SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
Commission File Number: 0-24071
Sovran Acquisition Limited Partnership
(Exact name of Registrant as specified in its charter)
Delaware 16-1481551
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5166 Main Street
Williamsville, NY 14221
(Address of principal executive offices)
(Zip code)
(716) 633-1850
(Registrant's telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Securities Exchanges on which Registered
Not Applicable Not Applicable
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 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 ]
As of March 15, 2000, 12,984,205 Units of Limited
Partnership Interest were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Notice of Annual Meeting of Shareholders and Proxy Statement
for Annual Meeting of Shareholders of the Company to be held on
May 24, 2000 (Part III).
<PAGE>
ITEM 1. BUSINESS
General
Sovran Acquisition Limited Partnership (the "Operating
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
the Company's business and owns substantially all of the
Company's assets. The Operating Partnership is one of the
largest owners and operators of self-storage properties in the
Eastern United States and Texas. 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. The term "Company Predecessors" as
used herein refers to the Company's predecessor organizations
prior to the Company's initial public offering in June, 1995 (the
"Initial Offering") and the completion of the various
transactions that occurred simultaneously therewith (the
"Formation Transactions"). The term "Company" as used herein
means Sovran Self Storage, Inc. and its subsidiaries on a
consolidated basis (including the Operating Partnership) or,
where the context so requires, Sovran Self Storage, Inc. only,
and, as the context may require, the Company Predecessors. The
term "Operating Partnership" as used herein means Sovran
Acquisition Limited Partnership and, as the context may require,
the Company Predecessors.
The Company is currently a 93.55% 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 the same as the 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, par value $.01 per share ("Common
Shares"), at the time of such redemption, provided that the
Company at its option may elect to acquire any such Unit
presented for redemption for one Common Share or cash. With each
such redemption or acquisition by the Company, the Company's
percentage ownership interest in the Operating Partnership will
increase. In addition, whenever the Company issues Common
<PAGE>
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.
The Operating Partnership may issue additional Units to
acquire additional self-storage properties in transactions that
in certain circumstances defer some or all of the sellers' tax
consequences. The Operating Partnership believes that many
potential sellers of self-storage properties have a low tax basis
in their properties and would be more willing to sell the
properties in transactions that defer Federal income taxes.
Offering Units instead of cash for properties may provide
potential sellers partial Federal income tax deferral.
As of March 15, 2000 the Operating Partnership owned and
operated 225 self-storage properties (individually, a "Property"
and collectively, the "Properties") consisting of approximately
12.7 million net rentable square feet, situated in 21 states. As
of December 31, 1999, the Properties had a weighted average
occupancy of 85% and a weighted average annual rent per occupied
square foot of $7.86. The Operating Partnership believes that it
is the 5th largest operator of self-storage properties in the
United States based on facilities owned.
The Operating Partnership seeks to increase cash flow and
enhance investor value through aggressive management of the
Properties and selective acquisitions of new self-storage
properties. Aggressive property management entails increasing
rents, increasing occupancy levels, strictly controlling costs,
maximizing collections, strategically expanding and improving the
Properties and, should economic conditions warrant, developing
new properties. The Operating Partnership believes that there
continues to be significant opportunities for growth through
acquisitions, and constantly seeks to acquire self-storage
properties located primarily in the Eastern United States that
are susceptible to realization of increased economies of scale
and enhanced performance through application of the Operating
Partnership's management expertise.
The Operating Partnership's principal executive offices are
located at 5166 Main Street, Williamsville, New York 14221, and
its telephone number is (716) 633-1850.
Industry Overview
The Operating Partnership believes that self-storage
facilities offer inexpensive storage space to residential and
commercial users. In addition to fully enclosed and secure
storage space, some operators, including the Operating
Partnership, also offer outside storage for automobiles,
recreational vehicles and boats. The storage sites are usually
fenced and well lighted with gates that are either manually
operated or automated. All facilities have a full-time
manager/leasing agent. Customers have access to their storage
area during business hours and in certain circumstances are
provided with 24 hour access. Individual storage units are
secured by the customer's lock, which may be purchased from the
<PAGE>
Operating Partnership, and the customer has control of access to
the unit.
The Operating Partnership believes that the self-storage
industry is characterized by a trend toward consolidation,
continuing increase in demand, relatively slow growth in supply
and a targeted market of primarily residential customers.
According to published data, of the approximately 30,000
facilities in the United States, less than 13% are managed by the
ten largest operators. The remainder of the industry is
characterized by numerous small, local operators. The shortage
of skilled operators, the scarcity of financing available to
small operators for acquisitions and expansions and the potential
for savings through economies of scale are factors which are
leading to a consolidation in the industry. The Operating
Partnership believes that as a result of this trend, significant
growth opportunities exist for operators with proven management
systems and sufficient capital resources.
The self-storage industry has also experienced relatively
slow growth in supply in recent years due to the scarcity of
financing available to small operators, restrictive zoning and
other regulations and the substantial start up costs associated
with the construction and lease-up of new facilities. Demand for
self-storage service has increased as indicated by an increase in
industry-wide average rents and in industry average occupancy.
It is expected to remain strong because it is slow to react to
changing conditions and because of various other factors,
including population growth, increased mobility, expansion of
condominium, townhouse and apartment living, and increasing
consumer awareness, particularly by commercial users. Commercial
customers tend to rent larger areas for longer terms, are more
reliable payers and are less sensitive to price increases. The
Operating Partnership estimates that commercial users account for
approximately 30% of its total occupancy, which is substantially
higher than the reported industry average of 18%.
Property Management
The Operating Partnership believes that it has developed
substantial expertise in managing self-storage facilities. Key
elements of the Operating Partnership's management system
include:
- Recruiting, training and retaining capable, aggressive on-
site Property Managers;
- Motivating Property Managers by providing incentive-based
compensation;
- Developing and maintaining an integrated marketing plan for
each Property;
- Performing regular preventive maintenance to avoid
significant repair obligations;
- Linking all facilities to a central customized management
information system; and
<PAGE>
- Utilization of a national marketing program that attracts
commercial tenants who have multi-market self-storage
needs.
Each Property is generally managed by a full-time Property
Manager and one or more assistant managers. Each Property
Manager is responsible for most operational decisions with
respect to his or her Property, including rent charges and
maintenance, subject to certain monetary limits. Assistant
managers enable Property Managers to have sufficient time to
perform marketing functions. Each Property Manager reports to an
Area or Regional Manager who in turn reports to an Executive Vice
President. The Operating Partnership currently employs two
Executive Vice Presidents who primarily focus on marketing and
overall supervision of the Area and Regional Managers. The Area
and Regional Managers are responsible for overseeing site
operations.
Property Managers attend a thorough orientation program and
undergo continuous training which emphasizes telephone skills,
closing techniques, identification of selected marketing
opportunities, networking with possible referral sources, and
familiarization with the Operating Partnership's customized
management information system. In addition to frequent contact
with Area and Regional Managers and other Operating Partnership
personnel, Property Managers receive periodic newsletters
regarding a variety of operational issues, and from time to time
attend "roundtable" seminars with other Property Managers.
The Operating Partnership annually develops a written
marketing plan for each of its Properties the content of which is
highly dependent upon local conditions. The focus of each
marketing plan is, in part, determined by occupancy rates. If
all storage units of the same size at a Property are at or near
90% occupancy, then the plan will generally include increases in
rental rates. If a Property has excess capacity, then the
marketing plan will target selected markets such as local
military bases, colleges, apartment and condominium complexes,
industrial parks, medical centers, retail shopping malls and
office suites. The Operating Partnership primarily uses
telephone directories to advertise its services, including a map
and when possible, listing Properties in the same marketplace in
a single advertisement. The Operating Partnership also conducts
quarterly surveys of its competitors' practices, which include
"shopping" competing facilities.
The Operating Partnership's customized computer system
performs billing, collections and reservation functions for each
Property, and also tracks information used in developing
marketing plans based on occupancy levels, and tenant
demographics and histories. The system generates daily, weekly
and monthly financial reports for each Property that are
immediately transmitted to the Operating Partnership's principal
office each night. The system also requires a Property Manager
to input a descriptive explanation for all debit and credit
transactions, paid-to-date changes, and all other discretionary
activities, which allows the accounting staff at the Operating
Partnership's principal office to promptly review all such
<PAGE>
transactions. Late charges are automatically imposed. More
sensitive activities such as rental rate changes and unit size or
number changes are completed only by Area and Regional Managers.
The Operating Partnership's customized management information
system permits it to add new facilities to its portfolio with
minimal additional overhead expense.
The Operating Partnership's Executive Vice Presidents,
Regional Managers, Area Managers and Property Managers are
compensated with a base salary and may, in addition, earn
incentive compensation. The Operating Partnership annually
establishes a target gross income and net operating income for
each Property. As incentive compensation, Property Managers earn
a specific bonus per move-in; and Executive Vice Presidents,
Regional Managers and Area Managers earn a percentage of the
combined net operating incomes in excess of the targeted levels
for all facilities reporting to them. This incentive
compensation program is not subject to any caps or increment
requirements. It is not unusual for any manager to earn in
excess of 10% of the base salary as incentive compensation. The
Operating Partnership believes that the structure of these
programs causes its managers to exercise their operational
autonomy in a manner to maximize income through increased rental
rates.
Environmental and Other Regulations
The Operating Partnership is subject to federal, state, and
local environmental regulations that apply generally to the
ownership of real property and the operation of self-storage
facilities. The Operating Partnership has not received notice
from any governmental authority or private party of any material
environmental noncompliance, claim, or liability in connection
with any of the Properties, and is not aware of any environmental
condition with respect to any of the Properties that could have a
material adverse effect on the Operating Partnership's financial
condition or results of operations.
The Properties are also generally subject to the same types
of local regulations governing other real property, including
zoning ordinances. The Operating Partnership believes that the
Properties are in substantial compliance with all such
regulations.
Insurance
Each of the Properties is covered by fire, flood and
property insurance, including comprehensive liability, all-risk
property insurance, provided by reputable companies and with
commercially reasonable terms. In addition, the Operating
Partnership maintains a policy insuring against environmental
liabilities resulting from tenant storage on terms customary for
the industry, and title insurance insuring fee title to the
Properties in an aggregate amount believed to be adequate.
Competition
The primary factors upon which competition in the self-
storage industry is based are location, rental rates, suitability
<PAGE>
of a property's design to prospective tenants' needs, and the
manner in which the property is operated and marketed. The
Operating Partnership believes it competes successfully on these
bases. The extent of competition depends in significant part on
local market conditions. The Operating Partnership seeks to
locate its facilities so as not to cause its own Properties to
compete with one another for customers, but the number of self-
storage facilities in a particular area could have a material
adverse effect on the performance of any of the Properties.
Several of the Operating Partnership's competitors,
including Public Storage Management, Inc., Shurgard Incorporated,
U-Haul International and Storage USA, Inc., are larger and have
substantially greater financial resources than the Operating
Partnership. These larger operators may, among other possible
advantages, be capable of greater leverage and the payment of
higher prices for acquisitions.
Investment Policy
While the Operating Partnership emphasizes equity real
estate investments, it may, in its discretion, invest in
mortgages and other real estate interests related to self-storage
properties consistent with the Company's qualification as a REIT.
The Operating Partnership may also retain a purchase money
mortgage for a portion of the sale price in connection with the
disposition of properties from time to time. Should investment
opportunities become available, the Operating Partnership may
look to acquire self-storage properties via a joint-venture
partnership or similar entity. The Operating Partnership may or
may not have a significant investment in such a venture, but
would use such an opportunity to expand its portfolio of branded
and managed properties.
Subject to the percentage of ownership limitations and gross
income tests necessary for the Company's REIT qualification, the
Operating Partnership also may invest in securities of entities
engaged in real estate activities or securities of other issuers,
including for the purpose of exercising control over such
entities.
Disposition Policy
Management periodically reviews the assets comprising the
Operating Partnership's portfolio. The Operating Partnership has
no current intention to dispose of any of the Properties,
although it reserves the right to do so. Any disposition
decision will be based on a variety of factors, including, but
not limited to, the (i) potential to continue to increase cash
flow and value, (ii) sale price, (iii) strategic fit with the
rest of the Operating Partnership's portfolio, (iv) potential
for, or existence of, environmental or regulatory issues, (v)
alternative uses of capital, and (vi) maintaining the Company's
qualification as a REIT. In 1999, the Operating Partnership sold
a facility located in Tennessee for $2.5 million resulting in a
gain of $.65 million.
<PAGE>
Borrowing Policy
The Board of Directors of the Company currently limits the
amount of debt that may be incurred by the Company to less than
50% of the sum of market value of the issued and outstanding
Common and Preferred Stock plus the Company's debt (Market
Capitalization). The Company, however, may from time to time re-
evaluate and modify its borrowing policy in light of then current
economic conditions, relative costs of debt and equity capital,
market values of properties, growth and acquisition opportunities
and other factors.
The Operating Partnership increased the balance outstanding
on the $150 million credit facility from $112 million in 1998 to
$123 million at December 31, 1999. The proceeds were used to
fund a portion of the 1999 acquisitions. The credit facility
matures February 2001 and provides for funds at LIBOR plus 1.25%.
In July 1999, the Operating Partnership issued 1,200,000
shares of 9.85% Series B Cumulative Redeemable Preferred Stock.
The net proceeds of $28.6 million were used to repay a portion of
the credit facility.
The Operating Partnership also has a $75 million unsecured
term note that bears interest at LIBOR plus 1.50%.
To the extent that the Operating Partnership desires to
obtain additional capital to pay distributions, to provide
working capital, to pay existing indebtedness or to finance
acquisitions, expansions or development of new properties, the
Company may utilize preferred stock offerings, floating or fixed
rate debt financing, retention of cash flow (subject to
satisfying the Operating Partnership's distribution requirements
under the REIT rules) or a combination of these methods.
Additional debt financing may also be obtained through mortgages
on its Properties, which may be recourse, non-recourse, or cross-
collateralized and may contain cross-default provisions. The
Operating Partnership has not established any limit on the number
or amount of mortgages that may be placed on any single Property
or on its portfolio as a whole. For additional information
regarding borrowings, see "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Liquidity and
Capital Resources" and Note 5 to the Operating Partnership's
Financial Statements appearing elsewhere herein.
Employees
The Operating Partnership currently employs a total of 608
employees, including 242 Property Managers, 14 Area Managers, 6
Regional Managers, 2 Executive Vice Presidents and 300 part time
employees. At the Operating Partnership's headquarters, in
addition to the Company's 3 senior executive officers, the
Operating Partnership employs 41 people engaged in various
support activities such as accounting and management information
systems. None of the Operating Partnership's employees is
covered by a collective bargaining agreement. The Operating
Partnership considers its employee relations to be excellent.
<PAGE>
ITEM 2. PROPERTIES
Overview
At December 31, 1999, the Operating Partnership, owned 100%
fee simple interests in, and operated, a total of 222 Properties,
consisting of approximately 12.5 million net rentable square
feet, situated in twenty-one states in the Eastern and Midwestern
United States, Arizona and Texas. As of December 31, 1999, the
Properties had a weighted average occupancy of 85% and a weighted
average annual rent per square foot of $7.86. The Operating
Partnership believes that it is the 5th largest operator of self-
storage properties in the United States based on facilities
owned.
