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Real Estate Facilities | 6 Months Ended
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Jun. 30, 2023
Real Estate [Abstract] |
Real Estate Facilities | Note 3. Real Estate Facilities The following summarizes the activity in real estate facilities during the six months ended June 30, 2023:
Real estate facilities |  |  |
Balance at December 31, 2022 |  | $ | 1,887,205,645 |
Impact of foreign exchange rate changes |  |  | 4,419,660 |
Improvements and additions |  |  | 5,683,428 |
Balance at June 30, 2023 |  | $ | 1,897,308,733 |
Accumulated depreciation |  |  |
Balance at December 31, 2022 |  | $ | (202,682,688 | )
Depreciation expense |  |  | (26,167,303 | )
Impact of foreign exchange rate changes |  |  | (644,664 | )
Balance at June 30, 2023 |  | $ | (229,494,655 | )
SSGT II Merger On June 1, 2022, we closed on our merger with SSGT II (the "SSGT II Merger"). On such date, (the "SSGT II Merger Date"), each share of SSGT II’s common stock, $0.001 par value per share (“SSGT II Common Stock”), issued and outstanding immediately prior to the effective time of the Merger (other than shares owned by us, any subsidiary of ours, or any subsidiary of SSGT II) was automatically converted into the right to receive 0.9118 shares of our Class A Shares, subject to the treatment of fractional shares in accordance with the SSGT II merger agreement (the “SSGT II Merger Consideration”). As a result, we acquired all of the real estate owned by SSGT II, consisting of (i) 10 wholly-owned self storage facilities located in seven states comprising approximately 7,740 self storage units and approximately 853,900 net rentable square feet, and (ii) SSGT II’s 50% equity interest in three unconsolidated real estate ventures located in the Greater Toronto Area of Ontario, Canada. As of the merger date, the unconsolidated real estate ventures (collectively, the "SSGT II JV Properties") consisted of one operating self storage property and two parcels of land being developed into self storage facilities, with subsidiaries of SmartCentres Real Estate Investment Trust, an unaffiliated third party ("SmartCentres") owning the other 50% of such entities. Additionally, we obtained SSGT II's rights to acquire (i) one parcel of land being developed into a self storage facility in an unconsolidated joint venture with SmartCentres, and (ii) a self storage property located in Southern California, which we acquired on July 13, 2023. O n January 12, 2023, we acquired the aforementioned parcel of land in an unconsolidated joint venture that we and SmartCentres intend to develop into a self storage facility in the future. As of June 30, 2023, one of the development joint venture properties had been completed and had begun operations. The following table reconciles the total consideration transferred in the SSGT II Merger:
Fair value of consideration: |  |  |
Common stock issued |  | $ | 168,791,577 |
Cash(1) |  |  | 76,300,006 |
Preexisting investments in and advances to SSGT II(2) |  |  | 16,066,930 |
Total consideration |  | $ | 261,158,513 |
(1) The approximately $76.3 million in cash was primarily used to pay off approximately $75.1 million of SSGT II's debt that we did not assume in the SSGT II Merger, as well as approximately $1.2 million in transaction costs. (2) Upon our acquisition of SSGT II, we recorded a gain of approximately $16.1 million to record the then fair market value of our special limited partnership interest in SSGT II operating partnership. We issued approximately 11.5 million Class A Shares to the former SSGT II stockholders in connection with the SSGT II Merger. The estimated fair value of our common stock issued was determined by third party valuation specialists primarily based on an income approach to value our properties as well as our Managed REIT Platform, adjusted for market related adjustments and illiquidity discounts, less the estimated fair value of our debt and other liabilities. These fair value measurements are based on significant inputs not observable in the market and thus represent a Level 3 measurement as discussed in Note 2 – Summary of Significant Accounting Policies. The key assumptions used in estimating the fair value of our common stock included a marketability discount of 6%, projected annual net operating income, land sales comparisons, growth rates, discount rates, and capitalization rates. The following table summarizes the relative fair values of the assets acquired and liabilities assumed in the SSGT II Merger:
Assets Acquired: |  |  |
Land |  | $ | 21,111,616 |
Buildings |  |  | 201,026,974 |
Site improvements |  |  | 6,221,128 |
Construction in process |  |  | 252,925 |
Intangible assets (1) |  |  | 15,688,002 |
Investments in real estate joint ventures |  |  | 7,394,539 |
Cash and cash equivalents, and restricted cash |  |  | 10,759,283 |
Other assets |  |  | 847,359 |
Total assets acquired |  | $ | 263,301,826 |
Liabilities assumed: |  |  |
Total liabilities assumed (2) |  | $ | 2,143,313 |
Total net assets acquired |  | $ | 261,158,513 |
(1) Approximately $8.0 million of the intangible assets acquired related to the value of a purchase and sale agreement for the acquisition of a property in San Gabriel, CA that we assumed in the SSGT II Merger. The remainder of the intangible asset relates to value ascribed to the in-place leases on the properties acquired. (2) Liabilities assumed represents accounts payable and other liabilities. As a result of our acquiring SSGT II and terminating the preexisting advisory and property management agreements with SSGT II, we expensed approximately $2.0 million related to such assets on the acquisition date. SST IV Merger On March 17, 2021, we closed on our merger with SST IV (the “SST IV Merger”). On such date, (the "SST IV Merger Date"), we acquired all of the real estate owned by SST IV, consisting of (i) 24 self storage facilities located in nine states comprising approximately 18,000 self storage units and approximately 2.0 million net rentable square feet, and (ii) SST IV’s 50% equity interest in six unconsolidated real estate ventures located in the Greater Toronto Area of Ontario, Canada (collectively the “SST IV JV Properties”). The SST IV JV Properties consisted of three operating self storage properties and three parcels of land in various stages of development into self storage facilities as of the merger date, jointly owned with subsidiaries of SmartCentres. The three development joint venture properties have subsequently been completed and have begun operations. As a result of the SST IV Merger, approximately 23.1 million Class A Shares were issued in exchange for approximately 10.6 million shares of SST IV common stock. Self Storage Facility Acquisitions There were no self storage facility acquisitions during the six months ended June 30, 2023. Subsequent to June 30, 2023, we purchased a self storage facility located in San Gabriel, California (the "San Gabriel Property"). See Note 14 – Subsequent Events for additional information. Potential Acquisitions Subsequent to June 30, 2023, we, through our wholly-owned subsidiaries were party to one purchase and sale agreement with an unaffiliated third party for the acquisition of a self storage facility in the United States. The total purchase price for the property was approximately $20 million, plus closing costs. There can be no assurance that we will complete this acquisition. If we fail to acquire this property, in addition to the incurred acquisition costs, we may also forfeit earnest money as a result. We may assign the above purchase and sale agreement to one of our Managed REITs.

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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -URI https://asc.fasb.org/topic&trid=2156125 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 978 -URI https://asc.fasb.org/topic&trid=2134977 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 976 -URI https://asc.fasb.org/topic&trid=2134846 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 974 -URI https://asc.fasb.org/topic&trid=2156429 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 972 -URI https://asc.fasb.org/topic&trid=2134617 + Details
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