during the first 12
months, it has the option of increasing our total notional subscription to $75
million. Interest is payable on the bonds at the end of each quarter in cash
or through an issuance of additional bonds. The bonds issued to pay interest
can be issued above the commitment amount. Shurgard Europe has two one-year
options to extend the three year redemption date of the bonds. Shurgard Europe
must redeem the bonds on the redemption date, or may redeem at anytime prior to
the redemption date, on paying us 115% of the face value of the outstanding
bonds plus accrued and unpaid interest. The subscription agreement entitles us
to a commitment fee of 0.5% and a structuring fee of 1.5% of the initial
commitment of $50 million, as well as an unused fee equal to 100 basis points
of the undrawn amount payable in arrears on an annual basis. These fees are
being recognized as revenue using the effective interest method over the
extended term of the bonds. Our intent is to hold these bonds to
maturity.  As of December 31, 2002, $49.3 million of bonds
had been issued to us and we have recorded $1.4 million in interest income.
The terms of the bonds provide that the parties will treat the bonds as an
equity investment in Shurgard Europe for federal income tax purposes.

We provide property management services to affiliates including marketing,
maintenance, management information systems, access to our call center and
management of on-site personnel. Management fees from related parties were
$454,000, $393,000 and $250,000 for the years ended December 31, 2002, 2001,
and 2000, respectively.

CONSOLIDATED STATEMENT OF INCOME

Income before extraordinary items increased from 2001 to 2002 due to
increased income from operations, as well as a decrease in the amortization of
participation rights discount and interest on loans related to our development
activity. The increase from 2000 to 2001 is primarily due to the gain from
sale of property and increased performance from store portfolio offset by
increased participation rights amortization.

Real estate operations revenue rose from 2001 to 2002 as a result of
factors discussed under SEGMENT PERFORMANCE.In addition to the expenses
identified under SEGMENT PERFORMANCE, operating expenses include internal
acquisition costs and development expenses related to discontinued efforts of
$1.5 million, $765,000 and $376,000 for 2002, 2001 and 2000, respectively.
Direct and indirect operating expenses of $3.4 million and $2.6 million for our
containerized storage operations beginning June 30, 2001 are included in
operating expenses for 2002 and 2001, respectively. We incurred $4.5 million
and $2.2 million in expenses related to our role as construction agent for
Storage Centers Trust (SCT) during 2002 and 2001, respectively. All other
amounts are included in NOI after indirect operating and leasehold expenses and
are discussed in SEGMENT PERFORMANCE.

Other revenue increased from 2001 to 2002 due to the receipt during 2002
of $5.7 million in developer fees related to expense reimbursements in our role
as construction agent for the tax retention operating leases (see Tax Retention
Operating Leasesunder OFF BALANCE SHEET TRANSACTIONS) during 2002 versus $2.2
million in 2001, as well as $3.2 million of revenue from our containerized
storage operations which we began consolidating June 30, 2001, and $766,000 of
income from our tenant insurance program. Other revenue increased from 2000 to
2001 due to $2.2 million in expense reimbursements related to our role as
construction agent for SCT (see Tax Retention Operating Leasesunder OFF
BALANCE SHEET TRANSACTIONS), as well as $2.0 million of revenue from our
containerized storage operations (see Containerized Storage Operationsunder
TAXABLE REIT SUBSIDIARY OPERATIONS).

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Depreciation and amortization increased from 2001 to 2002 and from 2000 to
2001 due to an increased number of stores included in our consolidated
financial statements over the same period of time. Beginning January 1, 2002,
we ceased amortization of goodwill (see Note N to our Consolidated Financial
Statements).

General and administrative expenses in 2002 include $1.9 million of
expenses associated with the impairment of certain land held for sale.
Excluding the effect of the impairment in 2002 and the effect of expenses
associated with the closure of two containerized warehouses in 2001, general
and administrative expenses increased from 2001 to 2002 by $709,000 or 8.3%.
The increase from 2000 to 2001 includes expenses associated with the disposal
of two containerized storage warehouses. Excluding the effect of the disposal
of these warehouses, general and administrative expense increased $2.8 million
primarily due to costs related to the restatement of our financial statements
during 2001, the negotiations of certain joint venture agreements and increases
in personnel and information technology expenses related to our growth. As a
percentage of real estate operations revenue, these expenses decreased from
5.2% to 4.4% from 2001 to 2002 and increased from 2.5% to 5.2% from 2000 to
2001. Excluding the impact of the impairment and closure of these warehouses,
general and administrative expenses as a percentage of revenue was 3.7%, 3.8%
and 2.5% for 2002, 2001 and 2000, respectively.

Interest income and other in 2002 includes gain on sale of property of
$942,000 and a one-time lease termination settlement of $1.8 million. During
2001 we recognized a gain on sale of property of $2.0 million. The increase
from 2000 to 2001 is primarily due to the gain from sale of property.

Interest expense consists of two components: interest on loans and
amortization of participation rights discount. Interest expense on line of
credit and notes payable increased from 2000 to 2001 and again from 2001 to
2002 due to increases in the outstanding balances. This increase from 2001 to
2002 represents borrowings related to the purchase of a 74% interest in
Morningstar and the development of new storage centers and acquisitions.
Additionally, we capitalized interest related to the construction of domestic
storage centers of $102,000, $1.3 million and $3.8 million in 2002, 2001 and
2000, respectively. In 2002, we reduced the participation rights liability
associated with CCP/Shurgard by $6.4 million which resulted in decreased
amortization for the second half of 2002. The amortization of participation
rights discount increased from 2000 to 2001 due to the increase in the number
of stores subject to participation rights and changes in the estimated cash
flows related to those rights. (See Note H to our Consolidated Financial
Statements). Amortization of loan costs of $1.4 million, $2.1 million and $2.1
million is included in amortization expense for 2002, 2001 and 2000,
respectively. During 2001 we entered into three interest rate swaps to
mitigate the risk of interest rate fluctuations related to the companys
various options at the end of its Tax Retention Operating Lease transaction.
Since these transactions do not qualify for hedge accounting treatment under
SFAS No. 133, we recorded $11.0 million and $1.6 million in unrealized loss for
these financial instruments for the years ended December 31, 2002 and 2001,
respectively. (See Note X to our Consolidated Financial Statements).

Minority interest increased from 2001 to 2002 which relates to the growing
operations of our consolidated partially owned subsidiaries and the inclusion
of the 26% non-controlled interest in Morningstar, as discussed previously.
The increase from 2000 to 2001 is due to additional capital contributions from
our California developer resulting in an increase in its ownership position.

Income tax benefit consists of the current year income tax benefit for
Shurgard TRS, our taxable REIT subsidiary, including its subsidiaries: STG
since its consolidation beginning June 2001, SS Income Plan, our tenant
insurance program, and other taxable subsidiaries (See TAXABLE REIT SUBSIDIARY
OPERATIONS). The net operating losses carried forward for STG and the
operating losses from other taxable subsidiaries, are offset by income from the
other entities. The reduction in our tax benefit from 2001 to 2002 is due to
the recognition of $766,000 in taxable income from SS Income Plan.

During 2002, we received approximately $738,000 as an adjustment to the
purchase price of SFP II and we recorded a $1.2 million gain from the
extinguishment of participation rights, both of which are recorded as early
extinguishment of debt. Finally, with the early extinguishment of a mortgage
note payable, a loss on early extinguishment of debt of $164,000 was incurred.
During 2001 we incurred $1.0 million in costs related to the early
extinguishment of a $122.6 million note to a financial services company and
$400,000 related to the early extinguishment of the mortgage financing for SFP
II.

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##### Table of Contents



OTHER REAL ESTATE INVESTMENTS

The following table shows income (loss) from unconsolidated real estate
investments for the years ended December 31, 2002, 2001 and 2000. All income
and loss amounts reflect our pro rata ownership percentage and are reported
under Expenses as Loss from Other Real Estate Investments in our Consolidated
Statement of Net Income.

Loss from Other Real Estate Investments

|                              |  |      |        |      |  |      |        |   |  |   |        |  
|----------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|(in thousands)                |  | 2002 |        | 2001 |  | 2000
|                              |  |      |        |      |  |     
|Containerized storage         |  | $    |       |      |  | $    | (1,679 | ) |  | $ | (1,842 | )
|Unconsolidated joint ventures |  |      | 632    |      |  |      | (1,083 | ) |  |   | (1,668 | )
|Participating mortgages       |  |      | 31     |      |  |      | 1,500  |   |  |   | 1,659  |  
|European Operations           |  |      | (2,059 | )    |  |      | (2,009 | ) |  |   | (1,569 | )
|                              |  |      |        |      |  |      |        |   |  |   |        |  
|                              |  | $    | (1,396 | )    |  | $    | (3,271 | ) |  | $ | (3,420 | )
|                              |  |      |        |      |  |      |        |   |  |   |        |  

Containerized Storage

STG, a containerized storage business, is wholly owned by Shurgard TRS, a
taxable REIT subsidiary and is subject to corporate level tax. Prior to
October 2002, STG operated as Shurgard Storage To Go, Inc, a separate taxable
REIT subsidiary. In June 2001, we purchased all of the issued and outstanding
shares of STG and converted our outstanding note receivable to equity. As a
result of this transaction, we began consolidating STG in our financial
statements as of the date of the purchase of the shares. Operating results
prior to June 2001 are accounted for under the equity method. The amount in
other real estate investments for 2001 includes the first six months of
operations prior to consolidation (See Containerized Storage Operationsunder
TAXABLE REIT SUBSIDIARY OPERATIONS).

Unconsolidated Joint Ventures

We have 29 properties in joint ventures in which our ownership interests
range from 50% to 90%, and over which we do not exercise effective control
because all major decisions require the agreement of both parties. These joint
ventures generated $9.0 million in NOI for 2002 compared to $7.6 million in
2001. As of December 31, 2002, we had invested a total of $29.4 million in
these joint ventures net of income. Additionally, we have guaranteed certain
joint venture loans totaling $15.1 million. Performance related to stores
developed through these joint ventures is included in the appropriate tables
and section discussions (Same Stores,Domestic Acquisitionsor Domestic
Development) under SEGMENT PERFORMANCE.

Participating Mortgages

As of December 31, 2001, we had $2.6 million invested in a participating
mortgage loan. We received contingent interest payments from the mortgaged
property equal to 50% of both operating cash flow and distributions from the
gain on sale of real property, in accordance with the terms of the applicable
agreement. We received $639,000 and $422,000 in the years 2001 and 2000 in
contingent interest in connection with agreements related to the five
properties. In December 2001, we purchased four of the five properties at a
cost of $13.8 million, including $10.3 million outstanding under the
participating mortgage. We purchased the fifth property in February 2002.
Operating results for the five properties are included in same store results
for 2000 through 2002.

European Operations

Our net loss from European operations, including our interest in Recom &
Co. (see OFF BALANCE SHEET TRANSACTIONS),was $2.1 million, $2.0 million and
$1.6 million for the years ended December 31, 2002, 2001 and 2000,
respectively. Our European investment owns 96 stores in six countries. These
properties generated $18.5 million in NOI in 2002 compared to $9.6 million in
2001 and $3.6 million in 2000.

TAXABLE REIT SUBSIDIARY OPERATIONS

Containerized Storage Operations

Since 1996 we have invested in STG, a Washington corporation whose
business is to provide services ancillary to self storage, including but not
limited to containerized storage services. We originally owned five percent
(5%) of the Series A Common Stock in STG and 75% of non-voting, Series B Common
Stock for a combined economic interest of

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71.25%. In June 2001, we purchased
for $57,000 the remaining 95% of the Series A Common stock of STG that was
formerly owned by certain of our current and former key employees. At that
time, we converted our $16 million note receivable to equity and began
consolidating STG in our financial statements.

In March 2001, the Board of Directors decided to close the Chicago
containerized storage operations. We incurred approximately $285,000 in
expenses related to this closing. In April 2001, we opened a new warehouse in
Orange County, California to take advantage of business opportunities in the
Southern California market. Despite a new, more aggressive advertising
approach, the Orange County warehouse failed to rent up as expected. In the
fourth quarter of 2001, based on poor performance outlooks, we decided to close
both the Orange County and Atlanta warehouses. We accrued $2.4 million in
costs for closing down operations in these two locations. The $2.4 million exit
costs included estimates of the costs associated with subleasing the
warehouses, lease termination fees for warehouses and equipment, severance
costs, charges to prepaid expenses, estimated loss on sale of containers and
estimated loss from operations during closing. During 2002, we charged $2.2
million to the liability. These costs consisted primarily of lease termination
fees and costs necessary to relocate current customers incurred during 2002.
We expect to have the exit plan completed during the first half of 2003.

Our losses, net of tax, related to STG for the years ended December 31,
2002, 2001 and 2000 were $558,000, $5.8 million and $1.8 million, respectively.
The losses for 2001 include expenses accrued in the fourth quarter 2001 in
connection with the closure of the Orange County and Atlanta warehouses
discussed above, as well as $1.7 million in impairment of existing assets and
goodwill. In connection with the warehouse closures discussed above, we
performed an impairment analysis on the remaining assets and goodwill related
to STG. Impairment expense was calculated as the difference
between fair value, using the discounted cash flow method, and the book
value. The goodwill impairment, asset impairment and exit cost accrual are
recorded in General, administrative and other on the 2001 Consolidated
Statement of Income.

Other

During 2002, we began a new tenant insurance program. Under this program,
policies are issued and administered by a third party for a fee, the storage
centers receive a cost reimbursement for handling certain administrative duties
and SS Income Plan receives the profits, if any, of the policy. SS Income Plan
reinsures for losses in excess of premiums collected. During 2002 we
recognized $766,000 in revenue based on the excess of premiums over claims and
administrative costs.

In December 2002, we contributed all inventory owned by us and our
wholly-owned subsidiaries into SS Income Plan, a wholly owned subsidiary of
Shurgard TRS, our taxable REIT subsidiary. Beginning in 2003, all inventory
sales will be conducted through this entity. We do not conduct any other
material taxable operations.

RECENT ACCOUNTING PRONOUNCEMENTS

SFAS No.133, Accounting for Derivative Instruments and Hedging
Activities, as amended, establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts and for hedging activities. Under SFAS No.133, certain
contracts that were not formerly considered derivatives may now meet the
definition of a derivative. We adopted SFAS No.133 effective January 1, 2001.
We use derivatives to mitigate the risk of interest rate fluctuations. Gains
or losses resulting from changes in the fair value of derivatives are
recognized in earnings or recorded in Other Comprehensive Income and recognized
in the statement of earnings when the hedged item affects earnings, depending
on the purpose of the derivatives and whether they qualify for hedge accounting
treatment.

In June 2001, the FASB issued SFAS No.141, Business Combinations. SFAS
No.141 requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001. During 2002, we purchased a 74%
interest in Morningstar which was accounted for as a purchase in compliance
with SFAS No.141.

In June 2001, the FASB issued SFAS No.142, Goodwill and Other Intangible
Assets. SFAS No.142 changes the accounting for goodwill from an amortization
method to an impairment-only approach. Amortization of goodwill, including
goodwill recorded in past business combinations, ceased on adoption of this
statement. We implemented SFAS No.142 on January 1, 2002. In connection with
the adoption of this statement and our annual evaluation, we evaluated our
goodwill and determined that goodwill remaining on the books as of December 31,
2002 was not impaired. The remaining goodwill of $25 million has been
determined to have an indefinite life and amortization of this goodwill ceased
on adoption of this statement.

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In July 2001, the FASB issued SFAS No.143, Accounting for Asset
Retirement Obligations. This statement establishes accounting standards for
recognition and measurement of a liability for an asset retirement obligation
and the associated asset retirement cost. This statement is effective for us
beginning in 2003. Adoption of FASB No. 143 is not expected to have a
significant impact on our financial position, results of operations or cash
flows.

In August 2001, the FASB issued SFAS No.144, Accounting for the
Impairment or Disposal of Long-Lived Assets, The statement supercedes SFAS No.
121 Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of and the accounting and reporting provisions of APB
Opinion No. 30, Reporting the Results of Operations-Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions for the disposal of a segment
of business (as previously defined in that Opinion). SFAS No.144 establishes a
single accounting model, based on the framework established in SFAS No.121, for
long-lived assets to be disposed of by sale. It retains the fundamental
provisions of SFAS No.121 for (a) recognition and measurement of the impairment
of long-lived assets to be held and used and (b) measurement of the impairment
of long-lived assets to be disposed of by sale. SFAS No.144 is effective for
us in 2002. The adoption of SFAS No.144 has not had a significant impact on
our financial position or results of operations.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. The rescission of SFAS No. 4, Reporting Gains and Losses from
Extinguishment of Debt, and SFAS No. 64, Extinguishments of
Debt Made to Satisfy Sinking-Fund Requirements, which amended SFAS No. 4,
will affect income statement classification of gains and losses from
extinguishment of debt. SFAS No. 4 required that gains and losses from
extinguishment of debt be classified as an extraordinary item, if material.
Under SFAS No. 145, extinguishment of debt is now considered a risk management
strategy by the reporting enterprise and the FASB does not believe it should be
considered extraordinary under the criteria in APB Opinion No. 30, Reporting
the Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions, unless the debt extinguishment meets the unusual in nature and
infrequency of occurrence criteria in APB Opinion No. 30. SFAS No. 145 will be
effective for us beginning in 2003. On adoption, extinguishments of debt will
be classified under the criteria in APB Opinion No. 30. Amounts from 2002 and
2001 will be reclassified into Income from Operations on adoption of SFAS
No.145.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS No.146 requires recognition
of costs associated with exit or disposal activities when they are incurred
rather than at the date of a commitment to an exit or disposal plan. SFAS
No.146 is effective for exit or disposal activities initiated after December
31, 2002. On adoption, costs associated with exit or disposal activities will
be recognized as incurred.

In November 2002, insert the the FASB issued FASB Interpretation No. 45
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, which elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
It also clarifies that a guarantor is required to recognize, at the inception
of a guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement
provisions of this Interpretation are applicable on a prospective basis to
guarantees issued or modified after December 31, 2002, irrespective of the
guarantors fiscal year-end. The disclosure requirements in this
Interpretation are effective for financial statements of interim or annual
periods ending after December 15, 2002. (See Note D, J and V to our Consolidated
Financial Statements).

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure which amended SFAS
No.123, Accounting for Stock-Based Compensation. SFAS No. 148 provides
alternative methods of transition for a voluntary change to the fair value
based method of accounting for stock-based compensation and amends the
disclosure requirements of SFAS No.123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. SFAS.No. 148 is effective for periods ending after December 15, 2002.
We have adopted the disclosure provisions of SFAS No.148 and we continue to
account for stock- based compensation under APB No. 25; therefore, SFAS .No.
148 will have no effect on our financial position, results of operations or
cash flows. (See Note Q to our Consolidated Financial Statements).

In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities which clarifies the application
of Accounting Research Bulletin No. 51 Consolidated Financial Statements for
entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. FASB Interpretation

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No. 46 becomes effective for
us beginning July 2003. It is reasonably possible that we will be considered
the primary beneficiary of variable interest entities created prior to February
1, 2003, on adoption of FASB Interpretation No. 46, and therefore will be
required to consolidate the assets and liabilities of these entities on
adoption of FASB Interpretation No. 46, which will have a material effect on
our balance sheet and results of operations. (See Note J to our Consolidated
Financial Statements and OFF BALANCE SHEET TRANSACTIONS).

We accounted for sales of certain storage centers in which we have
continuing involvement, as defined in SFAS No. 66, Accounting for Sales of
Real Estate, as financing arrangements. (See Note H to our Consolidated
Financial Statements).

FUNDS FROM OPERATIONS

Funds from operations (FFO), pursuant to the National Association of Real
Estate Investment Trusts (NAREIT) October 1999, as amended in April 2002,
White Paper on Funds from Operations, is defined as net income, calculated in
accordance with generally accepted accounting principles (GAAP) including
non-recurring events, except for those defined as extraordinary items under
GAAP and gains and losses from sales of depreciable operating
property, plus depreciation of real estate assets and amortization of
intangible assets exclusive of deferred financing costs less dividends paid to
preferred shareholders. We believe that because amortization of participation
rights discount reflect our partners increasing interests in unrecognized
gains on depreciable operating properties (represented by the difference
between the expected option price and our partners contributions), it is
consistent to add it back to net income. Contributions to FFO from
unconsolidated entities in which the reporting entity holds an active interest
are to be reflected in FFO on the same basis. We believe FFO is a meaningful
disclosure as a supplement to net income because net income implicitly assumes
that the value of assets diminish predictably over time while we believe that
real estate values have historically risen or fallen with market conditions.
FFO is not a substitute for net cash provided by operating activities or net
income computed in accordance with GAAP, nor should it be considered an
alternative indication of our operating performance or liquidity. In addition,
FFO is not comparable to funds from operations reported by other REITs that
do not define funds from operations in accordance with the NAREIT definition.
The following table sets forth the calculation of FFO in accordance with the
NAREIT definition.

|                                                                                            |  |      |         |      |  |      |         |   |  |   |        |  
|------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------ | -
|                                                                                            |  | 2002 |         | 2001 |  | 2000
|                                                                                            |  |      |         |      |  |     
|Net income                                                                                  |  | $    | 56,633  |      |  | $    | 33,312  |   |  | $ | 32,307 |  
|Gain on sale of operating real estate                                                       |  |      | (942    | )    |  |      | (2,044  | ) |  |   |        |  
|Early extinguishment of debt                                                                |  |      | (1,724  | )    |  |      | 1,445   |   |  |   |        |  
|Preferred distribution                                                                      |  |      | (14,695 | )    |  |      | (15,098 | ) |  |   | (8,750 | )
|Depreciation/amortization                                                                   |  |      | 47,963  |      |  |      | 45,234  |   |  |   | 40,693 |  
|Adjustment to depreciation/amortization from
unconsolidated joint ventures and subsidiaries |  |      | 3,294   |      |  |      | 3,339   |   |  |   | 3,310  |  
|Deferred financing costs                                                                    |  |      | (1,439  | )    |  |      | (2,081  | ) |  |   | (2,061 | )
|Amortization of participation rights discount                                               |  |      | 4,824   |      |  |      | 16,876  |   |  |   | 11,262 |  
|                                                                                            |  |      |         |      |  |      |         |   |  |   |        |  
|FFO                                                                                         |  | $    | 93,914  |      |  | $    | 80,983  |   |  | $ | 76,761 |  
|                                                                                            |  |      |         |      |  |      |         |   |  |   |        |  

FFO for 2002 increased $12.9 million over 2001 FFO, which had increased
$4.2 million over 2000. As previously discussed, this growth rate reflects the
improved performance of the original portfolio of properties as well as the
addition of properties over the past three years through acquisitions and
developments. In 2003, assuming we grow Same Store NOI after indirect operating
and leasehold expense at 0% to 3%, we directly finance new developments and we
increase our interest in Shurgard Europe to just over 50%, we expect FFO to
increase $8.3 million to $13.6 million. This expectation regarding FFO growth
constitutes a forward-looking statement within the meaning of the Private
Securities Litigation Reform Act and is based on several assumptions. If any of
these assumptions are not satisfied or prove to be incorrect, actual results
could differ materially from those indicated in the statement. The risks and
uncertainties that may cause these assumptions and this forward-looking
statement to prove to be incorrect include the risks that implementation of the
business plan, including marketing and sales initiatives, will not be
successful and that our earnings, expenses or revenues may be affected by other
factors, such as the risk that competition from new self storage facilities or
other storage alternatives may cause rents to decline, occupancy rates to drop,
or delays in rent up of newly developed properties. We may experience increases
in labor, taxes, marketing and other operating and construction expenses. For a
discussion of the factors that might cause these assumptions not to occur see
SEGMENT PERFORMANCE, OTHER REAL ESTATE INVESTMENTS, OWNERSHIP AND LEASING
ARRANGEMENTSand Risk Factorsin (Item 1) Businessof this Annual Report on
Form 10-K/A.

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INVESTING TRANSACTIONS

In 2002, we invested $37.1 million in domestic development and expansion
projects and $7.7 million in capital improvements to our existing portfolio.
The $4.4 million increase in other real estate investments reflects the amount
invested in joint ventures.

In addition, on June 26, 2002, we purchased for $62 million a 74% interest
in Morningstar which owns and operates 40 storage centers in North Carolina and
South Carolina that consist of 3.1 million net rentable square feet. The 40
existing storage centers include seven sites with pre-identified expansion
opportunities and nine sites with continued development potential. We
have also entered into an agreement with certain members of Morningstar to form
one or more joint ventures for the purpose of developing and operating high
quality self storage properties in North and South Carolina. The properties
owned by the entity and the properties to be developed in the joint ventures
will be managed by the members of Morningstar through an affiliated entity.

In May 2002, we entered into a subscription agreement to purchase up to
$50 million of three year 9.75% payment-in-kind cumulative preferred bonds to
be issued at the option of Shurgard Europe (See RELATED PARTY TRANSACTIONS).
As of December 31, 2002, we had subscribed to $49.3 million of these bonds.

In 2001, we invested $19.3 million in the acquisition of four storage
centers, $38.9 million in domestic development and expansion projects, and $7.1
million in capital improvements to our existing portfolio. The $2.0 million
increase in other real estate investments reflects the amount invested in joint
ventures.

During 2001, we exercised our option to purchase five properties in which
we had participating mortgages and in December 2001, we purchased four of the
five properties at a cost of $13.8 million, including $10.3 million outstanding
under the participating mortgage. We purchased the fifth property in February
2002. Operating results for the five properties are included in same store
results for 2000 through 2002.

In November 2001 we purchased an additional partnership unit in Shurgard
Institutional Fund LP for $1.3 million. We currently own 23 of 25 units and
are entitled to 92% of this partnerships limited partner distributions.

In 2000, we invested $24.9 million in the acquisition of seven storage
centers, $74.8 million in domestic development and expansion projects, and $7.0
million in capital improvements to our existing portfolio. The $4.9 million
increase in other real estate investments reflects primarily the $4.7 million
invested in joint ventures and the $200,000 invested in our containerized
storage operation. Additionally, during 2000, loans to affiliates included in
other real estate investments increased $2.2 million due to additional loans to
our containerized storage operation.

Under the Merger Agreement with Shurgard Incorporated, we were
contingently obligated to issue additional shares as consideration for certain
partnership interests held by Shurgard Incorporated, which were not valued at
the time of the merger. In 1998, we recorded the issuance of 145,286 shares and
in 2000 issued the final 387,933 shares related to this obligation.

CAPITAL EXPENDITURES

In addition to continued investments in acquisitions and developments, we
invest in improving our current portfolio of real estate. Investments in
existing storage properties include primarily expansions, conversions (i.e.,
size of units or climate control) and certain recurring improvements to roofs,
pavement, sealant and other items such as security upgrades that we believe are
necessary to maintain our quality standards and our ability to generate premium
returns.

Of the $6.6 million in capital improvements expended during 2002, $1.6
million was for roofs, pavement and sealant, representing approximately $0.06
per net rentable square foot. During 2001, $6.7 million in capital
improvements were expended of which $2.4 million was for roofs, pavement and
sealant, representing approximately $0.09 per net rentable square foot, while
$1.7 million out of a total of $7.0 million was spent for these items during
2000 representing approximately $0.07 per net rentable square foot.
Specifically identified capital improvements expected for 2003 total $5.7 to
$6.8 million, of which $2.5 to $3.7 million represents roofs, pavement and
sealant.

FINANCING TRANSACTIONS

Line of Credit

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The balance on the domestic line of credit increased from $47.8 million at
December 31, 2001 to $113.5 million at December 31, 2002. Draws on the line
were used to fund acquisition and development activity and general corporate
purposes, and payments were made primarily from the proceeds of stock offerings
and reimbursements from SCT for costs incurred in connection with our role as
construction agent. At December 31, 2002, we had an unsecured domestic line of
credit to borrow up to $360 million at a spread over LIBOR, maturing February
2005. Availability under this line of credit is limited based on various
financial covenants and guarantees under certain tax retention operating
leases. At December 31, 2002, the current available amount was $131.3 million,
of which approximately $113.5 million was outstanding. At December 31, 2002,
the weighted average interest rate was 2.75%.

The balance on the domestic line of credit decreased $42.1 million from
December 31, 2000 to December 31, 2001. Draws on the line were used to fund
acquisitions, the purchase of partnership units, development activity and
general corporate purposes, and payments were primarily made from the proceeds
of bond and stock offerings.

Long-term Financing

On June 28, 2002, we raised $86.25 million (approximately $82.3 million
net proceeds) through the sale of 2.5 million shares of Class A Common Stock.
On August 19, 2002, we used approximately $50 million of the proceeds to redeem
in full our 8.80% Series B Cumulative Redeemable Preferred Stock issued on
April 16, 1997. Prior to the closing of the offering, we borrowed under our
revolving credit facility to fund the balance of the $62 million purchase of
the 74% interest in Morningstar. We repaid this borrowing with proceeds from
the offering. In connection with the purchase of our interest in Morningstar,
we acquired notes payable of $58.4 million with an aggregate fair value of
$61.3 million and recorded a premium on these notes of $2.1 million
(representing 74% of the difference between face value and fair value). These
notes have various interest rates ranging from 3.74% to 9.05% per annum and
mature between 2005 and 2012.

On July 24, 2002, we paid $1.2 million to pay off a mortgage note payable.
In connection with the early extinguishment of this debt, we recorded
prepayment penalties of $164,000.

On June 27, 2002, we paid $12.5 million to pay off a participating
mortgage including $7.3 million in mortgage debt, $5.0 million in participation
rights and $200,000 in prepayment penalties. In connection with the early
extinguishment of this debt, we recorded a gain, net of prepayment penalties,
of $1.2 million.

Shurgard-Resco L.L.C., a consolidated entity, borrowed $14.7 million in
May 2002. The note matures June 1, 2012, is secured by 3 properties owned by
Shurgard-Resco L.L.C., and has a fixed interest rate of 7.10% per annum.

In 2002 we entered into, and terminated, a fixed to variable rate swap for
$50 million of the senior notes payable due in 2004. This hedge was designated
as a fair value hedge. The gain or loss on the swap and the bonds are
recognized in earnings and the carrying value of the bonds is adjusted
accordingly. On August 20, 2002, we terminated these swaps at a gain of $2
million. This gain is being amortized to interest expense over the remaining
life of the bonds using the effective interest rate method. As of December 31,
2002, the carrying value of the bonds was increased by $1.6 million.

In February 2001, we issued $200 million in senior unsecured notes
(approximately $198.4 million in net proceeds) that bear interest at 7.75% and
are due 2011. The notes require semi-annual interest payments due February 22
and August 22. Additionally, in February 2001, we raised $86.25 million
(approximately $83.1 million in net proceeds) through the sale of 3.45 million
shares of Series D Cumulative Redeemable Preferred Stock. These preferred
shares require quarterly distributions of 8.75% per year and are callable at
our option after five years, at a redemption price of $25 per share. In 2001,
we raised net proceeds after offering costs of $76.0 million through the sale
of 2.7 million shares of Class A Common Stock. Proceeds from these issuances
were used to repay balances outstanding under our line of credit, to purchase
the partnership interests noted above and to pay off our $122.6 million note
payable prior to its maturity in June 2001. In connection with the payoff of
the $122.6 million note payable, we incurred approximately $1 million in
expense related to the early extinguishment of this debt.

During 2000, Shurgard/Fremont Partners II (SFPII) borrowed an additional
$12.9 million under its non-recourse credit facility. On October 1, 2001, we
exercised our option to acquire our joint venture partners interest in SFP II
for $37.7 million. This payment was accounted for as a reduction in
participation rights (See Note H in our Consolidated Financial Statements). On September 28, 2001, we repaid the
partnerships outstanding mortgage financing of approximately $62.3 million
with proceeds from our common stock offering and incurred $409,000 in expenses
in connection with the early extinguishment of this debt.

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Additionally, during 2000, CCP/Shurgard obtained a non-recourse credit
facility to borrow up to $67.7 million of which $66.3 million was outstanding
as of December 31, 2002. The note matures December 2003, is secured by the 21
properties owned by CCP/ Shurgard, and requires monthly payments of interest
only at 275 basis points above LIBOR. We have an interest rate swap in effect
that fixes the interest rate at 6.93%. CCP Shurgard has the option to extend
the maturity date for up to two consecutive additional one year periods.

SHORT-TERM AND LONG-TERM LIQUIDITY

Cash balances increased from $7.0 million at December 31, 2001 to $11.7
million at December 31, 2002 primarily due to payment of notes payable and the
purchase of participation rights offset by the common and preferred stock
offerings. The following table summarizes certain information regarding our
liquidity and capital resources:

|                                            |  |                 |      |                |  |                |      |   |  |  |      |  
|------------------------------------------- |  | --------------- | ---- | -------------- |  | -------------- | ---- | - |  |  | ---- | -
|                                            |  | At December 31,
|                                            |  |                
|                                            |  | 2002            |      | 2001           |  | 2000          
|                                            |  |                 |      |                |  |               
|Debt to total assets (2)                    |  |                 | 43   | %              |  |                | 38   | % |  |  | 36   | %
|Total market capitalization (1)             |  | $1,874 million  |      | $1,708 million |  | $1,264 million
|Debt to total market capitalization (1) (2) |  |                 | 32   | %              |  |                | 28   | % |  |  | 35   | %
|Weighted avg. interest rate (3)             |  |                 | 7.23 | %              |  |                | 7.87 | % |  |  | 8.25 | %



|(1) |  | Total market capitalization is based on the closing market price as of
December 31, 2002, of the Class A Common Stock, Series B Preferred Stock,
Series C Preferred Stock and the Series D Preferred Stock multiplied by
their respective total number of outstanding shares plus total debt.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Debt includes notes payable and line of credit and participation rights.                                                                                                                                                                                                                     
|   
|(3) |  | Represents weighted average interest rate on our outstanding domestic
line of credit and notes payable.                                                                                                                                                                                      

Our total domestic notes payable at December 31, 2002 was $443.3 million,
most of which is fixed rate debt or variable rate debt fixed by swap
agreements. In addition, we have $113.5 million variable rate debt on our line
of credit. We limit our use of variable rate debt; however, at times balances
could be significant enough that fluctuations in interest rates would impact
our earnings. We believe that we will be able to minimize the impact of such
rate fluctuations through the use of interest rate swaps and caps, refinancing
or other strategies.

Cash provided by operating activities for the years ended December 31,
2002, 2001 and 2000 was $128.5 million, $116.5 million and $85.6 million,
respectively. We believe that our cash flow in 2003 will be sufficient to make
required principal payments and distributions in accordance with REIT
requirements. Operating cash flow is subject to certain risks and uncertainties
that may affect our ability to meet these obligations, including the risk that
implementation of the business plan, including marketing and sales initiatives,
will not be successful and that our earnings, expenses or revenues may be
affected by other factors, such as the risk that competition from new self
storage facilities or other storage alternatives may cause rents to decline,
occupancy rates to drop, or delays in rent-up of newly developed properties.
Additionally, we may experience increases in labor, taxes, marketing and other
operating and construction expenses.

During 2003, we intend to exercise our option to acquire an additional 43%
interest in Shurgard Europe. We expect this investment of approximately $150
million to be funded through a combination of debt or equity. The actual
amount of our contribution and our ultimate ownership interest depends on the
extent, if any, to which our European operating partners and certain employees
choose to contribute. As of December 31, 2002, the option price to acquire all
36 properties in the tax retention operating lease was $154.5 million and is
expected to be $244 million when they are completely built out. We are not
obligated to exercise our option on all properties in this facility. If we
choose to exercise our option to purchase these properties, funds would be
available through our existing line of credit. We believe we have existing
liquidity to finance both transactions.

We anticipate meeting our long-term liquidity needs primarily through a
combination of our lines of credit, unsecured debt, common and preferred
equity, and alternative capital sources. In order to continue to grow at
historical rates and to meet our capital objectives, it will be necessary to
obtain equity capital during the next two to three years. We will evaluate
various alternatives, including joint ventures with private institutions and
public pension funds and the issuance of

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additional common stock. Additionally, we anticipate reducing our
distribution payout ratio in order to retain cash flow for growth.

COMMITMENTS AND CONTINGENCIES

The following tables summarize our contractual obligations and our
off-balance sheet commitments.

|                                  |  |                        |         |      |  |           |        |           |  |        |         |  |  |   |        |  |  |          |         | 
|--------------------------------- |  | ---------------------- | ------- | ---- |  | --------- | ------ | --------- |  | ------ | ------- |  |  | - | ------ |  |  | -------- | ------- | 
|                                  |  | Payments due by Period
|                                  |  |                       
|                                  |  |                        |         |      |  |           |        |           |  |        |         |  |  |   |        |  |  | 2008 and
|(in thousands)                    |  | Total                  |         | 2003 |  | 2004-2005 |        | 2006-2007 |  | beyond
|                                  |  |                        |         |      |  |           |        |           |  |       
|Contractual Obligations           |  |                        |         |      |  |           |        |           |  |        |         |  |  |   |        |  |  |          |         | 
|Long-term debt                    |  | $                      | 443,289 |      |  | $         | 66,266 |           |  | $      | 73,123  |  |  | $ | 52,595 |  |  | $        | 251,305 | 
|Operating lease obligations       |  |                        | 77,363  |      |  |           | 5,644  |           |  |        | 11,274  |  |  |   | 11,066 |  |  |          | 49,379  | 
|Partcipation rights liability (1) |  |                        | 47,472  |      |  |           | 27,406 |           |  |        | 20,066  |  |  |   |       |  |  |          |        | 
|                                  |  |                        |         |      |  |           |        |           |  |        |         |  |  |   |        |  |  |          |         | 
|Total                             |  | $                      | 568,124 |      |  | $         | 99,316 |           |  | $      | 104,463 |  |  | $ | 63,661 |  |  | $        | 300,684 | 
|                                  |  |                        |         |      |  |           |        |           |  |        |         |  |  |   |        |  |  |          |         | 

|                                                                |  |                                            |         |      |  |           |         |           |  |        |         |  |  |   |       |          |  |   |   | 
|--------------------------------------------------------------- |  | ------------------------------------------ | ------- | ---- |  | --------- | ------- | --------- |  | ------ | ------- |  |  | - | ----- | -------- |  | - | - | 
|                                                                |  | Amount of Commitment Expiration per Period
|                                                                |  |                                           
|                                                                |  | Total                                      |         |      |  |           |         |           |  |        |         |  |  |   |       |          |  |  
|                                                                |  | amounts                                    |         |      |  |           |         |           |  |        |         |  |  |   |       | 2008 and
|(in thousands)                                                  |  | Committed                                  |         | 2003 |  | 2004-2005 |         | 2006-2007 |  | beyond
|                                                                |  |                                            |         |      |  |           |         |           |  |       
|Other Commercial Commitments
& Contingent Liabilities           |  |                                            |         |      |  |           |         |           |  |        |         |  |  |   |       |          |  |   |   | 
|Joint Venture loan guarantees (2)                               |  | $                                          | 15,097  |      |  | $         | 4,426   |           |  | $      | 8,971   |  |  | $ | 1,700 |          |  | $ |  | 
|Residual lease guarantees on
tax retention operating leases (3) |  |                                            | 134,342 |      |  |           |         |           |  |        | 134,342 |  |  |   |       |          |  |   |   | 
|Development contract commitments                                |  |                                            | 316     |      |  |           | 316     |           |  |        |         |  |  |   |       |          |  |   |   | 
|Other related party guarantees                                  |  |                                            | 20,363  |      |  |           |         |           |  |        | 20,363  |  |  |   |       |          |  |   |   | 
|Contingent obligations under
European joint venture (4)         |  |                                            | 147,600 |      |  |           | 147,600 |           |  |        |        |  |  |   |      |          |  |   |  | 
|                                                                |  |                                            |         |      |  |           |         |           |  |        |         |  |  |   |       |          |  |   |   | 
|Totals                                                          |  | $                                          | 317,718 |      |  | $         | 152,342 |           |  | $      | 163,676 |  |  | $ | 1,700 |          |  | $ |  | 
|                                                                |  |                                            |         |      |  |           |         |           |  |        |         |  |  |   |       |          |  |   |   | 



|(1)           |  | Estimate of amount and timing of cash flows. See Development
Financing Joint Venturesunder OWNERSHIP AND LEASING                                                                                                                 
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ARRANGEMENTS.
|             
|(2)           |  | See Unconsolidated Joint Venturesunder OWNERSHIP AND LEASING
ARRANGEMENTS.                                                                                                                                                       
|             
|(3)           |  | See Tax Retention Operating Leasesunder OWNERSHIP AND LEASING
ARRANGEMENTS.                                                                                                                                                      
|             
|(4)           |  | See EUROPEAN OPERATIONS. Bank debt for which we are contingently
liable as a general partner of Recom. The debt matures in 2003, or
sooner, if we, our partners in Recom or Shurgard Europe default in our
separate indebtedness.

OFF BALANCE SHEET TRANSACTIONS

Tax Retention Operating Leases

In 2001, we executed an agreement with a third party, SCT to enter into up
to $250 million worth of tax retention operating leases. SCT is a trust that
takes title to the development properties identified by us, constructs them to
our specifications and then leases them to us for a period of four years with
available extensions. Under the lease and related agreements, we will function
as construction agent and tenant. We have the option to acquire a property at
or before the end of its lease term. At the end of the lease term, we may
acquire a property or it may be sold to a third party, or the lease may be
extended by mutual agreement. If we elect to purchase the property, the
purchase price will be equal to the total property cost plus interest carry and
a fixed equity return to SCT at a combined rate of approximately 150 basis
points over London Interbank Offering Rate (LIBOR). Prior to such purchase, we
will have no ownership interest in these properties. The lease term for these
properties begins on SCTs acquisition of the land and/or an existing storage
center. Financing for acquisitions is provided under a credit facility
provided by commercial banks to SCT. Rent commences under the lease on
completion of construction and equals the lesser of 85% of the storage centers
positive monthly net operating income or SCTs interest carry costs.

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SCT has total assets of $155.6 million consisting of storage centers, both
operating and under construction, and liabilities of $154.1 million that
consists primarily of SCTs line of credit. As construction agent we are
entitled to a developer fee to the extent of costs incurred. During 2002, we
exercised our option to purchase three properties from SCT at a cost of $14.2
million.

In connection with these leases, we have residual lease guarantees
totaling 87% of SCTs property costs. Under the terms of the lease, if we do
not elect to exercise our purchase option and the properties are sold to a
third party for less than SCTs property cost, then we are liable for the
difference up to the guarantee amount. At December 31, 2002, our maximum
exposure to loss is $134.3 million, the total of our residual lease guarantees
on 36 properties.

Recom

Recom & Co SNC (Recom) is a Belgian partnership in which we, our European
operating partners and some Shurgard Europe employees have ownership interests
as described below. Our interests and those of Recom and some of our European
partners reflect fully diluted equity interests, after taking into account the
exercise of warrants as described below. Recom holds a 53.83% interest in
Shurgard Europe as described below. We own a 9.11% interest in Recom and our
European operating partners and an entity comprised of some Shurgard Europe
employees own collectively a 1.24% interest. The remaining 89.65% interest is
held by a trust funded by a commercial banking group through which Recom has
established a $168.5 million credit facility. As a general partner of Recom,
we are contingently liable for repayment of any amounts outstanding under the
credit facility in the event of default. Balances under the credit facility
are unsecured, bear interest at LIBOR plus 1.5% (plus certain additional costs)
and mature on June 21, 2003. The loan contains customary affirmative and
negative lending covenants and default provisions that apply to us, our other
Recom partners and Shurgard Europe and could be due prior to maturity in the
event of default by us or them in our or their separate indebtedness. Recom is
managed by one of our European operating partners who are responsible for day
to day operations. Any significant capital commitment or any sale of assets
requires unanimous approval of all partners. We, our European operating
partners and some of the Shurgard Europe employees have the right to increase
our respective equity interests in Recom, pro rata in proportion to our
existing ownership, by purchasing additional shares at a Euro fixed price. For
example, if we and these partners were to purchase additional interests to
provide capital for repayment of the credit facility balance at December 31,
2002, our interest would increase to 87.65%. If we were the only party to
purchase additional interests for this purpose, our interest would increase to
99.58%. One of our European operating partners has an option, exercisable in
June 2003, to purchase the trusts interest in Recom identified above for a
fixed price and is subject to a put option by the trust, exercisable also in
June 2003, with respect to the same interest at the same price.

As of December 31, 2002, Recoms investment in Shurgard Europe consisted
of current equity of 16.1 million Euro (US$18.4 million) and warrants to
purchase additional equity for 118.2 million Euro (US$123.9 million). In
addition, Recom has funded Shurgard Europe subordinated debt of 121.8 million
Euro (US$127.6 million) that bears interest at 8.25% per annum and matures in
2009. Recoms 53.83% interest in Shurgard Europe referred to above reflects the
exercise of these warrants in full.

Under this structure, of the 7.57% aggregate interest we currently own in
Shurgard Europe, we hold 2.66% directly and 4.89% indirectly through Recom. If
we were to increase our interest in Recom to the largest percentage identified
above, our indirect interest in Shurgard Europe through Recom would increase to
53.60% and our aggregate interest in Shurgard Europe would be 56.26%. It is
our intention to exercise our right to increase our interest during 2003. The
actual amount of our contribution and our ultimate ownership interest depends
on the extent, if any, to which our European operating partners and certain
employees choose to contribute.

Recom has total assets of $146.7 million and total liabilities of $151.1
million of which we guarantee $147.6 million. Recoms assets include
investment in Shurgard Europe of $18.4 million, loan to Shurgard Europe of
$127.6 million and other assets of $0.7 million. It is reasonably likely that
we will be considered the primary beneficiary of Recom under FASB
Interpretation No. 46 on July 1, 2003, and that we will have to consolidate the
assets and liabilities of Recom into Shurgards financial statements. Our
maximum exposure to loss would be our contingent liability as general partner
which totaled $147.6 million at December 31, 2002.

Other joint ventures

Unconsolidated joint ventures:We operate 29 properties in unconsolidated
joint ventures that have been developed primarily through our Florida and
Tennessee joint ventures. Our ownership interests range from 50% to 90%, and
we do not exercise effective control because all major decisions require the
agreement of both parties. These joint ventures

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have total assets of $98.1
million and total liabilities of $67.2 million. We have guaranteed debt of
$15.1 million related to these joint ventures. Our maximum exposure to loss
would be $44.5 million, the total of these guarantees and the net book value of
our investment which was $29.4 million at December 31, 2002.

Shurgard Europe:Shurgard Europe is a Belgian joint venture in which we
own 2.66%, four unaffiliated institutional investors own 43.26%, our European
operating partners own .25% and Recom owns 53.83%. Our European operating
partners are European entrepreneurs who worked with us in 1995 to establish the
European operations and who joined us as original investors at that time. The
four institutional investors, consisting of European and U.S. banking,
insurance and real estate institutions, acquired their interests in October
1999 through a commitment to invest 122 million Euro in the joint venture. On
February 27, 2001, the joint venture obtained commitments from all of its
owners on a pro rata basis to invest an additional 28 million Euro. The
commitments were made pro rata and, therefore, did not alter the percentage
ownership of the parties. At December 31, 2002, Shurgard Europe had drawn on
122 million Euro of the initial commitment from the institutional investors and
had not yet drawn on any of the additional February 2001 commitment.

Shurgard Europe is managed by a board of managers in which we hold 50% of
the votes, our European operating partners hold 7% and the institutional
investors collectively hold 43%. Substantially all major decisions require
approval of managers holding at least 80% of the votes. The joint venture
agreement provides that if, by December 31, 2004, the institutional investors
have not had an opportunity to liquidate their interests through an initial
public offering or a sale of all their interests, then they may initiate steps
that could lead to an initial public offering or to the sale of Shurgard Europe
or its assets in accordance with prescribed procedures. All partners
interests in Shurgard Europe are subject to a right of first refusal. We,
Recom and our European operating partners are subject to other restrictions on
transfer and sale. The operation of these provisions could substantially
affect our ownership interest in and the structure of our European investment.

Shurgard Europe has total assets of $543.5 million and total liabilities
of $494.3 million including $49.3 million bonds payable to us and $127.6
million note payable to Recom. Our maximum exposure to loss would be the
balance of the bonds payable to us of $49.3 million at December 31, 2002.

We are currently evaluating the joint ventures and Shurgard Europe on an
entity by entity basis to determine if they meet the criteria to be classified
as a variable interest entity under the requirements of FASB Interpretation No.
46. Some of all of these entities may be required to be consolidated in our
financial statements beginning July 1, 2003.

REIT QUALIFICATION AND DISTRIBUTION REQUIREMENTS

As a REIT, we must distribute at least 90% of our taxable income to our
shareholders each year, and we generally are not required to pay federal income
tax on our taxable income. To satisfy this requirement, our distributions must
be made in the taxable year to which they relate or in the following taxable
year if they are (i) declared before the REIT timely files its tax return for
such year and (ii) paid on or before the first regular distribution payment
date after the date of declaration.

Additionally, as a REIT, we must derive at least 95% of our total gross
income from specified classes of income related to real property,
distributions, interest or certain gains from the sale or other disposition of
stock or other securities. Our revenue from truck rentals, sales of locks and
boxes and management services performed for other owners of properties do not
qualify under this 95% gross income test. Such non-qualifying income was
approximately 3.6% of gross revenue in 2002 and we expect to meet the 95% test
in 2003. Our acquisition of additional properties will tend to reduce the
percentage of non-qualifying income, while additional management contracts,
including those with off balance sheet joint ventures and partnerships, and the
sales of properties from the existing portfolio will tend to increase the
percentage of non-qualifying income. While we intend to manage our activities
so that we continue to satisfy the 95% test in the future, we can provide no
assurance that non-qualifying income will not exceed 5% in future years, which
will result in a loss of REIT status.

