XML 32 R22.htm IDEA: XBRL DOCUMENT

SELF-STORAGE INVESTMENT PORTFOLIO (Tables)

9 Months Ended

Sep. 30, 2020

SELF-STORAGE INVESTMENT PORTFOLIO [Abstract]

As of September 30, 2020, the aggregate committed principal amount of the Company’s development property investments was approximately $314.5 million and outstanding principal was $283.3 million, as described in more detail in the table below (dollars in thousands):


	Metropolitan	Total				Remaining
	Statistical Area	Investment		Funded		Unfunded
Closing Date	("MSA")	Commitment		Investment ⁽¹⁾		Commitment		Fair Value
Development property investments (includes a profits interest):
7/2/2015	Milwaukee ⁽²⁾⁽⁷⁾	$	7,650	$	7,648	$	2	$	8,316
10/27/2015	Austin ⁽²⁾⁽⁷⁾		8,658		8,184		474		8,071
2/24/2017	New Orleans ⁽²⁾⁽⁷⁾		12,549		12,371		178		15,017
3/1/2017	Houston ⁽²⁾⁽⁹⁾		14,825		14,825		—		15,661
5/2/2017	Tampa 2 ⁽²⁾⁽⁷⁾		8,091		7,984		107		9,444
5/19/2017	Tampa 3 ⁽²⁾⁽⁷⁾		9,224		8,618		606		10,561
6/12/2017	Tampa 4 ⁽²⁾⁽⁷⁾		10,266		10,014		252		13,317
6/29/2017	Boston 1 ⁽²⁾⁽⁶⁾		—		—		—		3,850
8/30/2017	Orlando 4⁽²⁾⁽⁷⁾		9,037		8,329		708		10,376
9/14/2017	Los Angeles 1		28,750		10,923		17,827		11,143
9/14/2017	Miami 1 ⁽³⁾		14,657		14,463		194		15,657
10/12/2017	Miami 2 ^(4)(10)		—		1,661		—		1,459
10/30/2017	New York City 3 ^(4)(10)		—		8,261		—		7,916
11/16/2017	Miami 3 ^(2)(4)(7)		20,168		19,093		1,745		21,914
12/15/2017	New York City 4 ⁽²⁾⁽⁷⁾		10,591		9,747		844		11,435
12/28/2017	New York City 5 ⁽²⁾		16,073		16,064		9		17,646
3/30/2018	Philadelphia ^(2)(4)(8)		14,338		11,536		3,264		11,313
5/1/2018	Miami 9 ^(4)(10)		—		3,877		—		3,639
5/15/2018	Atlanta 7 ⁽²⁾⁽⁷⁾		9,418		8,502		916		9,948
5/23/2018	Kansas City ⁽²⁾⁽⁷⁾		9,968		8,754		1,214		10,489
6/7/2018	Orlando 5 ⁽²⁾		12,969		12,057		912		13,885

11/16/2018	Baltimore 2 ⁽¹⁰⁾		—		785		—		690
3/1/2019	New York City 6		18,796		4,297		14,499		4,311
4/18/2019	New York City 7 ⁽³⁾⁽⁴⁾		23,462		15,781		8,050		17,374
		$	259,490	$	223,774	$	51,801	$	253,432
Preferred equity investments:
6/12/2018	Los Angeles 2 ⁽³⁾⁽⁵⁾		9,298		9,659		649		10,384
3/15/2019	Stamford ⁽²⁾⁽⁵⁾		2,904		3,222		—		5,479
5/8/2019	New York City 8 ⁽⁵⁾		21,000		23,073		—		23,492
7/11/2019	New York City 9 ⁽⁵⁾		13,095		14,218		—		14,177
8/21/2019	New York City 10 ⁽⁵⁾		8,674		9,346		—		9,290
		$	54,971	$	59,518	$	649	$	62,822

Total investments reported at fair value		$	314,461	$	283,292	$	52,450	$	316,254

(1)Represents principal balance of loan gross of origination fees. The principal balance includes interest accrued on the investment.

(2)Construction at the facility was substantially complete and/or certificate of occupancy had been received as of September 30, 2020. See Note 4, Fair Value of Financial Instruments, for information regarding recognition of entrepreneurial profit.

(3)Facility had achieved at least 40% construction completion but construction was not considered substantially complete as of September 30, 2020. See Note 4, Fair Value of Financial Instruments, for information regarding recognition of entrepreneurial profit.

(4)These investments contain a higher loan-to-cost (“LTC”) ratio and a higher interest rate, some of which interest is payment-in-kind PIK interest. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. The funded amount of these investments include PIK interest accrued. These PIK interest amounts are not included in the commitment amount for each investment.

(5)A traditional bank has or is expected to provide 60-70% of the total cost through a first mortgage construction loan. Of the remaining 30-40% of costs required to complete the project, the Company will provide 90% through a preferred equity investment, pursuant to which the Company will receive a preferred return on its investment of 6.9% per annum that will be paid out of future cash flows of the underlying facility, a 1% transaction fee and a 49.9% Profits Interest. The funded amount of these investments include interest accrued on the preferred equity investment. These interest amounts are not included in the commitment amount for each investment.

