10. INVESTMENT IN JOINT VENTURES

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

Venture	Number of Properties at Mar. 31, 2018	Company common ownership interest at Mar. 31, 2018	Carrying value of investment at Mar. 31, 2018	Carrying value of investment at Dec. 31, 2017
Sovran HHF Storage Holdings LLC (“Sovran HHF”)¹	57	20%	$84.6 million	$85.1 million
Sovran HHF Storage Holdings II LLC (“Sovran HHF II”)²	30	15%	$13.2 million	$13.3 million
191 III Holdings LLC (“191 III”)³	6	20%	$9.4 million	$9.4 million
Life Storage-SERS Storage LLC (“SERS”)⁴	3	20%	$3.6 million	$3.6 million
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%	$4.4 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%	$11.4 million	$11.5 million
N 32nd Street Self Storage, LLC (“N32”)¹⁰	1	46%	$1.3 million	$1.3 million

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 three months ended March 31, 2018, the Company contributed $0.2 million as its share of capital to the joint venture. During the three months ended March 31, 2018, the Company received $1.4 million of distributions from Sovran HHF. As of March 31, 2018, 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 three months ended March 31, 2018, the Company received $0.5 million of distributions from Sovran HHF II.

191 III owns six self-storage facilities in California. During 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 the three months ended March 31, 2018, the Company contributed $0.1 million as its share of capital to the joint venture. During the three months ended March 31, 2018, the Company received $0.1 million of distributions from 191 III.

⁴

SERS owns three self-storage facilities in Georgia. During 2017, SERS acquired these three self-storage facilities for a total of $39.1 million. In connection with the acquisition of these self-storage facilities, SERS entered into $22.0 million of mortgage debt which is secured by the self-storage facilities acquired. During the three months ended March 31, 2018, the Company did not make any contributions to SERS and distributions received from SERS were minimal.

⁵

Iskalo owns the building that houses the Company’s headquarters and other tenants. The Company paid rent to Iskalo of $0.3 million and $0.3 million during the three months ended March 31, 2018 and 2017, respectively. During the three months ended March 31, 2018, the Company received $0.1 million of distributions from Iskalo.

⁶	Urban Box is currently developing a self-storage facility in Florida. During the three months ended March 31, 2018, the Company contributed $0.3 million to Urban Box as its share of capital to the joint venture.

⁷	McDonald is currently developing a self-storage facility in New York. McDonald has entered into a non-recourse mortgage loan with $6.7 million of principal outstanding at March 31, 2018.

⁸	Merrick owns a self-storage facility in New York. Merrick has entered into a non-recourse mortgage loan with $10.4 million of principal outstanding at March 31, 2018.

⁹	RAP owns a self-storage facility in New York. The Company contributed $0.1 million of common capital to RAP during the three months ended March 31, 2018.

¹⁰	N32 is currently developing a self-storage facility in Arizona.

Based on the facts and circumstances of each of the Company’s joint ventures, the Company has determined that none of the joint ventures are a variable interest entity (VIE) in accordance with ASC 810, Consolidation. As a result, the Company used the voting model under ASC 810 to determine whether or not to consolidate the joint ventures. Based upon each member’s substantive participation rights over the activities as stipulated in the joint venture agreements, none of the joint ventures are consolidated by the Company. Due to the Company’s significant influence over the operations of each of the joint ventures, all joint ventures are accounted for under the equity method of accounting.

The carrying values of the Company’s investments in joint ventures are assessed for other-than-temporary impairment on a periodic basis and no such impairments have been recorded on any of the Company’s investments in joint ventures.

The Company earns management and/or call center fees ranging from 6% to 7% of joint venture gross revenues as property manager of the self-storage facilities owned by HHF, HHF II, 191 III, SERS, RAP and Merrick. These fees, which are included in other operating income in the consolidated statements of operations, totaled $1.9 million and $1.3 million for the three months ended March 31, 2018 and 2017, respectively. The Company will also earn management fees upon commencement of the operation of storage facilities owned by Urban Box, McDonald, and N32.

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

(dollars in thousands) Venture	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
Sovran HHF	$	689		$	538
Sovran HHF II		368			340
191 III		18			35
SERS		62			—
RAP		(216	)		—
Merrick		(16	)		(246	)
Iskalo		67			54
	$	972		$	721

A summary of the combined unconsolidated joint ventures’ financial statements as of and for the three months ended March 31, 2018 is as follows:

(dollars in thousands)
Balance Sheet Data:
Investment in storage facilities, net	$	1,074,836
Investment in office building, net		4,761
Other assets		14,172
Total Assets	$	1,093,769
Due to the Company	$	900
Mortgages payable		463,930
Other liabilities		6,835
Total Liabilities	$	471,665
Unaffiliated partners’ equity		489,409
Company equity		132,695
Total Partners’ Equity		622,104
Total Liabilities and Partners’ Equity	$	1,093,769
Income Statement Data:
Total revenues	$	27,377
Property operating expenses		(8,677	)
Administrative, management and call center fees		(2,135	)
Depreciation and amortization of customer list		(6,467	)
Amortization of financing fees		(374	)
Income tax expense		(77	)
Interest expense		(4,121	)
Net income	$	5,526

The Company does not guarantee the debt of any of its equity method investees.

We do not expect to have material future cash outlays relating to these joint ventures outside our share of capital for future acquisitions of properties and our share of the payoff of secured debt held by these joint ventures.