Finally, in order to maintain our status as a REIT, we must satisfy on a
quarterly basis various tests restricting the nature of our assets. In
general, at least 75% of our assets must consist of real estate assets, cash,
cash items (including receivables) and government securities. Furthermore, we
may not hold securities of any issuer that represent (i) more than 5% of the
value of our total assets or (ii) more than 10% of the vote or value of the
issuers outstanding securities, and no more than 20% of the value of our total
assets may be represented by securities in one or more taxable REIT
subsidiaries. While we intend to manage our activities so that we continue to
satisfy these asset tests in the future, we can provide no assurance that we
will be able to do so.

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ITEM 7A - QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate and Foreign Currency Exchange Rate Risk

In order to mitigate our interest rate risk, we contract with financial
institutions for derivative products that help us manage this exposure. Our
investment policy prohibits us from entering into any such contract solely to
secure profit by speculating on the direction of currency exchange or interest
rates if unrelated to capital borrowed, lent or invested by us.

We have foreign currency exposures related to our investment in the
construction, acquisition, and operation of storage centers in countries
outside the US to the extent such activities are financed with financial
instruments or equity denominated in non-functional currencies. Since all
foreign debt is denominated in the corresponding functional currency, our
currency exposure is limited to our equity investment in those countries.
Countries in which we have exposure to foreign currency fluctuations include
Belgium, France, the Netherlands, Sweden, Denmark and the United Kingdom. Our
gross investment in these foreign operations at December 31, 2002 was $3.7
million and is not considered material. At December 31, 2002, cumulative
losses, including depreciation expense, have exceeded our gross investment by
$6 million. During 2002, all foreign investments are accounted for under the
equity method.

The table below provides information about our derivative financial
instruments and other financial instruments that are sensitive to changes in
interest rates, including loans to shareholders, debt obligations and interest
rate swaps. For debt obligations, the table presents principal cash flows and
related weighted average interest rates by expected maturity dates. For
interest rate swaps, the table presents notional amounts and weighted average
interest rates by contractual maturity dates. Notional amounts are used to
calculate the contractual payments to be exchanged under the contract.

|                          |  |      |         |      |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  |   |         |  |  |   |         |  
|------------------------- |  | ---- | ------- | ---- |  | ---- | ------ | ---- |  | ---- | ------ | ---------- |  | ----- | ----- | ---------- |  | - | ------ | - |  | - | ------- | - |  | - | ------- |  |  | - | ------- | -
|Expected maturity         |  |      |         |      |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  |   |         |  |  |   |         |  
|date                      |  | 2003 |         | 2004 |  | 2005 |        | 2006 |  | 2007 |        | Thereafter |  | Total |       | Fair Value
|                          |  |      |         |      |  |      |        |      |  |      |        |            |  |       |       |           
|Liabilities               |  |      |         |      |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  |   |         |  |  |   |         |  
|Lines of credit           |  | $    | 113,525 |      |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  | $ | 113,525 |  |  | $ | 113,525 |  
|Variable rate             |  |      | 2.68    | %    |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  |   |         |  |  |   |         |  
|Interest rate             |  |      |         |      |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  |   |         |  |  |   |         |  
|Notes payable             |  |      |         |      |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  |   |         |  |  |   |         |  
|Fixed rate                |  |      |         |      |  | $    | 50,000 |      |  | $    | 13,919 |            |  | $     | 2,595 |            |  | $ | 50,000 |   |  | $ | 251,306 |   |  | $ | 367,820 |  |  | $ | 439,440 |  
|Interest rate             |  |      | 7.64    | %    |  |      | 7.66   | %    |  |      | 7.66   | %          |  |       | 7.60  | %          |  |   | 7.60   | % |  |   | 7.60    | % |  |   |         |  |  |   |         |  
|Variable rate             |  |      |         |      |  |      |        |      |  | $    | 9,204  |            |  |       |       |            |  |   |        |   |  |   |         |   |  | $ | 9,204   |  |  | $ | 9,204   |  
|Interest rate             |  |      | 3.68    | %    |  |      | 4.52   | %    |  |      | 5.66   | %          |  |       |       |            |  |   |        |   |  |   |         |   |  |   |         |  |  |   |         |  
|Interest rate derivatives |  |      |         |      |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  |   |         |  |  | $ | (12,601 | )
|Interest rate swaps       |  |      |         |      |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  |   |         |  |  |   |         |  
|Variable to fixed         |  | $    | 66,266  |      |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  | $ | 66,266  |  |  | $ | (2,066  | )
|Avg. pay rate             |  |      | 6.93    | %    |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  |   |         |  |  |   |         |  
|Avg. received rate        |  |      | 4.18    | %    |  |      |        |      |  |      |        |            |  |       |       |            |  |   |        |   |  |   |         |   |  |   |         |  |  |   |         |  

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Item 8 -Financial Statements and Supplementary Data

CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)

|                                                                                    |                                                                                                                                                                                        |                       |                   |         |               |         |               |         |           |         | 
|----------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | ----------------- | ------- | ------------- | ------- | ------------- | ------- | --------- | ------- | 
|                                                                                    |                                                                                                                                                                                        |                       |                   |         | December 31,  |         | December 31, 
|                                                                                    |                                                                                                                                                                                        |                       |                   |         | 2002          |         | 2001         
|                                                                                    |                                                                                                                                                                                        |                       |                   |         | (as restated) |         | (as restated)
|                                                                                    |                                                                                                                                                                                        |                       |                   |         |               |         |              
|ASSETS:                                                                             |                                                                                                                                                                                        |                       |                   |         |               |         |               |        
|Storage centers:                                                                    |                                                                                                                                                                                        |                       |                   |         |               |         |               |        
|                                                                                    | Land                                                                                                                                                                                   |                       | $                 | 293,306 |               |         | $             | 263,324 |          
|                                                                                    | Buildings, equipment and other, net                                                                                                                                                    |                       |                   | 961,901 |               |         |               | 872,269 |          
|                                                                                    | Construction in progress                                                                                                                                                               |                       |                   | 7,948   |               |         |               | 900     |          
|                                                                                    |                                                                                                                                                                                        |                       |                   |         |               |         |               |         |          
|                                                                                    |                                                                                                                                                                                        | Total storage centers |                   |         | 1,263,155     |         |               |         | 1,136,493 |        
|Other real estate investments                                                       |                                                                                                                                                                                        |                       | 29,403            |         |               |         | 29,146        |        
|Cash and cash equivalents                                                           |                                                                                                                                                                                        |                       | 11,662            |         |               |         | 6,982         |        
|Restricted cash                                                                     |                                                                                                                                                                                        |                       | 1,098             |         |               |         | 815           |        
|Notes receivable from related parties                                               |                                                                                                                                                                                        |                       | 49,317            |         |               |         |              |        
|Goodwill                                                                            |                                                                                                                                                                                        |                       | 24,506            |         |               |         | 25,919        |        
|Other assets, net                                                                   |                                                                                                                                                                                        |                       | 41,035            |         |               |         | 39,450        |        
|                                                                                    |                                                                                                                                                                                        |                       |                   |         |               |         |               |         |          
|                                                                                    |                                                                                                                                                                                        | Total assets          |                   | $       | 1,420,176     |         |               | $       | 1,238,805 |        
|                                                                                    |                                                                                                                                                                                        |                       |                   |         |               |         |               |        
|LIABILITIES & SHAREHOLDERS EQUITY:                                                 |                                                                                                                                                                                        |                       |                   |         |               |         |               |        
|Accounts payable and other liabilities                                              |                                                                                                                                                                                        | $                     | 62,257            |         |               | $       | 45,260        |        
|Lines of credit                                                                     |                                                                                                                                                                                        |                       | 113,525           |         |               |         | 47,795        |        
|Notes payable                                                                       |                                                                                                                                                                                        |                       | 446,837           |         |               |         | 375,298       |        
|Participation rights liability, net of discount of $2,370
and $17,777, respectively |                                                                                                                                                                                        |                       | 47,472            |         |               |         | 47,654        |        
|                                                                                    |                                                                                                                                                                                        |                       |                   |         |               |         |               |         |          
|                                                                                    |                                                                                                                                                                                        |                       | Total liabilities |         |               | 670,091 |               |         |           | 516,007 | 
|                                                                                    |                                                                                                                                                                                        |                       |                   |         |               |         |               |         |          
|Minority interest                                                                   |                                                                                                                                                                                        |                       | 15,374            |         |               |         | 6,375         |        
|Commitments and contingencies ( Notes H, J, R and V)                                |                                                                                                                                                                                        |                       |                   |         |               |         |               |        
|Shareholders equity:                                                               |                                                                                                                                                                                        |                       |                   |         |               |         |               |        
|                                                                                    | Series B Cumulative Redeemable Preferred Stock; $0.001 par
value: 2,000,000 shares authorized; none and 2,000,000 shares
issued and outstanding; liquidation preference of $50,000,000 |                       |                   |        |               |         |               | 50,000  |          
|                                                                                    | Series C Cumulative Redeemable Preferred Stock; $0.001 par
value: 2,000,000 shares authorized; 2,000,000 shares issued and
outstanding; liquidation preference of $50,000,000          |                       |                   | 48,115  |               |         |               | 48,115  |          

See Notes to Consolidated Financial Statements

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|                                          |                                                                                                                                                                               |                            |          |               |         |               |          |           |         | 
|----------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | -------- | ------------- | ------- | ------------- | -------- | --------- | ------- | 
|                                          |                                                                                                                                                                               |                            |          | December 31,  |         | December 31, 
|                                          |                                                                                                                                                                               |                            |          | 2002          |         | 2001         
|                                          |                                                                                                                                                                               |                            |          | (as restated) |         | (as restated)
|                                          |                                                                                                                                                                               |                            |          |               |         |              
|                                          | Series D Cumulative Redeemable Preferred Stock; $0.001 par
value: 3,450,000 shares authorized; 3,450,000 shares issued
and outstanding; liquidation preference of $86,250,000 |                            |          | 83,068        |         |               |          | 83,068    |        
|                                          | Class A Common Stock, $0.001 par value; 120,000,000 authorized;
35,934,249 and 32,655,408 shares issued and outstanding                                                       |                            |          | 36            |         |               |          | 33        |        
|                                          | Class B Common Stock, $0.001 par value; 500,000 shares
authorized; none and 154,604 issued and outstanding                                                                    |                            |          |              |         |               |          |          |        
|                                          | Loans to shareholders                                                                                                                                                         |                            |          |              |         |               |          | (2,772    | )      
|Additional paid-in capital                |                                                                                                                                                                               |                            | 804,582  |               |         |               | 707,317  |          
|Accumulated net income less distributions |                                                                                                                                                                               |                            | (199,217 | )             |         |               | (168,377 | )        
|Accumulated other comprehensive loss      |                                                                                                                                                                               |                            | (1,873   | )             |         |               | (961     | )        
|                                          |                                                                                                                                                                               |                            |          |               |         |               |          |           |        
|                                          |                                                                                                                                                                               | Total shareholders equity |          |               | 734,711 |               |          |           | 716,423 | 
|                                          |                                                                                                                                                                               |                            |          |               |         |               |          |           |        
|                                          | Total liabilities and shareholders equity                                                                                                                                    |                            | $        | 1,420,176     |         |               | $        | 1,238,805 |        
|                                          |                                                                                                                                                                               |                            |          |               |         |               |          |           |        

See Notes to Consolidated Financial Statements

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CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)

|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |         |         | 
|------------------------------ | ------------------------------------------------------- | --------------------------------------------- | -------------- | ------- | ----------------- | ------- | ----------------- | ------- | ----------------- | ------- | ------ | ------- | ------- | ------- | 
|                               |                                                         |                                               |                |         | Year ended        |         | Year ended        |         |                   |         |       
|                               |                                                         |                                               |                |         | December 31, 2002 |         | December 31, 2001 |         | Year ended       
|                               |                                                         |                                               |                |         | (as restated)     |         | (as restated)     |         | December 31, 2000
|                               |                                                         |                                               |                |         |                   |         |                   |         |                  
|Revenue                        |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |        
|                               | Real estate operations                                  |                                               | $              | 252,938 |                   |         | $                 | 226,362 |                   |         | $      | 200,343 |        
|                               | Other                                                   |                                               |                | 11,175  |                   |         |                   | 6,228   |                   |         |        | 1,615   |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|                               |                                                         | Total revenue                                 |                |         | 264,113           |         |                   |         | 232,590           |         |        |         | 201,958 |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|Expenses                       |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |        
|                               | Operating                                               |                                               |                | 82,111  |                   |         |                   | 68,890  |                   |         |        | 58,124  |        
|                               | Depreciation and amortization                           |                                               |                | 47,963  |                   |         |                   | 45,234  |                   |         |        | 40,693  |        
|                               | Real estate taxes                                       |                                               |                | 24,268  |                   |         |                   | 20,148  |                   |         |        | 17,940  |        
|                               | Loss from other real estate investments                 |                                               |                | 1,396   |                   |         |                   | 3,271   |                   |         |        | 3,420   |        
|                               | General, administrative and other                       |                                               |                | 11,195  |                   |         |                   | 11,770  |                   |         |        | 4,911   |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|                               |                                                         |                                               | Total expenses |         |                   | 166,933 |                   |         |                   | 149,313 |        |         |         | 125,088 | 
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|Income from operations         |                                                         |                                               | 97,180         |         |                   |         | 83,277            |         |                   |         | 76,870 |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|Other Income (Expense)         |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |        
|                               | Interest:                                               |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|                               |                                                         | Interest on loans                             |                |         | (32,025           | )       |                   |         | (36,562           | )       |        |         | (36,175 | )      
|                               |                                                         | Amortization of participation rights discount |                |         | (4,824            | )       |                   |         | (16,876           | )       |        |         | (11,262 | )      
|                               |                                                         | Unrealized loss on financial instruments      |                |         | (10,999           | )       |                   |         | (1,602            | )       |        |         |        |        
|                               | Interest income and other                               |                                               |                | 5,900   |                   |         |                   | 5,783   |                   |         |        | 3,617   |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|                               |                                                         | Other income (expense), net                   |                |         | (41,948           | )       |                   |         | (49,257           | )       |        |         | (43,820 | )      
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|                               | Minority interest                                       |                                               |                | (637    | )                 |         |                   | (808    | )                 |         |        | (743    | )      
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|                               | Income before income tax benefit and
extraordinary item |                                               |                | 54,595  |                   |         |                   | 33,212  |                   |         |        | 32,307  |        
|                               | Income tax benefit                                      |                                               |                | 314     |                   |         |                   | 1,545   |                   |         |        |        |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|                               | Income before extraordinary items                       |                                               |                | 54,909  |                   |         |                   | 34,757  |                   |         |        | 32,307  |        
|                               | Early extinguishment of debt                            |                                               |                | 1,724   |                   |         |                   | (1,445  | )                 |         |        |        |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|                               |                                                         | Net Income                                    |                | $       | 56,633            |         |                   | $       | 33,312            |         |        | $       | 32,307  |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|Net income allocation          |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |        
|                               | Allocable to preferred shareholders                     |                                               | $              | 14,695  |                   |         | $                 | 15,098  |                   |         | $      | 8,750   |        
|                               | Allocable to common shareholders                        |                                               |                | 41,938  |                   |         |                   | 18,214  |                   |         |        | 23,557  |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|                               |                                                         | $                                             | 56,633         |         |                   | $       | 33,312            |         |                   | $       | 32,307 |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|Net Income per Common Share:   |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |        
|Basic earnings per share:      |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |        
|                               | Income before extraordinary item                        |                                               | $              | 1.15    |                   |         | $                 | 0.63    |                   |         | $      | 0.80    |        
|                               | Early extinguishment of debt                            |                                               |                | 0.05    |                   |         |                   | (0.04   | )                 |         |        |        |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|                               | Net Income                                              |                                               | $              | 1.20    |                   |         | $                 | 0.59    |                   |         | $      | 0.80    |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|Diluted earnings per share:    |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |        
|                               | Income before extraordinary item                        |                                               | $              | 1.13    |                   |         | $                 | 0.63    |                   |         | $      | 0.79    |        
|                               | Early extinguishment of debt                            |                                               |                | 0.05    |                   |         |                   | (0.04   | )                 |         |        |        |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|                               | Net Income                                              |                                               | $              | 1.18    |                   |         | $                 | 0.59    |                   |         | $      | 0.79    |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        
|Distributions per common share |                                                         | $                                             | 2.11           |         |                   | $       | 2.07              |         |                   | $       | 2.03   |        
|                               |                                                         |                                               |                |         |                   |         |                   |         |                   |         |        |         |        

See Notes to Consolidated Financial Statements

49



---



##### Table of Contents



CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY



|                                                    |                                          |           |        |           |   |              |         |              |   |        |        |        |   |   |    |   |   |  |      |   |   |   |   |   |   | 
|--------------------------------------------------- | ---------------------------------------- | --------- | ------ | --------- | - | ------------ | ------- | ------------ | - | ------ | ------ | ------ | - | - | -- | - | - |  | ---- | - | - | - | - | - | - | 
|                                                    |                                          |           |        | Preferred |   | Class A      |         | Class B     
|                                                    |                                          |           |        | Stock     |   | Common Stock |         | Common Stock
|                                                    |                                          |           |        |           |   |              |         |             
|(in thousands)                                      |                                          | Shares    |        | Amount    |   | Shares       |         | Amount       |   | Shares |        | Amount
|                                                    |                                          |           |        |           |   |              |         |              |   |        |        |       
|Balance,
Jan 1, 2000                                |                                          |           | 4,000  |           |   | $            | 96,171  |              |   |        | 29,093 |        |   | $ | 29 |   |   |  | 155  |   |   | $ |  |  
|Comprehensive income:                               |                                          |           |        |           |   |              |         |              |   |        |        |        |   |   |    |   |   |  |      |   |   |   |   |  
|                                                    | Net income                               |           |        |           |   |              |         |              |   |        |        |       |   |   |    |  |   |  |      |  |   |   |   |  |  
|Issuance of common stock                            |                                          |           |       |           |   |              |        |              |   |        | 527    |        |   |   | 1  |   |   |  |     |   |   |   |  |  
|Payments on loan to
shareholder                     |                                          |           |       |           |   |              |        |              |   |        |       |        |   |   |   |   |   |  |     |   |   |   |  |  
|Distributions:                                      |                                          |           |        |           |   |              |         |              |   |        |        |        |   |   |    |   |   |  |      |   |   |   |   |  
|                                                    |                                          | Preferred |        |           |  |              |         |              |  |        |        |        |  |   |    |   |  |  |      |   |  |   |   |   |  | 
|                                                    |                                          | Common    |        |           |  |              |         |              |  |        |        |        |  |   |    |   |  |  |      |   |  |   |   |   |  | 
|                                                    |                                          |           |        |           |   |              |         |              |   |        |        |        |   |   |    |   |   |  |      |   |   |   |   |  
|Balance, Dec. 31, 2000                              |                                          |           | 4,000  |           |   |              | 96,171  |              |   |        | 29,620 |        |   |   | 30 |   |   |  | 155  |   |   |   |  |  
|Comprehensive income:                               |                                          |           |        |           |   |              |         |              |   |        |        |        |   |   |    |   |   |  |      |   |   |   |   |  
|                                                    | Net income (as restated)                 |           |        |          |   |              |         |             |   |        |        |       |   |   |    |  |   |  |      |  |   |   |   |  |  
|                                                    | Other comprehensive income
(as restated) |           |        |          |   |              |         |             |   |        |        |       |   |   |    |  |   |  |      |  |   |   |   |  |  
|Total comprehensive income
(as restated)            |                                          |           |       |           |   |              |        |              |   |        |       |        |   |   |   |   |   |  |     |   |   |   |  |  
|Issuance of common
and preferred stock              |                                          |           | 3,450  |           |   |              | 85,012  |              |   |        | 3,035  |        |   |   | 3  |   |   |  |     |   |   |   |  |  
|Payments on loan to
shareholder                     |                                          |           |       |           |   |              |        |              |   |        |       |        |   |   |   |   |   |  |     |   |   |   |  |  
|Distributions:                                      |                                          |           |        |           |   |              |         |              |   |        |        |        |   |   |    |   |   |  |      |   |   |   |   |  
|                                                    |                                          | Preferred |        |           |  |              |         |              |  |        |        |        |  |   |    |   |  |  |      |   |  |   |   |   |  | 
|                                                    |                                          | Common    |        |           |  |              |         |              |  |        |        |        |  |   |    |   |  |  |      |   |  |   |   |   |  | 
|                                                    |                                          |           |        |           |   |              |         |              |   |        |        |        |   |   |    |   |   |  |      |   |   |   |   |  
|Balance, Dec. 31, 2001
(as restated)                |                                          |           | 7,450  |           |   |              | 181,183 |              |   |        | 32,655 |        |   |   | 33 |   |   |  | 155  |   |   |   |  |  
|Comprehensive income:                               |                                          |           |        |           |   |              |         |              |   |        |        |        |   |   |    |   |   |  |      |   |   |   |   |  
|                                                    | Net income (as restated)                 |           |        |          |   |              |         |             |   |        |        |       |   |   |    |  |   |  |      |  |   |   |   |  |  
|                                                    | Other comprehensive income
(as restated) |           |        |          |   |              |         |             |   |        |        |       |   |   |    |  |   |  |      |  |   |   |   |  |  
|Total comprehensive income
(as restated)            |                                          |           |       |           |   |              |        |              |   |        |       |        |   |   |   |   |   |  |     |   |   |   |  |  
|Issuance of common
and preferred stock              |                                          |           |       |           |   |              |        |              |   |        | 3,279  |        |   |   | 3  |   |   |  | (155 | ) |   |   |  |  
|Redemption of common                                |                                          |           | (2,000 | )         |   |              | (50,000 | )            |   |        |       |        |   |   |   |   |   |  |     |   |   |   |  |  
|and preferred stock
Payments on loan to
shareholder |                                          |           |       |           |   |              |        |              |   |        |       |        |   |   |   |   |   |  |     |   |   |   |  |  
|Distributions:                                      |                                          |           |        |           |   |              |         |              |   |        |        |        |   |   |    |   |   |  |      |   |   |   |   |  
|                                                    |                                          | Preferred |        |           |  |              |         |              |  |        |        |        |  |   |    |   |  |  |      |   |  |   |   |   |  | 
|                                                    |                                          | Common    |        |           |  |              |         |              |  |        |        |        |  |   |    |   |  |  |      |   |  |   |   |   |  | 
|                                                    |                                          |           |        |           |   |              |         |              |   |        |        |        |   |   |    |   |   |  |      |   |   |   |   |  
|Balance, Dec. 31, 2002
(as restated)                |                                          |           | 5,450  |           |   | $            | 131,183 |              |   |        | 35,934 |        |   | $ | 36 |   |   |  |     |   |   | $ |  |  
|                                                    |                                          |           |        |           |   |              |         |              |   |        |        |        |   |   |    |   |   |  |      |   |   |   |   |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                    |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |        |         |  
|--------------------------------------------------- | ---------------------------------------- | --------- | ------ | -------- | - | ------------- | ------- | ------------- | - | ------------- | -------- | --------- | ------- | ----------- | ------ | ---- | - | - | ------- | ------ | ------- | -
|                                                    |                                          |           |        |          |   |               |         |               |   |               |          | Accumu-   |         | Accumu-     |        |      |   |  
|                                                    |                                          |           |        |          |   |               |         |               |   |               |          | lated Net |         | lated Other |        |      |   |  
|                                                    |                                          |           |        | Loans to |   |               |         |               |   | Income        |          | Compre-   |         |             |        |     
|                                                    |                                          |           |        | Class B  |   | Additional    |         | Less Dis-     |   | hensive       |          |           |         |            
|                                                    |                                          |           |        | Share-   |   | Paid in       |         | tributions    |   | Income        |          | Total    
|(in thousands)                                      |                                          | holders   |        | Capital  |   | (as restated) |         | (as restated) |   | (as restated)
|                                                    |                                          |           |        |          |   |               |         |               |   |              
|Balance,
Jan 1, 2000                                |                                          | $         | (4,002 | )        |   | $             | 614,860 |               |   | $             | (86,858  | )         |         | $           |       |      |   | $ | 620,200 |       
|Comprehensive income:                               |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |       
|                                                    | Net income                               |           |        |         |   |               |         |              |   |               |          | 32,307    |         |             |        |     |   |   |         | 32,307 |        
|Issuance of common stock                            |                                          |           |       |          |   |               | 12,490  |               |   |               |         |           |         |             |       |      |   |   | 12,491  |       
|Payments on loan to
shareholder                     |                                          |           | 326    |          |   |               |        |               |   |               |         |           |         |             |       |      |   |   | 326     |       
|Distributions:                                      |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |       
|                                                    |                                          | Preferred |        |          |  |               |         |               |  |               |          |           | (8,750  | )           |        |      |  |   |         |        | (8,750  | )
|                                                    |                                          | Common    |        |          |  |               |         |               |  |               |          |           | (59,936 | )           |        |      |  |   |         |        | (59,936 | )
|                                                    |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |       
|Balance, Dec. 31, 2000                              |                                          |           | (3,676 | )        |   |               | 627,350 |               |   |               | (123,237 | )         |         |             |       |      |   |   | 596,638 |       
|Comprehensive income:                               |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |       
|                                                    | Net income (as restated)                 |           |        |         |   |               |         |              |   |               |          | 33,312    |         |             |        |     |   |   |         | 33,312 |        
|                                                    | Other comprehensive income
(as restated) |           |        |         |   |               |         |              |   |               |          |          |         |             |        | (961 | ) |   |         | (961   | )      
|                                                    |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |        |        
|Total comprehensive income
(as restated)            |                                          |           |       |          |   |               |        |               |   |               |         |           |         |             |       |      |   |   | 32,351  |       
|Issuance of common
and preferred stock              |                                          |           |       |          |   |               | 79,967  |               |   |               |         |           |         |             |       |      |   |   | 164,982 |       
|Payments on loan to
shareholder                     |                                          |           | 904    |          |   |               |        |               |   |               |         |           |         |             |       |      |   |   | 904     |       
|Distributions:                                      |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |       
|                                                    |                                          | Preferred |        |          |  |               |         |               |  |               |          |           | (15,098 | )           |        |      |  |   |         |        | (15,098 | )
|                                                    |                                          | Common    |        |          |  |               |         |               |  |               |          |           | (63,354 | )           |        |      |  |   |         |        | (63,354 | )
|                                                    |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |       
|Balance, Dec. 31, 2001
(as restated)                |                                          |           | (2,772 | )        |   |               | 707,317 |               |   |               | (168,377 | )         |         |             | (961   | )    |   |   | 716,423 |       
|Comprehensive income:                               |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |       
|                                                    | Net income (as restated)                 |           |        |         |   |               |         |              |   |               |          | 56,633    |         |             |        |     |   |   |         | 56,633 |        
|                                                    | Other comprehensive income
(as restated) |           |        |         |   |               |         |              |   |               |          |          |         |             |        | (912 | ) |   |         | (912   | )      
|                                                    |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |        |        
|Total comprehensive income
(as restated)            |                                          |           |       |          |   |               |        |               |   |               |         |           |         |             |       |      |   |   | 55,721  |       
|Issuance of common
and preferred stock              |                                          |           |       |          |   |               | 97,265  |               |   |               |         |           |         |             |       |      |   |   | 97,268  |       
|Redemption of common                                |                                          |           |       |          |   |               |        |               |   |               |         |           |         |             |       |      |   |   | (50,000 | )     
|and preferred stock
Payments on loan to
shareholder |                                          |           | 2,772  |          |   |               |        |               |   |               |         |           |         |             |       |      |   |   | 2,772   |       
|Distributions:                                      |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |       
|                                                    |                                          | Preferred |        |          |  |               |         |               |  |               |          |           | (14,695 | )           |        |      |  |   |         |        | (14,695 | )
|                                                    |                                          | Common    |        |          |  |               |         |               |  |               |          |           | (72,778 | )           |        |      |  |   |         |        | (72,778 | )
|                                                    |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |       
|Balance, Dec. 31, 2002
(as restated)                |                                          | $         |       |          |   | $             | 804,582 |               |   | $             | (199,217 | )         |         | $           | (1,873 | )    |   | $ | 734,711 |       
|                                                    |                                          |           |        |          |   |               |         |               |   |               |          |           |         |             |        |      |   |   |         |       

See Notes to Consolidated Financial Statements

50



---



##### Table of Contents



CONSOLIDATED STATEMENTS OF CASHFLOWS
(in thousands)

|                                                                                 |                                                                                               |                                                                                |        |               |          |               |        |              |         |   |        |          |          |  
|-------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | ------ | ------------- | -------- | ------------- | ------ | ------------ | ------- | - | ------ | -------- | -------- | -
|                                                                                 |                                                                                               |                                                                                |        | Year ended    |          | Year ended    |        |              |         |  
|                                                                                 |                                                                                               |                                                                                |        | December 31,  |          | December 31,  |        | Year ended  
|                                                                                 |                                                                                               |                                                                                |        | 2002          |          | 2001          |        | December 31,
|                                                                                 |                                                                                               |                                                                                |        | (as restated) |          | (as restated) |        | 2000        
|                                                                                 |                                                                                               |                                                                                |        |               |          |               |        |             
|Operating activities                                                             |                                                                                               |                                                                                |        |               |          |               |        |              |         |   |        |         
|Net income                                                                       |                                                                                               | $                                                                              | 56,633 |               |          | $             | 33,312 |              |         | $ | 32,307 |         
|Adjustment to reconcile net income to net cash
provided by operating activities: |                                                                                               |                                                                                |        |               |          |               |        |              |         |   |        |         
|                                                                                 | Early extinguishment of debt                                                                  |                                                                                |        | (1,724        | )        |               |        | 1,445        |         |   |        |          |         
|                                                                                 | Gain on sale of assets                                                                        |                                                                                |        | (942          | )        |               |        | (2,001       | )       |   |        |          |         
|                                                                                 | Unrealized loss on financial instruments                                                      |                                                                                |        | 10,999        |          |               |        | 1,602        |         |   |        |          |         
|                                                                                 | Asset impairment                                                                              |                                                                                |        | 1,899         |          |               |        |              |         |   |        |          |         
|                                                                                 | Depreciation and amortization                                                                 |                                                                                |        | 47,963        |          |               |        | 45,234       |         |   |        | 40,693   |         
|                                                                                 | Amortization of participation rights discount                                                 |                                                                                |        | 4,824         |          |               |        | 16,876       |         |   |        | 11,262   |         
|                                                                                 | Losses from other real estate investments                                                     |                                                                                |        | 3,032         |          |               |        | 4,062        |         |   |        | 5,932    |         
|                                                                                 | Minority interest                                                                             |                                                                                |        | 637           |          |               |        | 808          |         |   |        | 743      |         
|                                                                                 | Changes in operating accounts, net of effect of
purchase of Morningstar Storage Centers, LLC: |                                                                                |        |               |          |               |        |              |         |   |        |          |         
|                                                                                 |                                                                                               | Restricted cash                                                                |        |               | 164      |               |        |              | 7,695   |   |        |          | (1,344   | )
|                                                                                 |                                                                                               | Other assets                                                                   |        |               | 3,584    |               |        |              | (3,746  | ) |        |          | (5,099   | )
|                                                                                 |                                                                                               | Accounts payable and other liabilities                                         |        |               | 1,417    |               |        |              | 11,189  |   |        |          | 1,113    |  
|                                                                                 |                                                                                               |                                                                                |        |               |          |               |        |              |         |   |        |         
|                                                                                 |                                                                                               | Net cash provided by operating activities                                      |        |               | 128,486  |               |        |              | 116,476 |   |        |          | 85,607   |  
|                                                                                 |                                                                                               |                                                                                |        |               |          |               |        |              |         |   |        |         
|Investing activities:                                                            |                                                                                               |                                                                                |        |               |          |               |        |              |         |   |        |         
|                                                                                 | Construction, acquisition and
improvements to storage centers                                 |                                                                                |        | (44,838       | )        |               |        | (65,295      | )       |   |        | (106,693 | )       
|                                                                                 |                                                                                               | Proceeds from sale of assets                                                   |        |               | 2,409    |               |        |              | 3,720   |   |        |          |          |  
|                                                                                 |                                                                                               | Purchase of other real estate investments                                      |        |               | (4,413   | )             |        |              | (1,946  | ) |        |          | (4,908   | )
|                                                                                 |                                                                                               | Purchase of non-competition agreements                                         |        |               | (960     | )             |        |              | (3,448  | ) |        |          | (583     | )
|                                                                                 |                                                                                               | Bond receivable from European affiliate                                        |        |               | (49,317  | )             |        |              |         |   |        |          |          |  
|                                                                                 |                                                                                               | Increase in loans to affiliates                                                |        |               |          |               |        |              |         |   |        |          | (2,204   | )
|                                                                                 |                                                                                               | Increase in cash due to consolidation of containerized
storage operations      |        |               |          |               |        |              | 90      |   |        |          |          |  
|                                                                                 |                                                                                               | Purchase of additional interest in affiliated partnership                      |        |               |          |               |        |              | (1,296  | ) |        |          | (3,807   | )
|                                                                                 |                                                                                               | Purchase of interest in Morningstar Storage Centers, LLC,
net of cash acquired |        |               | (60,257  | )             |        |              |         |   |        |          |          |  
|                                                                                 |                                                                                               | Distribution in excess of earnings from
other real estate investments          |        |               | 451      |               |        |              | 709     |   |        |          | 483      |  
|                                                                                 |                                                                                               |                                                                                |        |               |          |               |        |              |         |   |        |         
|                                                                                 |                                                                                               | Net cash used in investing activities                                          |        |               | (156,925 | )             |        |              | (67,466 | ) |        |          | (117,712 | )
|                                                                                 |                                                                                               |                                                                                |        |               |          |               |        |              |         |   |        |         

See Notes to Consolidated Financial Statements

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|                                                              |                                                                        |   |         |         |   |   |        |          |   |   |        |         |  
|------------------------------------------------------------- | ---------------------------------------------------------------------- | - | ------- | ------- | - | - | ------ | -------- | - | - | ------ | ------- | -
|Financing activities:                                         |                                                                        |   |         |         |   |   |        |          |   |   |        |        
|                                                              | Proceeds from notes payable                                            |   |         | 19,538  |   |   |        | 207,623  |   |   |        | 73,103  |  
|                                                              | Payments on notes payable                                              |   |         | (10,142 | ) |   |        | (237,754 | ) |   |        | (21     | )
|                                                              | Proceeds from (payments on) lines of credit, net                       |   |         | 65,730  |   |   |        | (42,130  | ) |   |        | (12,077 | )
|                                                              | Payments on participation rights                                       |   |         | (4,369  | ) |   |        | (69,704  | ) |   |        |         |  
|                                                              | Payment of loan costs                                                  |   |         | (245    | ) |   |        | (4,964   | ) |   |        | (2,237  | )
|                                                              | Proceeds from financing arrangements                                   |   |         | 1,376   |   |   |        | 731      |   |   |        | 35,390  |  
|                                                              | Proceeds from issuance of common stock, net                            |   |         | 82,254  |   |   |        | 76,018   |   |   |        |         |  
|                                                              | Proceeds from preferred stock offering, net                            |   |         |         |   |   |        | 83,068   |   |   |        |         |  
|                                                              | Proceeds from payments on loans to shareholder                         |   |         | 2,863   |   |   |        | 904      |   |   |        | 326     |  
|                                                              | Proceeds from participating mortgages                                  |   |         | 2,530   |   |   |        | 10,416   |   |   |        |         |  
|                                                              | Distributions paid                                                     |   |         | (87,473 | ) |   |        | (78,453  | ) |   |        | (68,686 | )
|                                                              | Payment for redemption of preferrred stock                             |   |         | (50,000 | ) |   |        |          |   |   |        |         |  
|                                                              | Proceeds from exercise of stock options and dividend
reinvestment plan |   |         | 15,009  |   |   |        | 5,896    |   |   |        | 3,284   |  
|                                                              | Contribution received from minority partners                           |   |         |         |   |   |        |          |   |   |        | 228     |  
|                                                              | Distributions paid to minority partners                                |   |         | (3,952  | ) |   |        | (1,343   | ) |   |        | (1,186  | )
|                                                              |                                                                        |   |         |         |   |   |        |          |   |   |        |         |  
|                                                              | Net cash provided by (used in) financing activities                    |   |         | 33,119  |   |   |        | (49,692  | ) |   |        | 28,124  |  
|                                                              |                                                                        |   |         |         |   |   |        |          |   |   |        |         |  
|                                                              | Increase (decrease) in cash and cash equivalents                       |   |         | 4,680   |   |   |        | (682     | ) |   |        | (3,981  | )
|                                                              | Cash and cash equivalents at beginning of period                       |   |         | 6,982   |   |   |        | 7,664    |   |   |        | 11,645  |  
|                                                              |                                                                        |   |         |         |   |   |        |          |   |   |        |         |  
|                                                              | Cash and cash equivalents at end of period                             |   | $       | 11,662  |   |   | $      | 6,982    |   |   | $      | 7,664   |  
|                                                              |                                                                        |   |         |         |   |   |        |          |   |   |        |         |  
|Supplemental schedule of cash flow information:               |                                                                        |   |         |         |   |   |        |          |   |   |        |        
|Cash paid for interest on loans                               |                                                                        | $ | 11,195  |         |   | $ | 31,538 |          |   | $ | 31,188 |        
|                                                              |                                                                        |   |         |         |   |   |        |          |   |   |        |         |  
|Cash paid on participation rights                             |                                                                        | $ |        |         |   | $ | 1,303  |          |   | $ | 2,225  |        
|                                                              |                                                                        |   |         |         |   |   |        |          |   |   |        |         |  
|Supplemental schedule of noncash investing
transactions:      |                                                                        |   |         |         |   |   |        |          |   |   |        |        
|Fair value adjustments of derivatives                         |                                                                        | $ | (11,912 | )       |   | $ | (2,563 | )        |   |   |        |        
|                                                              |                                                                        |   |         |         |   |   |        |          |   |   |        |        
|Conversion of note receivable to equity
investment in STG     |                                                                        |   |         |         |   | $ | 16,238 |          |   |   |        |        
|                                                              |                                                                        |   |         |         |   |   |        |          |   |   |        |        
|Non-cash contribution from minority interest partners         |                                                                        |   |         |         |   | $ | 3,324  |          |   |   |        |        
|                                                              |                                                                        |   |         |         |   |   |        |          |   |   |        |        
|Common stock issued as consideration for partnership
interest |                                                                        |   |         |         |   |   |        |          |   | $ | 9,213  |        
|                                                              |                                                                        |   |         |         |   |   |        |          |   |   |        |        

See Notes to Consolidated Financial Statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A - Organization

Shurgard Storage Centers, Inc. (Shurgard), a Washington corporation, was
organized on July 23, 1993 to serve as a vehicle for investments in, and
ownership of, a professionally managed, internationally diverse real estate
portfolio consisting primarily of self-service storage properties that provides
month-to-month leases for business and personal use. We intend to qualify as a
real estate investment trust (REIT) as defined in Section 856 of the Internal
Revenue Code.

Note B - Summary of Significant Accounting Policies

Basis of presentation:The consolidated financial statements are presented
in accordance with accounting principles generally accepted in the United
States of America and include the accounts of Shurgard and our subsidiaries.
All inter-company balances and transactions have been eliminated in
consolidation. We consolidate the accounts of those subsidiaries or joint
ventures in which we have effective control as evidenced by, among other
factors, a majority interest in the investment and the ability to cause a sale
of assets. All investments in joint ventures that do not qualify for
consolidation, but in which we exercise significant influence, are accounted
for under the equity method and are included in other real estate investments.

Use of estimates:The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires us to make estimates and assumptions that affect the reported amount
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.

Recent accounting pronouncements:In June 2001, the Financial Accounting
Standards Board (FASB) issued SFAS No.141, Business Combinations. SFAS
No.141 requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001. During 2002 we purchased a 74%
interest in Morningstar Storage Centers, LLC (Morningstar) which was accounted
for as a purchase in accordance with SFAS No. 141. (See Note D).

In June 2001,the FASB issued SFAS No.142, Goodwill and Other Intangible
Assets. SFAS No.142 changes the accounting for goodwill from an amortization
method to an impairment-only approach. Amortization of goodwill, including
goodwill recorded in past business combinations, ceased on adoption of this
statement. We adopted SFAS No.142 on January 1, 2002. In connection with the
adoption of this statement and our annual evaluation, we evaluated our goodwill
and determined that goodwill of $25 million was not impaired. See Note N.

In July 2001, the FASB issued SFAS No.143, Accounting for Asset
Retirement Obligations. This statement establishes accounting standards for
recognition and measurement of a liability for an asset retirement obligation
and the associated asset retirement cost. This statement is effective for us
beginning in 2003. Adoption of SFAS No.143 is not expected to have a
significant impact on our financial position, results of operations, or cash
flows.

In August 2001, the FASB issued SFAS No.144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which supercedes SFAS No. 121
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of and the accounting and reporting provisions of APB Opinion
No. 30, Reporting the Results of Operations-Reporting the Effects of Disposal
of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions for the disposal of a segment of business
(as previously defined in that Opinion). SFAS No.144 establishes a single
accounting model, based on the framework established in SFAS No.121, for
long-lived assets to be disposed of by sale. It retains the
fundamental provisions of SFAS No.121 for (a) recognition and measurement
of the impairment of long-lived assets to be held and used and (b) measurement
of the impairment of long-lived assets to be disposed of by sale. We adopted
SFAS No.144 on January 1, 2002. The adoption of SFAS No.144 did not have a
significant impact on our financial position or results of operations.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. The rescission of SFAS No. 4, Reporting Gains and Losses from
Extinguishment of Debt, and SFAS No. 64, Extinguishments of Debt Made to
Satisfy Sinking-Fund Requirements, which amended SFAS No. 4, will affect
income statement classification of gains and losses from extinguishment of
debt. SFAS No. 4 requires that gains and losses from extinguishment of debt be
classified as an extraordinary item, if material. Under SFAS No. 145,
extinguishment of debt is now considered a risk management strategy by the
reporting enterprise

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and the FASB does not believe it should be considered
extraordinary, unless the debt extinguishment is both unusual in nature and
infrequently occurring under the criteria in APB Opinion No. 30, Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
TransactionsSFAS No. 145 will be effective for us beginning in 2003. On
adoption, extinguishments of debt will be classified under the criteria in APB
Opinion No. 30. Amounts from 2002 and 2001 will be reclassified into Income
from Operations on adoption of SFAS No.145.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS 146 requires recognition
of costs associated with exit or disposal activities when they are incurred
rather than at the date of a commitment to an exit or disposal plan and
associated liabilities to be recognized at fair value . SFAS No.146 is
effective for exit or disposal activities initiated after December 31, 2002.
On adoption, costs associated with exit or disposal activities will be
recognized as incurred.

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure, which amended SFAS
No.123, Accounting for Stock-Based Compensation. SFAS No. 148 provides
alternative methods of transition for a voluntary change to the fair value
based method of accounting for stock-based compensation and amends the
disclosure requirements of SFAS No.123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. SFAS No. 148 is effective for periods ending after December 15, 2002.
We have adopted the disclosure provisions of SFAS No.148 and continue to
account for stock-based compensation under APB Opinion No. 25, therefore, SFAS
No. 148 will have no effect on our financial position, results of operations or
cash flows (See Note Q). If we had recorded compensation expense in accordance
with SFAS No.123, we would have recognized $1.1 million, $1.9 million and $1.5
million in expense for the years ended December 31, 2002, 2001 and 2000. Our
net income for those years would have been $55.6 million, $31.5 million and
$30.8 million, respectively.

In November 2002, the FASB issued FASB Interpretation No. 45 Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, which elaborates on the disclosures to
be made by a guarantor in its interim and annual financial statements about its
obligations under certain guarantees that it has issued. It also clarifies
that a guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and initial measurement provisions of this
Interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002, irrespective of the guarantors fiscal
year-end (See Note V).

In January 2003,the FASB issued FASB Interpretation No. 46, Consolidation
of Variable Interest Entities which clarifies the application of Accounting
Research Bulletin No. 51
Consolidated Financial Statements for entities in which equity investors
do not have the characteristics of a controlling financial interest or do not
have sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. FASB
Interpretation No. 46 becomes effective for us beginning July 2003. It is
reasonably possible that we will be considered the primary beneficiary of
variable interest entities created prior to February 1, 2003, and therefore
will be required to consolidate the assets and liabilities of these entities,
upon adoption of FASB Interpretation No. 46, which will have a material effect
on our balance sheet and results of operations (See Note D, J and V).

Storage centers:Storage centers are recorded at cost. Depreciation on
buildings and equipment is recorded on a straight-line basis over their
estimated useful lives, which range from three to 40 years.

Other real estate investments:As of December 31, 2002, investments
accounted for under the equity method included 28 joint ventures. Although we
own a majority interest in most of these entities, all significant business
decisions require the approval of both parties and, therefore, we do not have
voting control. (See Note E and Note J).

Financing arrangements:We accounted for sales of certain storage centers
in which we have continuing involvement, as defined in SFAS No.66, Accounting
for Sales of Real Estate, as financing arrangements. (See Note H).

Cash equivalents:Cash equivalents consist of money market instruments and
securities with original maturities of 90 days or less.

Restricted cash:Restricted cash consists of cash deposits and represents
expense reserves required by lenders.

Other assets:Other assets include financing costs and non-competition
agreements, which are presented net of accumulated amortization of $10.7
million and $8.7 million as of December 31, 2002 and 2001, respectively.
Financing

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costs are amortized using the effective interest method over the life
of the related debt and the related expense is included in amortization.
Non-competition agreements are amortized over their estimated useful lives,
which range from three to 30 years.

Federal income taxes:To qualify as a REIT, we must distribute annually at
least 90% of our taxable income and meet certain other requirements.
Additionally, as a REIT, we will not be subject to federal income taxes to the
extent of distributions. We were not required to pay any federal income tax in
2000 or 2001 and we intend to make elections regarding distributions such that
we will not pay federal taxes for 2002. As a result, no provision for federal
income taxes for the REIT has been made in our financial statements. We are
subject to certain international and state income taxes as well as certain
franchise taxes; however, these taxes are currently immaterial.

Shurgard TRS, Inc. (Shurgard TRS), a wholly owned subsidiary, is a taxable
REIT subsidiary and is subject to corporate level tax. Shurgard Storage To Go,
Inc. (STG), Shurgard Preferred Partners, SS Income Plan and Storage Line
Management are wholly owned subsidiaries of Shurgard TRS. At December 31,
2002, Shurgard TRS had a deferred tax asset primarily attributable to net
operating loss carryforwards from STG that will expire beginning in 2017, and
other temporary differences in fixed assets and operating losses (See Note M).
When determining the necessary amount, if any, of valuation allowance on the
deferred tax asset, we estimate projected future taxable income from all
sources and analyze whether it is more likely than not that we will be able to
realize all tax benefits.

Revenue recognition:The majority of our customers rent under
month-to-month lease agreements and revenue is recognized at the contracted
rate for each month occupied. Revenue
related to customers who sign longer period leases is recognized ratably
over the term of the lease. Management fee revenue is recognized each month for
which services are rendered; these contracts are generally cancelable by either
party on specified advanced notice.

As a construction agent for Storage Centers Trust (SCT) we are paid a
development fee. Fees are recognized as earned to the extent of costs
incurred. Due to our contingent liability under the related lease, no profit
is recognized as services are performed.

We recognize revenue related to our tenant insurance program based on the
excess of premiums over claims and administrative costs.

Valuation of long-lived assets:Using our best estimates based on
reasonable and supportable assumptions and projections, we review storage
centers and other long-lived assets for impairment whenever events or changes
in circumstances indicate that the carrying amount of our assets might not be
recoverable. During 2002 we determined that certain parcels of land held for
sale were impaired. Using the expected cash flow method, we determined that the
net book value of this land exceeded its fair value less costs to sell. The
total impairment loss for these parcels of land was $1.9 million and is
included in General, administrative and other expense in the Consolidated
Statement of Net Income for 2002. The land held for sale with a carrying value
of $4.4 million is included in Other assets on the Balance Sheet.

At December 31, 2001, we determined that certain assets of STG were
impaired. The closure of two warehouses in Southern California and Atlanta
caused us to evaluate the assets of the three remaining warehouses in
Washington, Northern California and Oregon (See Note L). Using the discounted
cash flow method for determining the fair value of assets associated with these
warehouses, we determined that the remaining net book value of assets in the
Oregon warehouse in the amount of $268,000, and $1.5 million of goodwill
associated with the Northern California and Washington warehouses were
impaired. The total impairment loss of $1.7 million is included in General,
administrative and other in the Consolidated Statement of Income for 2001.

Financial instruments:The carrying values reflected on the balance sheet
at December 31, 2002, reasonably approximate the fair value of cash and cash
equivalents, other assets, accounts payable, lines of credit, variable rate
debt and other liabilities. Based on the borrowing rates currently available to
us for bank loans with similar terms and average maturities, we estimate the
fair value of fixed rate long-term debt including swap arrangements is $503.9
million compared to a book value of $434.1 million.

Environmental costs:Our policy is to accrue environmental assessments
and/or remediation costs when it is probable that such efforts will be required
and the related costs can be reasonably estimated. The majority of our real
estate facilities have undergone independent environmental investigations and
our policy is to have such investigations conducted on all new real estate
acquired. Although there can be no assurance that there is not environmental
55Table of Contentscontamination at our facilities, we are not aware of any such
contamination at any of our facilities that individually or in aggregate would
be material to our business, financial condition, or results of operations.Note C  Storage Centers

|                               |  |             |           |             |  |   |           |  
|------------------------------ |  | ----------- | --------- | ----------- |  | - | --------- | -
|                               |  | December 31 |           | December 31
|                               |  | 2002        |           | 2001       
|(in
thousands)                 |  |             |           |            
|Land                           |  | $           | 293,306   |             |  | $ | 263,324   |  
|Buildings                      |  |             | 1,181,774 |             |  |   | 1,036,193 |  
|Equipment and other            |  |             | 54,969    |             |  |   | 49,481    |  
|                               |  |             |           |             |  |   |           |  
|                               |  |             | 1,530,049 |             |  |   | 1,348,998 |  
|Less: Accumulated Depreciation |  |             | (274,842  | )           |  |   | (213,405  | )
|                               |  |             |           |             |  |   |           |  
|                               |  |             | 1,255,207 |             |  |   | 1,135,593 |  
|Construction in progress       |  |             | 7,948     |             |  |   | 900       |  
|                               |  |             |           |             |  |   |           |  
|                               |  | $           | 1,263,155 |             |  | $ | 1,136,493 |  
|                               |  |             |           |             |  |   |           |  

Note D  Acquisitions

On June 26, 2002 we acquired a 74% membership interest in Morningstar
Storage Centers, LLC (Morningstar) for $62.0 million. The results of
Morningstars operations have been included in our consolidated financial
statements since that date. Morningstar operates and owns, directly or
indirectly, 40 existing self-storage properties in North and South Carolina,
including seven sites with pre-identified expansion opportunities and nine
sites with continued development potential. In addition, we have entered into
an agreement with certain of the members of Morningstar to form one or more
joint ventures for the purpose of developing and operating high quality self
storage properties in North and South Carolina. The properties owned by
Morningstar and the properties to be developed in the joint ventures will be
managed by the other members of Morningstar through an affiliated entity.

