RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2024

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Supervisory and Administrative Fees

For the self storage properties that are managed by the PROs, the Company has entered into asset management agreements with the PROs to provide leasing, operating, supervisory and administrative services. The asset management agreements generally provide for fees ranging from 5% to 6% of gross revenue for the managed self storage properties. During the three months ended June 30, 2024 and 2023, the Company incurred $5.1 million and $5.4 million, respectively, for supervisory and administrative fees to the PROs and during the six months ended June 30, 2024 and 2023, the Company incurred $10.2 million and $10.6 million, respectively, for supervisory and administrative fees to the PROs. Such fees are included in general and administrative expenses in the accompanying condensed consolidated statements of operations.

Payroll Services

For the self storage properties that are managed by the PROs, the employees responsible for operations are employees of the PROs who charge the Company for the costs associated with the respective employees. For the three months ended June 30, 2024 and 2023, the Company incurred $6.8 million and $6.5 million, respectively, for payroll and related costs reimbursable to these PROs and for the six months ended June 30, 2024 and 2023, the Company incurred $13.7 million and $13.1 million, respectively, for payroll and related costs reimbursable to these PROs. Such costs are included in property operating expenses in the accompanying condensed consolidated statements of operations.

Effective July 1, 2024, in connection with the internalization of the PRO structure, the Company purchased the PROs' management contracts and plans to transition the majority of operations in a phased approach, which is expected to occur over the 12-month period following the Closing Date. The Company has executed new asset management and property management agreements with a number of the PROs for all or a part of this transitionary period at newly negotiated management fees.