XML 31 R15.htm IDEA: XBRL DOCUMENT
v3.25.0.1

Investments in Unconsolidated Real Estate Entities | 12 Months Ended
--- | ---
Dec. 31, 2024
Equity Method Investments and Joint Ventures [Abstract] |
Investments in Unconsolidated Real Estate Entities | INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES Investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures represent the Company's interest in preferred stock of SmartStop and Strategic Storage, an affiliate of SmartStop, and the Company's noncontrolling interest in real estate joint ventures. The Company accounts for its investments in SmartStop and Strategic Storage preferred stock, which do not have a readily determinable fair value, at the transaction price less impairment, if any. The Company accounts for its investments in joint ventures using the equity method of accounting. The Company initially records these investments at cost and subsequently adjusts for cash contributions, distributions and net equity in income or loss, which is allocated in accordance with the provisions of the applicable partnership or joint venture agreement. In these joint ventures, the Company and the joint venture partner generally receive a preferred return on their invested capital. To the extent that cash or profits in excess of these preferred returns are generated through operations or capital transactions, the Company would receive a higher percentage of the excess cash or profits, as applicable, than its equity interest. The Company separately reports investments with net equity less than zero in cash distributions in unconsolidated real estate ventures in the consolidated balance sheets. The net equity of certain joint ventures is less than zero because distributions have exceeded the Company's investment in and share of income from these joint ventures. This is generally the result of financing distributions, capital events or operating distributions that are usually greater than net income, as net income includes non-cash charges for depreciation and amortization while distributions do not. Net investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures consist of the following:
| Number of Stores |  | Equity Ownership % |  | Excess Profit % (1) |  | December 31,
|  | 2024 |  | 2023
PRISA Self Storage LLC | 85 |  | 4% |  | 4% |  | $ | 8,967 |  |  | $ | 9,435 |
HF1 Sovran HHF Storage Holdings LLC (2) | 37 |  | 49% |  | 49%-59% |  | 304,526 |  |  | 105,339 |
Storage Portfolio II JV LLC | 36 |  | 10% |  | 30% |  | (9,584) |  |  | (8,314) |
Storage Portfolio IV JV LLC | 32 |  | 10% |  | 30% |  | 47,150 |  |  | 48,184 |
Storage Portfolio I LLC | 24 |  | 34% |  | 49% |  | (43,803) |  |  | (42,487) |
PR II EXR JV LLC | 23 |  | 25% |  | 25% |  | 105,909 |  |  | 108,160 |
HF2 Sovran HHF Storage Holdings II LLC (2) | 22 |  | 49% |  | 49%-59% |  | 114,034 |  |  | 41,613 |
HF5 Life Storage-HIERS Storage LLC | 17 |  | 20% |  | 20% |  | 25,192 |  |  | 26,051 |
HF6 191 V Life Storage Holdings LLC | 17 |  | 20% |  | 20% |  | 10,821 |  |  | 12,702 |
ESS-CA TIVS JV LP | 16 |  | 55% |  | 55%-65% |  | 27,217 |  |  | 29,128 |
VRS Self Storage, LLC | 16 |  | 45% |  | 54% |  | (17,557) |  |  | (16,386) |
HF10 Life Storage HHF Wasatch Holdings LLC | 16 |  | 20% |  | 20% |  | 19,295 |  |  | 20,019 |
Other unconsolidated real estate ventures (3) (4) | 119 |  | 10%-50% |  | 10%-50% |  | 314,852 |  |  | 317,104 |
SmartStop Self Storage REIT, Inc. Preferred Stock (6) | n/a |  | n/a |  | n/a |  | 200,000 |  |  | 200,000 |
Strategic Storage Trust VI, Inc. Preferred Stock (5) | n/a |  | n/a |  | n/a |  | 150,000 |  |  | 150,000 |
Net Investments in and Cash distributions in unconsolidated real estate entities | 460 |  |  |  |  |  | $ | 1,257,019 |  |  | $ | 1,000,548 |
Investments in unconsolidated real estate entities |  |  |  |  |  |  | $ | 1,332,338 |  |  | $ | 1,071,617 |
Cash distributions in unconsolidated real estate ventures |  |  |  |  |  |  | (75,319) |  |  | (71,069) |
Net Investments in and Cash distributions in unconsolidated real estate entities |  |  |  |  |  |  | $ | 1,257,019 |  |  | $ | 1,000,548 |
(1)Includes pro-rata equity ownership share and promoted interest. (2)In November 2024, the Company acquired additional ownership interest in HF1 Sovran HHF Storage Holdings LLC and HF2 Sovran HHF Storage Holdings II LLC from its partner in the unconsolidated joint ventures for cash consideration of $251,235. The transaction increased the equity ownership percentages from 20% and 15%, respectively, to 49% in each unconsolidated joint venture. The additional investment is presented on the Company's consolidated balance sheets under investments in unconsolidated real estate entities. (3)In September 2024, the Company sold its membership interest in the Alan Jathoo JV LLC unconsolidated joint venture, which held nine stores, to its partner in such joint venture and recognized a gain of $3,406 on the transaction. This gain and the gain from the ESS Bristol