This acquisition was accounted for as a purchase transaction. Assets and
liabilities are recorded at book value plus 74% of the difference between book
value and fair market value. The following table summarizes the estimated fair
values of the assets acquired and liabilities assumed at the date of
acquisition.

|                                |  |   |         | 
|------------------------------- |  | - | ------- | 
|(in thousands)                  |  |   |         | 
|Current assets                  |  | $ | 2,780   | 
|Storage centers                 |  |   | 144,888 | 
|Other assets                    |  |   | 21      | 
|                                |  |   |         | 
|Total assets acquired           |  |   | 147,689 | 
|Current liabilities             |  |   | 2,254   | 
|Long-term debt                  |  |   | 61,316  | 
|Minority interest               |  |   | 1,775   | 
|                                |  |   |         | 
|Total liabilities assumed       |  |   | 65,345  | 
|                                |  |   |         | 
|Net assets acquired             |  |   | 82,344  | 
|Fair value of minority interest |  |   | 20,344  | 
|                                |  |   |         | 
|Purchase price                  |  | $ | 62,000  | 
|                                |  |   |         | 

The following table summarizes unaudited pro forma results of operations
for the years ended December 31, 2002 and 2001 as if the acquisition had taken
place at the beginning of those periods.

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|                                  |                                   |   |                   |      |                   |   |         |       |  
|--------------------------------- | --------------------------------- | - | ----------------- | ---- | ----------------- | - | ------- | ----- | -
|                                  |                                   |   | For year ended   
|                                  |                                   |   | December 31, 2002 |      | December 31, 2001
|                                  |                                   |   |                   |      |                  
|Pro Forma results of Operations   |                                   |   |                   |      |                   |   |         |      
|(in thousands)                    |                                   |   |                   |      |                   |   |         |      
|Revenue                           |                                   | $ | 272,294           |      |                   | $ | 249,066 |      
|Income before extraordinary items |                                   | $ | 55,286            |      |                   | $ | 35,042  |      
|Net Income                        |                                   | $ | 57,010            |      |                   | $ | 33,597  |      
|Basic earnings per share:         |                                   |   |                   |      |                   |   |         |      
|                                  | Income before extraordinary items |   | $                 | 1.16 |                   |   | $       | 0.64  |  
|                                  | Early extinguishment of debt      |   |                   | 0.05 |                   |   |         | (0.04 | )
|                                  |                                   |   |                   |      |                   |   |         |      
|                                  | Net Income                        |   | $                 | 1.21 |                   |   | $       | 0.60  |  
|                                  |                                   |   |                   |      |                   |   |         |      
|Diluted earnings per share:       |                                   |   |                   |      |                   |   |         |      
|                                  | Income before extraordinary items |   | $                 | 1.14 |                   |   | $       | 0.64  |  
|                                  | Early extinguishment of debt      |   |                   | 0.05 |                   |   |         | (0.04 | )
|                                  |                                   |   |                   |      |                   |   |         |      
|                                  | Net Income                        |   | $                 | 1.19 |                   |   | $       | 0.60  |  
|                                  |                                   |   |                   |      |                   |   |         |      

In November 2001, we purchased one limited partner unit in Shurgard
Institutional Fund LP from an unaffiliated third party for $1.3 million. We
currently own 23 of 25 units and are entitled to 92.6% of this partnerships
limited partner distributions. As this represents a majority interest, Shurgard
Institutional Fund LP is consolidated for financial statement purposes. We
continue to own a general partnership interest in this partnership.

In September 2000, we purchased 3 limited partner units of Shurgard
Institutional Fund LP II for $3.8 million in cash. We currently own all of the
9.5 limited partner units and are entitled to 100% of LP distributions. We
continue to own a general partnership interest in this partnership. Due to our
majority interest, Shurgard Institutional Fund LP II is consolidated for
financial statement purposes.

We have an agreement with a California developer under which it purchases
sites in southern California and constructs storage centers on them according
to our specifications. On completion of the rent-up period, the storage centers
are purchased by a joint venture. Prior to such purchase, we have no ownership
in the properties and accordingly, they are not included in any discussions in
our operating results. The developers interest in the joint venture is based
on a predetermined formula based on the fair value of the property at
contribution. During 1999, the joint venture purchased one of the completed
storage centers for $3.1 million; during 2000, the joint venture purchased an
additional completed storage center for $11.0 million; and during 2001, we
purchased two of the completed storage centers for $13.4 million. At December
31, 2002, we had guaranteed $20.4 million in outstanding debt for three
properties related to this agreement. We recognized approximately $1.5
million, $1.2 million and $691,000 in earnings for years ended December 31,
2002, 2001 and 2000 respectively, which represents 90.7%, 78.7% and 77.3%,
respectively, of joint ventures earnings.

Note E  Other Real Estate Investments

|                                      |  |              |        |              |  |   |        | 
|------------------------------------- |  | ------------ | ------ | ------------ |  | - | ------ | 
|                                      |  | December 31, |        | December 31,
|                                      |  | 2002         |        | 2001        
|                                      |  |              |        |             
|Investment in participating mortgages |  | $            |       |              |  | $ | 2,555  | 
|Investment in joint ventures          |  |              | 29,403 |              |  |   | 26,591 | 
|                                      |  |              |        |              |  |   |        | 
|                                      |  | $            | 29,403 |              |  | $ | 29,146 | 
|                                      |  |              |        |              |  |   |        | 

Pursuant to affiliation agreements with three storage operators, we have
developed 29 properties in joint ventures in which our ownership interests
range from 50% to 90%. As of December 31, 2002, we had invested a total of
$29.4 million in these joint ventures, net of joint venture earnings. We have
guaranteed $15.1 million of loans. The financial results of these joint
ventures are not consolidated in our financial statements because each
affiliation agreement allows

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the local operator to control the daily operations
of the property, and all significant investment decisions require the approval
of both parties regardless of ownership percentage.

As of December 31, 2001, we had $2.6 million invested in a participating
mortgage loan. In addition to fixed interest payments, we received contingent
interest payments from the mortgaged property equal to 50% of both operating
cash flow and distributions from the gain on sale of real property, in
accordance with the terms of the applicable agreement. During 2002, we
exercised our option to acquire this property.

Our interest in Shurgard Self Storage, SCA (Shurgard Europe) is 7.57%, and
we do not have effective control of Shurgard Europe. The joint venture
agreement requires a vote of two thirds of the Board of Managers for all major
decisions; however, we continue to exercise significant influence over Shurgard
Europe through our control of half of the seats on the Board of Managers. The
negative investment balances of $5.9 million and $4.1 million are included in
other liabilities as of December 31, 2002 and 2001, respectively.

Note F  Lines of Credit

We have an unsecured domestic line of credit to borrow up to $360 million.
This facility matures in February 2005 and requires monthly interest payments
at 125 basis points over LIBOR. Availability under this line of credit is
limited based on various financial covenants and guarantees under certain tax
retention operating leases. At December 31, 2002, the available amount was
$131.3 million. At December 31, 2002, there was $113.5 million outstanding and
the weighted average rate was 2.75%.

Note G  Notes Payable

|                                  |  |                   |         |                   |  |   |         | 
|--------------------------------- |  | ----------------- | ------- | ----------------- |  | - | ------- | 
|(in thousands)                    |  | December 31, 2002 |         | December 31, 2001
|                                  |  |                   |         |                  
|Senior notes payable              |  | $                 | 300,000 |                   |  | $ | 300,000 | 
|Mortgage notes payable            |  |                   | 143,289 |                   |  |   | 75,298  | 
|                                  |  |                   |         |                   |  |   |         | 
|                                  |  |                   | 443,289 |                   |  |   | 375,298 | 
|Premium on senior notes payable   |  |                   | 1,601   |                   |  |   |        | 
|Premium on mortgage notes payable |  |                   | 1,947   |                   |  |   |        | 
|                                  |  |                   |         |                   |  |   |         | 
|                                  |  | $                 | 446,837 |                   |  | $ | 375,298 | 
|                                  |  |                   |         |                   |  |   |         | 

On July 24, 2002, we paid $1.2 million to retire a mortgage note payable
incurring prepayment penalties of $164,000 which are included in early
extinguishment of debt in the Consolidated Statements of Income.

On June 27, 2002, we paid $12.5 million to pay off a participating
mortgage including $7.3 million in mortgage debt, $5.0 million in participation
rights and $0.2 million in prepayment penalties. In connection with the early
extinguishment of this debt, we recorded a gain, net of prepayment penalties,
of $1.2 million.

On June 26, 2002, in connection with the purchase of our 74% interest in
Morningstar (See Note D), we acquired notes payable of $58.4 million with fair
values of $61.3 million and recorded a premium on these notes of $2.1 million
(74% of the difference between face value and fair value). These notes have
various interest rates ranging from 3.74% to 9.05% per annum and mature between
2005 and 2012.

Shurgard-Resco L.L.C., a consolidated entity, borrowed $14.7 million in
May 2002. The note matures June 1, 2012, is secured by 3 properties owned by
Shurgard-Resco L.L.C., and has a fixed interest rate of 7.10% per annum.

At December 31, 2002, $66.3 million of the mortgage notes payable is
secured by 21 properties accounted for as participation rights (See Note H) and
is a non-recourse credit facility that requires payments of interest only.
This note matures December 2003 with two consecutive one year extension
options.

In April 1997, we issued $100 million in senior unsecured notes, $50
million of which are seven year notes due April 2004 bearing interest at 7.5%
and $50 million of which are ten year notes due April 2007 bearing interest at
7.625%. The notes require semi-annual interest due April 25th and October 25th.
During 2002 we entered into, and later terminated, a fixed to variable rate
swap for $50 million of the senior notes payable due in 2004. This hedge was
designated as a fair

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value hedge. As a result of this hedge, the carrying
value of the bonds was increased by $1.6 million as of December 31, 2002 (See
Note P).

On February 22, 2001, we issued $200 million in senior unsecured notes
that are ten-year notes bearing interest at 7.75% and are due 2011. The notes
require semi-annual interest payments due February 22 and August 22.

Additionally, we have a mortgage note payable totaling approximately $1.9
million dollars secured by one wholly owned property which mortgage note
matures in 2011.

The maturities of debt principal over the next five fiscal years and
thereafter are approximately $66.3 million in 2003, $50.0 million in 2004,
$23.1 million in 2005, $2.6 million in 2006, $50.0 million in 2007, and $251.3
million in 2008 and thereafter. Each of these notes contains covenants that
require us to submit financial information and maintain certain financial
ratios. Secured debt of $143.3 million is secured by storage centers with a net
book value of $179.1 million. As of December 31, 2002, we were in compliance
with all debt covenants.

Note H  Participation Rights

During the past several years we formed four joint ventures; SFPI in May
1998 with Fremont Storage Partners I, SFPII in March 1999 with Fremont Storage
Partners II, Shurgard/K&S I, LLC in October 1999 with K&S Storage, LLC and
CCP/Shurgard Venture, LLC (CCP/Shurgard) in May 2000 with an affiliate of JP
Morgan Partners. Under these joint venture agreements, we constructed storage
centers financed through the use of cash flows provided by operations and our
line of credit and, on completion, contributed those storage centers to the
joint ventures. At the time of contribution, we were reimbursed to the extent
our historical cost plus negative cash flow prior to the transfer exceeded our
pro rata portion of required equity (calculated as total required funding less
amounts provided from financial institutions multiplied by our ownership
percentage). We either retain an option to purchase the storage centers from
the joint venture or the joint venture has a right to put those storage centers
to us at a future date. The purchase price is calculated as the greater of (a)
that amount necessary to provide a specified return on the partners
contributed capital (12% in the case of CCP/Shurgard) or (b) annualized NOI
(See Note T) divided by 9.25%. Due to our continuing involvement with the
storage centers, in accordance with SFAS No.66, Accounting for Sales of Real
Estate, we do not recognize the sale of these properties and, due to the
likelihood of our exercising the options, we account for these transactions as
financing arrangements. Under this method we recognize a participation rights
liability and a related discount on the underlying liability for the estimated
fair value of our joint venture partners share of the estimated option
purchase price based on the best evidence available to us. The discount is
amortized as a component of interest expense over the term of the related
agreements. Changes in the estimated fair value of the participation rights and
related discount are recognized prospectively over the remaining term of the
agreements. The storage centers, mortgage notes payable, and other related
assets and liabilities of the joint ventures are included in our consolidated balance sheets, and the related revenue and
expenses of these properties are included in our Consolidated Statements of
Income.

During 2001, we exercised our option to acquire our joint venture
partners interest in SFP I, SFP II and Shurgard/K&S I for a total of $69.4
million. These acquisitions were accounted for as a reduction in participation
rights liability.

During 2002, we re-evaluated our estimate of the option price, the
projected timing of our joint venture partners exercise of their put option
and the related expected cash flows. These changes were accounted for as a
change in estimate, reduced gross participation rights and subsequent
amortization of participation rights. The effect of this change in estimate on
the 2002 financial statements decreased gross participation rights by $6.4
million and increased income before extraordinary items and net income by $3.4
million and diluted earnings per share by $0.10.

On June 27, 2002, we paid off the participating mortgage for one storage
center. The lenders were to receive 90% of the propertys appreciation. As a
result this mortgage was accounted for in the same manner as described above.
We paid off this participating mortgage for $12.5 million including $7.3
million in mortgage debt and $0.2 million in prepayment penalties. The
remaining $5.0 million payment was accounted for as reduction in participation
rights. In connection with the early extinguishment of this debt, we
recognized an extraordinary gain of $1.2 million, net of prepayment penalties.

The following table summarizes the estimated liability for participation
rights and the related discount:

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|                                      |  |                   |        |                   |  |   |         |  
|------------------------------------- |  | ----------------- | ------ | ----------------- |  | - | ------- | -
|(in thousands)                        |  |                   |        |                   |  |   |         |  
|                                      |  | December 31, 2002 |        | December 31, 2001
|                                      |  |                   |        |                  
|Gross participation rights            |  | $                 | 49,842 |                   |  | $ | 65,431  |  
|Participation rights discount         |  |                   | (2,370 | )                 |  |   | (17,777 | )
|                                      |  |                   |        |                   |  |   |         |  
|Participation rights, net of discount |  | $                 | 47,472 |                   |  | $ | 47,654  |  
|                                      |  |                   |        |                   |  |   |         |  

Note I  Lease Obligations

We lease certain parcels of land and buildings under operating leases with
terms up to 50 years. The future minimum rental payments required under these
leases are as follows (in thousands):

|           |  |   |        | 
|---------- |  | - | ------ | 
|2003       |  | $ | 5,644  | 
|2004       |  |   | 5,596  | 
|2005       |  |   | 5,678  | 
|2006       |  |   | 5,603  | 
|2007       |  |   | 5,463  | 
|Thereafter |  |   | 49,379 | 
|           |  |   |        | 
|           |  | $ | 77,363 | 
|           |  |   |        | 

Expense under these leases was approximately $3.5 million, $2.6 million
and $1.1 million for the years ended December 31, 2002, 2001 and 2000,
respectively.

Note J  Variable interest entities

Tax Retention Operating Leases

In February 2001, we executed an agreement with a third party to enter
into up to $250 million in tax retention operating leases in connection with
the line of credit discussed in Note F. Most of our development projects since that time have been developed by
this third party and leased through this facility. Under the related
agreements, we function as construction agent and tenant. At the end of the
lease term, we may acquire a property or it may be sold to a third party, or
the lease may be extended by mutual agreement; we have the option to acquire a
property at or before the end of its lease term. If we exercise our options,
the purchase price for the property will be equal to the total property cost
plus interest carry and a fixed equity return to the third party at a combined
rate of approximately 150 basis points over LIBOR. Prior to such purchase, we
have no legal ownership in these properties. As of December 31, 2002, the third
party has eight storage centers under construction, has purchased land for
construction of seven additional storage centers and has sixteen completed
developments and four acquisitions with one additional completed storage center
subleased to a third party. The lease term for these properties begins on the
third partys acquisition of the land and/or property. Rent commences under
the lease on completion of construction and equals 85% of the storage centers
positive monthly net operating income. For the year ended December 31, 2002
and 2001, we paid $678,000 and $122,000, respectively, in lease payments on
these properties. During 2002, we exercised our option on three properties for
a total cost of $14.2 million. Additionally, during December 2002, we gave
notice that we intend to exercise our option on one additional property for
$2.6 million. This property has not been completed and we have determined that
no further construction will be done on this property and the land will be
sold. We have expensed $1.2 million in abandoned development expense in
connection with this property. As of December 31, 2002, the assets in this
variable interest entity have a carrying value of $155.6 million. In
connection with these leases, our maximum exposure to loss is our liability for
contingent residual lease guarantees totaling $134.3 million as of December 31,
2002.

European Partnership

Recom & Co SNC (Recom) is a Belgian partnership in which we, our European
operating partners and certain Shurgard Europe employees have ownership
interests as described below. Our interests and those of Recom and some of our
European partners reflect fully diluted equity interests, after taking into
account the exercise of warrants as described below. Recom holds a 53.83%
interest in Shurgard Europe as described below. We own a 9.11% interest in
Recom, and our European operating partners and an entity comprised of some
Shurgard Europe employees own collectively a 1.24% interest. The remaining
89.65% interest is held by a trust funded by a commercial banking group through
which Recom has established a $168.5 million credit facility. As a general
partner of Recom, we are contingently

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liable for repayment of any amounts outstanding under the credit facility
in the event of default. Balances under the credit facility are unsecured,
bear interest at LIBOR plus 1.5% (plus certain additional costs) and mature on
June 21, 2003. The loan contains customary affirmative and negative lending
covenants and default provisions that apply to us, our other Recom partners and
Shurgard Europe and could be due prior to maturity in the event of default by
us or them in our or their separate indebtedness. Recom is managed by one of
our European operating partners who is responsible for day to day operations.
Any significant capital commitment or any sale of assets requires unanimous
approval of all partners. We, our European operating partners and some of the
Shurgard Europe employees have the right to increase our respective equity
interests in Recom, pro rata in proportion to our existing ownership interest,
by purchasing additional shares at a Euro fixed price. For example, if we and
these partners were to purchase additional interests to provide capital for
repayment of the credit facility balance at December 31, 2002, our interest
would increase to 87.65%. If we were the only party to purchase additional
interests for this purpose, our interest would increase to 99.58%. One of our
European operating partners has an option, exercisable in June 2003, to
purchase the trusts interest in Recom identified above for a fixed price and
is subject to a put option held by the trust, exercisable also in June 2003,
with respect to the same interest at the same price.

Recom has total assets of $146.7 million and total liabilities of $151.1
million of which we guarantee $147.6 million. Recoms assets include an
investment in Shurgard Europe of $18.4 million, a loan to Shurgard Europe of
$127.6 million and other assets of $0.7 million. Upon adoption of FASB
Interpretation No. 46, it is reasonably likely that we will be considered the
primary beneficiary of Recom and that we will have to consolidate the assets
and liabilities of Recom in Shurgards financial statements. Our maximum
exposure to loss would be our contingent liability as general partner which
totaled $147.6 million at December 31, 2002.

Other joint ventures

We operate 29 properties in unconsolidated joint ventures that have been
developed primarily through our Florida and Tennessee joint ventures. Our
ownership interests range from 50% to 90%, and we do not exercise effective
control because all major decisions require the agreement of both parties. As
of December 31, 2002, these joint ventures have total assets of $98.1 million
and total liabilities of $67.2 million. We have guaranteed debt of $15.1
million related to these joint ventures. Our maximum exposure to loss is
$44.5 million, the total of these guarantees and the net book value of our
investment which was $29.4 million at December 31, 2002.

Shurgard Europe is a Belgian joint venture in which we own 2.66%, four
unaffiliated institutional investors own 43.26%, our European operating
partners own .25% and Recom owns 53.83%. Our European operating partners are
European entrepreneurs who worked with us in 1995 to establish the European
operations and who joined us as original investors at that time. The four
institutional investors, consisting of European and U.S. banking, insurance and
real estate institutions, acquired their interests in October 1999 through a
commitment to invest 122 million Euro in the joint venture. On February 27,
2001, the joint venture obtained commitments from all of its owners to invest
an additional 28 million Euro. The commitments were made pro rata and,
therefore, did not alter the percentage ownership of the parties. At December
31, 2002, Shurgard Europe had drawn on 122 million Euro of the initial
commitment from the institutional investors and had not yet drawn on any of the
additional February 2001 commitment.

Shurgard Europe is managed by a board of managers in which we hold 50% of
the votes, our European operating partners hold 7% and the institutional
investors collectively hold 43%. Substantially all major decisions require
approval of managers holding at least 80% of the votes. The joint venture
agreement provides that if, by December 31, 2004, the institutional investors
have not had an opportunity to liquidate their interests through an initial
public offering or a sale of their interests, they may initiate steps that
could lead to an initial public offering or to the sale of Shurgard Europe or
its assets in accordance with prescribed procedures. All partners interests
in Shurgard Europe are subject to a right of first refusal. We, Recom and our
European operating partners are subject to other restrictions on transfer and
sale. The operation of these provisions could substantially affect our
ownership interest in and the structure of our European investment.

Shurgard Europe has total assets of $543.5 million and total liabilities
of $494.3 million including $49.3 million bonds payable to us and $127.6
million note payable to Recom. Our maximum exposure to loss is the balance of
the bonds payable to us of $49.3 million at December 31, 2002.

We are currently evaluating the joint ventures and Shurgard Europe on an
entity by entity basis to determine if they meet the criteria to be classified
as a variable interest entity under FASB Interpretation No. 46. Based on

completing the

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preliminary steps of this evaluation, some or all of these
entities may be consolidated in our financial statements beginning July 1,
2003.

Note K - Related Party Transactions

On May 27, 2002, we entered into a subscription agreement to purchase up
to $50 million of three year 9.75% payment-in-kind cumulative preferred bonds
to be issued at the option of Shurgard Europe redeemable
December 31, 2004. Pursuant to the subscription
agreement, Shurgard Europe may issue up to $50 million of these preferred bonds
to us during the first two years of the three-year commitment term. If
Shurgard Europe issues more than $40 million in bonds during the first 12
months, it has the option of increasing our total notional subscription to $75
million. Interest is payable on the bonds at the end of each quarter in cash
or through an issuance of additional bonds. The bonds issued to pay interest
can be issued above the commitment amount. Shurgard Europe has two one-year
options to extend the three year redemption date of the bonds. Shurgard Europe
must redeem the bonds on the redemption date, or may redeem at anytime prior to
the redemption date, on paying us 115% of the face value of the outstanding
bonds plus accrued and unpaid interest. The subscription agreement entitles us
to a commitment fee of 0.5% and a structuring fee of 1.5% of the initial
commitment of $50 million, as well as an unused fee equal to 100 basis points
of the undrawn amount payable in arrears on a quarterly basis. These fees are
being recognized as revenue using the interest method over the term of the
bonds. Our intent is to hold these bonds to maturity. As of December 31, 2002, $49.3 million of bonds had been issued to us
and we have recorded $1.4 million in interest income.

We provide property management services to affiliates including marketing,
maintenance, management information systems, access to our call center and
management of on-site personnel. Management fees from related parties were
$454,000 $393,000 and $250,000 for the years ended December 31, 2002, 2001, and
2000, respectively.

Note L - Exit Costs

In December 2001, the Board of Directors approved an exit plan to
discontinue the operations of STG in the Atlanta and Southern California
markets. In connection with this decision, we accrued incremental costs that
we expected to incur during the closing of the warehouses of $4.1 million which
are included in General, administrative and other in the Consolidated Statement
of Income for 2001. These costs consisted of lease termination fees for
warehouses and equipment, severance packages, estimated loss on sale of
containers and estimated loss from operations during closing of $2.4 million,
as well as impairment losses on certain assets and goodwill of an additional
$1.7 million. The costs charged to this accrual during 2002 consisted
primarily of lease termination fees and costs necessary to relocate current
customers incurred during 2002. We expect to have the exit plan completed in
the first half of 2003.

|                                                 |  |   |      |   |         |  | 
|------------------------------------------------ |  | - | ---- | - | ------- |  | 
|Total exit costs accrued during 2001             |  | $ | 2.4  |   | million
|                                                 |  |   |      |   |         |  | 
|Total accrued exit costs as of December 31, 2001 |  | $ | 2.4  |   | million
|Costs applied to accrual                         |  |   | (2.2 | ) | million
|                                                 |  |   |      |   |         |  | 
|Total accrued exit costs as of December 31, 2002 |  | $ | 0.2  |   | million
|                                                 |  |   |      |   |         |  | 

Note M - Income Taxes

In June 2001, we purchased the remaining shares of STG, a taxable REIT
subsidiary, and began consolidating the assets and liabilities of STG as of
that date. In addition, we began operations for Shurgard TRS, a taxable REIT
subsidiary, in 2002, which includes Shurgard Preferred Partners, Storage Line
Management and SS Income Plan. STG has also been merged into Storage To Go,
LLC, a wholly-owned subsidiary of Shurgard TRS. The income tax benefit,
calculated at the statutory rate of 34%, consists entirely of a deferred tax
benefit due to net operating losses. The components of deferred tax assets
(liabilities) for Shurgard TRS at December 31, 2001 are included in the table
below. As of December 31, 2002, no valuation allowance had been established.

|                                 |  |      |       |      |  |   |       |  
|-------------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|                                 |  | 2002 |       | 2001
|                                 |  |      |       |     
|Net operating loss carryforwards |  | $    | 8,227 |      |  | $ | 7,173 |  
|Accrual for warehouse closure    |  |      | 56    |      |  |   | 891   |  
|Fixed assets                     |  |      | 25    |      |  |   | (70   | )
|                                 |  |      |       |      |  |   |       |  
|                                 |  | $    | 8,308 |      |  | $ | 7,994 |  
|                                 |  |      |       |      |  |   |       |  

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The following table reconciles Shurgards net income to REIT taxable
income for the years ended December 31, 2002, 2001 and 2000:

|                                               |  |                   |         |                   |  |                   |         |   |  |   |         |  
|---------------------------------------------- |  | ----------------- | ------- | ----------------- |  | ----------------- | ------- | - |  | - | ------- | -
|                                               |  | Year ended        |         | Year ended        |  | Year ended       
|(in thousands)                                 |  | December 31, 2002 |         | December 31, 2001 |  | December 31, 2000
|                                               |  |                   |         |                   |  |                  
|Net Income                                     |  | $                 | 56,633  |                   |  | $                 | 33,312  |   |  | $ | 32,307  |  
|Book adjustment for restatement                |  |                   |         |                   |  |                   |         |   |  |   | 20,666  |  
|Unrealized loss on financial instruments       |  |                   | 10,999  |                   |  |                   | 1,602   |   |  |   |         |  
|Prepaid Rent                                   |  |                   | 21      |                   |  |                   | 244     |   |  |   | (20     | )
|Original Issue Discount                        |  |                   | 40      |                   |  |                   | 131     |   |  |   | 182     |  
|Investment in Unconsolidated Entities          |  |                   | 9,626   |                   |  |                   | 26,181  |   |  |   | 1,935   |  
|Travel and Entertainment                       |  |                   | 185     |                   |  |                   | 194     |   |  |   | 225     |  
|Gain from Distributions in Excess of Tax Basis |  |                   |         |                   |  |                   | 60      |   |  |   |         |  
|Depreciation and Amortization                  |  |                   | 1,580   |                   |  |                   | 5,586   |   |  |   | 2,845   |  
|Gain on Disposition of Assets                  |  |                   | (43     | )                 |  |                   | (141    | ) |  |   | (85     | )
|Other items                                    |  |                   | 167     |                   |  |                   | (260    | ) |  |   | (105    | )
|TROL Lease Expense                             |  |                   | 2,480   |                   |  |                   |        |   |  |   |        |  
|Dividends Paid                                 |  |                   | (87,469 | )                 |  |                   | (70,400 | ) |  |   | (59,908 | )
|                                               |  |                   |         |                   |  |                   |         |   |  |   |         |  
|REIT Tax Loss                                  |  | $                 | (5,781  | )                 |  | $                 | (3,491  | ) |  | $ | (1,958  | )
|                                               |  |                   |         |                   |  |                   |         |   |  |   |         |  

For income tax purposes, distributions paid to common shareholders consist
of ordinary income, capital gains, return of capital or a combination thereof.
For the years ended December 31, 2002, 2001 and 2000 distributions paid per
share were taxable as follows:

|                  |  |        |      |            |  |        |      |            |  |        |      |            |  |  |      |   |  |   |      |  |  |  |       |  
|----------------- |  | ------ | ---- | ---------- |  | ------ | ---- | ---------- |  | ------ | ---- | ---------- |  |  | ---- | - |  | - | ---- |  |  |  | ----- | -
|                  |  | 2002   |      | 2001       |  | 2000  
|                  |  |        |      |            |  |       
|(in thousands)    |  | Amount |      | Percentage |  | Amount |      | Percentage |  | Amount |      | Percentage
|                  |  |        |      |            |  |        |      |            |  |        |      |           
|Ordinary income   |  | $      | 1.92 |            |  |        | 91.0 | %          |  | $      | 1.74 |            |  |  | 84.1 | % |  | $ | 1.73 |  |  |  | 85.2  | %
|Return of capital |  |        | 0.11 |            |  |        | 5.2  | %          |  |        | 0.26 |            |  |  | 12.6 | % |  |   | 0.30 |  |  |  | 14.8  | %
|Capital gains     |  |        | 0.08 |            |  |        | 3.8  | %          |  |        | 0.07 |            |  |  | 3.4  | % |  |   |     |  |  |  | 0.0   | %
|                  |  |        |      |            |  |        |      |            |  |        |      |            |  |  |      |   |  |   |      |  |  |  |       |  
|                  |  | $      | 2.11 |            |  |        | 100  | %          |  | $      | 2.07 |            |  |  | 100  | % |  | $ | 2.03 |  |  |  | 100.0 | %
|                  |  |        |      |            |  |        |      |            |  |        |      |            |  |  |      |   |  |   |      |  |  |  |       |  

Note N  Goodwill and Other Intangible Assets

On January 1, 2002 we adopted SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS No.142 changes the accounting for goodwill from an amortization
method to an impairment-only approach. The following table summarizes our net
income for the years ended December 31, 2002, 2001 and 2000, excluding goodwill
amortization prior to adoption of SFAS No. 142.

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|                                           |                                            |      |                                 |      |  |      |        |       |   |   |        |      | 
|------------------------------------------ | ------------------------------------------ | ---- | ------------------------------- | ---- |  | ---- | ------ | ----- | - | - | ------ | ---- | 
|                                           |                                            |      | For the year ended December 31,
|                                           |                                            |      |                                
|(in thousands except per share data)       |                                            | 2002 |                                 | 2001 |  | 2000
|                                           |                                            |      |                                 |      |  |     
|Reported income before extraordinary items |                                            | $    | 54,909                          |      |  | $    | 34,757 |       |   | $ | 32,307 |     
|Add back: Goodwill amortization            |                                            |      |                                |      |  |      | 1,073  |       |   |   | 1,041  |     
|                                           |                                            |      |                                 |      |  |      |        |       |   |   |        |     
|Adjusted income before extraordinary items |                                            |      | 54,909                          |      |  |      | 35,830 |       |   |   | 33,348 |     
|Early extinguishment of debt               |                                            |      | 1,724                           |      |  |      | (1,445 | )     |   |   |       |     
|                                           |                                            |      |                                 |      |  |      |        |       |   |   |        |     
|Adjusted net income                        |                                            | $    | 56,633                          |      |  | $    | 34,385 |       |   | $ | 33,348 |     
|                                           |                                            |      |                                 |      |  |      |        |       |   |   |        |     
|Basic earnings per share:                  |                                            |      |                                 |      |  |      |        |       |   |   |        |     
|                                           | Reported income before extraordinary items |      | $                               | 1.15 |  |      | $      | 0.63  |   |   | $      | 0.80 | 
|                                           | Add back: Goodwill amortization            |      |                                 |     |  |      |        | 0.04  |   |   |        | 0.04 | 
|                                           |                                            |      |                                 |      |  |      |        |       |   |   |        |     
|                                           | Adjusted income before extraordinary items |      |                                 | 1.15 |  |      |        | 0.67  |   |   |        | 0.84 | 
|                                           | Early extinguishment of debt               |      |                                 | 0.05 |  |      |        | (0.05 | ) |   |        |     | 
|                                           |                                            |      |                                 |      |  |      |        |       |   |   |        |     
|                                           | Adjusted net income                        |      | $                               | 1.20 |  |      | $      | 0.62  |   |   | $      | 0.84 | 
|                                           |                                            |      |                                 |      |  |      |        |       |   |   |        |     
|Diluted earning per share:                 |                                            |      |                                 |      |  |      |        |       |   |   |        |     
|                                           | Reported income before extraordinary items |      | $                               | 1.13 |  |      | $      | 0.63  |   |   | $      | 0.79 | 
|                                           | Add back: Goodwill amortization            |      |                                 |     |  |      |        | 0.04  |   |   |        | 0.03 | 
|                                           |                                            |      |                                 |      |  |      |        |       |   |   |        |     
|                                           | Adjusted income before extraordinary items |      |                                 | 1.13 |  |      |        | 0.67  |   |   |        | 0.82 | 
|                                           | Early extinguishment of debt               |      |                                 | 0.05 |  |      |        | (0.05 | ) |   |        |     | 
|                                           |                                            |      |                                 |      |  |      |        |       |   |   |        |     
|                                           | Adjusted net income                        |      | $                               | 1.18 |  |      | $      | 0.62  |   |   | $      | 0.82 | 
|                                           |                                            |      |                                 |      |  |      |        |       |   |   |        |     

The following table summarizes our expected amortization of intangible
assets, as included in Other assets, net in our Consolidated Balance Sheet,
over the next five years and thereafter (in thousands):

|           |  |   |       | 
|---------- |  | - | ----- | 
|2003       |  | $ | 1,952 | 
|2004       |  |   | 1,040 | 
|2005       |  |   | 709   | 
|2006       |  |   | 404   | 
|2007       |  |   | 347   | 
|thereafter |  |   | 926   | 
|           |  |   |       | 
|           |  | $ | 5,378 | 
|           |  |   |       | 

Note O  Shareholders Equity

In addition to the rights, privileges and powers of Class A Common Stock,
Class B common shareholders received loans from Shurgard to fund certain
obligations to the 17 partnerships that comprised our predecessor. For the
years ended December 31, 2002 and 2001, we received $80,000 and $49,000 in
interest income on these notes. The loans were paid in full as of December 31,
2002 and the Class B Common Stock was converted to Class A Common Stock. As of
December 31, 2002, there are no shareholder loans outstanding.

Shurgard has 40 million shares of preferred stock authorized, of which 2.8
million shares have been designated as Series A Junior Participating Preferred
Stock, (none are issued or outstanding at December 31, 2002); 2 million shares
have been designated as Series B Cumulative Redeemable Preferred Stock (none of
which are issued or outstanding at December 31, 2002, as discussed below), 2
million shares have been designated as Series C Cumulative Redeemable preferred
stock (2 million shares of which are issued and outstanding at December 31,
2002, as discussed below), and 3.45 million shares have been designated as
Series D Cumulative Redeemable Preferred Stock (3.45 million shares of which
are issued and outstanding at December 31, 2002, as discussed below). The Board
of Directors is authorized to determine the rights, preferences and privileges
of the preferred stock including the number of shares constituting any such
series and the designation thereof.

Series C Cumulative Redeemable Preferred Stock requires quarterly
distribution payments totaling 8.7% per year and is callable at our option
after five years, at a redemption price of $25 per share.

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In February 2001, we raised $86.25 million (approximately $83.1 million in
net proceeds) through the sale of 3.45 million shares of Series D Cumulative
Redeemable Preferred Stock. These preferred shares require quarterly
distributions of 8.75% per year and are callable at our option after five
years, at a redemption price of $25 per share.

On March 24, 1995, Shurgard acquired Shurgard Incorporated (the Management
Company) through a merger. Under the Management Company Merger Agreement, we
were contingently obligated to issue additional shares as consideration for
certain partnership interests held by the Management Company, which were not
valued at the time of the merger. On June 5, 2000, we issued the final 387,933
Class A common shares due under this obligation with an aggregate value of $9.2
million.

In 2001, we raised net proceeds after offering costs of $76.0 million
through the sale of 2.7 million shares of Class A Common Stock.

On June 28, 2002, we raised $86.25 million (approximately $82.3 million
net proceeds) through the sale of 2.5 million shares of Class A Common Stock.
We used approximately $50 million of the proceeds to redeem in full our 8.80%
Series B Cumulative Redeemable Preferred Stock, issued on April 16, 1997, on
August 19, 2002. Additional proceeds were used to repay a portion of the
indebtedness under our revolving credit facility.

Note P  Derivative Financial Instruments and Other Comprehensive Income

SFAS No.133 requires that all derivatives be recognized in the balance
sheet and measured at fair value. Gains or losses resulting from changes in the
fair value of derivatives are recognized in earnings or recorded in other
comprehensive income, and recognized in the statement of earnings when the
hedged item affects earnings, depending on the purpose of the derivatives and
whether they qualify for hedge accounting treatment. Changes in the fair value
of derivative instruments that do not qualify for hedge accounting under SFAS
No. 133 are recognized in earnings.

The adoption of SFAS No.133 on January 1, 2001 resulted in a cumulative
reduction in Other Comprehensive Income (OCI) of $348,000. The reduction in
OCI was attributable to losses on cash flow hedges. There was no net gain or
loss recognized in earnings for the years ended December 2002 and 2001 due to
hedge ineffectiveness. Changes in the time value of an interest rate cap have
been excluded from the assessment of hedge effectiveness, are reported in
Interest income and other on the Consolidated Statements of Income and were
$17,000 and $126,000 for the years ended December 31, 2002 and 2001,
respectively. Approximately $25,000 of OCI will be reclassified into earnings
during the next twelve months through amortization.

For the
year ended December 31, 2002, other assets increased $106,000,
other liabilities increased $11.9 million, $11.0 million in
unrealized loss on financial instruments was recognized in earnings and other comprehensive loss increased $912,000 due to changes in the
value of derivative instruments. Total accumulated other comprehensive loss was
$1.9 million as of December 31, 2002.

In March 2002, we entered into a fixed to variable rate swap for $50
million of the senior notes payable due in 2004. This hedge was designated as
a fair value hedge. The gain or loss on the swap and the bonds are recognized
in earnings and the carrying value of the bonds is adjusted accordingly. On
August 20, 2002, we terminated these swaps at a gain of $2 million. This gain
is being amortized to interest expense over the remaining life of the bonds
using the effective interest rate method. For the year ended December 31,
2002, the carrying value of the bonds was increased by $1.6 million. For the
year ended December 31, 2002, interest expense was reduced by $452,000 for
amortization of the gain.

Subsequent to our adoption of SFAS No.133 for the year ended December 31,
2001, other assets increased $106,000, other liabilities increased $2.1
million, $1.6 million in unrealized losses on financial instruments was
recognized in earnings, and other comprehensive loss increased $0.9 million.
Additionally, for the year ended December 31, 2001, we recognized $1.2 million
in interest expense related to the termination of swap agreements for SFPI and
SFPII in connection with paying off the debt.

Duringsee suggestions 2001 we entered into three interest rate swaps to
mitigate the risk of interest rate fluctuations related to our various options
at the end of its Tax Retention Operating Lease transaction. These derivative
instruments do not qualify for hedge accounting treatment under SFAS No. 133.
They are recorded on the Balance Sheet at estimated fair value and adjusted
each period through earnings. As of December 31, 2002, our liability under the
derivative instruments is $12.6 million. We recorded $11.0 million and $1.6
million in unrealized loss for these financial instruments for the years ended
December 31, 2002 and 2001, respectively.

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Note Q - Stock Compensation and Benefit Plans

The 1993 Stock Option Plan (the 1993 Plan) provides for the granting of
options for up to 3% of our outstanding shares of Class A Common Stock at the
end of each year, limited in the aggregate to 5,000,000 shares. In general, the
options vest ratably over five years and must be exercised within ten years
from date of grant. The exercise price for qualified incentive options under
the 1993 Plan must be at least equal to fair market value at date of grant and
at least 85% of fair market value at date of grant for non qualified options.
The 1993 Plan expires in 2003. The remaining outstanding options under the
1993 Plan expire in 2005.

The 1995 Long-Term Incentive Compensation Plan (the 1995 Plan) provided
for the granting of options for up to 2% of the adjusted average shares of our
Class A Common Stock outstanding during the preceding calendar year, as well as
stock appreciation rights, stock awards (including restricted stock),
performance awards, other stock-based awards and distribution equivalent
rights. The 1995 Plan required mandatory acceleration of vesting in the event
of certain mergers and consolidations or a sale of substantially all the assets
or a liquidation of Shurgard, except where such awards were assumed or replaced
in the transaction. The 1995 Plan permitted the plan administrator to authorize
loans, loan guarantees or installment payments to assist award recipients in
acquiring shares pursuant to awards and contains certain limitations imposed by
tax legislation. The 1995 Plan allowed for grants to consultants and agents, as
well as our officers and key employees. The 1995 plan expired in July 2000.

The 2000 Long-Term Incentive Compensation Plan (the 2000 Plan) provides
for the granting of options for up to 2.8 million shares of our Class A Common
Stock, as well as stock appreciation rights, stock awards (including restricted
stock), performance awards, other stock-based awards and distribution
equivalent rights. The 2000 Plan requires mandatory acceleration of vesting in
the event of certain mergers and consolidations or a sale of substantially all
the assets or a liquidation of Shurgard, except where such awards are assumed
or replaced in the transaction. The 2000 Plan permits the plan administrator to
authorize loans, loan guarantees or installment payments to assist award
recipients in acquiring shares pursuant to awards and contains certain
limitations imposed by tax legislation. The 2000 Plan allows for grants to
consultants and agents, as well as our officers, directors and key employees.
We granted 39,325, 34,289 and 39,525 shares of restricted Class A Common Stock
to officers and key employees for years ended December 31, 2002, 2001 and 2000,
respectively, and recorded approximately $416,000, $175,000 and $11,000 in
compensation expense, respectively. The shares granted entitle the grantee to
all shareholder rights: however, the shares will vest ratably over 5 years. If
a grantees employment is terminated prior to the end of the five-year period,
the unvested shares will be forfeited. During 2002, 5,587 shares were
forfeited due to employee terminations. In December 2001, we granted 142,358
shares of discounted options to officers and key employees. During 2002 we
recognized $204,000 in expense related to these options.

In 1993, we also established the Stock Option Plan for Nonemployee
Directors (the Directors Plan) for the purpose of attracting and retaining the
services of experienced and knowledgeable outside directors. This plan was
amended during 1995 and provided current outside directors with 6,000 shares
each in 1995 and 3,000 shares each annually thereafter. Such options vest on
the date of our next annual meeting so long as such director continues to serve
as a director until such date. In 1998 the Directors Plan was amended and
restated to provide for discretionary grants. The total number of shares
reserved under the Plan did not change and remains at 200,000. The exercise
price for options granted under the Directors Plan are equal to fair market
value the day before the date of grant. As of December 31, 2002, 151,680 of
these options were outstanding.

We have an employee incentive savings and stock ownership plan, in which
substantially all employees are eligible to participate. Each year, employees
may contribute an amount up to 15% of their annual compensation not to exceed
the maximum allowable by law. Employee contributions may be invested in one or
more of ten mutual fund investment options administered by a third party. We
match a portion of employee contributions and may make annual discretionary
contributions in the form of company stock. Our expense for contributions to
this plan was approximately $597,000, $737,000 and $809,000 for 2002, 2001 and
2000, respectively. We do not offer post-employment or post-retirement
benefits.

In 1996, we established an Employee Stock Purchase Plan under which
employees can elect to purchase Shurgard stock through regular periodic payroll
deductions without paying broker commissions. This plan provides for potential
price discounts of up to 15%. Effective January 2000, a 10% discount was
offered to employees under this plan.

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The weighted average remaining contractual life of options outstanding at
December 31, 2002 was 7.6 years and option prices ranged from $20.75 to $34.70
per share.

The following table summarizes information about stock options outstanding
and exercisable at December 31, 2002:

|                               |           |  |           |           |                |   |          |       | 
|------------------------------ | --------- |  | --------- | --------- | -------------- | - | -------- | ----- | 
|                               |           |  |           |           |                |   | Weighted
|                               |           |  | Number of |           | Average       
|                               |           |  | Shares    |           | Exercise Price
|                               |           |  |           |           |               
|Outstanding, January 1, 2000   |           |  | 2,247,576 |           |                | $ | 24.46    |      
|                               | Granted   |  |           | 1,164,500 |                |   | $        | 23.15 | 
|                               | Forfeited |  |           | (385,583  | )              |   | $        | 24.40 | 
|                               | Exercised |  |           | (36,854   | )              |   | $        | 23.01 | 
|                               |           |  |           |           |                |   |          |      
|Outstanding, December 31, 2000 |           |  | 2,989,639 |           |                | $ | 23.98    |      
|                               | Granted   |  |           | 545,418   |                |   | $        | 28.77 | 
|                               | Forfeited |  |           | (197,643  | )              |   | $        | 24.75 | 
|                               | Exercised |  |           | (240,064  | )              |   | $        | 22.82 | 
|                               |           |  |           |           |                |   |          |      
|Outstanding, December 31, 2001 |           |  | 3,097,350 |           |                | $ | 24.86    |      
|                               | Granted   |  |           | 485,939   |                |   | $        | 31.32 | 
|                               | Forfeited |  |           | (157,335  | )              |   | $        | 24.95 | 
|                               | Exercised |  |           | (539,493  | )              |   | $        | 23.78 | 
|                               |           |  |           |           |                |   |          |      
|Outstanding, December 31, 2002 |           |  | 2,886,461 |           |                | $ | 26.15    |      
|                               |           |  |           |           |                |   |          |      
|Exercisable, December 31, 2000 |           |  | 999,709   |           |                | $ | 25.34    |      
|                               |           |  |           |           |                |   |          |      
|Exercisable, December 31, 2001 |           |  | 1,451,793 |           |                | $ | 24.69    |      
|                               |           |  |           |           |                |   |          |      
|Exercisable, December 31, 2002 |           |  | 1,807,732 |           |                | $ | 24.78    |      
|                               |           |  |           |           |                |   |          |      

|                 |  |                   |           |                  |  |                     |  |  |         |  |           | 
|---------------- |  | ----------------- | --------- | ---------------- |  | ------------------- |  |  | ------- |  | --------- | 
|                 |  | Number of Options |           | Weighted Average |  | Number of          
|Range of         |  | Outstanding       |           | Remaining        |  | Options Exercisable
|Exercise Prices  |  | December 31, 2002 |           | Contractual Life |  | December 31, 2002  
|                 |  |                   |           |                  |  |                    
|$20.75 to $23.00 |  |                   | 27,100    |                  |  | 2.1 years           |  |  | 27,100  | 
|$25.50 to $27.00 |  |                   | 17,696    |                  |  | 3.2 years           |  |  | 17,696  | 
|$28.25 to $28.25 |  |                   | 122,923   |                  |  | 4.1 years           |  |  | 122,923 | 
|$27.88 to $29.00 |  |                   | 241,266   |                  |  | 5.1 years           |  |  | 241,266 | 
|$21.31 to $27.56 |  |                   | 640,454   |                  |  | 6.6 years           |  |  | 633,787 | 
|$22.63 to $23.31 |  |                   | 863,840   |                  |  | 7.7 years           |  |  | 564,692 | 
|$24.56 to $32.25 |  |                   | 487,243   |                  |  | 8.8 years           |  |  | 200,268 | 
|$28.99 to $34.70 |  |                   | 485,939   |                  |  | 9.9 years           |  |  |        | 
|                 |  |                   |           |                  |  |                     |  |  |         |  |           | 
|                 |  |                   | 2,886,461 |                  |  |                     |  |  |         |  | 1,807,732 | 
|                 |  |                   |           |                  |  |                     |  |  |         |  |           | 

We have adopted the disclosure only provisions of SFAS No.123, Accounting
for Stock-Based Compensation. No compensation cost has been recognized for
options granted at market price. Had compensation cost for options granted
under our stock option plans been determined based on the fair value at the
grant date for awards in 2000, 2001 and 2002 consistent with the provisions of
SFAS No.123, our net income and net income per share would have been reduced to
the pro forma amounts indicated below (in thousands):

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|                                               |                      |   |                         |        |      |   |      |        |   |   |      |        |  
|---------------------------------------------- | -------------------- | - | ----------------------- | ------ | ---- | - | ---- | ------ | - | - | ---- | ------ | -
|                                               |                      |   | Year Ended December 31,
|                                               |                      |   |                        
|                                               |                      |   | 2002                    |        | 2001 |   | 2000
|                                               |                      |   |                         |        |      |   |     
|Net income:                                    |                      |   |                         |        |      |   |      |        |   |   |      |       
|                                               | As reported          |   | $                       | 56,633 |      |   | $    | 33,312 |   |   | $    | 32,307 |  
|                                               | Compensation expense |   |                         | (1,061 | )    |   |      | (1,854 | ) |   |      | (1,478 | )
|                                               |                      |   |                         |        |      |   |      |        |   |   |      |        |  
|                                               | Pro forma            |   | $                       | 55,572 |      |   | $    | 31,458 |   |   | $    | 30,829 |  
|                                               |                      |   |                         |        |      |   |      |        |   |   |      |        |  
|Basic net income per share:                    |                      |   |                         |        |      |   |      |        |   |   |      |       
|                                               | As reported          |   | $                       | 1.20   |      |   | $    | 0.59   |   |   | $    | 0.80   |  
|                                               | Pro forma            |   | $                       | 1.17   |      |   | $    | 0.53   |   |   | $    | 0.75   |  
|Dilutive net income per share:                 |                      |   |                         |        |      |   |      |        |   |   |      |       
|                                               | As reported          |   | $                       | 1.18   |      |   | $    | 0.59   |   |   | $    | 0.79   |  
|                                               | Pro forma            |   | $                       | 1.15   |      |   | $    | 0.53   |   |   | $    | 0.74   |  
|Weighted average fair value of options granted |                      | $ | 1.75                    |        |      | $ | 2.16 |        |   | $ | 2.54 |       

The fair value of options granted under our stock option plans during
2002, 2001 and 2000 was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions used:
dividend yield of 8.20%, 8.41% and 8.81%; expected volatility of 20%, 19% and
28%; risk free interest rate of 2.76%, 5.07% and 5.12%; and expected life of
5.2, 6.5 and 6.5 years, respectively.

