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INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | 9 Months Ended
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Sep. 30, 2023
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 | ​ | September 30, | ​ | December 31, | ​ | September 30, | ​ | December 31,
Unconsolidated Real Estate Ventures |  | Interest | ​ | 2023 | ​ | 2022 |  | 2023 | ​ | 2022
Fontana Self Storage, LLC ("Fontana") (1) | ​ | 50% | ​ | 1 | ​ | 1 | ​ | $ | 13,628 | ​ | $ | 13,789
Rancho Cucamonga Self Storage, LLC ("RCSS") (1) | ​ | 50% | ​ | 1 | ​ | 1 | ​ | ​ | 20,758 | ​ | ​ | 20,994
191 V CUBE LLC ("HVP V") | ​ | 20% | ​ | 6 | ​ | 6 | ​ | ​ | 13,132 | ​ | ​ | 14,318
191 IV CUBE LLC ("HVP IV") | ​ | 20% | ​ | 28 | ​ | 28 | ​ | ​ | 17,596 | ​ | ​ | 19,853
CUBE HHF Northeast Venture LLC ("HHFNE") | ​ | 10% | ​ | 13 | ​ | 13 | ​ | ​ | 998 | ​ | ​ | 1,101
CUBE HHF Limited Partnership ("HHF") | ​ | 50% | ​ | 28 | ​ | 28 | ​ | ​ | 33,558 | ​ | ​ | 35,938
​ | ​ | ​ | ​ | 77 | ​ | 77 | ​ | $ | 99,670 | ​ | $ | 105,993
​
| (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 September 30, 2023, this difference was $12.9 million and $19.2 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.
​ As of September 30, 2023, the Company also held a 10% interest in 191 IV CUBE Southeast LLC ("HVPSE"). 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. During the nine months ended September 30, 2023, the Company received distributions of $1.7 million in excess of its investment in HVPSE from proceeds that were held back at the time of the sale. These distributions are included in Equity in earnings of real estate ventures within the consolidated statements of operations. As of September 30, 2023, HVPSE had no significant assets or liabilities. ​ The Company determined that Fontana, RCSS, HVP V, HVPSE, HVP IV, HHFNE and HHF (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 consolidated balance sheets and the Company’s earnings from its investments in the Ventures are presented in Equity in earnings of real estate ventures within the consolidated statements of operations. ​ The following is a summary of the financial position of the Ventures as of September 30, 2023 and December 31, 2022. ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, | ​ | December 31,
​ | ​ | 2023 |  | 2022
Assets | ​ | (in thousands)
Storage properties, net | ​ | $ | 721,616 | ​ | $ | 741,563
Other assets | ​ |  | 14,058 | ​ |  | 11,708
Total assets | ​ | $ | 735,674 | ​ | $ | 753,271
​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and equity | ​ | ​ | ​ | ​ | ​ | ​
Debt | ​ | $ | 470,126 | ​ | $ | 468,783
Other liabilities | ​ | ​ | 23,794 | ​ | ​ | 16,626
Equity | ​ | ​ | ​ | ​ | ​ | ​
CubeSmart | ​ |  | 67,613 | ​ | ​ | 73,289
Joint venture partners | ​ |  | 174,141 | ​ | ​ | 194,573
Total liabilities and equity | ​ | $ | 735,674 | ​ | $ | 753,271
​ The following is a summary of results of operations of the Ventures for the three and nine months ended September 30, 2023 and 2022. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | Nine Months Ended September 30,
​ |  | 2023 |  | 2022 |  | 2023 | ​ | 2022
​ | ​ | (in thousands)
Total revenues | ​ | $ | 25,519 | ​ | $ | 26,915 | ​ | $ | 74,139 | ​ | $ | 78,511
Operating expenses | ​ |  | (10,642) | ​ | ​ | (11,340) | ​ |  | (31,707) | ​ |  | (33,321)
Other income (expenses) | ​ | ​ | 27 | ​ | ​ | (137) | ​ | ​ | (221) | ​ | ​ | (375)
Interest expense, net | ​ |  | (4,276) | ​ | ​ | (4,225) | ​ |  | (12,785) | ​ |  | (11,678)
Depreciation and amortization | ​ |  | (7,611) | ​ |  | (9,124) | ​ |  | (23,058) | ​ |  | (29,052)
Gains from sale of real estate, net | ​ | ​ | — | ​ | ​ | 114,107 | ​ | ​ | — | ​ | ​ | 114,107
Net income | ​ | $ | 3,017 | ​ | $ | 116,196 | ​ | $ | 6,368 | ​ | $ | 118,192
Company’s share of net income | ​ | $ | 1,141 | ​ | $ | 46,558 | ​ | $ | 4,482 | ​ | $ | 47,532
​

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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 -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481687/323-10-50-3 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 323 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481543/323-740-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org//323/tableOfContent + Details
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