FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



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

For the quarterly period ended June 30, 2001



Commission file number: 1-13820



SOVRAN ACQUISITION LIMITED PARTNERSHIP(Exact name of Registrant as specified in its charter)



|Delaware                                                       |  | 16-1481551                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

6467 Main Street
Buffalo, NY 14221
(Address of principal executive offices) (Zip code)
(716) 633-1850
(Registrant's telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____







|PART I. | FINANCIAL INFORMATION
|------- | ---------------------
|ITEM 1. | FINANCIAL STATEMENTS 

SOVRAN ACQUISITION LIMITED PARTNERSHIP
BALANCE SHEETS

|(dollars in thousands, except unit data)                                                                  | June 30
2001(unaudited) | December 31,2000
|--------------------------------------------------------------------------------------------------------- | ----------------------- | ----------------
|Assets                                                                                                    |                         |                 
|Investment in storage facilities:                                                                         |                         |                 
|Land                                                                                                      | $ 110,874               | $ 110,874       
|Building and equipment                                                                                    | 460,182                 | 451,847         
|                                                                                                          | 571,056                 | 562,721         
|Less: accumulated depreciation                                                                            | (52,003)                | (45,253)        
|Investment in storage facilities, net                                                                     | 519,053                 | 517,468         
|Cash and cash equivalents                                                                                 | 2,744                   | 1,421           
|Accounts receivable                                                                                       | 1,446                   | 1,141           
|Receivable from related parties                                                                           | 736                     | 2,007           
|Notes receivable from joint ventures                                                                      | 27,457                  | 15,772          
|Investment in joint ventures                                                                              | 4,595                   | 4,033           
|Prepaid expenses and other assets                                                                         | 5,299                   | 5,297           
|Total Assets                                                                                              | $ 561,330               | $ 547,139       
|Liabilities                                                                                               |                         |                 
|Line of credit                                                                                            | $139,000                | $124,000        
|Term note                                                                                                 | 105,000                 | 105,000         
|Accounts payable and accrued liabilities                                                                  | 4,412                   | 4,393           
|Deferred revenue                                                                                          | 3,540                   | 3,221           
|Accrued distributions                                                                                     | 7,571                   | 7,472           
|Mortgage payable                                                                                          | 2,207                   | 2,223           
|Total Liabilities                                                                                         | 261,730                 | 246,309         
|Limited partners' capital interest
(794,499 units in 2001 and 853,037 in 2000)                            | 21,745                  | 16,954          
|                                                                                                          |                         |                 
|Partners' Capital                                                                                         |                         |                 
|General partner (219,567 units issued and
 outstanding in 2001 and 2000)                                  | 4,990                   | 5,171           
|Limited partners (12,031,198 and 11,809,120
  units issued and outstanding in 2001 and
2000 respectively) | 242,575                 | 248,705         
|Preferred partners (1,200,000 Series B
  Preferred Units, at $25 liquidation
  preference)                | 30,000                  | 30,000          
|Accumulated other comprehensive income                                                                    | 290                     | -               
|Total Partners' Capital                                                                                   | 277,855                 | 283,876         
|                                                                                                          |                         |                 
|Total Liabilities and Partners' Capital                                                                   | $561,330                | $547,139        
|See notes to financial statements.                                                                        |                         |                 





SOVRAN ACQUISITION LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(unaudited)

|(dollars in thousands, except unit data)                      | April 1, 2001 
          to          June 30, 2001 | April 1, 2000
          to         June 30, 2000
|------------------------------------------------------------- | -------------------------------------------------- | ------------------------------------------------
|Revenues:                                                     |                                                    |                                                 
|Rental income                                                 | $   22,131                                         | $   21,927                                      
|Interest and other income                                     | 544                                                | 362                                             
|Equity in income of joint ventures                            | 103                                                | -                                               
|Total revenues                                                | 22,778                                             | 22,289                                          
|                                                              |                                                    |                                                 
|Expenses:                                                     |                                                    |                                                 
|Property operations and maintenance                           | 4,856                                              | 4,595                                           
|Real estate taxes                                             | 2,119                                              | 2,000                                           
|General and administrative                                    | 1,703                                              | 1,482                                           
|Interest                                                      | 3,523                                              | 4,278                                           
|Depreciation and amortization                                 | 3,723                                              | 3,526                                           
|Total expenses                                                | 15,924                                             | 15,881                                          
|                                                              |                                                    |                                                 
|Net income                                                    | 6,854                                              | 6,408                                           
|Distributions to preferred unitholders                        | (739)                                              | (739)                                           
|Net income available to common unitholders                    | $   6,115                                          | $   5,669                                       
|                                                              |                                                    |                                                 
|Per common unit:                                              |                                                    |                                                 
|Earnings per common unit - basic                              | $   0.47                                           | $    0.44                                       
|                                                              |                                                    |                                                 
|Earnings per common unit - diluted                            | $   0.47                                           | $    0.44                                       
|                                                              |                                                    |                                                 
|Common units used in basic earnings 
    per unit calculation | 12,989,332                                         | 12,879,746                                      
|Common unit used in diluted earnings
    per unit calculation | 13,067,836                                         | 12,881,318                                      
|                                                              |                                                    |                                                 
|Distributions declared per common unit                        | $         0.58                                     | $         0.57                                  