Investments LLC transaction referenced below are presented in equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest on the Company's consolidated statements of operations for the year ended December 31, 2024. (4)In August 2024, the ESS Bristol Investments LLC unconsolidated joint venture sold five of its eight stores to another of the Company's unconsolidated joint ventures, and the Company recognized a gain of $10,324 for its pro rata share of the transaction. The Company then acquired its partner's membership interest in the remaining three stores held by ESS Bristol Investments LLC, which is now presented under real estate assets, net on the Company's consolidated balance sheets. (5)In May 2023, the Company invested $150,000 in shares of convertible preferred stock of Strategic Storage with a dividend rate of 8.35% per annum, subject to increase after five years. The preferred shares are generally not redeemable for three years, except in the case of a change of control or initial listing of Strategic Storage. Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities on the Company's consolidated statements of operations. (6)In October 2019, the Company invested $200,000 in shares of convertible preferred stock of SmartStop with a dividend rate of 6.25% per annum. On November 1, 2024, the dividend rate increased to 7.00% per annum, and is now subject to increase each year. The preferred shares are generally not redeemable for five years, except in the case of a change of control or initial listing of SmartStop. Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities line on the Company's consolidated statements of operations. Subsequent to year end, on February 4, 2025, the Company invested $100,000 in shares of newly issued convertible preferred stock of Strategic Storage Growth Trust III, Inc., an affiliate of SmartStop Self Storage REIT, Inc. The dividend rate for the preferred shares is 8.85% per annum, subject to increase after five years. The preferred shares are generally not redeemable for five years, except in the case of a change of control or initial listing, and are redeemable thereafter subject to a redemption premium. In accordance with ASC 810, the Company reviews all of its joint venture relationships annually to ensure that there are no entities that require consolidation. As of December 31, 2024, there were no previously unconsolidated entities that were required to be consolidated as a result of this review. The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. Equity in earnings and dividend income from unconsolidated real estate entities consists of the following:
| For the Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Equity in earnings of PRISA Self Storage LLC | $ | 3,212 |  |  | $ | 3,320 |  |  | $ | 3,272 |
Equity in earnings of HF1 Sovran HHF Storage Holdings LLC (1) | 4,977 |  |  | 1,553 |  |  | — |
Equity in earnings of Storage Portfolio II JV LLC | 2,661 |  |  | 3,094 |  |  | 3,398 |
Equity in earnings of Storage Portfolio IV JV LLC | 1,440 |  |  | 1,319 |  |  | 917 |
Equity in earnings of Storage Portfolio I LLC | 4,822 |  |  | 5,182 |  |  | 4,684 |
Equity in earnings of PR II EXR JV LLC | 2,351 |  |  | 2,227 |  |  | 1,229 |
Equity in earnings of HF2 Sovran HHF Storage Holdings II LLC (1) | 2,466 |  |  | 691 |  |  | — |
Equity in earnings of HF5 Life Storage-HIERS Storage LLC (1) | 761 |  |  | 377 |  |  | — |
Equity in earnings of HF6 191 V Life Storage Holdings LLC (1) | (891) |  |  | (735) |  |  | — |
Equity in earnings of ESS-CA TIVS JV LP | 3,574 |  |  | 3,873 |  |  | 2,753 |
Equity in earnings of VRS Self Storage, LLC | 5,186 |  |  | 5,253 |  |  | 5,401 |
Equity in earnings of HF10 Life Storage HHF Wasatch Holdings LLC (1) | 598 |  |  | 40 |  |  | — |
Equity in earnings of other minority owned stores (1) | 10,847 |  |  | 7,740 |  |  | 7,265 |
Dividend income from SmartStop preferred stock | 12,755 |  |  | 12,500 |  |  | 12,509 |
Dividend income from Strategic Storage preferred stock | 12,513 |  |  | 8,401 |  |  | — |
| $ | 67,272 |  |  | $ | 54,835 |  |  | $ | 41,428 |
(1)For the year ended December 31, 2023, the earnings of the 16 joint ventures from the Life Storage Merger are from the close of acquisition on July 20, 2023. Equity in earnings of certain of our joint ventures includes the amortization of the Company’s excess purchase price of $60,253 of these equity investments over its original basis. The excess basis is amortized over 39 years. The Company provides management services to joint ventures for a fee. Management fee revenues for affiliated real estate joint ventures for the years ended December 31, 2024, 2023 and 2022 were $38,940, $31,755 and $24,389, respectively.

X
- References No definition available. + Details
Name: | us-gaap_EquityMethodInvestmentsAndJointVenturesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
Name: | us-gaap_EquityMethodInvestmentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration