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Real Estate Facilities | 12 Months Ended
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Dec. 31, 2023
Real Estate [Abstract] |
Real Estate Facilities | Note 3. Real Est ate Facilities The following summarizes the activity in real estate facilities during the years ended December 31, 2023 and 2022:
Real estate facilities |  |  |
Balance at December 31, 2021 |  | $ | 1,593,623,628 |
Facilities acquired through merger with SSGT II |  |  | 228,359,718 |
Other facility acquisitions |  |  | 69,981,850 |
Impact of foreign exchange rate changes |  |  | (12,984,154 | )
Improvements and additions |  |  | 8,224,603 |
Balance at December 31, 2022 |  |  | 1,887,205,645 |
Acquisitions |  |  | 23,696,536 |
Impact of foreign exchange rate changes and other |  |  | 4,342,673 |
Improvements and additions |  |  | 9,501,518 |
Balance at December 31, 2023 |  | $ | 1,924,746,372 |
Accumulated depreciation |  |  |
Balance at December 31, 2021 |  | $ | (155,926,875 | )
Depreciation expense |  |  | (48,400,073 | )
Impact of foreign exchange rate changes |  |  | 1,644,260 |
Balance at December 31, 2022 |  |  | (202,682,688 | )
Depreciation expense |  |  | (52,619,881 | )
Impact of foreign exchange rate changes and other |  |  | (541,715 | )
Balance at December 31, 2023 |  | $ | (255,844,284 | )
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 SSGT II 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 SSGT II 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 under development located in Southern California, which we acquired on July 13, 2023. On 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. A s of December 31, 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 intrinsic 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 and acquired on July 13, 2023. 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 SST IV Merger Date, jointly owned with subsidiaries of SmartCentres. The three development joint venture properties have subsequently been completed and have begun operations. The following table reconciles the total consideration transferred in the SST IV Merger:
Fair Value of Consideration Transferred: |  |  |
Common stock issued |  | $ | 231,412,470 |
Cash (1) |  |  | 54,250,000 |
Other |  |  | 365,703 |
Total Consideration Transferred |  | $ | 286,028,173 |
(1) The approximately $54.3 million in cash was primarily used to pay off approximately $54.0 million of SST IV debt that we did not assume in the SST IV Merger, as well as approximately $0.3 million in transaction costs. 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. The estimated fair value of our common stock issued was determined by third party valuation specialists primarily based on an income approach to value the 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 SST IV Merger:
Assets Acquired: |  |  |
Land |  | $ | 54,385,560 |
Buildings |  |  | 257,618,228 |
Site improvements |  |  | 12,340,848 |
Construction in progress |  |  | 1,467,090 |
Intangible assets |  |  | 20,052,449 |
Investments in real estate joint ventures |  |  | 17,495,254 |
Cash and cash equivalents, and restricted cash |  |  | 7,763,490 |
Other assets |  |  | 4,145,394 |
Total assets acquired |  | $ | 375,268,313 |
Liabilities assumed: |  |  |
Debt |  | $ | 81,165,978 |
Accounts payable and other liabilities |  |  | 8,074,162 |
Total liabilities assumed |  | $ | 89,240,140 |
Total net assets acquired |  | $ | 286,028,173 |
As a result of our acquiring SST IV and terminating the preexisting advisory and property management agreements with SST IV, and the write off of a special limited partnership interest we had related to SST IV, we expensed approximately $8.4 million related to such assets on the acquisition date. Self Storage Facility Acquisitions In connection with the SSGT II Merger, we recorded an intangible asset of approximately $8.0 million related to the intrinsic value of a purchase and sale agreement for the San Gabriel Property which was being developed by the seller into a self storage facility. On July 5, 2023, we entered into an approximately $10.4 million first mortgage bridge loan to the seller, and on July 13, 2023, we closed on the San Gabriel Property and the seller repaid the bridge loan in full. We recorded approximately $23.7 million to Real estate facilities related to the San Gabriel Property, which consisted of the contractual purchase price of approximately $15.5 million, as well as approximately $8.0 million which was previously recorded as an intangible asset. The following table summarizes the purchase price allocation for the real estate related assets acquired during the year ended December 31, 2023:
Acquisition |  | Acquisition Date |  | Real Estate Assets |  |  | Intangibles |  |  | Total (1) |  |  | 2023 Revenue(2) |  |  | 2023 Net Operating Loss(2)(3) |
San Gabriel Property |  | 7/13/2023 |  | $ | 23,696,536 |  |  | $ | - |  |  | $ | 23,696,536 |  |  | $ | 22,964 |  |  | $ | (157,676 | )
|  |  |  | $ | 23,696,536 |  |  | $ | - |  |  | $ | 23,696,536 |  |  | $ | 22,964 |  |  | $ | (157,676 | )
(1) The allocation noted above is based on a determination of the relative fair value of the total consideration provided and represents the amount paid including capitalized acquisition costs. (2) The operating results of the self storage property acquired have been included in our consolidated statements of operations since its acquisition date. (3) Net operating loss excludes corporate general and administrative expenses, interest expenses, depreciation, amortization and acquisition related expenses. Potential Acquisitions We, through our wholly-owned subsidiaries were party to a purchase and sale agreement with an unaffiliated third party for the acquisition of a self storage facility located in the U.S. which had not yet closed as of December 31, 2023. The total purchase price for this property was approximately $10.5 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 of approximately $0.2 million 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 -Topic 976 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//976/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 978 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//978/tableOfContent Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 970 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//970/tableOfContent Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 972 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//972/tableOfContent Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 974 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//974/tableOfContent + Details
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