The Operating Partnership's self-storage facilities offer
inexpensive, easily accessible, enclosed storage space to
residential and commercial users on a month-to-month basis. Most
of the Operating Partnership's Properties are fenced with
computerized gates and are well lighted. All but twenty-three of
the Properties are single-story, thereby providing customers with
the convenience of direct vehicle access to their storage units.
All Properties have a Property Manager on-site during business
hours. Customers have access to their storage areas during
business hours, and some commercial customers are provided 24-
hour access. Individual storage units are secured by a lock
furnished by the customer to provide the customer with control of
access to the unit.
Currently, 212 of the Properties conduct business under the
user-friendly trade name "Uncle BoB's Self-Storage" and the
remainder are operated under various names acquired with the
Properties. The Operating Partnership intends to convert all of
the Properties to the "Uncle BoB's" trade name.
<PAGE>
The table below provides certain information regarding the properties:
<TABLE>
<CAPTION>
Uncle
BoB's Occupancy
Year Trade at Mgr.
Location Built Sq. Ft. Name 12/31/99 Acres Units Bldgs. Floors Apt. Construction
__________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALABAMA
Birmingham I 1990 36,975 Y 79% 2.7 297 9 1 Y Masonry/Steel Roof
Birmingham II 1990 52,550 Y 87% 4.7 404 8 1 Y Masonry/Steel Roof
Montgomery I 1982 74,830 Y 81% 5.0 619 16 1 Y Masonry/Steel Roof
Birmingham III 1970 72,410 Y 77% 4.3 409 6 1 Y Masonry/Steel Roof
Montgomery II 1984 42,305 Y 95% 2.7 287 10 1 N Masonry/Steel Roof
Montgomery III 1988 41,550 Y 90% 2.4 391 9 1 Y Steel Bldg./Steel Roof
Birmingham-Walt 1984 63,380 Y 69% 3.3 390 6 1 Y Masonry Wall/Metal Roof
ARIZONA
Gilbert-Elliot Rd 1995 59,320 Y 79% 3.3 701 8 1 Y Masonry Wall/Metal Roof
Glendale-59th Ave 1997 67,076 Y 82% 4.6 634 7 1 Y Masonry Wall/Metal Roof
Mesa-Baseline 1986 39,125 Y 87% 1.8 393 11 1 Y Masonry Wall/Metal Roof
Mesa-E. Broadway 1986 38,825 Y 75% 1.8 371 5 1 Y Masonry Wall/Metal Roof
Mesa-W. Broadway 1976 36,405 Y 78% 1.9 403 5 1 Y Masonry Wall/Metal Roof
Mesa-Greenfield 1986 48,585 Y 79% 2.1 435 8 1 N Masonry Wall/Metal Roof
Phoenix-Camelback 1984 43,660 Y 76% 2.0 536 7 1 Y Masonry Wall/Metal Roof
Phoenix-Bell 1984 96,630 Y 71% 4.6 942 7 1 Y Metal Wall/Metal Roof
Phoenix-35th Ave 1996 72,140 Y 80% 4.3 728 8 1 Y Masonry Wall/Metal Roof
CONNECTICUT
New Haven 1985 48,290 Y 77% 3.9 392 5 1 N Masonry Wall/Steel Roof
Hartford-Metro I 1988 49,000 Y 91% 10.0 334 10 1 N Steel Bldg./Steel Roof
Hartford-Metro II 1992 39,025 Y 97% 6.0 315 7 1 N Steel Bldg./Steel Roof
FLORIDA
Lakeland I 1985 48,055 Y 79% 3.5 443 11 1 Y Masonry Wall/Steel Roof
Tallahassee I 1973 147,059 Y 80% 18.7 713 21 1 Y Masonry Wall/Tar & Gravel Roof
Tallahassee II 1975 43,740 Y 97% 4.0 241 7 1 Y Masonry Wall/Tar & Gravel Roof
Port St. Lucie 1985 54,250 Y 74% 4.0 597 12 1 N Steel Bldg./Steel Roof
Deltona 1984 63,992 Y 85% 5.0 453 5 1 Y Masonry Wall/Shingle Roof
Jacksonville I 1985 39,882 Y 92% 2.7 295 14 1 Y Masonry Wall/Tar & Gravel Roof
Orlando I 1988 50,445 Y 82% 2.8 594 3 2 Y Steel Bldg./Steel Roof
Ft. Lauderdale 1985 100,900 Y 93% 7.6 647 7 1 Y Steel Bldg./Steel Roof
West Palm I 1985 45,465 Y 74% 3.2 406 6 1 N Steel Bldg./Steel Roof
Melbourne I 1986 83,104 Y 89% 8.3 744 11 1 Y Masonry Wall/Shingled Roof
<PAGE>
Pensacola I 1983 108,291 Y 87% 7.5 949 13 1 Y Steel Bldg./Steel Roof
Pensacola II 1986 57,720 Y 94% 3.4 508 9 1 Y Steel Bldg./Steel Roof
Melbourne II 1986 56,039 Y 85% 3.4 618 11 1 N Steel Bldg./Steel Roof
Jacksonville II 1987 53,975 Y 95% 4.4 480 11 1 Y Masonry/Steel Roof
Pensacola III 1986 64,641 Y 93% 6.1 515 12 1 N Steel Bldg./Steel Roof
Pensacola IV 1990 38,850 Y 94% 2.7 280 9 1 Y Masonry/Steel Roof
Pensacola V 1990 39,445 Y 81% 2.6 326 4 1 Y Masonry/Steel Roof
Tampa I 1989 60,516 Y 91% 3.3 877 6 1 N Masonry/Steel Roof
Tampa II 1985 56,081 Y 86% 2.9 782 10 1 N Masonry/Steel Roof
Tampa III 1988 47,321 Y 93% 2.2 665 14 1 N Masonry/Steel Roof
Orlando II 1986 134,834 Y 77% 8.5 1,360 20 1 Y Masonry Wall/Steel Roof
Ft. Myers I 1988 27,654 Y 77% 1.1 267 6 2 Y Steel Bldg./Steel Roof
Ft. Myers II 1991/94 23,053 Y 93% 1.9 300 2 1 Y Masonry/Steel Roof
Tampa IV 1985 58,605 Y 88% 4.0 558 10 1 Y Masonry/Steel Roof
West Palm II 1986 30,993 Y 89% 2.3 382 9 1 Y Masonry/Steel Roof
Ft. Myers III 1986 36,040 Y 91% 2.4 261 9 1 Y Masonry/Steel Roof
Lakeland II 1988 60,010 Y 83% 4.0 591 9 1 N Masonry Wall/Steel Roof
Ft. Myers IV 1987 59,706 Y 97% 4.5 277 4 1 Y Masonry/Steel Roof
Jacksonville III 1987 102,500 Y 84% 5.9 788 13 1 Y Masonry Wall/Shingle Roof
Jacksonville IV 1985 43,895 Y 87% 2.7 506 7 1 Y Steel Bldg./Steel Roof
Jacksonville V 1987/92 53,855 Y 98% 2.9 511 13 2 Y Steel Bldg./Masonry Wall/ Steel Roof
Orlando III 1975 52,704 Y 76% 3.2 504 8 2 N Masonry Wall/Steel Roof
Orlando IV-W 25th St 1984 38,636 Y 87% 2.8 408 6 1 Y Steel Bldg/Steel Roof
Delray I-Mini 1969 50,355 Y 96% 3.5 486 3 1 Y Masonry Wall/Concrete Roof
Delray II-Safeway 1980 70,078 Y 86% 4.3 711 17 1 Y Masonry Wall/Concrete Roof
Tampa-E. Hillborough 1985 84,690 N 80% 5.3 736 16 1 Y Masonry Wall/Metal Roof
Titusville 1986/90 54,850 Y 94% 6.0 417 9 1 Y Metal Wall/Shingle Roof
Ft.Myers-Mall 1991/94 20,881 Y 73% 1.3 230 4 1 Y Masonry/Steel Roof
Indian Harbor-Beach 1985 64,978 Y 91% 4.0 717 15 1 N Masonry Wall/Metal Roof
Hollywood-Sheridan 1988 129,613 N 93% 7.0 1,167 21 1 Y Masonry Wall/Concrete Roof
Pompano Beach-Atlantic 1985 75,154 N 86% 4.0 980 17 1 N Masonry Wall/Concrete Roof
Pompano Beach-Sample 1988 63,610 N 83% 3.6 839 14 1 N Masonry Wall/Metal Roof
Boca Raton-18th St 1991 89,527 N 85% 6.2 1,063 8 1 N Masonry Wall/Metal Roof
Vero Beach 1997 34,450 Y 94% 1.9 314 2 1 N Masonry Wall/Metal Roof
Hollywood-N.21st 1987 58,917 Y 96% 3.1 716 11 1 Y Masonry Wall/Metal Roof
Cocoa 1982 73,242 N 86% 2.5 720 12 1 Y Masonry Wall/Metal Roof
GEORGIA
Savannah 1981 59,530 Y 89% 5.4 499 11 1 Y Masonry Wall/Steel Roof
Atlanta-Metro I 1988 68,935 Y 91% 3.9 525 5 1 Y Steel Bldg./Steel Roof
Atlanta-Metro II 1988 45,300 Y 84% 3.9 375 6 1 Y Steel Bldg./Steel Roof
Atlanta-Metro III 1988 56,695 Y 72% 5.3 408 9 1 Y Steel Bldg./Steel Roof
Atlanta-Metro IV 1989 42,495 Y 84% 3.5 315 7 1 Y Steel Bldg./Steel Roof
Atlanta-Metro V 1988 44,545 Y 82% 4.2 308 3 1 Y Masonry Wall/Tar & Gravel Roof
<PAGE>
Atlanta-Metro VI 1986 50,400 Y 81% 3.6 452 7 1 Y Steel Bldg./Steel Roof
Atlanta-Metro VII 1981 39,010 Y 79% 2.5 328 9 2 Y Masonry Wall/Tar & Gravel Roof
Atlanta-Metro VIII 1975 46,791 Y 85% 3.3 438 6 2 Y Masonry Wall/Tar & Gravel Roof
Augusta I 1988 52,360 Y 90% 4.0 408 13 1 Y Steel Bldg./Steel Roof
Macon I 1989 40,700 Y 90% 3.2 353 14 1 Y Steel Bldg./Steel Roof
Augusta II 1987 46,200 Y 87% 3.5 373 4 1 Y Masonry Wall/Steel Roof
Atlanta-Metro IX 1988 55,826 Y 88% 4.6 408 6 1 Y Steel Bldg./Steel Roof
Atlanta-Metro X 1988 47,895 Y 95% 6.8 412 9 1 N Steel Bldg./Steel Roof
Macon II 1989/94 58,915 Y 81% 14.0 540 11 1 Y Steel Bldg./Steel Roof
Savannah II 1988 49,365 Y 95% 2.6 462 8 1 Y Masonry Wall/Steel Roof
Atlanta-Alpharetta 1994 80,540 Y 66% 5.8 551 8 1&2 Y Steel Bldg./Steel Roof
Atlanta-Marietta-Roswell 1996 59,450 Y 83% 6.0 451 8 1&2 Y Steel Bldg./Steel Roof
Atlanta-Doraville 1995 68,465 Y 90% 4.9 636 8 1&2 Y St&Masonry Bldg/Steel Roof
Ft. Oglethorpe 1989 45,125 Y 83% 3.3 444 6 1 Y Masonry Wall/Metal Roof
LOUISIANA
Baton Rouge-Airline 1982 72,120 Y 84% 2.5 412 12 1 Y Masonry Wall/Metal Roof
Baton Rouge-Airline 2 1985 44,895 Y 90% 2.8 444 9 1 N Masonry Wall/Steel Roof
Lafayette-Pinhook 1 1980 57,030 Y 76% 3.2 492 7 1 Y Masonry Wall/Metal Roof
Lafayette-Pinhook 2 1992/94 47,025 Y 80% 2.4 439 2 1 Y Metal Wall/Metal Roof
Lafayette-Ambassador 1975 33,885 Y 79% 2.0 452 3 1 Y Masonry Wall/Shingle Roof
Lafayette-Evangeline 1977 35,230 Y 56% 3.1 353 3 1 Y Masonry Wall/Metal Roof
Lafayette-Guilbeau 1994 63,735 Y 79% 3.4 598 1 1 N Metal Wall/Metal Roof
MAINE
Westbrook 1988 41,000 N 84% 5.9 430 7 1 Y Metal Wall/Metal Roof
MARYLAND
Salisbury 1979 33,560 Y 82% 3.0 416 10 1 N Masonry Wall/Tar & Gravel Roof
Baltimore I-Frederick 1984 21,233 Y 85% 1.9 347 2 3 N Masonry Wall/Shingled Roof
Baltimore II-Gaithersburg 1988 61,834 Y 93% 2.2 539 2 4 Y Masonry Wall/Tar & Gravel Roof
Baltimore III-Landover 1990 51,838 Y 93% 3.1 674 8 1 Y Steel Bldg./Steel Roof
MASSACHUSETTS
New Bedford 1982 42,068 Y 97% 3.4 372 7 1 Y Steel Bldg./Steel Roof
Springfield 1986 42,100 Y 88% 4.7 318 5 1 N Masonry Wall/Shingle Roof
Northbridge 1988 50,410 Y 90% 3.5 356 10 1 N Metal Wall/Metal Roof
Salem 1979 53,205 Y 91% 2.0 498 2 2 Y Steel Wall/Metal Roof
Boston-Metro I 1980 37,875 Y 98% 2.0 401 3 2 Y Masonry Wall/Tar & Gravel Roof
Boston-Metro II 1986 38,315 Y 96% 3.6 439 8 2 N Masonry Wall/Tar & Gravel Roof
MICHIGAN
Grand Rapids 1976 57,900 Y 94% 5.4 526 9 1 Y Masonry Wall/Steel Roof
Grand Rapids II 1983 32,300 Y 95% 8.0 296 6 1 N Masonry & Steel Walls
Kalamazoo 1978 60,218 Y 87% 11.6 672 14 1 Y Steel Bldg/Steel & Shingle Roof
Lansing 1987 45,005 Y 92% 3.8 405 9 1 Y Steel Bldg/Steel Roof
Holland 1978 96,448 Y 94% 13.6 730 18 1 Y Masonry Wall/Steel Roof
Waterford-Highland 1978 136,821 N 88% 16.6 1,696 16 1 Y Masonry Wall/Metal Roof
<PAGE>
MISSISSIPPI
Jackson I 1990 41,960 Y 94% 2.0 343 6 1 Y Masonry/Steel Roof
Jackson II 1990 38,815 Y 88% 2.1 310 9 1 Y Masonry/Steel Roof
Jackson III-155 1995 62,048 Y 97% 1.3 426 2 1 N Metal Wall/Metal Roof
Jackson-N.West 1984 57,175 N 90% 5.2 473 13 1 Y Masonry Wall/Metal Roof
NEW HAMPSHIRE
Salem-Policy 1980 62,775 Y 100% 8.7 546 9 1 Y Masonry Wall/Metal Roof
NEW YORK
Middletown 1988 26,000 Y 96% 2.8 283 4 1 N Steel Bldg./Steel Roof
Buffalo I 1981 76,290 Y 94% 5.1 535 10 1 Y Steel Bldg./Steel Roof
Rochester I 1981 41,834 Y 64% 2.9 407 5 1 Y Steel Bldg./Steel Roof
Rochester II 1980 29,610 Y 90% 3.5 242 9 1 N Masonry Wall/Shingle Roof
Buffalo II 1984 54,635 Y 90% 6.2 438 12 1 Y Steel Bldg./Steel Roof
Syracuse I 1987 73,320 Y 87% 7.5 767 16 1 N Steel Bldg./Steel Roof
Syracuse II 1983 54,650 Y 95% 3.6 424 10 1 Y Steel Bldg./Shingled Roof
Rochester III 1990 67,865 Y 95% 2.7 462 1 1 N Masonry Wall/Shingle Roof
Harriman 1989/95 66,240 Y 85% 6.1 642 10 1 Y Metal Wall/Metal Roof