Note R  Shareholder Rights Plan

In March 1994, we adopted a Shareholder Rights Plan and declared a
distribution of one Right for each outstanding share of common stock. Under
certain conditions, each Right may be exercised to purchase one one-hundredth
of a share of Series A Junior Participating Preferred Stock at a purchase price
of $65, subject to adjustment. The Rights will be exercisable only if a person
or group has acquired 10% or more of the outstanding shares of common stock, or
following the commencement of a tender or exchange offer for 10% or more of
such outstanding shares of common stock. If a person or group acquires more
than 10% of the then outstanding shares of common stock, each Right will
entitle its holder to receive, on exercise, common stock (or, in certain
circumstances, cash, property or other securities of Shurgard) having a value
equal to two times the exercise price of the Right. In addition, if Shurgard is
acquired in a merger or other business combination transaction, each Right will
entitle its holder to purchase that number of the acquiring companys common
shares having a market value of twice the Rights exercise price. We will be
entitled to redeem the Rights at $0.0001 per Right at any time prior to the
earlier of the expiration of the Rights in March 2004 or the time that a person
has acquired a 10% position. The Rights do not have voting or distribution
rights, and until they become exercisable, have no dilutive effect on our
earnings.

Note S  Net Income Per Share

The following summarizes the computation of basic and diluted net income
per share:

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|                                     |  |            |         |        |  |          |        |            |  |   |       |  
|------------------------------------ |  | ---------- | ------- | ------ |  | -------- | ------ | ---------- |  | - | ----- | -
|                                     |  |            |         |        |  | Weighted |        | Net Income
|                                     |  |            |         |        |  | Average  |        | Per       
|(in thousands except per share date) |  | Net income |         | Shares |  | Share   
|                                     |  |            |         |        |  |         
|For the year ended December 31, 2000 |  |            |         |        |  |          |        |            |  |   |       |  
|Net income                           |  | $          | 32,307  |        |  |          |        |            |  |   |       |  
|Less: preferred distributions        |  |            | (8,750  | )      |  |          |        |            |  |   |       |  
|                                     |  |            |         |        |  |          |        |            |  |   |       |  
|Basic net income                     |  |            | 23,557  |        |  |          | 29,561 |            |  | $ | 0.80  |  
|Effect of dilutive stock options     |  |            |        |        |  |          | 200    |            |  |   | (0.01 | )
|                                     |  |            |         |        |  |          |        |            |  |   |       |  
|Diluted net income                   |  | $          | 23,557  |        |  |          | 29,761 |            |  | $ | 0.79  |  
|                                     |  |            |         |        |  |          |        |            |  |   |       |  
|For the year ended December 31, 2001 |  |            |         |        |  |          |        |            |  |   |       |  
|Net income                           |  | $          | 33,312  |        |  |          |        |            |  |   |       |  
|Less: preferred distributions        |  |            | (15,098 | )      |  |          |        |            |  |   |       |  
|                                     |  |            |         |        |  |          |        |            |  |   |       |  
|Basic net income                     |  |            | 18,214  |        |  |          | 30,689 |            |  | $ | 0.59  |  
|Effect of dilutive stock options     |  |            |        |        |  |          | 397    |            |  |   |      |  
|                                     |  |            |         |        |  |          |        |            |  |   |       |  
|Diluted net income                   |  | $          | 18,214  |        |  |          | 31,086 |            |  | $ | 0.59  |  
|                                     |  |            |         |        |  |          |        |            |  |   |       |  
|For the year ended December 31, 2002 |  |            |         |        |  |          |        |            |  |   |       |  
|Net income                           |  | $          | 56,633  |        |  |          |        |            |  |   |       |  
|Less: preferred distributions        |  |            | (14,695 | )      |  |          |        |            |  |   |       |  
|                                     |  |            |         |        |  |          |        |            |  |   |       |  
|Basic net income                     |  |            | 41,938  |        |  |          | 34,836 |            |  | $ | 1.20  |  
|Effect of dilutive stock options     |  |            |        |        |  |          | 565    |            |  |   | (0.02 | )
|                                     |  |            |         |        |  |          |        |            |  |   |       |  
|Diluted net income                   |  | $          | 41,938  |        |  |          | 35,401 |            |  | $ | 1.18  |  
|                                     |  |            |         |        |  |          |        |            |  |   |       |  

Note T  Segment Reporting

Shurgard currently has two reportable segments: Same and New Stores. Our
definition of Same Stores includes existing stores acquired prior to January 1
of the previous year as well as developed properties that have been operating
for a full two years as of January 1 of the current year. We project that newly
developed properties will reach stabilization in an average of approximately 24
months. New Stores include existing domestic facilities that had not been
acquired as of January 1 of the previous year as well as domestic developed
properties that have not been operating a full two years as of January 1 of the
current year.

These reportable segments allow us to focus on improving results from our
existing domestic real estate assets and renting up our new domestic
facilities. We evaluate each segments performance based on net operating
income (NOI) and NOI after indirect and leasehold expenses. NOI is defined as
rental revenue less direct operating expenses and real estate taxes, but does not include any allocation of indirect operating
expense. Indirect and leasehold expense includes land or building lease expense
and certain shared property costs such as bank fees, district and corporate
management, purchasing, national contracts personnel and marketing, as well as
certain overhead costs allocated to property operations such as business
information technology, legal services, human resources and accounting.
Indirect operating expense is allocated to stores based on number of months in
operation during the period and does not include internal real estate
acquisition costs or abandoned development expense.

The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. There are no inter-segment
sales and transfers. We do not allocate development and acquisition expense,
depreciation and amortization, general, administrative and other, interest
expense, interest income and other (net) and minority interest to the segments.

Using the definition of Same Store and New Store described above, the
portfolio of assets reported in these segments changes from year to year.
Assets transition from New Store to Same Store over time. The following table
illustrates the results using the 2002 Same Store and New Store base for
reportable segments as of and for the years ended December 31, 2002 and 2001.
Same stores include all stores acquired prior to January 1, 2001, and domestic
developments opened prior to January 1, 2000. New stores represent all stores
acquired after January 1, 2001, and domestic developments opened after January
1, 2000. Disposed stores represent properties sold during 2002:

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|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|--------------------------------------------------------- |  | ----------- | ------- | ---------- |  | -------- | ------- | ----- |  | - | --- |  |  | - | --------- | -
|(in thousands)                                            |  | Same Stores |         | New Stores |  | Disposed |         | Total
|                                                          |  |             |         |            |  |          |         |      
|Year Ended December 31, 2002                              |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Real estate operations revenue                            |  | $           | 231,350 |            |  | $        | 35,979  |       |  | $ | 203 |  |  | $ | 267,532   |  
|Less unconsolidated joint ventures                        |  |             | (11,330 | )          |  |          | (3,264  | )     |  |   |    |  |  |   | (14,594   | )
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated revenue                                      |  |             | 220,020 |            |  |          | 32,715  |       |  |   | 203 |  |  |   | 252,938   |  
|Direct operating and real estate tax expense              |  |             | 67,658  |            |  |          | 17,425  |       |  |   | 124 |  |  |   | 85,207    |  
|Less unconsolidated joint ventures                        |  |             | (3,972  | )          |  |          | (1,572  | )     |  |   |    |  |  |   | (5,544    | )
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated direct operating and real estate tax
expense |  |             | 63,686  |            |  |          | 15,853  |       |  |   | 124 |  |  |   | 79,663    |  
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated NOI                                          |  |             | 156,334 |            |  |          | 16,862  |       |  |   | 79  |  |  |   | 173,275   |  
|Indirect and leasehold expense                            |  |             | 13,080  |            |  |          | 5,643   |       |  |   |    |  |  |   | 18,723    |  
|Less unconsolidated joint ventures                        |  |             | (765    | )          |  |          | (383    | )     |  |   |    |  |  |   | (1,148    | )
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated indirect and leasehold expense               |  |             | 12,315  |            |  |          | 5,260   |       |  |   |    |  |  |   | 17,575    |  
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated NOI after indirect and leasehold
expense     |  | $           | 144,019 |            |  | $        | 11,602  |       |  | $ | 79  |  |  | $ | 155,700   |  
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Total Assets                                              |  | $           | 963,715 |            |  | $        | 297,212 |       |  | $ |    |  |  | $ | 1,260,927 |  
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Year Ended December 31, 2001                              |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Real estate operations revenue                            |  | $           | 227,776 |            |  | $        | 13,263  |       |  | $ | 763 |  |  | $ | 241,802   |  
|Less unconsolidated joint ventures                        |  |             | (13,945 | )          |  |          | (1,495  | )     |  |   |    |  |  |   | (15,440   | )
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated revenue                                      |  |             | 213,831 |            |  |          | 11,768  |       |  |   | 763 |  |  |   | 226,362   |  
|Direct operating and real estate tax expense              |  |             | 65,627  |            |  |          | 7,446   |       |  |   | 375 |  |  |   | 73,448    |  
|Less unconsolidated joint ventures                        |  |             | (4,730  | )          |  |          | (1,123  | )     |  |   |    |  |  |   | (5,853    | )
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated direct operating and real estate tax
expense |  |             | 60,897  |            |  |          | 6,323   |       |  |   | 375 |  |  |   | 67,595    |  
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated NOI                                          |  |             | 152,934 |            |  |          | 5,445   |       |  |   | 388 |  |  |   | 158,767   |  
|Indirect and leasehold expense                            |  |             | 14,220  |            |  |          | 2,703   |       |  |   |    |  |  |   | 16,923    |  
|Less unconsolidated joint ventures                        |  |             | (807    | )          |  |          | (234    | )     |  |   |    |  |  |   | (1,041    | )
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated indirect and leasehold expense               |  |             | 13,413  |            |  |          | 2,469   |       |  |   |    |  |  |   | 15,882    |  
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated NOI after indirect and leasehold
expense     |  | $           | 139,521 |            |  | $        | 2,976   |       |  | $ | 388 |  |  | $ | 142,885   |  
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  
|Total Assets                                              |  | $           | 992,897 |            |  | $        | 187,077 |       |  | $ |    |  |  | $ | 1,179,974 |  
|                                                          |  |             |         |            |  |          |         |       |  |   |     |  |  |   |           |  

The following table illustrates the results using the 2001 Same Store and
New Store base for reportable segments as of and for the years ended December
31, 2001 and 2000. Same stores include all stores acquired prior to January 1,
2000, and all domestic developments opened prior to January 1, 1999. New
stores represent all stores acquired after January 1, 2000 and domestic
developments opened after January 1, 1999:

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|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|--------------------------------------------------------- |  | ----------- | --------- | ---------- |  | -------- | ------- | ----- |  | - | --- |  |  | - | --------- | -
|Year Ended December 31, 2001                              |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|(in thousands)                                            |  | Same Stores |           | New Stores |  | Disposed |         | Total
|                                                          |  |             |           |            |  |          |         |      
|Real estate operations revenue                            |  | $           | 210,277   |            |  | $        | 31,248  |       |  | $ | 277 |  |  | $ | 241,802   |  
|Less unconsolidated joint ventures                        |  |             | (11,700   | )          |  |          | (3,740  | )     |  |   |    |  |  |   | (15,440   | )
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated revenue                                      |  |             | 198,577   |            |  |          | 27,508  |       |  |   | 277 |  |  |   | 226,362   |  
|Direct operating and real estate tax expense              |  |             | 59,521    |            |  |          | 13,765  |       |  |   | 162 |  |  |   | 73,448    |  
|Less unconsolidated joint ventures                        |  |             | (3,754    | )          |  |          | (2,099  | )     |  |   |    |  |  |   | (5,853    | )
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated direct operating and real estate tax
expense |  |             | 55,767    |            |  |          | 11,666  |       |  |   | 162 |  |  |   | 67,595    |  
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated NOI                                          |  |             | 142,810   |            |  |          | 15,842  |       |  |   | 115 |  |  |   | 158,767   |  
|Indirect and leasehold expense                            |  |             | 13,062    |            |  |          | 3,861   |       |  |   |    |  |  |   | 16,923    |  
|Less unconsolidated joint ventures                        |  |             | (615      | )          |  |          | (426    | )     |  |   |    |  |  |   | (1,041    | )
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated indirect and leasehold expense               |  |             | 12,447    |            |  |          | 3,435   |       |  |   |    |  |  |   | 15,882    |  
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated NOI after indirect and leasehold
expense     |  | $           | 130,363   |            |  | $        | 12,407  |       |  | $ | 115 |  |  | $ | 142,885   |  
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Total Assets                                              |  | $           | 992,897   |            |  | $        | 187,077 |       |  | $ |    |  |  | $ | 1,179,974 |  
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Year Ended December 31, 2000                              |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Real estate operations revenue                            |  | $           | 197,786   |            |  | $        | 15,423  |       |  | $ | 537 |  |  | $ | 213,746   |  
|Less unconsolidated joint ventures                        |  |             | (11,226   | )          |  |          | (2,177  | )     |  |   |    |  |  |   | (13,403   | )
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated revenue                                      |  |             | 186,560   |            |  |          | 13,246  |       |  |   | 537 |  |  |   | 200,343   |  
|Direct operating and real estate tax expense              |  |             | 57,727    |            |  |          | 7,908   |       |  |   | 293 |  |  |   | 65,928    |  
|Less unconsolidated joint ventures                        |  |             | (3,579    | )          |  |          | (1,450  | )     |  |   |    |  |  |   | (5,029    | )
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated direct operating and real estate tax
expense |  |             | 54,148    |            |  |          | 6,458   |       |  |   | 293 |  |  |   | 60,899    |  
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated NOI                                          |  |             | 132,412   |            |  |          | 6,788   |       |  |   | 244 |  |  |   | 139,444   |  
|Indirect and leasehold expense                            |  |             | 13,266    |            |  |          | 1,944   |       |  |   |    |  |  |   | 15,210    |  
|Less unconsolidated joint ventures                        |  |             | (504      | )          |  |          | (232    | )     |  |   |    |  |  |   | (736      | )
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated indirect and leasehold expense               |  |             | 12,762    |            |  |          | 1,712   |       |  |   |    |  |  |   | 14,474    |  
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Consolidated NOI after indirect and leasehold
expense     |  | $           | 119,650   |            |  | $        | 5,076   |       |  | $ | 244 |  |  | $ | 124,970   |  
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  
|Total Assets                                              |  | $           | 1,008,374 |            |  | $        | 116,325 |       |  | $ |    |  |  | $ | 1,124,699 |  
|                                                          |  |             |           |            |  |          |         |       |  |   |     |  |  |   |           |  

The following table reconciles the reportable segments revenue per the table above to consolidated total revenue for
the years ended December 31, 2002, 2001 and 2000:

|                                    |  |      |         |      |  |      |         |  |  |   |         | 
|----------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | - | ------- | 
|(in thousands)                      |  | 2002 |         | 2001 |  | 2000
|                                    |  |      |         |      |  |     
|Consolidated real estate operations |  | $    | 252,938 |      |  | $    | 226,362 |  |  | $ | 200,343 | 
|Other                               |  |      | 11,175  |      |  |      | 6,228   |  |  |   | 1,615   | 
|                                    |  |      |         |      |  |      |         |  |  |   |         | 
|Total revenue                       |  | $    | 264,113 |      |  | $    | 232,590 |  |  | $ | 201,958 | 
|                                    |  |      |         |      |  |      |         |  |  |   |         | 

The following table reconciles the reportable segments direct and indirect
operating expense to consolidated operating expense and real estate taxes for
the years ended December 31, 2002, 2001 and 2000:

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|                                                          |  |      |         |      |  |      |        |  |  |   |        | 
|--------------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------ |  |  | - | ------ | 
|(in thousands)                                            |  | 2002 |         | 2001 |  | 2000
|                                                          |  |      |         |      |  |     
|Consolidated direct operating and real
estate tax expense |  | $    | 79,663  |      |  | $    | 67,595 |  |  | $ | 60,899 | 
|Consolidated indirect operating and
leasehold expense     |  |      | 17,575  |      |  |      | 15,882 |  |  |   | 14,474 | 
|Other operating expense                                   |  |      | 9,141   |      |  |      | 5,561  |  |  |   | 691    | 
|                                                          |  |      |         |      |  |      |        |  |  |   |        | 
|Consolidated operating and real estate
tax expense        |  | $    | 106,379 |      |  | $    | 89,038 |  |  | $ | 76,064 | 
|                                                          |  |      |         |      |  |      |        |  |  |   |        | 

The following table reconciles the reportable segments NOI per the table above to consolidated net income for the
years ended December 31, 2002, 2001 and 2000:

|                                                      |  |      |         |      |  |      |         |   |  |   |         |  
|----------------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|(in thousands)                                        |  | 2002 |         | 2001 |  | 2000
|                                                      |  |      |         |      |  |     
|Consolidated NOI after indirect and
leasehold expense |  | $    | 155,700 |      |  | $    | 142,885 |   |  | $ | 124,970 |  
|Loss from other real estate investments               |  |      | (1,396  | )    |  |      | (3,271  | ) |  |   | (3,420  | )
|Other revenue                                         |  |      | 11,175  |      |  |      | 6,228   |   |  |   | 1,615   |  
|Other operating expense                               |  |      | (9,141  | )    |  |      | (5,561  | ) |  |   | (691    | )
|Depreciation and amortization                         |  |      | (47,963 | )    |  |      | (45,234 | ) |  |   | (40,693 | )
|Interest on loans                                     |  |      | (32,025 | )    |  |      | (36,562 | ) |  |   | (36,175 | )
|Unrealized loss on financial instruments              |  |      | (10,999 | )    |  |      | (1,602  | ) |  |   |         |  
|General and administrative                            |  |      | (11,195 | )    |  |      | (11,770 | ) |  |   | (4,911  | )
|Interest income and other                             |  |      | 5,900   |      |  |      | 5,783   |   |  |   | 3,617   |  
|Amortization of participation rights
discount         |  |      | (4,824  | )    |  |      | (16,876 | ) |  |   | (11,262 | )
|Minority interest                                     |  |      | (637    | )    |  |      | (808    | ) |  |   | (743    | )
|Income tax benefit                                    |  |      | 314     |      |  |      | 1,545   |   |  |   |        |  
|Early extinguishment of debt                          |  |      | 1,724   |      |  |      | (1,445  | ) |  |   |        |  
|                                                      |  |      |         |      |  |      |         |   |  |   |         |  
|Net income                                            |  | $    | 56,633  |      |  | $    | 33,312  |   |  | $ | 32,307  |  
|                                                      |  |      |         |      |  |      |         |   |  |   |         |  

The following table reconciles the reportable segments assets to consolidated assets as of December 31, 2002,
2001, and 2000:

|                              |  |      |           |      |  |      |           |   |  |   |           |  
|----------------------------- |  | ---- | --------- | ---- |  | ---- | --------- | - |  | - | --------- | -
|(in thousands)                |  | 2002 |           | 2001 |  | 2000
|                              |  |      |           |      |  |     
|Segment assets                |  | $    | 1,260,927 |      |  | $    | 1,179,974 |   |  | $ | 1,124,699 |  
|Unconsolidated joint ventures |  |      | (95,537   | )    |  |      | (88,205   | ) |  |   | (88,167   | )
|Corporate assets              |  |      | 254,786   |      |  |      | 147,036   |   |  |   | 193,710   |  
|                              |  |      |           |      |  |      |           |   |  |   |           |  
|Consolidated assets           |  | $    | 1,420,176 |      |  | $    | 1,238,805 |   |  | $ | 1,230,242 |  
|                              |  |      |           |      |  |      |           |   |  |   |           |  

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Note U  Supplemental Quarterly Financial Data (Unaudited)

|                                      |  |                    |        |          |  |               |        |             |  |              |        |               |  |             |        |             |  |               |        |  |  |   |        |  |  |   |        |  |  |   |        | 
|------------------------------------- |  | ------------------ | ------ | -------- |  | ------------- | ------ | ----------- |  | ------------ | ------ | ------------- |  | ----------- | ------ | ----------- |  | ------------- | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------ | 
|                                      |  | Three months Ended
|                                      |  |                   
|                                      |  | As previously      |        | As       |  | As previously |        |             |  |              |        | As previously |  |             |        |             |  | As previously |        |  |  |  
|                                      |  | reported           |        | restated |  | reported      |        | As restated |  | reported     |        | As restated   |  | reported    |        | As restated
|                                      |  |                    |        |          |  |               |        |             |  |              |        |               |  |             |        |            
|                                      |  | March 31           |        | March 31 |  | June 30       |        | June 30     |  | September 30 |        | September 30  |  | December 31 |        | December 31
|(in thousands, except per share data) |  | 2002               |        | 2002     |  | 2002          |        | 2002        |  | 2002         |        | 2002          |  | 2002        |        | 2002       
|                                      |  |                    |        |          |  |               |        |             |  |              |        |               |  |             |        |            
|Revenue                               |  | $                  | 60,616 |          |  | $             | 60,616 |             |  | $            | 64,013 |               |  | $           | 64,013 |             |  | $             | 69,400 |  |  | $ | 69,400 |  |  | $ | 70,084 |  |  | $ | 70,084 | 
|Income from operations                |  | $                  | 22,373 |          |  | $             | 22,373 |             |  | $            | 24,276 |               |  | $           | 24,276 |             |  | $             | 27,041 |  |  | $ | 27,041 |  |  | $ | 23,490 |  |  | $ | 23,490 | 
|Net income                            |  | $                  | 13,214 |          |  | $             | 13,389 |             |  | $            | 18,676 |               |  | $           | 14,083 |             |  | $             | 18,722 |  |  | $ | 13,390 |  |  | $ | 17,020 |  |  | $ | 15,771 | 
|Net income per common share:          |  |                    |        |          |  |               |        |             |  |              |        |               |  |             |        |             |  |               |        |  |  |   |        |  |  |   |        |  |  |   |        | 
|Basic                                 |  | $                  | 0.28   |          |  | $             | 0.28   |             |  | $            | 0.44   |               |  | $           | 0.30   |             |  | $             | 0.42   |  |  | $ | 0.27   |  |  | $ | 0.38   |  |  | $ | 0.36   | 
|Diluted                               |  | $                  | 0.27   |          |  | $             | 0.28   |             |  | $            | 0.43   |               |  | $           | 0.29   |             |  | $             | 0.42   |  |  | $ | 0.27   |  |  | $ | 0.38   |  |  | $ | 0.35   | 

|                                      |  |                    |        |         |  |              |        |              |  |               |        |             |  |          |        |               |  |   |        |  |  |   |        | 
|------------------------------------- |  | ------------------ | ------ | ------- |  | ------------ | ------ | ------------ |  | ------------- | ------ | ----------- |  | -------- | ------ | ------------- |  | - | ------ |  |  | - | ------ | 
|                                      |  | Three months Ended
|                                      |  |                   
|                                      |  |                    |        |         |  |              |        |              |  | As previously |        |             |  |          |        | As previously |  |   |        | 
|                                      |  |                    |        |         |  |              |        |              |  | reported      |        | As restated |  | reported |        | As restated  
|                                      |  |                    |        |         |  |              |        |              |  |               |        |             |  |          |        |              
|                                      |  | March 31           |        | June 30 |  | September 30 |        | September 30 |  | December 31   |        | December 31
|(in thousands, except per share data) |  | 2001               |        | 2001    |  | 2001         |        | 2001         |  | 2001          |        | 2001       
|                                      |  |                    |        |         |  |              |        |              |  |               |        |            
|Revenue                               |  | $                  | 53,133 |         |  | $            | 58,397 |              |  | $             | 60,935 |             |  | $        | 60,935 |               |  | $ | 60,125 |  |  | $ | 60,125 | 
|Income from operations                |  | $                  | 18,362 |         |  | $            | 22,431 |              |  | $             | 24,443 |             |  | $        | 24,443 |               |  | $ | 18,041 |  |  | $ | 18,041 | 
|Net income                            |  | $                  | 4,137  |         |  | $            | 9,962  |              |  | $             | 11,715 |             |  | $        | 8,944  |               |  | $ | 9,100  |  |  | $ | 10,269 | 
|Net income per common share:          |  |                    |        |         |  |              |        |              |  |               |        |             |  |          |        |               |  |   |        |  |  |   |        | 
|Basic                                 |  | $                  | 0.04   |         |  | $            | 0.20   |              |  | $             | 0.26   |             |  | $        | 0.17   |               |  | $ | 0.15   |  |  | $ | 0.18   | 
|Diluted                               |  | $                  | 0.04   |         |  | $            | 0.19   |              |  | $             | 0.25   |             |  | $        | 0.16   |               |  | $ | 0.15   |  |  | $ | 0.17   | 

Note V  Contingent Liabilities and Commitments

The following tables summarize our contractual obligations and our
off-balance sheet commitments.

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|                               |       |   |                        |         |      |   |           |        |           |   |        |         |  |   |        |        |  |   |          |         | 
|------------------------------ | ----- | - | ---------------------- | ------- | ---- | - | --------- | ------ | --------- | - | ------ | ------- |  | - | ------ | ------ |  | - | -------- | ------- | 
|                               |       |   | Payments due by Period
|                               |       |   |                       
|                               |       |   |                        |         |      |   |           |        |           |   |        |         |  |   |        |        |  |   | 2008 and
|                               |       |   | Total                  |         | 2003 |   | 2004-2005 |        | 2006-2007 |   | beyond
|                               |       |   |                        |         |      |   |           |        |           |   |       
|Contractual Obligations        |       |   |                        |         |      |   |           |        |           |   |        |         |  |   |        |        |  |   |          |        
|Long-term debt                 |       | $ | 443,289                |         |      | $ | 66,266    |        |           | $ | 73,123 |         |  | $ | 52,595 |        |  | $ | 251,305  |        
|Operating lease obligations    |       |   | 77,363                 |         |      |   | 5,644     |        |           |   | 11,274 |         |  |   | 11,066 |        |  |   | 49,379   |        
|Participation rights liability |       |   | 47,472                 |         |      |   | 27,406    |        |           |   | 20,066 |         |  |   |       |        |  |   |         |        
|                               |       |   |                        |         |      |   |           |        |           |   |        |         |  |   |        |        |  |   |          |        
|                               | Total |   | $                      | 568,124 |      |   | $         | 99,316 |           |   | $      | 104,463 |  |   | $      | 63,661 |  |   | $        | 300,684 | 
|                               |       |   |                        |         |      |   |           |        |           |   |        |         |  |   |        |        |  |   |          |        

|                                                            |        |   |                                            |         |      |   |           |         |           |   |         |         |  |   |       |       |          |   |   |   | 
|----------------------------------------------------------- | ------ | - | ------------------------------------------ | ------- | ---- | - | --------- | ------- | --------- | - | ------- | ------- |  | - | ----- | ----- | -------- | - | - | - | 
|                                                            |        |   | Amount of Commitment Expiration per Period
|                                                            |        |   |                                           
|                                                            |        |   | Total                                      |         |      |   |           |         |           |   |         |         |  |   |       |       |          |   |  
|                                                            |        |   | amounts                                    |         |      |   |           |         |           |   |         |         |  |   |       |       | 2008 and
|                                                            |        |   | Committed                                  |         | 2003 |   | 2004-2005 |         | 2006-2007 |   | beyond 
|                                                            |        |   |                                            |         |      |   |           |         |           |   |        
|Other Commercial Commitments
& Contingent Liabilities       |        |   |                                            |         |      |   |           |         |           |   |         |         |  |   |       |       |          |   |   |  
|Joint Venture loan guarantees                               |        | $ | 15,097                                     |         |      | $ | 4,426     |         |           | $ | 8,971   |         |  | $ | 1,700 |       |          | $ |  |  
|Residual lease guarantees on
tax retention operating leases |        |   | 134,342                                    |         |      |   |           |         |           |   | 134,342 |         |  |   |       |       |          |   |   |  
|Development contract commitments                            |        |   | 316                                        |         |      |   | 316       |         |           |   |         |         |  |   |       |       |          |   |   |  
|Other related party guarantees                              |        |   | 20,363                                     |         |      |   |           |         |           |   | 20,363  |         |  |   |       |       |          |   |   |  
|Contingent obligations under
European joint venture         |        |   | 147,600                                    |         |      |   | 147,600   |         |           |   |        |         |  |   |      |       |          |   |  |  
|                                                            |        |   |                                            |         |      |   |           |         |           |   |         |         |  |   |       |       |          |   |   |  
|                                                            | Totals |   | $                                          | 317,718 |      |   | $         | 152,342 |           |   | $       | 163,676 |  |   | $     | 1,700 |          |   | $ |  | 
|                                                            |        |   |                                            |         |      |   |           |         |           |   |         |         |  |   |       |       |          |   |   |  

We are a defendant in litigation filed on June 17, 2002, in the Superior
Court of California for Orange County styled as Gary Drake v. Shurgard Storage
Centers, Inc. et al (Case No. 02CC00152). The complaint alleges that we
misrepresent the size of our storage units, seeks class action status and seeks
damages, injunctive relief and declaratory relief against us under California
statutory and common law relating to consumer protection, unfair competition,
fraud and deceit and negligent misrepresentation. We do not currently believe
that the outcome of this litigation will have a material adverse effect on our
financial position or results of operations. However, we cannot presently
determine the potential total damages, if any, or the ultimate outcome of the
litigation. We intend to vigorously defend this action.

We are a defendant in litigation filed on October 30, 2002, in the United
States District Court for the Northern District of California styled as
Patricia Scura et al. v. Shurgard Storage Centers, Inc. (Case No. C
02-5246-WDB). The complaint alleges that we required our hourly store
employees to perform work before and after their scheduled work times and
failed to pay overtime compensation for work performed before and after hours
and during meal periods. The lawsuit seeks class action status and seeks
damages, injunctive relief and a declaratory judgment against us under the
federal Fair Labor Standards Act and California statutory wage and hour laws
and laws relating to unlawful and unfair business practices. We do not
currently believe that the outcome of this litigation will have a material
adverse effect on our financial position or results of operations. However, we
cannot presently determine the potential total damages, if any, or the ultimate
outcome of the litigation. We intend to vigorously defend this action.

In addition, from time to time we are subject to various legal proceedings
that arise in the ordinary course of business. Although we cannot predict the
outcomes of these proceedings with certainty, we do not believe that the
disposition of these matters and the matters discussed above will have a
material adverse effect on our financial position, results of operations or
cash flows.

Note W  Subsequent Events

On March 11, 2003, we entered into an Agreement and Plan of Merger for the
acquisition of five entities owning 18 self storage centers located in
Minnesota and operated under the name of Minnesota Mini-Storage. As
consideration in the transaction, we will issue 3,050,000 shares of common
stock at closing and have agreed to issue an additional 50,000 shares if the
properties meet certain revenue targets prior to the end of 2005. The shares
will be issued pursuant to a Form S-4 registration statement to be filed with
the Securities and Exchange Commission. The transaction is subject to

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the
approval of the entities existing equity owners. In connection with the
execution of the merger agreement, equity owners holding more than a majority
of the voting securities of the entities have agreed to vote in favor of the
transaction. We anticipate closing during the second quarter of 2003. The acquisition
will be accounted for as a purchase in accordance with SFAS No. 141.

On March 10, 2003, through our wholly owned subsidiary SSC Benelux, Inc,
we entered into a Securities Purchase Agreement with SSC General Partners
(Guernsey) Limited and SSC Partner (Gurnsey) Limited and Credit Suisse First
Boston Europe (Limited) (collectively CSFB) to acquire their equity interest
in Shurgard Self Storage SCA (Shurgard Europe). The agreement provides that
we will purchase CSFBs 10.6% ownership interest in Shurgard Europe for
approximately 45 million Euro ($49.6 million at March 10, 2003). CSFB is one of
four institutional joint venture partners who, together with us, our European
operating partners and certain Shurgard Europe employees, own Shurgard Europe.
Under the existing joint venture agreement, the other partners have the
opportunity to purchase their pro rata interest in the portion of CSFBs equity
interest being sold to Shurgard on the same terms being offered to Shurgard.

Note X  Restatement

Subsequent to the issuance of its consolidated financial statements for
the year ended December 31, 2002, the company determined that a transaction
entered into in August 2001 to mitigate the risk of interest rate fluctuations
related to various options at the end of its Tax Retention Operating Lease
transaction did not qualify for hedge accounting treatment (See Note
M).  This
transaction was originally accounted for as a hedge of the forecasted
transaction and changes in the estimated fair value of the derivative
instrument were recorded in Other Comprehensive Income rather than in earnings.
As a result, the accompanying consolidated financial statements for the years
ended December 31, 2002 and 2001 have been restated. A summary of the
significant effects of the restatement is as follows (in thousands):

|                                                        |  |               |          |             |  |          |          |               |  |   |          |   |  |   |          |  
|------------------------------------------------------- |  | ------------- | -------- | ----------- |  | -------- | -------- | ------------- |  | - | -------- | - |  | - | -------- | -
|                                                        |  | 2002          |          | 2001       
|                                                        |  |               |          |            
|                                                        |  | As previously |          |             |  |          |          | As previously |  |   |          |  
|                                                        |  |               |          |             |  |          |          |               |  |   |          |  
|                                                        |  | reported      |          | As restated |  | reported |          | As restated  
|                                                        |  |               |          |             |  |          |          |              
|At December 31,
Liabilities and Shareholders equity     |  |               |          |             |  |          |          |               |  |   |          |   |  |   |          |  
|Accounts payable and other liabilities                  |  | $             | 58,847   |             |  | $        | 62,257   |               |  | $ | 45,358   |   |  | $ | 45,260   |  
|Accumulated net income less distributions               |  | $             | (186,616 | )           |  | $        | (199,217 | )             |  | $ | (166,775 | ) |  | $ | (168,377 | )
|Accumulated other comprehensive loss                    |  | $             | (11,064  | )           |  | $        | (1,873   | )             |  | $ | (2,661   | ) |  | $ | (961     | )
|For the year ended December 31,
Other Income (Expense)  |  |               |          |             |  |          |          |               |  |   |          |   |  |   |          |  
|Unrealized loss from financial instruments              |  |               |          |             |  | $        | (10,999  | )             |  |   |          |   |  | $ | (1,602   | )
|Income before income tax benefit and
extraordinary item |  | $             | 65,594   |             |  | $        | 54,595   |               |  | $ | 34,814   |   |  | $ | 33,212   |  
|Income before extraordinary item                        |  | $             | 65,908   |             |  | $        | 54,909   |               |  | $ | 36,359   |   |  | $ | 34,757   |  
|Net income                                              |  | $             | 67,632   |             |  | $        | 56,633   |               |  | $ | 34,914   |   |  | $ | 33,312   |  
|Net Income per Common Share
Basic earnings per share    |  |               |          |             |  |          |          |               |  |   |          |   |  |   |          |  
|Income before extraordinary item                        |  | $             | 1.47     |             |  | $        | 1.15     |               |  | $ | 0.69     |   |  | $ | 0.63     |  
|Net income                                              |  | $             | 1.52     |             |  | $        | 1.20     |               |  | $ | 0.65     |   |  | $ | 0.59     |  
|Diluted earnings per share                              |  |               |          |             |  |          |          |               |  |   |          |   |  |   |          |  
|Income before extraordinary item                        |  | $             | 1.45     |             |  | $        | 1.13     |               |  | $ | 0.68     |   |  | $ | 0.63     |  
|Net income                                              |  | $             | 1.50     |             |  | $        | 1.18     |               |  | $ | 0.64     |   |  | $ | 0.59     |  

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Schedule III  Real Estate and Accumulated

See Notes to Consolidated Financial Statements

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|                    |  |                  |  |       |  |         |    |      |  |        |       |         |  |              |       |          |  |           |        |         |  |          |       |   |  |  |  | 
|------------------- |  | ---------------- |  | ----- |  | ------- | -- | ---- |  | ------ | ----- | ------- |  | ------------ | ----- | -------- |  | --------- | ------ | ------- |  | -------- | ----- | - |  |  |  | 
|                    |  |                  |  |       |  |         |    |      |  |        |       |         |  | INITIAL COST |       | Costs   
|                    |  |                  |  |       |  |         |    |      |  |        |       |         |  |              |       | Subse-  
|                    |  |                  |  |       |  |         |    |      |  |        |       |         |  |              |       |          |  | Building, |        | Gross   |  | quent to
|                    |  |                  |  |       |  |         |    |      |  | Encum- |       |         |  |              |       | Equip. & |  | Storage   |        | Acquis-
|Property Name       |  | Location         |  | State |  | brances |    | Land |  | Other  |       | Centers |  | ition       
|                    |  |                  |  |       |  |         |    |      |  |        |       |         |  |             
|Ahwatukee           |  | Phoenix          |  | AZ    |  |         |    |      |  |        | 721   |         |  |              | 2,469 |          |  |           | 3,191  |         |  |          | (2    | )
|Airpark             |  | Scottsdale       |  | AZ    |  |         |    |      |  |        | 880   |         |  |              | 3,694 |          |  |           | 4,574  |         |  |          | 13    |  
|Arrowhead           |  | Phoenix          |  | AZ    |  |         |    |      |  |        | 569   |         |  |              | 2,600 |          |  |           | 3,168  |         |  |          | 10    |  
|Chandler            |  | Chandler         |  | AZ    |  |         |    |      |  |        | 652   |         |  |              | 2,608 |          |  |           | 3,260  |         |  |          | 577   |  
|Colonnade           |  | Phoenix          |  | AZ    |  |         |    |      |  |        |      |         |  |              | 1,146 |          |  |           | 1,146  |         |  |          | 1     |  
|Cooper Road         |  | Gilbert          |  | AZ    |  |         |    |      |  |        | 376   |         |  |              | 2,471 |          |  |           | 2,847  |         |  |          | 9     |  
|Dobson Ranch        |  | Mesa             |  | AZ    |  |         |    |      |  |        | 499   |         |  |              | 1,996 |          |  |           | 2,495  |         |  |          | 160   |  
|Houghton Road       |  | Tucson           |  | AZ    |  |         | (1 | )    |  |        | 607   |         |  |              | 2,536 |          |  |           | 3,143  |         |  |          | 252   |  
|Mesa                |  | Mesa             |  | AZ    |  |         |    |      |  |        | 352   |         |  |              | 1,829 |          |  |           | 2,182  |         |  |          | 539   |  
|Mill Avenue         |  | Tempe            |  | AZ    |  |         |    |      |  |        | 147   |         |  |              | 1,799 |          |  |           | 1,946  |         |  |          | 52    |  
|Phoenix             |  | Phoenix          |  | AZ    |  |         |    |      |  |        | 670   |         |  |              | 2,697 |          |  |           | 3,368  |         |  |          | 141   |  
|Phoenix East        |  | Phoenix          |  | AZ    |  |         |    |      |  |        | 543   |         |  |              | 2,189 |          |  |           | 2,731  |         |  |          | 194   |  
|Scottsdale          |  | Scottsdale       |  | AZ    |  |         |    |      |  |        | 410   |         |  |              | 1,743 |          |  |           | 2,153  |         |  |          | 208   |  
|Scottsdale North    |  | Scottsdale       |  | AZ    |  |         |    |      |  |        | 1,093 |         |  |              | 4,811 |          |  |           | 5,904  |         |  |          | 144   |  
|Shea                |  | Scottsdale       |  | AZ    |  |         |    |      |  |        | 786   |         |  |              | 3,165 |          |  |           | 3,951  |         |  |          | 163   |  
|Speedway            |  | Tucson           |  | AZ    |  |         |    |      |  |        | 744   |         |  |              | 2,304 |          |  |           | 3,048  |         |  |          | 694   |  
|Tempe               |  | Tempe            |  | AZ    |  |         |    |      |  |        | 273   |         |  |              | 1,110 |          |  |           | 1,383  |         |  |          | 237   |  
|Union Hills         |  | Phoenix          |  | AZ    |  |         |    |      |  |        | 615   |         |  |              | 2,475 |          |  |           | 3,090  |         |  |          | 150   |  
|Val Vista           |  | Gilbert          |  | AZ    |  |         |    |      |  |        | 682   |         |  |              | 2,805 |          |  |           | 3,487  |         |  |          | 1,147 |  
|Warner              |  | Mesa             |  | AZ    |  |         |    |      |  |        | 313   |         |  |              | 1,352 |          |  |           | 1,665  |         |  |          | 175   |  
|Alicia Parkway      |  | Laguna Hills     |  | CA    |  |         |    |      |  |        | 1,729 |         |  |              | 7,027 |          |  |           | 8,757  |         |  |          | 281   |  
|Aliso Viejo         |  | Aliso Viejo      |  | CA    |  |         |    |      |  |        | 2,218 |         |  |              | 3,628 |          |  |           | 5,846  |         |  |          | 757   |  
|Antioch             |  | Antioch          |  | CA    |  |         | (1 | )    |  |        | 638   |         |  |              | 4,366 |          |  |           | 5,003  |         |  |          | 754   |  
|Bloomington         |  | Bloomington      |  | CA    |  |         |    |      |  |        | 237   |         |  |              | 1,027 |          |  |           | 1,264  |         |  |          | 85    |  
|Blossom Valley      |  | San Jose         |  | CA    |  |         |    |      |  |        | 1,204 |         |  |              | 4,128 |          |  |           | 5,332  |         |  |          | 514   |  
|Cabot Road          |  | Laguna Niguel    |  | CA    |  |         | (3 | )    |  |        | 1,300 |         |  |              | 6,129 |          |  |           | 7,429  |         |  |          | 13    |  
|Capital Expressway  |  | San Jose         |  | CA    |  |         |    |      |  |        | 973   |         |  |              | 6,181 |          |  |           | 7,155  |         |  |          | 120   |  
|Castro Business Pk. |  | Castro Valley    |  | CA    |  |         |    |      |  |        | 97    |         |  |              | 390   |          |  |           | 487    |         |  |          | 26    |  
|Castro Valley       |  | Castro Valley    |  | CA    |  |         |    |      |  |        | 810   |         |  |              | 4,010 |          |  |           | 4,820  |         |  |          | 13    |  
|Colton              |  | Colton           |  | CA    |  |         |    |      |  |        | 283   |         |  |              | 1,142 |          |  |           | 1,424  |         |  |          | 94    |  
|Costa Mesa          |  | Costa Mesa       |  | CA    |  |         | (3 | )    |  |        | 1,057 |         |  |              | 2,956 |          |  |           | 4,013  |         |  |          | 208   |  
|Culver City         |  | Los Angeles      |  | CA    |  |         |    |      |  |        | 1,039 |         |  |              | 4,146 |          |  |           | 5,185  |         |  |          | 165   |  
|Daly City           |  | Daly City        |  | CA    |  |         |    |      |  |        | 1,846 |         |  |              | 5,438 |          |  |           | 7,284  |         |  |          | 717   |  
|El Cajon            |  | El Cajon         |  | CA    |  |         |    |      |  |        | 1,013 |         |  |              | 4,113 |          |  |           | 5,126  |         |  |          | 500   |  
|El Cerrito          |  | Richmond         |  | CA    |  |         |    |      |  |        | 765   |         |  |              | 3,055 |          |  |           | 3,820  |         |  |          | 163   |  
|Fontana Sierra      |  | Fontana          |  | CA    |  |         |    |      |  |        | 391   |         |  |              | 1,572 |          |  |           | 1,962  |         |  |          | 718   |  
|Hayward             |  | Hayward          |  | CA    |  |         |    |      |  |        | 322   |         |  |              | 1,322 |          |  |           | 1,645  |         |  |          | 261   |  
|Huntington Beach    |  | Huntington Beach |  | CA    |  |         |    |      |  |        | 949   |         |  |              | 3,794 |          |  |           | 4,743  |         |  |          | 362   |  
|Kearney-Balboa      |  | San Diego        |  | CA    |  |         |    |      |  |        | 830   |         |  |              | 3,333 |          |  |           | 4,163  |         |  |          | 314   |  
|La Habra            |  | La Habra         |  | CA    |  |         |    |      |  |        | 715   |         |  |              | 2,886 |          |  |           | 3,600  |         |  |          | 311   |  
|Martinez            |  | Martinez         |  | CA    |  |         |    |      |  |        | 1,012 |         |  |              | 2,215 |          |  |           | 3,227  |         |  |          | 2,385 |  
|Mountain View       |  | Mountain View    |  | CA    |  |         |    |      |  |        | 439   |         |  |              | 1,757 |          |  |           | 2,196  |         |  |          | 170   |  
|Newark              |  | Newark           |  | CA    |  |         |    |      |  |        | 855   |         |  |              | 3,421 |          |  |           | 4,276  |         |  |          | 104   |  
|Ontario             |  | Ontario          |  | CA    |  |         |    |      |  |        | 512   |         |  |              | 2,058 |          |  |           | 2,570  |         |  |          | 50    |  
|Orange              |  | Orange           |  | CA    |  |         |    |      |  |        | 1,144 |         |  |              | 4,580 |          |  |           | 5,724  |         |  |          | 85    |  
|Palo Alto           |  | Palo Alto        |  | CA    |  |         |    |      |  |        | 701   |         |  |              | 2,805 |          |  |           | 3,506  |         |  |          | 241   |  
|Pinole              |  | Pinole           |  | CA    |  |         |    |      |  |        | 614   |         |  |              | 1,023 |          |  |           | 1,637  |         |  |          | 1,652 |  
|Rohnert Park        |  | Rohnert Park     |  | CA    |  |         |    |      |  |        | 1,218 |         |  |              | 4,296 |          |  |           | 5,514  |         |  |          | 146   |  
|S. San Francisco    |  | San Francisco    |  | CA    |  |         |    |      |  |        | 721   |         |  |              | 2,897 |          |  |           | 3,618  |         |  |          | 231   |  
|Sacramento          |  | Sacramento       |  | CA    |  |         |    |      |  |        | 680   |         |  |              | 2,723 |          |  |           | 3,403  |         |  |          | 32    |  
|San Juan Creek      |  | San Juan         |  | CA    |  |         |    |      |  |        | 1,450 |         |  |              | 5,526 |          |  |           | 6,976  |         |  |          |      |  
|San Leandro         |  | San Leandro      |  | CA    |  |         |    |      |  |        | 776   |         |  |              | 3,105 |          |  |           | 3,881  |         |  |          | 129   |  
|San Lorenzo         |  | San Lorenzo      |  | CA    |  |         |    |      |  |        | 611   |         |  |              | 2,447 |          |  |           | 3,058  |         |  |          | 120   |  
|Santa Ana           |  | Santa Ana        |  | CA    |  |         |    |      |  |        | 1,467 |         |  |              | 5,920 |          |  |           | 7,387  |         |  |          | 308   |  
|Solana Beach        |  | Solana Beach     |  | CA    |  |         |    |      |  |        |      |         |  |              | 6,837 |          |  |           | 6,837  |         |  |          | 336   |  
|Sunnyvale           |  | Sunnyvale        |  | CA    |  |         |    |      |  |        | 1,697 |         |  |              | 6,541 |          |  |           | 8,238  |         |  |          | 4,970 |  
|Tracy               |  | Tracy            |  | CA    |  |         |    |      |  |        | 732   |         |  |              | 2,928 |          |  |           | 3,660  |         |  |          | 89    |  
|Tracy II            |  | Tracy            |  | CA    |  |         |    |      |  |        | 840   |         |  |              | 3,746 |          |  |           | 4,586  |         |  |          |      |  
|Union City          |  | Hayward          |  | CA    |  |         |    |      |  |        | 287   |         |  |              | 1,208 |          |  |           | 1,494  |         |  |          | 198   |  
|Van Ness            |  | San Francisco    |  | CA    |  |         |    |      |  |        | 5,289 |         |  |              | 9,001 |          |  |           | 14,289 |         |  |          | 407   |  
|Vista Park-Land Ls. |  | San Jose         |  | CA    |  |         | (2 | )    |  |        |      |         |  |              |      |          |  |           |       |         |  |          | 56    |  
|Walnut              |  | Walnut           |  | CA    |  |         |    |      |  |        | 751   |         |  |              | 3,006 |          |  |           | 3,757  |         |  |          | 98    |  
|Walnut Creek        |  | Walnut Creek     |  | CA    |  |         | (1 | )    |  |        | 630   |         |  |              | 4,512 |          |  |           | 5,143  |         |  |          | 836   |  
|Westpark            |  | Irvine           |  | CA    |  |         | (3 | )    |  |        | 690   |         |  |              | 7,478 |          |  |           | 8,169  |         |  |          | 4,903 |  
|Westwood            |  | Santa Monica     |  | CA    |  |         |    |      |  |        | 951   |         |  |              | 3,797 |          |  |           | 4,748  |         |  |          | 4,189 |  
|Lakewood            |  | Golden           |  | CO    |  |         |    |      |  |        | 528   |         |  |              | 2,108 |          |  |           | 2,636  |         |  |          | 67    |  
|Northglenn          |  | Northglenn       |  | CO    |  |         |    |      |  |        | 531   |         |  |              | 2,152 |          |  |           | 2,683  |         |  |          | 154   |  
|preciation Tamarac  |  | Denver           |  | CO    |  |         |    |      |  |        | 194   |         |  |              | 776   |          |  |           | 970    |         |  |          | 198   |  