See notes to financial statements.



SOVRAN ACQUISITION LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(unaudited)

|(dollars in thousands, except unit data)                      | January 1, 2001
          to          June 30, 2001 | January 1, 2000
          to        June 30, 2000
|------------------------------------------------------------- | --------------------------------------------------- | -------------------------------------------------
|Revenues:                                                     |                                                     |                                                  
|Rental income                                                 | $   43,931                                          | $   43,461                                       
|Interest and other income                                     | 986                                                 | 626                                              
|Equity in income of joint ventures                            | 146                                                 | -                                                
|Total revenues                                                | 45,063                                              | 44,087                                           
|                                                              |                                                     |                                                  
|Expenses:                                                     |                                                     |                                                  
|Property operations and maintenance                           | 10,025                                              | 9,332                                            
|Real estate taxes                                             | 4,205                                               | 4,015                                            
|General and administrative                                    | 3,301                                               | 2,939                                            
|Interest                                                      | 7,586                                               | 8,192                                            
|Depreciation and amortization                                 | 7,371                                               | 6,982                                            
|Total expenses                                                | 32,488                                              | 31,460                                           
|                                                              |                                                     |                                                  
|Net income                                                    | 12,575                                              | 12,627                                           
|Distributions to preferred unitholders                        | (1,478)                                             | (1,478)                                          
|Net income available to common unitholders                    | $  11,097                                           | $  11,149                                        
|                                                              |                                                     |                                                  
|Per common unit:                                              |                                                     |                                                  
|Earnings per common unit - basic                              | $   0.86                                            | $    0.86                                        
|                                                              |                                                     |                                                  
|Earnings per common unit - diluted                            | $   0.85                                            | $    0.86                                        
|                                                              |                                                     |                                                  
|Common units used in basic earnings 
    per unit calculation | 12,941,578                                          | 12,983,918                                       
|Common unit used in diluted earnings
    per unit calculation | 12,992,337                                          | 12,984,838                                       
|                                                              |                                                     |                                                  
|Distributions declared per common unit                        | $         1.16                                      | $         1.14                                   

See notes to financial statements.



SOVRAN ACQUISITION LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOW
(unaudited)

