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INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | 12 Months Ended
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Dec. 31, 2022
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | 5. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES ​ The Company’s investments in unconsolidated real estate ventures are summarized as follows (dollars in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | CubeSmart | ​ | Number of Stores as of | ​ | Carrying Value of Investment as of
​ | ​ | Ownership | ​ | December 31, | ​ | December 31,
Unconsolidated Real Estate Ventures |  | Interest | ​ | 2022 | ​ | 2021 |  | 2022 | ​ | 2021
Fontana Self Storage, LLC ("Fontana") (1) | ​ | 50% | ​ | 1 | ​ | 1 | ​ | $ | 13,789 | ​ | $ | 14,225
Rancho Cucamonga Self Storage, LLC ("RCSS") (1) | ​ | 50% | ​ | 1 | ​ | 1 | ​ | ​ | 20,994 | ​ | ​ | 21,536
191 V CUBE LLC ("HVP V") (2) | ​ | 20% | ​ | 6 | ​ | 5 | ​ | ​ | 14,318 | ​ | ​ | 16,080
191 IV CUBE Southeast LLC ("HVPSE") (3) | ​ | 10% | ​ | - | ​ | 14 | ​ | ​ | — | ​ | ​ | 4,541
191 IV CUBE LLC ("HVP IV") | ​ | 20% | ​ | 28 | ​ | 28 | ​ | ​ | 19,853 | ​ | ​ | 23,223
CUBE HHF Northeast Venture LLC ("HHFNE") | ​ | 10% | ​ | 13 | ​ | 13 | ​ | ​ | 1,101 | ​ | ​ | 1,291
CUBE HHF Limited Partnership ("HHF") | ​ | 50% | ​ | 28 | ​ | 28 | ​ | ​ | 35,938 | ​ | ​ | 38,855
​ | ​ | ​ | ​ | 77 | ​ | 90 | ​ | $ | 105,993 | ​ | $ | 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 December 31, 2022, this difference was $13.1 million for Fontana and $19.6 million for RCSS. These differences are being amortized over the expected useful life of the self-storage properties owned by the ventures.
​
| (2) | During the year ended December 31, 2022, HVP V acquired one store located in New Jersey for a purchase price of $33.2 million. The Company contributed $0.1 million towards this purchase, which was primarily funded by HVP V's secured term loan.
​
| (3) | On August 30, 2022, HVPSE sold all 14 of its stores to an unaffiliated third-party buyer for an aggregate sales price of $235.0 million. The stores owned by HVPSE were located in Florida (2), Georgia (8) and South Carolina (4). As of the transaction date, HVPSE had an $81.6 million secured term loan, which was repaid in full at the time of the sale. Net proceeds to the venture from the transaction totaled $150.1 million, of which $49.9 million were distributed to the Company. The venture recorded gains which aggregated to approximately $114.1 million in connection with the sale. As of December 31, 2022, the venture retained cash of $3.5 million to pay venture-level expenses. After such expenses are paid, any remaining proceeds will be distributed to the venture’s partners per the terms of the operating agreement.
​ Based upon the facts and circumstances at acquisition of Fontana and RCSS and formation of HVP V, HVPSE, HVP IV, HHFNE, and HHF (the “Ventures”), the Company determined that the Ventures are not VIEs in accordance with the accounting standard for the consolidation of VIEs. As a result, the Company used the voting interest model under the accounting standard for consolidation in order to determine whether to consolidate the Ventures. Based upon each member's substantive participating rights over the activities of each entity as stipulated in the operating agreements, the Ventures are not consolidated by the Company and are accounted for under the equity method of accounting. The Company’s investments in the Ventures are included in Investment in real estate ventures, at equity on the Company’s consolidated balance sheets and the Company’s earnings from its investments in the Ventures are presented in Equity in earnings of real estate ventures on the Company’s consolidated statements of operations. ​ The amounts reflected in the following table are based on the historical financial information of the Ventures. The following is a summary of the financial position of the Ventures as of December 31, 2022 and 2021: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31,
​ | ​ | 2022 |  | 2021
Assets | ​ | (in thousands)
Storage properties, net | ​ | $ | 741,563 | ​ | $ | 850,250
Other assets | ​ |  | 11,708 | ​ |  | 34,760
Total assets | ​ | $ | 753,271 | ​ | $ | 885,010
​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and equity | ​ | ​ | ​ | ​ | ​ | ​
Debt | ​ | $ | 468,783 | ​ | $ | 526,972
Other liabilities | ​ | ​ | 16,626 | ​ | ​ | 14,500
Equity | ​ | ​ | ​ | ​ | ​ | ​
CubeSmart | ​ |  | 73,289 | ​ | ​ | 86,083
Joint venture partners | ​ |  | 194,573 | ​ | ​ | 257,455
Total liabilities and equity | ​ | $ | 753,271 | ​ | $ | 885,010
​ The following is a summary of results of operations of the Ventures for the years ended December 31, 2022, 2021 and 2020: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the year ended December 31, |
​ |  | 2022 |  | 2021 |  | 2020 |
​ | ​ | (in thousands) | ​
Total revenues | ​ | $ | 102,910 | ​ | $ | 88,449 | ​ | $ | 67,239 | ​
Operating expenses | ​ |  | (42,408) | ​ |  | (37,967) | ​ |  | (30,755) | ​
Other expenses | ​ | ​ | (484) | ​ | ​ | (1,138) | ​ | ​ | (430) | ​
Interest expense, net | ​ |  | (15,568) | ​ |  | (12,031) | ​ |  | (11,585) | ​
Depreciation and amortization | ​ |  | (36,866) | ​ |  | (37,805) | ​ |  | (33,086) | ​
Gains from sale of real estate, net | ​ | ​ | 114,107 | ​ | ​ | 46,966 | ​ | ​ | — | ​
Net income (loss) | ​ | $ | 121,691 | ​ | $ | 46,474 | ​ | $ | (8,617) | ​
Company’s share of net income (loss) | ​ | $ | 48,877 | ​ | $ | 25,275 | ​ | $ | 178 | ​
​ ​

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI https://asc.fasb.org/topic&trid=2196965 + Details
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