77



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##### Table of Contents



|                   |  |                    |  |       |  |         |       |      |  |        |       |         |       |              |       |          |       |           |        |         |       |          |       |   |     |  |  | 
|------------------ |  | ------------------ |  | ----- |  | ------- | ----- | ---- |  | ------ | ----- | ------- | ----- | ------------ | ----- | -------- | ----- | --------- | ------ | ------- | ----- | -------- | ----- | - | --- |  |  | 
|                   |  |                    |  |       |  |         |       |      |  |        |       |         |       | INITIAL COST |       | Costs   
|                   |  |                    |  |       |  |         |       |      |  |        |       |         |       |              |       | Subse-  
|                   |  |                    |  |       |  |         |       |      |  |        |       |         |       |              |       |          |       | Building, |        | Gross   |       | quent to
|                   |  |                    |  |       |  |         |       |      |  | Encum- |       |         |       |              |       | Equip. & |       | Storage   |        | Acquis-
|Property Name      |  | Location           |  | State |  | brances |       | Land |  | Other  |       | Centers |       | ition       
|                   |  |                    |  |       |  |         |       |      |  |        |       |         |       |             
|Thornton           |  | Denver             |  | CO    |  |         |       |      |  |        | 237   |         |       |              | 956   |          |       |           | 1,193  |         |       |          | 137   |  
|Windermere         |  | Littleton          |  | CO    |  |         |       |      |  |        | 653   |         |       |              | 2,690 |          |       |           | 3,343  |         |       |          | 279   |  
|Blue Heron         |  | West Palm Beach    |  | FL    |  |         |       |      |  |        |       |         | 1,327 |              |       |          | 5,490 |           |        |         | 6,818 |          |       |   | 850 | 
|Davie              |  | Davie              |  | FL    |  |         |       |      |  |        | 1,890 |         |       |              | 3,021 |          |       |           | 4,910  |         |       |          | 4,849 |  
|Delray Beach       |  | Delray Beach       |  | FL    |  |         |       |      |  |        | 748   |         |       |              | 2,993 |          |       |           | 3,741  |         |       |          | 279   |  
|Lauderhill         |  | Lauderhill         |  | FL    |  |         |       |      |  |        | 761   |         |       |              | 3,164 |          |       |           | 3,925  |         |       |          | 315   |  
|Margate            |  | Margate            |  | FL    |  |         |       |      |  |        | 906   |         |       |              | 3,623 |          |       |           | 4,529  |         |       |          | 252   |  
|Military Trail     |  | West Palm Beach    |  | FL    |  |         |       |      |  |        |       |         | 1,140 |              |       |          | 4,564 |           |        |         | 5,704 |          |       |   | 524 | 
|Oakland Park       |  | Ft. Lauderdale     |  | FL    |  |         |       |      |  |        | 2,443 |         |       |              | 9,878 |          |       |           | 12,322 |         |       |          | 696   |  
|Seminole           |  | Seminole           |  | FL    |  |         |       |      |  |        | 336   |         |       |              | 1,344 |          |       |           | 1,680  |         |       |          | 153   |  
|Ansley Park        |  | Atlanta            |  | GA    |  |         |       |      |  |        | 804   |         |       |              | 3,255 |          |       |           | 4,059  |         |       |          | 4,032 |  
|Brookhaven         |  | Atlanta            |  | GA    |  |         |       |      |  |        | 1,082 |         |       |              | 2,223 |          |       |           | 3,305  |         |       |          | 2,768 |  
|Clairemont         |  | Atlanta            |  | GA    |  |         |       |      |  |        | 470   |         |       |              | 1,907 |          |       |           | 2,377  |         |       |          | 244   |  
|Decatur            |  | Atlanta            |  | GA    |  |         |       |      |  |        | 644   |         |       |              | 2,719 |          |       |           | 3,363  |         |       |          | 2,730 |  
|Forest Park        |  | Forest Park        |  | GA    |  |         |       |      |  |        | 573   |         |       |              | 2,293 |          |       |           | 2,866  |         |       |          | 127   |  
|Gwinnett           |  | Lawrenceville      |  | GA    |  |         |       |      |  |        | 820   |         |       |              | 2,324 |          |       |           | 3,144  |         |       |          | 485   |  
|Holcomb Bridge     |  | Roswell            |  | GA    |  |         | (1    | )    |  |        | 917   |         |       |              | 2,991 |          |       |           | 3,908  |         |       |          | (8    | )
|Jones Bridge       |  | Atlanta            |  | GA    |  |         |       |      |  |        | 676   |         |       |              | 3,930 |          |       |           | 4,606  |         |       |          | (64   | )
|Lawrenceville      |  | Lawrenceville      |  | GA    |  |         |       |      |  |        | 858   |         |       |              | 3,064 |          |       |           | 3,922  |         |       |          | 134   |  
|Morgan Falls       |  | Dunwoody           |  | GA    |  |         |       |      |  |        | 1,429 |         |       |              | 5,718 |          |       |           | 7,147  |         |       |          | 178   |  
|Norcross           |  | Norcross           |  | GA    |  |         |       |      |  |        | 562   |         |       |              | 2,248 |          |       |           | 2,810  |         |       |          | 127   |  
|Peachtree          |  | Duluth             |  | GA    |  |         |       |      |  |        | 1,144 |         |       |              | 4,784 |          |       |           | 5,929  |         |       |          | 121   |  
|Perimeter          |  | Atlanta            |  | GA    |  |         |       |      |  |        | 1,458 |         |       |              | 2,715 |          |       |           | 4,173  |         |       |          | 218   |  
|Roswell            |  | Roswell            |  | GA    |  |         |       |      |  |        | 435   |         |       |              | 1,743 |          |       |           | 2,178  |         |       |          | 160   |  
|Sandy Plains       |  | Marietta           |  | GA    |  |         |       |      |  |        | 1,012 |         |       |              | 4,066 |          |       |           | 5,078  |         |       |          | 29    |  
|Satellite Blvd.    |  | Duluth             |  | GA    |  |         |       |      |  |        | 670   |         |       |              | 2,831 |          |       |           | 3,501  |         |       |          | 36    |  
|Stone Mountain     |  | Stone Mountain     |  | GA    |  |         |       |      |  |        | 656   |         |       |              | 2,637 |          |       |           | 3,293  |         |       |          | 129   |  
|Tucker             |  | Tucker             |  | GA    |  |         |       |      |  |        | 241   |         |       |              | 656   |          |       |           | 897    |         |       |          | 417   |  
|Alsip              |  | Alsip              |  | IL    |  |         |       |      |  |        | 250   |         |       |              | 1,001 |          |       |           | 1,251  |         |       |          | 1,285 |  
|Bolingbrook        |  | Bolingbrook        |  | IL    |  |         |       |      |  |        | 641   |         |       |              | 2,631 |          |       |           | 3,272  |         |       |          | 238   |  
|Bridgeview         |  | Bridgeview         |  | IL    |  |         |       |      |  |        | 479   |         |       |              | 1,917 |          |       |           | 2,396  |         |       |          | 170   |  
|Country Club Hills |  | Country Club Hills |  | IL    |  |         |       |      |  |        | 777   |         |       |              | 3,109 |          |       |           | 3,886  |         |       |          | 466   |  
|Dolton             |  | Calumet City       |  | IL    |  |         |       |      |  |        | 344   |         |       |              | 1,489 |          |       |           | 1,834  |         |       |          | 1,134 |  
|Fox Valley         |  | Chicago            |  | IL    |  |         |       |      |  |        | 927   |         |       |              | 2,986 |          |       |           | 3,912  |         |       |          | 6     |  
|Hillside           |  | Hillside           |  | IL    |  |         |       |      |  |        | 261   |         |       |              | 1,043 |          |       |           | 1,304  |         |       |          | 108   |  
|Lisle              |  | Lisle              |  | IL    |  |         |       |      |  |        | 575   |         |       |              | 2,335 |          |       |           | 2,910  |         |       |          | 253   |  
|Lombard            |  | Lombard            |  | IL    |  |         |       |      |  |        | 392   |         |       |              | 1,566 |          |       |           | 1,958  |         |       |          | 295   |  
|Oak Forest         |  | Orland Park        |  | IL    |  |         |       |      |  |        | 704   |         |       |              | 1,869 |          |       |           | 2,573  |         |       |          | 1,355 |  
|Palatine           |  | Palatine           |  | IL    |  |         | (1    | )    |  |        | 413   |         |       |              | 2,213 |          |       |           | 2,626  |         |       |          | 848   |  
|Rolling Meadows    |  | Rolling Meadows    |  | IL    |  |         |       |      |  |        | 384   |         |       |              | 1,587 |          |       |           | 1,970  |         |       |          | 422   |  
|Schaumburg         |  | Schaumburg         |  | IL    |  |         |       |      |  |        | 443   |         |       |              | 1,808 |          |       |           | 2,251  |         |       |          | 357   |  
|Schaumburg South   |  | Schaumburg         |  | IL    |  |         |       |      |  |        | 490   |         |       |              | 3,231 |          |       |           | 3,722  |         |       |          | 535   |  
|Willowbrook        |  | Willowbrook        |  | IL    |  |         |       |      |  |        | 412   |         |       |              | 1,650 |          |       |           | 2,062  |         |       |          | 248   |  
|Wheaton            |  | Wheaton            |  | IL    |  |         | (2    | )    |  |        |       |         |       |              |       |          |       |           |       |         |       |          | 5,226 |  
|Allisonville       |  | Indianapolis       |  | IN    |  |         |       |      |  |        | 827   |         |       |              | 3,394 |          |       |           | 4,221  |         |       |          | 331   |  
|Carmel             |  | Carmel             |  | IN    |  |         |       |      |  |        | 404   |         |       |              | 2,560 |          |       |           | 2,964  |         |       |          | 12    |  
|Castleton          |  | Indianapolis       |  | IN    |  |         |       |      |  |        | 494   |         |       |              | 1,969 |          |       |           | 2,464  |         |       |          | 102   |  
|College Park       |  | Indianapolis       |  | IN    |  |         |       |      |  |        | 694   |         |       |              | 2,777 |          |       |           | 3,471  |         |       |          | 249   |  
|County Line        |  | SouthPort          |  | IN    |  |         |       |      |  |        |      |         |       |              | 2,600 |          |       |           | 2,600  |         |       |          | 41    |  
|Downtown Indy      |  | Indianapolis       |  | IN    |  |         | (1    | )    |  |        | 947   |         |       |              | 3,393 |          |       |           | 4,340  |         |       |          | (61   | )
|Eaglecreek         |  | Indianapolis       |  | IN    |  |         |       |      |  |        | 802   |         |       |              | 2,646 |          |       |           | 3,448  |         |       |          | 27    |  
|East 62nd Street   |  | Indianapolis       |  | IN    |  |         |       |      |  |        | 376   |         |       |              | 1,629 |          |       |           | 2,005  |         |       |          |      |  
|East Washington    |  | Indianapolis       |  | IN    |  |         | (1    | )    |  |        | 399   |         |       |              | 2,583 |          |       |           | 2,982  |         |       |          | (3    | )
|Geist              |  | Fishers            |  | IN    |  |         |       |      |  |        | 547   |         |       |              | 2,356 |          |       |           | 2,903  |         |       |          |      |  
|Georgetown         |  | Indianapolis       |  | IN    |  |         |       |      |  |        | 461   |         |       |              | 2,143 |          |       |           | 2,604  |         |       |          | 219   |  
|Glendale           |  | Indianapolis       |  | IN    |  |         |       |      |  |        | 520   |         |       |              | 2,077 |          |       |           | 2,597  |         |       |          | 87    |  
|Annapolis          |  | Annapolis          |  | M D   |  |         |       |      |  |        |      |         |       |              | 3,432 |          |       |           | 3,432  |         |       |          | 84    |  
|Briggs Chaney      |  | Silver Spring      |  | M D   |  |         |       |      |  |        | 430   |         |       |              | 1,727 |          |       |           | 2,157  |         |       |          | 99    |  
|Clinton            |  | Clinton            |  | M D   |  |         |       |      |  |        | 303   |         |       |              | 1,213 |          |       |           | 1,516  |         |       |          | 2,016 |  
|Crofton            |  | Gambrills          |  | M D   |  |         |       |      |  |        | 376   |         |       |              | 1,516 |          |       |           | 1,893  |         |       |          | 117   |  
|Frederick          |  | Frederick          |  | M D   |  |         |       |      |  |        | 206   |         |       |              | 826   |          |       |           | 1,032  |         |       |          | 126   |  
|Gaithersburg       |  | Gaithersburg       |  | M D   |  |         |       |      |  |        | 614   |         |       |              | 2,465 |          |       |           | 3,079  |         |       |          | 1,538 |  
|Germantown         |  | Germantown         |  | M D   |  |         |       |      |  |        | 552   |         |       |              | 2,218 |          |       |           | 2,770  |         |       |          | 102   |  
|Laurel             |  | Laurel             |  | M D   |  |         |       |      |  |        | 391   |         |       |              | 1,570 |          |       |           | 1,962  |         |       |          | 166   |  
|Oxon Hill          |  | Ft. Washington     |  | M D   |  |         |       |      |  |        | 349   |         |       |              | 1,401 |          |       |           | 1,750  |         |       |          | 76    |  
|Reisterstown       |  | Owing Mills        |  | M D   |  |         |       |      |  |        | 586   |         |       |              | 1,177 |          |       |           | 1,763  |         |       |          |      |  
|Suitland           |  | Suitland           |  | M D   |  |         |       |      |  |        | 660   |         |       |              | 2,638 |          |       |           | 3,298  |         |       |          | 128   |  
|Ann Arbor          |  | Ann Arbor          |  | M I   |  |         |       |      |  |        | 424   |         |       |              | 1,695 |          |       |           | 2,119  |         |       |          | 149   |  
|Canton             |  | Canton             |  | M I   |  |         |       |      |  |        | 433   |         |       |              | 1,797 |          |       |           | 2,230  |         |       |          | 382   |  
|Canton Township    |  | Canton Township    |  | M I   |  |         | (1    | )    |  |        | 842   |         |       |              | 2,308 |          |       |           | 3,150  |         |       |          | 745   |  
|Clinton Township   |  | Clinton Township   |  | M I   |  |         |       |      |  |        | 754   |         |       |              | 3,195 |          |       |           | 3,948  |         |       |          | 237   |  
|Flint East         |  | Flint              |  | M I   |  |         |       |      |  |        | 297   |         |       |              | 1,192 |          |       |           | 1,489  |         |       |          | 40    |  
|Flint South        |  | Flint              |  | M I   |  |         |       |      |  |        | 615   |         |       |              | 1,738 |          |       |           | 2,353  |         |       |          | 64    |  
|Fraser             |  | Fraser             |  | M I   |  |         |       |      |  |        | 627   |         |       |              | 2,599 |          |       |           | 3,226  |         |       |          | 14    |  
|Grand Rapids       |  | Grand Rapids       |  | M I   |  |         |       |      |  |        | 192   |         |       |              | 810   |          |       |           | 1,002  |         |       |          | 85    |  
|Jackson            |  | Jackson            |  | M I   |  |         |       |      |  |        | 317   |         |       |              | 1,282 |          |       |           | 1,599  |         |       |          | 13    |  
|Lansing            |  | Lansing            |  | M I   |  |         |       |      |  |        | 124   |         |       |              | 500   |          |       |           | 623    |         |       |          | 64    |  
|Livonia            |  | Livonia            |  | M I   |  |         |       |      |  |        | 636   |         |       |              | 2,634 |          |       |           | 3,270  |         |       |          | 32    |  
|Madison Heights    |  | Detroit            |  | M I   |  |         |       |      |  |        | 487   |         |       |              | 2,099 |          |       |           | 2,586  |         |       |          | 437   |  
|Mt. Clemens        |  | Mt. Clemens        |  | M I   |  |         | 1,950 |      |  |        | 935   |         |       |              | 2,614 |          |       |           | 3,550  |         |       |          | 18    |  
|Plymouth           |  | Canton Township    |  | M I   |  |         |       |      |  |        | 348   |         |       |              | 1,436 |          |       |           | 1,784  |         |       |          | 1,772 |  
|Rochester          |  | Utica              |  | M I   |  |         |       |      |  |        | 610   |         |       |              | 2,445 |          |       |           | 3,055  |         |       |          | 45    |  

78



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##### Table of Contents



|                    |  |                  |  |       |  |         |       |      |  |        |       |         |  |              |       |          |  |           |       |         |  |          |       |  |  |  |  | 
|------------------- |  | ---------------- |  | ----- |  | ------- | ----- | ---- |  | ------ | ----- | ------- |  | ------------ | ----- | -------- |  | --------- | ----- | ------- |  | -------- | ----- |  |  |  |  | 
|                    |  |                  |  |       |  |         |       |      |  |        |       |         |  | INITIAL COST |       | Costs   
|                    |  |                  |  |       |  |         |       |      |  |        |       |         |  |              |       | Subse-  
|                    |  |                  |  |       |  |         |       |      |  |        |       |         |  |              |       |          |  | Building, |       | Gross   |  | quent to
|                    |  |                  |  |       |  |         |       |      |  | Encum- |       |         |  |              |       | Equip. & |  | Storage   |       | Acquis-
|Property Name       |  | Location         |  | State |  | brances |       | Land |  | Other  |       | Centers |  | ition       
|                    |  |                  |  |       |  |         |       |      |  |        |       |         |  |             
|Rochester Hills     |  | Rochester Hills  |  | MI    |  |         |       |      |  |        | 970   |         |  |              | 3,929 |          |  |           | 4,900 |         |  |          | 122   | 
|Southfield          |  | Southfield       |  | MI    |  |         |       |      |  |        | 702   |         |  |              | 2,824 |          |  |           | 3,526 |         |  |          | 597   | 
|Sterling Heights    |  | Sterling Heights |  | MI    |  |         |       |      |  |        | 919   |         |  |              | 3,692 |          |  |           | 4,611 |         |  |          | 138   | 
|Taylor              |  | Taylor           |  | MI    |  |         |       |      |  |        | 632   |         |  |              | 2,094 |          |  |           | 2,726 |         |  |          | 1,407 | 
|Troy - Maple        |  | Troy             |  | MI    |  |         |       |      |  |        | 556   |         |  |              | 2,243 |          |  |           | 2,799 |         |  |          | 2,841 | 
|Troy - Oakland Mall |  | Troy             |  | MI    |  |         |       |      |  |        | 642   |         |  |              | 2,604 |          |  |           | 3,246 |         |  |          | 398   | 
|Walled Lake         |  | Walled Lake      |  | MI    |  |         |       |      |  |        | 359   |         |  |              | 1,437 |          |  |           | 1,797 |         |  |          | 271   | 
|Warren              |  | Warren           |  | MI    |  |         |       |      |  |        | 683   |         |  |              | 2,831 |          |  |           | 3,514 |         |  |          | 1,205 | 
|Auburn Hills        |  | Auburn Hilss     |  | MI    |  |         | (2    | )    |  |        |       |         |  |              |       |          |  |           |      |         |  |          | 3,669 | 
|Olive               |  | St. Louis        |  | MO    |  |         |       |      |  |        | 818   |         |  |              | 3,705 |          |  |           | 4,523 |         |  |          | 89    | 
|Albemarle           |  | Charlotte        |  | NC    |  |         | 3,500 |      |  |        | 788   |         |  |              | 4,567 |          |  |           | 5,355 |         |  |          |      | 
|Amity Court         |  | Charlotte        |  | NC    |  |         | 1,927 |      |  |        | 433   |         |  |              | 2,314 |          |  |           | 2,747 |         |  |          |      | 
|Arrowood            |  | Charlotte        |  | NC    |  |         | 2,718 |      |  |        | 1,155 |         |  |              | 3,151 |          |  |           | 4,306 |         |  |          |      | 
|Capital Blvd.       |  | Raleigh          |  | NC    |  |         |       |      |  |        | 342   |         |  |              | 1,376 |          |  |           | 1,718 |         |  |          | 1,311 | 
|Cary                |  | Cary             |  | NC    |  |         |       |      |  |        | 714   |         |  |              | 2,860 |          |  |           | 3,574 |         |  |          | 219   | 
|Clayton             |  | Clayton          |  | NC    |  |         |       |      |  |        | 764   |         |  |              | 2,495 |          |  |           | 3,259 |         |  |          |      | 
|Concord Kannapolis  |  | Concord          |  | NC    |  |         |       |      |  |        | 665   |         |  |              | 2,403 |          |  |           | 3,068 |         |  |          |      | 
|Cone Boulevard      |  | Greensboro       |  | NC    |  |         | 1,186 |      |  |        | 599   |         |  |              | 3,106 |          |  |           | 3,705 |         |  |          |      | 
|COTT                |  | Matthews         |  | NC    |  |         | 805   |      |  |        | 237   |         |  |              | 1,471 |          |  |           | 1,708 |         |  |          |      | 
|Country Club        |  | Winston Salem    |  | NC    |  |         |       |      |  |        | 757   |         |  |              | 3,462 |          |  |           | 4,219 |         |  |          |      | 
|Creedmoor           |  | Raleigh          |  | NC    |  |         |       |      |  |        | 807   |         |  |              | 3,178 |          |  |           | 3,985 |         |  |          | 1     | 
|Eastland            |  | Charlotte        |  | NC    |  |         | 1,790 |      |  |        | 590   |         |  |              | 3,743 |          |  |           | 4,333 |         |  |          |      | 
|English Road        |  | High Point       |  | NC    |  |         |       |      |  |        | 602   |         |  |              | 2,100 |          |  |           | 2,702 |         |  |          |      | 
|Garner              |  | Garner           |  | NC    |  |         |       |      |  |        | 204   |         |  |              | 818   |          |  |           | 1,022 |         |  |          | 85    | 
|Glenwood            |  | Raleigh          |  | NC    |  |         |       |      |  |        | 266   |         |  |              | 1,066 |          |  |           | 1,332 |         |  |          | 129   | 
|Hickory             |  | Hickory          |  | NC    |  |         |       |      |  |        | 892   |         |  |              | 3,826 |          |  |           | 4,718 |         |  |          |      | 
|Lexington           |  | Lexington        |  | NC    |  |         |       |      |  |        | 430   |         |  |              | 1,625 |          |  |           | 2,055 |         |  |          |      | 
|Matthews            |  | Matthews         |  | NC    |  |         | 1,847 |      |  |        | 775   |         |  |              | 5,617 |          |  |           | 6,392 |         |  |          |      | 
|Monroe              |  | Matthews         |  | NC    |  |         | 2,224 |      |  |        | 556   |         |  |              | 3,239 |          |  |           | 3,795 |         |  |          |      | 
|Morrisville         |  | Morrisville      |  | NC    |  |         |       |      |  |        | 409   |         |  |              | 1,640 |          |  |           | 2,048 |         |  |          | 126   | 
|North Tryon         |  | Charlotte        |  | NC    |  |         | 2,066 |      |  |        | 927   |         |  |              | 2,723 |          |  |           | 3,650 |         |  |          |      | 
|Park Road           |  | Charlotte        |  | NC    |  |         |       |      |  |        | 1,488 |         |  |              | 6,754 |          |  |           | 8,242 |         |  |          |      | 
|Pavilion            |  | Charlotte        |  | NC    |  |         | 1,557 |      |  |        | 1,320 |         |  |              | 2,251 |          |  |           | 3,571 |         |  |          |      | 
|Pineville           |  | Pineville        |  | NC    |  |         | 9,700 |      |  |        | 2,688 |         |  |              | 5,916 |          |  |           | 8,604 |         |  |          |      | 
|Randleman Road      |  | Greensboro       |  | NC    |  |         | 2,041 |      |  |        | 1,113 |         |  |              | 2,600 |          |  |           | 3,713 |         |  |          |      | 
|Rockingham          |  | Rockingham       |  | NC    |  |         | 810   |      |  |        | 178   |         |  |              | 1,870 |          |  |           | 2,048 |         |  |          |      | 
|Salisbury           |  | Salisbury        |  | NC    |  |         | 3,336 |      |  |        | 237   |         |  |              | 5,296 |          |  |           | 5,533 |         |  |          |      | 
|Silas Creek         |  | Winston, Salem   |  | NC    |  |         |       |      |  |        | 1,640 |         |  |              | 2,457 |          |  |           | 4,097 |         |  |          |      | 
|Stallings           |  | Matthews         |  | NC    |  |         |       |      |  |        | 747   |         |  |              | 2,075 |          |  |           | 2,822 |         |  |          |      | 
|Wake Forest         |  | Wake Forest      |  | NC    |  |         | 484   |      |  |        | 851   |         |  |              | 1,547 |          |  |           | 2,398 |         |  |          |      | 
|Weddington          |  | Waxhaw           |  | NC    |  |         |       |      |  |        | 642   |         |  |              | 2,520 |          |  |           | 3,162 |         |  |          |      | 
|Wilkinson           |  | Charlotte        |  | NC    |  |         |       |      |  |        | 575   |         |  |              | 3,270 |          |  |           | 3,845 |         |  |          |      | 
|Winston-Salem       |  | Winston, Salem   |  | NC    |  |         |       |      |  |        | 354   |         |  |              | 1,930 |          |  |           | 2,284 |         |  |          |      | 
|Bricktown           |  | Bricktown        |  | NJ    |  |         | (1    | )    |  |        | 1,398 |         |  |              | 2,640 |          |  |           | 4,038 |         |  |          | 1,747 | 
|Marlboro            |  | Morganville      |  | NJ    |  |         |       |      |  |        | 1,320 |         |  |              | 4,963 |          |  |           | 6,284 |         |  |          | 13    | 
|Old Bridge          |  | Matawan          |  | NJ    |  |         |       |      |  |        | 767   |         |  |              | 2,301 |          |  |           | 3,068 |         |  |          | 2,080 | 
|Voorhees            |  | Voorhees         |  | NJ    |  |         |       |      |  |        | 1,121 |         |  |              | 4,268 |          |  |           | 5,388 |         |  |          | 28    | 
|Beth Page           |  | Long Island      |  | NY    |  |         | (1    | )    |  |        | 2,370 |         |  |              | 6,209 |          |  |           | 8,579 |         |  |          | 1,362 | 
|Commack             |  | Huntington       |  | NY    |  |         | (1    | )    |  |        | 3,461 |         |  |              | 6,203 |          |  |           | 9,664 |         |  |          | 116   | 
|Gold Street         |  | Brooklyn         |  | NY    |  |         |       |      |  |        | 1,194 |         |  |              | 4,821 |          |  |           | 6,015 |         |  |          | 777   | 
|Great Neck          |  | Long Island      |  | NY    |  |         | (1    | )    |  |        | 436   |         |  |              | 2,632 |          |  |           | 3,067 |         |  |          | 269   | 
|Hempstead           |  | Hempstead        |  | NY    |  |         | (1    | )    |  |        | 1,902 |         |  |              | 4,572 |          |  |           | 6,475 |         |  |          | 686   | 
|Melville            |  | Long Island      |  | NY    |  |         |       |      |  |        | 1,099 |         |  |              | 3,897 |          |  |           | 4,996 |         |  |          | 3,690 | 
|Nesconset           |  | Long Island      |  | NY    |  |         | (1    | )    |  |        | 1,072 |         |  |              | 2,919 |          |  |           | 3,991 |         |  |          | 598   | 
|Northern Boulevard  |  | Long Island City |  | NY    |  |         |       |      |  |        | 1,244 |         |  |              | 5,039 |          |  |           | 6,283 |         |  |          | 600   | 
|Utica               |  | Brooklyn         |  | NY    |  |         |       |      |  |        | 830   |         |  |              | 3,556 |          |  |           | 4,386 |         |  |          | 226   | 
|Van Dam             |  | Long Island City |  | NY    |  |         |       |      |  |        | 760   |         |  |              | 3,189 |          |  |           | 3,949 |         |  |          | 345   | 
|Yonkers             |  | Yonkers          |  | NY    |  |         |       |      |  |        | 913   |         |  |              | 3,936 |          |  |           | 4,849 |         |  |          | 352   | 
|16th and Sandy      |  | Portland         |  | OR    |  |         |       |      |  |        | 231   |         |  |              | 938   |          |  |           | 1,169 |         |  |          | 1,327 | 
|Allen Blvd.         |  | Beaverton        |  | OR    |  |         |       |      |  |        | 525   |         |  |              | 2,101 |          |  |           | 2,626 |         |  |          | 90    | 
|Barbur Boulevard    |  | Portland         |  | OR    |  |         |       |      |  |        | 337   |         |  |              | 3,411 |          |  |           | 3,748 |         |  |          | 2,316 | 
|Beaverton           |  | Beaverton        |  | OR    |  |         |       |      |  |        | 216   |         |  |              | 863   |          |  |           | 1,078 |         |  |          | 118   | 
|Denny Road          |  | Beaverton        |  | OR    |  |         |       |      |  |        | 593   |         |  |              | 2,380 |          |  |           | 2,973 |         |  |          | 100   | 
|Division            |  | Portland         |  | OR    |  |         |       |      |  |        | 352   |         |  |              | 1,395 |          |  |           | 1,746 |         |  |          | 1,924 | 
|Gresham             |  | Portland         |  | OR    |  |         |       |      |  |        | 744   |         |  |              | 2,442 |          |  |           | 3,186 |         |  |          | 88    | 
|Hillsboro           |  | Portland         |  | OR    |  |         |       |      |  |        | 720   |         |  |              | 2,992 |          |  |           | 3,712 |         |  |          | 135   | 
|King City           |  | Tigard           |  | OR    |  |         |       |      |  |        | 511   |         |  |              | 2,051 |          |  |           | 2,562 |         |  |          | 119   | 
|Liberty Road        |  | Salem            |  | OR    |  |         |       |      |  |        | 524   |         |  |              | 1,280 |          |  |           | 1,805 |         |  |          | 1,452 | 
|Milwaukie           |  | Milwaukie        |  | OR    |  |         |       |      |  |        | 583   |         |  |              | 2,005 |          |  |           | 2,587 |         |  |          | 2,397 | 
|Oregon City         |  | Portland         |  | OR    |  |         |       |      |  |        | 321   |         |  |              | 1,613 |          |  |           | 1,934 |         |  |          | 1,374 | 
|Portland            |  | Portland         |  | OR    |  |         |       |      |  |        | 382   |         |  |              | 1,530 |          |  |           | 1,912 |         |  |          | 63    | 
|Salem               |  | Salem            |  | OR    |  |         |       |      |  |        | 574   |         |  |              | 2,294 |          |  |           | 2,868 |         |  |          | 307   | 
|Airport             |  | Philadelphia     |  | PA    |  |         |       |      |  |        | 799   |         |  |              | 3,194 |          |  |           | 3,993 |         |  |          | 319   | 
|Edgemont            |  | Philadelphia     |  | PA    |  |         |       |      |  |        | 497   |         |  |              | 3,070 |          |  |           | 3,567 |         |  |          | 2,731 | 
|Painters Crossing  |  | Philadelphia     |  | PA    |  |         |       |      |  |        | 513   |         |  |              | 2,868 |          |  |           | 3,382 |         |  |          | 5     | 
|Valley Forge        |  | Berwyn           |  | PA    |  |         |       |      |  |        | 331   |         |  |              | 2,816 |          |  |           | 3,147 |         |  |          |      | 
|West Chester        |  | West Chester     |  | PA    |  |         |       |      |  |        |      |         |  |              | 4,197 |          |  |           | 4,197 |         |  |          | 386   | 
|Ashley River        |  | Charleston       |  | SC    |  |         |       |      |  |        | 851   |         |  |              | 4,239 |          |  |           | 5,090 |         |  |          |      | 
|Ballantyne          |  | Fort Mill        |  | SC    |  |         |       |      |  |        | 640   |         |  |              | 2,153 |          |  |           | 2,793 |         |  |          |      | 
|Charleston          |  | Ladson           |  | SC    |  |         | 2,188 |      |  |        | 403   |         |  |              | 3,453 |          |  |           | 3,856 |         |  |          |      | 
|Dave Lyle           |  | Rock Hill        |  | SC    |  |         |       |      |  |        | 487   |         |  |              | 2,595 |          |  |           | 3,082 |         |  |          |      | 

79



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##### Table of Contents



|                     |  |                 |  |       |  |         |       |      |  |        |       |         |  |              |       |          |  |           |       |         |  |          |       |   |  |  |  | 
|-------------------- |  | --------------- |  | ----- |  | ------- | ----- | ---- |  | ------ | ----- | ------- |  | ------------ | ----- | -------- |  | --------- | ----- | ------- |  | -------- | ----- | - |  |  |  | 
|                     |  |                 |  |       |  |         |       |      |  |        |       |         |  | INITIAL COST |       | Costs   
|                     |  |                 |  |       |  |         |       |      |  |        |       |         |  |              |       | Subse-  
|                     |  |                 |  |       |  |         |       |      |  |        |       |         |  |              |       |          |  | Building, |       | Gross   |  | quent to
|                     |  |                 |  |       |  |         |       |      |  | Encum- |       |         |  |              |       | Equip. & |  | Storage   |       | Acquis-
|Property Name        |  | Location        |  | State |  | brances |       | Land |  | Other  |       | Centers |  | ition       
|                     |  |                 |  |       |  |         |       |      |  |        |       |         |  |             
|Garners Ferry       |  | Columbia        |  | SC    |  |         | 2,446 |      |  |        | 1,071 |         |  |              | 2,809 |          |  |           | 3,880 |         |  |          |      |  
|Greenville (SC)      |  | Greenville      |  | SC    |  |         | 1,888 |      |  |        | 989   |         |  |              | 2,162 |          |  |           | 3,151 |         |  |          |      |  
|Rock Hill            |  | Rock Hill       |  | SC    |  |         | 1,645 |      |  |        | 415   |         |  |              | 2,063 |          |  |           | 2,478 |         |  |          |      |  
|Rosewood             |  | Columbia        |  | SC    |  |         |       |      |  |        | 317   |         |  |              |      |          |  |           | 317   |         |  |          |      |  
|Shriners             |  | Greenville      |  | SC    |  |         |       |      |  |        | 431   |         |  |              | 2,564 |          |  |           | 2,995 |         |  |          |      |  
|Spartanburg          |  | Spartanburg     |  | SC    |  |         | 494   |      |  |        | 268   |         |  |              | 1,466 |          |  |           | 1,734 |         |  |          |      |  
|Sumter               |  | Sumter          |  | SC    |  |         |       |      |  |        | 268   |         |  |              | 2,020 |          |  |           | 2,288 |         |  |          |      |  
|Sunset               |  | Lexington       |  | SC    |  |         |       |      |  |        | 535   |         |  |              | 2,423 |          |  |           | 2,958 |         |  |          |      |  
|Woodruff Road (SC)   |  | Greenville      |  | SC    |  |         |       |      |  |        | 1,082 |         |  |              | 1,693 |          |  |           | 2,775 |         |  |          |      |  
|Bandera Road         |  | San Antonio     |  | TX    |  |         |       |      |  |        | 468   |         |  |              | 1,873 |          |  |           | 2,342 |         |  |          | 124   |  
|Bedford              |  | Bedford         |  | TX    |  |         |       |      |  |        | 408   |         |  |              | 1,678 |          |  |           | 2,086 |         |  |          | 87    |  
|Bee Caves Road       |  | Austin          |  | TX    |  |         |       |      |  |        | 608   |         |  |              | 3,609 |          |  |           | 4,217 |         |  |          | 913   |  
|Beltline             |  | Irving          |  | TX    |  |         |       |      |  |        | 414   |         |  |              | 1,671 |          |  |           | 2,086 |         |  |          | 327   |  
|Blanco Road          |  | San Antonio     |  | TX    |  |         |       |      |  |        | 801   |         |  |              | 3,235 |          |  |           | 4,035 |         |  |          | 122   |  
|Champions            |  | Houston         |  | TX    |  |         |       |      |  |        | 515   |         |  |              | 2,775 |          |  |           | 3,290 |         |  |          | (2    | )
|Cinco Ranch          |  | Houston         |  | TX    |  |         |       |      |  |        | 1,751 |         |  |              | 1,336 |          |  |           | 3,088 |         |  |          | 28    |  
|Cityplace            |  | Dallas          |  | TX    |  |         |       |      |  |        | 1,045 |         |  |              | 3,314 |          |  |           | 4,359 |         |  |          | 262   |  
|East Lamar           |  | Arlington       |  | TX    |  |         |       |      |  |        | 742   |         |  |              | 1,863 |          |  |           | 2,605 |         |  |          | 280   |  
|Federal Road         |  | Houston         |  | TX    |  |         |       |      |  |        | 552   |         |  |              | 2,223 |          |  |           | 2,775 |         |  |          | 141   |  
|First Colony         |  | Missouri City   |  | TX    |  |         |       |      |  |        | 447   |         |  |              | 2,175 |          |  |           | 2,622 |         |  |          | (12   | )
|Forum 303            |  | Arlington       |  | TX    |  |         |       |      |  |        | 273   |         |  |              | 1,100 |          |  |           | 1,373 |         |  |          | 147   |  
|Fredericksburg Road  |  | San Antonio     |  | TX    |  |         |       |      |  |        | 645   |         |  |              | 2,596 |          |  |           | 3,241 |         |  |          | 275   |  
|Georgetown           |  | Austin          |  | TX    |  |         |       |      |  |        | 403   |         |  |              | 1,711 |          |  |           | 2,114 |         |  |          | 6     |  
|Greenville           |  | Dallas          |  | TX    |  |         |       |      |  |        | 768   |         |  |              | 3,200 |          |  |           | 3,968 |         |  |          | 12    |  
|Helotes              |  | San Antonio     |  | TX    |  |         | (1    | )    |  |        | 481   |         |  |              | 2,277 |          |  |           | 2,758 |         |  |          | (14   | )
|Henderson Pass       |  | San Antonio     |  | TX    |  |         |       |      |  |        | 562   |         |  |              | 2,348 |          |  |           | 2,910 |         |  |          | 792   |  
|Henderson Street     |  | Fort Worth      |  | TX    |  |         |       |      |  |        | 318   |         |  |              | 3,137 |          |  |           | 3,455 |         |  |          | 660   |  
|Highway 26           |  | Hurst           |  | TX    |  |         |       |      |  |        | 517   |         |  |              | 2,761 |          |  |           | 3,278 |         |  |          | 50    |  
|Highway 78           |  | San Antonio     |  | TX    |  |         |       |      |  |        | 392   |         |  |              | 1,550 |          |  |           | 1,942 |         |  |          | 32    |  
|Hill Country Village |  | San Antonio     |  | TX    |  |         |       |      |  |        | 679   |         |  |              | 2,731 |          |  |           | 3,410 |         |  |          | 135   |  
|Hillcroft            |  | Houston         |  | TX    |  |         |       |      |  |        |      |         |  |              | 3,712 |          |  |           | 3,712 |         |  |          | (23   | )
|Hurst                |  | Hurst           |  | TX    |  |         |       |      |  |        | 363   |         |  |              | 1,492 |          |  |           | 1,855 |         |  |          | 90    |  
|Imperial Valley      |  | Houston         |  | TX    |  |         |       |      |  |        | 461   |         |  |              | 1,856 |          |  |           | 2,318 |         |  |          | 157   |  
|Irving               |  | Irving          |  | TX    |  |         |       |      |  |        | 180   |         |  |              | 734   |          |  |           | 913   |         |  |          | 736   |  
|Kingwood             |  | Kingwood        |  | TX    |  |         |       |      |  |        | 525   |         |  |              | 2,097 |          |  |           | 2,622 |         |  |          | 754   |  
|Lakeline             |  | Austin          |  | TX    |  |         |       |      |  |        | 737   |         |  |              | 3,412 |          |  |           | 4,149 |         |  |          | 39    |  
|Las Colinas          |  | Irving          |  | TX    |  |         | (1    | )    |  |        | 478   |         |  |              | 2,717 |          |  |           | 3,195 |         |  |          | 435   |  
|Lewisville           |  | Dallas          |  | TX    |  |         |       |      |  |        | 434   |         |  |              | 2,521 |          |  |           | 2,955 |         |  |          | 35    |  
|MacArthur            |  | Irving          |  | TX    |  |         |       |      |  |        | 180   |         |  |              | 734   |          |  |           | 913   |         |  |          | 1,145 |  
|McArthur Crossing    |  | Irving          |  | TX    |  |         |       |      |  |        | 746   |         |  |              | 2,577 |          |  |           | 3,323 |         |  |          | 401   |  
|Medical Center (TX)  |  | Houston         |  | TX    |  |         |       |      |  |        | 737   |         |  |              | 2,950 |          |  |           | 3,687 |         |  |          | 305   |  
|Medical Center SA    |  | San Antonio     |  | TX    |  |         | (1    | )    |  |        | 660   |         |  |              | 2,683 |          |  |           | 3,343 |         |  |          | 61    |  
|Mission Bend         |  | Houston         |  | TX    |  |         |       |      |  |        | 653   |         |  |              | 2,218 |          |  |           | 2,871 |         |  |          | 533   |  
|Nacodoches           |  | San Antonio     |  | TX    |  |         |       |      |  |        | 363   |         |  |              | 1,565 |          |  |           | 1,928 |         |  |          | 1,352 |  
|North Austin         |  | Austin          |  | TX    |  |         |       |      |  |        | 609   |         |  |              | 2,436 |          |  |           | 3,045 |         |  |          | 128   |  
|North Carrollton     |  | Carrollton      |  | TX    |  |         |       |      |  |        | 627   |         |  |              | 2,739 |          |  |           | 3,366 |         |  |          | 7     |  
|North Park           |  | Kingwood        |  | TX    |  |         |       |      |  |        | 570   |         |  |              | 2,163 |          |  |           | 2,733 |         |  |          | 8     |  
|Oak Farm Dairy       |  | Houston         |  | TX    |  |         |       |      |  |        | 2,603 |         |  |              | 2,730 |          |  |           | 5,332 |         |  |          | 664   |  
|Oak Hills            |  | Austin          |  | TX    |  |         | (1    | )    |  |        | 149   |         |  |              | 3,568 |          |  |           | 3,717 |         |  |          | (42   | )
|Oltorf               |  | Austin          |  | TX    |  |         |       |      |  |        |      |         |  |              |       |          |  |           |      |         |  |          | 3     |  
|Olympia              |  | Missouri City   |  | TX    |  |         | (1    | )    |  |        | 489   |         |  |              | 2,912 |          |  |           | 3,401 |         |  |          | (9    | )
|Park Cities East     |  | Dallas          |  | TX    |  |         |       |      |  |        | 1,017 |         |  |              | 2,686 |          |  |           | 3,703 |         |  |          | 255   |  
|Parker Road          |  | Dallas          |  | TX    |  |         |       |      |  |        | 809   |         |  |              | 2,211 |          |  |           | 3,020 |         |  |          | 5     |  
|Preston Road         |  | Dallas          |  | TX    |  |         |       |      |  |        | 703   |         |  |              | 2,903 |          |  |           | 3,605 |         |  |          | (24   | )
|Quarry               |  | San Antonio     |  | TX    |  |         |       |      |  |        | 1,316 |         |  |              | 2,817 |          |  |           | 4,133 |         |  |          | 55    |  
|River Oaks           |  | Houston         |  | TX    |  |         |       |      |  |        | 987   |         |  |              | 2,565 |          |  |           | 3,552 |         |  |          | 6,464 |  
|Round Rock           |  | Austin          |  | TX    |  |         |       |      |  |        | 386   |         |  |              | 1,641 |          |  |           | 2,027 |         |  |          | 8     |  
|San Antonio NE       |  | San Antonio     |  | TX    |  |         |       |      |  |        | 406   |         |  |              | 1,630 |          |  |           | 2,036 |         |  |          | 128   |  
|Slaughter Lane       |  | Austin          |  | TX    |  |         |       |      |  |        | 592   |         |  |              | 2,428 |          |  |           | 3,019 |         |  |          | 8     |  
|South Cooper         |  | Arlington       |  | TX    |  |         |       |      |  |        | 632   |         |  |              | 2,305 |          |  |           | 2,937 |         |  |          | 324   |  
|South Main           |  | Houston         |  | TX    |  |         |       |      |  |        | 404   |         |  |              | 1,039 |          |  |           | 1,442 |         |  |          | 76    |  
|Southlake            |  | Dallas          |  | TX    |  |         |       |      |  |        | 670   |         |  |              | 2,738 |          |  |           | 3,408 |         |  |          | 230   |  
|Sugarland            |  | Sugarland       |  | TX    |  |         |       |      |  |        | 761   |         |  |              | 2,991 |          |  |           | 3,752 |         |  |          | 113   |  
|T.C. Jester          |  | Houston         |  | TX    |  |         |       |      |  |        | 903   |         |  |              | 3,613 |          |  |           | 4,516 |         |  |          | 476   |  
|Thousand Oaks        |  | San Antonio     |  | TX    |  |         |       |      |  |        | 421   |         |  |              | 1,683 |          |  |           | 2,104 |         |  |          | 84    |  
|Universal City       |  | San Antonio     |  | TX    |  |         |       |      |  |        | 169   |         |  |              | 593   |          |  |           | 762   |         |  |          | 1,040 |  
|Valley Ranch         |  | Coppell         |  | TX    |  |         |       |      |  |        | 791   |         |  |              | 3,210 |          |  |           | 4,001 |         |  |          | 4     |  
|West University      |  | Houston         |  | TX    |  |         |       |      |  |        | 1,121 |         |  |              | 4,484 |          |  |           | 5,605 |         |  |          | 145   |  
|Westchase            |  | Houston         |  | TX    |  |         |       |      |  |        | 250   |         |  |              | 2,756 |          |  |           | 3,006 |         |  |          | (18   | )
|Westheimer           |  | Houston         |  | TX    |  |         |       |      |  |        | 611   |         |  |              | 2,470 |          |  |           | 3,081 |         |  |          | 71    |  
|Windcrest            |  | San Antonio     |  | TX    |  |         |       |      |  |        | 626   |         |  |              | 2,535 |          |  |           | 3,161 |         |  |          | 423   |  
|Woodforest           |  | Houston         |  | TX    |  |         |       |      |  |        | 538   |         |  |              | 1,870 |          |  |           | 2,408 |         |  |          | 399   |  
|Woodlands            |  | Houston         |  | TX    |  |         |       |      |  |        | 737   |         |  |              | 2,948 |          |  |           | 3,685 |         |  |          | 333   |  
|Bayside              |  | Virginia Beach  |  | VA    |  |         |       |      |  |        | 236   |         |  |              | 943   |          |  |           | 1,179 |         |  |          | 317   |  
|Burke                |  | Fairfax         |  | VA    |  |         |       |      |  |        | 634   |         |  |              | 2,539 |          |  |           | 3,173 |         |  |          | 76    |  
|Burke Centre         |  | Burke           |  | VA    |  |         |       |      |  |        | 716   |         |  |              | 3,304 |          |  |           | 4,020 |         |  |          | 319   |  
|Burke Ctr. Bus. Park |  | Fairfax         |  | VA    |  |         |       |      |  |        | 319   |         |  |              | 1,474 |          |  |           | 1,793 |         |  |          | (317  | )
|Cascades             |  | Sterling        |  | VA    |  |         |       |      |  |        | 2,292 |         |  |              | 3,639 |          |  |           | 5,931 |         |  |          | 65    |  
|Cedar Road           |  | Chesapeake      |  | VA    |  |         |       |      |  |        | 295   |         |  |              | 1,184 |          |  |           | 1,479 |         |  |          | 137   |  
|Charlottesville      |  | Charlottesville |  | VA    |  |         |       |      |  |        | 305   |         |  |              | 1,225 |          |  |           | 1,530 |         |  |          | 114   |  
|Chesapeake           |  | Chesapeake      |  | VA    |  |         |       |      |  |        | 454   |         |  |              | 1,821 |          |  |           | 2,275 |         |  |          | 72    |  

