Property Dispositions

6 Months Ended

Jun. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Property Dispositions

Property Dispositions

From time to time, we may decide to sell a property. We have an active capital recycling program, with a goal of extending the average lease term through reinvestment, improving portfolio credit quality through dispositions and acquisitions of assets, increasing the asset criticality factor in our portfolio, and/or executing strategic dispositions of assets. We may decide to dispose of a property due to vacancy, tenants electing not to renew their leases, tenant insolvency, or lease rejection in the bankruptcy process. In such cases, we assess whether we can obtain the highest value from the property by selling it, as opposed to re-leasing it. We may also sell a property when we receive an unsolicited offer or negotiate a price for an investment that is consistent with our strategy for that investment. When it is appropriate to do so, we classify the property as an asset held for sale on our consolidated balance sheet.

Property Dispositions

The results of operations for properties that have been sold or classified as held for sale are included in the consolidated financial statements and are summarized as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Revenues	$	4,282		$	5,752		$	10,396		$	11,352
Expenses	(3,255		)	(5,095		)	(8,239		)	(10,394		)
Gain on sale of real estate, net of tax	25,017			—			50,415			2,197
Loss on extinguishment of debt	(5,091		)	—			(7,590		)	—
Income from properties sold or classified as held for sale, net of income taxes	$	20,953		$	657		$	44,982		$	3,155

2016 — During the three months ended June 30, 2016, we sold nine self-storage properties for total proceeds of $61.3 million, net of closing costs, recognized a gain on sale of $25.0 million, and loss on extinguishment of debt of $5.1 million. The proceeds from the sale were used to repay a non-recourse mortgage loan encumbering the properties with an outstanding principal balance of $27.9 million.

During the six months endedJune 30, 2016, we sold 12 self-storage properties for total proceeds of $107.7 million, net of closing costs, recognized a gain on these sales of $50.4 million in the aggregate, and loss on extinguishment of debt of $7.6 million. Proceeds from the sales were used to repay non-recourse mortgage loans encumbering the properties with outstanding principal balances aggregating $42.9 million.

During the three months ended June 30, 2016, we entered into a contract to sell 22 self-storage properties for a total contract price of $154.4 million (Note 4). At June 30, 2016, these properties were classified as assets held for sale and were subsequently sold on August 1, 2016 (Note 15).

2015 — In connection with the partial sale of our investment in IShops LLC in 2014, we deferred 15% of the gain due to our then-existing purchase option to acquire a 15% equity interest in the parent company that owns I Shops LLC. Upon expiration of the purchase option on January 31, 2015, we recognized the previously deferred gain of $2.2 million during the six months ended June 30, 2015.