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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                ----------------

                                   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, 2000

                                       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 0-23466

                         SHURGARD STORAGE CENTERS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                 WASHINGTON                           91-1603837
          (STATE OF ORGANIZATION)          (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:

<TABLE>
<CAPTION>
         TITLE OF EACH CLASS                                NAME OF EACH EXCHANGE ON WHICH REGISTERED
         -------------------                                -----------------------------------------
<S>                                                         <C>
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             New York Stock Exchange
  value $.001 per share
8.7% Series C Cumulative Redeemable Preferred Stock, par             New York Stock Exchange
  value $.001 per share
8.75% Series D Cumulative Redeemable Preferred Stock, par            New York Stock Exchange
  value $.001 per share
</TABLE>

        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 [ ]


<PAGE>


        Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 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]

        Aggregate market value of voting stock held by nonaffiliates of the
registrant as of February 23, 2001: $713,148,701.

   Class A Common Stock outstanding as of February 23, 2001: 29,725,217 shares
    Class B Common Stock outstanding as of February 23, 2001: 154,604 shares

        Documents incorporated by reference: Part III is incorporated by
reference from the Proxy Statement filed in connection with our Annual
Shareholders Meeting held May 8, 2001.

                               THERE ARE 76 PAGES.

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        This amendment on Form 10-K 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. The amendment
reflects the restatement of Form 10-K/A for the year ended December 31, 2000,
filed on August 22, 2001, related to accounting for four development joint
ventures and a participating mortgage. See Note R to our consolidated financial
statements for further discussion of this matter.


                                       3
<PAGE>

                                     PART I

ITEM 1 -- BUSINESS

OVERVIEW

        Shurgard Storage Centers, Inc. (the Company or SSCI) 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. As of December 31, 2000,
we operated a network of 428 storage centers and three business parks located
throughout the United States and in Europe. Of these properties, we own,
directly and through our subsidiaries and joint ventures, 399 properties
containing approximately 25.3 million net rentable square feet. Of the 399
properties, 352 are located in 19 states in the U.S., and 47 are located in
Europe. We also manage for third parties 31 self storage centers and one
business park containing approximately 1.9 million net rentable square feet. For
the year ended December 31, 2000, our properties had a weighted average annual
net rentable square foot occupancy rate of 83% and a weighted average rent per
net rentable square foot of $10.80.

        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 (the Consolidation) that were sponsored by Shurgard
Incorporated (the Management Company). On March 24, 1995, the Management Company
merged with and into the Company (the Merger) 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 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.

                --  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. A variety of measures are used 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 lighting. Customers are
                    each assigned a designated personal identification number
                    for use in connection with a computerized gate access
                    system. Each access is 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.


                                       4
<PAGE>

                --  Capital Expenditures and 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 strengthens
                    the brand image of Shurgard.

                --  Selective Disposition. We regularly review our portfolio
                    compared to established internal standards, identify those
                    properties which cannot meet these standards and dispose of
                    such properties. We intend to continue this policy.

        -   Marketing and Marketing Research. We place primary marketing
            emphasis on providing 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 rent
            a unit at the store most convenient to the customer. In 2000, we
            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. We will continue to implement
            additional programs through the first half of 2001.

        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 also conducted
focus group research and telephone surveys, and utilize customer comment cards
to identify the primary considerations in customers' self storage choices and
satisfaction so that we can better attract and service customers.

        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. We
            empower local market personnel to change marginal rental rates in
            order to ensure a fast, flexible response to changing market
            conditions. Market personnel 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 appeal our real estate tax assessments. 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 with little additional
            overhead expense.

        -   Strategic Build-Outs. We seek to increase revenue by building out
            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

        Our external growth strategy is to develop new, high-quality self
storage properties and to selectively 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 with 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.


                                       5
<PAGE>

        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. We utilize
our staff of real estate professionals in various markets to develop and acquire
new stores 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 utilize 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. Management believes
that, under current market conditions, development will generally provide
superior long-term returns when compared to acquisitions of similar size,
quality and location. Based on this belief, our current growth plan focuses
heavily on property development; however, management continually analyzes market
conditions and acquisition opportunities.

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

                --  Development Expertise. We have substantial construction
                    management and architectural experience that was acquired
                    over the past 26 years. Along with our predecessors, we
                    developed more than a third of the properties we currently
                    own or manage, and, since 1972, we have maintained an
                    internal development staff, which currently employs 34
                    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 and, at a minimum, a Phase I
            environmental assessment report.

        -   European Investment. The strategies mentioned above also apply to
            our European investment. During the past seven years, our European
            partners have cautiously tested the product on local consumers and
            have tailored their self storage product to meet the needs of
            European consumers. During that time they built the infrastructure
            necessary to support an accelerated expansion program. Today, these
            European operations employ over 225 employees with a senior
            management team made up of seasoned managers with substantial local
            development, finance, operations and marketing experience. As of
            December 31, 2000, we had a 7.57% interest in 47 storage centers
            operating in five countries.

        -   Shurgard Storage To Go, Inc. Our customer service focus means that
            we are continually exploring new ways to serve our customers'
            storage needs. One of the ways we have broadened our ability to meet
            customer needs is by bringing storage directly to the customer
            through containerized storage through Shurgard Storage To Go.
            Weatherized 8'x5'x8' storage containers are delivered to customers
            for packing. The containers are then picked up and delivered 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, service fees may be
            charged for transportation of the container. This business venture
            is currently operating in the Seattle, Portland, San Francisco,
            Chicago and Atlanta markets. We are currently in the process of
            exiting the Chicago market.

        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
information system links our corporate office with each store. During 1997, we
completed the development and installation of proprietary software that
expedites


                                       6
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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 purchased a new network-based accounting package
that has aided in the compilation and dissemination of information from and to
our stores. During 1998, as part of our move to our new corporate offices, we
installed an enterprise wide-area network and remote access capability. We
believe that this new information system is adequate to support the management
of our currently owned properties as well as planned future growth. During 1999,
we were recognized for our centralized sales management software (Aladdin) under
Microsoft's Best Business Operations Solution award. This software enables our
national sales center, commercial accounts, and our corporate employees to have
remote sales access to our entire network of stores.

        Other Activities

        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 enables 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.

        For financial information about our industry segments, see our
consolidated financial statements and related notes, including NOTE N. For
financial information about our foreign and domestic operations, see the
consolidated financial statements and the related notes, including NOTE E.

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 equity, and alternative capital
sources. We have established a revolving domestic credit facility of up to $360
million, which we expect to meet our borrowing needs over the next several
years. 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
additional common stock. Additionally, we anticipate reducing our dividend
payout ratio in order to retain 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
policy specifically 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.

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 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


                                       7
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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 market in which our stores are located. We
compete with, among others, national, regional and local self storage operators
and developers. The primary factors on which competition is based are 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 comes 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 a high-quality operator that emphasizes customer service
and security. We do not seek to be the lowest-price storage provider.

        To the extent we experience new supply added to 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. Overall, development starts have declined during
the past year and we believe, given our geographic diversification, that there
continues to be both internal and external growth opportunities.

REGULATION

        Environmental Regulations

        The Company is 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 utilize
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.

        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 result in the owner or manager incurring
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.

        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. 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 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 (1) adjacent property,
however, it is not established whether this contamination is the result of
migration from the Shurgard property. Our consultant is revising the work plan
to incorporate the sample results. The MDNR must approve any revision to the
work plan. It is anticipated that the revised work plan would include continued
sampling and monitoring. In the event significant contamination has spread to
adjacent properties, the MDNR could be more


                                       8
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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 a current claim 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

        Under the ADA, all public accommodations are required to meet certain
federal requirements 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 such requirements may require substantial capital
expenditures, which would reduce money otherwise available for distribution to
shareholders.

INSURANCE

        We believe that our self storage properties are covered by adequate
fire, flood, wind, earthquake and property insurance, as well as business
interruption insurance, provided by reputable companies and with commercially
reasonable deductibles and limits. We purchase title insurance on all of our
properties at the time of acquisition. We use our discretion in determining
amounts, coverage limits and deductibility provisions of title, casualty and
other insurance, based on the purchase price paid for such property, in each
case with a view to obtaining appropriate insurance coverage on our properties
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 $10,000,000, with a deductible of $50,000; (2) excess
liability insurance, covering up to an aggregate of $20,000,000; (3) property
insurance, covering up to an aggregate of $40,000,000, with deductibles of
$5,000 or $20,000 under certain circumstances, and $50,000 in the case of flood
damage; and (4) boiler & machinery insurance, covering up to $5,000,000 of
direct damages. Depending on the type of the 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.

EMPLOYEES

        As of December 31, 2000, the Company employed approximately 1,000
persons. None of our employees are covered by a collective bargaining agreement.
We believe that our relations with our employees are good.


                                       9
<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT

        The following table sets forth certain information regarding the
executive officers of the Company as of December 31, 2000.

<TABLE>
<CAPTION>
NAME                                             AGE                     POSITIONS AND OFFICES WITH THE COMPANY
----                                             ---                     --------------------------------------
<S>                                               <C>  <C>
Charles Barbo..............................       59   Chairman of the Board, President and Chief Executive Officer
Harrell Beck...............................       44   Director, Senior Vice President, Chief Financial Officer and Treasurer
David Grant................................       47   Executive Vice President
Christine McKay............................       39   Senior Vice President, Secretary and General Counsel
John Steckler..............................       43   Senior Vice President, Marketing
Steve Tyler................................       48   Senior Vice President, Operations
</TABLE>

----------

For Mr. Barbo's and Mr. Beck's biographies, see our proxy statement for the
annual meeting of shareholders to be held on May 8, 2001.

        David Grant has served as our Executive Vice President and Director of
Real Estate Investment since July 1993. He became Managing Director of SSC
Benelux & Co., SCA (formerly SSC Benelux & Co., SCS) 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. 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 McKay has 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 Shurgard
Storage To Go, Inc., 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.

        John Steckler has served as Senior Vice President, Marketing since
October 1999. He joined SSCI in April 1996 as Vice President of Marketing. Prior
to Shurgard, Mr. Steckler was Vice President of Sales and Marketing for Pro-Tec
Sport Helmets and Gargoyles Performance Eyewear, where he was responsible for
new product development and expanded sales and distribution. He has a Bachelor
of Arts degree in Communications from the University of Washington. He is a
member of the American Marketing Association and Sales Marketing Executives.

        Steve Tyler joined SSCI 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.

ITEM 2 -- PROPERTIES

        The Company owns, as of December 31, 2000, directly and through its
subsidiaries and joint ventures, 399 properties (including 397 self storage
properties), 352 of which are located in 19 states and 47 which are located in
Europe. 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.
Accordingly, we have marketing and direct sales programs that target commercial
users. Based on a survey of our customers conducted during 2000, we estimate
that commercial users account for approximately 25 -- 30% of our total customer
base.


                                       10
<PAGE>

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

        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 Ryder 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 that are located on a site of 1.5 to 5
acres. The smallest store has approximately 21,000 net rentable square feet,
while the largest store has approximately 290,000 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 able to bear substantial weight
loads, such as warehouses and newspaper plants, 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 provides information regarding the year developed or
acquired, year built, approximate net rentable square feet and acreage of each
of the self storage properties and business parks owned and operated by us as of
December 31, 2000. As of December 31, 2000, 134 properties with square footage
of 9.3 million are encumbered. We own additional properties which are under
development, but not reflected in this table. This table includes stores in
which we own an interest (either fee title or leasehold), but whose results are
not consolidated for financial reporting purposes. There are 326 stores whose
results are consolidated in the financial statements. These stores represent
21.0 million net rentable square feet and are built on approximately 1,205 acres
of land. This table does not include properties under development or leased to
others, nor does it include undeveloped land. At December 31, 2000, we leased
one 99,000 square foot storage center to an unrelated third party built on 2.5
acres, owned 6 parcels of land under development totaling 23.8 acres and 2
parcels of undeveloped land totaling 6.1 acres.

<TABLE>
<CAPTION>
                                                                                                 APPROXIMATE
                                                                     STATE/      OWNED   YEAR    NET RENTABLE
PROPERTY NAME                                PROPERTY LOCATION      COUNTRY      SINCE   BUILT    SQUARE FEET    ACREAGE
-------------                              --------------------  -------------  ------- ------- ---------------  --------
                                                                                                (IN THOUSANDS)
<S>                                        <C>                   <C>            <C>     <C>     <C>              <C>
Ahwatukee(6)(8).......................     Phoenix               AZ               1998     1998          70         4.1
Airpark...............................     Scottsdale            AZ               1997     1997          49         1.3
Arrowhead(6)(8).......................     Phoenix               AZ               1997     1997          67         3.2
Chandler..............................     Chandler              AZ               1986     1986          71         4.0
Colonade(2)...........................     Phoenix               AZ               1998     1997          30
Dobson Ranch..........................     Mesa                  AZ               1996     1978          58         4.2
Houghton Road(7)(8)...................     Tucson                AZ               1999     2000          68         3.9
Mesa..................................     Mesa                  AZ               1987     1985          99         4.8
Mill Avenue(8)........................     Tempe                 AZ               1999     1998          30         0.6
Phoenix...............................     Phoenix               AZ               1985     1984          78         2.7
Phoenix East..........................     Phoenix               AZ               1987     1984          66         2.0
Scottsdale............................     Scottsdale            AZ               1985     1976          47         3.0
Scottsdale North......................     Scottsdale            AZ               1985     1985         112         4.1
Shea..................................     Scottsdale            AZ               1997     1996          43         1.3
Speedway(8)...........................     Tucson                AZ               1998     1998          71         3.0
</TABLE>


                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                                                                 APPROXIMATE
                                                                     STATE/      OWNED   YEAR    NET RENTABLE
PROPERTY NAME                                PROPERTY LOCATION      COUNTRY      SINCE   BUILT    SQUARE FEET    ACREAGE
-------------                              --------------------  -------------  ------- ------- ---------------  --------
                                                                                                (IN THOUSANDS)
<S>                                        <C>                   <C>            <C>     <C>     <C>              <C>
Tempe.................................     Tempe                 AZ               1984     1976          54         3.0
Union Hills(8)........................     Phoenix               AZ               1998     1998          65         3.8
Val Vista(6)(8).......................     Gilbert               AZ               1999     1999          52         5.5
Warner(1).............................     Mesa                  AZ               1995     1985          61         3.1
Alicia Parkway........................     Laguna Hills          CA               1998     1991         100         4.5
Aliso Viejo...........................     Aliso Viejo           CA               1996     1996          86         3.5
Antioch(7)(8).........................     Antioch               CA               1999     1999          57         1.8
Bloomington...........................     Bloomington           CA               1997     1983          50         2.8
Blossom Valley(6)(8)..................     San Jose              CA               1998     1998          64         1.4
Capital Expressway(2)(8)..............     San Jose              CA               2000     2000          66         1.7
Castro Valley.........................     Castro Valley         CA               1996     1975          50         2.3
Colton................................     Colton                CA               1985     1984          73         3.8
Costa Mesa(8)(1)......................     Costa Mesa            CA               1999     1998          40         1.5
Culver City...........................     Los Angeles           CA               1988     1989          77         1.4
Daly City.............................     Daly City             CA               1995     1989          96         5.2
El Cajon..............................     El Cajon              CA               1986     1977         129         6.0
El Cerrito............................     Richmond              CA               1986     1987          62         1.5
Fontana Sierra........................     Fontana               CA               1987     1980          85         3.6
Hayward...............................     Hayward               CA               1985     1983          48         2.8
Huntington Beach......................     Huntington Beach      CA               1988     1986          99         3.3
Kearney-Balboa........................     San Diego             CA               1986     1984          90         2.3
La Habra..............................     La Habra              CA               1986     1979          95         7.1
Martinez(1)...........................     Martinez              CA               1995     1987          56         3.0
Mountain View.........................     Mountain View         CA               1987     1986          28         0.7
Newark................................     Newark                CA               1996     1991          61         3.1
Ontario...............................     Ontario               CA               1996     1984          57         2.1
Orange................................     Orange                CA               1996     1985          89         2.8
Palo Alto.............................     Palo Alto             CA               1986     1987          48         1.4
Pinole(1).............................     Pinole                CA               1995     1988          37         2.5
S. San Francisco......................     San Francisco         CA               1987     1985          56         2.1
Sacramento............................     Sacramento            CA               1996     1991          53         2.6
San Leandro...........................     San Leandro           CA               1996     1991          59         2.7
San Lorenzo...........................     San Lorenzo           CA               1996     1990          54         1.9
Santa Ana.............................     Santa Ana             CA               1986     1975         167         8.1
Solana Beach(2).......................     Solana Beach          CA               1987     1984          87         4.5
Sunnyvale.............................     Sunnyvale             CA               1986     1974         101         6.5
Tracy.................................     Tracy                 CA               1996     1986          70         3.0
Union City............................     Hayward               CA               1985     1985          41         2.9
Van Ness(6)(8)........................     San Francisco         CA               1999     1934          84         1.6
Walnut................................     Walnut                CA               1996     1986          97         3.6
Walnut Creek(2)(7)(8).................     Walnut Creek          CA               1999     1987         105
Westpark(1)(8)........................     Irvine                CA               2000     1999         110         5.6
Westwood..............................     Santa Monica          CA               1986     1988          64         0.3
Lakewood..............................     Golden                CO               1986     1985          67         2.7
Northglenn............................     Northglenn            CO               1987     1979          75         5.5
Tamarac...............................     Denver                CO               1984     1977          25         1.9
Thornton..............................     Denver                CO               1984     1984          41         2.4
Windermere............................     Littleton             CO               1984     1977          80         5.3
Blue Heron............................     West Palm Beach       FL               1987     1975         167        11.8
Brandon(1)(8).........................     Brandon               FL               1999     1999          69         9.5
Carrollwood(1)(8).....................     Tampa                 FL               1999     1999          62         2.1
Davie(1)..............................     Davie                 FL               1996     1990          76         5.5
Daytona Beach(1)(8)...................     Daytona Beach         FL               1999     1999          74         7.2
Delray Beach..........................     Delray Beach          FL               1996     1986          77         4.5
Eau Galllie(1)(8).....................     Melbourne             FL               1999     1999          59         3.7
Hyde Park(1)(8).......................     Tampa                 FL               1999     1999          62         2.5
</TABLE>


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                                                 APPROXIMATE
                                                                     STATE/      OWNED   YEAR    NET RENTABLE
PROPERTY NAME                                PROPERTY LOCATION      COUNTRY      SINCE   BUILT    SQUARE FEET    ACREAGE
-------------                              --------------------  -------------  ------- ------- ---------------  --------
                                                                                                (IN THOUSANDS)
<S>                                        <C>                   <C>            <C>     <C>     <C>              <C>
Lauderhill............................     Lauderhill            FL               1997     1986          62         4.0
Maitland(1)...........................     Orlando               FL               1997     1997          78         8.7
Margate...............................     Margate               FL               1996     1984          75         4.0
Military Trail........................     West Palm Beach       FL               1987     1981         124         9.4
Oakland Park..........................     Ft. Lauderdale        FL               1985     1974         290        13.4
Oldsmar(1)(8).........................     Tampa                 FL               2000     2000          53         2.9
Ormond Beach(1)(8)....................     Ormond Beach          FL               1999     1999          60         6.8
Oviedo(1).............................     Orlando               FL               1997     1997          65         9.0
Red Bug(1)............................     Seminole County       FL               1997     1997          75         4.3
S. Semoran(1).........................     Orlando               FL               1997     1997          68         5.2
Seminole..............................     Seminole              FL               1986     1984          61         2.7
South Orange(1).......................     Orlando               FL               1997     1997          71         5.0
Vineland(1)(8)........................     Orlando               FL               1999     1998          48         3.3
West Town(1)(8).......................     Altamonte Springs     FL               1998     1998          50         2.8
West Waters(1)(8).....................     Tampa                 FL               2000     2000          71        14.4
Ansley Park...........................     Atlanta               GA               1995     1991          69         1.4
Brookhaven............................     Atlanta               GA               1995     1992          66         2.0
Clairemont............................     Atlanta               GA               1996     1990          41         1.1
Decatur...............................     Atlanta               GA               1995     1992          65         2.5
Forest Park...........................     Forest Park           GA               1996     1980          65         7.9
Gwinnett..............................     Lawrenceville         GA               1996     1996          71         4.4
Holcomb Bridge(7)(8)..................     Roswell               GA               1999     2000          57         3.8
Jones Bridge(6).......................     Atlanta               GA               1997     1997          75         5.3
Lawrenceville(6)(8)...................     Lawrenceville         GA               1997     1997          74         3.4
Morgan Falls..........................     Dunwoody              GA               1996     1990          76         3.7
Norcross..............................     Norcross              GA               1996     1984          62         9.3
Peachtree.............................     Duluth                GA               1997     1996         100         6.2
Perimeter.............................     Atlanta               GA               1996     1996          72         3.3
Roswell...............................     Roswell               GA               1986     1986          57         3.8
Sandy Plains(6)(8)....................     Marietta              GA               1998     1998          68         6.9
Satellite Blvd........................     Duluth                GA               1997     1994          75         5.2
Stone Mountain........................     Stone Mountain        GA               1996     1985          61        10.1
Tucker................................     Tucker                GA               1996     1987          60         4.6
Alsip.................................     Alsip                 IL               1982     1980          79         4.6
Bolingbrook...........................     Bolingbrook           IL               1997     1997          68         1.5
Bridgeview............................     Bridgeview            IL               1985     1983          75         4.1
Country Club Hills(6)(8)..............     Country Club Hills    IL               1999     1999          74         4.9
Dolton................................     Calumet City          IL               1982     1979          79         3.0
Fox Valley(6)(8)......................     Chicago               IL               1998     1998          71         4.6
Hillside..............................     Hillside              IL               1988     1988          66         5.3
Lisle.................................     Lisle                 IL               1986     1976          53         3.4
Lombard...............................     Lombard               IL               1982     1980          53         3.1
Oak Forest............................     Orland Park           IL               1995     1991          87         3.9
Palatine(7)(8)........................     Palatine              IL               2000     2000          52         3.9
Rolling Meadows.......................     Rolling Meadows       IL               1982     1980          71         4.5
Schaumburg............................     Schaumburg            IL               1982     1980          71         4.3
Schaumburg South(6)(8)................     Schaumburg            IL               1999     1999          72         5.2
Willowbrook...........................     Willowbrook           IL               1986     1979          44         3.3
Allisonville..........................     Indianapolis          IN               1997     1987          90         7.4
Carmel................................     Carmel                IN               1996     1996          61         4.3
Castleton.............................     Indianapolis          IN               1998     1988          48         3.6
College Park..........................     Indianapolis          IN               1986     1984          68         6.0
County Line(2)(6)(8)..................     SouthPort             IN               1998     1998          72         4.5
Downtown Indy(7)(8)...................     Indianapolis          IN               1999     1999          61         1.2
Eaglecreek(6)(8)......................     Indianapolis          IN               1998     1998          73         5.1
East Washington(7)(8).................     Indianapolis          IN               1999     1999          69         4.7
</TABLE>


                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                                                                 APPROXIMATE
                                                                     STATE/      OWNED   YEAR    NET RENTABLE
PROPERTY NAME                                PROPERTY LOCATION      COUNTRY      SINCE   BUILT    SQUARE FEET    ACREAGE
-------------                              --------------------  -------------  ------- ------- ---------------  --------
                                                                                                (IN THOUSANDS)
<S>                                        <C>                   <C>            <C>     <C>     <C>              <C>
Georgetown............................     Indianapolis          IN               1996     1996          72         4.2
Glendale..............................     Indianapolis          IN               1986     1985          60         5.6
Annapolis(2)(6)(8)....................     Annapolis             MD               1998     1998          69         3.2
Briggs Chaney.........................     Silver Spring         MD               1994     1987          28         2.0
Clinton...............................     Clinton               MD               1986     1985          30         2.0
Crofton...............................     Gambrills             MD               1988     1985          40         2.1
Frederick.............................     Frederick             MD               1994     1987          32         1.7
Gaithersburg..........................     Gaithersburg          MD               1994     1986          77         5.4
Germantown............................     Germantown            MD               1994     1988          45         1.9
Laurel................................     Laurel                MD               1988     1984          30         2.0
Oxon Hill.............................     Ft. Washington        MD               1994     1987          28         1.3
Suitland..............................     Suitland              MD               1987     1985          45         2.7
Ann Arbor.............................     Ann Arbor             MI               1988     1977          62         3.9
Canton................................     Canton                MI               1988     1986          56         3.3
Canton Township(7)(8).................     Canton Township       MI               2000     2000          68         4.1
Clinton Township(6)(8)................     Clinton Township      MI               1999     1999          70         5.0
Flint East............................     Flint                 MI               1997     1977          45         2.7
Fraser................................     Fraser                MI               1988     1985          73         5.2
Grand Rapids..........................     Grand Rapids          MI               1983     1978          45         3.2
Jackson...............................     Jackson               MI               1997     1978          49         3.1
Kalamazoo.............................     Kalamazoo             MI               1980     1980          41         3.0
Lansing...............................     Lansing               MI               1983     1978          40         2.5
Livonia...............................     Livonia               MI               1988     1985          67         4.8
Madison Heights.......................     Detroit               MI               1995     1977          66         4.1
Plymouth..............................     Canton Township       MI               1985     1979          62         5.3
Rochester.............................     Utica                 MI               1996     1989          57         4.8
Southfield............................     Southfield            MI               1983     1976          76         4.3
Sterling Heights......................     Sterling Heights      MI               1996     1986         105         8.9
Taylor................................     Taylor                MI               1995     1980          83         4.2
Troy East.............................     Troy                  MI               1981     1975          81         4.8
Troy West.............................     Troy                  MI               1983     1979          88         5.2
Walled Lake...........................     Walled Lake           MI               1985     1984          69         4.3
Warren................................     Warren                MI               1988     1985          68         4.6
SouthHaven(1)(8)......................     Memphis               MS               1998     1998          43         7.7
Capital Blvd..........................     Raleigh               NC               1994     1984          34         2.1
Cary..................................     Cary                  NC               1994     1984          58         4.7
Creedmoor(6)(8).......................     Raleigh               NC               1997     1997          72         5.1
Garner................................     Garner                NC               1994     1987          28         3.1
Glenwood..............................     Raleigh               NC               1994     1983          31         1.9
Morrisville...........................     Morrisville           NC               1994     1988          40         3.3
Bricktown(7)(8).......................     Bricktown             NJ               1999     2000          71         4.6
Old Bridge............................     Matawan               NJ               1987     1987          77         6.1
Beth Page(7)(8).......................     Long Island           NY               2000     2000          81         3.5
Commack(7)(8).........................     Huntington            NY               1999     1999          80         5.2
Gold..................................     Brooklyn              NY               1986     1940         102         0.4
Great Neck(7)(8)......................     Long Island           NY               1999     1929          20         0.4
Hempstead(7)(8).......................     Hempstead             NY               1999     1999          66         2.3
Melville(6)(8)........................     Long Island           NY               1998     1998          74         7.4
Nesconset(7)(8).......................     Long Island           NY               2000     2000          50         3.1
Northern(2)...........................     Long Island City      NY               1987     1940          76         1.9
Utica.................................     Brooklyn              NY               1986     1964          75         1.1
Van Dam...............................     Long Island City      NY               1986     1925          56         0.5
Yonkers...............................     Yonkers               NY               1986     1928         100         1.6
16th and Sandy(1).....................     Portland              OR               1995     1973          26         0.5
Allen Blvd............................     Beaverton             OR               1996     1973          42         2.6
Barbur Boulevard......................     Portland              OR               1995     1993          67         2.8
</TABLE>