NORTH CAROLINA
Charlotte 1986 37,815 Y 74% 2.9 333 6 1 Y Steel Bldg./Steel Roof
Fayetteville 1980 90,992 Y 64% 6.2 1,021 12 1 Y Steel Bldg./Steel Roof
Greensboro 1986 45,230 Y 70% 3.4 422 5 1 Y Steel Bldg./Mas. Wall/ Steel Roof
Raleigh I 1985 58,460 Y 79% 5.0 543 8 2 Y Steel Bldg./Steel Roof
Raleigh II 1985 33,125 Y 80% 2.5 325 8 1 Y Steel Bldg./Steel Roof
Charlotte II 1995 48,830 Y 54% 5.6 477 7 1 Y Masonry Wall/Steel Roof
Charlotte III 1995 31,320 Y 92% 2.9 336 6 1 Y Masonry Wall/Steel Roof
Greensboro-Hilltop 1995 32,328 Y 86% 1.0 311 7 1 N Metal Wall/Metal Roof
Greensboro-StageCoach 1997 9,625 Y 89% 2.5 91 2 1 N Metal Wall/Metal Roof
Greensboro-High Point 1993 58,420 Y 65% 2.5 518 9 1 N Steel wall/Metal Roof
Durham-Hillborough 1988/91 67,351 Y 78% 5.0 623 5 1 Y Metal Wall/Metal Roof
Durham-Cornwallis 1990/96 79,040 Y 73% 4.7 665 9 1 Y Masonry Wall/Metal Roof
Jacksonville-Center 1995 50,670 Y 68% 5.0 449 11 1 Y Metal Wall/Metal Roof
Jacksonville-Gum Branch 1989 62,930 Y 83% 5.0 479 14 1 Y Metal Wall/Metal Roof
Jacksonville-N. Marine 1985 43,540 Y 69% 8.4 413 6 1 Y Masonry Wall/Shingle Roof
OHIO
Youngstown 1980 54,830 Y 84% 5.8 364 5 1 Y Steel Bldg./Steel Roof
Cleveland-Metro I 1980 48,930 Y 89% 6.4 350 9 1 Y Steel Bldg./Steel Roof
Cleveland-Metro II 1987 60,890 Y 93% 4.8 453 4 1 Y Steel Bldg./Steel Roof
Cincinnati 1988 48,615 Y 96% 2.8 496 7 1 Y Masonry Wall/Steel Roof
Dayton 1988 62,602 Y 97% 3.6 615 8 1 Y Masonry Wall/Steel Roof
Youngstown II 1988 55,750 Y 90% 3.9 499 7 1 Y Masonry Wall/Steel Roof
Akron 1990 38,320 Y 89% 3.4 296 12 1 Y Masonry Wall/Steel Roof
Cleveland III 1986 68,100 Y 78% 3.4 598 12 1 Y Masonry Wall/Steel Roof
Cleveland IV 1978 65,810 Y 92% 3.5 597 5 1 Y Masonry Wall/Steel Roof
<PAGE>
Cleveland V 1979 74,702 Y 92% 3.1 661 9 1&2 Y Masonry Wall/Rolled Roof
Cleveland VI 1979 47,165 Y 90% 2.6 377 8 1 Y Masonry Wall/Concrete Roof
Cleveland VII 1977 70,140 Y 95% 4.3 609 13 1 Y Masonry Wall/Steel Roof
Cleveland VIII 1970 47,975 Y 92% 5.7 477 6 1 N Masonry Wall/Steel Roof
Cleveland IX 1982 54,690 Y 85% 4.4 296 5 1 N Masonry Wall/Steel Roof
Cleveland 10-Avon 1989 46,700 Y 82% 5.8 369 6 1 N Metal Wall/Metal Roof
Warren-Elm 1986 60,230 Y 82% 7.3 498 8 1 Y Masonry Wall/Metal Roof
Warren-Youngstown 1986 59,107 Y 87% 5.0 548 11 1 N Masonry Wall/Metal Roof
Batavia 1988 61,810 N 72% 5.5 547 9 1 N Metal Wall/Steel Roof
PENNSYLVANIA
Allentown 1983 41,700 Y 87% 6.3 342 7 1 Y Masonry Wall/Shingle Roof
Sharon 1975 38,270 Y 92% 3.0 313 5 1 Y Steel Bldg./Steel Roof
Harrisburg I 1983 48,850 Y 96% 4.1 445 9 1 Y Masonry Wall/Steel Roof
Harrisburg II 1985 58,845 Y 90% 9.2 292 10 1 Y Masonry Wall/Steel Roof
Pittsburgh 1990 57,650 Y 90% 3.4 509 6 1 Y Steel Bldg./Steel Roof
Pittsburgh II 1983 102,750 Y 76% 4.8 750 4 2 Y Masonry Wall/Shingled Roof
Harrisburg-Peiffers 1984 63,770 Y 92% 4.1 612 9 1 Y Masonry Wall/Metal Roof
RHODE ISLAND
East Greenwich 1984/88 70,955 Y 91% 4.9 672 9 1 Y Metal Wall/Metal Roof
W. Warwick 1986/94 30,631 Y 89% 2.3 336 4 1 N Metal Wall/Steel Roof
Providence 1984 38,670 Y 98% 3.7 388 7 1 Y Masonry Wall/Tar & Gravel Roof
SOUTH CAROLINA
Charleston I 1985 49,714 Y 92% 3.3 412 11 1 Y Steel Bldg./Mas. Wall/Steel Roof
Columbia I 1985 47,800 Y 94% 3.3 398 7 1 Y Steel Bldg./Steel Roof
Columbia II 1987 58,830 Y 90% 6.0 464 8 1 N Steel Bldg./Steel Roof
Columbia III 1989 41,490 Y 76% 3.5 335 5 2 Y Steel Bldg./Steel Roof
Columbia IV 1986 57,770 Y 89% 5.6 453 7 1 Y Steel Bldg./Steel Roof
Spartanburg 1989 40,450 Y 76% 3.6 350 6 1 Y Steel Bldg./Steel Roof
Charleston II 1985 40,318 Y 98% 2.2 331 10 1 Y Masonry Wall/Steel Roof
TENNESSEE
Chattanooga-Lee Hwy 1987 37,180 Y 88% 3.3 390 6 1 Y Masonry Wall/Metal Roof
Chattanooga-Hwy 58 1985 35,630 Y 80% 2.4 329 4 1 Y Masonry Wall/Metal Roof
Hendersonville 1986/97 93,005 Y 70% 5.7 646 16 1 Y Masonry Wall/Metal Roof
TEXAS
Arlington I 1987 45,965 Y 92% 2.3 384 7 1 Y Masonry Wall/Steel Roof
Arlington II 1986 67,220 Y 73% 3.8 286 11 1 Y Masonry Wall/Steel Roof
Ft. Worth 1986 40,875 Y 92% 2.4 341 3 1 Y Masonry Wall/Asphalt Roof
San Antonio I 1986 49,920 Y 84% 3.9 486 12 1 Y Masonry Wall/Steel Roof
San Antonio II 1986 40,170 Y 80% 1.9 285 7 1 Y Masonry Wall/Steel Roof
San Antonio III 1981 48,782 Y 82% 2.6 495 5 1 Y Masonry Wall/Steel Roof
Universal 1985 35,120 Y 94% 2.4 397 8 1 Y Masonry Wall/Steel Roof
San Antonio IV 1995 44,560 Y 94% 5.4 415 11 1 Y Steel Bldg/Steel Roof
Houston-Eastex 1993/95 70,030 Y 95% 6.4 563 5 1 Y Metal Wall/Steel Roof
<PAGE>
Houston-Nederland 1995 61,871 Y 95% 6.3 531 1 1 Y Metal Wall/Steel Roof
Houston-College 1995 35,650 Y 98% 1.8 316 1 1 Y Metal Wall/Steel Roof
Dallas-Skillman 1975 121,659 Y 81% 5.9 1,107 8 1&2 Y Masonry Wall/Steel Roof
Dallas-Centennial 1977 103,783 Y 81% 6.7 1,094 8 1&2 N Masonry Wall/Steel Roof
Dallas-Samuell 1975 79,046 Y 90% 3.8 793 6 1&2 Y Masonry Wall/Steel Roof
Dallas-Hargrove 1975 71,914 Y 86% 3.1 747 5 1&2 Y Masonry Wall/Steel Roof
Houston-Antoine 1984 75,720 Y 83% 4.1 671 9 1 Y Metal Wall/Metal Roof
Katy 1994 44,030 Y 87% 8.6 438 10 1 Y Metal Wall/Metal Roof
Humble 1986 63,589 Y 89% 2.3 601 6 1 Y Masonry Wall/Metal Roof
Houston-Old Katy 1996 52,800 Y 88% 3.0 490 19 1 Y Masonry Wall/Shingle Roof
Webster-Hwy 3 1997 54,850 Y 70% 3.3 536 6 1 Y Masonry Wall/Metal Roof
Carrollton 1997 51,760 Y 84% 3.2 499 5 1 Y Masonry Wall/Metal Roof
San Marcos 1994 61,690 Y 82% 5.0 432 18 1 N Metal Wall/Metal Roof
Austin-McNeil 1994 72,490 Y 78% 7.0 556 19 1 Y Metal Wall/Metal Roof
Austin-FM 1996 60,150 Y 95% 4.9 390 9 1 Y Metal Wall/Metal Roof
Euless 1996 93,120 Y 50% 7.5 499 9 1 Y Metal Wall/Metal Roof
N. Richland Hills 1996 76,545 Y 87% 7.4 549 11 1 Y Metal Wall/Metal Roof
Katy-Franz 1993 67,135 Y 82% 7.2 531 10 1 Y Metal Wall/Metal Roof
Cedar Hill 1985 53,735 N 93% 3.0 416 16 1 Y Metal Wall/Metal Roof
VIRGINIA
Newport News I 1988 50,065 Y 94% 3.2 449 7 1 Y Steel Bldg./Steel Roof
Alexandria 1984 76,334 Y 88% 3.2 1,129 4 2 Y Masonry Wall/Tar & Gravel Roof
Norfolk I 1984 40,350 Y 85% 2.7 328 7 1 Y Steel Bldg./Steel Roof
Norfolk II 1989 45,375 Y 92% 2.1 358 4 1 Y Masonry Wall/Steel Roof
Richmond 1987 52,070 Y 89% 2.7 526 5 1 Y Masonry Wall/Steel Roof
Newport News II 1988/93 63,475 Y 88% 4.7 407 8 1 Y Steel Bldg./Steel Roof
Lynchburg-Lakeside 1982 47,628 Y 88% 5.3 435 10 1 Y Masonry Wall/Steel Roof
Lynchburg-Timberlake 1985 44,150 Y 63% 2.3 384 4 1 Y Masonry Wall/Steel Roof
Lynchburg-Amherst 1987 23,388 Y 89% 1.5 202 3 1 N Masonry Wall/Metal Roof
Christiansburg 1985/90 38,622 Y 79% 3.2 346 6 1 Y Masonry Wall/Metal Roof
Chesapeake 1988/95 37,450 Y 85% 12.0 341 7 1 Y Metal Wall/Steel Roof
Danville 1988 49,672 Y 79% 3.2 408 8 1 N Steel Wall/Metal Roof
Chesapeake-Military 1996 58,435 Y 64% 3.0 592 3 1 N Masonry Wall/Metal Roof
Chesapeake-Volvo 1995 63,250 Y 94% 4.0 533 4 1 N Masonry Wall/Metal Roof
Virginia Beach-Shell 1991 52,566 Y 75% 2.5 588 5 1 N Masonry Wall/Metal Roof
Virginia Beach-Central 1993/95 96,693 Y 70% 5.0 934 6 1 N Masonry Wall/Metal Roof
NorfolK-Naval Base 1975 126,508 Y 84% 5.2 1,272 11 1 N Masonry Wall/Metal Roof
Lynchburg-Timberlake 1990/96 49,727 Y 84% 5.2 458 7 1 N Masonry Wall/Metal Roof
Total for all Properties 12,532,748 961 112,173 1,823
Weighted Average 85%
</TABLE>
<PAGE>
ITEM 3. 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, filed a lawsuit
against the Company on June 13, 1995 in the United States
District Court for the Northern District of Ohio. The Plaintiff
has since 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 judgement as to the Plaintiff's continuing interest
in the Company. The Plaintiff is seeking 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 claims to
have a continuing interest) and an accounting. The amended
complaint also added Messrs. Attea, Myszka, Rogers and Lannon as
additional defendants. The parties are currently involved in
discovery and trial. The Company is vigorously defending the
lawsuit. Messrs. Attea, Myszka, Rogers and Lannon have agreed to
indemnify the Company for costs and any loss arising from the
lawsuit. The Operating Partnership believes that the actual
amount of the Plaintiff's recovery in this matter if any, would
be within the ability of these individuals to provide
indemnification. The Operating Partnership does not believe that
the lawsuit will have a material, adverse effect upon the
Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during the fourth quarter of the
fiscal year covered by this report to a vote of security holders,
through the solicitation of proxies or otherwise.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There is no established public trading market for the Units.
As of March 15, 2000, there were 17 holders of record of Units.
The following table sets forth the quarterly distributions
per Unit paid by the Operating Partnership to holders of its
Units with respect to each such period.
Quarter Ended Distributions Per Unit
March 31, 1997 .520
June 30, 1997 .520
September 30, 1997 .540
December 31, 1997 .540
March 31, 1998 .540
June 30, 1998 .540
September 30, 1998 .560
December 31, 1998 .560
<PAGE>
March 31, 1999 .560
June 30, 1999 .560
September 30, 1999 .570
December 31, 1999 .570
The partnership agreement of the Operating Partnership (the
"Partnership Agreement") provides that the Operating Partnership
will distribute all available cash (as defined in the Partnership
Agreement) on at least a quarterly basis, in amounts determined
by the general partner in its sole discretion, to the partners in
accordance with their respective percentage interest in the
Operating Partnership. Distributions are declared at the
discretion of the Board of Directors of Holdings, the general
partner of the Operating Partnership and a wholly-owned
subsidiary of the Company, and will depend on actual funds from
operations of the Operating Partnership, its financial condition,
capital requirements, the annual distribution requirements under
the REIT provisions of the Internal Revenue Code of 1986, as
amended, and such other factors as the Board of Directors may
deem relevant. The Board of Directors of Holdings may modify the
Operating Partnership's distribution policy from time to time,
subject to the terms of the Partnership Agreement.