|(dollars in thousands)                                                                                    | January 1, 2001
          to          June 30, 2001 | January 1, 2000
         to         June 30, 2000
|--------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | -------------------------------------------------
|Operating Activities                                                                                      |                                                     |                                                  
|Net income                                                                                                | $  12,575                                           | $  12,627                                        
|Adjustments to reconcile net income to net cash
  provided by operating activities:                       |                                                     |                                                  
|Depreciation and amortization                                                                             | 7,371                                               | 6,982                                            
|Equity in income of joint ventures                                                                        | (146)                                               | -                                                
|Restricted stock earned                                                                                   | 171                                                 | 47                                               
|Changes in assets and liabilities:                                                                        |                                                     |                                                  
|Accounts receivable                                                                                       | (305)                                               | (655)                                            
|Prepaid expenses and other assets                                                                         | (290)                                               | (426)                                            
|Accounts payable and other liabilities                                                                    | (15)                                                | 234                                              
|Deferred revenue                                                                                          | 319                                                 | 248                                              
|Net cash provided by operating activities                                                                 | 19,680                                              | 19,057                                           
|                                                                                                          |                                                     |                                                  
|Investing Activities                                                                                      |                                                     |                                                  
|Additions to storage facilities                                                                           | (8,378)                                             | (14,256)                                         
|Advances to joint ventures                                                                                | (12,101)                                            | -                                                
|Receipts from (advances to) related parties                                                               | 1,271                                               | (486)                                            
|Net cash used in investing activities                                                                     | (19,208)                                            | (14,742)                                         
|                                                                                                          |                                                     |                                                  
|Financing Activities                                                                                      |                                                     |                                                  
|Net proceeds from issuance of common stock
    through Dividend Reinvestment and Stock 
    Purchase Plan | 4,011                                               | 828                                              
|Proceeds from line of credit draw down                                                                    | 15,000                                              | 19,500                                           
|Distributions paid                                                                                        | (16,419)                                            | (16,375)                                         
|Purchase of treasury stock                                                                                | (449)                                               | (7,371)                                          
|Redemption of Operating Partnership Units                                                                 | (1,276)                                             | -                                                
|Mortgage principal payments                                                                               | (16)                                                | (26)                                             
|Net cash provided by (used in) financing activities                                                       | 851                                                 | (3,444)                                          
|Net increase in cash                                                                                      | 1,323                                               | 871                                              
|Cash at beginning of period                                                                               | 1,421                                               | 1,032                                            
|Cash at end of period                                                                                     | $    2,744                                          | $   1,903                                        
|Supplemental cash flow information
  Cash paid for interest                                               | $  7,950                                            | $   8,249                                        
|Fair value of net liabilities assumed on the 
acquisition of storage facilities                           | -                                                   | 84                                               



Distributions declared but unpaid were $7,571 at June 30, 2001 and $7,321 at June 30, 2000.

See notes to financial statements.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

|1. | BASIS OF PRESENTATION
|-- | ---------------------

The accompanying unaudited financial statements of Sovran Acquisition Limited Partnership (the "Operating Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 2001 are not necessarily indicative of the results that may be expected for the year ended December 31, 2001.



|2. | ORGANIZATION
|-- | ------------

Sovran Acquisition Limited Partnership is the entity through which Sovran Self Storage, Inc. (the "Company"), a self-administered and self-managed real estate investment trust ("REIT"), conducts substantially all of its business and owns substantially all of its assets. In 1995, the Company was formed under Maryland law and the Operating Partnership was organized as a Delaware limited partnership to continue and to expand the self-storage operations of the Company's privately owned predecessor organizations. On June 26, 1995, the Company commenced operations, through the Operating Partnership, effective with the completion of its initial public offering of 5,890,000 shares. At June 30, 2001, the Operating Partnership owned 222 self-storage properties in 21 states. The Operating Partnership also manages 11 properties under an agreement with a joint venture that is 45% owned by the Company.

As of June 30, 2001, the Company was a 93.9% economic owner of the Operating Partnership and controls it through Sovran Holdings, Inc. ("Holdings"), a wholly owned subsidiary of the Company incorporated in Delaware and the sole general partner of the Operating Partnership (this structure is commonly referred to as an umbrella partnership REIT or "UPREIT"). The board of directors of Holdings, the members of which are also members of the Board of Directors of the Company, manages the affairs of the Operating Partnership by directing the affairs of Holdings. The Company's limited partner and indirect general partner interests in the Operating Partnership entitle it to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to its ownership interest therein and entitle the Company to vote on all matters requiring a vote of the limited partners.

The other limited partners of the Operating Partnership are persons who contributed their direct or indirect interests in certain self-storage properties to the Operating Partnership. The Operating Partnership is obligated to redeem each unit of limited partnership ("Unit") at the request of the holder thereof for cash equal to the fair market value of a share of the Company's common stock ("Common Shares") at the time of such redemption, provided that the Company at its option may elect to acquire any Unit presented for redemption for one Common Share or cash. With each such redemption the Company's percentage ownership interest in the Operating Partnership will increase. In addition, whenever the Company issues Common Shares, the Company is obligated to contribute any net proceeds therefrom to the Operating Partnership and the Operating Partnership is obligated to issue an equivalent number of Units to the Company. Such limited partners' redemption rights are reflected in "limited partners' capital interest" in the accompanying balance sheets at the cash redemption amount at the balance sheet date.







|3. | INVESTMENT IN STORAGE FACILITIES
|-- | --------------------------------

The following summarizes activity in storage facilities during the period ended June 30, 2001.

