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INVESTMENT ACTIVITY
 3 Months Ended
Mar. 31, 2013
INVESTMENT ACTIVITY  
INVESTMENT ACTIVITY

4.  INVESTMENT ACTIVITY

 

2013 Acquisitions

 

During the three months ended March 31, 2013, the Company acquired one facility located in Arizona for a purchase price of approximately $6.9 million.  In connection with this acquisition, the Company allocated a portion of the purchase price to the intangible value of in-place leases which aggregated $0.6 million.   The estimated life of these in-place leases is 12 months and the amortization expense that was recognized during the three months ended March 31, 2013 was approximately $0.1 million.

 

Development

 

During the three months ended March 31, 2013, the Company incurred development costs of approximately $2.7 million.  To-date, the Company has incurred approximately $7.4 million in costs.  These costs are capitalized to construction in progress while under development and are reflected in Storage facilities on the Company’s consolidated balance sheets.

 

2012 Acquisitions

 

During 2012, as part of the $560 million Storage Deluxe transaction involving 22 Class A self-storage facilities located primarily in the greater New York City area, the Company acquired the final six properties with a purchase price of approximately $201.9 million. The six properties purchased are located in New York and Connecticut.  In connection with the acquisitions, the Company allocated a portion of the purchase price to the intangible value of in-place leases which aggregated $12.3 million.  The estimated life of these in-place leases is 12 months and the amortization expense that was recognized during the three months ended March 31, 2013 was approximately $2.7 million.   In connection with the six acquired facilities, the Company assumed mortgage debt, and recorded the debt at a fair value of $93.1 million, which includes an outstanding principal balance totaling $88.9 million and a net premium of $4.2 million in addition to the face value of the assumed debt to reflect the fair values of the debt at the time of assumption.

 

On September 28, 2012, the Company purchased, from its joint venture partner, the remaining 50% ownership in a partnership that owned nine storage facilities in Pennsylvania, Virginia, New York, New Jersey and Florida, collectively the HSRE Venture (“HSREV”), for cash of $21.7 million. In addition, upon taking control of these assets, the Company repaid $59.3 million of mortgage loans related to the properties.  Following the purchase, the Company wholly owned the nine storage facilities which were unencumbered and had a fair value of $102 million at acquisition.  In connection with this acquisition, the Company allocated a portion of the fair value to the intangible value of in-place leases which aggregated $8.3 million. The estimated life of these in-place leases is 12 months and the amortization expense that was recognized during the three months ended March 31, 2013 was approximately $2.1 million.

 

During 2012, the Company acquired an additional 22 self-storage facilities located throughout the United States for an aggregate purchase price of approximately $128.4 million.  In connection with these acquisitions, the Company allocated a portion of the purchase price to the intangible value of in-place leases which aggregated $13.2 million. The estimated life of these in-place leases is 12 months and the amortization expense that was recognized during the three months ended March 31, 2013 was approximately $3.1 million.  In connection with two of the acquired facilities, the Company assumed mortgage debt, and recorded the debt at a fair value of $13.9 million, which includes an outstanding principal balance totaling $13.4 million and a net premium of $0.5 million in addition to the face value of the assumed debt to reflect the fair values of the debt at the time of assumption.