The Operating Partnership's line of credit contains
customary representations, covenants and events of default,
including covenants which restrict the ability of the Operating
Partnership to make distributions in excess of stated amounts.
In general, during any four consecutive fiscal quarters the
Operating Partnership may only distribute up to 90% of the
Operating Partnership's funds from operations (as defined in the
related agreement). The line of credit contains exceptions to
these limitations to allow the Operating Partnership to make any
distributions necessary to allow the Company to maintain its
status as a REIT. The Operating Partnership does not anticipate
that this provision will adversely effect the ability of the
Operating Partnership to make distributions, as currently
anticipated.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION> Operating Partnership Predecessor (a)
For Period For Period
from from
At or for Year Ended December 31, 6/26/95 to 1/1/95 to
(Dollars in thousands, 1999 1998 1997 1996 12/31/95 6/25/95
except per Unit data) _____________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Operating Data:
Total revenues $ 84,256 $ 69,360 $49,354 $33,597 $12,942 $ 9,532
Income before extraordinary
item 27,347 25,155 23,763 15,682 6,744 311
Net income 27,347 24,798 23,763 15,682 6,744 311
Net income per Unit before
Extraordinary item-basic 1.97 1.94 1.97 1.88 0.91 -
Net income per Unit- Basic 1.97 1.91 1.97 1.88 0.91 -
Net income per Unit- diluted 1.97 1.91 1.96 1.87 0.91 -
Distributions declared
per Unit 2.26 2.20 2.12 2.05 1.04 -
Balance Sheet Data:
Investment in storage
facilities at cost $556,473 $502,502 $333,036 $220,711 $159,461 $114,008
Total Assets 529,719 490,124 327,073 235,415 160,437 84,527
Total Debt 203,253 190,059 39,559 - 5,000 69,102
Total Liabilities 218,281 203,439 50,319 8,131 10,697 71,311
Limited partners' capital
interest at redemption value 15,888 21,683 14,454 4,435 - -
Partners' capital 295,550 265,002 262,300 222,849 149,740 13,216
Other Data:
Net cash provided by
operating activities $ 40,502 $34,151 $31,159 $20,152 $7,188 $2,003
Net cash used in
investing activities (50,836) (153,367) (98,765) (58,760) (157,965) (3,340)
Net cash provided by
financing activities 8,382 119,633 53,486 54,563 151,509 507
Funds from operations
available to common
unitholders(b) 37,815 35,762 30,294 19,816 8,036 -
</TABLE>
<PAGE>
(a) The Operating Partnership began operations on June 26, 1995,
and had no historical results of operations before that date.
Results of operations prior to June 26, 1995 relate to Sovran
Capital, Inc. and the Sovran Partnerships (Company Predecessors).
(b) Funds from operations ("FFO") means income (loss) before
extraordinary item(computed in accordance with GAAP) (i) less
gain on sale of property, (ii) plus depreciation of real estate
assets and amortization of intangible assets exclusive of
deferred financing costs and (iii) significant non-recurring
events (unsuccessful debt offering costs in 1998). FFO is a
supplemental performance measure for REITs as defined by the
National Association of Real Estate Investment Trusts, Inc. FFO
is presented because analysts consider FFO to be one measure of
the performance of the Operating Partnership. FFO does not take
into consideration scheduled principal payments on debt, capital
improvements and other obligations. Accordingly, FFO is not a
substitute for the Operating Partnership's cash flow or net
income as a measure of the Operating Partnership liquidity or
operating performance or ability to pay distributions.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the financial
condition and results of operations should be read in conjunction
with the financial statements and notes thereto included
elsewhere in this report.
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 21E 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 its existing
business and operations; 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
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 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.
RESULTS OF OPERATIONS
Year Ended December 31, 1999 compared to Year Ended December 31,
1998
In 1999, the Operating Partnership recorded rental revenues
of $82.4 million, an increase of $14.2 million or 21% when
compared to 1998 rental revenues of $68.2 million. Of this,
$11.9 million resulted from the acquisition of 18 stores during
1999 and from having the 1998 acquisitions included for a full
year of operations. The additional $2.3 million increase
resulted from increased revenues at the 156 core properties
considered in same store sales. For this core group, revenues
increased 3.9%, primarily as the result of rental rate increases
which were slightly offset by an average occupancy decrease of
.4% to 86%. Interest and other income increased to $1.9 million
in 1999 from $1.1 million in 1998 due to a $.65 million gain on
the sale of a facility.
Property operating and real estate tax expense increased
$4.8 million or 25% during the period. Of this, $3.9 million was
incurred by the facilities acquired in 1999 and from having the
1998 acquisitions included for a full year of operations, and
$0.9 million additional cost was incurred in the operation of the
156 core properties.
<PAGE>
General and administrative expenses increased $.7 million in
1999. The increase was primarily a result of increased
supervisory and accounting costs associated with the operation of
an increased number of properties, and the start up and marketing
costs related to Uncle BoB's Flex-a-Space.
In 1999, interest expense increased to $13.9 million from
$9.6 million as a result of increased borrowings under the line
of credit. The credit facility was utilized throughout 1999 to
fund the purchase of the 18 stores.
Depreciation and amortization expense increased to $13.1
million from $10.3 million, primarily as a result of the
additional depreciation taken on the $46 million of real estate
assets acquired in 1999 and a full year of depreciation on 1998
acquisitions.
Earnings before interest, depreciation and amortization, and
extraordinary loss increased 20.8% from $45.1 million in 1998 to
$54.4 million in 1999 as a result of the aforementioned items.
Year Ended December 31, 1998 compared to Year Ended December 31,
1997
In 1998, the Operating Partnership recorded rental revenues
of $68.2 million, an increase of $19.6 million or 40% when
compared to 1997 rental revenues of $48.6 million. Of this, $18.4
million resulted from the acquisition of fifty stores during 1998
and from having the 1997 acquisitions included for a full year of
operations. The additional $1.2 million increase resulted from
increased revenues at the 111 core properties considered in same
store sales. For this core group, revenues increased 3.8%,
primarily as the result of rental rate increases which were
slightly offset by an average occupancy decrease of 1% to 86.4%.
Interest and other income increased to $1.1 million in 1998 from
$.8 million in 1997.
Property operating and real estate tax expense increased
$5.8 million or 42% during the period. Of this, $5.5 million was
incurred by the facilities acquired in 1998 and from having the
1997 acquisitions included for a full year of operations, and
$0.3 million additional cost was incurred in the operation of the
111 core properties.
General and administrative expenses increased $2.1 million
in 1998. Of the increase, $.5 million related to the costs
associated with the unsuccessful public debt offering costs in
1998. The additional increase was primarily a result of
increased supervisory and accounting costs associated with the
operation of an increased number of properties, and the change in
the treatment of internal property acquisition costs as discussed
in Note 14 to the financial statements.
In 1998, interest expense increased to $9.6 million from
$2.2 million as a result of increased borrowings under the line
of credit and term note. The credit facility and term note were
<PAGE>
utilized throughout 1998 to fund the purchase of the fifty
stores, as opposed to 1997 in which the Operating Partnership
issued additional Units to fund a portion of the acquired stores.
Depreciation and amortization expense increased to $10.3
million from $7.0 million, primarily as a result of the
additional depreciation taken on the $170 million of real estate
assets acquired in 1998 and a full year of depreciation on 1997
acquisitions.
Earnings before interest, depreciation and amortization, and
extraordinary loss increased 36.8% from $32.9 million in 1997 to
$45.1 million in 1998 as a result of the aforementioned items.
A $.36 million extraordinary loss was recorded in 1998 when
the Operating Partnership's former unsecured credit facility was
replaced with a new line of credit with more favorable terms.
Pro Forma Year Ended December 31, 1999 compared to Pro Forma Year
Ended December 31, 1998
The following unaudited pro forma information shows the
results of operations as though the acquisitions of storage
facilities in 1999 and 1998, and the Company's preferred stock
offering in 1999 had all occurred as of the beginning of 1998.
Year Ended December 31,
(Dollars in thousands) 1999 1998
_________________________________________________________________
Revenues:
Rental income $84,623 $82,024
Interest and other income 1,897 1,340
_________________________________________________________________
Total revenues 86,520 83,364
_________________________________________________________________
Expenses:
Property operations and
maintenance 17,407 16,680
Real estate taxes 7,521 6,950
General and administrative 5,591 4,940
Interest 14,667 14,667
Depreciation and amortization 13,523 13,523
_________________________________________________________________
Total expenses 58,709 56,760
_________________________________________________________________
Income before extraordinary item $ 27,811 $ 26,604
Extraordinary loss on extinguishment
of debt - (357)
_________________________________________________________________
Net income $ 27,811 $ 26,247
Preferred unit distribution (2,955) (2,955)
_________________________________________________________________
Net income available to
common unitholders $ 24,856 $ 23,292
===========================
<PAGE>
Rental revenue of $84.6 million in 1999 increased by 3.2%
over 1998's revenues of $82.0 million, primarily as a result of
rate increases at the stores.
Operating expenses and real estate taxes in 1999 were $24.9
million, as compared to $23.6 million in 1998, an increase of
5.5%. While cost efficiencies were enjoyed regarding insurance
and yellow-page advertising, these savings were offset by the
Operating Partnership's paying higher wages to attract
professional managers, and increased property taxes.
General and administrative costs were determined by the
Operating Partnership's historical costs incurred in the
management of 222 properties.
Interest expense in both years was determined by applying
the 1999 year-end rate and the applicable non-usage fee
associated with the Operating Partnership's $150 million credit
facility and $75 million term note.
Such unaudited pro forma information is based upon the
historical statements of operations of the Operating Partnership.
It should be read in conjunction with the financial statements of
the Operating Partnership and notes thereto. In management's
opinion, all adjustments necessary to reflect the effects of
these transactions have been made. This unaudited pro forma
statement does not purport to represent what the actual results
of operations of the Operating Partnership would have been
assuming such transactions had been completed as set forth above,
nor does it purport to represent the results of operations for
future periods.
LIQUIDITY AND CAPITAL RESOURCES
Capital Resources, Unsecured Line of Credit and Term Note
The Operating Partnership's unsecured credit facility
provides availability up to $150 million, of which $123 million
was drawn at December 31, 1999. The facility matures February
2001 and bears interest at LIBOR plus 1.25%.
In addition to the credit facility, the Operating
Partnership has an unsecured term note due December 2000, that
bears interest at LIBOR plus 1.50%. The credit facility and term
note currently have investment grade ratings from Standard and
Poors (BBB-), Moodys (Baa3), and Duff and Phelps (BBB-).
In July 1999, the Company issued 1,200,000 shares of 9.85%
Series B Cumulative Redeemable Preferred Stock. The net proceeds
of $28.6 million were used to repay a portion of the credit
facility. The Series B Preferred Stock is currently rated by
Standard and Poors (BB+), Moodys (Ba2) and Duff and Phelps (BB+).
In 1998 and 1999, there has been a net outflow of capital
from the REIT sector, which has depressed prices of common shares
of most REIT's, including the Company's. Accordingly, management
does not feel it appropriate to issue equity in the form of
<PAGE>
common shares or Operating Partnership Units, because to do so
would be dilutive to existing shareholders. The Operating
Partnership expects to fund its maturing obligations and its
future growth through a renewal of its line of credit, issuance
of 5-10 year notes of either a secured or unsecured (or
combination of both) nature, issuance of preferred stock and
private placement solicitation of public pension funds and other
sources of capital.
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 acquisitions for the year 2000.
In 1999, the Company continued its common stock repurchase
program authorized by the Board of Directors by acquiring 300,500
shares for $6.5 million. At December 31, 1999, the total shares
repurchased by the Company was 376,200 at a total cost of $8.4
million.
Acquisition of Properties
During 1999 the Operating Partnership used borrowings
pursuant to the line of credit to acquire 18 properties
comprising .9 million square feet from unaffiliated storage
operators. These properties are located in existing markets in
Florida, Louisiana, Rhode Island, and Texas. The Operating
Partnership also entered two new states, Arizona and Maine during
1999. In 1998, fifty facilities totaling 3.2 million square feet
were acquired. At December 31, 1999, a total of 222 facilities
and 12.5 million square feet of net rentable storage space was
owned and operated by the Operating Partnership in 21 states.
Future Acquisition and Development Plans
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 operations, or to
expand in new markets by acquiring several facilities at once in
those new markets.
At December 31, 1999, the Operating Partnership had
contracts totaling of $11.2 million to acquire additional
properties in New York, Massachusetts and Texas.
The Operating Partnership will continue to pursue the
acquisition of quality self-storage properties in markets where
it already operates, and in strategic new markets where a
substantial property base can be quickly established.
The Operating Partnership also intends to expand and enhance
certain of its existing facilities by building additional storage
buildings on presently vacant land and by installing climate
control and enhanced security systems at selected sites.
<PAGE>
Distribution Requirements of the Company and Impact on the
Operating Partnership
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 95% 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. The
first distribution of 2000 may be applied toward the Company's
1999 distribution requirement. The Company's source of funds for
such distributions are solely and directly from the Operating
Partnership.
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 1999, the Company's percentage of revenue from such
sources exceeded 97%, thereby passing the 95% test, and no
special measures are expected to be required to enable the
Company to maintain its REIT designation.
INTEREST RATE RISK
As of December 31, 1999, the Operating Partnership has one
outstanding interest rate collar transaction through June 30,
2000. Under the agreement, which is based on a notional amount
of $70 million, if the LIBOR rate exceeds 6.5%, the bank pays the
Operating Partnership the rate in excess of 6.5% multiplied by
$70 million for the outstanding period. If LIBOR drops below
5.265%, the Operating Partnership must pay the bank the
difference between LIBOR and 5.265% multiplied by $70 million for
the outstanding period.
Based upon the Operating Partnership's indebtedness at
December 31, 1999, and taking the interest rate collar agreements
into account, a 1% increase in interest rates would result in an
increase to interest expense of approximately $1.9 million.
INFLATION
The Operating Partnership does not believe that inflation
has had or will have a direct 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 quarter, 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
<PAGE>
periods. However, the Operating Partnership believes that its
tenant mix, diverse geographic 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.
IMPACT OF YEAR 2000
The Operating Partnership employs several different computer
systems for financial reporting, property management, asset
control and payroll. These systems are purchased by the
Operating Partnership from third parties and therefore there is
no internally generated programming code. The Operating
Partnership's critical applications relating to financial
reporting, property management and asset control were updated to
Year 2000 compliant versions within the last year as part of the
normal maintenance agreements at a cost of less than $50,000.
