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INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURE (Tables)

3 Months Ended

Mar. 31, 2022

INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

Schedule of investments in real estate ventures


		CubeSmart		Number of Stores as of				Carrying Value of Investment as of
		Ownership		March 31,		December 31,		March 31,			December 31,
Unconsolidated Real Estate Ventures		Interest		2022		2021		2022			2021
Fontana Self Storage, LLC ("Fontana") ⁽¹⁾		50%		1		1		$	14,240		$	14,225
Rancho Cucamonga Self Storage, LLC ("RCSS") ⁽¹⁾		50%		1		1			21,549			21,536
191 V CUBE LLC ("HVP V") ⁽²⁾		20%		5		5			15,515			16,080
191 IV CUBE Southeast LLC ("HVPSE") ⁽³⁾		10%		14		14			4,436			4,541
191 IV CUBE LLC ("HVP IV") ⁽⁴⁾		20%		28		28			22,177			23,223
CUBE HHF Northeast Venture LLC ("HHFNE") ⁽⁵⁾		10%		13		13			1,244			1,291
CUBE HHF Limited Partnership ("HHF") ⁽⁶⁾		50%		28		28			37,864			38,855
				90		90		$	117,025		$	119,751

(1)

On December 9, 2021, the Company completed the acquisition of LAACO, which included a 50% interest in Fontana and RCSS, each of which owns one self-storage property in California. As of the date of acquisition, the Company recognized differences between the Company’s equity investment in Fontana and RCSS and the underlying equity reflected at the venture level. As of March 31, 2022, this difference was $13.4 million and $20.0 million for Fontana and RCSS, respectively. These differences are being amortized over the expected useful life of the self-storage properties owned by the ventures.

(2)

The stores owned by HVP V are located in Florida (2), New Jersey (2) and New York (1). HVP V paid an aggregate of $143.7 million for these properties, of which $2.2 million was allocated to the value of the in-place leases. These acquisitions were funded initially through pro-rata contributions by the Company and its unaffiliated joint venture partner. The Company’s total contribution to HVP V related to these acquisitions was $22.6 million. As of March 31, 2022, HVP V had an outstanding $80.6 million secured term loan, which bears interest at SOFR plus 2.05% and matures on September 30, 2025 with an option to extend the maturity date through September 30, 2026, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement.

(3)

The stores owned by HVPSE are located in Florida (2), Georgia (8) and South Carolina (4). HVPSE paid $135.3 million for these stores, of which $7.7 million was allocated to the value of the in-place leases. The acquisition was funded primarily through the venture’s $81.6 million secured term loan. The remainder of the purchase price was contributed pro-rata by the Company and its unaffiliated joint venture partner. The Company’s total contribution to HVPSE related to this portfolio acquisition was $5.6 million. The secured loan

bears interest at LIBOR plus 1.60% and matures on March 19, 2023 with options to extend the maturity date through March 19, 2025, subject to satisfaction of certain conditions and payment of the extension fees as stipulated in the loan agreement.

(4)

The stores owned by HVP IV are located in Arizona (2), Connecticut (3), Florida (4), Georgia (2), Illinois (5), Maryland (2), Minnesota (1), Pennsylvania (1) and Texas (8). The Company’s total contribution to HVP IV in connection with these store acquisitions was $32.0 million. As of March 31, 2022, HVP IV had an outstanding $221.6 million secured loan, which bears interest at LIBOR plus 1.95% per annum, and matures on April 19, 2025.

(5)

The stores owned by HHFNE are located in Connecticut (3), Massachusetts (6), Rhode Island (2) and Vermont (2). The Company’s total contribution to HHFNE in connection with these store acquisitions was $3.8 million. As of March 31, 2022, HHFNE had an outstanding $45.0 million secured loan facility, which bears interest at LIBOR plus 1.20% per annum and matures on December 16, 2024.

(6)

The stores owned by HHF are located in North Carolina (1) and Texas (27). On October 5, 2021, HHF sold seven stores in Texas for an aggregate sales price of approximately $85.0 million. The venture recorded gains which aggregated to approximately $46.9 million in connection with the sale. As of March 31, 2022, HHF had an outstanding $105.0 million secured loan, which bears interest at a fixed rate of 2.58% per annum and matures on February 5, 2028.

Summary of the financial position of the ventures


		March 31,			December 31,
		2022			2021

Assets		(in thousands)
Storage properties, net		$	843,343		$	850,250
Other assets			32,067			34,760
Total assets		$	875,410		$	885,010

Liabilities and equity
Debt		$	527,490		$	526,972
Other liabilities			15,447			14,500
Equity
CubeSmart			83,675			86,083
Joint venture partners			248,798			257,455
Total liabilities and equity		$	875,410		$	885,010

Summary of results of operations of the ventures


		Three Months Ended March 31,
		2022			2021

		(in thousands)
Total revenues		$	24,965		$	18,823
Operating expenses			(10,743)			(8,605)
Other (expenses) income			(114)			3
Interest expense, net			(3,852)			(3,535)
Depreciation and amortization			(10,388)			(8,713)
Net loss		$	(132)		$	(2,027)
Company’s share of net income (loss)		$	294		$	20