| Summary of Company's Unconsolidated Joint Ventures |
A summary of the Company’s unconsolidated joint ventures is as follows:
|
Venture
|
|
Number of
Properties at
June 30,
2020
|
|
|
Company
common
ownership
interest at
June 30,
2020
|
|
|
Carrying value
of investment
at June 30,
2020
|
|
|
Carrying value of
investment at
December 31,
2019
|
|
|
Sovran HHF Storage Holdings LLC (“Sovran HHF”)1
|
|
57
|
|
|
20%
|
|
|
$81.6 million
|
|
|
$83.1 million
|
|
|
Sovran HHF Storage Holdings II LLC (“Sovran HHF II”)
|
|
30
|
|
|
15%
|
|
|
$14.0 million
|
|
|
$13.9 million
|
|
|
191 III Life Storage Holdings LLC (“191 III”)2
|
|
|
—
|
|
|
20%
|
|
|
|
—
|
|
|
$8.9 million
|
|
|
Life Storage-SERS Storage LLC (“SERS”)
|
|
3
|
|
|
20%
|
|
|
$3.0 million
|
|
|
$3.2 million
|
|
|
Life Storage-HIERS Storage LLC (“HIERS”)3
|
|
17
|
|
|
20%
|
|
|
$14.5 million
|
|
|
$14.9 million
|
|
|
Iskalo Office Holdings, LLC (“Iskalo”)4
|
|
N/A
|
|
|
49%
|
|
|
($0.3 million)
|
|
|
($0.4 million)
|
|
|
Bluebird Sanford Storage LP ("Sanford")5
|
|
1
|
|
|
15%
|
|
|
$0.3 million
|
|
|
$0.3 million
|
|
|
Bluebird Ingram Storage LP ("Ingram")6
|
|
1
|
|
|
15%
|
|
|
$1.1 million
|
|
|
$1.2 million
|
|
|
Life Storage Spacemax, LLC ("Spacemax")7
|
|
6
|
|
|
40%
|
|
|
$16.9 million
|
|
|
$16.1 million
|
|
|
Life Storage Virtus, LLC ("Virtus")8
|
|
1
|
|
|
20%
|
|
|
$1.6 million
|
|
|
|
—
|
|
|
Joint ventures with properties in development stage9
|
|
5
|
|
|
Various
|
|
|
$2.9 million
|
|
|
$3.1 million
|
|
|
Other unconsolidated joint ventures (6 joint ventures)
|
|
6
|
|
|
Various
|
|
|
$11.8 million
|
|
|
$10.3 million
|
|
|
1
|
As of June 30, 2020, 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
|
191 III owned six self-storage facilities in California. The Company acquired these six self-storage facilities and related assets from 191 III in March 2020 for total contractual consideration of $124.2 million, which is net of the Company’s share of 191 III’s gain resulting from the transaction. In connection with this transaction, the non-recourse mortgage loan previously entered into by 191 III was settled. See Note 5 for additional information regarding this transaction. As 191 no longer operates any self-storage facilities subsequent to the sale of the six self-storage facilities to the Company, the Company received a distribution of $8.4 million in March 2020 as the Company’s return of its remaining investment in 191 III. 191 III is expected to be dissolved later in 2020.
|
|
3
|
In November 2019, HIERS acquired five self-storage facilities for a total of $56.3 million. In connection with the acquisition of these self-storage facilities, HIERS entered into $27.6 million of mortgage debt which is secured by the self-storage facilities acquired. During 2019, the Company contributed $5.7 million as is its share of capital to fund the acquisition of these five self-storage facilities.
|
|
4
|
Iskalo owns the building that houses the Company’s headquarters. The Company paid rent to Iskalo of $0.6 million during each of the six months ended June 30, 2020 and 2019.
|
|
5
|
In March 2019, the Company executed a joint venture agreement, Bluebird Sanford Storage LP, with an unrelated third-party with the purpose of acquiring and operating a self-storage facility. During 2019, Sanford acquired a self-storage facility for a total of $4.9 million. In connection with this acquisition, Sanford entered into $3.2 million of non-recourse mortgage debt. During 2019, the Company contributed $0.3 million to Sanford as the Company’s share of the initial capital investment in the joint venture.
