Noncontrolling Interest in Operating Partnership

6 Months Ended

Jun. 30, 2018

Noncontrolling Interest [Line Items]

Noncontrolling Interest in Operating Partnership

NONCONTROLLING INTEREST IN OPERATING PARTNERSHIP

The Company’s interest in its stores is held through the Operating Partnership. Between its general partner and limited partner interests, the Company held a 90.9% ownership interest in the Operating Partnership as of June 30, 2018. The remaining ownership interests in the Operating Partnership (including Preferred Operating Partnership units) of 9.1% are held by certain former owners of assets acquired by the Operating Partnership.

The noncontrolling interest in the Operating Partnership represents OP Units that are not owned by the Company. OP Units are redeemable at the option of the holder, which redemption may be satisfied at the Company's option in cash, based upon the fair market value of an equivalent number of shares of the Company’s common stock (based on the ten-day average trading price) at the time of the redemption, or shares of the Company's common stock on a one-for-one basis, subject to anti-dilution adjustments provided in the Partnership Agreement. As of June 30, 2018, the ten-day average closing price of the Company's common stock was $99.22 and there were 5,646,138 OP Units outstanding. Assuming that all of the OP Unit holders exercised their right to redeem all of their OP Units on June 30, 2018 and the Company elected to pay the OP Unit holders cash, the Company would have paid $560,210 in cash consideration to redeem the units.

OP Unit activity is summarized as follows for the periods presented:



	For the Six Months Ended June 30,
	2018		2017
OP Units redeemed for common stock	10,000		—
OP Units redeemed for cash	30,000		33,896
Cash paid for OP Units redeemed	$	2,558	$	2,510
OP Units issued in conjunction with acquisitions	21,768		—
Value of OP Units issued in conjunction with acquisitions	$	1,877	$	—

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section, but separate from the company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations, and requires changes in ownership interest to be accounted for similarly as equity transactions. If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the OP Units and classifies the noncontrolling interest represented by the OP Units as stockholders’ equity in the accompanying condensed consolidated balance sheets. The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling amount as permanent equity in the condensed consolidated balance sheets. Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount and (2) the redemption value as of the end of the period in which the determination is made.