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|                      |  |                |  |       |  |         |    |      |  |        |        |         |  |              |         |          |  |           |           |         |  |          |           |   |  |   |         |  
|--------------------- |  | -------------- |  | ----- |  | ------- | -- | ---- |  | ------ | ------ | ------- |  | ------------ | ------- | -------- |  | --------- | --------- | ------- |  | -------- | --------- | - |  | - | ------- | -
|                      |  |                |  |       |  |         |    |      |  |        |        |         |  | INITIAL COST |         | Costs   
|                      |  |                |  |       |  |         |    |      |  |        |        |         |  |              |         | Subse-  
|                      |  |                |  |       |  |         |    |      |  |        |        |         |  |              |         |          |  | Building, |           | Gross   |  | quent to
|                      |  |                |  |       |  |         |    |      |  | Encum- |        |         |  |              |         | Equip. & |  | Storage   |           | Acquis-
|Property Name         |  | Location       |  | State |  | brances |    | Land |  | Other  |        | Centers |  | ition       
|                      |  |                |  |       |  |         |    |      |  |        |        |         |  |             
|Dale City             |  | Dale City      |  | VA    |  |         |    |      |  |        | 346    |         |  |              | 1,388   |          |  |           | 1,734     |         |  |          | 384       |  
|Fairfax               |  | Fairfax        |  | VA    |  |         |    |      |  |        | 1,136  |         |  |              | 4,555   |          |  |           | 5,691     |         |  |          | 2,325     |  
|Falls Church          |  | Falls Church   |  | VA    |  |         |    |      |  |        | 1,413  |         |  |              | 5,661   |          |  |           | 7,075     |         |  |          | 524       |  
|Fordson               |  | Alexandria     |  | VA    |  |         |    |      |  |        | 324    |         |  |              | 3,114   |          |  |           | 3,438     |         |  |          |          |  
|Fullerton             |  | Springfield    |  | VA    |  |         |    |      |  |        | 1,139  |         |  |              | 4,346   |          |  |           | 5,486     |         |  |          | 16        |  
|Gainesville           |  | Gainesville    |  | VA    |  |         |    |      |  |        | 245    |         |  |              | 983     |          |  |           | 1,228     |         |  |          | 99        |  
|Herndon               |  | Herndon        |  | VA    |  |         |    |      |  |        | 582    |         |  |              | 2,334   |          |  |           | 2,916     |         |  |          | 218       |  
|Holland Road          |  | Virginia Beach |  | VA    |  |         |    |      |  |        | 204    |         |  |              | 818     |          |  |           | 1,022     |         |  |          | 147       |  
|Jeff Davis Hwy        |  | Richmond       |  | VA    |  |         |    |      |  |        | 306    |         |  |              | 1,226   |          |  |           | 1,531     |         |  |          | 93        |  
|Kempsville            |  | Virginia Beach |  | VA    |  |         |    |      |  |        | 279    |         |  |              | 1,116   |          |  |           | 1,395     |         |  |          | 121       |  
|Laskin Road           |  | Virginia Beach |  | VA    |  |         |    |      |  |        | 305    |         |  |              | 1,225   |          |  |           | 1,530     |         |  |          | 115       |  
|Leesburg              |  | Leesburg       |  | VA    |  |         |    |      |  |        | 541    |         |  |              | 2,174   |          |  |           | 2,715     |         |  |          | 48        |  
|Manassas E. & W.      |  | Manassas       |  | VA    |  |         |    |      |  |        | 654    |         |  |              | 2,627   |          |  |           | 3,281     |         |  |          | 388       |  
|McLean                |  | McLean         |  | VA    |  |         |    |      |  |        |       |         |  |              | 1,839   |          |  |           | 1,839     |         |  |          | 1,801     |  
|Merrifield            |  | Fairfax        |  | VA    |  |         |    |      |  |        | 3,184  |         |  |              | 3,966   |          |  |           | 7,151     |         |  |          | 1,364     |  
|Midlothian Turnpike   |  | Richmond       |  | VA    |  |         |    |      |  |        | 646    |         |  |              | 2,591   |          |  |           | 3,237     |         |  |          | 86        |  
|Newport News. North   |  | Newport News   |  | VA    |  |         |    |      |  |        | 574    |         |  |              | 2,301   |          |  |           | 2,875     |         |  |          | 245       |  
|Newport News. S       |  | Newport News   |  | VA    |  |         |    |      |  |        | 496    |         |  |              | 2,014   |          |  |           | 2,510     |         |  |          | 340       |  
|North Richmond        |  | Richmond       |  | VA    |  |         |    |      |  |        | 344    |         |  |              | 1,375   |          |  |           | 1,719     |         |  |          | 117       |  
|Old Towne             |  | Alexandria     |  | VA    |  |         | (1 | )    |  |        | 2,036  |         |  |              | 7,210   |          |  |           | 9,246     |         |  |          | 161       |  
|Potomac Mills         |  | Potomac Mills  |  | VA    |  |         |    |      |  |        | 1,114  |         |  |              | 3,440   |          |  |           | 4,554     |         |  |          | 7         |  
|Princess Anne Rd.     |  | Virginia Beach |  | VA    |  |         |    |      |  |        | 305    |         |  |              | 1,225   |          |  |           | 1,530     |         |  |          | 87        |  
|S. Military Highway   |  | Virginia Beach |  | VA    |  |         |    |      |  |        | 289    |         |  |              | 1,161   |          |  |           | 1,450     |         |  |          | 292       |  
|Telegraph             |  | Lorton         |  | VA    |  |         |    |      |  |        | 441    |         |  |              | 2,036   |          |  |           | 2,477     |         |  |          | 0         |  
|Temple Avenue         |  | Petersburg     |  | VA    |  |         |    |      |  |        | 297    |         |  |              | 1,193   |          |  |           | 1,490     |         |  |          | 117       |  
|Virginia Beach        |  | Virginia Beach |  | VA    |  |         |    |      |  |        | 502    |         |  |              | 1,832   |          |  |           | 2,334     |         |  |          | 451       |  
|Auburn                |  | Auburn         |  | WA    |  |         |    |      |  |        | 760    |         |  |              | 2,773   |          |  |           | 3,533     |         |  |          | 138       |  
|Bellefield            |  | Bellevue       |  | WA    |  |         |    |      |  |        | 957    |         |  |              | 3,830   |          |  |           | 4,787     |         |  |          | 209       |  
|Bellingham            |  | Bellingham     |  | WA    |  |         |    |      |  |        | 601    |         |  |              | 2,400   |          |  |           | 3,001     |         |  |          | 132       |  
|Bremerton             |  | Bremerton      |  | WA    |  |         |    |      |  |        | 563    |         |  |              | 2,297   |          |  |           | 2,860     |         |  |          | 27        |  
|Burien                |  | Seattle        |  | WA    |  |         |    |      |  |        | 646    |         |  |              | 2,622   |          |  |           | 3,268     |         |  |          | 236       |  
|Burien II             |  | Seattle        |  | WA    |  |         |    |      |  |        | 388    |         |  |              | 1,553   |          |  |           | 1,941     |         |  |          | 207       |  
|Canyon Park JV        |  | Bothell        |  | WA    |  |         |    |      |  |        | 1,023  |         |  |              | 2,949   |          |  |           | 3,972     |         |  |          | 236       |  
|Canyon Rd.            |  | Puyallup       |  | WA    |  |         |    |      |  |        | 234    |         |  |              | 937     |          |  |           | 1,171     |         |  |          | 115       |  
|Capitol Hill          |  | Seattle        |  | WA    |  |         |    |      |  |        | 764    |         |  |              | 4,516   |          |  |           | 5,280     |         |  |          | 925       |  
|Corporate Office      |  | Seattle        |  | WA    |  |         |    |      |  |        | 3,947  |         |  |              | 7,096   |          |  |           | 11,043    |         |  |          | 16,847    |  
|E. Bremerton          |  | Bremerton      |  | WA    |  |         |    |      |  |        | 576    |         |  |              | 2,312   |          |  |           | 2,888     |         |  |          | 134       |  
|East Lynnwood         |  | Lynnwood       |  | WA    |  |         |    |      |  |        | 482    |         |  |              | 1,933   |          |  |           | 2,415     |         |  |          | 514       |  
|Edmonds               |  | Edmonds        |  | WA    |  |         |    |      |  |        | 1,190  |         |  |              | 4,806   |          |  |           | 5,996     |         |  |          | 210       |  
|Everett               |  | Everett        |  | WA    |  |         |    |      |  |        | 512    |         |  |              | 2,045   |          |  |           | 2,557     |         |  |          | 709       |  
|Factoria              |  | Bellevue       |  | WA    |  |         |    |      |  |        | 590    |         |  |              | 2,362   |          |  |           | 2,952     |         |  |          | 40        |  
|Factoria Square       |  | Bellevue       |  | WA    |  |         |    |      |  |        | 1,226  |         |  |              | 4,909   |          |  |           | 6,135     |         |  |          | 122       |  
|Federal Way           |  | Federal Way    |  | WA    |  |         |    |      |  |        | 862    |         |  |              | 3,414   |          |  |           | 4,275     |         |  |          | 269       |  
|Gig Harbor            |  | Gig Harbor     |  | WA    |  |         |    |      |  |        | 1,119  |         |  |              | 769     |          |  |           | 1,887     |         |  |          | 48        |  
|Hazel Dell            |  | Vancouver      |  | WA    |  |         |    |      |  |        | 728    |         |  |              | 1,506   |          |  |           | 2,234     |         |  |          | 1,825     |  
|Highland Hill         |  | Tacoma         |  | WA    |  |         |    |      |  |        | 592    |         |  |              | 2,362   |          |  |           | 2,954     |         |  |          | 148       |  
|Interbay              |  | Seattle        |  | WA    |  |         |    |      |  |        | 952    |         |  |              | 3,777   |          |  |           | 4,729     |         |  |          | 210       |  
|Issaquah              |  | Issaquah       |  | WA    |  |         |    |      |  |        | 615    |         |  |              | 2,460   |          |  |           | 3,075     |         |  |          | 161       |  
|Juanita               |  | Kirkland       |  | WA    |  |         | (1 | )    |  |        | 877    |         |  |              | 4,523   |          |  |           | 5,400     |         |  |          | (54       | )
|Kennydale             |  | Renton         |  | WA    |  |         |    |      |  |        | 816    |         |  |              | 3,267   |          |  |           | 4,083     |         |  |          | 156       |  
|Kent                  |  | Kent           |  | WA    |  |         |    |      |  |        | 557    |         |  |              | 2,297   |          |  |           | 2,854     |         |  |          | 5         |  
|Lacey                 |  | Olympia        |  | WA    |  |         |    |      |  |        | 251    |         |  |              | 1,014   |          |  |           | 1,265     |         |  |          | 42        |  
|Lake City             |  | Seattle        |  | WA    |  |         |    |      |  |        | 572    |         |  |              | 2,421   |          |  |           | 2,993     |         |  |          | 236       |  
|Lake Union            |  | Seattle        |  | WA    |  |         |    |      |  |        | 1,580  |         |  |              | 7,440   |          |  |           | 9,021     |         |  |          | 15        |  
|Lakewood 512          |  | Tacoma         |  | WA    |  |         |    |      |  |        | 920    |         |  |              | 3,676   |          |  |           | 4,596     |         |  |          | 251       |  
|Lynnwood              |  | Lynnwood       |  | WA    |  |         |    |      |  |        | 775    |         |  |              | 3,186   |          |  |           | 3,961     |         |  |          | 99        |  
|Mill Creek            |  | Everett        |  | WA    |  |         |    |      |  |        | 627    |         |  |              | 3,760   |          |  |           | 4,387     |         |  |          | 554       |  
|North Spokane         |  | Spokane        |  | WA    |  |         |    |      |  |        | 581    |         |  |              | 2,328   |          |  |           | 2,909     |         |  |          | 1,322     |  
|Parkland              |  | Tacoma         |  | WA    |  |         |    |      |  |        | 400    |         |  |              | 1,634   |          |  |           | 2,034     |         |  |          | 61        |  
|Pier 57               |  | Seattle        |  | WA    |  |         |    |      |  |        | 872    |         |  |              | 4,558   |          |  |           | 5,430     |         |  |          | 198       |  
|Pt. Orchard           |  | Pt. Orchard    |  | WA    |  |         |    |      |  |        | 483    |         |  |              | 2,013   |          |  |           | 2,496     |         |  |          | 66        |  
|Redmond               |  | Redmond        |  | WA    |  |         |    |      |  |        | 537    |         |  |              | 5,503   |          |  |           | 6,040     |         |  |          | (18       | )
|Renton                |  | Renton         |  | WA    |  |         |    |      |  |        | 625    |         |  |              | 2,557   |          |  |           | 3,182     |         |  |          | 243       |  
|Salmon Creek          |  | Vancouver      |  | WA    |  |         |    |      |  |        | 759    |         |  |              | 3,327   |          |  |           | 4,086     |         |  |          | 29        |  
|Sammamish             |  | Redmond        |  | WA    |  |         |    |      |  |        | 963    |         |  |              | 3,854   |          |  |           | 4,817     |         |  |          | 48        |  
|Shoreline/Aurora N.   |  | Seattle        |  | WA    |  |         |    |      |  |        | 1,495  |         |  |              | 6,006   |          |  |           | 7,501     |         |  |          | 726       |  
|Smokey Point          |  | Arlington      |  | WA    |  |         |    |      |  |        | 232    |         |  |              | 929     |          |  |           | 1,161     |         |  |          | 129       |  
|South Center          |  | Renton         |  | WA    |  |         |    |      |  |        | 425    |         |  |              | 1,783   |          |  |           | 2,208     |         |  |          | 215       |  
|South Hill            |  | Seattle        |  | WA    |  |         |    |      |  |        | 300    |         |  |              | 1,247   |          |  |           | 1,547     |         |  |          | 155       |  
|South Tacoma          |  | Tacoma         |  | WA    |  |         |    |      |  |        | 315    |         |  |              | 1,263   |          |  |           | 1,578     |         |  |          | 115       |  
|Spokane               |  | Spokane        |  | WA    |  |         |    |      |  |        | 232    |         |  |              | 952     |          |  |           | 1,184     |         |  |          | 96        |  
|Sprague               |  | Tacoma         |  | WA    |  |         |    |      |  |        | 717    |         |  |              | 1,431   |          |  |           | 2,148     |         |  |          | 2,304     |  
|Totem Lake            |  | Kirkland       |  | WA    |  |         |    |      |  |        | 660    |         |  |              | 2,668   |          |  |           | 3,328     |         |  |          | 219       |  
|Vancouver Mall        |  | Vancouver      |  | WA    |  |         |    |      |  |        | 364    |         |  |              | 1,457   |          |  |           | 1,821     |         |  |          | 219       |  
|West Olympia          |  | Olympia        |  | WA    |  |         |    |      |  |        | 359    |         |  |              | 1,446   |          |  |           | 1,806     |         |  |          | 13        |  
|West Seattle          |  | Seattle        |  | WA    |  |         |    |      |  |        | 698    |         |  |              | 4,202   |          |  |           | 4,900     |         |  |          | 35        |  
|Whitecenter           |  | Seattle        |  | WA    |  |         |    |      |  |        | 559    |         |  |              | 2,284   |          |  |           | 2,843     |         |  |          | 143       |  
|Woodinville           |  | Woodinville    |  | WA    |  |         |    |      |  |        | 674    |         |  |              | 2,693   |          |  |           | 3,367     |         |  |          | 130       |  
|Bellevue              |  | Bellevue       |  | Wa    |  |         |    |      |  |        | 1,860  |         |  |              | 7,483   |          |  |           | 9,343     |         |  |          | 5,112     |  
|Containerized storage |  |                |  |       |  |         |    |      |  |        |       |         |  |              |        |          |  |           | 4,889     |         |  |          | 4,889     |   |  |   | (854    | )
|                      |  |                |  |       |  |         |    |      |  |        |        |         |  |              |         |          |  |           |           |         |  |          |           |   |  |   |         |  
|                      |  |                |  |       |  |         |    |      |  | $      | 46,601 |         |  | $            | 276,481 |          |  | $         | 1,069,111 |         |  | $        | 1,345,592 |   |  | $ | 184,457 |  
|                      |  |                |  |       |  |         |    |      |  |        |        |         |  |              |         |          |  |           |           |         |  |          |           |   |  |   |         |  

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|                   |  |                  |  |       |  |      |       |       |  |                    |       |       |  |          |       |         |  |        |        |       |  |      |         |         |  |  |         |  |  |       |     |  |  |  |  | 
|------------------ |  | ---------------- |  | ----- |  | ---- | ----- | ----- |  | ------------------ | ----- | ----- |  | -------- | ----- | ------- |  | ------ | ------ | ----- |  | ---- | ------- | ------- |  |  | ------- |  |  | ----- | --- |  |  |  |  | 
|                   |  |                  |  |       |  |      |       |       |  | Gross Amount as of |       |       |  |          |       |         |  |        |        |       |  |      |         |         |  | 
|                   |  |                  |  |       |  |      |       |       |  |                    |       |       |  |          |       |         |  |        |        |       |  |      |         |         |  | 
|                   |  |                  |  |       |  |      |       |       |  |                    |       |       |  | Building |       | Gross   |  |        |        |       |  |      |         |         |  |  |         |  |  | Depr.
|                   |  |                  |  |       |  |      |       |       |  |                    |       |       |  | Equip. & |       | Storage |  | Accum. |        | Owned |  | Year |         | Life in
|Property Name      |  | Location         |  | State |  | Land |       | Other |  | Centers            |       | Depr. |  | Since    |       | Built   |  | mos.  
|                   |  |                  |  |       |  |      |       |       |  |                    |       |       |  |          |       |         |  |       
|Ahwatukee          |  | Phoenix          |  | AZ    |  |      | 721   |       |  |                    | 2,468 |       |  |          | 3,189 |         |  |        | (416   | )     |  |      | 1998    |         |  |  | 1998    |  |  |       | 360 | 
|Airpark            |  | Scottsdale       |  | AZ    |  |      | 880   |       |  |                    | 3,707 |       |  |          | 4,587 |         |  |        | (737   | )     |  |      | 1997    |         |  |  | 1997    |  |  |       | 360 | 
|Arrowhead          |  | Phoenix          |  | AZ    |  |      | 569   |       |  |                    | 2,609 |       |  |          | 3,178 |         |  |        | (458   | )     |  |      | 1997    |         |  |  | 1997    |  |  |       | 360 | 
|Chandler           |  | Chandler         |  | AZ    |  |      | 652   |       |  |                    | 3,185 |       |  |          | 3,837 |         |  |        | (948   | )     |  |      | 1986    |         |  |  | 1986    |  |  |       | 360 | 
|Colonnade          |  | Phoenix          |  | AZ    |  |      |      |       |  |                    | 1,147 |       |  |          | 1,147 |         |  |        | (219   | )     |  |      | 1998    |         |  |  | 1997    |  |  |       | 360 | 
|Cooper Road        |  | Gilbert          |  | AZ    |  |      | 376   |       |  |                    | 2,480 |       |  |          | 2,856 |         |  |        | (140   | )     |  |      | 2001    |         |  |  | 2001    |  |  |       | 360 | 
|Dobson Ranch       |  | Mesa             |  | AZ    |  |      | 499   |       |  |                    | 2,156 |       |  |          | 2,655 |         |  |        | (486   | )     |  |      | 1996    |         |  |  | 1978    |  |  |       | 360 | 
|Houghton Road      |  | Tucson           |  | AZ    |  |      | 607   |       |  |                    | 2,788 |       |  |          | 3,395 |         |  |        | (254   | )     |  |      | 1999    |         |  |  | 2000    |  |  |       | 360 | 
|Mesa               |  | Mesa             |  | AZ    |  |      | 355   |       |  |                    | 2,366 |       |  |          | 2,721 |         |  |        | (754   | )     |  |      | 1987    |         |  |  | 1985    |  |  |       | 360 | 
|Mill Avenue        |  | Tempe            |  | AZ    |  |      | 431   |       |  |                    | 1,567 |       |  |          | 1,998 |         |  |        | (211   | )     |  |      | 1999    |         |  |  | 1998    |  |  |       | 360 | 
|Phoenix            |  | Phoenix          |  | AZ    |  |      | 656   |       |  |                    | 2,853 |       |  |          | 3,509 |         |  |        | (911   | )     |  |      | 1985    |         |  |  | 1984    |  |  |       | 360 | 
|Phoenix East       |  | Phoenix          |  | AZ    |  |      | 543   |       |  |                    | 2,382 |       |  |          | 2,925 |         |  |        | (766   | )     |  |      | 1987    |         |  |  | 1984    |  |  |       | 360 | 
|Scottsdale         |  | Scottsdale       |  | AZ    |  |      | 410   |       |  |                    | 1,951 |       |  |          | 2,361 |         |  |        | (629   | )     |  |      | 1985    |         |  |  | 1976/85 |  |  |       | 360 | 
|Scottsdale North   |  | Scottsdale       |  | AZ    |  |      | 1,093 |       |  |                    | 4,955 |       |  |          | 6,048 |         |  |        | (1,502 | )     |  |      | 1985/87 |         |  |  | 1985    |  |  |       | 360 | 
|Shea               |  | Scottsdale       |  | AZ    |  |      | 807   |       |  |                    | 3,307 |       |  |          | 4,114 |         |  |        | (622   | )     |  |      | 1997    |         |  |  | 1996    |  |  |       | 360 | 
|Speedway           |  | Tucson           |  | AZ    |  |      | 773   |       |  |                    | 2,969 |       |  |          | 3,742 |         |  |        | (433   | )     |  |      | 1998    |         |  |  | 1998    |  |  |       | 360 | 
|Tempe              |  | Tempe            |  | AZ    |  |      | 273   |       |  |                    | 1,347 |       |  |          | 1,620 |         |  |        | (413   | )     |  |      | 1984    |         |  |  | 1976    |  |  |       | 360 | 
|Union Hills        |  | Phoenix          |  | AZ    |  |      | 617   |       |  |                    | 2,623 |       |  |          | 3,240 |         |  |        | (418   | )     |  |      | 1998    |         |  |  | 1998    |  |  |       | 360 | 
|Val Vista          |  | Gilbert          |  | AZ    |  |      | 778   |       |  |                    | 3,856 |       |  |          | 4,634 |         |  |        | (920   | )     |  |      | 1999    |         |  |  | 1999    |  |  |       | 360 | 
|Warner             |  | Mesa             |  | AZ    |  |      | 313   |       |  |                    | 1,527 |       |  |          | 1,840 |         |  |        | (610   | )     |  |      | 1995    |         |  |  | 1985    |  |  |       | 360 | 
|Alicia Parkway     |  | Laguna Hills     |  | CA    |  |      | 1,729 |       |  |                    | 7,309 |       |  |          | 9,038 |         |  |        | (856   | )     |  |      | 1998    |         |  |  | 1991    |  |  |       | 360 | 
|Aliso Viejo        |  | Aliso Viejo      |  | CA    |  |      | 2,218 |       |  |                    | 4,385 |       |  |          | 6,603 |         |  |        | (997   | )     |  |      | 1996    |         |  |  | 1996    |  |  |       | 360 | 
|Antioch            |  | Antioch          |  | CA    |  |      | 678   |       |  |                    | 5,079 |       |  |          | 5,757 |         |  |        | (489   | )     |  |      | 1999    |         |  |  | 1999    |  |  |       | 360 | 
|Bloomington        |  | Bloomington      |  | CA    |  |      | 237   |       |  |                    | 1,112 |       |  |          | 1,349 |         |  |        | (264   | )     |  |      | 1997    |         |  |  | 1983    |  |  |       | 360 | 
|Blossom Valley     |  | San Jose         |  | CA    |  |      | 1,212 |       |  |                    | 4,634 |       |  |          | 5,846 |         |  |        | (680   | )     |  |      | 1998    |         |  |  | 1998    |  |  |       | 360 | 
|Cabot Road         |  | Laguna Niguel    |  | CA    |  |      | 1,300 |       |  |                    | 6,142 |       |  |          | 7,442 |         |  |        | (269   | )     |  |      | 2001    |         |  |  | 2001    |  |  |       | 360 | 
|Capital Expressway |  | San Jose         |  | CA    |  |      | 995   |       |  |                    | 6,280 |       |  |          | 7,275 |         |  |        | (470   | )     |  |      | 2000    |         |  |  | 2000    |  |  |       | 360 | 
|Castro Business Pk |  | Castro Valley    |  | CA    |  |      | 97    |       |  |                    | 416   |       |  |          | 513   |         |  |        | (95    | )     |  |      | 1996    |         |  |  | 1975    |  |  |       | 360 | 
|Castro Valley      |  | Castro Valley    |  | CA    |  |      | 907   |       |  |                    | 3,926 |       |  |          | 4,833 |         |  |        | (1,007 | )     |  |      | 1996    |         |  |  | 1975    |  |  |       | 360 | 
|Colton             |  | Colton           |  | CA    |  |      | 283   |       |  |                    | 1,235 |       |  |          | 1,518 |         |  |        | (403   | )     |  |      | 1985    |         |  |  | 1984    |  |  |       | 360 | 
|Costa Mesa         |  | Costa Mesa       |  | CA    |  |      | 882   |       |  |                    | 3,339 |       |  |          | 4,221 |         |  |        | (378   | )     |  |      | 1999    |         |  |  | 1998    |  |  |       | 360 | 
|Culver City        |  | Los Angeles      |  | CA    |  |      | 1,039 |       |  |                    | 4,311 |       |  |          | 5,350 |         |  |        | (1,330 | )     |  |      | 1988    |         |  |  | 1989    |  |  |       | 360 | 
|Daly City          |  | Daly City        |  | CA    |  |      | 1,846 |       |  |                    | 6,155 |       |  |          | 8,001 |         |  |        | (1,872 | )     |  |      | 1995    |         |  |  | 1989    |  |  |       | 360 | 
|El Cajon           |  | El Cajon         |  | CA    |  |      | 1,013 |       |  |                    | 4,613 |       |  |          | 5,626 |         |  |        | (1,489 | )     |  |      | 1986    |         |  |  | 1977    |  |  |       | 360 | 
|El Cerrito         |  | Richmond         |  | CA    |  |      | 765   |       |  |                    | 3,218 |       |  |          | 3,983 |         |  |        | (975   | )     |  |      | 1986    |         |  |  | 1987    |  |  |       | 360 | 
|Fontana Sierra     |  | Fontana          |  | CA    |  |      | 589   |       |  |                    | 2,091 |       |  |          | 2,680 |         |  |        | (591   | )     |  |      | 1987    |         |  |  | 1980/85 |  |  |       | 360 | 
|Hayward            |  | Hayward          |  | CA    |  |      | 322   |       |  |                    | 1,584 |       |  |          | 1,906 |         |  |        | (512   | )     |  |      | 1985    |         |  |  | 1983    |  |  |       | 360 | 
|Huntington Beach   |  | Huntington Beach |  | CA    |  |      | 949   |       |  |                    | 4,156 |       |  |          | 5,105 |         |  |        | (1,244 | )     |  |      | 1988    |         |  |  | 1986    |  |  |       | 360 | 
|Kearney-Balboa     |  | San Diego        |  | CA    |  |      | 830   |       |  |                    | 3,647 |       |  |          | 4,477 |         |  |        | (1,189 | )     |  |      | 1986    |         |  |  | 1984    |  |  |       | 360 | 
|La Habra           |  | La Habra         |  | CA    |  |      | 715   |       |  |                    | 3,196 |       |  |          | 3,911 |         |  |        | (1,008 | )     |  |      | 1986    |         |  |  | 1979/91 |  |  |       | 360 | 
|Martinez           |  | Martinez         |  | CA    |  |      | 1,524 |       |  |                    | 4,088 |       |  |          | 5,612 |         |  |        | (949   | )     |  |      | 1995    |         |  |  | 1987    |  |  |       | 360 | 
|Mountain View      |  | Mountain View    |  | CA    |  |      | 439   |       |  |                    | 1,927 |       |  |          | 2,366 |         |  |        | (590   | )     |  |      | 1987    |         |  |  | 1986    |  |  |       | 360 | 
|Newark             |  | Newark           |  | CA    |  |      | 855   |       |  |                    | 3,525 |       |  |          | 4,380 |         |  |        | (761   | )     |  |      | 1996    |         |  |  | 1991    |  |  |       | 360 | 
|Ontario            |  | Ontario          |  | CA    |  |      | 512   |       |  |                    | 2,108 |       |  |          | 2,620 |         |  |        | (462   | )     |  |      | 1996    |         |  |  | 1984    |  |  |       | 360 | 
|Orange             |  | Orange           |  | CA    |  |      | 1,144 |       |  |                    | 4,665 |       |  |          | 5,809 |         |  |        | (987   | )     |  |      | 1996    |         |  |  | 1985    |  |  |       | 360 | 
|Palo Alto          |  | Palo Alto        |  | CA    |  |      | 705   |       |  |                    | 3,042 |       |  |          | 3,747 |         |  |        | (919   | )     |  |      | 1986    |         |  |  | 1987    |  |  |       | 360 | 

82



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##### Table of Contents



|                   |  |                    |  |       |  |      |       |       |  |                    |        |       |  |          |        |         |  |        |        |       |  |      |      |         |  |  |           |  |  |       |     |  |  |  |  | 
|------------------ |  | ------------------ |  | ----- |  | ---- | ----- | ----- |  | ------------------ | ------ | ----- |  | -------- | ------ | ------- |  | ------ | ------ | ----- |  | ---- | ---- | ------- |  |  | --------- |  |  | ----- | --- |  |  |  |  | 
|                   |  |                    |  |       |  |      |       |       |  | Gross Amount as of |        |       |  |          |        |         |  |        |        |       |  |      |      |         |  | 
|                   |  |                    |  |       |  |      |       |       |  |                    |        |       |  |          |        |         |  |        |        |       |  |      |      |         |  | 
|                   |  |                    |  |       |  |      |       |       |  |                    |        |       |  | Building |        | Gross   |  |        |        |       |  |      |      |         |  |  |           |  |  | Depr.
|                   |  |                    |  |       |  |      |       |       |  |                    |        |       |  | Equip. & |        | Storage |  | Accum. |        | Owned |  | Year |      | Life in
|Property Name      |  | Location           |  | State |  | Land |       | Other |  | Centers            |        | Depr. |  | Since    |        | Built   |  | mos.  
|                   |  |                    |  |       |  |      |       |       |  |                    |        |       |  |          |        |         |  |       
|Pinole             |  | Pinole             |  | CA    |  |      | 980   |       |  |                    | 2,309  |       |  |          | 3,289  |         |  |        | (463   | )     |  |      | 1995 |         |  |  | 1988      |  |  |       | 360 | 
|Rohnert Park       |  | Rohnert Park       |  | CA    |  |      | 1,220 |       |  |                    | 4,440  |       |  |          | 5,660  |         |  |        | (182   | )     |  |      | 2001 |         |  |  | 2001      |  |  |       | 360 | 
|S. San Francisco   |  | San Francisco      |  | CA    |  |      | 721   |       |  |                    | 3,128  |       |  |          | 3,849  |         |  |        | (999   | )     |  |      | 1987 |         |  |  | 1985      |  |  |       | 360 | 
|Sacramento         |  | Sacramento         |  | CA    |  |      | 680   |       |  |                    | 2,755  |       |  |          | 3,435  |         |  |        | (597   | )     |  |      | 1996 |         |  |  | 1991      |  |  |       | 360 | 
|San Juan Creek     |  | San Juan           |  | CA    |  |      | 1,450 |       |  |                    | 5,526  |       |  |          | 6,976  |         |  |        | (245   | )     |  |      | 2001 |         |  |  | 2001      |  |  |       | 360 | 
|San Leandro        |  | San Leandro        |  | CA    |  |      | 776   |       |  |                    | 3,234  |       |  |          | 4,010  |         |  |        | (701   | )     |  |      | 1996 |         |  |  | 1991      |  |  |       | 360 | 
|San Lorenzo        |  | San Lorenzo        |  | CA    |  |      | 611   |       |  |                    | 2,567  |       |  |          | 3,178  |         |  |        | (578   | )     |  |      | 1996 |         |  |  | 1990      |  |  |       | 360 | 
|Santa Ana          |  | Santa Ana          |  | CA    |  |      | 1,467 |       |  |                    | 6,228  |       |  |          | 7,695  |         |  |        | (1,958 | )     |  |      | 1986 |         |  |  | 1975/86   |  |  |       | 360 | 
|Solana Beach       |  | Solana Beach       |  | CA    |  |      |      |       |  |                    | 7,173  |       |  |          | 7,173  |         |  |        | (2,267 | )     |  |      | 1987 |         |  |  | 1984      |  |  |       | 360 | 
|Sunnyvale          |  | Sunnyvale          |  | CA    |  |      | 1,697 |       |  |                    | 11,511 |       |  |          | 13,208 |         |  |        | (2,626 | )     |  |      | 1986 |         |  |  | 1974/75   |  |  |       | 360 | 
|Tracy              |  | Tracy              |  | CA    |  |      | 732   |       |  |                    | 3,017  |       |  |          | 3,749  |         |  |        | (666   | )     |  |      | 1996 |         |  |  | 1986      |  |  |       | 360 | 
|Tracy II           |  | Tracy              |  | CA    |  |      | 840   |       |  |                    | 3,746  |       |  |          | 4,586  |         |  |        | (23    | )     |  |      | 2002 |         |  |  | 2000      |  |  |       | 360 | 
|Union City         |  | Hayward            |  | CA    |  |      | 287   |       |  |                    | 1,405  |       |  |          | 1,692  |         |  |        | (448   | )     |  |      | 1985 |         |  |  | 1985      |  |  |       | 360 | 
|Van Ness           |  | San Francisco      |  | CA    |  |      | 5,289 |       |  |                    | 9,407  |       |  |          | 14,696 |         |  |        | (857   | )     |  |      | 1999 |         |  |  | 1999/1934 |  |  |       | 360 | 
|Vista Park-Land Ls |  | San Jose           |  | CA    |  |      |      |       |  |                    | 56     |       |  |          | 56     |         |  |        | (22    | )     |  |      | 2001 |         |  |  | 2000      |  |  |       | 360 | 
|Walnut             |  | Walnut             |  | CA    |  |      | 751   |       |  |                    | 3,104  |       |  |          | 3,855  |         |  |        | (667   | )     |  |      | 1996 |         |  |  | 1986      |  |  |       | 360 | 
|Walnut Creek       |  | Walnut Creek       |  | CA    |  |      | 626   |       |  |                    | 5,353  |       |  |          | 5,979  |         |  |        | (468   | )     |  |      | 1999 |         |  |  | 1987      |  |  |       | 360 | 
|Westpark           |  | Irvine             |  | CA    |  |      | 4,190 |       |  |                    | 8,882  |       |  |          | 13,072 |         |  |        | (854   | )     |  |      | 2000 |         |  |  | 1999      |  |  |       | 360 | 
|Westwood           |  | Santa Monica       |  | CA    |  |      | 951   |       |  |                    | 7,986  |       |  |          | 8,937  |         |  |        | (1,925 | )     |  |      | 1986 |         |  |  | 1988      |  |  |       | 360 | 
|Lakewood           |  | Golden             |  | CO    |  |      | 528   |       |  |                    | 2,175  |       |  |          | 2,703  |         |  |        | (666   | )     |  |      | 1986 |         |  |  | 1985      |  |  |       | 360 | 
|Northglenn         |  | Northglenn         |  | CO    |  |      | 531   |       |  |                    | 2,306  |       |  |          | 2,837  |         |  |        | (759   | )     |  |      | 1987 |         |  |  | 1979      |  |  |       | 360 | 
|Tamarac            |  | Denver             |  | CO    |  |      | 194   |       |  |                    | 974    |       |  |          | 1,168  |         |  |        | (348   | )     |  |      | 1984 |         |  |  | 1977      |  |  |       | 360 | 
|Thornton           |  | Denver             |  | CO    |  |      | 237   |       |  |                    | 1,093  |       |  |          | 1,330  |         |  |        | (348   | )     |  |      | 1984 |         |  |  | 1984      |  |  |       | 360 | 
|Windermere         |  | Littleton          |  | CO    |  |      | 653   |       |  |                    | 2,969  |       |  |          | 3,622  |         |  |        | (989   | )     |  |      | 1984 |         |  |  | 1977/79   |  |  |       | 360 | 
|Blue Heron         |  | West Palm Beach    |  | FL    |  |      | 1,327 |       |  |                    | 6,341  |       |  |          | 7,668  |         |  |        | (1,878 | )     |  |      | 1987 |         |  |  | 1975      |  |  |       | 360 | 
|Davie              |  | Davie              |  | FL    |  |      | 2,863 |       |  |                    | 6,896  |       |  |          | 9,759  |         |  |        | (1,804 | )     |  |      | 1996 |         |  |  | 1990      |  |  |       | 360 | 
|Delray Beach       |  | Delray Beach       |  | FL    |  |      | 748   |       |  |                    | 3,272  |       |  |          | 4,020  |         |  |        | (752   | )     |  |      | 1996 |         |  |  | 1986      |  |  |       | 360 | 
|Lauderhill         |  | Lauderhill         |  | FL    |  |      | 761   |       |  |                    | 3,479  |       |  |          | 4,240  |         |  |        | (687   | )     |  |      | 1997 |         |  |  | 1986      |  |  |       | 360 | 
|Margate            |  | Margate            |  | FL    |  |      | 906   |       |  |                    | 3,875  |       |  |          | 4,781  |         |  |        | (827   | )     |  |      | 1996 |         |  |  | 1984      |  |  |       | 360 | 
|Military Trail     |  | West Palm Beach    |  | FL    |  |      | 1,140 |       |  |                    | 5,088  |       |  |          | 6,228  |         |  |        | (1,514 | )     |  |      | 1987 |         |  |  | 1981      |  |  |       | 360 | 
|Oakland Park       |  | Ft. Lauderdale     |  | FL    |  |      | 2,443 |       |  |                    | 10,575 |       |  |          | 13,018 |         |  |        | (3,233 | )     |  |      | 1985 |         |  |  | 1974/78   |  |  |       | 360 | 
|Seminole           |  | Seminole           |  | FL    |  |      | 336   |       |  |                    | 1,497  |       |  |          | 1,833  |         |  |        | (456   | )     |  |      | 1986 |         |  |  | 1984/85   |  |  |       | 360 | 
|Ansley Park        |  | Atlanta            |  | GA    |  |      | 1,527 |       |  |                    | 6,564  |       |  |          | 8,091  |         |  |        | (1,974 | )     |  |      | 1995 |         |  |  | 1991      |  |  |       | 360 | 
|Brookhaven         |  | Atlanta            |  | GA    |  |      | 1,616 |       |  |                    | 4,457  |       |  |          | 6,073  |         |  |        | (1,327 | )     |  |      | 1995 |         |  |  | 1992      |  |  |       | 360 | 
|Clairemont         |  | Atlanta            |  | GA    |  |      | 470   |       |  |                    | 2,151  |       |  |          | 2,621  |         |  |        | (490   | )     |  |      | 1996 |         |  |  | 1990      |  |  |       | 360 | 
|Decatur            |  | Atlanta            |  | GA    |  |      | 1,144 |       |  |                    | 4,949  |       |  |          | 6,093  |         |  |        | (1,523 | )     |  |      | 1995 |         |  |  | 1992      |  |  |       | 360 | 
|Forest Park        |  | Forest Park        |  | GA    |  |      | 573   |       |  |                    | 2,420  |       |  |          | 2,993  |         |  |        | (564   | )     |  |      | 1996 |         |  |  | 1980      |  |  |       | 360 | 
|Gwinnett           |  | Lawrenceville      |  | GA    |  |      | 820   |       |  |                    | 2,809  |       |  |          | 3,629  |         |  |        | (657   | )     |  |      | 1996 |         |  |  | 1996      |  |  |       | 360 | 
|Holcomb Bridge     |  | Roswell            |  | GA    |  |      | 920   |       |  |                    | 2,980  |       |  |          | 3,900  |         |  |        | (248   | )     |  |      | 1999 |         |  |  | 2000      |  |  |       | 360 | 
|Jones Bridge       |  | Atlanta            |  | GA    |  |      | 676   |       |  |                    | 3,866  |       |  |          | 4,542  |         |  |        | (631   | )     |  |      | 1997 |         |  |  | 1997      |  |  |       | 360 | 
|Lawrenceville      |  | Lawrenceville      |  | GA    |  |      | 858   |       |  |                    | 3,198  |       |  |          | 4,056  |         |  |        | (542   | )     |  |      | 1997 |         |  |  | 1997      |  |  |       | 360 | 
|Morgan Falls       |  | Dunwoody           |  | GA    |  |      | 1,429 |       |  |                    | 5,896  |       |  |          | 7,325  |         |  |        | (1,308 | )     |  |      | 1996 |         |  |  | 1990      |  |  |       | 360 | 
|Norcross           |  | Norcross           |  | GA    |  |      | 562   |       |  |                    | 2,375  |       |  |          | 2,937  |         |  |        | (547   | )     |  |      | 1996 |         |  |  | 1984      |  |  |       | 360 | 
|Peachtree          |  | Duluth             |  | GA    |  |      | 1,144 |       |  |                    | 4,906  |       |  |          | 6,050  |         |  |        | (1,037 | )     |  |      | 1997 |         |  |  | 1996      |  |  |       | 360 | 
|Perimeter          |  | Atlanta            |  | GA    |  |      | 1,458 |       |  |                    | 2,933  |       |  |          | 4,391  |         |  |        | (734   | )     |  |      | 1996 |         |  |  | 1996      |  |  |       | 360 | 
|Roswell            |  | Roswell            |  | GA    |  |      | 435   |       |  |                    | 1,903  |       |  |          | 2,338  |         |  |        | (573   | )     |  |      | 1986 |         |  |  | 1986      |  |  |       | 360 | 
|Sandy Plains       |  | Marietta           |  | GA    |  |      | 1,012 |       |  |                    | 4,095  |       |  |          | 5,107  |         |  |        | (593   | )     |  |      | 1998 |         |  |  | 1998      |  |  |       | 360 | 
|Satellite Blvd     |  | Duluth             |  | GA    |  |      | 670   |       |  |                    | 2,867  |       |  |          | 3,537  |         |  |        | (602   | )     |  |      | 1997 |         |  |  | 1994      |  |  |       | 360 | 
|Stone Mountain     |  | Stone Mountain     |  | GA    |  |      | 656   |       |  |                    | 2,766  |       |  |          | 3,422  |         |  |        | (625   | )     |  |      | 1996 |         |  |  | 1985      |  |  |       | 360 | 
|Tucker             |  | Tucker             |  | GA    |  |      | 241   |       |  |                    | 1,073  |       |  |          | 1,314  |         |  |        | (240   | )     |  |      | 1996 |         |  |  | 1987      |  |  |       | 360 | 
|Alsip              |  | Alsip              |  | IL    |  |      | 250   |       |  |                    | 2,286  |       |  |          | 2,536  |         |  |        | (583   | )     |  |      | 1982 |         |  |  | 1980      |  |  |       | 360 | 
|Bolingbrook        |  | Bolingbrook        |  | IL    |  |      | 641   |       |  |                    | 2,869  |       |  |          | 3,510  |         |  |        | (501   | )     |  |      | 1997 |         |  |  | 1997      |  |  |       | 360 | 
|Bridgeview         |  | Bridgeview         |  | IL    |  |      | 479   |       |  |                    | 2,087  |       |  |          | 2,566  |         |  |        | (645   | )     |  |      | 1985 |         |  |  | 1983      |  |  |       | 360 | 
|Country Club Hills |  | Country Club Hills |  | IL    |  |      | 781   |       |  |                    | 3,571  |       |  |          | 4,352  |         |  |        | (391   | )     |  |      | 1999 |         |  |  | 1999      |  |  |       | 360 | 
|Dolton             |  | Calumet City       |  | IL    |  |      | 344   |       |  |                    | 2,624  |       |  |          | 2,968  |         |  |        | (724   | )     |  |      | 1982 |         |  |  | 1979      |  |  |       | 360 | 
|Fox Valley         |  | Chicago            |  | IL    |  |      | 932   |       |  |                    | 2,986  |       |  |          | 3,918  |         |  |        | (504   | )     |  |      | 1998 |         |  |  | 1998      |  |  |       | 360 | 
|Hillside           |  | Hillside           |  | IL    |  |      | 261   |       |  |                    | 1,151  |       |  |          | 1,412  |         |  |        | (370   | )     |  |      | 1988 |         |  |  | 1988      |  |  |       | 360 | 
|Lisle              |  | Lisle              |  | IL    |  |      | 576   |       |  |                    | 2,587  |       |  |          | 3,163  |         |  |        | (793   | )     |  |      | 1986 |         |  |  | 1976/86   |  |  |       | 360 | 
|Lombard            |  | Lombard            |  | IL    |  |      | 392   |       |  |                    | 1,861  |       |  |          | 2,253  |         |  |        | (639   | )     |  |      | 1982 |         |  |  | 1980      |  |  |       | 360 | 
|Oak Forest         |  | Orland Park        |  | IL    |  |      | 704   |       |  |                    | 3,224  |       |  |          | 3,928  |         |  |        | (866   | )     |  |      | 1995 |         |  |  | 1991      |  |  |       | 360 | 
|Palatine           |  | Palatine           |  | IL    |  |      | 453   |       |  |                    | 3,021  |       |  |          | 3,474  |         |  |        | (249   | )     |  |      | 2000 |         |  |  | 2000      |  |  |       | 360 | 
|Rolling Meadows    |  | Rolling Meadows    |  | IL    |  |      | 384   |       |  |                    | 2,008  |       |  |          | 2,392  |         |  |        | (576   | )     |  |      | 1982 |         |  |  | 1980      |  |  |       | 360 | 
|Schaumburg         |  | Schaumburg         |  | IL    |  |      | 446   |       |  |                    | 2,162  |       |  |          | 2,608  |         |  |        | (642   | )     |  |      | 1982 |         |  |  | 1980      |  |  |       | 360 | 
|Schaumburg South   |  | Schaumburg         |  | IL    |  |      | 504   |       |  |                    | 3,753  |       |  |          | 4,257  |         |  |        | (398   | )     |  |      | 1999 |         |  |  | 1999      |  |  |       | 360 | 
|Willowbrook        |  | Willowbrook        |  | IL    |  |      | 412   |       |  |                    | 1,898  |       |  |          | 2,310  |         |  |        | (604   | )     |  |      | 1986 |         |  |  | 1979/82   |  |  |       | 360 | 
|Wheaton            |  | Wheaton            |  | IL    |  |      | 283   |       |  |                    | 4,943  |       |  |          | 5,226  |         |  |        | (15    | )     |  |      | 2002 |         |  |  | 2001      |  |  |       | 360 | 
|Allisonville       |  | Indianapolis       |  | IN    |  |      | 827   |       |  |                    | 3,725  |       |  |          | 4,552  |         |  |        | (692   | )     |  |      | 1997 |         |  |  | 1987      |  |  |       | 360 | 
|Carmel             |  | Carmel             |  | IN    |  |      | 404   |       |  |                    | 2,572  |       |  |          | 2,976  |         |  |        | (638   | )     |  |      | 1996 |         |  |  | 1996      |  |  |       | 360 | 
|Castleton          |  | Indianapolis       |  | IN    |  |      | 522   |       |  |                    | 2,044  |       |  |          | 2,566  |         |  |        | (364   | )     |  |      | 1998 |         |  |  | 1988      |  |  |       | 360 | 
|College Park       |  | Indianapolis       |  | IN    |  |      | 694   |       |  |                    | 3,026  |       |  |          | 3,720  |         |  |        | (979   | )     |  |      | 1986 |         |  |  | 1984      |  |  |       | 360 | 
|County Line        |  | SouthPort          |  | IN    |  |      |      |       |  |                    | 2,641  |       |  |          | 2,641  |         |  |        | (404   | )     |  |      | 1998 |         |  |  | 1998      |  |  |       | 360 | 
|Downtown Indy      |  | Indianapolis       |  | IN    |  |      | 986   |       |  |                    | 3,293  |       |  |          | 4,279  |         |  |        | (321   | )     |  |      | 1999 |         |  |  | 1999      |  |  |       | 360 | 
|Eaglecreek         |  | Indianapolis       |  | IN    |  |      | 802   |       |  |                    | 2,673  |       |  |          | 3,475  |         |  |        | (443   | )     |  |      | 1998 |         |  |  | 1998      |  |  |       | 360 | 
|East 62nd Street   |  | Indianapolis       |  | IN    |  |      | 376   |       |  |                    | 1,629  |       |  |          | 2,005  |         |  |        | (48    | )     |  |      | 2002 |         |  |  | 1999      |  |  |       | 360 | 
|East Washington    |  | Indianapolis       |  | IN    |  |      | 412   |       |  |                    | 2,567  |       |  |          | 2,979  |         |  |        | (215   | )     |  |      | 1999 |         |  |  | 1999      |  |  |       | 360 | 
|Geist              |  | Fishers            |  | IN    |  |      | 547   |       |  |                    | 2,356  |       |  |          | 2,903  |         |  |        | (76    | )     |  |      | 2002 |         |  |  | 1999      |  |  |       | 360 | 
|Georgetown         |  | Indianapolis       |  | IN    |  |      | 461   |       |  |                    | 2,362  |       |  |          | 2,823  |         |  |        | (535   | )     |  |      | 1996 |         |  |  | 1996      |  |  |       | 360 | 
|Glendale           |  | Indianapolis       |  | IN    |  |      | 520   |       |  |                    | 2,164  |       |  |          | 2,684  |         |  |        | (669   | )     |  |      | 1986 |         |  |  | 1985      |  |  |       | 360 | 
|Annapolis          |  | Annapolis          |  | M D   |  |      |      |       |  |                    | 3,516  |       |  |          | 3,516  |         |  |        | (555   | )     |  |      | 1998 |         |  |  | 1998      |  |  |       | 360 | 
|Briggs Chaney      |  | Silver Spring      |  | M D   |  |      | 430   |       |  |                    | 1,826  |       |  |          | 2,256  |         |  |        | (567   | )     |  |      | 1994 |         |  |  | 1987      |  |  |       | 360 | 
|Clinton            |  | Clinton            |  | M D   |  |      | 650   |       |  |                    | 2,882  |       |  |          | 3,532  |         |  |        | (614   | )     |  |      | 1986 |         |  |  | 1985      |  |  |       | 360 | 
|Crofton            |  | Gambrills          |  | M D   |  |      | 376   |       |  |                    | 1,634  |       |  |          | 2,010  |         |  |        | (491   | )     |  |      | 1988 |         |  |  | 1985      |  |  |       | 360 | 