                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                                                                 APPROXIMATE
                                                                     STATE/      OWNED   YEAR    NET RENTABLE
PROPERTY NAME                                PROPERTY LOCATION      COUNTRY      SINCE   BUILT    SQUARE FEET    ACREAGE
-------------                              --------------------  -------------  ------- ------- ---------------  --------
                                                                                                (IN THOUSANDS)
<S>                                        <C>                   <C>            <C>     <C>     <C>              <C>
Beaverton.............................     Beaverton             OR               1985     1974          25         2.0
Denny Road............................     Beaverton             OR               1989     1988          65         6.2
Division(1)...........................     Portland              OR               1996     1992          47         2.0
Gresham...............................     Portland              OR               1996     1996          64         4.4
Hillsboro.............................     Portland              OR               1996     1996          65         8.9
King City.............................     Tigard                OR               1987     1986          83         4.9
Liberty Road..........................     Salem                 OR               1995     1993          54         4.4
Milwaukie(1)..........................     Milwaukie             OR               1996     1990          62         3.3
Oregon City...........................     Portland              OR               1995     1992          57         3.2
Portland..............................     Portland              OR               1988     1988          49         2.1
Salem.................................     Salem                 OR               1983     1979          67         3.8
Airport...............................     Philadelphia          PA               1986     1985          96         6.7
Edgemont..............................     Philadelphia          PA               1995     1992          64         5.5
Painter's Crossing(6)(8)..............     Philadelphia          PA               1998     1998          49         3.3
West Chester(2).......................     West Chester          PA               1986     1980          84         7.0
Franklin(1)...........................     Nashville             TN               1995     1995          55         3.3
Hermitage(1)..........................     Nashville             TN               1995     1995          65         2.8
Hickory Hollow(1).....................     Nashville             TN               1997     1997          46         2.5
Medical Center(1).....................     Nashville             TN               1994     1995          60         2.3
Rivergate(1)..........................     Nashville             TN               1996     1996          46         4.7
South Main(1)(8)......................     Memphis               TN               1999     1999          27         1.6
Stones River(1)(8)....................     Murfeesboro           TN               1998     1998          39         3.3
Sycamore(1)...........................     Memphis               TN               1998     1984          45         3.1
Winchester(1).........................     Memphis               TN               1998     1988          65         8.9
Wolfchase(1)..........................     Memphis               TN               1997     1997          39         1.8
Arlington/Forum 303...................     Arlington             TX               1986     1984          57         2.7
Bandera Road..........................     San Antonio           TX               1988     1981          75         3.6
Bedford...............................     Bedford               TX               1985     1984          69         2.7
Bee Caves Road(6)(8)..................     Austin                TX               1999     1999          68        11.0
Beltline Road.........................     Irving                TX               1989     1985          68         6.3
Blanco Road...........................     San Antonio           TX               1988     1989          66         3.6
Champions(6)(8).......................     Houston               TX               1998     1998          65         3.7
Cinco Ranch(8)........................     Houston               TX               1999     1998          57         3.0
Cityplace(6)(8).......................     Dallas                TX               1999     1999          60         2.8
East Lamar............................     Arlington             TX               1996     1996          43         3.0
Federal...............................     Houston               TX               1988     1988          55         3.4
First Colony(8).......................     Missouri City         TX               2000     1994          42         2.8
Fredicksburg..........................     San Antonio           TX               1987     1978          82         4.5
Georgetown............................     Austin                TX               1997     1996          58         4.1
Greenville(6)(8)......................     Dallas                TX               1998     1998          61         2.8
Helotes(7)(8).........................     San Antonio           TX               2000     2000          56         3.4
Henderson Street(6)(8)................     Fort Worth            TX               1999     1999          66         0.9
Henderson Pass........................     San Antonio           TX               1998     1995          46         2.5
Highway 78............................     San Antonio           TX               1998     1997          55         4.4
Hill Country Village..................     San Antonio           TX               1985     1982          79         4.0
Hillcroft(2)..........................     Houston               TX               1991     1988          59         3.4
Hurst.................................     Hurst                 TX               1987     1974          67         4.7
Imperial Valley.......................     Houston               TX               1988     1987          54         3.1
Irving/MacArthur Blvd.(3).............     Irving                TX               1985     1975         141        11.4
Kingwood..............................     Kingwood              TX               1988     1988          54         3.3
Las Colinas(7)(8).....................     Irving                TX               2000     2000          54         1.9
Lewisville............................     Dallas                TX               1997     1997          62         4.0
McArthur Crossing.....................     Irving                TX               1996     1996          65         4.1
Medical Center........................     Houston               TX               1989     1989          57         2.6
Medical Center SA(7)(8)...............     San Antonio           TX               1998     1999          58         3.0
Mission Bend..........................     Houston               TX               1995     1995          69         4.1
</TABLE>


                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                                                                 APPROXIMATE
                                                                     STATE/      OWNED   YEAR    NET RENTABLE
PROPERTY NAME                                PROPERTY LOCATION      COUNTRY      SINCE   BUILT    SQUARE FEET    ACREAGE
-------------                              --------------------  -------------  ------- ------- ---------------  --------
                                                                                                (IN THOUSANDS)
<S>                                        <C>                   <C>            <C>     <C>     <C>              <C>
Nacodoches............................     San Antonio           TX               1998     1996          39         2.5
North Austin..........................     Austin                TX               1986     1982          67         5.9
North Carrollton(8)...................     Carrollton            TX               2000     1999          65         3.6
North Park(8).........................     Kingwood              TX               2000     1996          48         3.6
Oak Farm Dairy(6)(8)..................     Houston               TX               1999     1999          65         1.8
Oak Hills(7)(8).......................     Austin                TX               1999     1999          65         2.9
Olympia(7)(8).........................     Missouri City         TX               1998     1999          63         4.0
Park Cities East......................     Dallas                TX               1995     1995          68         4.3
Parker Road...........................     Dallas                TX               1995     1995          65         3.5
Preston Road..........................     Dallas                TX               1997     1997          62         3.2
Quarry(8).............................     San Antonio           TX               1999     1999          66         1.4
River Oaks(1).........................     Houston               TX               1996     1989          67         2.4
Round Rock............................     Austin                TX               1997     1995          55         3.6
San Antonio NE........................     San Antonio           TX               1985     1982          74         3.6
Slaughter Lane........................     Austin                TX               1997     1994          76         4.6
South Cooper..........................     Arlington             TX               1996     1996          66         3.7
South Main(8).........................     Houston               TX               2000     1999          25         3.6
Southlake(6)(8).......................     Dallas                TX               1998     1998          66         4.6
Spring Branch(8)......................     Houston               TX               2000     1996          27         2.0
Sugarland.............................     Sugarland             TX               1988     1987          55         3.0
T.C. Jester...........................     Houston               TX               1996     1990          64         2.8
Thousand Oaks.........................     San Antonio           TX               1986     1987          53         2.9
Universal City(1).....................     San Antonio           TX               1995     1985          82         5.1
Valley Ranch..........................     Coppell               TX               1997     1995          94         5.1
West U................................     Houston               TX               1989     1988          60         1.8
Westchase(8)..........................     Houston               TX               2000     1998          52         2.3
Westheimer............................     Houston               TX               1986     1977          73         3.7
Windcrest.............................     San Antonio           TX               1996     1975          87         6.3
Woodforest............................     Houston               TX               1996     1996          54         6.2
Woodlands.............................     Houston               TX               1988     1988          64         3.8
Bayside...............................     Virginia Beach        VA               1988     1984          28         1.7
Burke.................................     Fairfax               VA               1996     1984          32         1.7
Cascades(6)(8)........................     Sterling              VA               1998     1998          63         7.7
Cedar Road............................     Chesapeake            VA               1994     1989          36         2.1
Charlottesville.......................     Charlottesville       VA               1994     1984          32         2.1
Chesapeake............................     Chesapeake            VA               1996     1986          58         5.2
Crater Road...........................     Petersburg            VA               1994     1987          36         3.8
Dale City.............................     Dale City             VA               1994     1986          31         1.6
Fairfax...............................     Fairfax               VA               1986     1980          62         5.6
Falls Church..........................     Falls Church          VA               1987     1988          93         1.5
Gainesville...........................     Gainesville           VA               1994     1988          31         2.0
Herndon...............................     Herndon               VA               1988     1985          39         3.0
Holland Road..........................     Virginia Beach        VA               1994     1985          34         3.9
Jeff Davis Hwy........................     Richmond              VA               1994     1990          35         5.2
Kempsville............................     Virginia Beach        VA               1989     1985          33         2.0
Laskin Road...........................     Virginia Beach        VA               1994     1984          39         2.5
Leesburg..............................     Leesburg              VA               1996     1986          28         1.6
Manassas E. & W.(3)...................     Manassas              VA               1988     1984          69         3.5
McLean(2).............................     McLean                VA               1997     1997          38         4.2
Merrifield(6)(8)......................     Fairfax               VA               1999     1999          73         4.7
Midlothian Turnpike...................     Richmond              VA               1996     1984          44         2.9
Newport News North....................     Newport News          VA               1996     1986          59         3.8
Newport News. S.......................     Newport News          VA               1985     1985          59         3.9
North Richmond........................     Richmond              VA               1988     1984          37         2.6
Old Towne(7)(8).......................     Alexandria            VA               1999     1999          77         0.9
Potomac Mills(6)......................     Potomac Mills         VA               1997     1997          69         3.8
</TABLE>


                                       16
<PAGE>

<TABLE>
<CAPTION>
                                                                                                 APPROXIMATE
                                                                     STATE/      OWNED   YEAR    NET RENTABLE
PROPERTY NAME                                PROPERTY LOCATION      COUNTRY      SINCE   BUILT    SQUARE FEET    ACREAGE
-------------                              --------------------  -------------  ------- ------- ---------------  --------
                                                                                                (IN THOUSANDS)
<S>                                        <C>                   <C>            <C>     <C>     <C>              <C>
Princess Anne Road....................     Virginia Beach        VA               1994     1985          40         2.2
S. Military Highway...................     Virginia Beach        VA               1996     1984          48         2.7
Temple Avenue.........................     Petersburg            VA               1994     1989          34         4.0
Virginia Beach........................     Virginia Beach        VA               1989     1985          65         2.3
Auburn................................     Auburn                WA               1996     1996          62         7.3
Bellefield............................     Bellevue              WA               1996     1978          65         2.9
Bellevue East & West(3)...............     Bellevue              WA               1984     1975         165        10.8
Bellingham............................     Bellingham            WA               1981     1981          74         5.7
Bremerton.............................     Bremerton             WA               1997     1976          41         2.5
Burien................................     Seattle               WA               1985     1974          92         5.3
Burien II.............................     Seattle               WA               1985     1979          60         3.0
Canyon Park JV(1).....................     Bothell               WA               1996     1990          58         4.4
Canyon Rd.............................     Puyallup              WA               1996     1986          28         1.7
Capitol Hill(1).......................     Seattle               WA               1987     1988          71         0.7
E. Bremerton..........................     Bremerton             WA               1996     1985          66         3.1
East Lynnwood.........................     Lynnwood              WA               1986     1978          80         3.8
Edmonds...............................     Edmonds               WA               1984     1974         121         6.5
Everett...............................     Everett               WA               1981     1978          63         4.2
Factoria..............................     Bellevue              WA               1984     1984          57         3.8
Factoria Square.......................     Bellevue              WA               1996     1989          70         1.9
Federal Way...........................     Federal Way           WA               1984     1975         134         5.7
Fife(4)...............................     Tacoma                WA               1984     1977          63         3.9
Gig Harbor(8).........................     Gig Harbor            WA               1999     1980          35         2.7
Hazel Dell(1).........................     Vancouver             WA               1996     1989          56         3.4
Highland Hill.........................     Tacoma                WA               1981     1982          60         3.9
Interbay..............................     Seattle               WA               1987     1988          84         0.4
Issaquah..............................     Issaquah              WA               1985     1986          56         4.7
Juanita(7)(8).........................     Kirkland              WA               1998     1999          65         2.0
Kennydale.............................     Renton                WA               1996     1991          57         2.8
Kent..................................     Kent                  WA               1997     1977          44         2.5
Lacey.................................     Olympia               WA               1997     1977          25         1.4
Lake City(1)..........................     Seattle               WA               1995     1987          51         1.1
Lake Union(8).........................     Seattle               WA               1998     1998          68         2.1
Lakewood 512(4).......................     Tacoma                WA               1987     1979         130        12.2
Lynnwood..............................     Lynnwood              WA               1997     1979          54         4.0
Mill Creek(6)(8)......................     Everett               WA               1998     1998          68         3.1
North Spokane.........................     Spokane               WA               1984     1976          78         4.1
Parkland..............................     Tacoma                WA               1997     1980          52         4.2
Pier 57(6)(8).........................     Seattle               WA               1986     1912          59         0.3
Portt Orchard.........................     Portt Orchard         WA               1997     1991          46         3.0
Redmond(6)(8).........................     Redmond               WA               1998     1998          52         3.0
Renton................................     Renton                WA               1984     1979          80         4.5
Salmon Creek..........................     Vancouver             WA               1997     1997          68         2.6
Sammamish(6)(8).......................     Redmond               WA               1998     1998          76         5.0
Shoreline/Aurora N.(3)................     Seattle               WA               1986     1978         136         6.1
Smokey Point..........................     Arlington             WA               1987     1984          35         2.2
South Center..........................     Renton                WA               1985     1979          68         4.1
South Hill............................     Seattle               WA               1995     1980          45         2.8
South Tacoma..........................     Tacoma                WA               1987     1975          46         3.1
Spokane...............................     Spokane               WA               1997     1976          49         2.6
Sprague(1)............................     Tacoma                WA               1996     1950          52         2.8
Totem Lake............................     Kirkland              WA               1984     1978          61         2.6
Vancouver Mall........................     Vancouver             WA               1980     1982          46         3.3
West Olympia..........................     Olympia               WA               1997     1978          30         2.2
West Seattle..........................     Seattle               WA               1997     1997          66         3.4
Whitecenter...........................     Seattle               WA               1980     1981          48         3.4
</TABLE>


                                       17
<PAGE>

<TABLE>
<CAPTION>
                                                                                                 APPROXIMATE
                                                                     STATE/      OWNED   YEAR    NET RENTABLE
PROPERTY NAME                                PROPERTY LOCATION      COUNTRY      SINCE   BUILT    SQUARE FEET    ACREAGE
-------------                              --------------------  -------------  ------- ------- ---------------  --------
                                                                                                (IN THOUSANDS)
<S>                                        <C>                   <C>            <C>     <C>     <C>              <C>
Woodinville...........................     Woodinville           WA               1984     1982          70         3.5
Aartselaar(5).........................     Antwerpen             Belgium          1997     1997          76         1.7
Antwerpen Bredabann(5)................     Antwerpen             Belgium          2000     2000          67         1.5
Brugge(5).............................     Flanders              Belgium          1999     1999          74         1.7
Forest(5)(9)..........................     Brussels              Belgium          1995     1995          49         0.4
Ghent(5)..............................     Flanders              Belgium          1998     1998          72         1.7
Jette(5)..............................     Brussels              Belgium          2000     2000          67         1.6
Kortjik(5)............................     Flanders              Belgium          1999     1999          63         1.5
Leuven(5).............................     Brussels              Belgium          1998     1998          63         1.7
Liege(5)..............................     Liege                 Belgium          2000     2000          52         1.2
Machalein(5)..........................     Brussels              Belgium          1997     1997          65         1.5
Molenbeek(5)(9).......................     Brussels              Belgium          1995     1995          34         0.5
Overijse(5)...........................     Brussels              Belgium          1998     1998          49         1.4
Waterloo(5)...........................     Brussels              Belgium          1995     1995          86         3.5
Zaventem(5)...........................     Brussels              Belgium          1996     1996          75         3.0
Ballainvilliers(5)....................     Paris                 France           2000     2000          58         1.3
Fresnes(5)............................     Paris                 France           2000     2000          56         1.3
Montrouge(2)(5).......................     Paris                 France           1997     1996          59         1.4
Nantere(5)............................     Paris                 France           2000     2000          68         1.6
Nice(5)...............................     Nice                  France           1997     1991          42         1.0
Osny(5)...............................     Paris                 France           2000     2000          54         1.2
Pontault-Combault(5)..................     Paris                 France           1999     1999          54         1.2
Port Marly(5).........................     Paris                 France           2000     2000          46         1.1
Rosny(5)..............................     Paris                 France           2000     2000          64         1.5
Varlin(2)(5)..........................     Paris                 France           1997     1997          23         0.5
Villejuste(5).........................     Paris                 France           2000     2000          61         1.4
Amersfoot(5)..........................     Amersfoot             Netherlands      2000     2000          66         1.5
Amsterdam(5)..........................     Amsterdam             Netherlands      2000     2000          54         1.2
Den Haag(5)...........................     Den Haag              Netherlands      1999     1999          61         1.4
Maastricht(5).........................     Maastricht            Netherlands      2000     2000          51         1.2
Rotterdam(5)..........................     Rotterdam             Netherlands      2000     2000          52         1.2
Utrecht Nieuwegein(5).................     Utrecht               Netherlands      2000     2000          61         1.4
Handen(5).............................     Stockholm             Sweden           1999     1999          65         1.5
Jacobsberg(2)(5)......................     Stockholm             Sweden           1998     1998          60         2.6
Kungens Kurva(5)......................     Stockholm             Sweden           1998     1998          72         6.8
Lundavagen(5).........................     Malmo                 Sweden           2000     2000          70         1.6
Molndal(2)(5).........................     Gothenburg            Sweden           1999     1999          65         1.5
Rissne(5).............................     Stockholm             Sweden           1998     1998          67         2.3
Sodertalje(5).........................     Stockholm             Sweden           2000     2000          53         1.2
Sodermalm(2)(5).......................     Stockholm             Sweden           1999     1999          26         0.6
Solna(5)..............................     Stockholm             Sweden           1999     1999          69         1.6
Taby(5)...............................     Stockholm             Sweden           1998     1998          60         2.5
Uppsala(5)............................     Uppsala               Sweden           1999     1999          63         1.5
Croydon(5)............................     London                UK               1999     1999          67         1.5
Norbury(5)............................     London                UK               1999     1999          45         1.0
Hanworth(5)...........................     London                UK               2000     2000          44         1.0
Hayes(5)..............................     London                UK               1999     1999          67         1.5
Reading(5)............................     London                UK               2000     2000          51         1.2
                                                                                                    -------      ------
          Total.......................                                                               25,469       1,406
                                                                                                    =======      ======
</TABLE>

----------

(1) We own between 50 and 90% of the entities that own these properties.

(2) We do not have fee title, but have a long-term lease, with respect to the
    storage facility or the land on which this property is located. We have not
    included acreage on properties with building leases.


                                       18
<PAGE>

(3) These properties are now operated as one property.

(4) Property is a business park.

(5) We own a 7.57% interest in the entity that owns this unconsolidated property

(6) We own a 10% interest in the entity that owns this property. The property is
    included in our financial statements as it was sold to the entity subject to
    a purchase option. (See Note H to the consolidated financial statements
    included elsewhere herein.)

(7) We own a 20% interest in the entity that owns this property. The property is
    included in our financial statements as it was sold to the entity subject to
    a purchase option. (see Note H to the consolidated financial statements
    included elsewhere herein.)

(8) This property is included in our New Store operating results. All other
    domestic properties are included in our Same Store operating results. (See
    Note N to the consolidated financial statements included elsewhere herein.)

(9) We have a capital lease on this property with an option to purchase the
    property at the end of the lease term.

        The following table sets forth information by state regarding weighted
average occupancy and weighted average rent per square foot for the domestic
self storage properties and business parks owned by the Company for the years
ended December 31, 2000, 1999 and 1998. 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.

<TABLE>
<CAPTION>
                                                                  AVERAGE OCCUPANCY        AVERAGE RENT PER SQUARE FOOT
                                                 % OF 2000 ------------------------------ -----------------------------
STATE                                             REVENUE     2000      1999       1998      2000      1999       1998
-----                                           ---------- --------- ---------  --------- --------- ---------   -------
<S>                                             <C>        <C>       <C>        <C>       <C>       <C>         <C>
Arizona....................................           5%       82%       76%        77%    $  9.69   $  9.45    $  9.38
California.................................          16        88        89         91       12.71     11.63      10.97
Florida....................................           7        73        78         83       10.52     10.09       9.80
Georgia....................................           5        79        74         75       10.04     10.07       9.87
Illinois...................................           4        84        84         85       10.51     10.12       9.60
Michigan...................................           6        90        86         89        9.33      8.72       8.23
New York...................................           5        80        83         88       19.59     18.99      18.35
Oregon.....................................           3        89        85         84        9.54      9.29       9.19
Texas......................................          14        80        82         84        9.40      9.11       8.69
Virginia...................................           8        84        81         84       11.93     11.24      10.60
Washington.................................          17        87        84         87       10.95     10.39       9.87
Other......................................          10        78        78         78       10.04      9.79       9.72
Weighted Average...........................         100%       83%       82%        84%    $ 10.82   $ 10.30    $  9.90
</TABLE>

        The following table sets forth information for all domestic properties
owned by the Company regarding weighted average occupancy and weighted average
rent per square foot for the years ended December 31, 2000 through December 31,
1996.

<TABLE>
<CAPTION>
                                                                   2000        1999         1998      1997       1996
                                                                ----------  ----------   ---------  ---------  --------
<S>                                                             <C>         <C>          <C>        <C>        <C>
Weighted average occupancy.................................           83%         82%         84%        86%        87%
Weighted average rent per square foot......................       $10.82      $10.30       $9.90      $9.37      $9.23
</TABLE>

        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 1999, the average rental period for a tenant is approximately
11 months. This average is comprised of the rental periods of business tenants,
whose average stay is 18 months, and those of residential customers, whose
average stay is 10 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. The Company owns two business parks, both of which are
located near Tacoma, Washington. The business parks were built in 1977 and 1979
and contain an aggregate of approximately 191,000 net rentable square feet. We
also manage one additional business park for an unaffiliated owner. In addition,
we own a property in downtown Seattle, Washington that, until 1997, was leased
to a records storage company affiliated with our management, on terms approved
by our disinterested directors. The building was then converted to self storage
and reopened for operations in 1998.


                                       19
<PAGE>

ITEM 3 -- LEGAL PROCEEDINGS

        None.

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 2000.


                                       20
<PAGE>

                                     PART II

ITEM 5 -- MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

        The Company's common stock is traded on the NYSE under the symbol "SHU."
As of February 23, 2001 there were 19,739 holders of record of our common stock
and the reported NYSE closing price per share of common stock was $24.88.

        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.

<TABLE>
<CAPTION>
                                                 PRICE PER SHARE OF
                                                    COMMON STOCK
                                                 ------------------  DISTRIBUTIONS
                                                   HIGH      LOW       DECLARED(1)
                                                 -------   --------  -------------
<S>                                              <C>       <C>       <C>
2000
Fourth Quarter..............................      $24.69   $21.88         $.51
Third Quarter...............................       25.00    22.38          .51
Second Quarter..............................       27.25    21.88          .51
First Quarter...............................       26.13    22.13          .51
1999
Fourth Quarter..............................      $24.69   $20.94         $.50
Third Quarter...............................       27.31    24.63          .50
Second Quarter..............................       27.63    24.88          .50
First Quarter...............................       25.88    24.00          .50
</TABLE>

----------

(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. Our bank line of credit limits our dividends to no more than 95% of
funds from operations. (See Item 7 -- Management's Discussion and Analysis of
Financial Condition and Results of Operations -- FUNDS FROM OPERATIONS) For
years prior to January 1, 2001, we were required to distribute annually to our
shareholders at least 95% of our "REIT taxable income," which, as defined by the
relevant tax statutes and regulations, is generally equivalent to net taxable
ordinary income. As a result of legislation passed in December 1999, this
distribution requirement has been reduced to 90%.


                                       21
<PAGE>

ITEM 6 -- SELECTED FINANCIAL DATA

        The following selected consolidated financial data of the Company should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the other financial information
included elsewhere in this Form 10-K/A. This selected financial data contains
certain financial information that has been restated. See Note R to our
consolidated financial statements for further discussion of this matter.

<TABLE>
<CAPTION>
                                                               AT OR FOR YEAR ENDED DECEMBER 31,
                                           ----------------------------------------------------------------------
                                             2000(1)        1999(1)           1998           1997          1996
                                           ----------      ----------      ----------      --------      --------
                                          (AS RESTATED)  (AS RESTATED)    (AS RESTATED)
                                                              (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                       <C>            <C>              <C>              <C>           <C>
OPERATING DATA:

Total revenue .......................      $  198,538      $  173,154      $  160,392      $140,434      $110,399

Income before accounting change .....          32,307          37,677          37,394        42,311        32,785
Income before accounting change
  per common share:
  Basic .............................            0.80            0.99            1.14          1.40          1.39
  Diluted ...........................            0.79            0.99            1.14          1.40          1.39
Distributions per common share:
  Ordinary income ...................            1.73            1.91            1.80          1.80          1.41
  Capital gain ......................                             .05             .01
  Return of capital .................             .30             .03             .14           .11
                                           ----------      ----------      ----------      --------      --------
          Total .....................            2.03            1.99            1.95          1.91          1.41(2)
                                           ==========      ==========      ==========      ========      ========
BALANCE SHEET DATA:

Total assets ........................       1,230,242       1,149,860       1,151,996       955,488       804,483
Total borrowings ....................         595,524         488,075         450,786       296,971       272,791
</TABLE>


(1) For 1999 and 2000, the Company's European operations are no longer being
    consolidated, but are now reported under the equity method. This reporting
    change was made retroactive to January 1999.