UNITHOLDER INFORMATION
CORPORATE HEADQUARTERS
6467 Main Street
Williamsville, New York 14221
716-633-1850
SOVRAN'S WEBSITE
http://www.sovranss.com
http://www.unclebobsselfstorage.com
FORM 10-K REPORT
A copy of the Operating Partnership's Annual Report on Form 10-K
for the year ended December 31, 1999, filed with the Securities
Exchange Commission, will be furnished to unitholders without
charge upon written request.
Please contact Christine M. Aguglia, 716-633-1850
INVESTOR RELATIONS
For more information or to receive Sovran's quarterly reports,
please contact Andrew J. Gregoire, 716-633-1850
INDEPENDENT AUDITORS
Ernst & Young LLP
1400 Key Tower
Buffalo, New York 14202
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The information required is included in Item 7 under the
heading Interest Rate Risk.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Balance Sheets - Sovran Acquisition Limited Partnership
December 31,
(Dollars in thousands) 1999 1998
Assets
Investment in storage facilities:
Land $111,833 $102,864
Building and equipment 444,640 399,638
________ ________
556,473 502,502
Less accumulated depreciation (33,453) (21,339)
________ _______
Investments in storage facilities, net 523,020 481,163
Cash and cash equivalents 1,032 2,984
Accounts receivable 1,796 1,699
Prepaid expenses and other assets 3,871 4,278
________ _______
Total Assets $529,719 $490,124
======== =======
Liabilities
Line of credit $123,000 $112,000
Term note 75,000 75,000
Accounts payable and accrued
liabilities 4,210 3,059
Deferred revenue 3,322 2,943
Accrued distributions 7,496 7,378
Mortgage payable 5,253 3,059
_______ _______
Total Liabilities 218,281 203,439
Limited partners' capital interest (853,037
and 863,037 units, respectively), at
redemption value (Note 1) 15,888 21,683
Partners' Capital
General partner (219,567 and
units issued and outstanding,
in 1999 and 1998) 5,283 5,284
Limited partner (12,079,596 and
12,093,189 units issued and
outstanding, respectively) 260,267 259,718
Preferred Partners (1,200,000 Series B
Preferred Units, at $25 liquidation
preference) 30,000 -
_______ _______
Total partners' capital 295,550 265,002
_______ _______
Total liabilities and
partners' capital $529,719 $490,124
======= =======
(See notes to financial statements.)
<PAGE>
Sovran Acquisition Limited Partnership
Statements of Operations
<TABLE>
<CAPTION>
Operating Partnership
__________________________________________
Year Ended Year Ended Year Ended
Dollars in thousands, December 31, December 31, December 31,
except per unit data) 1999 1998 1997
<S> <C> <C> <C>
Revenues:
Rental income $82,387 $68,231 $48,584
Interest and other income 1,869 1,129 770
_______ _______ _______
Total revenues 84,256 69,360 49,354
Expenses:
Property operations and
maintenance 17,035 13,793 9,708
Real estate taxes 7,238 5,659 3,955
General and administrative 5,571 4,849 2,757
Interest 13,927 9,601 2,166
Depreciation and
amortization 13,138 10,303 7,005
_______ _______ _______
Total expenses 56,909 44,205 25,591
_______ _______ _______
Income before
extraordinary item 27,347 25,155 23,763
Extraordinary loss on
extinguishment of debt - (357) -
_______ _______ _______
Net income $27,347 $24,798 $23,763
Distributions to preferred
unitholders (1,239) - -
_______ _______ _______
Net income available to
common unitholders $26,108 $24,798 $23,763
======= ======= =======
Earnings per unit
before extraordinary
item-basic $ 1.97 $ 1.94 $ 1.97
Extraordinary loss $ - $ (0.03) $ -
Earnings per unit-basic $ 1.97 $ 1.91 $ 1.97
Earnings per unit-diluted $ 1.97 $ 1.91 $ 1.96
Distributions declared
per unit $ 2.26 $ 2.20 $ 2.12
(See notes to financial statements.)
</TABLE>
<PAGE>
Sovran Acquisition Limited Partnership
Statements of Partners' Capital
<TABLE>
<CAPTION> Sovran Sovran Self Total
Holdings, Inc. Storage Inc. Preferred Partners' Limited Partners'
(Dollars in thousands) General Partner Limited Partner Partners Capital Capital Interest
_____________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Balance January 1, 1997 $ 2,523 $ 220,326 $ - $ 222,849 $ 4,435
Proceeds from issuance of
common stock 2,796 39,148 - 41,944 -
Issuance of redeemable units
for acquisition of storage
facilities - - - - 9,240
Exercise of stock options - 328 - 328 -
Earned portion of restricted
stock - 13 - 13 -
Net income 366 22,753 - 23,119 644
Distributions (413) (24,708) - (25,121) (697)
Adjustment to reflect limited
partners' redeemable capital
at balance sheet date (15) (817) - (832) 832
_________________________________________________________________________
Balance December 31, 1997 5,257 257,043 - 262,300 14,454
Proceeds from issuance of
common stock - 538 - 538 -
Issuance of redeemable units
for acquisition of storage
facilities - - - - 11,367
Issuance of common stock for
acquisition of storage
facilities - 3,336 - 3,336 -
Exercise of stock options - 362 - 362 -
Earned portion of restricted
stock - 36 - 36 -
Purchase of treasury shares - (1,990) - (1,990) -
Net income 443 23,097 - 23,540 1,258
Distributions (483) (26,585) - (27,068) (1,448)
Adjustment to reflect limited
partners' redeemable capital
at balance sheet date 67 3,881 - 3,948 (3,948)
__________________________________________________________________________
Balance December 31, 1998 5,284 259,718 - 265,002 21,683
<PAGE>
Proceeds from issuance of
common stock - 6,435 - 6,435 -
Redemption of Partnership Units - - - - (261)
Issuance of 9.85% Series B
Preferred Units - (1,415) 30,000 28,585 -
Exercise of stock options - 169 - 169 -
Earned portion of restricted stock - 102 - 102 -
Purchase of treasury shares - (6,454) - (6,454) -
Deferred compensation - 22 - 22 -
Net income 427 25,158 - 25,585 1,762
Distributions (517) (28,736) - (29,253) (1,939)
Adjustment to reflect limited
partners' redeemable capital
at balance sheet date 89 5,268 - 5,357 (5,357)
__________________________________________________________________________
Balance December 31, 1999 $5,283 $260,267 $30,000 $295,550 $15,888
==========================================================================
See notes to financial statements.
</TABLE>
<PAGE>
Sovran Acquisition Limited Partnership
Statements of Cash Flows of the Operating Partnership
<TABLE>
<CAPTION>
Year Ended December 31,
(dollars in thousands) 1999 1998 1997
<S> <C> <C> <C>
Operating Activities
Net income $27,347 $24,798 $23,763
Adjustments to reconcile net
income to net cash provided
by operating activities:
Extraordinary loss - 357 -
Depreciation and amortization 13,138 10,303 7,005
Gain on sale of real estate (652) - -
Restricted stock earned 102 36 13
Changes in assets and liabilities:
Accounts receivable (873) (812) (162)
Prepaid expenses and other assets 374 (1,051) (283)
Accounts payable and other liabilities 988 483 894
Deferred revenue 78 37 (71)
_____________________________________
Net cash provided by operating activities 40,502 34,151 31,159
Investing Activities
Proceeds from sale of real estate 2,302 - -
Additions to storage facilities (53,090) (153,367) (98,970)
Other assets (48) - 205
____________________________________
Net cash used in investing activities (50,836) (153,367) (98,765)
Financing Activities
Net proceeds from sale of common stock 6,604 900 42,273
Net proceeds from sale of preferred stock 28,585 - -
Proceeds from line of credit 11,000 76,000 36,000
Proceeds from term note - 75,000 -
Financing costs - (1,824) -
Distributions paid (31,074) (27,953) (24,787)
Purchase of treasury stock (6,454) (1,990) -
Redemption of partner units (261) - -
Mortgage principal payments (18) (500) -
____________________________________
<PAGE>
Net cash provided by financing activities 8,382 119,633 53,486
____________________________________
Net (decrease) increase in cash (1,952) 417 (14,120)
Cash at beginning of period 2,984 2,567 16,687
____________________________________
Cash at end of period $ 1,032 $ 2,984 $ 2,567
====================================
Supplemental cash flow information
Cash paid for interest $ 13,966 $ 9,024 $ 2,238
Storage facilities acquired through issuance
of Operating Partnership Units and Common Stock - 14,703 9,240
Storage facilities acquired through
assumption of mortgage 2,212 - 3,559
Fair value of net liabilities assumed on the
acquisition of storage facilities 463 1,458 4,144
Distributions declared but unpaid at December 31, 1999, 1998 and 1997 were $7,496, $7,378, and
$6,816, respectively.
See notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Sovran Acquisition Limited Partnership - December 31, 1999
1. ORGANIZATION
Sovran Acquisition Limited Partnership (the "Operating
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. Since its formation the Operating
Partnership has purchased a total of 149 (eighteen in 1999, fifty
in 1998, forty-four in 1997, twenty-nine in 1996 and eight in
1995) self storage properties from unaffiliated third parties,
increasing the total number of self-storage properties owned at
December 31, 1999 to 222 properties in 21 states.
As of December 31, 1999, the Company was a 93.55% 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. The Company presently anticipates that it will elect to
issue Common Shares to acquire Units presented for redemption,
rather than paying 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
<PAGE>
reflected in "limited partners' capital interest" in the
accompanying balance sheets at the cash redemption amount at the
balance sheet date. Capital activity with regard to such limited
partners' redemption rights is reflected in the accompanying
statements of partners' capital.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents: The Operating Partnership considers
all highly liquid debt instruments purchased with maturity of
three months or less to be cash equivalents.
Revenue Recognition: Rental income is recorded when earned.
Rental income received prior to the start of the rental period is
included in deferred revenue.
Interest and Other Income: Other income consists primarily of
interest income, sales of storage-related merchandise (locks and
packing supplies) and commissions from truck rentals. In 1999,
the other income also includes a $652 gain on the sale of a
facility in Tennessee.
Investment in Storage Facilities: Storage facilities are recorded
at cost. Depreciation is computed using the straight line method
over estimated useful lives of forty years for buildings and
improvements, and five to twenty years for furniture, fixtures
and equipment. Expenditures for significant renovations or
improvements which extend the useful life of assets are
capitalized. Repair and maintenance costs are expensed as
incurred.
Whenever events or changes in circumstances indicate that
the basis of the Operating Partnership's property may not be
recoverable, the Operating Partnership's policy is to assess any
impairment of value. Impairment is evaluated based upon
comparing the sum of the expected undiscounted future cash flows
to the carrying value of the property; on a property by property
basis. If the sum of the cash flow is less than the carrying
amount, an impairment loss is recognized for the amount by which
the carrying amount of the asset exceeds the fair value of the
asset. At December 31, 1999 and 1998, no assets had been
determined to be impaired under this policy, and, accordingly,
this policy had no impact on the Operating Partnership's
financial position or results of operations.
Prepaid Expenses and Other Assets: Included in prepaid expenses
and other assets are prepaid expenses and intangible assets. The
intangible assets at December 31, 1999, consist primarily of loan
acquisition costs of approximately $1,845, net of accumulated
amortization of approximately $1,023; and covenants not to
compete of $785, net of accumulated amortization of $643. Loan
acquisition costs are amortized over the terms of the related
debt; and the covenants are amortized over the contract periods.
Amortization expense was $879, $541 and $794 for the periods
ended December 31, 1999, 1998 and 1997, respectively.
<PAGE>
Income Taxes: No provision has been made for income taxes in the
accompanying financial statements since the Operating Partnership
qualifies as a partnership for federal and state income tax
purposes and its partners are required to include their
respective shares of profits and losses in their income tax
returns.
Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
3. EARNINGS PER UNIT
The Operating Partnership reports earnings per unit data in
accordance with Statement of Financial Accounting Standards No.
128, "Earnings Per Share." The following table sets forth the
computation of basic and diluted earnings per unit.
Year Ended Year Ended Year Ended
(Amounts in thousands, December 31, December 31, December 31,
except per unit data) 1999 1998 1997
___________________________________________________________________
Numerator:
Net Income available
to common unitholders $ 26,108 $ 24,798 $ 23,763
___________________________________________________________________
Denominator:
Denominator for basic
earnings per unit -
weighted average units 13,267 12,948 12,090
___________________________________________________________________
Effect of Dilutive Securities:
Options for Company stock 3 38 62
Denominator for diluted
earnings per unit -
adjusted weighted -
average units and
assumed conversion 13,270 12,986 12,152
__________________________________________________________________
Basic Earnings per
Common Unit $ 1.97 $ 1.91 $ 1.97
Diluted Earnings
per Common Unit $ 1.97 $ 1.91 $ 1.96
__________________________________________________________________
<PAGE>
4. INVESTMENT IN STORAGE FACILITIES
The following summarizes activity in storage facilities during
the years ended December 31, 1999 and December 31, 1998
(Dollars in Thousands) 1999 1998
________________________________________________________________
Cost:
Beginning balance $ 502,502 $ 333,036
Property acquisitions 45,811 157,080
Improvements and equipment additions 9,959 12,940
Dispositions (1,799) (554)
________________________________________________________________
Ending balance $ 556,473 $ 502,502
________________________________________________________________
Accumulated Depreciation:
Beginning balance $ 21,339 $ 11,639
Additions during the year 12,259 9,762
Dispositions (145) (62)
________________________________________________________________
Ending balance $ 33,453 $ 21,339
________________________________________________________________
5. UNSECURED LINE OF CREDIT AND TERM NOTE
The Operating Partnership has a $150 million unsecured
credit facility that matures February 2001 and provides for funds
at LIBOR plus 1.25%. The average interest rate at December 31,
1999 on the line of credit was approximately 7.1%, 6.6% at
December 31, 1998. At December 31, 1999, there was $27 million
available on the line.
In 1998 the Operating Partnership recorded an extraordinary
loss on the extinguishment of debt of $357,000 representing the
unamortized financing costs of a former revolving credit
facility and related costs.
In December 1998, the Operating Partnership entered into a
$75 million unsecured term note that matures on December 22, 2000
and bears interest at LIBOR plus 1.50% (approximately 7.35% at
December 31, 1999).
As of December 31, 1999, the Operating Partnership has one
outstanding interest rate collar transaction through June 30,
2000. Under the agreement, which is based on a notional amount
of $70 million, if the LIBOR rate exceeds 6.5%, the bank pays the
Operating Partnership the rate in excess of 6.5% multiplied by
$70 million for the outstanding period. If LIBOR drops below
5.265%, the Operating Partnership must pay the bank the
difference between LIBOR and 5.265% multiplied by $70 million for
the outstanding period.
The net carrying amount of the Operating Partnership's debt
instruments approximates fair value.
<PAGE>
6. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The following unaudited pro forma information shows the
results of operations as though the acquisitions of storage
facilities in 1999 and 1998, and the preferred stock offering of
the Company in 1999 had all occurred as of the beginning of 1998.
(Dollars in thousands, except Year ended December 31,
unit data) 1999 1998
_________________________________________________________________
Total revenues $ 86,520 $ 83,364
_________________________________________________________________
Total expenses (58,709) (56,760)
_________________________________________________________________
Income before extraordinary loss $ 27,811 $ 26,604
_________________________________________________________________
Net Income $ 27,811 $ 26,247
_________________________________________________________________
Net Income available to common
Unitholders $ 24,856 $ 23,292
_________________________________________________________________
Earnings per common unit before
extraordinary loss - basic $ 1.89 $ 1.80
_________________________________________________________________
Earnings per common unit - basic $ 1.89 $ 1.77
_________________________________________________________________
Earnings per common unit - diluted $ 1.89 $ 1.77
_________________________________________________________________
Units used in basic earnings
per common unit calculation 13,152,200 13,152,200
_________________________________________________________________
Such unaudited pro forma information is based upon the
historical statements of operations of the Operating Partnership.
It should be read in conjunction with the financial statements of
the Operating Partnership and notes thereto. In management's
opinion, all adjustments necessary to reflect the effects of
these transactions have been made. This unaudited pro forma
statement does not purport to represent what the actual results
of operations of the Operating Partnership would have been
assuming such transactions had been completed as set forth above,
nor does it purport to represent the results of operations for
future periods.
7. STOCK OPTIONS
The Operating Partnership continues to account for Company
stock-based compensation using the measurement prescribed by APB
Opinion No. 25 which does not recognize compensation expense
because the number of stock options granted is fixed and the
exercise price of the stock options equals the market price of
the underlying stock on the date of grant. Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation," requires companies that choose not to adopt
the new fair value accounting rules to disclose pro forma net
income and earnings per unit under the new method. The Operating
Partnership will issue a Unit to the Company for each common
share of the Company issued under the following plans.
<PAGE>
The Company has established the 1995 Award and Option Plan
(the Plan) for the purpose of attracting and retaining the
Company's executive officers and other employees. The options
vest ratably over four and five years, and must be exercised
within ten years from the date of grant. The exercise price for
qualified incentive stock options must be at least equal to the
fair market value at the date of grant. As of December 31, 1999,
options for 383,550 shares were outstanding under the Plan. The
total options available under the Plan (including restricted
stock issuances is 900,000.
The Company also established the 1995 Outside Directors'
Stock Option Plan (the Non-employee Plan) for the purpose of
attracting and retaining the services of experienced and
knowledgeable outside directors. The Non-employee Plan provides
for the annual granting of options to purchase 2,500 shares of
common stock to each eligible director. Such options vest over a
one-year period for initial awards and immediately upon
subsequent grants. The total shares reserved under the Non-
employee Plan is 100,000. The exercise price for options granted
under the Non-employee Plan is equal to fair market value at date
of grant. As of December 31, 1999, options for 49,500 shares
were outstanding under the Non-employee Plan.
The fair value for these options was estimated at the date
of grant using a Black-Scholes option pricing model with the
following weighted-average assumptions: risk-free interest rate
of 7.0% for 1999 and 5.5% for 1998, dividend yield of 10% for
1999 and 8% for 1998, volatility factor of the expected market
price of the Company's common stock of .21 for 1999 and .19 for
1998.
The Black-Scholes options valuation model was developed for
use in estimating the fair value of traded options which have no
vesting restrictions and are fully transferable. In addition,
option valuation models require the input of highly subjective
assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because
changes in the subjective input assumptions can materially affect
the fair value estimate, in management's opinion, the existing
models do not necessarily provide a reliable single measure of
the fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated fair
value of the options is amortized to expense over the options'
vesting period. The Operating Partnership's pro forma
information for the year ended December 31, 1999, 1998 and 1997
follows (in thousands, except for earnings per unit information).
1999 1998 1997
_________________________________________________________________
Pro forma net income
available to
common unitholders $ 26,001 $ 24,640 $ 23,620
Pro forma earnings per share:
Basic $ 1.96 $ 1.90 $ 1.95
Diluted $ 1.96 $ 1.90 $ 1.94
<PAGE>
The Company has also issued 18,400 shares of restricted
stock to employees which vest over a four and five year periods.
The fair value of the restricted stock on the date of grant
ranged from $24.22 to $29.19.
<PAGE>
<TABLE>
A summary of the Company's stock option activity and related information for the years ended
December 31 follows:
<CAPTION>
1999 1998 1997
Weighted average Weighted average Weighted average
Options exercise price Options exercise price Options exercise price
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of year: 387,600 $25.99 295,250 $25.36 293,500 $23.97
Granted 58,200 27.18 110,350 27.91 34,000 29.93
Exercised (6,750) 23.00 (15,750) 23.00 (14,250) 23.00
Forfeited (6,000) 30.62 (2,250) 23.00 (18,000) 24.53
____________________________________________________________________________________________________
Outstanding at end
of year 433,050 $25.32 387,600 $25.99 295,250 $ 25.36
____________________________________________________________________________________________________
Exercisable at end
of year 305,910 $24.27 208,500 $24.19 146,750 $ 25.12
____________________________________________________________________________________________________
Exercise prices for options outstanding as of December 31, 1999 ranged from $23.00 to $29.66. The
weighted average remaining contractual life of those options is 6.8 years.
</TABLE>
<PAGE>
8. RETIREMENT PLAN
Employees of the Operating Partnership qualifying under
certain age and service requirements are eligible to be a
participant in a 401(K) Plan which was effective September 1,
1997. The Operating Partnership contributes to the Plan at the
rate of 50% of the first 4% of gross wages. Total expense to the
Operating Partnership was approximately $56,000 and $53,000 for
the year ended December 31, 1999 and 1998, respectively.
9. SHAREHOLDER RIGHTS PLAN
In November 1996, the Company adopted a Shareholder Rights
Plan and declared a dividend distribution of one Right for each
outstanding share of common stock. Under certain conditions,
each Right may be exercised to purchase one one-thousandth of a
share of Series A Junior Participating Preferred Stock at a
purchase price of $75, 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 having a value equal to two times the
exercise price of the Right. In addition, if the Company 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. The Company will be entitled to
redeem the Rights at $.01 per Right at any time prior to the
earlier of the expiration of the Rights in November 2006 or the
time that a person has acquired a 10% position. The Rights do
not have voting or dividend rights, and until they become
exercisable, have no dilutive effect on the Operating
Partnership's earnings.
10. PREFERRED STOCK
On July 30, 1999, the Company issued 1,200,000 shares of
9.85% Series B Cumulative Redeemable Preferred Stock. The
offering price was $25 per share resulting in net proceeds of
$28.8 million after expenses. The Series B Preferred Stock is
not redeemable until on or after July 30, 2004, after which time
the Company may redeem the shares at $25.00 per share
($30,000,000 aggregate), plus any accrued and unpaid dividends.
The shares may be redeemed only with the proceeds of certain
sales of equity securities. Dividends on the Series B Preferred
Stock are cumulative from the date of original issue and are
payble quarterly in arrears on the last day of each March, June,
September, and December at a rate of $2.4625 per annum per share.
Holders of the Series B Preferred Stock generally have no
voting rights. However, if the Company does not pay dividends on
the Sries B shares for six or more quarterly periods (whether or
not consecutive), the holders of the shares, voting as a class
with the holders of any other class or series of stock with
<PAGE>
similar voting rights, will be entitled to vote for the election
of two additional directors to serve on the Board of Directors
until all Series B dividends are paid.
11. SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)
The following is a summary of quarterly results of operations for the
years ended December 31, 1999 and 1998 (dollars in thousands, except per
unit data)
1999 Quarter Ended
_________________________________________
March 31 June 30 Sept. 30 Dec. 31
_________________________________________
Revenues $19,451 $20,605 $22,570 $21,630
Net income $ 6,263 $ 6,595 $ 8,177 $ 6,312
Net income available to
common unitholders $ 6,263 $ 6,595 $ 7,676 $ 5,574
Net income per common unitholders
Basic $ 0.47 $ 0.50 $ 0.57 $ 0.43
Diluted $ 0.47 $ 0.50 $ 0.57 $ 0.43
1998 Quarter Ended
_________________________________________
March 31 June 30 Sept. 30 Dec. 31
_________________________________________
Revenue $14,375 $16,442 $19,107 $19,436
Income before extraordinary loss $ 6,203 $ 6,271 $ 6,638 $ 6,036
Net Income $ 5,853 $ 6,271 $ 6,638 $ 6,036
Net Income Per Unit (Note 3):
Before extraordinary
Loss - Basic $ 0.49 $ 0.49 $ 0.50 $ 0.46
Basic $ 0.46 $ 0.49 $ 0.50 $ 0.46
Diluted $ 0.46 $ 0.49 $ 0.50 $ 0.46
12. 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.
As of December 31, 1999, the Operating Partnership had
entered into contracts for the purchase of four facilities.
Three of these facilities were acquired in February and March,
2000 for a total cost of $7,917,000.
<PAGE>
13. 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, filed a lawsuit
against the Company on June 13, 1995 in the United States
District Court for the Northern District of Ohio. The Plaintiff
has since 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 judgement as to the Plaintiff's continuing interest
in the Company. The Plaintiff is seeking 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 claims to
have a continuing interest) and an accounting. The amended
complaint also added Messrs. Attea, Myszka, Rogers and Lannon as
additional defendants. The parties are currently involved in
discovery and trial. The Company is vigorously defending the
lawsuit. Messrs. Attea, Myszka, Rogers and Lannon have agreed to
indemnify the Company for costs and any loss arising from the
lawsuit. The Operating Partnership believes that the actual
amount of the Plaintiff's recovery in this matter if any, would
be within the ability of these individuals to provide
indemnification. The Operating Partnership does not believe that
the lawsuit will have a material, adverse effect upon the
Operating Partnership.
14. INTERNAL PROPERTY ACQUISITION COSTS
On March 19, 1998 the Financial Accounting Standards Board
Emerging Issues Task Force reached a consensus as to the
accounting for internal acquisition costs incurred in connection
with real property. The Task Force consensus indicates that
internal costs related to the acquisition of operating properties
should be expensed as incurred. The Operating Partnership had
previously capitalized such costs and has complied with the
consensus prospectively. The amount of such costs capitalized in
1998 (through the date of the pronouncement) and 1997 were
$238,000 and $728,000, respectively.
<PAGE>
Report of Independent Auditors
The Board of Directors and Partners
Sovran Acquisition Limited Partnership:
We have audited the accompanying balance sheets of Sovran
Acquisition Limited Partnership as of December 31, 1999 and 1998
and the related statements of operations, partners' capital and
cash flows for each of the three years in the period ended
December 31, 1999. Our audit also included the financial
statement schedule listed in the Index at Item 14(a). These
financial statements and schedule are the responsibility of the
management of Sovran Acquisition Limited Partnership. Our
responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with auditing
standards generally accepted in the United States. 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, the financial statements referred to above
present fairly, in all material respects, the financial position
of Sovran Acquisition Limited Partnership as of December 31, 1999
and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31,
1999, in conformity with accounting principles generally accepted
in the United States. Also in our opinion, the related financial
statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
Ernst & Young LLP
Buffalo, New York
January 26, 2000
<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
Through Holdings, a wholly-owned subsidiary of the Company
and the sole general partner of the Operating Partnership, the
Company controls the Operating Partnership. The Board of
Directors of Holdings, the members of which are the same as the
members of the Board of Directors of the Company, manages the
affairs of the Operating Partnership by directing the affairs of
the general partner of the Operating Partnership. The Operating
Partnership has no directors, or executive officers.
Consequently, this information incorporated by reference reflects
information with respect to the directors and executive officers
of the Company and Holdings.
The information required is incorporated by reference to
"Election of Directors", including "Executive Officers of the
Company" and "Section 16(a) Beneficial Ownership Reporting
Compliance" in the Company's Proxy Statement for the Annual
Meeting of Shareholders of the Company to be held on May 24,
2000.
Item 11. Executive Compensation
Through Holdings, a wholly-owned subsidiary of the Company
and the sole general partner of the Operating Partnership, the
Company controls the Operating Partnership. The Board of
Directors of Holdings, the members of which are the same as the
members of the Board of Directors of the Company, manages the
affairs of the Operating Partnership by directing the affairs of
the general partner of the Operating Partnership. The Directors
and Officers of Holdings receive their compensation from the
Company and are not separately compensated by Holdings.
Consequently, the information incorporated by reference reflects
compensation paid to the Directors and executive officers of the
Company.
The information required is incorporated by reference to
"Executive Compensation" and "Compensation of Directors" in the
Company's Proxy Statement for Annual Meeting of Shareholders of
the Company to be held May 24, 2000.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The Operating Partnership has no directors or officers. No
director or officer of the Company or Holdings beneficially owns
any Units.
<PAGE>
The Company beneficially owns 12,299,163 Units which
constitute 93.55% of all outstanding Units. No other person
holds more than a 5% beneficial ownership in the Operating
Partnership.
The information required herein for the Company is
incorporated by reference to "Security Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement for
Annual Meeting of Shareholders of the Company to be held on
May 24, 2000.
RECENT SALES OF UNREGISTERED SECURITIES
During 1999, the Operating Partnership issued Units in
private placements in reliance on the exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended, in
the amounts and for the consideration set forth below:
- On January 22, 1999, in connection with the Sovran Self
Storage, Inc. Dividend Reinvestment and Stock Purchase
Plan, the Company transferred $1,255,390 to the
Operating Partnership in exchange for 52,819 Units.
- On February 22, 1999, in connection with the Sovran
Self Storage, Inc. Dividend Reinvestment and Stock
Purchase Plan, the Company transferred $311,360 to the
Operating Partnership in exchange for 13,161 Units.
- On March 22, 1999, in connection with the Sovran Self
Storage, Inc. Dividend Reinvestment and Stock Purchase
Plan, the Company transferred $9,453 to the Operating
Partnership in exchange for 399 Units.
- On April 22, 1999, in connection with the Sovran Self
Storage, Inc. Dividend Reinvestment and Stock Purchase
Plan, the Company transferred $1,209,847 to the
Operating Partnership in exchange for 52,222 Units.
- On May 22, 1999, in connection with the Sovran Self
Storage, Inc. Dividend Reinvestment and Stock Purchase
Plan, the Company transferred $25,359 to the Operating
Partnership in exchange for 999 Units.
- On June 22, 1999, in connection with the Sovran Self
Storage, Inc. Dividend Reinvestment and Stock Purchase
Plan, the Company transferred $45,915 to the Operating
Partnership in exchange for 1,809 Units.
- On June 24, 1999, in connection with the Sovran Self
Storage, Inc. 1995 Award and Option Plan, the Operating
Partnership issued 4,500 Units to the Company.
- On June 28, 1999, the Operating Partnership redeemed
10,000 Units from Storage 17, Inc.
- On July 1, 1999, in connection with the Sovran Self
Storage, Inc. 1995 Award and Option Plan, the Operating
Partnership issued 2,250 Units to the Company.
<PAGE>
- On July 22, 1999, in connection with the Sovran Self
Storage, Inc. Dividend Reinvestment and Stock Purchase
Plan, the Company transferred $1,596,857 to the
Operating Partnership in exchange for 64,413 Units.
- On August 22, 1999, in connection with the Sovran Self
Storage, Inc. Dividend Reinvestment and Stock Purchase
Plan, the Company transferred $1,200,701 to the
Operating Partnership in exchange for 53,061 Units.