|
|
6
|
In March 2019, the Company executed a joint venture agreement, Bluebird Ingram Storage, LP, with an unrelated third-party with the purpose of acquiring, further developing, and operating a self-storage facility. During 2019, Ingram acquired a self-storage facility for a total of $20.7 million. In connection with this acquisition, Ingram entered into $17.6 million of non-recourse mortgage debt. During 2019, the Company contributed $1.3 million to Ingram as the Company’s share of the initial capital investment in the joint venture.
|
|
7
|
In August 2019, the Company executed a joint venture agreement, Life Storage Spacemax, LLC, with an unrelated third-party with the purpose of acquiring and operating self-storage facilities. During 2019, Spacemax acquired six self-storage facilities for a total of $82.7 million. In connection with this acquisition, Spacemax entered into $42.0 million of non-recourse mortgage debt. During 2019, the Company contributed $16.3 million to Spacemax as the Company’s share of the initial capital investment in the joint venture.
|
|
8
|
In February 2020, the Company executed a joint venture agreement, Life Storage Virtus, LLC, with an unrelated third-party with the purpose of acquiring and operating a self-storage facility. During the first quarter of 2020, Virtus acquired a self-storage facility for a total of $21.7 million. In connection with this acquisition, Virtus entered into $14.0 million of non-recourse mortgage debt. During 2020, the Company contributed $1.7 million to Virtus as the Company’s share of the initial capital investment in the joint venture.
|
|
9
|
The Company has entered into five separate joint ventures, two of which are developing self-storage facilities in Ontario, Canada, and three of which are developing self-storage facilities in the New York City market. The Company has contributed an aggregate total of $2.9 million as its share of capital to these joint ventures.
|
|
| 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, 2020
|
|
|
Three Months
Ended
June 30, 2019
|
|
|
Six Months
Ended
June 30, 2020
|
|
|
Six Months
Ended
June 30, 2019
|
|
|
Sovran HHF
|
|
$
|
861
|
|
|
$
|
880
|
|
|
$
|
1,783
|
|
|
$
|
1,709
|
|
|
Sovran HHF II
|
|
|
446
|
|
|
|
477
|
|
|
|
901
|
|
|
|
890
|
|
|
Other unconsolidated joint ventures
|
|
|
(337
|
)
|
|
|
(247
|
)
|
|
|
(598
|
)
|
|
|
(678
|
)
|
|
|
|
$
|
970
|
|
|
$
|
1,110
|
|
|
$
|
2,086
|
|
|
$
|
1,921
|
|
|
| Summary of Unconsolidated Joint Ventures' Financial Statements |
A summary of the combined unconsolidated joint ventures’ financial statements as of and for the six months ended June 30, 2020 is as follows:
|
(dollars in thousands)
|
|
|
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
Investment in storage facilities, net
|
|
$
|
1,235,973
|
|
|
Investment in office building, net
|
|
|
4,246
|
|
|
Other assets
|
|
|
27,432
|
|
|
Total Assets
|
|
$
|
1,267,651
|
|
|
Due to the Company
|
|
$
|
796
|
|
|
Mortgages payable
|
|
|
544,321
|
|
|
Other liabilities
|
|
|
23,068
|
|
|
Total Liabilities
|
|
$
|
568,185
|
|
|
Unaffiliated partners’ equity
|
|
|
552,062
|
|
|
Company equity
|
|
|
147,404
|
|
|
Total Partners’ Equity
|
|
|
699,466
|
|
|
Total Liabilities and Partners’ Equity
|
|
$
|
1,267,651
|
|
|
Income Statement Data:
|
|
|
|
|
|
Total revenues
|
|
$
|
66,337
|
|
|
Property operating expenses
|
|
|
(20,367
|
)
|
|
Administrative, management and call center fees
|
|
|
(5,112
|
)
|
|
Gain on disposal of self-storage facilities
|
|
|
33,038
|
|
|
Depreciation and amortization of customer list
|
|
|
(15,706
|
)
|
|
Amortization of financing fees
|
|
|
(402
|
)
|
|
Income tax expense
|
|
|
(162
|
)
|
|
Interest expense
|
|
|
(12,055
|
)
|
|
Net income
|
|
$
|
45,571
|
|
|