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Property Acquisitions and Dispositions | 12 Months Ended
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Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Property Acquisitions and Dispositions | PROPERTY ACQUISITIONS AND DISPOSITIONS The Life Storage Merger On July 20, 2023, the Company closed its merger with Life Storage (the “Life Storage Merger”), which included 757 wholly-owned stores and one consolidated joint venture store. Under the terms of the Life Storage Merger, Life Storage stockholders and holders of units of the Life Storage operating partnership received 0.895 of a share of common stock (or OP Unit, as applicable) of the Company for each issued and outstanding share (or operating partnership unit) of Life Storage they owned for total equity consideration of $11,602,808, based on the Company's closing share price on July 19, 2023. At closing, the Company retired $1,160,000 in balances on Life Storage's line of credit which included $375,000 that Life Storage used to pay off its private placement notes in connection with the closing of the Life Storage Merger. The Company also paid off $32,000 in secured loans. On July 25, 2023, the Company completed obligor exchange offers and consent solicitations (together the “Exchange Offers”) related to Life Storage's various senior notes. Upon the closing of the Exchange Offers, a total of $2,351,100 of Life Storage's senior notes were exchanged for senior notes of the same tenor of Extra Space Storage L.P. The remaining Life Storage senior note balances which were not exchanged total $48,900 and no longer have any financial reporting requirements or covenants. Consideration and Purchase Price Allocation The Life Storage Merger was accounted for as an asset acquisition in accordance with ASC Topic 805 which requires that the cost of an acquisition be allocated on a relative fair value basis to the assets acquired and the liabilities assumed. The following table summarizes the fair value of total consideration transferred in the Life Storage Merger:
Consideration Type | July 20, 2023
Common stock | $ | 11,353,338 |
OP units | 249,470 |
Cash for payoff of Life Storage credit facility and debt | 1,192,000 |
Transaction Costs | 55,318 |
Total consideration | $ | 12,850,127 |
The following table summarizes the estimated fair values assigned to the assets acquired and liabilities assumed:
| July 20, 2023
Real estate assets | $ | 14,587,735 |
Equity investment in joint venture partnerships | 325,250 |
Cash and other assets | 107,423 |
Intangible assets - other | 82,000 |
Trade name | 50,000 |
Unsecured senior notes | (2,106,866) |
Accounts payable, accrued expenses and other liabilities | (191,077) |
Noncontrolling interests | (4,338) |
Fair value of net assets acquired | $ | 12,850,127 |
Fair Value Measurement The estimated fair values of assets acquired and liabilities assumed were primarily based on information that was available as of the closing date of the Life Storage Merger. The methodology used to estimate the fair values to apply purchase accounting and the ongoing financial statement impact, if any, are summarized below: •Real estate assets – Real estate assets acquired were recorded at fair value using standard valuation methodologies, including the cost and market approaches. The remaining useful lives for real estate assets, excluding land, were reset to 39 years. Tenant relationships for storage leases were recorded at fair value based on estimated costs the Company avoided to replace them. Tenant relationships are amortized to expense over 18 months, which is based on the Company’s historical experience with turnover in its stores. •Equity investment in joint venture partnerships - Equity investment in joint venture partnerships were recorded at fair value based on a direct capitalization of net operating income. •Intangible assets - other – Customer relationships relating to tenant reinsurance contracts were recorded at fair value based on the income approach which estimates the potential revenue loss the Company avoided to replace them. These assets are amortized to expense over 36 months, which is based on the Company’s historical experience with average length of stay for tenants. •Trade name – Trade names were recorded at fair value based on royalty payments avoided had the trade name been owned by a third party. This is determined using market royalty rates and a discounted cash flow analysis under the relief-from-royalty method. This method incorporates various assumptions, including projected revenue growth rates, the terminal growth rate, the royalty rate to be applied, and the discount rate utilized. The trade name is an indefinite lived asset and as such is not amortized. During the year ended December 31, 2024, the Company decided to operate all stores under a single brand. As a result of that decision, the Company deemed the Life Storage trade name intangible asset to be impaired and recognized a loss for the full value of the asset. •Unsecured senior notes – Unsecured senior notes were recorded at fair value using readily available market data. The below-market value of debt is recorded as a debt discount and reported as a reduction of the unsecured senior notes, net balance on the consolidated balance sheets. The discount is amortized using the effective interest method as an increase to interest expense over the remaining terms of the unsecured senior notes. •Other assets and liabilities – The carrying values of cash, accounts receivable, prepaids and other assets, accounts payable, accrued expenses and other liabilities represented the fair values. The Company amortizes to expense intangible assets - other on a straight-line basis. The following table summarizes the accumulated amortization related to intangible assets - other:
| December 31, 2024 | For the Year Ended December 31, 2024 | For the Year Ended December 31, 2023
Intangible Assets: | Gross Carrying Amount | Accumulated Amortization | Amortization Expense | Amortization Expense
Intangible assets - other | $ | 82,000 |  | $ | 49,819 |  | $ | 34,124 |  | $ | 15,695 |
| Estimated Aggregate Amortization Expense
Intangible Assets: | 2025 | 2026
Intangible assets - other | $ | 19,833 |  | $ | 11,569 |
Store Acquisitions The following table shows the Company’s acquisitions of stores for the years ended December 31, 2024 and 2023. The table excludes purchases of raw land and improvements made to existing assets. All store acquisitions are considered asset acquisitions under ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.”
