Global Self Storage (SELF) risk factors, FY2024 10-K

Risks Related to our Self Storage Properties and our Business

1. 01Adverse economic or other conditions in the markets in which we do business and more broadly could negatively affect our occupancy levels and rental rates and therefore our operating results
2. 02Our operations may be affected by general economic, political and market conditions
3. 03Our storage leases are relatively short-term in nature, which exposes us to the risk that we may have to re-lease our units and we may be unable to do so on attractive terms, on a timely basis or at all
4. 04Increases in taxes and regulatory compliance costs may reduce our income and adversely impact our cash flows
5. 05Our property taxes could increase due to various reasons, including a reassessment, which could adversely impact our operating results and cash flow
6. 06We depend upon our on-site personnel to maximize tenant satisfaction at each of our properties, and any difficulties we encounter in hiring, training, and maintaining skilled field personnel may harm our operating performance
7. 07We face competition from other self storage properties, which may adversely impact the markets in which we invest and in which our self storage properties operate
8. 08Rental revenues are significantly influenced by demand for self storage space generally, and a decrease in such demand would likely have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio or if we owned a larger number of self storage properties
9. 09We may not be successful in identifying and consummating suitable acquisitions, or integrating and operating acquired properties, which may adversely impact our growth
10. 10We may not be able to develop a captive pipeline of acquisition targets without the use of non-refundable deposits
11. 11We may acquire properties subject to liabilities which may adversely impact our operating results
12. 12Our investments in redevelopment projects may not yield anticipated returns which could adversely impact our economic performance
13. 13Store ownership through joint ventures may limit our ability to act exclusively in our interest
14. 14Our performance is subject to risks associated with the real estate industry
15. 15Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties
16. 16Costs associated with complying with various federal, state and local laws, regulations and governmental policies including the ADA may result in unanticipated expenses
17. 17Extensive environmental regulation to which we are subject creates uncertainty regarding future environmental expenditures and liabilities
18. 18Climate change and regulatory and other efforts to reduce climate change could adversely affect our business
19. 19We may become subject to litigation or threatened litigation or other claims that may divert management’s time and attention, require us to pay damages and expenses or restrict the operation of our business
20. 20Uninsured losses or losses in excess of our insurance coverage could adversely affect our financial condition and cash flow
21. 21To the extent that we invest in publicly traded REITs, our performance may be subject to the risks of investment in such securities
22. 22We may be unable to make distributions in the future, maintain our current level of distributions or increase distributions over time
23. 23We rely on information technology in our operations, and any material failure, inadequacy, interruption or security breach through cyber-attacks, cyber-intrusions, or other methods could disrupt our information technology networks and related systems and harm our business
24. 24Privacy concerns could result in regulatory changes that may harm our business
25. 25In recent years, the outbreaks of a number of diseases, including COVID-19, avian influenza, H1N1, and other viruses, have increased the risk of a pandemic or major public health issues

Risks Related to Our Organization and Structure

1. 26The ability of our board of directors to revoke our REIT election without stockholder approval may cause adverse consequences to our stockholders
2. 27Our business could be harmed if key personnel with business experience in the self storage industry terminate their employment with us
3. 28There may be conflicts of interest resulting from the relationships among us, our affiliates, and other related parties
4. 29Certain provisions of Maryland law could inhibit changes in control of our company
5. 30Our rights and the rights of our stockholders to take action against our directors and officers are limited, which could limit your recourse in the event of actions not in your best interest
6. 31active and deliberate dishonesty by the director or officer that was established by a final judgment and is material to the cause of action
7. 32Our charter contains provisions that make removal of our directors difficult, which could make it difficult for our stockholders to effect changes to our management
8. 33We may change our investment and financing strategies and enter into new lines of business without stockholder consent, which may subject us to different risks
9. 34If other self storage companies convert to a REIT structure or if tax laws change, we may no longer have an advantage in competing for potential acquisitions
10. 35Our board of directors has the power to issue additional shares of our stock in a manner that may not be in the best interest of our stockholders
11. 36Restrictions on ownership and transfer of our shares may restrict change of control or business combination opportunities in which our stockholders might receive a premium for their shares

Risks Related to Our Debt Financings

1. 37Disruptions in the financial markets could affect our ability to obtain debt financing on reasonable terms or at all and have other adverse effects
2. 38We depend on external sources of financing that are outside of our control, which could adversely affect our ability to acquire or redevelop properties, satisfy our debt obligations and/or make distributions to stockholders
3. 39The terms and covenants relating to our indebtedness could adversely impact our economic performance

Risks Related to Our Qualification as a REIT

1. 40Our failure to qualify or remain qualified as a REIT would subject us to U.S. federal income tax and applicable state and local taxes, which would reduce the amount of operating cash flow available for distribution to stockholders
2. 41Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flow
3. 42To maintain our REIT qualification, we may be forced to borrow funds during unfavorable market conditions
4. 43Failure to make required distributions would subject us to tax, which would reduce the operating cash flow available for distribution to stockholders
5. 44Complying with the REIT requirements may cause us to forgo and/or liquidate otherwise attractive investments
6. 45We may be subject to a 100% tax on income from “prohibited transactions,” and this tax may limit our ability to sell assets or require us to restructure certain of our activities in order to avoid being subject to the tax
7. 46We conduct certain activities (such as selling packing supplies and locks and renting trucks or other moving equipment) through one or more TRSs
8. 47We may not have cash available to make distributions
9. 48Our REIT qualification could be adversely affected by the REIT qualification of any REIT in which we hold an interest
10. 49We could fail to qualify as a REIT if we have not distributed any earnings and profits attributable to a taxable year before we elected to be taxed as a REIT
11. 50We may not have satisfied requirements related to the ownership of our outstanding stock, which could cause us to fail to qualify as a REIT
12. 51Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities
13. 52Legislative or regulatory tax changes related to REITs could materially and adversely affect our business

Risks Related to Our Common Stock

1. 53The future sales of shares of our common stock may depress the price of our common stock and dilute stockholders’ beneficial ownership
2. 54Any future offerings of debt, which would be senior to our common stock upon liquidation, and/or preferred equity securities which may be senior to our common stock for purposes of dividend distributions or upon liquidation, may adversely affect the market price of our common stock
3. 55The market price and trading volume of our common stock may vary substantially
4. 56general market and economic conditions, including the current state of the credit and capital markets