(2) Does not include the distribution of $.47 per share declared in January 1997
    based on financial results for the quarter ended December 31, 1996. Reflects
    only three quarterly distributions due to a change in our policy regarding
    the timing of dividend declaration.


                                       22
<PAGE>

ITEM 7 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

        The Management's Discussion and Analysis of Financial Condition and
Results of Operations presented below reflects certain restatements to our
previously reported results of operations for these periods. See Note R to the
consolidated financial statements for a discussion of this matter.

OVERVIEW

        Shurgard Storage Centers, Inc. is a REIT headquartered in Seattle,
Washington, specializing in all aspects of the self storage industry. As of
December 31, 2000, we operated a network of 428 storage centers and three
business parks located throughout the United States and in Europe. Of these
properties, we own, directly and through our subsidiaries and joint ventures,
399 operating properties containing approximately 25.5 million net rentable
square feet. Of the 399 operating properties, 352 are located in 19 states in
the U.S. and 47 are located in Europe. We also manage for third parties, 31 self
storage centers and one business park containing approximately 1.9 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 by increasing
funds from operations 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.

        As part of our focus on providing the highest quality products to our
customers, we look for those storage centers that are located in well-populated
retail areas. When entering a market, we seek dominant locations within specific
three to five mile trade areas. "Dominant locations" refers to highly visible
and accessible locations in retail corridors which create customer awareness.
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. This is accomplished through the use of signage,
color schemes, quality of the building and our trademark "lighthouse" office
design in new developments.

        During 2000, we acquired 7 and developed 21 new domestic storage centers
directly or through joint ventures. Additionally, our European partners opened
19 developments during 2000. These European developments are located as follows:
three in Belgium, seven in France, five in the Netherlands, two in Sweden, and
two in the United Kingdom. The following discussion of operations provides
additional comparative financial information and discussion of each of the areas
of growth, including internal or Same Store growth, direct acquisitions,
domestic development, European operations, property management operations and
other forms of real estate investments. A discussion of capital expenditures,
financing transactions and liquidity is also included.

        When used in this discussion and elsewhere in this Annual Report on Form
10-K, 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 COMPETITION FROM NEW SELF STORAGE FACILITIES OR OTHER STORAGE
ALTERNATIVES MAY CAUSE RENT TO DECLINE AND MAY CAUSE OCCUPANCY RATES TO DROP,
TAX LAW CHANGES MAY CHANGE THE TAXABILITY OF FUTURE INCOME, INCREASES IN
INTEREST RATES MAY INCREASE THE COST OF REFINANCING LONG TERM DEBT, AND WE MAY
BE AFFECTED BY LEGISLATION RELATING TO LATE FEES. ACTUAL RESULTS MAY DIFFER IF
INCREASES IN LABOR, TAXES, MARKETING AND OTHER OPERATING AND CONSTRUCTION
EXPENSES OCCUR. Other factors which could affect our financial results are
described below and in Item 1 (Business) of this Annual Report on Form 10-K.
Forward-looking statements are based on estimates as of the date of this report.
The Company disclaims any obligation to publicly release the results of any
revisions to these forward-looking statements reflecting new estimates, events
or circumstances after the date of this report.

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


                                       23
<PAGE>

segment, New Stores, represents those storage centers recently acquired or
developed for which performance is measured primarily based on original
investment expectations. The following sections discuss the performance of these
segments.

SAME STORES

        In 2000, 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 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. 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, 2000 and 1999.

SAME STORE RESULTS

<TABLE>
<CAPTION>
                                                 YEAR ENDED DECEMBER 31,                    YEAR ENDED DECEMBER 31,
                                         ---------------------------------------    ---------------------------------------
                                                                             %                                         %
                                            2000           1999           CHANGE       1999            1998          CHANGE
                                         -----------    -----------       ------    -----------    -----------       ------
                                                                   (DOLLARS IN THOUSANDS EXCEPT AVERAGE RENT)
<S>                                      <C>            <C>               <C>       <C>            <C>               <C>
Rental revenue.......................    $   183,726    $   172,112         6.7%    $   166,291    $   159,451         4.3%
Direct operating and real
  estate tax expense(1)..............         52,924         49,506         6.9%         47,472         46,394         2.3%
                                         -----------    -----------                 -----------    -----------
NOI..................................        130,802        122,606         6.7%        118,819        113,057         5.1%
Leasehold expense....................            860            799         7.7%            621            545        13.9%
Indirect operating expense(2)........         10,749          9,246        16.3%          8,651          9,474        -8.7%
                                         -----------    -----------                 -----------    -----------
NOI after indirect and
  leasehold expense..................    $   119,193    $   112,561         5.9%    $   109,547    $   103,038         6.3%
                                         ===========    ===========                 ===========    ===========
Avg. annual rent per sq.ft.(3).......    $     10.83    $     10.35         4.6%    $     10.37    $      9.93         4.4%
Avg. sq.ft. occupancy................             88%            86%                         86%            86%
Total net rentable sq.ft.............     18,000,000     18,000,000                  17,300,000     17,300,000
No. of properties....................            277            277                         264            264
</TABLE>

----------

(1) Includes all direct property and real estate tax expenses. Does not include
    any allocation of indirect expense.

(2) 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.

(3) Average annual rent per square foot is calculated by dividing actual rent
    collected by the average number of square feet occupied during the period.

        Similar to last year, the business trends in most of our markets
continue to be positive. This is a direct reflection of the strength of the
demand in most of our trade areas and the quality of our stores and our people.
During 2000, we experienced increased competition in several of our markets
where competitors have opened in the vicinity of some of our stores. Markets
impacted by this increased competition include Indianapolis, Houston, and South
Florida. We believe that the quality of our storage centers as well as our
geographic diversity helps mitigate the impact of competition in individual
markets. Market conditions in California, New York and Virginia contributed to
above average revenue and NOI increases.

        NOI has risen over the last three years due to increases in revenue,
which are a function of changes in rental rates and occupancy. While the storage
business is seasonal, spring and summer being peak occupancy periods, the cycle
is annual and the annual revenue trend from 1998 to 2000 reflects general market
changes. Revenue gains from 1999 to 2000 resulted primarily from rental rate
increases with some occupancy improvements, while gains from 1998 to 1999
resulted entirely from rate increases.


                                       24

<PAGE>



        Over the past two years the self storage and other industries have been
involved in lawsuits challenging their late fee policies. Shurgard is currently
not a party to any such late fee litigation. However, we have reevaluated our
late fee structures in each state and have, where appropriate, reduced the late
fees charged to customers. We expect that this will affect year over year
results through the second quarter of 2001.

        Direct operating expenses were up 6.9% in 2000 as compared to 1999
primarily due to increases in marketing and sales expenditures of approximately
50% over 1999 for new marketing campaigns and sales center programs implemented
during 2000. Increases in personnel costs, utilities and real estate taxes also
contributed to the increase. During 1999, declines in personnel costs, which
include decreased workers compensation costs and lower on-site employee bonuses,
were offset by increases in real estate taxes, costs of retail goods, and repair
and maintenance expenditures.

        In the first quarter of 2000, we began implementation of several new
sales initiatives. These initiatives involved the roll out of an enhanced
e-commerce program to allow on line sales of all of our products and services.
Other sales initiatives implemented during 2000 include the expansion of our
commercial accounts, the telemarketing sales force and the direct sales force.
These new sales initiatives resulted in increases in both direct and indirect
operating expense and resulted in increased revenue growth in the second half of
2000. Year over year Same Store revenue growth accelerated from 5.0% in the
first quarter of 2000 to 7.5% in the fourth quarter of 2000. We expect to
continue to see expense increases through the first half of 2001 when compared
to 2000.

        While we have seen improvement in our revenue growth, rising indirect
operating expenses resulted in NOI after indirect costs growing at only 5.9% for
2000 compared to 6.3% for 1999. Our definition of indirect operating expense
includes certain shared property costs like bank fees, district and corporate
management, purchasing, national contracts personnel and marketing, as well as
certain overhead costs allocated to property operations like business
information technology, legal services, human resources, and accounting. Same
Store indirect operating expenses rose 16.3% from 1999 to 2000 primarily due to
marketing, sales and technology expenses related to the new initiatives
described above. Although, as discussed above, we expect to continue to see
above normal increases for the first of 2001, expense growth should moderate
during the last half of the year. In 1999, Same Store indirect operating
expenses fell 8.7% because many of these expenses are fixed costs that do not
grow in proportion to the number of stores we operate.

NEW STORES

        Our definition of New Stores, as shown in the table below, includes
existing domestic facilities that had not been acquired as of January 1 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, 2000
and 1999.

NEW STORE RESULTS

<TABLE>
<CAPTION>
                                                           YEAR ENDED               YEAR ENDED
                                                          DECEMBER 31,              DECEMBER 31,
                                                      --------------------      --------------------
                                                        2000         1999        1999         1998
                                                      -------      -------      -------      -------
                                                                 (DOLLARS IN THOUSANDS )
<S>                                                   <C>          <C>          <C>          <C>
Rental revenue .................................      $30,021      $11,731      $17,833      $ 6,106
Direct operating and real estate tax expenses(1)       13,005        5,740        7,878        2,896
                                                      -------      -------      -------      -------
NOI ............................................       17,016        5,991        9,955        3,210
Leasehold expense ..............................        1,189          175          353          241
Indirect operating expense(2) ..................        2,412          937        1,532          721
                                                      -------      -------      -------      -------
NOI after indirect and leasehold expense .......      $13,415      $ 4,879      $ 8,070      $ 2,248
                                                      =======      =======      =======      =======
No. of properties ..............................           80           80           65           65
No. of property months(3) ......................          746          337          561          241
</TABLE>
----------

(1)    Includes all direct property and real estate tax expenses. Does not
       include any allocation of indirect expense.

(2)    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.



                                       25
<PAGE>

(3)    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 property months included for the periods presented.
Although this increase gives some indication of how much of our overall NOI
growth results from this segment, it is not a good method of evaluating the
performance of assets within this segment. We use several different methods when
evaluating the performance of domestic acquisitions and developments in this
segment. Acquisitions and development properties are evaluated based on
comparisons of actual results to pro forma NOI for the appropriate period from
opening or at maturity. The performance of our acquisitions and developments are
discussed in the sections that follow. Additionally, increases in the expense
per property month represent the expanded marketing and sales initiatives
discussed previously.

        Domestic Acquisitions

        We continue to selectively seek acquisition opportunities for high
quality storage centers that meet our investment standards. We have limited our
efforts to pursue only those centers that enhance our existing network of stores
(i.e. establish greater market presence or expand an established market to
create greater economies of scale). The operating results of our acquisitions
are presented in the tables below in order to show the impact of our operating
strategies since the acquisition date.

                          RESULTS OF 2000 ACQUISITIONS

<TABLE>
<CAPTION>
                                                     YEAR ENDED
                                                 DECEMBER 31, 2000
                                                     --------
                                                (DOLLARS IN THOUSANDS
                                                 EXCEPT AVERAGE RENT)
<S>                                             <C>
Rental revenue ................................      $  1,938
Direct operating and real estate tax expense(1)           650
                                                     --------
NOI ...........................................         1,288
Leasehold expense
Indirect operating expense(2) .................           133
                                                     --------
NOI after indirect and leasehold expense ......      $  1,155
                                                     ========
Avg. annual rent per sq.ft.(3) ................      $  10.84
Avg. sq.ft. occupancy .........................            83%
Total net rentable sq.ft ......................       368,000
Number of properties ..........................             7
Number of property-months(4) ..................            41
Purchase price ................................      $ 24,870
</TABLE>
----------

(1)    Includes all direct property and real estate tax expenses. Does not
       include any allocation of indirect expense.

(2)    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.

(3)    Average annual rent per square foot is calculated by dividing actual
       rents collected by the average number of square feet occupied during the
       period.

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

        During 2000, we purchased seven storage centers totaling 368,000 net
rentable square feet for a total cost of $24.9 million (including the cost
associated with the related non-competition agreements). One of these properties
is located in California and six are located in Texas. The 2001 projected yield
on these properties is 11% to 12% (calculated as projected 2001 NOI divided by
purchase price). These projections are based on numerous assumptions and actual
results may vary due to the factors discussed in the OVERVIEW. For a discussion
of purchases of partnership units, see INVESTING TRANSACTIONS.

        Additionally, 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. Upon completion of the rent up period,
the storage centers are



                                       26
<PAGE>

purchased by a joint venture in which we owned 77.3% as of December 31, 2000.
Prior to such purchase, we have no ownership in the properties and as such, they
are not included in any discussions of operating results under SEGMENT
PERFORMANCE. The developer's interest in the corporation is based upon a
predetermined formula and the current value of each property at the time of
purchase. During the fourth quarter of 1999, the joint venture purchased one of
the completed storage centers for $3.1 million and during the second quarter of
2000 the joint venture purchased one additional storage center for $11.0
million. At December 31, 2000, this developer had two properties under
construction in connection with this agreement, land purchased pending
construction for one property and two completed stores in rent up. At December
31, 2000, we had guaranteed $22.4 million in outstanding debt for five
properties related to this agreement and may guarantee additional amounts as
future properties are developed.

                          RESULTS OF 1999 ACQUISITIONS

<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31,
                                                       2000           1999           % CHANGE
                                                     --------       --------         --------
                                                   (DOLLARS IN THOUSANDS, EXCEPT AVERAGE RENT)
<S>                                                  <C>            <C>                 <C>
Rental revenue ................................      $  2,116       $    774            173%
Direct operating and real estate tax expense(1)           760            263            189%
                                                     --------       --------
NOI ...........................................         1,356            511            165%
Leasehold expense
Indirect operating expense(2) .................           197             67            194%
                                                     --------       --------
NOI after indirect and leasehold expense ......      $  1,159       $    444            161%
                                                     ========       ========
Avg. annual rent per sq. ft.(3) ...............      $  11.72       $  10.36
Avg. sq. ft. occupancy ........................            82%            80%
Total net rentable sq. ft. ....................       209,000        209,000
Number of properties ..........................             5              5
Number of property-months(4) ..................            60             24
Purchase price ................................                     $ 13,251
</TABLE>
----------

(1)    Includes all direct property and real estate tax expenses. Does not
       include any allocation of indirect expenses.

(2)    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.

(3)    Average annual rent per square foot is calculated by dividing actual
       rents collected by the average number of square feet occupied during the
       period.

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

        During 1999, we purchased five storage centers totaling 209,000 net
rentable square feet for a total cost of $13.3 million (including the cost
associated with the related non-competition agreements). These properties are
located in Arizona, California, Florida, Texas and Washington.

                          RESULTS OF 1998 ACQUISITIONS

<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31,                YEAR ENDED DECEMBER 31,
                                                    ----------------------------------      -----------------------------------
                                                                                   %                                        %
                                                      2000          1999        CHANGE        1999          1998         CHANGE
                                                    --------      --------      ------      --------      --------      -------
                                                                      (DOLLARS IN THOUSANDS, EXCEPT AVERAGE RENT)
<S>                                                  <C>          <C>             <C>       <C>          <C>             <C>
Rental revenue ................................     $  3,869      $  3,560         8.7%     $  3,560      $  1,552          129%
Direct operating and real estate tax expense(1)        1,344         1,237         8.6%        1,237           587          111%
                                                    --------      --------                  --------      --------
NOI ...........................................        2,525         2,323         8.7%        2,323           965          141%
Leasehold expense
Indirect operating expense(2) .................          310           267          16%          262           158           66%
                                                    --------      --------                  --------      --------
NOI after indirect and leasehold expense ......     $  2,215      $  2,056         7.7%     $  2,061      $    807          155%
                                                    ========      ========                  ========      ========
Avg. annual rent per sq. ft.(3) ...............     $   9.45      $   9.10                  $   9.10      $   8.40
Avg. sq. ft. occupancy ........................           81%           83%                       83%           91%
</TABLE>



                                       27
<PAGE>

<TABLE>
<S>                                                  <C>          <C>             <C>       <C>          <C>             <C>
Total net rentable sq. ft .....................      467,000       467,000                   467,000       347,000
Number of properties(4) .......................            8             8                         8             7
Number of property-months(5) ..................           96            96                        96            53
Purchase price ................................                                                           $ 24,908
</TABLE>
----------

(1)    Includes all direct property and real estate tax expenses. Does not
       include any allocation of indirect expense.

(2)    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.

(3)    Average annual rent per square foot is calculated by dividing actual
       rents collected by the average number of square feet occupied during the
       period.

(4)    The California property was purchased on December 22, 1998 and therefore
       had no material impact on our operations and has been excluded from the
       1998 data. The inclusion of this property in 1999, as well as build outs
       on two properties, represents the increase in total net rentable square
       feet over 1998.

(5)    Represents the sum of the number of months we operated each property
       during the year.

        During 1998, we purchased seven storage centers totaling 426,000 net
rentable square feet for a total cost of $23.8 million (including the cost
associated with the related non-competition agreements). We also acquired a
leasehold in an existing self storage center containing 41,000 net rentable
square feet for $1.2 million. These acquisitions were located as follows: one in
Arizona, one in California, one in Indiana, two in Tennessee and three in Texas.
The operating results of these 1998 acquisitions are included in Same Store
Results for 2000.

        Domestic Development

        Our long-term growth plan includes significant 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
is expected to continue at least through 2001. Each development project
progresses through a series of review processes from initial review, through due
diligence, final review and finally to the land purchase and construction. We
believe the success of this strategy has been greatly enhanced as a result of
the substantial experience we, or our predecessors, have gained through the
development of over one third of our properties.

        We, or our joint venture partners, opened 21 domestic storage centers in
2000, and, when all phases are complete, these 21 projects will total
approximately 1.3 million net rentable square feet with an estimated total cost
of $98.3 million. Three of these storage centers were developed through our
Tennessee and Florida joint ventures and 18 were contributed to CCP/Shurgard
Venture, LLC (CCP/Shurgard). (For a further discussion of CCP/Shurgard, see
DEVELOPMENT FINANCING ARRANGEMENTS).

        We, or our joint venture partners, opened 21 storage centers in 1999,
representing approximately 1.5 million net rentable square feet. Of the 21
stores opened, six were developed through our Florida joint ventures, three were
contributed to CCP/Shurgard and nine were contributed to Shurgard/Fremont
Partners II (SFPII). These 1999 developments together generated $4.7 million in
NOI for the 12 months of 2000. For the month of December 2000, these
developments had NOI of $301,000, which represents 18% of projected monthly NOI
at maturity, and averaged 67% occupancy. The operating results of these 1999
developments are included in the New Store Results in the previous section. The
2001 projected yield on these properties is 12% to 13% (calculated as projected
NOI at stabilization divided by invested cost).

        Of the 23 storage centers opened in 1998, representing approximately 1.6
million net rentable square feet, three were developed through our Tennessee and
Florida joint ventures, and 16 were contributed to either Shurgard/Fremont
Partners I (SFPI) or SFPII, joint ventures. For the month of December 2000,
these developments had NOI of $754,000 and averaged 78% occupancy. These 1998
developments together generated $8.1 million in NOI for the 12 months of 2000.
The operating results of these 1998 developments are



                                       28
<PAGE>

included in either the SAME STORE RESULTS or the NEW STORE RESULTS in the
previous section depending on whether they have met the criteria for inclusion
in Same Stores. Total cost to develop these properties was $113.0 million.

        We can give no assurance that these projections regarding the 1999
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.

        In addition to the above completed developments, six storage centers
were under construction (one of these is being developed in Florida through an
unconsolidated joint venture) as of December 31, 2000. As a general rule, to
limit the risks of development, we typically do not purchase land until the
entitlement process is complete. Construction usually begins shortly after we
obtain title to the land. The following table summarizes domestic development
projects in progress at December 31, 2000.

<TABLE>
<CAPTION>
                                                                            TOTAL COST TO
                                                 NUMBER       ESTIMATED       DATE AS OF
                                                   OF       COMPLETED COST   DECEMBER 31,
                                                PROJECTS   OF PROJECTS(1)(2)   2000(1)
                                                 ------         ------         ------
<S>                                              <C>       <C>              <C>
CONSOLIDATED DEVELOPMENTS:
Construction in progress ...............              5         $23.0m         $13.1m
Land purchased pending construction ....              2          $7.9m          $2.2m

UNCONSOLIDATED DEVELOPMENTS:
Construction in progress ...............              1          $5.1m          $3.2m

EXPANSION OF EXISTING PROPERTIES:
Opened during 2000 .....................              1          $1.9m          $1.9m
Construction in progress ...............              1          $1.2m          $1.0m
</TABLE>
----------

(1)    Table includes 100% of the costs of projects regardless of our ownership
       percentage.

(2)    The actual completed cost of projects could vary due to delays during
       construction caused by weather, unforeseen site conditions and problems
       with subcontractors or contractors. For a further discussion of events
       that could impact this estimate, see the discussion below.

        We believe that a long-term strategy of growth through development will
result in superior returns over the long-term. A development strategy, however,
creates a short-term dilution of earnings during the rent-up phase of a project.
Although certain costs, including real estate taxes and interest, are
capitalized during the construction period, NOI does not generally exceed
interest expense on development projects for at least the first year of
operations. This rent-up deficit for our pro-rata interest in developments was
$7.8 million (NOI of $11.6 million, less $19.4 million of interest assuming 8.5%
on invested capital) for 2000 compared to $2.4 million in 1999 and $3.3 million
in 1998. The rent-up deficit for a typical $4.0 million project, assuming it
takes an average of 24 months to rent up and is financed with debt at 8.5%, is
estimated to be approximately $332,000 in the first year of operations. The
total cost of a development varies significantly based on the cost of the land.
The cost of some future projects may be higher than the typical project
described above based on the markets in which we develop those future sites. The
amount of rent-up deficit and the timing of positive cash flow cannot be
predicted with certainty as it is based on a number of factors including length
of rent up, ability to collect stated rental rates on leased units, actual
operating expenses incurred, and the time of year a property opens. Another
result of this rent-up period is a decrease in our operating margins as new
property expenses are added, but the related revenue stream does not hit
stabilized levels until occupancy reaches 85%.

        We anticipate opening 15-20 domestic developments in 2001, including the
eight listed in the table above. The actual number of projects could be reduced
by zoning and permitting delays outside of our control, increased competition
for sites, delays during construction caused by, among other things, weather,
unforeseen site conditions, labor shortages, personnel turnover, scheduling
problems with contractors, subcontractors or suppliers, or resource constraints.

        In addition to utilizing the experience of our in-house real estate
development personnel, in the past few years we have begun establishing
relationships with quality storage operators outside our current markets. We
believe that the most efficient way to operate storage centers is to saturate a
market to create brand awareness and allow certain economies of scale in
operation processes and advertisement. These relationships create an instant
presence in a new market as affiliate owned centers begin using the "Shurgard"
name. In exchange for the use of our name, computer systems and general
operations support services, the affiliate pays us an



                                       29
<PAGE>

affiliation fee. Additionally, these affiliation agreements provide the
framework for the joint development of additional storage centers, allowing us
to take advantage of the local operator's market knowledge. We have signed three
such affiliation agreements, which include (1) an agreement with a Tennessee
developer that opened three jointly developed centers in 1995, one in 1996, two
in 1997, two in 1998 and one in 2000 (2) an agreement with a Florida developer
that opened five jointly developed centers in 1997, one in 1998, six in 1999,
two in 2000, and had one under construction in 2000 and (3) an agreement with a
San Antonio developer to develop properties in Oklahoma and Texas. As of
December 31, 2000, one property was under construction in connection with this
third affiliation agreement.

DEVELOPMENT FINANCING ARRANGEMENTS

        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 have 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 in May 2000 with Chase Capital Partners, and in 2001, we
executed an agreement to enter into up to $250 million of tax retention
operating leases.

        Under the joint venture agreements, we constructed storage centers
financed through the use of cash flows provided by operations and our line of
credit and, upon 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, which is 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 7% 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 under accounting principles generally accepted in the
United States of America (GAAP). 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.

        The following is a summary of the terms of each of these four joint
ventures:

<TABLE>
<CAPTION>
                                                   SFPI            SFP II           K&S I, LLC       CCP/SHURGARD
                                                 ---------         ---------         ---------         ---------
(Dollars In thousands)
                                                At 12/31/00      At 12/31/00       At 12/31/00        At 12/31/00
<S>                                           <C>           <C>                  <C>                   <C>
Total participation rights, net of
  discount .............................         $  27,372         $  31,502         $   3,584         $  32,247
Total mortgage debt ....................         $  45,050         $  62,266         $   6,482         $  60,400
Properties contributed at
  December 31, 2000 ....................                15                16                 1                21
Purchase option/put exercise                     Exercised  December 2001 to     April 2000 to         Beginning
  period ...............................      January 2001      October 2003      January 2002          May 2002
</TABLE>

        In 2001, we executed an agreement with a third party to enter into up to
$250 million worth of tax retention operating leases. We anticipate that most of
our development projects over the next two years will be developed by this third
party and leased through this facility. Under the lease and related agreements,
we will 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 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 the Landlord at a combined rate of approximately 150
basis points over LIBOR. Prior to such purchase, we will have no ownership in
these properties.

EUROPEAN OPERATIONS



                                       30
<PAGE>

        On October 12, 1999, we along with the other existing investors of SSC
Benelux & Co., SCA, (Benelux SCA) entered into a European joint venture
agreement with certain unaffiliated third party investors. The new investors
have committed 122 million Euro to Benelux SCA, in exchange for a 43% interest
in this company. Concurrently, Benelux SCA established a 140 million Euro credit
facility with a commercial bank group. On February 27, 2001 the investors in
Benelux SCA committed to invest an additional 28 million Euro in Benelux SCA.
Concurrent with this undertaking the existing Euro credit facility was increased
from 140 million Euro to 215 million Euro. These additional financial resources
will be used to execute the European expansion plan and are sufficient to fund
projected development openings through the end of 2001 (See European
Development). In order to fund new developments beyond 2001, our European
partners are currently evaluating various capital alternatives.