83



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##### Table of Contents



|                    |  |                  |  |       |  |      |       |       |  |                    |       |       |  |          |       |         |  |        |        |       |  |      |         |         |  |  |         |  |  |       |     |  |  |  |  | 
|------------------- |  | ---------------- |  | ----- |  | ---- | ----- | ----- |  | ------------------ | ----- | ----- |  | -------- | ----- | ------- |  | ------ | ------ | ----- |  | ---- | ------- | ------- |  |  | ------- |  |  | ----- | --- |  |  |  |  | 
|                    |  |                  |  |       |  |      |       |       |  | Gross Amount as of |       |       |  |          |       |         |  |        |        |       |  |      |         |         |  | 
|                    |  |                  |  |       |  |      |       |       |  |                    |       |       |  |          |       |         |  |        |        |       |  |      |         |         |  | 
|                    |  |                  |  |       |  |      |       |       |  |                    |       |       |  | Building |       | Gross   |  |        |        |       |  |      |         |         |  |  |         |  |  | Depr.
|                    |  |                  |  |       |  |      |       |       |  |                    |       |       |  | Equip. & |       | Storage |  | Accum. |        | Owned |  | Year |         | Life in
|Property Name       |  | Location         |  | State |  | Land |       | Other |  | Centers            |       | Depr. |  | Since    |       | Built   |  | mos.  
|                    |  |                  |  |       |  |      |       |       |  |                    |       |       |  |          |       |         |  |       
|Frederick           |  | Frederick        |  | M D   |  |      | 206   |       |  |                    | 952   |       |  |          | 1,158 |         |  |        | (302   | )     |  |      | 1994    |         |  |  | 1987    |  |  |       | 360 | 
|Gaithersburg        |  | Gaithersburg     |  | M D   |  |      | 614   |       |  |                    | 4,003 |       |  |          | 4,617 |         |  |        | (1,048 | )     |  |      | 1994    |         |  |  | 1986    |  |  |       | 360 | 
|Germantown          |  | Germantown       |  | M D   |  |      | 552   |       |  |                    | 2,320 |       |  |          | 2,872 |         |  |        | (690   | )     |  |      | 1994    |         |  |  | 1988    |  |  |       | 360 | 
|Laurel              |  | Laurel           |  | M D   |  |      | 391   |       |  |                    | 1,737 |       |  |          | 2,128 |         |  |        | (524   | )     |  |      | 1988    |         |  |  | 1984    |  |  |       | 360 | 
|Oxon Hill           |  | Ft. Washington   |  | M D   |  |      | 349   |       |  |                    | 1,477 |       |  |          | 1,826 |         |  |        | (443   | )     |  |      | 1994    |         |  |  | 1987    |  |  |       | 360 | 
|Reisterstown        |  | Owing Mills      |  | M D   |  |      | 586   |       |  |                    | 1,177 |       |  |          | 1,763 |         |  |        | (31    | )     |  |      | 2002    |         |  |  | 1992    |  |  |       | 360 | 
|Suitland            |  | Suitland         |  | M D   |  |      | 660   |       |  |                    | 2,766 |       |  |          | 3,426 |         |  |        | (856   | )     |  |      | 1987    |         |  |  | 1985    |  |  |       | 360 | 
|Ann Arbor           |  | Ann Arbor        |  | M I   |  |      | 424   |       |  |                    | 1,844 |       |  |          | 2,268 |         |  |        | (642   | )     |  |      | 1988    |         |  |  | 1977    |  |  |       | 360 | 
|Canton              |  | Canton           |  | M I   |  |      | 433   |       |  |                    | 2,179 |       |  |          | 2,612 |         |  |        | (536   | )     |  |      | 1988    |         |  |  | 1986    |  |  |       | 360 | 
|Canton Township     |  | Canton Township  |  | M I   |  |      | 852   |       |  |                    | 3,043 |       |  |          | 3,895 |         |  |        | (206   | )     |  |      | 2000    |         |  |  | 2000    |  |  |       | 360 | 
|Clinton Township    |  | Clinton Township |  | M I   |  |      | 772   |       |  |                    | 3,413 |       |  |          | 4,185 |         |  |        | (443   | )     |  |      | 1999    |         |  |  | 1999    |  |  |       | 360 | 
|Flint East          |  | Flint            |  | M I   |  |      | 291   |       |  |                    | 1,238 |       |  |          | 1,529 |         |  |        | (222   | )     |  |      | 1997    |         |  |  | 1977    |  |  |       | 360 | 
|Flint South         |  | Flint            |  | M I   |  |      | 615   |       |  |                    | 1,802 |       |  |          | 2,417 |         |  |        | (62    | )     |  |      | 2001    |         |  |  | 1983    |  |  |       | 360 | 
|Fraser              |  | Fraser           |  | M I   |  |      | 627   |       |  |                    | 2,613 |       |  |          | 3,240 |         |  |        | (569   | )     |  |      | 1988    |         |  |  | 1985    |  |  |       | 360 | 
|Grand Rapids        |  | Grand Rapids     |  | M I   |  |      | 192   |       |  |                    | 895   |       |  |          | 1,087 |         |  |        | (303   | )     |  |      | 1983    |         |  |  | 1978    |  |  |       | 360 | 
|Jackson             |  | Jackson          |  | M I   |  |      | 309   |       |  |                    | 1,303 |       |  |          | 1,612 |         |  |        | (244   | )     |  |      | 1997    |         |  |  | 1978    |  |  |       | 360 | 
|Lansing             |  | Lansing          |  | M I   |  |      | 124   |       |  |                    | 563   |       |  |          | 687   |         |  |        | (199   | )     |  |      | 1983    |         |  |  | 1978/79 |  |  |       | 360 | 
|Livonia             |  | Livonia          |  | M I   |  |      | 636   |       |  |                    | 2,666 |       |  |          | 3,302 |         |  |        | (607   | )     |  |      | 1988    |         |  |  | 1985    |  |  |       | 360 | 
|Madison Heights     |  | Detroit          |  | M I   |  |      | 487   |       |  |                    | 2,536 |       |  |          | 3,023 |         |  |        | (667   | )     |  |      | 1995    |         |  |  | 1977    |  |  |       | 360 | 
|Mt. Clemens         |  | Mt. Clemens      |  | M I   |  |      | 935   |       |  |                    | 2,633 |       |  |          | 3,568 |         |  |        | (120   | )     |  |      | 2001    |         |  |  | 2001    |  |  |       | 360 | 
|Plymouth            |  | Canton Township  |  | M I   |  |      | 348   |       |  |                    | 3,208 |       |  |          | 3,556 |         |  |        | (657   | )     |  |      | 1985    |         |  |  | 1979    |  |  |       | 360 | 
|Rochester           |  | Utica            |  | M I   |  |      | 610   |       |  |                    | 2,490 |       |  |          | 3,100 |         |  |        | (553   | )     |  |      | 1996    |         |  |  | 1989    |  |  |       | 360 | 
|Rochester Hills     |  | Rochester Hills  |  | M I   |  |      | 970   |       |  |                    | 4,052 |       |  |          | 5,022 |         |  |        | (166   | )     |  |      | 2001    |         |  |  | 2001    |  |  |       | 360 | 
|Southfield          |  | Southfield       |  | M I   |  |      | 702   |       |  |                    | 3,421 |       |  |          | 4,123 |         |  |        | (955   | )     |  |      | 1983    |         |  |  | 1976    |  |  |       | 360 | 
|Sterling Heights    |  | Sterling Heights |  | M I   |  |      | 919   |       |  |                    | 3,830 |       |  |          | 4,749 |         |  |        | (835   | )     |  |      | 1996    |         |  |  | 1986    |  |  |       | 360 | 
|Taylor              |  | Taylor           |  | M I   |  |      | 632   |       |  |                    | 3,501 |       |  |          | 4,133 |         |  |        | (938   | )     |  |      | 1995    |         |  |  | 1980    |  |  |       | 360 | 
|Troy - Maple        |  | Troy             |  | M I   |  |      | 1,987 |       |  |                    | 3,653 |       |  |          | 5,640 |         |  |        | (1,020 | )     |  |      | 1981    |         |  |  | 1975/77 |  |  |       | 360 | 
|Troy - Oakland Mall |  | Troy             |  | M I   |  |      | 642   |       |  |                    | 3,002 |       |  |          | 3,644 |         |  |        | (932   | )     |  |      | 1983    |         |  |  | 1979    |  |  |       | 360 | 
|Walled Lake         |  | Walled Lake      |  | M I   |  |      | 359   |       |  |                    | 1,709 |       |  |          | 2,068 |         |  |        | (578   | )     |  |      | 1985/89 |         |  |  | 1984    |  |  |       | 360 | 
|Warren              |  | Warren           |  | M I   |  |      | 815   |       |  |                    | 3,904 |       |  |          | 4,719 |         |  |        | (683   | )     |  |      | 1988    |         |  |  | 1985    |  |  |       | 360 | 
|Auburn Hills        |  | Auburn Hilss     |  | M I   |  |      | 565   |       |  |                    | 3,104 |       |  |          | 3,669 |         |  |        | (9     | )     |  |      | 2002    |         |  |  | 2001    |  |  |       | 360 | 
|Olive               |  | St. Louis        |  | M O   |  |      | 818   |       |  |                    | 3,794 |       |  |          | 4,612 |         |  |        | (1,151 | )     |  |      | 1994    |         |  |  | 1994    |  |  |       | 360 | 
|Albemarle           |  | Charlotte        |  | NC    |  |      | 788   |       |  |                    | 4,567 |       |  |          | 5,355 |         |  |        | (699   | )     |  |      | 2002    |         |  |  | 1984    |  |  |       | 360 | 
|Amity Court         |  | Charlotte        |  | NC    |  |      | 433   |       |  |                    | 2,314 |       |  |          | 2,747 |         |  |        | (334   | )     |  |      | 2002    |         |  |  | 1993    |  |  |       | 360 | 
|Arrowood            |  | Charlotte        |  | NC    |  |      | 1,155 |       |  |                    | 3,151 |       |  |          | 4,306 |         |  |        | (700   | )     |  |      | 2002    |         |  |  | 1992    |  |  |       | 360 | 
|Capital Blvd.       |  | Raleigh          |  | NC    |  |      | 342   |       |  |                    | 2,687 |       |  |          | 3,029 |         |  |        | (527   | )     |  |      | 1994    |         |  |  | 1984    |  |  |       | 360 | 
|Cary                |  | Cary             |  | NC    |  |      | 714   |       |  |                    | 3,079 |       |  |          | 3,793 |         |  |        | (895   | )     |  |      | 1994    |         |  |  | 1984    |  |  |       | 360 | 
|Clayton             |  | Clayton          |  | NC    |  |      | 764   |       |  |                    | 2,495 |       |  |          | 3,259 |         |  |        | (194   | )     |  |      | 2002    |         |  |  | 1999    |  |  |       | 360 | 
|Concord Kannapolis  |  | Concord          |  | NC    |  |      | 665   |       |  |                    | 2,403 |       |  |          | 3,068 |         |  |        | (499   | )     |  |      | 2002    |         |  |  | 1995    |  |  |       | 360 | 
|Cone Boulevard      |  | Greensboro       |  | NC    |  |      | 599   |       |  |                    | 3,106 |       |  |          | 3,705 |         |  |        | (129   | )     |  |      | 2002    |         |  |  | 2000    |  |  |       | 360 | 
|COTT                |  | Matthews         |  | NC    |  |      | 237   |       |  |                    | 1,471 |       |  |          | 1,708 |         |  |        | (295   | )     |  |      | 2002    |         |  |  | 1989    |  |  |       | 360 | 
|Country Club        |  | Winston Salem    |  | NC    |  |      | 757   |       |  |                    | 3,462 |       |  |          | 4,219 |         |  |        | (337   | )     |  |      | 2002    |         |  |  | 2000    |  |  |       | 360 | 
|Creedmoor           |  | Raleigh          |  | NC    |  |      | 807   |       |  |                    | 3,179 |       |  |          | 3,986 |         |  |        | (534   | )     |  |      | 1997    |         |  |  | 1997    |  |  |       | 360 | 
|Eastland            |  | Charlotte        |  | NC    |  |      | 590   |       |  |                    | 3,743 |       |  |          | 4,333 |         |  |        | (594   | )     |  |      | 2002    |         |  |  | 1983    |  |  |       | 360 | 
|English Road        |  | High Point       |  | NC    |  |      | 602   |       |  |                    | 2,100 |       |  |          | 2,702 |         |  |        | (117   | )     |  |      | 2002    |         |  |  | 2000    |  |  |       | 360 | 
|Garner              |  | Garner           |  | NC    |  |      | 204   |       |  |                    | 903   |       |  |          | 1,107 |         |  |        | (291   | )     |  |      | 1994    |         |  |  | 1987    |  |  |       | 360 | 
|Glenwood            |  | Raleigh          |  | NC    |  |      | 266   |       |  |                    | 1,195 |       |  |          | 1,461 |         |  |        | (365   | )     |  |      | 1994    |         |  |  | 1983    |  |  |       | 360 | 
|Hickory             |  | Hickory          |  | NC    |  |      | 892   |       |  |                    | 3,826 |       |  |          | 4,718 |         |  |        | (764   | )     |  |      | 2002    |         |  |  | 1986    |  |  |       | 360 | 
|Lexington           |  | Lexington        |  | NC    |  |      | 430   |       |  |                    | 1,625 |       |  |          | 2,055 |         |  |        | (343   | )     |  |      | 2002    |         |  |  | 1987    |  |  |       | 360 | 
|Matthews            |  | Matthews         |  | NC    |  |      | 775   |       |  |                    | 5,617 |       |  |          | 6,392 |         |  |        | (1,011 | )     |  |      | 2002    |         |  |  | 1981    |  |  |       | 360 | 
|Monroe              |  | Matthews         |  | NC    |  |      | 556   |       |  |                    | 3,239 |       |  |          | 3,795 |         |  |        | (709   | )     |  |      | 2002    |         |  |  | 1985    |  |  |       | 360 | 
|Morrisville         |  | Morrisville      |  | NC    |  |      | 409   |       |  |                    | 1,765 |       |  |          | 2,174 |         |  |        | (520   | )     |  |      | 1994    |         |  |  | 1988    |  |  |       | 360 | 
|North Tryon         |  | Charlotte        |  | NC    |  |      | 927   |       |  |                    | 2,723 |       |  |          | 3,650 |         |  |        | (625   | )     |  |      | 2002    |         |  |  | 1987    |  |  |       | 360 | 
|Park Road           |  | Charlotte        |  | NC    |  |      | 1,488 |       |  |                    | 6,754 |       |  |          | 8,242 |         |  |        | (708   | )     |  |      | 2002    |         |  |  | 1998    |  |  |       | 360 | 
|Pavilion            |  | Charlotte        |  | NC    |  |      | 1,320 |       |  |                    | 2,251 |       |  |          | 3,571 |         |  |        | (329   | )     |  |      | 2002    |         |  |  | 1997    |  |  |       | 360 | 
|Pineville           |  | Pineville        |  | NC    |  |      | 2,688 |       |  |                    | 5,916 |       |  |          | 8,604 |         |  |        | (1,299 | )     |  |      | 2002    |         |  |  | 1983    |  |  |       | 360 | 
|Randleman Road      |  | Greensboro       |  | NC    |  |      | 1,113 |       |  |                    | 2,600 |       |  |          | 3,713 |         |  |        | (340   | )     |  |      | 2002    |         |  |  | 1998    |  |  |       | 360 | 
|Rockingham          |  | Rockingham       |  | NC    |  |      | 178   |       |  |                    | 1,870 |       |  |          | 2,048 |         |  |        | (347   | )     |  |      | 2002    |         |  |  | 1996    |  |  |       | 360 | 
|Salisbury           |  | Salisbury        |  | NC    |  |      | 237   |       |  |                    | 5,296 |       |  |          | 5,533 |         |  |        | (780   | )     |  |      | 2002    |         |  |  | 1986    |  |  |       | 360 | 
|Silas Creek         |  | Winston, Salem   |  | NC    |  |      | 1,640 |       |  |                    | 2,457 |       |  |          | 4,097 |         |  |        | (193   | )     |  |      | 2002    |         |  |  | 2000    |  |  |       | 360 | 
|Stallings           |  | Matthews         |  | NC    |  |      | 747   |       |  |                    | 2,075 |       |  |          | 2,822 |         |  |        | (459   | )     |  |      | 2002    |         |  |  | 1995    |  |  |       | 360 | 
|Wake Forest         |  | Wake Forest      |  | NC    |  |      | 851   |       |  |                    | 1,547 |       |  |          | 2,398 |         |  |        | (91    | )     |  |      | 2002    |         |  |  | 1998    |  |  |       | 360 | 
|Weddington          |  | Waxhaw           |  | NC    |  |      | 642   |       |  |                    | 2,520 |       |  |          | 3,162 |         |  |        | (208   | )     |  |      | 2002    |         |  |  | 1999    |  |  |       | 360 | 
|Wilkinson           |  | Charlotte        |  | NC    |  |      | 575   |       |  |                    | 3,270 |       |  |          | 3,845 |         |  |        | (562   | )     |  |      | 2002    |         |  |  | 1986    |  |  |       | 360 | 
|Winston-Salem       |  | Winston, Salem   |  | NC    |  |      | 354   |       |  |                    | 1,930 |       |  |          | 2,284 |         |  |        | (529   | )     |  |      | 2002    |         |  |  | 1985    |  |  |       | 360 | 
|Bricktown           |  | Bricktown        |  | NJ    |  |      | 1,397 |       |  |                    | 4,388 |       |  |          | 5,785 |         |  |        | (317   | )     |  |      | 1999    |         |  |  | 2000    |  |  |       | 360 | 
|Marlboro            |  | Morganville      |  | NJ    |  |      | 1,320 |       |  |                    | 4,977 |       |  |          | 6,297 |         |  |        | (266   | )     |  |      | 2000    |         |  |  | 2000    |  |  |       | 360 | 
|Old Bridge          |  | Matawan          |  | NJ    |  |      | 767   |       |  |                    | 4,381 |       |  |          | 5,148 |         |  |        | (993   | )     |  |      | 1987    |         |  |  | 1987    |  |  |       | 360 | 
|Voorhees            |  | Voorhees         |  | NJ    |  |      | 1,121 |       |  |                    | 4,295 |       |  |          | 5,416 |         |  |        | (220   | )     |  |      | 2001    |         |  |  | 2001    |  |  |       | 360 | 
|Beth Page           |  | Long Island      |  | NY    |  |      | 2,434 |       |  |                    | 7,507 |       |  |          | 9,941 |         |  |        | (499   | )     |  |      | 2000    |         |  |  | 2000    |  |  |       | 360 | 
|Commack             |  | Huntington       |  | NY    |  |      | 3,461 |       |  |                    | 6,319 |       |  |          | 9,780 |         |  |        | (759   | )     |  |      | 1999    |         |  |  | 1999    |  |  |       | 360 | 
|Gold Street         |  | Brooklyn         |  | NY    |  |      | 1,194 |       |  |                    | 5,598 |       |  |          | 6,792 |         |  |        | (1,892 | )     |  |      | 1986    |         |  |  | 1940    |  |  |       | 360 | 
|Great Neck          |  | Long Island      |  | NY    |  |      | 438   |       |  |                    | 2,898 |       |  |          | 3,336 |         |  |        | (256   | )     |  |      | 1999    |         |  |  | 1929    |  |  |       | 360 | 
|Hempstead           |  | Hempstead        |  | NY    |  |      | 1,914 |       |  |                    | 5,247 |       |  |          | 7,161 |         |  |        | (463   | )     |  |      | 1999    |         |  |  | 1999    |  |  |       | 360 | 
|Melville            |  | Long Island      |  | NY    |  |      | 1,099 |       |  |                    | 7,587 |       |  |          | 8,686 |         |  |        | (810   | )     |  |      | 1998    |         |  |  | 1998    |  |  |       | 360 | 
|Nesconset           |  | Long Island      |  | NY    |  |      | 1,074 |       |  |                    | 3,515 |       |  |          | 4,589 |         |  |        | (285   | )     |  |      | 2000    |         |  |  | 2000    |  |  |       | 360 | 
|Northern Boulevard  |  | Long Island City |  | NY    |  |      | 1,244 |       |  |                    | 5,639 |       |  |          | 6,883 |         |  |        | (1,851 | )     |  |      | 1987    |         |  |  | 1940    |  |  |       | 360 | 
|Utica               |  | Brooklyn         |  | NY    |  |      | 830   |       |  |                    | 3,782 |       |  |          | 4,612 |         |  |        | (1,334 | )     |  |      | 1986    |         |  |  | 1964    |  |  |       | 360 | 
|Van Dam             |  | Long Island City |  | NY    |  |      | 760   |       |  |                    | 3,534 |       |  |          | 4,294 |         |  |        | (1,243 | )     |  |      | 1986    |         |  |  | 1925    |  |  |       | 360 | 
|Yonkers             |  | Yonkers          |  | NY    |  |      | 913   |       |  |                    | 4,288 |       |  |          | 5,201 |         |  |        | (1,510 | )     |  |      | 1986    |         |  |  | 1928    |  |  |       | 360 | 
|16th and Sandy      |  | Portland         |  | OR    |  |      | 479   |       |  |                    | 2,017 |       |  |          | 2,496 |         |  |        | (495   | )     |  |      | 1995    |         |  |  | 1973    |  |  |       | 360 | 
|Allen Blvd.         |  | Beaverton        |  | OR    |  |      | 525   |       |  |                    | 2,191 |       |  |          | 2,716 |         |  |        | (494   | )     |  |      | 1996    |         |  |  | 1973    |  |  |       | 360 | 

84



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##### Table of Contents



|                     |  |               |  |       |  |      |       |       |  |                    |       |       |  |          |        |         |  |        |        |       |  |      |      |         |  |  |         |  |  |       |     |  |  |  |  | 
|-------------------- |  | ------------- |  | ----- |  | ---- | ----- | ----- |  | ------------------ | ----- | ----- |  | -------- | ------ | ------- |  | ------ | ------ | ----- |  | ---- | ---- | ------- |  |  | ------- |  |  | ----- | --- |  |  |  |  | 
|                     |  |               |  |       |  |      |       |       |  | Gross Amount as of |       |       |  |          |        |         |  |        |        |       |  |      |      |         |  | 
|                     |  |               |  |       |  |      |       |       |  |                    |       |       |  |          |        |         |  |        |        |       |  |      |      |         |  | 
|                     |  |               |  |       |  |      |       |       |  |                    |       |       |  | Building |        | Gross   |  |        |        |       |  |      |      |         |  |  |         |  |  | Depr.
|                     |  |               |  |       |  |      |       |       |  |                    |       |       |  | Equip. & |        | Storage |  | Accum. |        | Owned |  | Year |      | Life in
|Property Name        |  | Location      |  | State |  | Land |       | Other |  | Centers            |       | Depr. |  | Since    |        | Built   |  | mos.  
|                     |  |               |  |       |  |      |       |       |  |                    |       |       |  |          |        |         |  |       
|Barbur Boulevard     |  | Portland      |  | OR    |  |      | 741   |       |  |                    | 5,323 |       |  |          | 6,064  |         |  |        | (1,559 | )     |  |      | 1995 |         |  |  | 1993    |  |  |       | 360 | 
|Beaverton            |  | Beaverton     |  | OR    |  |      | 216   |       |  |                    | 980   |       |  |          | 1,196  |         |  |        | (352   | )     |  |      | 1985 |         |  |  | 1974    |  |  |       | 360 | 
|Denny Road           |  | Beaverton     |  | OR    |  |      | 593   |       |  |                    | 2,480 |       |  |          | 3,073  |         |  |        | (765   | )     |  |      | 1989 |         |  |  | 1988    |  |  |       | 360 | 
|Division             |  | Portland      |  | OR    |  |      | 700   |       |  |                    | 2,970 |       |  |          | 3,670  |         |  |        | (913   | )     |  |      | 1996 |         |  |  | 1992    |  |  |       | 360 | 
|Gresham              |  | Portland      |  | OR    |  |      | 744   |       |  |                    | 2,530 |       |  |          | 3,274  |         |  |        | (606   | )     |  |      | 1996 |         |  |  | 1996    |  |  |       | 360 | 
|Hillsboro            |  | Portland      |  | OR    |  |      | 720   |       |  |                    | 3,127 |       |  |          | 3,847  |         |  |        | (715   | )     |  |      | 1996 |         |  |  | 1996    |  |  |       | 360 | 
|King City            |  | Tigard        |  | OR    |  |      | 511   |       |  |                    | 2,170 |       |  |          | 2,681  |         |  |        | (622   | )     |  |      | 1987 |         |  |  | 1986    |  |  |       | 360 | 
|Liberty Road         |  | Salem         |  | OR    |  |      | 749   |       |  |                    | 2,508 |       |  |          | 3,257  |         |  |        | (754   | )     |  |      | 1995 |         |  |  | 1993    |  |  |       | 360 | 
|Milwaukie            |  | Milwaukie     |  | OR    |  |      | 1,052 |       |  |                    | 3,932 |       |  |          | 4,984  |         |  |        | (1,147 | )     |  |      | 1996 |         |  |  | 1990    |  |  |       | 360 | 
|Oregon City          |  | Portland      |  | OR    |  |      | 571   |       |  |                    | 2,737 |       |  |          | 3,308  |         |  |        | (870   | )     |  |      | 1995 |         |  |  | 1992    |  |  |       | 360 | 
|Portland             |  | Portland      |  | OR    |  |      | 382   |       |  |                    | 1,593 |       |  |          | 1,975  |         |  |        | (493   | )     |  |      | 1988 |         |  |  | 1988    |  |  |       | 360 | 
|Salem                |  | Salem         |  | OR    |  |      | 574   |       |  |                    | 2,601 |       |  |          | 3,175  |         |  |        | (836   | )     |  |      | 1983 |         |  |  | 1979/81 |  |  |       | 360 | 
|Airport              |  | Philadelphia  |  | PA    |  |      | 799   |       |  |                    | 3,513 |       |  |          | 4,312  |         |  |        | (1,106 | )     |  |      | 1986 |         |  |  | 1985    |  |  |       | 360 | 
|Edgemont             |  | Philadelphia  |  | PA    |  |      | 975   |       |  |                    | 5,323 |       |  |          | 6,298  |         |  |        | (1,550 | )     |  |      | 1995 |         |  |  | 1992    |  |  |       | 360 | 
|Painters Crossing   |  | Philadelphia  |  | PA    |  |      | 516   |       |  |                    | 2,871 |       |  |          | 3,387  |         |  |        | (474   | )     |  |      | 1998 |         |  |  | 1998    |  |  |       | 360 | 
|Valley Forge         |  | Berwyn        |  | PA    |  |      | 331   |       |  |                    | 2,816 |       |  |          | 3,147  |         |  |        |       |       |  |      | 2002 |         |  |  | 2002    |  |  |       | 360 | 
|West Chester         |  | West Chester  |  | PA    |  |      |      |       |  |                    | 4,583 |       |  |          | 4,583  |         |  |        | (1,378 | )     |  |      | 1986 |         |  |  | 1980    |  |  |       | 360 | 
|Ashley River         |  | Charleston    |  | SC    |  |      | 851   |       |  |                    | 4,239 |       |  |          | 5,090  |         |  |        | (459   | )     |  |      | 2002 |         |  |  | 1999    |  |  |       | 360 | 
|Ballantyne           |  | Fort Mill     |  | SC    |  |      | 640   |       |  |                    | 2,153 |       |  |          | 2,793  |         |  |        | (216   | )     |  |      | 2002 |         |  |  | 1998    |  |  |       | 360 | 
|Charleston           |  | Ladson        |  | SC    |  |      | 403   |       |  |                    | 3,453 |       |  |          | 3,856  |         |  |        | (468   | )     |  |      | 2002 |         |  |  | 1999    |  |  |       | 360 | 
|Dave Lyle            |  | Rock Hill     |  | SC    |  |      | 487   |       |  |                    | 2,595 |       |  |          | 3,082  |         |  |        | (155   | )     |  |      | 2002 |         |  |  | 2000    |  |  |       | 360 | 
|Florence             |  | Florence      |  | SC    |  |      | 636   |       |  |                    | 4,441 |       |  |          | 5,077  |         |  |        | (678   | )     |  |      | 2002 |         |  |  | 1985    |  |  |       | 360 | 
|Garners Ferry       |  | Columbia      |  | SC    |  |      | 1,071 |       |  |                    | 2,809 |       |  |          | 3,880  |         |  |        | (495   | )     |  |      | 2002 |         |  |  | 1988    |  |  |       | 360 | 
|Greenville (SC)      |  | Greenville    |  | SC    |  |      | 989   |       |  |                    | 2,162 |       |  |          | 3,151  |         |  |        | (640   | )     |  |      | 2002 |         |  |  | 1987    |  |  |       | 360 | 
|Rock Hill            |  | Rock Hill     |  | SC    |  |      | 415   |       |  |                    | 2,063 |       |  |          | 2,478  |         |  |        | (230   | )     |  |      | 2002 |         |  |  | 1998    |  |  |       | 360 | 
|Rosewood             |  | Columbia      |  | SC    |  |      | 317   |       |  |                    |      |       |  |          | 317    |         |  |        |       |       |  |      | 2002 |         |  |  |         |  |  |       | 360 | 
|Shriners             |  | Greenville    |  | SC    |  |      | 431   |       |  |                    | 2,564 |       |  |          | 2,995  |         |  |        | (289   | )     |  |      | 2002 |         |  |  | 1998    |  |  |       | 360 | 
|Spartanburg          |  | Spartanburg   |  | SC    |  |      | 268   |       |  |                    | 1,466 |       |  |          | 1,734  |         |  |        | (427   | )     |  |      | 2002 |         |  |  | 1986    |  |  |       | 360 | 
|Sumter               |  | Sumter        |  | SC    |  |      | 268   |       |  |                    | 2,020 |       |  |          | 2,288  |         |  |        | (405   | )     |  |      | 2002 |         |  |  | 1986    |  |  |       | 360 | 
|Sunset               |  | Lexington     |  | SC    |  |      | 535   |       |  |                    | 2,423 |       |  |          | 2,958  |         |  |        | (166   | )     |  |      | 2002 |         |  |  | 1999    |  |  |       | 360 | 
|Woodruff Road (SC)   |  | Greenville    |  | SC    |  |      | 1,082 |       |  |                    | 1,693 |       |  |          | 2,775  |         |  |        | (333   | )     |  |      | 2002 |         |  |  | 1996    |  |  |       | 360 | 
|Bandera Road         |  | San Antonio   |  | TX    |  |      | 468   |       |  |                    | 1,998 |       |  |          | 2,466  |         |  |        | (639   | )     |  |      | 1988 |         |  |  | 1981    |  |  |       | 360 | 
|Bedford              |  | Bedford       |  | TX    |  |      | 408   |       |  |                    | 1,765 |       |  |          | 2,173  |         |  |        | (564   | )     |  |      | 1985 |         |  |  | 1984    |  |  |       | 360 | 
|Bee Caves Road       |  | Austin        |  | TX    |  |      | 626   |       |  |                    | 4,504 |       |  |          | 5,130  |         |  |        | (474   | )     |  |      | 1999 |         |  |  | 1999    |  |  |       | 360 | 
|Beltline             |  | Irving        |  | TX    |  |      | 414   |       |  |                    | 1,999 |       |  |          | 2,413  |         |  |        | (677   | )     |  |      | 1989 |         |  |  | 1985/86 |  |  |       | 360 | 
|Blanco Road          |  | San Antonio   |  | TX    |  |      | 801   |       |  |                    | 3,356 |       |  |          | 4,157  |         |  |        | (1,071 | )     |  |      | 1988 |         |  |  | 1989/91 |  |  |       | 360 | 
|Champions            |  | Houston       |  | TX    |  |      | 484   |       |  |                    | 2,804 |       |  |          | 3,288  |         |  |        | (440   | )     |  |      | 1998 |         |  |  | 1998    |  |  |       | 360 | 
|Cinco Ranch          |  | Houston       |  | TX    |  |      | 523   |       |  |                    | 2,593 |       |  |          | 3,116  |         |  |        | (344   | )     |  |      | 1999 |         |  |  | 1998    |  |  |       | 360 | 
|Cityplace            |  | Dallas        |  | TX    |  |      | 1,118 |       |  |                    | 3,503 |       |  |          | 4,621  |         |  |        | (429   | )     |  |      | 1999 |         |  |  | 1999    |  |  |       | 360 | 
|East Lamar           |  | Arlington     |  | TX    |  |      | 742   |       |  |                    | 2,143 |       |  |          | 2,885  |         |  |        | (520   | )     |  |      | 1996 |         |  |  | 1996    |  |  |       | 360 | 
|Federal Road         |  | Houston       |  | TX    |  |      | 552   |       |  |                    | 2,364 |       |  |          | 2,916  |         |  |        | (753   | )     |  |      | 1988 |         |  |  | 1988    |  |  |       | 360 | 
|First Colony         |  | Missouri City |  | TX    |  |      | 427   |       |  |                    | 2,183 |       |  |          | 2,610  |         |  |        | (185   | )     |  |      | 2000 |         |  |  | 1994    |  |  |       | 360 | 
|Forum 303            |  | Arlington     |  | TX    |  |      | 273   |       |  |                    | 1,247 |       |  |          | 1,520  |         |  |        | (417   | )     |  |      | 1986 |         |  |  | 1984    |  |  |       | 360 | 
|Fredericksburg Road  |  | San Antonio   |  | TX    |  |      | 645   |       |  |                    | 2,871 |       |  |          | 3,516  |         |  |        | (906   | )     |  |      | 1987 |         |  |  | 1978/82 |  |  |       | 360 | 
|Georgetown           |  | Austin        |  | TX    |  |      | 403   |       |  |                    | 1,717 |       |  |          | 2,120  |         |  |        | (393   | )     |  |      | 1997 |         |  |  | 1996    |  |  |       | 360 | 
|Greenville           |  | Dallas        |  | TX    |  |      | 768   |       |  |                    | 3,212 |       |  |          | 3,980  |         |  |        | (572   | )     |  |      | 1998 |         |  |  | 1998    |  |  |       | 360 | 
|Helotes              |  | San Antonio   |  | TX    |  |      | 493   |       |  |                    | 2,251 |       |  |          | 2,744  |         |  |        | (194   | )     |  |      | 2000 |         |  |  | 2000    |  |  |       | 360 | 
|Henderson Pass       |  | San Antonio   |  | TX    |  |      | 1,386 |       |  |                    | 2,316 |       |  |          | 3,702  |         |  |        | (403   | )     |  |      | 1998 |         |  |  | 1995    |  |  |       | 360 | 
|Henderson Street     |  | Fort Worth    |  | TX    |  |      | 338   |       |  |                    | 3,777 |       |  |          | 4,115  |         |  |        | (408   | )     |  |      | 1999 |         |  |  | 1999    |  |  |       | 360 | 
|Highway 26           |  | Hurst         |  | TX    |  |      | 527   |       |  |                    | 2,800 |       |  |          | 3,327  |         |  |        | (152   | )     |  |      | 2001 |         |  |  | 2001    |  |  |       | 360 | 
|Highway 78           |  | San Antonio   |  | TX    |  |      | 392   |       |  |                    | 1,582 |       |  |          | 1,974  |         |  |        | (272   | )     |  |      | 1998 |         |  |  | 1997    |  |  |       | 360 | 
|Hill Country Village |  | San Antonio   |  | TX    |  |      | 679   |       |  |                    | 2,866 |       |  |          | 3,545  |         |  |        | (917   | )     |  |      | 1985 |         |  |  | 1982    |  |  |       | 360 | 
|Hillcroft            |  | Houston       |  | TX    |  |      |      |       |  |                    | 3,689 |       |  |          | 3,689  |         |  |        | (1,165 | )     |  |      | 1991 |         |  |  | 1988    |  |  |       | 360 | 
|Hurst                |  | Hurst         |  | TX    |  |      | 363   |       |  |                    | 1,582 |       |  |          | 1,945  |         |  |        | (493   | )     |  |      | 1987 |         |  |  | 1974    |  |  |       | 360 | 
|Imperial Valley      |  | Houston       |  | TX    |  |      | 461   |       |  |                    | 2,014 |       |  |          | 2,475  |         |  |        | (643   | )     |  |      | 1988 |         |  |  | 1987    |  |  |       | 360 | 
|Irving               |  | Irving        |  | TX    |  |      | 314   |       |  |                    | 1,335 |       |  |          | 1,649  |         |  |        | (410   | )     |  |      | 1985 |         |  |  | 1975/84 |  |  |       | 360 | 
|Kingwood             |  | Kingwood      |  | TX    |  |      | 525   |       |  |                    | 2,851 |       |  |          | 3,376  |         |  |        | (835   | )     |  |      | 1988 |         |  |  | 1988    |  |  |       | 360 | 
|Lakeline             |  | Austin        |  | TX    |  |      | 748   |       |  |                    | 3,440 |       |  |          | 4,188  |         |  |        | (205   | )     |  |      | 2001 |         |  |  | 2001    |  |  |       | 360 | 
|Las Colinas          |  | Irving        |  | TX    |  |      | 491   |       |  |                    | 3,139 |       |  |          | 3,630  |         |  |        | (237   | )     |  |      | 2000 |         |  |  | 2000    |  |  |       | 360 | 
|Lewisville           |  | Dallas        |  | TX    |  |      | 434   |       |  |                    | 2,556 |       |  |          | 2,990  |         |  |        | (573   | )     |  |      | 1997 |         |  |  | 1997    |  |  |       | 360 | 
|MacArthur            |  | Irving        |  | TX    |  |      | 359   |       |  |                    | 1,699 |       |  |          | 2,058  |         |  |        | (522   | )     |  |      | 1985 |         |  |  | 1975/84 |  |  |       | 360 | 
|McArthur Crossing    |  | Irving        |  | TX    |  |      | 746   |       |  |                    | 2,978 |       |  |          | 3,724  |         |  |        | (753   | )     |  |      | 1996 |         |  |  | 1996    |  |  |       | 360 | 
|Medical Center (TX)  |  | Houston       |  | TX    |  |      | 737   |       |  |                    | 3,255 |       |  |          | 3,992  |         |  |        | (1,160 | )     |  |      | 1989 |         |  |  | 1989    |  |  |       | 360 | 
|Medical Center SA    |  | San Antonio   |  | TX    |  |      | 667   |       |  |                    | 2,737 |       |  |          | 3,404  |         |  |        | (216   | )     |  |      | 1998 |         |  |  | 1999    |  |  |       | 360 | 
|Mission Bend         |  | Houston       |  | TX    |  |      | 653   |       |  |                    | 2,751 |       |  |          | 3,404  |         |  |        | (637   | )     |  |      | 1995 |         |  |  | 1995    |  |  |       | 360 | 
|Nacodoches           |  | San Antonio   |  | TX    |  |      | 381   |       |  |                    | 2,899 |       |  |          | 3,280  |         |  |        | (445   | )     |  |      | 1998 |         |  |  | 1996    |  |  |       | 360 | 
|North Austin         |  | Austin        |  | TX    |  |      | 609   |       |  |                    | 2,564 |       |  |          | 3,173  |         |  |        | (789   | )     |  |      | 1986 |         |  |  | 1982    |  |  |       | 360 | 
|North Carrollton     |  | Carrollton    |  | TX    |  |      | 627   |       |  |                    | 2,746 |       |  |          | 3,373  |         |  |        | (276   | )     |  |      | 2000 |         |  |  | 1999    |  |  |       | 360 | 
|North Park           |  | Kingwood      |  | TX    |  |      | 549   |       |  |                    | 2,192 |       |  |          | 2,741  |         |  |        | (187   | )     |  |      | 2000 |         |  |  | 1996    |  |  |       | 360 | 
|Oak Farm Dairy       |  | Houston       |  | TX    |  |      | 2,652 |       |  |                    | 3,344 |       |  |          | 5,996  |         |  |        | (380   | )     |  |      | 1999 |         |  |  | 1999    |  |  |       | 360 | 
|Oak Hills            |  | Austin        |  | TX    |  |      | 149   |       |  |                    | 3,526 |       |  |          | 3,675  |         |  |        | (412   | )     |  |      | 1999 |         |  |  | 1999    |  |  |       | 360 | 
|Oltorf               |  | Austin        |  | TX    |  |      |      |       |  |                    | 3     |       |  |          | 3      |         |  |        |       |       |  |      | 2002 |         |  |  | 2002    |  |  |       | 360 | 
|Olympia              |  | Missouri City |  | TX    |  |      | 498   |       |  |                    | 2,894 |       |  |          | 3,392  |         |  |        | (219   | )     |  |      | 1998 |         |  |  | 1999    |  |  |       | 360 | 
|Park Cities East     |  | Dallas        |  | TX    |  |      | 1,017 |       |  |                    | 2,941 |       |  |          | 3,958  |         |  |        | (732   | )     |  |      | 1995 |         |  |  | 1995    |  |  |       | 360 | 
|Parker Road          |  | Dallas        |  | TX    |  |      | 809   |       |  |                    | 2,216 |       |  |          | 3,025  |         |  |        | (548   | )     |  |      | 1995 |         |  |  | 1995    |  |  |       | 360 | 
|Preston Road         |  | Dallas        |  | TX    |  |      | 703   |       |  |                    | 2,878 |       |  |          | 3,581  |         |  |        | (618   | )     |  |      | 1997 |         |  |  | 1997    |  |  |       | 360 | 
|Quarry               |  | San Antonio   |  | TX    |  |      | 488   |       |  |                    | 3,700 |       |  |          | 4,188  |         |  |        | (525   | )     |  |      | 1999 |         |  |  | 1999    |  |  |       | 360 | 
|River Oaks           |  | Houston       |  | TX    |  |      | 2,177 |       |  |                    | 7,839 |       |  |          | 10,016 |         |  |        | (2,231 | )     |  |      | 1996 |         |  |  | 1989    |  |  |       | 360 | 
|Round Rock           |  | Austin        |  | TX    |  |      | 386   |       |  |                    | 1,649 |       |  |          | 2,035  |         |  |        | (390   | )     |  |      | 1997 |         |  |  | 1995    |  |  |       | 360 | 
|San Antonio NE       |  | San Antonio   |  | TX    |  |      | 406   |       |  |                    | 1,758 |       |  |          | 2,164  |         |  |        | (565   | )     |  |      | 1985 |         |  |  | 1982    |  |  |       | 360 | 
|Slaughter Lane       |  | Austin        |  | TX    |  |      | 592   |       |  |                    | 2,435 |       |  |          | 3,027  |         |  |        | (557   | )     |  |      | 1997 |         |  |  | 1994    |  |  |       | 360 | 
|South Cooper         |  | Arlington     |  | TX    |  |      | 632   |       |  |                    | 2,629 |       |  |          | 3,261  |         |  |        | (609   | )     |  |      | 1996 |         |  |  | 1996    |  |  |       | 360 | 