(dollars in thousands)

|Cost:                                |            
|------------------------------------ | -----------
|Beginning balance                    | $   562,721
|Property acquisitions                | -          
|Improvements and equipment additions | 8,490      
|Dispositions                         | (155)      
|Ending balance                       | $   571,056
|Accumulated Depreciation:            |            
|Beginning balance                    | $    45,253
|Additions during the period          | 6,793      
|Dispositions                         | (43)       
|Ending balance                       | $    52,003



|4. | UNSECURED LINE OF CREDIT AND TERM NOTE
|-- | --------------------------------------

At June 30, 2001, the Operating Partnership had a $150 million revolving line of credit of which $139 million was drawn. The facility bears interest at LIBOR plus 1.375% and matures November 2003.

The Operating Partnership also has a $75 million unsecured term note due November 2003 (extendable at the Operating Partnership's option to November 2005), bearing interest at LIBOR plus 1.75%, and a $30 million term note through November 2001 at LIBOR plus 1.375%.

The net carrying amount of the Operating Partnership's debt instruments approximates fair value.



|5. | DERIVATIVE FINANCIAL INSTRUMENTS
|-- | --------------------------------

On January 1, 2001, the Operating Partnership adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended, which requires companies to carry all derivatives on the balance sheet at fair value. The Operating Partnership determines the fair value of derivatives by reference to quoted market prices. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it. The Operating Partnership's use of derivative instruments is limited to cash flow hedges, as defined in SFAS No. 133, of certain interest rate risks.

In order to provide interest rate risk protection the Operating Partnership entered into an interest rate swap agreement on March 29, 2001, to effectively convert $50 million of variable-rate debt to fixed-rate debt. The $50 million interest rate swap agreement matures in November 2005. The cash flow hedge is considered effective and the gain or loss on the change in fair value is reported in other comprehensive income.

The March 2001 interest rate swap agreement is the only derivative instrument, as defined by SFAS No. 133, held by the Operating Partnership, as such there was no impact upon adoption of SFAS No. 133 at January 1, 2001. The net impact of the derivative instrument was an increase to other comprehensive income of $290,000 at June 30, 2001. The fair value of the derivative at June 30, 2001 was a $290,000 asset.



|6. | COMMITMENTS AND CONTINGENCIES
|-- | -----------------------------

The Operating Partnership's current practice is to conduct environmental investigations in connection with property acquisitions. At this time, the Operating Partnership is not aware of any environmental contamination of any of its facilities which individually or in the aggregate would be material to the Operating Partnership's overall business, financial condition, or results of operations.



|7. | LEGAL PROCEEDINGS
|-- | -----------------

A former business associate (Plaintiff) of certain officers and directors of the Company, including Robert J. Attea, Kenneth F. Myszka, David L. Rogers and Charles E. Lannon, commenced a lawsuit against the Company on June 13, 1995 in the United States District Court for the Northern District of Ohio. The Plaintiff subsequently amended the complaint in the lawsuit alleging breach of fiduciary duty, breach of contract, breach of general partnership/joint venture arrangement, breach of duty of good faith, fraud and deceit, and other causes of action including declaratory judgment as to the Plaintiff's continuing interest in the Company. The Plaintiff sought money damages in excess of $15 million, as well as punitive damages and declaratory and injunctive relief (including the imposition of a constructive trust on assets of the Company in which the Plaintiff claimed to have a continuing interest) and an accounting. The amended complaint also added Messrs. Attea, Myszka, Rogers and Lannon as additional defendants. In April 2000, following trial, the jury rendered a verdict adverse to the Company with respect to Plaintiff's claims for breach of contract and breach of general partnership/joint venture arrangement and found total compensatory damages in the amount of $6,462,068. The Company filed a post-trial motion for judgment as a matter of law and a motion for a new trial. Although the motion for judgment as a matter of law was denied, the motion for a new trial was granted and a new trial is currently scheduled to commence on October 1, 2001. Messrs. Attea, Myszka, Rogers and Lannon have agreed to indemnify the Company for costs and any loss arising from the lawsuit and their obligation to do so is secured by an escrow arrangement covering shares of the Company's common stock owned by them having a current value substantially in excess of the amount of the damages found by the jury. Pursuant to that agreement, in April 2001 Messrs. Attea, Myszka, Lannon, and Rogers made payment to the Company of $1,785,000 in connection with expenses arising from the lawsuit that had previously been advanced by the Company. In view of the indemnification agreement and escrow arrangement, the Company does not believe that the lawsuit will have a material adverse effect upon the Company.



|8. | INVESTMENT IN JOINT VENTURES
|-- | ----------------------------

Investment in joint ventures includes an ownership interest in Locke Sovran I, LLC, which operates 11 self-storage facilities throughout the United States, and an ownership interest in Iskalo Office Holdings, LLC, which owns the building that houses the Operating Partnership's headquarters and other tenants.