        Under the terms of the joint venture agreement, the 122 million Euro in
equity capital will be funded through periodic contributions until December 31,
2001, the 28 million Euro may be funded through periodic contributions until
December 31, 2002. Additionally, the terms of the agreement provide for an earn
out that allows the original Benelux SCA shareholders to receive up to 10
million Euro in additional equity based on exceeding certain development targets
prior to December 31, 2001. Benelux SCA is managed by a board of managers, which
consists of all the parties of the transaction. Substantially all major
decisions of the board require agreement of at least two thirds of the parties.
As a general partner, we are contingently liable for $135 million of this joint
venture's debt.

        We now own 7.57% of Benelux SCA, but continue to have significant
influence over operations through our control of half of the seats on the board
of managers. From July 1998 until October 1999, we owned 13.06% and during the
first half of 1998, we owned 12.5%. Approximately two thirds of our interest in
Benelux SCA is owned through a joint venture with two unaffiliated entities. We,
together with one of our partners, have the right to increase our participation
in the joint venture through an equity contribution. Our portion of operating
losses, based on the percentages described above, before the cumulative effect
of a change in accounting principle for European operations was $1.4 million,
$1.1 million (our portion of the cumulative effect of a change in accounting
principle was $268,000) and $412,000 for the years ended December 31, 2000, 1999
and 1998, respectively. Our carrying value of this investment was ($2.4)
million, ($1.0) million and $0.3 million as of December 31, 2000, 1999 and 1998,
respectively.

        Our pro rata portion of FFO losses was $855,000, $587,000 and $185,000
for the years ended December 31, 2000, 1999 and 1998, respectively. In order to
take advantage of the investment opportunity, Benelux SCA is accelerating its
expansion rate in Europe. Although the operations of existing stores are
improving, this expansion will produce losses for the next three to four 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 the European operations are consolidated in our
financial statements for the year ended December 31, 1998. Beginning in 1999,
the results are no longer consolidated due to the October 1999 transaction
discussed previously, and our remaining interest is accounted for under the
equity method of accounting. The data included in the following discussion and
tables reflect total European operations, not our pro rata percentage.

        As a result of SSCI's investment in Europe, we face certain risks
inherent in international business operations, including 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, and the burdens of complying with different permitting standards and a
wide variety of foreign laws.

        European Business Summary

        Since 1992, Benelux SCA 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. Our partners have
learned that government regulations, cultural differences, building practices
and marketing techniques are all factors to be considered in each country.
Through experience, they have built the infrastructure necessary to support an
accelerated expansion program. As of December 31, 2000, Benelux SCA had 47
storage centers operating in five countries. Today, Benelux SCA employs over 225
employees including a senior management team with substantial local development,
finance, operations and marketing experience. The following tables include
certain financial and operating information that illustrates the performance and
growth of Benelux SCA.

                         SUMMARY OF EUROPEAN PROPERTIES:

<TABLE>
<CAPTION>
                                                                                                     DECEMBER 31,
                                    NUMBER OF     TOTAL NET   ESTIMATED       DECEMBER 31, 2000          2000
                                      OPEN        RENTABLE      TOTAL    --------------------------     % RATE
                                  PROPERTIES(5)  SQ. FT.(1)    COST(1)   OCCUPANCY(2)   RATES(2)(3)  INCREASES(4)
                                  -------------  ----------    -------   ------------   -----------  ------------
<S>                               <C>            <C>          <C>        <C>            <C>          <C>


</TABLE>

                                       31
<PAGE>

<TABLE>
<S>                               <C>            <C>          <C>        <C>            <C>          <C>
COUNTRY
  Belgium.....................         14           855,000      $48.0m       72.7%      $ 11.50        2.5%
  France......................         11           585,000      $40.0m       81.8%      $ 20.08        3.7%
  Netherlands.................          6           345,000      $26.0m       56.1%      $ 14.68       (9.1)%(6)
  Sweden......................         11           660,000      $46.0m       65.5%      $ 16.33        4.5%
  United Kingdom..............          5           273,000      $36.6m       39.4%      $ 23.84       (1.8)%(6)
                                  -------       -----------      ------
                                       47         2,718,000     $196.6m
</TABLE>
----------

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

(2)    Includes stores that have been operating more than 12 months.

(3)    Average annual rent per square foot is calculated by dividing actual rent
       collected by the average number of square feet occupied during the
       period.

(4)    In the respective local currencies.

(5)    Six of these stores opened in late December and will experience their
       first accounting month in January.

(6)    The year over year decrease in the average rental rate is due to
       significant fluctuations in the occupied unit mix. Stores opened in
       December 1999 rented a very limited unit mix that overstated the average
       rental rate for that month as the rate per square foot is higher on
       smaller units.

                      CERTAIN FINANCIAL DATA OF BENELUX SCA

<TABLE>
<CAPTION>
                                                          2000       1999      1998
                                                        -------    -------    ------
<S>                                                   <C>        <C>        <C>
Total Revenue....................................       $ 14.4m    $  9.2m    $ 4.3m
Total Assets.....................................       $251.9m    $168.9m    $90.7m
Total Bank Debt(1)...............................       $193.3m    $133.8m    $70.5m
</TABLE>
----------

(1)    Includes unsecured debt between Benelux SCA and affiliate of $88.9, $93.5
       and $25.8 million as of December 31, 2000, 1999 and 1998, respectively.

        The self storage industry is not well established in much of Europe and
we believe this presents Benelux SCA with the opportunity to become a dominant
player throughout Western Europe. Although we are seeing other industry players
entering the European markets, we believe the supply being added to the market
still leaves significant opportunity when compared to the overall size of the
market. Benelux SCA and its subsidiaries have established expansion plans that
focus in four markets: the Benelux region (which includes Belgium, Luxembourg
and the Netherlands), France, Scandinavia (including Sweden and Denmark) and the
UK. The following sections discuss in detail the performance of existing stores
as well as the progress in carrying out these expansion plans.

        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
at December 31, 2000 and 1999.

<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31,(1)                YEAR ENDED DECEMBER 31,(2)
                                                    -------------------------------------     --------------------------------------
                                                        2000           1999       % CHANGE       1999           1998       % CHANGE
                                                    -----------    -----------    --------    -----------    -----------   ---------
                                                                       (DOLLARS IN THOUSANDS, EXCEPT AVERAGE RENT)
<S>                                                 <C>            <C>            <C>         <C>            <C>           <C>
Rental revenue.................................     $     5,866    $     4,954        18%     $     5,660    $     4,160        36%
Direct operating and real estate tax expense(3)           1,801          1,741         3%           1,946          2,128        (9)%
                                                    -----------    -----------                -----------    -----------
NOI............................................           4,065          3,213        27%           3,714          2,032        83%
Leasehold expense..............................             492            429        15%             496            353        40%
Indirect operating expense(4)..................           1,667          2,472       (33)%          2,860          2,337        22%
                                                    -----------    -----------                -----------    -----------
NOI after indirect and leasehold expense.......     $     1,906    $       312       511%     $       358    $      (658)      154%
                                                    ===========    ===========                ===========    ===========
Avg. annual rent per sq. ft.(5)................     $     13.10    $     12.00         9%     $     14.39    $     12.35        16%
</TABLE>



                                       32
<PAGE>

<TABLE>
<S>                                                 <C>            <C>                 <C>    <C>            <C>                <C>
Avg. sq. ft. occupancy.........................              88%            80%                        83%            70%
Total net rentable sq. ft......................         492,000        492,000                    492,000        492,000
# of properties................................               9              9                          9              9
</TABLE>
----------

(1)    Amounts have been translated from local currencies using the average
       exchange rate for 2000.

(2)    Amounts have been translated from local currencies using the average
       exchange rate for 1999.

(3)    Includes all direct property and real estate tax expenses. Does not
       include any allocation of indirect expense.

(4)    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.

(5)    Average annual rent per square foot is calculated by dividing actual rent
       collected by the average number of square feet occupied during the
       period.

        In 2000, our European partners increased rental rates of Same Stores an
average of 9% while occupancy rose eight percentage points. These rate
increases, as well as increases in occupancy, resulted in the 18% revenue
increase from 1999 to 2000. Increases in revenue combined with maintaining
expenses at a 3% growth resulted in the 27% Same Store NOI growth over 1999.
These nine same stores had an occupancy of 90% at the end of December 2000.
Decreases in indirect operating expense are the result of spreading certain
fixed costs over more stores as our European partners expand.

        In 1999, our European partners increased rental rates of Same Stores an
average of 16%. These rate increases, as well as increases in occupancy,
resulted in the 36% revenue increase from 1998 to 1999. Property operating
expenses decreased 9% in 1999 over 1998 due to improved expense controls,
decreases in repair and maintenance expenses due to renegotiations of
maintenance contracts, and improved operating efficiencies resulting from
economies of scale.

European Development

        Benelux SCA's strategy is to quickly dominate markets they enter by
building a network of high quality storage centers that can be managed with
economies of scale. There are few storage centers available for acquisition, so
our European joint venture has focused on a strategy of in-house development.
Through this strategy, they are able to maintain high quality standards and
consistent building design to develop brand and product awareness. Each
development project progresses through a series of review processes from initial
review, through due diligence, final review and finally to the land purchase and
construction. We believe the success of this strategy has been greatly enhanced
as a result of the substantial experience gained through the development of over
90% of the European properties. Benelux SCA opened 19 storage centers in 2000,
12 in 1999 and seven in 1998. The following table summarizes European
developments by country in U.S. dollars:

<TABLE>
<CAPTION>
                                                                           TOTAL NET
                                                                        RENTABLE SQ. FT.
                                           NUMBER OF        ESTIMATED   WHEN ALL PHASES
                                           PROPERTIES     TOTAL COST(1)  ARE COMPLETE
                                           ----------     -------------  ------------
<S>                                        <C>            <C>           <C>
OPENED IN 2000

  France...............................         7             $29.9m       407,000
  United Kingdom.......................         2             $15.8m        95,000
  Netherlands..........................         5             $20.4m       284,000
  Belgium..............................         3             $10.9m       186,000
  Sweden...............................         2             $ 9.4m       123,000
OPENED IN 1999

  Belgium..............................         2             $ 5.5m       137,000
  France...............................         1             $ 3.4m        54,000
  Netherlands..........................         1             $ 5.6m        61,000
  Sweden...............................         5             $20.6m       282,000
  United Kingdom.......................         3             $20.7m       179,000
</TABLE>



                                       33
<PAGE>

<TABLE>
<S>                                        <C>            <C>           <C>
OPENED IN 1998
  Belgium..............................         3             $10.1m       185,000
  Sweden...............................         4             $15.9m       260,000
</TABLE>
----------

(1)    The actual completed cost of these projects could vary due to delays
       during construction caused by weather, unforeseen site conditions and
       problems with subcontractors or contractors. For a further discussion of
       events that could impact this estimate, see DOMESTIC DEVELOPMENT.

        During 2000, Benelux SCA opened 19 storage centers with an estimated
total cost of $86.4 million and net rentable square feet of 1.1 million when all
phases are complete. Six of these stores opened in late December and will
experience their first full month of operations in January 2001. After an
average of five months of operation, the remaining 13 openings of this year have
an average occupancy of 33% and generated $1.2 million in net operating losses
in 2000.

        Of the 12 storage centers opened in 1999, 11 opened in the last two
months of the year. These 12 storage centers have an estimated total cost of
$55.8 million and net rentable square feet of 713,000 when all phases are
complete. The average occupancy at the end of December 2000 was 48% after an
average of 14 months of operations. These storage centers generated $250,000 of
NOI for the year ended December 31, 2000.

        The seven storage centers opened during 1998 had an average occupancy of
70% after an average of 27 months of operations and together generated $2.0
million in NOI for 2000. For the month of December 2000, NOI for these
developments represented 70% of projected monthly NOI at stabilization (as
measured in the relevant local currency).

        The average projected yield on total cost of the storage centers
included in the table above is 13%. The projected yield is based on projected
monthly NOI at stabilization less leasehold expense and an estimate of indirect
operating costs of 6% of revenue. There can be no assurance that this projected
yield will be achieved as many factors affect the performance of the stores. The
stores could fail to reach projected rental rate and occupancy levels if
customer product knowledge and acceptance is slower than anticipated, and if
they experience competition from other self-storage properties and other storage
alternatives. Actual yields may also be lower if major expenses such as property
taxes, labor, and marketing, among others, increase more than projected or if
indirect operating expenses exceed assumed levels.

        In addition to the above completed developments, Benelux SCA currently
has another six storage centers under construction. These developments are
located as follows: two in France, two in the Netherlands, one in Sweden, and
one in the UK. Additionally, it has purchased one Belgian site on which
construction has not yet started. The following table summarizes European
development projects in progress at December 31, 2000:

<TABLE>
<CAPTION>
                                                              ESTIMATED         TOTAL COST TO
                                              NUMBER OF       COMPLETED          DATE AS OF
                                              PROJECTS   COST OF PROJECTS(1)  DECEMBER 31, 2000
                                              --------   -------------------  -----------------
<S>                                           <C>        <C>                  <C>
NEW DEVELOPMENTS
Construction in Progress
  France................................          2                   $9.6m              $5.1m
  Sweden................................          1                   $4.8m              $1.4m
  Netherlands...........................          2                   $8.4m              $3.2m
  UK....................................          1                   $7.1m              $4.6m
Land purchased pending construction
  Belgium...............................          1                   $3.9m              $1.8m
</TABLE>
----------

(1)    The actual completed cost of projects could vary due to delays during
       construction caused by weather, unforeseen site conditions and problems
       with subcontractors or contractors. For a further discussion of events
       that could impact this estimate, see DOMESTIC DEVELOPMENT.

        In the current state of the European self storage market, we believe
that a strategy of growth through development will result in higher returns over
the long term. However, as discussed earlier, this expansion and development
strategy creates a short-term dilution of earnings during the rent-up phase of a
project. For further discussion, see DOMESTIC DEVELOPMENT.



                                       34
<PAGE>

        We currently anticipate that in 2001, our European partner will open 20
to 30 developments, including the six listed in the table above. The actual
number of projects could be reduced due to zoning and permit delays outside of
its control, increased competition for sites, delays during construction caused
by, among other things, weather, unforeseen site conditions, labor shortages,
personnel turnover, scheduling problems with contractors, subcontractors or
suppliers, or resource constraints.

OTHER REAL ESTATE INVESTMENTS

        The following table shows income (loss) from unconsolidated real estate
investments for the years ended December 31, 2000, 1999 and 1998. All income and
loss amounts reflect our pro rata ownership percentage.

                INCOME (LOSS) FROM OTHER REAL ESTATE INVESTMENTS

<TABLE>
<CAPTION>
                                                  YEAR ENDED DECEMBER 31,
                                              -------------------------------
                                                 2000        1999        1998
                                              ----------  ----------  -------
                                                     (DOLLARS IN THOUSANDS)
<S>                                           <C>         <C>         <C>
Containerized storage.....................    $  (1,842)  $  (2,654)  $  (3,133)
Unconsolidated joint ventures.............       (1,668)       (684)        (75)
Participating mortgages...................        1,659       1,631       1,639
European Operations.......................       (1,569)     (1,595)       (136)
Other partnership investments.............                                  137
                                              ---------   ---------   ---------
          Total...........................    $  (3,420)  $  (3,302)  $  (1,568)
                                              =========   =========   ==========
</TABLE>

        Containerized Storage

        Shurgard Storage To Go, Inc. (STG) is operating in five major U.S.
markets, including Seattle, Portland, San Francisco, Atlanta and Chicago. We are
currently in the process of exiting the Chicago market. During 2001, STG intends
to concentrate on maximizing revenue growth through effective marketing and
pricing strategies and optimizing warehouse capacity and logistics. For the year
ended December 31, 2000, STG had an average of 5,161 containers rented with an
average rental rate of $59.76 per container, compared to 5,229 containers rented
for the year ended December 31, 1999, with an average rental rate of $47.02 per
container, and 3,524 containers rented for the year ended December 31, 1998,
with an average rental rate of $56.34 per container.

        At December 31, 2000, our gross investment in STG was $5.0 million. At
December 31, 2000, SSCI owned 95.5% of the nonvoting stock in STG, which is not
a qualified REIT Subsidiary and is subject to corporate level tax. As of
December 31, 2000, we had committed to lend up to $13.40 million under unsecured
five year notes to fund negative cash flow during the rent up stage, of which,
$12.92 million was outstanding. Subsequent to December 31, 2000, we committed to
lend an additional $500,000. We also currently guarantee $8.7 million in lease
obligations. In 2000, our pro rata percentage of STG losses was $1.8 million,
compared to losses of $2.7 million for the 12 months ended December 1999, which
includes a $92,000 cumulative effect of a change in accounting principle
reflecting the write-off of start-up costs in accordance with SOP 98-5, and $3.1
million for the 12 months ended December 1998. During 2001, we plan to
recapitalize STG by converting substantially all of our existing loan to STG
into equity and acquiring all or substantially all of the voting stock of STG.
As a result of this transaction, we will take control and consolidate STG's
operating results. Additionally, STG will no longer incur interest expense for
the loan and we will no longer receive interest income of approximately
$900,000. Due to continuing improvement in STG operating results, we expect
losses to be reduced to $1.6 million for 2001, including $1.0 million for
depreciation. This projected 2001 loss is based on several assumptions,
including meeting the projected number of container rentals and lengthening the
average customer rental period. There is, of course, no assurance that this
expectation will be met as numerous factors affect profitability. These factors
include, among other things, the possible inability to attract new customers,
the expense of sales and marketing efforts, the potential of new competition
(both containerized and other forms of storage) entering our markets and the
possibility that customers may not be willing to pay the rates projected.
Subsequent to December 31, 2000, we purchased the remaining non-voting shares of
STG increasing our ownership in the non-voting shares to 100%. As a result of
the purchase, our percentage ownership in STG, including both voting and
non-voting stock, increased from 90.68% to 95.0%. The remaining 5% of STG is
owned by unrelated parties.

        Unconsolidated Joint Ventures

        Pursuant to our affiliation agreements with two storage operators, we
have entered into 24 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. As of December 31, 2000,
we had invested a total of $25.6 million in these joint ventures. Our pro rata
portion of joint venture losses totaled $1.7 million ($522,000 of income before
depreciation and amortization) for the 12 months ended



                                       35
<PAGE>

December 31, 2000, as losses from new properties added during the previous and
current year offset earnings from stabilized properties. Our pro rata portion of
losses for these joint ventures totaled $684,000 ($1.0 million of income before
depreciation and amortization) and $135,000 ($1.2 million of income before
depreciation and amortization) for 1999 and 1998, respectively. Three new
properties were added in 2000 and six new properties were added in both 1999 and
1998. We have guaranteed certain joint venture loans totaling $25.5 million.
Performance related to stores developed through these joint ventures is included
in the appropriate tables and section discussions (SAME STORES, Domestic
Acquisitions or Domestic Development) under SEGMENT PERFORMANCE.

        Participating Mortgages

        We have $13.1 million invested in three participating mortgage loans.
All three mortgages are non-recourse to the borrower, bear interest at 8% per
annum and mature in January 2005. These loans are secured by real estate,
including four storage centers and office/warehouse space. We receive contingent
interest payments from the mortgaged properties equal to 50% of both operating
cash flow and distributions from the gain on sale of real property, as defined.
We have options to purchase the properties at established prices, which are
exercisable from January 2000 until January 2005.

        Other

        Income from other partnership investments for 1998 represents income
from investments in Shurgard Institutional Fund LP. Shurgard Institutional Fund
LP was consolidated for financial statement purposes beginning September 1998.
For a further discussion of investments in partnership units, see INVESTING
TRANSACTIONS.

CONSOLIDATED STATEMENT OF INCOME

        Income before cumulative effect of accounting change grew less then 1%
from 1998 to 1999 and decreased 14.3% from 1999 to 2000 primarily because of an
increase in the amortization of participation rights discount and interest on
loans related to our development activity. Comparability of individual line
items is affected by the consolidation of Benelux SCA in 1998 and the use of
equity accounting for this investment during 1999 and 2000. For a complete
discussion of our investment in Benelux SCA, see EUROPEAN OPERATIONS.

        Excluding the impact of Benelux SCA in 1998, rental income rose 12.3%
from 1998 to 1999 and 14.5% from 1999 to 2000. Domestic operating expense rose
9.0% from 1998 to 1999 and 23.0% from 1999 to 2000, while domestic real estate
tax expense rose 19.6% from 1998 to 1999 and 13.7% from 1999 to 2000. Included
in operating expenses are internal acquisition costs and development expenses
related to discontinued efforts of $376,000, $461,000 and $926,000 for 1998,
1999 and 2000, respectively. All other amounts are included in NOI after
indirect operating and leasehold expenses discussed in SAME STORES and NEW
STORES.

        Excluding the effect of Benelux SCA on 1998, depreciation and
amortization increased 14.1% from 1998 to 1999 and 10.7% from 1999 to 2000. This
increase reflects the increased number of stores included in our consolidated
financial statements over the same period of time.

        Domestic general and administrative expenses decreased less than 1.0%
from 1998 to 1999 and increased 17.1% from 1999 to 2000. The increases resulted
from higher personnel and information technology expenses which are primarily
related to our growth. Over the same period, these expenses decreased as a
percentage of rental revenue from 2.7% in 1998 to 2.5% in 2000.

        Property management revenue decreased $482,000 from 1998 to 1999 and
rose $204,000 from 1999 to 2000. The decrease from 1998 to 1999 reflects the
consolidation of Shurgard Institutional Fund LP whose management fees were
eliminated upon consolidation after 1998. The increase from 1999 to 2000
reflects increases in management fees and cost reimbursements. Loss from other
real estate investments is discussed in OTHER REAL ESTATE INVESTMENTS.

        Interest income and other rose $1.4 million from 1998 to 1999 and an
additional $0.8 million from 1999 to 2000. Increases relate to the amortization
of income received for a non-compete agreement signed in late 1999 and interest
income earned on our loan to STG (see OTHER REAL ESTATE INVESTMENTS).

        Interest expense consists of two components: interest on loans and
amortization of participation rights discount. Domestic interest expense on line
of credit and notes payable increased $14.1 million from 1998 to 2000 due to an
increase in the outstanding balances. This rise represents borrowings to
purchase partnership units and to fund development of new storage centers and
acquisitions. Additionally, during 2000, we capitalized $3.8 million in interest
related to the construction of domestic storage centers while $6.0



                                       36
<PAGE>

million and $4.5 million were capitalized in 1999 and 1998, respectively.
Included in 1998 is interest expense related to Benelux SCA of $1.8 million, net
of capitalized interest of $1.0 million. The amortization of participation
rights discount increased from 1998 to 2000 due to the increase in the number of
stores subject to participation rights and changes in the estimated cash flows
related to those rights. Amortization of loan costs of $2.1 million, $1.9
million and $1.3 million is included in amortization expense for 2000, 1999 and
1998, respectively.

        Minority interest decreased $2.9 million from 1998 to 1999 and increased
$72,000 from 1999 to 2000. The change from 1998 to 1999 is a result of no longer
consolidating Benelux SCA. The change from 1999 to 2000 relates primarily to the
purchase of additional partnership units in Shurgard Institutional Fund LP.

RECENT ACCOUNTING PRONOUNCEMENTS

        On April 3, 1998, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 98-5, "Reporting on the Costs of Start-Up
Activities," which was effective for fiscal years beginning after December 15,
1998. SOP 98-5 requires start-up activities and organization expenses to be
expensed as incurred. We implemented SOP 98-5 in the first quarter of 1999. This
initial application for consolidated entities is reported as a cumulative effect
of a change in accounting principle.

        Effective January 1, 1998, the Company adopted SOP 97-1 "Accounting by
Participating Mortgage Loan Borrowers." This Statement prescribes borrowers'
accounting for participating mortgage loans and requires, among other things,
that borrowers recognize liabilities for the estimated fair value of lenders'
participations in the appreciation in value (if any) of mortgaged real estate
projects and record such participations as interest over the terms of the
related loans. The Company had not previously recognized lenders' participations
in the appreciation in value of mortgaged properties. The initial application is
reported as a cumulative change in accounting principle.

        Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting
for Derivative Instruments and Hedging Activities," is effective for all fiscal
years beginning after June 15, 2000. SFAS 133, as amended, establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities.
Under SFAS 133, certain contracts that were not formerly considered derivatives
may now meet the definition of a derivative. We adopted SFAS 133 effective
January 1, 2001. We use interest rate swaps to fix a portion of our variable
rate debt. We do not expect the adoption of SFAS 133 to have a significant
impact on our financial position, results of operations, or cash flows.

        Although we expect the derivative instruments we currently use to hedge
to continue to be highly effective, if they are determined not to be highly
effective in the future, or if we use derivative instruments that do not meet
the stringent requirements for hedge accounting under SFAS 133, our future
earnings could reflect greater volatility. Additionally, if a cash flow hedge is
discontinued because the forecasted transaction is no longer expected to occur,
any gain or loss in accumulated comprehensive income associated with the hedged
transaction will be immediately recognized in net income.

FUNDS FROM OPERATIONS

        Funds from operations (FFO), pursuant to the National Association of
Real Estate Investment Trusts' (NAREIT) October 1999, White Paper on Funds from
Operations, is defined as net income, calculated in accordance with 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
stockholders. 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. Our 1999 and 1998 financial
information has been restated to reflect the new definition. The following table
sets forth the calculation of FFO in accordance with the NAREIT definition (in
thousands):



                                       37
<PAGE>

<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31,
                                                                     -------------------------------------
                                                                        2000          1999            1998
                                                                     ----------    ----------      -------
<S>                                                                  <C>           <C>             <C>
Net income.......................................................    $  32,307     $  36,579       $  35,226
Cumulative effect of change in accounting principle..............                      1,098           2,168
Adjustment to cumulative effect of a change in
  Accounting principle for unconsolidated joint ventures.........                        447
Gain on sale of operating real estate............................                       (370)           (216)
Amortization of participation rights discount....................       11,262         8,057           3,999
Preferred dividend...............................................       (8,750)       (8,750)         (4,690)
Depreciation/amortization........................................       40,693        36,768          33,991
Adjustment to depreciation/amortization for
  unconsolidated joint ventures and subsidiaries.................        3,310         2,774             339
Deferred financing costs.........................................       (2,061)       (1,912)         (1,294)
                                                                     ---------     ---------       ---------
FFO..............................................................    $  76,761     $  74,691       $  69,523
                                                                     =========     =========       =========
</TABLE>

        FFO for 2000 increased $2.1 million over 1999 FFO, which had risen $5.2
million over 1998. 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 2001, assuming we grow Same Store NOI after indirect operating
and leasehold expense at 7 1/2 to 8%, we continue to finance development
primarily through third party equity and STG meets our expectation, we expect
FFO to increase 7 to 8%. 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, Domestic Development, OTHER REAL ESTATE INVESTMENTS and
Containerized Storage.

