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INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE | 6 Months Ended
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Jun. 30, 2015
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE | 5. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE On December 10, 2013, the Company acquired a 50% ownership interest in 35 self-storage facilities located in Texas (34) and North Carolina (1) through a newly-formed joint venture (“HHF”). HHF paid $315.7 million for these facilities, of which $12.1 million was allocated to the value of the in-place lease intangible. The Company and the unaffiliated joint venture partner (collectively the “HHF Partners”), each contributed cash equal to 50% of the capital required to fund the acquisition. HHF was not consolidated as the entity was not determined to be a variable interest entity (“VIE”) and the HHF Partners have equal ownership and voting rights in the entity. The Company accounts for its unconsolidated interest in the real estate venture using the equity method. The Company’s investment in HHF is included in Investment in real estate venture, at equity on the Company’s consolidated balance sheets and losses attributed to HHF are presented in Equity in losses of real estate ventures on the Company’s consolidated statements of operations. On May 1, 2014, HHF obtained a $100 million loan secured by the 34 self-storage facilities located in Texas that are owned by the venture. There is no recourse to the Company, subject to customary exceptions to non-recourse provisions. The loan bears interest at 3.59% per annum and matures on April 30, 2021. This financing completed the planned capital structure of HHF and proceeds (net of closing costs) of $99.2 million were distributed proportionately to the partners. The amounts reflected in the following table are based on the historical financial information of the real estate venture. The following is a summary of the financial position of the HHF venture as of June 30, 2015 and December 31, 2014 (in thousands):
|  | June 30, |  | December 31, |
|  | 2015 |  | 2014 |
Assets |  |  |  |  |  |  |
Storage facilities, net |  | $ | 284,665 |  | $ | 291,357 |
Other assets |  |  | 4,447 |  |  | 5,786 |
Total assets |  | $ | 289,112 |  | $ | 297,143 |
Liabilities and equity |  |  |  |  |  |  |
Other liabilities |  | $ | 4,370 |  | $ | 5,725 |
Debt |  |  | 100,000 |  |  | 100,000 |
Equity |  |  |  |  |  |  |
CubeSmart |  |  | 92,371 |  |  | 95,709 |
Joint venture partner |  |  | 92,371 |  |  | 95,709 |
Total liabilities and equity |  | $ | 289,112 |  | $ | 297,143 |
The following is a summary of results of operations of the real estate venture for the three and six months ended June 30, 2015 and 2014 (in thousands):
|  | Three Months Ended June 30, |  | Six Months Ended June 30, |
|  | 2015 |  | 2014 |  | 2015 |  | 2014 |
Total revenues |  | $ | 7,465 |  | $ | 6,500 |  | $ | 14,525 |  | $ | 13,020 |
Operating expenses |  |  | 3,174 |  |  | 2,842 |  |  | 6,227 |  |  | 5,621 |
Interest expense, net |  |  | 931 |  |  | 610 |  |  | 1,862 |  |  | 610 |
Depreciation and amortization |  |  | 3,560 |  |  | 6,506 |  |  | 7,112 |  |  | 12,985 |
Net loss |  |  | (200) |  |  | (3,458) |  |  | (676) |  |  | (6,196) |
Company’s share of net loss |  |  | (100) |  |  | (1,729) |  |  | (338) |  |  | (3,098) |

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- 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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=35687916&loc=d3e32847-111569 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=35687916&loc=d3e32787-111569 + Details
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