In December 2000, the Operating Partnership contributed seven self-storage properties to Locke Sovran I, LLC with a fair market value of $19.8 million, in exchange for a $15 million 1 year note bearing interest at LIBOR plus 1.75%, and a 45% interest in Locke Sovran I, LLC. During the six months ended June 30, 2001, the Operating Partnership advanced additional funds to Locke Sovran I, LLC that were used to purchase three storage facilities. At June 30, 2001, the 1 year note receivable from Locke Sovran I, LLC was $27.5 million.



|9. | EARNINGS PER UNIT
|-- | -----------------

The Operating Partnership reports earnings per Unit in accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share." In computing earnings per Unit, the Operating Partnership excludes preferred stock dividends from net income to arrive at net income available to common unitholders. The following table sets forth the computation of basic and diluted earnings per common Unit:

|(in thousands except per unit data)                                                                      | Six Months EndedJune 30, 2001 | Six Months EndedJune 30, 2000
|-------------------------------------------------------------------------------------------------------- | ----------------------------- | -----------------------------
|Numerator:                                                                                               |                               |                              
|Net income available to common unitholders                                                               | $  11,097                     | $  11,149                    
|                                                                                                         |                               |                              
|Denominator:                                                                                             |                               |                              
|Denominator for basic earnings per unit -
    weighted average units                                     | 12,942                        | 12,984                       
|                                                                                                         |                               |                              
|Effect of Dilutive Securities:                                                                           |                               |                              
|Stock options                                                                                            | 50                            | 1                            
|Denominator for diluted earnings per unit -
    adjusted weighted average units and
    assumed exercise | 12,992                        | 12,985                       
|                                                                                                         |                               |                              
|Basic earnings per common unit                                                                           | $       .86                   | $       .86                  
|Diluted earnings per common unit                                                                         | $       .85                   | $       .86                  



|ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
|------- | ------------------------------------------------------------------------------------

The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the financial statements and notes thereto included elsewhere in this report.

The Operating Partnership operates as a REIT and owns or manages a portfolio of 233 self-storage facilities, providing storage space for business and personal use to customers in 21 states. The Operating Partnership's investment objective is to increase cash flow and enhance shareholder value by aggressively managing its portfolio, to expand and enhance the facilities in that portfolio and to selectively acquire new properties in geographic areas that will either complement or efficiently grow the portfolio.

When used in this discussion and elsewhere in this document, the words "intends," "believes," "anticipates," and similar expressions are intended to identify "forward-looking statements" within the meaning of that term in Section 27A of the Securities Act of 1933, and in Section 21F of Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Operating Partnership to be materially different from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the effect of competition from new self-storage facilities, which would cause rents and occupancy rates to decline; the Operating Partnership's ability to evaluate, finance and integrate acquired businesses into the Operating Partnership's existing business and operations; the Operating Partnership's ability to form joint ventures and sell existing properties to those joint ventures; the Operating Partnership's existing indebtedness may mature in an unfavorable credit environment, preventing refinancing or forcing refinancing of the indebtedness on terms that are not as favorable as the existing terms; the Operating Partnership's ability to effectively compete in the industries in which it does business; the Operating Partnership's ability to successfully implement its Uncle Bob's Flex-a-Space strategy; the Operating Partnership's cash flow may be insufficient to meet required payments of principal and interest; and tax law changes which may change the taxability of future income.



LIQUIDITY AND CAPITAL RESOURCES

The Operating Partnership's unsecured credit facility provides availability up to $150 million, of which $139 million was drawn on June 30, 2001. The facility matures in November 2003 and bears interest at LIBOR plus 1.375%.

In addition to the credit facility, the Operating Partnership has two unsecured term notes; one in the amount of $30 million due November 2001 bearing interest at LIBOR plus 1.375% and the other in the amount of $75 million bearing interest at LIBOR plus 1.75%. This note has a maturity date of November 2003, but can be extended through November 2005 at the Operating Partnership's option.

The credit facility and term notes currently have investment grade ratings from Standard and Poor's (BBB-), Moody's (Baa3), and Fitch (BBB-).