INVESTING TRANSACTIONS

        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 $0.2 million 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 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. In 1998, we recorded the issuance of 145,286 shares and in 2000
issued the final 387,933 shares related to this obligation.

        In 1999, we invested $13.3 million in the acquisition of five storage
centers, $103.4 million in domestic development and expansion projects, and $6.3
million in capital improvements to our existing portfolio. The $8.2 million
increase in other real estate investments reflects primarily the $8.0 million
invested in joint ventures and the $0.2 million invested in our containerized
storage operation. Additionally, during 1999, loans to affiliates increased $2.0
million primarily due to the loan we made to our containerized storage operation

        During 1999, we purchased one limited partner unit in Shurgard
Institutional Fund LP II, from an unaffiliated third party, for $1.2 million in
cash. During 2000, we purchased the remaining limited partner units for $3.8
million in cash. We now own all of the limited partner units and are entitled to
100% of limited partner distributions. We continue to own a general partnership
interest in this partnership which is consolidated in our financial statements.

        During 1998, we invested $24.9 million in the acquisition of eight
storage centers, $110.4 million in domestic development and expansion projects,
$44.1 million in European development projects, and $5.1 million in capital
improvements to our existing portfolio. The $9.5 million increase in other real
estate investments reflects primarily the $9.3 million invested in joint
ventures and



                                       38
<PAGE>

the $0.2 million invested in our containerized storage operation. Additionally,
during 1998, loans to affiliates increased $6 million due to the loan we made to
our containerized storage operation.

        During 1998, we purchased 18 limited partner units in Shurgard
Institutional Fund LP, from unaffiliated third parties, for $22.6 million in
cash ($21.2 million, net of cash received). We now own 22 of 25 units and are
entitled to 88% of this partnership's limited partner distributions. Three out
of these 22 units were purchased in 1997 from an unaffiliated third party, for
$3.7 million in cash. We continue to own a general partnership interest in this
partnership. Due to our majority interest, effective September 24, 1998,
Shurgard Institutional Fund LP is consolidated for financial statement purposes.
Prior to this date, earnings were included in income from other real estate
investments.

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 $7.0 million in capital improvements expended during 2000, $1.7
million was for roofs, pavement and sealant, representing approximately $0.07
per net rentable square foot, while $1.9 million out of a total of $6.2 million
was spent for these items during 1999 representing approximately $0.10 per net
rentable square foot. During 1998, $1.8 million out of $5.0 million was spent
for these items, representing approximately $0.09 per net rentable square foot.
Specifically identified capital improvements expected for 2001 total $4.1 to
$5.0 million, of which $1.9 to $2.7 million represents roofs, pavement and
sealant. During 1996, we completed an extensive research and evaluation program
through which we selected an updated logo. In order to maintain our brand
awareness across all Shurgard businesses, we implemented a process to replace
signs, awnings, etc. to incorporate our new logo over 1997 and 1998. In
connection with this branding, during 1999, we installed signs at five stores at
a cost of approximately $45,000, and we installed signs at 132 stores and 134
stores during 1998 and 1997 at a cost of about $1.1 million and $0.8 million,
respectively.

FINANCING TRANSACTIONS

Line of Credit

        The balance on the domestic line of credit decreased $12.1 million from
December 31, 1999 to December 31, 2000. Draws on the line were used to fund
acquisitions, the purchase of partnership units, development activity and
general corporate purposes, and payments were made from reimbursements from
joint ventures for development costs. At December 31, 2000, we had an unsecured
domestic line of credit to borrow up to $200 million at a spread over LIBOR,
maturing September 30, 2001, with the option to extend until September 2002. The
amount available and the spread vary based on the terms of the agreement; at
December 31, 2000, the current available amount was $200 million, of which
approximately $90.0 million was outstanding. At December 31, 2000, the weighted
average interest rate was 7.9%.

        Net borrowings under the domestic line of credit during 1999 totaled
$20.6 million. Draws on the line were used to fund acquisitions, purchases of
partnership units, development activity and general corporate purposes. As of
December 31, 1999, $102.0 million was outstanding, and the interest rate spread
was 115 basis points over LIBOR.

        Net borrowings under the domestic line of credit during 1998 totaled $37
million. Draws on the line were used to fund acquisitions, purchases of
partnership units, development activity and general corporate purposes. As of
December 31, 1998, $81.5 million was outstanding, and the interest rate spread
was 95 basis points over LIBOR.

        At December 31, 1998, we had seven European credit lines (denominated in
local currencies) to borrow up to a total of $14.7 million of which $13.5
million was outstanding. Since January 1999, our European results have been
reported under the equity method of accounting.

        In February 2001, we expanded our revolving credit facility from $200 to
$360 million. This amended 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.

Long-term Financing



                                       39
<PAGE>

        During 2000, SFPII borrowed an additional $12.9 million under its
non-recourse credit facility. At December 31, 2000, $62.2 million was
outstanding under this credit facility. We have swap agreements in effect for
each borrowing which fix the weighted average interest rate at 8.48% until March
2002 for the balances outstanding as of December 31, 2000. Additionally, during
2000, CCP/Shurgard obtained a non-recourse credit facility to borrow up to $67.7
million of which $60.4 million was outstanding as of December 31, 2000. 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 cap in effect for the $60.4 million which limits the
interest rate to 7.50% plus the spread on the LIBOR indexed floating rate. We
have a 20% equity interest in CCP/Shurgard.

        During 1999, SFPI borrowed an additional $2.3 million under its
non-recourse credit facility. At December 31, 1999, $45.0 million was
outstanding under this credit facility. This loan was repaid in full on January
31, 2001.

        Additionally, K&S I, LLC, a partnership, formed on October 15, 1999, has
a non-recourse credit facility from a commercial bank of $6.5 million. The note
matures October 2001, is secured by the property owned by K&S I, LLC, and
requires monthly payments of interest only at 320 basis points above LIBOR. As
of December 31, 2000, the interest rate was 9.94%.

        We have financed one of our storage centers located in California with a
participating mortgage under which the lender receives the stated interest rate
of 8% per annum plus 90% of net cash flows, as defined, and participates 90% in
the increased value of the property. The estimated increase in value, which is
recognized as a participation rights discount, is being amortized over the life
of the loan. At December 31, 2000, $4.9 million of a total participation of $9.5
million had been amortized.

        In December 1998, we raised net proceeds after offering costs of $48.1
million through the sale of 2 million shares of Series C Cumulative Redeemable
Preferred Stock. These preferred shares require quarterly distribution payments
totaling 8.7% per year and are callable at our option after five years at a
redemption price of $25 per share.

        In February 2001, we issued $200 million in senior unsecured notes
(approximately $198.4 million in net proceeds) which 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, in February 2001, we
raised $86.25 million (approximately $83.4 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.
A portion of these proceeds were used to repay balances outstanding under our
line of credit. Remaining proceeds will be used to pay off our $122.6 million
note payable prior to its maturity in June 2001. In connection with this payoff,
we expect to incur approximately $750,000 to $1 million in expense related to
the early extinguishment of this debt.

SHORT-TERM AND LONG-TERM LIQUIDITY

        Cash balances decreased from $11.6 million at December 31, 1999 to $7.7
million at December 31, 2000 as capital expenditures were funded primarily
through cash flow and financing alternatives obtained by forming joint ventures
as discussed previously in Development Financing Arrangements. The following
table summarizes certain information regarding our liquidity and capital
resources:

<TABLE>
<CAPTION>
                                                                      AT DECEMBER 31,
                                                        ---------------------------------------
                                                            2000          1999          1998(1)
                                                        ------------  ------------   ----------
<S>                                                     <C>           <C>            <C>
Debt to total assets before depreciation (2).......             35%           34%            34%
Total market capitalization(3).....................     $     1,318m  $     1,194m   $    1,274m
Debt to total market capitalization(2)(3)..........             38%           36%            33%
Weighted avg. interest rate(4).....................           8.25%         8.05%          7.89%
</TABLE>
----------

(1)    Includes European operations. Beginning in 1999, our European operations
       are no longer being consolidated, but are now reported under the equity
       method.

(2)    Debt includes notes payable and line of credit

(3)    Total market capitalization is based on the closing market price of the
       Class A Common Stock, Series B Preferred Stock, and the Series C
       Preferred Stock multiplied by their respective total number of
       outstanding shares plus total debt.



                                       40
<PAGE>

(4)    Represents weighted average interest rate on our outstanding domestic
       line of credit and notes payable.

        Our total domestic debt at December 31, 2000 was $495.4 million, of
which $338.5 million is fixed rate debt or variable rate debt fixed by swap
agreements. 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,
2000, 1999 and 1998 was $85.6 million, $86.1 million and $76.9 million,
respectively. We believe that our cash flow in 2001 will be sufficient to make
required principal payments and distributions in accordance with REIT
requirements.

        We anticipate meeting our long-term liquidity needs primarily through a
combination of our lines of credit, unsecured debt, 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 additional common stock. Additionally, we
anticipate reducing our distribution payout ratio in order to retain cash flow
for growth.

REIT QUALIFICATION AND DISTRIBUTION REQUIREMENTS

        As a REIT, we are not required to pay federal income tax on annual
taxable income that we currently distribute to our shareholders, provided that
we distribute an amount equal to at least 95% of our taxable income. Such
distributions must be made in the taxable year to which they relate or in the
following taxable year if declared before the REIT timely files its tax return
for such years and is paid on or before the first regular distribution payment
date after such declaration. For the years ended December 31, 2000, 1999 and
1998, 14.7%, 1.8% and 7.1% of distributions were return of capital,
respectively.

        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 nonqualifying income was approximately 2% of gross revenue in
2000 and we expect to meet the 95% test in 2001. Our acquisition of additional
properties will tend to reduce the percentage of nonqualifying 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 nonqualifying 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 nonqualifying income will not
exceed 5% in future years.

        In December 1999, legislation was passed to reduce the taxable income
distribution requirements for a REIT from 95% to 90%. This change applies to
distributions made beginning in the year 2001.

ITEM 7A -- QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE AND FOREIGN CURRENCY EXCHANGE RATE RISK

        Our primary market risks are interest rate exposure and foreign currency
exchange rate exposure. We do not enter into speculative derivative transactions
or leveraged swap agreements. The derivative instruments that we own are not
held as investments and it is our intent to hold such instruments for their
respective terms. Therefore, changes in their values will not have a significant
effect on our operations, cash flows or financial position.

        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, and the United Kingdom. Our gross investment in these
foreign operations at December 31, 2000 was $3.5 million and is not considered
material. At December 31, 2000, cumulative losses, including depreciation
expense, have exceeded our gross investment by $2 million. During 2000, 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 loans to shareholders, the



                                       41
<PAGE>

table presents contractual principal cash flows to be received and the weighted
average interest rates. 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.

<TABLE>
<CAPTION>
 EXPECTED MATURITY DATE           2001             2002          2003         2004      2005   THERE-AFTER    TOTAL     FAIR VALUE
-------------------------     -----------      -----------      -------     -------     ----   -----------   --------   ----------
                                                                             (IN THOUSANDS)
<S>                           <C>              <C>              <C>         <C>         <C>    <C>           <C>        <C>
Liabilities
Lines of Credit:
Variable Rate (US$) .....     $    89,925                                                                    $ 89,925     $ 89,925
  Interest rate .........            7.72%
Notes Payable:
Fixed Rate (US$) ........     $   123,956                                   $57,275              $50,000     $231,252     $231,258
  Interest rate .........            7.97%            7.59%        7.59%       7.59%    7.63%       7.63%
Variable Rate (US$) .....     $    51,531      $    62,266      $60,400                                      $174,197     $174,197
  Interest rate .........            8.96%            7.25%        7.94%
Equity Loans to
Shareholders ............     $     1,836      $     1,339      $   501                                      $  3,676     $  3,321
  Interest rate .........            0.66%            1.40%        5.32%
Interest Rate Derivatives
Interest Rate Swaps:
Variable to Fixed (US$) .     $    45,050      $    62,266                                                                $   (220)
  Avg. pay rate .........            5.96%            6.23%
  Avg. received rate ....            4.75%            5.19%
</TABLE>



                                       42
<PAGE>

ITEM 8 -- FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,    DECEMBER 31,
                                                                                     2000            1999
                                                                                -------------   --------------
                                                                                 (AS RESTATED)   (AS RESTATED)
                                                                                ------------------------------
                                                                                  (IN THOUSANDS, EXCEPT SHARE
                                                                                            DATA)
<S>                                                                             <C>             <C>
ASSETS:
  Storage centers:
     Land...................................................................    $     248,741   $     228,601
     Buildings and equipment, net...........................................          842,115         757,512
     Construction in progress...............................................           22,686          49,939
                                                                                -------------   -------------
          Total storage centers.............................................        1,113,542       1,036,052
  Other real estate investments.............................................           49,501          47,451
  Cash and cash equivalents.................................................            7,664          11,645
  Restricted cash and investments...........................................            8,510           7,166
  Other assets..............................................................           51,025          47,546
                                                                                -------------   -------------
          Total assets......................................................    $   1,230,242   $   1,149,860
                                                                                =============   =============

LIABILITIES AND SHAREHOLDERS' EQUITY:

  Accounts payable and other liabilities....................................    $      33,876   $      34,837
  Lines of credit...........................................................           89,925         102,002
  Notes payable.............................................................          405,429         332,347
  Participation rights, net of discount of $33,340 and $19,860..............          100,170          53,726
                                                                                -------------   -------------
          Total liabilities.................................................          629,400         522,912
  Minority interest in other real estate investments........................            4,204           6,748
  Commitments and contingencies (Notes C, D, E,
   F, I and P)
  Shareholders' equity:
     Series B Cumulative Redeemable Preferred Stock, $0.001 par value:
      2,300,000 shares authorized; 2,000,000 shares issued and outstanding;
      liquidation preference of $50,000,000.................................           48,056          48,056
     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
     Class A Common Stock, $0.001 par value; 120,000,000 shares
      authorized; 29,620,225 and 29,093,474 shares issued and outstanding...          624,464         611,973
     Class B Common Stock, $0.001 par value; 500,000 shares
      authorized, 154,604 issued and outstanding; net of
      loans to shareholders of $3,676 and $4,002............................             (760)         (1,086)
     Accumulated net income less distributions..............................         (123,237)        (86,858)
                                                                                -------------   -------------
          Total shareholders' equity........................................          596,638         620,200
                                                                                -------------   -------------
          Total liabilities and shareholders' equity........................    $   1,230,242   $   1,149,860
                                                                                =============   =============
</TABLE>

                 See notes to consolidated financial statements



                                       43
<PAGE>


                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                          YEAR ENDED    YEAR ENDED     YEAR ENDED
                                                         DECEMBER 31,  DECEMBER 31,   DECEMBER 31,
                                                             2000          1999           1998
                                                         ------------  -----------    -----------
                                                         (AS RESTATED) (AS RESTATED)  (AS RESTATED)
                                                         ------------  -----------    -----------
                                                          (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                      <C>           <C>            <C>
REVENUE:
  Rental...........................................      $   200,343   $   175,045    $   160,067
  Loss from other real estate
     investments...................................           (3,420)       (3,302)        (1,568)
  Property management..............................            1,615         1,411          1,893
                                                         -----------   -----------    -----------
          Total revenue............................          198,538       173,154        160,392
EXPENSES:
  Operating........................................           58,124        47,265         46,705
  Depreciation and amortization....................           40,693        36,768         33,991
  Real estates taxes...............................           17,940        15,777         13,324
  General, administrative and other................            4,911         4,193          4,619
                                                         -----------   -----------    -----------
          Total expenses...........................          121,668       104,003         98,639
                                                         -----------   -----------    -----------
     Income from operations........................           76,870        69,151         61,753
OTHER INCOME (EXPENSE):
Interest:
  Interest on loans................................          (36,175)      (25,428)       (23,883)
  Amortization of participation rights discount....          (11,262)       (8,057)        (3,999)
  Interest income and other........................            3,617         2,826          1,439
                                                         -----------   -----------    -----------

     Other income (expense), net...................          (43,820)      (30,659)       (26,443)
  Minority interest................................             (743)         (815)         2,084
                                                         -----------   -----------    -----------
  Income before cumulative effect of a
     change in accounting principle................           32,307        37,677         37,394
  Cumulative effect of a change in
     accounting principle..........................                         (1,098)        (2,168)
                                                         -----------   -----------    -----------
     Net income....................................      $    32,307   $    36,579    $    35,226
                                                         ===========   ===========    ===========
Net income allocation:
  Allocable to preferred shareholders..............      $     8,750   $     8,750    $     4,690
  Allocable to common shareholders.................           23,557        27,829         30,536
                                                         -----------   -----------    -----------
                                                         $    32,307   $    36,579    $    35,226
                                                         ===========   ===========    ===========
NET INCOME PER COMMON SHARE:
Basic net income per share:
  Income before accounting change..................      $      0.80   $      0.99    $      1.14
  Accounting change................................                           (.04)         (0.08)
                                                         -----------   -----------    -----------
  Net income.......................................      $      0.80   $      0.95    $      1.06
                                                         ===========   ===========    ===========
Diluted net income per share:
  Income before accounting change..................      $      0.79   $      0.99    $      1.14
  Accounting change................................                           (.04)         (0.08)
                                                         -----------   -----------    -----------
  Net income.......................................      $      0.79   $      0.95    $      1.06
                                                         ===========   ===========    ===========
Distributions per common share.....................      $      2.03   $      1.99    $      1.95
                                                         ===========   ===========    ===========
</TABLE>

                 See notes to consolidated financial statements



                                       44
<PAGE>


                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                    CLASS A             CLASS B                  ACCUMULATED   ACCUMULATED
                            PREFERRED STOCK      COMMON STOCK        COMMON STOCK    LOANS TO     NET INCOME      OTHER
                          ------------------   ----------------    --------------     CLASS B        LESS     COMPREHENSIVE
                           SHARES    AMOUNT    SHARES    AMOUNT    SHARES  AMOUNT  SHAREHOLDERS DISTRIBUTIONS     INCOME      TOTAL
                           ------    ------    ------    ------    ------  ------  ------------ ------------- ------------- --------
                                                                                                              (AS RESTATED)
                                                                   (IN THOUSANDS)
<S>                        <C>      <C>       <C>       <C>         <C>    <C>        <C>         <C>           <C>        <C>
Balance, Jan. 1, 1998...   2,000    $48,056   28,432    $595,269    155    $2,916     $(4,002)    $(31,452)     $(2,095)   $608,692
Comprehensive income:
 Net income (as restated)                                                                           35,226                   35,226
 Other comprehensive
  income:
   Foreign currency
     translation.......                                                                                             648         648
                                                                                                                           --------
      Total comprehensive
        income........                                                                                                       35,874
Issuance of Series C
 Preferred Stock........   2,000     48,115                                                                                  48,115
Issuance of common stock                         390      10,215                                                             10,215
Distributions
 Preferred.............                                                                            (4,690)                   (4,690)
 Common................                                                                           (55,904)                  (55,904)
                           -----    -------   ------     -------    ---    ------     -------     -------       -------    --------
Balance, Dec. 31 1998...   4,000     96,171   28,822     605,484    155     2,916      (4,002)    (56,820)       (1,447)    642,302
Comprehensive income:
 Net income (as restated)                                                                          36,579                    36,579
 Other comprehensive
  income:
   Foreign currency
     Translation.......                                                                                           1,447       1,447
                                                                                                                           --------
Total comprehensive income                                                                                                   38,026
Issuance of common stock                         271       6,489                                                              6,489
Distributions:
 Preferred.............                                                                            (8,750)                   (8,750)
 Common................                                                                           (57,867)                  (57,867)
                           -----    -------   ------     -------    ---    ------     -------     -------       -------    --------
Balance, Dec. 31, 1999..   4,000     96,171   29,093     611,973    155     2,916      (4,002)    (86,858)           --     620,200
Comprehensive income:
 Net income (as restated)                                                                          32,307                    32,307
Issuance of Common stock                         527      12,491                                                             12,491
Payment on loan to
 Shareholder...........                                                                   326                                   326
Distributions:
 Preferred.............                                                                            (8,750)                   (8,750)
 Common................                                                                           (59,936)                  (59,936)
                           -----    -------   ------    --------    ---    ------     -------     -------       -------    --------
Balance, Dec. 31, 2000
(as restated)..........    4,000    $96,171   29,620    $624,464    155    $2,916     $(3,676)    $(123,237)    $    --    $596,638
                           =====    =======   ======    ========    ===    ======     =======     =========     =======    ========
</TABLE>

                 See notes to consolidated financial statements



                                       45
<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                  YEAR           YEAR           YEAR
                                                                                  ENDED          ENDED          ENDED
                                                                              DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                                                                  2000           1999           1998
                                                                              ------------   ------------   ------------
                                                                              (AS RESTATED)  (AS RESTATED)  (AS RESTATED)
                                                                              ------------   ------------   ------------
                                                                                           (IN THOUSANDS)
<S>                                                                           <C>            <C>            <C>
OPERATING ACTIVITIES:
  Net income.............................................................     $    32,307    $    36,579    $    35,226
  Adjustments to reconcile earnings to net cash provided by
    operating activities:
    Cumulative effect of change in accounting principle..................                          1,098          2,168
    Depreciation and amortization........................................          40,693         36,768         33,991
    Amortization of participation rights discount........................          11,262          8,057          3,999
    Other................................................................                         (1,049)          (294)
    Loss from other real estate investments..............................           5,932          5,747          4,092

    Minority interest in earnings from investments in other real estate
       Investments.......................................................             743            815         (2,084)
    Changes in operating accounts:
      Restricted cash and investments....................................          (1,344)          (302)           164
      Other assets.......................................................          (5,099)        (3,844)        (4,682)
      Accounts payable and other liabilities.............................           1,113          2,212          4,350
                                                                              -----------    -----------    -----------
        Net cash provided by operating activities........................          85,607         86,081         76,930
                                                                              -----------    -----------    -----------

INVESTING ACTIVITIES:
  Proceeds from sale of real estate and equipment........................                         14,421          2,000
  Purchase of other real estate investments..............................          (4,908)        (8,172)        (9,498)
  Purchase of non-competition agreements and other amortizable assets....            (583)          (994)        (3,175)
  Decrease in cash and cash equivalents as a result of
    deconsolidation .....................................................                         (1,301)
  Distributions in excess of earnings from other real estate investments.             483            999          5,860
  Purchase of units of affiliated partnership............................          (3,807)        (1,191)
  Investment in limited partnerships.....................................                                       (21,181)
  Increase in loans to affiliates........................................          (2,204)        (2,041)        (5,950)
  Construction, acquisition and improvements to storage centers..........        (106,693)      (122,967)      (184,472)
                                                                              -----------    -----------    -----------
        Net cash used in investing activities............................        (117,712)      (121,246)      (216,416)
                                                                              -----------    -----------    -----------

FINANCING ACTIVITIES:
  Proceeds from preferred stock offering, net............................                                        48,115
  Proceeds from exercise of stock options and dividend reinvestment plan.           3,284          6,489         10,199
  Net proceeds from financing arrangements...............................          35,390         20,909         18,075
  Distributions paid.....................................................         (68,686)       (66,617)       (60,594)
  Net proceeds from (payments on) lines of credit........................         (12,077)        20,552         37,024
  Proceeds from notes payable............................................          73,103         58,342         90,765
  Payments of financing costs............................................          (2,237)        (2,054)        (1,166)
  Proceeds from payment on loan to shareholder...........................             326
  Principal payments on notes payable....................................             (21)          (222)           (26)
  Contributions by minority partners.....................................             228            862
  Distributions to minority partners.....................................          (1,186)          (925)          (748)
                                                                              -----------    -----------    -----------
        Net cash provided by financing activities........................          28,124         37,336        141,644
        Net effect of translation on cash................................                                            68
                                                                              -----------    -----------    -----------
  (Decrease) increase in cash and cash equivalents.......................          (3,981)         2,171          2,226
  Cash and cash equivalents at beginning of period.......................          11,645          9,474          7,248
                                                                              -----------    -----------    -----------
  Cash and cash equivalents at end of period.............................     $     7,664    $    11,645    $     9,474
                                                                              ===========    ===========    ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid for interest.................................................     $    39,789    $    31,094    $    28,102
  Cash paid on participation rights......................................     $     2,225    $       450

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
  INFORMATION:
  Note receivable in connection with non-compete agreement...............                    $     1,435
</TABLE>



                                       46
<PAGE>

<TABLE>
<S>                                                                           <C>            <C>            <C>
  Liabilities incurred in connection with the construction of storage
      centers............................................................     $     6,143    $     9,573    $    11,035
  Stock issued as additional consideration for merger....................     $     9,207    $     3,814
</TABLE>

                 See notes to consolidated financial statements







                                       47
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A -- ORGANIZATION

        Shurgard Storage Centers, Inc. (SSCI), 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 which 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 include the
accounts of SSCI and its subsidiaries. All inter-company balances and
transactions have been eliminated upon 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.

        In October 1999, a group of unaffiliated investors purchased a 42%
interest in SSC Benelux & Co., SCA (Benelux SCA). As a result of this
transaction, we no longer control Benelux SCA and for the years ended December
31, 2000 and 1999, our remaining 7.57% interest has been accounted for under the
equity method of accounting. (See Note E).

        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.

