Investment in Storage Facilities and Intangible Assets

3 Months Ended

Mar. 31, 2023

Investment in Storage Facilities and Intangible Assets

5. INVESTMENT IN STORAGE FACILITIES AND INTANGIBLE ASSETS

The following summarizes our activity in storage facilities during the three months ended March 31, 2023:


(dollars in thousands)
Cost:
Beginning balance	$	8,171,806
Improvements and equipment additions		22,365
Net increase in construction in progress		3,232
Dispositions		(1,406	)
Ending balance	$	8,195,997
Accumulated Depreciation:
Beginning balance	$	1,170,520
Additions during the period		45,722
Dispositions		(894	)
Ending balance	$	1,215,348

The Company measures the fair value of in-place customer lease intangible assets based on the Company’s experience with customer turnover and the cost to replace the in-place leases. The Company amortizes in-place customer leases on a straight-line basis over 12 months (the estimated future benefit period). The Company measures the value of trade names, which have an indefinite life and are not amortized, by calculating discounted cash flows utilizing the relief from royalty method.

In-place customer leases are included in other assets on the Company’s consolidated balance sheets as follows:


(Dollars in thousands)	March 31, 2023			December 31, 2022
In-place customer leases	$	118,216		$	118,216
Accumulated amortization		(116,058	)		(114,005	)
Net carrying value at the end of period	$	2,158		$	4,211

Amortization expense related to in-place customer leases was $2.1 million and $5.6 million for the three months ended March 31, 2023 and 2022, respectively, and is included in depreciation and amortization expense in the consolidated statements of operations.