The Company also has 1,200,000 shares of 9.85% Series B Cumulative Redeemable Preferred Stock outstanding. The Series B Preferred Stock is currently rated by Standard and Poor's (BB+), Moody's (Ba2) and Fitch (BB+).

The Operating Partnership believes that its internally generated cash flows and borrowing capacity under the credit facility will be sufficient to fund ongoing operations, capital improvements, dividends, and share repurchases for the year 2001. The Operating Partnership expects to fund its maturing obligations and its future growth through issuance of secured or unsecured term notes, issuance of preferred stock, sale of Properties, private placement solicitation of joint venture equity and other sources of capital.



UMBRELLA PARTNERSHIP REIT

The Operating Partnership has the ability to issue Units in exchange for properties sold by independent owners. By utilizing such Units as currency in facility acquisitions, the Operating Partnership may partially defer the seller's income-tax liability and obtain more favorable pricing or terms. As of June 30, 2001, 794,499 Units have been issued in exchange for property at the request of the sellers.



ACQUISITION OF PROPERTIES

The Operating Partnership's external growth strategy is to increase the number of facilities it owns by acquiring suitable facilities in markets in which it already has an operating presence or to expand into new markets by acquiring several facilities at once in those new markets. There were no acquisitions in the six months ended June 30, 2001.



REIT QUALIFICATION AND DISTRIBUTION REQUIREMENTS

As a REIT, the Company is not required to pay federal income tax on income that it distributes to its shareholders, provided that the amount distributed is equal to at least 90% of taxable income. These distributions must be made in the year to which they relate or in the following year if declared before the Company files its federal income-tax return and if it is paid before the first regular dividend of the following year.

As a REIT, the Company must derive at least 95% of its total gross income from income related to real property, interest and dividends. In the six months ended June 30, 2001, the Company's percentage of revenue from such sources exceeded 98%, thereby passing the 95% test, and no special measures are expected to be required to enable the Company to maintain its REIT designation.



RESULTS OF OPERATIONS

The following discussion is based on the financial statements of the Operating Partnership as of June 30, 2001 and June 30, 2000.

FOR THE PERIOD JANUARY 1, 2001 THROUGH JUNE 30, 2001, COMPARED TO THE PERIOD JANUARY 1, 2000 TO JUNE 30, 2000 (DOLLARS IN THOUSANDS)

Total revenues increased from $44,087 for the six months ended June 30, 2000 to $45,063 for the six months ended June 30, 2001. The increase was due to improved performance at the Operating Partnership's core properties and revenue from its joint venture. These increases were offset by the loss of revenue from the sale of seven facilities to a joint venture in December 2000.

Property operating and real estate tax expenses increased $883 mainly due to increased utility, employee benefits and snow plowing costs in the first quarter of 2001, offset by the operating expenses of the seven facilities sold to a joint venture in December 2000.

General and administrative expenses increased $362 as a result of costs associated with managing additional properties and the costs related to the Operating Partnership's customer care center.

Interest expense decreased $606 due to a reduction of interest rates mainly in the second quarter of 2001 as compared to the second quarter of 2000.

THREE MONTHS ENDED JUNE 30, 2001, COMPARED TO THREE MONTHS ENDED JUNE 30, 2000 (DOLLARS IN THOUSANDS)

The following discussion compares the activities of the Operating Partnership for the three months ended June 30, 2001 with the activities of the Operating Partnership for the three months ended June 30, 2000.

Total revenues increased from $22,289 for the three months ended June 30, 2000 to $22,778 for the three months ended June 30, 2001, an increase of $489 or 2%. This increase consisted of $880 that was realized as a result of increased rental rates at the 220 properties owned by the Operating Partnership at April 1, 2000, and $184 resulted from the operations of the properties acquired since April 1, 2000. These increases were offset by the sale of seven facilities to a joint venture in December 2000 that resulted in a decrease in revenue of $575. Overall, same-store revenues grew 4.1% for the three-month period ended June 30, 2001 as compared to the same period in 2000.

Property operating and real estate tax expenses increased $380 or 5.8% during the period of which $242 related to the operations of its sites operated more than one year.

General and administrative expenses increased $221 principally as a result of increased administrative costs associated with managing the additional properties and the costs related to the Operating Partnership's customer care center.

Interest expense decreased $755 due to a reduction of interest rates.

