INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

9 Months Ended

Sep. 30, 2025

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

Investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures represent the Company’s interest in preferred stock of SmartStop Self Storage REIT, Inc. (“SmartStop”), Strategic Storage Trust VI, Inc. and Strategic Storage Growth Trust III, Inc. (collectively, “Strategic Storage”), affiliates of SmartStop, and the Company’s noncontrolling interest in real estate joint ventures. The Company accounts for its investments in SmartStop and Strategic Storage preferred stock, which do not have a readily determinable fair value, at the transaction price less impairment, if any. The Company accounts for its investments in joint ventures using the equity method of accounting. The Company initially records these investments at cost and subsequently adjusts for cash contributions, distributions and net equity in income or loss, which is allocated in accordance with the provisions of the applicable partnership or joint venture agreement.

In these joint ventures, the Company and the joint venture partner generally receive a preferred return on their invested capital. To the extent that cash or profits in excess of these preferred returns are generated through operations or capital transactions, the Company would receive a higher percentage of the excess cash or profits, as applicable, than its equity interest.

The Company separately reports investments with net equity less than zero in cash distributions in unconsolidated real estate ventures in the condensed consolidated balance sheets. The net equity of certain joint ventures is less than zero because distributions have exceeded the Company’s investment in and share of income from these joint ventures. This is generally the

result of financing distributions, capital events or operating distributions that are usually greater than net income, as net income includes non-cash charges for depreciation and amortization while distributions do not.

Net investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures consist of the following:


	Number of Stores	Equity Ownership %	Excess Profit % (1)	September 30,		December 31,
				2025		2024
PRISA Self Storage LLC	85	4%	4%	$	8,795	$	8,967
HF1 Sovran HHF Storage Holdings LLC	37	49%	49%-59%	302,356		304,526
Storage Portfolio II JV LLC	36	10%	30%	(10,261)		(9,584)
Storage Portfolio IV JV LLC	32	10%	30%	46,507		47,150
Storage Portfolio I LLC	24	34%	49%	(44,357)		(43,803)
ESS CA-TIVS JV LP (3)	—	55%	55%-65%	—		27,217
HF2 Sovran HHF Storage Holdings II LLC	22	49%	49%-59%	112,784		114,034
HF5 Life Storage-HIERS Storage LLC	17	20%	20%	24,716		25,192
HF6 191 V Life Storage Holdings LLC	17	20%	20%	9,824		10,821
PR II EXR JV LLC (4)	—	25%	25%	—		105,909
VRS Self Storage, LLC	16	45%	54%	(18,465)		(17,557)
HF10 Life Storage HHF Wasatch Holdings LLC	16	20%	20%	18,337		19,295
Other unconsolidated real estate ventures (2)(3)	109	10%-50%	10%-50%	286,028		314,852
Strategic Storage Growth Trust III, Inc. Preferred Stock (5)	n/a	n/a	n/a	100,000		—
Strategic Storage Trust VI, Inc. Preferred Stock (6)	n/a	n/a	n/a	150,000		150,000
SmartStop Self Storage REIT, Inc. Preferred Stock (7)	n/a	n/a	n/a	—		200,000
Net Investments in and Cash distributions in unconsolidated real estate entities	411			$	986,264	$	1,257,019

Investments in unconsolidated real estate entities				$	1,063,969	$	1,332,338
Cash distributions in unconsolidated real estate ventures				(77,705)		(75,319)
Net Investments in and Cash distributions in unconsolidated real estate entities				$	986,264	$	1,257,019

(1) Includes pro-rata equity ownership share and promoted interest.

(2) On July 8, 2025, the Company sold its membership interest in the Life Storage Spacemax LLC joint venture, which held six properties. The sale resulted in a net gain of $9,354, which has been included on the equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest line on the Company’s condensed consolidated statements of operations.

(3) On April 30, 2025, the Company acquired all of its partners’ membership interests in the ESS-NYFL JV LP and ESS CA-TIVS JV LP joint ventures. The total value of the real estate was recorded at $436,797, which included $258,000 of assumed debt. The Company now owns 100% of the 27 properties that were held in the two joint ventures.

(4) On March 31, 2025, the Company closed on the transfer and distribution of membership interests in its PR II EXR JV LLC joint venture. The Company exchanged its 25% ownership interest in 17 properties for its partner’s 75% ownership interest in six properties. The portfolio consisted of 23 properties; therefore, the Company now owns 100% of the six properties, and its partner now owns 100% of the 17 properties.

(5) On February 4, 2025, the Company invested $100,000 in shares of newly issued convertible preferred stock of Strategic Storage Growth Trust III, Inc., an affiliate of SmartStop. The dividend rate for the preferred shares is 8.85% per annum, subject to increase after five years. The preferred shares are generally not redeemable for five years, except in the case of a change of control or initial listing, and are redeemable thereafter subject to a redemption premium. Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities line on the Company’s condensed consolidated statements of operations.

(6) In May 2023, the Company invested $150,000 in shares of convertible preferred stock of Strategic Storage Trust VI, Inc. with a dividend rate of 8.35% per annum, subject to increase after five years. The preferred shares are generally not redeemable for three years, except in the case of a change of control or initial listing of Strategic Storage. Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities on the Company’s condensed consolidated statements of operations.

(7) In October 2019, the Company invested $200,000 in shares of convertible preferred stock of SmartStop with a dividend rate of 7.00% per annum as of October 2024. Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities line on the Company’s condensed consolidated statements of operations. On April 4, 2025, the Company was repaid its $200,000 preferred equity investment in SmartStop.