        New accounting principles: Statement of Financial Accounting Standards
(SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities",
is effective for all fiscal years beginning after June 15, 2000. SFAS 133, as
amended, establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities. Under SFAS 133, certain contracts that
were not formerly considered derivatives may now meet the definition of a
derivative. We adopted SFAS 133 effective January 1, 2001. We use interest rate
swaps to fix a portion of our variable rate debt. We do not expect the adoption
of SFAS 133 to have a significant impact on our financial position, results of
operations, or cash flows.

        We implemented the AICPA Statement of Position (SOP) 98-5, "Reporting on
the Costs of Start-Up Activities", in the first quarter of 1999. The initial
application is reported as a cumulative effect of change in accounting
principle.

        Effective January 1, 1998, the Company adopted SOP 97-1 "Accounting by
Participating Mortgage Loan Borrowers." This Statement establishes borrowers'
accounting for participating mortgage loans and requires, among other things,
that borrowers recognize liabilities for the estimated fair value of lenders'
participation in the appreciation in value (if any) of mortgaged real estate and
record such participation as interest over the terms of the related loans. The
Company had not previously recognized participations in the appreciation in the
value of the mortgaged properties. The initial application is reported as a
cumulative effect of a change in accounting principle.

        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 30 years.

        Other real estate investments: As of December 31, 2000, investments
accounted for under the equity method included 24 joint ventures. Also, included
in other real estate investments are participating mortgages, which are
accounted for as loans.

        Financing arrangements: We accounted for sales of certain storage
centers in which we have continuing involvement, as defined in SFAS 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.



                                       48
<PAGE>

        Restricted cash and investments: Restricted cash and investments consist
of cash deposits and securities held in trust in connection with certain notes
payable. Restricted cash deposits represent expense reserves required by
lenders. Restricted securities (Note J), per the loan agreement, must be held to
maturity and thus are carried at amortized cost. The related premium is
amortized over the estimated remaining life of the security using the constant
yield method.

        Other assets: Other assets include financing costs, non-competition
agreements, and goodwill, which are presented net of accumulated amortization of
$23,189,000 and $18,748,000 as of December 31, 2000 and 1999, respectively.
Financing costs are amortized on the effective interest method over the life of
the related debt and the related expense is included in amortization.
Non-competition agreements and goodwill 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 95% 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
1998 or 1999 and we intend to make elections regarding distributions such that
we will not pay federal taxes for 2000. As a result, no provision for federal
income taxes 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. Legislation passed in December
1999 reduces the taxable income distribution requirements for a REIT from 95% to
90% beginning January 2001.

        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 upon specified advance of notice.
Management fees from related parties were $250,000, $293,000 and $257,000 for
the years ended December 31, 2000, 1999 and 1998, respectively.

        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. At December 31, 2000, no assets had been impaired.

        Financial instruments: The carrying values reflected on the balance
sheet at December 31, 2000, reasonably approximate the fair value of cash and
cash equivalents, other assets, accounts payable, lines of credit, variable rate
debt and other liabilities. We estimate that the fair value of loans to
shareholders is $3.3 million and the fair value of participating mortgages is
$14.4 million. 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 $339.7 million compared
to a book value of $338.5 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
contamination at our facilities, we are not aware of any such contamination at
any of our facilities which individually or in aggregate would be material to
our business, financial condition, or results of operations.

        Reclassification: Certain amounts in the prior year financial statements
have been reclassified to conform to the current presentation.

NOTE C -- STORAGE CENTERS

<TABLE>
<CAPTION>
                                                           DECEMBER 31,         DECEMBER 31,
                                                              2000                 1999
                                                           -----------          -----------
                                                                    (IN THOUSANDS)
<S>                                                        <C>                  <C>
Land .............................................         $   248,741          $   228,601
Buildings ........................................             972,070              857,215
Equipment & other ................................              39,876               34,662
                                                           -----------          -----------
                                                             1,260,687            1,120,478
Less accumulated depreciation ....................            (169,831)            (134,365)
                                                           -----------          -----------
                                                             1,090,856              986,113
Construction in progress, including land of $6,930
</TABLE>



                                       49
<PAGE>

<TABLE>
<S>                                                        <C>                  <C>
  and $14,193, respectively ......................              22,686               49,939
                                                           -----------          -----------
                                                           $ 1,113,542          $ 1,036,052
                                                           ===========          ===========
</TABLE>


        We have entered into various construction contracts for development of
new or improvements to existing storage centers. Outstanding commitments under
these contracts total $51.0 million. In 2000, 1999 and 1998, we capitalized
approximately $3.8 million, $6.0 million and $4.5 million, respectively, of
interest related to the development of storage centers.

NOTE D -- ACQUISITIONS

        In March 1999, we purchased from an unaffiliated third party one limited
partner unit in Shurgard Institutional Fund LP II, an affiliated partnership,
for $1.2 million in cash. In September of 2000, we purchased the remaining 3
units 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.

        In July 1998, we purchased eighteen limited partner units for $22.6
million in cash ($21.2 million, net of cash received). All purchases were from
unaffiliated third parties. We currently own 22 of 25 units and are entitled to
88% of this partnership's limited partner distributions. As this represents a
majority interest, Shurgard Institutional Fund LP has been consolidated for
financial statement purposes since July 1998. We continue to own a general
partnership interest in this partnership.

        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. Upon completion of the rent up period, the
storage centers are purchased by a joint venture in which we owned 77.3% as of
December 31, 2000. Prior to such purchase, we have no ownership in the
properties and as such, they are not included in any discussions in our
operating results. The developer's interest in the entity is based upon 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, and during 2000 the joint venture purchased an additional completed
storage center for $11.0 million. At December 31, 2000, we had guaranteed $22.4
million in outstanding debt for three properties related to this agreement and
may guarantee additional amounts as future properties are developed.

NOTE E -- OTHER REAL ESTATE INVESTMENTS

<TABLE>
<CAPTION>
                                                             DECEMBER 31,    DECEMBER 31,
                                                                 2000            1999
                                                             ------------    ------------
                                                                   (IN THOUSANDS)
<S>                                                          <C>             <C>
Investments in participating mortgages ................         $13,071         $13,230
Investments in joint ventures .........................          27,799          24,429
Investment in containerized storage business ..........           8,631           9,792
                                                                -------         -------
                                                                $49,501         $47,451
                                                                =======         =======
</TABLE>

     We have invested $13.1 million in three participating mortgage loans. All
three mortgages are non-recourse to the borrower, bear interest at 8% per annum
and mature in January 2005. These loans are secured by real estate, including
four storage centers and office/warehouse space. Additionally, we receive
contingent interest payments from the mortgaged properties 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 agreements. We received $422,000,
$562,000 and $685,000 in the years 2000, 1999 and 1998 in connection with these
agreements. We have options to purchase the properties at established prices,
which are exercisable from January 2001 to January 2006.

     Pursuant to affiliation agreements with two storage operators, we have
entered into 24 joint ventures in which our ownership interests range from 50%
to 90%. As of December 31, 2000, we had invested a total of $25.6 million in
these joint ventures. We have guaranteed $25.5 million of loans. The financial
results for these projects are not consolidated in our financial statements
because each affiliation agreement allows 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.

In July 1998, we increased our participation in Benelux SCA to 13.06% from 12.5%
by purchasing an additional interest from a joint venture partner for $300,000.
In October 1999, a group of unaffiliated investors purchased a 42% interest in
Benelux SCA for 122 million Euro ($114.5 million in U.S. dollars at December 31,
2000). As a result of this agreement, our interest decreased to 7.57%, and we no
longer have effective control of Benelux SCA. The joint venture agreement
requires a vote of two thirds of the


                                       50
<PAGE>

Board of Managers for all major decisions; however, we continue to exercise
significant influence over Benelux SCA through our control of half of the seats
on the Board of Managers. The negative investment balances of $2.4 million and
$1.0 million are included in other liabilities as of December 31, 2000 and 1999,
respectively.

     As of December 31, 2000, we had invested $5.0 million in Shurgard Storage
to Go, Inc. (STG), a containerized storage business. Our investment was offset
by our portion of STG losses. As of December 31, 2000, we had committed to lend
STG up to $13.4 million under unsecured five-year notes of which $12.92 million
was outstanding and included in other real estate investments as of December 31,
2000. The outstanding principal balances bear interest at the 12 month London
Interbank Offer Rate (LIBOR) plus 375 basis points per annum, and are due from
July 15, 2002 to January 28, 2005. Additionally, we have currently guaranteed
$8.7 million in lease obligations. At December 31, 2000, we owned 95.5% of the
nonvoting stock in this start-up venture which is not a qualified REIT
subsidiary and is subject to corporate level tax. In order to comply with the
changes in REIT rules, we plan to recapitalize STG by converting substantially
all of our existing loan to STG into equity and acquiring all or substantially
all of the voting stock of STG.

NOTE F -- LINES OF CREDIT

     We have an unsecured domestic line of credit to borrow up to $200 million
at a spread over LIBOR, maturing September 30, 2001, with the option to extend
until September 2002. The amount available and the spread vary based on the
terms of the agreement; as of December 31, 2000, the current available amount
was $200 million, of which approximately $90 million was outstanding. At
December 31, 2000, the weighted average interest rate was 7.87%. Covenants on
this line of credit restrict our dividends to no more than 95% of funds from
operations and require us to maintain certain financial ratios.

NOTE G -- NOTES PAYABLE

<TABLE>
<CAPTION>
                                                 DECEMBER 31,      DECEMBER 31,
                                                    2000              1999
                                                 ------------      ------------
                                                          (IN THOUSANDS)
<S>                                              <C>              <C>
Note payable to financial services company         $122,580         $122,580
Senior notes payable .....................          100,000          100,000
Mortgage notes payable ...................          182,849          109,767
                                                   --------         --------
                                                   $405,429         $332,347
                                                   ========         ========
</TABLE>

        The $122.6 million non-recourse note payable to a financial services
company requires monthly payments of interest only at 8.28% until it matures
June 2001 and is secured by 86 properties. As required by the loan agreement, we
deposit cash in restricted accounts to fund certain expenses including real
estate taxes and insurance. Subsequent to the establishment of this note, we
have removed three properties from the assets securing this note, and, as part
of the defeasance, were required to place US treasury notes costing $3.8 million
into a trust account. These treasury notes mature in June 2001 and carry an
effective interest rate of 5.6%.

        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.

        At December 31, 2000, four of our six mortgage notes payable are secured
by 53 properties accounted for as financing arrangements (See Note H) and are
non-recourse credit facilities which require payments of interest only.

<TABLE>
<CAPTION>
                                                                                 EFFECTIVE WEIGHTED
  OUTSTANDING BALANCE AT                                                      AVERAGE INTEREST RATE AT
     DECEMBER 31, 2000                                                            DECEMBER 31, 2000
      (IN THOUSANDS)               MATURITY DATE          INTEREST RATE        AFTER EFFECT OF HEDGING
--------------------------     --------------------  ---------------------   -------------------------
<S>                            <C>                   <C>                     <C>
          $45,000                    May 2001            LIBOR plus 200                 7.57%
           62,200                   March 2002           LIBOR plus 225                 8.48
            6,500                  October 2001          LIBOR plus 320                 9.94
           60,400                 December 2003          LIBOR plus 275                 9.49
</TABLE>

        The $60.4 million note is covered by an interest rate cap that limits
the interest rate to 7.5% plus the spread on LIBOR. The $45 million note was
paid in full on January 30, 2001.

        The remaining two mortgage notes are secured by a deed of trust on two
storage centers. The first is a recourse mortgage due in monthly installments of
$13,441, including principal and interest at 10.25%, and matures April 2001. The
second is a non-recourse



                                       51
<PAGE>

participating mortgage for $7.3 million requiring fixed monthly payments of
interest only at 8% plus quarterly payments of 90% of excess cash flow, as
defined in the agreement. This mortgage also requires payment of 90% of the
storage center's appreciation upon maturity, January 2004.

        The maturities of principal on debt over the next five fiscal years are
approximately $175.4 million in 2001; $62.6 million in 2002; $60.4 million in
2003; $57 million in 2004; $50 million in 2007. Each of these notes contains
covenants which require us to submit financial information and maintain certain
financial ratios. The book value of storage centers securing our notes payable
is $462.5 million.

NOTE H -- PARTICIPATION RIGHTS

        Beginning in 1998, we entered into a series of four development joint
ventures with unrelated third parties. The purpose of these joint ventures was
to expand our development capacity, broaden our access to capital, and to
minimize the effect of the rent-up deficit on funds from operations by sharing
the rent-up risk with our joint venture partners. We have a 10% or 20% equity
interest in each of these joint ventures, which are structured as general
partnerships or limited liability companies, and generally require the agreement
of both partners on all major decisions. Under the terms of each joint venture,
cash from the third-party equity contributions and the proceeds from mortgage
debt were utilized to purchase the storage centers when or shortly after we
completed construction. The amount paid to us was based on historical cost of
the properties plus negative cash flow prior to transfer.

        Under the terms of three joint ventures, we have an option to acquire
the storage centers or the other investor's partnership interest. Each purchase
option is exercisable at certain times, typically in two to three years. If we
exercise our option, the purchase price for the properties is the greater of a
base purchase price (an amount sufficient to yield a 7% return on the partners'
unreturned capital contribution), or a calculated purchase price (based on the
annualized net operating income (NOI) of the properties for the three or
four-month period preceding the exercise of the option divided by 9.25%).

        The terms of the fourth joint venture are similar to those described
above, except that our joint venture partner has the right to present each
property to us for purchase after the thirty-first month following the
contribution of the property to the joint venture. If we elect to purchase a
property, the purchase price is the greater of an amount necessary to return all
partners a 12% internal rate of return on contributed equity or an amount
calculated in a manner similar to the three joint ventures discussed above. If
we decline to purchase a property at the stipulated price, the property, without
our consent, may be sold to a third party, and in addition, our voting rights
will be suspended. If the aggregate sales proceeds from any properties purchased
by third parties are less than the stipulated price, our share of the proceeds
will be reduced by an amount that cannot exceed our contributed capital in
accordance with a formula. The joint venture cannot sell the properties to a
third party prior to offering the properties to us at the stipulated price.

        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.

        We also own a storage center subject to a participating mortgage. The
lenders will receive 90% of the property's appreciation. As a result this
mortgage is accounted for in the same manner as described above.

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



                                       52
<PAGE>

<TABLE>
<CAPTION>
                                                            Year ended December 31,
                                                 -----------------------------------------------
(in thousands)                                     2000               1999               1998
                                                 ---------          ---------          ---------
<S>                                              <C>                <C>                <C>
Gross participation rights .............         $ 133,510          $  73,586          $  36,439
Participation rights Discount ..........           (33,340)           (19,860)           (11,679)
                                                 ---------          ---------          ---------
Participation rights, net ..............         $ 100,170          $  53,726          $  24,760
                                                 =========          =========          =========
</TABLE>


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):

<TABLE>
<S>                                               <C>
2001..........................................    $     1,321
2002..........................................          1,350
2003..........................................          1,394
2004..........................................          1,415
2005..........................................          1,426
Thereafter....................................         30,242
                                                  -----------
                                                  $    37,148
                                                  ===========
</TABLE>

        Expense under these leases was approximately $1,157,000, $690,000 and
$600,000 for the years ended December 31, 2000, 1999, and 1998, respectively.

NOTE J -- SHAREHOLDERS' EQUITY

        In addition to the rights, privileges and powers of Class A Common
Stock, Class B common stockholders received loans from SSCI to fund certain
obligations to the 17 partnerships which comprise our predecessor. The loans are
due between 2000 and 2003 and are secured by the Class B Common Stock. Class B
Common Stock is convertible to Class A Common Stock at a one-to-one ratio as the
loans are repaid. During 2000, $326,000 was paid on these notes and 76,529 Class
B shares are currently convertible to Class A shares. Substantially all these
notes are non-interest bearing.

        SSCI 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 and outstanding at December 31, 2000); 2.3 million
shares have been designated as Series B Cumulative Redeemable Preferred Stock (2
million of which are issued and outstanding at December 31, 2000, as discussed
below) and 2 million shares have been designated as Series C Cumulative
Redeemable preferred stock (2 million of which are issued and outstanding at
December 31, 2000, 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 B Cumulative Redeemable Preferred Stock require quarterly
distribution payments totaling 8.8% per year and are callable at our option
after five years, at a redemption price of $25 per share. In December 1998, we
raised net proceeds after offering costs of $48.1 million through the sale of 2
million shares of Series C Cumulative Redeemable Preferred Stock. These
preferred shares require quarterly distribution payments totaling 8.7% per year
and are callable at our option after five years, at a redemption price of $25
per share.

        On March 24, 1995, SSCI 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 February 4, 1999, we issued 145,286 Class A
common shares for $3.8 million related to this obligation. On June 5, 2000, we
issued the final 387,933 Class A common shares due under this obligation for
$9.2 million.

NOTE K -- STOCK COMPENSATION AND BENEFIT PLANS



                                       53
<PAGE>

        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 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 SSCI, 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 plan expired in July 2000.

        The 2000 Long-Term Incentive Compensation Plan (the 2000 Plan) provides
for the granting of options for up to 1.4 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 SSCI, 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 and key employees. In December 2000, we granted 39,525 shares of
restricted Class A common stock to officers and key employees. 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.

        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 upon
continued service until our next annual meeting. 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 is equal to fair
market value at date of grant. As of December 31, 2000, 78,920 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. We match a portion of employee contributions and
may make annual discretionary contributions to purchase company stock. Our
expense for contributions to this plan was approximately, $809,000, $989,000,
and $921,000 for 2000, 1999, and 1998, 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 SSCI 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.

        The weighted average remaining contractual life of options outstanding
at December 31, 2000 was 8.5 years and option prices ranged from $18.90 to
$29.00 per share. The following table summarizes the outstanding and exercisable
options under all of our plans:

<TABLE>
<CAPTION>
                                                                             WEIGHTED
                                                            NUMBER OF         AVERAGE
                                                             SHARES       EXERCISE PRICE
                                                             ------       --------------
<S>                                                      <C>              <C>
Outstanding, January 1, 1998.........................         479,932       $   25.82
  Granted............................................         417,500           28.98
  Forfeited..........................................         (53,227)          23.53
  Exercised..........................................         (18,639)          27.50
                                                         ------------
Outstanding, December 31, 1998.......................         825,566           27.36
  Granted............................................       1,582,270           23.14
  Forfeited..........................................        (150,685)          23.96
</TABLE>



                                       54
<PAGE>

<TABLE>
<S>                                                      <C>              <C>
  Exercised..........................................          (9,575)          26.54
                                                         ------------
Outstanding, December 31, 1999.......................       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
                                                         ============
Exercisable, December 31, 1998.......................         231,278           25.57
                                                         ============
Exercisable, December 31, 1999.......................         471,051           26.67
                                                         ============
Exercisable, December 31, 2000.......................         999,709           25.34
                                                         ============
</TABLE>

        The following table summarizes information about stock options
outstanding and exercisable at December 31, 2000:

<TABLE>
<CAPTION>
                                              NUMBER OF OPTIONS      WEIGHTED AVERAGE          NUMBER OF
                                                 OUTSTANDING             REMAINING         OPTIONS EXERCISABLE
RANGE OF EXERCISE PRICES                      DECEMBER 31, 2000      CONTRACTUAL LIFE       DECEMBER 31, 2000
------------------------                   ---------------------   --------------------  --------------------
<S>                                        <C>                     <C>                   <C>
$18.90 to $18.90.......................               6,000             3.3 years                   6,000
$20.75 to $23.88.......................             108,200             4.3 years                 108,200
$25.50 to $27.00.......................              32,513             5.0 years                  32,513
$28.25 to $28.25.......................             164,858             6.0 years                 164,858
$27.88 to $29.00.......................             306,979             7.0 years                 228,559
$21.63 to $27.56.......................           1,210,339             8.8 years                 457,912
$22.63 to $23.94.......................           1,160,750             9.8 years                   1,667
                                                -----------                                    ----------
                                                  2,989,639                                       999,709
                                                ===========                                    ==========
</TABLE>

        During 1999, 8,696 shares were issued related to performance awards
granted in 1996, which were contingent on meeting performance objectives over a
three year period.

        In January 2001, we granted 76,000 options at an average of $24.85 per
share which represented the market price at the time of the grants. Of these
options, 26,000 were granted to employees and vest ratably over three years, and
50,000 were granted to directors which vest upon continued service at the
following year's annual meeting.

        During 1999, a bonus plan was established under which employees will
share a one time bonus payment of $50 million. The bonus is an all or nothing
bonus, and is earned upon achievement of the equivalent of $5.00 funds from
operations (FFO, as defined by National Association of Real Estate Investment
Trusts) per share annually. The $5.00 FFO threshold is measured by annualizing
any single quarter FFO; e.g., a fiscal quarter FFO of $1.25 is equivalent to
$5.00 FFO annually. This goal must be achieved by December 31, 2003, or no bonus
will be paid. The bonus is payable to all employees based on length of service
and position within the company and is subject to adjustment by the Board for
unplanned expansion of existing business or new business ventures.

        We have adopted the disclosure only provisions of the SFAS 123,
"Accounting for Stock-Based Compensation." No compensation cost has been
recognized for the stock option plans. Had compensation cost for options granted
under our two stock option plans been determined based on the fair value at the
grant date for awards in 1998, 1999 and 2000 consistent with the provisions of
SFAS 123, our net income and net income per share would have been reduced to the
pro forma amounts indicated below (in thousands):

<TABLE>
<CAPTION>
                                                                                   YEAR ENDED DECEMBER 31,
                                                                           --------------------------------------
                                                                               2000         1999          1998
                                                                           -----------  -----------   -----------
<S>                                                                        <C>          <C>           <C>
Net income:
  As reported.........................................................     $    32,307  $    36,579   $    35,226
  Pro forma...........................................................          30,829       35,548        34,624
Dilutive net income per share:
  As reported.........................................................            0.79         0.95          1.06
  Pro forma...........................................................            0.74         0.92          1.04
Weighted average fair value of options granted........................            2.54         2.38          2.90
</TABLE>

        The fair value of options granted under our stock option plans during
2000, 1999 and 1998 was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions used:
dividend yield of 8.81%, 8.64% and 6.76%, expected volatility of 28%, 22% and
21%, risk free interest rate of 5.12%, 6.39% and 4.64%, and expected life of
6.5, 6.5 and 6.5 years, respectively.

NOTE L -- SHAREHOLDER RIGHTS PLAN



                                       55
<PAGE>

        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, upon exercise, common stock (or, in certain circumstances,
cash, property or other securities of SSCI) having a value equal to two times
the exercise price of the Right. In addition, if SSCI 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 $.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 M -- NET INCOME PER SHARE

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

<TABLE>
<CAPTION>
                                                                                      WEIGHTED
                                                                                       AVERAGE        NET INCOME
                                                                      NET INCOME        SHARES         PER SHARE
                                                                      ----------        ------         ---------
                                                                         (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                                                                   <C>             <C>            <C>
FOR THE YEAR ENDED DECEMBER 31, 1998

Net income......................................................      $   35,226
Less: Preferred dividends.......................................          (4,690)
                                                                      ----------
Basic net income................................................          30,536         28,693        $  1.06
Effect of dilutive stock options................................                             31
                                                                      ----------       --------        -------
Diluted net income..............................................      $   30,536         28,724        $  1.06
                                                                      ==========       ========        =======
FOR THE YEAR ENDED DECEMBER 31, 1999

Net income......................................................      $   36,579
Less: Preferred dividends.......................................          (8,750)
                                                                      ----------
Basic net income................................................          27,829         29,087        $  0.95
Effect of dilutive stock options................................                             43
                                                                      ----------       --------        -------
Diluted net income..............................................      $   27,829         29,130        $  0.95
                                                                      ==========       ========        =======
FOR THE YEAR ENDED DECEMBER 31, 2000

Net income......................................................      $   32,307
Less: Preferred dividends.......................................          (8,750)
                                                                      ----------
Basic net income................................................          23,557         29,561        $  0.80
Effect of dilutive stock options................................                            200           (.01)
                                                                      ----------       --------        --------
Diluted net income..............................................      $   23,557         29,761        $  0.79
                                                                      ==========       ========        =======
</TABLE>

NOTE N -- SEGMENT REPORTING

        SSCI 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. Additionally, prior to 1999, we consolidated the European
operations and reported a third segment: European Stores. Disposed stores
represents properties sold during the 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,



                                       56
<PAGE>

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. SSCI does not allocate development and acquisition expense,
depreciation and amortization, general, administrative and other, interest
expense, interest and other income (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 tables
illustrates the results using the 2000 Same Store and New Store base for
reportable segments as of and for the years ended December 31, 2000 and 1999.
Same stores includes all stores acquired prior to January 1, 1999, and domestic
developments opened prior to January 1, 1998. New stores represents all stores
acquired after January 1, 1999, and domestic developments opened after January
1, 1998:

<TABLE>
<CAPTION>
                                                                      SAME STORES      NEW STORES       DISPOSED         TOTAL
                                                                      -----------      ----------       --------         -----
                                                                                            (IN THOUSANDS)
<S>                                                                   <C>             <C>              <C>         <C>
YEAR ENDED DECEMBER 31, 2000