|  |  | Consideration Paid | Total
Period | Number of Stores |  | Total |  | Cash Paid |  | Loan Assumed | Finance Lease Liability | Investments in Real Estate Ventures | Net Liabilities/ (Assets) Assumed | Value of Equity Issued |  | Real estate assets
Total 2024 | 58 |  | $ | 584,168 |  |  | $ | 479,059 |  |  | $ | — |  | $ | — |  | $ | 1,853 |  | $ | 2,842 |  | $ | 100,414 |  |  | $ | 584,168 |
Total 2023 | 14 |  | $ | 147,729 |  |  | $ | 135,577 |  |  | $ | 12,000 |  | $ | — |  | $ | — |  | $ | 152 |  | $ | — |  |  | $ | 147,729 |
On September 15, 2022, the Company completed the acquisition of multiple entities doing business as Storage Express for a purchase price of $590.0 million. A portion of the consideration paid was in the form of the issuance of 619,294 OP units (a total value of $125 million) and the remainder in cash. The portfolio included 106 operating stores and eight parcels of land for future development, all located in Illinois, Indiana, Kentucky and Ohio. This acquisition did not meet the definition of a business under ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” and was therefore recorded as an asset acquisition. Other Investments On June 1, 2022, the Company completed the acquisition of Bargold Storage Systems, LLC (“Bargold”) for a purchase price of approximately $179.3 million. Bargold leases space in apartment buildings, primarily in New York City and its boroughs, builds out the space as storage units, and subleases the units to tenants. As of June 1, 2022, Bargold had approximately 17,000 storage units with an approximate occupancy of 97%. This acquisition is considered a business combination under ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The following table summarizes the total consideration transferred to acquire Bargold:
Total cash paid by the company | $ | 157,302 |
Fair value of Series D Units issued | 16,000 |
Fair value of OP Units issued | 6,000 |
Total consideration transferred | $ | 179,302 |
As part of this acquisition, the Company recorded an expense of $1,465 related to transaction costs. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date:
Cash and cash equivalents | $ | 175 |
Fixed assets | 6,411 |
Developed technology | 500 |
Trademarks | 500 |
Customer relationships | 1,870 |
Other assets | 125 |
Accounts payables and accrued liabilities assumed | (1,090) |
Nets asset acquired | 8,491 |
Goodwill | 170,811 |
Total assets acquired | $ | 179,302 |
The following table summarizes the revenues and earnings related to Bargold since the acquisition date of June 1, 2022, which are included in the Company's consolidated statement of operations for the year ended December 31, 2022:
Total revenues | $ | 9,374 |
Net income from operations | $ | 1,718 |
Pro Forma Information As noted above, during the year ended December 31, 2022, the Company acquired Bargold. The following pro forma financial information is based on the combined historical financial statements of the Company and Bargold, however, only includes revenue and presents the Company's results as if the acquisition had occurred on January 1, 2022. Net income was excluded as it was impracticable to report expenses due to the lack of historical accrual basis accounting.
| For the Year Ended December 31, 2022 |  |
| Pro Forma |  |
Total revenues | $ | 1,930,816 |  |  |
Store Dispositions During the year ended December 31, 2024, the Company closed on the sale of six stores for total consideration of $102,484. Five of the six stores had been classified as held for sale. The five stores previously held for sale had been written down, resulting in a loss of $33,662, while the sale of the sixth store resulted in a $37,344 gain. These amounts have been recognized on the Company's consolidated statements of operations at December 31, 2024, presented within gain (loss) on real estate assets held for sale and sold, net. The Company disposed of one store on May 18, 2022 and one on June 21, 2022, for a total cash consideration of approximately $38,745, resulting in a gain of approximately $14,200. Both had been classified as held for sale.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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