10. INVESTMENT IN JOINT VENTURES

The Company has a 20% ownership interest in Sovran HHF Storage Holdings LLC (“Sovran HHF”), a joint venture that was formed in May 2008 to acquire self-storage properties that are managed by the Company. The carrying value of the Company’s investment at September 30, 2012 was $21.2 million. Twenty-five properties were acquired by Sovran HHF in 2008 for approximately $171.5 million and no additional properties have been acquired by Sovran HHF since then. In 2008, the Company contributed $18.6 million to the joint venture as its share of capital required to fund the acquisitions. In 2012 and 2011 the Company contributed an additional $1.2 million and $0.8 million, respectively, to the joint venture. As of September 30, 2012, the carrying value of the Company’s investment in Sovran HHF exceeds its share of the underlying equity in net assets of Sovran HHF by approximately $1.7 million as a result of the capitalization of certain acquisition related costs in 2008. This difference is included in the carrying value of the investment, which is assessed for other-than-temporary impairment on a periodic basis. No other-than-temporary impairments have been recorded on this investment.

The Company has a 15% ownership interest in Sovran HHF Storage Holdings II LLC (“Sovran HHF II”), a joint venture that was formed in 2011 to acquire self-storage properties that are managed by the Company. The carrying value of the Company’s investment at September 30, 2012 was $13.3 million. Twenty properties were acquired by Sovran HHF II during 2011 for approximately $166.1 million. During 2011, the Company contributed $12.8 million to the joint venture as its share of capital required to fund the acquisitions. Ten additional properties were acquired by Sovran HHF II during the nine months ended September 30, 2012 for approximately $29 million. During 2012, the Company contributed $2.3 million to the joint venture as its share of capital required to fund the acquisitions. The carrying value of this investment is assessed for other-than-temporary impairment on a periodic basis and no such impairments have been recorded on this investment.

As manager of Sovran HHF and Sovran HHF II, the Company earns a management and call center fee of 7% of gross revenues which totaled $2.2 million and $1.2 million for the nine months ended September 30, 2012 and 2011, respectively. The management and call center fees earned by the Company for the three months ended September 30, 2012 and September 30, 2011 totaled $0.8 million and $0.6 million, respectively. For the nine months ended September 30, 2012 and 2011 the Company also received acquisition fees of $0.2 million and $0.7 million, respectively, for securing purchases for Sovran HHF II in 2012 and 2011.

The Company’s share of Sovran HHF and Sovran HHF II’s income (loss) for the nine months ended September 30, 2012 and September 30, 2011 was $574,000 and ($497,000), respectively. The Company’s share of Sovran HHF and Sovran HHF II’s income (loss) for the three months ended September 30, 2012 and September 30, 2011 was $340,000 and ($637,000), respectively. Included in the Company’s share of the income of Sovran HHF II for the nine months ended September 30, 2012 and 2011 is the Company’s share of property acquisition related costs of $162,000 and $734,000, respectively.

The Company also has a 49% ownership interest in Iskalo Office Holdings, LLC, which owns the building that houses the Company’s headquarters and other tenants. The Company’s investment includes a capital contribution of $196,049. The carrying value of the Company’s investment is a liability of $0.5 million at September 30, 2012 and December 31, 2011, and is included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets.

The Company’s share of Iskalo Office Holdings, LLC’s income (loss) for the nine months ended September 30, 2012 and September 30, 2011 was $9,000 and ($59,000), respectively. The Company’s share of Iskalo Office Holdings, LLC’s (loss) for the three months ended September 30, 2012 and September 30, 2011 was ($4,000) and ($4,000), respectively.

A summary of the unconsolidated joint ventures’ financial statements as of and for the nine months ended September 30, 2012 is as follows:


(dollars in thousands)	Sovran HHF Storage Holdings LLC			Sovran HHF Storage Holdings II LLC			Iskalo Office Holdings, LLC
Balance Sheet Data:
Investment in storage facilities, net	$	160,556		$	190,986		$	—
Investment in office building		—			—			5,182
Other assets		5,007			4,517			611

Total Assets	$	165,563		$	195,503		$	5,793

Due to the Company	$	321		$	336		$	—
Mortgages payable		64,790			104,444			6,636
Other liabilities		3,228			2,174			720

Total Liabilities		68,339			106,954			7,356
Unaffiliated partners’ equity (deficiency)		77,779			75,206			(1,070	)
Company equity (deficiency)		19,445			13,343			(493	)

Total Partners’ Equity (deficiency)		97,224			88,549			(1,563	)

Total Liabilities and Partners’ Equity (deficiency)	$	165,563		$	195,503		$	5,793

Income Statement Data:
Total revenues	$	14,709		$	17,351		$	836
Depreciation and amortization		(2,770	)		(3,972	)		(175	)
Other expenses		(9,520	)		(12,780	)		(642	)

Net income	$	2,419		$	599		$	19

Included in other expenses of Sovran HHF II for the nine months ended September 30, 2012 is $1.1 million of property acquisition related costs. The Company does not guarantee the debt of Sovran HHF, Sovran HHF II, or Iskalo Office Holdings, LLC.

We do not expect to have material future cash outlays relating to these joint ventures.