Rental revenue....................................................    $    183,726    $     30,021     $      --   $       213,747
Less unconsolidated joint ventures................................         (10,309)         (3,095)                        (13,404)
                                                                      ------------    ------------     ---------   ---------------
Consolidated revenue..............................................         173,417          26,926                         200,343
Direct operating and real estate tax expense......................          52,924          13,005                          65,929
Less unconsolidated joint ventures................................          (3,105)         (1,925)                         (5,030)
                                                                      ------------    ------------     ---------   ---------------
Consolidated direct operating and real estate tax expense.........          49,819          11,080                          60,899
                                                                      ------------    ------------     ---------   ---------------
Consolidated NOI..................................................         123,598          15,846            --           139,444
Indirect and leasehold expense....................................          11,609           3,601                          15,210
Less unconsolidated joint ventures................................            (459)           (277)                           (736)
                                                                      ------------    ------------                 ---------------
Consolidated indirect and leasehold expense.......................          11,150           3,324                          14,474
                                                                      ------------    ------------     ---------   ---------------
Consolidated NOI after indirect and leasehold expense.............    $    112,448    $     12,522     $      --   $       124,970
                                                                      ============    ============     =========   ===============
          Total Assets............................................    $    781,065    $    343,634                 $     1,124,699
                                                                      ============    ============                 ===============
YEAR ENDED DECEMBER 31, 1999
Rental revenue....................................................    $    172,112    $     11,731     $   2,121   $       185,964
Less unconsolidated joint ventures................................          (9,686)         (1,233)                        (10,919)
                                                                      ------------    ------------     ---------   ---------------
Consolidated revenue..............................................         162,426          10,498         2,121           175,045
Direct operating and real estate tax expense......................          49,506           5,740           801            56,047
Less unconsolidated joint ventures................................          (2,960)           (770)                         (3,730)
                                                                      ------------    ------------     ---------   ---------------
Consolidated direct operating and real estate tax expenses........          46,546           4,970           801            52,317
                                                                      ------------    ------------     ---------   ---------------
Consolidated NOI..................................................         115,880           5,528         1,320           122,728
Indirect and leasehold expense....................................          10,045           1,112                          11,157
Less unconsolidated joint ventures................................            (418)            (80)                           (498)
                                                                      ------------    ------------     ---------   ---------------
Consolidated indirect and leasehold expense.......................           9,627           1,032                          10,659
                                                                      ------------    ------------     ---------   ---------------
Consolidated NOI after indirect and leasehold expense.............    $    106,253    $      4,496     $   1,320   $       112,069
                                                                      ============    ============     =========   ===============
          Total Assets............................................    $    803,119    $    229,071                 $     1,032,190
                                                                      ============    ============                 ===============
</TABLE>

        The following table illustrates the results using the 1999 Same Store,
New Store and European store base for reportable segments as of and for the
years ended December 31, 1999 and 1998. Same stores includes all stores acquired
prior to January 1, 1998, and all domestic developments opened prior to January
1, 1997. New stores represents all stores acquired after January 1, 1998 and
domestic developments opened after January 1, 1997:

<TABLE>
<CAPTION>
                                                                                                EUROPEAN
                                                                  SAME STORES     NEW STORES     STORES     DISPOSED       TOTAL
                                                                  -----------     ----------    --------    --------       -----
                                                                                             (IN THOUSANDS)
<S>                                                               <C>            <C>           <C>         <C>         <C>
YEAR ENDED DECEMBER 31, 1999

Rental revenue................................................     $  166,291    $   17,833    $      --   $   1,840   $   185,964
Less unconsolidated joint ventures............................         (7,619)       (3,300)                               (10,919)
                                                                   ----------    ----------    ---------   ---------   -----------
Consolidated revenue..........................................        158,672        14,533                    1,840       175,045
Direct operating and real estate tax expense..................         47,472         7,878                      697        56,047
Less unconsolidated joint ventures............................         (2,076)       (1,654)                                (3,730)
                                                                   ----------    ----------    ---------   ---------   -----------
Consolidated direct operating and real estate tax expenses....         45,396         6,224                      697        52,317
                                                                   ----------    ----------    ---------   ---------   -----------
Consolidated NOI..............................................        113,276         8,309           --       1,143       122,728
Indirect and leasehold expense................................          9,272         1,885                                 11,157
</TABLE>



                                       57
<PAGE>

<TABLE>
<CAPTION>
                                                                                                EUROPEAN
                                                                  SAME STORES     NEW STORES     STORES     DISPOSED       TOTAL
                                                                  -----------     ----------    --------    --------       -----
                                                                                             (IN THOUSANDS)
<S>                                                               <C>            <C>           <C>         <C>         <C>
Less unconsolidated ventures..................................           (282)         (216)                                  (498)
                                                                   ----------    ----------    ---------   ---------   -----------
Consolidated indirect and leasehold expense...................          8,990         1,669                                 10,659
                                                                   ----------    ----------    ---------   ---------   -----------
Consolidated NOI after indirect and leasehold expense.........     $  104,286    $    6,640    $      --   $   1,143   $   112,069
                                                                   ==========    ==========    =========   =========   ===========
          Total Assets........................................     $  755,447    $  276,743                            $ 1,032,190
                                                                   ==========    ==========                            ===========
YEAR ENDED DECEMBER 31, 1998
Rental revenue................................................     $  159,451    $    6,106    $   4,243   $   2,160   $   171,960
Less unconsolidated joint ventures............................         (9,507)       (2,386)                               (11,893)
                                                                   ----------    ------------  ---------   ---------   ------------
Consolidated revenue..........................................        149,944         3,720        4,243       2,160       160,067
Direct operating and real estate tax expenses.................         46,394         2,896        2,545         963        52,798
Less unconsolidated joint ventures............................         (2,772)       (1,065)                                (3,837)
                                                                   ----------    -----------   ---------   ---------   ------------
Consolidated direct operating and real estate tax expenses....         43,622         1,831        2,545         963        48,961
                                                                   ----------    -----------   ---------   ---------   -----------
Consolidated NOI..............................................        106,322         1,889        1,698       1,197       111,106
Indirect and leasehold expense................................         10,019           962          720                    11,701
Less unconsolidated joint ventures............................           (437)         (408)                                  (845)
                                                                   -----------   ----------    ---------   ---------   -----------
Consolidated indirect and leasehold expense...................          9,582           554          720                    10,856
                                                                   ----------    ----------    ---------   ---------   -----------
Consolidated NOI after indirect and leasehold expense.........     $   96,740    $    1,335    $     978   $   1,197   $   100,250
                                                                   ==========    ============  =========   =========   ===========
          Total Assets........................................     $  784,549    $  162,171    $  90,664               $ 1,037,384
                                                                   ==========    ==========    =========               ===========
</TABLE>

        The following table reconciles the reportable segments' revenue per the
table above to consolidated total revenue for the years ended December 31, 2000,
1999 and 1998:

<TABLE>
<CAPTION>
                                                                               2000            1999            1998
                                                                           ------------    ------------    ------------
                                                                                          (IN THOUSANDS)
<S>                                                                        <C>             <C>             <C>
Consolidated rental revenue............................................    $    200,343    $    175,045    $    160,067
Loss from other real estate investments................................          (3,420)         (3,302)         (1,568)
Property management revenue............................................           1,615           1,411           1,893
                                                                           ------------    ------------    ------------
          Total revenue................................................    $    198,538    $    173,154    $    160,392
                                                                           ============    ============    ============
</TABLE>

        The following table reconciles the reportable segments direct and
indirect operating expense to consolidated operating expense and real estate
taxes for the years ending December 31, 2000, 1999, and 1998:

<TABLE>
<CAPTION>
                                                                                   2000         1999          1998
                                                                               -----------  -----------   --------
                                                                                           (IN THOUSANDS)
<S>                                                                            <C>          <C>           <C>
Consolidated direct operating and real estate tax expense.................     $    60,899  $    52,317   $    48,961

Consolidated indirect operating and leasehold expense.....................          14,474       10,659        10,856
Development and acquisition expense.......................................             691           66           212
                                                                               -----------  -----------   -----------
Consolidated operating and real estate tax expense........................     $    76,064  $    63,042   $    60,029
                                                                               ===========  ===========   ===========
</TABLE>


        The following table reconciles the reportable segments' NOI per the
table above to consolidated net income for the years ending December 31, 2000,
1999 and 1998:

<TABLE>
<CAPTION>
                                                                                        2000            1999             1998
                                                                                   ------------    ------------     -------------
                                                                                                   (IN THOUSANDS)
<S>                                                                                <C>             <C>              <C>
Consolidated NOI after indirect and leasehold expense..........................    $    124,970    $    112,069     $    100,250
Loss from other real estate investments........................................          (3,420)         (3,302)          (1,568)
Property management revenue....................................................           1,615           1,411            1,893
Development and acquisition expense............................................            (691)            (66)            (212)
Depreciation/amortization......................................................         (40,693)        (36,768)         (33,991)
Interest on lines of credit and notes payable..................................         (36,175)        (25,428)         (23,883)
General and administrative expense.............................................          (4,911)         (4,193)          (4,619)
Interest and other income......................................................           3,617           2,826            1,439
Amortization of participation rights discount..................................         (11,262)         (8,057)          (3,999)
Minority interest..............................................................            (743)           (815)           2,084
Change in accounting principle.................................................                          (1,098)          (2,168)
                                                                                   ------------    ------------     -------------
</TABLE>



                                       58
<PAGE>

<TABLE>
<S>                                                                                <C>             <C>              <C>
Net income.....................................................................    $     32,307    $     36,579     $     35,226
                                                                                   ============    =============    ============
</TABLE>

        The following table reconciles the reportable segments' assets to
consolidated assets as of December 31, 2000, 1999 and 1998:

<TABLE>
<CAPTION>
                                                           2000               1999              1998
                                                     ---------------    ---------------   ---------------
                                                                        (IN THOUSANDS)
<S>                                                  <C>                <C>               <C>
Segment assets...................................    $     1,124,699    $     1,032,190   $     1,037,384
Unconsolidated joint ventures....................            (88,167)           (70,771)          (51,605)
Corporate assets.................................            193,710            188,441           166,217
                                                     ---------------    ---------------   ---------------
Consolidated assets..............................    $     1,230,242    $     1,149,860   $     1,151,996
                                                     ===============    ===============   ===============
</TABLE>

NOTE O -- SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                               Three months ended
                     -----------------------------------------------------------------------------------------------------------
                          March 31, 2000             June 30, 2000            September 30, 2000         December 31, 2000
                     ------------------------   ------------------------    ------------------------    ------------------------
                                                       (in thousands, except per share data)
                        as                         as                          as                          as
                    previously                 previously                  previously                  previously
                     reported     as restated   reported     as restated    reported     as restated    reported     as restated
                     --------     -----------   --------     -----------    --------     -----------    --------     -----------
<S>                 <C>           <C>          <C>           <C>           <C>           <C>           <C>           <C>
Revenue              $44,259       $44,259       $48,682       $49,008       $51,719       $53,003       $51,207       $52,268
Income from
 operations           16,086        16,241        18,990        19,025        21,464        21,918        20,072        19,686
Net income            11,299         6,112        13,313         7,839        14,787        10,178        13,233         8,178
Net income per
 common share
  Basic                 0.31          0.13          0.38          0.19          0.42          0.27          0.37          0.21
  Diluted               0.31          0.13          0.38          0.19          0.42          0.27          0.37          0.20
</TABLE>


<TABLE>
<CAPTION>
                                                               Three months ended
                     -----------------------------------------------------------------------------------------------------------
                         March 31, 1999              June 30, 1999             September 30, 1999          December 31, 1999
                     ------------------------   ------------------------    ------------------------    ------------------------
                                                       (in thousands, except per share data)
                        as                         as                          as                          as
                    previously                 previously                  previously                  previously
                     reported     as restated   reported     as restated    reported     as restated    reported     as restated
                     --------     -----------   --------     -----------    --------     -----------    --------     -----------
<S>                 <C>           <C>          <C>           <C>           <C>           <C>           <C>           <C>
Revenue              $40,016       $40,016       $42,843       $42,843       $45,272       $45,272       $45,023       $45,023
Income from
 operations           14,966        14,982        17,484        17,760        18,795        18,819        17,421        17,590
Net income             9,798         7,015        13,142        10,270        14,018        10,554        13,715         8,740
Net income per
 common share
  Basic                 0.26          0.17          0.38          0.28          0.41          0.29          0.39          0.21
  Diluted               0.26          0.17          0.38          0.28          0.41          0.29          0.39          0.21
</TABLE>


NOTE P -- CONTINGENT LIABILITIES AND COMMITMENTS

        As a general partner, we are contingently liable for $135 million of an
unconsolidated joint venture's debt.

        Under the terms of the SFPII agreements we are committed to make an
option payment of approximately $14 million. If we choose to exercise the option
to purchase SFP II properties or our partner's interest, the option payment will
be used to reduce the participation rights liability.

NOTE Q -- SUBSEQUENT EVENTS



                                       59
<PAGE>

        On January 30, 2001, we exercised our option to acquire our joint
venture partner's interest in SFP I for $27.7 million. This payment was
accounted for as a reduction in participation rights (See Note H). Additionally,
we repaid the partnership's outstanding mortgage financing of approximately
$45.0 million.

        In February 2001, we issued $200 million in senior unsecured notes
(approximately $198.4 million in net proceeds) which 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, in February 2001, we
raised $86.25 million (approximately $83.4 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.
A portion of these proceeds were used to repay balances outstanding under our
line of credit.

        In February 2001, we expanded our revolving credit facility from $200 to
$360 million. This amended 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.

        In February 2001, we executed an agreement with a third party to enter
into up to $250 million worth of tax retention operating leases. We anticipate
that most of our development projects for the next two years will be developed
by this third party and leased through this facility. Under the related
agreements, we will 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. The purchase price for the
property will be equal to the total property cost plus interest carry and a
fixed equity return to the landlord at a combined rate of approximately 150
basis points over LIBOR.

        In February 2001, we committed to lend an additional $500,000 to STG.

NOTE R - RESTATEMENT

        During November 2001, we determined that four joint venture arrangements
entered into during the period from 1998 to 2000 should have been accounted for
as financing arrangements from inception, as discussed in Note H,. These
arrangements were previously consolidated and our partners' share of the
ventures' operating results were reflected as minority interest (minority
interest was re-characterized as third party interests in profit sharing
arrangements in our 10-K/A filed on August 22, 2001). The excess of the
repurchase price of the joint venture properties over the original sales price
to the joint venture was capitalized in a manner similar to the acquisition of a
minority interest. We also determined that we had not appropriately changed our
method of accounting for the participation features included in a mortgage loan
assumed in connection with the acquisition of a property in 1995 to conform to
the requirements of SOP 97-1, Accounting by Participating Mortgage Loan
Borrowers. We were required to adopt the provisions of SOP 97-1 effective
January 1, 1998, as a cumulative effect of a change in accounting principle. As
a result, the accompanying consolidated financial statements as of December 31,
2000 and 1999 and for each of the three years in the period ended December 31,
2000 have been restated. A summary of the significant effects of the restatement
is as follows:

<TABLE>
<CAPTION>
                                                                AT DECEMBER 31,
                                    -----------------------------------------------------------------------
                                                  2000                                    1999
                                    -------------------------------         -------------------------------
                                    AS PREVIOUSLY                           AS PREVIOUSLY
(in thousands)                       REPORTED           AS RESTATED          REPORTED           AS RESTATED
                                    -----------         -----------         -----------         -----------
<S>                                 <C>                 <C>                 <C>                 <C>
Buildings and equipment, net        $   843,027         $   842,115         $   761,921         $   757,512
Total assets                          1,239,157           1,230,242           1,154,269           1,149,860
Accounts payable and other
  liabilities                            34,394              33,876              35,355              34,837
Participation rights, net of
  discount                                   --             100,170                  --              53,726
Third party liability                    64,640                  --              34,015                  --
Total liabilities                       594,388             629,400             503,719             522,912
Accumulated net income
  less distributions                    (79,310)           (123,237)            (63,256)            (86,858)
Total liabilities and
  shareholders' equity                1,239,157           1,230,242           1,154,269           1,149,860
</TABLE>



                                       60
<PAGE>

<TABLE>
<CAPTION>
                                                          FOR THE YEAR ENDED DECEMBER 31,
                                -------------------------------------------------------------------------------------------------
                                              2000                            1999                              1998
                                ------------------------------    -----------------------------     -----------------------------
                                AS PREVIOUSLY                     AS PREVIOUSLY                     AS PREVIOUSLY
                                  REPORTED         AS RESTATED       REPORTED       AS RESTATED        REPORTED       AS RESTATED
                                -------------      -----------    -------------     -----------     -------------     -----------
<S>                             <C>                <C>            <C>               <C>             <C>               <C>
REVENUE:
Rental                            $ 197,399        $ 200,343                                          $ 158,989        $ 160,067
Loss from other real
estate investments                                                                                       (1,628)          (1,568)

Property Management                   1,888            1,615
Total revenue                       195,867          198,538               --               --          159,254          160,392
EXPENSES:
Operating                            55,511           58,124           47,660           47,265           46,421           46,705
Depreciation and
amortization                         40,893           40,693           36,858           36,768           33,644           33,991
Total expenses                      119,255          121,668          104,488          104,003           97,838           98,639
Income from operations               76,612           76,870           68,666           69,151           61,416           61,753
INTEREST:
Interest on loans                   (31,411)         (36,175)         (22,445)         (25,428)         (21,076)         (23,883)
Amortization of
participation rights
discount                                 --          (11,262)              --           (8,057)              --           (3,999)
Third party interest in
profit sharing
arrangements                          4,349               --            3,539               --              879               --
Interest income and
other                                 3,825            3,617                                              1,431            1,439
Other income
(expense), net                      (23,237)         (43,820)         (16,080)         (30,659)         (18,766)         (26,443)
Income before
cumulative effect of a
change in accounting                 52,632           32,307           51,771           37,677           44,734           37,394
Cumulative effect of a
change in accounting
principle                                                                                                    --           (2,168)
NET INCOME                        $  52,632        $  32,307        $  50,673        $  36,579        $  44,734        $  35,226
NET INCOME PER COMMON SHARE
Basic net income per
share
Income before
accounting change                 $    1.48        $    0.80        $    1.48        $    0.99        $    1.40        $    1.14
Accounting change                        --               --            (0.04)           (0.04)              --            (0.08)
                                  ---------        ---------        ---------        ---------        ---------        ---------
Net income                        $    1.48        $    0.80        $    1.44        $    0.95        $    1.40        $    1.06
                                  =========        =========        =========        =========        =========        =========
Diluted earnings per
share
Income before
accounting change                 $    1.47        $    0.79        $    1.48        $    0.99        $    1.39        $    1.14
Accounting change                        --               --            (0.04)           (0.04)              --            (0.08)
                                  ---------        ---------        ---------        ---------        ---------        ---------
Net income                        $    1.47        $    0.79        $    1.44        $    0.95        $    1.39        $    1.06
                                  =========        =========        =========        =========        =========        =========
</TABLE>



                                       61
<PAGE>

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
         (as restated, see Note R to consolidated financial statements)

<TABLE>
<CAPTION>
(Amounts in thousands)                                                        BUILDING       GROSS PROPERTY    ACCUM.     OWNED
PROPERTY NAME            LOCATION         STATE  ENCUMBRANCES     LAND      EQUIP. & OTHER      COSTS           DEPR.     SINCE
-------------            --------         -----  ------------     ----      --------------      -----           -----     -----
<S>                    <C>                <C>    <C>            <C>         <C>              <C>              <C>        <C>
Ahwatukee              Phoenix              AZ        (2)       $    721       $  2,454       $  3,175        $   (226)      1998
Airpark                Scottsdale           AZ                       880          3,671          4,551            (457)      1997
Arrowhead              Phoenix              AZ        (2)            569          2,585          3,154            (254)      1997
Chandler               Chandler             AZ        (1)            652          3,137          3,789            (730)      1986
Colonnade              Phoenix              AZ                        --          1,145          1,145            (132)      1998
Dobson Ranch           Mesa                 AZ                       499          2,060          2,559            (325)      1996
Houghton Road          Tucson               AZ        (4)            607          2,730          3,337             (37)      1999
Mesa                   Mesa                 AZ        (1)            355          2,281          2,636            (570)      1987
Mill Avenue            Tempe                AZ                       431          1,553          1,984             (77)      1999
Phoenix                Phoenix              AZ        (1)            656          2,824          3,480            (696)      1985
Phoenix East           Phoenix              AZ        (1)            543          2,341          2,884            (576)      1987
Scottsdale             Scottsdale           AZ        (1)            410          1,827          2,237            (479)      1985
Scottsdale North       Scottsdale           AZ                     1,093          4,902          5,995          (1,156)   1985/87
Shea                   Scottsdale           AZ                       807          3,282          4,089            (375)      1997
Speedway               Tucson               AZ                       773          2,965          3,738            (210)      1998
Tempe                  Tempe                AZ                       273          1,211          1,484            (323)      1984
Union Hills            Phoenix              AZ                       617          2,612          3,229            (218)      1998
Val Vista              Gilbert              AZ        (3)            778          3,800          4,578            (200)      1999
Warner                 Mesa                 AZ                       313          1,507          1,820            (510)      1995
Alicia Parkway         Laguna Hills         CA                     1,729          7,292          9,021            (297)      1998
Aliso Viejo            Aliso Viejo          CA                     2,218          4,376          6,594            (680)      1996
Antioch                Antioch              CA        (4)            637          4,746          5,383             (75)      1999
Bloomington            Bloomington          CA                       237          1,087          1,324            (171)      1997
Blossom Valley         San Jose             CA        (2)          1,212          4,609          5,821            (348)      1998
Capital Expressway     San Jose             CA                       973          6,181          7,154             (34)      2000
Castro Business Park   Castro Valley        CA                        97            390            487             (57)      1996
Castro Valley          Castro Valley        CA                       907          3,917          4,824            (692)      1996
Colton                 Colton               CA        (1)            283          1,194          1,477            (308)      1985
Costa Mesa             Costa Mesa           CA                     1,050          2,974          4,024            (132)      1999
Culver City            Los Angeles          CA                     1,039          4,243          5,282          (1,017)      1988
Daly City              Daly City            CA     7,275           1,846          6,075          7,921          (1,412)      1995
El Cajon               El Cajon             CA                     1,013          4,541          5,554          (1,163)      1986
El Cerrito             Richmond             CA                       765          3,154          3,919            (750)      1986
Fontana Sierra         Fontana              CA        (1)            589          1,994          2,583            (431)      1987
Hayward                Hayward              CA        (1)            322          1,498          1,820            (357)      1985
Huntington Beach       Huntington Beach     CA                       949          4,063          5,012            (938)      1988
Kearney-Balboa         San Diego            CA        (1)            830          3,559          4,389            (909)      1986
La Habra               La Habra             CA        (1)            715          3,109          3,824            (768)      1986
Martinez               Martinez             CA                     1,524          4,060          5,584            (706)      1995
Mountain View          Mountain View        CA        (1)            439          1,883          2,322            (432)      1987
Newark                 Newark               CA                       855          3,456          4,311            (511)      1996
Ontario                Ontario              CA                       512          2,101          2,613            (308)      1996
Orange                 Orange               CA                     1,144          4,619          5,763            (654)      1996
Palo Alto              Palo Alto            CA        (1)            705          3,021          3,726            (681)      1986
Pinole                 Pinole               CA                       980          2,295          3,275            (341)      1995
S. San Francisco       San Francisco        CA        (1)            721          3,096          3,817            (760)      1987
Sacramento             Sacramento           CA                       680          2,735          3,415            (405)      1996
San Leandro            San Leandro          CA                       776          3,149          3,925            (464)      1996
San Lorenzo            San Lorenzo          CA                       611          2,519          3,130            (377)      1996
Santa Ana              Santa Ana            CA                     1,467          6,156          7,623          (1,507)      1986
Solana Beach           Solana Beach         CA                        --          7,143          7,143          (1,761)      1987
Sunnyvale              Sunnyvale            CA                     1,697         11,459         13,156          (1,796)      1986
Tracy                  Tracy                CA                       732          3,004          3,736            (441)      1996
Union City             Hayward              CA        (1)            287          1,347          1,634            (351)      1985
Van Ness               San Francisco        CA        (3)          5,289          9,331         14,620            (191)      1999
</TABLE>