(6)The Company’s loan was repaid in full through a refinancing initiated by the Company’s partner. The investment represents the Company’s 49.9% Profits Interest which was retained during the transaction.

(7)As of September 30, 2020, this investment was pledged as collateral to the Company’s Credit Facility.

(8)The Company has commenced foreclosure proceedings against the borrower of its $14.3 million Philadelphia development property investment because it has defaulted under the loan by, among other things, failing to pay the general contractor. The total unpaid balance of the loan is $11.5 million. In addition to its development property investment, the Company has funded protective advances and recorded receivables related to accrued interest totaling $4.5 million within “Prepaid expenses and other assets” in its Consolidated Balance Sheets. As the investment was a collateral dependent loan, the Company considered the fair value of the collateral when determining the fair value of the investment and the collectability of the related protective advances and interest receivables as of September 30, 2020.

(9)The Company has commenced foreclosure proceedings against the borrower of its $14.8 million Houston development property because the borrower has defaulted under the loan by, among other things, failing to pay interest and operating expenses with respect to the property. The total unpaid balance of the loan is $14.8 million. In addition to its development property investment, the Company has funded protective advances and recorded receivables related to accrued interest totaling $1.8 million within “Prepaid expenses and other assets” in its Consolidated Balance Sheets. As the investment was a collateral dependent loan, the Company considered the fair value of the collateral when determining the fair value of the investment and the collectability of the related protective advances and interest receivables as of September 30, 2020.

(10)

The Company has re-assessed these development property investments for which either development or construction has not yet commenced and communicated our intent to forgo those projects with the respective developers. The Company and its respective developer partners on these investments are in active dialogues concerning the repayment of its outstanding principal along with any current and future accrued interest.

As of December 31, 2019, the aggregate committed principal amount of the Company’s development property investments was approximately $608.9 million and outstanding principal was $478.6 million, as described in more detail in the table below (dollars in thousands):


	Metropolitan	Total				Remaining
	Statistical Area	Investment		Funded		Unfunded
Closing Date	("MSA")	Commitment		Investment ⁽¹⁾		Commitment		Fair Value
Development property investments (includes a profits interest):
7/2/2015	Milwaukee ⁽²⁾⁽⁷⁾	$	7,650	$	7,648	$	2	$	8,884
8/14/2015	Raleigh ^(2)(7)(10)		8,792		8,789		3		8,593
10/27/2015	Austin ⁽²⁾⁽⁷⁾		8,658		8,136		522		8,099
9/20/2016	Charlotte 2 ^(2)(7)(10)		12,888		12,677		211		13,984
1/18/2017	Atlanta 3^(2)(7)(10)		14,115		13,297		818		16,130
1/31/2017	Atlanta 4 ^(2)(7)(10)		13,678		13,497		181		17,082
2/24/2017	Orlando 3 ^(2)(7)(10)		8,056		7,767		289		9,725
2/24/2017	New Orleans ⁽²⁾⁽⁷⁾		12,549		12,021		528		14,504
2/27/2017	Atlanta 5^(2)(7)(10)		17,492		17,492		—		19,970
3/1/2017	Fort Lauderdale^(2)(7)(10)		9,952		9,383		569		13,635
3/1/2017	Houston ⁽²⁾⁽⁹⁾		14,825		14,825		—		17,820
4/14/2017	Louisville 1 ^(2)(7)(10)		8,523		7,552		971		9,550
4/20/2017	Denver 1 ^(2)(7)(10)		9,806		9,616		190		10,947
4/20/2017	Denver 2 ⁽²⁾⁽⁷⁾		11,164		11,009		155		12,383
5/2/2017	Atlanta 6 ^(2)(7)(10)		12,543		12,025		518		14,744
5/2/2017	Tampa 2 ⁽²⁾⁽⁷⁾		8,091		7,644		447		9,196
5/19/2017	Tampa 3 ⁽²⁾⁽⁷⁾		9,224		8,326		898		10,086
6/12/2017	Tampa 4 ⁽²⁾⁽⁷⁾		10,266		9,614		652		12,673
6/19/2017	Baltimore 1^{(2)(4)(7)(10)}		10,775		11,010		274		13,581
6/28/2017	Knoxville^(2)(7)(10)		9,115		8,628		487		10,355
6/29/2017	Boston 1 ⁽²⁾⁽⁶⁾		—		—		—		3,361
6/30/2017	New York City 2 ^(2)(4)(10)		27,982		28,974		665		31,047
7/27/2017	Jacksonville 3 ^(2)(7)(10)		8,096		7,751		345		10,129
8/30/2017	Orlando 4⁽²⁾⁽⁷⁾		9,037		8,107		930		10,251
9/14/2017	Los Angeles 1		28,750		10,157		18,593		10,347
9/14/2017	Miami 1 ⁽³⁾		14,657		12,618		2,039		13,373
9/28/2017	Louisville 2^(2)(7)(10)		9,940		9,530		410		11,688
10/12/2017	Miami 2 ⁽⁴⁾		9,459		1,494		8,045		1,280
10/30/2017	New York City 3 ⁽⁴⁾		15,301		6,776		8,822		6,383
11/16/2017	Miami 3 ⁽³⁾⁽⁴⁾		20,168		12,086		8,413		12,898
11/21/2017	Minneapolis 1 ^(2)(7)(10)		12,674		10,684		1,990		12,290
12/1/2017	Boston 2^(2)(7)(10)		8,771		7,918		853		10,024
12/15/2017	New York City 4 ⁽³⁾		10,591		6,705		3,886		7,528
12/27/2017	Boston 3		10,174		2,757		7,417		2,674
12/28/2017	New York City 5 ⁽²⁾		16,073		13,817		2,256		16,373
2/8/2018	Minneapolis 2^(2)(7)(10))		10,543		9,904		639		11,763
3/30/2018	Philadelphia ^(2)(4)(8)		14,338		11,536		3,263		11,807
4/6/2018	Minneapolis 3 ^(2)(7)(10)		12,883		10,337		2,546		12,043
5/1/2018	Miami 9 ⁽⁴⁾		12,421		3,560		9,006		3,427
5/15/2018	Atlanta 7 ⁽³⁾		9,418		6,563		2,855		7,683
5/23/2018	Kansas City ⁽²⁾		9,968		8,235		1,733		9,663