- On September 2, 1999, in connection with the Sovran
Self Storage, Inc. 1995 Award and Option Plan, the
Operating Partnership issued 1,000 Units to the
Company.
- On September 22, 1999, in connection with the Sovran
Self Storage, Inc. Dividend Reinvestment and Stock
Purchase Plan, the Company transferred $35,606 to the
Operating Partnership in exchange for 1,543 Units.
- On October 22, 1999, in connection with the Sovran Self
Storage, Inc. Dividend Reinvestment and Stock Purchase
Plan, the Company transferred $737,908 to the Operating
Partnership in exchange for 36,119 Units.
- On November 22, 1999, in connection with the Sovran
Self Storage, Inc. Dividend Reinvestment and Stock
Purchase Plan, the Company transferred $38,360 to the
Operating Partnership in exchange for 1,917 Units.
- On December 22, 1999, in connection with the Sovran
Self Storage, Inc. Dividend Reinvestment and Stock
Purchase Plan, the Company transferred $12,551 to the
Operating Partnership in exchange for 695 Units.
Item 13. Certain Relationships and Related Transactions
The information required herein is incorporated by reference
to "Certain Transactions" in the Company's Proxy Statement for
the Annual Meeting of Shareholders to be held on May 24, 2000.
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) Documents filed as part of this Annual Report on Form
10-K:
1. Financial Statements filed as part of this Annual Report on
Form 10-K.
(i) Balance Sheets for Years Ended December 31, 1999 and
1998.
(ii) Statements of Operations for Years Ended December 31,
1999, 1998, and 1997.
(iii) Statements of Partners' Capital of the for Years Ended
December 31, 1999, 1998, and 1997.
(iv) Statements of Cash Flows for Years Ended December 31,
1999, 1998, and 1997.
<PAGE>
(v) Selected Financial Data.
(vi) Notes to Financial Statements.
(vii) Report of Independent Auditors.
2. The following financial statement schedule as of the period
ended December 31, 1999 is included in this Annual Report on
From 10-K.
Schedule III Real Estate and Accumulated Depreciation.
All other financial schedules are omitted because they are
inapplicable, not required, or the information is included
elsewhere in the financial statements or the notes thereto.
<PAGE>
<TABLE> Sovran Acquisition Limited Partnership
Schedule III
Combined Real Estate and Accumulated Depreciation
(in thousands)
December 31, 1999
<CAPTION>
Cost
Capitalized
Initial Subsequent to Gross Amount at Which
Cost to Company Acquisition Carried at Close of Period
___________________________ _____________ ____________________________
Building, Building, Building
Equipment Equipment Equipment
and and Land and Accumulated
Description ST Land Improvements Improvements Land Improvements Total Depreciation Acquired
<S> <C><C> <C> <C> <C> <C> <C> <C> <C>
Boston-Metro I MA $ 363 $ 1,679 $ 123 $ 363 $ 1,802 $ 2,165 $ 209 6/26/95
Boston-Metro II MA 680 1,616 101 680 1,717 2,397 197 6/26/95
E. Providence RI 345 1,268 97 345 1,365 1,710 160 6/26/95
Charleston I SC 416 1,516 114 416 1,630 2,046 198 6/26/95
Lakeland I FL 397 1,424 51 397 1,475 1,872 177 6/26/95
Charlotte NC 308 1,102 128 308 1,230 1,538 134 6/26/95
Tallahassee I FL 770 2,734 1,205 770 3,939 4,709 354 6/26/95
Youngstown OH 239 1,110 164 239 1,274 1,513 155 6/26/95
Cleveland-Metro I OH 179 836 201 179 1,037 1,216 113 6/26/95
Cleveland-Metro II OH 701 1,659 93 701 1,752 2,453 208 6/26/95
Tallahassee II FL 204 734 167 204 901 1,105 102 6/26/95
Pt. St. Lucie FL 395 1,501 176 395 1,677 2,072 214 6/26/95
Deltona FL 483 1,752 290 483 2,042 2,525 228 6/26/95
Middletown NY 224 808 153 224 961 1,185 108 6/26/95
Buffalo I NY 423 1,531 740 497 2,197 2,694 231 6/26/95
Rochester I NY 395 1,404 47 395 1,451 1,846 163 6/26/95
Salisbury MD 164 760 204 164 964 1,128 99 6/26/95
New Bedford MA 367 1,325 197 367 1,522 1,889 167 6/26/95
Fayetteville NC 853 3,057 102 853 3,159 4,012 359 6/26/95
Allentown PA 199 921 766 203 1,683 1,886 129 6/26/95
Jacksonville I FL 152 728 181 152 909 1,061 116 6/26/95
Columbia I SC 268 1,248 37 268 1,285 1,553 150 6/26/95
Rochester II NY 230 847 109 234 952 1,186 112 6/26/95
Savannah I GA 463 1,684 148 463 1,832 2,295 213 6/26/95
Greensboro NC 444 1,613 137 444 1,750 2,194 200 6/26/95
Raleigh I NC 649 2,329 123 649 2,452 3,101 277 6/26/95
<PAGE>
New Haven CT 387 1,402 316 387 1,718 2,105 173 6/26/95
Atlanta-Metro I GA 844 2,021 245 844 2,266 3,110 254 6/26/95
Atlanta-Metro II GA 302 1,103 98 303 1,200 1,503 149 6/26/95
Buffalo II NY 315 745 118 315 863 1,178 103 6/26/95
Raleigh II NC 321 1,150 167 321 1,317 1,638 149 6/26/95
Columbia II SC 361 1,331 93 374 1,411 1,785 172 6/26/95
Columbia III SC 189 719 124 189 843 1,032 107 6/26/95
Columbia IV SC 488 1,188 135 488 1,323 1,811 162 6/26/95
Atlanta-Metro III GA 430 1,579 111 430 1,690 2,120 208 6/26/95
Orlando I FL 513 1,930 152 513 2,082 2,595 256 6/26/95
Spartanburg SC 331 1,209 39 331 1,248 1,579 148 6/26/95
Sharon PA 194 912 213 194 1,125 1,319 128 6/26/95
Ft. Lauderdale FL 1,503 3,619 176 1,503 3,795 5,298 453 6/26/95
West Palm I FL 398 1,035 57 398 1,092 1,490 148 6/26/95
Atlanta-Metro IV GA 423 1,015 138 423 1,153 1,576 135 6/26/95
Atlanta-Metro V GA 483 1,166 105 483 1,271 1,754 152 6/26/95
Atlanta-Metro VI GA 308 1,116 185 308 1,301 1,609 163 6/26/95
Atlanta-Metro VII GA 170 786 111 174 893 1,067 113 6/26/95
Atlanta-Metro VIII GA 413 999 242 413 1,241 1,654 146 6/26/95
Baltimore I MD 154 555 109 154 664 818 79 6/26/95
Baltimore II MD 479 1,742 436 479 2,178 2,657 226 6/26/95
Augusta I GA 357 1,296 91 357 1,387 1,744 159 6/26/95
Macon I GA 231 1,081 73 231 1,154 1,385 139 6/26/95
Melbourne I FL 883 2,104 1,128 883 3,232 4,115 299 6/26/95
Newport News VA 316 1,471 171 316 1,642 1,958 194 6/26/95
Pensacola I FL 632 2,962 179 651 3,122 3,773 373 6/26/95
Augusta II GA 315 1,139 142 315 1,281 1,596 147 6/26/95
Hartford-Metro I CT 715 1,695 172 715 1,867 2,582 206 6/26/95
Atlanta-Metro IX GA 304 1,118 200 304 1,318 1,622 152 6/26/95
Alexandria VA 1,375 3,220 83 1,375 3,303 4,678 372 6/26/95
Pensacola II FL 244 901 115 244 1,016 1,260 140 6/26/95
Melbourne II FL 834 2,066 107 834 2,173 3,007 289 6/26/95
Hartford-Metro II CT 234 861 55 234 916 1,150 106 6/26/95
Atlanta-Metro X GA 256 1,244 72 256 1,316 1,572 164 6/26/95
Norfolk I VA 313 1,462 189 313 1,651 1,964 176 6/26/95
Norfolk II VA 278 1,004 143 278 1,147 1,425 145 6/26/95
Birmingham I AL 307 1,415 50 307 1,465 1,772 169 6/26/95
Birmingham II AL 730 1,725 81 730 1,806 2,536 208 6/26/95
Montgomery I AL 863 2,041 121 863 2,162 3,025 252 6/26/95
Jacksonville II FL 326 1,515 119 326 1,634 1,960 191 6/26/95
Pensacola III FL 369 1,358 220 369 1,578 1,947 196 6/26/95
Pensacola IV FL 244 1,128 103 244 1,231 1,475 156 6/26/95
Pensacola V FL 226 1,046 197 226 1,243 1,469 155 6/26/95
<PAGE>
Tampa I FL 1,088 2,597 239 1,088 2,836 3,924 339 6/26/95
Tampa II FL 526 1,958 210 526 2,168 2,694 284 6/26/95
Tampa III FL 672 2,439 208 672 2,647 3,319 317 6/26/95
Jackson I MS 343 1,580 153 343 1,733 2,076 207 6/26/95
Jackson II MS 209 964 235 209 1,199 1,408 133 6/26/95
Richmond VA 443 1,602 145 443 1,747 2,190 209 8/25/95
Orlando II FL 1,161 2,755 195 1,162 2,949 4,111 335 9/29/95
Birmingham III AL 424 1,506 219 424 1,725 2,149 185 1/16/96
Macon II GA 431 1,567 58 431 1,625 2,056 172 12/1/95
Harrisburg I PA 360 1,641 159 360 1,800 2,160 197 12/29/95
Harrisburg II PA 627 2,224 183 636 2,398 3,034 255 12/29/95
Syracuse I NY 470 1,712 120 472 1,830 2,302 191 12/27/95
Ft. Myers FL 205 912 76 206 987 1,193 143 12/28/95
Ft. Myers II FL 412 1,703 195 413 1,897 2,310 258 12/28/95
Newport News II VA 442 1,592 65 442 1,657 2,099 170 1/5/96
Montgomery II AL 353 1,299 64 353 1,363 1,716 150 1/23/96
Charleston II SC 237 858 128 232 991 1,223 100 3/1/96
Tampa IV FL 766 1,800 150 766 1,950 2,716 182 3/28/96
Arlington I TX 442 1,767 84 442 1,851 2,293 174 3/29/96
Arlington II TX 408 1,662 171 408 1,833 2,241 201 3/29/96
Ft. Worth TX 328 1,324 76 328 1,400 1,728 134 3/29/96
San Antonio I TX 436 1,759 140 436 1,899 2,335 186 3/29/96
San Antonio II TX 289 1,161 126 289 1,287 1,576 127 3/29/96
Syracuse II NY 481 1,559 311 495 1,856 2,351 166 6/5/96
Montgomery III AL 279 1,014 120 279 1,134 1,413 110 5/21/96
West Palm II FL 345 1,262 78 345 1,340 1,685 131 5/29/96
Ft. Myers III FL 229 884 57 229 941 1,170 93 5/29/96
Pittsburgh PA 545 1,940 75 545 2,015 2,560 182 6/19/96
Lakeland II FL 359 1,287 735 359 2,022 2,381 143 6/26/96
Springfield MA 251 917 371 297 1,242 1,539 127 6/28/96
Ft. Myers IV FL 344 1,254 125 344 1,379 1,723 129 6/28/96
Cincinnati OH 557 1,988 51 557 2,039 2,596 178 7/23/96
Dayton OH 667 2,379 51 667 2,430 3,097 211 7/23/96
Baltimore III MD 777 2,770 50 777 2,820 3,597 246 7/26/96
Jacksonville III FL 568 2,028 553 568 2,581 3,149 206 8/23/96
Jacksonville IV FL 436 1,635 91 436 1,726 2,162 172 8/26/96
Pittsburgh II PA 627 2,257 562 631 2,815 3,446 220 8/28/96
Jacksonville V FL 535 2,033 75 538 2,105 2,643 210 8/30/96
Charlotte II NC 487 1,754 24 487 1,778 2,265 150 9/16/96
Charlotte III NC 315 1,131 30 315 1,161 1,476 98 9/16/96
Orlando III FL 314 1,113 291 314 1,404 1,718 115 10/30/96
Rochester III NY 704 2,496 70 708 2,562 3,270 191 12/20/96
Youngstown II OH 600 2,142 66 600 2,208 2,808 168 1/10/97
<PAGE>
Akron OH 413 1,478 29 413 1,507 1,920 115 1/10/97
Cleveland III OH 751 2,676 289 751 2,965 3,716 222 1/10/97
Cleveland IV OH 725 2,586 305 725 2,891 3,616 228 1/10/97
Cleveland V OH 637 2,918 410 637 3,328 3,965 250 1/10/97
Cleveland VI OH 495 1,781 275 495 2,056 2,551 156 1/10/97
Cleveland VII OH 761 2,714 394 761 3,108 3,869 246 1/10/97
Cleveland VIII OH 418 1,921 528 418 2,449 2,867 194 1/10/97
Cleveland IX OH 606 2,164 101 606 2,265 2,871 173 1/10/97
Grand Rapids I MI 455 1,631 31 455 1,662 2,117 124 1/17/97
Grand Rapids II MI 219 790 103 219 893 1,112 79 1/17/97
Kalamazoo MI 516 1,845 102 516 1,947 2,463 143 1/17/97
Lansing MI 327 1,332 7 327 1,339 1,666 99 1/17/97
Holland MI 451 1,830 319 451 2,149 2,600 175 1/17/97
San Antonio III TX 474 1,686 113 474 1,799 2,273 134 1/30/97
Universal TX 346 1,236 56 346 1,292 1,638 98 1/30/97
San Antonio IV TX 432 1,560 61 432 1,621 2,053 127 1/30/97
Houston-Eastex TX 634 2,565 39 634 2,604 3,238 184 3/26/97
Houston-Nederland TX 566 2,279 63 566 2,342 2,908 165 3/26/97
Houston-College TX 293 1,357 66 293 1,423 1,716 101 3/26/97
Lynchburg-Lakeside VA 335 1,342 107 335 1,449 1,784 120 3/31/97
Lynchburg-Timberlake VA 328 1,315 175 328 1,490 1,818 114 3/31/97
Lynchburg-Amherst VA 155 710 111 152 824 976 67 3/31/97
Christiansburg VA 245 1,120 80 245 1,200 1,445 82 3/31/97
Chesapeake VA 260 1,043 154 260 1,197 1,457 81 3/31/97
Danville VA 326 1,488 25 326 1,513 1,839 106 3/31/97
Orlando-W 25th St FL 289 1,160 58 289 1,218 1,507 87 3/31/97
Delray I-Mini FL 491 1,756 297 491 2,053 2,544 141 4/11/97
Savannah II GA 296 1,196 96 296 1,292 1,588 92 5/8/97
Delray II-Safeway FL 921 3,282 114 921 3,396 4,317 223 5/21/97
Cleveland X-Avon OH 301 1,214 148 303 1,360 1,663 93 6/4/97
Dallas-Skillman TX 960 3,847 418 960 4,265 5,225 315 6/30/97
Dallas-Centennial TX 965 3,864 386 943 4,272 5,215 307 6/30/97
Dallas-Samuell TX 570 2,285 334 570 2,619 3,189 195 6/30/97
Dallas-Hargrove TX 370 1,486 221 370 1,707 2,077 140 6/30/97
Houston-Antoine TX 515 2,074 218 515 2,292 2,807 169 6/30/97
Atlanta-Alpharetta GA 1,033 3,753 132 1,033 3,885 4,918 262 7/24/97
Atlanta-Marietta GA 769 2,788 27 769 2,815 3,584 179 7/24/97
Atlanta-Doraville GA 735 3,429 46 735 3,475 4,210 214 8/21/97
Greensboro-Hilltop NC 268 1,097 55 268 1,152 1,420 71 9/25/97
GreensboroStgCch NC 89 376 34 89 410 499 27 9/25/97
Baton Rouge-Airline LA 396 1,831 160 396 1,991 2,387 132 10/9/97