                                       62
<PAGE>


<TABLE>
<CAPTION>
(Amounts in thousands)                                                          BUILDING     GROSS PROPERTY     ACCUM.         OWNED
PROPERTY NAME             LOCATION           STATE    ENCUMBRANCES     LAND   EQUIP. & OTHER     COSTS           DEPR.         SINCE
----------------------    --------           -----    ------------     ----   --------------     -----           -----       -------
<S>                       <C>                <C>      <C>             <C>     <C>            <C>                <C>          <C>
Holcomb Bridge            Roswell             GA          (4)           917       3,075          3,992            (44)          1999
Jones Bridge              Atlanta             GA          (2)         1,565       3,848          5,413           (354)          1997
Lawrenceville             Lawrenceville       GA          (2)           858       3,179          4,037           (303)          1997
Morgan Falls              Dunwoody            GA                      1,429       5,824          7,253           (876)          1996
Norcross                  Norcross            GA                        562       2,345          2,907           (356)          1996
Peachtree                 Duluth              GA                      1,144       4,874          6,018           (661)          1997
Perimeter                 Atlanta             GA                      1,458       2,921          4,379           (527)          1996
Roswell                   Roswell             GA                        435       1,808          2,243           (432)          1986
Sandy Plains              Marietta            GA          (3)         1,012       4,106          5,118           (288)          1998
Satellite Blvd            Duluth              GA                        670       2,867          3,537           (389)          1997
Stone Mountain            Stone Mountain      GA                        656       2,725          3,381           (413)          1996
Tucker                    Tucker              GA                        241       1,004          1,245           (155)          1996
Alsip                     Alsip               IL          (1)           250       2,270          2,520           (406)          1982
Bolingbrook               Bolingbrook         IL                        641       2,840          3,481           (291)          1997
Bridgeview                Bridgeview          IL          (1)           479       2,048          2,527           (487)          1985
Country Club Hills        Country Club Hills  IL          (3)           781       3,503          4,284           (116)          1999
Dolton                    Calumet City        IL          (1)           344       2,611          2,955           (539)          1982
Fox Valley                Chicago             IL          (2)           932       2,973          3,905           (283)          1998
Hillside                  Hillside            IL                        261       1,120          1,381           (274)          1988
Lisle                     Lisle               IL          (1)           576       2,576          3,152           (596)          1986
Lombard                   Lombard             IL          (1)           392       1,808          2,200           (485)          1982
Oak Forest                Orland Park         IL                        704       3,201          3,905           (646)          1995
Palatine                  Palatine            IL          (4)           413       2,845          3,258            (14)          2000
Rolling Meadows           Rolling Meadows     IL          (1)           384       1,789          2,173           (422)          1982
Schaumburg                Schaumburg          IL          (1)           443       2,074          2,517           (482)          1982
Schaumburg South          Schaumburg          IL          (3)           495       3,677          4,172           (122)          1999
Willowbrook               Willowbrook         IL          (1)           412       1,879          2,291           (468)          1986
Allisonville              Indianapolis        IN                        827       3,693          4,520           (405)          1997
Carmel                    Carmel              IN                        404       2,554          2,958           (460)          1996
Castleton                 Indianapolis        IN                        522       2,043          2,565           (197)          1998
College Park              Indianapolis        IN                        694       3,014          3,708           (730)          1986
County Line               SouthPort           IN          (2)            --       2,635          2,635           (205)          1998
Downtown Indy             Indianapolis        IN          (4)           947       3,126          4,073           (102)          1999
Eaglecreek                Indianapolis        IN          (2)           802       2,646          3,448           (243)          1998
East Washington           Indianapolis        IN          (4)           399       2,650          3,049           (148)          1999
Georgetown                Indianapolis        IN                        461       2,360          2,821           (364)          1996
Glendale                  Indianapolis        IN                        520       2,141          2,661           (509)          1986
Annapolis                 Annapolis           MD          (2)            --       3,489          3,489           (299)          1998
Briggs Chaney             Silver Spring       MD                        430       1,813          2,243           (435)          1994
Clinton                   Clinton             MD                        674       2,872          3,546           (403)          1986
Crofton                   Gambrills           MD          (1)           376       1,610          1,986           (376)          1988
Frederick                 Frederick           MD                        206         929          1,135           (234)          1994
Gaithersburg              Gaithersburg        MD                        614       3,850          4,464           (763)          1994
Germantown                Germantown          MD                        552       2,307          2,859           (532)          1994
Laurel                    Laurel              MD          (1)           391       1,671          2,062           (399)          1988
Oxon Hill                 Ft. Washington      MD                        349       1,457          1,806           (342)          1994
Suitland                  Suitland            MD                        660       2,725          3,385           (652)          1987
Ann Arbor                 Ann Arbor           MI                        424       1,844          2,268           (488)          1988
Canton                    Canton              MI                        433       2,131          2,564           (324)          1988
Canton Township           Canton Township     MI          (4)           842       2,298          3,140              0           2000
Clinton Township          Clinton Township    MI          (3)           772       3,424          4,196           (199)          1999
Flint East                Flint               MI                        291       1,182          1,473           (132)          1997
Fraser                    Fraser              MI                        627       2,547          3,174           (380)          1988
Grand Rapids              Grand Rapids        MI                        192         890          1,082           (234)          1983
Jackson                   Jackson             MI                        309       1,281          1,590           (146)          1997
Kalamazoo                 Kalamazoo           MI                        177         816            993           (226)          1980
Lansing                   Lansing             MI          (1)           124         560            684           (146)          1983
Livonia                   LIvonia             MI                        636       2,643          3,279           (393)          1988
Madison Heights           Detroit             MI                        487       2,536          3,023           (500)          1995
Plymouth                  Canton Township     MI                        348       2,605          2,953           (451)          1985
Rochester                 Utica               MI                        610       2,489          3,099           (371)          1996
Southfield                Southfield          MI          (1)           702       2,938          3,640           (730)          1983
Sterling Heights          Sterling Heights    MI                        919       3,746          4,665           (559)          1996
Taylor                    Taylor              MI                        632       3,484          4,116           (680)          1995
Troy - Maple              Troy                MI          (1)         1,987       3,428          5,415           (732)          1981
Troy - Oakland Mall       Troy                MI          (1)           642       2,933          3,575           (719)          1983
Walled Lake               Walled Lake         MI          (1)           359       1,695          2,054           (449)       1985/89
Warren                    Warren              MI                        683       2,777          3,460           (412)          1988
Olive                     St. Louis           MO                        818       3,794          4,612           (886)          1994
St. Peters                St. Louis           MO                      1,233          --          1,233             --           1999
Sulfur Springs            St. Louis           MO                      1,200          --          1,200             --           1999
Capital Blvd              Raleigh             NC                        342       1,658          2,000           (386)          1994
Cary                      Cary                NC                        714       3,068          3,782           (655)          1994
</TABLE>



                                       63
<PAGE>


<TABLE>
<CAPTION>
                                                                                                GROSS
(Amounts in thousands)                                                          BUILDING       PROPERTY     ACCUM.        OWNED
PROPERTY NAME            LOCATION             STATE   ENCUMBRANCES     LAND   EQUIP. & OTHER     COSTS       DEPR.        SINCE
-------------            --------             -----   ------------     ----   --------------   --------     ------        -----
<S>                      <C>                  <C>     <C>             <C>     <C>              <C>         <C>            <C>
Creedmoor                Raleigh                NC           (2)         807        3,162        3,969         (298)       1997
Garner                   Garner                 NC                       204          896        1,100         (208)       1994
Glenwood                 Raleigh                NC                       266        1,166        1,432         (274)       1994
Morrisville              Morrisville            NC                       409        1,760        2,169         (388)       1994
Bricktown                Bricktown              NJ           (4)       1,398        4,112        5,510           (9)       1999
Old Bridge               Matawan                NJ                       767        4,250        5,017         (673)       1987
Beth Page                Long Island            NY           (4)       2,370        7,275        9,645           --        2000
Commack                  Huntington             NY           (4)       3,461        5,531        8,992         (181)       1999
Gold Street              Brooklyn               NY                     1,194        5,441        6,635       (1,480)       1986
Great Neck               Long Island            NY           (4)         436        2,690        3,126          (12)       1999
Hempstead                Hempstead              NY           (4)       1,902        5,025        6,927          (55)       1999
Melville                 Long Island            NY        6,482        1,099        7,566        8,665         (281)       1998
Nesconset                Long Island            NY           (4)       1,072        3,261        4,333           (8)       2000
Northern Boulevard       Long Island City       NY                     1,244        5,528        6,772       (1,465)       1987
Utica                    Brooklyn               NY                       830        3,713        4,543       (1,078)       1986
Van Dam                  Long Island City       NY                       760        3,493        4,253         (999)       1986
Yonkers                  Yonkers                NY                       913        4,259        5,172       (1,208)       1986
16th and Sandy           Portland               OR                       479        1,886        2,365         (379)       1995
Allen Blvd               Beaverton              OR                       525        2,185        2,710         (325)       1996
Barbur Boulevard         Portland               OR                       741        5,315        6,056       (1,220)       1995
Beaverton                Beaverton              OR           (1)         216          966        1,182         (269)       1985
Denny Road               Beaverton              OR           (1)         593        2,438        3,031         (595)       1989
Division                 Portland               OR                       687        2,934        3,621         (708)       1996
Gresham                  Portland               OR                       744        2,522        3,266         (431)       1996
Hillsboro                Portland               OR                       720        3,099        3,819         (490)       1996
King City                Tigard                 OR           (1)         511        2,095        2,606         (503)       1987
Liberty Road             Salem                  OR                       749        2,475        3,224         (591)       1995
Milwaukie                Milwaukie              OR                     1,034        3,902        4,936         (890)       1996
Oregon City              Portland               OR                       571        2,708        3,279         (693)       1995
Portland                 Portland               OR           (1)         382        1,571        1,953         (376)       1988
Salem                    Salem                  OR           (1)         574        2,533        3,107         (610)       1983
Airport                  Philadelphia           PA                       799        3,379        4,178         (835)       1986
Edgemont                 Philadelphia           PA                       975        5,285        6,260       (1,209)       1995
Painter's Crossing       Philadelphia           PA           (2)         516        2,857        3,373         (267)       1998
West Chester             West Chester           PA                        --        4,453        4,453       (1,054)       1986
Arlington/Forum 303      Arlington              TX           (1)         273        1,204        1,477         (315)       1986
Bandera Road             San Antonio            TX           (1)         468        1,987        2,455         (477)       1988
Bedford                  Bedford                TX                       408        1,735        2,143         (428)       1985
Bee Caves Road           Austin                 TX           (3)         626        4,285        4,911         (147)       1999
Beltline Road            Irving                 TX           (1)         414        1,983        2,397         (502)       1989
Blanco Road              San Antonio            TX           (1)         801        3,333        4,134         (821)       1988
Champions                Houston                TX           (3)         484        2,818        3,302         (219)       1998
Cinco Ranch              Houston                TX                       523        2,584        3,107         (148)       1999
Cityplace                Dallas                 TX           (3)       1,118        3,609        4,727         (154)       1999
East Lamar               Arlington              TX                       742        2,109        2,851         (352)       1996
Federal                  Houston                TX           (1)         552        2,329        2,881         (569)       1988
First Colony             Missouri City          TX                       427        2,137        2,564          (25)       2000
Fredicksburg             San Antonio            TX           (1)         645        2,835        3,480         (678)       1987
Georgetown               Austin                 TX                       403        1,689        2,092         (247)       1997
Greenville               Dallas                 TX           (2)         768        3,189        3,957         (315)       1998
Helotes                  San Antonio            TX           (4)         481        2,354        2,835          (45)       2000
Henderson Pass           San Antonio            TX                     1,386        2,274        3,660         (215)       1998
Henderson Street         Fort Worth             TX           (3)         338        3,633        3,971         (128)       1999
Highway 78               San Antonio            TX                       392        1,550        1,942         (131)       1998
Hill Country Village     San Antonio            TX           (1)         679        2,824        3,503         (708)       1985
Hillcroft                Houston                TX                        --        3,670        3,670         (909)       1991
Hurst                    Hurst                  TX           (1)         363        1,533        1,896         (376)       1987
Imperial Valley          Houston                TX           (1)         461        1,969        2,430         (484)       1988
Irving/MacArthur Blvd    Irving                 TX           (1)         674        2,935        3,609         (737)       1985
Kingwood                 Kingwood               TX                       525        2,846        3,371         (594)       1988
Las Colinas              Irving                 TX           (4)         478        3,123        3,601          (18)       2000
Lewisville               Dallas                 TX                       434        2,552        2,986         (380)       1997
McArthur Crossing        Irving                 TX                       746        2,909        3,655         (506)       1996
Medical Center           Houston                TX           (1)         737        3,227        3,964         (912)       1989
Medical Center SA        San Antonio            TX           (4)         660        2,822        3,482          (55)       1998
Mission Bend             Houston                TX                       653        2,735        3,388         (454)       1995
Nacodoches               San Antonio            TX                       381        2,885        3,266         (218)       1998
North Austin             Austin                 TX           (1)         609        2,557        3,166         (603)       1986
North Carrollton         Carrollton             TX                       627        2,747        3,374          (73)       2000
North Park               Kingwood               TX                       549        2,160        2,709          (25)       2000
Oak Farm Dairy           Houston                TX           (3)       2,652        3,408        6,060         (114)       1999
Oak Hills                Austin                 TX           (4)         149        3,431        3,580         (149)       1999
Olympia                  Missouri City          TX           (4)         489        3,046        3,535          (78)       1998
Park Cities East         Dallas                 TX                     1,017        2,909        3,926         (538)       1995
Parker Road              Dallas                 TX                       809        2,206        3,015         (410)       1995
</TABLE>



                                       64
<PAGE>



<TABLE>
<CAPTION>
                                                                                                  GROSS
(Amounts in thousands)                                                           BUILDING        PROPERTY      ACCUM.       OWNED
PROPERTY NAME              LOCATION            STATE   ENCUMBRANCES     LAND    EQUIP. & OTHER     COSTS        DEPR.       SINCE
-------------              --------            -----   ------------     ----    --------------   --------      ------       -----
<S>                        <C>                 <C>     <C>            <C>       <C>              <C>          <C>         <C>
Preston Road               Dallas                TX                       703         2,822        3,525         (414)       1997
Quarry                     San Antonio           TX                       488         3,668        4,156         (243)       1999
River Oaks                 Houston               TX                     2,137         7,786        9,923       (1,699)       1996
Round Rock                 Austin                TX                       386         1,612        1,998         (240)       1997
San Antonio NE             San Antonio           TX          (1)          406         1,734        2,140         (430)       1985
Slaughter Lane             Austin                TX                       592         2,419        3,011         (346)       1997
South Cooper               Arlington             TX                       632         2,590        3,222         (436)       1996
South Main                 Houston               TX                       392         1,067        1,459          (12)       2000
Southlake                  Dallas                TX          (3)          670         2,935        3,605         (204)       1998
Spring Branch              Houston               TX                       305           483          788           (6)       2000
Sugarland                  Sugarland             TX          (1)          761         3,068        3,829         (730)       1988
T.C. Jester                Houston               TX                       903         4,081        4,984         (594)       1996
Thousand Oaks              San Antonio           TX          (1)          421         1,760        2,181         (447)       1986
Universal City             San Antonio           TX                       169         1,614        1,783         (371)       1995
Valley Ranch               Coppell               TX                       791         3,200        3,991         (433)       1997
West U                     Houston               TX          (1)        1,121         4,579        5,700       (1,105)       1989
Westchase                  Houston               TX                       351         2,617        2,968          (30)       2000
Westheimer                 Houston               TX          (1)          611         2,507        3,118         (608)       1986
Windcrest                  San Antonio           TX                       626         2,833        3,459         (403)       1996
Woodforest                 Houston               TX                       538         2,213        2,751         (349)       1996
Woodlands                  Houston               TX          (1)          737         3,213        3,950         (796)       1988
Bayside                    Virginia Beach        VA                       236         1,174        1,410         (274)       1988
Burke                      Fairfax               VA                       634         2,615        3,249         (400)       1996
Cascades                   Sterling              VA          (2)        2,292         3,693        5,985         (306)       1998
Cedar Road                 Chesapeake            VA                       295         1,248        1,543         (292)       1994
Charlottesville            Charlottesville       VA                       305         1,335        1,640         (330)       1994
Chesapeake                 Chesapeake            VA                       454         1,874        2,328         (280)       1996
Crater Road                Petersburg            VA                       224           961        1,185         (237)       1994
Dale City                  Dale City             VA                       346         1,677        2,023         (386)       1994
Fairfax                    Fairfax               VA          (1)        1,137         6,557        7,694       (1,424)       1986
Falls Church               Falls Church          VA          (1)        1,413         5,918        7,331       (1,388)       1987
Gainesville                Gainesville           VA                       245         1,079        1,324         (276)       1994
Herndon                    Herndon               VA          (1)          582         2,538        3,120         (630)       1988
Holland Road               Virginia Beach        VA                       204           955        1,159         (245)       1994
Jeff Davis Hwy             Richmond              VA                       306         1,290        1,596         (307)       1994
Kempsville                 Virginia Beach        VA          (1)          279         1,196        1,475         (280)       1989
Laskin Road                Virginia Beach        VA                       305         1,331        1,636         (325)       1994
Leesburg                   Leesburg              VA                       541         2,209        2,750         (335)       1996
Manassas E. & W            Manassas              VA          (1)          654         3,004        3,658         (750)       1988
McLean                     McLean                VA                        (6)        3,641        3,635         (433)       1997
Merrifield                 Fairfax               VA          (3)        3,192         5,188        8,380         (161)       1999
Midlothian Turnpike        Richmond              VA                       646         2,660        3,306         (395)       1996
Newport News North         Newport News          VA                       574         2,542        3,116         (376)       1996
Newport News. S            Newport News          VA          (1)          496         2,285        2,781         (543)    1985/92
North Richmond             Richmond              VA          (1)          344         1,457        1,801         (360)       1988
Old Towne                  Alexandria            VA          (4)        2,038         7,003        9,041         (363)       1999
Potomac Mills              Potomac Mills         VA          (2)        1,122         3,423        4,545         (325)       1997
Princess Anne Road         Virginia Beach        VA                       305         1,274        1,579         (288)       1994
S. Military Highway        Virginia Beach        VA                       289         1,423        1,712         (217)       1996
Temple Avenue              Petersburg            VA                       297         1,292        1,589         (319)       1994
Virginia Beach             Virginia Beach        VA                       502         2,232        2,734         (540)       1989
Auburn                     Auburn                WA                       760         2,894        3,654         (537)       1996
Bellefield                 Bellevue              WA                       957         3,887        4,844         (567)       1996
Bellevue East & West       Bellevue              WA          (1)        2,385        11,964       14,349       (2,069)       1984
Bellingham                 Bellingham            WA       1,376           601         2,527        3,128         (587)       1981
Bremerton                  Bremerton             WA                       563         2,296        2,859         (263)       1997
Burien                     Seattle               WA                       646         2,818        3,464         (684)       1985
Burien II                  Seattle               WA                       388         1,737        2,125         (411)       1985
Canyon Park JV             Bothell               WA                     1,023         3,183        4,206       (1,026)       1996
Canyon Rd                  Puyallup              WA                       234           972        1,206         (150)       1996
Capitol Hill               Seattle               WA                       839         5,245        6,084       (2,200)       1987
Corporate Office           Seattle               WA                     3,915        18,410       22,325       (5,643)       1998
E. Bremerton               Bremerton             WA                       576         2,403        2,979         (378)       1996
East Lynnwood              Lynnwood              WA          (1)          482         2,071        2,553         (517)       1986
Edmonds                    Edmonds               WA                     1,190         4,918        6,108       (1,166)       1984
Everett                    Everett               WA                       512         2,233        2,745         (576)       1981
Factoria                   Bellevue              WA          (1)          580         2,405        2,985         (573)       1984
Factoria Square            Bellevue              WA                     1,226         4,967        6,193         (742)       1996
Federal Way                Federal Way           WA          (1)          862         3,576        4,438         (870)       1984
Fife                       Tacoma                WA                       440         1,832        2,272         (446)       1984
Gig Harbor                 Gig Harbor            WA                     1,059           843        1,902          (51)       1999
Hazel Dell                 Vancouver             WA                     1,073         2,918        3,991         (703)       1996
Highland Hill              Tacoma                WA                       592         2,420        3,012         (569)       1981
Interbay                   Seattle               WA                       952         3,896        4,848         (935)       1987
Issaquah                   Issaquah              WA          (1)          615         2,579        3,194         (647)       1985
</TABLE>



                                       65
<PAGE>


<TABLE>
<CAPTION>
(Amounts in thousands)                                                     BUILDING     GROSS PROPERTY      ACCUM.        OWNED
PROPERTY NAME          LOCATION        STATE  ENCUMBRANCES     LAND     EQUIP. & OTHER      COSTS            DEPR.        SINCE
-------------          --------        -----  ------------     ----     --------------      -----            -----        -----
<S>                    <C>             <C>    <C>           <C>         <C>             <C>               <C>           <C>
Juanita                Kirkland          WA           (4)          877          4,472          5,349           (114)          1998
Kennydale              Renton            WA                        816          3,412          4,228           (491)          1996
Kent                   Kent              WA                        544          2,294          2,838           (271)          1997
Lacey                  Olympia           WA                        185          1,087          1,272           (117)          1997
Lake City              Seattle           WA                        572          2,643          3,215           (767)          1995
Lake Union             Seattle           WA                      2,956          5,774          8,730         (1,252)          1998
Lakewood 512           Tacoma            WA                        920          3,901          4,821           (893)      87/88/91
Lynnwood               Lynnwood          WA                        757          3,198          3,955           (370)          1997
Mill Creek             Everett           WA           (3)          627          4,214          4,841           (213)          1998
North Spokane          Spokane           WA           (1)          581          2,565          3,146           (694)          1984
Parkland               Tacoma            WA                        391          1,642          2,033           (193)          1997
Pier 57                Seattle           WA           (3)          872          4,761          5,633           (324)          1986
Pt. Orchard            Pt. Orchard       WA                        483          2,057          2,540           (316)          1997
Redmond                Redmond           WA           (3)          537          5,574          6,111           (442)          1998
Renton                 Renton            WA           (1)          625          2,672          3,297           (689)          1984
Salmon Creek           Vancouver         WA                        759          3,329          4,088           (457)          1997
Sammamish              Redmond           WA           (2)          963          3,895          4,858           (306)          1998
Shoreline/Aurora N     Seattle           WA           (1)        1,495          6,269          7,764         (1,503)          1986
Smokey Point           Arlington         WA           (1)          232          1,039          1,271           (262)          1987
South Center           Renton            WA                        425          1,947          2,372           (493)          1985
South Hill             Seattle           WA                        300          1,333          1,633           (280)          1995
South Tacoma           Tacoma            WA           (1)          315          1,366          1,681           (314)          1987
Spokane                Spokane           WA                        227            988          1,215           (130)          1997
Sprague                Tacoma            WA                      1,152          3,221          4,373           (759)          1996
Totem Lake             Kirkland          WA                        660          2,773          3,433           (688)          1984
Vancouver Mall         Vancouver         WA           (1)          364          1,675          2,039           (434)          1980
West Olympia           Olympia           WA                        351          1,450          1,801           (167)          1997
West Seattle           Seattle           WA                        698          4,206          4,904           (555)          1997
Whitecenter            Seattle           WA           (1)          559          2,389          2,948           (576)          1980
Woodinville            Woodinville       WA                        674          2,780          3,454           (658)          1984
Excess Land SSPHI                                     --           269             --            269             --           1995
                                              ----------    ----------    -----------    -----------     -----------
                                              $   15,133    $  248,741    $ 1,011,946    $ 1,260,687     $  (169,831)
                                              ==========    ==========    ===========    ===========     ===========
</TABLE>


(1)     These properties are encumbered through one mortgage loan totaling
        $122,580.

(2)     These properties are encumbered through one mortgage loan totaling
        $45,050.

(3)     These properties are encumbered through one mortgage loan totaling
        $62,266.

(4)     These properties are encumbered through one mortgage loan totaling
        $60,400.


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



                                       66
<PAGE>


<TABLE>
<S>                                              <C>                 <C>
(Amounts in thousands)
LAND, BUILDING, EQUIPMENT AND OTHER
Balance at December 31, 1998                                         $ 1,067,445
      Deconsolidation of SSC Benelux & Co.                               (58,014)
      Additions during the period
             Acquisitions                        $    9,330
             Developments                            92,445
             Facility Expansions                      8,304
             Improvements and Other                   8,097
                                                 ----------
                                                                         118,176
             Cost of Real Estate Sold                                     (7,130)
                                                                   -------------
Balance at December 31, 1999                                           1,120,477
      Additions during the period
             Acquisitions                        $   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
                                                                   =============
ACCUMULATED DEPRECIATION
Balance at December 31, 1998                                       $     106,503
      Deconsolidation of SSC Benelux & Co.                                (2,838)
      Depreciation expense                                                32,215
      Disposal                                                            (1,514)
                                                                   -------------
Balance at December 31, 1999                                             134,366
      Depreciation expense                                                36,247
      Disposal                                                              (782)
                                                                   -------------
Balance at December 31, 2000                                       $     169,831
                                                                   =============
</TABLE>



                                       67
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

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

        We have audited the accompanying consolidated balance sheets of Shurgard
Storage Centers, Inc. and subsidiaries (the Company) as of December 31, 2000 and
1999, and the related consolidated statements of income, shareholders' equity,
and cash flows for each of the three years in the period ended December 31,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements 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 the Company as of December
31, 2000 and 1999, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2000 in conformity with
accounting principles generally accepted in the United States of America.

        As discussed in Note R, the accompanying financial statements and
supplemental schedule have been restated.

        As discussed in Note A to the consolidated financial statements, in 1998
the Company changed its method of accounting for financings under participating
mortgages and in 1999 changed its method of accounting for costs of start-up
activities.

        Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule listed in
the table of contents on page 73 is presented for the purpose of additional
analysis and is not a required part of the basic financial statements. This
schedule is the responsibility of the Company's management. Such schedule has
been subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.

/s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP

Seattle, Washington
February 8, 2001
(February 28, 2001 as to Note Q)
(November 28, 2001 as to the effects of the restatement discussed in Note R)



                                       68
<PAGE>

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 8, 2001, 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 8, 2001, 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 8, 2001, and is incorporated herein by reference.

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 8, 2001, and is incorporated herein by reference.

                                     PART IV

ITEM 14 -- EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

        (a) 1. Financial Statements

<TABLE>
<CAPTION>
                                                                                              PAGE
                                                                                               NO.
<S>                                                                                           <C>
Consolidated Balance Sheets at December 31, 2000 and 1999..............................       43
For the years ended December 31, 2000, 1999 and 1998:
  Consolidated Statements of Income....................................................       44
  Consolidated Statements of Shareholders' Equity......................................       45
  Consolidated Statements of Cash Flows................................................       46
  Notes to Consolidated Financial Statements...........................................       47-61
  Schedule III Real Estate and Accumulated Depreciation................................       62-67
  Independent Auditors' Report.........................................................       68
</TABLE>

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)



                                       69
<PAGE>

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)

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 Novia 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.,



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<PAGE>

        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)

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**

10.28   Agency Agreement between Shurgard Storage Centers, Inc. and First
        Security Bank, N. A., dated February 26, 2001**

10.29   Credit Agreement among Shurgard Storage Centers, Inc., First Security
        Bank, N.A. and Bank of America, N.A., dated February 26, 2001**

10.30   Lease Agreement between First Security Bank, N.A. and Shurgard Storage
        Centers, Inc., dated February 26, 2001**

10.31   Security Agreement between Shurgard Storage Centers, Inc., First
        Security Bank, N.A. and Bank of America, N.A., dated February 26, 2001**

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**

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**

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.**

10.35   Loan Agreement between CCP/Shurgard Venture, LLC and General Electric
        Capital Corporation, dated December 28, 2000.**

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.**

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.**

12.1    Statement Re: Computation of Earnings to Fixed Charges**

21.1    Subsidiaries of the Registrant**

23.1    Consent of Deloitte & Touche LLP


----------

(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.



                                       71
<PAGE>

(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.

(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.

*       Management contract or compensatory plan or arrangement

**      Filed previously.

        (b) Reports on Form 8-K

        On December 26, 2000, we filed Form 8-K which announced that the Company
exercised its option to purchase the partnership interest of Fremont Storage
Partners I, L.P. in Shurgard/Fremont Partners I.



                                       72
<PAGE>

                                    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 22nd day of
August 2001.

                                            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 22nd day of August 2001.

<TABLE>
<CAPTION>
              SIGNATURE                                                  TITLE
              ---------                                                  -----
<S>                                                 <C>
        /s/ CHARLES K. BARBO                           Chairman of the Board, President and Chief
--------------------------------------              Executive Officer (Principal Executive Officer)
           Charles K. Barbo                                Senior Vice President, Treasurer,

         /s/ HARRELL L. BECK                              Chief Financial Officer and Director
--------------------------------------                (Principal Financial and Accounting Officer)
           Harrell L. Beck

        /s/ GEORGE HUTCHINSON                                           Director
--------------------------------------
          George Hutchinson

         /s/ RAYMOND JOHNSON                                            Director
--------------------------------------
           Raymond Johnson

           /s/ W. J. SMITH                                              Director
--------------------------------------
             W. J. Smith

        /s/ W. THOMAS PORTER                                            Director
--------------------------------------
           W. Thomas Porter
</TABLE>


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