INFLATION

The Operating Partnership does not believe that inflation has had or will have a direct adverse effect on its operations. Substantially all of the leases at the facilities allow for monthly rent increases, which provide the Operating Partnership with the opportunity to achieve increases in rental income as each lease matures.



SEASONALITY

The Operating Partnership's revenues typically have been higher in the third and fourth quarters, primarily because the Operating Partnership increases its rental rates on most of its storage units at the beginning of May and, to a lesser extent, because self-storage facilities tend to experience greater occupancy during the late spring, summer and early fall months due to the greater incidence of residential moves during these periods. However, the Operating Partnership believes that its tenant mix, diverse geographical locations, rental structure and expense structure provide adequate protection against undue fluctuations in cash flows and net revenues during off-peak seasons. Thus, the Operating Partnership does not expect seasonality to affect materially distributions to unitholders.



QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

On January 1, 2001 the Company adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended, which requires companies to carry all derivatives on the balance sheet at fair value. The Company's use of derivative instruments is limited to cash flow hedges, as defined in SFAS No. 133, of certain interest rate risks. In order to provide interest rate risk protection the Company entered into an interest rate swap agreement in March 2001, to effectively convert $50 million of variable-rate debt to fixed-rate debt. The Operating Partnership receives a floating interest rate based upon LIBOR and pays a fixed rate of 5.36% on $50 million notional amount through November 2005. There have been no other material changes to the Operating Partnership's exposure to interest rate risk since December 31, 2000.

Because all but $50 million of the Operating Partnership's outstanding debt of $246 million is on a floating rate basis, changes in short term interest rates will have a significant impact on the Operating Partnership's earnings and funds from operations. Should the Operating Partnership enter into further rate swap agreements, earnings could be negatively affected, as short-term rates are presently significantly below the five year cost of funds.

|PART II. | OTHER INFORMATION
|-------- | -----------------

|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

A former business associate (Plaintiff) of certain officers and directors of the Company, including Robert J. Attea, Kenneth F. Myszka, David L. Rogers and Charles E. Lannon, commenced a lawsuit against the Company on June 13, 1995 in the United States District Court for the Northern District of Ohio. The Plaintiff subsequently amended the complaint in the lawsuit alleging breach of fiduciary duty, breach of contract, breach of general partnership/joint venture arrangement, breach of duty of good faith, fraud and deceit, and other causes of action including declaratory judgment as to the Plaintiff's continuing interest in the Company. The Plaintiff sought money damages in excess of $15 million, as well as punitive damages and declaratory and injunctive relief (including the imposition of a constructive trust on assets of the Company in which the Plaintiff claimed to have a continuing interest) and an accounting. The amended complaint also added Messrs. Attea, Myszka, Rogers and Lannon as additional defendants. In April 2000, following trial, the jury rendered a verdict adverse to the Company with respect to Plaintiff's claims for breach of contract and breach of general partnership/joint venture arrangement and found total compensatory damages in the amount of $6,462,068. The Company filed a post-trial motion for judgment as a matter of law and a motion for a new trial. Although the motion for judgment as a matter of law was denied, the motion for a new trial was granted and a new trial is currently scheduled to commence on October 1, 2001. Messrs. Attea, Myszka, Rogers and Lannon have agreed to indemnify the Company for costs and any loss arising from the lawsuit and their obligation to do so is secured by an escrow arrangement covering shares of the Company's common stock owned by them having a current value substantially in excess of the amount of the damages found by the jury. Pursuant to that agreement, in April 2001 Messrs. Attea, Myszka, Lannon, and Rogers made payment to the Company of $1,785,000 in connection with expenses arising from the lawsuit that had previously been advanced by the Company. In view of the indemnification agreement and escrow arrangement, the Company does not believe that the lawsuit will have a material adverse effect upon the Company.



|ITEM 2. | CHANGES IN SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------

No disclosure required.



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

No disclosure required.



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

No disclosure required.



|ITEM 5. | OTHER INFORMATION
|------- | -----------------

No disclosure required.



|ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K
|------- | --------------------------------

None





SIGNATURES

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



|                    | Sovran Acquisition Limited Partnership
By: Sovran Holdings, Inc.
Its General Partner              
|------------------- | --------------------------------------------------------------------------------------------------
|                    | By:  / S / David L. Rogers
          David L. Rogers
           Secretary, Chief Financial Officer
|August 10, 2001Date |