Real Estate Facilities

12 Months Ended

Dec. 31, 2019

3.Real Estate Facilities

Activity in real estate facilities during 2019, 2018 and 2017 is as follows:



	For the Years Ended December 31,
	2019		2018		2017
	(Amounts in thousands)
Operating facilities, at cost:
Beginning balance	$	15,296,844	$	14,665,989	$	13,963,229
Costs incurred for capital expenditures to maintain
real estate facilities		192,539		139,397		124,780
Acquisitions		421,097		169,436		274,115
Dispositions		(426)		(25,633)		(1,092)
Hurricane damage		-		-		(8,226)
Developed or expanded facilities opened for operation		379,092		348,270		311,559
Impact of foreign exchange rate changes		-		(615)		1,624
Ending balance		16,289,146		15,296,844		14,665,989
Accumulated depreciation:
Beginning balance		(6,140,072)		(5,700,331)		(5,270,963)
Depreciation expense		(483,408)		(457,029)		(433,466)
Dispositions		5		16,876		123
Hurricane damage		-		-		4,940
Impact of foreign exchange rate changes		-		412		(965)
Ending balance		(6,623,475)		(6,140,072)		(5,700,331)
Construction in process:
Beginning balance		285,339		264,441		230,310
Costs incurred for development and expansion
of real estate facilities		235,687		362,397		349,712
Developed or expanded facilities opened for operation		(379,092)		(348,270)		(311,559)
Dispositions		-		(2,698)		(4,022)
Transfer from other assets		-		9,469		-
Ending balance		141,934		285,339		264,441
Total real estate facilities at December 31,	$	9,807,605	$	9,442,111	$	9,230,099

During 2019, we acquired 44 self-storage facilities and one commercial facility (3,133,000 net rentable square feet of storage space and 46,000 net rentable square feet of commercial space), for a total cost of $439.6 million, consisting of $437.8 million in cash and the assumption of $1.8 million in mortgage notes. Approximately $18.5 million of the total cost was allocated to intangible assets. We completed development and redevelopment activities costing $379.1 million during 2019, adding 3.7 million net rentable square feet of self-storage space. Construction in process at December 31, 2019 consists of projects to develop new self-storage facilities and expand existing self-storage facilities.

During 2019, we paid a total of $284.7 million with respect to the development and expansion of real estate facilities, including $81.4 million to repay amounts accrued at December 31, 2018. Of the $235.7 million in costs incurred during 2019, $32.4 million remains unpaid at December 31, 2019.

During 2019, we paid a total of $187.3 million with respect to capital expenditures to maintain real estate facilities, including $11.3 million to repay amounts accrued at December 31, 2018. Of the $192.5 million in costs incurred during 2019, $16.6 million remains unpaid at December 31, 2019.

During 2018, we acquired 25 self-storage facilities (1.6 million net rentable square feet), for a total cost of $181.0 million in cash, of which $11.6 million was allocated to intangible assets. We completed development and redevelopment activities costing $348.3 million during 2018, adding 3.0 million net rentable square feet of self-storage space. Construction in process at December 31, 2018 consists of projects to develop new self-storage facilities and redevelop existing self-storage facilities. On October 18, 2018, we sold our property in West London to Shurgard for $42.1 million and recorded a related gain on sale of real estate of approximately $31.5 million. This gain was net of the recognition of a cumulative other comprehensive loss totaling $4.8 million with respect to foreign currency translation. On October 25, 2018, we sold a commercial facility for $8.7 million and recorded a related gain on sale of real estate of approximately $4.6 million. During 2018, we also sold portions of real estate facilities in connection with eminent domain proceedings for $3.4 million in cash proceeds and recorded a related gain on sale of real estate of approximately $1.8 million. During 2018, we also transferred $9.5 million of accumulated construction costs from other assets to construction in process.

During 2018, we paid a total of $340.0 million with respect to the development and expansion of real estate facilities, including $58.8 million to repay amounts accrued at December 31, 2017. Of the $362.4 million in costs incurred during 2018, $81.2 million remained unpaid at December 31, 2018.

During 2018, we paid a total of $141.0 million with respect to capital expenditures to maintain real estate facilities, including $13.0 million to repay amounts accrued at December 31, 2017. Of the $139.4 million in costs incurred during 2018, $11.4 million remained unpaid at December 31, 2018.

During 2017, we acquired 22 self-storage facilities from third parties (1,365,000 net rentable square feet), for a total cost of $149.8 million, in cash. Approximately $8.2 million of the total cost was allocated to intangible assets. On December 31, 2017, we acquired the remaining 74.25% of the interests which we did not own in one of the unconsolidated entities that owned 12 self-storage facilities (749,000 net rentable square feet) for a total cost of $135.5 million in cash. Approximately $9.0 million of the $141.8 million acquisition cost (which includes the $6.3 million book value of our existing investment) was allocated to intangible assets and $0.3 million was allocated to other assets.

We completed development and redevelopment activities during 2017, adding 2.7 million net rentable square feet of self-storage space, at an aggregate cost of $311.6 million. During 2017, we sold real estate for a total of approximately $6.4 million in cash proceeds, of which $0.3 million was collected in 2016, and recorded a related gain on real estate investment sales of approximately $1.4 million in 2017.

During 2017, we paid a total of $337.3 million with respect to the development and expansion of real estate facilities, including $48.1 million to repay amounts accrued at December 31, 2016. Of the $349.7 million in costs incurred during 2017, $60.5 million remained unpaid at December 31, 2017.

During 2017, we paid a total of $120.6 million with respect to capital expenditures to maintain real estate facilities, including $9.0 million to repay amounts accrued at December 31, 2016. Of the $124.8 million in costs incurred during 2017, $13.1 million remained unpaid at December 31, 2017.

At December 31, 2019, the adjusted basis of real estate facilities for U.S. federal tax purposes was approximately $10.6 billion (unaudited).