6/7/2018	Orlando 5 ⁽²⁾		12,969		10,340		2,629		11,780
11/16/2018	Baltimore 2		9,247		757		8,490		709
3/1/2019	New York City 6		18,796		3,168		15,628		3,122
4/18/2019	New York City 7 ⁽⁴⁾		23,462		7,304		16,287		7,067
		$	553,880	$	422,034	$	135,455	$	490,651
Preferred equity investments:
6/12/2018	Los Angeles 2 ⁽⁵⁾		9,298		9,173		649		9,403
3/15/2019	Stamford ⁽²⁾⁽⁵⁾		2,904		3,064		—		4,952
5/8/2019	New York City 8 ⁽⁵⁾		21,000		21,945		—		22,359
7/11/2019	New York City 9 ⁽⁵⁾		13,095		13,526		—		13,489
8/21/2019	New York City 10 ⁽⁵⁾		8,674		8,892		—		8,830
		$	54,971	$	56,600	$	649	$	59,033

Total investments reported at fair value		$	608,851	$	478,634	$	136,104	$	549,684

(1)Represents principal balance of loan gross of origination fees. The principal balance includes interest accrued on the investment.

(2)Construction at the facility was substantially complete and/or certificate of occupancy had been received as of December 31, 2019. See Note 4, Fair Value of Financial Instruments, for information regarding recognition of entrepreneurial profit.

(3)Facility had achieved at least 40% construction completion but construction was not considered substantially complete as of December 31, 2019. See Note 4, Fair Value of Financial Instruments, for information regarding recognition of entrepreneurial profit.

(7)As of December 31, 2019, this investment was pledged as collateral to the Company’s Credit Facility.

(9)The Company has commenced foreclosure proceedings against the borrower of its $14.8 million Houston development property because the borrower has defaulted under the loan by, among other things, failing to pay interest and operating expenses with respect to the property. The total unpaid balance of the loan is $14.8 million. In addition to its development property investment, the Company has funded protective advances and recorded receivables related to accrued interest totaling $0.9 million within “Prepaid expenses and other assets” in its Consolidated Balance Sheets. As the investment was a collateral dependent loan, the Company considered the fair value of the collateral when determining the fair value of the investment and the collectability of the related protective advances and interest receivables as of December 31, 2019.

(10)	During the nine months ended September 30, 2020, the Company purchased its partner’s 50.1% Profits Interest in this investment.

Schedule of Changes in Fair Value of Investments

The following table provides a reconciliation of the funded principal to the fair market value of investments at September 30, 2020:



Funded principal	$	283,292
Adjustments:
Unamortized origination and other fees		(3,292)
Net unrealized gain (loss) on investments		36,340
Other		(86)
Fair value of investments	$	316,254

The following table provides a reconciliation of the funded principal to the fair market value of investments at December 31, 2019:



Funded principal	$	478,634
Adjustments:
Unamortized origination and other fees		(5,633)
Net unrealized gain (loss) on investments		76,767
Other		(84)
Fair value of investments	$	549,684

Real Estate Investment, Impact in Consolidated Balance Sheet , Disclosure

The following table shows the components of the real estate investments as presented in the Company’s accompanying Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019:



	September 30, 2020		December 31, 2019
Land	$	72,262	$	29,430
Building and improvements		448,796		186,295
In-place leases		16,128		8,629
Property equipment		217		122
Construction-in-progress		—		16,460
Accumulated depreciation and amortization		(23,410)		(10,092)
Self-storage real estate owned, net	$	513,993	$	230,844