Baton Rouge-Airline2 LA 282 1,303 87 282 1,390 1,672 93 11/21/97
Harrisburg-Peiffers PA 635 2,550 61 637 2,609 3,246 138 12/3/97
<PAGE>
Chesapeake-Military VA 542 2,210 42 542 2,252 2,794 113 2/5/98
Chesapeake-Volvo VA 620 2,532 49 620 2,581 3,201 129 2/5/98
Virginia Beach Shell VA 540 2,211 45 540 2,256 2,796 114 2/5/98
Virginia Beach
Central VA 864 3,994 62 864 4,056 4,920 202 2/5/98
Norfolk-Naval Base VA 1,243 5,019 72 1,243 5,091 6,334 249 2/5/98
Tampa-E.Hillsborough FL 709 3,235 218 709 3,453 4,162 214 2/4/98
Northbridge MA 441 1,788 36 441 1,824 2,265 89 2/9/98
Harriman NY 843 3,394 59 843 3,453 4,296 168 2/4/98
Greensboro-High PointNC 397 1,834 136 397 1,970 2,367 97 2/10/98
Lynchburg-Timberlake VA 488 1,746 69 488 1,815 2,303 85 2/18/98
Titusville FL 492 1,990 16 492 2,006 2,498 95 2/25/98
Salem MA 733 2,941 322 733 3,263 3,996 150 3/3/98
Chattanooga-Lee Hwy TN 384 1,371 102 384 1,473 1,857 75 3/27/98
Chattanooga-Hwy 58 TN 296 1,198 89 296 1,287 1,583 60 3/27/98
Ft. Oglethorpe GA 349 1,250 39 349 1,289 1,638 60 3/27/98
Birmingham-Walt AL 544 1,942 176 544 2,118 2,662 108 3/27/98
East Greenwich RI 702 2,821 109 702 2,930 3,632 128 3/26/98
Durham-Hillborough NC 775 3,103 71 775 3,174 3,949 143 4/9/98
Durham-Cornwallis NC 940 3,763 62 940 3,825 4,765 169 4/9/98
Hendersonville TN 1,050 4,203 34 1,050 4,237 5,287 187 4/9/98
Salem-Policy NH 742 2,977 12 742 2,989 3,731 132 4/7/98
Warrem-Elm OH 522 1,864 89 522 1,953 2,475 84 4/22/98
Warren-Youngstown OH 512 1,829 16 512 1,845 2,357 78 4/22/98
Waterford-Highland MI 1,487 5,306 236 1,487 5,542 7,029 232 4/28/98
Indian Harbor FL 662 2,654 95 662 2,749 3,411 110 6/2/98
Jackson 3 - I55 MS 744 3,021 27 744 3,048 3,792 134 5/13/98
Katy-N.Fry TX 419 1,524 36 419 1,560 1,979 67 5/20/98
Hollywood-Sheridan FL 1,208 4,854 32 1,208 4,886 6,094 186 7/1/98
Pompano Beach -
Atlantic FL 944 3,803 29 944 3,832 4,766 148 7/1/98
Pompano Beach -
Sample FL 903 3,643 28 903 3,671 4,574 142 7/1/98
Boca Raton-18th St FL 1,503 6,059 87 1,503 6,146 7,649 234 7/1/98
Vero Beach FL 489 1,813 16 489 1,829 2,318 81 6/12/98
Humble TX 447 1,790 33 447 1,823 2,270 70 6/16/98
Houston-Old Katy TX 659 2,680 22 659 2,702 3,361 106 6/19/98
Webster TX 635 2,302 19 635 2,321 2,956 92 6/19/98
Carrollton TX 548 1,988 37 548 2,025 2,573 81 6/19/98
Hollywood-N.21st FL 840 3,373 35 840 3,408 4,248 123 8/3/98
San Marcos TX 324 1,493 37 324 1,530 1,854 60 6/30/98
Austin-McNeil TX 492 1,995 57 492 2,052 2,544 81 6/30/98
Austin-FM TX 484 1,951 69 481 2,023 2,504 80 6/30/98
<PAGE>
Jacksonville-Center NC 327 1,329 20 327 1,349 1,676 50 8/6/98
Jacksonville-
Gum Branch NC 508 1,815 73 508 1,888 2,396 65 8/17/98
Jacksonville-
N. Marine NC 216 782 153 216 935 1,151 33 9/24/98
Euless TX 550 1,998 44 550 2,042 2,592 67 9/29/98
N. Richland Hills TX 670 2,407 11 670 2,418 3,088 78 10/9/98
Batavia OH 390 1,570 32 390 1,602 1,992 45 11/19/98
Jackson-N. West MS 460 1,642 150 460 1,792 2,252 62 12/1/98
Katy-Franz TX 507 2,058 11 507 2,069 2,576 58 12/15/98
W. Warwick RI 447 1,776 23 447 1,799 2,246 42 2/2/99
Lafayette-Pinhook 1 LA 556 1,951 157 556 2,108 2,664 58 2/17/99
Lafayette-Pinhook 2 LA 708 2,860 33 708 2,893 3,601 63 2/17/99
Lafayette-Ambassador LA 314 1,095 107 314 1,202 1,516 33 2/17/99
Lafayette-Evangeline LA 188 652 119 188 771 959 16 2/17/99
Lafayette-Guilbeau LA 963 3,896 23 963 3,919 4,882 85 2/17/99
Gilbert-Elliott Rd AZ 651 2,600 33 651 2,633 3,284 39 5/18/99
Glendale-59th Ave AZ 565 2,596 35 565 2,631 3,196 40 5/18/99
Mesa-Baseline AZ 330 1,309 43 330 1,352 1,682 20 5/18/99
Mesa-E. Broadway AZ 339 1,346 33 339 1,379 1,718 21 5/18/99
Mesa-W. Broadway AZ 291 1,026 35 292 1,060 1,352 16 5/18/99
Mesa-Greenfield AZ 354 1,405 35 355 1,439 1,794 21 5/18/99
Phoenix-Camelback AZ 453 1,610 37 454 1,646 2,100 25 5/18/99
Phoenix-Bell AZ 872 3,476 35 873 3,510 4,383 52 5/18/99
Phoenix-35th Ave AZ 849 3,401 40 850 3,440 4,290 51 5/21/99
Westbrook ME 410 1,626 102 411 1,727 2,138 18 8/2/99
Cocoa FL 667 2,373 33 668 2,405 3,073 16 9/29/99
Cedar Hill TX 335 1,521 20 336 1,540 1,876 7 11/9/99
Corporate Office NY 0 68 616 0 684 684 275 1/1/95
_________________ _________ _____________________________________________________
$111,650 $412,895 $ 31,928 $111,833 $444,640 $556,473 $33,453
================= ========= =====================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998 December 31, 1997
<S> <C> <C> <C> <C> <C> <C>
Cost:
Balance at beginning of period $ 502,502 $333,036 $ 220,711
Additions during period:
Acquisitions through
foreclosure $ - $ - $ -
Other acquisitions 45,811 157,080 106,926
Improvements, etc. 9,959 12,940 5,527
_________ _________ ________
55,770 170,020 112,453
Deductions during period:
Cost of real estate sold (1,799) (1,799) (554) (554) (128) (128)
_______ _________ _____ ________ _____ _________
Balance at close of period $ 556,473 $502,502 $ 333,036
========= ======== =========
Accumulated Depreciation:
Balance at beginning of period $ 21,339 $ 11,639 $ 5,457
Additions during period:
Depreciation expense $ 12,259 12,259 $ 9,762 $ 9,762 $ 6,211 6,211
________ _______ _______
Deductions during period:
Accumulated depreciation of
real estate sold (145) (145) (62) (62) (29) (29)
_________ _________ ________ ________ ________ ________
Balance at close of period $ 33,453 $ 21,339 $ 11,639
========= ========= =========
</TABLE>
<PAGE>
Exhibits
Exhibit No. Description
3.1 Agreement of Limited Partnership of
the Operating Partnership, as
amended
3.2* Amended and Restated Articles of
Incorporation of the Company
3.3* By-laws of the Company
3.4 Articles Supplementary to the
Amended and Restated Articles of
Incorporation of the Company
classifying and designating the
Company's Series A Junior
Participating Preferred Stock
(Incorporated by reference to
Exhibit 3.1 to the Company's Form
8A filed December 3, 1996)
3.5 Articles Supplementary to the
Amended and Restated Articles of
Incorporation of the Company
classifying and designating the
9.85% Series B Cumulative
Redeemable Preferred Stock.
(Incorporated by reference to
Exhibit 1.6 to the Company's Form
8-A filed July 29, 1999)
10.1 Revolving Credit Agreement the
Company, the Operating Partnership,
Fleet National Bank and other
lenders named therein (Incorporated
by reference to Exhibit 10.1 to the
Company's report on Form 10-Q for
the quarter ended March 31, 1998)
10.2* Form of Non-competition Agreement
between the Company and Charles E.
Lannon
10.3* Form of Non-competition Agreement
between the Company and Robert J.
Attea
10.4* Form of Non-competition Agreement
between the Company and Kenneth F.
Myszka
10.5* Form of Non-competition Agreement
between the Company and David L.
Rogers
10.6* Sovran Self Storage, Inc. 1995
Award and Option Plan
<PAGE>
10.7* Sovran Self Storage, Inc. 1995
Outside Directors' Option Plan
10.8* Sovran Self Storage Incentive
Compensation Plan for Executive
Officer
10.9* Restricted Stock Agreement between
the Company and David L. Rogers
10.10* Form of Supplemental
Representations, Warranties and
Indemnification Agreement among the
Company and Robert J. Attea,
Charles E. Lannon, Kenneth F.
Myszka and David L. Rogers
10.11* Form of Pledge Agreement among the
Company and Robert J. Attea,
Charles E. Lannon, Kenneth F.
Myszka and David L. Rogers
10.12* Form of Indemnification Agreement
between the Company and certain
Officers and Directors of the
Company
10.13* Form of Subscription Agreement
(including Registration Rights
Statement) among the Company and
subscribers for 422,171 Common
Shares
10.14* Form of Registration Rights and
Lock-Up Agreement among the Company
and Robert J. Attea, Charles E.
Lannon, Kenneth F. Myszka and
David L. Rogers
10.15* Form of Facilities Services
Agreement between the Company and
Williamsville Properties, Inc.
10.16 Term Loan Agreement (Incorporated
by reference to Exhibit 10.16 filed
with the Company's Annual Report on
Form 10-K for the year ended
December 31, 1998)
10.18 Sovran Self Storage, Inc. Deferred
Compensation Plan for Directors
(Incorporated by reference to
Appendix A to the Company's Proxy
Statement for the 1999 Annual
Meeting of Shareholders)
12.1 Statement Re: Computation of
Earnings to Fixed Charges
<PAGE>
23 Consent of Independent Auditors
27 Financial Data Schedule
_________________
* Incorporated by reference to the exhibits as filed with the
Company's Registration Statement on Form S-11 (File No. 33-91422)
filed June 19, 1995.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Sovran Holdings Inc., as general
partner of registrant, certifies that it 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
March 30, 2000 By: /S/ David L. Rogers
________________________________
David L. Rogers,
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of Sovran Holdings Inc., as general partner of
registrant, and in the capacities and on the dates indicated.
Signature Title Date
/s/ Robert J. Attea Chairman of the March 30, 2000
________________________ Board of Directors,
Robert J. Attea Chief Executive
Officer and Director
(Principal Executive
Officer)
/s/ Kenneth F. Myszka President, Chief March 30, 2000
________________________ Operating Officer
Kenneth F. Myszka and Director
/s/David L. Rogers Chief Financial March 30, 2000
________________________ Officer (Principal
David L. Rogers Financial and
Accounting Officer)
/s/John Burns Director March 30, 2000
_______________________
John Burns
/s/Michael A. Elia Director March 30, 2000
_______________________
Michael A. Elia
/s/Anthony P. Gammie Director March 30, 2000
_______________________
Anthony P. Gammie
/s/Charles E. Lannon Director March 30, 2000
_______________________
Charles E. Lannon
<PAGE>
<TABLE>
Sovran Acquisition Limited Partnership
Exhibit (12.1) Statement Re: Computation of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
Amounts in Thousands
<CAPTION>
June 26, 1995
Year ended December 31, to
1999 1998 1997 1996 December 31, 1995
__________________________________________________________
<S> <C> <C> <C> <C> <C>
Earnings:
Net income $27,347 $24,798 $ 23,763 $15,682 $ 6,744
Fixed charges 15,944 9,925 2,743 2,386 323
__________________________________________________________
Earnings (1) 43,291 34,723 26,506 18,068 7,067
Fixed charges:
Interest expense 13,927 9,601 2,166 1,924 131
Preferred stock dividends 1,239 - - - -
Amortization of
financing fees 778 324 577 462 192
__________________________________________________________
Fixed charges (2) $15,944 $ 9,925 $ 2,743 $ 2,386 $ 323
Ratio of earnings to combined
fixed charges and preferred
stock dividends (1)(2) 2.72 3.50 9.66 7.57 21.88
</TABLE>
<PAGE>
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-3, No. 333-51169) of Sovran Self Storage, Inc.
and Sovran Acquisition Limited Partnership and in the related
Prospectus of our report dated January 26, 2000, with respect to
the financial statements and schedule included in this Annual
Report (Form 10-K) of Sovran Acquisition Limited Partnership.
/s/ Ernst & Young LLP
Buffalo, New York
March 28, 2000
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 1,032
<SECURITIES> 0
<RECEIVABLES> 1,796
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,699
<PP&E> 556,473
<DEPRECIATION> 33,453
<TOTAL-ASSETS> 529,719
<CURRENT-LIABILITIES> 218,281
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 295,550
<TOTAL-LIABILITY-AND-EQUITY> 529,719
<SALES> 0
<TOTAL-REVENUES> 84,256
<CGS> 0
<TOTAL-COSTS> 24,273
<OTHER-EXPENSES> 18,709
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,927
<INCOME-PRETAX> 27,347
<INCOME-TAX> 0
<INCOME-CONTINUING> 27,347
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,347
<EPS-BASIC> 1.97
<EPS-DILUTED> 1.97
</TABLE>
