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Investment in Joint Ventures (Tables)
 6 Months Ended
Jun. 30, 2017
Equity Method Investments and Joint Ventures [Abstract]  
Summary of Company's Unconsolidated Joint Ventures

A summary of the Company’s unconsolidated joint ventures is as follows:

 

Venture

    Number of
Properties		      Company
common
ownership
interest		     Carrying value of
investment at
Jun. 30, 2017		      Carrying value of
investment at
Dec. 31, 2016		  

Sovran HHF Storage Holdings LLC (“Sovran HHF”)1

      57        20 %    $ 86.5 million      $ 43.8 million  

Sovran HHF Storage Holdings II LLC (“Sovran HHF II”)2

      30        15 %    $ 13.4 million      $ 13.5 million  

191 III Holdings LLC (“191 III”)3

      6        20 %    $ 10.0 million      $ 0.7 million  

Life Storage-SERS Storage LLC (“SERS”)4

      0        20 %    $ 0.2 million        N/A  

Iskalo Office Holdings, LLC (“Iskalo”)5

      N/A        49 %    ($ 0.4 million )     ($ 0.4 million ) 

Urban Box Coralway Storage, LLC (“Urban Box”)6

      1        85 %    $ 4.1 million      $ 4.1 million  

SNL/Orix 1200 McDonald Ave., LLC (“McDonald”)7

      1        5 %    $ 2.7 million      $ 2.7 million  

SNL Orix Merrick, LLC (“Merrick”)8

      1        5 %    $ 2.5 million      $ 2.5 million  

Review Avenue Partners, LLC (“RAP”)9

      1        40 %    $ 12.0 million        N/A  

N 32nd Street Self Storage, LLC (“N32”)10

      1        46 %    $ 1.3 million        N/A  

 

1 Sovran HHF owns self-storage facilities in Arizona (11), Colorado (4), Florida (3), Georgia (1), Kentucky (2), Nevada (5), New Jersey (2), Ohio (6), Pennsylvania (1), Tennessee (2) and Texas (20). In June 2017, Sovran HHF acquired 18 self-storage facilities for $330 million in Arizona, Nevada and Tennessee. In connection with this acquisition, Sovran HHF entered into $135 million of mortgage debt which is secured by 16 of the self-storage facilities acquired. During the six months ended June 30, 2017, the Company contributed $40.0 million as its share of capital to fund the acquisition and an additional $3.2 million to fund the repayment of certain mortgages held by the joint venture. During the six months ended June 30, 2017, the Company received $1.7 million of distributions from Sovran HHF. As of June 30, 2017, 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.

 

2 Sovran HHF II owns self-storage facilities in New Jersey (17), Pennsylvania (3), and Texas (10). During the six months ended June 30, 2017, the Company received $0.9 million of distributions from Sovran HHF II.

 

3 191 III owns six self-storage facilities in California. During the six months ended June 30, 2017, 191 III acquired these six self-storage facilities for a total of $104.1 million. In connection with the acquisition of these self-storage facilities, 191 III entered into $57.2 million of mortgage debt which is secured by the self-storage facilities acquired. During 2017 and 2016, the Company contributed $9.5 million and $0.7 million, respectively, as its share of capital to fund these acquisitions. During the six months ended June 30, 2017, the Company received $0.2 million of distributions from 191 III.

 

4 In May 2017, the Company executed a joint venture agreement, Life Storage-SERS Storage LLC (“SERS”), with an unrelated third party with the purpose of acquiring and operating self-storage facilities. During the six months ended June 30, 2017, the Company contributed $0.2 million as its share of capital to SERS. At June 30, 2017, SERS is under contract to acquire three self-storage facilities for a total of $39.0 million, of which the Company is committed to contribute up to $7.8 million. The Company expects SERS to enter into mortgage debt to fund a portion of the acquisition of these three self-storage facilities. The purchase of these facilities by SERS is subject to customary conditions to closing, and there is no assurance that the facilities will be acquired.

 

5 Iskalo owns the buildings that houses the Company’s headquarters and other tenants. The Company paid rent to Iskalo of $0.6 million and $0.5 million during the six months ended June 30, 2017 and 2016, respectively. During the six months ended June 30, 2017, the Company received $0.1 million of distributions from Iskalo.

 

6 Urban Box is currently developing a self-storage facility in Florida.

 

7 McDonald is currently developing a self-storage facility in New York. During 2016, the Company contributed $0.4 million of common capital and $2.3 million of preferred capital to McDonald as its share of capital to develop the property. McDonald entered into a non-recourse mortgage loan in order to finance the future development costs.

 

8 Merrick is currently developing a self-storage facility in New York. During 2016, the Company contributed $0.4 million of common capital and $2.1 million of preferred capital to Merrick as its share of capital to develop the property. Merrick has entered into a non-recourse mortgage loan in order to finance the future development costs.

 

9 In January 2017, the Company executed a joint venture agreement, Review Avenue Partners, LLC (“RAP”), with an unrelated third party. The Company contributed $12.5 million of common capital to RAP during the six months ended June 30, 2017. RAP is currently operating a self-storage property in New York.

 

10 In April 2017, the Company executed a joint venture agreement, N 32nd Street Self Storage, LLC (“N32”), with an unrelated third party. The Company contributed $1.3 million of common capital to N32 during the six months ended June 30, 2017. N32 is currently developing a self-storage property in Arizona.
Company's Share of Unconsolidated Joint Ventures' Income (Loss)

The Company’s share of the unconsolidated joint ventures’ income (loss) is as follows:

 

(dollars in thousands)

Venture

    Three Months
Ended 
June 30, 2017		      Three Months
Ended 
June 30, 2016		      Six Months
Ended 
June 30, 2017		      Six Months
Ended 
June 30, 2016		  

Sovran HHF

    $ 624      $ 570      $ 1,162      $ 1,078  

Sovran HHF II

      362        370        702        708  

191 III

      (10 )       —          25        —    

Urban Box

      —          4        —          14  

RAP

      (255 )       —          (501 )       —    

Iskalo

      64        54        118        113  
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 785      $ 998      $ 1,506      $ 1,913  
  

 

 

     

 

 

     

 

 

     

 

 

  

Summary of Unconsolidated Joint Ventures' Financial Statements

A summary of the unconsolidated joint ventures’ financial statements as of and for the six months ended June 30, 2017 is as follows:

 

(dollars in thousands)

  

Balance Sheet Data:

 

Investment in storage facilities, net

    $ 1,034,265  

Investment in office building, net

      4,919  

Other assets

      24,401  
  

 

 

  

Total Assets

    $ 1,063,585  
  

 

 

  

Due to the Company

    $ 1,056  

Mortgages payable

      430,733  

Other liabilities

      12,059  
  

 

 

  

Total Liabilities

    $ 443,848  

Unaffiliated partners’ equity

      489,344  

Company equity

      130,393  
  

 

 

  

Total Partners’ Equity

      619,737  
  

 

 

  

Total Liabilities and Partners’ Equity

    $ 1,063,585  
  

 

 

  

Income Statement Data:

   

Total revenues

    $ 41,402  

Property operating expenses

      (13,793 ) 

Administrative, management and call center fees

      (3,494 ) 

Depreciation and amortization of customer list

      (8,437 ) 

Amortization of financing fees

      (325 ) 

Income tax expense

      (123 ) 

Interest expense

      (5,626 ) 
  

 

 

  

Net income

    $ 9,604