85



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##### Table of Contents



|                     |  |                 |  |       |  |      |       |       |  |                    |        |       |  |          |        |         |  |        |         |       |  |      |          |         |  |  |         |  |  |       |     |  |  |  |  | 
|-------------------- |  | --------------- |  | ----- |  | ---- | ----- | ----- |  | ------------------ | ------ | ----- |  | -------- | ------ | ------- |  | ------ | ------- | ----- |  | ---- | -------- | ------- |  |  | ------- |  |  | ----- | --- |  |  |  |  | 
|                     |  |                 |  |       |  |      |       |       |  | Gross Amount as of |        |       |  |          |        |         |  |        |         |       |  |      |          |         |  | 
|                     |  |                 |  |       |  |      |       |       |  |                    |        |       |  |          |        |         |  |        |         |       |  |      |          |         |  | 
|                     |  |                 |  |       |  |      |       |       |  |                    |        |       |  | Building |        | Gross   |  |        |         |       |  |      |          |         |  |  |         |  |  | Depr.
|                     |  |                 |  |       |  |      |       |       |  |                    |        |       |  | Equip. & |        | Storage |  | Accum. |         | Owned |  | Year |          | Life in
|Property Name        |  | Location        |  | State |  | Land |       | Other |  | Centers            |        | Depr. |  | Since    |        | Built   |  | mos.  
|                     |  |                 |  |       |  |      |       |       |  |                    |        |       |  |          |        |         |  |       
|South Main           |  | Houston         |  | TX    |  |      | 392   |       |  |                    | 1,126  |       |  |          | 1,518  |         |  |        | (100    | )     |  |      | 2000     |         |  |  | 1999    |  |  |       | 360 | 
|Southlake            |  | Dallas          |  | TX    |  |      | 670   |       |  |                    | 2,968  |       |  |          | 3,638  |         |  |        | (437    | )     |  |      | 1998     |         |  |  | 1998    |  |  |       | 360 | 
|Sugarland            |  | Sugarland       |  | TX    |  |      | 761   |       |  |                    | 3,104  |       |  |          | 3,865  |         |  |        | (959    | )     |  |      | 1988     |         |  |  | 1987    |  |  |       | 360 | 
|T.C. Jester          |  | Houston         |  | TX    |  |      | 903   |       |  |                    | 4,089  |       |  |          | 4,992  |         |  |        | (875    | )     |  |      | 1996     |         |  |  | 1990    |  |  |       | 360 | 
|Thousand Oaks        |  | San Antonio     |  | TX    |  |      | 421   |       |  |                    | 1,767  |       |  |          | 2,188  |         |  |        | (575    | )     |  |      | 1986     |         |  |  | 1987    |  |  |       | 360 | 
|Universal City       |  | San Antonio     |  | TX    |  |      | 169   |       |  |                    | 1,633  |       |  |          | 1,802  |         |  |        | (504    | )     |  |      | 1995     |         |  |  | 1985    |  |  |       | 360 | 
|Valley Ranch         |  | Coppell         |  | TX    |  |      | 791   |       |  |                    | 3,214  |       |  |          | 4,005  |         |  |        | (709    | )     |  |      | 1997     |         |  |  | 1995    |  |  |       | 360 | 
|West University      |  | Houston         |  | TX    |  |      | 1,121 |       |  |                    | 4,629  |       |  |          | 5,750  |         |  |        | (1,434  | )     |  |      | 1989     |         |  |  | 1988    |  |  |       | 360 | 
|Westchase            |  | Houston         |  | TX    |  |      | 351   |       |  |                    | 2,637  |       |  |          | 2,988  |         |  |        | (224    | )     |  |      | 2000     |         |  |  | 1998    |  |  |       | 360 | 
|Westheimer           |  | Houston         |  | TX    |  |      | 611   |       |  |                    | 2,541  |       |  |          | 3,152  |         |  |        | (780    | )     |  |      | 1986     |         |  |  | 1977    |  |  |       | 360 | 
|Windcrest            |  | San Antonio     |  | TX    |  |      | 626   |       |  |                    | 2,958  |       |  |          | 3,584  |         |  |        | (614    | )     |  |      | 1996     |         |  |  | 1975    |  |  |       | 360 | 
|Woodforest           |  | Houston         |  | TX    |  |      | 538   |       |  |                    | 2,269  |       |  |          | 2,807  |         |  |        | (507    | )     |  |      | 1996     |         |  |  | 1996    |  |  |       | 360 | 
|Woodlands            |  | Houston         |  | TX    |  |      | 737   |       |  |                    | 3,281  |       |  |          | 4,018  |         |  |        | (1,031  | )     |  |      | 1988     |         |  |  | 1988    |  |  |       | 360 | 
|Bayside              |  | Virginia Beach  |  | VA    |  |      | 236   |       |  |                    | 1,260  |       |  |          | 1,496  |         |  |        | (364    | )     |  |      | 1988     |         |  |  | 1984    |  |  |       | 360 | 
|Burke                |  | Fairfax         |  | VA    |  |      | 634   |       |  |                    | 2,615  |       |  |          | 3,249  |         |  |        | (595    | )     |  |      | 1996     |         |  |  | 1984    |  |  |       | 360 | 
|Burke Centre         |  | Burke           |  | VA    |  |      | 1,035 |       |  |                    | 3,304  |       |  |          | 4,339  |         |  |        | (169    | )     |  |      | 2001     |         |  |  | 1983    |  |  |       | 360 | 
|Burke Ctr. Bus. Park |  | Fairfax         |  | VA    |  |      |      |       |  |                    | 1,476  |       |  |          | 1,476  |         |  |        |        |       |  |      | 2001     |         |  |  | 1983    |  |  |       | 360 | 
|Cascades             |  | Sterling        |  | VA    |  |      | 2,292 |       |  |                    | 3,704  |       |  |          | 5,996  |         |  |        | (565    | )     |  |      | 1998     |         |  |  | 1998    |  |  |       | 360 | 
|Cedar Road           |  | Chesapeake      |  | VA    |  |      | 295   |       |  |                    | 1,321  |       |  |          | 1,616  |         |  |        | (385    | )     |  |      | 1994     |         |  |  | 1989    |  |  |       | 360 | 
|Charlottesville      |  | Charlottesville |  | VA    |  |      | 305   |       |  |                    | 1,339  |       |  |          | 1,644  |         |  |        | (430    | )     |  |      | 1994     |         |  |  | 1984    |  |  |       | 360 | 
|Chesapeake           |  | Chesapeake      |  | VA    |  |      | 454   |       |  |                    | 1,893  |       |  |          | 2,347  |         |  |        | (426    | )     |  |      | 1996     |         |  |  | 1986    |  |  |       | 360 | 
|Crater Road          |  | Petersburg      |  | VA    |  |      | 224   |       |  |                    | 978    |       |  |          | 1,202  |         |  |        | (305    | )     |  |      | 1994     |         |  |  | 1987    |  |  |       | 360 | 
|Dale City            |  | Dale City       |  | VA    |  |      | 346   |       |  |                    | 1,772  |       |  |          | 2,118  |         |  |        | (507    | )     |  |      | 1994     |         |  |  | 1986    |  |  |       | 360 | 
|Fairfax              |  | Fairfax         |  | VA    |  |      | 1,414 |       |  |                    | 6,602  |       |  |          | 8,016  |         |  |        | (1,951  | )     |  |      | 1986     |         |  |  | 1980    |  |  |       | 360 | 
|Falls Church         |  | Falls Church    |  | VA    |  |      | 1,413 |       |  |                    | 6,186  |       |  |          | 7,599  |         |  |        | (1,801  | )     |  |      | 1987     |         |  |  | 1988    |  |  |       | 360 | 
|Fordson              |  | Alexandria      |  | VA    |  |      | 324   |       |  |                    | 3,114  |       |  |          | 3,438  |         |  |        | (100    | )     |  |      | 2002     |         |  |  | 1984    |  |  |       | 360 | 
|Fullerton            |  | Springfield     |  | VA    |  |      | 1,139 |       |  |                    | 4,363  |       |  |          | 5,502  |         |  |        | (154    | )     |  |      | 2001     |         |  |  | 1983    |  |  |       | 360 | 
|Gainesville          |  | Gainesville     |  | VA    |  |      | 245   |       |  |                    | 1,082  |       |  |          | 1,327  |         |  |        | (350    | )     |  |      | 1994     |         |  |  | 1988    |  |  |       | 360 | 
|Herndon              |  | Herndon         |  | VA    |  |      | 582   |       |  |                    | 2,552  |       |  |          | 3,134  |         |  |        | (848    | )     |  |      | 1988     |         |  |  | 1985    |  |  |       | 360 | 
|Holland Road         |  | Virginia Beach  |  | VA    |  |      | 204   |       |  |                    | 965    |       |  |          | 1,169  |         |  |        | (326    | )     |  |      | 1994     |         |  |  | 1985    |  |  |       | 360 | 
|Jeff Davis Hwy       |  | Richmond        |  | VA    |  |      | 306   |       |  |                    | 1,318  |       |  |          | 1,624  |         |  |        | (401    | )     |  |      | 1994     |         |  |  | 1990    |  |  |       | 360 | 
|Kempsville           |  | Virginia Beach  |  | VA    |  |      | 279   |       |  |                    | 1,237  |       |  |          | 1,516  |         |  |        | (368    | )     |  |      | 1989     |         |  |  | 1985    |  |  |       | 360 | 
|Laskin Road          |  | Virginia Beach  |  | VA    |  |      | 305   |       |  |                    | 1,340  |       |  |          | 1,645  |         |  |        | (424    | )     |  |      | 1994     |         |  |  | 1984    |  |  |       | 360 | 
|Leesburg             |  | Leesburg        |  | VA    |  |      | 541   |       |  |                    | 2,222  |       |  |          | 2,763  |         |  |        | (499    | )     |  |      | 1996     |         |  |  | 1986    |  |  |       | 360 | 
|Manassas E. & W.     |  | Manassas        |  | VA    |  |      | 654   |       |  |                    | 3,015  |       |  |          | 3,669  |         |  |        | (993    | )     |  |      | 1988     |         |  |  | 1984    |  |  |       | 360 | 
|McLean               |  | McLean          |  | VA    |  |      |      |       |  |                    | 3,640  |       |  |          | 3,640  |         |  |        | (712    | )     |  |      | 1997     |         |  |  | 1997    |  |  |       | 360 | 
|Merrifield           |  | Fairfax         |  | VA    |  |      | 3,192 |       |  |                    | 5,323  |       |  |          | 8,515  |         |  |        | (531    | )     |  |      | 1999     |         |  |  | 1999    |  |  |       | 360 | 
|Midlothian Turnpike  |  | Richmond        |  | VA    |  |      | 646   |       |  |                    | 2,677  |       |  |          | 3,323  |         |  |        | (600    | )     |  |      | 1996     |         |  |  | 1984    |  |  |       | 360 | 
|Newport News North   |  | Newport News    |  | VA    |  |      | 574   |       |  |                    | 2,546  |       |  |          | 3,120  |         |  |        | (567    | )     |  |      | 1996     |         |  |  | 1986    |  |  |       | 360 | 
|Newport News. S      |  | Newport News    |  | VA    |  |      | 496   |       |  |                    | 2,354  |       |  |          | 2,850  |         |  |        | (711    | )     |  |      | 1985/92  |         |  |  | 1985    |  |  |       | 360 | 
|North Richmond       |  | Richmond        |  | VA    |  |      | 344   |       |  |                    | 1,492  |       |  |          | 1,836  |         |  |        | (483    | )     |  |      | 1988     |         |  |  | 1984    |  |  |       | 360 | 
|Old Towne            |  | Alexandria      |  | VA    |  |      | 2,036 |       |  |                    | 7,371  |       |  |          | 9,407  |         |  |        | (779    | )     |  |      | 1999     |         |  |  | 1999    |  |  |       | 360 | 
|Potomac Mills        |  | Potomac Mills   |  | VA    |  |      | 1,122 |       |  |                    | 3,439  |       |  |          | 4,561  |         |  |        | (579    | )     |  |      | 1997     |         |  |  | 1997    |  |  |       | 360 | 
|Princess Anne Rd.    |  | Virginia Beach  |  | VA    |  |      | 305   |       |  |                    | 1,312  |       |  |          | 1,617  |         |  |        | (388    | )     |  |      | 1994     |         |  |  | 1985    |  |  |       | 360 | 
|S. Military Highway  |  | Virginia Beach  |  | VA    |  |      | 289   |       |  |                    | 1,453  |       |  |          | 1,742  |         |  |        | (338    | )     |  |      | 1996     |         |  |  | 1984    |  |  |       | 360 | 
|Telegraph            |  | Lorton          |  | VA    |  |      | 441   |       |  |                    | 2,036  |       |  |          | 2,477  |         |  |        | (72     | )     |  |      | 2001     |         |  |  | 2001    |  |  |       | 360 | 
|Temple Avenue        |  | Petersburg      |  | VA    |  |      | 297   |       |  |                    | 1,310  |       |  |          | 1,607  |         |  |        | (410    | )     |  |      | 1994     |         |  |  | 1989    |  |  |       | 360 | 
|Virginia Beach       |  | Virginia Beach  |  | VA    |  |      | 502   |       |  |                    | 2,283  |       |  |          | 2,785  |         |  |        | (701    | )     |  |      | 1989     |         |  |  | 1985    |  |  |       | 360 | 
|Auburn               |  | Auburn          |  | WA    |  |      | 760   |       |  |                    | 2,911  |       |  |          | 3,671  |         |  |        | (738    | )     |  |      | 1996     |         |  |  | 1996    |  |  |       | 360 | 
|Bellefield           |  | Bellevue        |  | WA    |  |      | 957   |       |  |                    | 4,039  |       |  |          | 4,996  |         |  |        | (878    | )     |  |      | 1996     |         |  |  | 1978    |  |  |       | 360 | 
|Bellingham           |  | Bellingham      |  | WA    |  |      | 601   |       |  |                    | 2,532  |       |  |          | 3,133  |         |  |        | (781    | )     |  |      | 1981     |         |  |  | 1981    |  |  |       | 360 | 
|Bremerton            |  | Bremerton       |  | WA    |  |      | 563   |       |  |                    | 2,324  |       |  |          | 2,887  |         |  |        | (431    | )     |  |      | 1997     |         |  |  | 1976    |  |  |       | 360 | 
|Burien               |  | Seattle         |  | WA    |  |      | 646   |       |  |                    | 2,858  |       |  |          | 3,504  |         |  |        | (912    | )     |  |      | 1985     |         |  |  | 1974    |  |  |       | 360 | 
|Burien II            |  | Seattle         |  | WA    |  |      | 388   |       |  |                    | 1,760  |       |  |          | 2,148  |         |  |        | (558    | )     |  |      | 1985     |         |  |  | 1979    |  |  |       | 360 | 
|Canyon Park JV       |  | Bothell         |  | WA    |  |      | 1,023 |       |  |                    | 3,185  |       |  |          | 4,208  |         |  |        | (1,231  | )     |  |      | 1996     |         |  |  | 1990    |  |  |       | 360 | 
|Canyon Rd.           |  | Puyallup        |  | WA    |  |      | 234   |       |  |                    | 1,052  |       |  |          | 1,286  |         |  |        | (227    | )     |  |      | 1996     |         |  |  | 1986    |  |  |       | 360 | 
|Capitol Hill         |  | Seattle         |  | WA    |  |      | 839   |       |  |                    | 5,366  |       |  |          | 6,205  |         |  |        | (2,557  | )     |  |      | 1987     |         |  |  | 1988    |  |  |       | 360 | 
|Corporate Office     |  | Seattle         |  | WA    |  |      | 4,213 |       |  |                    | 23,677 |       |  |          | 27,890 |         |  |        | (12,540 | )     |  |      | 1998     |         |  |  | 1998    |  |  |       | 360 | 
|E. Bremerton         |  | Bremerton       |  | WA    |  |      | 576   |       |  |                    | 2,446  |       |  |          | 3,022  |         |  |        | (549    | )     |  |      | 1996     |         |  |  | 1985    |  |  |       | 360 | 
|East Lynnwood        |  | Lynnwood        |  | WA    |  |      | 482   |       |  |                    | 2,447  |       |  |          | 2,929  |         |  |        | (707    | )     |  |      | 1986     |         |  |  | 1978    |  |  |       | 360 | 
|Edmonds              |  | Edmonds         |  | WA    |  |      | 1,190 |       |  |                    | 5,016  |       |  |          | 6,206  |         |  |        | (1,528  | )     |  |      | 1984     |         |  |  | 1974/75 |  |  |       | 360 | 
|Everett              |  | Everett         |  | WA    |  |      | 512   |       |  |                    | 2,754  |       |  |          | 3,266  |         |  |        | (780    | )     |  |      | 1981     |         |  |  | 1978    |  |  |       | 360 | 
|Factoria             |  | Bellevue        |  | WA    |  |      | 580   |       |  |                    | 2,412  |       |  |          | 2,992  |         |  |        | (745    | )     |  |      | 1984     |         |  |  | 1984    |  |  |       | 360 | 
|Factoria Square      |  | Bellevue        |  | WA    |  |      | 1,226 |       |  |                    | 5,031  |       |  |          | 6,257  |         |  |        | (1,105  | )     |  |      | 1996     |         |  |  | 1989    |  |  |       | 360 | 
|Federal Way          |  | Federal Way     |  | WA    |  |      | 862   |       |  |                    | 3,682  |       |  |          | 4,544  |         |  |        | (1,134  | )     |  |      | 1984     |         |  |  | 1975    |  |  |       | 360 | 
|Gig Harbor           |  | Gig Harbor      |  | WA    |  |      | 1,059 |       |  |                    | 876    |       |  |          | 1,935  |         |  |        | (123    | )     |  |      | 1999     |         |  |  | 1980    |  |  |       | 360 | 
|Hazel Dell           |  | Vancouver       |  | WA    |  |      | 1,087 |       |  |                    | 2,972  |       |  |          | 4,059  |         |  |        | (905    | )     |  |      | 1996     |         |  |  | 1989    |  |  |       | 360 | 
|Highland Hill        |  | Tacoma          |  | WA    |  |      | 592   |       |  |                    | 2,510  |       |  |          | 3,102  |         |  |        | (745    | )     |  |      | 1981     |         |  |  | 1982    |  |  |       | 360 | 
|Interbay             |  | Seattle         |  | WA    |  |      | 952   |       |  |                    | 3,987  |       |  |          | 4,939  |         |  |        | (1,230  | )     |  |      | 1987     |         |  |  | 1988    |  |  |       | 360 | 
|Issaquah             |  | Issaquah        |  | WA    |  |      | 615   |       |  |                    | 2,621  |       |  |          | 3,236  |         |  |        | (848    | )     |  |      | 1985     |         |  |  | 1986    |  |  |       | 360 | 
|Juanita              |  | Kirkland        |  | WA    |  |      | 877   |       |  |                    | 4,469  |       |  |          | 5,346  |         |  |        | (397    | )     |  |      | 1998     |         |  |  | 1999    |  |  |       | 360 | 
|Kennydale            |  | Renton          |  | WA    |  |      | 816   |       |  |                    | 3,423  |       |  |          | 4,239  |         |  |        | (739    | )     |  |      | 1996     |         |  |  | 1991    |  |  |       | 360 | 
|Kent                 |  | Kent            |  | WA    |  |      | 543   |       |  |                    | 2,316  |       |  |          | 2,859  |         |  |        | (448    | )     |  |      | 1997     |         |  |  | 1977    |  |  |       | 360 | 
|Lacey                |  | Olympia         |  | WA    |  |      | 185   |       |  |                    | 1,122  |       |  |          | 1,307  |         |  |        | (205    | )     |  |      | 1997     |         |  |  | 1977    |  |  |       | 360 | 
|Lake City            |  | Seattle         |  | WA    |  |      | 572   |       |  |                    | 2,657  |       |  |          | 3,229  |         |  |        | (971    | )     |  |      | 1995     |         |  |  | 1987    |  |  |       | 360 | 
|Lake Union           |  | Seattle         |  | WA    |  |      | 2,956 |       |  |                    | 6,080  |       |  |          | 9,036  |         |  |        | (2,050  | )     |  |      | 1998     |         |  |  | 1998    |  |  |       | 360 | 
|Lakewood 512         |  | Tacoma          |  | WA    |  |      | 920   |       |  |                    | 3,927  |       |  |          | 4,847  |         |  |        | (1,168  | )     |  |      | 87/88/91 |         |  |  | 1979/81 |  |  |       | 360 | 
|Lynnwood             |  | Lynnwood        |  | WA    |  |      | 757   |       |  |                    | 3,303  |       |  |          | 4,060  |         |  |        | (620    | )     |  |      | 1997     |         |  |  | 1979    |  |  |       | 360 | 
|Mill Creek           |  | Everett         |  | WA    |  |      | 627   |       |  |                    | 4,314  |       |  |          | 4,941  |         |  |        | (584    | )     |  |      | 1998     |         |  |  | 1998    |  |  |       | 360 | 
|North Spokane        |  | Spokane         |  | WA    |  |      | 581   |       |  |                    | 3,650  |       |  |          | 4,231  |         |  |        | (866    | )     |  |      | 1984     |         |  |  | 1976    |  |  |       | 360 | 
|Parkland             |  | Tacoma          |  | WA    |  |      | 391   |       |  |                    | 1,704  |       |  |          | 2,095  |         |  |        | (332    | )     |  |      | 1997     |         |  |  | 1980    |  |  |       | 360 | 
|Pier 57              |  | Seattle         |  | WA    |  |      | 872   |       |  |                    | 4,756  |       |  |          | 5,628  |         |  |        | (669    | )     |  |      | 1986     |         |  |  | 1912    |  |  |       | 360 | 

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|                      |  |             |  |       |  |      |       |       |  |                    |         |       |  |          |           |         |  |        |           |       |  |      |          |         |  |  |         |  |  |       |     |  |  |  |  | 
|--------------------- |  | ----------- |  | ----- |  | ---- | ----- | ----- |  | ------------------ | ------- | ----- |  | -------- | --------- | ------- |  | ------ | --------- | ----- |  | ---- | -------- | ------- |  |  | ------- |  |  | ----- | --- |  |  |  |  | 
|                      |  |             |  |       |  |      |       |       |  | Gross Amount as of |         |       |  |          |           |         |  |        |           |       |  |      |          |         |  | 
|                      |  |             |  |       |  |      |       |       |  |                    |         |       |  |          |           |         |  |        |           |       |  |      |          |         |  | 
|                      |  |             |  |       |  |      |       |       |  |                    |         |       |  | Building |           | Gross   |  |        |           |       |  |      |          |         |  |  |         |  |  | Depr.
|                      |  |             |  |       |  |      |       |       |  |                    |         |       |  | Equip. & |           | Storage |  | Accum. |           | Owned |  | Year |          | Life in
|Property Name         |  | Location    |  | State |  | Land |       | Other |  | Centers            |         | Depr. |  | Since    |           | Built   |  | mos.  
|                      |  |             |  |       |  |      |       |       |  |                    |         |       |  |          |           |         |  |       
|Pt. Orchard           |  | Pt. Orchard |  | WA    |  |      | 483   |       |  |                    | 2,079   |       |  |          | 2,562     |         |  |        | (468      | )     |  |      | 1997     |         |  |  | 1991    |  |  |       | 360 | 
|Redmond               |  | Redmond     |  | WA    |  |      | 529   |       |  |                    | 5,493   |       |  |          | 6,022     |         |  |        | (834      | )     |  |      | 1998     |         |  |  | 1998    |  |  |       | 360 | 
|Renton                |  | Renton      |  | WA    |  |      | 625   |       |  |                    | 2,800   |       |  |          | 3,425     |         |  |        | (899      | )     |  |      | 1984     |         |  |  | 1979/89 |  |  |       | 360 | 
|Salmon Creek          |  | Vancouver   |  | WA    |  |      | 759   |       |  |                    | 3,356   |       |  |          | 4,115     |         |  |        | (711      | )     |  |      | 1997     |         |  |  | 1997    |  |  |       | 360 | 
|Sammamish             |  | Redmond     |  | WA    |  |      | 963   |       |  |                    | 3,902   |       |  |          | 4,865     |         |  |        | (584      | )     |  |      | 1998     |         |  |  | 1998    |  |  |       | 360 | 
|Shoreline/Aurora N    |  | Seattle     |  | WA    |  |      | 1,495 |       |  |                    | 6,732   |       |  |          | 8,227     |         |  |        | (1,944    | )     |  |      | 1986     |         |  |  | 1978    |  |  |       | 360 | 
|Smokey Point          |  | Arlington   |  | WA    |  |      | 232   |       |  |                    | 1,058   |       |  |          | 1,290     |         |  |        | (338      | )     |  |      | 1987     |         |  |  | 1984/87 |  |  |       | 360 | 
|South Center          |  | Renton      |  | WA    |  |      | 425   |       |  |                    | 1,998   |       |  |          | 2,423     |         |  |        | (659      | )     |  |      | 1985     |         |  |  | 1979    |  |  |       | 360 | 
|South Hill            |  | Seattle     |  | WA    |  |      | 300   |       |  |                    | 1,402   |       |  |          | 1,702     |         |  |        | (398      | )     |  |      | 1995     |         |  |  | 1980    |  |  |       | 360 | 
|South Tacoma          |  | Tacoma      |  | WA    |  |      | 315   |       |  |                    | 1,378   |       |  |          | 1,693     |         |  |        | (419      | )     |  |      | 1987     |         |  |  | 1975    |  |  |       | 360 | 
|Spokane               |  | Spokane     |  | WA    |  |      | 227   |       |  |                    | 1,053   |       |  |          | 1,280     |         |  |        | (227      | )     |  |      | 1997     |         |  |  | 1976    |  |  |       | 360 | 
|Sprague               |  | Tacoma      |  | WA    |  |      | 1,169 |       |  |                    | 3,283   |       |  |          | 4,452     |         |  |        | (984      | )     |  |      | 1996     |         |  |  | 1950/89 |  |  |       | 360 | 
|Totem Lake            |  | Kirkland    |  | WA    |  |      | 660   |       |  |                    | 2,887   |       |  |          | 3,547     |         |  |        | (890      | )     |  |      | 1984     |         |  |  | 1978    |  |  |       | 360 | 
|Vancouver Mall        |  | Vancouver   |  | WA    |  |      | 364   |       |  |                    | 1,676   |       |  |          | 2,040     |         |  |        | (595      | )     |  |      | 1980     |         |  |  | 1982    |  |  |       | 360 | 
|West Olympia          |  | Olympia     |  | WA    |  |      | 351   |       |  |                    | 1,468   |       |  |          | 1,819     |         |  |        | (276      | )     |  |      | 1997     |         |  |  | 1978    |  |  |       | 360 | 
|West Seattle          |  | Seattle     |  | WA    |  |      | 698   |       |  |                    | 4,237   |       |  |          | 4,935     |         |  |        | (857      | )     |  |      | 1997     |         |  |  | 1997    |  |  |       | 360 | 
|Whitecenter           |  | Seattle     |  | WA    |  |      | 559   |       |  |                    | 2,427   |       |  |          | 2,986     |         |  |        | (751      | )     |  |      | 1980     |         |  |  | 1981    |  |  |       | 360 | 
|Woodinville           |  | Woodinville |  | WA    |  |      | 674   |       |  |                    | 2,823   |       |  |          | 3,497     |         |  |        | (850      | )     |  |      | 1984     |         |  |  | 1982/84 |  |  |       | 360 | 
|Bellevue              |  | Bellevue    |  | Wa    |  |      | 2,385 |       |  |                    | 12,070  |       |  |          | 14,455    |         |  |        | (2,894    | )     |  |      | 1984     |         |  |  | 1975    |  |  |       | 360 | 
|Containerized storage |  |             |  |       |  |      |       |       |  |                    |        |       |  |          | 4,035     |         |  |        | 4,035     |       |  |      | (3,248   | )       |  |  |         |  |  |       |     |  |  |  |  | 
|                      |  |             |  |       |  |      |       |       |  |                    |         |       |  |          |           |         |  |        |           |       |  |      |          |         |  |  |         |  |  |       |     |  |  |  |  | 
|                      |  |             |  |       |  |      |       |       |  | $                  | 293,306 |       |  | $        | 1,236,743 |         |  | $      | 1,530,049 |       |  | $    | (274,842 | )       |  |  |         |  |  |       |     |  |  |  |  | 
|                      |  |             |  |       |  |      |       |       |  |                    |         |       |  |          |           |         |  |        |           |       |  |      |          |         |  |  |         |  |  |       |     |  |  |  |  | 



|(1) |  | These properties are encumbered through one mortgage loan totaling $66.3 million.
|--- |  | ---------------------------------------------------------------------------------
|   
|(2) |  | These properties were acquired through a lease of the building and land.         
|   
|(3) |  | These properties are encumbered
through one mortgage loan totaling $14.7 million.

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SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

The following tables reconcile the changes in land, building, equipment and other, as well as
accumulated depreciation over the last two years.

|                                    |                                           |                          |  |   |         |   |           |        |        |  
|----------------------------------- | ----------------------------------------- | ------------------------ |  | - | ------- | - | --------- | ------ | ------ | -
|(Amounts in thousands)              |                                           |                          |  |   |         |   |           |       
|Land, Building, Equipment and Other |                                           |                          |  |   |         |   |           |       
|Balance at January 1, 2000          |                                           |                          |  |   |         | $ | 1,120,477 |       
|                                    | Additions during the period               |                          |  |   |         |   |           |        |       
|                                    |                                           | Acquistions              |  | $ | 40,963  |   |           |        |        |  
|                                    |                                           | Developments             |  |   | 91,897  |   |           |        |        |  
|                                    |                                           | Facility Expansions      |  |   | 187     |   |           |        |        |  
|                                    |                                           | Improvements and Other   |  |   | 8,030   |   |           |        |        |  
|                                    |                                           |                          |  |   |         |   |           |       
|                                    |                                           |                          |  |   |         |   | 141,077   |       
|                                    |                                           | Cost of Real Estate Sold |  |   |         |   |           |        | (867   | )
|                                    |                                           |                          |  |   |         |   |           |       
|Balance at December 31, 2000        |                                           |                          |  |   |         |   | 1,260,687 |       
|                                    | Consolidation of Storage to Go            |                          |  |   |         |   |           | 4,890  |       
|                                    | Additions during the period               |                          |  |   |         |   |           |        |       
|                                    |                                           | Acquistions              |  | $ | 34,301  |   |           |        |        |  
|                                    |                                           | Developments             |  |   | 32,359  |   |           |        |        |  
|                                    |                                           | Facility Expansions      |  |   |        |   |           |        |        |  
|                                    |                                           | Improvements and Other   |  |   | 19,033  |   |           |        |        |  
|                                    |                                           |                          |  |   |         |   |           |       
|                                    |                                           |                          |  |   |         |   | 85,693    |       
|                                    |                                           | Cost of Real Estate Sold |  |   |         |   |           |        | (2,272 | )
|                                    |                                           |                          |  |   |         |   |           |       
|Balance at December 31, 2001        |                                           |                          |  |   |         |   | 1,348,998 |       
|                                    | Additions during the period               |                          |  |   |         |   |           |        |       
|                                    |                                           | Acquistions              |  | $ | 173,639 |   |           |        |        |  
|                                    |                                           | Developments             |  |   | 3,147   |   |           |        |        |  
|                                    |                                           | Improvements and Other   |  |   | 6,085   |   |           |        |        |  
|                                    |                                           |                          |  |   |         |   |           |       
|                                    |                                           |                          |  |   |         |   | 182,871   |       
|                                    |                                           | Cost of Real Estate Sold |  |   |         |   |           |        | (1,820 | )
|                                    |                                           |                          |  |   |         |   |           |       
|Balance at December 31, 2002        |                                           |                          |  |   |         | $ | 1,530,049 |       
|                                    |                                           |                          |  |   |         |   |           |       
|Accumulated Depreciation            |                                           |                          |  |   |         |   |           |       
|Balance at January 1, 2000          |                                           |                          |  |   |         | $ | 134,366   |       
|                                    | Depreciation expense                      |                          |  |   |         |   |           | 36,247 |       
|                                    | Disposal                                  |                          |  |   |         |   |           | (782   | )     
|                                    |                                           |                          |  |   |         |   |           |       
|Balance at December 31, 2000        |                                           |                          |  |   |         |   | 169,831   |       
|                                    | Consolidation of Storage to Go            |                          |  |   |         |   |           | 2,502  |       
|                                    | Depreciation expense                      |                          |  |   |         |   |           | 41,581 |       
|                                    | Disposal                                  |                          |  |   |         |   |           | (508   | )     
|                                    |                                           |                          |  |   |         |   |           |       
|Balance at December 31, 2001        |                                           |                          |  |   |         |   | 213,405   |       
|                                    | Depreciation expense                      |                          |  |   |         |   |           | 46,084 |       
|                                    | Depreciation from Morningstar Acquisition |                          |  |   |         |   |           | 16,208 |       
|                                    | Disposal                                  |                          |  |   |         |   |           | (855   | )     
|                                    |                                           |                          |  |   |         |   |           |       
|Balance at December 31, 2002        |                                           |                          |  |   |         | $ | 274,842   |       
|                                    |                                           |                          |  |   |         |   |           |       

See Notes to Consolidated Financial Statements

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INDEPENDENT AUDITORS REPORT

Board of Directors and Stockholders
Shurgard Storage Centers, Inc.
Seattle, Washington

We have audited the accompanying consolidated balance sheets of Shurgard
Storage Centers, Inc. and subsidiaries (the Corporation) as of December 31,
2002 and 2001, and the related consolidated statements of income, shareholders
equity, and cash flows for each of the three years in the period ended December
31, 2002. Our audits also included the financial statement schedule listed in
the Index at Item 16. These financial statements and financial statement
schedule are the responsibility of the Corporations management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Shurgard Storage Centers, Inc. and
subsidiaries as of December 31, 2002 and 2001, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2002 in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, such financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

As discussed in Note P, in 2001
the Corporation changed its method of accounting for derivative
activities to conform to Statement of Financial Accounting Standards
(SFAS) No. 133.

As described in Note B, in 2002 the
Corporation changed its method of accounting for goodwill to conform
to SFAS No. 142.

As discussed in Note X, the
accompanying 2002 and 2001 consolidated financial statements have
been restated.

DELOITTE & TOUCHE LLP

Seattle, Washington
February 21, 2003
(March 11, 2003 as to Note W; May 20, 2003 as to the effects of the restatement
described in Note X )

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Item 9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.




PART III




Item 10  Directors and Executive Officers of the Registrant

Information regarding the Registrants executive officers called for by
Part III Item 10 is set forth in Item I of Part I herein under the caption
Executive Officers of the Registrant. Information regarding directors of the
Company and Section 16 reporting is set forth in our proxy statement for the
annual meeting of shareholders to be held May 13, 2003, and is incorporated
herein by reference.




Item 11  Executive Compensation

Information regarding executive compensation is set forth in our proxy
statement for the annual meeting of shareholders to be held May 13, 2003, and
is incorporated herein by reference.




Item 12  Security Ownership of Certain Beneficial Owners and Management

Information regarding security ownership of certain beneficial owners and
management is set forth in our proxy statement for the annual meeting of
shareholders to be held May 13, 2003, and is incorporated herein by reference.

Equity Compensation Plan Information

The following table provides information as of December 31, 2002, regarding
shares outstanding and available for issuance under the Companys existing
stock option plans:

|                                                           |  |                      |           |                   |  |                         |       |  |  |                         |           | 
|---------------------------------------------------------- |  | -------------------- | --------- | ----------------- |  | ----------------------- | ----- |  |  | ----------------------- | --------- | 
|                                                           |  | (a)                  |           | (b)               |  | (c)                    
|                                                           |  |                      |           |                   |  | Number of Securities   
|                                                           |  |                      |           |                   |  |                         |       |  |  | Remaining Available for
|                                                           |  | Number of Securities |           | Weighted-Average  |  | Future Issuance Under  
|                                                           |  | to be Issued Upon    |           | Exercise Price of |  | Equity Compensation    
|                                                           |  | Exercise of          |           | Outstanding       |  | Plans (Excluding       
|                                                           |  | Outstanding Options, |           | Options, Warrants |  | Securities Reflected in
|Plan Category                                              |  | Warrants and Rights  |           | and Rights        |  | Column (a))            
|                                                           |  |                      |           |                   |  |                        
|Equity compensation plans
approved by security holders (1) |  |                      | 2,886,461 |                   |  | $                       | 26.15 |  |  |                         | 1,058,827 | 
|                                                           |  |                      |           |                   |  |                         |       |  |  |                         |           | 
|Total                                                      |  |                      | 2,886,461 |                   |  | $                       | 26.15 |  |  |                         | 1,058,827 | 
|                                                           |  |                      |           |                   |  |                         |       |  |  |                         |           | 



|(1) |  | Includes the 1993 Stock Option Plan approved by the shareholders at the
1993 Annual Meeting held on July 24, 1993, the 1995 Long-Term Incentive
Plan approved by the shareholders at the 1995 Annual Meeting held July 26,
1995, and the 2000 Long-Term Incentive Plan approved by the shareholders
at the 2000 Annual Meeting held May 9, 2000, and as amended at the Annual
Meeting held May 14, 2002.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Item 13  Certain Relationships and Related Transactions

Information regarding certain relationships and related transactions is
set forth in our proxy statement for the annual meeting of shareholders to be
held May 13, 2003, and is incorporated herein by reference.

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Item 14  Disclosure Controls

(a)  Within 90 days prior to the date of this report, the Corporation
carried out an evaluation - under the supervision and with the
participation of the Corporations management, including the Corporations
Chief Executive Officer and Chief Financial Officer - of the effectiveness of
the design and operation of the Corporations disclosure controls and
procedures pursuant to Exchange Act Rule 13a-5. Based on that evaluation, the
Corporations Chief Executive Officer and Chief Financial Officer have
concluded that the Corporations disclosure controls and procedures are
effective.

(b)  There have been no significant changes in the Corporations
internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation described in the preceding
paragraph.




PART IV




Item 16  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)  1. Financial Statements

|                                                          |                                                       |  |      |    | 
|--------------------------------------------------------- | ----------------------------------------------------- |  | ---- | -- | 
|                                                          |                                                       |  | Page
|                                                          |                                                       |  | No. 
|                                                          |                                                       |  |     
|Consolidated Balance Sheets at December 31, 2002 and 2001 |                                                       |  | 47   |   
|For the years ended December 31, 2002, 2001 and 2000:     |                                                       |  |      |   
|                                                          | Consolidated Statements of Income                     |  |      | 48 | 
|                                                          | Consolidated Statements of Shareholders Equity       |  |      | 50 | 
|                                                          | Consolidated Statements of Cash Flows                 |  |      | 51 | 
|                                                          | Notes to Consolidated Financial Statements            |  |      | 53 | 
|                                                          | Schedule III Real Estate and Accumulated Depreciation |  |      | 76 | 
|                                                          | Independent Auditors Report                          |  |      | 89 | 

2. Financial Statement Schedules

Schedule III  Real Estate and Accumulated Depreciation has been included
as noted above.

3.Exhibits

|     |  |                                                                                                                                                                            
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | Articles of Incorporation of the Registrant(1)                                                                                                                             
|     |  |                                                                                                                                                                            
|3.2  |  | Designation of Rights and Preferences of Series A Junior Participating Preferred Stock (Exhibit 3.2)(2)                                                                    
|     |  |                                                                                                                                                                            
|3.3  |  | Designation of Rights and Preferences of 8.8% Series B Cumulative Redeemable Preferred Stock (Exhibit
3.3)(2)                                                              
|     |  |                                                                                                                                                                            
|3.4  |  | Restated Bylaws of the Registrant (Exhibit 3.4)(2)                                                                                                                         
|     |  |                                                                                                                                                                            
|3.5  |  | Designation of Rights and Preferences of 8.7% Series C Cumulative Redeemable Preferred Stock (Exhibit
3)(3)                                                                
|     |  |                                                                                                                                                                            
|4.1  |  | Rights Agreement between the Registrant and Gemisys Corporation dated as of March 17, 1994 (Exhibit
2.1)(4)                                                                
|     |  |                                                                                                                                                                            
|4.2  |  | First Amendment to Rights Agreement between the Registrant and Gemisys Corporation dated May 13, 1997
(Exhibit 4.2)(5)                                                     
|     |  |                                                                                                                                                                            
|4.3  |  | Indenture between the Registrant and LaSalle National Bank, as Trustee, dated April 25, 1997, (Exhibit
10.4)(6)                                                            
|     |  |                                                                                                                                                                            
|4.4  |  | Supplemental Indenture dated July 11, 1997**                                                                                                                               
|     |  |                                                                                                                                                                            
|4.5  |  | Form of 7 1/2% Notes due 2001 (Exhibit 4.1)(7)                                                                                                                             
|     |  |                                                                                                                                                                            
|4.6  |  | Form of 7 5/8% Notes due 2007 (Exhibit 4.2)(7)                                                                                                                             
|     |  |                                                                                                                                                                            
|10.1 |  | Amended and Restated Loan Agreement between Nomura Asset Capital Corp., as Lender, and SSC Property
Holdings, Inc., as Borrower, dated as of June 8, 1994 (Exhibit 10.4)(8)

91



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|       |  |                                                                                                                                                                                                                                                                                                      
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2   |  | Amended and Restated Collection Account and Servicing Agreement among SSC Property Holdings, Inc.,
Pacific Mutual Life Insurance Company, LaSalle National Bank and Nomura Asset Capital Corp. dated as
of June 8, 1994 (Exhibit 10.5)(8)                                                            
|       |  |                                                                                                                                                                                                                                                                                                      
|10.3   |  | Amended and Restated Loan Agreement among Shurgard Storage Centers, Inc., Seattle-First National Bank,
KeyBank of Washington, U.S. Bank of Washington and LaSalle National Bank dated September 9, 1996
(Exhibit 99.40)(9)                                                                           
|       |  |                                                                                                                                                                                                                                                                                                      
|10.4   |  | First Amendment to Amended and Restated Loan Agreement dated as of November 14, 1996 (Exhibit 10.8)(5)                                                                                                                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                      
|10.5   |  | Second Amendment to Amended and Restated Loan Agreement dated as of March 12, 1997 (Exhibit 10.10)(10)                                                                                                                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                      
|10.6   |  | Third Amendment to Amended and Restated Loan Agreement dated as of July 27, 1997 (Exhibit 10.6)(11)                                                                                                                                                                                                  
|       |  |                                                                                                                                                                                                                                                                                                      
|10.7   |  | Fourth Amendment to Amended and Restated Loan Agreement dated as of January 30, 1998 (Exhibit 10.7)(11)                                                                                                                                                                                              
|       |  |                                                                                                                                                                                                                                                                                                      
|10.8   |  | Fifth Amendment to Amended and Restated Loan Agreement dated as of May 1, 1998 ((Exhibit 10.1)(12)                                                                                                                                                                                                   
|       |  |                                                                                                                                                                                                                                                                                                      
|10.9   |  | Sixth Amendment to Amended and Restated Loan Agreement dated as of October 27, 1998 (Exhibit 10.1)(13)                                                                                                                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                      
|10.10  |  | Agreement and Plan of Merger between the Registrant and Shurgard Incorporated dated as of December 19,
1994 (Exhibit 10.7)(14)                                                                                                                                                                       
|       |  |                                                                                                                                                                                                                                                                                                      
|*10.11 |  | Amended and Restated 1993 Stock Option Plan (Exhibit 10.7)(11)                                                                                                                                                                                                                                       
|       |  |                                                                                                                                                                                                                                                                                                      
|*10.12 |  | Amended and Restated Stock Incentive Plan for Nonemployee Directors (Exhibit 10.7)(15)                                                                                                                                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                      
|*10.13 |  | 1995 Long-Term Incentive Compensation Plan(16)                                                                                                                                                                                                                                                       
|       |  |                                                                                                                                                                                                                                                                                                      
|*10.14 |  | Form of Business Combination Agreement, together with schedule of actual agreements(23)                                                                                                                                                                                                              
|       |  |                                                                                                                                                                                                                                                                                                      
|10.15  |  | Partnership Agreement, dated April 28, 1998, between Shurgard Development I, Inc. and Fremont Storage
Partners I, L.P. forming Shurgard/Fremont Partners I (Exhibit 1.1)(17)                                                                                                                         
|       |  |                                                                                                                                                                                                                                                                                                      
|10.16  |  | Seventh Amendment to Amended and Restated Loan Agreement dated as of April 28, 1999 (Exhibit 10.3)(18)                                                                                                                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                      
|10.17  |  | Partnership Agreement, dated March 17, 1999, between Shurgard Development II, Inc. and Fremont Storage
Partners II, L.L.C, forming Shurgard/Fremont Partners II (Exhibit 10.1)(18)                                                                                                                   
|       |  |                                                                                                                                                                                                                                                                                                      
|10.18  |  | First Amendment to Partnership Agreement between Shurgard Development II, Inc. and Fremont Storage
Partners II, L.L.C, forming Shurgard/Fremont Partners II as of April 27, 1999. (Exhibit 10.2)(18)                                                                                                 
|       |  |                                                                                                                                                                                                                                                                                                      
|10.19  |  | Second Amended and Restated Loan Agreement among Shurgard Storage Centers, Inc., Bank of America,
N.A., Key Bank National Association, U.S. Bank National Association, and LaSalle Bank National
Association, dated September 30, 1999. (Exhibit 10.1)(19)                                           
|       |  |                                                                                                                                                                                                                                                                                                      
|10.20  |  | First Amendment to Second Amended and Restated Loan agreement among Shurgard Storage Centers, Inc.,
Bank of America, N.A., Key Bank National Association, U.S. Bank National Association, and LaSalle Bank
National Association, dated September 30, 1999(20)                                        
|       |  |                                                                                                                                                                                                                                                                                                      
|10.21  |  | Second Amendment to Second Amended and Restated Loan agreement among Shurgard Storage Centers, Inc.,
Bank of America, N.A., Key Bank National Association, U.S. Bank National Association, LaSalle Bank
National Association, The Bank of Nova Scotia, and Bank One, dated December 16, 1999(20)     
|       |  |                                                                                                                                                                                                                                                                                                      
|10.22  |  | Separation Agreement and Mutual General Release among Shurgard Storage Centers, Inc. and Michael and
Tina Rowe, dated January 26, 2000(20)                                                                                                                                                           
|       |  |                                                                                                                                                                                                                                                                                                      
|10.23  |  | Third Amendment to the Second Amended and Restated Loan Agreement among Shurgard Storage Centers,
Inc., Bank of America, N.A., Key Bank National Association, U.S. Bank National Association, LaSalle
Bank National Association, The Bank of Nova Scotia and Bank One, N.A., dated March 31, 2000(21)
|       |  |                                                                                                                                                                                                                                                                                                      
|10.24  |  | Service Agreement between Shurgard Storage Centers, Inc., David K. Grant, and SSC Benelux & Co., SCA
dated June 7, 2000(22)                                                                                                                                                                          
|       |  |                                                                                                                                                                                                                                                                                                      
|10.25  |  | Limited Liability Company Agreement between Shurgard Development IV, Inc. and Chase Capital Partners
Real Estate Storage, LLC forming CCP/Shurgard Venture, LLC, dated May 12, 2000(22)                                                                                                              

92



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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.26 |  | Form of Business Combination Agreement dated July 27, 2000, together with schedule of actual
agreements(23)                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.27 |  | 2000 Long-Term Incentive Compensation Plan (24)                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.28 |  | Agency Agreement between Shurgard Storage Centers, Inc. and First Security Bank, N. A., dated February
26, 2001 (24)                                                                                                                                                                                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.29 |  | Credit Agreement among Shurgard Storage Centers, Inc., First Security Bank, N.A. and Bank of America,
N.A., dated February 26, 2001 (24)                                                                                                                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.30 |  | Lease Agreement between First Security Bank, N.A. and Shurgard Storage Centers, Inc., dated February
26, 2001 (24)                                                                                                                                                                                                                                                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.31 |  | Security Agreement between Shurgard Storage Centers, Inc., First Security Bank, N.A. and Bank of
America, N.A., dated February 26, 2001 (24)                                                                                                                                                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.32 |  | Participation Agreement among Shurgard Storage Centers, Inc., Shurgard Evergreen, L.P., Shurgard
Texas, L.P., Shurgard Institutional Fund, L.P. II, SSC Evergreen, Inc., First Security Bank, N.A.,
Bank of America, N.A., Bank Hapoalim B.M., The Bank of Nova Scotia, Bank One, N.A., Commerzbank, AG,
New York and Grand Cayman Branches, Keybank, N.A., Suntrust Bank, U.S. Bank, N.A., Washington Mutual
Bank, Fleet National Bank, and LaSalle Bank, N.A., dated February 26, 2001 (24) 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.33 |  | Trust Agreement among Shurgard Storage Centers, Inc., First Security Bank, N.A., Bank of America,
N.A., Bank Hapoalim, B.M., Bank of Nova Scotia, Commerzbank, AG, New York and Grand Cayman Branches,
Keybank, N.A., Suntrust Bank, U.S. Bank, N.A., Washington Mutual Bank, Fleet National Bank, and
LaSalle Bank, N.A., dated February 26, 2001 (24)                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.34 |  | Amended and Restated Limited Liability Company Agreement of CCP/Shurgard Venture, LLC, between
Shurgard Development IV, Inc. and CCPRE-Storage, LLC, dated December 26, 2000 (24)                                                                                                                                                                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.35 |  | Loan Agreement between CCP/Shurgard Venture, LLC and General Electric Capital Corporation, dated
December 28, 2000 (24)                                                                                                                                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.36 |  | Contribution Agreement between Shurgard Development IV, Inc., Shurgard Storage Centers, Inc., Shurgard
Texas L.P., SSC Evergreen, CCPRE-Storage, LLC, and CCP/Shurgard Venture, LLC, dated December 28, 2000
(24)                                                                                                                                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.37 |  | Third Amended and Restated Loan Agreement among Shurgard Storage Centers, Inc., and Bank of America,
N.A., Bank One, N.A. Commerzbank AG, New York and Grand Cayman Branches and U.S. Bank, N.A. dated
February 26, 2001 (24)                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.38 |  | Amendment of 1996 Employee Stock Purchase Plan dated January 30, 2001 (25)                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.39 |  | Amended and restated Class A Common Stock Dividend Reinvestment Plan, dated January 30, 2001 (25)                                                                                                                                                                                                                                                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.40 |  | Separation Agreement, Confidentiality Agreement and General Release for John Steckler                                                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.41 |  | First Amendment to Third Amended and Restated Loan Agreement among Shurgard Storage Centers, inc., and
Bank of America, N.A., Bank One, N.A. Commerzbank AG, New York and Grand Cayman Branches and U.S.
Bank, N.A. dated November 27, 2001                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.42 |  | Agreement and pan of merger by and among Shurgard Storage Inc. (Shurgard) SSCI Minnesota Corporation
(Merger Subsidiary) and Two S Properties, Inc., Three S Properties, Inc., Superior Storage I, LLC,
Superior Storage II, LLC, Superior Woodbury, LLC (collectively, the Companies) and the revocable
Trust of Gerald A. Schwalbach, the revocable Trust of Patrick L. Stotesbery (collectively, the
Trusts), and Gerald A. Schwalbach, Patrick L. Stotesbery dated March 10, 2003.
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.43 |  | Securities Purchase Agreement, SSC Benelux Inc. as Buyer, SSC General Partner (Guensey) Limited and
SSC Partner (Guernsey) Limited as Seller, and Credit Suisse First Boston Europe (Limited) as date
March 10, 2003.                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|12.1  |  | Statement Re: Computation of Earnings to Fixed Charges**                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|21.1  |  | Subsidiaries of the Registrant**                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|23.1  |  | Consent of Deloitte & Touche LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|99.1  |  | Certification CEO (26)                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|99.2  |  | Certification CFO (27)                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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---

|(1)  |  | Incorporated by reference to Exhibit B contained in the Definitive
Additional Proxy Materials on Form DEF14A filed on April 29, 1997.                      
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(2)  |  | Incorporated by reference to designated exhibit filed with the
Registrants Current Report on Form 8-K dated May 14, 1997.                                 
|    
|(3)  |  | Incorporated by reference to designated exhibit filed with Registrants
Registration Statement on Form 8-A filed on December 4, 1998.                      
|    
|(4)  |  | Incorporated by reference to designated exhibit filed with the
Registrants Registration Statement on Form 8-A filed on March 17, 1994.                    
|    
|(5)  |  | Incorporated by reference to designated exhibit filed with the
Registrants Form 8-B Registration on July 16, 1997.                                        
|    
|(6)  |  | Incorporated by reference to designated exhibit filed with the
Registrants Form 10-Q for the quarter ended March 31, 1997.                                
|    
|(7)  |  | Incorporated by reference to designated exhibit filed with the
Registrants Current Reports on Form 8-K dated April 22, 1997.                              
|    
|(8)  |  | Incorporated by reference to designated exhibit filed with the
Registrants Registration Statement on Form S-4, Amendment No. 1, filed on
January 25, 1995.
|    
|(9)  |  | Incorporated by reference to designated exhibit filed with the
Registrants Schedule 13E-3/A Amendment No. 11 filed on October 12, 1996.                   
|    
|(10) |  | Incorporated by reference to designated exhibit filed with the
Registrants Annual Report on Form 10-K for the year-ended December 31,
1996.               
|    
|(11) |  | Incorporated by reference to designated exhibit filed with the
Registrants Annual Report on Form 10-K for the year-ended December 31,
1997.               
|    
|(12) |  | Incorporated by reference to designated exhibit filed with the
Registrants Form 10-Q for the quarter ended March 31, 1998.                                
|    
|(13) |  | Incorporated by reference to designated exhibit filed with the
Registrants Current Report on Form 8-K filed December 3, 1998.                             
|    
|(14) |  | Incorporated by reference to Appendix I filed as part of the Registrants
definitive Proxy Statement/ Prospectus dated February 15, 1995.                  
|    
|(15) |  | Incorporated by reference to designated exhibit filed with the
Registrants Annual Report on Form 10-K filed on March 31, 1995.                            
|    
|(16) |  | Incorporated by reference to Appendix B filed as part of the Registrants
definitive Proxy Statement dated June 8, 1995.                                   
|    
|(17) |  | Incorporated by reference to designated exhibit filed with the
Registrants Current Reports on Form 8-K dated May 29, 1998.                                
|    
|(18) |  | Incorporated by reference to designated exhibit filed with the
Registrants Form 10-Q for the quarter ended March 31, 1999.                                
|    
|(19) |  | Incorporated by reference to designated exhibit filed with the
Registrants Form 10-Q for the quarter ended September 30, 1999.                            

94



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|(20) |  | Incorporated by reference to designated exhibit filed with the
Registrants Annual Report on Form 10-K filed March 14, 2000.                       
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(21) |  | Incorporated by reference to designated exhibit filed with the
Registrants Form 10-Q for the quarter ended March 31, 2000.                        
|    
|(22) |  | Incorporated by reference to designated exhibit filed with the
Registrants Form 10-Q for the quarter ended June 30, 2000.                         
|    
|(23) |  | Incorporated by reference to designated exhibit filed with the
Registrants Form 10-Q for the quarter ended September 30, 2000.                    
|    
|(24) |  | Incorporated by reference to designated exhibit filed with the
Registrants From 10-K for the year ended December 31, 2000.                        
|    
|(25) |  | Incorporated by reference to designated exhibit filed with the
Registrants Form 10-Q for the quarter ended March, 31, 2001.                       
|    
|(26) |  | Incorporated by reference to designated exhibit filed with the
Registrants Form 10-Q for the quarters ended June, 30, 2002 and September
30, 2002.
|    
|(27) |  | Incorporated by reference to designated exhibit filed with the
Registrants Form 10-Q for the quarters ended June, 30, 2002 and September
30, 2002.

95



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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this Annual
Report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Seattle, State of Washington, on the 20th day
of May 2003.

| |  |                                |                         |                
| |  | ------------------------------ | ----------------------- | ---------------
| |  | SHURGARD STORAGE CENTERS, INC.
| |  |                                |                         |                
| |  | By:                            | /s/ HARRELL L. BECK    
| |  |                                |                         |                
| |  |                                |                         | Harrell L. Beck
| |  |                                | Senior Vice President  
| |  |                                | Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Annual Report on Form 10-K has been signed by the following
persons in the capacities indicated below on the 20th day of May 2003.

|                                             |  |                                                                                                                    
|-------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------
|Signature                                    |  | Title                                                                                                              
|                                             |  |                                                                                                                    
|/s/ Charles K. Barbo
Charles K. Barbo        |  | Chairman of the Board, President and Chief
Executive Officer (Principal Executive Officer)                         
|                                             |  |                                                                                                                    
|/s/ Harrell L. Beck
Harrell L. Beck          |  | Senior Vice President, Treasurer,
Chief Financial Officer and Director
(Principal Financial and Accounting Officer)
|                                             |  |                                                                                                                    
|/s/ George P. Hutchinson
George P.Hutchinson |  | Director                                                                                                           
|                                             |  |                                                                                                                    
|/s/ Raymond A. Johnson
Raymond A. Johnson    |  | Director                                                                                                           
|                                             |  |                                                                                                                    
|/s/ W. J. Smith
W. J. Smith                  |  | Director                                                                                                           
|                                             |  |                                                                                                                    
|/s/ W. Thomas Porter
W. Thomas Porter        |  | Director                                                                                                           
|                                             |  |                                                                                                                    
|/s/ Anna Karin Andrews
Anna Karin Andrews    |  | Director                                                                                                           
|                                             |  |                                                                                                                    
|/s/ Howard P. Behar
Howard P. Behar          |  | Director                                                                                                           

CERTIFICATIONS*

I, Charles K. Barbo, Chairman, President and Chief Executive Officer, certify
that:

1. I have reviewed this annual report on Form 10-K of Shurgard Storage Centers,
Inc.:

2. Based on my knowledge, this annual 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 annual
report;

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3.     Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures 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 annual report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: May 20, 2003

/s/ Charles K. Barbo

Charles K. Barbo
Chief Executive Officer




CERTIFICATIONS*

I, Harrell Beck, Senior Vice President, Treasurer and Chief Financial Officer,
certify that:

1.     I have reviewed this annual report on Form 10-K of Shurgard Storage Centers,
Inc.;

2.     Based on my knowledge, this annual 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 annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

97



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a) designed such disclosure controls and procedures 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 annual report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the Evaluation Date); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: May 20, 2003

/s/ Harrell Beck

Harrell Beck
Chief Financial Officer

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