906933--3/20/2006--SHURGARD_STORAGE_CENTERS

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Risks Associated with our Proposed Merger with Public Storage The announcement of our proposed merger with Public Storage may have a negative effect on our business, financial condition and operating results If we are unable to realize our proposed merger with Public Storage, our business, financial condition, operating results and stock price could suffer The Merger Agreement limits our ability to pursue alternatives to the proposed merger. Certain restrictive pre-closing covenants in the Merger Agreement may negatively affect our business, financial condition, operating results and cash flows We have significant real estate holdings that can be difficult to sell in unfavorable economic conditions and that can have unpredictable decreases in value Our real estate development and acquisition activities can result in unforeseen liabilities and increases in costs. We focus almost exclusively on the self-storage business, which makes us vulnerable to changes in the profitability of self-storage properties. Our occupancy rates may decline if we are unable to compete successfully against other companies in the self-storage industry We would have great difficulty acquiring or developing properties without access to financing We face risks due to our investments through joint ventures We face possible liability for environmental cleanup costs and damages for contamination related to our properties. We must comply with the Americans with Disabilities Act and fire and safety regulations, which can require significant expenditures If property taxes increase, our earnings and cash flows could decline We face potential underinsured losses on our investments Terrorist attacks and the possibility of armed conflict may have an adverse effect on our business, financial condition, operating results and cash flows and could decrease the value of our assets We have significant international operations that carry additional risks Our European operations may not become profitable Our growth strategy in Europe may not be successful Risks Relating to Qualification and Operation as a REIT We might lose our REIT status and incur significant tax liabilities We may pay taxes even if we continue to qualify as a REIT Our REIT distribution requirements are complex and may create tax difficulties Our indirect investments may result in liabilities against which we cannot protect Inability to access the capital markets could delay or adversely affect execution of our business plan. Market interest rates may negatively affect the price of our debt securities, preferred stock and common stock and increase our interest costs Covenants in our debt agreements could limit our activities. We may not be able to repay our debt financing obligations. If we fail to maintain an effective system of internal control, we may not be able to accurately report our financial results or prevent fraud. The Jobs and Growth Tax Relief Reconciliation Act of 2003 may adversely affect the value of our common stock

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906933--3/20/2006--SHURGARD_STORAGE_CENTERS_INC